Calamos Asset Management, Inc. /DE/ - FORM 10-Q

Attached files

file	filename
EX-32.2 - SECTION 906 CERTIFICATION CFO - Calamos Asset Management, Inc. /DE/	clms-2016x09x30xex322.htm
EX-32.1 - SECTION 906 CERTIFICATION CEO - Calamos Asset Management, Inc. /DE/	clms-2016x09x30xex321.htm
EX-31.2 - SECTION 302 CERTIFICATION CFO - Calamos Asset Management, Inc. /DE/	clms-2016x09x30xex312.htm
EX-31.1 - SECTION 302 CERTIFICATION CEO - Calamos Asset Management, Inc. /DE/	clms-2016x09x30xex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

FORM 10-Q

________________



þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	FOR THE QUARTERLY PERIOD ENDED: September 30, 2016

or

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File Number: 000-51003

________________

CALAMOS ASSET MANAGEMENT, INC.

(Exact Name of Registrant as Specified in its Charter)

________________



Delaware		32-0122554
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

2020 Calamos Court, Naperville, Illinois		60563
(Address of Principal Executive Offices)		(Zip Code)

(630) 245-7200

(Registrant’s telephone number, including area code)

___________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer ¨	Accelerated filer þ	Non-accelerated filer ¨	Smaller reporting company ¨
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes þ No

At October 28, 2016, there were 20,530,571 shares of Class A common stock and 100 shares of Class B common stock outstanding.

TABLE OF CONTENTS



PART I — FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk	32
Item 4. Controls and Procedures	33
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	33
Item 2. Unregistered Sales of Equity Securities	33
Item 6. Exhibits	34
SIGNATURES	35

PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

CALAMOS ASSET MANAGEMENT, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except share data)



	September 30, 2016			December 31, 2015
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	76,550		$	104,717
Receivables:
Affiliates and affiliated funds	12,000			13,891
Customers	2,961			3,876
Investment securities	57,960			257,057
Derivative assets	6,904			4,311
Consolidated funds and partnership investments	603,062			112,640
Prepaid expenses	3,587			3,709
Deferred tax assets, net	—			8,294
Other current assets	714			631
Total current assets	763,738			509,126
Non-current assets:
Deferred tax assets, net	37,022			30,010
Goodwill and intangible assets, net	7,152			7,301
Property and equipment, net of accumulated depreciation and amortization ($61,691 at September 30, 2016 and $60,713 at December 31, 2015)	13,339			13,308
Other non-current assets	1,465			1,717
Total non-current assets	58,978			52,336
Total assets	$	822,716		$	561,462
LIABILITIES AND EQUITY
LIABILITIES
Current liabilities:
Distribution fees payable	$	6,640		$	7,641
Accrued compensation and benefits	25,013			28,583
Interest payable	—			1,390
Derivative liabilities	15,486			5,475
Liabilities of consolidated funds and partnership investments	13,771			75
Accrued expenses and other current liabilities	4,446			5,118
Total current liabilities	65,356			48,282
Non-current liabilities:
Long-term debt	—			45,955
Deferred rent	8,409			8,788
Other non-current liabilities	2,143			2,043
Total non-current liabilities	10,552			56,786
Total liabilities	75,908			105,068

Redeemable non-controlling interest in consolidated funds and partnership investments	394,525			77,835

EQUITY
Class A Common Stock, $0.01 par value; authorized 600,000,000 shares; 25,688,201 shares issued and 16,753,711 shares outstanding at September 30, 2016; 25,326,522 shares issued and 16,917,360 shares outstanding at December 31, 2015	257			253
Class B Common Stock, $0.01 par value; authorized 1,000 shares; 100 shares issued and outstanding at September 30, 2016 and December 31, 2015	—			—
Additional paid-in capital	226,892			224,065
Retained earnings	76,096			81,881
Accumulated other comprehensive income	303			1,110
Treasury stock; 8,934,490 shares at September 30, 2016 and 8,409,162 shares at December 31, 2015	(117,806		)	(113,579		)
Calamos Asset Management, Inc. stockholders’ equity	185,742			193,730
Non-controlling interest in Calamos Investments LLC (Calamos Interests)	166,541			184,829
Total equity	352,283			378,559
Total liabilities and equity	$	822,716		$	561,462

See accompanying notes to consolidated financial statements.

CALAMOS ASSET MANAGEMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share data)

(unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
REVENUES
Investment management fees	$	39,725		$	46,738		$	118,725		$	141,648
Distribution and underwriting fees	8,055			10,264			24,764			31,858
Other	537			616			1,603			1,880
Total revenues	48,317			57,618			145,092			175,386
EXPENSES
Employee compensation and benefits	23,679			23,891			73,096			70,613
Distribution expenses	8,008			10,172			24,760			31,178
Marketing and sales promotion	3,419			4,063			9,330			21,798
General and administrative	9,106			10,865			26,995			30,583
Total operating expenses	44,212			48,991			134,181			154,172
Operating income	4,105			8,627			10,911			21,214
NON-OPERATING INCOME (LOSS)
Net interest expense	(180		)	(717		)	(1,572		)	(2,168		)
Debt extinguishment costs	(4,867		)	—			(4,867		)	—
Investment and other income (loss)	30,174			(10,997		)	18,874			(4,568		)
Total non-operating income (loss)	25,127			(11,714		)	12,435			(6,736		)
Income (loss) before income taxes	29,232			(3,087		)	23,346			14,478
Income tax provision (benefit)	796			(46		)	1,715			1,694
Net income (loss)	28,436			(3,041		)	21,631			12,784
Net income attributable to non-controlling interest in Calamos Investments LLC (Calamos Interests)	(6,563		)	(894		)	(5,076		)	(12,031		)
Net (income) loss attributable to redeemable non-controlling interest in consolidated funds and partnership investments	(20,706		)	4,298			(16,486		)	1,744
Net income attributable to Calamos Asset Management, Inc.	$	1,167		$	363		$	69		$	2,497
Earnings per share:
Basic	$	0.07		$	0.02		$	—		$	0.14
Diluted	$	0.07		$	0.02		$	—		$	0.14
Weighted average shares outstanding:
Basic	16,751,609			17,316,823			16,744,592			17,657,669
Diluted	17,137,237			18,208,850			17,094,693			18,445,524

Cash dividends declared per share	$	0.15		$	0.15		$	0.45		$	0.45

See accompanying notes to consolidated financial statements.

CALAMOS ASSET MANAGEMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	28,436		$	(3,041	)	$	21,631		$	12,784
Other comprehensive income (loss), before income tax provision (benefit)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses)	1,205			(19,871		)	(6,389		)	(7,816		)
Reclassification adjustment for realized (gains) losses included in net income (loss)	—			—			617			(2,510		)
Other comprehensive income (loss), before income tax provision (benefit)	1,205			(19,871		)	(5,772		)	(10,326		)
Income tax provision (benefit) related to other comprehensive income (loss)	99			(1,857		)	(474		)	(1,225		)
Other comprehensive income (loss), after income tax provision (benefit)	1,106			(18,014		)	(5,298		)	(9,101		)
Comprehensive income (loss)	29,542			(21,055		)	16,333			3,683
Comprehensive (income) loss attributable to non-controlling interest in Calamos Investments LLC (Calamos Interests)	(7,500		)	13,958			(585		)	(5,015		)
Comprehensive (income) loss attributable to redeemable non-controlling interest in consolidated funds and partnership investments	(20,706		)	4,298			(16,486		)	1,744
Comprehensive income (loss) attributable to Calamos Asset Management, Inc.	$	1,336		$	(2,799	)	$	(738	)	$	412

See accompanying notes to consolidated financial statements.

CALAMOS ASSET MANAGEMENT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except share data)

(unaudited)



	Calamos Asset Management, Inc. Stockholders
(in thousands)	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non-controlling Interest in Calamos Investments LLC (Calamos Interests)			Total			Redeemable Non-controlling Interest in Consolidated Funds and Partnership Investments
Balance at December 31, 2014	$	250	$	221,208		$	89,311		$	1,297		$	(107,129	)	$	216,982		$	421,919		$	76,167
Net income (loss)	—		—			2,497			—			—			12,031			14,528			(1,744		)
Other comprehensive loss	—		—			—			(2,085		)	—			(7,016		)	(9,101		)	—
Repurchase of common stock by Calamos Investments LLC (985,466 Class A common shares)	—		—			—			—			(2,655		)	(9,302		)	(11,957		)	—
Issuance of common stock (240,886 Class A common shares)	2		(2		)	—			—			—			—			—			—
Impact of the redemption of common stock from Calamos Investments LLC by Calamos Asset Management, Inc. (240,886 Class A common shares)	—		2,202			—			—			(2,202		)	—			—			—
Shares withheld for taxes under stock incentive plans and other cumulative impact of changes in ownership of Calamos Investments LLC	—		(111		)	—			—			—			(564		)	(675		)	—
Net purchase of redeemable non-controlling interests in partnership investments	—		—			—			—			—			—			—			(229		)
Compensation expense recognized under stock incentive plans	—		1,034			—			—			—			3,621			4,655			—
Impact on non-controlling interests as a result of dividends paid to Calamos Investments LLC on repurchased common stock	—		(997		)	—			—			—			997						—
Dividend equivalent accrued under stock incentive plans	—		—			(158		)	—			—			(556		)	(714		)	—
Equity and tax distributions paid to non-controlling interests in Calamos Investments LLC (Calamos Interests)	—		—			—			—			—			(33,730		)	(33,730		)	—
Dividends declared	—		—			(7,957		)	—			—			—			(7,957		)	—
Balance at September 30, 2015	$	252	$	223,334		$	83,693		$	(788	)	$	(111,986	)	$	182,463		$	376,968		$	74,194

Balance at December 31, 2015	$	253	$	224,065		$	81,881		$	1,110		$	(113,579	)	$	184,829		$	378,559		$	77,835
Consolidation of funds upon adoption of new accounting pronouncement on January 1, 2016	—		—			1,882			—			—			6,594			8,476			318,154
Net income	—		—			69			—			—			5,076			5,145			16,486
Other comprehensive loss	—		—			—			(807		)	—			(4,491		)	(5,298		)	—
Repurchase of common stock by Calamos Investments LLC (525,328 Class A common shares)	—		—			—			—			(1,050		)	(3,650		)	(4,700		)	—
Issuance of common stock (361,679 Class A common shares)	4		(4		)	—			—			—			—			—			—
Impact of the redemption of common stock from Calamos Investments LLC by Calamos Asset Management, Inc. (361,679 Class A common shares)	—		3,177			—			—			(3,177		)	—			—			—
Shares withheld for taxes under stock incentive plans and other cumulative impact of changes in ownership of Calamos Investments LLC	—		(287		)	—			—			—			(779		)	(1,066		)	—
Compensation expense recognized under stock incentive plans	—		1,263			—			—			—			4,426			5,689			—
Impact on non-controlling interests as a result of dividends paid to Calamos Investments LLC on repurchased common stock	—		(1,322		)	—			—			—			1,322			—			—
Dividend equivalent accrued under stock incentive plans	—		—			(196		)	—			—			(692		)	(888		)	—
Consolidation of funds during period	—		—			—			—			—			—			—			48,694
Net purchase (sales) of redeemable non-controlling interest in consolidated funds and partnership investments	—		—			—			—			—			—			—			(66,644		)
Equity and tax distributions paid to non-controlling interests in Calamos Investments LLC (Calamos Interests)	—		—			—			—			—			(26,094		)	(26,094		)	—
Dividends declared	—		—			(7,540		)	—			—			—			(7,540		)	—
Balance at September 30, 2016	$	257	$	226,892		$	76,096		$	303		$	(117,806	)	$	166,541		$	352,283		$	394,525

See accompanying notes to consolidated financial statements.

CALAMOS ASSET MANAGEMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)



	Nine Months Ended September 30,
	2016			2015
Cash and cash equivalents at beginning of period	$	104,717		$	35,285
Cash flows provided by operating activities:
Net income	21,631			12,784
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred sales commissions	810			1,358
Other depreciation and amortization	2,780			3,111
Loss on disposal of property and equipment	—			89
Deferred rent	(379		)	17
Change in unrealized gains on trading securities, derivative assets, derivative liabilities, consolidated funds and partnership investments, net	(17,340		)	(1,157		)
Net realized losses on sale of investment securities, derivative assets, derivative liabilities, consolidated funds and partnership investments, net	2,905			6,719
Debt extinguishment costs	4,867			—
Change in deferred tax asset valuation allowance	628			—
Deferred taxes, net	5,522			4,309
Stock-based compensation	5,689			4,655
Employee taxes paid on vesting under stock incentive plans	(996		)	(730		)
(Increase) decrease in assets:
Receivables:
Affiliates and affiliated funds, net	1,891			2,242
Customers	915			(1,234		)
Other assets	(5,042		)	(3,780		)
Decrease in liabilities:
Distribution fees payable	(1,001		)	(2,661		)
Accrued compensation and benefits	(3,570		)	(1,833		)
Accrued expenses and other liabilities	(2,780		)	(2,030		)
Net cash provided by operating activities	16,530			21,859
Cash flows provided by investing activities:
Net additions to property and equipment	(2,604		)	(2,574		)
Purchases of investment securities	(18,906		)	(20,370		)
Proceeds from sale of investment securities	35,514			89,022
Net purchases of derivatives	(1,000		)	—
Contributions to consolidated funds and partnership investments	(7,890		)	(229		)
Distributions from consolidated funds and partnership investments	39,415			23,403
Net cash paid for acquisition	—			(55		)
Net cash provided by investing activities	44,529			89,197
Cash flows used in financing activities:
Repayment of long-term debt	(45,955		)	—
Debt extinguishment costs	(4,867		)	—
Deferred tax benefit (expense) on vesting under stock incentive plans	(70		)	56
Repurchase of common stock by Calamos Investments LLC (525,328 at September 30, 2016, and 985,466 at September 30, 2015 Class A common shares)	(4,700		)	(11,957		)
Equity distributions paid to non-controlling interests (Calamos Interests)	(15,559		)	(23,338		)
Tax distributions paid to non-controlling interests (Calamos Interests)	(10,535		)	(10,392		)
Cash dividends paid to common stockholders	(7,540		)	(7,957		)
Net cash used in financing activities	(89,226		)	(53,588		)
Net (decrease) increase in cash and cash equivalents	(28,167		)	57,468
Cash and cash equivalents at end of period	$	76,550		$	92,753
Supplemental disclosure of cash flow information:
Cash paid (refunded) for:
Income taxes, net	$	(91	)	$	(105	)
Interest	$	3,142		$	3,032

See accompanying notes to consolidated financial statements.

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Organization and Description of Business

Calamos Asset Management, Inc. (“CAM”), representing the public shares outstanding, as of September 30, 2016, owned 22.2% of the operating company, Calamos Investments LLC (“Calamos Investments”), with the remaining 77.8% privately owned by Calamos Partners LLC (“Calamos Partners”), a Delaware limited liability company, and John P. Calamos, Sr., the Founder, Chairman and Global Chief Investment Officer of CAM. Calamos Partners received its interest from Calamos Family Partners, Inc., a Delaware corporation, on July 26, 2016. CAM, together with Calamos Investments and Calamos Investments’ subsidiaries (the “Company”), operates the investment advisory and distribution services businesses reported within these consolidated financial statements. CAM operates and is the sole manager, and thus controls all of the business and affairs of Calamos Investments and, as a result of this control, consolidates the financial results of Calamos Investments with its own financial results. Calamos Partners' and John P. Calamos, Sr.'s (collectively "Calamos Interests") ownership interest, in accordance with applicable accounting guidance, is reflected and referred to within these consolidated financial statements as "non-controlling interest in Calamos Investments LLC". As shown in the diagram below, Calamos Partners also owns all of CAM’s outstanding Class B common stock, which represents 97.4% of the combined voting power of all classes of CAM’s voting stock. The graphic below illustrates our organizational and ownership structure as of September 30, 2016:


(1)	Represents combined economic interest of Calamos Partners LLC and John P. Calamos, Sr. who is also a member of Calamos Investments LLC.

(2)

Represents combined economic interest of all public stockholders, including John P. Calamos, Sr. and John P. Calamos, Jr.’s combined 20.78% ownership interest of Class A common stock. The calculation of ownership interest includes options and restricted stock units ("RSUs") that vest within 60 days, as well as Calamos Partners' indirect ownership interest in Class A common stock purchased by Calamos Investments LLC, pursuant to the Company’s share repurchase plan.

The Company primarily provides investment advisory services to individuals and institutional investors through a number of investment products that include open-end funds and closed-end funds (the “Funds”), separate accounts, and partnerships, as well as provides model portfolio design and oversight for separately managed accounts. The subsidiaries through which the Company provides these services include: Calamos Advisors LLC (“CAL”), a Delaware limited liability company and registered investment

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

advisor; Calamos Financial Services LLC (“CFS”), a Delaware limited liability company and registered broker-dealer; Calamos Wealth Management LLC, a Delaware limited liability company and registered investment advisor; and Calamos Investments LLP, a United Kingdom limited liability partnership, registered investment advisor with the Financial Conduct Authority in the United Kingdom, and a global distributor of the offshore funds and Company products. For reporting purposes, the offshore funds are included within the open-end funds.

(2)Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Management believes the accounting estimates are appropriate and reasonably stated; however, due to the inherent uncertainties in making estimates, actual amounts could differ from these estimates.

The consolidated financial statements as of September 30, 2016 and for the three and nine months ended September 30, 2016, and 2015 have not been audited by the Company’s independent registered public accounting firm. In the opinion of management, these statements contain all adjustments, including those of a normal recurring nature, necessary for fair presentation of the financial condition and results of operations. The results for the interim periods presented are not necessarily indicative of the results to be obtained for a full fiscal year. This Form 10-Q filing should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

New Accounting Guidance

In August 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to add or clarify guidance on the classification of certain cash receipts and cash payments, such as debt prepayment and extinguishment costs, on the statement of cash flows. The amendment is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company early adopted this guidance, resulting in debt extinguishment costs of $4.9 million being classified as cash flows from financing activities for the nine months ended September 30, 2016.

The Company implemented Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which amended the consolidation requirements under GAAP, on January 1, 2016, using the modified retrospective method. The modified retrospective method did not require the restatement of prior year periods. In connection with the adoption of this guidance, the Company reevaluated all of its investments for consolidation, including its investments in open-end funds. The adoption of the guidance resulted in open-end funds regulated outside the U.S. previously accounted for as voting interest entities ("VOE") to be evaluated as variable interest entities ("VIE") and led to the consolidation of five open-end funds that were previously accounted for as available-for-sale securities. The adoption also resulted in the consolidation of four U.S. regulated open-end funds that were previously accounted for as available-for-sale securities. The impact to the consolidated statements of financial condition upon adoption was the consolidation of $333.6 million of assets, $15.4 million of liabilities, and $318.2 million of redeemable non-controlling interests. In connection with the adoption, the Company reclassified $1.9 million and $6.6 million, respectively, in accumulated other comprehensive income to retained earnings and non-controlling interest in Calamos Investments LLC. Additional disclosures related to consolidated voting interest entities and variable interest entities, and the impact the new accounting guidance has had on the quarter are included in Note 5, Consolidated Funds and Partnership Investments.

Principles of Consolidation

The consolidated financial statements include the financial statements of CAM, Calamos Investments, Calamos Investments’ wholly-owned subsidiaries, the Company’s partnerships, and open-end funds in which it has a controlling financial interest or operating control. The equity method of accounting is used for investments in which the Company has significant influence, but less than a 50% controlling interest. All intercompany balances and transactions have been eliminated.

The Calamos Interests’ combined 77.8% interest in Calamos Investments at September 30, 2016 and December 31, 2015 is represented as a non-controlling interest in Calamos Investments LLC in the Company’s consolidated financial statements. The non-controlling interest in Calamos Investments is derived by multiplying the historical equity of Calamos Investments by the Calamos Interests’ aggregate ownership percentage for the periods presented. Issuances and repurchases of CAM’s common stock may result in changes to CAM’s ownership percentage and to the non-controlling interests’ ownership percentage of Calamos

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Investments with resulting changes reflected in the consolidated statements of changes in equity. Income is allocated based on the average ownership interest during the period in which the income is earned.

CAM owns certain assets to which it has exclusive economic rights. As of September 30, 2016, these assets included cash and cash equivalents of $55.8 million, net non-current deferred tax assets of $37.0 million, net current income taxes receivable of $256,000, and a loan receivable from Calamos Investments of $45.0 million. As of December 31, 2015, these assets included cash, cash equivalents and investment securities of $77.3 million, net current and non-current deferred tax assets of $38.3 million, net current income taxes receivable of $355,000, and a loan receivable from Calamos Investments of $25.0 million. These assets are reported together with Calamos Investments’ consolidated assets in the consolidated statements of financial condition. Additionally, net income before income taxes of $23.3 million and $14.5 million for the nine months ended September 30, 2016 and 2015, respectively, each included $303,000 and $721,000, respectively, of interest income and realized gains and losses on cash and cash equivalents held solely by CAM. These portions of CAM’s income and expense are not affected by non-controlling interests.

The Company consolidates investments in which the Company’s controlling interest exceeds 50%, or in which the Company operates and controls the business and affairs of the entity or is deemed to be the primary beneficiary. In order to make this determination, an analysis is performed to determine if the investment in an affiliate, partnership or open-end fund is a VOE or VIE. The analysis involves judgment and considers several factors, including an entity’s legal organization, capital structure, the rights of the equity investment holders, the Company's ownership interest in the entity, and its contractual involvement with the entity. The Company continually reviews and reconsiders its previously reached VIE or VOE conclusions upon the occurrence of certain events, such as changes to its ownership interest, changes to an entity’s organization and legal structure, or amendments to governing documents.

The open-end funds that the Company consolidates in its consolidated financial statements are generally those products to which it provided initial seed capital at the time of their formation and has a controlling interest. The Company's U.S. regulated open-end funds are considered VOEs while those regulated outside the U.S. are considered VIEs. VIEs are entities that, by design (i) lack sufficient equity to permit the entity to finance its activities independently, or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, the obligation to absorb the entity’s losses, or the rights to receive the entity’s residual returns. The Company consolidates a VIE when it is the primary beneficiary, which is the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the VIE that could potentially be significant. For the periods the funds and partnerships are consolidated, the assets and liabilities of the funds and partnerships are presented as consolidated funds and partnership investments and liabilities of consolidated funds and partnership investments, respectively, in the consolidated statements of financial condition. The net income for these funds and partnerships is included in investment and other income in the consolidated statements of operations, and the change in funds and partnership investments is included in contributions to or distributions from consolidated funds and partnership investments in the consolidated statements of cash flows. The combined interests of all of the consolidated funds and partnerships not owned by the Company and that are redeemable at the option of the holder, are presented as redeemable non-controlling interest in consolidated funds and partnership investments in the Company’s consolidated financial statements for the periods those funds and partnerships were consolidated. See Note 5, Consolidated Funds and Partnership Investments, for more discussion regarding these funds.

Calamos Investments, through its wholly-owned subsidiaries and affiliates, is indirectly the general partner and controls the operations of Calamos Global Opportunities Fund LP. The results of this partnership are included in the Company's consolidated financial statements.

The Company holds non-controlling interests in certain other partnership investments that are included in partnership investments and consolidated funds in the consolidated statements of financial condition. These other partnership investments are accounted for under the equity method.

Restricted Cash

The Company has a $430,000 security deposit related to a property lease that is restricted from the Company’s general corporate use and is being reported in other non-current assets in the consolidated statements of financial condition.

Treasury Stock

On November 13, 2014, the Company announced a repurchase of up to an additional 3 million shares of the Company's outstanding Class A Common Stock primarily to continue to manage the dilution from share issuances under the Company’s incentive compensation plan. During the nine months ended September 30, 2016, Calamos Investments repurchased 525,328 shares of Class A common stock, at an average purchase price of $8.95 and a total cost of $4.7 million under this repurchase program. As Calamos Investments is consolidated with CAM, the repurchased shares are reported as treasury shares. As such, CAM’s 22.2% ownership interest in these shares totaling $1.0 million is reported in treasury stock, with Calamos Interests’ 77.8% ownership interest in

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

these shares, totaling $3.7 million, reported in non-controlling interest in the consolidated statements of financial condition. The total shares repurchased are not included in the calculation of basic and diluted earnings per share in accordance with GAAP.

During the three and nine months ended September 30, 2016, CAM redeemed 6,634 and 361,679, respectively, Class A common shares from Calamos Investments for a value of $75,000 and $4.1 million, respectively, which represents the fair value of the shares on the date of redemption. As Calamos Investments is consolidated with CAM, the impact of the distribution reflecting the non-controlling interest is $58,000 and $3.2 million, respectively.

During the three and nine months ended September 30, 2016, dividends on shares held by Calamos Investments totaled $567,000 and $1.7 million, respectively. The payment of these dividends increased Calamos Investments' equity by $441,000 for the third quarter of 2016, and $1.3 million for the nine months ended September 30, 2016, from additional paid in capital to non-controlling interest in Calamos Investments LLC in the consolidated statement of changes in equity. Those amounts represent Calamos Interests' ownership interest in those dividend payments.

For a comprehensive disclosure of the Company's significant accounting policies, see the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

(3)Investment Securities

The Company carries all investment securities it owns at fair value and records all changes in fair value in current earnings or as a separate component of accumulated other comprehensive income (loss) in equity. As such, unrealized gains and losses on trading securities, as well as realized gains and losses on all investment securities, are included in investment and other income in the consolidated statements of operations. Unrealized gains and losses on available-for-sale securities are reported, net of CAM's deferred income tax, as a separate component of accumulated other comprehensive income (loss) in equity until realized.

The following table provides a summary of investment securities as of September 30, 2016 and December 31, 2015:



(in thousands)
September 30, 2016	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available-for-sale securities:
Funds
U.S. Equity	$	54	$	1	$	(1	)	$	54
Global Equity	10,151		1,075		—			11,226
Convertible	32		—		—			32
Fixed Income	5,485		390		—			5,875
Alternative	51		2		—			53
Multi-Strategy	19,971		2,179		(3		)	22,147
Total Funds	35,744		3,647		(4		)	39,387
Common stock	141		233		—			374
Total available-for-sale securities	$	35,885	$	3,880	$	(4	)	$	39,761
Trading securities:
Funds
U.S. Equity	$	2,229	$	99	$	—		$	2,328
Global Equity	4,735		360		—			5,095
Convertible	1,816		122		—			1,938
Fixed Income	53		2		—			55
Alternative	8,678		112		(7		)	8,783
Total trading securities	$	17,511	$	695	$	(7	)	$	18,199
Total investment securities								$	57,960

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)



(in thousands)
December 31, 2015	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available-for-sale securities:
Funds
U.S. Equity	$	62,839	$	2,914	$	(44	)	$	65,709
Global Equity	124,929		6,606		(46		)	131,489
Convertible	5,093		—		(14		)	5,079
Fixed Income	16,922		58		(15		)	16,965
Alternative	14,153		125		(191		)	14,087
Multi-Strategy	16,150		208		(133		)	16,225
Total Funds	240,086		9,911		(443		)	249,554
Common stock	141		181		—			322
Total available-for-sale securities	$	240,227	$	10,092	$	(443	)	$	249,876
Trading securities:
Funds
U.S. Equity	$	5,194	$	—	$	(478	)	$	4,716
Global Equity	2,500		—		(35		)	2,465
Total trading securities	$	7,694	$	—	$	(513	)	$	7,181
Total investment securities								$	257,057

The investments in Funds at September 30, 2016 and December 31, 2015 of $57.6 million and $256.7 million, respectively, were invested in affiliated funds that are not consolidated and accounts that are separately managed. In connection with the adoption of the new consolidation accounting guidance on January 1, 2016, the Company reevaluated all of its investments for consolidation, including its investments in open-end funds. The Company determined that its interests in certain available-for-sale securities with a fair value of $197.5 million at December 31, 2015, were deemed controlling interests under the new accounting guidance and resulted in these open-end funds being consolidated on January 1, 2016.

The aggregate fair value of available-for-sale investment securities that were in an unrealized loss position at September 30, 2016 and December 31, 2015 was $164,000 and $12.5 million, respectively. As of September 30, 2016 and December 31, 2015, the Company had no investment securities that had been in a continuous loss position for 12 months or longer.

The Company recorded other-than-temporary impairment charges of $55,000 and $374,000, respectively, for the three and nine months ended September 30, 2016 on certain available-for-sale securities with unrealized losses. Other-than-temporary impairment charges recorded for the three and nine months ended September 30, 2015 were $4.5 million and $5.3 million, respectively. The other-than-temporary impairment charges were reported in non-operating income (loss) in the consolidated statements of operations.

As of September 30, 2016 and December 31, 2015, the Company believes that the remaining $4,000 and $443,000, respectively, in unrealized losses on certain available-for-sale securities are only temporary in nature, as these losses are a result of short-term declines in the net asset value of the funds. Further, the Company has the intent and ability to hold these securities for a period of time sufficient to allow for recovery of the fair value. The Company also considered current market conditions and the nature of the securities held when determining the recoverability of those securities' fair value.

The following table provides a summary of changes in investment securities for the three and nine months ended September 30, 2016 and 2015:



	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	2016		2015			2016		2015
Available-for-sale securities:
Proceeds from sales	$	1,814	$	8,353		$	18,857	$	48,925
Gross realized gains on sales	$	286	$	291		$	63	$	2,849
Trading securities:
Changes in unrealized gains (losses)	$	9,440	$	(789	)	$	5,652	$	6,426

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The table below summarizes the tax provision (benefit) on unrealized gains (losses) and (gains) losses reclassified out of accumulated other comprehensive income (loss) on available-for-sale securities for the three and nine months ended September 30, 2016 and 2015:



	Three Months Ended September 30, 2016						Three Months Ended September 30, 2015
(in thousands)	Before-Tax Amount		Tax Provision (Benefit)		After-Tax Amount		Before-Tax Amount			Tax Provision (Benefit)			After-Tax Amount
Available-for-sale securities:
Changes in unrealized gains (losses)	$	1,205	$	99	$	1,106	$	(19,871	)	$	(1,857	)	$	(18,014	)
Other comprehensive income (loss)	$	1,205	$	99	$	1,106	$	(19,871	)	$	(1,857	)	$	(18,014	)



	Nine Months Ended September 30, 2016									Nine Months Ended September 30, 2015
(in thousands)	Before-Tax Amount			Tax Provision (Benefit)			After-Tax Amount			Before-Tax Amount			Tax Provision (Benefit)			After-Tax Amount
Available-for-sale securities:
Changes in unrealized gains (losses)	$	2,087		$	171		$	1,916		$	(7,816	)	$	(773	)	$	(7,043	)
Reclassification adjustment for realized (gains) losses included in income	617			51			566			(2,510		)	(452		)	(2,058		)
Unrealized gains on consolidation of funds upon adoption of new accounting pronouncement	(8,476		)	(696		)	(7,780		)	—			—			—
Other comprehensive loss	$	(5,772	)	$	(474	)	$	(5,298	)	$	(10,326	)	$	(1,225	)	$	(9,101	)

Reclassification of realized (gains) losses out of accumulated other comprehensive income (loss) are reported in non-operating income (loss), in investment income (loss), in the consolidated statement of operations. See Note 9, Non-Operating Income (Loss).

(4)Derivative Assets and Liabilities

The Company used exchange-traded option contracts as an economic hedge of price changes in its investment securities portfolio in order to reduce the volatility equity markets have on the fair value of the Company's corporate investment portfolio and that could result in realized or unrealized gains and losses. The Company's investment securities and consolidated funds, net of redeemable non-controlling interest, totaling $216.4 million at September 30, 2016, consist primarily of positions in several Calamos equity and fixed income funds. The equity price risk in the investment portfolio may be hedged using exchange-traded option contracts that correlate most closely with the change in value of the portfolio being hedged. The use of these option contracts are part of a hedge overlay strategy to minimize downside risk in the hedged portfolio. The Company may adjust its hedge position in response to movement and volatility in prices and changes in the composition of the hedged portfolio, but generally is not actively buying and selling contracts.

The Company has elected not to offset its derivative assets with its derivative liabilities even if a right of offset exists. When applicable, the fair value of option contracts is reported on a gross basis in derivative assets and derivative liabilities in the consolidated statements of financial condition. Net gains and losses on these contracts are reported in investment and other income (loss) in the consolidated statements of operations. The Company recorded net losses of $3.7 million and $8.4 million, respectively, on these contracts for the three and nine months ended September 30, 2016. The Company did not record a gain or loss for the three and nine months ended September 30, 2015. The Company may use these derivatives for risk management purposes but does not designate the contracts as hedges for accounting purposes. The Company had $6.9 million and $4.3 million, respectively, of derivative assets outstanding as of September 30, 2016 and December 31, 2015. As of September 30, 2016 and December 31, 2015, the Company had $15.5 million and $5.5 million, respectively, of derivative liabilities outstanding.

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(5)Consolidated Funds and Partnership Investments

Presented below are the underlying assets and liabilities of the funds and partnership investments that the Company reports on a consolidated basis, as well as partnership investments that the Company accounts for under the equity method. These investments are presented as consolidated funds and partnership investments and liabilities of consolidated funds and partnership investments, respectively, in its consolidated statements of financial condition as of September 30, 2016 and December 31, 2015.



(in thousands)	September 30, 2016
	Consolidated Funds			Partnership Investments			Total
Assets
Securities owned	$	441,413		$	115,839		$	557,252
Cash and cash equivalents	15,151			6,265			21,416
Receivables for securities sold	20,189			—			20,189
Other current assets	1,599			261			1,860
Exchange-traded option contracts	2,111			214			2,325
Total assets of consolidated funds and partnership investments	$	480,463		$	122,579		$	603,042
Liabilities
Payables on redemptions	$	(933	)	$	—		$	(933	)
Payables for securities purchased	(10,369		)	—			(10,369		)
Securities sold not yet purchased	(22		)	—			(22		)
Accrued expenses and other current liabilities	(1,357		)	(315		)	(1,672		)
Exchange-traded option contracts	(775		)	—			(775		)
Total liabilities of consolidated funds and partnership investments	$	(13,456	)	$	(315	)	$	(13,771	)

Equity method investment in partnerships	$	—		$	20		$	20



(in thousands)	December 31, 2015
	Consolidated Funds		Partnership Investments			Total
Assets
Securities owned	$	—	$	106,667		$	106,667
Cash and cash equivalents	—		5,356			5,356
Other current assets	—		500			500
Exchange-traded option contracts	—		87			87
Total assets of consolidated partnership investments	$	—	$	112,610		$	112,610
Liabilities
Accrued expenses and other current liabilities	—		(75		)	(75		)
Total	$	—	$	(75	)	$	(75	)

Equity method investment in partnerships	$	—	$	30		$	30

The open-end funds included in the Company's consolidated financial statements are generally those products for which it provided initial seed capital at the time of their formation and for which the Company has a controlling interest. The Company's U.S. regulated open-end funds are considered voting interest entities while those regulated outside the U.S. are considered variable interest entities. The Company is required to recognize the valuation changes associated with all underlying investments held by these funds in its consolidated financial statements of operations, and disclose the portion attributable to third party investors as net income attributable to redeemable non-controlling interests.

Calamos Investments, through its wholly-owned subsidiaries and affiliates, is indirectly the general partner and controls the operations of Calamos Global Opportunities Fund LP. This investment is presented as a consolidated partnership in the table above.

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Profits and losses are allocated to the general partner and limited partners in proportion to their ownership interests at the beginning of each month. Partners' admissions, additional contributions and withdrawals are permitted on a monthly basis.

(6)Fair Value Measurements

The Company utilizes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1 — observable inputs such as quoted prices for identical assets and liabilities in active markets; Level 2 — inputs, other than the quoted prices in active markets, that are observable either directly or indirectly (including quoted prices of similar securities, interest rates, credit risk, fair value adjustments to quoted foreign securities, etc.); and Level 3 — unobservable inputs in which there is little or no market data, and require the reporting entity to develop its own assumptions. For each period presented, the Company did not have any assets or liabilities measured at fair value using Level 3 measurements. Transfers between levels are measured at the end of the reporting period. The Company had no transfers between levels during the period.

Investments are presented in the consolidated financial statements at fair value in accordance with GAAP. Investments in open-end funds are stated at fair value based on end of day published net asset values of shares owned by the Company. The fair value of investment securities and consolidated funds, net of redeemable non-controlling interest, in open-end funds was $180.5 million and $228.1 million at September 30, 2016 and December 31, 2015, respectively. There are no unfunded commitments related to these investments. These investments may be redeemed daily with a redemption notice period of up to seven days. Investments in securities traded on a national securities exchange are stated at the last reported sales price on the day of valuation. Other securities, including derivatives, traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated at the last quoted bid price. However, short sales positions and call options written are reported at the last quoted ask price. Convertible bonds, fixed income securities and other securities for which quotations are not readily available are valued at fair value based on observable inputs such as market prices for similar instruments as validated by third party pricing agencies and the Company’s prime broker. Debt securities are valued based upon prices received from an independent pricing service or from a dealer or broker who makes markets in such securities. Pricing services utilize various observable market data and as such, debt securities are generally categorized as Level 2.

The following tables provide the hierarchy of inputs used to derive the fair value of the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015. Foreign currency contracts are carried in the Company's consolidated funds and partnership investments and are presented on a net basis where the right of offset exists, and had an insignificant impact for the periods presented.

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)



				Fair Value Measurements Using
(in thousands) Description	September 30, 2016			Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)
Cash and cash equivalents
Money market funds	$	5,296		$	5,296		$	—
Investment securities (Note 3)
Funds
U.S. Equity	2,382			2,382			—
Global Equity	16,321			16,321			—
Convertible	1,970			1,970			—
Fixed Income	5,930			525			5,405
Alternative	8,836			8,836			—
Multi-Strategy	22,147			22,147			—
Total Funds	57,586			52,181			5,405
Common stock	374			374			—
Total investment securities	57,960			52,555			5,405
Derivative assets (Note 4)
Exchange-traded option contracts	6,904			6,904			—
Securities and derivative assets owned by consolidated funds and partnership investments (Note 5)
Common stocks	314,589			189,952			124,637
Preferred stocks	40,173			31,976			8,197
Convertible bonds	174,805			—			174,805
Corporate bonds	27,685			—			27,685
Money market funds	14,327			14,327			—
Exchange-traded option contracts	2,325			2,325			—
Total securities and derivative assets owned by consolidated funds and partnership investments	573,904			238,580			335,324
Derivative liabilities (Note 4)
Exchange-traded option contracts	(15,486		)	(15,486		)	—
Derivative liabilities owned by consolidated funds (Note 5)
Exchange-traded option contracts	(775		)	(775		)	—
Total	$	627,803		$	287,074		$	340,729

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)



				Fair Value Measurements Using
(in thousands) Description	December 31, 2015			Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)
Cash and cash equivalents
Money market funds	$	25,240		$	25,240		$	—
Investment securities (Note 3)
Funds
U.S. Equity	70,425			70,425			—
Global Equity	133,954			133,954			—
Convertible	5,079			5,079			—
Fixed Income	16,965			12,097			4,868
Alternative	14,087			14,087			—
Multi-Strategy	16,225			16,225			—
Total Funds	256,735			251,867			4,868
Common stock	322			322			—
Total investment securities	257,057			252,189			4,868
Derivative assets (Note 4)
Exchange-traded option contracts	4,311			4,311			—
Securities and derivatives owned by partnership investments (Note 5)
Common stocks	53,467			27,899			25,568
Preferred stocks	3,875			3,875			—
Convertible bonds	48,369			—			48,369
Corporate bonds	957			—			957
Money market funds	5,309			5,309			—
Exchange-traded option contracts	87			87			—
Total securities and derivatives owned by partnership investments	112,064			37,170			74,894
Derivative liabilities (Note 4)
Exchange-traded option contracts	(5,475		)	(5,475		)	—
Total	$	393,197		$	313,435		$	79,762

The fair value of the Company’s long-term debt, which had a total carrying value of $46.0 million at December 31, 2015, was approximately $51.6 million, calculated using discounted cash flows based on the Company's incremental borrowing rates and market inputs for similar bonds. The fair value of the debt was based on Level 2 inputs within the fair value hierarchy. The Company repaid its long-term debt on July 28, 2016 and incurred debt extinguishment costs of $4.9 million, included in non-operating income (loss).

The fair value and carrying value of the Company's contingent consideration at September 30, 2016 and December 31, 2015, was $409,000 and $998,000, respectively. This contingent consideration is associated with the Company's purchase of Phineus Partners LP in 2015, reported in other current and non-current liabilities in the consolidated statements of financial condition. For the three months ended September 30, 2016, the change in the fair value of the contingent consideration is not material, and is included in other income in the consolidated statements of operations. The fair value of the contingent consideration is based on Level 3 unobservable inputs within the fair value hierarchy as it is calculated using certain assumptions regarding business performance and probability of payment.

The carrying value of all other financial instruments approximates fair value due to the short maturities of these financial instruments.

(7)Loans Payable

The Company has access to margin loans for the settlement of option liabilities, as well as an additional source of liquidity. The interest rate that can be charged on margin loans is 1.75% per annum, based on the brokerage firm’s lending rate. These loans are due on demand. The Company had no margin loan balances outstanding at September 30, 2016 and December 31, 2015.

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(8)Stock-Based Compensation

Under the Company’s incentive compensation plan, certain employees of the Company receive stock-based compensation comprised of stock options and restricted stock units (“RSUs”). Historically, RSUs have been settled with newly issued shares so that no cash was used by the Company to settle awards; however, the Company may also use treasury shares upon the exercise of stock options and upon conversion of RSUs. The Company’s Annual Report on Form 10-K for the year ended December 31, 2015 provides details of this plan and its provisions.

During the nine months ended September 30, 2016, the Company granted 2,364,892 RSUs and there were 158,768 RSUs forfeited. The RSUs granted in the first nine months of 2016, included awards to key investment personnel and officers as part of a strategic plan to promote retention and succession planning. During the same period, the Company granted no stock options and there were 299,412 stock options forfeited.

During the nine months ended September 30, 2016, 478,173 RSUs vested with 116,494 units withheld for taxes and 361,679 RSUs converted into an equal number of shares of CAM’s Class A common stock. The total intrinsic value and the fair value of the converted shares was $3.1 million. The total tax benefit realized in connection with the vesting of the RSUs during the nine months ended September 30, 2016 was $412,000, as the Company receives tax benefits based upon the portion of Calamos Investments’ expense that it recognizes.

During the nine months ended September 30, 2016 and 2015, compensation expense recorded in connection with the RSUs and stock options was $5.7 million and $4.7 million, respectively, of which $1.3 million and $1.0 million, respectively, was credited as additional paid-in capital after giving effect to the non-controlling interests. The amount of deferred tax asset created was $467,000 and $382,000 during the nine months ended September 30, 2016 and 2015, respectively. As of September 30, 2016, $21.1 million of total unrecognized compensation expense related to unvested stock option and RSU awards is expected to be recognized over a weighted-average period of 4.0 years.

(9)Non-Operating Income (Loss)

Non-operating income (loss) was comprised of the following components for the three and nine months ended September 30, 2016 and 2015:



	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2016			2015			2016			2015
Interest income	$	58		$	49		$	194		$	138
Interest expense	(238		)	(766		)	(1,766		)	(2,306		)
Net interest expense	(180		)	(717		)	(1,572		)	(2,168		)

Debt extinguishment costs	(4,867		)	—			(4,867		)	—

Investment income (loss)	29,542			(11,332		)	17,147			(5,565		)
Dividend income	605			322			1,663			848
Miscellaneous other income	27			13			64			149
Investment and other income (loss)	30,174			(10,997		)	18,874			(4,568		)
Non-operating income (loss)	$	25,127		$	(11,714	)	$	12,435		$	(6,736	)

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(10)Income Taxes

Calamos Investments is subject to certain income-based state taxes; therefore, income taxes reflect not only the portion attributed to CAM stockholders but also a portion of income taxes attributable to non-controlling interests.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
(in thousands)
Income tax provision (benefit)	$	796		$	(46	)	$	1,715		$	1,694
Income tax (provision) benefit attributable to non-controlling interest in Calamos Investments	9			3			(26		)	(28		)
Income tax provision (benefit) attributable to CAM	805			(43		)	1,689			1,666
Net income attributable to CAM	1,167			363			69			2,497
Income before taxes attributable to CAM	$	1,972		$	320		$	1,758		$	4,163
CAM’s effective income tax rate	40.8		%	(13.4		)%	*			40.0		%

________________

* Not meaningful

CAM's effective income tax rate was 40.8% for the third quarter of 2016, compared with (13.4)% for the third quarter of 2015. For the first nine months of 2016, CAM's income tax provision was consistent with income before income tax provision attributable to CAM, resulting in an income tax rate that was not meaningful. The income tax provision for the first nine months of 2016 included $964,000 of deferred tax expense related to expired employee stock options and an allowance for employee stock options expected to expire in future periods. As of September 30, 2016, the Company's valuation allowance on this deferred tax asset was $628,000. Excluding the deferred tax valuation allowance and deferred tax expense related to expired employee stock options, CAM's effective income tax rate would be 41.2% for the first nine months of 2016. CAM's effective income tax rate was 40.0% for the first nine months of 2015, a result of $238,000 of deferred tax expense related to expired employee options in the prior year.

On January 1, 2016 the Company early adopted Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires that deferred tax liabilities and assets be classified as non-current on the balance sheet. The Company has applied the requirements of this standard prospectively, which resulted in the reclassification of $8.3 million from current deferred tax assets to non-current deferred tax assets in the consolidated statements of financial condition as of January 1, 2016.

(11)Earnings Per Share

The following table reflects the calculation of basic and diluted earnings per share:



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2016		2015		2016		2015
Earnings per share – basic:
Earnings available to common shareholders	$	1,167	$	363	$	69	$	2,497
Weighted average shares outstanding	16,751,609		17,316,823		16,744,592		17,657,669
Earnings per share – basic	$	0.07	$	0.02	$	—	$	0.14
Earnings per share – diluted:
Earnings available to common shareholders	$	1,167	$	363	$	69	$	2,497
Weighted average shares outstanding	16,751,609		17,316,823		16,744,592		17,657,669
Dilutive impact of restricted stock units	385,628		892,027		350,101		787,855
Weighted average shares outstanding	17,137,237		18,208,850		17,094,693		18,445,524
Earnings per share – diluted	$	0.07	$	0.02	$	—	$	0.14

When dilutive, diluted shares outstanding are calculated (a) assuming that Calamos Interests exchanged all of their ownership interest in Calamos Investments and their CAM Class B common stock for shares of CAM’s Class A common stock (the "Exchange")

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

and (b) including the effect of outstanding dilutive equity incentive compensation awards. As of September 30, 2016, and 2015, the impact of the Exchange was anti-dilutive and, therefore, excluded from the calculation of diluted earnings per share.

The Company uses the treasury stock method to reflect the dilutive effect of unvested RSUs and unexercised stock options on diluted earnings (loss) per share. Under the treasury stock method, if the average market price of common stock increases above the option’s exercise price, the proceeds that would be assumed to be realized from the exercise of the option would be used to acquire outstanding shares of common stock. However, the awards may be anti-dilutive even when the market price of the underlying stock exceeds the option’s exercise price. This result is possible because compensation cost attributed to future services and not yet recognized is included as a component of the assumed proceeds upon exercise. The dilutive effect of such options and RSUs would increase the weighted average number of shares used in the calculation of diluted earnings per share.

The Company amended its certificate of incorporation requiring that the Exchange be based on a fair value approach (details of the amendment are set forth in the Company’s Schedule 14C filed with the Securities and Exchange Commission on January 12, 2009). The amendment results in the same or fewer shares of Class A common stock being issuable at the time of the Exchange.

The shares issuable upon the Exchange as presented are estimated solely on the formula as described in Schedule 14C that does not necessarily reflect all inputs used in a fair valuation. It is critical to note that this formula does not incorporate certain economic factors and as such, in the event of an actual Exchange, the majority of the Company’s independent directors may determine the fair market value of CAM’s net assets and its ownership in Calamos Investments. For example, premiums and/or discounts for control and marketability as well as a different discount rate for future cash flows may be applied. Therefore, the directors’ valuation may result in the actual number of shares being materially different from the shares presented. Further, based upon currently available information, the Company believes it is unlikely that any Exchange would transpire without a fair market valuation of CAM’s net assets and possibly an agreement by Calamos Interests to Exchange, based upon that fair market valuation.

The following table shows the number of shares which were excluded from the computation of diluted earnings per share as they were anti-dilutive:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Shares of Class A common stock issuable upon an Exchange of Calamos Interests’ ownership in Calamos Investments*	—	11,665,798	—	11,665,798
Restricted stock units	2,839,205	—	1,965,985	11,874
Stock options	849,073	1,148,485	849,073	1,148,485
Total	3,688,278	12,814,283	2,815,058	12,826,157

* Number of shares calculated with the value of Calamos Investments determined by using the closing price of our shares as of September 30, 2016 ($6.82) and September 30, 2015 ($9.48) as well as assuming said closing prices fully reflect all of CAM's assets; including the application of a 12% discount rate to certain deferred tax assets at each of September 30, 2016 and 2015. The value of Calamos Investments is then multiplied by Calamos Interests' percentage ownership in Calamos Investments, with the result divided by the applicable period-end closing price. See Note 2, Summary of Significant Accounting Policies - Principles of Consolidation, for a description of certain assets owned by CAM.

(12)Commitments and Contingencies

In the normal course of business, the Company may be party to various legal proceedings from time to time. Management believes that a current complaint filed against CAL and CFS, alleging breaches of fiduciary duties with respect to the receipt of advisory, distribution and servicing fees paid by an open-end investment company advised by CAL, is without merit and CAL and CFS intend to defend themselves vigorously against the allegations. Currently, management believes that the ultimate resolution of this complaint will not materially affect the Company’s business, financial position or results of operations and that the likelihood of a material adverse impact is remote.

(13)Recently Issued Accounting Pronouncements

The Company has reviewed all newly issued accounting pronouncements that are applicable to its business and to the preparation of its consolidated financial statements, including those not yet required to be adopted. Accounting guidance that will become effective in future years, with respect to the Company’s consolidated financial statements, is described below:

In March 2016, the FASB issued an accounting update related to employee share-based payment accounting. The amendment includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in

CALAMOS ASSET MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

the financial statements, including: income tax effects of share-based payments, minimum statutory tax withholding requirements and forfeitures. The amendment is effective for annual and interim periods beginning after December 15, 2016. The provisions may be applied using various transition approaches, including prospective, retrospective and modified retrospective. The Company is evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In February 2016, the FASB issued an accounting update related to the accounting for leases. Under the new guidance, lessees will be required to recognize a right-of-use asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term, and a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis. This guidance is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance on its results of operations, cash flows and financial position.

In January 2016, the FASB issued an accounting update that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The new guidance will require the change in fair value of equity instruments with readily determinable fair values to be recognized through the statements of operations. This guidance is effective for annual and interim periods beginning after December 15, 2017, and requires a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Early adoption is not permitted. The Company is currently evaluating the full impact of the standard, however, upon adoption the change in the fair value of available-for-sale securities will be recognized in the consolidated statements of operations instead of accumulated other comprehensive income on the statements of financial position.

In May 2014, the FASB issued new guidance on revenue from contracts with customers. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB decided to defer the effective date of the new revenue guidance by one year to annual reporting periods beginning after December 15, 2017, with early adoption being permitted for annual periods beginning after December 15, 2016. The Company's effective date is January 1, 2018. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on its results of operations, cash flows or financial position.

(14)Subsequent Event

The Company has received notice that one account, representing approximately $1.1 billion, or 5%, of our total assets under management at September 30, 2016, will be terminated in the fourth quarter of 2016.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a firm of 335 full-time associates that primarily provides investment advisory services to institutions and individuals, managing and servicing $20.1 billion and $22.5 billion in assets under management as of September 30, 2016 and 2015, respectively. Assets under management do not include assets under advisement of $460 million and $612 million as of September 30, 2016 and 2015, respectively, for which the Company provides model portfolio design and oversight.

Our operating results fluctuate primarily due to changes in the total value and composition of our assets under management. The value and composition of our assets under management are, and will continue to be, influenced by a variety of factors including: purchases and redemptions of shares of open-end funds; net inflows into and withdrawals from separate accounts that we manage; fluctuations in the financial markets around the world that result in appreciation or depreciation of assets under management; and the number and types of our investment strategies and products. We routinely experience inflows and outflows in our assets under management. We have received notice that one account, representing approximately $1.1 billion, or 5%, of our total assets under management at September 30, 2016, will be terminated in the fourth quarter of this year. The expected impact of this termination on annual revenue, if not replaced, is approximately $4.8 million. Based on our current pipeline and preliminary discussions with prospective new accounts, we see the potential to completely replace this lost revenue, starting with expected new awards in the first quarter of 2017.

We market our investment strategies to our clients through a variety of products designed to suit their investment needs. We currently categorize the portfolios that we manage within four investment product types captured in our funds and separate accounts. The following table lists our assets under management by product as of September 30, 2016 and 2015.



	September 30,
(in millions)	2016		2015
Funds
Open-end funds	$	10,958	$	12,513
Closed-end funds	6,230		6,399
Total funds	17,188		18,912
Separate Accounts
Institutional accounts	1,682		2,525
Managed accounts	1,198		1,017
Total separate accounts	2,880		3,542
Total assets under management	$	20,068	$	22,454

Our revenues are substantially comprised of investment management fees earned under contracts with funds and separate accounts that we manage or service. Our revenues are also comprised of distribution and underwriting fees, including asset-based distribution and/or service fees received pursuant to Rule 12b-1 plans. Investment management fees and distribution and underwriting fees may fluctuate based on a number of factors including: the total value and composition of our assets under management; market appreciation and depreciation on investments; the level of net inflows and outflows, which represent the sum of new and existing client funding, withdrawals and terminations; and purchases and redemptions of open-end fund shares. The mix of assets under management among our investment products impacts our revenues as our fee schedules vary by product.

Our largest operating expenses are typically related to: employee compensation and benefits expenses, which include salaries, incentive compensation and related benefits costs; distribution expenses, which include open-end funds distribution costs (such as Rule 12b-1 payments) and amortization of deferred sales commissions; and marketing and sales promotion expenses, which include expenses necessary to market products offered by us. Operating expenses may fluctuate due to a number of factors including variations in staffing and compensation, changes in distribution expense as a result of fluctuations in open-end fund net sales and market appreciation or depreciation, and marketing-related expenses that include supplemental distribution payments.

Operating Results

Third Quarter and Nine Months Ended September 30, 2016 Compared with Third Quarter and Nine Months Ended September 30, 2015

Assets Under Management

Assets under management were $20.1 billion and $22.5 billion as of September 30, 2016 and 2015, respectively, and consisted of 86% funds and 14% separate accounts as of September 30, 2016, and 84% funds and 16% separate accounts as of September 30, 2015.



	Three Months Ended September 30,										Nine Months Ended September 30,
							Change										Change
(in millions)	2016			2015			Amount			Percent	2016			2015			Amount			Percent
Open-end Funds
Beginning assets under management	$	11,221		$	13,863		$	(2,642	)	(19)%	$	12,172		$	14,790		$	(2,618	)	(18)%
Sales	543			620			(77		)	(12)	1,786			1,919			(133		)	(7)
Redemptions	(1,194		)	(1,220		)	26			2	(3,291		)	(3,866		)	575			15
Market appreciation (depreciation)	388			(750		)	1,138			*	291			(330		)	621			*
Ending assets under management	10,958			12,513			(1,555		)	(12)	10,958			12,513			(1,555		)	(12)
Average assets under management	11,201			13,324			(2,123		)	(16)	11,351			14,040			(2,689		)	(19)
Closed-end Funds
Beginning assets under management	6,062			6,977			(915		)	(13)	6,346			6,211			135			2
Sales	—			10			(10		)	*	—			805			(805		)	*
Redemptions	—			(29		)	29			*	(166		)	(29		)	(137		)	*
Market appreciation (depreciation)	168			(559		)	727			*	50			(588		)	638			*
Ending assets under management	6,230			6,399			(169		)	(3)	6,230			6,399			(169		)	(3)
Average assets under management	6,184			6,809			(625		)	(9)	6,064			6,694			(630		)	(9)
Institutional Accounts
Beginning assets under management	1,729			2,583			(854		)	(33)	2,309			1,576			733			47
Sales	2			229			(227		)	(99)	183			1,382			(1,199		)	(87)
Redemptions	(125		)	(93		)	(32		)	(34)	(784		)	(321		)	(463		)	*
Market appreciation (depreciation)	76			(194		)	270			*	(26		)	(112		)	86			77
Ending assets under management	1,682			2,525			(843		)	(33)	1,682			2,525			(843		)	(33)
Average assets under management	1,728			2,603			(875		)	(34)	1,974			2,306			(332		)	(14)
Managed Accounts
Beginning assets under management	1,137			1,009			128			13	1,081			929			152			16
Sales	90			86			4			5	231			227			4			2
Redemptions	(62		)	(39		)	(23		)	(59)	(143		)	(119		)	(24		)	(20)
Market appreciation (depreciation)	33			(39		)	72			*	29			(20		)	49			*
Ending assets under management	1,198			1,017			181			18	1,198			1,017			181			18
Average assets under management	1,170			1,010			160			16	1,117			987			130			13
Total Assets Under Management
Beginning assets under management	20,149			24,432			(4,283		)	(18)	21,908			23,506			(1,598		)	(7)
Sales	635			945			(310		)	(33)	2,200			4,333			(2,133		)	(49)
Redemptions	(1,381		)	(1,381		)	—			—	(4,384		)	(4,335		)	(49		)	(1)
Market appreciation (depreciation)	665			(1,542		)	2,207			*	344			(1,050		)	1,394			*
Ending assets under management	20,068			22,454			(2,386		)	(11)	20,068			22,454			(2,386		)	(11)
Average assets under management	$	20,283		$	23,746		$	(3,463	)	(15)%	$	20,506		$	24,027		$	(3,521	)	(15)%

________________

* Not meaningful

Fund sales in the third quarter and first nine months of 2016 were primarily due to our alternative, U.S. equity, and global equity strategies, but were not sufficient to overcome the aggregate outflows sustained from redemptions in these strategies. Net redemptions in our funds were $651 million in the third quarter of 2016, compared with net redemptions of $619 million in the third quarter of 2015. Market appreciation in our funds was $556 million in the third quarter of 2016, compared with market depreciation of $1.3 billion in the third quarter of 2015. Net redemptions in our funds of $1.7 billion for the first nine months of 2016, represent an unfavorable change of $500 million from net redemptions of $1.2 billion for the first nine months of 2015. Market appreciation in our funds totaled $341 million in the first nine months of 2016, compared with depreciation of $918 million in the first nine months of 2015.

Separate accounts, which represent accounts we manage for both institutions and individuals, combined net redemptions were $95 million in the third quarter of 2016, compared with net sales of $183 million in the third quarter of 2015. Institutional net

redemptions were $123 million in the third quarter of 2016, driven primarily from U.S. equity strategies, compared with net sales of $136 million in the third quarter of 2015. Managed account net sales were $28 million in the third quarter of 2016, compared with net sales of $47 million in the third quarter of 2015. Separate account combined appreciation in the third quarter of 2016 was $109 million, compared with depreciation of $233 million in the third quarter of 2015.

Separate account net redemptions in the first nine months of 2016 were $513 million, compared with net sales of $1.2 billion in the first nine months of 2015. Institutional net redemptions were $601 million in the first nine months of 2016, compared with net sales of $1.1 billion in the first nine months of 2015. Managed account net sales were $88 million in the first nine months of 2016, compared with net sales of $108 million in the first nine months of 2015. Separate account combined appreciation in the first nine months of 2016 was $3 million, compared with depreciation of $132 million in the first nine months of 2015.

Financial Overview



	Three Months Ended September 30,											Nine Months Ended September 30,
							Change											Change
	2016			2015			Amount			Percent		2016			2015			Amount			Percent
(in thousands, except margin)
Operating income	$	4,105		$	8,627		$	(4,522	)	(52	)%	$	10,911		$	21,214		$	(10,303	)	(49	)%
Operating margin	8.5		%	15.0		%	(6.5		)%	(43	)%	7.5		%	12.1		%	(4.6		)%	(38	)%
Net income attributable to Calamos Asset Management, Inc.	$	1,167		$	363		$	804		*		$	69		$	2,497		$	(2,428	)	(97	)%

________________

* Not meaningful

Operating income for the third quarter of 2016 was $4.1 million, compared with $8.6 million for the third quarter of 2015. Operating margin for the third quarter of 2016 decreased to 8.5% from 15.0% for the third quarter of 2015. The decrease in both operating income and operating margin for the third quarter of 2016 was primarily due to the decrease in investment management fees. Operating income for the first nine months of 2016 decreased to $10.9 million from $21.2 million for the same period a year ago. Operating margin was 7.5% for the first nine months of 2016, compared with 12.1% for the first nine months of 2015. The decrease in both operating income and operating margin for the first nine months of 2016 was primarily attributable to the decrease in investment management fees, partially offset by the closed-end fund launch expenses of $11.5 million in the prior year.

Revenues

Total revenues decreased by $9.3 million, or 16%, to $48.3 million for the third quarter of 2016 from $57.6 million for the third quarter of 2015. Total revenues decreased by $30.3 million, or 17%, to $145.1 million for the first nine months of 2016, from $175.4 million for the first nine months of 2015. The decrease was primarily due to lower investment management fees and distribution and underwriting fees.



	Three Months Ended September 30,									Nine Months Ended September 30,
					Change									Change
(in thousands)	2016		2015		Amount			Percent		2016		2015		Amount			Percent
Investment management fees	$	39,725	$	46,738	$	(7,013	)	(15	)%	$	118,725	$	141,648	$	(22,923	)	(16	)%
Distribution and underwriting fees	8,055		10,264		(2,209		)	(22	)%	24,764		31,858		(7,094		)	(22	)%
Other	537		616		(79		)	(13	)%	1,603		1,880		(277		)	(15	)%
Total revenues	$	48,317	$	57,618	$	(9,301	)	(16	)%	$	145,092	$	175,386	$	(30,294	)	(17	)%

Investment management fees decreased by15% in the third quarter of 2016 compared with the third quarter of 2015, which was primarily due to a $3.5 billion, or 15%, decrease in average assets under management for the same period. Investment management fees from open-end funds decreased by 20% to $20.7 million for the third quarter of 2016, from $25.8 million for the third quarter of 2015, driven by a 16% decrease in average open-end fund assets. Investment management fees from our closed-end funds decreased by 9% to $14.4 million for the third quarter of 2016, from $15.9 million for the third quarter of 2015, due to a 9% decrease in average closed-end fund assets. Investment management fees from our separately managed accounts decreased by 8% to $4.3 million for the third quarter of 2016, from $4.6 million for the third quarter of 2015, due to a 20% decrease in average separately managed accounts assets under management. Investment management fees that we earned as a percentage of average assets under management for the third quarter of 2016 were 0.78%, compared with 0.77% for the third quarter of 2015. Investment management fees from assets under advisement for which we provide model portfolio design and oversight were $320,000 for

the third quarter of 2016, compared with $475,000 for the third quarter of 2015. Investment management fees that we earned for assets under advisement for the third quarter of 2016 and 2015 were 0.30%.

Investment management fees decreased by 16% in the first nine months of 2016 compared with the first nine months of 2015, which was primarily due to a $3.5 billion, or 15%, decrease in average assets under management for the same period. Investment management fees from open-end funds decreased by 22% to $62.5 million for the first nine months of 2016, from $80.6 million for the first nine months of 2015, driven by a 19% decrease in average open-end fund assets. Investment management fees from our closed-end funds decreased by 9% to $42.1 million for the first nine months of 2016, from $46.1 million for the first nine months of 2015, due to a 9% decrease in average closed-end fund assets. Investment management fees from our separately managed accounts decreased by 4% to $12.9 million for the first nine months of 2016, from $13.4 million for the first nine months of 2015, due to a 6% decrease in average separately managed accounts assets under management. Investment management fees that we earned as a percentage of average assets under management for the first nine months of 2016 were 0.77%, compared with 0.78% for the first nine months of 2015. Investment management fees from assets under advisement for which we provide model portfolio design and oversight were $1.2 million for the first nine months of 2016, compared with $1.5 million for the first nine months of 2015. Investment management fees that we earned for assets under advisement for the first nine months of 2016 and 2015 were 0.30%.

Distribution and underwriting fees decreased by 22%, or $2.2 million, to $8.1 million for the third quarter of 2016. Distribution and underwriting fees decreased by 22%, or $7.1 million, to $24.8 million for the first nine months of 2016, compared with the first nine months of 2015. The decrease was primarily due to a shift in open-end fund assets from Class A, B and C shares to Class I shares. More open-end fund investors are choosing to compensate their financial advisors through fee-based models, increasing the demand for and a shift towards our Class I shares. Because we do not collect distribution fees from Class I shares, our distribution revenue has decreased with this shift in assets. For the third quarter and first nine months of 2016, average open-end fund assets decreased by 16% and 19%, respectively, across most share classes, compared with the third quarter and first nine months of 2015. The decrease in average open-end fund assets when compared with the prior year period is largely due to net redemptions in our U.S. equity and alternative strategies.

Operating Expenses

Operating expenses decreased by $4.8 million and $20.0 million for the third quarter and first nine months of 2016, respectively, from the third quarter and first nine months of 2015. The third quarter of 2016 reflected decreases in distribution expenses, general and administrative, marketing and sales promotion expenses, and employee compensation and benefits expenses. For the first nine months of 2016 decreases in marketing and sales promotion expenses, distribution expenses, and general and administrative expenses were offset by an increase in employee compensation and benefits expenses. The first nine months of 2015 included $11.5 million of expenses related to the launch of a new closed-end fund, comprised of $10.0 million of marketing and sales promotion expenses and $1.5 million of employee compensation and benefits expenses.



	Three Months Ended September 30,								Nine Months Ended September 30,
					Change								Change
(in thousands)	2016		2015		Amount			Percent	2016		2015		Amount			Percent
Employee compensation and benefits	$	23,679	$	23,891	$	(212	)	(1)%	$	73,096	$	70,613	$	2,483		4%
Distribution expenses	8,008		10,172		(2,164		)	(21)%	24,760		31,178		(6,418		)	(21)%
Marketing and sales promotion	3,419		4,063		(644		)	(16)%	9,330		21,798		(12,468		)	(57)%
General and administrative	9,106		10,865		(1,759		)	(16)%	26,995		30,583		(3,588		)	(12)%
Total operating expenses	$	44,212	$	48,991	$	(4,779	)	(10)%	$	134,181	$	154,172	$	(19,991	)	(13)%

Employee compensation and benefits expenses decreased by $212,000 and increased by $2.5 million for the third quarter and first nine months of 2016, respectively, when compared with the third quarter and first nine months of 2015. The decrease in the third quarter of 2016 is primarily due to lower incentive compensation expenses. The increase in the first nine months of 2016 is primarily due to increases in equity compensation expenses, offset by decreases in salary and related benefits expenses and incentive compensation expenses. The increase in equity compensation expenses for the first nine months of 2016 is primarily a result of short-term and long-term equity awards to key investment personnel and officers. These awards are part of a strategic plan to promote retention and succession planning. The first nine months of 2015 included incentive compensation expenses related to the launch of a new closed-end fund.

Distribution expenses decreased by $2.2 million and $6.4 million for the third quarter and first nine months of 2016, respectively, when compared with the third quarter and first nine months of 2015. The decreases are primarily due to a shift of average open-end fund assets to Class I shares which do not result in distribution expenses.

Marketing and sales promotion expenses decreased by $644,000 and $12.5 million for the third quarter and first nine months of 2016, respectively, when compared with the third quarter and first nine months of 2015. The decrease in the third quarter of 2016 is primarily due to lower reimbursements of fund operating expenses that are above the expense cap, and lower supplemental distribution payments to distribution intermediaries. The decrease in the first nine months of 2016 is largely the result of the launch of a new closed-end fund in the first quarter of 2015, lower reimbursements of fund operating expenses that are above the expense cap, and lower supplemental distribution payments to distribution intermediaries.

General and administrative expenses decreased by $1.8 million and $3.6 million for the third quarter and first nine months of 2016, respectively, when compared with the third quarter and first nine months of 2015. The decrease in the third quarter of 2016 is primarily due to lower professional services expenses and travel and entertainment expenses. The decrease in the first nine months of 2016 is due to reductions in professional services expenses, travel and entertainment expenses, occupancy-related costs, and depreciation expenses.

Non-Operating Activities, Net of Redeemable Non-controlling Interest in Consolidated Funds and Partnership Investments

Non-operating income (loss), net of redeemable non-controlling interest in consolidated funds and partnership investments increased by $11.8 million and $941,000 for the third quarter and first nine months of 2016, respectively, when compared with the third quarter and first nine months of 2015. The increase in the third quarter of 2016 included an increase in investment income of $40.9 million offset by an increase in net income attributable to redeemable non-controlling interest in consolidated funds and partnership investments of $25.0 million and $4.9 million in debt extinguishment costs related to the repayment of long-term debt on July 28, 2016. The increase in the first nine months of 2016, compared with the first nine months of 2015, was due to increases in investment income of $22.7 million and dividend income of $815,000, and a decrease in interest expense of $596,000, offset by an increase in net income attributable to redeemable non-controlling interest in consolidated funds and partnership investments of $18.2 million and $4.9 million in debt extinguishment costs related to the repayment of long-term debt. The increase in investment income for the nine months ended September 30, 2016, when compared with the same period in 2015, was mainly due to the consolidation of funds from the adoption of a new accounting pronouncement and realized and unrealized gains from investment securities offset by option contract losses within the Company's investment portfolio.

The following table summarizes our non-operating activities, net of redeemable non-controlling interest in consolidated funds and partnership investments for the third quarter and nine months ended September 30, 2016 and 2015:



	Three Months Ended September 30,									Nine Months Ended September 30,
(in thousands)	2016			2015			Change			2016			2015			Change
Interest income	$	58		$	49		$	9		$	194		$	138		$	56
Interest expense	(238		)	(766		)	528			(1,766		)	(2,306		)	540
Net interest expense	(180		)	(717		)	537			(1,572		)	(2,168		)	596

Debt extinguishment costs	(4,867		)	—			(4,867		)	(4,867		)	—			(4,867		)

Investment income (loss)	29,542			(11,332		)	40,874			17,147			(5,565		)	22,712
Dividend income	605			322			283			1,663			848			815
Miscellaneous other income	27			13			14			64			149			(85		)
Investment and other income (loss)	30,174			(10,997		)	41,171			18,874			(4,568		)	23,442
Non-operating income (loss), GAAP basis	25,127			(11,714		)	36,841			12,435			(6,736		)	19,171
Net (income) loss attributable to redeemable non-controlling interest in consolidated funds and partnership investments	(20,706		)	4,298			(25,004		)	(16,486		)	1,744			(18,230		)
Non-operating income (loss), net of redeemable non-controlling interest in consolidated funds and partnership investments, non-GAAP basis ⁽¹⁾	$	4,421		$	(7,416	)	$	11,837		$	(4,051	)	$	(4,992	)	$	941

________________


⁽¹⁾	Non-operating income (loss), net of redeemable non-controlling interest in consolidated funds and partnership investments is a non-GAAP financial measure. Management believes this measure provides comparability of this information among reporting periods and is an effective measure for reviewing the Company’s non-operating contribution to its results.

The following table provides a summary of the returns that we generated from our corporate investment portfolio. This table combines the investment and dividend income as reported in our consolidated statements of operations with the change in fair value of our investment securities that are recorded in accumulated other comprehensive income (loss), a component of equity, for the third quarter and nine months ended September 30, 2016:



	Three Months Ended September 30, 2016									Nine Months Ended September 30, 2016
(in thousands)	Non-Operating Income (Loss), net			Change in Accumulated Other Comprehensive Income (Loss)			Total			Non-Operating Income (Loss), net			Change in Accumulated Other Comprehensive Income (Loss)			Change in Retained Earnings due to Consolidation of Funds		Total
Funds and common stock	$	28,147		$	1,205		$	29,352		$	20,672		$	(5,772	)	$	8,476	$	23,376
Partnership investments	5,134			—			5,134			4,893			—			—		4,893
Equity option contracts	(3,739		)	—			(3,739		)	(8,418		)	—			—		(8,418		)
Investment income (loss)	29,542			1,205			30,747			17,147			(5,772		)	8,476		19,851
Dividend income	605						605			1,663								1,663
Redeemable non-controlling interest in consolidated funds and partnership investments	(20,706		)				(20,706		)	(16,486		)						(16,486		)
Investment portfolio results	$	9,441					$	10,646		$	2,324							$	5,028
Less: Non-controlling interest in Calamos Investments LLC				(937		)							4,491
Deferred income taxes				(99		)							474
Change in accumulated other comprehensive income (loss)				$	169								$	(807	)

Our investment portfolio returned $10.6 million, or 4.4%, and $5.0 million, or 1.9%, in the third quarter and first nine months of 2016, respectively. For the third quarter and first nine months of 2016, the results primarily reflect unrealized gains from investment securities, net of redeemable non-controlling interest in consolidated funds and partnership investments, offset with option contract losses. Retained earnings was impacted by the consolidation of funds related to the adoption of a new accounting pronouncement, resulting in an $8.5 million change in accumulated other comprehensive income (loss) for the first nine months of 2016, which was adjusted in the table above when computing investment portfolio results.

Income Tax Provision

Calamos Investments LLC (“Calamos Investments”) is subject to certain income-based state taxes; therefore, income taxes reflect not only the portion attributed to us but also income taxes attributable to non-controlling interests. CAM's effective income tax rate for the third quarter of 2016 was approximately 40.8%, compared with (13.4)% for the third quarter of 2015. CAM's income tax provision for the first nine months of 2016 was consistent with income tax provision attributable to CAM, resulting in an income tax rate that was not meaningful. The income tax provision for the first nine months of 2016 included $964,000 of deferred tax expense related to expired employee stock options and an allowance for employee stock options expected to expire in future periods. As of September 30, 2016, the Company's valuation allowance on this deferred tax asset was $628,000. Excluding the deferred tax valuation allowance and deferred tax expense related to expired employee stock options, CAM's effective income tax rate would be 41.2% for the first nine months of 2016. CAM's income tax rate was 40.0% for the first nine months of 2015, a result of $238,000 of deferred tax expense related to expired employee stock options in the prior year.

Net income

Net income attributable to CAM was $1.2 million and $69,000 for the third quarter and first nine months of 2016, respectively, compared with $363,000 and $2.5 million for the third quarter and first nine months of 2015. Non-GAAP net income attributable to CAM was $2.5 million and $6.4 million for the third quarter and first nine months of 2016, respectively, compared with $3.3 million and $10.4 million for the third quarter and first nine months of 2015. See "Supplemental Non-GAAP Financial Measures" below for descriptions of non-GAAP financial measures and a reconciliation of non-GAAP financial measures to GAAP financial measures.

Supplemental Non-GAAP Financial Measures

We provide investors with certain adjusted, non-GAAP financial measures including non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to CAM and non-GAAP diluted earnings per share. These non-GAAP financial measures are provided to supplement the consolidated financial statements presented on a GAAP basis. These non-GAAP financial measures adjust GAAP financial measures to include the tax benefit from the amortization of deferred taxes on intangible assets, and to exclude closed-end fund launch expenses, net of taxes, and CAM’s non-operating (income) loss, net of taxes. We believe these adjustments are appropriate to enhance an overall understanding of our operating financial performance, as well as to facilitate comparisons with our historical earnings results. These adjustments to our GAAP results are made with the intent of providing investors a more complete understanding of our underlying earnings results and trends and our marketplace performance. In addition, these non-GAAP financial measures are among the primary indicators management uses as a basis of managing our business.

The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables below:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
(in thousands)
GAAP operating income	$	4,105		$	8,627		$	10,911		$	21,214
Adjustment:
Closed-end fund launch expenses	—			—			—			11,544
Non-GAAP operating income	$	4,105		$	8,627		$	10,911		$	32,758

Total revenues	$	48,317		$	57,618		$	145,092		$	175,386

GAAP operating margin	8.5		%	15.0		%	7.5		%	12.1		%
Non-GAAP operating margin	8.5		%	15.0		%	7.5		%	18.7		%



	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
(in thousands, except per share data)
GAAP net income attributable to CAM	$	1,167		$	363	$	69	$	2,497
Adjustments:
Deferred tax amortization on intangible assets⁽¹⁾	1,979			1,979		5,937		5,937
Closed-end fund launch expenses, net of taxes⁽²⁾	—			—		—		1,615
Non-operating (income) loss, net of taxes	(668		)	1,005		419		346
Non-GAAP net income attributable to CAM	$	2,478		$	3,347	$	6,425	$	10,395
Diluted - Weighted average shares outstanding	17,137,237			18,208,850		17,094,693		18,445,524
Diluted earnings per share	$	0.07		$	0.02	$	—	$	0.14
Non-GAAP diluted earnings per share	$	0.14		$	0.18	$	0.38	$	0.56

________________

⁽¹⁾For the first nine months of 2016, the deferred tax amortization on intangible assets, the realization of which is not reflected in our consolidated statements of operations, resulted in cash savings of approximately $1.2 million during the period and the creation of a federal net operating loss carryforward benefit of approximately $4.7 million which can be utilized in future years, to the extent of net income, to offset the Company's income taxes payable. See Note 17, Income Taxes, to the audited consolidated financial statements included in Item 8., Financial Statements and Supplemental Data included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

⁽²⁾Closed-end fund launch expenses are shown net of the non-controlling interest in Calamos Investments and income taxes.

Non-GAAP operating income is calculated by adjusting for the closed-end fund launch expenses from GAAP operating income. Non-GAAP operating margin is calculated by dividing non-GAAP operating income by total revenues.

Non-GAAP net income attributable to CAM is calculated by adjusting the following items from GAAP net income attributable to CAM:


(i)	amortization of deferred taxes on intangible assets associated with the election under section 754 of the Internal Revenue Code of 1986, as amended (Section 754 election);


(ii)	closed-end fund launch expenses, net of taxes; and


(iii)	non-operating income, net of taxes.

Non-GAAP diluted earnings per share is calculated by dividing non-GAAP net income attributable to CAM by diluted weighted average shares outstanding.

The deferred tax assets from the Section 754 election allows for a quarterly reduction of $2.0 million in current and future income taxes owed by us, to the extent that a tax payable exists during the quarter. To the extent that the deferred tax asset exceeds net income, a federal net operating loss carryforward is created. The cash savings and any resulting net operating loss carryforward accrue solely for the benefit of the shareholders of CAM’s common stock. We believe that adjusting this item from the calculation of the above non-GAAP items can be a useful measure in allowing investors to see our performance. Closed-end fund launch expenses, net of taxes, are excluded because revenue associated with these expenses will not fully impact results until future periods. Non-operating (income) loss is excluded from the above non-GAAP items as it can distort comparisons between periods. As noted above, we believe that measures excluding these items are useful in analyzing operating trends and allows for more comparability between periods, which may be useful to investors.

We believe that non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to CAM and non-GAAP diluted earnings per share are useful measures of performance and may be useful to investors, because they provide measures of our core business activities adjusting for items that are non-cash and costs that may distort comparisons between periods. These measures are provided in addition to our operating income, operating margin, net income attributable to CAM and diluted earnings per share calculated under GAAP, but are not substitutes for those calculations.

Liquidity and Capital Resources

We manage our liquidity position to ensure adequate resources are available to fund ongoing operations of the business, provide seed capital for new funds, provide conservative levels of capital for the Company’s regulated subsidiaries, fund our stock repurchase program, and invest in other corporate strategic initiatives. Our principal sources of liquidity are cash flows from operating activities and our corporate investment portfolio, which is comprised of cash and cash equivalents, investment securities, derivatives and partnership investments and consolidated funds. Investment securities are principally comprised of Company-sponsored funds. In addition, the individual securities held within our partnership investments are typically highly liquid.

We believe cash generated from operations, investing and financing activities will be sufficient over the foreseeable future to meet our working capital requirements and liquidity needs with respect to the foregoing activities, as well as to support future growth.

The following table summarizes our principal sources of liquidity as of September 30, 2016 and December 31, 2015:



(in thousands)	September 30, 2016			December 31, 2015			Increase (Decrease)
Cash and cash equivalents	$	76,550		$	104,717		$	(28,167	)
Investment securities	57,960			257,057			(199,097		)
Derivatives, net	(8,582		)	(1,164		)	(7,418		)
Consolidated funds and partnership investments, net of liabilities and redeemable non-controlling interests	194,766			34,730			160,036
Total corporate investment portfolio	$	320,694		$	395,340		$	(74,646	)

We utilize a hedging strategy using exchange-traded equity option contracts as an economic hedge to reduce downside risk and price volatility of the total portfolio value. This strategy allows us the flexibility to continue to provide seed capital for the development of new products when necessary, while seeking to help reduce risk.

On July 28, 2016, Calamos Investments repaid the balance of $46.0 million of long-term debt and incurred debt extinguishment costs of $4.9 million, included in non-operating income (loss). The notes were repaid out of cash on hand and the proceeds from an increase in the short term, interest-bearing loan from CAM.

As of September 30, 2016, Calamos Investments had a $45.0 million short-term, interest-bearing loan from CAM to fund new seed investments and to provide excess liquidity.

The following table summarizes key data relating to our liquidity and capital resources:



(in thousands)	September 30, 2016		December 31, 2015
Statements of financial condition data:
Cash and cash equivalents	$	76,550	$	104,717
Receivables	14,961		17,767
Investment securities and derivatives, net	49,378		255,893
Consolidated funds and partnership investments, net of liabilities and redeemable non-controlling interests	194,766		34,730
Deferred tax assets, net	37,022		38,304
Long-term debt	—		45,955

The deferred tax assets above include an annual reduction of $7.9 million in future income taxes owed by us through 2019. This reduction results from our election under Section 754 of the Internal Revenue Code, whereby we stepped up the tax basis in certain intangible assets to their fair market value. These assets are amortized over fifteen years on CAM’s tax return. As a result, this cash savings will accrue solely for the benefit of the Company.

Cash flows for the nine months ended September 30, 2016 and 2015 are shown below.



	Nine Months Ended September 30,
(in thousands)	2016			2015
Cash flow data:
Net cash provided by operating activities	$	16,530		$	21,859
Net cash provided by investing activities	44,529			89,197
Net cash used in financing activities	(89,226		)	(53,588		)

Net cash provided by operating activities totaled $16.5 million for the nine months ended September 30, 2016. These net cash flows are primarily attributable to investment management and distribution and underwriting fees generated by core business activities, partially offset by staff, distribution, and other operating expenses.

Net cash provided by investing activities totaled $44.5 million for the nine months ended September 30, 2016. The net cash provided by investing activities primarily represents net cash inflows as a result of proceeds from sales of investments of $35.5 million, and distributions from consolidated funds and partnership investments of $39.4 million, partially offset by cash outflows of $15.1 million of seed capital to help expand our product offering, $7.9 million of contributions to consolidated funds and partnership investments, and $4.4 million related to the purchase of common shares of a Calamos-sponsored closed-end fund.

Net cash used in financing activities totaled $89.2 million for the nine months ended September 30, 2016, and primarily represents the repayment of long-term debt of $46.0 million and the pro rata equity and income tax distributions paid by Calamos Investments to our non-controlling interests of $26.1 million. Net cash used in financing activities was also due to cash dividends paid to common stockholders of $7.5 million, debt extinguishment costs of $4.9 million, and Calamos Investments' repurchase of $4.7 million in Class A common stock as a result of our stock repurchase program. Finally, we expect cash flows from financing activities to change with tax distributions based on the levels of income that the Company generates.

Recently Issued Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board ("FASB") issued an accounting update related to employee share-based payment accounting. The amendment includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements, including: income tax effects of share-based payments, minimum statutory tax withholding requirements and forfeitures. The amendment is effective for annual and interim periods beginning after December 15, 2016. The provisions may be applied using various transition approaches, including prospective, retrospective and modified retrospective. The Company is evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

Critical Accounting Policies and Estimates

Our significant accounting policies are summarized in note 2 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015. A complete discussion of critical accounting policies is included in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2015. Given the impact the implementation of the new consolidation accounting guidance on January 1, 2016 has had on our consolidated financial statements, we now consider our consolidation policy one of the policies that are most critical to the preparation and understanding of our consolidated financial statements. Our consolidation policy is discussed in Note 2, Summary of Significant Accounting Policies. There were no other significant changes in our significant accounting policies or critical accounting policies during the nine months ended September 30, 2016.

Other Information - Market Capitalization

Calamos Investments is owned (a) 22.2% by CAM, and (b) 77.8% by Calamos Interests. As of September 30, 2016, CAM holds two groups of assets: (1) CAM’s 22.2% ownership interest in Calamos Investments and (2) primarily cash and cash equivalents, investment securities, income tax receivables, net deferred tax assets, and a loan receivable from Calamos Investments. CAM presents the entire operations of Calamos Investments with its own in the consolidated financial statements. Calamos Interests’ 77.8% ownership in Calamos Investments is presented as a non-controlling interest in the consolidated financial statements.

CAM’s certificate of incorporation provides that ownership in Calamos Investments is exchangeable into Class A shares of CAM on a fair value basis. As a result, the reported market capitalization of CAM only reflects CAM’s 22.2% interest in Calamos Investments, rather than the full value of Calamos Investments.

Forward-Looking Information

This report and other documents or statements made or filed by us contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may include, without limitation: statements regarding proposed new products; results of operations or liquidity; projections, predictions, expectations, estimates or forecasts of our business; financial and operating results and future economic performance; market capitalization; management's goals and objectives; payment of dividends; and other similar expressions concerning matters that are not historical facts.

Forward-looking statements may sometimes be identified by words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “opportunity,” “potential,” “predict,” “seek,” “should,” “trend,” “will,” “would,” and similar expressions.

Forward-looking statements are not a guarantee of future performance or results, or of the date of such performance or results, if achieved. Forward-looking statements are based on information available and known at the time those statements are made as well as management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including risks not otherwise listed or described in this report.

Important factors that could cause such differences include, but are not limited to: changes in applicable laws, rules or regulations; downward fee pressures and increased industry competition; risks inherent to the investment management business; the loss of revenues due to contract terminations and redemptions; unsatisfactory service levels by third-party vendors; the inability to maintain compliance with financial covenants; the performance of our investment strategies and corporate investment portfolio; our ownership and organizational structure; general and prolonged declines in the prices of securities; realization of deferred income tax assets; significant changes in market conditions and the economy that require a modification to our business plan; catastrophic or unpredictable events; the loss of key personnel, including executives, portfolio managers, and corporate officers; the unavailability, consolidation and elimination of third-party retail distribution channels; increased costs of and timing of payments related to distribution; failure to recruit and retain qualified personnel; a loss of assets, and thus revenues; fluctuation in the level of our expenses; fluctuation in foreign currency exchange rates with respect to our global operations and business; changes in accounting estimates; poor performance of our largest funds; damage to our reputation; the extent and timing of any share repurchases; and the variability of any exchanges of interests in Calamos Investments into shares of CAM's Class A common stock.

Further, the value and composition of our assets under management are, and will continue to be, influenced by a variety of factors including, among other things: purchases and redemptions of shares of the open-end funds and other investment products; fluctuation in both the underlying value and liquidity of the financial markets around the world that result in appreciation or depreciation of assets under management; open-end fund capital gain distributions; our ability to access capital markets; our introduction of new investment strategies, products and programs; our ability to educate our clients about our investment philosophy and provide them with best-in-class service; the relative investment performance of our products as compared to competing offerings and market indices; competitive conditions in the pooled fund, asset management and broader financial services sectors; investor sentiment and confidence; our decision to open or close products and strategies; and our ability to execute on our strategic plan to expand the business. Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2015 discusses some of these and other important factors in detail under the caption “Risk Factors.”

Forward-looking statements speak only as of the date the statements are made. Readers should not place undue reliance on any forward-looking statements when deciding whether to buy, sell or hold our securities. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

An analysis of our market risk was included in our Annual Report on Form 10-K for the year ended December 31, 2015. There were no material changes to the Company’s market risk during the nine months ended September 30, 2016.

Item 4. Controls and Procedures

Our management, including our principal executive and principal financial officers, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of September 30, 2016, and has concluded that such disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There were no changes in the Company’s internal control over financial reporting that occurred during the third quarter of 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

As previously reported in the Company's periodic reports, Calamos Advisors LLC and Calamos Financial Services LLC were named as defendants in a complaint captioned Chill v. Calamos Advisors LLC, et at. The complaint relates to investment advisory and distribution fees paid by an open-end investment company managed by Calamos Advisors LLC. The defendants believe that the complaint is without merit and intend to defend themselves vigorously against the allegations.

In the normal course of business, the Company may be a party to various legal proceedings and other regulatory matters. Currently, there is no such litigation or matters that management believes would have a material effect on our consolidated financial position or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES

Item 6. Exhibits



Exhibit Number			Description of Exhibit

3(i)(a)			Second Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3(i) to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2009 File No. 000-51003).

3(i)(b)			Amendment of the Second Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3(i)(b) to the Registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2016 File No. 000-51003).

3(ii)			Third Amended and Restated By-laws of the Registrant (incorporated by reference to Exhibit 3(ii) to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2016).

4.1			Stockholders’ Agreement, dated as of October 28, 2004, among John P. Calamos, Sr., Nick P. Calamos and John P. Calamos, Jr., certain trusts controlled by them, Calamos Family Partners, Inc. and the Registrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 3, 2004 File No. 000-51003).

4.2			Amendment to Stockholders' Agreement, dated as of July 26, 2016, by Registrant (incorporated by reference to Exhibit 4.2 to the Registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2016 File No. 000-51003).

4.3			Registration Rights Agreement, dated as of November 2, 2004, between Calamos Family Partners, Inc., John P. Calamos, Sr. and the Registrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 3, 2004 File No. 000-51003).

4.4			Note Purchase Agreement, dated as of July 13, 2007, by and among Calamos Investments LLC and various institutional investors (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 18, 2007 File No. 000-51003).

4.5			Waiver and First Amendment to 2007 Note Purchase Agreement, dated as of December 22, 2008, between Calamos Investments LLC and various institutional investors (incorporated by reference to Exhibit 4.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2008 File No. 000-51003).

31.1			Certification of Principal Executive Officer pursuant to Rule 13a-14(a).

31.2			Certification of Principal Financial Officer pursuant to Rule 13a-14(a).

32.1			Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2			Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.

101.INS			XBRL Instance Document

101.SCH			XBRL Taxonomy Extension Schema Document

101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB			XBRL Taxonomy Extension Label Linkbase Document

101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF			XBRL Taxonomy Extension Definition Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CALAMOS ASSET MANAGEMENT, INC.

(Registrant)



Date:	November 4, 2016	By: /s/ Thomas E. Herman
		Name: Thomas E. Herman
		Title: Senior Vice President and Chief Financial Officer
		(Duly Authorized Officer and Principal Financial Officer)

Calamos Asset Management, Inc. /DE/ - FORM 10-Q - November 4, 2016

Attached files

Calamos Asset Management, Inc. /DE/ Reports