|12 Months Ended|
Dec. 31, 2014
|Related Party Transactions [Abstract]|
Shared and Transition Services
Prior to October 2013, the Company operated under a shared services arrangement with MMC where by the Company was charged for actual costs specifically incurred on behalf of the Company or allocated to the Company on a pro rata basis. These costs included reimbursement for health insurance premiums, shared services and other general and administrative costs. The Company was charged $4.3 million (including $3.2 million for reimbursement for health insurance premiums) and $4.8 million (including $3.5 million for reimbursement for health insurance premiums) in the years ended December 31, 2013 and 2012, respectively under this arrangement. These amounts are included in selling, general and administrative expense in the accompanying consolidated statements of net and comprehensive income.
Beginning in October 2013, certain services are provided to the Company under a Transition Services Agreement (“TSA”) between MMC and the Company, which replaced the pre-IPO shared services arrangement. The TSA is intended to provide certain services until the Company can acquire the services separately, and the Company expects that these charges will decrease over time. During the years ended December 31, 2014 and 2013, the Company incurred $1.3 million and $824,000 under the TSA of which $1.0 million and $687,000 was incurred for reimbursement of health insurance premiums. These amounts are included in selling, general and administrative expense in the accompanying consolidated statements of net and comprehensive income. In April 2014, the Company established its own health insurance plan significantly reducing the reliance on the TSA. As of December 31, 2014 and 2013, $97,000 and $506,000, respectively, remains unpaid and included in accounts payable and other accrued expenses – related party in the accompanying consolidated balance sheets.
Brokerage and Financing Services with the Subsidiaries of MMC
MMC has wholly or majority owned subsidiaries that buy and sell commercial real estate properties. The Company performs certain brokerage and financing services related to transactions of the subsidiaries of MMC. For the years ended December 31, 2014, 2013 and 2012, the Company recorded real estate brokerage commissions and financing fees of $1.3 million, $735,000 and $1.1 million, respectively, from subsidiaries of MMC related to these services. The Company incurred cost of services of $816,000, $441,000 and $711,000, respectively, related to these revenues.
Operating Lease with MMC
The Company has an operating lease with MMC for an office located in Palo Alto, California. The lease expires May 31, 2022. Rent expense for this lease totaled $438,000, $398,000 and $278,000 for the years ended December 31, 2014, 2013 and 2012, respectively, which is included in selling, general and administrative expense in the accompanying consolidated statements of net and comprehensive income.
The Company, from time-to-time makes advances to non-executive employees. At December 31, 2014 and 2013, the aggregate principal amount for employee loans outstanding was $378,000 and $418,000, respectively, which is included in employee notes receivable in the accompanying consolidated balance sheets.
See Note 9 – “Stockholders’ Equity” for information on pre-IPO dividends to MMC.
As of December 31, 2014, Mr. Marcus, the Company’s founder and Co-Chairman, continues to beneficially own indirectly approximately 65% of the Company’s fully diluted shares, including shares to be issued upon settlement of vested deferred stock units, or DSUs.
On February 6, 2015, the Company filed a Registration Statement on Form S-3, registering for future sale of 4,600,000 shares, principally controlled by Mr. Marcus. The Company cannot sell any shares under this Registration Statement.
Prior to its termination on June 30, 2013, the Company was subject to a cash sweep arrangement with MMC. Under the arrangement, the Company’s cash was swept daily into an MMC money market account. The Company received interest on the balances held in the sweep accounts. The Company earned interest of $0, $74,000 and $147,000 on the balances for the years ended December 31, 2014, 2013 and 2012, respectively.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/presentationRef