Enom 2013 Annual Report Download - page 104

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13. Stockholders
’
Equity
Stock Repurchases
Under the stock repurchase plan announced on August 19, 2011 and further increased on February 8, 2012, we are authorized to
repurchase up to $50.0 million of its common stock from time to time in open market purchases or in negotiated transactions. During the year
ended December 31, 2013, we repurchased 0.6 million shares at an average price of $8.65 per share for an aggregate amount of $4.8 million. The
timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, debt
covenant requirements, alternative investment opportunities and other market conditions.
Shares repurchased by us are accounted for when the transaction is settled and there were no unsettled share repurchases as at
December 31, 2013.
Other
Each share of common stock has the right to one vote per share. Each restricted stock purchase right has the right to one vote per share
and the right to receive dividends or other distributions paid or made with respect to common shares, subject to restrictions for continued
employment service.
Effective January 31, 2011, all shares of preferred stock and preferred stock warrants were converted into 61 .7 million shares of common
stock in connection with our initial public offering as described in Note 1— Company Background and Overview. As a result the carrying value
of the preferred stock of $373.8 million and the carrying value of the preferred stock warrants of $0.5 million were reclassified from mezzanine
equity and liabilities, respectively, to stockholder’s equity.
14. Fair Value of Financial Instruments
Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We measure
our financial assets and liabilities in th ree levels, based on the markets in which the assets and liabilities are traded and the reliability of the
assumptions used to determine fair value.
In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs to the extent possible and consider counterparty credit risk in our assessment of fair value.
We chose not to elect the fair value option for our financial assets and liabilities that had not been previously carried at fair value.
Therefore, material financial assets and liabilities not carried at fair value, such as trade accounts receivable and payables, are reported at their
carrying values.
The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable, receivables from domain
name registries, registry deposits, restricted cash, accounts payable, term loan, revolving credit facility, accrued liabilities and customer deposits
approximate fair value because of their short maturities. For the term loans and revolving loan facility, the carrying amount approximates fair
value since it bears interest at variable rates or fixed rates which approximates fa ir value. Our investments in marketable securities are recorded
at fair value. Certain assets, including equity investments, investments held at cost, goodwill and intangible assets are also subject to
measurement at fair value on a nonrecurring basis, if they are deemed to be impaired as the result of an impairment review.
F-28
1
Level 1—valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow a
company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing
sources for market transactions involving identical assets, liabilities or funds.
1
Level 2—valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets
or liabilities or quoted prices in markets that are not active. Level 2 includes U.S. Treasury, U.S. government and agency debt
securities, and certain corporate obligations. Valuations are usually obtained from third-party pricing services for identical or
comparable assets or liabilities.
1
Level 3—valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models,
discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions.
Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.