HARTFORD, Conn., April 28, 2021 /PRNewswire/ -- Virtus
Investment Partners, Inc. (NASDAQ: VRTS) today reported financial
results for the three months ended March 31,
2021.
|
Financial
Highlights (Unaudited)
|
|
(in millions,
except per share data or as noted)
|
|
|
Three Months
Ended
|
|
|
|
Three
Months
Ended
|
|
|
|
3/31/2021
|
|
3/31/2020
|
|
Change
|
|
12/31/2020
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Financial
Measures
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
216.9
|
|
|
$
|
144.6
|
|
|
50%
|
|
$
|
171.6
|
|
|
26%
|
|
Operating
expenses
|
$
|
154.8
|
|
|
$
|
120.0
|
|
|
29%
|
|
$
|
120.7
|
|
|
28%
|
|
Operating income
(loss)
|
$
|
62.1
|
|
|
$
|
24.6
|
|
|
152%
|
|
$
|
50.9
|
|
|
22%
|
|
Operating
margin
|
28.7%
|
|
|
17.0%
|
|
|
|
|
29.7%
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
|
36.6
|
|
|
$
|
(4.3)
|
|
|
N/M
|
|
$
|
43.3
|
|
|
(15%)
|
|
Earnings (loss) per
share - diluted
|
$
|
4.54
|
|
|
$
|
(0.58)
|
|
|
N/M
|
|
$
|
5.40
|
|
|
(16%)
|
|
Weighted average
shares outstanding - diluted
|
8.052
|
|
|
7.422
|
|
|
8%
|
|
8.026
|
|
|
—%
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures (1)
|
|
|
|
|
|
|
|
|
|
|
Revenues, as
adjusted
|
$
|
187.3
|
|
|
$
|
127.1
|
|
|
47%
|
|
$
|
153.5
|
|
|
22%
|
|
Operating expenses,
as adjusted
|
$
|
109.3
|
|
|
$
|
87.1
|
|
|
25%
|
|
$
|
91.6
|
|
|
19%
|
|
Operating income
(loss), as adjusted
|
$
|
78.0
|
|
|
$
|
40.1
|
|
|
95%
|
|
$
|
61.9
|
|
|
26%
|
|
Operating margin, as
adjusted
|
41.6%
|
|
|
31.5%
|
|
|
|
|
40.3%
|
|
|
|
|
Net income (loss)
attributable to common stockholders, as adjusted
|
$
|
54.6
|
|
|
$
|
26.5
|
|
|
106%
|
|
$
|
41.4
|
|
|
32%
|
|
Earnings (loss) per
share - diluted, as adjusted
|
$
|
6.78
|
|
|
$
|
3.32
|
|
|
104%
|
|
$
|
5.15
|
|
|
32%
|
|
Weighted average
shares outstanding - diluted, as adjusted
|
8.052
|
|
|
7.975
|
|
|
1%
|
|
8.026
|
|
|
—%
|
|
|
(1) See the
information beginning on page 11 for reconciliations to the most
directly comparable U.S. GAAP measures and other important
disclosures
|
|
N/M - Not
Meaningful
|
Earnings Summary
The company presents U.S. GAAP and non-GAAP earnings information
in this release. Management believes that the non-GAAP financial
measures presented reflect the company's operating results from
providing investment management and related services to individuals
and institutions and uses these measures to evaluate financial
performance. Non-GAAP financial measures have material limitations
and should not be viewed in isolation or as a substitute for U.S.
GAAP measures. Reconciliations of the non-GAAP financial measures
to the most comparable U.S. GAAP measures can be found beginning on
page 11 of this earnings release.
|
Assets Under
Management and Asset Flows
|
|
(in
billions)
|
|
|
Three Months
Ended
|
|
|
|
Three
Months
Ended
|
|
|
|
3/31/2021
|
|
3/31/2020
|
|
Change
|
|
12/31/2020
|
|
Change
|
|
Ending total assets
under management
|
$
|
168.9
|
|
|
$
|
90.7
|
|
|
86%
|
|
$
|
132.2
|
|
|
28%
|
|
Average total assets
under management
|
$
|
154.3
|
|
|
$
|
105.9
|
|
|
46%
|
|
$
|
121.1
|
|
|
27%
|
|
Total
sales
|
$
|
10.6
|
|
|
$
|
7.2
|
|
|
47%
|
|
$
|
8.9
|
|
|
19%
|
|
Net flows
|
$
|
2.4
|
|
|
$
|
(1.4)
|
|
|
N/M
|
|
$
|
2.7
|
|
|
(11%)
|
Total assets under management increased 28% to $168.9 billion at March
31, 2021 from $132.2 billion
at December 31, 2020 due to the
addition of $29.5 billion as a result
of the finalization of the AllianzGI partnership, $4.7 billion of market appreciation, and
$2.4 billion of positive net flows.
In addition, the company had $3.4
billion of other fee earning assets, also as a result of the
AllianzGI partnership.
Total sales of $10.6 billion
increased by $1.7 billion, or 19%,
from the fourth quarter as a result of higher sales of open-end
funds and retail separate accounts. Open-end fund sales of
$5.9 billion increased 37% with
growth in all asset classes. Retail separate account sales of
$2.7 billion increased 24% with
growth in both the intermediary sold and private client channels.
Institutional sales of $1.9 billion
compared sequentially with $2.3
billion, as the prior quarter included the funding of
several large new mandates.
Net flows of $2.4 billion
represented an annualized organic growth rate of 7.5% and included
positive net flows in retail separate accounts, open-end funds,
exchange traded funds (ETFs), and institutional. Retail separate
accounts contributed positive net flows of $1.8 billion with positive net flows in both the
intermediary sold and private client channels. Open-end fund net
flows of $0.6 billion reflected
positive net flows in fixed income, multi-asset, specialty, and
global equity strategies. ETF net flows of $0.1 billion were positive for the third
consecutive quarter. Institutional positive net flows continued the
trend of organic growth over the past four quarters with
contributions from multiple affiliates.
GAAP Results
Operating income increased 22% to $62.1
million from $50.9 million in
the prior quarter, as a 26% increase in total revenues, due to
higher average assets under management, was partially offset by a
28% increase in total operating expenses, largely due to higher
employment expenses.
The higher average assets in the first quarter were primarily
the result of the addition of $29.5
billion of assets from AllianzGI. The sequential increase in
operating expenses was primarily due to employment expenses, which
increased due to seasonal items and higher variable compensation,
as well as other operating expenses due to the addition of a new
affiliate.
Net income attributable to common stockholders of $4.54 per diluted common share included
($1.68) of fair value adjustments on
affiliate noncontrolling interests, ($0.29) of realized and unrealized losses on
investments, and ($0.24) of
acquisition and integration costs. Prior quarter net income per
diluted share of $5.40 included
$1.96 of realized and unrealized
gains on investments and ($1.56) of
fair value adjustments on affiliate noncontrolling interests. The
fair value adjustments on affiliate noncontrolling interests
reflect the increase in the value of an affiliate with minority
ownership.
The effective tax rate during the quarter of 22% compared with
19% in the prior quarter, primarily reflecting changes in the
valuation allowances related to marketable
securities.
Non-GAAP Results
Revenues, as adjusted, of $187.3
million increased 22% sequentially as a result of a 27%
increase in average assets under management due to the February 1, 2021 addition of the AllianzGI
assets, market appreciation, and positive net flows. Revenues, as
adjusted, included performance-related fees of $0.6 million, compared with $3.7 million in the prior quarter.
Employment expenses, as adjusted, increased to $90.4 million from $73.5
million in the prior quarter largely due to $9.4 million of seasonally higher expenses,
primarily payroll taxes and benefits related to the timing of
annual incentive payments, as well as higher variable incentive
compensation. Other operating expenses, as adjusted, of
$17.8 million increased sequentially
from $17.1 million primarily due to
incremental operating expenses associated with the new affiliated
manager as a result of the AllianzGI partnership.
Operating income, as adjusted, and the related margin increased
to $78.0 million and 41.6%,
respectively, from $61.9 million and
40.3% in the prior quarter primarily due to higher revenues,
partially offset by the seasonal employment expenses and higher
variable incentive compensation.
Net income attributable to common stockholders, as adjusted, per
diluted common share was $6.78, an
increase of $1.63, or 32%, from
$5.15 in the prior quarter, and the
company reported its highest level of net income, as adjusted. The
sequential increase primarily reflected higher revenues, as
adjusted, as a result of the higher average assets under
management.
The effective tax rate, as adjusted, of 27% was unchanged from
the prior quarter.
|
Select Balance
Sheet Items (Unaudited)
|
|
(in
millions)
|
|
|
As
of
|
|
|
|
As
of
|
|
|
|
3/31/2021
|
|
3/31/2020
|
|
Change
|
|
12/31/2020
|
|
Change
|
|
Cash and cash
equivalents
|
$
|
228.3
|
|
|
$
|
158.5
|
|
|
44%
|
|
$
|
246.5
|
|
|
(7%)
|
|
Gross debt
(1)
|
$
|
199.8
|
|
|
$
|
258.2
|
|
|
(23%)
|
|
$
|
205.7
|
|
|
(3%)
|
|
Revenue participation
liability (2)
|
$
|
137.7
|
|
|
$
|
—
|
|
|
N/M
|
|
$
|
—
|
|
|
N/M
|
|
Redeemable
noncontrolling interests (3)
|
$
|
98.1
|
|
|
$
|
62.2
|
|
|
58%
|
|
$
|
87.5
|
|
|
12%
|
|
Total equity
attributable to stockholders
|
$
|
729.4
|
|
|
$
|
656.2
|
|
|
11%
|
|
$
|
711.2
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
Working capital
(4)
|
$
|
211.1
|
|
|
$
|
155.4
|
|
|
36%
|
|
$
|
172.0
|
|
|
23%
|
|
Net debt (cash)
(5)
|
$
|
(28.5)
|
|
|
$
|
99.8
|
|
|
N/M
|
|
$
|
(40.8)
|
|
|
(30%)
|
|
|
|
(1)
|
Excludes deferred
financing costs of $4.0 million, $6.7 million, and $4.5 million, as
of March 31, 2021, March 31, 2020, and December 31, 2020,
respectively
|
|
(2)
|
Represents the
estimate of future AllianzGI related revenue participation payments
accounted for as consideration
|
|
(3)
|
Excludes redeemable
noncontrolling interests of consolidated investment products of
$14.4 million, $24.9 million, and $28.1 million as of March 31,
2021, March 31, 2020, and December 31, 2020,
respectively
|
|
(4)
|
Defined as cash and
cash equivalents plus accounts receivable, net, less accrued
compensation and benefits, accounts payable and accrued
liabilities, dividends payable, required debt principal payments
due over next 12 months and actual AllianzGI revenue participation
amounts earned as of the balance sheet date and due within 12
months
|
|
(5)
|
Defined as gross debt
less cash and cash equivalents
|
Working capital at March 31, 2021
of $211.1 million increased 23% from
December 31, 2020 reflecting net cash
generated from the business and capital activities.
During the quarter, the company returned $5.0 million to shareholders through the
repurchase of 19,912 shares of common stock. In addition, the
company net settled 57,885 shares for $15.1
million to satisfy employee tax obligations.
The company reduced gross debt in the quarter by $5.9 million to $199.8
million. Over the prior four quarters, the company has
reduced gross debt by 23%.
In connection with the finalization of the strategic partnership
with AllianzGI, the company recorded a $137.7 million liability representing the
estimate of future revenue participation payments.
Conference Call
Management will host an investor conference call on Wednesday, April 28, 2021, at 10 a.m. Eastern to discuss these financial
results and related matters. The webcast of the call can be
accessed in the Investor Relations section of www.virtus.com, or by
telephone at 877-930-7765 for callers in the U.S. and Canada or 253-336-7413 for international
callers (Conference ID: 9391821). The presentation that will be
reviewed as part of the conference call will be available prior to
the call in the Investor Relations section of www.virtus.com. A
replay of the call will be available through May 5, 2021 by telephone at 855-859-2056 (U.S.
and Canada) or 404-537-3406
(international) (Conference ID: 9391821).
About Virtus Investment Partners
Virtus Investment Partners (NASDAQ: VRTS) is a distinctive
partnership of boutique investment managers singularly committed to
the long-term success of individual and institutional investors.
The company provides investment management products and services
through its affiliated managers and select subadvisers, each with a
distinct investment style, autonomous investment process, and
individual brand. Virtus Investment Partners offers access to a
variety of investment styles across multiple disciplines to meet a
wide array of investor needs. Virtus' affiliates include Ceredex
Value Advisors, Duff & Phelps Investment Management, Kayne
Anderson Rudnick Investment Management, Newfleet Asset Management,
NFJ Investment Group, Seix Investment Advisors, Silvant Capital
Management, and Sustainable Growth Advisers. Additional information
can be found at virtus.com.
|
U.S. GAAP
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
(in thousands,
except per share data)
|
|
|
Three Months
Ended
|
|
|
|
Three Months
Ended
|
|
|
|
3/31/2021
|
|
3/31/2020
|
|
Change
|
|
12/31/2020
|
|
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Investment management
fees
|
$
|
173,269
|
|
|
$
|
120,288
|
|
|
44%
|
|
$
|
144,715
|
|
|
20%
|
|
Distribution and
service fees
|
20,348
|
|
|
9,460
|
|
|
115%
|
|
10,279
|
|
|
98%
|
|
Administration and
shareholder service fees
|
22,560
|
|
|
14,653
|
|
|
54%
|
|
16,407
|
|
|
38%
|
|
Other income and
fees
|
720
|
|
|
165
|
|
|
336%
|
|
245
|
|
|
194%
|
|
Total
revenues
|
216,897
|
|
|
144,566
|
|
|
50%
|
|
171,646
|
|
|
26%
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
Employment
expenses
|
91,759
|
|
|
66,130
|
|
|
39%
|
|
73,527
|
|
|
25%
|
|
Distribution and
other asset-based expenses
|
32,294
|
|
|
19,409
|
|
|
66%
|
|
20,686
|
|
|
56%
|
|
Other operating
expenses
|
19,580
|
|
|
18,885
|
|
|
4%
|
|
17,232
|
|
|
14%
|
|
Operating expenses of
consolidated investment products
|
559
|
|
|
6,749
|
|
|
(92%)
|
|
641
|
|
|
(13%)
|
|
Depreciation
expense
|
1,098
|
|
|
1,258
|
|
|
(13%)
|
|
1,100
|
|
|
—%
|
|
Amortization
expense
|
9,465
|
|
|
7,533
|
|
|
26%
|
|
7,529
|
|
|
26%
|
|
Total operating
expenses
|
154,755
|
|
|
119,964
|
|
|
29%
|
|
120,715
|
|
|
28%
|
|
Operating Income
(Loss)
|
62,142
|
|
|
24,602
|
|
|
153%
|
|
50,931
|
|
|
22%
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
|
|
|
Realized and
unrealized gain (loss) on investments, net
|
891
|
|
|
(7,544)
|
|
|
N/M
|
|
5,071
|
|
|
(82%)
|
|
Realized and
unrealized gain (loss) of consolidated investment products,
net
|
(4,687)
|
|
|
(8,669)
|
|
|
(46%)
|
|
10,768
|
|
|
N/M
|
|
Other income
(expense), net
|
1,771
|
|
|
612
|
|
|
189%
|
|
1,070
|
|
|
66%
|
|
Total other income
(expense), net
|
(2,025)
|
|
|
(15,601)
|
|
|
(87%)
|
|
16,909
|
|
|
N/M
|
|
Interest Income
(Expense)
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(2,314)
|
|
|
(3,199)
|
|
|
(28%)
|
|
(2,692)
|
|
|
(14%)
|
|
Interest and dividend
income
|
136
|
|
|
752
|
|
|
(82%)
|
|
236
|
|
|
(42%)
|
|
Interest and dividend
income of investments of consolidated investment
products
|
23,876
|
|
|
29,229
|
|
|
(18%)
|
|
25,697
|
|
|
(7%)
|
|
Interest expense of
consolidated investment products
|
(14,448)
|
|
|
(24,486)
|
|
|
(41%)
|
|
(15,179)
|
|
|
(5%)
|
|
Total interest income
(expense), net
|
7,250
|
|
|
2,296
|
|
|
216%
|
|
8,062
|
|
|
(10%)
|
|
Income (Loss)
Before Income Taxes
|
67,367
|
|
|
11,297
|
|
|
496%
|
|
75,902
|
|
|
(11%)
|
|
Income tax expense
(benefit)
|
15,153
|
|
|
10,291
|
|
|
47%
|
|
14,088
|
|
|
8%
|
|
Net Income
(Loss)
|
52,214
|
|
|
1,006
|
|
|
N/M
|
|
61,814
|
|
|
(16%)
|
|
Noncontrolling
interests
|
(15,626)
|
|
|
(5,291)
|
|
|
195%
|
|
(18,499)
|
|
|
(16%)
|
|
Net Income (Loss)
Attributable to Common Stockholders
|
$
|
36,588
|
|
|
$
|
(4,285)
|
|
|
N/M
|
|
$
|
43,315
|
|
|
(16%)
|
|
Earnings (Loss) Per
Share - Basic
|
$
|
4.79
|
|
|
$
|
(0.58)
|
|
|
N/M
|
|
$
|
5.67
|
|
|
(16%)
|
|
Earnings (Loss) Per
Share - Diluted
|
$
|
4.54
|
|
|
$
|
(0.58)
|
|
|
N/M
|
|
$
|
5.40
|
|
|
(16%)
|
|
Cash Dividends
Declared Per Common Share
|
$
|
0.82
|
|
|
$
|
0.67
|
|
|
22%
|
|
$
|
0.82
|
|
|
—%
|
|
Weighted Average
Shares Outstanding - Basic
|
7,633
|
|
|
7,422
|
|
|
3%
|
|
7,641
|
|
|
—%
|
|
Weighted Average
Shares Outstanding - Diluted
|
8,052
|
|
|
7,422
|
|
|
8%
|
|
8,026
|
|
|
—%
|
|
Assets Under
Management - Product and Asset Class
|
|
(in
millions)
|
|
|
Three Months
Ended
|
|
3/31/2020
|
|
06/30/2020
|
|
9/30/2020
|
|
12/31/2020
|
|
3/31/2021
|
|
By product (period
end):
|
|
|
|
|
|
|
|
|
|
|
Open-End Funds
(1)
|
$
|
34,361
|
|
|
$
|
41,144
|
|
|
$
|
44,574
|
|
|
$
|
50,771
|
|
|
$
|
72,164
|
|
|
Closed-End
Funds
|
5,343
|
|
|
5,639
|
|
|
5,629
|
|
|
5,914
|
|
|
11,664
|
|
|
Exchange Traded
Funds
|
480
|
|
|
541
|
|
|
543
|
|
|
837
|
|
|
1,021
|
|
|
Retail Separate
Accounts
|
17,660
|
|
|
22,054
|
|
|
24,727
|
|
|
29,751
|
|
|
37,244
|
|
|
Institutional
Accounts
|
28,507
|
|
|
34,819
|
|
|
36,851
|
|
|
40,861
|
|
|
42,802
|
|
|
Structured
Products
|
4,343
|
|
|
4,264
|
|
|
4,163
|
|
|
4,060
|
|
|
3,985
|
|
|
Total
|
$
|
90,694
|
|
|
$
|
108,461
|
|
|
$
|
116,487
|
|
|
$
|
132,194
|
|
|
$
|
168,880
|
|
|
|
|
|
|
|
|
|
|
|
|
By product
(average) (2)
|
|
|
|
|
|
|
|
|
|
|
Open-End Funds
(1)
|
$
|
41,992
|
|
|
$
|
38,182
|
|
|
$
|
43,603
|
|
|
$
|
47,782
|
|
|
$
|
66,247
|
|
|
Closed-End
Funds
|
6,524
|
|
|
5,566
|
|
|
5,742
|
|
|
5,847
|
|
|
9,340
|
|
|
Exchange Traded
Funds
|
962
|
|
|
554
|
|
|
549
|
|
|
683
|
|
|
890
|
|
|
Retail Separate
Accounts
|
20,414
|
|
|
17,660
|
|
|
22,054
|
|
|
24,727
|
|
|
32,118
|
|
|
Institutional
Accounts
|
31,821
|
|
|
31,931
|
|
|
36,771
|
|
|
37,989
|
|
|
41,764
|
|
|
Structured
Products
|
4,191
|
|
|
4,265
|
|
|
4,171
|
|
|
4,068
|
|
|
3,985
|
|
|
Total
|
$
|
105,904
|
|
|
$
|
98,158
|
|
|
$
|
112,890
|
|
|
$
|
121,096
|
|
|
$
|
154,344
|
|
|
|
|
|
|
|
|
|
|
|
|
By asset class
(period end):
|
|
|
|
|
|
|
|
|
|
|
Equity
|
$
|
50,587
|
|
|
$
|
66,205
|
|
|
$
|
72,811
|
|
|
$
|
86,268
|
|
|
$
|
106,183
|
|
|
Fixed Income
(3)
|
26,735
|
|
|
27,427
|
|
|
28,273
|
|
|
28,965
|
|
|
35,069
|
|
|
Multi-Asset
(4)
|
9,708
|
|
|
10,714
|
|
|
11,105
|
|
|
12,201
|
|
|
22,498
|
|
|
Alternatives
(5)
|
3,664
|
|
|
4,115
|
|
|
4,298
|
|
|
4,760
|
|
|
5,130
|
|
|
Total
|
$
|
90,694
|
|
|
$
|
108,461
|
|
|
$
|
116,487
|
|
|
$
|
132,194
|
|
|
$
|
168,880
|
|
|
Assets Under
Management - Average Management Fees Earned (6)
|
|
(in basis
points)
|
|
|
Three Months
Ended
|
|
3/31/2020
|
|
6/30/2020
|
|
9/30/2020
|
|
12/31/2020
|
|
3/31/2021
|
|
All
Products
|
|
|
|
|
|
|
|
|
|
|
Open-End Funds
(1)
|
48.5
|
|
49.5
|
|
50.4
|
|
51.8
|
|
48.0
|
|
Closed-End
Funds
|
62.8
|
|
61.8
|
|
62.1
|
|
62.2
|
|
56.2
|
|
Exchange Traded
Funds
|
9.5
|
|
5.1
|
|
6.5
|
|
3.3
|
|
6.7
|
|
Retail Separate
Accounts
|
48.7
|
|
49.0
|
|
45.7
|
|
47.1
|
|
45.7
|
|
Institutional
Accounts (7)
|
29.1
|
|
31.1
|
|
31.5
|
|
34.6
|
|
31.5
|
|
Structured
Products
|
33.9
|
|
26.8
|
|
34.2
|
|
31.1
|
|
38.8
|
|
All Products
(7)
|
42.6
|
|
42.9
|
|
43.1
|
|
44.9
|
|
43.1
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents assets
under management of U.S. retail funds, offshore funds and variable
insurance funds
|
|
(2)
|
Averages are
calculated as follows:
|
|
- Funds - average
daily or weekly balances
|
|
- Retail Separate
Accounts - prior-quarter ending balance
|
|
- Institutional
Accounts and Structured Products - average of month-end balances in
quarter
|
|
(3)
|
Includes ultra-short
strategies previously included in a separate liquidity
strategy
|
|
(4)
|
Includes strategies
with substantial holdings in at least two of the following asset
classes: equity, fixed income and alternatives
|
|
(5)
|
Includes real estate
securities, infrastructure, mid-stream energy, long/short, and
options strategies
|
|
(6)
|
Represents investment
management fees, as adjusted divided by average assets.
Investment management fees, as adjusted exclude the impact of
consolidated investment products and are net of revenue related
adjustments. Revenue related adjustments are based on
specific agreements and reflect the portion of investment
management fees passed-through to third-party client intermediaries
for services to investors in sponsored investment
products
|
|
(7)
|
Includes
performance-related fees, in basis points, earned during the three
months ended as follows:
|
|
|
3/31/2020
|
|
6/30/2020
|
|
9/30/2020
|
|
12/31/2020
|
|
3/31/2021
|
|
Institutional
Accounts
|
0.8
|
|
0.7
|
|
2.1
|
|
3.9
|
|
0.6
|
|
All
Products
|
0.2
|
|
0.2
|
|
0.7
|
|
1.2
|
|
0.2
|
|
Assets Under
Management - Asset Flows by Product
|
|
(in
millions)
|
|
|
Three Months
Ended
|
|
3/31/2020
|
|
6/30/2020
|
|
9/30/2020
|
|
12/31/2020
|
|
3/31/2021
|
|
Open-End Funds
(1)
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
$
|
43,824
|
|
|
$
|
34,361
|
|
|
$
|
41,144
|
|
|
$
|
44,574
|
|
|
$
|
50,771
|
|
|
Inflows
|
4,059
|
|
|
4,714
|
|
|
3,997
|
|
|
4,285
|
|
|
5,853
|
|
|
Outflows
|
(5,747)
|
|
|
(4,115)
|
|
|
(3,501)
|
|
|
(3,527)
|
|
|
(5,258)
|
|
|
Net flows
|
(1,688)
|
|
|
599
|
|
|
496
|
|
|
758
|
|
|
595
|
|
|
Market
performance
|
(7,733)
|
|
|
6,255
|
|
|
3,006
|
|
|
5,694
|
|
|
1,130
|
|
|
Other (2)
|
(42)
|
|
|
(71)
|
|
|
(72)
|
|
|
(255)
|
|
|
19,668
|
|
|
Ending
balance
|
$
|
34,361
|
|
|
$
|
41,144
|
|
|
$
|
44,574
|
|
|
$
|
50,771
|
|
|
$
|
72,164
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed-End
Funds
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
$
|
6,748
|
|
|
$
|
5,343
|
|
|
$
|
5,639
|
|
|
$
|
5,629
|
|
|
$
|
5,914
|
|
|
Inflows
|
5
|
|
|
—
|
|
|
15
|
|
|
5
|
|
|
—
|
|
|
Outflows
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net flows
|
5
|
|
|
—
|
|
|
15
|
|
|
5
|
|
|
—
|
|
|
Market
performance
|
(1,185)
|
|
|
380
|
|
|
54
|
|
|
364
|
|
|
105
|
|
|
Other (2)
|
(225)
|
|
|
(84)
|
|
|
(79)
|
|
|
(84)
|
|
|
5,645
|
|
|
Ending
balance
|
$
|
5,343
|
|
|
$
|
5,639
|
|
|
$
|
5,629
|
|
|
$
|
5,914
|
|
|
$
|
11,664
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Traded
Funds
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
$
|
1,156
|
|
|
$
|
480
|
|
|
$
|
541
|
|
|
$
|
543
|
|
|
$
|
837
|
|
|
Inflows
|
86
|
|
|
74
|
|
|
60
|
|
|
218
|
|
|
175
|
|
|
Outflows
|
(233)
|
|
|
(140)
|
|
|
(35)
|
|
|
(40)
|
|
|
(77)
|
|
|
Net flows
|
(147)
|
|
|
(66)
|
|
|
25
|
|
|
178
|
|
|
98
|
|
|
Market
performance
|
(505)
|
|
|
137
|
|
|
(12)
|
|
|
126
|
|
|
98
|
|
|
Other (2)
|
(24)
|
|
|
(10)
|
|
|
(11)
|
|
|
(10)
|
|
|
(12)
|
|
|
Ending
balance
|
$
|
480
|
|
|
$
|
541
|
|
|
$
|
543
|
|
|
$
|
837
|
|
|
$
|
1,021
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Separate
Accounts
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
$
|
20,414
|
|
|
$
|
17,660
|
|
|
$
|
22,054
|
|
|
$
|
24,727
|
|
|
$
|
29,751
|
|
|
Inflows
|
1,061
|
|
|
1,483
|
|
|
1,727
|
|
|
2,181
|
|
|
2,699
|
|
|
Outflows
|
(775)
|
|
|
(654)
|
|
|
(617)
|
|
|
(914)
|
|
|
(896)
|
|
|
Net flows
|
286
|
|
|
829
|
|
|
1,110
|
|
|
1,267
|
|
|
1,803
|
|
|
Market
performance
|
(3,040)
|
|
|
3,560
|
|
|
1,591
|
|
|
3,757
|
|
|
2,141
|
|
|
Other (2)
|
—
|
|
|
5
|
|
|
(28)
|
|
|
—
|
|
|
3,549
|
|
|
Ending
balance
|
$
|
17,660
|
|
|
$
|
22,054
|
|
|
$
|
24,727
|
|
|
$
|
29,751
|
|
|
$
|
37,244
|
|
|
Assets Under
Management - Asset Flows by Product (continued)
|
|
(in
millions)
|
|
|
Three Months
Ended
|
|
3/31/2020
|
|
6/30/2020
|
|
9/30/2020
|
|
12/31/2020
|
|
3/31/2021
|
|
Institutional
Accounts
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
$
|
32,859
|
|
|
$
|
28,507
|
|
|
$
|
34,819
|
|
|
$
|
36,851
|
|
|
$
|
40,861
|
|
|
Inflows
|
1,499
|
|
|
3,141
|
|
|
2,075
|
|
|
2,252
|
|
|
1,884
|
|
|
Outflows
|
(1,777)
|
|
|
(1,667)
|
|
|
(2,381)
|
|
|
(1,687)
|
|
|
(1,868)
|
|
|
Net flows
|
(278)
|
|
|
1,474
|
|
|
(306)
|
|
|
565
|
|
|
16
|
|
|
Market
performance
|
(4,150)
|
|
|
4,880
|
|
|
2,473
|
|
|
3,481
|
|
|
1,181
|
|
|
Other (2)
|
76
|
|
|
(42)
|
|
|
(135)
|
|
|
(36)
|
|
|
744
|
|
|
Ending
balance
|
$
|
28,507
|
|
|
$
|
34,819
|
|
|
$
|
36,851
|
|
|
$
|
40,861
|
|
|
$
|
42,802
|
|
|
|
|
|
|
|
|
|
|
|
|
Structured
Products
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
$
|
3,903
|
|
|
$
|
4,343
|
|
|
$
|
4,264
|
|
|
$
|
4,163
|
|
|
$
|
4,060
|
|
|
Inflows
|
491
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Outflows
|
(42)
|
|
|
(73)
|
|
|
(69)
|
|
|
(81)
|
|
|
(79)
|
|
|
Net flows
|
449
|
|
|
(73)
|
|
|
(69)
|
|
|
(81)
|
|
|
(79)
|
|
|
Market
performance
|
39
|
|
|
33
|
|
|
10
|
|
|
9
|
|
|
35
|
|
|
Other (2)
|
(48)
|
|
|
(39)
|
|
|
(42)
|
|
|
(31)
|
|
|
(31)
|
|
|
Ending
balance
|
$
|
4,343
|
|
|
$
|
4,264
|
|
|
$
|
4,163
|
|
|
$
|
4,060
|
|
|
$
|
3,985
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
$
|
108,904
|
|
|
$
|
90,694
|
|
|
$
|
108,461
|
|
|
$
|
116,487
|
|
|
$
|
132,194
|
|
|
Inflows
|
7,201
|
|
|
9,412
|
|
|
7,874
|
|
|
8,941
|
|
|
10,611
|
|
|
Outflows
|
(8,574)
|
|
|
(6,649)
|
|
|
(6,603)
|
|
|
(6,249)
|
|
|
(8,178)
|
|
|
Net flows
|
(1,373)
|
|
|
2,763
|
|
|
1,271
|
|
|
2,692
|
|
|
2,433
|
|
|
Market
performance
|
(16,574)
|
|
|
15,245
|
|
|
7,122
|
|
|
13,431
|
|
|
4,690
|
|
|
Other (2)
|
(263)
|
|
|
(241)
|
|
|
(367)
|
|
|
(416)
|
|
|
29,563
|
|
|
Ending
balance
|
$
|
90,694
|
|
|
$
|
108,461
|
|
|
$
|
116,487
|
|
|
$
|
132,194
|
|
|
$
|
168,880
|
|
|
|
|
(1)
|
Represents assets
under management of U.S. retail funds, offshore funds and variable
insurance funds
|
|
(2)
|
Represents open-end
and closed-end fund distributions net of reinvestments, the net
change in assets from cash management strategies, and the effect on
net flows from non-sales related activities such as asset
acquisitions/(dispositions), seed capital
investments/(withdrawals), structured products reset transactions,
and the use of leverage
|
Non-GAAP Information and Reconciliations
(in
thousands except per share data)
The following are reconciliations and related notes of the most
comparable U.S. GAAP measure to each non-GAAP measure.
The non-GAAP financial measures included in this release differ
from financial measures determined in accordance with U.S. GAAP as
a result of the reclassification of certain income statement items,
as well as the exclusion of certain expenses and other items that
are not reflective of the earnings generated from providing
investment management and related services. Non-GAAP financial
measures have material limitations and should not be viewed in
isolation or as a substitute for U.S. GAAP measures.
|
Reconciliation of
Total Revenues, GAAP to Total Revenues, as Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Total revenues,
GAAP
|
$
|
216,897
|
|
$
|
144,566
|
|
$
|
171,646
|
|
Consolidated
investment products revenues (1)
|
2,673
|
|
1,952
|
|
2,581
|
|
Investment management
fees (2)
|
(11,943)
|
|
(9,947)
|
|
(10,403)
|
|
Distribution and
service fees (2)
|
(20,351)
|
|
(9,462)
|
|
(10,283)
|
|
Total revenues, as
adjusted
|
$
|
187,276
|
|
$
|
127,109
|
|
$
|
153,541
|
|
Reconciliation of
Total Operating Expenses, GAAP to Operating Expenses, as
Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Total operating
expenses, GAAP
|
$
|
154,755
|
|
$
|
119,964
|
|
$
|
120,715
|
|
Consolidated
investment products expenses (1)
|
(559)
|
|
(6,749)
|
|
(641)
|
|
Distribution and
other asset-based expenses (3)
|
(32,294)
|
|
(19,409)
|
|
(20,686)
|
|
Amortization of
intangible assets (4)
|
(9,465)
|
|
(7,533)
|
|
(7,529)
|
|
Acquisition and
integration expenses (5)
|
(2,647)
|
|
781
|
|
344
|
|
Other (6)
|
(480)
|
|
—
|
|
(580)
|
|
Total operating
expenses, as adjusted
|
$
|
109,310
|
|
$
|
87,054
|
|
$
|
91,623
|
|
Reconciliation of
Operating Income (Loss), GAAP to Operating Income (Loss), as
Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Operating income
(loss), GAAP
|
$
|
62,142
|
|
$
|
24,602
|
|
$
|
50,931
|
|
Consolidated
investment products (earnings) losses (1)
|
3,232
|
|
8,701
|
|
3,222
|
|
Amortization of
intangible assets (4)
|
9,465
|
|
7,533
|
|
7,529
|
|
Acquisition and
integration expenses (5)
|
2,647
|
|
(781)
|
|
(344)
|
|
Other (6)
|
480
|
|
—
|
|
580
|
|
Operating income
(loss), as adjusted
|
$
|
77,966
|
|
$
|
40,055
|
|
$
|
61,918
|
|
|
|
|
|
|
|
Operating margin,
GAAP
|
28.7%
|
|
17.0%
|
|
29.7%
|
|
Operating margin, as
adjusted
|
41.6%
|
|
31.5%
|
|
40.3%
|
|
Reconciliation of Net
Income (Loss) Attributable to Common Stockholders, GAAP to Net
Income (Loss) Attributable to Common Stockholders, as
Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Net income (loss)
attributable to common stockholders, GAAP
|
$
|
36,588
|
|
$
|
(4,285)
|
|
$
|
43,315
|
|
Amortization of
intangible assets, net of tax (4)
|
6,201
|
|
4,601
|
|
4,739
|
|
Acquisition and
integration expenses, net of tax (5)
|
1,940
|
|
(554)
|
|
(250)
|
|
Other, net of tax
(6)
|
11,047
|
|
7,218
|
|
12,405
|
|
Seed capital and CLO
investments (gains) losses, net of tax (7)
|
(1,156)
|
|
19,484
|
|
(18,847)
|
|
Net income (loss)
attributable to common stockholders, as adjusted
|
$
|
54,620
|
|
$
|
26,464
|
|
$
|
41,362
|
|
Weighted average
shares outstanding - diluted
|
8,052
|
|
7,422
|
|
8,026
|
|
Dilutive impact of
restricted stock units and stock options
|
—
|
|
232
|
|
—
|
|
Preferred
stockA
|
—
|
|
321
|
|
—
|
|
Weighted average
shares outstanding - diluted, as adjusted
|
8,052
|
|
7,975
|
|
8,026
|
|
|
|
|
|
|
|
Earnings (loss) per
share - diluted, GAAP
|
$
|
4.54
|
|
$
|
(0.58)
|
|
$
|
5.40
|
|
Earnings (loss) per
share - diluted, as adjusted
|
$
|
6.78
|
|
$
|
3.32
|
|
$
|
5.15
|
|
|
|
A
For the period ending March 31, 2020, assumes conversion of
preferred shares to common shares at the actual mandatory
conversion rate of 0.7938 for the portion of the period prior to
the conversion, which occurred on February 1, 2020
|
|
Reconciliation of
Income (Loss) Before Taxes, GAAP to Income (Loss) Before Taxes, as
Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Income (loss) before
taxes, GAAP
|
$
|
67,367
|
|
$
|
11,297
|
|
$
|
75,902
|
|
Consolidated
investment products (earnings) losses (1)
|
(30)
|
|
1,732
|
|
(3,292)
|
|
Amortization of
intangible assets (4)
|
9,465
|
|
7,533
|
|
7,529
|
|
Acquisition and
integration expenses (5)
|
2,647
|
|
(781)
|
|
(344)
|
|
Other (6)
|
480
|
|
(704)
|
|
580
|
|
Seed capital and CLO
investments (gains) losses (7)
|
(1,533)
|
|
20,185
|
|
(18,798)
|
|
Income (loss) before
taxes, as adjusted
|
$
|
78,396
|
|
$
|
39,262
|
|
$
|
61,577
|
|
Reconciliation of
Income Tax Expense (Benefit), GAAP to Income Tax Expense (Benefit),
as Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Income tax expense
(benefit), GAAP
|
$
|
15,153
|
|
$
|
10,291
|
|
$
|
14,088
|
|
Tax impact
of:
|
|
|
|
|
|
|
Amortization of
intangible assets (4)
|
2,528
|
|
2,189
|
|
2,055
|
|
Acquisition and
integration expenses (5)
|
707
|
|
(227)
|
|
(94)
|
|
Other
(6)
|
2,931
|
|
(1,547)
|
|
706
|
|
Seed capital
and CLO investments (gains) losses (7)
|
(377)
|
|
701
|
|
49
|
|
Income tax expense
(benefit), as adjusted
|
$
|
20,942
|
|
$
|
11,407
|
|
$
|
16,804
|
|
|
|
|
|
|
|
Effective tax rate,
GAAPA
|
22.5%
|
|
91.1%
|
|
18.6%
|
|
Effective tax rate,
as adjustedB
|
26.7%
|
|
29.1%
|
|
27.3%
|
|
|
|
A Reflects income tax expense
(benefit), GAAP, divided by income (loss) before taxes,
GAAP
|
|
B Reflects income tax expense
(benefit), as adjusted, divided by income (loss) before taxes, as
adjusted
|
|
Reconciliation of
Administration and Shareholder Service Fees, GAAP to Administration
and Shareholder Service Fees, as Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Administration and
shareholder service fees, GAAP
|
$
|
22,560
|
|
$
|
14,653
|
|
$
|
16,407
|
|
Consolidated
investment products fees (1)
|
61
|
|
39
|
|
65
|
|
Administration and
shareholder service fees, as adjusted
|
$
|
22,621
|
|
$
|
14,692
|
|
$
|
16,472
|
|
Reconciliation of
Employment Expenses, GAAP to Employment Expenses, as
Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Employment expenses,
GAAP
|
$
|
91,759
|
|
$
|
66,130
|
|
$
|
73,527
|
|
Acquisition and
integration expenses (5)
|
(867)
|
|
781
|
|
515
|
|
Other (6)
|
(480)
|
|
—
|
|
(580)
|
|
Employment expenses,
as adjusted
|
$
|
90,412
|
|
$
|
66,911
|
|
$
|
73,462
|
|
Reconciliation of
Other Operating Expenses, GAAP to Other Operating Expenses, as
Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Other operating
expenses, GAAP
|
$
|
19,580
|
|
$
|
18,885
|
|
$
|
17,232
|
|
Acquisition and
integration expenses (5)
|
(1,780)
|
|
—
|
|
(171)
|
|
Other operating
expenses, as adjusted
|
$
|
17,800
|
|
$
|
18,885
|
|
$
|
17,061
|
|
Reconciliation of
Total Other Income (Expense), Net, GAAP to Total Other Income
(Expense), Net, as Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Total other income
(expense), net GAAP
|
$
|
(2,025)
|
|
$
|
(15,601)
|
|
$
|
16,909
|
|
Consolidated
investment products (1)
|
5,256
|
|
(4,855)
|
|
3,106
|
|
Seed capital and CLO
investments (gains) losses (7)
|
(1,533)
|
|
20,185
|
|
(18,798)
|
|
Total other income
(expense), net as adjusted
|
$
|
1,698
|
|
$
|
(271)
|
|
$
|
1,217
|
|
Reconciliation of
Interest and Dividend Income, GAAP to Interest and Dividend Income,
as Adjusted:
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Interest and dividend
income, GAAP
|
$
|
136
|
|
$
|
752
|
|
$
|
236
|
|
Consolidated
investment products (1)
|
910
|
|
2,629
|
|
898
|
|
Interest and dividend
income, as adjusted
|
$
|
1,046
|
|
$
|
3,381
|
|
$
|
1,134
|
|
Reconciliation of
Total Noncontrolling Interests, GAAP to Total Noncontrolling
Interests, as Adjusted
|
|
|
Three Months
Ended
|
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Total noncontrolling
interests, GAAP
|
$
|
(15,626)
|
|
$
|
(5,291)
|
|
$
|
(18,499)
|
|
Consolidated
investment products (1)
|
30
|
|
(1,732)
|
|
3,292
|
|
Amortization of
intangible assets (4)
|
(736)
|
|
(743)
|
|
(735)
|
|
Other (6)
|
13,498
|
|
6,375
|
|
12,531
|
|
Total noncontrolling
interests, as adjusted
|
$
|
(2,834)
|
|
$
|
(1,391)
|
|
$
|
(3,411)
|
Notes to Reconciliations:
Reclassifications:
1. Consolidated investment
products - Revenues and expenses generated by operating
activities of mutual funds and CLOs that are consolidated in the
financial statements. Management believes that excluding these
operating activities to reflect net revenues and expenses of the
company prior to the consolidation of these products is consistent
with the approach of reflecting its operating results from managing
third-party client assets.
Other Adjustments:
Revenue Related
2. Investment
management/Distribution and service fees - Each of these
revenue line items is reduced to exclude fees passed through to
third-party client intermediaries who own the retail client
relationship and are responsible for distributing the product and
servicing the client. The amount of fees fluctuates each period,
based on a predetermined percentage of the value of assets under
management, and varies based on the type of investment product. The
specific adjustments are as follows:
Investment management fees - Based
on specific agreements, the portion of investment management fees
passed-through to third-party intermediaries for services to
investors in sponsored investment products.
Distribution and service fees -
Based on distinct arrangements, fees collected by the company then
passed-through to third-party client intermediaries for services to
investors in sponsored investment products. The adjustment
represents all of the company's distribution and service fees that
are recorded as a separate line item on the condensed consolidated
statements of operations.
Management believes that making
these adjustments aids in comparing the company's operating results
with other asset management firms that do not utilize third-party
client intermediaries.
Expense Related
3. Distribution and other
asset-based expenses - Primarily payments to third-party client
intermediaries for providing services to investors in sponsored
investment products. Management believes that making this
adjustment aids in comparing the company's operating results with
other asset management firms that do not utilize third-party client
intermediaries.
4. Amortization of intangible
assets - Non-cash amortization expense or impairment expense,
if any, attributable to acquisition-related intangible assets,
including any portion that is allocated to noncontrolling
interests. Management believes that making this adjustment aids in
comparing the company's operating results with other asset
management firms that have not engaged in acquisitions.
5. Acquisition and integration
expenses - Expenses that are directly related to acquisition
and integration activities. Acquisition expenses include
transaction closing costs, certain professional fees, and financing
fees. Integration expenses include costs incurred that are directly
attributable to combining businesses, including compensation,
restructuring and severance charges, professional fees, consulting
fees, and other expenses. Management believes that making these
adjustments aids in comparing the company's operating results with
other asset management firms that have not engaged in
acquisitions.
Components of Acquisition and Integration Expenses for the
respective periods are shown below:
|
Three Months
Ended
|
|
Acquisition and
Integration Expenses
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Employment
expenses
|
$
|
867
|
|
$
|
(781)
|
|
$
|
(515)
|
|
Other operating
expenses
|
1,780
|
|
—
|
|
171
|
|
Total Acquisition
and Integration Expenses
|
$
|
2,647
|
|
$
|
(781)
|
|
$
|
(344)
|
6. Other - Certain expenses
that are not reflective of the ongoing earnings generation of the
business. Employment expenses and noncontrolling interests are
adjusted for fair value measurements of affiliate minority
interests. Interest expense is adjusted to remove gains on early
extinguishment of debt. Income tax expense (benefit) items are
adjusted for uncertain tax positions, changes in tax law, valuation
allowances, and other unusual or infrequent items not related to
current operating results to reflect a normalized effective
rate. Management believes that making these adjustments aids
in comparing the company's operating results with prior
periods.
Components of Other for the respective periods are shown below:
|
Three Months
Ended
|
|
Other
|
3/31/2021
|
|
3/31/2020
|
|
12/31/2020
|
|
Employment expense
fair value adjustments
|
$
|
480
|
|
—
|
|
$
|
580
|
|
Tax impact of
employment expense fair value adjustments
|
(128)
|
|
—
|
|
(158)
|
|
Gain on
extinguishment of debt
|
—
|
|
(704)
|
|
—
|
|
Tax impact of
gain on extinguishment of debt
|
—
|
|
205
|
|
—
|
|
Other discrete tax
adjustments
|
(2,803)
|
|
1,342
|
|
(548)
|
|
Affiliate minority
interest fair value adjustments
|
13,498
|
|
6,375
|
|
12,531
|
|
Total
Other
|
$
|
11,047
|
|
$
|
7,218
|
|
$
|
12,405
|
Seed Capital and CLO Related
7. Seed capital and CLO
investments (gains) losses - Gains and losses (realized
and unrealized) of seed capital and CLO investments. Gains and
losses (realized and unrealized) generated by investments in seed
capital and CLO investments can vary significantly from period to
period and do not reflect the company's operating results from
providing investment management and related services. Management
believes that making this adjustment aids in comparing the
company's operating results with prior periods and with other asset
management firms that do not have meaningful seed capital and CLO
investments.
Definitions:
Revenues, as adjusted, comprise the fee revenues
paid by clients for investment management and related services.
Revenues, as adjusted, for purposes of calculating net income
attributable to common stockholders, as adjusted, differ from U.S.
GAAP, namely in excluding the impact of operating activities of
consolidated investment products and reduced to exclude fees
passed-through to third-party client intermediaries who own the
retail client relationship and are responsible for distributing the
product and servicing the client.
Operating expenses, as adjusted, is calculated to
reflect expenses from ongoing continuing operations. Operating
expenses, as adjusted, for purposes of calculating net income
attributable to common stockholders, as adjusted, differ from U.S.
GAAP expenses in that they exclude amortization or impairment, if
any, of intangible assets, restructuring and severance, the effect
of consolidated investment products, acquisition and
integration-related expenses and certain other expenses that do not
reflect the ongoing earnings generation of the business.
Operating margin, as adjusted, is a metric used to
evaluate efficiency represented by operating income, as adjusted,
divided by revenues, as adjusted.
Earnings (loss) per share, as adjusted, represent
net income (loss) attributable to common stockholders, as adjusted,
divided by weighted average shares outstanding, as adjusted, on
either a basic or diluted basis.
Forward-Looking Information
This press release contains statements that are, or may be
considered to be, forward-looking statements. All statements that
are not historical facts, including statements about our beliefs or
expectations, are "forward-looking statements" within the meaning
of The Private Securities Litigation Reform Act of 1995, as
amended. These statements may be identified by such forward-looking
terminology as "expect," "estimate," "intent," "plan," "intend,"
"believe," "anticipate," "may," "will," "should," "could,"
"continue," "project," "opportunity," "predict," "would,"
"potential," "future," "forecast," "guarantee," "assume," "likely,"
"target" or similar statements or variations of such terms.
Our forward-looking statements are based on a series of
expectations, assumptions and projections about the company
and the markets in which we operate, are not guarantees
of future results or performance, and involve substantial risks and
uncertainty including assumptions and projections concerning our
assets under management, net asset inflows and outflows, operating
cash flows, business plans and ability to borrow, for all future
periods. All forward-looking statements are as of the date of this
release only. The company can give no assurance that such
expectations or forward-looking statements will prove to be
correct. Actual results may differ materially.
Our business and our forward- looking statements involve
substantial known and unknown risks and uncertainties, including
those discussed under "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in
our 2020 Annual Report on Form 10-K, as supplemented by our
periodic filings with the Securities and Exchange Commission (the
"SEC"), as well as the following risks and uncertainties resulting
from: (i) any reduction in our assets under management; (ii)
general domestic and global economic, political and pandemic
conditions; (iii) inability to achieve the expected benefits of our
strategic transactions; (iv) the on-going effects of the COVID-19
pandemic and associated global economic disruption; (v) withdrawal,
renegotiation or termination of investment advisory agreements;
(vi) damage to our reputation; (vii) inability to satisfy financial
covenants and payments related to our indebtedness; (viii)
inability to attract and retain key personnel; (ix) challenges from
the competition we face in our business; (x) adverse developments
related to unaffiliated subadvisers; (xi) negative implications of
changes in key distribution relationships; (xii) interruptions in
or failure to provide critical technological service by us or third
parties; (xiii) risk of loss on our investments; (xiv) lack of
sufficient capital on satisfactory terms; (xv) adverse regulatory
and legal developments; (xvi) failure to comply with investment
guidelines or other contractual requirements; (xvii) adverse civil
litigation and government investigations or proceedings; (xviii)
unfavorable changes in tax laws or limitations; (xix) volatility
associated with our common stock; (xx) inability to make quarterly
common stock dividends; (xxi) certain corporate governance
provisions in our charter and bylaws; (xxii) losses or costs not
covered by insurance; (xxiii) impairment of goodwill or intangible
assets; and other risks and uncertainties. Any occurrence of,
or any material adverse change in, one or more risk factors or
risks and uncertainties referred to above, in our 2020 Annual
Report on Form 10-K and our other periodic reports filed with
the SEC could materially and adversely affect our operations,
financial results, cash flows, prospects and liquidity.
Certain other factors that may impact our continuing operations,
prospects, financial results and liquidity, or that may cause
actual results to differ from such forward-looking statements, are
discussed or included in the company's periodic reports filed with
the SEC and are available on our website at www.virtus.com under
"Investor Relations." You are urged to carefully consider all such
factors.
The company does not undertake or plan to update or revise any
such forward-looking statements to reflect actual results, changes
in plans, assumptions, estimates or projections, or other
circumstances occurring after the date of this release, even if
such results, changes or circumstances make it clear that any
forward-looking information will not be realized. If there are any
future public statements or disclosures by us that modify or affect
any of the forward-looking statements contained in or accompanying
this release, such statements or disclosures will be deemed to
modify or supersede such statements in this release.
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SOURCE Virtus Investment Partners, Inc.