|
CoStar Group, Inc.
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
52-2091509
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
1331 L Street, NW, Washington, DC 20005
|
|
(Address of principal executive offices) (zip code)
|
|
|
|
(202) 346-6500
|
|
(Registrant’s telephone number, including area code)
|
|
|
|
(877) 739-0486
|
|
(Registrant’s facsimile number, including area code)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Common Stock, $.01 par value
|
NASDAQ Global Select Market
|
Large accelerated filer
x
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
PART I
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
PART III
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
PART IV
|
|
|
Item 15.
|
||
|
||
|
||
|
Item 1.
|
Business
|
•
|
Approximately
1.5 million
sale and lease listings;
|
•
|
Approximately
4.3 million
total properties;
|
•
|
Approximately
8.6 billion
square feet of sale and lease listings;
|
•
|
Approximately
5.7 million
tenants;
|
•
|
Approximately
2.1 million
sales transactions valued in the aggregate at approximately
$5.0 trillion
; and
|
•
|
Approximately
15.3 million
digital attachments, including building photographs, aerial photographs, plat maps and floor plans.
|
•
|
calling our information sources on recently updated properties to re-verify information;
|
•
|
performing periodic research audits and field checks to determine if we correctly canvassed buildings;
|
•
|
providing training and retraining to our research professionals to ensure accurate data compilation; and
|
•
|
compiling measurable performance metrics for research teams and managers for feedback on data quality.
|
Brokers
|
|
Lenders, Investment Bankers
|
|
Institutional Advisors, Asset Managers
|
Binswanger
|
|
AEGON USA Realty Advisors
|
|
Aberdeen Asset Management — U.K.
|
BNP Paribas — U.K.
|
|
Bank of America, N.A.
|
|
AEW Capital Management LP
|
Carter
|
|
Capital One Bank
|
|
BlackRock
|
Cassidy Turley
|
|
Citibank
|
|
Hartford Investment Management Company
|
CB Richard Ellis
|
|
Citigroup Global Markets — U.K.
|
|
ING Investment Management
|
CB Richard Ellis — U.K.
|
|
Deutsche Bank
|
|
M&G Real Estate — U.K.
|
Charles Dunn Company
|
|
JP Morgan Chase Bank
|
|
Manulife Financial
|
Coldwell Banker Commercial NRT
|
|
Key Bank
|
|
MetLife Real Estate Investment
|
Colliers
|
|
Q10 Capital LLC
|
|
NorthMarq Capital
|
Colliers International UK — U.K.
|
|
Suntrust
|
|
Progressive Casualty Insurance Co.
|
CRESA
|
|
TD Bank
|
|
Prudential
|
Cushman & Wakefield
|
|
Wells Fargo
|
|
Standard Life Investments — U.K.
|
Cushman & Wakefield — U.K.
|
|
Wells Fargo — U.K.
|
|
USAA Real Estate Company
|
DAUM Commercial Real Estate Services
|
|
|
|
|
Drivers Jonas Deloitte — U.K.
|
|
|
|
|
DTZ, a UGL company
|
|
|
|
|
Gerald Eve — U.K.
|
|
Owners, Developers
|
|
Appraisers, Accountants
|
GVA Grimley — U.K.
|
|
Grosvenor Estate Holdings — U.K.
|
|
Deloitte
|
HFF
|
|
Hines
|
|
Integra
|
Jones Lang LaSalle
|
|
Industrial Developments
|
|
KPMG
|
Jones Lang LaSalle — U.K.
|
|
LNR Property Corp
|
|
Marvin F. Poer
|
Kidder Mathews
|
|
Shorenstein Properties, LLC
|
|
Price Waterhouse Coopers
|
Knight Frank LLP — U.K.
|
|
Tishman Speyer
|
|
Ryan LLC
|
Lambert Smith Hampton — U.K.
|
|
|
|
|
Marcus & Millichap
|
|
|
|
|
Mohr Partners
|
|
|
|
|
NAI Global
|
|
Retailers
|
|
Government
Agencies
|
NB Real Estate — U.K.
|
|
Carter's
|
|
City of Chicago
|
Newmark Grubb Knight Frank
|
|
Dollar General Corporation
|
|
Cook County Assessor’s Office
|
Re/Max
|
|
Jos. A Bank
|
|
County of Los Angeles
|
Savills Commercial — U.K.
|
|
Massage Envy
|
|
Federal Deposit Insurance Corporation
|
Sperry Van Ness
|
|
Petco
|
|
Federal Reserve Bank of New York
|
Studley
|
|
Rent-A-Center
|
|
Internal Revenue Service
|
Transwestern
|
|
Sony
|
|
Transportation Security Administration
|
U.S. Equities Realty
|
|
Spencer Gifts LLC
|
|
U.S. Department of Housing and Urban Development
|
USI Real Estate Brokerage Services
|
|
Starbucks
|
|
U.S. General Services Administration
|
Weichert Commercial Brokerage
|
|
Walgreens
|
|
Valuation Office Agency — U.K.
|
|
|
|
|
|
REITs
|
|
Property Managers
|
|
Vendors
|
Boston Properties
|
|
AP Commercial
|
|
Comcast Corporation
|
Brandywine Realty Trust
|
|
Elliott Associates
|
|
Cox Communications
|
Duke Realty Corporation
|
|
Leggat McCall Properties
|
|
Kastle Systems
|
KBS Realty Advisors
|
|
Lincoln Property Company
|
|
Regus
|
Kimco Realty Corporation
|
|
Navisys Group
|
|
Time Warner Cable
|
Simon Property Group
|
|
Osprey Management Company
|
|
Turner Construction Company
|
Vornado/Charles E. Smith
|
|
PM Realty Group
|
|
Verizon Communications
|
•
|
quality and depth of the underlying databases;
|
•
|
ease of use, flexibility, and functionality of the software;
|
•
|
timeliness of the data;
|
•
|
breadth of geographic coverage and services offered;
|
•
|
client service and support;
|
•
|
perception that the service offered is the industry standard;
|
•
|
price;
|
•
|
effectiveness of marketing and sales efforts;
|
•
|
proprietary nature of methodologies, databases and technical resources;
|
•
|
vendor reputation;
|
•
|
brand loyalty among customers; and
|
•
|
capital resources.
|
•
|
online marketing services or websites targeted to commercial real estate brokers, buyers and sellers of commercial real estate properties, insurance companies, mortgage brokers and lenders, such as commercialsearch.com, PropertyLine.com, Reed Business Information Limited, officespace.com, MrOfficeSpace.com, TenantWise, www.propertyshark.com, Rofo, BuildingSearch.com, CIMLS, CompStak, Rightmove, WorkplaceIQ, RealPoint LLC and estatesgazette.com;
|
•
|
publishers and distributors of information, analytics and marketing services, including regional providers and national print publications, such as Xceligent, eProperty Data, CBRE Economic Advisors, Marshall & Swift, Yale Robbins, Reis, Real Capital Analytics and The Smith Guide;
|
•
|
locally controlled real estate boards, exchanges or associations sponsoring property listing services and the companies with whom they partner, such as Xceligent, eProperty Data, Catalyst, the National Association of Realtors, CCIM Institute, Society of Industrial and Office Realtors, the Commercial Association of Realtors Data Services and the Association of Industrial Realtors;
|
•
|
real estate portfolio management software solutions, such as Cougar Software, MRI Software, Altus and Intuit;
|
•
|
real estate lease management and administration software solutions, such as Accruent, Tririga, Manhattan Software and AMT;
|
•
|
in-house research departments operated by commercial real estate brokers; and
|
•
|
public record providers.
|
•
|
trade secret, misappropriation, copyright, trademark, computer fraud, database protection and other laws;
|
•
|
registration of copyrights and trademarks;
|
•
|
nondisclosure, noncompetition and other contractual provisions with employees and consultants;
|
•
|
license agreements with customers;
|
•
|
patent protection; and
|
•
|
technical measures.
|
Item 1A.
|
Risk Factors
|
•
|
Significant underperformance relative to historical or projected future operating results;
|
•
|
Significant changes in the manner of our use of acquired assets or the strategy for our overall business;
|
•
|
Significant negative industry or economic trends; or
|
•
|
Significant decline in our market capitalization relative to net book value for a sustained period.
|
•
|
Rates of subscriber adoption and retention;
|
•
|
Timing of our sales conference or significant marketing events;
|
•
|
A slow-down during the end-of-year holiday period;
|
•
|
Changes in our pricing strategy and timing of changes;
|
•
|
The timing and success of new service introductions and enhancements;
|
•
|
The shift of focus from, or phase out of services that overlap or are redundant with other services we offer;
|
•
|
The amount and timing of our operating expenses and capital expenditures;
|
•
|
Our ability to control expenses;
|
•
|
The amount and timing of non-cash stock-based charges;
|
•
|
Costs related to acquisitions of businesses or technologies or impairment charges associated with such investments and acquisitions;
|
•
|
Competition;
|
•
|
Changes or consolidation in the real estate industry;
|
•
|
Our investments in geographic expansion and to increase coverage in existing markets;
|
•
|
Interest rate fluctuations;
|
•
|
Successful execution of our expansion and integration plans;
|
•
|
The development of our sales force;
|
•
|
Foreign currency and exchange rate fluctuations;
|
•
|
Inflation; and
|
•
|
Changes in client budgets.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for the Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
High
|
|
Low
|
||||
Year Ended December 31, 2012
|
|
|
|
||||
First Quarter
|
$
|
69.86
|
|
|
$
|
56.67
|
|
Second Quarter
|
$
|
81.20
|
|
|
$
|
67.26
|
|
Third Quarter
|
$
|
85.40
|
|
|
$
|
77.79
|
|
Fourth Quarter
|
$
|
89.54
|
|
|
$
|
77.06
|
|
|
|
|
|
||||
Year Ended December 31, 2013
|
|
|
|
|
|
||
First Quarter
|
$
|
109.46
|
|
|
$
|
89.28
|
|
Second Quarter
|
$
|
129.51
|
|
|
$
|
105.73
|
|
Third Quarter
|
$
|
170.09
|
|
|
$
|
131.03
|
|
Fourth Quarter
|
$
|
186.62
|
|
|
$
|
161.29
|
|
Month, 2013
|
|
Total Number of
Shares
Purchased
|
|
|
Average Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Number of
Shares that May Yet
Be Purchased Under
the Plans or
Programs
|
October 1 through 31
|
|
—
|
|
|
—
|
|
—
|
|
—
|
November 1 through 30
|
|
—
|
|
|
—
|
|
—
|
|
—
|
December 1 through 31
|
|
4,948
|
|
|
$183.12
|
|
—
|
|
—
|
Total
|
|
4,948
|
(1)
|
|
$183.12
|
|
—
|
|
—
|
•
|
An equal investment in the Standards & Poor's Stock 500 (“S&P 500”) Index;
|
•
|
An equal investment in the S&P 500 Internet Software & Services Index; and
|
Company / Index
|
|
12/31/08
|
|
12/31/09
|
|
12/31/10
|
|
12/31/11
|
|
12/31/12
|
|
12/31/13
|
||||||
CoStar Group, Inc.
|
|
100
|
|
|
126.81
|
|
|
174.74
|
|
|
202.58
|
|
|
271.31
|
|
|
560.35
|
|
S&P 500 Index
|
|
100
|
|
|
126.46
|
|
|
145.51
|
|
|
148.59
|
|
|
172.37
|
|
|
228.19
|
|
S&P 500 Internet Software & Services Index
|
|
100
|
|
|
184.67
|
|
|
189.39
|
|
|
199.35
|
|
|
238.88
|
|
|
355.42
|
|
Item 6.
|
Selected Consolidated Financial and Operating Data
|
|
Year Ended December 31,
|
||||||||||||||||||
Consolidated Statement of Operations Data:
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
||||||||||
Revenues
|
$
|
209,659
|
|
|
$
|
226,260
|
|
|
$
|
251,738
|
|
|
$
|
349,936
|
|
|
$
|
440,943
|
|
Cost of revenues
|
73,714
|
|
|
83,599
|
|
|
88,167
|
|
|
114,866
|
|
|
129,185
|
|
|||||
Gross margin
|
135,945
|
|
|
142,661
|
|
|
163,571
|
|
|
235,070
|
|
|
311,758
|
|
|||||
Operating expenses
|
104,110
|
|
|
119,886
|
|
|
141,800
|
|
|
207,630
|
|
|
257,604
|
|
|||||
Income from operations
|
31,835
|
|
|
22,775
|
|
|
21,771
|
|
|
27,440
|
|
|
54,154
|
|
|||||
Interest and other income
|
1,253
|
|
|
735
|
|
|
798
|
|
|
526
|
|
|
326
|
|
|||||
Interest and other expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,832
|
)
|
|
(6,943
|
)
|
|||||
Income before income taxes
|
33,088
|
|
|
23,510
|
|
|
22,569
|
|
|
23,134
|
|
|
47,537
|
|
|||||
Income tax expense, net
|
14,395
|
|
|
10,221
|
|
|
7,913
|
|
|
13,219
|
|
|
17,803
|
|
|||||
Net income
|
$
|
18,693
|
|
|
$
|
13,289
|
|
|
$
|
14,656
|
|
|
$
|
9,915
|
|
|
$
|
29,734
|
|
Net income per share — basic
|
$
|
0.95
|
|
|
$
|
0.65
|
|
|
$
|
0.63
|
|
|
$
|
0.37
|
|
|
$
|
1.07
|
|
Net income per share — diluted
|
$
|
0.94
|
|
|
$
|
0.64
|
|
|
$
|
0.62
|
|
|
$
|
0.37
|
|
|
$
|
1.05
|
|
Weighted average shares outstanding — basic
|
19,780
|
|
|
20,330
|
|
|
23,131
|
|
|
26,533
|
|
|
27,670
|
|
|||||
Weighted average shares outstanding — diluted
|
19,925
|
|
|
20,707
|
|
|
23,527
|
|
|
26,949
|
|
|
28,212
|
|
|
As of December 31,
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
||||||||||
Cash, cash equivalents, short-term and long-term investments
|
$
|
255,698
|
|
|
$
|
239,316
|
|
|
$
|
573,379
|
|
|
$
|
177,726
|
|
|
$
|
277,943
|
|
Working capital
|
203,660
|
|
|
188,279
|
|
|
521,401
|
|
|
97,925
|
|
|
196,913
|
|
|||||
Total assets
|
404,579
|
|
|
439,648
|
|
|
771,035
|
|
|
1,165,139
|
|
|
1,256,982
|
|
|||||
Total long-term liabilities
|
1,826
|
|
|
7,252
|
|
|
50,076
|
|
|
237,158
|
|
|
217,567
|
|
|||||
Stockholders’ equity
|
359,006
|
|
|
381,502
|
|
|
659,177
|
|
|
826,343
|
|
|
927,862
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Significant underperformance relative to historical or projected future operating results;
|
•
|
Significant changes in the manner of our use of the acquired assets or the strategy for our overall business;
|
•
|
Significant negative industry or economic trends; or
|
•
|
Significant decline in our market capitalization relative to net book value for a sustained period.
|
•
|
Purchase amortization in cost of revenues may be useful for investors to consider because it represents the use of our acquired database technology, which is one of the sources of information for our database of commercial real estate information. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
|
•
|
Purchase amortization in operating expenses may be useful for investors to consider because it represents the estimated attrition of our acquired customer base and the diminishing value of any acquired trade names. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
|
•
|
Depreciation and other amortization may be useful for investors to consider because they generally represent the wear and tear on our property and equipment used in our operations. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
|
•
|
The amount of interest income we generate may be useful for investors to consider and may result in current cash inflows. However, we do not consider the amount of interest income to be a representative component of the day-to-day operating performance of our business.
|
•
|
The amount of interest expense we incur may be useful for investors to consider and may result in current cash outflows. However, we do not consider the amount of interest expense to be a representative component of the day-to-day operating performance of our business.
|
•
|
Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes during the period and may reduce the amount of funds otherwise available for use in our business. However, we do not consider the amount of income tax expense to be a representative component of the day-to-day operating performance of our business.
|
•
|
Purchase amortization in cost of revenues, purchase amortization in operating expenses, depreciation and other amortization, interest income, interest expense, and income tax expense as previously described above with respect to the calculation of EBITDA.
|
•
|
Stock-based compensation expense may be useful for investors to consider because it represents a portion of the compensation of our employees and executives. Determining the fair value of the stock-based instruments involves a high degree of judgment and estimation and the expenses recorded may bear little resemblance to the actual value realized upon the future exercise or termination of the related stock-based awards. Therefore, we believe it is useful to exclude stock-based compensation in order to better understand the long-term performance of our core business.
|
•
|
The amount of acquisition- and integration-related costs incurred may be useful for investors to consider because they generally represent professional service fees and direct expenses related to the acquisition. Because we do not acquire businesses on a predictable cycle we do not consider the amount of acquisition- and integration-related costs to be a representative component of the day-to-day operating performance of our business.
|
•
|
The amount of restructuring costs incurred may be useful for investors to consider because they generally represent costs incurred in connection with a change in the makeup of our properties or personnel. We do not consider the amount of restructuring related costs to be a representative component of the day-to-day operating performance of our business.
|
•
|
The amount of material settlement and impairment costs incurred outside of our ordinary course of business may be useful for investors to consider because they generally represent gains or losses from the settlement of litigation matters. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2012
|
|
2013
|
||||||
Net income
|
$
|
14,656
|
|
|
$
|
9,915
|
|
|
$
|
29,734
|
|
Purchase amortization in cost of revenues
|
1,353
|
|
|
8,634
|
|
|
11,883
|
|
|||
Purchase amortization in operating expenses
|
2,237
|
|
|
13,607
|
|
|
15,183
|
|
|||
Depreciation and other amortization
|
9,262
|
|
|
10,511
|
|
|
12,992
|
|
|||
Interest income
|
(798
|
)
|
|
(526
|
)
|
|
(326
|
)
|
|||
Interest expense
|
—
|
|
|
4,832
|
|
|
6,943
|
|
|||
Income tax expense, net
|
7,913
|
|
|
13,219
|
|
|
17,803
|
|
|||
EBITDA
|
$
|
34,623
|
|
|
$
|
60,192
|
|
|
$
|
94,212
|
|
|
|
|
|
|
|
||||||
Net cash flows provided by (used in)
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
$
|
27,785
|
|
|
$
|
86,126
|
|
|
$
|
108,298
|
|
Investing activities
|
$
|
58,366
|
|
|
$
|
(640,398
|
)
|
|
$
|
(18,966
|
)
|
Financing activities
|
$
|
252,680
|
|
|
$
|
164,941
|
|
|
$
|
10,405
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2011
|
|
2012
|
|
2013
|
|||||||||||||||
Revenues
|
$
|
251,738
|
|
|
100.0
|
%
|
|
$
|
349,936
|
|
|
100.0
|
%
|
|
$
|
440,943
|
|
|
100.0
|
%
|
Cost of revenues
|
88,167
|
|
|
35.0
|
|
|
114,866
|
|
|
32.8
|
|
|
129,185
|
|
|
29.3
|
|
|||
Gross margin
|
163,571
|
|
|
65.0
|
|
|
235,070
|
|
|
67.2
|
|
|
311,758
|
|
|
70.7
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Selling and marketing
|
61,164
|
|
|
24.3
|
|
|
84,113
|
|
|
24.0
|
|
|
98,708
|
|
|
22.4
|
|
|||
Software development
|
20,037
|
|
|
8.0
|
|
|
32,756
|
|
|
9.4
|
|
|
46,757
|
|
|
10.6
|
|
|||
General and administrative
|
58,362
|
|
|
23.2
|
|
|
77,154
|
|
|
22.0
|
|
|
96,956
|
|
|
22.0
|
|
|||
Purchase amortization
|
2,237
|
|
|
0.9
|
|
|
13,607
|
|
|
3.9
|
|
|
15,183
|
|
|
3.4
|
|
|||
Total operating expenses
|
141,800
|
|
|
56.4
|
|
|
207,630
|
|
|
59.3
|
|
|
257,604
|
|
|
58.4
|
|
|||
Income from operations
|
21,771
|
|
|
8.6
|
|
|
27,440
|
|
|
7.9
|
|
|
54,154
|
|
|
12.3
|
|
|||
Interest and other income
|
798
|
|
|
0.3
|
|
|
526
|
|
|
0.2
|
|
|
326
|
|
|
0.1
|
|
|||
Interest and other expense
|
—
|
|
|
—
|
|
|
(4,832
|
)
|
|
(1.4
|
)
|
|
(6,943
|
)
|
|
(1.6
|
)
|
|||
Income before income taxes
|
22,569
|
|
|
8.9
|
|
|
23,134
|
|
|
6.7
|
|
|
47,537
|
|
|
10.8
|
|
|||
Income tax expense, net
|
7,913
|
|
|
3.1
|
|
|
13,219
|
|
|
3.9
|
|
|
17,803
|
|
|
4.1
|
|
|||
Net income
|
$
|
14,656
|
|
|
5.8
|
%
|
|
$
|
9,915
|
|
|
2.8
|
%
|
|
$
|
29,734
|
|
|
6.7
|
%
|
|
2012
|
|
2013
|
||||||||||||||||||||||||||||
|
Mar. 31
|
|
Jun. 30
|
|
Sep. 30
|
|
Dec. 31
|
|
Mar. 31
|
|
Jun. 30
|
|
Sep. 30
|
|
Dec. 31
|
||||||||||||||||
Revenues
|
$
|
68,629
|
|
|
$
|
85,223
|
|
|
$
|
96,001
|
|
|
$
|
100,083
|
|
|
$
|
104,033
|
|
|
$
|
108,999
|
|
|
$
|
112,301
|
|
|
$
|
115,610
|
|
Cost of revenues
|
24,334
|
|
|
28,172
|
|
|
30,882
|
|
|
31,478
|
|
|
33,606
|
|
|
32,101
|
|
|
31,724
|
|
|
31,754
|
|
||||||||
Gross margin
|
44,295
|
|
|
57,051
|
|
|
65,119
|
|
|
68,605
|
|
|
70,427
|
|
|
76,898
|
|
|
80,577
|
|
|
83,856
|
|
||||||||
Operating expenses
|
35,693
|
|
|
57,064
|
|
|
56,173
|
|
|
58,700
|
|
|
73,025
|
|
|
61,615
|
|
|
60,807
|
|
|
62,157
|
|
||||||||
Income (loss) from operations
|
8,602
|
|
|
(13
|
)
|
|
8,946
|
|
|
9,905
|
|
|
(2,598
|
)
|
|
15,283
|
|
|
19,770
|
|
|
21,699
|
|
||||||||
Interest and other income
|
250
|
|
|
131
|
|
|
59
|
|
|
86
|
|
|
104
|
|
|
83
|
|
|
52
|
|
|
87
|
|
||||||||
Interest and other expense
|
—
|
|
|
(1,200
|
)
|
|
(1,822
|
)
|
|
(1,810
|
)
|
|
(1,755
|
)
|
|
(1,758
|
)
|
|
(1,736
|
)
|
|
(1,694
|
)
|
||||||||
Income before income taxes
|
8,852
|
|
|
(1,082
|
)
|
|
7,183
|
|
|
8,181
|
|
|
(4,249
|
)
|
|
13,608
|
|
|
18,086
|
|
|
20,092
|
|
||||||||
Income tax expense (benefit), net
|
3,720
|
|
|
5,628
|
|
|
404
|
|
|
3,467
|
|
|
(1,839
|
)
|
|
5,315
|
|
|
7,034
|
|
|
7,293
|
|
||||||||
Net income (loss)
|
$
|
5,132
|
|
|
$
|
(6,710
|
)
|
|
$
|
6,779
|
|
|
$
|
4,714
|
|
|
$
|
(2,410
|
)
|
|
$
|
8,293
|
|
|
$
|
11,052
|
|
|
$
|
12,799
|
|
Net income (loss) per share — basic
|
$
|
0.20
|
|
|
$
|
(0.25
|
)
|
|
$
|
0.25
|
|
|
$
|
0.17
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.30
|
|
|
$
|
0.40
|
|
|
$
|
0.46
|
|
Net income (loss) per share — diluted
|
$
|
0.20
|
|
|
$
|
(0.25
|
)
|
|
$
|
0.24
|
|
|
$
|
0.17
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.29
|
|
|
$
|
0.39
|
|
|
$
|
0.45
|
|
|
2012
|
|
2013
|
||||||||||||||||||||
|
Mar. 31
|
|
Jun. 30
|
|
Sep. 30
|
|
Dec. 31
|
|
Mar. 31
|
|
Jun. 30
|
|
Sep. 30
|
|
Dec. 31
|
||||||||
Revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenues
|
35.5
|
|
|
33.1
|
|
|
32.2
|
|
|
31.5
|
|
|
32.3
|
|
|
29.5
|
|
|
28.2
|
|
|
27.5
|
|
Gross margin
|
64.5
|
|
|
66.9
|
|
|
67.8
|
|
|
68.5
|
|
|
67.7
|
|
|
70.5
|
|
|
71.8
|
|
|
72.5
|
|
Operating expenses
|
52.0
|
|
|
67.0
|
|
|
58.5
|
|
|
58.7
|
|
|
70.2
|
|
|
56.5
|
|
|
54.1
|
|
|
53.7
|
|
Income (loss) from operations
|
12.5
|
|
|
(0.1
|
)
|
|
9.3
|
|
|
9.8
|
|
|
(2.5
|
)
|
|
14.0
|
|
|
17.7
|
|
|
18.8
|
|
Interest and other income
|
0.4
|
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
Interest and other expense
|
—
|
|
|
(1.4
|
)
|
|
(1.9
|
)
|
|
(1.8
|
)
|
|
(1.7
|
)
|
|
(1.6
|
)
|
|
(1.5
|
)
|
|
(1.5
|
)
|
Income before income taxes
|
12.9
|
|
|
(1.3
|
)
|
|
7.5
|
|
|
8.1
|
|
|
(4.1
|
)
|
|
12.5
|
|
|
16.2
|
|
|
17.4
|
|
Income tax expense (benefit), net
|
5.4
|
|
|
6.6
|
|
|
0.4
|
|
|
3.4
|
|
|
(1.8
|
)
|
|
4.9
|
|
|
6.4
|
|
|
6.3
|
|
Net income (loss)
|
7.5
|
%
|
|
(7.9
|
)%
|
|
7.1
|
%
|
|
4.7
|
%
|
|
(2.3
|
)%
|
|
7.6
|
%
|
|
9.8
|
%
|
|
11.1
|
%
|
|
Total
|
|
2014
|
|
2015-2016
|
|
2017-2018
|
|
2019 and thereafter
|
||||||||||
Operating leases
|
$
|
143,944
|
|
|
$
|
17,004
|
|
|
$
|
29,232
|
|
|
$
|
28,233
|
|
|
$
|
69,475
|
|
Long-term debt obligations
(1)
|
153,125
|
|
|
24,063
|
|
|
94,062
|
|
|
35,000
|
|
|
—
|
|
|||||
Purchase obligations
(2)
|
7,364
|
|
|
6,499
|
|
|
792
|
|
|
73
|
|
|
—
|
|
|||||
Total contractual principal cash obligations
|
$
|
304,433
|
|
|
$
|
47,566
|
|
|
$
|
124,086
|
|
|
$
|
63,306
|
|
|
$
|
69,475
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
Allowance for doubtful accounts and billing adjustments
(1)
|
|
Balance at
Beginning
of Year
|
|
Charged to
Expense
|
|
Charged to
Other
Accounts
(2)
|
|
Write-offs,
Net of
Recoveries
|
|
Balance at
End of Year
|
||||||||||
Year ended December 31, 2011
|
|
$
|
2,415
|
|
|
$
|
1,525
|
|
|
$
|
—
|
|
|
$
|
1,416
|
|
|
$
|
2,524
|
|
Year ended December 31, 2012
|
|
$
|
2,524
|
|
|
$
|
1,456
|
|
|
$
|
475
|
|
|
$
|
1,520
|
|
|
$
|
2,935
|
|
Year ended December 31, 2013
|
|
$
|
2,935
|
|
|
$
|
2,317
|
|
|
$
|
—
|
|
|
$
|
1,855
|
|
|
$
|
3,397
|
|
(1)
|
Additions to the allowance for doubtful accounts are charged to bad debt expense.
|
(2)
|
Amounts represent opening balances from acquired businesses.
|
|
COSTAR GROUP, INC.
|
|
|
|
|
|
By:
|
/s/ Andrew C. Florance
|
|
|
Andrew C. Florance
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ Michael R. Klein
|
|
Chairman of the Board
|
|
February 20, 2014
|
Michael R. Klein
|
|
|
|
|
|
|
|
|
|
/s/ Andrew C. Florance
|
|
Chief Executive Officer and
|
|
February 20, 2014
|
Andrew C. Florance
|
|
President and a Director
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Brian J. Radecki
|
|
Chief Financial Officer
|
|
February 20, 2014
|
Brian J. Radecki
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ David Bonderman
|
|
Director
|
|
February 20, 2014
|
David Bonderman
|
|
|
|
|
|
|
|
|
|
/s/ Michael J. Glosserman
|
|
Director
|
|
February 20, 2014
|
Michael J. Glosserman
|
|
|
|
|
|
|
|
|
|
/s/ Warren H. Haber
|
|
Director
|
|
February 18, 2014
|
Warren H. Haber
|
|
|
|
|
|
|
|
|
|
/s/ John W. Hill
|
|
Director
|
|
February 19, 2014
|
John W. Hill
|
|
|
|
|
|
|
|
|
|
/s/ Christopher J. Nassetta
|
|
Director
|
|
February 17, 2014
|
Christopher J. Nassetta
|
|
|
|
|
|
|
|
|
|
/s/ David J. Steinberg
|
|
Director
|
|
February 17, 2014
|
David J. Steinberg
|
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of April 27, 2011, by and among CoStar Group, Inc., Lonestar Acquisition Sub, Inc. and LoopNet, Inc. (Incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on April 28, 2011).
|
2.2
|
|
Amendment No. 1 to the Agreement and Plan of Merger, dated as of May 20, 2011, among LoopNet, Inc., the Registrant and Lonestar Acquisition Sub, Inc. (Incorporated by referenced to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed May 23, 2011).
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the Commission on June 6, 2013).
|
3.2
|
|
Third Amended and Restated By-Laws (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on September 24, 2013).
|
4.1
|
|
Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-4 of the Registrant (Reg. No. 333-174214) filed with the Commission on June 3, 2011).
|
*10.1
|
|
CoStar Group, Inc. 1998 Stock Incentive Plan, as amended (Incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 10-Q for the quarter ended September 30, 2005).
|
*10.2
|
|
CoStar Group, Inc. 2007 Stock Incentive Plan, as amended (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed June 8, 2012).
|
*10.3
|
|
CoStar Group, Inc. 2007 Stock Incentive Plan French Sub-Plan (Incorporated by reference to Exhibit 10.3 to the Registrant’s Report on Form 10-K for the year ended December 31, 2007).
|
*10.4
|
|
Form of Stock Option Agreement between the Registrant and certain of its officers, directors and employees (Incorporated by reference to Exhibit 10.8 to the Registrant’s Report on Form 10-K for the year ended December 31, 2004).
|
*10.5
|
|
Form of Stock Option Agreement between the Registrant and Andrew C. Florance (Incorporated by reference to Exhibit 10.8.1 to the Registrant’s Report on Form 10-K for the year ended December 31, 2004).
|
*10.6
|
|
Form of Restricted Stock Agreement between the Registrant and certain of its officers, directors and employees (Incorporated by reference to Exhibit 10.9 to the Registrant’s Report on Form 10-K for the year ended December 31, 2004).
|
*10.7
|
|
Form of 2007 Plan Restricted Stock Grant Agreement between the Registrant and certain of its officers, directors and employees (Incorporated by reference to Exhibit 99.1 to the Registrant’s Report on Form 8-K filed June 22, 2007).
|
*10.8
|
|
Form of 2007 Plan Restricted Stock Unit Agreement between the Registrant and certain of its officers and employees (filed herewith).
|
*10.9
|
|
Form of 2007 Plan Incentive Stock Option Grant Agreement between the Registrant and certain of its officers and employees (Incorporated by reference to Exhibit 10.8 to the Registrant’s Report on Form 10-K for the year ended December 31, 2008).
|
*10.10
|
|
Form of 2007 Plan Incentive Stock Option Grant Agreement between the Registrant and Andrew C. Florance (Incorporated by reference to Exhibit 10.9 to the Registrant’s Report on Form 10-K for the year ended December 31, 2008).
|
*10.11
|
|
Form of 2007 Plan Nonqualified Stock Option Grant Agreement between the Registrant and certain of its officers and employees (Incorporated by reference to Exhibit 10.10 to the Registrant’s Report on Form 10-K for the year ended December 31, 2008).
|
*10.12
|
|
Form of 2007 Plan Nonqualified Stock Option Grant Agreement between the Registrant and certain of its directors (Incorporated by reference to Exhibit 10.11 to the Registrant’s Report on Form 10-K for the year ended December 31, 2008).
|
*10.13
|
|
Form of 2007 Plan Nonqualified Stock Option Grant Agreement between the Registrant and Andrew C. Florance (Incorporated by reference to Exhibit 10.12 to the Registrant’s Report on Form 10-K for the year ended December 31, 2008).
|
*10.14
|
|
Form of 2007 Plan French Sub-Plan Restricted Stock Agreement between the Registrant and certain of its employees (Incorporated by reference to Exhibit 10.10 to the Registrant’s Report on Form 10-K for the year ended December 31, 2007).
|
*10.15
|
|
CoStar Group, Inc. 2011 Incentive Bonus Plan (Incorporated by referenced to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed June 8, 2011).
|
*10.16
|
|
CoStar Group, Inc. Employee Stock Purchase Plan, as amended (Incorporated by reference to Exhibit 10.14 to the Registrant’s Report on Form 10-K for the year ended December 31, 2010).
|
*10.17
|
|
Summary of Non-Employee Director Compensation (Incorporated by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended September 30, 2013).
|
Exhibit No.
|
|
Description
|
*10.18
|
|
Employment Agreement for Andrew C. Florance (Incorporated by reference to Exhibit 10.2 to Amendment No. 1 to the Registration Statement on Form S-1 of the Registrant (Reg. No. 333-47953) filed with the Commission on April 27, 1998).
|
*10.19
|
|
First Amendment to Andrew C. Florance Employment Agreement, effective January 1, 2009 (Incorporated by reference to Exhibit 10.16 to the Registrant’s Report on Form 10-K for the year ended December 31, 2008).
|
*10.20
|
|
Executive Service Contract dated February 16, 2007, between Property Investment Exchange Limited and Paul Marples (Incorporated by reference to Exhibit 10.14 to the Registrant’s Report on Form 10-K for the year ended December 31, 2007).
|
*10.21
|
|
Leaving Agreement dated February 27, 2013, between CoStar U.K. Limited and Paul Marples (Incorporated by reference to Exhibit 10.19 to the Registrant's Report on Form 10-K for the year ended December 31, 2012).
|
*10.22
|
|
Separation Agreement and General Release dated October 6, 2013, between CoStar Realty Information, Inc. and Jennifer Kitchen (filed herewith).
|
10.23
|
|
Form of Indemnification Agreement between the Registrant and each of its officers and directors (Incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 10-Q for the quarter ended March 31, 2004).
|
10.24
|
|
Agreement for Lease between CoStar UK Limited and Wells Fargo & Company, dated August 25, 2009 (Incorporated by reference to Exhibit 10.26 to the Registrant’s Report on Form 10-K for the year ended December 31, 2009).
|
10.25
|
|
Sub-Underlease between CoStar UK Limited and Wells Fargo & Company, dated November 18, 2009 (Incorporated by reference to Exhibit 10.28 to the Registrant’s Report on Form 10-K for the year ended December 31, 2009).
|
10.26
|
|
Deed of Office Lease by and between GLL L-Street 1331, LLC and CoStar Realty Information, Inc., dated February 18, 2011, and made effective as of June 1, 2010 (Incorporated by reference to Exhibit 10.1 to the Registrant’s Report on form 10-Q for the quarter ended March 31, 2011).
|
10.27
|
|
Credit Agreement dated February 16, 2012, by and among the Registrant, as Borrower, CoStar Realty Information, Inc., as Co-Borrower, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (Incorporated by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended March 31, 2012).
|
10.28
|
|
First Amendment dated as of April 25, 2012, to the Credit Agreement dated as of February 16, 2012, among the Registrant, CoStar Realty Information, Inc., the Lenders from time to time party thereto and JPMorgan Chase Bank N.A., as Administrative Agent (Incorporated by referenced to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed April 30, 2012).
|
21.1
|
|
Subsidiaries of the Registrant (filed herewith).
|
23.1
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (filed herewith).
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
32.1
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
32.2
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
101
|
|
The following materials from CoStar Group, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statement of Operations for the years ended December 31, 2011, 2012 and 2013, respectively; (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2011, 2012 and 2013, respectively; (iii) Consolidated Balance Sheets at December 31, 2012 and December 31, 2013, respectively; (iv) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2011, 2012 and 2013, respectively; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2012 and 2013, respectively; (vi) Notes to the Consolidated Financial Statements that have been detail tagged; and (vii) Schedule II – Valuation and Qualifying Accounts (submitted electronically with this report).
|
Reports of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Operations for the years ended December 31, 2011, 2012 and 2013
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2011, 2012 and 2013
|
|
Consolidated Balance Sheets as of December 31, 2012 and 2013
|
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2011, 2012 and 2013
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2012 and 2013
|
|
Notes to Consolidated Financial Statements
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2012
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Revenues
|
$
|
251,738
|
|
|
$
|
349,936
|
|
|
$
|
440,943
|
|
Cost of revenues
|
88,167
|
|
|
114,866
|
|
|
129,185
|
|
|||
Gross margin
|
163,571
|
|
|
235,070
|
|
|
311,758
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||
Selling and marketing
|
61,164
|
|
|
84,113
|
|
|
98,708
|
|
|||
Software development
|
20,037
|
|
|
32,756
|
|
|
46,757
|
|
|||
General and administrative
|
58,362
|
|
|
77,154
|
|
|
96,956
|
|
|||
Purchase amortization
|
2,237
|
|
|
13,607
|
|
|
15,183
|
|
|||
|
141,800
|
|
|
207,630
|
|
|
257,604
|
|
|||
Income from operations
|
21,771
|
|
|
27,440
|
|
|
54,154
|
|
|||
Interest and other income
|
798
|
|
|
526
|
|
|
326
|
|
|||
Interest and other expense
|
—
|
|
|
(4,832
|
)
|
|
(6,943
|
)
|
|||
Income before income taxes
|
22,569
|
|
|
23,134
|
|
|
47,537
|
|
|||
Income tax expense, net
|
7,913
|
|
|
13,219
|
|
|
17,803
|
|
|||
Net income
|
$
|
14,656
|
|
|
$
|
9,915
|
|
|
$
|
29,734
|
|
|
|
|
|
|
|
||||||
Net income per share — basic
|
$
|
0.63
|
|
|
$
|
0.37
|
|
|
$
|
1.07
|
|
Net income per share — diluted
|
$
|
0.62
|
|
|
$
|
0.37
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
||||||
Weighted average outstanding shares — basic
|
23,131
|
|
|
26,533
|
|
|
27,670
|
|
|||
Weighted average outstanding shares — diluted
|
23,527
|
|
|
26,949
|
|
|
28,212
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
Net income
|
|
$
|
14,656
|
|
|
$
|
9,915
|
|
|
$
|
29,734
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
|
25
|
|
|
1,277
|
|
|
610
|
|
|||
Net decrease in unrealized loss on investments
|
|
113
|
|
|
773
|
|
|
378
|
|
|||
Total other comprehensive income
|
|
138
|
|
|
2,050
|
|
|
988
|
|
|||
Total comprehensive income
|
|
$
|
14,794
|
|
|
$
|
11,965
|
|
|
$
|
30,722
|
|
|
December 31,
|
||||||
|
2012
|
|
2013
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
156,027
|
|
|
$
|
255,953
|
|
Short-term investments
|
37
|
|
|
—
|
|
||
Accounts receivable, less allowance for doubtful accounts of approximately $2,935 and $3,397 as of December 31, 2012 and 2013, respectively
|
16,392
|
|
|
20,761
|
|
||
Deferred income taxes, net
|
9,256
|
|
|
22,506
|
|
||
Income tax receivable
|
5,357
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
9,560
|
|
|
6,597
|
|
||
Debt issuance costs, net
|
2,934
|
|
|
2,649
|
|
||
Total current assets
|
199,563
|
|
|
308,466
|
|
||
|
|
|
|
||||
Long-term investments
|
21,662
|
|
|
21,990
|
|
||
Property and equipment, net
|
46,308
|
|
|
57,719
|
|
||
Goodwill
|
718,078
|
|
|
718,587
|
|
||
Intangibles and other assets, net
|
170,632
|
|
|
144,472
|
|
||
Deposits and other assets
|
2,274
|
|
|
1,855
|
|
||
Debt issuance costs, net
|
6,622
|
|
|
3,893
|
|
||
Total assets
|
$
|
1,165,139
|
|
|
$
|
1,256,982
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Current portion of long-term debt
|
$
|
17,500
|
|
|
$
|
24,063
|
|
Accounts payable
|
6,234
|
|
|
4,939
|
|
||
Accrued wages and commissions
|
23,831
|
|
|
20,104
|
|
||
Accrued expenses
|
19,002
|
|
|
23,200
|
|
||
Deferred gain on the sale of building
|
2,523
|
|
|
2,523
|
|
||
Income taxes payable
|
—
|
|
|
2,362
|
|
||
Deferred revenue
|
32,548
|
|
|
34,362
|
|
||
Total current liabilities
|
101,638
|
|
|
111,553
|
|
||
|
|
|
|
||||
Long-term debt, less current portion
|
153,125
|
|
|
129,062
|
|
||
Deferred gain on the sale of building
|
28,809
|
|
|
26,286
|
|
||
Deferred rent
|
17,305
|
|
|
22,828
|
|
||
Deferred income taxes, net
|
34,071
|
|
|
34,582
|
|
||
Income taxes payable
|
2,818
|
|
|
4,809
|
|
||
Other long-term liabilities
|
1,030
|
|
|
—
|
|
||
Total liabilities
|
338,796
|
|
|
329,120
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $0.01 par value; 2,000 shares authorized; none outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 60,000 shares authorized; 28,348 and 28,848 issued and outstanding as of December 31, 2012 and 2013, respectively
|
283
|
|
|
288
|
|
||
Additional paid-in capital
|
792,988
|
|
|
863,780
|
|
||
Accumulated other comprehensive loss
|
(6,518
|
)
|
|
(5,530
|
)
|
||
Retained earnings
|
39,590
|
|
|
69,324
|
|
||
Total stockholders’ equity
|
826,343
|
|
|
927,862
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,165,139
|
|
|
$
|
1,256,982
|
|
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Accumulated
Other
Comprehensive Income (Loss)
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2010
|
20,773
|
|
|
$
|
208
|
|
|
$
|
374,981
|
|
|
$
|
(8,706
|
)
|
|
$
|
15,019
|
|
|
$
|
381,502
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,656
|
|
|
14,656
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|||||
Net decrease in unrealized loss on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
113
|
|
|||||
Exercise of stock options
|
198
|
|
|
2
|
|
|
6,212
|
|
|
—
|
|
|
—
|
|
|
6,214
|
|
|||||
Restricted stock grants
|
197
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Restricted stock grants surrendered
|
(63
|
)
|
|
—
|
|
|
(2,307
|
)
|
|
—
|
|
|
—
|
|
|
(2,307
|
)
|
|||||
Stock compensation expense, net of forfeitures
|
—
|
|
|
—
|
|
|
8,056
|
|
|
—
|
|
|
—
|
|
|
8,056
|
|
|||||
Stock issued for equity offering
|
4,313
|
|
|
43
|
|
|
247,881
|
|
|
—
|
|
|
—
|
|
|
247,924
|
|
|||||
Employee stock purchase plan
|
8
|
|
|
—
|
|
|
452
|
|
|
—
|
|
|
—
|
|
|
452
|
|
|||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
2,541
|
|
|
—
|
|
|
—
|
|
|
2,541
|
|
|||||
Balance at December 31, 2011
|
25,426
|
|
|
254
|
|
|
637,816
|
|
|
(8,568
|
)
|
|
29,675
|
|
|
659,177
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,915
|
|
|
9,915
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
1,277
|
|
|
—
|
|
|
1,277
|
|
|||||
Net decrease in unrealized loss on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
773
|
|
|
—
|
|
|
773
|
|
|||||
Exercise of stock options
|
273
|
|
|
2
|
|
|
9,194
|
|
|
—
|
|
|
—
|
|
|
9,196
|
|
|||||
Restricted stock grants
|
855
|
|
|
8
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restricted stock grants surrendered
|
(96
|
)
|
|
—
|
|
|
(4,204
|
)
|
|
—
|
|
|
—
|
|
|
(4,204
|
)
|
|||||
Stock compensation expense, net of forfeitures
|
—
|
|
|
—
|
|
|
12,207
|
|
|
—
|
|
|
—
|
|
|
12,207
|
|
|||||
Employee stock purchase plan
|
10
|
|
|
—
|
|
|
749
|
|
|
—
|
|
|
—
|
|
|
749
|
|
|||||
Consideration for LoopNet, Inc.
|
1,880
|
|
|
19
|
|
|
137,036
|
|
|
—
|
|
|
—
|
|
|
137,055
|
|
|||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
198
|
|
|
—
|
|
|
—
|
|
|
198
|
|
|||||
Balance at December 31, 2012
|
28,348
|
|
|
283
|
|
|
792,988
|
|
|
(6,518
|
)
|
|
39,590
|
|
|
826,343
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,734
|
|
|
29,734
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
610
|
|
|
—
|
|
|
610
|
|
|||||
Net decrease in unrealized loss on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
378
|
|
|
—
|
|
|
378
|
|
|||||
Exercise of stock options
|
409
|
|
|
3
|
|
|
16,820
|
|
|
—
|
|
|
—
|
|
|
16,823
|
|
|||||
Restricted stock grants
|
238
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restricted stock grants surrendered
|
(158
|
)
|
|
—
|
|
|
(8,469
|
)
|
|
—
|
|
|
—
|
|
|
(8,469
|
)
|
|||||
Stock compensation expense, net of forfeitures
|
—
|
|
|
—
|
|
|
41,403
|
|
|
—
|
|
|
—
|
|
|
41,403
|
|
|||||
Employee stock purchase plan
|
11
|
|
|
—
|
|
|
1,455
|
|
|
—
|
|
|
—
|
|
|
1,455
|
|
|||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
19,585
|
|
|
—
|
|
|
—
|
|
|
19,585
|
|
|||||
Balance at December 31, 2013
|
28,848
|
|
|
$
|
288
|
|
|
$
|
863,780
|
|
|
$
|
(5,530
|
)
|
|
$
|
69,324
|
|
|
$
|
927,862
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2012
|
|
2013
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
14,656
|
|
|
$
|
9,915
|
|
|
$
|
29,734
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation
|
8,435
|
|
|
10,053
|
|
|
12,495
|
|
|||
Amortization
|
4,417
|
|
|
22,699
|
|
|
27,563
|
|
|||
Amortization of debt issuance costs
|
—
|
|
|
1,989
|
|
|
3,014
|
|
|||
Property and equipment write-off
|
628
|
|
|
122
|
|
|
104
|
|
|||
Excess tax benefit from stock-based compensation
|
(2,541
|
)
|
|
(198
|
)
|
|
(19,585
|
)
|
|||
Stock-based compensation expense
|
8,103
|
|
|
12,282
|
|
|
41,549
|
|
|||
Deferred consideration settlement
|
(1,207
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income tax expense (benefit), net
|
(17,104
|
)
|
|
13,643
|
|
|
(12,740
|
)
|
|||
Provision for losses on accounts receivable
|
1,525
|
|
|
1,456
|
|
|
2,317
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(4,573
|
)
|
|
1,295
|
|
|
(6,607
|
)
|
|||
Income taxes payable
|
7,992
|
|
|
7,598
|
|
|
29,295
|
|
|||
Prepaid expenses and other current assets
|
1,046
|
|
|
(3,316
|
)
|
|
2,934
|
|
|||
Deposits and other assets
|
(154
|
)
|
|
1,172
|
|
|
399
|
|
|||
Accounts payable and other liabilities
|
2,228
|
|
|
1,629
|
|
|
(3,882
|
)
|
|||
Deferred revenue
|
4,334
|
|
|
5,787
|
|
|
1,708
|
|
|||
Net cash provided by operating activities
|
27,785
|
|
|
86,126
|
|
|
108,298
|
|
|||
|
|
|
|
|
|
||||||
Investing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from sale and settlement of investments
|
4,911
|
|
|
15,365
|
|
|
76
|
|
|||
Proceeds from sale of building, net
|
83,553
|
|
|
—
|
|
|
—
|
|
|||
Purchases of property and equipment and other assets
|
(15,013
|
)
|
|
(14,834
|
)
|
|
(19,042
|
)
|
|||
Acquisitions, net of cash acquired
|
(15,085
|
)
|
|
(640,929
|
)
|
|
—
|
|
|||
Net cash provided by (used in) investing activities
|
58,366
|
|
|
(640,398
|
)
|
|
(18,966
|
)
|
|||
|
|
|
|
|
|
||||||
Financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from long-term debt
|
—
|
|
|
175,000
|
|
|
—
|
|
|||
Payments of long-term debt
|
—
|
|
|
(4,375
|
)
|
|
(17,500
|
)
|
|||
Payments of debt issuance costs
|
—
|
|
|
(11,546
|
)
|
|
—
|
|
|||
Payments of deferred consideration
|
(2,100
|
)
|
|
—
|
|
|
(1,344
|
)
|
|||
Excess tax benefit from stock-based compensation
|
2,541
|
|
|
198
|
|
|
19,585
|
|
|||
Repurchase of restricted stock to satisfy tax withholding obligations
|
(2,307
|
)
|
|
(4,204
|
)
|
|
(8,469
|
)
|
|||
Proceeds from equity offering, net of transaction costs
|
247,924
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of stock options and employee stock purchase plan
|
6,622
|
|
|
9,868
|
|
|
18,133
|
|
|||
Net cash provided by financing activities
|
252,680
|
|
|
164,941
|
|
|
10,405
|
|
|||
|
|
|
|
|
|
||||||
Effect of foreign currency exchange rates on cash and cash equivalents
|
44
|
|
|
78
|
|
|
189
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
338,875
|
|
|
(389,253
|
)
|
|
99,926
|
|
|||
Cash and cash equivalents at beginning of year
|
206,405
|
|
|
545,280
|
|
|
156,027
|
|
|||
Cash and cash equivalents at end of year
|
$
|
545,280
|
|
|
$
|
156,027
|
|
|
$
|
255,953
|
|
1.
|
ORGANIZATION
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
—
(CONTINUED)
|
|
Year Ended December 31,
|
||||||
|
2012
|
|
2013
|
||||
Foreign currency translation adjustment
|
$
|
(4,613
|
)
|
|
$
|
(4,003
|
)
|
Accumulated net unrealized loss on investments, net of tax
|
(1,905
|
)
|
|
(1,527
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(6,518
|
)
|
|
$
|
(5,530
|
)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
—
(CONTINUED)
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2012
|
|
2013
|
||||||
Cost of revenues
|
$
|
1,635
|
|
|
$
|
2,556
|
|
|
$
|
4,553
|
|
Selling and marketing
|
1,339
|
|
|
1,966
|
|
|
4,954
|
|
|||
Software development
|
1,130
|
|
|
2,241
|
|
|
7,244
|
|
|||
General and administrative
|
3,999
|
|
|
5,519
|
|
|
24,798
|
|
|||
Total stock-based compensation
|
$
|
8,103
|
|
|
$
|
12,282
|
|
|
$
|
41,549
|
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
—
(CONTINUED)
|
Leasehold improvements
|
|
Shorter of lease term or useful life
|
Furniture and office equipment
|
|
Five to ten years
|
Research vehicles
|
|
Five years
|
Computer hardware and software
|
|
Two to five years
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
—
(CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
—
(CONTINUED)
|
3.
|
ACQUISITION
|
Cash
|
$
|
746,393
|
|
Equity interest (1,880,300 shares at $72.89)
|
137,055
|
|
|
Fair value of total consideration transferred
|
$
|
883,448
|
|
Cash and cash equivalents
|
$
|
105,464
|
|
Accounts receivable
|
3,021
|
|
|
Goodwill
|
625,174
|
|
|
Acquired trade names and other
|
48,700
|
|
|
Acquired customer base
|
71,500
|
|
|
Acquired database technology
|
52,100
|
|
|
Deferred income taxes, net
|
(32,623
|
)
|
|
Other assets and liabilities
|
10,112
|
|
|
Fair value of identifiable net assets acquired
|
$
|
883,448
|
|
3.
|
ACQUISITION
—
(CONTINUED)
|
4.
|
INVESTMENTS
|
Maturity
|
|
Fair Value
|
||
Due in:
|
|
|
||
2014
|
|
$
|
—
|
|
2015 — 2018
|
|
853
|
|
|
2019 — 2023
|
|
—
|
|
|
2024 and thereafter
|
|
21,137
|
|
|
Available-for-sale investments
|
|
$
|
21,990
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Auction rate securities
|
$
|
23,517
|
|
|
$
|
411
|
|
|
$
|
(1,938
|
)
|
|
$
|
21,990
|
|
Available-for-sale investments
|
$
|
23,517
|
|
|
$
|
411
|
|
|
$
|
(1,938
|
)
|
|
$
|
21,990
|
|
4.
|
INVESTMENTS
—
(CONTINUED)
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Government-sponsored enterprise obligations
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37
|
|
Auction rate securities
|
23,567
|
|
|
101
|
|
|
(2,006
|
)
|
|
21,662
|
|
||||
Available-for-sale investments
|
$
|
23,604
|
|
|
$
|
101
|
|
|
$
|
(2,006
|
)
|
|
$
|
21,699
|
|
|
December 31,
|
||||||||||||||
|
2012
|
|
2013
|
||||||||||||
|
Aggregate
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Aggregate
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||
Government-sponsored enterprise obligations
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Auction rate securities
|
21,119
|
|
|
(2,006
|
)
|
|
21,137
|
|
|
(1,938
|
)
|
||||
Investments in an unrealized loss position
|
$
|
21,156
|
|
|
$
|
(2,006
|
)
|
|
$
|
21,137
|
|
|
$
|
(1,938
|
)
|
5.
|
FAIR VALUE
|
5.
|
FAIR VALUE
—
(CONTINUED)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
134,989
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
134,989
|
|
Money market funds
|
50,593
|
|
|
—
|
|
|
—
|
|
|
50,593
|
|
||||
Commercial paper
|
70,371
|
|
|
—
|
|
|
—
|
|
|
70,371
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
21,990
|
|
|
21,990
|
|
||||
Total assets measured at fair value
|
$
|
255,953
|
|
|
$
|
—
|
|
|
$
|
21,990
|
|
|
$
|
277,943
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,344
|
|
|
$
|
1,344
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,344
|
|
|
$
|
1,344
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
135,232
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
135,232
|
|
Money market funds
|
20,775
|
|
|
—
|
|
|
—
|
|
|
20,775
|
|
||||
Commercial paper
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Government-sponsored enterprise obligations
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
21,662
|
|
|
21,662
|
|
||||
Total assets measured at fair value
|
$
|
156,027
|
|
|
$
|
37
|
|
|
$
|
21,662
|
|
|
$
|
177,726
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,304
|
|
|
$
|
2,304
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,304
|
|
|
$
|
2,304
|
|
5.
|
FAIR VALUE
—
(CONTINUED)
|
|
Auction
Rate
Securities
|
||
Balance at December 31, 2007
|
$
|
53,975
|
|
Increase in unrealized loss included in accumulated other comprehensive loss
|
(3,710
|
)
|
|
Settlements
|
(20,925
|
)
|
|
Balance at December 31, 2008
|
29,340
|
|
|
Decrease in unrealized loss included in accumulated other comprehensive loss
|
684
|
|
|
Settlements
|
(300
|
)
|
|
Balance at December 31, 2009
|
29,724
|
|
|
Decrease in unrealized loss included in accumulated other comprehensive loss
|
40
|
|
|
Settlements
|
(575
|
)
|
|
Balance at December 31, 2010
|
29,189
|
|
|
Decrease in unrealized loss included in accumulated other comprehensive loss
|
245
|
|
|
Settlements
|
(4,850
|
)
|
|
Balance at December 31, 2011
|
24,584
|
|
|
Auction rate securities upon acquisition
|
442
|
|
|
Decrease in unrealized loss included in accumulated other comprehensive loss
|
836
|
|
|
Settlements
|
(4,200
|
)
|
|
Balance at December 31, 2012
|
21,662
|
|
|
Decrease in unrealized loss included in accumulated other comprehensive loss
|
378
|
|
|
Settlements
|
(50
|
)
|
|
Balance at December 31, 2013
|
$
|
21,990
|
|
5.
|
FAIR VALUE
—
(CONTINUED)
|
|
Deferred
Consideration
|
||
Balance at December 31, 2011
|
$
|
—
|
|
Deferred consideration upon acquisition
|
2,011
|
|
|
Accretion for 2012
|
293
|
|
|
Balance at December 31, 2012
|
2,304
|
|
|
Accretion for 2013
|
384
|
|
|
Payments made in 2013
|
(1,344
|
)
|
|
Balance at December 31, 2013
|
$
|
1,344
|
|
6.
|
PROPERTY AND EQUIPMENT
|
|
December 31,
|
||||||
|
2012
|
|
2013
|
||||
Leasehold improvements
|
$
|
28,527
|
|
|
$
|
36,933
|
|
Furniture, office equipment and research vehicles
|
25,837
|
|
|
27,395
|
|
||
Computer hardware and software
|
36,688
|
|
|
36,391
|
|
||
|
91,052
|
|
|
100,719
|
|
||
Accumulated depreciation and amortization
|
(44,744
|
)
|
|
(43,000
|
)
|
||
Property and equipment, net
|
$
|
46,308
|
|
|
$
|
57,719
|
|
7.
|
GOODWILL
|
|
United States
|
|
International
|
|
Total
|
||||||
Goodwill, December 31, 2011
|
$
|
67,465
|
|
|
$
|
24,319
|
|
|
$
|
91,784
|
|
Acquisitions
|
625,174
|
|
|
—
|
|
|
625,174
|
|
|||
Effect of foreign currency translation
|
—
|
|
|
1,120
|
|
|
1,120
|
|
|||
Goodwill, December 31, 2012
|
692,639
|
|
|
25,439
|
|
|
718,078
|
|
|||
Effect of foreign currency translation
|
—
|
|
|
509
|
|
|
509
|
|
|||
Goodwill, December 31, 2013
|
$
|
692,639
|
|
|
$
|
25,948
|
|
|
$
|
718,587
|
|
8.
|
INTANGIBLES AND OTHER ASSETS
|
|
December 31,
|
|
Weighted- Average
Amortization Period
(in years)
|
||||||
|
2012
|
|
2013
|
|
|||||
Capitalized product development cost
|
$
|
2,140
|
|
|
$
|
2,140
|
|
|
4
|
Accumulated amortization
|
(1,838
|
)
|
|
(2,029
|
)
|
|
|
||
Capitalized product development cost, net
|
302
|
|
|
111
|
|
|
|
||
|
|
|
|
|
|
||||
Building photography
|
12,474
|
|
|
13,743
|
|
|
5
|
||
Accumulated amortization
|
(11,639
|
)
|
|
(12,005
|
)
|
|
|
||
Building photography, net
|
835
|
|
|
1,738
|
|
|
|
||
|
|
|
|
|
|
||||
Acquired database technology
|
77,328
|
|
|
77,368
|
|
|
5
|
||
Accumulated amortization
|
(29,673
|
)
|
|
(41,073
|
)
|
|
|
||
Acquired database technology, net
|
47,655
|
|
|
36,295
|
|
|
|
||
|
|
|
|
|
|
||||
Acquired customer base
|
130,683
|
|
|
130,960
|
|
|
10
|
||
Accumulated amortization
|
(59,218
|
)
|
|
(74,734
|
)
|
|
|
||
Acquired customer base, net
|
71,465
|
|
|
56,226
|
|
|
|
||
|
|
|
|
|
|
||||
Acquired trade names and other
(1)
|
59,255
|
|
|
59,336
|
|
|
7
|
||
Accumulated amortization
|
(8,880
|
)
|
|
(9,234
|
)
|
|
|
||
Acquired trade names and other, net
|
50,375
|
|
|
50,102
|
|
|
|
||
|
|
|
|
|
|
||||
Intangibles and other assets, net
|
$
|
170,632
|
|
|
$
|
144,472
|
|
|
|
9.
|
LONG-TERM DEBT
|
9.
|
LONG-TERM DEBT — (CONTINUED)
|
Year ending December 31,
|
Maturities
|
||
Due in:
|
|
||
2014
|
$
|
24,063
|
|
2015
|
32,812
|
|
|
2016
|
61,250
|
|
|
2017
|
35,000
|
|
|
Long-term debt, including current maturities
|
$
|
153,125
|
|
10.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2012
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
22,779
|
|
|
$
|
(2,260
|
)
|
|
$
|
26,516
|
|
State
|
2,226
|
|
|
1,974
|
|
|
3,996
|
|
|||
Foreign
|
12
|
|
|
55
|
|
|
31
|
|
|||
Total current
|
25,017
|
|
|
(231
|
)
|
|
30,543
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
(14,661
|
)
|
|
15,512
|
|
|
(10,919
|
)
|
|||
State
|
(2,425
|
)
|
|
(2,067
|
)
|
|
(1,849
|
)
|
|||
Foreign
|
(18
|
)
|
|
5
|
|
|
28
|
|
|||
Total deferred
|
(17,104
|
)
|
|
13,450
|
|
|
(12,740
|
)
|
|||
Total provision for income taxes
|
$
|
7,913
|
|
|
$
|
13,219
|
|
|
$
|
17,803
|
|
10.
|
INCOME TAXES
—
(CONTINUED)
|
|
December 31,
|
||||||
|
2012
|
|
2013
|
||||
Deferred tax assets:
|
|
|
|
||||
Reserve for bad debts
|
$
|
1,106
|
|
|
$
|
1,274
|
|
Accrued compensation
|
4,830
|
|
|
6,725
|
|
||
Stock compensation
|
4,946
|
|
|
13,381
|
|
||
Net operating losses
|
20,431
|
|
|
17,457
|
|
||
Accrued reserve and other
|
6,007
|
|
|
4,284
|
|
||
Unrealized loss on securities
|
928
|
|
|
786
|
|
||
Deferred rent
|
1,845
|
|
|
4,329
|
|
||
Deferred revenue
|
1,220
|
|
|
1,538
|
|
||
Deferred gain from sale of building
|
12,386
|
|
|
11,499
|
|
||
Total deferred tax assets
|
53,699
|
|
|
61,273
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
||
Prepaids
|
(1,433
|
)
|
|
(1,096
|
)
|
||
Depreciation
|
(3,676
|
)
|
|
(6,033
|
)
|
||
Intangibles
|
(62,915
|
)
|
|
(55,284
|
)
|
||
Total deferred tax liabilities
|
(68,024
|
)
|
|
(62,413
|
)
|
||
|
|
|
|
||||
Net deferred tax liabilities, prior to valuation allowance
|
(14,325
|
)
|
|
(1,140
|
)
|
||
Valuation allowance
|
(10,490
|
)
|
|
(10,936
|
)
|
||
Net deferred tax liabilities
|
$
|
(24,815
|
)
|
|
$
|
(12,076
|
)
|
10.
|
INCOME TAXES
—
(CONTINUED)
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2012
|
|
2013
|
||||||
Expected federal income tax provision at statutory rate
|
$
|
7,899
|
|
|
$
|
8,097
|
|
|
$
|
16,638
|
|
State income taxes, net of federal benefit
|
(123
|
)
|
|
(1,360
|
)
|
|
885
|
|
|||
Foreign income taxes, net effect
|
(961
|
)
|
|
(2,971
|
)
|
|
(724
|
)
|
|||
Stock compensation
|
(143
|
)
|
|
(313
|
)
|
|
(116
|
)
|
|||
Increase in valuation allowance
|
643
|
|
|
2,978
|
|
|
588
|
|
|||
Nondeductible compensation
|
448
|
|
|
656
|
|
|
431
|
|
|||
Nondeductible transaction costs
|
—
|
|
|
5,829
|
|
|
—
|
|
|||
Other adjustments
|
150
|
|
|
303
|
|
|
101
|
|
|||
Income tax expense, net
|
$
|
7,913
|
|
|
$
|
13,219
|
|
|
$
|
17,803
|
|
Unrecognized tax benefit as of December 31, 2010
|
$
|
1,766
|
|
Increase for current year tax positions
|
1,243
|
|
|
Increase for prior year tax positions
|
445
|
|
|
Expiration of the statute of limitation for assessment of taxes
|
(107
|
)
|
|
Unrecognized tax benefit as of December 31, 2011
|
3,347
|
|
|
Increase for current year tax positions
|
792
|
|
|
Decrease for prior year tax positions
|
(161
|
)
|
|
Expiration of the statute of limitation for assessment of taxes
|
(69
|
)
|
|
Unrecognized tax benefit as of December 31, 2012
|
3,909
|
|
|
Increase for current year tax positions
|
66
|
|
|
Increase for prior year tax positions
|
2,037
|
|
|
Expiration of the statute of limitation for assessment of taxes
|
(55
|
)
|
|
Unrecognized tax benefit as of December 31, 2013
|
$
|
5,957
|
|
10.
|
INCOME TAXES
—
(CONTINUED)
|
11.
|
COMMITMENTS AND CONTINGENCIES
|
2014
|
$
|
17,004
|
|
2015
|
15,128
|
|
|
2016
|
14,104
|
|
|
2017
|
14,317
|
|
|
2018
|
13,916
|
|
|
2019 and thereafter
|
69,475
|
|
|
Total future minimum lease payments
|
$
|
143,944
|
|
11.
|
COMMITMENTS AND CONTINGENCIES
—
(CONTINUED)
|
12.
|
SEGMENT REPORTING
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2012
|
|
2013
|
||||||
Revenues
|
|
|
|
|
|
||||||
United States
|
$
|
233,381
|
|
|
$
|
330,805
|
|
|
$
|
420,817
|
|
International
|
|
|
|
|
|
|
|
||||
External customers
|
18,357
|
|
|
19,131
|
|
|
20,126
|
|
|||
Intersegment revenue
|
1,140
|
|
|
1,514
|
|
|
339
|
|
|||
Total international revenue
|
19,497
|
|
|
20,645
|
|
|
20,465
|
|
|||
Intersegment eliminations
|
(1,140
|
)
|
|
(1,514
|
)
|
|
(339
|
)
|
|||
Total revenues
|
$
|
251,738
|
|
|
$
|
349,936
|
|
|
$
|
440,943
|
|
|
|
|
|
|
|
||||||
EBITDA
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
38,099
|
|
|
$
|
70,199
|
|
|
$
|
97,348
|
|
International
|
(3,476
|
)
|
|
(10,007
|
)
|
|
(3,136
|
)
|
|||
Total EBITDA
|
$
|
34,623
|
|
|
$
|
60,192
|
|
|
$
|
94,212
|
|
|
|
|
|
|
|
Reconciliation of EBITDA to net income
|
|
|
|
|
|
|
|
|
|||
EBITDA
|
$
|
34,623
|
|
|
$
|
60,192
|
|
|
$
|
94,212
|
|
Purchase amortization in cost of revenues
|
(1,353
|
)
|
|
(8,634
|
)
|
|
(11,883
|
)
|
|||
Purchase amortization in operating expenses
|
(2,237
|
)
|
|
(13,607
|
)
|
|
(15,183
|
)
|
|||
Depreciation and other amortization
|
(9,262
|
)
|
|
(10,511
|
)
|
|
(12,992
|
)
|
|||
Interest income
|
798
|
|
|
526
|
|
|
326
|
|
|||
Interest expense
|
—
|
|
|
(4,832
|
)
|
|
(6,943
|
)
|
|||
Income tax expense, net
|
(7,913
|
)
|
|
(13,219
|
)
|
|
(17,803
|
)
|
|||
Net income
|
$
|
14,656
|
|
|
$
|
9,915
|
|
|
$
|
29,734
|
|
12.
|
SEGMENT REPORTING
—
(CONTINUED)
|
|
December 31,
|
||||||
|
2012
|
|
2013
|
||||
Property and equipment, net
|
|
|
|
||||
United States
|
$
|
42,480
|
|
|
$
|
53,733
|
|
International
|
3,828
|
|
|
3,986
|
|
||
Total property and equipment, net
|
$
|
46,308
|
|
|
$
|
57,719
|
|
|
|
|
|
||||
Goodwill
|
|
|
|
|
|
||
United States
|
$
|
692,639
|
|
|
$
|
692,639
|
|
International
|
25,439
|
|
|
25,948
|
|
||
Total goodwill
|
$
|
718,078
|
|
|
$
|
718,587
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
||
United States
|
$
|
1,215,949
|
|
|
$
|
1,311,292
|
|
International
|
40,933
|
|
|
43,464
|
|
||
Total operating segment assets
|
$
|
1,256,882
|
|
|
$
|
1,354,756
|
|
|
|
|
|
||||
Reconciliation of operating segment assets to total assets
|
|
|
|
|
|
||
Total operating segment assets
|
$
|
1,256,882
|
|
|
$
|
1,354,756
|
|
Investment in subsidiaries
|
(18,344
|
)
|
|
(18,344
|
)
|
||
Intersegment receivables
|
(73,399
|
)
|
|
(79,430
|
)
|
||
Total assets
|
$
|
1,165,139
|
|
|
$
|
1,256,982
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||
United States
|
$
|
335,855
|
|
|
$
|
324,626
|
|
International
|
70,108
|
|
|
79,266
|
|
||
Total operating segment liabilities
|
$
|
405,963
|
|
|
$
|
403,892
|
|
|
|
|
|
||||
Reconciliation of operating segment liabilities to total liabilities
|
|
|
|
|
|
||
Total operating segment liabilities
|
$
|
405,963
|
|
|
$
|
403,892
|
|
Intersegment payables
|
(67,167
|
)
|
|
(74,772
|
)
|
||
Total liabilities
|
$
|
338,796
|
|
|
$
|
329,120
|
|
13.
|
STOCKHOLDERS’ EQUITY
|
14.
|
NET INCOME PER SHARE
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2012
|
|
2013
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
14,656
|
|
|
$
|
9,915
|
|
|
$
|
29,734
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|||
Denominator for basic net income per share — weighted-average outstanding shares
|
23,131
|
|
|
26,533
|
|
|
27,670
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|||
Stock options and restricted stock
|
396
|
|
|
416
|
|
|
542
|
|
|||
Denominator for diluted net income per share — weighted-average outstanding shares
|
23,527
|
|
|
26,949
|
|
|
28,212
|
|
|||
|
|
|
|
|
|
||||||
Net income per share — basic
|
$
|
0.63
|
|
|
$
|
0.37
|
|
|
$
|
1.07
|
|
Net income per share — diluted
|
$
|
0.62
|
|
|
$
|
0.37
|
|
|
$
|
1.05
|
|
15.
|
EMPLOYEE BENEFIT PLANS
|
15.
|
EMPLOYEE BENEFIT PLANS
—
(CONTINUED)
|
|
Number of
Shares
|
|
Range of
Exercise Price
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contract
Life (in years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Outstanding at December 31, 2010
|
945,696
|
|
|
$17.34 - $55.07
|
|
$
|
36.10
|
|
|
|
|
|
||
Granted
|
111,470
|
|
|
$57.16 - $60.23
|
|
$
|
57.28
|
|
|
|
|
|
||
Exercised
|
(198,132
|
)
|
|
$17.97 - $54.51
|
|
$
|
31.37
|
|
|
|
|
|
||
Canceled or expired
|
(11,932
|
)
|
|
$36.48 - $54.51
|
|
$
|
40.65
|
|
|
|
|
|
||
Outstanding at December 31, 2011
|
847,102
|
|
|
$17.34 - $60.23
|
|
$
|
39.93
|
|
|
|
|
|
||
Granted
|
102,000
|
|
|
$58.95 - $58.95
|
|
$
|
58.95
|
|
|
|
|
|
||
Exercised
|
(274,842
|
)
|
|
$17.34 - $57.16
|
|
$
|
34.04
|
|
|
|
|
|
||
Canceled or expired
|
(541
|
)
|
|
$54.51 - $54.51
|
|
$
|
54.51
|
|
|
|
|
|
||
Outstanding at December 31, 2012
|
673,719
|
|
|
$25.00 - $60.23
|
|
$
|
45.20
|
|
|
|
|
|
||
Granted
|
126,800
|
|
|
$102.16 - $102.16
|
|
$
|
102.16
|
|
|
|
|
|
||
Exercised
|
(409,799
|
)
|
|
$25.00 - $58.95
|
|
$
|
41.05
|
|
|
|
|
|
||
Canceled or expired
|
(16,380
|
)
|
|
$36.48 - $58.95
|
|
$
|
47.54
|
|
|
|
|
|
||
Outstanding at December 31, 2013
|
374,340
|
|
|
$36.48 - $102.16
|
|
$
|
68.94
|
|
|
7.34
|
|
$
|
43,289
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at December 31, 2011
|
558,849
|
|
|
$17.34 - $55.07
|
|
$
|
37.15
|
|
|
|
|
|
||
Exercisable at December 31, 2012
|
432,196
|
|
|
$25.00 - $60.23
|
|
$
|
40.22
|
|
|
|
|
|
||
Exercisable at December 31, 2013
|
146,161
|
|
|
$36.48 - $60.23
|
|
$
|
47.72
|
|
|
5.44
|
|
$
|
20,004
|
|
15.
|
EMPLOYEE BENEFIT PLANS
—
(CONTINUED)
|
|
Year Ended December 31,
|
|||||||
|
2011
|
|
2012
|
|
2013
|
|||
Dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Expected volatility
|
40
|
%
|
|
40
|
%
|
|
37
|
%
|
Risk-free interest rate
|
2.2
|
%
|
|
0.9
|
%
|
|
0.9
|
%
|
Expected life (in years)
|
5
|
|
|
5
|
|
|
5
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of
Exercise Price
|
|
Number of
Shares
|
|
Weighted-Average Remaining Contractual Life (in years)
|
|
Weighted-
Average
Exercise Price
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
|
||||||
$36.48 - $41.21
|
|
16,991
|
|
|
4.94
|
|
$
|
37.84
|
|
|
16,991
|
|
|
$
|
37.84
|
|
$41.22 - $42.50
|
|
45,900
|
|
|
6.19
|
|
$
|
42.29
|
|
|
45,900
|
|
|
$
|
42.29
|
|
$42.51 - $53.22
|
|
38,296
|
|
|
2.33
|
|
$
|
46.14
|
|
|
36,037
|
|
|
$
|
46.35
|
|
$53.23 - $55.83
|
|
4,054
|
|
|
6.92
|
|
$
|
54.51
|
|
|
3,243
|
|
|
$
|
54.51
|
|
$55.84 - $57.61
|
|
61,198
|
|
|
7.17
|
|
$
|
57.16
|
|
|
28,930
|
|
|
$
|
57.16
|
|
$57.62 - $58.51
|
|
745
|
|
|
7.09
|
|
$
|
58.06
|
|
|
—
|
|
|
$
|
—
|
|
$58.52 - $59.59
|
|
78,036
|
|
|
8.14
|
|
$
|
58.95
|
|
|
13,900
|
|
|
$
|
58.95
|
|
$59.60 - $81.19
|
|
2,320
|
|
|
7.42
|
|
$
|
60.23
|
|
|
1,160
|
|
|
$
|
60.23
|
|
$81.20 - $102.16
|
|
126,800
|
|
|
9.19
|
|
$
|
102.16
|
|
|
—
|
|
|
$
|
—
|
|
$36.48 - $102.16
|
|
374,340
|
|
|
7.34
|
|
$
|
68.94
|
|
|
146,161
|
|
|
$
|
47.72
|
|
15.
|
EMPLOYEE BENEFIT PLANS
—
(CONTINUED)
|
|
Number of
Shares
|
|
Weighted-Average
Grant Date
Fair Value per Share
|
|||
Unvested restricted stock at December 31, 2012
|
1,020,673
|
|
|
$
|
66.17
|
|
Granted
|
238,314
|
|
|
$
|
119.84
|
|
Vested
|
(206,248
|
)
|
|
$
|
58.64
|
|
Canceled
|
(84,469
|
)
|
|
$
|
71.51
|
|
Unvested restricted stock at December 31, 2013
|
968,270
|
|
|
$
|
80.52
|
|
a.
|
The RSUs shall vest as indicated in the vest schedule above. In accordance with Section 4 below, any portion of the RSUs that have not vested at your termination of employment, consultancy, directorship or other position making you an eligible participant under the Plan will not thereafter vest, unless the Compensation Committee of the Company’s Board of Directors (or other administrator of the Plan, the “Administrator”) determines otherwise.
|
b.
|
The RSUs shall vest immediately upon the occurrence of a Change in Control.
|
i.
|
a Person (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) (other than the Company, any Company subsidiary, any Company benefit plan, or any underwriter temporarily holding securities for an offering of such securities) acquires ownership of more than 80% of the undiluted total voting power of the Company’s then outstanding securities eligible to vote to elect members of the Board (the “
Company Voting Securities
”);
|
ii.
|
consummation of a merger, consolidation or reorganization of the Company with or into any other entity, unless the holders of the Company Voting Securities outstanding immediately before such consummation, together with any trustee or other fiduciary holding securities under a Company benefit plan, hold securities that represent immediately after such merger or consolidation at least 20% of the combined voting power of the then outstanding voting securities of either the Company or the other surviving entity or its parent; or
|
iii.
|
the stockholders of the Company approve (A) a plan of complete liquidation or dissolution of the Company or (B) an agreement for the Company’s sale or disposition of all or substantially all of the Company’s assets,
and
such liquidation, dissolution, sale or disposition is consummated.
|
c.
|
The Administrator may, in its sole discretion, accelerate the time at which your RSUs shall vest; provided, that, except in the case of a Change in Control or your death or disability, the RSUs shall not vest in full (i) before the one-year anniversary of the Date of Grant if subject to achievement of performance criteria, and (ii) in all other cases, before the three-year anniversary of the Date of Grant.
|
d.
|
The vesting period of the RSUs may be adjusted by the Administrator to reflect the decreased level of employment during any period in which you are on an approved leave of absence or employed on a less than full time basis, provided, that the Administrator may take into consideration any accounting consequences to the Company.
|
e.
|
RSUs shall be settled by the delivery to you of one Share per vested RSU as soon as reasonably practicable following the vesting of such RSU pursuant to this Section 3, and in all events no later than March 15 of the year following the year of vesting (unless earlier delivery is required by Section 409A of the Internal Revenue Code or delivery is deferred pursuant to a nonqualified deferred compensation plan in accordance with the requirements of Section 409A of the Internal Revenue Code).
|
b.
|
the substitution for such RSUs, with appropriate adjustments as to the number and kind of shares of stock and prices with respect to the underlying Shares, in which event the RSUs will continue in the manner and under the terms so provided.
|
i.
|
a Person (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) (other than the Company, any Company subsidiary, any Company benefit plan, or any underwriter temporarily holding securities for an offering of such securities) acquires ownership of 100% of the combined voting power of all classes of stock of the Company;
|
ii.
|
merger, consolidation or reorganization of the Company with or into one or more entities in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly owned subsidiary, a reincorporation of the Company in a different jurisdiction or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings);
|
iii.
|
merger, consolidation or reorganization of the Company in which the Company is the surviving corporation, but after which the stockholders of the Company immediately prior to such merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company;
|
iv.
|
the liquidation or dissolution of the Company; or
|
v.
|
the sale or disposition of all or substantially all of the Company’s assets.
|
b.
|
the Company has received proof satisfactory to the Company that a person seeking to receive the Shares after your death or disability is authorized and entitled to receive the Shares; and
|
a.
|
You understand and agree that the Company has not advised you regarding your income tax liability in connection with the grant or vesting of the RSUs. You understand that you (and not the Company) shall be solely responsible for your own tax liability that may arise as a result of the transactions contemplated by this Agreement. The grant, vesting and settlement of the RSUs shall be subject to all applicable income and employment tax withholdings. The Company may refuse to issue the Shares in settlement of the RSUs to you until you satisfy all applicable tax withholding obligations. You acknowledge that the Company has the right, in its discretion, to deduct and retain without notice from shares issuable upon vesting of the RSUs (or any portion thereof) or, unless otherwise determined by the Administrator, from salary or other amounts payable to you, shares or cash having a value sufficient to satisfy the tax withholding obligations.
|
b.
|
To the extent required by applicable federal, state, local or foreign law, you shall make arrangements satisfactory to the Company in its sole discretion for the satisfaction of any withholding tax obligations that arise by reason of vesting or settlement of the RSUs or disposition of shares issued as a result of such settlement. By accepting the RSU Grant, you agree that, unless and to the extent you have otherwise satisfied your tax withholding obligations in a manner permitted or required by the Administrator pursuant to the Plan, the Company is authorized (but not required) to deduct and retain without notice from the Shares in respect of settlement of the RSUs the whole number of shares (rounding down) having a Fair Market Value on the vesting date or, if not a trading day, the first trading day before the vesting date (as determined by the Company consistent with any applicable tax requirements) sufficient to satisfy the applicable Tax Withholding Obligation. If the withheld shares are not sufficient to satisfy your Tax Withholding Obligation, you agree to pay to the Company as soon as practicable, by cash or check or, unless otherwise determined by the Administrator, deducted from salary or other amounts payable to you, any amount of the Tax Withholding Obligation that is not satisfied by the withholding of shares of Common Stock described above. Furthermore, the Company shall have the right to deduct and withhold any such applicable taxes from, or in respect of, any dividends or other distributions paid on or in respect of the Common Stock comprising the Shares following settlement of the RSUs.
|
c.
|
You are ultimately liable and responsible for all taxes owed by you in connection with the RSUs, regardless of any action the Company takes or any transaction pursuant to this Section 14 with respect to any tax withholding obligations that arise in connection with the RSUs. The Company makes no representation or undertaking regarding the treatment of any tax withholding in connection with the grant, issuance, vesting or settlement of the RSUs or the subsequent sale of any of the shares of Common Stock issued in settlement of the RSUs. The Company does not commit and is under no obligation to structure the RSUs to reduce or eliminate your tax liability.
|
a.
|
This Agreement and the Plan constitute the entire understanding between you and the Company regarding the RSUs. Any prior agreements, commitments or negotiations concerning the RSUs are superseded.
|
b.
|
The laws of the State of Delaware will govern all matters relating to this Agreement, without regard to the principles of conflict of laws.
|
c.
|
Any notice you give to the Company must be in writing and either hand-delivered or mailed to the Corporate Secretary of the Company (or to the Chief Financial Officer if either you would receive the notice or the position is vacant). If mailed, it should be sent by certified mail and be addressed to the foregoing executive at the Company’s then corporate headquarters. Any notice given to you will be addressed to you at your address as reflected on the personnel records of the Company. You may change the address for notice by like notice to the Company. Notice will be deemed to have been duly delivered when hand-delivered, or, if mailed, two business days after such notice is postmarked.
|
d.
|
In the event that any provision of this Agreement is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of the terms hereunder shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision.
|
e.
|
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted heirs, beneficiaries, successors and assigns.
|
f.
|
The headings preceding the text of the sections hereof are inserted solely for convenience of reference, and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.
|
g.
|
All questions arising under the Plan or under this Agreement shall be decided by the Administrator in its total and absolute discretion.
|
|
COSTAR GROUP, INC.
|
||
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
•
|
The National Labor Relations Act, as amended, 29 U.S.C., 151
et
seq
;
|
•
|
Title VII of the Civil Act of 1964, as amended, 42 U.S.C. Section 2000e
et
seq
;
|
•
|
The Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 621
et
seq
;
|
•
|
The Age Discrimination in Employment Act of 1967, as amended;
|
•
|
The Americans With Disabilities Act of 1990, as amended, 42 U.S.C. 12101;
|
•
|
The Older Worker Benefit Protection Act, 29 U.S.C. 621
et
seq
;
|
•
|
The Family and Medical Leave Act of 1993, 29 U.S.C. 2601
et
seq
;
|
•
|
Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
|
•
|
The Occupational Safety and Health Act of 1970, 29 U.S.C. 651 et seq;
|
•
|
The Immigration Reform Control Act, as amended;
|
•
|
The California Fair Employment and Housing Act, Cal. Gov’t Code 12900 et seq, if applicable;
|
•
|
The Massachusetts Fair Employment Practices Act, if applicable
|
•
|
The Minnesota Human Rights Act;
|
•
|
The New Jersey Law Against Discrimination;
|
•
|
The New Jersey Conscientious Employee Protection Act;
|
•
|
The West Virginia Human Rights Act
1
;
|
•
|
District of Columbia Human Rights Act - D.C. Code § 2-1401 et seq.;
|
•
|
District of Columbia Statutory Provision Regarding Retaliation/Discrimination for Filing a Workers Compensation Claim - D.C. Code § 32-1542;
|
•
|
District of Columbia Family and Medical Leave Act - D.C. Code § 32-501 et seq.;
|
•
|
District of Columbia Wage Payment and Collection Law - D.C. Code Ann. § 32-1301 et seq.;
|
•
|
District of Columbia Minimum Wage Act - D.C. Code § 32-1001 et seq.;
|
•
|
District of Columbia Smokers’ Rights Law - D.C. Code § 7-1703.03;
|
•
|
District of Columbia Parental Leave Act - D.C. Code § 32-1201 et seq.;
|
•
|
District of Columbia Rights of the Blind and Physically Disabled ("White Cane Act") - D.C. Code § 7-1001 et seq.;
|
•
|
D.C. Pregnancy Anti-Discrimination Act - D.C. Code § 2.401.05;
|
•
|
D.C. Accrued Sick and Safe Leave Act - D.C. Code § 32-131.01 et seq.; and
|
•
|
Any other federal, state or local statutory or common law.
|
Employer
|
|
|
|
|
|
|
|
/s/ Donna Tanenbaum
|
|
October 6, 2013
|
|
Name: Donna Tanenbaum
|
|
Date
|
|
Title: VP, Human Resources
|
|
|
|
|
|
|
|
Employee
|
|
|
|
|
|
|
|
/s/ Jennifer L. Kitchen
|
|
October 6, 2013
|
|
Name:
|
|
Date
|
|
|
|
|
|
|
|
Signature:
|
|
/s/ Jennifer L. Kitchen
|
|
|
|
Name:
|
|
Jennifer L. Kitchen
|
|
|
|
Date:
|
|
October 6, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acknowledged by Employer:
|
|
|
|
||
|
|
|
|
|
|
By:
|
|
/s/ Donna Tanenbaum
|
|
|
|
Name:
|
|
Donna Tanenbaum
|
|
|
|
Title:
|
|
VP, Human Resources
|
|
|
|
Date:
|
|
October 6, 2013
|
|
|
|
Employee Name (Print):
|
|
Jennifer Kitchen
|
|
COSTAR REALTY INFORMATION, INC.
|
|
||
Signature:
|
|
/s/ Jennifer L. Kitchen
|
|
By:
|
|
/s/ Carla J. Garrett
|
|
Address:
|
|
|
|
Name:
|
|
Carla Garrett
|
|
Phone number:
|
|
|
|
Title:
|
|
General Counsel
|
|
Date:
|
|
March 6, 2001
|
|
Date:
|
|
March 6, 2001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
Registration Statement Number 333-82599 on Form S-8 pertaining to the Realty Information Group, Inc. 1998 Stock Incentive Plan,
|
(2
|
)
|
Registration Statement Number 333-92165 on Form S-8 pertaining to the CoStar Group, Inc. 1998 Stock Incentive Plan, as amended,
|
(3
|
)
|
Registration Statement Number 333-45770 on Form S-8 pertaining to the CoStar Group, Inc. 1998 Stock Incentive Plan, as amended,
|
(4
|
)
|
Registration Statement Number 333-69548 on Form S-8 pertaining to the CoStar Group, Inc. 1998 Stock Incentive Plan, as amended,
|
(5
|
)
|
Registration Statement Number 333-135709 on Form S-8 pertaining to the CoStar Group, Inc. Employee Stock Purchase Plan,
|
(6
|
)
|
Registration Statement Number 333-143968 on Form S-8 pertaining to the CoStar Group, Inc. 2007 Stock Incentive Plan, as amended,
|
(7
|
)
|
Registration Statement Number 333-167424 on Form S-8 pertaining to the CoStar Group, Inc. 2007 Stock Incentive Plan, as amended,
|
(8
|
)
|
Registration Statement Number 333-174407 on Form S-3 of CoStar Group, Inc., and
|
(9
|
)
|
Registration Statement Number 333-182377 on Form S-8 pertaining to the CoStar Group, Inc. 2007 Stock Incentive Plan, as amended;
|
1.
|
I have reviewed this annual report on Form 10-K of CoStar Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 20, 2014
|
By:
|
/s/ Andrew C. Florance
|
|
|
|
Andrew C. Florance
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer and Duly Authorized Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of CoStar Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 20, 2014
|
By:
|
/s/ Brian J. Radecki
|
|
|
|
Brian J. Radecki
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer and Duly Authorized Officer)
|
1)
|
such Annual Report on Form 10-K of CoStar Group, Inc., for the year ended
December 31, 2013
, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m or 78o (d)); and
|
2)
|
the information contained in such Annual Report on Form 10-K of CoStar Group, Inc., for the year ended
December 31, 2013
, fairly presents, in all material respects, the financial condition and results of operations of CoStar Group, Inc.
|
|
By:
|
/s/ Andrew C. Florance
|
|
|
Andrew C. Florance
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer and Duly Authorized Officer)
|
1)
|
such Annual Report on Form 10-K of CoStar Group, Inc., for the year ended
December 31, 2013
, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o (d)); and
|
2)
|
the information contained in such Annual Report on Form 10-K of CoStar Group, Inc., for the year ended
December 31, 2013
, fairly presents, in all material respects, the financial condition and results of operations of CoStar Group, Inc.
|
|
By:
|
/s/ Brian J. Radecki
|
|
|
Brian J. Radecki
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer and Duly Authorized Officer)
|