Tucows 2013 Annual Report Download - page 97

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The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair
value on a recurring basis as at December 31, 2012:
December 31, 2012
Fair Value Measurement Using
Assets at
Level 1
Level 2
Level 3
Fair Value
Derivative instrument asset
$
—
$
444,782
$
—
$
444,782
Total Assets
$
—
$
444,782
$
—
$
444,782
15. Subsequent event:
On March 4, 2014, the Company announced that its Board of Directors has approved a stock buyback program to
repurchase from time to time up to $20 million of its common stock in the open market. Purchases will be made exclusively
through the facilities of the NASDAQ Capital Market. The stock buyback program will commence immediately and will
terminate on March 3, 2015.
All shares purchased by Tucows under the stock buyback program will be retired and returned to treasury.
16. Segment Reporting:
(a) We are organized and managed based on two segments, which are differentiated primarily by their
services, the markets they serve and the regulatory environments in which they operate. The two segments are Domain
Services and Network Access Services and are described as follows:
1.
Domain Services – This segment includes wholesale and retail domain name registration services, value
added services and portfolio services. The Company primarily earns revenues from the registration fees
charged to resellers in connection with new, renewed and transferred domain name registrations; the sale of
retail Internet domain name registration and email services to individuals and small businesses; and by
making its portfolio of domain names available for sale or lease. Domain Services revenues are attributed to
the country in which the contract originates, primarily Canada.
2.
Network Access Services - This segment derives revenue from the sale of retail mobile phones and services to
individuals and small businesses through the Ting website. Revenues are generated in the United States.
The Chief Executive Officer is the chief operating decision maker and regularly reviews the operations and
performance by segment. The chief operating decision maker reviews gross margin as a key measure of performance for each
segment and to make decisions about the allocation of resources. Sales and marketing expenses, technical operations and
development expenses, general and administrative expenses, depreciation of property and equipment, loss on disposition of
property and equipment, amortization of intangibles, loss (gain) on currency forward contracts, other income (expense), and
provision for income taxes, are organized along functional lines and are not included in the measurement of segment
profitability. Total assets and total liabilities are centrally managed and are not reviewed at the segment level by the chief
operating decision maker. The Company follows the same accounting policies for the segments as those described in note 2
to these consolidated financial statements.
F-25
Information by reportable segments, which is regularly reported to the chief operating decision maker is as follows:
Year Ended December 31, 2013
Domain
Name
Services
Network
Access Services
Consolidated
Totals
Net Revenues
$
113,404,668
16,530,236
129,934,904
Cost of Revenues
85,886,930
12,621,093
98,508,023
Gross Profit
27,517,738
3,909,143
31,426,881
Expenses:
Sales and marketing
12,141,036
Technical operations and development
4,158,603
General and administrative
7,204,895