Attached files
| file | filename |
|---|---|
| 8-K - 8-K - GAMCO INVESTORS, INC. ET AL | a15-24521_28k.htm |
| EX-2.1 - EX-2.1 - GAMCO INVESTORS, INC. ET AL | a15-24521_2ex2d1.htm |
| EX-10.2 - EX-10.2 - GAMCO INVESTORS, INC. ET AL | a15-24521_2ex10d2.htm |
| EX-10.4 - EX-10.4 - GAMCO INVESTORS, INC. ET AL | a15-24521_2ex10d4.htm |
| EX-10.1 - EX-10.1 - GAMCO INVESTORS, INC. ET AL | a15-24521_2ex10d1.htm |
| EX-10.3 - EX-10.3 - GAMCO INVESTORS, INC. ET AL | a15-24521_2ex10d3.htm |
Exhibit 99.1
GAMCO Investors, Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
On November 30, 2015, GAMCO Investors, Inc. (“GBL”) distributed all of the outstanding common stock of Associated Capital Group, Inc. (“AC”) to its stockholders (the “Distribution”). GBL contributed to AC its alternative investment management business, its institutional research services business and certain cash and other assets. Subsequent to the Distribution, GBL will no longer consolidate the financial results of AC for the purpose of its own financial reporting. After the date of the Distribution, the historical financial results of AC will be reflected in GBL’s consolidated financial statements as discontinued operations for all periods presented through the Distribution date, to be reported with the filing with the U.S. Securities and Exchange Commission (the “SEC”) of GBL’s Annual Report on Form 10-K for the year ending December 31, 2015.
The accompanying unaudited pro forma condensed consolidated financial statements reflect certain known impacts of the Distribution and the separation of AC from GBL. The unaudited pro forma condensed consolidated financial statements have been prepared giving effect to the Distribution as if this transaction had occurred on January 1, 2012 for the unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2015 and for the years ended December 31, 2014, 2013 and 2012 and as of September 30, 2015 for the unaudited pro forma condensed consolidated statement of financial condition.
The unaudited pro forma condensed consolidated financial statements have been derived from GBL’s historical condensed consolidated financial statements and reflect certain assumptions and adjustments that management believes are reasonable under the circumstances and given the information available at this time. These unaudited pro forma condensed consolidated financial statements reflect other adjustments that, in the opinion of management, are necessary to present fairly the pro forma financial position and results of the operations as of and for the periods indicated. The unaudited pro forma condensed consolidated financial statements are provided for illustrative and informational purposes only and are not intended to represent or be indicative of what GBL’s financial condition or results of operations would have been had GBL operated historically as an independent organization from AC or if the Distribution had occurred on the dates indicated. The unaudited pro forma condensed consolidated financial statements also should not be considered representative of our future consolidated financial position or consolidated results of operations. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with GBL’s historical condensed consolidated financial statements and accompanying notes.
The following is a brief description of the amounts recorded under each of the column headings in the accompanying unaudited pro forma condensed consolidated financial statements:
Historical
This column represents GBL’s historical financial position as of September 30, 2015 and historical results of operations for the nine months ended September 30, 2015 and the for the years ended December 31, 2014, 2013 and 2012 prior to any adjustments for the Distribution and pro forma adjustments described under the headings “Distribution of AC” and “Other Pro Forma Adjustments” below.
Distribution of AC
This column represents the elimination of the historical assets and liabilities and results of operations of AC from GBL’s historical condensed consolidated statement of financial condition as of September 30, 2015 and the statements of income for the nine months ended September 30, 2015 and the for the years ended December 31, 2014, 2013 and 2012, respectively. Amounts in this column also include transaction costs directly attributable to the Distribution, which are non-recurring in nature. Amounts in this column will be reflected in GBL’s condensed consolidated statements as discontinued operations in GBL’s filings with the SEC subsequent to the Distribution.
Other Pro Forma Adjustments
This column represents the adjustments that give effect to events that are directly attributable to the transactions described herein, factually supportable, and with respect to the unaudited pro forma condensed consolidated statement of income for the nine months ended September 30, 2015, expected to have a continuing impact on GBL. These adjustments have been computed assuming that the events giving rise to each adjustment had occurred on September 30, 2015 and January 1, 2015 with respect to the unaudited pro forma condensed consolidated statement of financial condition as of September 30, 2015 and unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2015, respectively. Other pro forma adjustments are more fully described in the accompanying Notes to the Unaudited Pro Forma Financial Information and include:
(i) GBL’s issuance to AC of a $250 million 4.0% PIK Note due November 30, 2015;
(ii) GBL’s sale of 4,393,055 shares of GBL Class A common stock from treasury to Gabelli Securities, Inc. (“GSI”) in exchange for a $150 million 4.0% note which was then contributed to AC as part of the spin-off.
GAMCO INVESTORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Nine Months ended September 30, 2015
(Dollars in thousands, except per share data)
|
|
|
|
|
|
|
Other |
|
|
|
|
| ||||
|
|
|
|
|
Distribution |
|
Pro Forma |
|
|
|
|
| ||||
|
|
|
Historical |
|
of AC (a) |
|
Adjustments |
|
Notes |
|
Pro Forma |
| ||||
|
Revenues |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Investment advisory and incentive fees |
|
$ |
257,563 |
|
$ |
(6,294 |
) |
$ |
— |
|
|
|
$ |
251,269 |
|
|
Distribution fees and other income |
|
39,402 |
|
(12 |
) |
— |
|
|
|
39,390 |
| ||||
|
Institutional research services |
|
6,130 |
|
(6,130 |
) |
— |
|
|
|
— |
| ||||
|
Total revenues |
|
303,095 |
|
(12,436 |
) |
— |
|
|
|
290,659 |
| ||||
|
Expenses |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Compensation |
|
127,627 |
|
(18,450 |
) |
— |
|
|
|
109,177 |
| ||||
|
Management fee |
|
11,360 |
|
1,026 |
|
(750 |
) |
(b) |
|
11,636 |
| ||||
|
Distribution costs |
|
39,747 |
|
346 |
|
— |
|
|
|
40,093 |
| ||||
|
Other operating expenses |
|
19,271 |
|
(5,114 |
) |
— |
|
|
|
14,157 |
| ||||
|
Total expenses |
|
198,005 |
|
(22,192 |
) |
(750 |
) |
|
|
175,063 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating income |
|
105,090 |
|
9,756 |
|
750 |
|
|
|
115,596 |
| ||||
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net gain/(loss) from investments |
|
(614 |
) |
834 |
|
— |
|
|
|
220 |
| ||||
|
Interest and dividend income |
|
3,227 |
|
(1,643 |
) |
— |
|
|
|
1,584 |
| ||||
|
Interest expense |
|
(5,899 |
) |
324 |
|
(7,500 |
) |
(c) |
|
(13,075 |
) | ||||
|
Total other income/(expense), net |
|
(3,286 |
) |
(485 |
) |
(7,500 |
) |
|
|
(11,271 |
) | ||||
|
Income before income taxes |
|
101,804 |
|
9,271 |
|
(6,750 |
) |
|
|
104,325 |
| ||||
|
Income tax provision |
|
38,547 |
|
3,646 |
|
(2,498 |
) |
(d) |
|
39,695 |
| ||||
|
Net income |
|
63,257 |
|
5,625 |
|
(4,253 |
) |
|
|
64,630 |
| ||||
|
Net loss attributable to noncontrolling interests |
|
(589 |
) |
589 |
|
— |
|
|
|
— |
| ||||
|
Net income attributable to GAMCO Investors, Inc.’s shareholders |
|
$ |
63,846 |
|
$ |
5,036 |
|
$ |
(4,253 |
) |
|
|
$ |
64,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income attributable to GAMCO Investors, Inc.’s shareholders per share: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
$ |
2.55 |
|
|
|
|
|
|
|
$ |
2.20 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted |
|
$ |
2.52 |
|
|
|
|
|
|
|
$ |
2.17 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
25,047 |
|
|
|
4,393 |
|
(e) |
|
29,440 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted |
|
25,337 |
|
|
|
4,393 |
|
(e) |
|
29,730 |
| ||||
GAMCO INVESTORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the year ended December 31, 2014
(Dollars in thousands, except per share data)
|
|
|
|
|
Distribution |
|
|
| |||
|
|
|
Historical |
|
of AC (a) |
|
Pro Forma |
| |||
|
Revenues |
|
|
|
|
|
|
| |||
|
Investment advisory and incentive fees |
|
$ |
369,996 |
|
$ |
(9,498 |
) |
$ |
360,498 |
|
|
Distribution fees and other income |
|
61,226 |
|
212 |
|
61,438 |
| |||
|
Institutional research services |
|
9,160 |
|
(9,160 |
) |
— |
| |||
|
Total revenues |
|
440,382 |
|
(18,446 |
) |
421,936 |
| |||
|
Expenses |
|
|
|
|
|
|
| |||
|
Compensation |
|
173,553 |
|
(22,298 |
) |
151,255 |
| |||
|
Stock based compensation |
|
7,199 |
|
(1,921 |
) |
5,278 |
| |||
|
Management fee |
|
18,627 |
|
36 |
|
18,663 |
| |||
|
Distribution costs |
|
58,611 |
|
1,135 |
|
59,746 |
| |||
|
Other operating expenses |
|
22,866 |
|
(5,323 |
) |
17,543 |
| |||
|
Total expenses |
|
280,856 |
|
(28,371 |
) |
252,485 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating income |
|
159,526 |
|
9,925 |
|
169,451 |
| |||
|
Other income (expense) |
|
|
|
|
|
|
| |||
|
Net gain/(loss) from investments |
|
10,689 |
|
(6,492 |
) |
4,197 |
| |||
|
Interest and dividend income |
|
5,589 |
|
(3,435 |
) |
2,154 |
| |||
|
Interest expense |
|
(8,049 |
) |
396 |
|
(7,653 |
) | |||
|
Shareholder-designated contribution |
|
(134 |
) |
— |
|
(134 |
) | |||
|
Total other income/(expense), net |
|
8,095 |
|
(9,531 |
) |
(1,436 |
) | |||
|
Income before income taxes |
|
167,621 |
|
394 |
|
168,015 |
| |||
|
Income tax provision |
|
62,505 |
|
(771 |
) |
61,734 |
| |||
|
Net income |
|
105,116 |
|
1,165 |
|
106,281 |
| |||
|
Net loss attributable to noncontrolling interests |
|
(4,274 |
) |
4,274 |
|
— |
| |||
|
Net income attributable to GAMCO Investors, Inc.’s shareholders |
|
$ |
109,390 |
|
$ |
(3,109 |
) |
$ |
106,281 |
|
|
|
|
|
|
|
|
|
| |||
|
Net income attributable to GAMCO Investors, Inc.’s shareholders per share: |
|
|
|
|
|
|
| |||
|
Basic |
|
$ |
4.32 |
|
|
|
$ |
4.20 |
| |
|
|
|
|
|
|
|
|
| |||
|
Diluted |
|
$ |
4.28 |
|
|
|
$ |
4.16 |
| |
|
|
|
|
|
|
|
|
| |||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
| |||
|
Basic |
|
25,335 |
|
|
|
25,335 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Diluted |
|
25,558 |
|
|
|
25,558 |
| |||
GAMCO INVESTORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the year ended December 31, 2013
(Dollars in thousands, except per share data)
|
|
|
|
|
Distribution |
|
|
| |||
|
|
|
Historical |
|
of AC (a) |
|
Pro Forma |
| |||
|
Revenues |
|
|
|
|
|
|
| |||
|
Investment advisory and incentive fees |
|
$ |
336,658 |
|
$ |
(10,333 |
) |
$ |
326,325 |
|
|
Distribution fees and other income |
|
51,964 |
|
70 |
|
52,034 |
| |||
|
Institutional research services |
|
8,940 |
|
(8,940 |
) |
— |
| |||
|
Total revenues |
|
397,562 |
|
(19,203 |
) |
378,359 |
| |||
|
Expenses |
|
|
|
|
|
|
| |||
|
Compensation |
|
161,798 |
|
(22,939 |
) |
138,859 |
| |||
|
Stock based compensation |
|
2,072 |
|
(510 |
) |
1,562 |
| |||
|
Management fee |
|
18,829 |
|
(4,485 |
) |
14,344 |
| |||
|
Distribution costs |
|
48,936 |
|
1,259 |
|
50,195 |
| |||
|
Other operating expenses |
|
23,515 |
|
(6,974 |
) |
16,541 |
| |||
|
Total expenses |
|
255,150 |
|
(33,649 |
) |
221,501 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating income |
|
142,412 |
|
14,446 |
|
156,858 |
| |||
|
Other income (expense) |
|
|
|
|
|
|
| |||
|
Net gain/(loss) from investments |
|
55,181 |
|
(51,034 |
) |
4,147 |
| |||
|
Interest and dividend income |
|
7,095 |
|
(4,434 |
) |
2,661 |
| |||
|
Interest expense |
|
(10,511 |
) |
478 |
|
(10,033 |
) | |||
|
Shareholder-designated contribution |
|
(10,626 |
) |
— |
|
(10,626 |
) | |||
|
Total other income/(expense), net |
|
41,139 |
|
(54,990 |
) |
(13,851 |
) | |||
|
Income before income taxes |
|
183,551 |
|
(40,544 |
) |
143,007 |
| |||
|
Income tax provision |
|
66,186 |
|
(13,212 |
) |
52,974 |
| |||
|
Net income |
|
117,365 |
|
(27,332 |
) |
90,033 |
| |||
|
Net loss attributable to noncontrolling interests |
|
512 |
|
(512 |
) |
— |
| |||
|
Net income attributable to GAMCO Investors, Inc.’s shareholders |
|
$ |
116,853 |
|
$ |
(26,820 |
) |
$ |
90,033 |
|
|
|
|
|
|
|
|
|
| |||
|
Net income attributable to GAMCO Investors, Inc.’s shareholders per share: |
|
|
|
|
|
|
| |||
|
Basic |
|
$ |
4.56 |
|
|
|
$ |
3.51 |
| |
|
|
|
|
|
|
|
|
| |||
|
Diluted |
|
$ |
4.54 |
|
|
|
$ |
3.50 |
| |
|
|
|
|
|
|
|
|
| |||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
| |||
|
Basic |
|
25,653 |
|
|
|
25,653 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Diluted |
|
25,712 |
|
|
|
25,712 |
| |||
GAMCO INVESTORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the year ended December 31, 2012
(Dollars in thousands, except per share data)
|
|
|
|
|
Distribution |
|
|
| |||
|
|
|
Historical |
|
of AC (a) |
|
Pro Forma |
| |||
|
Revenues |
|
|
|
|
|
|
| |||
|
Investment advisory and incentive fees |
|
$ |
288,480 |
|
$ |
(9,096 |
) |
$ |
279,384 |
|
|
Distribution fees and other income |
|
44,848 |
|
64 |
|
44,912 |
| |||
|
Institutional research services |
|
10,953 |
|
(10,953 |
) |
— |
| |||
|
Total revenues |
|
344,281 |
|
(19,985 |
) |
324,296 |
| |||
|
Expenses |
|
|
|
|
|
|
| |||
|
Compensation |
|
137,223 |
|
(21,241 |
) |
115,982 |
| |||
|
Stock based compensation |
|
13,583 |
|
(3,432 |
) |
10,151 |
| |||
|
Management fee |
|
13,018 |
|
(1,203 |
) |
11,815 |
| |||
|
Distribution costs |
|
40,842 |
|
1,437 |
|
42,279 |
| |||
|
Other operating expenses |
|
28,485 |
|
(8,339 |
) |
20,146 |
| |||
|
Total expenses |
|
233,151 |
|
(32,778 |
) |
200,373 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating income |
|
111,130 |
|
12,793 |
|
123,923 |
| |||
|
Other income (expense) |
|
|
|
|
|
|
| |||
|
Net gain/(loss) from investments |
|
16,434 |
|
(20,926 |
) |
(4,492 |
) | |||
|
Interest and dividend income |
|
5,651 |
|
(2,989 |
) |
2,662 |
| |||
|
Interest expense |
|
(15,899 |
) |
498 |
|
(15,401 |
) | |||
|
Total other income/(expense), net |
|
6,186 |
|
(23,417 |
) |
(17,231 |
) | |||
|
Income before income taxes |
|
117,316 |
|
(10,624 |
) |
106,692 |
| |||
|
Income tax provision |
|
41,721 |
|
(3,051 |
) |
38,670 |
| |||
|
Net income |
|
75,595 |
|
(7,573 |
) |
68,022 |
| |||
|
Net loss attributable to noncontrolling interests |
|
56 |
|
(56 |
) |
— |
| |||
|
Net income attributable to GAMCO Investors, Inc.’s shareholders |
|
$ |
75,539 |
|
$ |
(7,517 |
) |
$ |
68,022 |
|
|
|
|
|
|
|
|
|
| |||
|
Net income attributable to GAMCO Investors, Inc.’s shareholders per share: |
|
|
|
|
|
|
| |||
|
Basic |
|
$ |
2.87 |
|
|
|
$ |
2.59 |
| |
|
|
|
|
|
|
|
|
| |||
|
Diluted |
|
$ |
2.86 |
|
|
|
$ |
2.57 |
| |
|
|
|
|
|
|
|
|
| |||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
| |||
|
Basic |
|
26,283 |
|
|
|
26,283 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Diluted |
|
26,436 |
|
|
|
26,436 |
| |||
GAMCO INVESTORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
As of September 30, 2015
(Dollars in thousands, except per share data)
|
|
|
|
|
Distribution |
|
Other Pro |
|
|
|
|
| ||||
|
|
|
Historical |
|
of AC |
|
Forma Adjustments |
|
Notes |
|
Pro Forma |
| ||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cash and cash equivalents |
|
$ |
425,616 |
|
$ |
(363,055 |
) |
$ |
23,244 |
|
(f) |
|
$ |
85,805 |
|
|
Investments in securities |
|
126,917 |
|
(92,822 |
) |
— |
|
|
|
34,095 |
| ||||
|
Investments in sponsored registered investment companies |
|
115,046 |
|
(115,046 |
) |
— |
|
|
|
— |
| ||||
|
Investments in partnerships |
|
101,025 |
|
(101,022 |
) |
— |
|
|
|
3 |
| ||||
|
Receivable from brokers |
|
52,918 |
|
(51,761 |
) |
— |
|
|
|
1,157 |
| ||||
|
Investment advisory fees receivable |
|
28,629 |
|
(1,991 |
) |
— |
|
|
|
26,638 |
| ||||
|
Income tax receivable |
|
2,409 |
|
— |
|
— |
|
|
|
2,409 |
| ||||
|
Other assets |
|
20,109 |
|
19,174 |
|
(23,369 |
) |
(g) |
|
15,914 |
| ||||
|
Total assets |
|
$ |
872,669 |
|
$ |
(706,523 |
) |
$ |
(125 |
) |
|
|
$ |
166,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Payable to brokers |
|
$ |
49,074 |
|
$ |
(48,541 |
) |
$ |
— |
|
|
|
$ |
533 |
|
|
Income taxes payable and deferred tax liabilities |
|
10,529 |
|
(4,566 |
) |
— |
|
|
|
5,963 |
| ||||
|
Capital lease obligation |
|
5,191 |
|
— |
|
— |
|
|
|
5,191 |
| ||||
|
Compensation payable |
|
88,747 |
|
(5,047 |
) |
— |
|
|
|
83,700 |
| ||||
|
Securities sold, not yet purchased |
|
5,577 |
|
(5,577 |
) |
— |
|
|
|
— |
| ||||
|
Mandatorily redeemable noncontrolling interests |
|
1,257 |
|
(1,257 |
) |
— |
|
|
|
— |
| ||||
|
Accrued expenses and other liabilities |
|
34,246 |
|
(1,626 |
) |
(125 |
) |
(g) |
|
32,495 |
| ||||
|
Sub-total |
|
194,621 |
|
(66,614 |
) |
(125 |
) |
|
|
127,882 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
5.875% Senior notes (due June 1, 2021) |
|
100,000 |
|
— |
|
— |
|
|
|
100,000 |
| ||||
|
4.0% PIK Note (due November 30, 2020) |
|
— |
|
— |
|
250,000 |
|
(h) |
|
250,000 |
| ||||
|
Zero coupon subordinated debentures (due December 31, 2015) |
|
6,750 |
|
— |
|
— |
|
|
|
6,750 |
| ||||
|
Total liabilities |
|
301,371 |
|
(66,614 |
) |
249,875 |
|
|
|
484,632 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Redeemable noncontrolling interests |
|
6,018 |
|
(6,018 |
) |
— |
|
|
|
— |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Equity |
|
|
|
|
|
|
|
|
|
|
| ||||
|
GAMCO Investors, Inc. stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Class A Common Stock |
|
14 |
|
— |
|
— |
|
|
|
14 |
| ||||
|
Class B Common Stock |
|
19 |
|
— |
|
— |
|
|
|
19 |
| ||||
|
Additional paid-in capital |
|
299,769 |
|
(299,769 |
) |
— |
|
|
|
— |
| ||||
|
Retained earnings |
|
661,415 |
|
(331,487 |
) |
(420,270 |
) |
(i) |
|
(90,342 |
) | ||||
|
Accumulated other comprehensive income |
|
17,575 |
|
— |
|
— |
|
|
|
17,575 |
| ||||
|
Treasury stock, at cost |
|
(416,147 |
) |
— |
|
170,270 |
|
(j) |
|
(245,877 |
) | ||||
|
Total GAMCO Investors, Inc. stockholders’ equity |
|
562,645 |
|
(631,256 |
) |
(250,000 |
) |
|
|
(318,611 |
) | ||||
|
Noncontrolling interests |
|
2,635 |
|
(2,635 |
) |
— |
|
|
|
— |
| ||||
|
Total equity |
|
565,280 |
|
(633,891 |
) |
(250,000 |
) |
|
|
(318,611 |
) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total liabilities and equity |
|
$ |
872,669 |
|
$ |
(706,523 |
) |
$ |
(125 |
) |
|
|
$ |
166,021 |
|
GAMCO Investors, Inc.
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
(Dollars in thousands)
Notes to Unaudited Pro Forma Condensed Consolidated Statements of Income
(a) Distribution of AC. Represents the results of operations of AC for the nine months ended September 30, 2015 and the years ended December 31, 2014, 2013 and 2012 that qualify as discontinued operations under GAAP. Amounts in this column for the nine months ended September 30, 2015 also include $1,475 of transaction costs included in other operating expenses, primarily related to accounting and legal fees, which are directly attributable to the Distribution and non-recurring in nature.
(b) Management fee. Reflects the 10% management fee based on pre-tax income excluding this fee.
(c) Interest expense. Reflects interest expense on the $250 million 4.0% PIK Note that was issued to ACG in connection with the spin-off. The PIK Note pays interest at 4%, which is payable in cash or PIK, and will be paid off ratably over five years, or sooner at GBL option. For the nine months ended September 30, 2015, interest expense relating to the PIK Note was $7.5 million.
(d) Income tax provision. Represents a blended federal and state statutory rate of 37.0% applied to the pro forma adjustments to GBL’s unaudited pro forma condensed consolidated statement of income for the nine months ended September 30, 2015.
(e) Weighted average shares outstanding - basic and diluted. Reflects the issuance of 4,393,055 shares of GAMCO Investors, Inc. Class A common stock to GSI that occurred on November 27, 2015 in connection with the spin-off.
(f) Cash and cash equivalents. The increase in cash and cash equivalents of $23,244 consists of cash received from affiliates of $23,369 less cash paid to affiliates of $125 to settle intercompany balances.
(g) Other assets and accrued expenses and other liabilities. Reflects the settlement of intercompany balances between AC and GBL immediately subsequent to the spin-off. At September 30, 2015, AC owed certain GBL entities $23,369, including a $16 million demand loan with GBL, and was owed by certain GBL entities $125.
(h) 4.0% PIK Note (due November 30, 2020). This note was issued in connection with the spin-off and pays interest at 4.0% per year, which is payable in cash or PIK, and will be paid off ratably over five years, or sooner at GBL’s option.
(i) Retained earnings. Reflects reconciliation of the equity contribution as follows:
|
4.0% PIK Note (due November 30, 2020) |
|
$ |
(250,000 |
) |
|
Sale of Class A common stock treasury shares |
|
(170,270 |
) | |
|
Total Retained earnings |
|
$ |
(420,270 |
) |