Moelis & Company
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
2015
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
51,824
|
|
$
|
46,816
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
Bad debt expense
|
|
|
450
|
|
|
298
|
|
Depreciation and amortization
|
|
|
1,542
|
|
|
1,308
|
|
(Income) loss from equity method investments
|
|
|
(2,335
|
)
|
|
(3,060
|
)
|
Equity-based compensation
|
|
|
38,706
|
|
|
20,518
|
|
Deferred tax provision
|
|
|
(774
|
)
|
|
1,092
|
|
Other
|
|
|
80
|
|
|
(3
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
1,444
|
|
|
726
|
|
Other receivables
|
|
|
(92
|
)
|
|
(5,204
|
)
|
Prepaid expenses and other assets
|
|
|
(116
|
)
|
|
(1,797
|
)
|
Deferred compensation
|
|
|
(1,788
|
)
|
|
(1,121
|
)
|
Compensation payable
|
|
|
(75,900
|
)
|
|
(89,844
|
)
|
Accounts payable and accrued expenses
|
|
|
(4,014
|
)
|
|
(2,285
|
)
|
Deferred revenue
|
|
|
2,353
|
|
|
2,778
|
|
Dividends received
|
|
|
804
|
|
|
985
|
|
Other liabilities
|
|
|
2,252
|
|
|
413
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
14,436
|
|
|
(28,380
|
)
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Purchase of investments
|
|
|
(70,928
|
)
|
|
(26,994
|
)
|
Proceeds from sales of investments
|
|
|
46,000
|
|
|
39,999
|
|
Notes issued to employees
|
|
|
(352
|
)
|
|
|
|
Purchase of equipment and leasehold improvements
|
|
|
(2,286
|
)
|
|
(2,102
|
)
|
Return of capital from equity method investments
|
|
|
9
|
|
|
109
|
|
Change in restricted cash
|
|
|
21
|
|
|
(68
|
)
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(27,536
|
)
|
|
10,944
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Dividends and distributions
|
|
|
(117,910
|
)
|
|
(47,754
|
)
|
Purchase of treasury stock
|
|
|
(2,609
|
)
|
|
(5,953
|
)
|
Class A partnership units and other equity purchased
|
|
|
|
|
|
(90
|
)
|
Excess tax benefits from equity-based compensation
|
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(120,429
|
)
|
|
(53,797
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
|
(1,366
|
)
|
|
924
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(134,895
|
)
|
|
(70,309
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
248,022
|
|
|
197,944
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
113,127
|
|
$
|
127,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow disclosure:
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
Income taxes
|
|
$
|
14,719
|
|
$
|
11,904
|
|
Other non-cash activity
|
|
|
|
|
|
|
|
Class A Partnership Units or other equity converted into Class A Common Stock
|
|
$
|
783
|
|
$
|
3,644
|
|
Dividend equivalents issued
|
|
$
|
7,774
|
|
$
|
1,339
|
|
See notes to the condensed consolidated financial statements (unaudited).
7
Table of Contents
Moelis & Company
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
(dollars in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
Earnings
(Accumulated
Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
|
|
|
|
|
Class A
Common
Stock
|
|
Class B
Common
Stock
|
|
Treasury
Stock
|
|
Class A
Common
Stock
|
|
Class B
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
Capital
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
Balance as of January 1, 2016
|
|
|
20,536,740
|
|
|
31,229,236
|
|
|
(263,622
|
)
|
$
|
205
|
|
$
|
312
|
|
$
|
(7,616
|
)
|
$
|
190,703
|
|
$
|
(15,338
|
)
|
$
|
108
|
|
$
|
89,044
|
|
$
|
257,418
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,863
|
|
|
|
|
|
37,961
|
|
|
51,824
|
|
Equity-based compensation
|
|
|
250,042
|
|
|
(1,774
|
)
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
37,070
|
|
|
|
|
|
|
|
|
1,633
|
|
|
38,706
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(248
|
)
|
|
(409
|
)
|
|
(657
|
)
|
Dividends ($1.40 per share of Class A Common Stock) and distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,774
|
|
|
(36,483
|
)
|
|
|
|
|
(89,201
|
)
|
|
(117,910
|
)
|
Treasury stock purchases
|
|
|
|
|
|
|
|
|
(97,601
|
)
|
|
|
|
|
|
|
|
(2,609
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,609
|
)
|
Class A Partnership Units and other equity purchased or converted to Class A Common stock
|
|
|
103,538
|
|
|
(88,911
|
)
|
|
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
900
|
|
|
|
|
|
|
|
|
(117
|
)
|
|
783
|
|
Net excess tax benefit (detriment) from Equity-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
|
|
|
|
(47
|
)
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
132
|
|
|
|
|
|
|
|
|
|
|
|
132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2016
|
|
|
20,890,320
|
|
|
31,138,551
|
|
|
(361,223
|
)
|
$
|
209
|
|
$
|
311
|
|
$
|
(10,225
|
)
|
$
|
236,532
|
|
$
|
(37,958
|
)
|
$
|
(140
|
)
|
$
|
38,911
|
|
$
|
227,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2015
|
|
|
19,770,893
|
|
|
31,621,542
|
|
|
|
|
$
|
198
|
|
$
|
316
|
|
$
|
|
|
$
|
136,896
|
|
$
|
(24,118
|
)
|
$
|
85
|
|
$
|
61,008
|
|
$
|
174,385
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,467
|
|
|
|
|
|
34,349
|
|
|
46,816
|
|
Equity-based compensation
|
|
|
81,608
|
|
|
(5,300
|
)
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
18,605
|
|
|
|
|
|
|
|
|
1,912
|
|
|
20,518
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
570
|
|
|
996
|
|
|
1,566
|
|
Dividends ($0.40 per share of Class A Common Stock) and distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,339
|
|
|
(9,298
|
)
|
|
|
|
|
(39,795
|
)
|
|
(47,754
|
)
|
Treasury stock purchases
|
|
|
|
|
|
|
|
|
(192,660
|
)
|
|
|
|
|
|
|
|
(5,953
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,953
|
)
|
Class A Partnership Units and other equity purchased or converted into Class A Common Stock
|
|
|
501,259
|
|
|
(213,569
|
)
|
|
|
|
|
5
|
|
|
(2
|
)
|
|
|
|
|
4,203
|
|
|
|
|
|
|
|
|
(652
|
)
|
|
3,554
|
|
Net excess tax benefit from equity- based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2015
|
|
|
20,353,760
|
|
|
31,402,673
|
|
|
(192,660
|
)
|
$
|
204
|
|
$
|
314
|
|
$
|
(5,953
|
)
|
$
|
161,090
|
|
$
|
(20,949
|
)
|
$
|
655
|
|
$
|
57,818
|
|
$
|
193,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
notes to the condensed consolidated financial statements (unaudited).
8
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
(dollars in thousands)
1. ORGANIZATION AND BASIS OF PRESENTATION
Moelis & Company and its consolidated subsidiaries (the "Company," "we," "our," or "us") is a leading global investment bank, incorporated in Delaware. Prior to the Company's IPO
in April 2014, the business operated as a Delaware limited partnership that commenced operations during 2007. Following Moelis & Company's IPO, the operations are owned by Moelis &
Company Group LP ("Group LP"), a U.S. Delaware limited partnership, and Group LP is controlled by Moelis & Company. Moelis & Company's shareholders are entitled to
receive a portion of Group LP's economics through their direct ownership interests in shares of Class A common stock of Moelis & Company. The noncontrolling interest owners of
Group LP (not Moelis & Company) receive economics of the operations primarily through their ownership interests in Group LP partnership units.
The
Company's activities as an investment banking advisory firm constitute a single business segment offering clients, including corporations, governments and financial sponsors, a range
of advisory services with expertise across all major industries in mergers and acquisitions, recapitalizations and restructurings and other corporate finance matters.
Basis of Presentation
The condensed consolidated financial statements of Moelis & Company include its partnership interests in
Group LP,
its equity interest in the sole general partner of Group LP, Moelis & Company Group GP LLC ("Group GP"), and its interests in its subsidiaries. Moelis &
Company will operate and control all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in Group GP. The Company
operates through the following subsidiaries:
-
-
Moelis & Company LLC ("Moelis U.S."), a Delaware limited liability company, a registered broker-dealer with the U.S.
Securities and Exchange Commission ("SEC") and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA").
-
-
Moelis & Company International Holdings LLC ("Moelis International"), a Delaware limited liability company, owns the
following entities:
-
-
Moelis & Company UK LLP ("Moelis UK"), a limited liability partnership registered under the laws of England
and Wales. In addition to the United Kingdom, Moelis UK maintains operations through the following branches:
-
-
Moelis & Company UK LLP, French Branch (French branch) (previously operated as a subsidiary named
Moelis & Company France SAS through June 4, 2015)
-
-
Moelis & Company Europe Limited, Frankfurt am Main (German branch)
-
-
Moelis & Company UK LLP, DIFC Branch (Dubai branch)
-
-
50% of Moelis Australia Holdings PTY Limited ("Moelis Australia Holdings", or the "Australian JV"), a joint venture with
Magic Trust Trustee PTY Limited (the "Trust").
-
-
Moelis & Company Asia Limited ("Moelis Asia"), a limited company incorporated in Hong Kong licensed under the Hong
Kong Securities and Futures Ordinance to provide financial advisory services. In addition to Hong Kong, Moelis Asia maintains operations in Beijing China through Hong Kong Moelis & Company Asia
Limited Beijing Representative Office,
9
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
1. ORGANIZATION AND BASIS OF PRESENTATION (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America ("U.S. GAAP"). As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial
statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of
the Company's management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the
accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated and combined audited
financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015.
Consolidation
The Company's policy is to consolidate (i) entities, other than limited partnerships, in which it has a controlling financial
interest, (ii) variable interest entities where the Company has a variable interest and is deemed to be the primary beneficiary and (iii) limited partnerships where the Company has
ownership of the majority of voting interests. When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity's operating and financial decisions,
the Company applies the equity method of accounting in which it records in earnings its share of income or losses of the entity. All intercompany balances and transactions with the Company's
subsidiaries have been eliminated in consolidation.
Use of Estimates
The preparation of condensed consolidated financial statements and
related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary.
In
preparing the condensed consolidated financial statements, management makes estimates and assumptions regarding:
-
-
the adequacy of the allowance for doubtful accounts;
-
-
the realization of deferred taxes;
10
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
-
-
the measurement of equity-based compensation; and
-
-
other matters that affect the reported amounts and disclosures of contingencies in the financial statements.
Cash and Cash Equivalents
Cash and cash equivalents include all short-term highly liquid
investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase.
As
of June 30, 2016, the Company had cash equivalents of $73,348 (December 31, 2015: $178,872) invested primarily in government securities money market funds and U.S.
Treasury Bills. Additionally, as of June 30, 2016, the Company had cash of $39,779 (December 31, 2015: $69,150) maintained in U.S. and non-U.S. bank accounts, of which most bank account
balances had little or no insurance coverage (most balances are held in U.S. and U.K. accounts which exceeded the U.S. Federal Deposit Insurance Corporation and U.K. Financial Services Compensation
Scheme Coverage limits).
Restricted Cash
As of June 30, 2016 and December 31, 2015, the Company held cash of $737 and $819, respectively, in restricted
collateral deposits primarily held by certain non-U.S. subsidiaries.
Receivables
The accompanying condensed consolidated statements of financial condition present accounts receivable balances net of allowance for
doubtful accounts based on the Company's assessment of the collectability of customer accounts.
The
Company maintains an allowance for doubtful accounts that, in management's opinion, provides for an adequate reserve to cover losses that may be incurred. The Company regularly
reviews the allowance by considering factors such as historical experience, credit quality, age of the accounts receivable, and the current economic conditions that may affect a customer's ability to
pay such amounts owed to the Company.
After
concluding that a reserved accounts receivable is no longer collectible, the Company will charge-off the receivable. This is determined based on several factors including the age
of the accounts receivable and the credit worthiness of the customer. This has the effect of reducing both the gross receivable and the allowance for doubtful accounts.
Deferred Compensation
Deferred compensation costs represent arrangements with certain employees whereby cash payments are subject to a required
period
of service subsequent to payment by the Company. These amounts are charged to expenses over the period that the employee is required to provide services in order to vest in the payment.
Financial Instruments at Fair Value
Fair value is generally based on quoted prices, however if quoted market prices are not available, fair value
is
determined based on other relevant factors, including dealer price quotations, price activity for equivalent instruments and valuation pricing models. The Company established a fair value hierarchy
which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the
type of instrument, the characteristics specific to the instrument and the state of the marketplace (including the existence and transparency of transactions between
11
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
market
participants). Financial instruments with readily-available actively quoted prices or for which fair value can be measured from actively-quoted prices in an orderly market will generally have a
higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
Financial
instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest) based on inputs:
Level 1
Quoted prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to
access as of the reporting date. The Company, to the extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a
large position and a sale could reasonably affect the quoted price.
Level 2
Pricing inputs are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the
same as those used in Level 1. Fair value is determined through the use of models or other valuation methodologies.
Level 3
Pricing inputs are unobservable for the instruments and include situations where there is little, if any, market activity for
the investments. The inputs into the determination of fair value require significant judgment or estimation by the Company's management.
In
certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair
value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair
value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument.
For
level 3 investments in which pricing inputs are unobservable and limited market activity exists, management's determination of fair value is based on the best information
available, may incorporate management's own assumptions and involves a significant degree of judgment.
Equity Method Investments
The Company accounts for its equity method investments under the equity method of accounting as the Company does not
control
these entities but has the ability to exercise significant influence. The amounts recorded on the condensed consolidated financial statements of financial condition reflects the Company's share of
contributions made to, distributions received from, and the equity earnings and losses of, the investments. The Company reflects its share of gains and losses of the investment in income (loss) from
equity method investments in the condensed consolidated statements of operations.
Equipment and Leasehold Improvements
Office equipment and furniture and fixtures are stated at cost less accumulated depreciation, which is
determined
using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years, respectively. Leasehold improvements are stated at cost less accumulated amortization,
which is determined using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset.
Major
renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Upon retirement or disposal of assets, the cost and
related accumulated depreciation or amortization are removed from the condensed consolidated statements of
12
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
financial
condition and any gain or loss is reflected in the condensed consolidated statements of operations.
Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement
In conjunction with the IPO, the Company was treated for U.S. federal income
tax purposes as having directly
purchased Class A partnership units in Group LP from the existing unitholders. Additional Group LP Class A partnership units may be exchanged for shares of Class A
common stock in the Company. The initial purchase and future exchanges are expected to result in an increase in the tax basis of Group LP's assets attributable to the Company's interest in
Group LP. These increases in the tax basis of Group LP's assets attributable to the Company's interest in Group LP would not have been available but for the initial purchase and
future exchanges. Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income tax the Company would
otherwise be required to pay in the future. As a result, the Company records a deferred tax asset for such increase in tax basis.
The
Company has entered into a tax receivable agreement with its eligible Managing Directors that will provide for the payment by the Company to its eligible Managing Directors of 85% of
the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes as a result of (a) the increases in tax basis attributable to
exchanges by its eligible Managing Directors and (b) tax benefits related to imputed interest deemed to be paid by the Company as a result of this tax receivable agreement. The Company expects
to benefit from the remaining 15% of cash savings, if any, in income tax that it realizes and record any such estimated tax benefits as an increase to additional paid-in-capital. For purposes of the
tax receivable agreement, cash savings in income tax will be computed by comparing the Company's actual income tax liability to the amount of such taxes that it would have been required to pay had
there been no increase to the tax basis of the tangible and intangible assets of Group LP as a result of the exchanges and had it not entered into the tax receivable agreement. The term of the
tax receivable agreement commenced upon consummation of the IPO and will continue until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the tax
receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement. The Company has recorded the estimated tax benefits related to the increase in tax
basis and imputed interest as a result of the initial purchase and subsequent exchanges described above as a deferred tax asset in the condensed consolidated statements of financial condition. The
amount due to its eligible Managing Directors related to the tax receivable agreement as a result of the initial purchase and subsequent exchanges described above is recorded as amount due pursuant to
tax receivable agreement in the condensed consolidated statements of financial condition. The amounts recorded for the deferred tax asset and the liability for our obligations under the tax receivable
agreement are estimates. Any adjustments to our estimates subsequent to their initial establishment will be included in net income (loss). Future exchanges of Class A partnership units in
Group LP for Class A common shares in the Company will be accounted for in a similar manner.
Revenue and Expense Recognition
The Company recognizes revenues from providing advisory services when earned and collection is reasonably assured.
Upfront fees are recognized over the estimated period that the related services are performed. Transaction-related fees are recognized when
13
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
all
services for a transaction have been provided, specified conditions have been met and the transaction closes. Underwriting revenues are recognized when the offering is deemed complete and is
presented net of related expenses. Deferred revenues are recorded for fees received that have not yet been earned. Expenses are reflected on the condensed consolidated statements of operations, net of
client reimbursements. Reimbursable expenses billed to clients totaled $4,143 and $2,998 for the three months ended June 30, 2016 and 2015, respectively, and $7,394 and $5,871 for the
six months ended June 30, 2016 and 2015, respectively.
Equity-based Compensation
The Company recognizes the cost of employee services received in exchange for an equity instrument award. The cost is
based
on its grant-date fair value based on quoted market prices at the time of grant amortized over the service period required by the award's vesting terms.
For
the purposes of calculating diluted net income (loss) per share to holders of Class A common stock, unvested service-based awards are included in the diluted weighted average
shares of Class A common stock outstanding using the treasury stock method. See Note 7 for further discussion.
The
Company generally permits a retiring employee to retain and not forfeit certain qualifying incentive RSUs granted during employment if at retirement the employee (i) is at
least 54 years old and (ii) has provided at least 8 consecutive years of service to the Company. Any such RSUs will continue to vest on their applicable vesting schedule, subject to
noncompetition and other terms. Over time a greater number of employees may become retirement eligible and the related requisite service period over which we will expense these awards will be shorter
than the stated vesting period. Any unvested RSUs prior to meeting the stated requisite service period or retirement eligibility date are eligible to receive dividends in kind; however, the right to
dividends in kind will be forfeited if the underlying award does not vest.
Income Taxes
Prior to the Company's reorganization and IPO of Moelis & Company, the Company had been primarily subject to the New York
City
unincorporated business tax ("UBT") and certain other foreign, state and local taxes as applicable. The Company's operations are comprised of entities that are organized as limited liability companies
and limited partnerships. For U.S. federal income tax purposes, taxes related to income earned by these entities represent obligations of the noncontrolling interest holders, which is primarily made
up of individual partners and members, and have historically not been reflected in the condensed consolidated statements of financial condition. In connection with the Company's reorganization and
IPO, the Company became subject to U.S. corporate federal and state income tax on its allocable share of results of operations from Group LP.
The
Company accounts for income taxes in accordance with ASC 740, "
Accounting for Income Taxes
" ("ASC 740"), which requires the
recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in
which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company's condensed consolidated statements of financial condition as deferred tax
assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not
be realized.
14
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
ASC
740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect
amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and
adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three and six months ended June 30, 2016 and 2015, no unrecognized tax benefit
was recorded. To the extent that the Company's assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate
will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of
income tax expense. For the three and six months ended June 30, 2016 and 2015, no such amounts were recorded.
Foreign Currency Translation
Assets and liabilities held in non-U.S. dollar denominated (functional) currencies are translated into U.S. dollars
at
exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. A charge or credit is recorded to other
comprehensive income to reflect the translation of these amounts to the extent the non-U.S. currency is designated the functional currency of the subsidiary. Non-functional currency related
transaction gains and losses are immediately recorded in the condensed consolidated statements of operations.
3. RECENT ACCOUNTING PRONOUNCEMENTS
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). ASU 2014-09 requires a company to recognize revenue in
an amount that reflects the consideration to which the entity expects to be entitled in exchange for services provided. The amendment requires enhanced disclosures regarding the nature, amount, timing
and uncertainty of revenues and cash flows from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, "Deferral of the Effective Date" ("ASU 2015-14"), which
provides amendments that defer the effective date of ASU 2014-09 by one year. In March and April 2016, the FASB issued ASU No. 2016-08 and ASU No. 2016-10,
respectively, both entitled, "Revenue from Contracts with Customers". The amendments provide clarification on the implementation guidance for principal versus agent considerations and for identifying
performance obligations and licensing in Topic 606, but the updates do not change the core principles of the codification. Similarly, in May 2016 the FASB issued ASU 2016-12 to modify narrow
aspects of Topic 606, but not the core principles. The amendments in these updates are effective either retrospectively to each prior reporting period presented, or as a cumulative-effect adjustment
as of the date of adoption, during interim and annual periods beginning after December 15, 2017, with early adoption permitted beginning after December 15, 2016. The Company is currently
assessing the impact the adoption of ASU 2014-09 will have on its condensed consolidated financial statements.
In
January 2016, the FASB issued ASU No. 2016-01, "Financial InstrumentsOverall: Recognition and Measurement of Financial Assets and Financial Liabilities"
("ASU 2016-01"). ASU 2016-01 enhances the reporting model for financial instruments by addressing certain aspects of the recognition, measurement, presentation and disclosure of
financial instruments. Key provisions require equity
15
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
3. RECENT ACCOUNTING PRONOUNCEMENTS (Continued)
investments
with readily determinable fair values (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income.
In addition, the exit price notion must be used when measuring the fair value of financial instruments for disclosure purposes. ASU 2016-01 is effective for fiscal years, and interim periods
within those fiscal years, beginning after December 15, 2017. The Company is currently assessing the impact the adoption of ASU 2016-01 will have on its condensed consolidated financial
statements.
In
February 2016, the FASB issued ASU No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 increases the transparency and comparability among organizations by
recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments will retain lease classifications, distinguishing finance
leases from operating leases, using criteria that is substantially similar for distinguishing capital leases from operating leases in previous guidance. Lessees and lessors are required to recognize
and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its condensed consolidated
financial statements.
In
March 2016, the FASB issued ASU No. 2016-07, "InvestmentsEquity Method and Joint Ventures" ("ASU 2016-07"). ASU 2016-07 simplifies the
accounting for investments that become qualified for the equity method of accounting as a result of an increase in the level of ownership or degree of influence by eliminating the requirement of
adjusting the investment, results of operations and retained earnings retroactively as if the equity method had been in effect during all previous periods. ASU 2016-07 is effective for fiscal
years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The adoption of ASU 2016-07 will not have a material impact on the
Company's condensed consolidated financial statements.
In
March 2016, the FASB issued ASU No. 2016-09, "CompensationStock Compensation" ("ASU 2016-09"). ASU 2016-09 simplifies the accounting for
share-based payment awards to employees. The amendments in the update affect several aspects of Topic 718, including income tax consequences, classification of awards as either equity or liabilities,
and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early
adoption is permitted. The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its condensed consolidated financial statements.
4. EQUITY METHOD INVESTMENTS
Investment in Joint Venture
On April 1, 2010, the Company entered into a 50-50 joint venture in Moelis Australia Holdings, investing a combination of cash
and certain net assets of its wholly-owned subsidiary, Moelis Australia, in exchange for its interests. The remaining 50% is owned by an Australian trust established by and for the benefit of Moelis
Australia senior executives.
16
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
4. EQUITY METHOD INVESTMENTS (Continued)
For
the three months ended June 30, 2016 and 2015, income of $232 and a loss of $33 was recorded on this investment, respectively, and for the six months ended June 30,
2016 and 2015, income of $605 and $279 was recorded on this investment, respectively.
Other Equity Method Investment
In June 2014, the Company made an investment of $265 into a general partner entity which invests third-party funds and is controlled by
a related party, Moelis Asset Management LP. The Company has determined that it should account for this investment as an equity method investment on its condensed consolidated financial
statements. For the three months ended June 30, 2016 and 2015, $34 and $228 of income was recorded on this investment, respectively, and for the six months ended June 30, 2016 and
2015, $1,730 and $2,781 of income was recorded on this investment, respectively.
During
the six months ended June 30, 2016 and 2015, the Company received cash distributions from this entity in the amount of $813 and $1,094, respectively.
5. EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements, net consist of the following:
|
|
|
|
|
|
|
|
|
|
June 30,
2016
|
|
December 31,
2015
|
|
Office equipment
|
|
$
|
12,011
|
|
$
|
11,193
|
|
Furniture and fixtures
|
|
|
3,250
|
|
|
2,916
|
|
Leasehold improvements
|
|
|
8,032
|
|
|
7,073
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
23,293
|
|
|
21,182
|
|
Less accumulated depreciation and amortization
|
|
|
(13,859
|
)
|
|
(12,484
|
)
|
|
|
|
|
|
|
|
|
Equipment and leasehold improvements, net
|
|
$
|
9,434
|
|
$
|
8,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization expenses for fixed assets totaled $806 and $688 for the three months ended June 30, 2016 and 2015, respectively, and $1,542 and $1,308 for the
six months ended June 30, 2016 and 2015, respectively.
6. FAIR VALUE MEASUREMENTS
The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Financial instruments
measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest) based on inputs:
Level 1Quoted
prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to access as of the reporting date. The Company, to the
extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a large position and a sale could reasonably affect the
quoted price.
17
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
6. FAIR VALUE MEASUREMENTS (Continued)
Level 2Pricing
inputs are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the same as those used in level 1. Fair value
is determined through the use of models or other valuation methodologies.
Level 3Pricing
inputs are unobservable for the instruments and include situations in which there is little, if any, market activity for the investments. The inputs into the
determination of fair value require significant judgment or estimation by the Company's management.
The
estimated fair values of government securities money markets and U.S. Treasury Bills as of June 30, 2016 and December 31, 2015 are based on quoted prices for recent
trading activity in identical or similar instruments. The Company generally invests in U.S. Treasury Bills with maturities of less than twelve months. See Note 2 for further information on the
Company's fair value hierarchy.
In
fiscal 2015 the Company received convertible notes as compensation for its services and classified this investment as available-for-sale. These convertible notes do not have readily
determinable market values and are categorized accordingly as level 3. The fair value of the convertible notes as of December 31, 2015, was recorded at the initial transaction price at
which such notes were purchased by third party investors in the capital market transaction on which the Company provided services. The subsequent measurement of the fair value of the convertible notes
as of June 30, 2016, was recorded at carrying value plus accrued interest. Unrealized changes in fair value are reflected in other comprehensive income in the condensed consolidated financial
statements.
The
following table summarizes the levels of the fair value hierarchy into which the Company's financial assets and liabilities fall as of June 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets:
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Included in cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury bills
|
|
$
|
19,997
|
|
$
|
9,997
|
|
|
10,000
|
|
|
|
|
Government securities money market
|
|
|
53,351
|
|
|
|
|
|
53,351
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury bills
|
|
|
62,969
|
|
|
7,984
|
|
|
54,985
|
|
|
|
|
Convertible notes
|
|
|
678
|
|
|
|
|
|
|
|
|
678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial assets
|
|
$
|
136,995
|
|
$
|
17,981
|
|
$
|
118,336
|
|
$
|
678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
6. FAIR VALUE MEASUREMENTS (Continued)
The
following table summarizes the levels of the fair value hierarchy into which the Company's financial assets fall as of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets:
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Included in cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury bills
|
|
$
|
100,996
|
|
$
|
71,998
|
|
$
|
28,998
|
|
$
|
|
|
Government securities money market
|
|
|
77,876
|
|
|
|
|
|
77,876
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury bills
|
|
|
37,989
|
|
|
19,990
|
|
|
17,999
|
|
|
|
|
Convertible notes
|
|
|
635
|
|
|
|
|
|
|
|
|
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial assets
|
|
$
|
217,496
|
|
$
|
91,988
|
|
$
|
124,873
|
|
$
|
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Company's methodology for reclassifications impacting the fair value hierarchy is that transfers in/out of the respective category are reported at fair value as of the beginning of
the period in which the reclassification occurred. The changes to the Company's investment classified as level 3 are as follows for the six months ended June 30, 2016.
|
|
|
|
|
|
|
Convertible
notes
|
|
January 1, 2016
|
|
$
|
635
|
|
Unrealized gains (losses) included in accumulated other comprehensive income
|
|
|
43
|
|
|
|
|
|
|
June 30, 2016
|
|
$
|
678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) related to investment still held as of June 30, 2016
|
|
$
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
the end of the reporting period, the Company reviews U.S. treasury bills held to determine whether the securities are of the most recent issuance of that security with the same
maturity (referred to as "on-the-run", which is the most liquid version of the maturity band). If a U.S. treasury bill held at the end of the reporting period was from the most recent issuance it is
classified as level 1, otherwise it is referred to as "off-the-run" and is classified as level 2. During the six months ended June 30, 2016, there were transfers of $19,993 from
level 1 to level 2 related to U.S. Treasury bills that were initially acquired as on-the-run and classified as level 1, but subsequently transferred to level 2 as a result
of becoming off-the-run. There were no transfers between level 1, level 2 or level 3 during the six months ended June 30, 2015.
19
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
7. NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS
The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three and six months ended June 30, 2016
and 2015 are presented below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
(dollars in thousands, except per share amounts)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to holders of shares of Class A common stockbasic
|
|
$
|
6,893
|
|
$
|
7,131
|
|
$
|
13,863
|
|
$
|
12,467
|
|
Add (deduct) dilutive effect of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests related to Class A partnership units
|
|
|
|
(a)
|
|
|
(a)
|
|
|
(a)
|
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to holders of shares of Class A common stockdiluted
|
|
$
|
6,893
|
|
$
|
7,131
|
|
$
|
13,863
|
|
$
|
12,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares of Class A common stock outstandingbasic
|
|
|
20,745,043
|
|
|
19,978,108
|
|
|
20,654,657
|
|
|
19,961,286
|
|
Add (deduct) dilutive effect of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests related to Class A partnership units
|
|
|
|
(a)
|
|
|
(a)
|
|
|
(a)
|
|
|
(a)
|
Weighted average number of incremental shares issuable from unvested restricted stock, RSUs and stock options, as calculated using the treasury stock
method
|
|
|
2,873,050
|
(b)
|
|
1,110,112
|
(b)
|
|
2,397,598
|
(b)
|
|
1,182,875
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares of Class A common stock outstandingdiluted
|
|
|
23,618,093
|
|
|
21,088,220
|
|
|
23,052,255
|
|
|
21,144,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to holders of shares of Class A common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.33
|
|
$
|
0.36
|
|
$
|
0.67
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.29
|
|
$
|
0.34
|
|
$
|
0.60
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We
have not included the impact of Class B common stock because these shares are entitled to an insignificant amount of economic participation.
-
(a)
-
Class A
partnership units may be exchanged for Moelis & Company Class A common stock on a one-for-one basis, subject to applicable
lock-up, vesting and transfer restrictions. If all Class A partnership units were to be exchanged for Class A common stock, fully diluted Class A common stock outstanding would be
57,386,765 and 55,248,459 for the three months ended June 30, 2016 and 2015, respectively, and 56,911,313 and 55,321,222 for the six months ended June 30, 2016 and 2015,
respectively. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) available to holders of Class A common
stock would be adjusted due to the elimination of the noncontrolling interests in consolidated entities associated with
20
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
7. NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS (Continued)
the
Group LP Class A partnership units (including any tax impact). For the three and six months ended June 30, 2016 and 2015, such exchange is not reflected in diluted net income
(loss) per share as the assumed exchange is not dilutive.
-
(b)
-
During
the three and six months ended June 30, 2016 and 2015, certain shares of Moelis & Company's Class A common stock assumed to be
issued pursuant to certain RSUs as calculated using the treasury stock method were antidilutive and therefore have been excluded from the calculation of diluted net income (loss) per share
attributable to Moelis & Company. During the three months ended June 30, 2016 and 2015, the additional weighted average amount of RSUs that would have been included in this calculation
if the effect were dilutive would have been 1,793 and 1,701,845 units, respectively, and 899 and 1,012,501 units for the six months ended June 30, 2016 and 2015, respectively. Additionally,
during the three months ended June 30, 2016 and 2015, the additional weighted average amount of options that would have been included in this calculation if the effect were dilutive would have
been 14,505 and 10,000, respectively, and 1,053,593 and 0 weighted average options for the six months ended June 30, 2016 and 2015, respectively.
8. EQUITY-BASED COMPENSATION
Partnership Units
Prior to the Company's restructuring and IPO, the business operated as a partnership and its ownership structure was comprised of
common partners (principally outside investors) holding units and employees holding units. The common partners contributed capital to the partnership and were not subject to vesting. Units granted to
Managing Directors upon joining the Company and as part of annual incentive compensation generally vested based on service over five to eight years. Certain non-Managing Director employees were
granted units as part of their incentive arrangements and these units generally vest based on service ratably over four years. In connection with the Company's restructuring and IPO, substantially all
of the Managing Director partner equity subject to vesting had been accelerated. Units granted to non-Managing Director employees were not accelerated in connection with the Company's restructuring
and IPO and continue to vest based on the original terms of the grant.
In
connection with the reorganization and IPO, Group LP issued Class A partnership units to Moelis & Company and to certain existing unit holders. Following the
reorganization, a Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into one share of
Moelis & Company Class A common stock and represents the Company's noncontrolling interests. As of June 30, 2016, partners held 33,698,658 Group LP partnership units,
582,948 of which were unvested and will continue to vest over their service life.
In
relation to the vesting of units, the Company recognized compensation expenses of $736 and $846 for the three months ended June 30, 2016 and 2015, respectively, and expenses of
$1,633 and $1,912 for the six months ended June 30, 2016 and 2015, respectively. As of June 30, 2016, there was $4,621 of unrecognized compensation expense related to unvested
Class A partnership units which is expected to be recognized over a weighted-average period of 1.9 years, using the graded vesting method.
21
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
8. EQUITY-BASED COMPENSATION (Continued)
2014 Omnibus Incentive Plan
In connection with the IPO, the Company adopted the Moelis & Company 2014 Omnibus Incentive Plan (the "Plan") to provide
additional incentives to selected officers, employees, Managing Directors, non-employee directors, independent contractors, partners, senior advisors and consultants. The Plan provides for the
issuance of incentive stock options ("ISOs"), nonqualified stock options, stock appreciation rights ("SARs"), restricted stock, RSUs, stock bonuses, other stock-based awards and cash awards.
In
the first quarter of 2015, the Board of Directors authorized the repurchase of up to $25 million of shares of Class A common stock of the Company and/or Class A
partnership units of Group LP with no expiration date. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated
transactions or otherwise. The timing and the actual number of shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market
conditions. As of June 30, 2016, approximately $20 million of shares remain that may yet be purchased under the program.
Restricted Stock and Restricted Stock Units (RSUs)
Pursuant to the Plan and in connection with the Company's annual compensation process and ongoing hiring process, the Company issues
RSUs which generally vest over a service life of four to five years. For the three months ended June 30, 2016 and 2015, the Company recognized expenses of $19,942 and $10,148, respectively, and
expenses of $34,795 and $16,572 for the six months ended June 30, 2016 and 2015, respectively, in relation to the vesting of RSUs.
The
following table summarizes activity related to restricted stock and RSUs for the six months ended June 30, 2016 and 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock & RSUs
|
|
|
|
2016
|
|
2015
|
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|
Number of
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|
Unvested Balance at January 1,
|
|
|
5,123,481
|
|
$
|
28.67
|
|
|
2,473,624
|
|
$
|
25.86
|
|
Granted
|
|
|
3,561,401
|
|
|
24.07
|
|
|
2,369,571
|
|
|
32.13
|
|
Forfeited
|
|
|
(33,559
|
)
|
|
26.95
|
|
|
(21,149
|
)
|
|
30.32
|
|
Vested
|
|
|
(472,954
|
)
|
|
28.07
|
|
|
(82,236
|
)
|
|
27.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested Balance at June 30,
|
|
|
8,178,369
|
|
|
26.86
|
|
|
4,739,810
|
|
$
|
28.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of June 30, 2016, the total compensation expense related to unvested restricted stock and RSUs not yet recognized was $121,811. The Company assumes a forfeiture rate of 3%
annually based on expected
turnover and periodically reassesses this rate. The weighted-average period over which this compensation expense is expected to be recognized at June 30, 2016 is 2.2 years.
22
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
8. EQUITY-BASED COMPENSATION (Continued)
Stock Options
Pursuant to the Plan, the Company issued 3,501,881 stock options in 2014 which vest over a five-year period. The Company estimated the
fair value of stock option awards at grant using the Black-Scholes valuation model with the following assumptions:
|
|
|
|
|
|
|
Assumptions
|
|
Expected life (in years)
|
|
|
6
|
|
Weighted-average risk free interest rate
|
|
|
1.91
|
%
|
Expected volatility
|
|
|
35
|
%
|
Dividend yield
|
|
|
2.72
|
%
|
Weighted-average fair value at grant date
|
|
$
|
6.70
|
|
On
November 24, 2014 and March 4, 2016 the Company paid special dividends of $1.00 and $0.80 per share, respectively. As required under Section 5 of the Company's
2014 Omnibus Incentive Plan, the Compensation Committee of the Company's Board of Directors equitably reduced the exercise price of the Company's outstanding options to purchase common stock by $1.80
from $25.00 per share to $23.20 per share.
The
following table summarizes activity related to stock options for the six months ended June 30, 2016 and 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options Outstanding
|
|
|
|
2016
|
|
2015
|
|
|
|
Number
Outstanding
|
|
Weighted-Average
Exercise Price
Per Share
|
|
Number
Outstanding
|
|
Weighted-Average
Exercise Price
Per Share
|
|
Outstanding at January 1,
|
|
|
3,081,203
|
|
$
|
23.20
|
|
|
3,296,906
|
|
$
|
23.20
|
|
Grants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercises
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeiture or expirations
|
|
|
(124,000
|
)
|
|
23.20
|
|
|
(146,977
|
)
|
|
23.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at June 30,
|
|
|
2,957,203
|
|
$
|
23.20
|
|
|
3,149,929
|
|
$
|
23.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the three months ended June 30, 2016 and 2015, the Company recognized expenses of $1,335 and $975, respectively, and expenses of $2,278 and $2,034 for the six months ended
June 30, 2016 and 2015,
respectively, in relation to these stock options. As of June 30, 2016, the total compensation expense related to unvested stock options not yet recognized was $8,332. The Company assumes a
forfeiture rate of 3% annually based on expected turnover and periodically reassesses this rate. This compensation expense is expected to be recognized over a weighted-average period of
2.3 years.
23
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
9. STOCKHOLDERS EQUITY
Class A Common Stock
IPO and Reorganization
In April 2014, the Company issued 15,263,653 shares of Class A common stock as
follows:
-
-
7,699,851 shares in connection with the reorganization;
-
-
7,475,000 shares in connection with the IPO; and
-
-
88,802 shares in connection with the settlement of appreciation rights issued in prior years.
Secondary Offering
In November 2014, the Company completed a secondary offering of 6,325,000 shares of Class A common stock in order to facilitate
organized liquidity and increase the public float of its Class A common stock. In connection with the offering, the shares of Class A common stock outstanding of the Company increased by
4,511,058 shares as a result of the Company acquiring additional Class A partnership units in Group LP. The Company did not retain any proceeds from the secondary offering.
As
of June 30, 2016, 20,890,320 shares of Class A common stock were issued and 20,529,097 shares were outstanding. As of December 31, 2015, 20,536,740 shares of
Class A common stock were issued and 20,273,118 shares were outstanding, due primarily to the IPO and secondary offering transactions described above.
Class B Common Stock
IPO and Reorganization
In conjunction with Moelis & Company's IPO of its Class A common stock, the Company issued 36,158,698 shares of
Class B common stock. Moelis & Company Partner Holdings LP ("Partner Holdings") holds all shares of Class B common stock, enabling it initially to exercise majority voting
control over the Company. The economic rights of Class B common stock are based on the ratio of the Class B subscription price to the initial public offering price of shares of
Class A common stock (.00055 to 1), and the aggregate number of shares of Class B common stock may be converted to Class A common stock (up to a maximum of 20,000
shares). Holders of shares of Class B common stock are entitled to receive dividends of the same type as any dividends payable on outstanding shares of Class A common stock at a ratio of
.00055 to 1.
Secondary Offering
In connection with the secondary offering in November 2014, Partner Holdings surrendered 2,998,322 shares of Class B common
stock and was issued 1,658 shares of Class A common stock at a conversion ratio of .00055 to 1. The Company also purchased 1,509,131 shares of Class B common stock from Partner Holdings
for cash of $28 and subsequently cancelled those shares. The Company did not retain any proceeds from the secondary offering.
24
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
9. STOCKHOLDERS EQUITY (Continued)
As
of June 30, 2016 and December 31, 2015, 31,138,551 and 31,229,236 shares of Class B common stock were issued and outstanding, respectively, due primarily to the
IPO and secondary offering transactions described above.
Treasury Stock
During the six months ended June 30, 2016 and 2015, the Company repurchased 97,601 and 192,660 shares, respectively, pursuant to
the Company's share repurchase program and shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the vesting of RSUs. The result of the repurchases was an
increase of $2,609 and $5,953, respectively, in the treasury stock balance on the Company's condensed consolidated statement of financial condition as of June 30, 2016 and December 31,
2015.
Noncontrolling Interests
A Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into one
share of Moelis & Company Class A common stock and represents the Company's noncontrolling interests (non-redeemable). As of June 30, 2016 and December 31, 2015, partners
held 33,698,658 and 33,803,921 Group LP partnership units, respectively, representing a 62% and 63% noncontrolling interest in Moelis & Company, respectively.
Moelis &
Company operates and controls all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in
Group GP, and thus the 20,529,097 shares of Class A common stock outstanding at June 30, 2016 represents the controlling interest.
10. RELATED-PARTY TRANSACTIONS
Aircraft Lease
On August 30, 2014, a related party, Moelis & Company Manager LLC ("Manager"), acquired an aircraft with funds
received solely from its managing member (Mr. Moelis). The aircraft is used and operated by the Company pursuant to a dry lease with Manager which terminates on December 31, 2019. The
terms of the dry lease are comparable to the market rates of leasing from an independent third party. Pursuant to this dry lease arrangement, the lessee is obligated to bear its share of the costs of
operating the aircraft. For each of the three months ended June 30, 2016 and 2015, the Company incurred $312 in aircraft lease costs to be paid to Manager, respectively, and $624 in aircraft
costs for each of the six months ended June 30, 2016 and 2015, respectively. In addition, there are two other lessees of the aircraft; one of whom is Mr. Moelis and the other is Moelis
Asset Management LP. These lessees share the lease, operating and related costs of the plane in proportion to their respective use pursuant to a cost sharing and operating agreement.
Promissory Notes
As of June 30, 2016, there were $448 of unsecured promissory notes from employees held by the Company (December 31,
2015: $119). Any outstanding balances are reflected in other receivables on the condensed consolidated statements of financial condition. The notes held as of June 30, 2016 and
December 31, 2015 bear a fixed interest rate of 4.00%. During each of the six months ended June 30, 2016 and 2015, the Company received $0 of principal repayments and
25
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
10. RELATED-PARTY TRANSACTIONS (Continued)
recognized
interest income of $8 and $2, respectively, on such notes, which is included in other income and expenses on the condensed consolidated statements of operations.
Services Agreement
In connection with the Company's IPO, the Company entered into a services agreement with a related party, Moelis Asset
Management LP, whereby the Company provides certain administrative services, technology, and office space to Moelis Asset Management LP for a fee. This fee totaled $349 and $399 for the
three months ended June 30, 2016 and 2015, respectively, and $711 and $845 for the six months ended June 30, 2016 and 2015, respectively. The amount of the fee is based upon the
estimated usage and related expense of all shared services between the Company and Moelis Asset Management LP during the relevant period, and will be assessed periodically by Management as per
the terms of the agreement. As of June 30, 2016 and December 31, 2015, the Company had balances due from Moelis Asset Management LP of $0 and $3, respectively.
Joint Venture
As of June 30, 2016 and December 31, 2015, the Company had a net balance due from the Australian JV of $54 and a net
balance due to the Australian JV of $167, respectively, which are reflected in other receivables on the condensed consolidated statements of financial condition. These balances consist of amounts due
from the Australian JV for advisory services performed and billable expenses incurred on behalf of the Company during the period, offset by expenses paid by the Company on behalf of the Australian JV.
The relationship between the Company and the Australian JV is governed by a services agreement.
Other Equity Method Investment
In June of 2014, the Company made an investment of $265 into an entity controlled by a related party, Moelis Asset
Management LP. The Company has determined that it should account for this investment as an equity method investment on the condensed consolidated financial statements. For the three months
ended June 30, 2016 and 2015, income of $34 and $228 was recorded on this investment, respectively, and income of $1,730 and $2,781 was recorded on this investment for the six months ended
June 30, 2016 and 2015, respectively.
During
the six months ended June 30, 2016 and 2015, the Company received cash distributions from this entity in the amounts of $813 and $1,094, respectively.
Revenues
From time to time, Moelis Asset Management LP and its affiliates hire the Company to provide financial advisory services in the
ordinary course of business. The Company earned revenues associated with such transactions of $6,616 and $3,594 for the three months ended June 30, 2016 and 2015, respectively, and revenues of
$7,016 and $4,336 for the six months ended June 30, 2016 and 2015, respectively.
11. REGULATORY REQUIREMENTS
Under the SEC Uniform Net Capital Rule (SEC Rule 15c3-1) Alternative Standard under Section (a)(1)(ii), the minimum net capital requirement is $250. At June 30,
2016, Moelis U.S. had net capital of $55,156, which was $54,906 in excess of its required net capital. At December 31, 2015, Moelis U.S. had net capital of $41,373 which was $41,123 in excess
of its required net capital.
26
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
11. REGULATORY REQUIREMENTS (Continued)
Moelis
U.S. does not carry customer accounts and does not otherwise hold funds or securities for, or owe money or securities to, customers and accordingly is exempt under
Section (k)(2)(ii) of SEC Rule 15c3-3.
At
June 30, 2016, the aggregate regulatory net capital of Moelis UK was $16,026 which exceeded the minimum requirement by $15,971. At December 31, 2015, the aggregate
regulatory net capital of Moelis UK was $17,586, which exceeded the minimum requirement by $17,531.
12. COMMITMENTS AND CONTINGENCIES
Bank Line of Credit
In May 2015 the Company renewed its unsecured revolving credit facility which increased the commitment amount and extended the
maturity date to June 30, 2017. As of June 30, 2016, the commitment amount was $40,000.
Borrowings
on the facility bear interest at the greater of a fixed rate of 3.50% per annum or at the borrower's option of (i) LIBOR plus 1% or (ii) Prime minus 1.50%. As of
June 30, 2016 and December 31, 2015, the Company had no borrowings under the credit facility.
As
of June 30, 2016, the Company's available credit under this facility was $33,160 as a result of the issuance of an aggregate amount of $6,840 of various standby letters of
credit, which were required in connection with certain office lease and other agreements. The Company incurs a 1% per annum fee on the outstanding balance of issued letters of credit.
Leases
The Company maintains operating leases with expiration dates that extend through 2026. The Company incurred expense relating to its
operating
leases of $5,707 and $3,143 for the three months ended June 30, 2016 and 2015, respectively, and expenses of $9,459 and $6,385 for the six months ended June 30, 2016 and 2015,
respectively. During the second quarter, the Company decided to sublet a portion of its growth space in the U.K. which required a sublease loss reserve to be recognized for the estimated net economics
of such sublet. The expense related to operating leases for the three months ended June 30, 2016, includes $2,359 related to the aforementioned sublease loss reserve.
The
Company subleases office space under agreements which expire in October 2016. Sublease income from such agreements were $279 and $0 for the three months ended June 30, 2016
and 2015, respectively, and $524 and $0 for the six months ended June 30, 2016 and 2015, respectively, which were included as reductions of occupancy expense on the condensed consolidated
statements of operations.
27
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
12. COMMITMENTS AND CONTINGENCIES (Continued)
The
future minimum rental payments required under the operating leases in place at June 30, 2016, are as follows:
|
|
|
|
|
Fiscal year ended
|
|
Amount
|
|
Remainder of 2016 (net of $351 committed sublease income)
|
|
$
|
8,381
|
|
2017
|
|
|
17,249
|
|
2018
|
|
|
17,161
|
|
2019
|
|
|
17,163
|
|
2020
|
|
|
11,334
|
|
Thereafter
|
|
|
22,356
|
|
|
|
|
|
|
Total
|
|
$
|
93,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual Arrangements
In the normal course of business, the Company enters into contracts that contain a variety of representations and warranties
and which provide indemnification for specified losses, including certain indemnification of certain officers, directors and employees.
Joint Venture Put and Call Options
In connection with the Company's Australian JV, the Company granted a put option in April 2010 enabling the key
senior Australian executive to sell his shares held in the Australian JV back to the Company at fair value. The put option can be exercised if the key senior Australian executive ceases to be employed
by the Australian JV (including due to death, disability or resignation but excluding termination for cause) and following such cessation of employment, the key senior Australian executive, the
remaining Australian executives and the Company are unable to agree upon a restructuring of the Australian JV. If the put option is exercised, the Company will be required to pay 50% of the purchase
price upon exercise and the remaining balance within 18 months (in cash or listed stock). In addition, since April 2010, the Company has held a call option to purchase the shares from the Trust
at fair value with payment terms equal to those called for under the put option.
Legal
In the ordinary course of business, from time to time the Company and its affiliates are involved in judicial or regulatory proceedings,
arbitration or mediation concerning matters arising in connection with the conduct of its businesses, including contractual and employment matters. In addition, government agencies and self-regulatory
organizations conduct periodic examinations and initiate administrative proceedings regarding the Company's business, including, among other matters, compliance, accounting and operational matters,
that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees. In view of the
inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants
seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company cannot estimate the amount of such loss or range of loss, if any, related to such
matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be. Subject to the foregoing, the
Company believes, based on current knowledge and after
28
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
12. COMMITMENTS AND CONTINGENCIES (Continued)
consultation
with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company.
The
Company was previously named as one of several defendants in litigation arising from activities in 2011. The parties reached an agreement in principle to settle the litigation in
March 2016, resulting in the Company incurring $2.8 million of expense recognized in the quarter ended December 31, 2015. While there is an agreement in principle to settle the
litigation, the Company cannot make assurances whether the court will approve the settlement. In such event, the ultimate resolution could result in higher costs for the Company.
13. EMPLOYEE BENEFIT PLANS
The Company covers substantially all U.S. salaried employees with a defined contribution 401(k) plan. Each salaried employee of the Company who has attained the age of 21 is eligible to
participate in the 401(k) plan on their first day of employment. Any employer contributions to the 401(k) plan are entirely at the discretion of the Company. The Company accrued expenses relating to
employer matching contributions to the 401(k) plan for the three months ended June 30, 2016 and 2015, in the amounts of $468 and $360, respectively, and $974 and $656 for the six months ended
June 30, 2016 and 2015, respectively.
14. INCOME TAXES
Prior to the Company's reorganization and IPO of Moelis & Company, the Company had been primarily subject to the New York City unincorporated business tax ("UBT") and certain
other foreign, state and local taxes. The Company's operations are comprised of entities that are organized as limited liability companies and limited partnerships. For U.S. federal income tax
purposes, taxes related to income earned by these entities represent obligations of the noncontrolling interest holders, which is primarily made up of individual partners and members and have
historically not been reflected in the
condensed consolidated statements of financial condition. In connection with the Company's reorganization and IPO, the Company became subject to U.S. corporate federal, state and local income tax on
its allocable share of results of operations from Group LP.
The
Company's provision for income taxes and effective tax rate were $4,721 and 15% and $6,079 and 18% for the three months ended June 30, 2016 and 2015, respectively. For the six
months ended June 30, 2016 and 2015, the Company's provision for income taxes and effective tax rate were $10,165 and 16% and $10,379 and 18%, respectively. The income tax provision for the
aforementioned periods primarily reflects the Company's allocable share of earnings from Group LP at prevailing U.S. federal, state and local corporate income tax rates and the effect of the
allocable earnings to noncontrolling interests being subject to UBT and certain other foreign, state and local taxes.
The
Company recorded an increase in the net deferred tax asset of $1,993 for the six months ended June 30, 2016, which was primarily attributable to an increase in deferred
compensation and the step-up in tax basis in Group LP assets resulting from the exchange of Class A partnership units in Group LP for Class A common stock during the second
quarter. Approximately $518 of this deferred tax asset is attributable to exchanges by certain partners of Group LP who are party to the tax
29
Table of Contents
Moelis & Company
Notes to the Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(dollars in thousands)
14. INCOME TAXES (Continued)
receivable
agreement. Pursuant to this agreement, 85% (or $440) of the tax benefits associated with this portion of the deferred tax asset are payable to such exchanging partners over the next
15 years and recorded as amount due pursuant to tax receivable agreement in the condensed consolidated and combined statements of financial condition. The remaining tax benefit is allocable to
the Company and is recorded in additional paid-in-capital.
15. BUSINESS INFORMATION
The Company's activities as an investment banking advisory firm constitute a single business segment offering clients, including corporations, governments and financial sponsors, a range
of advisory services with expertise across all major industries in mergers and acquisitions, recapitalizations and restructurings and other corporate finance matters.
We
do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our comprehensive approach to client
service. For example, a restructuring engagement may evolve to require a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring
engagements and capital markets expertise can be instrumental on both M&A and restructuring assignments.
There
were no clients that accounted for more than 10% of revenues for the three or six months ended June 30, 2016 or 2015. Since the financial markets are global in nature, the
Company generally manages its business based on the operating results of the enterprise taken as whole, not by geographic region. The following table sets forth the geographical distribution of
revenues and assets based on the location of the office that generates the revenues or holds the assets, and therefore may not be reflective of the geography in which our clients are located.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
106,219
|
|
$
|
95,086
|
|
$
|
212,952
|
|
$
|
164,517
|
|
Europe
|
|
|
13,328
|
|
|
23,573
|
|
|
24,122
|
|
|
48,995
|
|
Rest of World
|
|
|
12,178
|
|
|
7,214
|
|
|
21,015
|
|
|
11,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
131,725
|
|
$
|
125,873
|
|
$
|
258,089
|
|
$
|
225,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2016
|
|
December 31,
2015
|
|
Assets:
|
|
|
|
|
|
|
|
United States
|
|
$
|
367,431
|
|
$
|
463,984
|
|
Europe
|
|
|
26,054
|
|
|
45,067
|
|
Rest of World
|
|
|
39,500
|
|
|
30,410
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
432,985
|
|
$
|
539,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16. SUBSEQUENT EVENTS
The Board of Directors of Moelis & Company declared a quarterly dividend of $0.32 per share to be paid on September 6, 2016 to Class A common stockholders of record
on August 22, 2016.
30
Table of Contents