Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Cash flows from operating activities      
Net income $ 87,257 $ 51,524 $ 64,657
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization expense 6,297 5,363 4,387
Provision for bad debt expense 291 219 47
Stock-based compensation 11,983 9,145 7,035
Deferred taxes, net (142) 12,825 (483)
Net realized (gains) losses on marketable securities, available-for-sale (10) (2) 123
Tax benefit from stock-based award activity 0 0 2,711
Excess tax benefit from stock-based award activity 0 0 (2,711)
Other non-cash items (194) 108 444
Changes in operating assets and liabilities:      
Commissions receivable 4,783 (4,777) (1,467)
Prepaid expenses 1,757 (1,567) (552)
Prepaid rent 1,500 (2,107) (4,210)
Assets held in rabbi trust 0 (700) (1,263)
Other assets, net (7,247) (13,665) (803)
Accounts payable and other liabilities 226 (572) 964
Income tax receivable/payable 5,794 (126) 2,867
Accrued bonuses and other employee related expenses 4,676 1,782 (8,218)
Deferred compensation and commissions (438) 8,427 10,988
Deferred rent and other liabilities 781 660 (30)
Net cash provided by operating activities 117,314 66,537 74,486
Cash flows from investing activities      
Acquisitions, net of cash received (14,926) 0 0
Purchases of marketable securities, available-for-sale (208,460) (65,093) (107,898)
Proceeds from sales and maturities of marketable securities, available-for-sale 113,911 44,753 137,593
Payments received on employee notes receivable 18 27 12
Issuances of employee notes receivable (451) (481) (455)
Purchase of property and equipment (8,072) (6,554) (9,473)
Proceeds from sale of property and equipment 0 10 40
Net cash (used in) provided by investing activities (117,980) (27,338) 19,819
Cash flows from financing activities      
Proceeds from issuance of shares pursuant to employee stock purchase plan 621 653 673
Taxes paid related to net share settlement of stock-based awards (5,023) (5,451) (5,565)
Excess tax benefit from stock-based award activity 0 0 2,711
Principal payments on notes payable to former stockholders (1,035) (986) (938)
Net cash used in financing activities (5,437) (5,784) (3,119)
Net (decrease) increase in cash and cash equivalents (6,103) 33,415 91,186
Cash and cash equivalents at beginning of year 220,786 187,371 96,185
Cash and cash equivalents at end of year 214,683 220,786 187,371
Supplemental disclosures of cash flow information      
Interest paid during the period 2,195 1,912 628
Income taxes paid, net 24,311 35,002 37,350
Supplemental disclosures of noncash investing and financing activities      
Reduction of accrued bonuses and other employee related expenses in settlement of employee notes receivable 192 243 325
Property and equipment additions incurred but not yet paid included in accounts payable and other liabilities 27 (359) 34
Contingent consideration and deferred payments in connection with acquisitions $ 3,727 $ 0 $ 0