Stamps.com 2015 Annual Report Download - page 73
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STAMPS.COM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Weelectedtoutilizethealternativetransitionmethodforcalculatingthetaxeffectsofstock-basedcompensation.Thealternative
transitionmethodincludescomputationalguidancetoestablishthebeginningbalanceoftheadditionalpaid-incapitalpool(“APIC
Pool”)relatedtothetaxeffectsofemployeestock-basedcompensation,andasimplifiedmethodtodeterminethesubsequentimpacton
theAPICPoolforemployeestock-basedcompensationawardsthatarevestedandoutstandinguponadoptionofFASBASCTopicNo.
718Compensation–StockCompensation(“ASC718”).Ataxbenefitwillberecordedinadditionalpaid-incapitalwhenthese
deductionsreduceourfutureincometaxespayable.
Treasury Stock
Wedidnotrepurchasesharesin2015.During2014and2013,werepurchasedapproximately435,000sharesfor$12.9millionand
179,000sharesfor$4.3million,respectively.
Segment Information
Operatingsegmentsaredefinedascomponentsofanenterpriseforwhichdiscretefinancialinformationisavailablethatis
evaluatedregularlybythechiefoperatingdecisionmaker(“CODM”)forpurposesofallocatingresourcesandevaluatingfinancial
performance.TheCompany'sCODMreviewsthefinancialinformationpresentedonaconsolidatedbasisforpurposesofallocating
resourcesandevaluatingfinancialperformance.TheCompany'sChiefExecutiveOfficerhasbeenidentifiedastheCODMasdefined
byguidanceregardingsegmentdisclosures.In2015,theCompanycompletedthereassessmentofitssegmentreportinginlightofits
Endiciaacquisitioninlate2015.Basedonthisreassessment,theCompanyhasidentifiedtwooperatingsegments.Bothoperating
segmentsaggregateintoonereportablesegmentastheoperatingsegmentsaresimilarasitrelatestoservicesoffered,processesto
providetheservices,andtypesofcustomers,andhavesimilareconomiccharacteristics.TheCompanyofferssimilarservices
consistingprimarilyofInternet-basedmailingandshippingsolutionstosubstantiallyallofitscustomers,whichprimarilyconsistof
individuals,smallbusinesses,homeoffices,medium-sizebusinessesandlargeenterprisesintheUnitedStates.In2013and2014,allof
ouroperations,revenueandassetswerewithintheUnitedStates.In2015,asaresultofourEndiciaacquisition,wehadinternational
revenueandassetsthatwerelessthan1%oftotalrevenueandassetswiththeremainderintheUnitedStates.During2015,2014and
2013,wedidnotrecognizerevenuefromanyonecustomerthatrepresented10%ormoreofrevenues.
Website Development Costs
Wedevelopandmaintainourwebsite.Costsassociatedwiththeoperationofourwebsiteconsistprimarilyofsoftwareand
hardwarepurchasedfromthirdpartiesandadministrativecostsrelatingtothemaintenanceanddevelopmentofthewebsite.Costs
relatedtothepurchaseofsoftwareandhardwarearecapitalizedbasedonourcapitalizationpolicy.Thesecapitalizedcostsare
amortizedbasedontheirestimatedusefullife.Administrativecostsrelatedtothemaintenanceanddevelopmentofourwebsiteare
expensedasincurred.
Short-Term Financing Obligation
Weutilizeshort-termfinancing,whichisseparatefromourdebtasdescribedinNote–7“Debt,”tofundcertaincompany
operations.AsofDecember31,2015wehad$13.3millioninshort-termfinancingobligations,whichwasincludedinaccounts
payableandaccruedexpensesand$34.2millionofunusedcredit.
Recent Accounting Pronouncements
InMay2014,theFinancialAccountingStandardsBoard(“FASB”)issuedAccountingStandardsUpdateNo.2014-09,Revenue
fromContractswithCustomers(“ASU2014-09”)anupdatedstandardonrevenuerecognition.ThisASUwillsupersedetherevenue
recognitionrequirementsinAccountingStandardsCodificationTopic605,RevenueRecognition,andmostindustry-specificguidance.
ASU2014-09providesenhancementstothequalityandconsistencyofhowrevenueisreportedwhilealsoimprovingcomparabilityin
thefinancialstatementsofcompaniesreportingusingUSGAAPandInternationalFinancialReportingStandards.Thecoreprincipleof
thenewstandardisforcompaniestorecognizerevenuetodepictthetransferofgoodsorservicestocustomersinamountsthatreflect
theconsiderationtowhichtheCompanyexpectstobeentitledinexchangefor
F-14