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Section 1: 10-Q (HTGC-10Q-20180630)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended June 30, 2018

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 814-00702

 

HERCULES CAPITAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Maryland

 

743113410

(State or Jurisdiction of

Incorporation or Organization)

 

(IRS Employer

Identification No.)

 

400 Hamilton Ave., Suite 310

Palo Alto, California

(Address of Principal Executive Offices)

 

94301

(Zip Code)

 

(650) 289-3060

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

On July 30, 2018, there were 95,831,773 shares outstanding of the Registrant’s common stock, $0.001 par value.

 

 


 

 

 

 


 

HERCULES CAPITAL, INC.

FORM 10-Q TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

  

3

 

Item 1.

 

 

Consolidated Financial Statements

  

3

 

 

 

Consolidated Statement of Assets and Liabilities as of June 30, 2018 and December 31, 2017 (unaudited)

  

3

 

 

 

Consolidated Statement of Operations for the three and six months ended June 30, 2018 and 2017 (unaudited)

  

5

 

 

 

Consolidated Statement of Changes in Net Assets for the six months ended June 30, 2018 and 2017 (unaudited)

  

6

 

 

 

Consolidated Statement of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited)

  

7

 

 

 

Consolidated Schedule of Investments as of June 30, 2018 (unaudited)

  

9

 

 

 

Consolidated Schedule of Investments as of December 31, 2017 (unaudited)

  

24

 

 

 

Notes to Consolidated Financial Statements (unaudited)

  

39

Item 2.

 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

73

Item 3.

 

 

Quantitative and Qualitative Disclosures About Market Risk

  

92

Item 4.

 

 

Controls and Procedures

  

93

 

PART II. OTHER INFORMATION

  

94

 

Item 1.

 

Legal Proceedings

  

94

Item 1A.

 

 

Risk Factors

 

94

Item 2.

 

 

Unregistered Sales of Equity Securities and Use of Proceeds

  

95

Item 3.

 

 Defaults Upon Senior Securities

  

95

Item 4.

 

 

Mine Safety Disclosures

  

95

Item 5.

 

 

Other Information

  

95

Item 6.

 

 

Exhibits and Financial Statement Schedules

  

96

 

SIGNATURES

  

99

 

 

 

 

2


 

PART I: FINANCIAL INFORMATION

In this Quarterly Report, the “Company,” “Hercules,” “we,” “us” and “our” refer to Hercules Capital, Inc. and its wholly owned subsidiaries and its affiliated securitization trusts on or after February 25, 2016 and “Hercules Technology Growth Capital, Inc.” and its wholly owned subsidiaries and its affiliated securitization trusts prior to February 25, 2016, unless the context otherwise requires.

 

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

(unaudited)

(dollars in thousands, except per share data)

 

 

 

June 30, 2018

 

 

December 31, 2017

 

Assets

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments (cost of $1,614,160 and $1,506,454, respectively)

 

$

1,616,515

 

 

$

1,491,458

 

Control investments (cost of $59,337 and $25,419, respectively)

 

 

56,716

 

 

 

19,461

 

Affiliate investments (cost of $84,063 and $87,956, respectively)

 

 

28,705

 

 

 

31,295

 

Total investments in securities, at value (cost of $1,757,560 and $1,619,829, respectively)

 

 

1,701,936

 

 

 

1,542,214

 

Cash and cash equivalents

 

 

59,461

 

 

 

91,309

 

Restricted cash

 

 

15,886

 

 

 

3,686

 

Interest receivable

 

 

14,408

 

 

 

12,262

 

Other assets

 

 

906

 

 

 

5,244

 

Total assets

 

$

1,792,597

 

 

$

1,654,715

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

25,115

 

 

$

26,896

 

SBA Debentures, net (principal of $190,200 and $190,200, respectively) (1)

 

 

188,457

 

 

 

188,141

 

2022 Notes, net (principal of $150,000 and $150,000, respectively) (1)

 

 

147,728

 

 

 

147,572

 

2024 Notes, net (principal of $83,510 and $183,510, respectively) (1)

 

 

81,694

 

 

 

179,001

 

2025 Notes, net (principal of $75,000 and $0, respectively) (1)

 

 

72,616

 

 

 

 

2021 Asset-Backed Notes, net (principal of $31,088 and $49,153, respectively) (1)

 

 

30,698

 

 

 

48,650

 

2022 Convertible Notes, net (principal of $230,000 and $230,000, respectively) (1)

 

 

224,269

 

 

 

223,488

 

Credit Facilities

 

 

58,323

 

 

 

 

Total liabilities

 

$

828,900

 

 

$

813,748

 

 

 

 

 

 

 

 

 

 

Net assets consist of:

 

 

 

 

 

 

 

 

Common stock, par value

 

 

94

 

 

 

85

 

Capital in excess of par value

 

 

1,026,313

 

 

 

908,501

 

Unrealized appreciation (depreciation) on investments (2)

 

 

(56,760

)

 

 

(79,760

)

Accumulated undistributed realized gains (losses) on investments

 

 

(34,205

)

 

 

(20,374

)

Undistributed net investment income

 

 

28,255

 

 

 

32,515

 

Total net assets

 

$

963,697

 

 

$

840,967

 

Total liabilities and net assets

 

$

1,792,597

 

 

$

1,654,715

 

 

 

 

 

 

 

 

 

 

Shares of common stock outstanding ($0.001 par value, 200,000,000 authorized)

 

 

94,260

 

 

 

84,424

 

Net asset value per share

 

$

10.22

 

 

$

9.96

 

 

(1)

The Company’s SBA Debentures, 2022 Notes, 2024 Notes, 2025 Notes, 2021 Asset-Backed Notes and 2022 Convertible Notes, as each term is defined herein, are presented net of the associated debt issuance costs for each instrument. See “Note 4 – Borrowings”.

(2)

Amounts include $1.1 million and $2.1 million in net unrealized depreciation on other assets and accrued liabilities, including escrow receivables, and estimated taxes payable as of June 30, 2018 and December 31, 2017, respectively.

 

See notes to consolidated financial statements.

3


 

The following table presents the assets and liabilities of our consolidated securitization trust for the 2021 Asset-Backed Notes (see Note 4), which is a variable interest entity (“VIE”). The assets of our securitization VIE can only be used to settle obligations of our consolidated securitization VIE, these liabilities are only the obligations of our consolidated securitization VIE, and the creditors (or beneficial interest holders) do not have recourse to our general credit. These assets and liabilities are included in the Consolidated Statement of Assets and Liabilities above.

 

(Dollars in thousands)

 

June 30, 2018

 

 

December 31, 2017

 

Assets

 

 

 

 

 

 

 

 

Restricted Cash

 

$

15,886

 

 

$

3,686

 

Total investments in securities, at value (cost of $98,105 and $146,208, respectively)

 

 

97,924

 

 

 

144,513

 

Total assets

 

$

113,810

 

 

$

148,199

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

2021 Asset-Backed Notes, net (principal of $31,088 and $49,153, respectively) (1)

 

$

30,698

 

 

$

48,650

 

Total liabilities

 

$

30,698

 

 

$

48,650

 

 

(1)

The Company’s 2021 Asset-Backed Notes are presented net of the associated debt issuance costs. See “Note 4 – Borrowings”.

See notes to consolidated financial statements.

4


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

(in thousands, except per share data)  

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Investment income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

$

44,535

 

 

$

39,979

 

 

$

86,369

 

 

$

82,324

 

Control investments

 

841

 

 

 

527

 

 

 

1,427

 

 

 

1,041

 

Affiliate investments

 

500

 

 

 

 

 

 

1,061

 

 

 

2

 

Total interest income

 

45,876

 

 

 

40,506

 

 

 

88,857

 

 

 

83,367

 

Fee income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitment, facility and loan fee income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

1,930

 

 

 

2,440

 

 

 

4,370

 

 

 

5,374

 

Control investments

 

 

 

 

5

 

 

 

 

 

 

10

 

Affiliate investments

 

84

 

 

 

 

 

 

192

 

 

 

 

Total commitment, facility and loan fee income

 

2,014

 

 

 

2,445

 

 

 

4,562

 

 

 

5,384

 

One-time fee income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

1,672

 

 

 

5,501

 

 

 

4,843

 

 

 

6,066

 

Total one-time fee income

 

1,672

 

 

 

5,501

 

 

 

4,843

 

 

 

6,066

 

Total fee income

 

3,686

 

 

 

7,946

 

 

 

9,405

 

 

 

11,450

 

Total investment income

 

49,562

 

 

 

48,452

 

 

 

98,262

 

 

 

94,817

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

9,878

 

 

 

9,254

 

 

 

19,264

 

 

 

18,861

 

Loan fees

 

3,362

 

 

 

1,348

 

 

 

4,537

 

 

 

4,186

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal Expenses

 

637

 

 

 

2,141

 

 

 

1,212

 

 

 

2,867

 

Other Expenses

 

3,037

 

 

 

2,609

 

 

 

6,471

 

 

 

5,947

 

Total general and administrative

 

3,674

 

 

 

4,750

 

 

 

7,683

 

 

 

8,814

 

Employee compensation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

7,017

 

 

 

5,916

 

 

 

12,775

 

 

 

11,262

 

Stock-based compensation

 

2,857

 

 

 

1,909

 

 

 

5,166

 

 

 

3,742

 

Total employee compensation

 

9,874

 

 

 

7,825

 

 

 

17,941

 

 

 

15,004

 

Total operating expenses

 

26,788

 

 

 

23,177

 

 

 

49,425

 

 

 

46,865

 

Net investment income

 

22,774

 

 

 

25,275

 

 

 

48,837

 

 

 

47,952

 

Net realized gain (loss) on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

(3,953

)

 

 

(5,319

)

 

 

(7,465

)

 

 

(2,030

)

Control investments

 

(2,900

)

 

 

(394

)

 

 

(4,308

)

 

 

(445

)

Affiliate investments

 

(2,058

)

 

 

 

 

 

(2,058

)

 

 

 

Total net realized gain (loss) on investments

 

(8,911

)

 

 

(5,713

)

 

 

(13,831

)

 

 

(2,475

)

Net change in unrealized appreciation (depreciation) on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-control/Non-affiliate investments

 

32,700

 

 

 

66,255

 

 

 

18,360

 

 

 

34,100

 

Control investments

 

3,957

 

 

 

(53,349

)

 

 

3,337

 

 

 

(53,135

)

Affiliate investments

 

1,540

 

 

 

681

 

 

 

1,303

 

 

 

1,119

 

Total net unrealized appreciation (depreciation) on investments

 

38,197

 

 

 

13,587

 

 

 

23,000

 

 

 

(17,916

)

Total net realized and unrealized gain (loss)

 

29,286

 

 

 

7,874

 

 

 

9,169

 

 

 

(20,391

)

Net increase (decrease) in net assets resulting from operations

$

52,060

 

 

$

33,149

 

 

$

58,006

 

 

$

27,561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income before investment gains and losses per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.26

 

 

$

0.31

 

 

$

0.57

 

 

$

0.58

 

Change in net assets resulting from operations per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.59

 

 

$

0.40

 

 

$

0.67

 

 

$

0.33

 

Diluted

$

0.59

 

 

$

0.40

 

 

$

0.67

 

 

$

0.33

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

87,125

 

 

 

82,292

 

 

 

85,868

 

 

 

81,858

 

Diluted

 

87,199

 

 

 

82,395

 

 

 

85,939

 

 

 

81,953

 

Distributions declared per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.31

 

 

$

0.31

 

 

$

0.62

 

 

$

0.62

 

See notes to consolidated financial statements.

5


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

(unaudited)

(dollars and shares in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized

 

 

Undistributed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

Appreciation

 

 

Realized

 

 

Undistributed

 

 

 

 

 

 

Common Stock

 

 

excess

 

 

(Depreciation)

 

 

Gains (Losses)

 

 

Net Investment

 

 

Net

 

 

Shares

 

 

Par Value

 

 

of par value

 

 

on Investments

 

 

on Investments

 

 

Income

 

 

Assets

 

Balance at December 31, 2016

 

79,555

 

 

$

80

 

 

$

839,657

 

 

$

(89,025

)

 

$

14,314

 

 

$

22,918

 

 

$

787,944

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

(17,916

)

 

 

(2,475

)

 

 

47,952

 

 

 

27,561

 

Public offering, net of offering expenses

 

3,309

 

 

 

3

 

 

 

46,908

 

 

 

 

 

 

 

 

 

 

 

 

46,911

 

Issuance of common stock due to stock option exercises

 

27

 

 

 

 

 

 

211

 

 

 

 

 

 

 

 

 

 

 

 

211

 

Retired shares from net issuance

 

(18

)

 

 

 

 

 

(170

)

 

 

 

 

 

 

 

 

 

 

 

(170

)

Issuance of common stock under restricted stock plan

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

(145

)

 

 

 

 

 

(1,988

)

 

 

 

 

 

 

 

 

 

 

 

(1,988

)

Distributions reinvested in common stock

 

81

 

 

 

 

 

 

1,122

 

 

 

 

 

 

 

 

 

 

 

 

1,122

 

Issuance of Convertible Notes

 

 

 

 

 

 

 

3,413

 

 

 

 

 

 

 

 

 

 

 

 

3,413

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(51,330

)

 

 

(51,330

)

Stock-based compensation (1)

 

 

 

 

 

 

 

3,777

 

 

 

 

 

 

 

 

 

 

 

 

3,777

 

Balance at June 30, 2017

 

82,819

 

 

$

83

 

 

$

892,930

 

 

$

(106,941

)

 

$

11,839

 

 

$

19,540

 

 

$

817,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2017

 

84,424

 

 

$

85

 

 

$

908,501

 

 

$

(79,760

)

 

$

(20,374

)

 

$

32,515

 

 

$

840,967

 

Net increase (decrease) in net assets resulting from operations

 

 

 

 

 

 

 

 

 

 

23,000

 

 

 

(13,831

)

 

 

48,837

 

 

 

58,006

 

Public offering, net of offering expenses

 

9,486

 

 

 

9

 

 

 

112,617

 

 

 

 

 

 

 

 

 

 

 

 

112,626

 

Issuance of common stock due to stock option exercises

 

38

 

 

 

 

 

 

433

 

 

 

 

 

 

 

 

 

 

 

 

433

 

Retired shares from net issuance

 

(36

)

 

 

 

 

 

(447

)

 

 

 

 

 

 

 

 

 

 

 

(447

)

Issuance of common stock under restricted stock plan

 

336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retired shares for restricted stock vesting

 

(57

)

 

 

 

 

 

(688

)

 

 

 

 

 

 

 

 

 

 

 

(688

)

Distributions reinvested in common stock

 

69

 

 

 

 

 

 

854

 

 

 

 

 

 

 

 

 

 

 

 

854

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(53,097

)

 

 

(53,097

)

Stock-based compensation (1)

 

 

 

 

 

 

 

5,043

 

 

 

 

 

 

 

 

 

 

 

 

5,043

 

Balance at June 30, 2018

 

94,260

 

 

$

94

 

 

$

1,026,313

 

 

$

(56,760

)

 

$

(34,205

)

 

$

28,255

 

 

$

963,697

 

 

(1)

Stock-based compensation includes $20 and $35 of restricted stock and option expense related to director compensation for the six months ended June 30, 2018 and 2017, respectively.

 

See notes to consolidated financial statements.

6


 

HERCULES CAPITAL, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

(dollars in thousands)

 

 

For the Six Months Ended June 30,

 

 

2018

 

 

2017

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations

$

58,006

 

 

$

27,561

 

Adjustments to reconcile net increase in net assets resulting from

operations to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Purchase of investments

 

(563,744

)

 

 

(340,632

)

Principal and fee payments received on investments

 

414,347

 

 

 

349,519

 

Proceeds from the sale of investments

 

9,768

 

 

 

18,450

 

Net unrealized depreciation (appreciation) on investments

 

(23,000

)

 

 

17,916

 

Net realized loss (gain) on investments

 

13,831

 

 

 

2,475

 

Accretion of paid-in-kind principal

 

(4,696

)

 

 

(4,656

)

Accretion of loan discounts

 

(1,562

)

 

 

(3,776

)

Accretion of loan discount on Convertible Notes

 

336

 

 

 

280

 

Accretion of loan exit fees

 

(8,923

)

 

 

(10,653

)

Change in deferred loan origination revenue

 

3,415

 

 

 

19

 

Unearned fees related to unfunded commitments

 

1,616

 

 

 

769

 

Amortization of debt fees and issuance costs

 

3,999

 

 

 

3,557

 

Depreciation

 

94

 

 

 

105

 

Stock-based compensation and amortization of restricted stock grants (1)

 

5,043

 

 

 

3,777

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

Interest and fees receivable

 

(2,146

)

 

 

1,410

 

Prepaid expenses and other assets

 

518

 

 

 

589

 

Accounts payable

 

244

 

 

 

 

Accrued liabilities

 

(1,016

)

 

 

898

 

Net cash provided by (used in) operating activities

 

(93,870

)

 

 

67,608

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of capital equipment

 

(116

)

 

 

(89

)

Net cash provided by (used in) investing activities

 

(116

)

 

 

(89

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Issuance of common stock, net

 

112,626

 

 

 

46,911

 

Retirement of employee shares

 

(701

)

 

 

(1,947

)

Distributions paid

 

(52,243

)

 

 

(50,208

)

Issuance of 2022 Convertible Notes

 

 

 

 

230,000

 

Issuance of 2024 Notes

 

 

 

 

5,637

 

Issuance of 2025 Notes

 

75,000

 

 

 

 

Repayments of 2019 Notes

 

 

 

 

(110,364

)

Repayments of 2024 Notes

 

(100,000

)

 

 

 

Repayments of 2021 Asset-Backed Notes

 

(18,065

)

 

 

(21,527

)

Borrowings of credit facilities

 

150,700

 

 

 

8,497

 

Repayments of credit facilities

 

(92,377

)

 

 

(13,513

)

Cash paid for debt issuance costs

 

(519

)

 

 

(4,480

)

Fees paid for credit facilities and debentures

 

(83

)

 

 

(253

)

Net cash provided by (used in) financing activities

 

74,338

 

 

 

88,753

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(19,648

)

 

 

156,272

 

Cash, cash equivalents and restricted cash at beginning of period

 

94,995

 

 

 

21,366

 

Cash, cash equivalents and restricted cash at end of period

$

75,347

 

 

$

177,638

 

 

 

 

 

 

 

 

 

Supplemental non-cash investing and financing activities:

 

 

 

 

 

 

 

Distributions reinvested

 

854

 

 

 

1,122

 

 

(1)

Stock-based compensation includes $20 and $35 of restricted stock and option expense related to director compensation for the six months ended June 30, 2018 and 2017, respectively.


See notes to consolidated financial statements.

7