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1. | OMGUK incorporated OMAM in the United Kingdom as a direct, wholly-owned subsidiary of OMGUK. |
2. | OMAM incorporated OMAM US, Inc. in the State of Delaware ("U.S. Sub") as a direct, wholly-owned subsidiary of OMAM. |
3. | U.S. Sub incorporated OMAM UK Limited in the United Kingdom ("U.K. Sub") as a direct, wholly-owned subsidiary of U.S. Sub. |
4. | The Company's existing intercompany debt, which was owed by OMUSH to OMGUK, was refinanced with new intercompany debt. |
5. | OMGUK contributed its shares in OMUSH and the new intercompany debt to OMAM in return for an issuance of shares by OMAM resulting in the elimination of existing intercompany debt of $1,003.5 million and the redemption of a $32.2 million intercompany receivable via a capital distribution back to OMGUK, for a net reduction of existing intercompany debt of $971.3 million. |
6. | The OMUSH shares were transferred to U.K. Sub via a series of share exchanges, and the new intercompany debt was contributed among OMAM, U.S. Sub and U.K. Sub. |
7. | OMAM underwent a reduction of share capital to maximize distributable reserves, re-registered in the United Kingdom as a public limited company, amended its articles of association to reflect the same and organized its share capital for purposes of the Offering. |
8. | OMAM declared a $175.0 million pre-Offering dividend to OMGUK. OMAM also issued a non-interest bearing promissory note to OMGUK in the principal amount of $37.0 million which was fully repaid by June 30, 2015. |
9. | OMAM entered into arrangements with OMGUK for the payment of future realizable benefits (estimated to total $198.1 million at December 31, 2015) associated with certain deferred tax assets existing as of the date of the Offering, as well as co-investments (with both a carrying value and fair value of $25.2 million at December 31, 2015) made by the Company in real-estate and timber strategies of its Affiliates. In accordance with the deferred tax asset arrangement, in December 2014, OMAM began to make quarterly payments to OMGUK. In the fourth quarter of 2014, OMAM adjusted the balance of the liability to reflect the impact of the 2013 income tax return and also reduced the liability as of the Offering date to reflect a revised estimate of the future realizable benefits as of the Offering date. The liability was adjusted again in the fourth quarter of 2015 to reflect the impact of the 2014 income tax return through October 8, 2014. |
10. | The Company made a payment of the $175.0 million pre-Offering dividend to OMGUK, funded by a new third party credit facility entered into at the closing of the Offering; and |
11. | OMAM completed the purchase of additional ownership of an Affiliate for $60.0 million in cash, resulting in a reduction of liabilities for the same amount. |
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2015 | 2014 | ||||||
Investments by consolidated Funds in related, unconsolidated master Funds | $ | — | $ | 23.6 | |||
Other investments of consolidated Funds attributable to non-controlling interests | — | 37.0 | |||||
Investments of consolidated Funds attributable to non-controlling interests held at fair value | — | 60.6 | |||||
Equity-accounted investments in unconsolidated Funds (Note 6) | 30.1 | 34.5 | |||||
Investments related to voluntary deferred compensation plans held at fair value | 66.9 | 59.7 | |||||
Total investments held at fair value | 97.0 | 154.8 | |||||
Equity-accounted investments in Affiliates (Note 6) | 54.0 | 50.5 | |||||
Equity-accounted investments in unconsolidated Funds, at cost (Note 6) | — | 0.5 | |||||
Investments in joint ventures | — | 2.4 | |||||
Other investments* | 51.6 | 1.7 | |||||
Total investments per Consolidated Balance Sheet | $ | 202.6 | $ | 209.9 | |||
2015 | 2014 | 2013 | |||||||||
Investment return of equity-accounted investments in unconsolidated Funds (Note 6) | $ | 0.3 | $ | 1.9 | $ | 2.9 | |||||
Realized and unrealized gains/losses on other discretionary investments held at fair value | — | 0.7 | 0.1 | ||||||||
Total investment return on OMAM products | 0.3 | 2.6 | 3.0 | ||||||||
Investment return of equity-accounted investments in Affiliates (Note 6) | 12.7 | 9.6 | 7.7 | ||||||||
Total investment income per Consolidated Statement of Operations | $ | 13.0 | $ | 12.2 | $ | 10.7 | |||||
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Quoted prices in active markets (Level I) | Significant other observable inputs (Level II) | Significant unobservable inputs (Level III) | Uncategorized | Total value, December 31, 2015 | |||||||||||||||
Assets of OMAM(1) | |||||||||||||||||||
Investment securities(2) | 66.9 | — | — | — | 66.9 | ||||||||||||||
Investments in unconsolidated Funds(3) | — | — | — | 30.1 | 30.1 | ||||||||||||||
Total fair value assets | $ | 66.9 | $ | — | $ | — | $ | 30.1 | $ | 97.0 | |||||||||
Liabilities of OMAM(1) | |||||||||||||||||||
Derivative securities | $ | — | $ | (8.8 | ) | $ | — | $ | — | $ | (8.8 | ) | |||||||
Total fair value liabilities | $ | — | $ | (8.8 | ) | $ | — | $ | — | $ | (8.8 | ) | |||||||
Quoted prices in active markets (Level I) | Significant other observable inputs (Level II) | Significant unobservable inputs (Level III) | Uncategorized | Total value, December 31, 2014 | |||||||||||||||
Assets of OMAM and consolidated Funds(1) | |||||||||||||||||||
Investments owned, at fair value | |||||||||||||||||||
Common and preferred stock | $ | 24.8 | $ | — | $ | — | $ | — | $ | 24.8 | |||||||||
Short-term investment funds | 0.1 | — | — | — | 0.1 | ||||||||||||||
Fixed income securities | 1.1 | — | — | — | 1.1 | ||||||||||||||
Collective investment funds | — | — | — | 32.5 | 32.5 | ||||||||||||||
Other investments | 0.3 | 1.8 | — | — | 2.1 | ||||||||||||||
Total investments at fair value | 26.3 | 1.8 | — | 32.5 | 60.6 | ||||||||||||||
Restricted cash held at fair value | 104.5 | — | — | — | 104.5 | ||||||||||||||
Consolidated Funds Total | 130.8 | 1.8 | — | 32.5 | 165.1 | ||||||||||||||
Investment securities(2) | 59.7 | — | — | — | 59.7 | ||||||||||||||
Investments in unconsolidated Funds(3) | — | — | — | 34.5 | 34.5 | ||||||||||||||
OMAM Total | 59.7 | — | — | 34.5 | 94.2 | ||||||||||||||
Total fair value assets | $ | 190.5 | $ | 1.8 | $ | — | $ | 67.0 | $ | 259.3 | |||||||||
Liabilities of consolidated Funds(1) | |||||||||||||||||||
Common stock | $ | (16.4 | ) | $ | — | $ | — | $ | — | $ | (16.4 | ) | |||||||
Total fair value liabilities | $ | (16.4 | ) | $ | — | $ | — | $ | — | $ | (16.4 | ) | |||||||
(1) | Assets and liabilities measured at fair value are comprised of financial investments managed by the Company's Affiliates. $0.0 million in assets and $0.0 million in liabilities at December 31, 2015 and $60.6 million in assets and $16.4 million in liabilities at December 31, 2014 are the result of the consolidation of Funds sponsored by the Company's Affiliates. |
(2) | Investment securities of $66.9 million and $59.7 million at December 31, 2015 and 2014, respectively, are investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I. |
(3) | The $30.1 million and $34.5 million at December 31, 2015 and December 31, 2014, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds advised by Affiliates and are valued using NAV which the Company relies on to determine their fair value as a practical expedient. The Company has not classified these investments in the fair value hierarchy in accordance with ASU 2015-07. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investments funds.The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates. |
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2015 | 2014 | ||||||
Assets | |||||||
Investments at fair value | $ | — | $ | 5.9 | |||
Restricted cash | — | 2,487.7 | |||||
Timber assets | — | 4,053.2 | |||||
Other assets of consolidated Funds | — | 165.0 | |||||
Total Assets | $ | — | $ | 6,711.8 | |||
Liabilities | |||||||
Borrowings | $ | — | $ | 4,095.9 | |||
Other liabilities of consolidated Funds | — | 150.8 | |||||
Total Liabilities | $ | — | $ | 4,246.7 | |||
2015 | 2014 | ||||||
Unconsolidated VIE assets | $ | 7,302.4 | $ | 9,993.5 | |||
Unconsolidated VIE liabilities | $ | 4,189.1 | $ | 1,515.0 | |||
Equity interests on the Consolidated Balance Sheet | $ | 10.8 | $ | 75.3 | |||
Maximum risk of loss(1) | $ | 16.6 | $ | 75.5 | |||
(1) | Includes equity investments the Company has made or is required to make and any earned but uncollected management/incentive fees. The Company does not record performance/incentive allocations until the respective measurement period has ended. |
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For the year ended December 31, 2015 | For the year ended December 31, 2014 | ||||||||||||||||||||||
Statements of Income | Heitman LLC | Other | Total | Heitman LLC | Other | Total | |||||||||||||||||
Net revenues(1) | $ | 128.9 | $ | 213.7 | $ | 342.6 | $ | 227.4 | $ | 89.1 | $ | 316.5 | |||||||||||
Operating income | 27.1 | 87.7 | 114.8 | 51.0 | 17.2 | 68.2 | |||||||||||||||||
Other income (expense), net | — | 97.8 | 97.8 | 26.1 | (102.1 | ) | (76.0 | ) | |||||||||||||||
Income (loss) before income taxes | 27.1 | 185.5 | 212.6 | 77.1 | (84.9 | ) | (7.8 | ) | |||||||||||||||
Less income tax expense | 0.8 | 5.1 | 5.9 | 3.0 | 1.9 | 4.9 | |||||||||||||||||
Exclude: noncontrolling interests income (loss) | — | 177.6 | 177.6 | 58.6 | (89.8 | ) | (31.2 | ) | |||||||||||||||
Net income attributable to controlling interests | $ | 26.3 | $ | 2.8 | $ | 29.1 | $ | 15.5 | $ | 3.0 | $ | 18.5 | |||||||||||
OMAM equity in net income of equity method investees | $ | 10.2 | $ | 2.8 | $ | 13.0 | $ | 8.5 | $ | 3.0 | $ | 11.5 | |||||||||||
For the year ended December 31, 2013 | |||||||||||
Statements of Income (cont.) | Heitman LLC | Other | Total | ||||||||
Net revenues(1) | $ | 218.3 | $ | 80.1 | $ | 298.4 | |||||
Operating income | 49.0 | 20.8 | 69.8 | ||||||||
Other income (expense), net | 172.8 | (13.4 | ) | 159.4 | |||||||
Income before income taxes | 221.8 | 7.4 | 229.2 | ||||||||
Less income tax expense | 1.8 | (0.4 | ) | 1.4 | |||||||
Exclude: noncontrolling interests income | 197.2 | 7.6 | 204.8 | ||||||||
Net income attributable to controlling interests | $ | 22.8 | $ | 0.2 | $ | 23.0 | |||||
OMAM equity in net income of equity method investees | $ | 10.4 | $ | 0.2 | $ | 10.6 | |||||
As of December 31, 2015 | As of December 31, 2014 | ||||||||||||||||||||||
Balance Sheets | Heitman LLC | Other | Total | Heitman LLC | Other | Total | |||||||||||||||||
Total assets | $ | 76.8 | $ | 2,670.4 | $ | 2,747.2 | $ | 1,647.1 | $ | 1,319.9 | $ | 2,967.0 | |||||||||||
Total liabilities | 39.0 | 1,026.2 | 1,065.2 | 581.1 | 552.8 | 1,133.9 | |||||||||||||||||
Non-controlling interests in subsidiaries | — | 1,612.7 | 1,612.7 | 1,014.4 | 756.9 | 1,771.3 | |||||||||||||||||
Members' equity | $ | 37.8 | $ | 31.5 | $ | 69.3 | $ | 51.6 | $ | 10.2 | $ | 61.8 | |||||||||||
OMAM equity investment and undistributed earnings of affiliated companies, before consolidating and reconciling adjustments | $ | 22.9 | $ | 31.5 | $ | 54.4 | $ | 44.7 | $ | 10.2 | $ | 54.9 | |||||||||||
Consolidating and reconciling adjustments: | |||||||||||||||||||||||
Goodwill attributable to equity method investment | 29.7 | — | 29.7 | 30.6 | — | 30.6 | |||||||||||||||||
OMAM investment in equity method investees at cost plus equity in undistributable earnings since acquisition | $ | 52.6 | $ | 31.5 | $ | 84.1 | $ | 75.3 | $ | 10.2 | $ | 85.5 | |||||||||||
(1) | Net revenue includes advisory fees for asset management services and investment income, including interest and dividends from consolidated investment partnerships. |
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2015 | 2014 | ||||||
Leasehold improvements | $ | 28.5 | $ | 26.7 | |||
Office equipment | 21.3 | 17.5 | |||||
Furniture and fixtures | 6.8 | 6.6 | |||||
Software and web development | 21.4 | 14.3 | |||||
Total property and equipment, at cost | 78.0 | 65.1 | |||||
Accumulated depreciation and amortization | (47.3 | ) | (41.0 | ) | |||
Property and equipment, net | $ | 30.7 | $ | 24.1 | |||
Future minimum rentals | |||
2016 | $ | 11.0 | |
2017 | 10.9 | ||
2018 | 10.4 | ||
2019 | 10.1 | ||
2020 | 9.6 | ||
Thereafter | 19.2 | ||
Total | $ | 71.2 | |
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Gross Book Value | Accumulated Impairment | Net Book Value | |||||||||
December 31, 2013 | $ | 160.6 | $ | (42.8 | ) | $ | 117.8 | ||||
Impairments | — | — | — | ||||||||
Additions | 11.0 | — | 11.0 | ||||||||
Disposals | (11.2 | ) | 8.9 | (2.3 | ) | ||||||
December 31, 2014 | $ | 160.4 | $ | (33.9 | ) | $ | 126.5 | ||||
Impairments | — | — | — | ||||||||
Additions | — | — | — | ||||||||
Disposals | — | — | — | ||||||||
December 31, 2015 | $ | 160.4 | $ | (33.9 | ) | $ | 126.5 | ||||
Gross Book Value | Accumulated Amortization & Impairment | Net Book Value | |||||||||
December 31, 2013 | $ | 26.8 | $ | (25.6 | ) | $ | 1.2 | ||||
Amortization | — | (0.1 | ) | (0.1 | ) | ||||||
Disposals | (4.1 | ) | 4.0 | (0.1 | ) | ||||||
December 31, 2014 | $ | 22.7 | $ | (21.7 | ) | $ | 1.0 | ||||
Additions | 0.6 | — | 0.6 | ||||||||
Amortization | — | (0.1 | ) | (0.1 | ) | ||||||
Disposals | — | — | — | ||||||||
December 31, 2015 | $ | 23.3 | $ | (21.8 | ) | $ | 1.5 | ||||
2016 | $ | 0.2 | |
2017 | 0.2 | ||
2018 | 0.2 | ||
2019 | 0.2 | ||
2020 | 0.2 | ||
Thereafter | 0.5 | ||
Total | $ | 1.5 | |
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2015 | 2014 | ||||||
Timber | $ | — | $ | 2,813.7 | |||
Timberlands | — | 1,880.5 | |||||
Timber lease rights | — | 198.8 | |||||
Other(1) | — | 27.1 | |||||
Total timber and timberlands, at cost | — | 4,920.1 | |||||
Accumulated depletion on timber | — | (866.0 | ) | ||||
Accumulated amortization | — | (0.9 | ) | ||||
Timber and timberlands, net | $ | — | $ | 4,053.2 | |||
(1) | The category "Other" includes buildings, roads, quarries, hunting lease rights and other similar tangible and intangible assets related to timber cutting operations. |
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2015 | 2014 | ||||||
Fees receivable from unconsolidated Funds | $ | 31.5 | $ | 18.2 | |||
Fees receivable from commonly controlled Old Mutual plc business units | 2.0 | 2.3 | |||||
Other amounts due from related parties | 5.2 | 5.9 | |||||
Other amounts due from Parent | 0.2 | 1.8 | |||||
Total amounts due from related parties | $ | 38.9 | $ | 28.2 | |||
2015 | 2014 | ||||||
Other amounts due to related parties | $ | 0.2 | $ | 0.4 | |||
Loan notes payable to Parent (Note 13) | — | 37.0 | |||||
Preferred dividend payable of consolidated Fund | — | 16.3 | |||||
Other amounts due to Parent(2) | 4.5 | 3.5 | |||||
Total current payables to related parties | 4.7 | 57.2 | |||||
Other amounts due to Parent(2) | 218.2 | 286.1 | |||||
Promissory note payable to related parties of consolidated Fund (Note 13) | — | 318.7 | |||||
Total long-term payables to related parties | 218.2 | 604.8 | |||||
Total amounts due to related parties | $ | 222.9 | $ | 662.0 | |||
2015 | 2014 | ||||||
Investment in unconsolidated master Funds(3) | $ | — | $ | 23.6 | |||
Investments in joint ventures | — | 2.4 | |||||
Investments in equity-accounted investees (Note 6) | 84.1 | 85.5 | |||||
Total related party investments | $ | 84.1 | $ | 111.5 | |||
2015 | 2014 | 2013 | |||||||||
Revenues: | |||||||||||
Management fees collected from commonly controlled Old Mutual business units(3) | $ | 9.3 | $ | 10.6 | $ | 9.6 | |||||
Management fees collected from unconsolidated Funds(1) | 107.0 | 47.5 | 46.4 | ||||||||
Performance fees collected from unconsolidated Funds(1) | 1.9 | 5.9 | 0.5 | ||||||||
Management fees collected from joint venture partners | — | 6.4 | 13.7 | ||||||||
Total related party revenues (including discontinued operations) | $ | 118.2 | $ | 70.4 | $ | 70.2 | |||||
Expenses: | |||||||||||
Interest expense owed to parent (Note 13) | $ | — | $ | 49.8 | $ | 72.1 | |||||
Rent and administrative costs recharged by commonly controlled Old Mutual business units(4) | 1.7 | 1.2 | 0.1 | ||||||||
Restricted stock grants of parent equity to OMAM employees (Note 18) | 0.5 | 4.5 | 5.0 | ||||||||
Recharged parent operational costs(5) | 1.8 | 5.5 | 5.3 | ||||||||
Total related party expenses (including discontinued operations) | $ | 4.0 | $ | 61.0 | $ | 82.5 | |||||
(1) | Transactions with unconsolidated Affiliate-sponsored Funds are considered related party items on the basis of the Company's significant influence over the activities of such entities in its capacity as investment advisor thereto. These transactions are comprised of fees for advisory services and investments in unconsolidated "master" Funds held by consolidated "feeder" Funds. |
(2) | During 2014, the Company entered into a deferred tax asset deed with the Parent for the payment of realized benefits associated with certain deferred tax assets, as well as a co-investment deed for the payment of realized benefits associated with co-investments made by the Company in real-estate and timber strategies of its Affiliates. Amounts owed to the Parent associated with the deferred tax asset deed were $198.1 million at December 31, 2015. Amounts owed to the Parent associated with the co-investment deed were $20.2 million at December 31, 2015, net of tax. As of December 31, 2015, the Company recorded a payable of $4.5 million for redemptions and estimated taxes due under the co-investment deed. Amounts withheld in excess of the future tax liability will be payable to the Parent upon settlement. |
(3) | The Company provides sub-advisory services in the ordinary course of business to commonly controlled Old Mutual business units. Management fees include amounts earned from these related parties. For the years ended December 31, 2015, 2014, and 2013, $0.0 million, $0.3 million, and $0.0 million, respectively, were earned from discontinued operations. |
(4) | The Company conducts a portion of its distribution activities out of Asia and the United Kingdom, and has entered into contractual arrangements with Related Business Units domiciled there to share their premises and leverage certain of their administrative functions. |
(5) | The Company's Parent provides the Company with various oversight services, including governance, which includes compensation for board and executive committees, investor relations, procurement of insurance coverage, human resources, financial reporting, internal audit, treasury, systems, risk and tax services. That portion of the above costs which (i) are directly attributable to the Company, (ii) have been charged to the Company by the Company's Parent and (iii) have been paid to the Parent by the Company, have been recorded in the Company's Consolidated Financial Statements and were $1.8 million, $2.1 million, and $2.0 million for the years ended December 31, 2015, 2014, and 2013, respectively. With respect to the above services which were not directly attributable to the Company, costs associated with these services were generally allocated based on the Company's proportion of the Parent's total consolidated, normalized revenues. In the years ended December 31, 2015, 2014, and 2013, $0.0 million, $3.4 million, and $3.3 million, respectively, of these costs incurred have been allocated to the Company through a non-cash contribution to Parent equity, with the balance of the charges settled in cash. Subsequent to the Offering, these general costs are no longer allocated and if required, are borne directly by the Company. |
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2015 | 2014 | ||||||
Accounts payable | $ | 8.4 | $ | 10.5 | |||
Accrued expenses | 25.7 | 26.1 | |||||
Treasury rate lock hedge liability (Note 21) | 8.8 | — | |||||
Other | 2.8 | 2.9 | |||||
Total accounts payable and accruals | $ | 45.7 | $ | 39.5 | |||
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2015 | 2014 | ||||||
Share-based payments liability (Note 18) | $ | 38.5 | $ | 42.3 | |||
Non-current compensation payable | 0.3 | 2.7 | |||||
Profit interests compensation liability (Note 2) | 155.2 | 123.8 | |||||
Voluntary deferral plan liability (Note 17) | 66.8 | 59.5 | |||||
Total other compensation liabilities | $ | 260.8 | $ | 228.3 | |||
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(in millions) | 2015 | 2014 | Interest rate | Maturity | |||||||
Third party obligations: | |||||||||||
Revolving credit facility | $ | 90.0 | $ | 177.0 | LIBOR + 1.25% plus 0.20% commitment fee | October 15, 2019 | |||||
Related party obligations: | |||||||||||
Loan note two | — | 37.0 | — | September 29, 2024 | |||||||
Total long term debt of the Company | $ | 90.0 | $ | 214.0 | |||||||
• | Loan note one: On September 29, 2014, the Company entered into loan note one with its Parent. Loan note one was issued in the amount of $175.0 million, accrues interest at 3% per annum and was payable in full on its maturity date, September 29, 2015. On October 15, 2014, the Company repaid loan note one upon the closing of its new revolving credit facility. |
• | Term loan two: On September 30, 2010, the Company entered into a $16.5 million term note to American AgCredit, PCA. The note was repayable in installments of $0.5 million on December 1, 2012, $12.0 million on November 1, 2013, $1.5 million on December 15, 2013 and $2.5 million on August 15, 2014. The note bore interest at a rate of 5.23% per annum and was paid out of a third party-funded interest reserve account at no cost to the Company. The note was fully repaid in August 2014. |
• | Related party credit facility: On September 30, 2005, the Company entered into a five year revolving credit facility with its Parent. During March 2013, the Company and its Parent agreed to extend the agreement through March 31, 2018, at a maximum amount of $750.0 million with a fee on undrawn amounts of 0.5%. In connection with the Reorganization, the Parent made a capital contribution to the Company in the amount of the outstanding principal on the Related party credit facility. |
• | Term loan one: On December 31, 2008, the Company issued a $900.0 million promissory note to its Parent. The note was due on September 30, 2015 and bore interest at a rate of 6.34% per annum. In connection with the Reorganization the Parent made a capital contribution to the Company in the amount of the outstanding principal on term loan one. |
(in millions) | 2015 | 2014 | Interest rate | Maturity | |||||||
Related party obligations: | |||||||||||
Shareholder loans and note interest | $ | — | $ | 318.7 | BBSW* + 5.5% | October 2022 | |||||
Total related party obligations: | — | 318.7 | |||||||||
Third party obligations: | |||||||||||
Term loan A | — | 163.0 | 6.0% - 6.26% | May 2016 | |||||||
Term loan B | — | 261.3 | 5.93% – LIBOR + 1.61% | October 1, 2016 | |||||||
Senior secured notes | — | 860.0 | 6.19% - 6.38% | December 1, 2019 | |||||||
Secured bank loan | — | 109.7 | variable | October 2017 | |||||||
Notes payable | — | 2,383.2 | LIBOR + margin | October 2027 | |||||||
Total third party obligations: | — | 3,777.2 | |||||||||
Total long term debt of consolidated Funds | $ | — | $ | 4,095.9 | |||||||
Future minimum debt commitments | ||||
2016 | $ | — | ||
2017 | — | |||
2018 | — | |||
2019 | 90.0 | |||
2020 | — | |||
Thereafter | — | |||
Total | $ | 90.0 | ||
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2015 | 2014 | 2013 | |||||||||
Current: | |||||||||||
Federal | $ | 40.8 | $ | 41.6 | $ | — | |||||
State | 7.4 | 5.1 | 4.5 | ||||||||
Foreign | 1.3 | 1.3 | 0.5 | ||||||||
Total current | 49.5 | 48.0 | 5.0 | ||||||||
Deferred: | |||||||||||
Federal | (4.5 | ) | (37.4 | ) | 12.0 | ||||||
State | (4.5 | ) | 0.5 | (3.9 | ) | ||||||
Foreign | 6.1 | 1.7 | 0.2 | ||||||||
Total deferred | (2.9 | ) | (35.2 | ) | 8.3 | ||||||
Total tax expense | $ | 46.6 | $ | 12.8 | $ | 13.3 | |||||
2015 | 2014 | 2013 | ||||||
Tax at U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | 3.0 | % | (7.3 | )% | (2.7 | )% | ||
Non-deductible expenses | — | % | 1.6 | % | (0.1 | )% | ||
Interest expense | (9.3 | )% | 14.7 | % | — | % | ||
Dividends from foreign subsidiaries | 0.3 | % | (6.6 | )% | — | % | ||
Parent company expense carve-out adjustment | — | % | (3.6 | )% | (1.4 | )% | ||
Adjustment to liabilities for uncertain tax positions | (0.4 | )% | 2.2 | % | 1.3 | % | ||
Change in valuation allowance | (3.4 | )% | 34.9 | % | 1.0 | % | ||
Effect of foreign operations | (1.0 | )% | 2.5 | % | 0.7 | % | ||
Effect of changes in tax law, rates | (0.5 | )% | (10.8 | )% | (1.6 | )% | ||
Effect of income from non-controlling interest | — | % | (108.4 | )% | (48.6 | )% | ||
Other | (0.5 | )% | 6.1 | % | 0.5 | % | ||
Effective income tax rate for continuing operations | 23.2 | % | (39.7 | )% | (15.9 | )% | ||
2015 | 2014 | ||||||
Deferred tax assets: | |||||||
Interest expense | $ | 164.3 | $ | 181.1 | |||
Federal net operating loss | 8.1 | 12.7 | |||||
State net operating loss carry forwards | 8.4 | 27.2 | |||||
Investment partnerships | 132.4 | 121.0 | |||||
Foreign tax credit carry forwards | 15.4 | 6.4 | |||||
Intangible assets | 1.8 | 2.5 | |||||
Employee compensation | 14.8 | 8.8 | |||||
Other | 5.6 | 4.5 | |||||
Cash flow hedge | 1.6 | — | |||||
Total deferred tax assets | 352.4 | 364.2 | |||||
Valuation allowance | (6.4 | ) | (33.9 | ) | |||
Deferred tax assets, net of valuation allowance | 346.0 | 330.3 | |||||
Deferred tax liabilities: | |||||||
Investments | 4.4 | — | |||||
Net deferred tax asset | $ | 341.6 | $ | 330.3 | |||
2015 | 2014 | 2013 | |||||||||
Balance as of January 1 | $ | 93.9 | $ | 97.2 | $ | 106.2 | |||||
Additions based on tax positions of prior years | — | — | 0.1 | ||||||||
Reductions for tax provisions of prior years | — | (1.5 | ) | (6.9 | ) | ||||||
Reductions related to lapses of statutes of limitations | (0.4 | ) | (1.8 | ) | (2.2 | ) | |||||
Balance as of December 31 | $ | 93.5 | $ | 93.9 | $ | 97.2 | |||||
|
|||
|
|||
|
|||
2015 | 2014 | 2013 | |||||||||
Balance, beginning of period | $ | 42.3 | $ | 86.0 | $ | 65.8 | |||||
Amortization and revaluation of granted awards | 0.2 | 43.4 | 30.0 | ||||||||
Reclassification of modified equity-settled award | — | — | 0.9 | ||||||||
Reclassification to profit interests award | (2.8 | ) | (1.7 | ) | — | ||||||
Affiliate disposals | — | (18.0 | ) | — | |||||||
Repurchases (cash settled) | (1.2 | ) | (67.4 | ) | (10.7 | ) | |||||
Balance, end of period | $ | 38.5 | $ | 42.3 | $ | 86.0 | |||||
2016 | $ | 1.7 | |
2017 | 0.9 | ||
2018 | 0.4 | ||
Total | $ | 3.0 | |
2015 | 2014 | 2013 | |||||||||
Shares granted during the year | — | 3,576,379 | 1,996,967 | ||||||||
Weighted average grant date fair value per share GBP | £ | — | £ | 2.03 | £ | 1.94 | |||||
Weighted average grant date fair value per share USD | $ | — | $ | 3.35 | $ | 3.03 | |||||
2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Number of shares | Weighted average grant date fair value per share GBP | Weighted average grant date fair value per share USD | Number of shares | Weighted average grant date fair value per share GBP | Weighted average grant date fair value per share USD | Number of shares | Weighted average grant date fair value per share GBP | Weighted average grant date fair value per share USD | ||||||||||||||||||||||||
Outstanding at the beginning of the year | 682,346 | £ | 1.77 | $ | 2.92 | 3,954,534 | £ | 1.73 | $ | 2.85 | 2,888,925 | £ | 1.47 | $ | 2.30 | |||||||||||||||||
Granted during the year | — | — | — | 3,576,379 | 2.03 | 3.35 | 1,996,967 | 1.94 | 3.03 | |||||||||||||||||||||||
Forfeited during the year | — | — | — | (10,711 | ) | 2.03 | 3.35 | (64,778 | ) | 1.51 | 2.36 | |||||||||||||||||||||
Exercised during the year | (472,545 | ) | 1.67 | 2.50 | (878,217 | ) | 1.45 | 2.39 | (543,708 | ) | 1.25 | 1.95 | ||||||||||||||||||||
Other transfers | — | 0 | 0 | (5,959,639 | ) | n/a | n/a | (322,872 | ) | 0 | — | |||||||||||||||||||||
Outstanding at the end of the year | 209,801 | £ | 2.00 | $ | 3.00 | 682,346 | £ | 1.77 | $ | 2.92 | 3,954,534 | £ | 1.73 | $ | 2.70 | |||||||||||||||||
OM Asset Management plc awards | Shares granted | Weighted average fair value | |||||
RSAs | 559,709 | $ | 17.60 | ||||
RSUs | 47,055 | $ | 17.65 | ||||
Performance-Based RSUs | 451,657 | $ | 24.65 | ||||
2015 | 2014 | |||||||||||||
OM Asset Management plc RSA Awards | Number of shares | Weighted average grant date fair value per share | Number of shares | Weighted average grant date fair value per share | ||||||||||
Outstanding at beginning of the year | 1,212,766 | $ | 14.00 | — | $ | — | ||||||||
Converted during the year | — | — | 1,212,766 | 14.00 | ||||||||||
Granted during the year | 559,709 | 17.60 | — | — | ||||||||||
Forfeited during the year | (2,128 | ) | 17.65 | (10,225 | ) | 15.46 | ||||||||
Exercised during the year | (203,700 | ) | 14.00 | — | — | |||||||||
Other transfers | — | — | 10,225 | 15.46 | ||||||||||
Outstanding at end of the year | 1,566,647 | $ | 15.28 | 1,212,766 | $ | 14.00 | ||||||||
2015 | 2014 | |||||||||||||
OM Asset Management plc RSU Awards | Number of shares | Weighted average grant date fair value per share | Number of shares | Weighted average grant date fair value per share | ||||||||||
Outstanding at beginning of the year | — | $ | — | — | $ | — | ||||||||
Granted during the year | 47,055 | 17.65 | — | — | ||||||||||
Forfeited during the year | — | — | — | — | ||||||||||
Exercised during the year | — | — | — | — | ||||||||||
Other transfers | — | — | — | — | ||||||||||
Outstanding at end of the year | 47,055 | $ | 17.65 | — | $ | — | ||||||||
2015 | 2014 | |||||||||||||
OM Asset Management plc performance-based RSU Awards | Number of shares | Weighted average grant date fair value per share | Number of shares | Weighted average grant date fair value per share | ||||||||||
Outstanding at beginning of the year | — | $ | — | — | $ | — | ||||||||
Granted during the year | 451,657 | 24.65 | — | — | ||||||||||
Forfeited during the year | — | — | — | — | ||||||||||
Exercised during the year | — | — | — | — | ||||||||||
Other transfers | — | — | — | — | ||||||||||
Outstanding at end of the year | 451,657 | $ | 24.65 | — | $ | — | ||||||||
|
|||
For the year ended December 31, 2015 | |||||||||||
Pre-Tax | Tax Benefit (Expense) | Net of Tax | |||||||||
Foreign currency translation adjustment including portion attributable to non-controlling interests | $ | (1.5 | ) | $ | — | $ | (1.5 | ) | |||
Change in net realized and unrealized gain (loss) on derivative securities | (8.2 | ) | 1.6 | (6.6 | ) | ||||||
Other comprehensive income (loss) | $ | (9.7 | ) | $ | 1.6 | $ | (8.1 | ) | |||
For the year ended December 31, 2014 | |||||||||||
Pre-Tax | Tax Benefit (Expense) | Net of Tax | |||||||||
Foreign currency translation adjustment including portion attributable to non-controlling interests | $ | (20.4 | ) | $ | — | $ | (20.4 | ) | |||
Other comprehensive loss | $ | (20.4 | ) | $ | — | $ | (20.4 | ) | |||
For the year ended December 31, 2013 | |||||||||||
Pre-Tax | Tax Benefit (Expense) | Net of Tax | |||||||||
Foreign currency translation adjustment including portion attributable to non-controlling interests | $ | (17.9 | ) | $ | — | $ | (17.9 | ) | |||
Other comprehensive loss | $ | (17.9 | ) | $ | — | $ | (17.9 | ) | |||
Foreign currency translation adjustment | Valuation of derivative securities | Total | ||||||||||
Balance, as of December 31, 2014 | $ | (20.4 | ) | — | $ | (20.4 | ) | |||||
Other comprehensive income (loss) | (1.5 | ) | (6.6 | ) | (8.1 | ) | ||||||
De-consolidation of Funds | 23.9 | — | 23.9 | |||||||||
Balance, as of December 31, 2015 | $ | 2.0 | $ | (6.6 | ) | $ | (4.6 | ) | ||||
|
|||
|
|||
2015 | 2014 | ||||||
Average notional value of swaps | $ | — | $ | 0.4 | |||
Average value of contracts to buy | $ | — | $ | 3.0 | |||
Average value of contracts to sell | $ | — | $ | 2.7 | |||
Balance sheet classification within consolidated funds | 2015 | 2014 | |||||||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | ||||||||||||||
Derivatives with unrealized gains & losses: | |||||||||||||||||||
Forward foreign currency exchange contracts | Other assets | Other liabilities | $ | — | $ | — | $ | 0.5 | $ | — | |||||||||
Interest rate contracts | Other assets | Other liabilities | — | — | 0.4 | — | |||||||||||||
Warrants | Investments | N/A | — | — | 0.1 | — | |||||||||||||
Total return swap contracts | Other assets | Other liabilities | — | — | — | — | |||||||||||||
Other derivatives | Investments | Other liabilities | — | — | — | — | |||||||||||||
Total | $ | — | $ | — | $ | 1.0 | $ | — | |||||||||||
2015 | 2014 | 2013 | |||||||||||||||||||||||
Income statement classification | Gains | Losses | Gains | Losses | Gains | Losses | |||||||||||||||||||
Realized gains (losses): | |||||||||||||||||||||||||
Forward foreign currency exchange contracts | OMAM funds net gains (losses): | $ | — | $ | — | $ | 0.1 | $ | — | $ | — | (0.1 | ) | ||||||||||||
Total return swap contracts | OMAM funds net gains (losses): | — | — | — | (0.3 | ) | — | — | |||||||||||||||||
Unrealized gains (losses): | |||||||||||||||||||||||||
Forward foreign currency exchange contracts | OMAM funds net gains (losses): | — | — | — | — | — | (1.7 | ) | |||||||||||||||||
Interest rate contracts | OMAM funds net gains (losses): | — | — | — | (0.4 | ) | 0.5 | — | |||||||||||||||||
Other derivatives | OMAM funds net gains (losses): | — | — | — | — | 1.1 | — | ||||||||||||||||||
Net change in unrealized appreciation: | |||||||||||||||||||||||||
Forward foreign currency exchange contracts | OMAM funds net gains (losses): | — | — | 0.1 | — | — | (4.9 | ) | |||||||||||||||||
Interest rate contracts | OMAM funds net gains (losses): | — | — | 0.4 | — | — | — | ||||||||||||||||||
Futures contracts | OMAM funds net gains (losses): | — | — | — | — | 0.4 | — | ||||||||||||||||||
Other derivatives | OMAM funds net gains (losses): | — | — | — | — | 0.6 | — | ||||||||||||||||||
Total | $ | — | $ | — | $ | 0.6 | $ | (0.7 | ) | $ | 2.6 | $ | (6.7 | ) | |||||||||||
|
|||
2015 | 2014 | 2013 | |||||||||
Revenues | $ | — | $ | 38.0 | $ | 84.8 | |||||
Compensation expense | — | 30.9 | 50.7 | ||||||||
Depreciation | — | 0.2 | 0.5 | ||||||||
Other operating expenses | — | 9.8 | 16.2 | ||||||||
Amortization and impairment of goodwill & intangibles | — | — | 0.1 | ||||||||
Operating income (loss) | — | (2.9 | ) | 17.3 | |||||||
Investment gain (loss) of consolidated Funds | — | 2.8 | (9.4 | ) | |||||||
Net interest income (expense) | — | 0.1 | — | ||||||||
Income (loss) before taxes | — | — | 7.9 | ||||||||
Income taxes | — | 1.1 | 5.2 | ||||||||
Discontinued net income (loss) | — | (1.1 | ) | 2.7 | |||||||
Gain (loss) on disposal, net of tax of $0.5, $(1.5) and $2.3 | 0.8 | 2.3 | (2.1 | ) | |||||||
Total discontinued operations | 0.8 | 1.2 | 0.6 | ||||||||
Attributable to non-controlling interests | — | 4.7 | (5.8 | ) | |||||||
Attributable to controlling interests | $ | 0.8 | $ | (3.5 | ) | $ | 6.4 | ||||
Pro forma earnings (loss) per share (basic) attributable to controlling interests | $ | 0.01 | $ | (0.03 | ) | $ | 0.05 | ||||
Pro forma earnings (loss) per share (diluted) attributable to controlling interests | $ | 0.01 | $ | (0.03 | ) | $ | 0.05 | ||||
2015 | 2014 | ||||||
Beginning balance at January 1 | $ | 5.6 | $ | 8.6 | |||
Abandoned lease liability principle payments | (1.6 | ) | (0.4 | ) | |||
Accrual of wind-up costs in relation to discontinued operation | (0.3 | ) | 0.3 | ||||
Payment of wind-up costs in relation to discontinued operation | — | (2.6 | ) | ||||
Adjustment to sub-lease arrangement on abandoned lease | 0.4 | 1.2 | |||||
Drawdowns on committed funding | — | (1.5 | ) | ||||
Ending balance at December 31 | $ | 4.1 | $ | 5.6 | |||
|
|||
• | The Company excludes the effect of Funds consolidation in periods prior to January 1, 2015 by removing the portion of Fund revenues, expenses and investment return which were not attributable to its shareholders. |
• | The Company includes within management fee revenue any fees paid to Affiliates as a result of Funds consolidation in periods prior to January 1, 2015. |
• | The Company includes its share of earnings from equity-accounted Affiliates within other income in revenue, rather than investment income. Earnings from equity-accounted Affiliates amounted to $12.7 million for the year ended December 31, 2015, $9.6 million for the year ended December 31, 2014 and $7.7 million for the year ended December 31, 2013. |
• | The Company treats sales-based compensation as a general and administrative expense, rather than part of fixed compensation and benefits. |
• | The Company segregates from operating expenses variable compensation and Affiliate key employee distributions, which represent Affiliate earnings shared with Affiliate key employees. |
i. | notional corporate cost allocations which are non-cash expenses that will not recur following the Offering; |
ii. | interest expense historically paid to the Parent, as the related debt was restructured in connection with the Offering and thereafter has been eliminated from the Company's consolidated results; and |
iii. | historic mark-to-market co-investment gains and losses, because these investments and ongoing returns thereon have been allocated wholly to OMGUK. |
iv. | It excludes non-cash expenses representing changes in the value of Affiliate equity and profit interests held by Affiliate key employees. These ownerships interests may in certain circumstances be repurchased by OMUS at a value based on a pre-determined fixed multiple of trailing earnings and as such this value is carried on the Company's balance sheet as a liability. Non-cash movements in the value of this liability are treated as compensation expense under U.S. GAAP. However, any equity or profit interests repurchased by OMUS can be used to fund a portion of future variable compensation awards, resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity. The Company's Affiliate equity and profit interest plans have been designed to ensure OMUS is never required to repurchase more equity than it can reasonably recycle through variable compensation awards in any given twelve month period. OMUS may also choose to retain repurchased Affiliate equity or profit interests, entitling us to an additional share of future Affiliate earnings that represents an unrecognized economic asset to the Company. |
v. | It excludes non-cash amortization or impairment expenses related to acquired goodwill and other intangibles as these are non-cash charges that do not result in an outflow of tangible economic benefits from the business. |
vi. | It excludes capital transaction costs, including the costs of raising debt or equity, gains or losses realized as a result of redeeming debt or equity and direct incremental costs associated with acquisitions of businesses or assets. |
vii. | It excludes the results of discontinued operations attributable to controlling interests since they are not part of the Company's ongoing business, and restructuring costs incurred in continuing operations which represent an exit from a distinct product or line of business. |
viii. | It excludes deferred tax resulting from changes in tax law and expiration of statutes, adjustments for uncertain tax positions, deferred tax attributable to intangible assets and other unusual items not related to current operating results to reflect ENI tax normalization. |
2015 | 2014 | 2013 | ||||||||||
U.S. GAAP net income attributable to controlling interests | 155.5 | 51.7 | 25.7 | |||||||||
Adjustments related to restructuring and reorganization actions undertaken in connection with our initial public offering: | ||||||||||||
i | Non-cash notional parent corporate cost allocation | — | 3.4 | 3.3 | ||||||||
ii | Intercompany interest expense | — | 49.8 | 72.2 | ||||||||
iii | Co-investment (gain) | — | (2.6 | ) | (3.0 | ) | ||||||
Adjustments to reflect our economic earnings: | ||||||||||||
iv | Non-cash key employee-owned equity and profit interest revaluations | 18.2 | 83.0 | * | 47.7 | |||||||
v | Amortization and impairment of goodwill and acquired intangible assets | 0.2 | 0.1 | 0.1 | ||||||||
vi | Capital transaction costs | 2.3 | — | — | ||||||||
vii | Discontinued operations attributable to controlling interests and restructuring | (0.2 | ) | 5.8 | (6.3 | ) | ||||||
viii | ENI tax normalization | (6.3 | ) | (6.7 | ) | 1.2 | ||||||
Tax effect of above adjustments** | (8.6 | ) | (33.2 | ) | (18.0 | ) | ||||||
Economic net income (including the non-recurring performance fee) | 161.1 | 151.3 | 122.9 | |||||||||
Non-recurring performance fee, net*** | (11.4 | ) | — | — | ||||||||
Economic net income, excluding the non-recurring performance fee | $ | 149.7 | $ | 151.3 | $ | 122.9 | ||||||
2015 | 2014 | 2013 | |||||||||
U.S. GAAP revenue | $ | 699.3 | $ | 1,056.3 | $ | 928.6 | |||||
Include investment return on equity-accounted Affiliates | 12.7 | 9.6 | 7.7 | ||||||||
Exclude non-recurring performance fee | (48.1 | ) | — | — | |||||||
Exclude revenue from consolidated Funds attributable to non-controlling interests | — | (430.5 | ) | (408.8 | ) | ||||||
ENI revenue | $ | 663.9 | $ | 635.4 | $ | 527.5 | |||||
Years ended December 31, | |||||||||||
($ in millions) | 2015 | 2014 | 2013 | ||||||||
U.S. GAAP operating expense | $ | 508.1 | $ | 1,123.5 | $ | 1,028.1 | |||||
Less: items excluded from economic net income | |||||||||||
Affiliate key employee equity revaluations | (18.5 | ) | (83.0 | ) | (47.7 | ) | |||||
Amortization of acquired intangible assets | (0.2 | ) | (0.1 | ) | (0.1 | ) | |||||
Pre-IPO non-cash notional Parent corporate cost allocation | — | (3.4 | ) | (3.3 | ) | ||||||
Other items excluded from ENI(1) | (4.4 | ) | (2.2 | ) | 0.1 | ||||||
Funds' operating expenses | — | (604.0 | ) | (602.1 | ) | ||||||
Less: items segregated out of U.S. GAAP operating expense | |||||||||||
Variable compensation(2) | (201.0 | ) | (169.8 | ) | (153.8 | ) | |||||
Affiliate key employee distributions | (38.8 | ) | (40.1 | ) | (28.4 | ) | |||||
ENI operating expense | $ | 245.2 | $ | 220.9 | $ | 192.8 | |||||
(1) | Other items include capital transaction costs, restructuring expenses, and expenses (excluding variable compensation) associated with the non-recurring performance fee in 2015. |
(2) | For the year ended December 31, 2015, $174.0 million of variable compensation expense (of the $201.0 million above) is included within economic net income, which excludes the revenue and the variable compensation attributable to the non-recurring performance fee. |
|
|||
2015 | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Revenue | $ | 160.6 | $ | 213.5 | $ | 161.8 | $ | 163.4 | |||||||
Operating income | 44.4 | 62.9 | 43.0 | 40.9 | |||||||||||
Income from continuing operations before income taxes | 46.2 | 64.7 | 46.7 | 43.7 | |||||||||||
Net income | 34.2 | 49.4 | 35.0 | 36.9 | |||||||||||
Net income attributable to controlling interests | 34.2 | 49.4 | 35.0 | 36.9 | |||||||||||
Basic earnings per share ($) | $ | 0.28 | $ | 0.41 | $ | 0.29 | $ | 0.31 | |||||||
Diluted earnings per share ($) | $ | 0.28 | $ | 0.41 | $ | 0.29 | $ | 0.30 | |||||||
Basic shares outstanding (in millions)* | 120.0 | 120.0 | 120.0 | 120.0 | |||||||||||
Diluted shares outstanding (in millions)* | 120.4 | 120.5 | 120.5 | 120.6 | |||||||||||
2014 | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Revenue | $ | 269.4 | $ | 260.3 | $ | 260.0 | $ | 266.5 | |||||||
Operating income (loss) | 5.6 | (45.6 | ) | (18.2 | ) | (9.1 | ) | ||||||||
Income (loss) from continuing operations before income taxes | 8.4 | (44.1 | ) | (15.7 | ) | 19.2 | |||||||||
Net income (loss) | 4.1 | (55.6 | ) | (8.4 | ) | 16.1 | |||||||||
Net income (loss) attributable to controlling interests | 10.3 | 8.8 | (1.7 | ) | 34.3 | ||||||||||
Basic earnings (loss) per share ($) | $ | 0.09 | $ | 0.07 | $ | (0.01 | ) | $ | 0.28 | ||||||
Diluted earnings (loss) per share ($) | $ | 0.09 | $ | 0.07 | $ | (0.01 | ) | $ | 0.28 | ||||||
Basic shares outstanding (in millions)* | 120.0 | 120.0 | 120.0 | 120.0 | |||||||||||
Diluted shares outstanding (in millions)* | 120.0 | 120.0 | 120.0 | 120.0 | |||||||||||
|
|||
|
|||
2015 | 2014 | ||||||
Investments by consolidated Funds in related, unconsolidated master Funds | $ | — | $ | 23.6 | |||
Other investments of consolidated Funds attributable to non-controlling interests | — | 37.0 | |||||
Investments of consolidated Funds attributable to non-controlling interests held at fair value | — | 60.6 | |||||
Equity-accounted investments in unconsolidated Funds (Note 6) | 30.1 | 34.5 | |||||
Investments related to voluntary deferred compensation plans held at fair value | 66.9 | 59.7 | |||||
Total investments held at fair value | 97.0 | 154.8 | |||||
Equity-accounted investments in Affiliates (Note 6) | 54.0 | 50.5 | |||||
Equity-accounted investments in unconsolidated Funds, at cost (Note 6) | — | 0.5 | |||||
Investments in joint ventures | — | 2.4 | |||||
Other investments* | 51.6 | 1.7 | |||||
Total investments per Consolidated Balance Sheet | $ | 202.6 | $ | 209.9 | |||
2015 | 2014 | 2013 | |||||||||
Investment return of equity-accounted investments in unconsolidated Funds (Note 6) | $ | 0.3 | $ | 1.9 | $ | 2.9 | |||||
Realized and unrealized gains/losses on other discretionary investments held at fair value | — | 0.7 | 0.1 | ||||||||
Total investment return on OMAM products | 0.3 | 2.6 | 3.0 | ||||||||
Investment return of equity-accounted investments in Affiliates (Note 6) | 12.7 | 9.6 | 7.7 | ||||||||
Total investment income per Consolidated Statement of Operations | $ | 13.0 | $ | 12.2 | $ | 10.7 | |||||
|
|||
Quoted prices in active markets (Level I) | Significant other observable inputs (Level II) | Significant unobservable inputs (Level III) | Uncategorized | Total value, December 31, 2015 | |||||||||||||||
Assets of OMAM(1) | |||||||||||||||||||
Investment securities(2) | 66.9 | — | — | — | 66.9 | ||||||||||||||
Investments in unconsolidated Funds(3) | — | — | — | 30.1 | 30.1 | ||||||||||||||
Total fair value assets | $ | 66.9 | $ | — | $ | — | $ | 30.1 | $ | 97.0 | |||||||||
Liabilities of OMAM(1) | |||||||||||||||||||
Derivative securities | $ | — | $ | (8.8 | ) | $ | — | $ | — | $ | (8.8 | ) | |||||||
Total fair value liabilities | $ | — | $ | (8.8 | ) | $ | — | $ | — | $ | (8.8 | ) | |||||||
Quoted prices in active markets (Level I) | Significant other observable inputs (Level II) | Significant unobservable inputs (Level III) | Uncategorized | Total value, December 31, 2014 | |||||||||||||||
Assets of OMAM and consolidated Funds(1) | |||||||||||||||||||
Investments owned, at fair value | |||||||||||||||||||
Common and preferred stock | $ | 24.8 | $ | — | $ | — | $ | — | $ | 24.8 | |||||||||
Short-term investment funds | 0.1 | — | — | — | 0.1 | ||||||||||||||
Fixed income securities | 1.1 | — | — | — | 1.1 | ||||||||||||||
Collective investment funds | — | — | — | 32.5 | 32.5 | ||||||||||||||
Other investments | 0.3 | 1.8 | — | — | 2.1 | ||||||||||||||
Total investments at fair value | 26.3 | 1.8 | — | 32.5 | 60.6 | ||||||||||||||
Restricted cash held at fair value | 104.5 | — | — | — | 104.5 | ||||||||||||||
Consolidated Funds Total | 130.8 | 1.8 | — | 32.5 | 165.1 | ||||||||||||||
Investment securities(2) | 59.7 | — | — | — | 59.7 | ||||||||||||||
Investments in unconsolidated Funds(3) | — | — | — | 34.5 | 34.5 | ||||||||||||||
OMAM Total | 59.7 | — | — | 34.5 | 94.2 | ||||||||||||||
Total fair value assets | $ | 190.5 | $ | 1.8 | $ | — | $ | 67.0 | $ | 259.3 | |||||||||
Liabilities of consolidated Funds(1) | |||||||||||||||||||
Common stock | $ | (16.4 | ) | $ | — | $ | — | $ | — | $ | (16.4 | ) | |||||||
Total fair value liabilities | $ | (16.4 | ) | $ | — | $ | — | $ | — | $ | (16.4 | ) | |||||||
(1) | Assets and liabilities measured at fair value are comprised of financial investments managed by the Company's Affiliates. $0.0 million in assets and $0.0 million in liabilities at December 31, 2015 and $60.6 million in assets and $16.4 million in liabilities at December 31, 2014 are the result of the consolidation of Funds sponsored by the Company's Affiliates. |
(2) | Investment securities of $66.9 million and $59.7 million at December 31, 2015 and 2014, respectively, are investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I. |
(3) | The $30.1 million and $34.5 million at December 31, 2015 and December 31, 2014, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds advised by Affiliates and are valued using NAV which the Company relies on to determine their fair value as a practical expedient. The Company has not classified these investments in the fair value hierarchy in accordance with ASU 2015-07. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investments funds.The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates. |
|
|||
2015 | 2014 | ||||||
Assets | |||||||
Investments at fair value | $ | — | $ | 5.9 | |||
Restricted cash | — | 2,487.7 | |||||
Timber assets | — | 4,053.2 | |||||
Other assets of consolidated Funds | — | 165.0 | |||||
Total Assets | $ | — | $ | 6,711.8 | |||
Liabilities | |||||||
Borrowings | $ | — | $ | 4,095.9 | |||
Other liabilities of consolidated Funds | — | 150.8 | |||||
Total Liabilities | $ | — | $ | 4,246.7 | |||
2015 | 2014 | ||||||
Unconsolidated VIE assets | $ | 7,302.4 | $ | 9,993.5 | |||
Unconsolidated VIE liabilities | $ | 4,189.1 | $ | 1,515.0 | |||
Equity interests on the Consolidated Balance Sheet | $ | 10.8 | $ | 75.3 | |||
Maximum risk of loss(1) | $ | 16.6 | $ | 75.5 | |||
(1) | Includes equity investments the Company has made or is required to make and any earned but uncollected management/incentive fees. The Company does not record performance/incentive allocations until the respective measurement period has ended. |
|
|||
For the year ended December 31, 2015 | For the year ended December 31, 2014 | ||||||||||||||||||||||
Statements of Income | Heitman LLC | Other | Total | Heitman LLC | Other | Total | |||||||||||||||||
Net revenues(1) | $ | 128.9 | $ | 213.7 | $ | 342.6 | $ | 227.4 | $ | 89.1 | $ | 316.5 | |||||||||||
Operating income | 27.1 | 87.7 | 114.8 | 51.0 | 17.2 | 68.2 | |||||||||||||||||
Other income (expense), net | — | 97.8 | 97.8 | 26.1 | (102.1 | ) | (76.0 | ) | |||||||||||||||
Income (loss) before income taxes | 27.1 | 185.5 | 212.6 | 77.1 | (84.9 | ) | (7.8 | ) | |||||||||||||||
Less income tax expense | 0.8 | 5.1 | 5.9 | 3.0 | 1.9 | 4.9 | |||||||||||||||||
Exclude: noncontrolling interests income (loss) | — | 177.6 | 177.6 | 58.6 | (89.8 | ) | (31.2 | ) | |||||||||||||||
Net income attributable to controlling interests | $ | 26.3 | $ | 2.8 | $ | 29.1 | $ | 15.5 | $ | 3.0 | $ | 18.5 | |||||||||||
OMAM equity in net income of equity method investees | $ | 10.2 | $ | 2.8 | $ | 13.0 | $ | 8.5 | $ | 3.0 | $ | 11.5 | |||||||||||
For the year ended December 31, 2013 | |||||||||||
Statements of Income (cont.) | Heitman LLC | Other | Total | ||||||||
Net revenues(1) | $ | 218.3 | $ | 80.1 | $ | 298.4 | |||||
Operating income | 49.0 | 20.8 | 69.8 | ||||||||
Other income (expense), net | 172.8 | (13.4 | ) | 159.4 | |||||||
Income before income taxes | 221.8 | 7.4 | 229.2 | ||||||||
Less income tax expense | 1.8 | (0.4 | ) | 1.4 | |||||||
Exclude: noncontrolling interests income | 197.2 | 7.6 | 204.8 | ||||||||
Net income attributable to controlling interests | $ | 22.8 | $ | 0.2 | $ | 23.0 | |||||
OMAM equity in net income of equity method investees | $ | 10.4 | $ | 0.2 | $ | 10.6 | |||||
As of December 31, 2015 | As of December 31, 2014 | ||||||||||||||||||||||
Balance Sheets | Heitman LLC | Other | Total | Heitman LLC | Other | Total | |||||||||||||||||
Total assets | $ | 76.8 | $ | 2,670.4 | $ | 2,747.2 | $ | 1,647.1 | $ | 1,319.9 | $ | 2,967.0 | |||||||||||
Total liabilities | 39.0 | 1,026.2 | 1,065.2 | 581.1 | 552.8 | 1,133.9 | |||||||||||||||||
Non-controlling interests in subsidiaries | — | 1,612.7 | 1,612.7 | 1,014.4 | 756.9 | 1,771.3 | |||||||||||||||||
Members' equity | $ | 37.8 | $ | 31.5 | $ | 69.3 | $ | 51.6 | $ | 10.2 | $ | 61.8 | |||||||||||
OMAM equity investment and undistributed earnings of affiliated companies, before consolidating and reconciling adjustments | $ | 22.9 | $ | 31.5 | $ | 54.4 | $ | 44.7 | $ | 10.2 | $ | 54.9 | |||||||||||
Consolidating and reconciling adjustments: | |||||||||||||||||||||||
Goodwill attributable to equity method investment | 29.7 | — | 29.7 | 30.6 | — | 30.6 | |||||||||||||||||
OMAM investment in equity method investees at cost plus equity in undistributable earnings since acquisition | $ | 52.6 | $ | 31.5 | $ | 84.1 | $ | 75.3 | $ | 10.2 | $ | 85.5 | |||||||||||
(1) | Net revenue includes advisory fees for asset management services and investment income, including interest and dividends from consolidated investment partnerships. |
|
|||
2015 | 2014 | ||||||
Leasehold improvements | $ | 28.5 | $ | 26.7 | |||
Office equipment | 21.3 | 17.5 | |||||
Furniture and fixtures | 6.8 | 6.6 | |||||
Software and web development | 21.4 | 14.3 | |||||
Total property and equipment, at cost | 78.0 | 65.1 | |||||
Accumulated depreciation and amortization | (47.3 | ) | (41.0 | ) | |||
Property and equipment, net | $ | 30.7 | $ | 24.1 | |||
2015 | 2014 | ||||||
Timber | $ | — | $ | 2,813.7 | |||
Timberlands | — | 1,880.5 | |||||
Timber lease rights | — | 198.8 | |||||
Other(1) | — | 27.1 | |||||
Total timber and timberlands, at cost | — | 4,920.1 | |||||
Accumulated depletion on timber | — | (866.0 | ) | ||||
Accumulated amortization | — | (0.9 | ) | ||||
Timber and timberlands, net | $ | — | $ | 4,053.2 | |||
(1) | The category "Other" includes buildings, roads, quarries, hunting lease rights and other similar tangible and intangible assets related to timber cutting operations. |
Future minimum rentals | |||
2016 | $ | 11.0 | |
2017 | 10.9 | ||
2018 | 10.4 | ||
2019 | 10.1 | ||
2020 | 9.6 | ||
Thereafter | 19.2 | ||
Total | $ | 71.2 | |
|
|||
Gross Book Value | Accumulated Impairment | Net Book Value | |||||||||
December 31, 2013 | $ | 160.6 | $ | (42.8 | ) | $ | 117.8 | ||||
Impairments | — | — | — | ||||||||
Additions | 11.0 | — | 11.0 | ||||||||
Disposals | (11.2 | ) | 8.9 | (2.3 | ) | ||||||
December 31, 2014 | $ | 160.4 | $ | (33.9 | ) | $ | 126.5 | ||||
Impairments | — | — | — | ||||||||
Additions | — | — | — | ||||||||
Disposals | — | — | — | ||||||||
December 31, 2015 | $ | 160.4 | $ | (33.9 | ) | $ | 126.5 | ||||
Gross Book Value | Accumulated Amortization & Impairment | Net Book Value | |||||||||
December 31, 2013 | $ | 26.8 | $ | (25.6 | ) | $ | 1.2 | ||||
Amortization | — | (0.1 | ) | (0.1 | ) | ||||||
Disposals | (4.1 | ) | 4.0 | (0.1 | ) | ||||||
December 31, 2014 | $ | 22.7 | $ | (21.7 | ) | $ | 1.0 | ||||
Additions | 0.6 | — | 0.6 | ||||||||
Amortization | — | (0.1 | ) | (0.1 | ) | ||||||
Disposals | — | — | — | ||||||||
December 31, 2015 | $ | 23.3 | $ | (21.8 | ) | $ | 1.5 | ||||
2016 | $ | 0.2 | |
2017 | 0.2 | ||
2018 | 0.2 | ||
2019 | 0.2 | ||
2020 | 0.2 | ||
Thereafter | 0.5 | ||
Total | $ | 1.5 | |
|
|||
2015 | 2014 | ||||||
Leasehold improvements | $ | 28.5 | $ | 26.7 | |||
Office equipment | 21.3 | 17.5 | |||||
Furniture and fixtures | 6.8 | 6.6 | |||||
Software and web development | 21.4 | 14.3 | |||||
Total property and equipment, at cost | 78.0 | 65.1 | |||||
Accumulated depreciation and amortization | (47.3 | ) | (41.0 | ) | |||
Property and equipment, net | $ | 30.7 | $ | 24.1 | |||
2015 | 2014 | ||||||
Timber | $ | — | $ | 2,813.7 | |||
Timberlands | — | 1,880.5 | |||||
Timber lease rights | — | 198.8 | |||||
Other(1) | — | 27.1 | |||||
Total timber and timberlands, at cost | — | 4,920.1 | |||||
Accumulated depletion on timber | — | (866.0 | ) | ||||
Accumulated amortization | — | (0.9 | ) | ||||
Timber and timberlands, net | $ | — | $ | 4,053.2 | |||
(1) | The category "Other" includes buildings, roads, quarries, hunting lease rights and other similar tangible and intangible assets related to timber cutting operations. |
|
|||
2015 | 2014 | ||||||
Fees receivable from unconsolidated Funds | $ | 31.5 | $ | 18.2 | |||
Fees receivable from commonly controlled Old Mutual plc business units | 2.0 | 2.3 | |||||
Other amounts due from related parties | 5.2 | 5.9 | |||||
Other amounts due from Parent | 0.2 | 1.8 | |||||
Total amounts due from related parties | $ | 38.9 | $ | 28.2 | |||
2015 | 2014 | ||||||
Other amounts due to related parties | $ | 0.2 | $ | 0.4 | |||
Loan notes payable to Parent (Note 13) | — | 37.0 | |||||
Preferred dividend payable of consolidated Fund | — | 16.3 | |||||
Other amounts due to Parent(2) | 4.5 | 3.5 | |||||
Total current payables to related parties | 4.7 | 57.2 | |||||
Other amounts due to Parent(2) | 218.2 | 286.1 | |||||
Promissory note payable to related parties of consolidated Fund (Note 13) | — | 318.7 | |||||
Total long-term payables to related parties | 218.2 | 604.8 | |||||
Total amounts due to related parties | $ | 222.9 | $ | 662.0 | |||
2015 | 2014 | ||||||
Investment in unconsolidated master Funds(3) | $ | — | $ | 23.6 | |||
Investments in joint ventures | — | 2.4 | |||||
Investments in equity-accounted investees (Note 6) | 84.1 | 85.5 | |||||
Total related party investments | $ | 84.1 | $ | 111.5 | |||
2015 | 2014 | 2013 | |||||||||
Revenues: | |||||||||||
Management fees collected from commonly controlled Old Mutual business units(3) | $ | 9.3 | $ | 10.6 | $ | 9.6 | |||||
Management fees collected from unconsolidated Funds(1) | 107.0 | 47.5 | 46.4 | ||||||||
Performance fees collected from unconsolidated Funds(1) | 1.9 | 5.9 | 0.5 | ||||||||
Management fees collected from joint venture partners | — | 6.4 | 13.7 | ||||||||
Total related party revenues (including discontinued operations) | $ | 118.2 | $ | 70.4 | $ | 70.2 | |||||
Expenses: | |||||||||||
Interest expense owed to parent (Note 13) | $ | — | $ | 49.8 | $ | 72.1 | |||||
Rent and administrative costs recharged by commonly controlled Old Mutual business units(4) | 1.7 | 1.2 | 0.1 | ||||||||
Restricted stock grants of parent equity to OMAM employees (Note 18) | 0.5 | 4.5 | 5.0 | ||||||||
Recharged parent operational costs(5) | 1.8 | 5.5 | 5.3 | ||||||||
Total related party expenses (including discontinued operations) | $ | 4.0 | $ | 61.0 | $ | 82.5 | |||||
(1) | Transactions with unconsolidated Affiliate-sponsored Funds are considered related party items on the basis of the Company's significant influence over the activities of such entities in its capacity as investment advisor thereto. These transactions are comprised of fees for advisory services and investments in unconsolidated "master" Funds held by consolidated "feeder" Funds. |
(2) | During 2014, the Company entered into a deferred tax asset deed with the Parent for the payment of realized benefits associated with certain deferred tax assets, as well as a co-investment deed for the payment of realized benefits associated with co-investments made by the Company in real-estate and timber strategies of its Affiliates. Amounts owed to the Parent associated with the deferred tax asset deed were $198.1 million at December 31, 2015. Amounts owed to the Parent associated with the co-investment deed were $20.2 million at December 31, 2015, net of tax. As of December 31, 2015, the Company recorded a payable of $4.5 million for redemptions and estimated taxes due under the co-investment deed. Amounts withheld in excess of the future tax liability will be payable to the Parent upon settlement. |
(3) | The Company provides sub-advisory services in the ordinary course of business to commonly controlled Old Mutual business units. Management fees include amounts earned from these related parties. For the years ended December 31, 2015, 2014, and 2013, $0.0 million, $0.3 million, and $0.0 million, respectively, were earned from discontinued operations. |
(4) | The Company conducts a portion of its distribution activities out of Asia and the United Kingdom, and has entered into contractual arrangements with Related Business Units domiciled there to share their premises and leverage certain of their administrative functions. |
(5) | The Company's Parent provides the Company with various oversight services, including governance, which includes compensation for board and executive committees, investor relations, procurement of insurance coverage, human resources, financial reporting, internal audit, treasury, systems, risk and tax services. That portion of the above costs which (i) are directly attributable to the Company, (ii) have been charged to the Company by the Company's Parent and (iii) have been paid to the Parent by the Company, have been recorded in the Company's Consolidated Financial Statements and were $1.8 million, $2.1 million, and $2.0 million for the years ended December 31, 2015, 2014, and 2013, respectively. With respect to the above services which were not directly attributable to the Company, costs associated with these services were generally allocated based on the Company's proportion of the Parent's total consolidated, normalized revenues. In the years ended December 31, 2015, 2014, and 2013, $0.0 million, $3.4 million, and $3.3 million, respectively, of these costs incurred have been allocated to the Company through a non-cash contribution to Parent equity, with the balance of the charges settled in cash. Subsequent to the Offering, these general costs are no longer allocated and if required, are borne directly by the Company. |
|
|||
2015 | 2014 | ||||||
Accounts payable | $ | 8.4 | $ | 10.5 | |||
Accrued expenses | 25.7 | 26.1 | |||||
Treasury rate lock hedge liability (Note 21) | 8.8 | — | |||||
Other | 2.8 | 2.9 | |||||
Total accounts payable and accruals | $ | 45.7 | $ | 39.5 | |||
|
|||
2015 | 2014 | ||||||
Share-based payments liability (Note 18) | $ | 38.5 | $ | 42.3 | |||
Non-current compensation payable | 0.3 | 2.7 | |||||
Profit interests compensation liability (Note 2) | 155.2 | 123.8 | |||||
Voluntary deferral plan liability (Note 17) | 66.8 | 59.5 | |||||
Total other compensation liabilities | $ | 260.8 | $ | 228.3 | |||
|
|||
(in millions) | 2015 | 2014 | Interest rate | Maturity | |||||||
Third party obligations: | |||||||||||
Revolving credit facility | $ | 90.0 | $ | 177.0 | LIBOR + 1.25% plus 0.20% commitment fee | October 15, 2019 | |||||
Related party obligations: | |||||||||||
Loan note two | — | 37.0 | — | September 29, 2024 | |||||||
Total long term debt of the Company | $ | 90.0 | $ | 214.0 | |||||||
(in millions) | 2015 | 2014 | Interest rate | Maturity | |||||||
Related party obligations: | |||||||||||
Shareholder loans and note interest | $ | — | $ | 318.7 | BBSW* + 5.5% | October 2022 | |||||
Total related party obligations: | — | 318.7 | |||||||||
Third party obligations: | |||||||||||
Term loan A | — | 163.0 | 6.0% - 6.26% | May 2016 | |||||||
Term loan B | — | 261.3 | 5.93% – LIBOR + 1.61% | October 1, 2016 | |||||||
Senior secured notes | — | 860.0 | 6.19% - 6.38% | December 1, 2019 | |||||||
Secured bank loan | — | 109.7 | variable | October 2017 | |||||||
Notes payable | — | 2,383.2 | LIBOR + margin | October 2027 | |||||||
Total third party obligations: | — | 3,777.2 | |||||||||
Total long term debt of consolidated Funds | $ | — | $ | 4,095.9 | |||||||
Future minimum debt commitments | ||||
2016 | $ | — | ||
2017 | — | |||
2018 | — | |||
2019 | 90.0 | |||
2020 | — | |||
Thereafter | — | |||
Total | $ | 90.0 | ||
|
|||
2015 | 2014 | 2013 | |||||||||
Current: | |||||||||||
Federal | $ | 40.8 | $ | 41.6 | $ | — | |||||
State | 7.4 | 5.1 | 4.5 | ||||||||
Foreign | 1.3 | 1.3 | 0.5 | ||||||||
Total current | 49.5 | 48.0 | 5.0 | ||||||||
Deferred: | |||||||||||
Federal | (4.5 | ) | (37.4 | ) | 12.0 | ||||||
State | (4.5 | ) | 0.5 | (3.9 | ) | ||||||
Foreign | 6.1 | 1.7 | 0.2 | ||||||||
Total deferred | (2.9 | ) | (35.2 | ) | 8.3 | ||||||
Total tax expense | $ | 46.6 | $ | 12.8 | $ | 13.3 | |||||
2015 | 2014 | 2013 | ||||||
Tax at U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | 3.0 | % | (7.3 | )% | (2.7 | )% | ||
Non-deductible expenses | — | % | 1.6 | % | (0.1 | )% | ||
Interest expense | (9.3 | )% | 14.7 | % | — | % | ||
Dividends from foreign subsidiaries | 0.3 | % | (6.6 | )% | — | % | ||
Parent company expense carve-out adjustment | — | % | (3.6 | )% | (1.4 | )% | ||
Adjustment to liabilities for uncertain tax positions | (0.4 | )% | 2.2 | % | 1.3 | % | ||
Change in valuation allowance | (3.4 | )% | 34.9 | % | 1.0 | % | ||
Effect of foreign operations | (1.0 | )% | 2.5 | % | 0.7 | % | ||
Effect of changes in tax law, rates | (0.5 | )% | (10.8 | )% | (1.6 | )% | ||
Effect of income from non-controlling interest | — | % | (108.4 | )% | (48.6 | )% | ||
Other | (0.5 | )% | 6.1 | % | 0.5 | % | ||
Effective income tax rate for continuing operations | 23.2 | % | (39.7 | )% | (15.9 | )% | ||
2015 | 2014 | ||||||
Deferred tax assets: | |||||||
Interest expense | $ | 164.3 | $ | 181.1 | |||
Federal net operating loss | 8.1 | 12.7 | |||||
State net operating loss carry forwards | 8.4 | 27.2 | |||||
Investment partnerships | 132.4 | 121.0 | |||||
Foreign tax credit carry forwards | 15.4 | 6.4 | |||||
Intangible assets | 1.8 | 2.5 | |||||
Employee compensation | 14.8 | 8.8 | |||||
Other | 5.6 | 4.5 | |||||
Cash flow hedge | 1.6 | — | |||||
Total deferred tax assets | 352.4 | 364.2 | |||||
Valuation allowance | (6.4 | ) | (33.9 | ) | |||
Deferred tax assets, net of valuation allowance | 346.0 | 330.3 | |||||
Deferred tax liabilities: | |||||||
Investments | 4.4 | — | |||||
Net deferred tax asset | $ | 341.6 | $ | 330.3 | |||
2015 | 2014 | 2013 | |||||||||
Balance as of January 1 | $ | 93.9 | $ | 97.2 | $ | 106.2 | |||||
Additions based on tax positions of prior years | — | — | 0.1 | ||||||||
Reductions for tax provisions of prior years | — | (1.5 | ) | (6.9 | ) | ||||||
Reductions related to lapses of statutes of limitations | (0.4 | ) | (1.8 | ) | (2.2 | ) | |||||
Balance as of December 31 | $ | 93.5 | $ | 93.9 | $ | 97.2 | |||||
|
|||
2015 | 2014 | 2013 | |||||||||
Balance, beginning of period | $ | 42.3 | $ | 86.0 | $ | 65.8 | |||||
Amortization and revaluation of granted awards | 0.2 | 43.4 | 30.0 | ||||||||
Reclassification of modified equity-settled award | — | — | 0.9 | ||||||||
Reclassification to profit interests award | (2.8 | ) | (1.7 | ) | — | ||||||
Affiliate disposals | — | (18.0 | ) | — | |||||||
Repurchases (cash settled) | (1.2 | ) | (67.4 | ) | (10.7 | ) | |||||
Balance, end of period | $ | 38.5 | $ | 42.3 | $ | 86.0 | |||||
2016 | $ | 1.7 | |
2017 | 0.9 | ||
2018 | 0.4 | ||
Total | $ | 3.0 | |
2015 | 2014 | |||||||||||||
OM Asset Management plc RSU Awards | Number of shares | Weighted average grant date fair value per share | Number of shares | Weighted average grant date fair value per share | ||||||||||
Outstanding at beginning of the year | — | $ | — | — | $ | — | ||||||||
Granted during the year | 47,055 | 17.65 | — | — | ||||||||||
Forfeited during the year | — | — | — | — | ||||||||||
Exercised during the year | — | — | — | — | ||||||||||
Other transfers | — | — | — | — | ||||||||||
Outstanding at end of the year | 47,055 | $ | 17.65 | — | $ | — | ||||||||
2015 | 2014 | 2013 | |||||||||
Shares granted during the year | — | 3,576,379 | 1,996,967 | ||||||||
Weighted average grant date fair value per share GBP | £ | — | £ | 2.03 | £ | 1.94 | |||||
Weighted average grant date fair value per share USD | $ | — | $ | 3.35 | $ | 3.03 | |||||
2015 | 2014 | |||||||||||||
OM Asset Management plc performance-based RSU Awards | Number of shares | Weighted average grant date fair value per share | Number of shares | Weighted average grant date fair value per share | ||||||||||
Outstanding at beginning of the year | — | $ | — | — | $ | — | ||||||||
Granted during the year | 451,657 | 24.65 | — | — | ||||||||||
Forfeited during the year | — | — | — | — | ||||||||||
Exercised during the year | — | — | — | — | ||||||||||
Other transfers | — | — | — | — | ||||||||||
Outstanding at end of the year | 451,657 | $ | 24.65 | — | $ | — | ||||||||
OM Asset Management plc awards | Shares granted | Weighted average fair value | |||||
RSAs | 559,709 | $ | 17.60 | ||||
RSUs | 47,055 | $ | 17.65 | ||||
Performance-Based RSUs | 451,657 | $ | 24.65 | ||||
2015 | 2014 | |||||||||||||
OM Asset Management plc RSA Awards | Number of shares | Weighted average grant date fair value per share | Number of shares | Weighted average grant date fair value per share | ||||||||||
Outstanding at beginning of the year | 1,212,766 | $ | 14.00 | — | $ | — | ||||||||
Converted during the year | — | — | 1,212,766 | 14.00 | ||||||||||
Granted during the year | 559,709 | 17.60 | — | — | ||||||||||
Forfeited during the year | (2,128 | ) | 17.65 | (10,225 | ) | 15.46 | ||||||||
Exercised during the year | (203,700 | ) | 14.00 | — | — | |||||||||
Other transfers | — | — | 10,225 | 15.46 | ||||||||||
Outstanding at end of the year | 1,566,647 | $ | 15.28 | 1,212,766 | $ | 14.00 | ||||||||
2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Number of shares | Weighted average grant date fair value per share GBP | Weighted average grant date fair value per share USD | Number of shares | Weighted average grant date fair value per share GBP | Weighted average grant date fair value per share USD | Number of shares | Weighted average grant date fair value per share GBP | Weighted average grant date fair value per share USD | ||||||||||||||||||||||||
Outstanding at the beginning of the year | 682,346 | £ | 1.77 | $ | 2.92 | 3,954,534 | £ | 1.73 | $ | 2.85 | 2,888,925 | £ | 1.47 | $ | 2.30 | |||||||||||||||||
Granted during the year | — | — | — | 3,576,379 | 2.03 | 3.35 | 1,996,967 | 1.94 | 3.03 | |||||||||||||||||||||||
Forfeited during the year | — | — | — | (10,711 | ) | 2.03 | 3.35 | (64,778 | ) | 1.51 | 2.36 | |||||||||||||||||||||
Exercised during the year | (472,545 | ) | 1.67 | 2.50 | (878,217 | ) | 1.45 | 2.39 | (543,708 | ) | 1.25 | 1.95 | ||||||||||||||||||||
Other transfers | — | 0 | 0 | (5,959,639 | ) | n/a | n/a | (322,872 | ) | 0 | — | |||||||||||||||||||||
Outstanding at the end of the year | 209,801 | £ | 2.00 | $ | 3.00 | 682,346 | £ | 1.77 | $ | 2.92 | 3,954,534 | £ | 1.73 | $ | 2.70 | |||||||||||||||||
|
|||
For the year ended December 31, 2015 | |||||||||||
Pre-Tax | Tax Benefit (Expense) | Net of Tax | |||||||||
Foreign currency translation adjustment including portion attributable to non-controlling interests | $ | (1.5 | ) | $ | — | $ | (1.5 | ) | |||
Change in net realized and unrealized gain (loss) on derivative securities | (8.2 | ) | 1.6 | (6.6 | ) | ||||||
Other comprehensive income (loss) | $ | (9.7 | ) | $ | 1.6 | $ | (8.1 | ) | |||
For the year ended December 31, 2014 | |||||||||||
Pre-Tax | Tax Benefit (Expense) | Net of Tax | |||||||||
Foreign currency translation adjustment including portion attributable to non-controlling interests | $ | (20.4 | ) | $ | — | $ | (20.4 | ) | |||
Other comprehensive loss | $ | (20.4 | ) | $ | — | $ | (20.4 | ) | |||
For the year ended December 31, 2013 | |||||||||||
Pre-Tax | Tax Benefit (Expense) | Net of Tax | |||||||||
Foreign currency translation adjustment including portion attributable to non-controlling interests | $ | (17.9 | ) | $ | — | $ | (17.9 | ) | |||
Other comprehensive loss | $ | (17.9 | ) | $ | — | $ | (17.9 | ) | |||
Foreign currency translation adjustment | Valuation of derivative securities | Total | ||||||||||
Balance, as of December 31, 2014 | $ | (20.4 | ) | — | $ | (20.4 | ) | |||||
Other comprehensive income (loss) | (1.5 | ) | (6.6 | ) | (8.1 | ) | ||||||
De-consolidation of Funds | 23.9 | — | 23.9 | |||||||||
Balance, as of December 31, 2015 | $ | 2.0 | $ | (6.6 | ) | $ | (4.6 | ) | ||||
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2015 | 2014 | ||||||
Average notional value of swaps | $ | — | $ | 0.4 | |||
Average value of contracts to buy | $ | — | $ | 3.0 | |||
Average value of contracts to sell | $ | — | $ | 2.7 | |||
Balance sheet classification within consolidated funds | 2015 | 2014 | |||||||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | ||||||||||||||
Derivatives with unrealized gains & losses: | |||||||||||||||||||
Forward foreign currency exchange contracts | Other assets | Other liabilities | $ | — | $ | — | $ | 0.5 | $ | — | |||||||||
Interest rate contracts | Other assets | Other liabilities | — | — | 0.4 | — | |||||||||||||
Warrants | Investments | N/A | — | — | 0.1 | — | |||||||||||||
Total return swap contracts | Other assets | Other liabilities | — | — | — | — | |||||||||||||
Other derivatives | Investments | Other liabilities | — | — | — | — | |||||||||||||
Total | $ | — | $ | — | $ | 1.0 | $ | — | |||||||||||
2015 | 2014 | 2013 | |||||||||||||||||||||||
Income statement classification | Gains | Losses | Gains | Losses | Gains | Losses | |||||||||||||||||||
Realized gains (losses): | |||||||||||||||||||||||||
Forward foreign currency exchange contracts | OMAM funds net gains (losses): | $ | — | $ | — | $ | 0.1 | $ | — | $ | — | (0.1 | ) | ||||||||||||
Total return swap contracts | OMAM funds net gains (losses): | — | — | — | (0.3 | ) | — | — | |||||||||||||||||
Unrealized gains (losses): | |||||||||||||||||||||||||
Forward foreign currency exchange contracts | OMAM funds net gains (losses): | — | — | — | — | — | (1.7 | ) | |||||||||||||||||
Interest rate contracts | OMAM funds net gains (losses): | — | — | — | (0.4 | ) | 0.5 | — | |||||||||||||||||
Other derivatives | OMAM funds net gains (losses): | — | — | — | — | 1.1 | — | ||||||||||||||||||
Net change in unrealized appreciation: | |||||||||||||||||||||||||
Forward foreign currency exchange contracts | OMAM funds net gains (losses): | — | — | 0.1 | — | — | (4.9 | ) | |||||||||||||||||
Interest rate contracts | OMAM funds net gains (losses): | — | — | 0.4 | — | — | — | ||||||||||||||||||
Futures contracts | OMAM funds net gains (losses): | — | — | — | — | 0.4 | — | ||||||||||||||||||
Other derivatives | OMAM funds net gains (losses): | — | — | — | — | 0.6 | — | ||||||||||||||||||
Total | $ | — | $ | — | $ | 0.6 | $ | (0.7 | ) | $ | 2.6 | $ | (6.7 | ) | |||||||||||
|
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2015 | 2014 | 2013 | |||||||||
Revenues | $ | — | $ | 38.0 | $ | 84.8 | |||||
Compensation expense | — | 30.9 | 50.7 | ||||||||
Depreciation | — | 0.2 | 0.5 | ||||||||
Other operating expenses | — | 9.8 | 16.2 | ||||||||
Amortization and impairment of goodwill & intangibles | — | — | 0.1 | ||||||||
Operating income (loss) | — | (2.9 | ) | 17.3 | |||||||
Investment gain (loss) of consolidated Funds | — | 2.8 | (9.4 | ) | |||||||
Net interest income (expense) | — | 0.1 | — | ||||||||
Income (loss) before taxes | — | — | 7.9 | ||||||||
Income taxes | — | 1.1 | 5.2 | ||||||||
Discontinued net income (loss) | — | (1.1 | ) | 2.7 | |||||||
Gain (loss) on disposal, net of tax of $0.5, $(1.5) and $2.3 | 0.8 | 2.3 | (2.1 | ) | |||||||
Total discontinued operations | 0.8 | 1.2 | 0.6 | ||||||||
Attributable to non-controlling interests | — | 4.7 | (5.8 | ) | |||||||
Attributable to controlling interests | $ | 0.8 | $ | (3.5 | ) | $ | 6.4 | ||||
Pro forma earnings (loss) per share (basic) attributable to controlling interests | $ | 0.01 | $ | (0.03 | ) | $ | 0.05 | ||||
Pro forma earnings (loss) per share (diluted) attributable to controlling interests | $ | 0.01 | $ | (0.03 | ) | $ | 0.05 | ||||
2015 | 2014 | ||||||
Beginning balance at January 1 | $ | 5.6 | $ | 8.6 | |||
Abandoned lease liability principle payments | (1.6 | ) | (0.4 | ) | |||
Accrual of wind-up costs in relation to discontinued operation | (0.3 | ) | 0.3 | ||||
Payment of wind-up costs in relation to discontinued operation | — | (2.6 | ) | ||||
Adjustment to sub-lease arrangement on abandoned lease | 0.4 | 1.2 | |||||
Drawdowns on committed funding | — | (1.5 | ) | ||||
Ending balance at December 31 | $ | 4.1 | $ | 5.6 | |||
|
|||
2015 | 2014 | 2013 | ||||||||||
U.S. GAAP net income attributable to controlling interests | 155.5 | 51.7 | 25.7 | |||||||||
Adjustments related to restructuring and reorganization actions undertaken in connection with our initial public offering: | ||||||||||||
i | Non-cash notional parent corporate cost allocation | — | 3.4 | 3.3 | ||||||||
ii | Intercompany interest expense | — | 49.8 | 72.2 | ||||||||
iii | Co-investment (gain) | — | (2.6 | ) | (3.0 | ) | ||||||
Adjustments to reflect our economic earnings: | ||||||||||||
iv | Non-cash key employee-owned equity and profit interest revaluations | 18.2 | 83.0 | * | 47.7 | |||||||
v | Amortization and impairment of goodwill and acquired intangible assets | 0.2 | 0.1 | 0.1 | ||||||||
vi | Capital transaction costs | 2.3 | — | — | ||||||||
vii | Discontinued operations attributable to controlling interests and restructuring | (0.2 | ) | 5.8 | (6.3 | ) | ||||||
viii | ENI tax normalization | (6.3 | ) | (6.7 | ) | 1.2 | ||||||
Tax effect of above adjustments** | (8.6 | ) | (33.2 | ) | (18.0 | ) | ||||||
Economic net income (including the non-recurring performance fee) | 161.1 | 151.3 | 122.9 | |||||||||
Non-recurring performance fee, net*** | (11.4 | ) | — | — | ||||||||
Economic net income, excluding the non-recurring performance fee | $ | 149.7 | $ | 151.3 | $ | 122.9 | ||||||
2015 | 2014 | 2013 | |||||||||
U.S. GAAP revenue | $ | 699.3 | $ | 1,056.3 | $ | 928.6 | |||||
Include investment return on equity-accounted Affiliates | 12.7 | 9.6 | 7.7 | ||||||||
Exclude non-recurring performance fee | (48.1 | ) | — | — | |||||||
Exclude revenue from consolidated Funds attributable to non-controlling interests | — | (430.5 | ) | (408.8 | ) | ||||||
ENI revenue | $ | 663.9 | $ | 635.4 | $ | 527.5 | |||||
Years ended December 31, | |||||||||||
($ in millions) | 2015 | 2014 | 2013 | ||||||||
U.S. GAAP operating expense | $ | 508.1 | $ | 1,123.5 | $ | 1,028.1 | |||||
Less: items excluded from economic net income | |||||||||||
Affiliate key employee equity revaluations | (18.5 | ) | (83.0 | ) | (47.7 | ) | |||||
Amortization of acquired intangible assets | (0.2 | ) | (0.1 | ) | (0.1 | ) | |||||
Pre-IPO non-cash notional Parent corporate cost allocation | — | (3.4 | ) | (3.3 | ) | ||||||
Other items excluded from ENI(1) | (4.4 | ) | (2.2 | ) | 0.1 | ||||||
Funds' operating expenses | — | (604.0 | ) | (602.1 | ) | ||||||
Less: items segregated out of U.S. GAAP operating expense | |||||||||||
Variable compensation(2) | (201.0 | ) | (169.8 | ) | (153.8 | ) | |||||
Affiliate key employee distributions | (38.8 | ) | (40.1 | ) | (28.4 | ) | |||||
ENI operating expense | $ | 245.2 | $ | 220.9 | $ | 192.8 | |||||
(1) | Other items include capital transaction costs, restructuring expenses, and expenses (excluding variable compensation) associated with the non-recurring performance fee in 2015. |
(2) | For the year ended December 31, 2015, $174.0 million of variable compensation expense (of the $201.0 million above) is included within economic net income, which excludes the revenue and the variable compensation attributable to the non-recurring performance fee. |
|
|||
2015 | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Revenue | $ | 160.6 | $ | 213.5 | $ | 161.8 | $ | 163.4 | |||||||
Operating income | 44.4 | 62.9 | 43.0 | 40.9 | |||||||||||
Income from continuing operations before income taxes | 46.2 | 64.7 | 46.7 | 43.7 | |||||||||||
Net income | 34.2 | 49.4 | 35.0 | 36.9 | |||||||||||
Net income attributable to controlling interests | 34.2 | 49.4 | 35.0 | 36.9 | |||||||||||
Basic earnings per share ($) | $ | 0.28 | $ | 0.41 | $ | 0.29 | $ | 0.31 | |||||||
Diluted earnings per share ($) | $ | 0.28 | $ | 0.41 | $ | 0.29 | $ | 0.30 | |||||||
Basic shares outstanding (in millions)* | 120.0 | 120.0 | 120.0 | 120.0 | |||||||||||
Diluted shares outstanding (in millions)* | 120.4 | 120.5 | 120.5 | 120.6 | |||||||||||
2014 | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Revenue | $ | 269.4 | $ | 260.3 | $ | 260.0 | $ | 266.5 | |||||||
Operating income (loss) | 5.6 | (45.6 | ) | (18.2 | ) | (9.1 | ) | ||||||||
Income (loss) from continuing operations before income taxes | 8.4 | (44.1 | ) | (15.7 | ) | 19.2 | |||||||||
Net income (loss) | 4.1 | (55.6 | ) | (8.4 | ) | 16.1 | |||||||||
Net income (loss) attributable to controlling interests | 10.3 | 8.8 | (1.7 | ) | 34.3 | ||||||||||
Basic earnings (loss) per share ($) | $ | 0.09 | $ | 0.07 | $ | (0.01 | ) | $ | 0.28 | ||||||
Diluted earnings (loss) per share ($) | $ | 0.09 | $ | 0.07 | $ | (0.01 | ) | $ | 0.28 | ||||||
Basic shares outstanding (in millions)* | 120.0 | 120.0 | 120.0 | 120.0 | |||||||||||
Diluted shares outstanding (in millions)* | 120.0 | 120.0 | 120.0 | 120.0 | |||||||||||
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