Hamilton Lane(HLNE) - 2021 Q3 - Quarterly Report

Filing Information Form 10-Q Details This Form 10-Q quarterly report for Hamilton Lane Incorporated covers the period ended December 31, 2020 - The report is a Quarterly Report on Form 10-Q for the period ended December 31, 2020[2] - Hamilton Lane Incorporated is classified as a 'Large accelerated filer'[3][4] Common Stock Outstanding as of February 1, 2021 | Class | Shares Outstanding | | :------------------ | :----------------- | | Class A Common Stock | 34,918,397 | | Class B Common Stock | 17,841,211 | Cautionary Note Regarding Forward-Looking Information The report contains forward-looking statements that are subject to significant risks and uncertainties - Forward-looking statements are identified by words such as 'will,' 'expect,' 'believe,' 'estimate,' 'continue,' 'anticipate,' 'intend,' 'plan' and similar expressions[12] - Key risks include managing growth, fund performance, changes in regulatory environment and tax status, market conditions, ability to access suitable investment opportunities, maintaining fee structure, attracting and retaining key employees, managing debt obligations, and client defaults[12] - The company undertakes no obligation to update or revise any forward-looking statement, except as required by law[13] PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements and accompanying notes Condensed Consolidated Balance Sheets Total assets and liabilities increased significantly from March to December 2020 Condensed Consolidated Balance Sheet Highlights (in thousands) | Item | Dec 31, 2020 | Mar 31, 2020 | Change (Dec 2020 vs Mar 2020) | | :--------------------------------- | :----------- | :----------- | :-------------------------------- | | Assets | | | | | Cash and cash equivalents | $92,895 | $50,124 | +$42,771 | | Investments | $264,613 | $207,747 | +$56,866 | | Deferred income taxes | $216,139 | $137,941 | +$78,198 | | Lease right-of-use assets, net | $66,170 | $9,577 | +$56,593 | | Total assets | $715,829 | $473,529 | +$242,300 | | Liabilities | | | | | Accrued compensation and benefits | $40,786 | $10,804 | +$29,982 | | Payable to related parties (TRA) | $176,046 | $98,956 | +$77,090 | | Lease liabilities | $73,967 | $10,184 | +$63,783 | | Total liabilities | $415,977 | $236,128 | +$179,849 | | Equity | | | | | Total Hamilton Lane Inc. equity | $216,320 | $154,791 | +$61,529 | | Total equity | $299,852 | $237,401 | +$62,451 | Condensed Consolidated Statements of Income The company shows strong revenue and net income growth for the three and nine months ended December 31, 2020 Condensed Consolidated Statements of Income Highlights (in thousands, except per share) | Item | 3 Months Ended Dec 31, 2020 | 3 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenues | $84,583 | $68,138 | $238,758 | $197,116 | | Total expenses | $41,864 | $39,246 | $128,892 | $114,306 | | Equity in income of investees | $11,923 | $4,454 | $8,699 | $14,331 | | Non-operating income | $6,229 | $97 | $6,830 | $4,175 | | Income before income taxes | $61,061 | $32,988 | $124,722 | $99,727 | | Net income | $54,632 | $28,437 | $104,200 | $88,163 | | Net income attributable to HLI | $33,203 | $13,497 | $58,263 | $40,177 | | Basic EPS of Class A common stock | $0.96 | $0.46 | $1.79 | $1.45 | | Diluted EPS of Class A common stock | $0.96 | $0.46 | $1.78 | $1.44 | | Dividends declared per share of Class A | $0.313 | $0.275 | $0.938 | $0.825 | Condensed Consolidated Statements of Comprehensive Income Comprehensive income attributable to the company increased substantially, mirroring strong net income growth Condensed Consolidated Statements of Comprehensive Income Highlights (in thousands) | Item | 3 Months Ended Dec 31, 2020 | 3 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :-------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income | $54,632 | $28,437 | $104,200 | $88,163 | | Total comprehensive income attributable to HLI | $33,203 | $13,506 | $58,341 | $40,172 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity increased due to net income and secondary offerings, partially offset by dividends Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Item | Dec 31, 2020 | Mar 31, 2020 | Change (Dec 2020 vs Mar 2020) | | :-------------------------- | :----------- | :----------- | :-------------------------------- | | Class A Common Stock | $35 | $30 | +$5 | | Class B Common Stock | $18 | $22 | -$4 | | Additional Paid-in Capital | $142,564 | $107,727 | +$34,837 | | Retained Earnings | $73,703 | $47,090 | +$26,613 | | Total Hamilton Lane Inc. equity | $216,320 | $154,791 | +$61,529 | | Total Equity | $299,852 | $237,401 | +$62,451 | - For the nine months ended December 31, 2020, net income contributed $58,263 thousand to retained earnings, while dividends declared reduced it by $31,650 thousand[24] - Secondary offerings resulted in a $15,933 thousand increase in additional paid-in capital and a $15,938 thousand decrease in non-controlling interests in Hamilton Lane Advisors, L.L.C. for the nine months ended December 31, 2020[24] Condensed Consolidated Statements of Cash Flows Net cash from operating activities increased substantially, while cash used in investing and financing also grew Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Item | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :-------------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $147,791 | $108,055 | | Net cash used in investing activities | $(47,413) | $(29,230) | | Net cash used in financing activities | $(57,781) | $(45,684) | | Increase in cash, cash equivalents, and restricted cash | $42,727 | $33,104 | | Cash, cash equivalents, and restricted cash at end of period | $95,937 | $84,694 | - Operating activities were primarily driven by net income ($104.2M in 2020 vs $88.2M in 2019) and changes in deferred income taxes ($13.4M in 2020 vs $7.2M in 2019)[30] - Investing activities saw increased cash usage due to higher purchases of furniture, fixtures and equipment ($8.6M in 2020 vs $1.2M in 2019) and contributions to investments ($57.1M in 2020 vs $37.2M in 2019)[30] - Financing activities included significant proceeds from offerings ($354.6M in 2020 vs $147.1M in 2019) and corresponding purchases of membership interests, along with increased dividends paid ($28.9M in 2020 vs $21.0M in 2019)[30] Notes to Condensed Consolidated Financial Statements The notes provide essential context for the financial statements, covering accounting policies, revenue, and investments 1. Organization Hamilton Lane Incorporated is a holding company controlling Hamilton Lane Advisors, L.L.C - HLI's principal asset is a controlling equity interest in Hamilton Lane Advisors, L.L.C. (HLA), through which it conducts its business[31] - As of December 31, 2020, HLI held approximately 64.6% of the economic interest in HLA, up from 55.1% as of March 31, 2020[31] - HLA is a registered investment advisor providing asset management and advisory services, sponsoring specialized funds and single client separate account entities that invest in third-party managed funds, direct co-investments, and other instruments[32] 2. Summary of Significant Accounting Policies The financial statements are prepared in accordance with U.S. GAAP for interim financial information - The financial statements are prepared in accordance with U.S. GAAP for interim financial information and include only normal recurring adjustments[33] - The company accounts for its investments in Partnerships using a three-month lag due to the timing of financial information from underlying investments[36] - The company adopted ASU 2018-13 (Fair Value Measurement) and ASU 2016-13 (Credit Losses) on April 1, 2020, with no material impact on consolidated financial statements[39][40] 3. Revenue Revenue grew significantly, driven by both management and advisory fees and incentive fees Revenue Disaggregation (in thousands) | Revenue Type | 3 Months Ended Dec 31, 2020 | 3 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Management and advisory fees | $75,279 | $59,837 | $208,913 | $179,584 | | Incentive fees | $9,304 | $8,301 | $29,845 | $17,532 | | Total revenues | $84,583 | $68,138 | $238,758 | $197,116 | - Specialized funds management and advisory fees increased by $10.4 million (37.4%) for the three months and $20.4 million (25.0%) for the nine months ended December 31, 2020, year-over-year[42] - Incentive fees from specialized funds increased significantly by $3.2 million (88.0%) for the three months and $15.5 million (137.9%) for the nine months ended December 31, 2020, year-over-year[42] 4. Investments Total investments increased significantly, driven by equity method investments in Partnerships Investment Composition (in thousands) | Investment Type | Dec 31, 2020 | Mar 31, 2020 | | :-------------------------------------- | :----------- | :----------- | | Equity method investments in Partnerships | $217,823 | $166,106 | | Other investments | $18,162 | $13,394 | | Investments valued under measurement alternative | $23,115 | $17,091 | | Total Investments | $264,613 | $207,747 | - Equity method income from investments in Partnerships and other equity method investments was $11.9 million for the three months and $8.7 million for the nine months ended December 31, 2020[45] - A direct equity co-investment held through a special purpose vehicle was transferred from Level 3 to Level 2 fair value hierarchy due to the expiration of lockup restrictions from its IPO, with a fair value of $4.3 million as of December 31, 2020[46] - The company recognized a gain on other investments of $1.3 million for the three months and $6.0 million for the nine months ended December 31, 2020[51] 5. Variable Interest Entities The company consolidates certain VIEs where it is the primary beneficiary and holds interests in unconsolidated VIEs - Consolidated VIEs had total assets of $4.3 million as of December 31, 2020, and no liabilities other than deferred incentive fee revenue of $3.7 million[53] - For unconsolidated VIEs, total commitments were $21.6 billion and remaining unfunded commitments were $8.4 billion as of December 31, 2020[54] Carrying Amount of Interests in Non-Consolidated VIEs (in thousands) | Item | Dec 31, 2020 | Mar 31, 2020 | | :---------------------- | :----------- | :----------- | | Investments | $122,651 | $118,696 | | Fees receivable | $7,305 | $8,703 | | Due from related parties | $1,028 | $1,194 | | Total VIE Assets | $130,984 | $128,593 | | Maximum exposure to loss | $132,602 | $127,444 | 6. Equity Two registered offerings in 2020 increased Class A common stock and reduced Class B common stock outstanding Common Stock Outstanding Rollforward (March 31, 2020 to December 31, 2020) | Item | Class A Common Stock | Class B Common Stock | | :------------------------------------------ | :------------------- | :------------------- | | March 31, 2020 | 29,842,784 | 22,049,727 | | Shares issued (repurchased) in offerings | 5,056,895 | (4,208,516) | | December 31, 2020 | 34,918,578 | 17,841,211 | - The June 2020 Offering generated approximately $205.0 million in net proceeds for the company, used to settle exchanges of 2,271,636 Class B units and 652,879 Class C units of HLA[59] - The September 2020 Offering generated approximately $149.7 million in net proceeds for the company, used to settle exchanges of 1,936,880 Class B units and 195,500 Class C units of HLA[60][61] 7. Equity-Based Compensation Total unrecognized compensation expense related to restricted stock was $10.9 million as of December 31, 2020 Restricted Stock Activity (Nine Months Ended Dec 31, 2020) | Item | Total Unvested | | :------------------ | :------------- | | March 31, 2020 | 441,515 | | Granted | 2,503 | | Vested | (9,630) | | Forfeited | (1,299) | | December 31, 2020 | 433,089 | - Total unrecognized compensation expense related to restricted stock was $10,888 thousand as of December 31, 2020[62] 8. Compensation and Benefits Compensation and benefits expenses increased significantly due to higher base compensation and bonus accruals Compensation and Benefits (in thousands) | Item | 3 Months Ended Dec 31, 2020 | 3 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Base compensation and benefits | $24,448 | $19,966 | $81,317 | $62,012 | | Incentive fee compensation | $2,329 | $2,046 | $7,287 | $4,314 | | Equity-based compensation | $1,759 | $1,761 | $5,310 | $5,244 | | Total compensation and benefits | $28,536 | $23,773 | $93,914 | $71,570 | - A change in estimate for certain discretionary compensation reduced compensation and benefits expense by $6.267 million for the three months ended December 31, 2020[63] 9. Income Taxes The effective tax rate varied due to income allocation and discrete tax adjustments from offerings Effective Tax Rates | Period | Effective Tax Rate | | :-------------------------- | :----------------- | | 3 Months Ended Dec 31, 2020 | 10.5% | | 3 Months Ended Dec 31, 2019 | 13.8% | | 9 Months Ended Dec 31, 2020 | 16.5% | | 9 Months Ended Dec 31, 2019 | 11.6% | - In connection with the June 2020 Offering, a deferred tax asset of $56.3 million and a tax receivable agreement payable of $44.5 million were recorded[67] - In connection with the September 2020 Offering, a deferred tax asset of $41.5 million and a tax receivable agreement payable of $32.8 million were recorded[68] 10. Earnings per Share Basic and diluted earnings per share for Class A common stock increased significantly year-over-year Earnings Per Share of Class A Common Stock | Item | 3 Months Ended Dec 31, 2020 | 3 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic earnings per share | $0.96 | $0.46 | $1.79 | $1.45 | | Diluted earnings per share | $0.96 | $0.46 | $1.78 | $1.44 | - The calculations of diluted EPS exclude 18.9 million outstanding Class B and Class C units of HLA for the three and nine months ended December 31, 2020, as their inclusion would be antidilutive[72] 11. Related-Party Transactions The company earned substantial fees from its Partnerships, which are considered related parties Related-Party Revenues (in thousands) | Revenue Type | 3 Months Ended Dec 31, 2020 | 3 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Management and advisory fees | $52,080 | $39,141 | $140,883 | $117,941 | | Incentive fees | $8,153 | $5,731 | $28,332 | $14,850 | - Expenses with a joint venture were $1.0 million for the three months and $3.0 million for the nine months ended December 31, 2020[75] - Fees receivable from Partnerships were $13.3 million as of December 31, 2020[76] 12. Supplemental Cash Flow Information This section details non-cash financing activities, including unpaid distributions and deferred tax assets from offerings Non-Cash Financing Activities (Nine Months Ended Dec 31, 2020) | Item | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Dividends declared but not paid | $10,775 | $8,026 | | Member distributions declared but not paid | $7,906 | $10,505 | | Establishment of net deferred tax assets related to offerings | $91,580 | $37,394 | 13. Commitments and Contingencies The company has commitments including potential clawbacks, unfunded investments, and operating leases - Unrecognized carried interest subject to contingencies was $497.4 million (net of non-controlling interests) as of December 31, 2020[80] - The company's aggregate unfunded commitment to Partnerships was $155.0 million as of December 31, 2020[82] - The company entered into a 17-year lease agreement for its new headquarters, with total operating lease liabilities of $74.0 million as of December 31, 2020[84][87] 14. Subsequent Events Subsequent events include a dividend declaration, a SPAC IPO, and an asset purchase agreement - On February 2, 2021, a quarterly dividend of $0.3125 per share of Class A common stock was declared[88] - Hamilton Lane Alliance Holdings I, Inc. (HLAH), a SPAC sponsored by the company, closed its IPO of 27.6 million units for $276 million on January 15, 2021[89] - The company entered into an asset purchase agreement with 361 Capital LLC for an estimated $13 million on January 28, 2021, expected to close in the fiscal fourth quarter[90] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a comprehensive analysis of the company's financial condition and results of operations Business Overview Hamilton Lane is a global private markets investment solutions provider for institutional investors - The company offers investment solutions across private equity, private credit, real estate, infrastructure, natural resources, growth equity, and venture capital[94] - Customized Separate Accounts had approximately $59 billion in AUM as of December 31, 2020, with discretionary investment authority[96] - Specialized Funds had approximately $17 billion in AUM as of December 31, 2020, investing across various private markets[96] - Advisory Services had approximately $581 billion in AUA as of December 31, 2020, assisting clients with asset allocation, strategic planning, and investment monitoring[96] Recent Transactions The company recently closed the initial public offering of its first special purpose acquisition company (SPAC) - On January 15, 2021, the company closed an IPO for its first SPAC, Hamilton Lane Alliance Holdings I, Inc. (HLAH), raising $276 million from 27.6 million units[99] - As part of the IPO, the company was issued 4.9 million shares for sponsoring HLAH and purchased 5 million warrants for $7.5 million, which vest upon a successful merger and at certain share price targets[99] Trends Affecting Our Business The COVID-19 pandemic continues to cause disruption and uncertainty in global economic markets - The COVID-19 pandemic has caused significant disruption and uncertainty in global economic markets[101] - Investment valuations may be volatile and adversely impacted, with decreases in public markets and credit indices potentially leading to negative valuation adjustments reported on a three-month lag[108] - Restrictions on travel and social distancing have challenged fundraising and new business generation, potentially leading to lower or delayed revenue growth[108] - As of December 31, 2020, the company maintained adequate liquidity with $92.9 million in cash and $125 million available under Loan Agreements[103] Operating Segments Hamilton Lane operates its business as a single segment for financial performance review and resource allocation - The company operates its business in a single segment[105] Key Financial and Operating Measures This section details key financial and operating measures, including revenue sources, expenses, and Fee-Earning AUM - Revenues are primarily generated from management and advisory fees, and to a lesser extent from incentive fees[108] - Management fees for customized separate accounts are generally based on committed or net invested capital, often decreasing over the contract life[110] - Incentive fees comprise carried interest and performance fees, recognized when a significant reversal (clawback) is not probable[114][116][118] - Compensation and benefits is the largest expense, including base compensation, equity-based compensation, and incentive fee compensation, expected to rise with headcount and business growth[119] - Fee-earning AUM is a metric for assets generating management fees, primarily based on commitments or net invested capital, and is not significantly affected by market appreciation or depreciation[127] Consolidated Results of Operations The company reported strong consolidated results with significant increases in revenues, net income, and Fee-Earning AUM Consolidated Results of Operations Summary (in thousands) | Item | 3 Months Ended Dec 31, 2020 | 3 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenues | $84,583 | $68,138 | $238,758 | $197,116 | | Total expenses | $41,864 | $39,246 | $128,892 | $114,306 | | Income before income taxes | $61,061 | $32,988 | $124,722 | $99,727 | | Net income attributable to HLI | $33,203 | $13,497 | $58,263 | $40,177 | - Total revenues increased by $16.4 million (24%) for the three months and $41.6 million (21%) for the nine months ended December 31, 2020, year-over-year[134][137] - Management and advisory fees from specialized funds increased by $10.4 million for the three months and $20.4 million for the nine months, largely due to a new secondary fund adding $1.7 billion in fee-earning AUM[135][138] - Total expenses increased by $2.6 million (7%) for the three months and $14.6 million (13%) for the nine months, driven by higher compensation and benefits[140][143] - Fee-earning AUM increased by $1.0 billion to $40.2 billion during the three months and $1.5 billion to $40.2 billion during the nine months ended December 31, 2020[160][164] Non-GAAP Financial Measures The company uses non-GAAP measures like FRE and Adjusted EBITDA to provide insight into core operating performance Non-GAAP Financial Measures (in thousands, except per share) | Item | 3 Months Ended Dec 31, 2020 | 3 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2020 | 9 Months Ended Dec 31, 2019 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Fee Related Earnings | $37,823 | $24,486 | $93,849 | $73,482 | | Adjusted EBITDA | $46,116 | $31,518 | $118,198 | $90,795 | | Non-GAAP earnings per share | $0.87 | $0.47 | $1.78 | $1.41 | - FRE increased by 54.5% for the three months and 27.7% for the nine months ended December 31, 2020, year-over-year[171] - Adjusted EBITDA increased by 46.3% for the three months and 30.2% for the nine months ended December 31, 2020, year-over-year[171] - Non-GAAP EPS increased by 85.1% for the three months and 26.2% for the nine months ended December 31, 2020, year-over-year[174] Investment Performance This section provides historical performance data for discretionary investment accounts through September 30, 2020 - Historical performance data for discretionary investment accounts is presented from inception through September 30, 2020[177] - Specialized funds are grouped by investment strategy: Primaries (Diversified), Secondaries, Co-investments, and Strategic Opportunities (Tail-end secondaries and credit)[179] - Performance is evaluated using Internal Rate of Return (IRR) and multiples, benchmarked against S&P 500 PME, MSCI World PME, CS HY II PME, and CS LL PME[184] - Gross IRR is net of underlying fund fees but excludes Hamilton Lane's fees, while Net IRR is net of all fees[185] Liquidity and Capital Resources The company manages liquidity through operating cash flows and expects to meet future needs from these sources - As of December 31, 2020, cash and cash equivalents were $92.9 million, up from $50.1 million at March 31, 2020[190] - The company has Loan Agreements, including a Term Loan and Revolving Loan, with $74.1 million in debt outstanding as of December 31, 2020[193][195] - Primary liquidity needs include funding business growth, investment commitments, operating expenses, tax receivable agreement payments, capital expenditures, debt service, income taxes, and dividend payments[199] - Net cash provided by operating activities was $147.8 million for the nine months ended December 31, 2020, an increase from $108.1 million in the prior year[201][202] - The company has a Stock Repurchase Program authorized for up to $50 million, with no repurchases made as of December 31, 2020[198] Off-Balance Sheet Arrangements There have been no material changes in the company's off-balance sheet arrangements - No material changes in off-balance sheet arrangements since the 2020 Form 10-K[204] Contractual Obligations, Commitments and Contingencies There have been no material changes in contractual obligations outside the ordinary course of business - No material changes in contractual obligations, commitments, and contingencies outside the ordinary course of business since the 2020 Form 10-K[206] Critical Accounting Policies Financial statement preparation requires management to make estimates and judgments affecting reported amounts - Financial statement preparation involves significant estimates and judgments affecting reported amounts of assets, liabilities, revenue, and expenses[208] Recent Accounting Pronouncements Information on recent accounting developments is detailed in Note 2 of the financial statements - Recent accounting developments and their impact are discussed in Note 2 of the financial statements[211] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company is exposed to market risks including price, interest rate, and foreign exchange rate risks - The company's predominant market risk exposure relates to its role as general partner or investment manager for specialized funds and customized separate accounts, affecting equity in income of investees[213] - Management fees are not significantly impacted by changes in investment values as they are generally based on committed or invested capital[213][217] - Foreign currency exchange rate risk is limited and is not expected to materially impact financial statements[214] - As of December 31, 2020, a 100 basis point increase in interest rates would result in an estimated $0.4 million increase in interest expense over the next 12 months on its $74.1 million floating-rate debt[215][216] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of December 31, 2020 - Management concluded that disclosure controls and procedures were effective as of December 31, 2020[221] - No material changes to internal control over financial reporting occurred during the quarter ended December 31, 2020[222] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company is not subject to any pending legal action that would materially affect its financial statements - The company may be subject to various legal, regulatory, and administrative proceedings in the ordinary course of business[225] - Management does not believe any pending or threatened legal proceeding would individually or in aggregate materially affect the condensed consolidated financial statements[225] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the 2020 Form 10-K - No material changes to risk factors previously disclosed in the 2020 Form 10-K[226] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company has not repurchased any shares under its Stock Repurchase Program as of December 31, 2020 Issuer Purchases of Equity Securities (Quarter Ended Dec 31, 2020) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :------------------ | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------- | | October 1-31, 2020 | — | $— | — | $50,000,000 | | November 1-30, 2020 | — | $— | — | $50,000,000 | | December 1-31, 2020 | — | $— | — | $50,000,000 | | Total | — | $— | — | $50,000,000 | - The Stock Repurchase Program, authorized in November 2018 for up to 6% of outstanding Class A common stock (not to exceed $50 million), remains fully available as no repurchases have been made[227] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL data - Exhibits include Amendment No. 1 to Tax Receivable Agreement, certifications pursuant to Sarbanes-Oxley Act (Sections 302 and 906), and financial information in Inline XBRL format[229] Signatures The report was duly signed by the company's Chief Financial Officer and Controller on February 2, 2021 - The report was signed by Atul Varma, Chief Financial Officer and Treasurer, and Michael Donohue, Managing Director and Controller, on February 2, 2021[232][233]