Income Taxes (Tables)
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12 Months Ended |
Dec. 31, 2015 |
Income Tax Disclosure [Abstract] |
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Components of Current and Deferred Income Tax Expense |
The components of current and deferred income tax expense included
in the Consolidated Statement of Operations for years ended
December 31, 2015, 2014 and 2013 as determined in accordance
with ASC 740, Income Taxes (“ASC 740”), are as
follows:
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Year Ended
December 31, |
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2015 |
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2014 |
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2013 |
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Current:
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Federal
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$ |
1,598 |
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$ |
— |
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$ |
— |
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State and local
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2,431 |
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94 |
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— |
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Foreign
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210 |
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— |
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— |
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4,239 |
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94 |
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— |
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Deferred:
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Federal
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46,784 |
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10,739 |
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— |
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State and local
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6,233 |
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1,664 |
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— |
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Foreign
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(123 |
) |
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— |
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— |
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52,894 |
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12,403 |
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— |
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Income tax expense from operations
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$ |
57,133 |
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$ |
12,497 |
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$ |
— |
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Schedule of Net Operating Losses for Tax Purposes |
The Company has generated net operating losses for tax purposes
(“NOLs”) during the year ended December 31, 2013
and prior periods which may be used to minimize income taxes. The
following table provides a summary of the NOL activity for the
years indicated:
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Year Ended
December 31, |
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2015 |
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2014 |
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2013 |
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Beginning NOLs
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$ |
(109,839 |
) |
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$ |
(140,959 |
) |
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$ |
(136,515 |
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2014 return to provision adjustment
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3,906 |
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— |
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— |
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U.S. GAAP income
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143,665 |
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77,609 |
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51,537 |
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Tax differences:
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Temporary
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11,804 |
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(1,425 |
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5,580 |
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Permanent
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(73,175 |
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(45,064 |
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(61,561 |
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State taxes
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(2,431 |
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— |
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— |
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Ending NOLs
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$ |
(26,070 |
) |
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$ |
(109,839 |
) |
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$ |
(140,959 |
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Schedule of Net Operating Loss Expiration |
Prior to the consideration of any limitations imposed due to
ownership changes, the Company’s available NOLs will expire
as follows:
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Year Ending December 31:
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2019
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$ |
5,078 |
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2021
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579 |
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2023
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608 |
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2024
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1,942 |
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2032
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13,419 |
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2033
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4,444 |
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$ |
26,070 |
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Schedule of Annual Limitations for Net Operating Losses |
The amounts summarized above are subject to the following annual
limitations as indicated by the years such NOLs were incurred:
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NOLs generated between
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Total |
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Annual
Prospective
Limitation |
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Amount
Deemed
Worthless |
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1998 — 2004
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$ |
8,207 |
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$ |
524 |
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$ |
3,487 |
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2005 — 2013
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17,863 |
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— |
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— |
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NOLs
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$ |
26,070 |
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$ |
524 |
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$ |
3,487 |
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Schedule of Reconciliation of Gross Net Operating Loss |
A reconciliation of the NOLs presented above and the amount
utilized in calculating the deferred tax asset at December 31,
2015 and 2014, respectively, is as follows:
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December 31, |
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2015 |
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2014 |
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NOLs
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$ |
26,070 |
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$ |
109,839 |
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NOLs deemed worthless
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(3,487 |
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(3,487 |
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Unrecognized stock-based compensation
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(17,863 |
) |
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(101,108 |
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Gross NOLs available for deferred tax asset
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4,720 |
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5,244 |
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Tax rate
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38.74 |
% |
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38.38 |
% |
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Tax affected
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$ |
1,828 |
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$ |
2,013 |
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Deferred Tax Assets |
At December 31, 2015 and 2014, the composition of the deferred
tax asset is summarized as follows:
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December 31, |
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2015 |
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2014 |
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Deferred tax assets:
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NOLs
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$ |
1,828 |
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$ |
2,013 |
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Foreign NOLs
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2,051 |
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816 |
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Stock-based compensation
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4,868 |
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6,046 |
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Accrued expenses
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10,197 |
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5,236 |
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Deferred rent liability
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2,116 |
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2,170 |
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Other
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82 |
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82 |
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Deferred tax assets
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21,142 |
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16,363 |
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Deferred tax liabilities:
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Incentive compensation
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2,753 |
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4,092 |
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Fixed assets
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2,272 |
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1,965 |
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Unrealized gains
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(5 |
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— |
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Deferred tax liabilities
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5,020 |
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6,057 |
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Total deferred tax assets less deferred tax liabilities
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16,122 |
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10,306 |
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Less: valuation allowance
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(2,051 |
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(816 |
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Net deferred tax assets and liabilities
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$ |
14,071 |
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$ |
9,490 |
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Reconciliation of Statutory Federal Income Tax Rate and Company's Effective Rate |
A reconciliation of the statutory federal income tax rate of 35%
and the Company’s effective rate is as follows:
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December 31, |
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2015 |
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2014 |
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2013 |
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Federal statutory rate
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35.00 |
% |
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35.00 |
% |
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35.00 |
% |
Permanent differences
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0.69 |
% |
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0.69 |
% |
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0.09 |
% |
State income tax rate, net of federal benefit
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4.11 |
% |
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1.55 |
% |
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10.06 |
% |
Foreign tax differential
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0.82 |
% |
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0.82 |
% |
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— |
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Change in valuation allowance
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0.90 |
% |
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(27.74 |
%) |
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(45.13 |
%) |
Change in effective state rate
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(0.06 |
%) |
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6.86 |
% |
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— |
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Other differences, net
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0.19 |
% |
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(0.19 |
%) |
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(0.02 |
%) |
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Effective rate
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41.65 |
% |
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16.99 |
% |
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0.00 |
% |
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