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 |
(State or Other Jurisdiction of |
(I.R.S. Employer | |
Incorporation or Organization) |
Identification No.) | |
(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
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44 |
September 30, 2021 (Unaudited) |
December 31, 2020 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Commissions receivable, net |
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Prepaid expenses |
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Marketable debt securities, available-for-sale |
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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 |
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Marketable debt securities, available-for-sale |
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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 |
$ | $ | ||||||
Deferred compensation and commissions |
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Income tax payable |
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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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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 September 30, |
Nine Months Ended September 30, |
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2021 |
2020 |
2021 |
2020 |
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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 |
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Depreciation and amortization |
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Total operating expenses |
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Operating income |
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Other income (expense), net |
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Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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 net unrealized gains |
( |
) | ( |
) | ( |
) | ||||||||||
Less: reclassification adjustment for net losses included in other income (expense), net |
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Net change, net of tax of $( |
( |
) | ( |
) | ( |
) | ||||||||||
Foreign currency translation gain (loss), net of tax of $ and 2020, respectively |
( |
) | ( |
) | ||||||||||||
Total other comprehensive (loss) income |
( |
) | ( |
) | ( |
) | ||||||||||
Comprehensive income |
$ | $ | $ | $ | ||||||||||||
Earnings per share: |
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Basic |
$ | $ | $ | $ | ||||||||||||
Diluted |
$ | $ | $ | $ | ||||||||||||
Weighted average common shares outstanding: |
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Basic |
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Diluted |
Three Months Ended September 30, 2021 |
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Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Stock Notes Receivable From Employees |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total |
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Shares |
Amount |
Shares |
Amount |
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Balance at June 30, 2021 |
$ | $ | $ |
$ | $ | $ | $ | |||||||||||||||||||||||||||||
Net and comprehensive income (loss) |
— | — | ( |
) | ||||||||||||||||||||||||||||||||
Stock-based award activity |
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Stock-based compensation |
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Issuance of common stock for settlement of deferred stock units |
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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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Balance as of September 30, 2021 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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Three Months Ended September 30, 2020 |
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Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Stock Notes Receivable From Employees |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total |
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Shares |
Amount |
Shares |
Amount |
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Balance at June 30, 2020 |
$ | |
$ | $ |
$ | |
$ | $ | $ | |||||||||||||||||||||||||||
Net and comprehensive income (loss) |
— | — | ( |
) | ||||||||||||||||||||||||||||||||
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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Balance as of September 30, 2020 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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Nine Months Ended September 30, 2021 |
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Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Stock Notes Receivable From Employees |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total |
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Shares |
Amount |
Shares |
Amount |
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Balance at December 31, 2020 |
$ | $ | $ |
$ | $ | $ | $ | |||||||||||||||||||||||||||||
Net and comprehensive income (loss) |
— | — | ( |
) | ||||||||||||||||||||||||||||||||
Stock-based award activity |
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Stock-based compensation |
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Shares issued pursuant to employee stock purchase plan |
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Issuance of common stock for settlement of deferred stock units |
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Issuance of common stock for vesting of restricted stock units |
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Issuance of common stock for unvested restricted stock awards |
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Issuance of common stock for stock settled deferred consideration |
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Shares withheld related to net share settlement of stock-based awards |
( |
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) | ( |
) | ||||||||||||||||||||||||||||||
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Balance as of September 30, 2021 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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Nine Months Ended September 30, 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 |
$ | |
$ | $ |
$ | ( |
) |
$ | $ | $ | ||||||||||||||||||||||||||
Cumulative effect of a change in accounting principle, net of tax |
( |
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) | ||||||||||||||||||||||||||||||||
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Balance at January 1, 2020, as adjusted |
( |
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Net and comprehensive income |
— | — | ||||||||||||||||||||||||||||||||||
Stock-based award activity |
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Stock-based compensation |
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Shares issued pursuant to employee stock purchase plan |
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Issuance of common stock for vesting of restricted stock units |
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Issuance of common stock for unvested restricted stock awards |
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Shares withheld related to net share settlement of stock-based awards |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Reduction of stock notes receivable from employees |
— | — | ||||||||||||||||||||||||||||||||||
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Balance as of September 30, 2020 |
$ | $ | $ | $ | |
$ | $ | $ | ||||||||||||||||||||||||||||
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Nine Months Ended September 30, |
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2021 | 2020 | |||||||
Cash flows from operating activities |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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Amortization of right-of-use |
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Credit loss recovery |
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Stock-based compensation |
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Deferred taxes, net |
( |
) | ||||||
Unrealized foreign exchange (gains) losses |
( |
) | ||||||
Net realized gains on marketable debt securities, available-for-sale |
( |
) | ( |
) | ||||
Other non-cash items |
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Changes in operating assets and liabilities: |
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Commissions receivable |
( |
) | ( |
) | ||||
Prepaid expenses |
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Advances and loans |
( |
) | ( |
) | ||||
Other assets |
( |
) | ( |
) | ||||
Accounts payable and other liabilities |
( |
) | ||||||
Income tax receivable/payable |
( |
) | ||||||
Accrued bonuses and other employee related expenses |
( |
) | ||||||
Deferred compensation and commissions |
( |
) | ( |
) | ||||
Operating lease liabilities |
( |
) | ( |
) | ||||
Other liabilities |
( |
) | ||||||
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Net cash provided by (used in) operating activities |
( |
) | ||||||
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Cash flows from investing activities |
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Acquisition of businesses, net of cash received |
( |
) | ||||||
Purchases of marketable debt securities, available-for-sale |
( |
) | ( |
) | ||||
Proceeds from sales and maturities of marketable debt securities, available-for-sale |
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Purchases of securities, held-to-maturity |
( |
) | ||||||
Issuances of employee notes receivable |
( |
) | ( |
) | ||||
Payments received on employee notes receivable |
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Purchase of property and equipment |
( |
) | ( |
) | ||||
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Net cash used in 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 |
( |
) | ( |
) | ||||
Proceeds from issuance of shares pursuant to employee stock purchase plan |
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Principal payments on notes payable to former stockholders |
( |
) | ||||||
Principal payments on stock appreciation rights liability |
( |
) | ( |
) | ||||
Principal payments on contingent and deferred consideration |
( |
) | ( |
) | ||||
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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 increase (decrease) in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
$ | $ | ||||||
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Supplemental disclosures of cash flow information |
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Interest paid during the period |
$ | $ | ||||||
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Income taxes paid, net |
$ | $ | ||||||
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1. |
Description of Business, Basis of Presentation and Recent Accounting Pronouncements |
2. |
Property and Equipment, Net |
September 30, 2021 |
December 31, 2020 |
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Computer software and hardware equipment |
$ | $ | ||||||
Furniture, fixtures and equipment |
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Less: accumulated depreciation and amortization |
( |
) | ( |
) | ||||
$ | $ | |||||||
3. |
Operating Leases |
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2021 |
2020 |
2021 |
2020 |
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Operating lease cost: |
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Lease cost (1) |
$ |
$ |
$ |
$ |
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Variable lease cost (2) |
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Sublease income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
$ | $ | $ | $ | |||||||||||||
(1) |
Includes short-term lease cost and ROU asset amortization. |
(2) |
Primarily relates to common area maintenance, property taxes, insurance, utilities and parking. |
September 30, 2021 |
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Remainder of 2021 |
$ | |||
2022 |
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2023 |
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2024 |
||||
2025 |
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Thereafter |
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Total future minimum lease payments |
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Less imputed interest |
( |
) | ||
Present value of operating lease liabilities |
$ | |||
Nine Months Ended September 30, |
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2021 |
2020 |
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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 |
$ | $ | ||||||
Tenant improvements owned by lessor related to ROU assets (1) |
$ | $ |
(1) |
Reclassification from other assets current. |
September 30, 2021 |
December 31, 2020 |
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Weighted average remaining operating lease term |
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Weighted average discount rate |
% | % |
4. |
Investments in Marketable Debt Securities, Available for Sale |
September 30, 2021 |
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Amortized Cost |
Allowance for Credit Losses |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
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Short-term investments: |
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U.S. treasuries |
$ | $ | $ | $ | $ | |||||||||||||||
Corporate debt |
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$ | $ | $ | $ | $ | ||||||||||||||||
Long-term investments: |
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U.S. treasuries |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
U.S. government sponsored entities |
( |
) | ||||||||||||||||||
Corporate debt |
( |
) |