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8-K - 8-K - Artio Global Investors Inc. | v300339_8k.htm |
News Release
Artio Global Investors Inc.
Artio Global Investors Reports Fourth Quarter and Full Year 2011 Results;
Announces Quarterly Dividend of $0.06 Per Share
NEW YORK, NY, January 26, 2012 – Artio Global Investors Inc. (NYSE: ART) (“Artio Global Investors”, together with its subsidiaries, “Artio Global” or the “Company”) today reported its results for the quarter and year ended December 31, 2011.
Financial Update
· | Adjusted1 net income attributable to Artio Global Investors of $10.0 million, or $0.17 per diluted share, for the fourth quarter of 2011 (GAAP net income attributable to Artio Global Investors of $8.3 million, or $0.14 per diluted share) |
· | Assets under management of $30.4 billion as of December 31, 2011 |
· | Investment management fees of $51.6 million for the fourth quarter of 2011 and $277.2 million for the full year 2011 |
· | Effective fee rate2 of 61.3 basis points for the fourth quarter of 2011 |
· | Adjusted operating margin of 34.5% for the fourth quarter of 2011 and 47.5% for the full year 2011 |
· | Quarterly dividend of $0.06 per share on Class A common stock |
The Company’s adjusted results for all periods assume the Principals’3 non-controlling interests have been fully exchanged for shares of Class A common stock and exclude the amortization of restricted stock units (“RSUs”) granted at the time of the Company’s initial public offering (“IPO”). In addition, the Company’s adjusted results for the third quarter and full year 2011 exclude a compensation charge (the “Compensation Charge”) of $7.6 million related to organizational changes. Adjusted results are presented to provide more meaningful comparisons between periods.
1 | See Exhibits 3 - 5 of this news release for a reconciliation of the Company’s U.S. GAAP results to its non-GAAP adjusted results (“adjusted”). |
2 | Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period. |
3 | Richard Pell, Chairman, Chief Executive Officer and Chief Investment Officer, and Rudolph-Riad Younes, Head of International and Global Equities, are collectively referred to as the “Principals”. |
For the fourth quarter of 2011, adjusted net income attributable to Artio Global Investors was $10.0 million, or $0.17 per diluted share, a decrease in each case of 37% from adjusted net income attributable to Artio Global Investors of $15.9 million, or $0.27 per diluted share, for the third quarter of 2011, and a decrease of 64% and 63%, respectively, from adjusted net income attributable to Artio Global Investors of $27.8 million, or $0.46 per diluted share, for the fourth quarter of 2010.
On a GAAP basis, net income attributable to Artio Global Investors for the fourth quarter of 2011 was $8.3 million, or $0.14 per diluted share, an increase of 29% and 27%, respectively, from net income attributable to Artio Global Investors of $6.4 million, or $0.11 per diluted share, for the third quarter of 2011, and a decrease in each case of 68% from net income attributable to Artio Global Investors of $25.7 million, or $0.44 per diluted share, for the fourth quarter of 2010.
For the full year 2011, adjusted net income attributable to Artio Global Investors was $73.4 million, or $1.23 per diluted share, a decrease of 29% and 28%, respectively, from adjusted net income attributable to Artio Global Investors of $103.5 million, or $1.72 per diluted share, for the full year 2010.
On a GAAP basis, net income attributable to Artio Global Investors for the full year 2011 was $57.9 million, or $0.99 per diluted share, a decrease of 31% and 37%, respectively, from net income attributable to Artio Global Investors of $83.6 million, or $1.58 per diluted share, for the full year 2010.
- 2 - |
The following tables compare the Company’s GAAP results and adjusted results. See Exhibits 3 – 5 of this news release for a reconciliation of the Company’s GAAP results to adjusted results.
Three
Months Ended (unaudited, in millions, except per share amounts) | ||||||||||||||||||||
Dec.
31, 2011 | Dec.
31, 2010 | %
Change | Sep.
30, 2011 | %
Change | ||||||||||||||||
Revenue4, GAAP | $ | 51.9 | $ | 85.2 | (39 | )% | $ | 63.8 | (19 | )% | ||||||||||
Operating income, GAAP | $ | 15.5 | $ | 45.0 | (65 | )% | $ | 21.2 | (27 | )% | ||||||||||
Operating income, adjusted | $ | 17.9 | $ | 47.7 | (62 | )% | $ | 31.9 | (44 | )% | ||||||||||
Net income attributable to Artio Global Investors, GAAP | $ | 8.3 | $ | 25.7 | (68 | )% | $ | 6.4 | 29 | % | ||||||||||
Net income attributable to Artio Global Investors, adjusted | $ | 10.0 | $ | 27.8 | (64 | )% | $ | 15.9 | (37 | )% | ||||||||||
Diluted EPS, GAAP | $ | 0.14 | $ | 0.44 | (68 | )% | $ | 0.11 | 27 | % | ||||||||||
Diluted EPS, adjusted | $ | 0.17 | $ | 0.46 | (63 | )% | $ | 0.27 | (37 | )% |
Year Ended
(unaudited, in millions, except per share amounts) | ||||||||||||
Dec. 31,
2011 | Dec. 31,
2010 | %
Change | ||||||||||
Revenue4, GAAP | $ | 276.0 | $ | 335.1 | (18 | )% | ||||||
Operating income, GAAP | $ | 112.7 | $ | 173.2 | (35 | )% | ||||||
Operating income, adjusted | $ | 131.0 | $ | 184.3 | (29 | )% | ||||||
Net income attributable to Artio Global Investors, GAAP | $ | 57.9 | $ | 83.6 | (31 | )% | ||||||
Net income attributable to Artio Global Investors, adjusted | $ | 73.4 | $ | 103.5 | (29 | )% | ||||||
Diluted EPS, GAAP | $ | 0.99 | $ | 1.58 | (37 | )% | ||||||
Diluted EPS, adjusted | $ | 1.23 | $ | 1.72 | (28 | )% |
4 | Represents total revenues and other operating income. |
- 3 - |
Business Update5
· | Four of the Company’s nine eligible mutual funds6 were in the top quartile of Lipper performance rankings for the three-year period ended December 31, 2011 |
· | Four of the Company’s nine eligible mutual funds7 were in the top quartile of Lipper performance rankings for the five-year period ended December 31, 2011 |
· | Net client cash outflows were $4.8 billion for the fourth quarter of 2011 and $16.7 billion for full year 2011, driven primarily by our International Equity I and II strategies. |
Management Commentary
“The fourth quarter concluded a disappointing year for Artio Global, as underperformance in our International Equity strategies further impacted net client cash flows, revenues and earnings,” said Richard Pell, Chairman, Chief Executive Officer and Chief Investment Officer.
“Looking ahead to 2012, we will remain vigilant on costs and seek to maintain a prudent approach to capital management. Despite expectations of further outflows from our International Equity strategies in the near-term, we also see opportunities for long-term growth. Our High Grade, High Yield and US Equity strategies are all well-positioned to gather additional assets, which over time should bring greater diversity and stability to our revenues.”
Fourth Quarter of 2011 Comparison with Fourth Quarter of 2010
Assets Under Management and Net Client Cash Flows
Assets under management were $30.4 billion as of December 31, 2011, down $23.0 billion, or 43%, from $53.4 billion as of December 31, 2010, due to net client cash outflows and market depreciation.
Net client cash outflows for the fourth quarter of 2011 were $4.8 billion, driven primarily by net client cash outflows from our International Equity I and II strategies.8
5 | See section entitled “Fund Performance and Other Disclaimers” and Exhibit 8 of this news release for further information about Lipper and Morningstar rankings. |
6 | Class I mutual fund shares with a three-year track record; other classes may have different performance characteristics. |
7 | Class I mutual fund shares with a five-year track record; other classes may have different performance characteristics. |
8 | See Exhibit 7 for more information on “Assets under Management by Investment Strategy”. |
- 4 - |
Revenues and Other Operating Income
Revenues and other operating income for the fourth quarter of 2011 totaled $51.9 million, down 39% from $85.2 million for the fourth quarter of 2010. The decrease was driven primarily by lower investment management fees of $51.6 million for the fourth quarter of 2011, down 39% from $84.7 million for the fourth quarter of 2010, due primarily to lower average assets under management.
Expenses
Employee Compensation and Benefits
For the fourth quarter of 2011, adjusted employee compensation and benefits expenses were $20.6 million, down 5% from $21.7 million for the fourth quarter of 2010. The decrease was due primarily to lower incentive compensation accruals, partly offset by accruals related to the Company’s long-term incentive plan implemented in 2011.
GAAP employee compensation and benefits expenses for the fourth quarter of 2011 were $23.0 million, down 6% from $24.4 million for the fourth quarter of 2010, due primarily to the reasons noted above.
Shareholder Servicing and Marketing Expenses
Shareholder servicing and marketing expenses for the fourth quarter of 2011 were $3.9 million, down 21% from $4.9 million for the fourth quarter of 2010, driven primarily by lower platform costs reflecting a decrease in average assets under management in proprietary funds.
General and Administrative Expenses
General and administrative expenses for the fourth quarter of 2011 were $9.5 million, a decrease of 13% from $10.9 million for the fourth quarter of 2010, due primarily to a decline in costs across several categories.
- 5 - |
Income Taxes
For the fourth quarter of 2011, the adjusted effective tax rate was 44.3%, 2.0 percentage points higher than the 42.3% adjusted effective tax rate for the fourth quarter of 2010. The increase was due primarily to true-ups related to 2010 tax expense recorded in the fourth quarter of 2011, partly offset by a lower apportionment of income for state and local tax purposes in the fourth quarter of 2011.
The GAAP effective tax rate was 45.0% for the fourth quarter of 2011, 3.6 percentage points higher than the 41.4% GAAP effective tax rate for the fourth quarter of 2010 due primarily to the reasons noted above.
Fourth Quarter of 2011 Comparison with Third Quarter of 2011
Assets Under Management
Assets under management were $30.4 billion as of December 31, 2011, a decrease of $3.9 billion, or 11%, from $34.3 billion as of September 30, 2011, due to net client cash outflows, partly offset by market appreciation.
Revenues and Other Operating Income
Revenues and other operating income for the fourth quarter of 2011 totaled $51.9 million, down 19% from $63.8 million for the third quarter of 2011, driven primarily by lower investment management fees. Investment management fees were $51.6 million for the fourth quarter of 2011, down 21% from $65.6 million for the third quarter of 2011, due primarily to a decrease in average assets under management.
Expenses
Employee Compensation and Benefits
For the fourth quarter of 2011, adjusted employee compensation and benefits expenses were $20.6 million, an increase of 16% from $17.7 million for the third quarter of 2011. The increase was due primarily to a year-to-date reduction of incentive compensation accruals in the third quarter of 2011 reflecting the impact of organizational changes, partly offset by lower salaries and benefits expenses in the fourth quarter of 2011 reflecting a decline in headcount.
- 6 - |
GAAP employee compensation and benefits expenses for the fourth quarter of 2011 were $23.0 million, down 19% from $28.4 million for the third quarter of 2011, due primarily to the Compensation Charge recorded in the third quarter of 2011, partly offset by the reasons noted above.
Shareholder Servicing and Marketing Expenses
Shareholder servicing and marketing expenses for the fourth quarter of 2011 were $3.9 million, a decrease of 17% from $4.7 million for the third quarter of 2011, due primarily to lower platform costs, reflecting a decrease in average assets under management in proprietary funds.
General and Administrative Expenses
General and administrative expenses were $9.5 million for the fourth quarter of 2011, unchanged from the third quarter of 2011.
Income Taxes
For the fourth quarter of 2011, the adjusted effective tax rate was 44.3%, 2.9 percentage points higher than the 41.4% adjusted effective tax rate for the third quarter of 2011 due primarily to true-ups related to 2010 tax expense recorded in the fourth quarter of 2011.
The GAAP effective tax rate was 45.0% for the fourth quarter of 2011, 19.9 percentage points lower than the 64.9% GAAP effective tax rate for the third quarter of 2011. The decrease was due primarily to the write-off of a deferred tax asset in the third quarter of 2011 related to the vesting of RSUs granted at the time of the IPO, at a price below their grant date fair value, and the inability to record a tax benefit in the third quarter of 2011 on non-operating losses attributable to the non-controlling interests’ economic ownership in the Consolidated Investment Products.
Full Year 2011 Comparison to Full Year 2010
Net Client Cash Flows
Net client cash outflows for full year 2011 were $16.7 billion, driven primarily by net client cash outflows from our International Equity I and II strategies8.
- 7 - |
Revenues and Other Operating Income
Revenues and other operating income for 2011 totaled $276.0 million, down 18% from $335.1 million for 2010, driven primarily by lower investment management fees. Investment management fees were $277.2 million for 2011, down 17% from $334.0 million for 2010, due primarily to lower average assets under management.
Expenses
Employee Compensation and Benefits
For 2011, adjusted employee compensation and benefits expenses were $86.9 million, down 1% from $87.9 million for 2010. The decrease was due primarily to lower accruals for incentive compensation, partly offset by accruals related to the Company’s long-term incentive plan implemented in 2011 and higher costs related to the amortization of deferred incentive compensation awards.
GAAP employee compensation and benefits expenses were $105.2 million for 2011, an increase of 6% from $99.0 million for 2010, due primarily to the Compensation Charge recorded in 2011, partly offset by the reasons noted above.
Shareholder Servicing and Marketing Expenses
Shareholder servicing and marketing expenses for 2011 were $18.7 million, down 7% from $20.1 million for 2010, driven primarily by lower custody and platform costs, and a decrease in marketing expenses.
General and Administrative Expenses
General and administrative expenses were $39.5 million for 2011, a decrease of 8% from $42.8 million for 2010, driven primarily by lower costs across several categories.
Income Taxes
For 2011, the adjusted effective tax rate was 42.1%, 1.3 percentage points lower than 43.4% for 2010, due primarily to a lower apportionment of income for state and local tax purposes.
- 8 - |
The GAAP effective tax rate was 45.2% for 2011, 5.5 percentage points higher than the 39.7% GAAP effective tax rate for 2010. The increase was due primarily to an increase in the proportion of pre-tax income subject to federal and state taxes9, the inability to record a tax benefit in 2011 on non-operating losses attributable to the non-controlling interests’ economic ownership in the Consolidated Investment Products, and a larger impact in 2011 from the write-off of a deferred tax asset related to the vesting of RSUs at prices below their grant date fair value, partly offset by the reason noted above.
Liquidity and Capital
As of December 31, 2011, the Company had cash and cash equivalents (excluding amounts held in consolidated investment products) of $108.5 million, investments held for deferred compensation of $10.2 million and an undrawn $100.0 million committed revolving credit facility. During the fourth quarter of 2011, in accordance with the terms of the Company’s credit agreement, the Company repaid $4.5 million of its term debt facility, reducing the outstanding balance to $37.5 million.
Total stockholders’ equity on the Statement of Financial Position was $162.8 million as of December 31, 2011, compared to $103.6 million as of December 31, 2010.
Share Repurchase
No shares were repurchased during the fourth quarter of 2011. As of December 31, 2011, the Company retains authorization to repurchase 2,226,061 shares of its common stock through December 31, 2013.
Shares
As of December 31, 2011, the total number of shares of Class A and Class B common stock outstanding was 59,251,113.
9 | Following the Principals’ exchanges in 2010 of an aggregate of 14,400,000 New Class A Units for 14,400,000 shares of Class A common stock, Artio Global Investors’ economic ownership in Artio Global Holdings LLC increased from approximately 74% to approximately 98%. |
- 9 - |
For purposes of calculating adjusted earnings per diluted share, the Principals’ New Class A Units, held in the intermediate holding company as of the beginning of the period, are assumed to have been fully exchanged into shares of Class A common stock on the first day of the period.
Dividend
On January 23, 2012, the Board of Directors declared a dividend of $0.06 per share on the Class A common stock for the fourth quarter of 2011, which is payable on February 28, 2012, to stockholders of record as of the close of business on February 15, 2012.
* * * *
Teleconference and Webcast Details
The Company will host a conference call for analysts and investors to review fourth quarter and full year 2011 results, today, January 26, 2012, beginning at 8:00 a.m. (Eastern Time). The call will be open to the public and can be accessed by dialing +1-888-680-0860 (inside the United States) or +1-617-213-4852 (outside the United States). The number should be dialed at least ten minutes prior to the start of the call. The passcode for the call will be 68510682. A simultaneous webcast of the call (on a listen-only basis), as well as an audio replay, will be available at www.ir.artioglobal.com.
* * * *
About Us
Artio Global Investors Inc. is the indirect holding company of Artio Global Management LLC ("Artio Global"), a registered investment adviser that actively invests in global equity and fixed income markets, primarily for institutional and intermediary clients. Headquartered in New York, Artio Global also has offices in Los Angeles, Toronto, London and Sydney.
In addition to International Equity, Artio Global offers a select group of other equity and fixed income strategies, including Global Equity, a series of US Equity strategies, High Grade Fixed Income, High Yield and Local Emerging Markets Debt. Access to these strategies is offered through a variety of investment vehicles, including separate accounts, commingled funds and mutual funds.
For more information, please visit www.artioglobal.com.
* * * *
- 10 - |
Cautionary Note Regarding Forward-Looking Statements
In addition to historical information, this news release may, and the related remarks do, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the intrinsic value of our common stock, investor behavior, net client cash flows, our compensation costs and adjusted compensation ratio, future tax rate, use of our free cash flow, potential share repurchases and declaration of dividends. These forward-looking statements are based on the Company’s current assumptions, expectations and projections about future events. Words like “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project”, and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements discuss matters that necessarily involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.
Among the factors that could cause actual results to differ from those expressed or implied by a forward-looking statement are those described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s report on Form 10-K (File No. 001-34457) filed with the Securities and Exchange Commission on February 25, 2011. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results, performance, or achievements.
Any forward-looking statements in this news release and the related remarks speak only as of the date of this news release. The related remarks may contain information about the Company subsequent to December 31, 2011. The Company is not under any obligation and does not intend to make publicly available any update or other revisions to any forward-looking statements to reflect circumstances existing after the date of this news release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.
* * * *
Contacts
Investor Relations: Peter Sands Head of Investor Relations +1 212 297 3891 ir@artioglobal.com |
Media Relations: Neil Shapiro Intermarket Communications +1 212 754 5423 nshapiro@Intermarket.com
|
* * * *
- 11 - |
Fund Performance and Other Disclaimers
Lipper rankings are for Class I mutual fund shares with three- and five-year track records only. Other classes may have different performance characteristics. Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds and fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested and do not include the effect of loads. If an expense waiver was in effect, it may have had a material effect on the total return or yield for the period.
Morningstar rankings are for Class I mutual fund shares with a minimum three-year track record. For each mutual fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a mutual fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. A fund’s independent Morningstar Rating metric is then compared against the mutual fund universe breakpoints to determine its hypothetical rating. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Data presented reflect past performance, which is no guarantee of future results. © 2012 Morningstar, Inc. All Rights Reserved.
This news release is not, and should not be considered, sales material and is not an offer or a solicitation for any securities.
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Exhibit - 1
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts or as noted)
Three Months Ended | % Change From | Year Ended | % Change From | |||||||||||||||||||||||||||||
Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2010 | |||||||||||||||||||||||||
Revenues and other operating income: | ||||||||||||||||||||||||||||||||
Investment management fees | $ | 51,589 | $ | 84,736 | $ | 65,576 | (39 | )% | (21 | )% | $ | 277,150 | $ | 334,037 | (17 | )% | ||||||||||||||||
Net gains (losses) on securities held for deferred compensation | 376 | 495 | (1,798 | ) | (24 | )% | 121 | % | (1,059 | ) | 1,077 | (198 | )% | |||||||||||||||||||
Foreign currency gains (losses) | (55 | ) | 2 | 6 | NM | NM | (69 | ) | 15 | NM | ||||||||||||||||||||||
Total revenues and other operating income | 51,910 | 85,233 | 63,784 | (39 | )% | (19 | )% | 276,022 | 335,129 | (18 | )% | |||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||
Employee compensation and benefits | 22,984 | 24,393 | 28,387 | (6 | )% | (19 | )% | 105,201 | 98,981 | 6 | % | |||||||||||||||||||||
Shareholder servicing and marketing | 3,917 | 4,948 | 4,708 | (21 | )% | (17 | )% | 18,653 | 20,125 | (7 | )% | |||||||||||||||||||||
General and administrative | 9,461 | 10,853 | 9,470 | (13 | )% | 0 | % | 39,460 | 42,807 | (8 | )% | |||||||||||||||||||||
Total expenses | 36,362 | 40,194 | 42,565 | (10 | )% | (15 | )% | 163,314 | 161,913 | 1 | % | |||||||||||||||||||||
Operating income before income tax expense | 15,548 | 45,039 | 21,219 | (65 | )% | (27 | )% | 112,708 | 173,216 | (35 | )% | |||||||||||||||||||||
Non-operating income (loss) | 76 | 445 | (6,190 | ) | (83 | )% | 101 | % | (5,705 | ) | (1,295 | ) | NM | |||||||||||||||||||
Income before income tax expense | 15,624 | 45,484 | 15,029 | (66 | )% | 4 | % | 107,003 | 171,921 | (38 | )% | |||||||||||||||||||||
Income taxes | 7,024 | 18,817 | 9,753 | (63 | )% | (28 | )% | 48,397 | 68,193 | (29 | )% | |||||||||||||||||||||
Net income | 8,600 | 26,667 | 5,276 | (68 | )% | 63 | % | 58,606 | 103,728 | (44 | )% | |||||||||||||||||||||
Net income attributable to non-controlling interests in AGH (1) | 307 | 884 | 319 | (65 | )% | (4 | )% | 2,114 | 20,123 | (89 | )% | |||||||||||||||||||||
Net income (loss) attributable to non-controlling interests in CIP (2) | 35 | 44 | (1,456 | ) | (20 | )% | 102 | % | (1,361 | ) | 44 | NM | ||||||||||||||||||||
Net income attributable to Artio Global Investors | $ | 8,258 | $ | 25,739 | $ | 6,413 | (68 | )% | 29 | % | $ | 57,853 | $ | 83,561 | (31 | )% | ||||||||||||||||
Net income per share attributable to Artio Global Investors: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.14 | $ | 0.44 | $ | 0.11 | (68 | )% | 27 | % | $ | 0.99 | $ | 1.58 | (37 | )% | ||||||||||||||||
Diluted | $ | 0.14 | $ | 0.44 | $ | 0.11 | (68 | )% | 27 | % | $ | 0.99 | $ | 1.58 | (37 | )% | ||||||||||||||||
Weighted average shares used in net income per share attributable to Artio Global Investors: | ||||||||||||||||||||||||||||||||
Basic | 58,051,113 | 58,535,264 | 58,157,478 | (1 | )% | 0 | % | 58,237,744 | 52,829,546 | 10 | % | |||||||||||||||||||||
Diluted (3) | 58,296,731 | 59,783,668 | 58,403,338 | (2 | )% | 0 | % | 58,332,338 | 53,002,615 | 10 | % | |||||||||||||||||||||
NM - Not Meaningful | ||||||||||||||||||||||||||||||||
Assets under management ($ in millions) | $ | 30,359 | $ | 53,407 | $ | 34,252 | (43 | )% | (11 | )% | $ | 30,359 | $ | 53,407 | (43 | )% | ||||||||||||||||
Average assets under management ($ in millions) (4) | $ | 33,380 | $ | 53,125 | $ | 41,670 | (37 | )% | (20 | )% | $ | 44,427 | $ | 52,930 | (16 | )% | ||||||||||||||||
Effective fee rate (basis points) (5) | 61.3 | 63.3 | 62.4 | 62.4 | 63.1 | |||||||||||||||||||||||||||
Effective tax rate | 45.0 | % | 41.4 | % | 64.9 | % | 45.2 | % | 39.7 | % | ||||||||||||||||||||||
Employee compensation and benefits as a percentage of total revenues and other operating income (6) | 44.3 | % | 28.6 | % | 44.5 | % | 38.1 | % | 29.5 | % | ||||||||||||||||||||||
Operating margin (7) | 30.0 | % | 52.8 | % | 33.3 | % | 40.8 | % | 51.7 | % |
1. | Represents non-controlling interests in Artio Global Holdings LLC. |
2. | Represents non-controlling interests in Consolidated Investment Products. |
3. | The effect of the assumed conversion of the Principals' New Class A Units was antidilutive for the three months ended Dec. 31, 2011 and Sep. 30, 2011, and the years ended Dec. 31, 2011 and 2010. |
4. | Average assets under management for a period is computed on the beginning-of-first-month balance and all end-of-month balances in the period. |
5. | Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period. |
6. | Calculated as employee compensation and benefits expense divided by total revenues and other operating income. |
7. | Calculated as operating income before income tax expense divided by total revenues and other operating income. |
- 13 - |
Exhibit - 2
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Non-GAAP Adjusted Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts or as noted)
Three Months Ended | % Change From | Year Ended | % Change From | |||||||||||||||||||||||||||||
Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2010 | |||||||||||||||||||||||||
Revenues and other operating income: | ||||||||||||||||||||||||||||||||
Investment management fees | $ | 51,589 | $ | 84,736 | $ | 65,576 | (39 | )% | (21 | )% | $ | 277,150 | $ | 334,037 | (17 | )% | ||||||||||||||||
Net gains (losses) on securities held for deferred compensation | 376 | 495 | (1,798 | ) | (24 | )% | 121 | % | (1,059 | ) | 1,077 | (198 | )% | |||||||||||||||||||
Foreign currency gains (losses) | (55 | ) | 2 | 6 | NM | NM | (69 | ) | 15 | NM | ||||||||||||||||||||||
Total revenues and other operating income | 51,910 | 85,233 | 63,784 | (39 | )% | (19 | )% | 276,022 | 335,129 | (18 | )% | |||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||
Employee compensation and benefits | 20,618 | 21,703 | 17,714 | (5 | )% | 16 | % | 86,894 | 87,925 | (1 | )% | |||||||||||||||||||||
Shareholder servicing and marketing | 3,917 | 4,948 | 4,708 | (21 | )% | (17 | )% | 18,653 | 20,125 | (7 | )% | |||||||||||||||||||||
General and administrative | 9,461 | 10,853 | 9,470 | (13 | )% | 0 | % | 39,460 | 42,807 | (8 | )% | |||||||||||||||||||||
Total expenses | 33,996 | 37,504 | 31,892 | (9 | )% | 7 | % | 145,007 | 150,857 | (4 | )% | |||||||||||||||||||||
Operating income before income tax expense | 17,914 | 47,729 | 31,892 | (62 | )% | (44 | )% | 131,015 | 184,272 | (29 | )% | |||||||||||||||||||||
Non-operating income (loss) | 41 | 401 | (4,734 | ) | (90 | )% | 101 | % | (4,344 | ) | (1,339 | ) | NM | |||||||||||||||||||
Income before income tax expense | 17,955 | 48,130 | 27,158 | (63 | )% | (34 | )% | 126,671 | 182,933 | (31 | )% | |||||||||||||||||||||
Income taxes | 7,951 | 20,351 | 11,245 | (61 | )% | (29 | )% | 53,301 | 79,472 | (33 | )% | |||||||||||||||||||||
Net income | 10,004 | 27,779 | 15,913 | (64 | )% | (37 | )% | 73,370 | 103,461 | (29 | )% | |||||||||||||||||||||
Net income attributable to non-controlling interests in AGH (1) | - | - | - | NM | NM | - | - | NM | ||||||||||||||||||||||||
Net income (loss) attributable to non-controlling interests in CIP (2) | - | - | - | NM | NM | - | - | NM | ||||||||||||||||||||||||
Net income attributable to Artio Global Investors | $ | 10,004 | $ | 27,779 | $ | 15,913 | (64 | )% | (37 | )% | $ | 73,370 | $ | 103,461 | (29 | )% | ||||||||||||||||
Net income per diluted share attributable to Artio Global Investors | $ | 0.17 | $ | 0.46 | $ | 0.27 | (63 | )% | (37 | )% | $ | 1.23 | $ | 1.72 | (28 | )% | ||||||||||||||||
Weighted average diluted shares used in net income per share attributable to Artio Global Investors | 59,496,731 | 59,783,668 | 59,603,338 | 0 | % | 0 | % | 59,532,338 | 60,113,847 | (1 | )% | |||||||||||||||||||||
NM - Not Meaningful | ||||||||||||||||||||||||||||||||
Assets under management ($ in millions) | $ | 30,359 | $ | 53,407 | $ | 34,252 | (43 | )% | (11 | )% | $ | 30,359 | $ | 53,407 | (43 | )% | ||||||||||||||||
Average assets under management ($ in millions) (3) | $ | 33,380 | $ | 53,125 | $ | 41,670 | (37 | )% | (20 | )% | $ | 44,427 | $ | 52,930 | (16 | )% | ||||||||||||||||
Effective fee rate (basis points) (4) | 61.3 | 63.3 | 62.4 | 62.4 | 63.1 | |||||||||||||||||||||||||||
Effective tax rate | 44.3 | % | 42.3 | % | 41.4 | % | 42.1 | % | 43.4 | % | ||||||||||||||||||||||
Employee compensation and benefits as a percentage of total revenues and other operating income (5) | 39.7 | % | 25.5 | % | 27.8 | % | 31.5 | % | 26.2 | % | ||||||||||||||||||||||
Operating margin (6) | 34.5 | % | 56.0 | % | 50.0 | % | 47.5 | % | 55.0 | % |
1. | Represents non-controlling interests in Artio Global Holdings LLC. |
2. | Represents non-controlling interests in Consolidated Investment Products. |
3. | Average assets under management for a period is computed on the beginning-of-first-month balance and all end-of-month balances in the period. |
4. | Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period. |
5. | Calculated as employee compensation and benefits expense divided by total revenues and other operating income. |
6. | Calculated as operating income before income tax expense divided by total revenues and other operating income. |
- 14 - |
Exhibit - 3
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts)
See Exhibit 5 for notes describing adjustments set forth below.
Three Months Ended Dec. 31, 2011 | Three Months Ended Dec. 31, 2010 | Three Months Ended Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||
GAAP | Adjustments | Adjusted | GAAP | Adjustments | Adjusted | GAAP | Adjustments | Adjusted | ||||||||||||||||||||||||||||
Revenues and other operating income: | ||||||||||||||||||||||||||||||||||||
Investment management fees | $ | 51,589 | $ | - | $ | 51,589 | $ | 84,736 | $ | - | $ | 84,736 | $ | 65,576 | $ | - | $ | 65,576 | ||||||||||||||||||
Net gains (losses) on securities held for deferred compensation | 376 | - | 376 | 495 | - | 495 | (1,798 | ) | - | (1,798 | ) | |||||||||||||||||||||||||
Foreign currency gains (losses) | (55 | ) | - | (55 | ) | 2 | - | 2 | 6 | - | 6 | |||||||||||||||||||||||||
Total revenues and other operating income | 51,910 | - | 51,910 | 85,233 | - | 85,233 | 63,784 | - | 63,784 | |||||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||||||
Employee compensation and benefits | 22,984 | (2,366 | )(a) | 20,618 | 24,393 | (2,690 | )(a) | 21,703 | 28,387 | (10,673 | )(a) | 17,714 | ||||||||||||||||||||||||
Shareholder servicing and marketing | 3,917 | - | 3,917 | 4,948 | - | 4,948 | 4,708 | - | 4,708 | |||||||||||||||||||||||||||
General and administrative | 9,461 | - | 9,461 | 10,853 | - | 10,853 | 9,470 | - | 9,470 | |||||||||||||||||||||||||||
Total expenses | 36,362 | (2,366 | ) | 33,996 | 40,194 | (2,690 | ) | 37,504 | 42,565 | (10,673 | ) | 31,892 | ||||||||||||||||||||||||
Operating income before income tax expense | 15,548 | 2,366 | 17,914 | 45,039 | 2,690 | 47,729 | 21,219 | 10,673 | 31,892 | |||||||||||||||||||||||||||
Non-operating income (loss) | 76 | (35 | )(e) | 41 | 445 | (44 | )(e) | 401 | (6,190 | ) | 1,456 | (e) | (4,734 | ) | ||||||||||||||||||||||
Income before income tax expense | 15,624 | 2,331 | 17,955 | 45,484 | 2,646 | 48,130 | 15,029 | 12,129 | 27,158 | |||||||||||||||||||||||||||
Income taxes | 7,024 | 927 | (b) | 7,951 | 18,817 | 1,534 | (b) | 20,351 | 9,753 | 1,492 | (b) | 11,245 | ||||||||||||||||||||||||
Net income | 8,600 | 1,404 | 10,004 | 26,667 | 1,112 | 27,779 | 5,276 | 10,637 | 15,913 | |||||||||||||||||||||||||||
Net income attributable to non-controlling interests in AGH | 307 | (307 | )(c) | - | 884 | (884 | )(c) | - | 319 | (319 | )(c) | - | ||||||||||||||||||||||||
Net income (loss) attributable to non-controlling interests in CIP | 35 | (35 | )(e) | - | 44 | (44 | )(e) | - | (1,456 | ) | 1,456 | (e) | - | |||||||||||||||||||||||
Net income attributable to Artio Global Investors | $ | 8,258 | $ | 1,746 | $ | 10,004 | $ | 25,739 | $ | 2,040 | $ | 27,779 | $ | 6,413 | $ | 9,500 | $ | 15,913 | ||||||||||||||||||
Net income per diluted share attributable to Artio Global Investors | $ | 0.14 | $ | 0.17 | $ | 0.44 | $ | 0.46 | $ | 0.11 | $ | 0.27 | ||||||||||||||||||||||||
Weighted average diluted shares used in net income per share attributable to Artio Global Investors | 58,296,731 | 1,200,000 | (d) | 59,496,731 | 59,783,668 | - | 59,783,668 | 58,403,338 | 1,200,000 | (d) | 59,603,338 |
- 15 - |
Exhibit - 4
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts)
See Exhibit 5 for notes describing adjustments set forth below.
Year Ended Dec. 31, 2011 | Year Ended Dec. 31, 2010 | |||||||||||||||||||||||
GAAP | Adjustments | Adjusted | GAAP | Adjustments | Adjusted | |||||||||||||||||||
Revenues and other operating income: | ||||||||||||||||||||||||
Investment management fees | $ | 277,150 | $ | - | $ | 277,150 | $ | 334,037 | $ | - | $ | 334,037 | ||||||||||||
Net gains (losses) on securities held for deferred compensation | (1,059 | ) | - | (1,059 | ) | 1,077 | - | 1,077 | ||||||||||||||||
Foreign currency gains (losses) | (69 | ) | - | (69 | ) | 15 | - | 15 | ||||||||||||||||
Total revenues and other operating income | 276,022 | - | 276,022 | 335,129 | - | 335,129 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Employee compensation and benefits | 105,201 | (18,307 | )(a) | 86,894 | 98,981 | (11,056 | )(a) | 87,925 | ||||||||||||||||
Shareholder servicing and marketing | 18,653 | - | 18,653 | 20,125 | - | 20,125 | ||||||||||||||||||
General and administrative | 39,460 | - | 39,460 | 42,807 | - | 42,807 | ||||||||||||||||||
Total expenses | 163,314 | (18,307 | ) | 145,007 | 161,913 | (11,056 | ) | 150,857 | ||||||||||||||||
Operating income before income tax expense | 112,708 | 18,307 | 131,015 | 173,216 | 11,056 | 184,272 | ||||||||||||||||||
Non-operating income (loss) | (5,705 | ) | 1,361 | (e) | (4,344 | ) | (1,295 | ) | (44 | )(e) | (1,339 | ) | ||||||||||||
Income before income tax expense | 107,003 | 19,668 | 126,671 | 171,921 | 11,012 | 182,933 | ||||||||||||||||||
Income taxes | 48,397 | 4,904 | (b) | 53,301 | 68,193 | 11,279 | (b) | 79,472 | ||||||||||||||||
Net income | 58,606 | 14,764 | 73,370 | 103,728 | (267 | ) | 103,461 | |||||||||||||||||
Net income attributable to non-controlling interests in AGH | 2,114 | (2,114 | )(c) | - | 20,123 | (20,123 | )(c) | - | ||||||||||||||||
Net income (loss) attributable to non-controlling interests in CIP | (1,361 | ) | 1,361 | (e) | - | 44 | (44 | )(e) | - | |||||||||||||||
Net income attributable to Artio Global Investors | $ | 57,853 | $ | 15,517 | $ | 73,370 | $ | 83,561 | $ | 19,900 | $ | 103,461 | ||||||||||||
Net income per diluted share attributable to Artio Global Investors | $ | 0.99 | $ | 1.23 | $ | 1.58 | $ | 1.72 | ||||||||||||||||
Weighted average diluted shares used in net income per share attributable to Artio Global Investors | 58,332,338 | 1,200,000 | (d) | 59,532,338 | 53,002,615 | 7,111,232 | (d) | 60,113,847 |
- 16 - |
Exhibit - 5
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Notes to Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Income
Management believes the Non-GAAP adjustments set forth below provide more meaningful comparisons between periods. Additional information on the reorganization of the Company's ownership structure and the relating non-recurring items are discussed in the Company's prospectus dated September 23, 2009.
(a) | Adjustments to exclude the amortization expense associated with the RSUs awarded at the time of the IPO from all periods presented, as the granting of the awards was one-time in nature. |
The three months ended Sep. 30, 2011 and the year ended Dec. 31, 2011 also exclude the Compensation Charge, as this was non-recurring. | |
(b) | The adjustments to income taxes for all periods presented reflect the tax effect of the assumed full exchange of the Principals' non-controlling interests for Class A common stock on the first day of the respective period, since prior to such exchange, income tax expense excludes the U.S. federal and state taxes for the income attributable to the Principals and an adjustment to reflect the tax effects of excluding the amortization expense associated with the RSUs awarded at the time of the IPO. |
The three months ended Sep. 30, 2011 and the year ended Dec. 31, 2011 also include an adjustment to reflect the tax effect of excluding the Compensation Charge. | |
(c) | Adjustment to eliminate the Principals' non-controlling interests, which are assumed to be exchanged for Class A common stock on the first day of the respective period. |
(d) | Diluted shares outstanding assumes the Principals have fully exchanged their New Class A Units in Artio Global Holdings LLC for shares of the Company's Class A common stock. |
(e) | Adjustments to eliminate third party investors' economic interests in the Consolidated Investment Products from both Net income (loss) attributable to non-controlling interests in the Consolidated Investment Products and Non-operating income (loss). Management believes these adjustments provide a more useful measure for comparing Non-operating loss between periods. |
- 17 - |
Exhibit - 6
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Assets under Management by Investment Vehicle
(unaudited, in millions)
Three Months Ended | % Change From | Year Ended | % Change From | |||||||||||||||||||||||||||||
Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2010 | |||||||||||||||||||||||||
Proprietary Funds | ||||||||||||||||||||||||||||||||
Beginning assets under management | $ | 15,464 | $ | 22,765 | $ | 21,192 | (32 | )% | (27 | )% | $ | 23,013 | $ | 24,482 | (6 | )% | ||||||||||||||||
Gross client cash inflows | 1,311 | 1,151 | 1,085 | 14 | % | 21 | % | 5,320 | 5,989 | (11 | )% | |||||||||||||||||||||
Gross client cash outflows | (3,734 | ) | (2,035 | ) | (2,887 | ) | (83 | )% | (29 | )% | (11,833 | ) | (8,919 | ) | (33 | )% | ||||||||||||||||
Net client cash flows | (2,423 | ) | (884 | ) | (1,802 | ) | (174 | )% | (34 | )% | (6,513 | ) | (2,930 | ) | (122 | )% | ||||||||||||||||
Transfers between investment vehicles | - | - | (38 | ) | NM | 100 | % | (38 | ) | - | NM | |||||||||||||||||||||
Total client cash flows | (2,423 | ) | (884 | ) | (1,840 | ) | (174 | )% | (32 | )% | (6,551 | ) | (2,930 | ) | (124 | )% | ||||||||||||||||
Market appreciation (depreciation) | 325 | 1,132 | (3,888 | ) | (71 | )% | 108 | % | (3,096 | ) | 1,461 | NM | ||||||||||||||||||||
Ending assets under management | 13,366 | 23,013 | 15,464 | (42 | )% | (14 | )% | 13,366 | 23,013 | (42 | )% | |||||||||||||||||||||
Institutional Commingled Funds | ||||||||||||||||||||||||||||||||
Beginning assets under management | 5,769 | 8,894 | 8,285 | (35 | )% | (30 | )% | 9,236 | 9,198 | 0 | % | |||||||||||||||||||||
Gross client cash inflows | 103 | 135 | 60 | (24 | )% | 72 | % | 420 | 802 | (48 | )% | |||||||||||||||||||||
Gross client cash outflows | (1,174 | ) | (353 | ) | (919 | ) | NM | (28 | )% | (3,666 | ) | (1,451 | ) | (153 | )% | |||||||||||||||||
Net client cash flows | (1,071 | ) | (218 | ) | (859 | ) | NM | (25 | )% | (3,246 | ) | (649 | ) | NM | ||||||||||||||||||
Transfers between investment vehicles | 11 | - | 38 | NM | (71 | )% | 237 | 22 | NM | |||||||||||||||||||||||
Total client cash flows | (1,060 | ) | (218 | ) | (821 | ) | NM | (29 | )% | (3,009 | ) | (627 | ) | NM | ||||||||||||||||||
Market appreciation (depreciation) | 203 | 560 | (1,695 | ) | (64 | )% | 112 | % | (1,315 | ) | 665 | NM | ||||||||||||||||||||
Ending assets under management | 4,912 | 9,236 | 5,769 | (47 | )% | (15 | )% | 4,912 | 9,236 | (47 | )% | |||||||||||||||||||||
Separate Accounts | ||||||||||||||||||||||||||||||||
Beginning assets under management | 10,838 | 17,611 | 14,221 | (38 | )% | (24 | )% | 16,801 | 17,854 | (6 | )% | |||||||||||||||||||||
Gross client cash inflows | 121 | 110 | 111 | 10 | % | 9 | % | 398 | 1,521 | (74 | )% | |||||||||||||||||||||
Gross client cash outflows | (1,440 | ) | (1,751 | ) | (1,232 | ) | 18 | % | (17 | )% | (5,589 | ) | (3,912 | ) | (43 | )% | ||||||||||||||||
Net client cash flows | (1,319 | ) | (1,641 | ) | (1,121 | ) | 20 | % | (18 | )% | (5,191 | ) | (2,391 | ) | (117 | )% | ||||||||||||||||
Transfers between investment vehicles | (11 | ) | - | - | NM | NM | (199 | ) | (22 | ) | NM | |||||||||||||||||||||
Total client cash flows | (1,330 | ) | (1,641 | ) | (1,121 | ) | 19 | % | (19 | )% | (5,390 | ) | (2,413 | ) | (123 | )% | ||||||||||||||||
Market appreciation (depreciation) | 291 | 831 | (2,262 | ) | (65 | )% | 113 | % | (1,612 | ) | 1,360 | NM | ||||||||||||||||||||
Ending assets under management | 9,799 | 16,801 | 10,838 | (42 | )% | (10 | )% | 9,799 | 16,801 | (42 | )% | |||||||||||||||||||||
Sub-advisory Accounts | ||||||||||||||||||||||||||||||||
Beginning assets under management | 2,181 | 4,590 | 3,137 | (52 | )% | (30 | )% | 4,357 | 4,459 | (2 | )% | |||||||||||||||||||||
Gross client cash inflows | 140 | 27 | 33 | NM | NM | 390 | 904 | (57 | )% | |||||||||||||||||||||||
Gross client cash outflows | (83 | ) | (431 | ) | (434 | ) | 81 | % | 81 | % | (2,137 | ) | (1,221 | ) | (75 | )% | ||||||||||||||||
Net client cash flows | 57 | (404 | ) | (401 | ) | 114 | % | 114 | % | (1,747 | ) | (317 | ) | NM | ||||||||||||||||||
Transfers between investment vehicles | - | - | - | NM | NM | - | - | NM | ||||||||||||||||||||||||
Total client cash flows | 57 | (404 | ) | (401 | ) | 114 | % | 114 | % | (1,747 | ) | (317 | ) | NM | ||||||||||||||||||
Market appreciation (depreciation) | 44 | 171 | (555 | ) | (74 | )% | 108 | % | (328 | ) | 215 | NM | ||||||||||||||||||||
Ending assets under management | 2,282 | 4,357 | 2,181 | (48 | )% | 5 | % | 2,282 | 4,357 | (48 | )% | |||||||||||||||||||||
Total Assets under Management | ||||||||||||||||||||||||||||||||
Beginning assets under management | 34,252 | 53,860 | 46,835 | (36 | )% | (27 | )% | 53,407 | 55,993 | (5 | )% | |||||||||||||||||||||
Gross client cash inflows | 1,675 | 1,423 | 1,289 | 18 | % | 30 | % | 6,528 | 9,216 | (29 | )% | |||||||||||||||||||||
Gross client cash outflows | (6,431 | ) | (4,570 | ) | (5,472 | ) | (41 | )% | (18 | )% | (23,225 | ) | (15,503 | ) | (50 | )% | ||||||||||||||||
Net client cash flows | (4,756 | ) | (3,147 | ) | (4,183 | ) | (51 | )% | (14 | )% | (16,697 | ) | (6,287 | ) | (166 | )% | ||||||||||||||||
Transfers between investment vehicles | - | - | - | NM | NM | - | - | NM | ||||||||||||||||||||||||
Total client cash flows | (4,756 | ) | (3,147 | ) | (4,183 | ) | (51 | )% | (14 | )% | (16,697 | ) | (6,287 | ) | (166 | )% | ||||||||||||||||
Market appreciation (depreciation) | 863 | 2,694 | (8,400 | ) | (68 | )% | 110 | % | (6,351 | ) | 3,701 | NM | ||||||||||||||||||||
Ending assets under management | $ | 30,359 | $ | 53,407 | $ | 34,252 | (43 | )% | (11 | )% | $ | 30,359 | $ | 53,407 | (43 | )% |
- 18 - |
Exhibit - 7
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Assets under Management by Investment Strategy
(unaudited, in millions)
Three Months Ended | % Change From | Year Ended | % Change From | |||||||||||||||||||||||||||||
Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2010 | |||||||||||||||||||||||||
International Equity I | ||||||||||||||||||||||||||||||||
Beginning assets under management | $ | 10,779 | $ | 19,194 | $ | 15,768 | (44 | )% | (32 | )% | $ | 18,781 | $ | 21,656 | (13 | )% | ||||||||||||||||
Gross client cash inflows | 152 | 277 | 186 | (45 | )% | (18 | )% | 952 | 1,345 | (29 | )% | |||||||||||||||||||||
Gross client cash outflows | (2,504 | ) | (1,844 | ) | (1,767 | ) | (36 | )% | (42 | )% | (8,176 | ) | (5,520 | ) | (48 | )% | ||||||||||||||||
Net client cash flows | (2,352 | ) | (1,567 | ) | (1,581 | ) | (50 | )% | (49 | )% | (7,224 | ) | (4,175 | ) | (73 | )% | ||||||||||||||||
Transfers between investment strategies | - | - | - | NM | NM | - | - | NM | ||||||||||||||||||||||||
Total client cash flows | (2,352 | ) | (1,567 | ) | (1,581 | ) | (50 | )% | (49 | )% | (7,224 | ) | (4,175 | ) | (73 | )% | ||||||||||||||||
Market appreciation (depreciation) | 253 | 1,154 | (3,408 | ) | (78 | )% | 107 | % | (2,877 | ) | 1,300 | NM | ||||||||||||||||||||
Ending assets under management | 8,680 | 18,781 | 10,779 | (54 | )% | (19 | )% | 8,680 | 18,781 | (54 | )% | |||||||||||||||||||||
International Equity II | ||||||||||||||||||||||||||||||||
Beginning assets under management | 13,045 | 22,999 | 19,546 | (43 | )% | (33 | )% | 23,272 | 24,716 | (6 | )% | |||||||||||||||||||||
Gross client cash inflows | 388 | 521 | 361 | (26 | )% | 7 | % | 2,015 | 3,229 | (38 | )% | |||||||||||||||||||||
Gross client cash outflows | (2,859 | ) | (1,610 | ) | (2,507 | ) | (78 | )% | (14 | )% | (10,781 | ) | (6,187 | ) | (74 | )% | ||||||||||||||||
Net client cash flows | (2,471 | ) | (1,089 | ) | (2,146 | ) | (127 | )% | (15 | )% | (8,766 | ) | (2,958 | ) | (196 | )% | ||||||||||||||||
Transfers between investment strategies | - | - | (39 | ) | NM | 100 | % | (39 | ) | 50 | (178 | )% | ||||||||||||||||||||
Total client cash flows | (2,471 | ) | (1,089 | ) | (2,185 | ) | (127 | )% | (13 | )% | (8,805 | ) | (2,908 | ) | NM | |||||||||||||||||
Market appreciation (depreciation) | 323 | 1,362 | (4,316 | ) | (76 | )% | 107 | % | (3,570 | ) | 1,464 | NM | ||||||||||||||||||||
Ending assets under management | 10,897 | 23,272 | 13,045 | (53 | )% | (16 | )% | 10,897 | 23,272 | (53 | )% | |||||||||||||||||||||
High Grade Fixed Income | ||||||||||||||||||||||||||||||||
Beginning assets under management | 5,158 | 5,466 | 4,885 | (6 | )% | 6 | % | 5,088 | 5,293 | (4 | )% | |||||||||||||||||||||
Gross client cash inflows | 492 | 143 | 305 | NM | 61 | % | 1,174 | 922 | 27 | % | ||||||||||||||||||||||
Gross client cash outflows | (167 | ) | (460 | ) | (185 | ) | 64 | % | 10 | % | (1,179 | ) | (1,537 | ) | 23 | % | ||||||||||||||||
Net client cash flows | 325 | (317 | ) | 120 | NM | 171 | % | (5 | ) | (615 | ) | 99 | % | |||||||||||||||||||
Transfers between investment strategies | (57 | ) | - | 1 | NM | NM | 43 | 10 | NM | |||||||||||||||||||||||
Total client cash flows | 268 | (317 | ) | 121 | 185 | % | 121 | % | 38 | (605 | ) | 106 | % | |||||||||||||||||||
Market appreciation (depreciation) | 77 | (61 | ) | 152 | NM | (49 | )% | 377 | 400 | (6 | )% | |||||||||||||||||||||
Ending assets under management | 5,503 | 5,088 | 5,158 | 8 | % | 7 | % | 5,503 | 5,088 | 8 | % | |||||||||||||||||||||
High Yield | ||||||||||||||||||||||||||||||||
Beginning assets under management | 4,165 | 4,920 | 5,246 | (15 | )% | (21 | )% | 4,907 | 3,516 | 40 | % | |||||||||||||||||||||
Gross client cash inflows | 621 | 462 | 409 | 34 | % | 52 | % | 2,241 | 3,066 | (27 | )% | |||||||||||||||||||||
Gross client cash outflows | (682 | ) | (568 | ) | (962 | ) | (20 | )% | 29 | % | (2,712 | ) | (2,017 | ) | (34 | )% | ||||||||||||||||
Net client cash flows | (61 | ) | (106 | ) | (553 | ) | 42 | % | 89 | % | (471 | ) | 1,049 | (145 | )% | |||||||||||||||||
Transfers between investment strategies | 57 | - | (1 | ) | NM | NM | (43 | ) | (10 | ) | NM | |||||||||||||||||||||
Total client cash flows | (4 | ) | (106 | ) | (554 | ) | 96 | % | 99 | % | (514 | ) | 1,039 | (149 | )% | |||||||||||||||||
Market appreciation (depreciation) | 134 | 93 | (527 | ) | 44 | % | 125 | % | (98 | ) | 352 | (128 | )% | |||||||||||||||||||
Ending assets under management | 4,295 | 4,907 | 4,165 | (12 | )% | 3 | % | 4,295 | 4,907 | (12 | )% | |||||||||||||||||||||
Global Equity | ||||||||||||||||||||||||||||||||
Beginning assets under management | 854 | 991 | 1,037 | (14 | )% | (18 | )% | 1,025 | 618 | 66 | % | |||||||||||||||||||||
Gross client cash inflows | 14 | 6 | 14 | 133 | % | 0 | % | 55 | 460 | (88 | )% | |||||||||||||||||||||
Gross client cash outflows | (191 | ) | (77 | ) | (16 | ) | (148 | )% | NM | (241 | ) | (141 | ) | (71 | )% | |||||||||||||||||
Net client cash flows | (177 | ) | (71 | ) | (2 | ) | (149 | )% | NM | (186 | ) | 319 | (158 | )% | ||||||||||||||||||
Transfers between investment strategies | - | - | 39 | NM | (100 | )% | 39 | (50 | ) | 178 | % | |||||||||||||||||||||
Total client cash flows | (177 | ) | (71 | ) | 37 | (149 | )% | NM | (147 | ) | 269 | (155 | )% | |||||||||||||||||||
Market appreciation (depreciation) | 44 | 105 | (220 | ) | (58 | )% | 120 | % | (157 | ) | 138 | NM | ||||||||||||||||||||
Ending assets under management | 721 | 1,025 | 854 | (30 | )% | (16 | )% | 721 | 1,025 | (30 | )% |
- 19 - |
Exhibit - 7
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Assets under Management by Investment Strategy
(unaudited, in millions)
Three Months Ended | % Change From | Year Ended | % Change From | |||||||||||||||||||||||||||||
Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2010 | |||||||||||||||||||||||||
US Equity | ||||||||||||||||||||||||||||||||
Beginning assets under management | 169 | 190 | 235 | (11 | )% | (28 | )% | 227 | 81 | 180 | % | |||||||||||||||||||||
Gross client cash inflows | 7 | 14 | 12 | (50 | )% | (42 | )% | 78 | 194 | (60 | )% | |||||||||||||||||||||
Gross client cash outflows | (27 | ) | (11 | ) | (21 | ) | (145 | )% | (29 | )% | (115 | ) | (88 | ) | (31 | )% | ||||||||||||||||
Net client cash flows | (20 | ) | 3 | (9 | ) | NM | (122 | )% | (37 | ) | 106 | (135 | )% | |||||||||||||||||||
Transfers between investment strategies | - | - | - | NM | NM | - | - | NM | ||||||||||||||||||||||||
Total client cash flows | (20 | ) | 3 | (9 | ) | NM | (122 | )% | (37 | ) | 106 | (135 | )% | |||||||||||||||||||
Market appreciation (depreciation) | 29 | 34 | (57 | ) | (15 | )% | 151 | % | (12 | ) | 40 | (130 | )% | |||||||||||||||||||
Ending assets under management | 178 | 227 | 169 | (22 | )% | 5 | % | 178 | 227 | (22 | )% | |||||||||||||||||||||
Other (1) | ||||||||||||||||||||||||||||||||
Beginning assets under management | 82 | 100 | 118 | (18 | )% | (31 | )% | 107 | 113 | (5 | )% | |||||||||||||||||||||
Gross client cash inflows | 1 | - | 2 | NM | (50 | )% | 13 | - | NM | |||||||||||||||||||||||
Gross client cash outflows | (1 | ) | - | (14 | ) | NM | 93 | % | (21 | ) | (13 | ) | (62 | )% | ||||||||||||||||||
Net client cash flows | - | - | (12 | ) | NM | 100 | % | (8 | ) | (13 | ) | 38 | % | |||||||||||||||||||
Transfers between investment strategies | - | - | - | NM | NM | - | - | NM | ||||||||||||||||||||||||
Total client cash flows | - | - | (12 | ) | NM | 100 | % | (8 | ) | (13 | ) | 38 | % | |||||||||||||||||||
Market appreciation (depreciation) | 3 | 7 | (24 | ) | (57 | )% | 113 | % | (14 | ) | 7 | NM | ||||||||||||||||||||
Ending assets under management | 85 | 107 | 82 | (21 | )% | 4 | % | 85 | 107 | (21 | )% | |||||||||||||||||||||
Total Assets under Management | ||||||||||||||||||||||||||||||||
Beginning assets under management | 34,252 | 53,860 | 46,835 | (36 | )% | (27 | )% | 53,407 | 55,993 | (5 | )% | |||||||||||||||||||||
Gross client cash inflows | 1,675 | 1,423 | 1,289 | 18 | % | 30 | % | 6,528 | 9,216 | (29 | )% | |||||||||||||||||||||
Gross client cash outflows | (6,431 | ) | (4,570 | ) | (5,472 | ) | (41 | )% | (18 | )% | (23,225 | ) | (15,503 | ) | (50 | )% | ||||||||||||||||
Net client cash flows | (4,756 | ) | (3,147 | ) | (4,183 | ) | (51 | )% | (14 | )% | (16,697 | ) | (6,287 | ) | (166 | )% | ||||||||||||||||
Transfers between investment strategies | - | - | - | NM | NM | - | - | NM | ||||||||||||||||||||||||
Total client cash flows | (4,756 | ) | (3,147 | ) | (4,183 | ) | (51 | )% | (14 | )% | (16,697 | ) | (6,287 | ) | (166 | )% | ||||||||||||||||
Market appreciation (depreciation) | 863 | 2,694 | (8,400 | ) | (68 | )% | 110 | % | (6,351 | ) | 3,701 | NM | ||||||||||||||||||||
Ending assets under management | 30,359 | 53,407 | 34,252 | (43 | )% | (11 | )% | 30,359 | 53,407 | (43 | )% |
1. Other includes the Local Emerging Markets Debt Fund, Global Credit Opportunities Fund, Other International Equity and Other strategies.
- 20 - |
Exhibit - 8
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Mutual Fund Performance Data (1)
Morningstar Ratings / | |||||||||||||||||||||||||
Funds in Total Universe (# of Funds) | Lipper Percentile Rankings (PR) / Funds in Total Universe (# of Funds) | ||||||||||||||||||||||||
1-Year | 3-Year | 5-Year | 10-Year | ||||||||||||||||||||||
# of | # of | # of | # of | # of | |||||||||||||||||||||
Fund (3) | Rating | Funds | Category | PR | Funds | PR | Funds | PR | Funds | PR | Funds | Classification | |||||||||||||
Artio International Equity Fund, Class A (2) | 3 | 853 | Foreign Large Blend | 100 | 339 | 100 | 302 | 89 | 243 | 17 | 145 | International Large-Cap Core | |||||||||||||
Artio International Equity Fund, Class I (2) | 3 | 853 | Foreign Large Blend | 100 | 339 | 100 | 302 | 87 | 243 | 13 | 145 | International Large-Cap Core | |||||||||||||
Artio International Equity II Fund, Class A | 2 | 853 | Foreign Large Blend | 100 | 339 | 97 | 302 | 79 | 243 | NA | NA | International Large-Cap Core | |||||||||||||
Artio International Equity II Fund, Class I | 2 | 853 | Foreign Large Blend | 99 | 339 | 97 | 302 | 76 | 243 | NA | NA | International Large-Cap Core | |||||||||||||
Artio Global Equity Fund, Class A | 3 | 957 | World Stock | 100 | 101 | 87 | 87 | 73 | 73 | NA | NA | Global Large-Cap Growth | |||||||||||||
Artio Global Equity Fund, Class I | 3 | 957 | World Stock | 99 | 101 | 81 | 87 | 71 | 73 | NA | NA | Global Large-Cap Growth | |||||||||||||
Artio Microcap Fund, Class A | 2 | 791 | Small Growth | 89 | 692 | 2 | 632 | 56 | 499 | NA | NA | Small-Cap Core | |||||||||||||
Artio Microcap Fund, Class I | 2 | 791 | Small Growth | 89 | 692 | 2 | 632 | 52 | 499 | NA | NA | Small-Cap Core | |||||||||||||
Artio Smallcap Fund, Class A | 3 | 791 | Small Growth | 77 | 692 | 5 | 632 | 11 | 499 | NA | NA | Small-Cap Core | |||||||||||||
Artio Smallcap Fund, Class I | 3 | 791 | Small Growth | 74 | 692 | 4 | 632 | 9 | 499 | NA | NA | Small-Cap Core | |||||||||||||
Artio Midcap Fund, Class A | 4 | 768 | Mid-Cap Growth | 4 | 312 | 2 | 274 | 41 | 234 | NA | NA | Mid-Cap Core | |||||||||||||
Artio Midcap Fund, Class I | 4 | 768 | Mid-Cap Growth | 4 | 312 | 1 | 274 | 34 | 234 | NA | NA | Mid-Cap Core | |||||||||||||
Artio Multicap Fund, Class A | 3 | 1,748 | Large Growth | 47 | 774 | 11 | 674 | 28 | 590 | NA | NA | Multi-Cap Core | |||||||||||||
Artio Multicap Fund, Class I | 3 | 1,748 | Large Growth | 43 | 774 | 9 | 674 | 21 | 590 | NA | NA | Multi-Cap Core | |||||||||||||
Artio Global High Income Fund, Class A | 4 | 600 | High Yield Bond | 90 | 487 | 53 | 420 | 22 | 355 | NA | NA | High Current Yield | |||||||||||||
Artio Global High Income Fund, Class I | 4 | 600 | High Yield Bond | 88 | 487 | 47 | 420 | 17 | 355 | NA | NA | High Current Yield | |||||||||||||
Artio Total Return Bond Fund, Class A | 4 | 1,238 | Intermediate Term Bond | 11 | 589 | 59 | 506 | 24 | 420 | 3 | 290 | Intermediate Investment Grade Debt | |||||||||||||
Artio Total Return Bond Fund, Class I | 4 | 1,238 | Intermediate Term Bond | 5 | 589 | 53 | 506 | 18 | 420 | 2 | 290 | Intermediate Investment Grade Debt |
Note: Data as of December 31, 2011
NA: Not applicable
1. | Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds and fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested and do not include the effect of loads. If an expense waiver was in effect, it may have had a material effect on the total return or yield for the period. |
For each mutual fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a mutual fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. A fund's independent Morningstar Rating metric is then compared against the mutual fund universe breakpoints to determine its hypothetical rating. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Data presented reflect past performance, which is no guarantee of future results. © 2012 Morningstar, Inc. All Rights Reserved. This news release is not, and should not be considered, sales material and is not an offer or a solicitation for any securities. | |
2. | Closed to new investors. |
3. | The Artio Local Emerging Markets Debt Fund was launched in May 2011 and is not yet ranked or rated in any of the above categories. |
- 21 - |