QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
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(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
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27 |
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38 |
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39 |
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40 |
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40 |
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41 |
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41 |
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41 |
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41 |
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42 |
March 31, 2020 (Unaudited) |
December 31, 2019 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | |
$ | |
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Commissions receivable, net |
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Prepaid expenses |
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Income tax receivable |
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Marketable debt securities, available-for-sale (includes amortized cost and an allowance for credit losses of $ |
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Advances and loans, net |
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Other assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets, net |
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Marketable debt securities, available-for-sale (includes amortized cost and an allowance for credit losses of $ |
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Assets held in rabbi trust |
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Deferred tax assets, net |
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Goodwill and other intangible assets, net |
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Advances and loans, net |
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Other assets |
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Total assets |
$ | |
$ | |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable and other liabilities |
$ | |
$ | |
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Notes payable to former stockholders |
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Deferred compensation and commissions |
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Operating lease liabilities |
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Accrued bonuses and other employee related expenses |
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Total current liabilities |
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Deferred compensation and commissions |
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Operating lease liabilities |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $ |
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Authorized shares – |
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Common stock, $ |
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Authorized shares – |
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Additional paid-in capital |
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Stock notes receivable from employees |
( |
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Retained earnings |
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Accumulated other comprehensive income |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ | |
$ | |
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Three Months Ended March 31, |
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2020 |
2019 |
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Revenues: |
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Real estate brokerage commissions |
$ | |
$ |
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Financing fees |
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Other revenues |
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Total revenues |
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Operating expenses: |
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Cost of services |
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Selling, general and administrative expense |
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Depreciation and amortization expense |
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Total operating expenses |
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Operating income |
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Other (expense) income, net |
( |
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Interest expense |
( |
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Income before provision for income taxes |
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Provision for income taxes |
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Net income |
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Other comprehensive (loss) income: |
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Marketable debt securities, available-for-sale: |
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Change in unrealized (losses) gains |
( |
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Less: reclassification adjustment for net losses (gains) included in other (expense) income, net |
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Net change, net of tax of $( |
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Foreign currency translation gain (loss), net of tax of $ |
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Total other comprehensive income |
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Comprehensive income |
$ | |
$ | |
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Earnings per share: |
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Basic |
$ | |
$ | |
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Diluted |
$ | |
$ | |
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Weighted average common shares outstanding: |
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Basic |
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Diluted |
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Three Months Ended March 31, 2020 |
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Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Stock Notes Receivable From Employees |
Retained Earnings |
Accumulated Other Comprehensive Income |
Total |
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Shares |
Amount |
Shares |
Amount |
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Balance at December 31, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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Cumulative effect of a change in accounting principle, net of tax |
— |
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— |
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( |
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( |
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Balance at January 1, 2020, as adjusted |
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( |
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Net and comprehensive income |
— |
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— |
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Stock-based award activity |
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Stock-based compensation |
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Issuance of common stock for vesting of restricted stock units |
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Shares withheld related to net share settlement of stock-based awards |
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( |
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( |
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( |
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Balance as of March 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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Three Months Ended March 31, 20 19 |
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Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Stock Notes Receivable From Employees |
Retained Earnings |
Accumulated Other Comprehensive Income |
Total |
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Shares |
Amount |
Shares |
Amount |
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Balance at December 31, 2018 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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Net and comprehensive income |
— |
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— |
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Stock-based award activity |
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Stock-based compensation |
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Issuance of common stock for vesting of restricted stock units |
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Shares withheld related to net share settlement of stock-based awards |
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( |
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( |
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( |
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Balance as of March 31, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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Three Months Ended March 31, |
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2020 |
2019 |
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Cash flows from operating activities |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash used in operating activities: |
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Depreciation and amortization expense |
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Amortization of right-of-use assets |
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Credit loss recovery |
( |
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Stock-based compensation |
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Deferred taxes, net |
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Unrealized f oreign exchange lo ss |
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Net realized (gains) losses on marketable debt securities, available-for-sale |
( |
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Other non-cash items |
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Changes in operating assets and liabilities: |
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Commissions receivable |
( |
) | ||||||
Prepaid expenses |
( |
) | ||||||
Advances and loans |
( |
) | ( |
) | ||||
Other assets |
( |
) | ( |
) | ||||
Accounts payable and other liabilities |
( |
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Income tax receivable/payable |
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Accrued bonuses and other employee related expenses |
( |
) | ( |
) | ||||
Deferred compensation and commissions |
( |
) | ( |
) | ||||
Operating lease liabilities |
( |
) | ( |
) | ||||
Other liabilities |
( |
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Net cash used in operating activities |
( |
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Cash flows from investing activities |
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Acquisition, net of cash received |
( |
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Purchases of marketable debt securities, available-for-sale |
( |
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Proceeds from sales and maturities of marketable debt securities, available-for-sale |
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Issuances of employee notes receivable |
( |
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Payments received on employee notes receivable |
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Purchase of property and equipment |
( |
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Net cash provided by investing activities |
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Cash flows from financing activities |
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Taxes paid related to net share settlement of stock-based awards |
( |
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Principal payments on stock appreciation rights liability |
( |
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Net cash used in financing activities |
( |
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Effect of currency exchange rate changes on cash and cash equivalents |
( |
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Net decrease in cash and cash equivalents |
( |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
$ | $ | ||||||
Supplemental disclosures of cash flow information |
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Interest paid during the period |
$ | $ | ||||||
Income taxes paid, net |
$ | $ | ||||||
1. |
Description of Business and Basis of Presentation |
2. |
Accounting Policies and Recent Accounting Pronouncements |
3. |
Property and Equipment, Net |
March 31, 2020 |
December 31, |
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Computer software and hardware equipment |
$ | |
$ | |
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Furniture, fixtures, and equipment |
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Less: accumulated depreciation and amortization |
( |
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$ | |
$ | |
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4. |
Operating Leases |
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Three Months Ended March 31, |
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2020 |
2019 |
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Operating lease cost: |
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Lease cost (1) |
$ |
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$ |
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Variable lease cost (2) |
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Sublease income |
( |
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$ | |
$ | |
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(1) |
Includes short-term lease cost and ROU asset amortization. |
(2) |
Primarily relates to common area maintenance, property taxes, insurance, utilities and parking. |
March 31, |
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Remainder of 2020 |
$ | |
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2021 |
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2022 |
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2023 |
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2024 |
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Thereafter |
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Total future minimum lease payments |
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Less imputed interest |
( |
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Present value of operating lease liabilities |
$ | |
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Three Months Ended March 31, |
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2020 |
2019 |
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Operating cash flow information: |
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Cash paid for amounts included in the measurement of operating lease liabilities |
$ | |
$ | |
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Noncash activity: |
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ROU assets obtained in exchange for operating lease liabilities |
$ |
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$ |