| Year-End Results |
| |
For the Years Ended December 31, |
| (in millions, except per share data and as
indicated) |
2006 |
2007 |
2008 |
2009 |
|
| Operating Results |
|
|
|
|
| Revenue |
$ 1,170.4 |
$ 1,369.9 |
$ 1,158.2 |
$ 841.8 |
| Net Income (controlling interest)(1) |
146.6 |
176.5 |
(1.3) |
59.5 |
| Cash Net Income(1)(2) |
224.5 |
263.5 |
225.4 |
185.7 |
| EBITDA(1)(3) |
342.1 |
417.1 |
309.0 |
242.8 |
|
Earnings per share -
diluted(*)(1) |
$ 3.69 |
$ 4.51 |
$ (0.03) |
$ 1.38 |
| Cash earnings per share(1)(4) |
5.73 |
6.77 |
5.57 |
4.37 |
|
| Balance Sheet Data |
|
|
|
|
| Senior debt |
$ 365.5 |
$ 519.5 |
$ 233.5 |
- |
| Senior convertible securities(1) |
405.6 |
377.0 |
445.5 |
457.0 |
| Mandatory convertible securities |
300.0 |
300.0 |
- |
- |
| Junior convertible trust preferred securities(1) |
209.6 |
549.8 |
505.0 |
507.4 |
|
| Other Financial Data |
|
|
|
| Assets under management |
|
|
|
| (at period end, in billions) |
$ 241.1 |
$ 274.8 |
$ 170.1 |
$ 208.0 |
|
Average shares outstanding -
diluted(1) |
43.7 |
42.4 |
38.2 |
43.3 |
Average shares outstanding -
adjusted diluted(4) |
39.2 |
38.9 |
40.5 |
42.5 |
|
| |
|
|
|
|
| * As required by generally accepted
accounting principles, the calculation of diluted earnings per
share includes the addition to Net Income (controlling interest) of
interest expense (net of tax) attributable to the Company’s dilutive
convertible securities (excluding the mandatory convertible securities).
These amounts are $14.5, $14.9, $0.0 and $0.1 for the years ended December
31, 2006, December 31, 2007, December 31, 2008 and December 31, 2009,
respectively.
|
(1) As more fully described in its
most recent Quarterly Report on Form 10-Q, in the first quarter of 2009 the
Company adopted several accounting standards that were retrospectively applied
to prior periods, including:
-
FASB Staff Position APB 14-1 "Accounting for Convertible Debt
Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash
Settlement)" ("APB 14-1");
-
Statement of Financial Accounting Standards ("FAS") No. 141
(revised 2007) "Business Combinations;"
-
FAS No. 160 "Non-Controlling Interests in Consolidated Financial
Statements, an amendement of ARB No. 51;" and
-
Emerging Issues Task Force Topic No. D-98 "Classification and
Measurement of Redeemable Securities."
|
| (2) Under our Cash Net Income definition,
we add to Net Income (controlling interest) amortization and deferred taxes
related to intangible assets and Affiliate depreciation and equity expense, and
exclude the effect of APB 14-1. This supplemental non-GAAP performance measure
is provided in addition to, but not as a substitute for, Net Income
(controlling interest). The Company considers Cash Net Income an important
measure of its financial performance, as management believes it best represents
operating performance before non-cash expenses relating to the acquisition of
interests in its affiliated investment management firms. Cash Net Income is
used by the Company’s management and Board of Directors as a principal
performance benchmark. |
| The Company adds back amortization
attributable to acquired client relationships because this expense does not
correspond to the changes in value of these assets, which do not diminish
predictably over time. The portion of deferred taxes generally attributable to
intangible assets (including goodwill) that it no longer amortizes but which
continues to generate tax deductions is added back, because the Company
believes it is unlikely these accruals will be used to settle material tax
obligations. The Company adds back non-cash expenses relating to certain
transfers of equity between Affiliate management partners, because these
transfers have no dilutive effect to our shareholders. The Company adds back
the portion of consolidated depreciation expense incurred by Affiliates because
under its Affiliate operating agreements, the Company is generally not required
to replenish these depreciating assets.
|
| (3) EBITDA is defined as earnings before
interest expense, income taxes, depreciation and amortization. This
supplemental non-GAAP liquidity measure is provided in addition to, but not as
a substitute for, cash flow from operations. As a measure of liquidity, the
Company believes EBITDA is useful as an indicator of its ability to service
debt, make new investments and meet working capital requirements. EBITDA, as
calculated by the Company, may not be consistent with computations of EBITDA by
other companies. |
|
(4) Cash earnings per share represents Cash Net Income divided by
the adjusted diluted average shares outstanding. In this calculation, the
potential share issuance in connection with the Company’s convertible
securities is measured using a “treasury stock” method. Under this method,
only the net number of shares of common stock equal to the value of the
contingently convertible securities and the junior convertible trust preferred
securities in excess of par, if any, are deemed to be outstanding. The Company
believes the inclusion of net shares under a treasury stock method best
reflects the benefit of the increase in available capital resources (which
could be used to repurchase shares of common stock) that occurs when these
securities are converted and the Company is relieved of its debt obligation.
This method does not take into account any increase or decrease in the
Company’s cost of capital in an assumed conversion. |
Note : For more information on our
use of these non-GAAP financial measures, including a reconciliation of Net
Income (controlling interest) to Cash Net Income and cash flow from operations
to EBITDA, and certain factors affecting our business, please see our most
recent Annual Report on Form 10-K and the recent press release reporting our
financial and operating results for the Fourth Quarter and Full Year 2009.
2008 Form 10-K
Press Release: Financial and Operating Results
for the Fourth Quarter and Full Year 2009. |