Go Daddy 2015 Annual Report Download - page 160

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Table of Contents
32
Deferred Revenue
Deferred revenue consists of sales of our products not yet recognized as revenue at the end of a period. Our deferred
revenue as of December 31, 2015 was $1,416.2 million, and is expected to be recognized as revenue as follows:
2016 2017 2018 2019 2020 Thereafter Total
Domains $ 497.2 $ 138.4 $ 61.5 $ 36.8 $ 21.2 $ 30.6 $ 785.7
Hosting and presence 330.8 93.4 35.6 11.6 4.7 4.4 480.5
Business applications 109.7 24.7 8.1 3.8 1.8 1.9 150.0
$ 937.7 $ 256.5 $ 105.2 $ 52.2 $ 27.7 $ 36.9 $ 1,416.2
Contractual Obligations
The following table summarizes our material contractual obligations and commitments as of December 31, 2015:
Payments due by period
1 year 2-3 years 4-5 years 5+ years
Long-term debt, including current maturities(1) $ 11.0 $ 22.0 $ 22.0 $ 1,028.5
Interest on long-term debt(2) 46.6 91.6 89.8 16.1
Lease financing obligation(3) 3.2 6.4 6.7 15.7
Operating leases(4) 40.1 36.2 18.1 34.8
Capital leases(5) 12.4 4.8 — —
Service agreements(6) 10.9 3.3 — —
Marketing agreements(7) 20.4 — — —
TRA payments(8) — 14.9 30.1 106.6
Tax distributions to Desert Newco's owners(9) 5.3 (9) (9) (9)
(1) See Note 9 to our consolidated financial statements for information regarding the terms of our long-term debt agreements.
(2) Interest on long-term debt excludes the amortization of deferred debt issuance costs and original issue discounts.
(3) We lease office space in Tempe, Arizona under which we occupy the total available space. See Note 10 to our consolidated financial statements for
information regarding the terms of our lease financing obligation.
(4) We lease office space, data center space (including commitments for specified levels of power) and vehicles under operating leases expiring at various dates
through September 2026.
(5) We lease certain computer equipment under capital leases. The capital lease payments included in the table above include the amounts representing interest.
(6) We have long-term agreements with certain vendors to provide for software and equipment maintenance, specified levels of bandwidth and other services.
(7) We have contractual commitments requiring future payments under certain marketing agreements.
(8) Reflects the estimated timing of TRA payments as of December 31, 2015. Such payments could be due later than estimated depending on the timing of our
use of the underlying tax attributes. As of December 31, 2015, we have recorded a liability of $151.6 million payable to the Reorganization Parties under the
TRAs, reflecting limitations on the use of the favorable tax attributes due to limitations of taxable income. The estimated amounts payable under the TRAs
do not consider any future exchanges of LLC Units. Such future exchanges will have a material impact on our liabilities under the TRAs. See "Risk Factors-
Risks Related to Our Company and Our Organizational Structure" and Note 12 to our audited consolidated financial statements for additional information
regarding our liability under the TRAs.
(9) Tax distributions are required under the terms of the New LLC Agreement. As of December 31, 2015, we have accrued $5.3 million for tax distributions
related to estimated taxable income allocations to Desert Newco's owners for 2015, which will be paid in March 2016. This accrued amount will be paid
based on ownership as of the payment date and is estimated to be as follows: $2.1 million to Holdings, $1.1 million to KKR, $1.1 million to SLP, $0.6
million to TCV and $0.4 million to other Desert Newco owners. Tax distributions beyond 2015 have not been included in the above table due to the
uncertainty of whether or not such distributions will be required and our inability to estimate the amounts we will be required to pay in those future periods.
See Note 12 to our audited consolidated financial statements for additional information regarding tax distributions.
Off-Balance Sheet Arrangements
As of December 31, 2015 and 2014, we had no off-balance sheet arrangements that had, or which are reasonably likely to
have, a material effect on our consolidated financial statements.