CIFC Corp. Announces Fourth Quarter and Full Year 2013 Results and a Quarterly Dividend
PR Newswire Association LLC |
Highlights
- Economic Net Income ("ENI", a non-GAAP measure) for the fourth quarter and full year 2013 was
$13.0 million and $41.9 million(1), respectively, compared to$12.4 million and $22.2 million(1) for the fourth quarter and full year of the prior year, respectively. - GAAP net income (loss) for the fourth quarter and full year 2013 was
$4.9 million and$23.4 million , respectively, as compared to $(2.5) million(2) and $(8.7) million(2) for the same period in the prior year, respectively. - Fee Earning Assets Under Management ("Fee Earning AUM" or "AUM") from loan-based products totaled
$12.0 billion as of December 31, 2013 as compared to$11.8 billion as of December 31, 2012 and$12.3 billion as ofSeptember 30, 2013 .- During the fourth quarter, the Company sponsored the issuance of one new CLO and increased subscriptions to other loan-based products that represented approximately
$607.6 million of new AUM. - During 2013, the Company sponsored the issuance of five new CLOs and increased subscriptions to other loan-based products that represented approximately
$3.0 billion of new AUM.
- During the fourth quarter, the Company sponsored the issuance of one new CLO and increased subscriptions to other loan-based products that represented approximately
CIFC was voted CLO Manager of the Year -Americas by Private Debt Investor in its inaugural annual awards.- Subsequent to year end, the Company sponsored the issuance of one new CLO that represents approximately
$600 million of new loan-based AUM. CIFC declares a cash dividend of$0.10 per share. The dividend will be paid onApril 25, 2014 to shareholders of record as of the close of business onApril 4, 2014 .
Explanatory Notes: |
|
(1) |
Prior year ENI has been adjusted to make it consistent with current year ENI by excluding investment advisory fees from non-core investment products (i.e. Legacy ABS and Corporate Bond collateralized debt obligations ("non-core")). |
(2) |
Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. |
Executive Overview
2013 was an important year for
Selected Financial Metrics |
||||||||||||||||
(In thousands, except per share data) (unaudited) |
||||||||||||||||
NON-GAAP FINANCIAL MEASURES (1) |
4Q'13 |
4Q'12 |
% Change vs. |
YTD '13 |
YTD '12 |
% Change vs. |
||||||||||
Management Fees - Senior |
$ |
5,810 |
$ |
4,750 |
22% |
$ |
21,817 |
$ |
16,969 |
29% |
||||||
Management Fees - Subordinated |
8,945 |
7,730 |
16% |
33,745 |
29,533 |
14% |
||||||||||
Incentive fees |
4,173 |
1,331 |
214% |
16,272 |
2,490 |
553% |
||||||||||
Total Investment Advisory Fees |
18,928 |
13,811 |
37% |
71,834 |
48,992 |
47% |
||||||||||
Net Investment Income |
7,631 |
8,823 |
(14)% |
16,243 |
13,377 |
21% |
||||||||||
Total ENI Revenues |
26,559 |
22,634 |
17% |
88,077 |
62,369 |
41% |
||||||||||
Compensation and benefits |
7,519 |
4,331 |
74% |
26,572 |
20,810 |
28% |
||||||||||
Other operating expenses |
4,524 |
4,461 |
1% |
13,720 |
13,463 |
2% |
||||||||||
Corporate interest expense |
1,471 |
1,490 |
(1)% |
5,865 |
5,912 |
(1)% |
||||||||||
Total ENI Expenses |
13,514 |
10,282 |
31% |
46,157 |
40,185 |
15% |
||||||||||
ENI (1) |
$ |
13,045 |
$ |
12,352 |
6% |
$ |
41,920 |
$ |
22,184 |
89% |
||||||
ENI per share - basic |
$ |
0.63 |
$ |
0.59 |
7% |
$ |
2.02 |
$ |
1.09 |
85% |
||||||
ENI per share - diluted (2) (3) |
$ |
0.54 |
$ |
0.53 |
2% |
$ |
1.76 |
$ |
1.04 |
69% |
||||||
ENI Weighted average shares outstanding - basic |
20,795 |
20,816 |
—% |
20,801 |
20,356 |
2% |
||||||||||
ENI Weighted average shares outstanding - diluted (3) |
25,947 |
24,948 |
4% |
25,737 |
24,488 |
5% |
||||||||||
NON-GAAP FINANCIAL MEASURES (1) |
4Q'13 |
4Q'12 |
% Change vs. 4Q'12 |
YTD '13 |
YTD '12 |
% Change vs. YTD'12 |
||||||||||
EBIT (4) |
$ |
14,516 |
$ |
13,842 |
5% |
$ |
47,785 |
$ |
28,096 |
70% |
||||||
EBITDA (5) |
$ |
14,720 |
$ |
14,007 |
5% |
$ |
48,519 |
$ |
28,585 |
70% |
||||||
EBITDA Margin (6) |
55% |
62% |
(7)% |
55% |
46% |
9% |
||||||||||
Fee Related EBITDA Margin (6) |
37% |
38% |
(1)% |
45% |
31% |
14% |
||||||||||
ENI Margin (6) |
49% |
55% |
(6)% |
48% |
36% |
12% |
||||||||||
NON-GAAP FINANCIAL MEASURES - AUM |
|
|
% Change vs. |
|
% Change vs. |
|||||||||||
Fee Earning AUM from loan-based products (7) |
|
|
(2)% |
|
2% |
|||||||||||
SELECTED GAAP RESULTS |
4Q'13 |
4Q'12 |
% Change vs. 4Q'12 |
YTD '13 |
YTD '12 |
% Change vs. YTD'12 |
||||||||||
Total net revenues |
$ |
1,831 |
$ |
2,650 |
(31)% |
$ |
8,733 |
$ |
10,922 |
(20)% |
||||||
Total expenses |
$ |
19,828 |
$ |
17,322 |
14% |
$ |
61,970 |
$ |
60,841 |
2% |
||||||
Net income (loss) attributable to |
$ |
4,891 |
$ |
(2,484) |
n/m |
$ |
23,371 |
$ |
(8,699) |
n/m |
||||||
Earnings (loss) per share - basic (8) |
$ |
0.24 |
$ |
(0.12) |
n/m |
$ |
1.12 |
$ |
(0.43) |
n/m |
||||||
Earnings (loss) per share - diluted (2) (8) |
$ |
0.21 |
$ |
(0.12) |
n/m |
$ |
0.98 |
$ |
(0.43) |
n/m |
||||||
Weighted average shares outstanding - basic |
20,795 |
20,816 |
—% |
20,801 |
20,356 |
2% |
||||||||||
Weighted average shares outstanding - diluted |
25,947 |
20,816 |
25% |
25,737 |
20,356 |
26% |
Explanatory Notes:
|
||||||||||||||
(1) |
See Appendix for a detailed description of these non-GAAP measures and reconciliations from net income (loss) attributable to |
|||||||||||||
(2) |
The numerator in the dilution calculation has been adjusted to add-back the effect of convertible note interest charges (before taxes for ENI and after taxes for GAAP). |
|||||||||||||
(3) |
GAAP weighted average shares outstanding was used as ENI weighted average shares outstanding for the current year. For the three months and year ended |
|||||||||||||
(4) |
EBIT is ENI before corporate interest expense. See Appendix. |
|||||||||||||
(5) |
EBITDA is EBIT before depreciation of fixed assets. See Appendix. |
|||||||||||||
(6) |
EBITDA Margin is EBITDA divided by Total ENI Revenue. Fee Related EBITDA Margin is EBITDA less Net Investment Income divided by Total Investment Advisory Fees. ENI Margin is ENI divided by Total ENI Revenue. |
|||||||||||||
(7) |
Amount excludes Fee Earning AUM attributable to non-core products of |
|||||||||||||
(8) |
Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. |
YTD'13 - ENI Total Investment |
|
Senior management fees |
30% |
Subordinated management fees |
47% |
Incentive fees |
23% |
Total ENI Investment Advisory Fees |
100% |
YTD'12 - ENI Total Investment |
|
Senior management fees |
35% |
Subordinated management fees |
60% |
Incentive fees |
5% |
Total ENI Investment Advisory Fees |
100% |
Fourth Quarter Overview
<org value="NASDAQ-SMALL:CIFC" idsrc="xmltag.org">CIFC reported ENI of
Fiscal Year Overview
Fee Earning AUM
Investment advisory fees earned from investment products the Company manages on behalf of third party investors are the Company's primary source of revenue. These fees typically consist of senior and subordinated management fees based on a percentage of the investment product's assets and, in some cases, incentive fees based on the returns the Company generates for investors in the products. Incentive fees are generally paid to the Company as funds mature when the relevant incentive return hurdles and certain other restrictions have been met.
The Company's total loan-based Fee Earning AUM was approximately
During the year, total Fee Earning AUM increased by approximately
The following table summarizes Fee Earning AUM for the Company's significant loan-based products (1):
December 31, 2013 |
September 30, 2013 |
December 31, 2012 |
|||||||||||||||||||
(in thousands, except # of Products) |
# of Products |
Fee Earning |
# of Products |
Fee Earning |
# of Products |
Fee Earning |
|||||||||||||||
Post 2011 CLOs |
8 |
$ |
4,127,951 |
7 |
$ |
3,622,438 |
3 |
$ |
1,579,558 |
||||||||||||
Legacy CLOs (3) |
20 |
6,811,382 |
24 |
7,626,653 |
29 |
9,599,220 |
|||||||||||||||
Total CLOs |
28 |
10,939,333 |
31 |
11,249,091 |
32 |
11,178,778 |
|||||||||||||||
Other loan-based products (4) |
6 |
1,106,526 |
4 |
1,031,464 |
3 |
666,120 |
|||||||||||||||
AUM from loan-based products |
34 |
$ |
12,045,859 |
35 |
$ |
12,280,555 |
35 |
$ |
11,844,898 |
||||||||||||
Explanatory Notes:
|
|||||||||||||||||||||
(1) |
Table excludes Fee Earning AUM attributable to non-core products of |
||||||||||||||||||||
(2) |
Fee Earning AUM generally reflects the aggregate principal or notional balance of the collateral and, in some cases, the cash balance held by the CLO as of the date of the last trustee report received for each CLO prior to the respective AUM date. |
||||||||||||||||||||
(3) |
Legacy CLOs represent all managed CLOs issued prior to 2011, including CLOs acquired since 2011 but issued prior to 2011. |
||||||||||||||||||||
(4) |
Other loan-based products investment advisory fee structures vary by fund and may not be similar to a CLO. |
($ in thousands) |
Legacy CLOs |
Post 2011 CLOs |
Other loan-based products |
Q4 '11 |
10,555,255 |
- |
73,249 |
Q1 '12 |
9,945,083 |
398,683 |
73,256 |
Q2 '12 |
9,545,456 |
401,313 |
133,828 |
Q3 '12 (1) |
9,804,751 |
848,714 |
320,042 |
Q4 '12 |
9,599,220 |
1,579,558 |
666,120 |
Q1 '13 |
9,004,131 |
2,585,214 |
780,288 |
Q2 '13 |
8,344,616 |
3,219,531 |
822,534 |
Q3 '13 |
7,626,653 |
3,622,438 |
1,031,464 |
Q4 '13 |
6,811,382 |
4,127,951 |
1,106,526 |
Explanatory Note:
|
||||
(1) |
Increase in AUM on the Legacy CLOs is the result of the acquisition of the rights to manage four "Navigator" CLOs during |
Total loan-based Fee Earning AUM activity for the three months and year ended December 31, 2013 are as follows ($ in thousands):
Activity during 4Q'13 |
Amount |
Activity during YTD '13 |
Amount |
|||||||
September 30, 2013 |
|
12,280,555 |
December 31, 2012 |
$ |
11,844,898 |
|||||
CLO New Issuances |
501,689 |
CLO New Issuances |
2,530,869 |
|||||||
CLO Principal Paydown |
(411,828) |
CLO Principal Paydown |
(2,013,497) |
|||||||
CLO Calls, Redemptions and Sales |
(385,911) |
CLO Calls, Redemptions and Sales |
(681,167) |
|||||||
Fund Subscriptions |
105,950 |
Fund Subscriptions |
494,161 |
|||||||
Fund Redemptions |
— |
Fund Redemptions |
(10,354) |
|||||||
Other (1) |
(44,596) |
Other (1) |
(119,051) |
|||||||
December 31, 2013 |
$ |
12,045,859 |
December 31, 2013 |
$ |
12,045,859 |
|||||
Explanatory Note:
|
||||||||||
(1) |
Other includes changes in collateral balances of CLOs between periods and market value changes in certain other loan-based products. |
Liquidity and Capital Resources
As of December 31, 2013, total cash and cash equivalents decreased by
Investments
Deconsolidated Non-GAAP (1) |
December 31, 2013 |
|
||||||
CIFC Managed CLO Equity (Residual Interests) |
$ |
44,292 |
$ |
47,454 |
||||
Warehouses (2) |
32,529 |
26,723 |
||||||
Other loan-based products (3) |
36,310 |
|
||||||
Total |
$ |
113,131 |
$ |
79,235 |
||||
Explanatory Notes:
|
||||||||
(1) |
Pursuant to GAAP, investments in consolidated CLOs, warehouses and certain other loan-based products are eliminated from "Investments at fair value" on our Consolidated Balance Sheets. See Appendix for a Reconciliation from GAAP to Non-GAAP - Consolidated Balance Sheets for further details. |
|||||||
(2) |
From time to time, the Company establishes "warehouses", entities designed to accumulate investments in advance of sponsoring new CLOs or other funds managed by the Company. To establish a warehouse, the Company contributes equity capital to a newly formed entity which is typically levered (three to five times) and begins accumulating investments. When the related CLO or fund is sponsored, typically three to nine months later, the warehouse is "terminated", with it concurrently repaying the related financing and returning to the Company its equity contribution, net of gains and losses, if any. |
|||||||
(3) |
Investments in other loan-based products includes |
Excluding non-recourse variable interest entity ("VIE") debt,
Recent Developments
On
On
Non-GAAP Financial Measures
The Company discloses financial measures that are calculated and presented on a basis of methodology other than in accordance with generally accepted accounting principles of
ENI is a non-GAAP financial measure of profitability which management uses in addition to GAAP Net income attributable to
EBIT and EBITDA are also non-GAAP financial measures that management considers, in addition to net income (loss) attributable to
ENI, EBIT and EBITDA may not be comparable to similar measures presented by other companies, as they are non-GAAP financial measures that are not based on a comprehensive set of accounting rules or principles and therefore may be defined differently by other companies. In addition, ENI, EBIT and EBITDA should be considered an addition to, not as a substitute for, or superior to, financial measures determined in accordance with GAAP.
A detailed calculation of ENI, EBIT and EBITDA and a reconciliation to the most comparable GAAP financial measure is included in the Appendix.
[Financial Tables to Follow in Appendix]
About
Forward-Looking Statements
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect
Appendix - Table of Contents
- Summary reconciliation of GAAP net income (loss) attributable to
CIFC Corp. to Non-GAAP measures (ENI, EBIT and EBITDA) for the Three Months and Years EndedDecember 31, 2013 and 2012 (unaudited) - Reconciliation of GAAP to Non-GAAP measures (GAAP basis Statements of Operations are adjusted to exclude the consolidation of VIEs) for the Three Months Ended
December 31, 2013 and 2012 (unaudited) - Reconciliation of GAAP to Non-GAAP measures (GAAP basis Statements of Operations are adjusted to exclude the consolidation of VIEs) for the Years Ended
December 31, 2013 and 2012 (unaudited) - Reconciliation of GAAP to Non-GAAP measures (GAAP basis Balance Sheets are adjusted to exclude the consolidation of VIEs) as of
December 31, 2013 and 2012 (unaudited) - Reconciliation from GAAP to Non-GAAP measures - Other (unaudited)
Appendix
Summary Reconciliation of GAAP Net income (loss) attributable to |
||||||||||||
(In thousands) (unaudited) |
4Q'13 |
4Q'12 |
YTD '13 |
YTD '12 |
||||||||
GAAP Net income (loss) attributable to |
$ |
4,891 |
$ |
(2,484) |
$ |
23,371 |
$ |
(8,699) |
||||
Advisory fee sharing arrangements (2) |
(2,356) |
(3,058) |
(15,744) |
(10,193) |
||||||||
Advisory fees attributable to non-core funds (3) |
(199) |
(649) |
(3,139) |
(3,168) |
||||||||
Compensation costs (4) |
1,593 |
2,135 |
3,767 |
2,135 |
||||||||
Insurance settlement received |
— |
— |
— |
(657) |
||||||||
Amortization and impairment of intangibles |
6,192 |
4,441 |
17,913 |
19,213 |
||||||||
Restructuring charges |
— |
1,954 |
— |
5,877 |
||||||||
Net (gain)/loss on contingent liabilities, derivatives and other (5) |
(46) |
2,004 |
(1,644) |
12,041 |
||||||||
Strategic transactions expenses (6) |
— |
— |
— |
657 |
||||||||
Gain on sales of contracts (7) |
— |
— |
(1,386) |
(5,772) |
||||||||
Income tax expense (benefit) (1) |
2,970 |
8,009 |
18,782 |
10,750 |
||||||||
Total reconciling and non-recurring items (1) |
8,154 |
14,836 |
18,549 |
30,883 |
||||||||
ENI |
$ |
13,045 |
$ |
12,352 |
$ |
41,920 |
$ |
22,184 |
||||
Add: Corporate interest expense |
1,471 |
1,490 |
5,865 |
5,912 |
||||||||
EBIT |
$ |
14,516 |
$ |
13,842 |
$ |
47,785 |
$ |
28,096 |
||||
Add: Depreciation of fixed assets |
204 |
165 |
734 |
489 |
||||||||
EBITDA |
$ |
14,720 |
$ |
14,007 |
$ |
48,519 |
$ |
28,585 |
Explanatory Notes:
|
||||||||||||
(1) |
Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. |
|||||||||||
(2) |
The Company shares advisory fees on certain of the CLOs it manages (for example, advisory fees on certain acquired funds are shared with the party that sold the funds to |
|||||||||||
(3) |
Current year ENI calculation includes the reduction attributable to non-core advisory fees. Prior year ENI calculation has been adjusted to conform with the current year's calculation. |
|||||||||||
(4) |
Compensation has been adjusted for non-cash compensation related to profits interests granted to |
|||||||||||
(5) |
Adjustment primarily includes the elimination of gains (losses) on contingent liabilities during the respective periods. |
|||||||||||
(6) |
These expenses relate to a transaction to enter into a strategic relationship with an affiliate of General Electric Capital Corporation. |
|||||||||||
(7) |
In |
Reconciliation from GAAP to Non-GAAP Measures - Consolidated Statements of Operations (unaudited) (1) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4Q'13 |
4Q'12 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) (unaudited) |
Consolidated |
Consolidation |
Deconsolidated |
Consolidated |
Consolidation |
Deconsolidated |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment advisory fees |
$ |
1,754 |
$ |
19,729 |
$ |
21,483 |
$ |
2,648 |
$ |
14,870 |
$ |
17,518 |
|||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income |
77 |
7,554 |
7,631 |
2 |
8,821 |
8,823 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net revenues |
1,831 |
27,283 |
29,114 |
2,650 |
23,691 |
26,341 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and benefits |
9,112 |
— |
9,112 |
6,466 |
— |
6,466 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Professional services |
1,903 |
— |
1,903 |
2,601 |
— |
2,601 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative expenses |
2,417 |
— |
2,417 |
1,695 |
— |
1,695 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
3,290 |
— |
3,290 |
4,606 |
— |
4,606 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of intangible assets |
3,106 |
— |
3,106 |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges |
— |
— |
— |
1,954 |
— |
1,954 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total expenses |
19,828 |
— |
19,828 |
17,322 |
— |
17,322 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense) and Gain (Loss) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain (loss) on investments at fair value |
935 |
(935) |
— |
1,873 |
(1,873) |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain (loss) on contingent liabilities at fair |
46 |
— |
46 |
(2,052) |
— |
(2,052) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate interest expense |
(1,471) |
— |
(1,471) |
(1,490) |
— |
(1,490) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain on the sale of management contracts |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strategic transactions expenses |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, net |
— |
— |
— |
48 |
— |
48 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net other income (expense) and gain (loss) |
(490) |
(935) |
(1,425) |
(1,621) |
(1,873) |
(3,494) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) |
(18,487) |
26,348 |
7,861 |
(16,293) |
21,818 |
5,525 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net results of Consolidated Entities |
46,944 |
(46,944) |
— |
(71,045) |
71,045 |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
28,457 |
(20,596) |
7,861 |
(87,338) |
92,863 |
5,525 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax (expense) benefit (2) |
(2,970) |
— |
(2,970) |
(8,009) |
— |
(8,009) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) (2) |
25,487 |
(20,596) |
4,891 |
(95,347) |
92,863 |
(2,484) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interest in Consolidated Entities |
(20,596) |
20,596 |
— |
92,863 |
(92,863) |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to |
$ |
4,891 |
$ |
— |
$ |
4,891 |
$ |
(2,484) |
$ |
— |
$ |
(2,484) |
|||||||||||||||||||||||||||||||||||||||||||||||||
Explanatory Notes:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) The Consolidated Statements of Operations have been adjusted to present on a deconsolidated non-GAAP basis, which eliminates the impact of Consolidated Funds (including VIEs). Management uses these statements in addition to GAAP to measure the performance of its core business. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation from GAAP to Non-GAAP Measures - Consolidated Statements of Operations (continued) (1) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
YTD '13 |
YTD '12 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) (unaudited) |
Consolidated |
Consolidation |
Deconsolidated |
Consolidated |
Consolidation |
Deconsolidated |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment advisory fees |
$ |
8,400 |
$ |
82,317 |
$ |
90,717 |
$ |
10,696 |
$ |
51,657 |
$ |
62,353 |
|||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income |
333 |
15,910 |
16,243 |
226 |
13,151 |
13,377 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net revenues |
8,733 |
98,227 |
106,960 |
10,922 |
64,808 |
75,730 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and benefits |
30,339 |
— |
30,339 |
22,945 |
—</p> |
22,945 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Professional services |
5,277 |
— |
5,277 |
6,221 |
— |
6,221 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative expenses |
7,707 |
— |
7,707 |
6,096 |
— |
6,096 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
15,541 |
— |
15,541 |
17,931 |
— |
17,931 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of intangible assets |
3,106 |
— |
3,106 |
1,771 |
— |
1,771 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges |
— |
— |
— |
5,877 |
— |
5,877 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total expenses |
61,970 |
— |
61,970 |
60,841 |
— |
60,841 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense) and Gain (Loss) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain (loss) on investments at fair value |
1,822 |
(1,822) |
— |
2,307 |
(2,476) |
(169) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain (loss) on contingent liabilities at fair value |
1,644 |
— |
1,644 |
(11,452) |
— |
(11,452) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate interest expense |
(5,865) |
— |
(5,865) |
(5,912) |
— |
(5,912) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain on the sale of management contracts |
1,386 |
— |
1,386 |
5,772 |
— |
5,772 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strategic transactions expenses |
— |
— |
— |
(657) |
— |
(657) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, net |
(2) |
— |
(2) |
(420) |
— |
(420) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net other income (expense) and gain (loss) |
(1,015) |
(1,822) |
(2,837) |
(10,362) |
(2,476) |
(12,838) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) |
(52,252) |
96,405 |
42,153 |
(60,281) |
62,332 |
2,051 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net results of Consolidated Entities |
169,869 |
(169,869) |
— |
(168,380) |
168,380 |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
115,617 |
(73,464) |
42,153 |
(228,661) |
230,712 |
2,051 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax (expense) benefit (2) |
(18,782) |
— |
(18,782) |
(10,750) |
— |
(10,750) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) (2) |
96,835 |
(73,464) |
23,371 |
(239,411) |
230,712 |
(8,699) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interest in Consolidated Entities |
(73,464) |
73,464 |
— |
230,712 |
(230,712) |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to |
$ |
23,371 |
$ |
— |
$ |
23,371 |
$ |
(8,699) |
$ |
— |
$ |
(8,699) |
|||||||||||||||||||||||||||||||||||||||||||||||||
Explanatory Notes:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) The Consolidated Statements of Operations have been adjusted to present on a deconsolidated non-GAAP basis, which eliminates the impact of Consolidated Funds (including VIEs). Management uses these statements in addition to GAAP to measure the performance of its core business. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation from GAAP to Non-GAAP - Consolidated Balance Sheets (unaudited) (1) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2013 |
December 31, 2012 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) (unaudited) |
GAAP |
Consolidation |
Deconsolidated |
GAAP |
Consolidation |
Deconsolidated |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
$ |
25,497 |
$ |
(4,132) |
$ |
21,365 |
$ |
47,692 |
$ |
— |
$ |
47,692 |
|||||||||||||||||||||||||||||||||||||||||||||||||
Restricted cash and cash equivalents |
1,700 |
— |
1,700 |
1,612 |
— |
1,612 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Due from brokers |
18,813 |
(4,985) |
13,828 |
1,150 |
— |
1,150 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments at fair value |
16,883 |
96,248 |
113,131 |
5,058 |
74,176 |
79,234 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables |
2,120 |
3,814 |
5,934 |
2,432 |
2,675 |
5,107 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid and other assets |
5,104 |
(222) |
4,882 |
5,392 |
— |
5,392 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax asset, net (2) |
57,675 |
— |
57,675 |
53,914 |
— |
53,914 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equipment and improvements, net |
4,261 |
— |
4,261 |
3,979 |
— |
3,979 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets, net |
25,223 |
— |
25,223 |
43,136 |
— |
43,136 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill |
76,000 |
— |
76,000 |
76,000 |
— |
76,000 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal (2) |
233,276 |
90,723 |
323,999 |
240,365 |
76,851 |
317,216 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets of Consolidated Entities |
11,366,912 |
(11,366,912) |
— |
10,267,915 |
(10,267,915) |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Assets (2) |
$ |
11,600,188 |
$ |
(11,276,189) |
$ |
323,999 |
$ |
10,508,280 |
$ |
(10,191,064) |
$ |
317,216 |
|||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Due to brokers |
$ |
5,499 |
$ |
(4,991) |
$ |
508 |
$ |
— |
$ |
— |
$ |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||
Accrued and other liabilities |
15,197 |
(270) |
14,927 |
15,734 |
— |
15,734 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred purchase payments |
1,179 |
— |
1,179 |
4,778 |
— |
4,778 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent liabilities at fair value |
16,961 |
— |
16,961 |
33,783 |
— |
33,783 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt |
139,164 |
— |
139,164 |
138,233 |
— |
138,233 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal |
178,000 |
(5,261) |
172,739 |
192,528 |
— |
192,528 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total non-recourse liabilities of Consolidated Entities |
11,114,435 |
(11,114,435) |
— |
10,113,035 |
(10,113,035) |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Liabilities |
11,292,435 |
(11,119,696) |
172,739 |
10,305,563 |
(10,113,035) |
192,528 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock |
21 |
— |
21 |
21 |
— |
21 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock |
(914) |
— |
(914) |
(664) |
— |
(664) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional paid-in capital |
963,011 |
— |
963,011 |
955,407 |
— |
955,407 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) |
— |
— |
— |
(3) |
— |
(3) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retained earnings (deficit) (2) |
(810,858) |
— |
(810,858) |
(830,073) |
— |
(830,073) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
151,260 |
— |
151,260 |
124,688 |
— |
124,688 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interest in Consolidated Funds |
5,107 |
(5,107) |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Appropriated retained earnings (deficit) of Consolidated Entities |
151,386 |
(151,386) |
— |
78,029 |
(78,029) |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Equity (2) |
307,753 |
(156,493) |
151,260 |
202,717 |
(78,029) |
124,688 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Liabilities and Stockholders' Equity (2) |
$ |
11,600,188 |
$ |
(11,276,189) |
$ |
323,999 |
$ |
10,508,280 |
$ |
(10,191,064) |
$ |
317,216 |
|||||||||||||||||||||||||||||||||||||||||||||||||
Explanatory Notes:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) The Consolidated Balance Sheets have been adjusted to present a deconsolidated non-GAAP statements, which eliminates the impact of Consolidated Funds (including VIEs). Management uses these statements in addition to GAAP to measure the performance of its core business. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Amounts in the prior year have been restated to reflect immaterial adjustments identified in the current year. |
Reconciliation of GAAP to Non-GAAP Measures - Other (unaudited) |
||||||||
The table below is a reconciliation of GAAP to Non-GAAP weighted average diluted shares outstanding (1): |
||||||||
(In thousands) (unaudited) |
4Q'13 |
4Q'12 |
YTD '13 |
YTD '12 |
||||
Basic GAAP Weighted-average Shares |
20,795 |
20,816 |
20,801 |
20,356 |
||||
Add: Convertible Notes (2) |
4,132 |
— |
4,132 |
— |
||||
Add: Stock Options |
527 |
— |
303 |
— |
||||
Add: Warrants and unvested RSUs |
492 |
— |
501 |
— |
||||
Diluted GAAP Weighted-average Shares |
25,947 |
20,816 |
25,737 |
20,356 |
||||
Add: ENI - Convertible Notes (2) |
— |
4,132 |
— |
4,132 |
||||
Diluted ENI Weighted-average Shares |
25,947 |
24,948 |
25,737 |
24,488 |
||||
Explanatory Notes:
|
||||||||
(1) |
GAAP weighted average shares outstanding was used as ENI weighted average shares outstanding for the current year. For the three months and year ended |
|||||||
(2) |
For the three months and year ended |
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SOURCE
Wordcount: | 5809 |
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