Go Daddy 2015 Annual Report Download - page 71

Table of Contents
Customer Care
Customer Care expense represents the costs to advise our customers and service their needs, primarily consisting of personnel costs. We expect these
expenses to increase in absolute dollars in the future as we expand our domestic and international Customer Care teams due to increases in total customers. We
expect Customer Care expenses to fluctuate as a percentage of total revenue depending on the level of personnel required to support the continued growth of our
business.
Year Ended December 31,
2015 to 2014
2014 to 2013
2015
2014
2013
$ change
% change
$ change
% change
Customer care $ 221.5
$ 190.5
$ 150.9
$ 31.0
16%
$ 39.6
26%
2015 compared to 2014 . Customer care expenses increased $31.0 million , or 16.3% , from $190.5 million in 2014 to $221.5 million in 2015 . The increase
was primarily due to a $28.5 million increase in compensation-related costs, primarily driven by increased average headcount, as well as $2.5 million of
incremental costs associated with the continued expansion of our international third-party Customer Care locations.
2014 compared to 2013 . Customer care expenses increased $39.6 million , or 26.2% , from $150.9 million in 2013 to $190.5 million in 2014 . The increase
was primarily due to a $34.8 million increase in compensation-related costs primarily attributable to an 11.5% increase in employee headcount, of which $5.8
million is related to our Media Temple business, as well as $4.8 million of incremental costs associated with the expansion of our international third-party
Customer Care locations.
General and administrative
General and administrative expenses primarily consist of personnel costs for our administrative functions, professional service fees, office rent for all
locations, all employee travel expenses, sponsor-based costs and other general costs. We expect general and administrative expenses to increase in absolute dollars
in the future as a result of our overall growth, increased personnel costs and increased expenses associated with being a public company.
Year Ended December 31,
2015 to 2014
2014 to 2013
2015
2014
2013
$ change
% change
$ change
% change
General and administrative $ 219.7
$ 172.0
$ 145.8
$ 47.7
28%
$ 26.2
18%
2015 compared to 2014 . In 2015 , general and administrative expenses include $ 29.7 million of additional expenses related to certain payments made
following the completion of the IPO, including $ 26.7 million paid to the Sponsors in connection with the termination of the transaction and monitoring fee
agreement and $ 3.0 million paid to Bob Parsons in connection with the termination of the executive chairman services agreement. Following these payments, we
are no longer obligated to make future payments under either of these agreements.
General and administrative expenses increased $47.7 million , or 27.7% , from $172.0 million in 2014 to $219.7 million in 2015 . Excluding the termination
payments discussed above, general and administrative expenses increased $18.0 million , or 10.5% , from $172.0 million in 2014 to $190.0 million in 2015 ,
primarily due to an $11.3 million increase in legal and professional fees resulting from the resolution of outstanding claims and a $7.0 million increase in
compensation-related costs driven by increased average headcount.
2014 compared to 2013 . General and administrative expenses increased $26.2 million , or 18.0% , from $145.8 million in 2013 to $172.0 million in 2014 .
The increase was primarily due to a $25.4 million increase in compensation-related costs, primarily driven by employee headcount increases during the second half
of 2013 (including the addition of certain executives, retention bonuses, $4.7 million related to our Media Temple business and an increase of $4.3 million in
equity-based compensation expense). The remaining increase was primarily due to a $7.7 million increase in travel and corporate functions and a $6.6 million
increase in office rent related to the expansion of our facilities, as well as increases in other general expenses associated with the overall growth of our business.
These increases were partially offset by a $13.8 million decrease related to sales tax reserves primarily recorded in the fourth quarter of 2013 and a $5.4 million
decrease in professional service fees resulting primarily from a favorable settlement agreement reached in December 2014 with an insurance carrier.
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