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Table of Contents
GoDaddy Inc.
Notes to Consolidated Financial Statements
(In millions, except share amounts which are reflected in thousands and per share amounts)
Reclassification of Debt Issuance Costs
In conjunction with the original issuance of the Term Loan, Revolving Credit Loan and Senior Note during 2011 and the modification of the Revolving
Credit Loan in May 2014, we incurred a total of $10.7 million of financing-related fees. In 2015 , we adopted newly-issued guidance regarding the presentation of
debt issuance costs, and accordingly, we retrospectively reclassified $4.1 million of debt issuance costs related to the Term Loan and Senior Note from prepaid
expenses and other current assets and other assets to be a direct deduction of the carrying amount of the debt liability at December 31, 2014 .
As of December 31, 2015 and 2014 , $2.1 million and $2.7 million of unamortized debt issuance costs related to the Revolving Credit Loan are recorded as
an asset. Such amounts are not recorded as a reduction of the debt liability because doing so would reduce the debt liability for Revolving Credit Loan below $0 .
Future Debt Maturities
Aggregate principal payments, exclusive of any unamortized original issue discounts and debt issuance costs, due on long-term debt as of December 31, 2015
are as follows:
Year Ending December 31:
2016 $ 11.0
2017 11.0
2018 11.0
2019 11.0
2020 11.0
Thereafter 1,028.5
$ 1,083.5
10. Commitments and Contingencies
Lease Financing Obligation
In April 2013, we entered into an 11 year lease agreement for new office space in Tempe, Arizona under which we occupied the total available space
commencing in September 2014 . The lease agreement allowed for rent abatement during the first full year, with rent payments of $0.3 million per month
thereafter, consisting of both base rent and a tenant improvement allowance. The lease provides us with two consecutive options to extend the term for five years
each. In the event we choose to extend the term of the lease, the monthly rent for each additional term will be based on 95% of the then-prevailing market rate.
As a result of our involvement during the construction period, we were considered to be the owner of the construction project for accounting purposes. Upon
completion of construction in September 2014 , we did not meet the sale-leaseback criteria for derecognition of the building assets and liabilities; therefore, we
were required to record an asset representing the total cost of the building paid by the lessor and the lease is accounted for as a financing obligation. We capitalized
$18.1 million of construction costs incurred by the lessor, which are being depreciated over an estimated useful life of 40 years. Rent payments are treated as
principal and interest payments on the lease financing obligation, with an amount recorded as estimated land lease expense each period. The lease financing
obligation at the end of the lease term will approximate the net book value of the building to be relinquished to the lessor. As of December 31, 2015 , the lease
financing obligation totaled $19.9 million , of which $19.8 million is included in other long-term liabilities.
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