x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Delaware | 14-1904657 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
280 Park Avenue New York, NY | 10017 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large Accelerated Filer | o | Accelerated Filer | x | |||
Non-Accelerated Filer | o (Do not check if a smaller reporting company) | Smaller Reporting Company | o |
Page | ||
Part I. | Financial Information | |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II. | Other Information | |
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
June 30, 2011 | December 31, 2010 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 140,671 | $ | 136,191 | |||
Securities owned | 10,146 | — | |||||
Equity investments | 38,755 | 43,979 | |||||
Investments, available-for-sale | 19,450 | 16,954 | |||||
Accounts receivable | 39,258 | 32,821 | |||||
Property and equipment—net | 12,063 | 13,242 | |||||
Goodwill | 21,337 | 20,334 | |||||
Intangible assets—net | 1,924 | 1,968 | |||||
Deferred income tax asset—net | 4,929 | 8,058 | |||||
Other assets | 5,278 | 4,039 | |||||
Total assets | $ | 293,811 | $ | 277,586 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Accrued compensation | $ | 12,694 | $ | 20,273 | |||
Income tax payable | 7,875 | 9,077 | |||||
Deferred rent | 1,959 | 2,209 | |||||
Other liabilities and accrued expenses | 11,967 | 12,662 | |||||
Total liabilities | 34,495 | 44,221 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interest | 3,379 | — | |||||
Stockholders’ equity: | |||||||
Common stock, $0.01 par value; 500,000,000 shares authorized; 46,121,999 and 45,395,084 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively | 461 | 454 | |||||
Additional paid-in capital | 388,752 | 378,081 | |||||
Accumulated deficit | (50,145 | ) | (65,553 | ) | |||
Accumulated other comprehensive income, net of tax | 5,911 | 2,971 | |||||
Less: Treasury stock, at cost, 2,981,392 and 2,754,696 shares at June 30, 2011 and December 31, 2010, respectively | (89,042 | ) | (82,588 | ) | |||
Total stockholders’ equity | 255,937 | 233,365 | |||||
Total liabilities and stockholders’ equity | $ | 293,811 | $ | 277,586 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Revenue: | |||||||||||||||
Investment advisory and administration fees | $ | 57,469 | $ | 40,835 | $ | 108,521 | $ | 78,927 | |||||||
Distribution and service fees | 2,586 | 2,236 | 5,001 | 4,400 | |||||||||||
Portfolio consulting and other | 1,404 | 1,161 | 2,692 | 2,249 | |||||||||||
Total revenue | 61,459 | 44,232 | 116,214 | 85,576 | |||||||||||
Expenses: | |||||||||||||||
Employee compensation and benefits | 21,818 | 17,251 | 41,804 | 33,375 | |||||||||||
Distribution and service fees | 6,150 | 4,831 | 11,904 | 9,141 | |||||||||||
General and administrative | 8,886 | 7,473 | 17,459 | 14,610 | |||||||||||
Depreciation and amortization | 1,295 | 1,113 | 2,481 | 2,267 | |||||||||||
Amortization, deferred commissions | 415 | 232 | 758 | 422 | |||||||||||
Total expenses | 38,564 | 30,900 | 74,406 | 59,815 | |||||||||||
Operating income | 22,895 | 13,332 | 41,808 | 25,761 | |||||||||||
Non-operating income: | |||||||||||||||
Interest and dividend income—net | 355 | 366 | 539 | 561 | |||||||||||
Loss from trading securities—net | (99 | ) | (371 | ) | (477 | ) | (182 | ) | |||||||
Gain from available-for-sale securities—net | 232 | 3,281 | 590 | 3,479 | |||||||||||
Equity in earnings (losses) of affiliates | 627 | (1,361 | ) | 613 | (820 | ) | |||||||||
Other | 191 | 135 | 1,016 | 47 | |||||||||||
Total non-operating income | 1,306 | 2,050 | 2,281 | 3,085 | |||||||||||
Income before provision for income taxes | 24,201 | 15,382 | 44,089 | 28,846 | |||||||||||
Provision for income taxes | 8,442 | 3,781 | 15,428 | 8,355 | |||||||||||
Net income | 15,759 | 11,601 | 28,661 | 20,491 | |||||||||||
Less: Net (income) loss attributable to redeemable noncontrolling interest | (80 | ) | 2 | (7 | ) | (8 | ) | ||||||||
Net income attributable to common shareholders | $ | 15,679 | $ | 11,603 | $ | 28,654 | $ | 20,483 | |||||||
Earnings per share attributable to common shareholders: | |||||||||||||||
Basic | $ | 0.36 | $ | 0.27 | $ | 0.66 | $ | 0.48 | |||||||
Diluted | $ | 0.36 | $ | 0.27 | $ | 0.65 | $ | 0.48 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 43,220 | 42,730 | 43,136 | 42,665 | |||||||||||
Diluted | 43,840 | 43,143 | 43,811 | 43,040 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income attributable to common shareholders | $ | 15,679 | $ | 11,603 | $ | 28,654 | $ | 20,483 | |||||||
Foreign currency translation gain (loss) | 1,419 | (2,394 | ) | 3,129 | (4,108 | ) | |||||||||
Net unrealized gain (loss) from available-for-sale securities, net of tax | 260 | (4,163 | ) | 401 | (3,299 | ) | |||||||||
Reclassification to statements of operations of gain from available-for-sale securities, net of tax | (232 | ) | (3,281 | ) | (590 | ) | (3,479 | ) | |||||||
Total comprehensive income attributable to common shareholders | $ | 17,126 | $ | 1,765 | $ | 31,594 | $ | 9,597 |
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income, net of tax | Treasury Stock | Total Stockholders’ Equity | Redeemable Noncontrolling Interest | Shares of Common Stock, net | ||||||||||||||||
Beginning balance, January 1, 2011 | $ | 454 | $ | 378,081 | $ | (65,553 | ) | $ | 2,971 | $ | (82,588 | ) | $ | 233,365 | $ | — | 42,640 | ||||||
Dividends | — | — | (13,246 | ) | — | — | (13,246 | ) | — | — | |||||||||||||
Issuance of common stock | 7 | 323 | — | — | — | 330 | — | 727 | |||||||||||||||
Repurchase of common stock | — | — | — | — | (6,454 | ) | (6,454 | ) | — | (226 | ) | ||||||||||||
Tax benefits associated with restricted stock units—net | — | 997 | — | — | — | 997 | — | — | |||||||||||||||
Issuance of restricted stock units | — | 823 | — | — | — | 823 | — | — | |||||||||||||||
Amortization of restricted stock units—net | — | 8,529 | — | — | — | 8,529 | — | — | |||||||||||||||
Forfeitures of vested restricted stock units | — | (1 | ) | — | — | — | (1 | ) | — | — | |||||||||||||
Net income | — | — | 28,654 | — | — | 28,654 | 7 | — | |||||||||||||||
Other comprehensive income, net of taxes | — | — | — | 2,940 | — | 2,940 | — | — | |||||||||||||||
Distribution payable to noncontrolling interest | — | — | — | — | — | — | (744 | ) | — | ||||||||||||||
Foreign currency translation adjustment on noncontrolling interest | — | — | — | — | — | — | 239 | — | |||||||||||||||
Transfer of redeemable noncontrolling interest in consolidated entity | — | — | — | — | — | — | 3,877 | — | |||||||||||||||
Ending balance, June 30, 2011 | $ | 461 | $ | 388,752 | $ | (50,145 | ) | $ | 5,911 | $ | (89,042 | ) | $ | 255,937 | $ | 3,379 | 43,141 |
Six Months Ended June 30, | |||||||
2011 | 2010 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 28,661 | $ | 20,491 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Stock compensation expense | 8,585 | 7,485 | |||||
Amortization, deferred commissions | 758 | 422 | |||||
Depreciation and amortization | 2,481 | 2,267 | |||||
Deferred rent | (250 | ) | (226 | ) | |||
Loss from trading securities - net | 477 | 182 | |||||
Equity in (earnings) losses of affiliates | (613 | ) | 820 | ||||
Gain from available-for-sale securities - net | (590 | ) | (3,479 | ) | |||
Deferred income taxes | 2,937 | 2,701 | |||||
Foreign currency gain | (145 | ) | (93 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (6,291 | ) | (2,507 | ) | |||
Due from broker | — | 2,487 | |||||
Deferred commissions | (1,096 | ) | (472 | ) | |||
Income tax receivable | — | 777 | |||||
Securities owned | (506 | ) | (12,695 | ) | |||
Other assets | (651 | ) | (146 | ) | |||
Accrued compensation | (7,196 | ) | (3,684 | ) | |||
Securities sold but not yet purchased | — | (1,171 | ) | ||||
Income tax payable | (1,463 | ) | (853 | ) | |||
Other liabilities and accrued expenses | (1,292 | ) | (46 | ) | |||
Net cash provided by operating activities | 23,806 | 12,260 | |||||
Cash flows from investing activities: | |||||||
Purchases of investments, available-for-sale | (15,957 | ) | (9,432 | ) | |||
Proceeds from sales of investments, available-for-sale | 13,857 | 21,744 | |||||
Purchases of property and equipment | (1,235 | ) | (769 | ) | |||
Net cash (used in) provided by investing activities | (3,335 | ) | 11,543 | ||||
Cash flows from financing activities: | |||||||
Excess tax benefits associated with restricted stock units | 1,450 | 380 | |||||
Issuance of common stock | 287 | 258 | |||||
Repurchase of common stock | (6,454 | ) | (3,247 | ) | |||
Dividends to stockholders | (12,956 | ) | (8,523 | ) | |||
Contributions from redeemable noncontrolling interest | — | 1,954 | |||||
Net cash used in financing activities | (17,673 | ) | (9,178 | ) | |||
Net increase in cash and cash equivalents | 2,798 | 14,625 | |||||
Effect of foreign exchange rate changes | 1,682 | (2,097 | ) | ||||
Cash and cash equivalents, beginning of the period | 136,191 | 153,002 | |||||
Cash and cash equivalents, end of the period | $ | 140,671 | $ | 165,530 |
Remaining Amortization Period (In Months) | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net | |||||||||||
June 30, 2011: | ||||||||||||||
Amortized intangible assets: | ||||||||||||||
Client relationships | 90 | $ | 1,543 | $ | (869 | ) | $ | 674 | ||||||
Non-amortized intangible assets: | ||||||||||||||
Mutual fund management contracts | — | 1,250 | — | 1,250 | ||||||||||
Total | $ | 2,793 | $ | (869 | ) | $ | 1,924 | |||||||
December 31, 2010: | ||||||||||||||
Amortized intangible assets: | ||||||||||||||
Client relationships | 96 | $ | 1,543 | $ | (825 | ) | $ | 718 | ||||||
Non-amortized intangible assets: | ||||||||||||||
Mutual fund management contracts | — | 1,250 | — | 1,250 | ||||||||||
Total | $ | 2,793 | $ | (825 | ) | $ | 1,968 |
Periods Ending December 31, | Estimated Amortization Expense | ||
2011 | $ | 45 | |
2012 | 89 | ||
2013 | 89 | ||
2014 | 89 | ||
2015 | 89 | ||
Thereafter | 273 | ||
Total | $ | 674 |
June 30, 2011 | |||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses < 12 months | Fair Value | ||||||||||||
Perpetual preferred securities | $ | 5,191 | $ | 267 | $ | (2 | ) | $ | 5,456 | ||||||
Common stocks | 9,726 | 600 | (150 | ) | 10,176 | ||||||||||
Company-sponsored mutual funds | 3,017 | 801 | — | 3,818 | |||||||||||
Total investments, available-for-sale | $ | 17,934 | $ | 1,668 | $ | (152 | ) | $ | 19,450 |
December 31, 2010 | |||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses < 12 months | Fair Value | ||||||||||||
Perpetual preferred securities | $ | 5,910 | $ | 15 | $ | (11 | ) | $ | 5,914 | ||||||
Common stocks | 6,215 | 726 | (44 | ) | 6,897 | ||||||||||
Company-sponsored mutual funds | 3,120 | 1,023 | — | 4,143 | |||||||||||
Total investments, available-for-sale | $ | 15,245 | $ | 1,764 | $ | (55 | ) | $ | 16,954 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Proceeds from sales | $ | 5,901 | $ | 16,970 | $ | 13,857 | $ | 21,744 | |||||||
Gross realized gains | 416 | 3,699 | 880 | 4,244 | |||||||||||
Gross realized losses | (184 | ) | (244 | ) | (290 | ) | (453 | ) |
• | Level 1—Unadjusted quoted prices for identical instruments in active markets. |
• | Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. |
• | Level 3—Valuations derived from valuation techniques in which significant inputs or significant value drivers are unobservable. |
Level 1 | Level 2 | Total | |||||||||
Cash equivalents* | $ | 63,597 | $ | — | $ | 63,597 | |||||
Securities owned | $ | 10,146 | $ | — | $ | 10,146 | |||||
Equity investments | $ | — | $ | 38,755 | $ | 38,755 | |||||
Investments, available-for-sale | |||||||||||
Perpetual preferred securities | $ | 1,031 | $ | 4,425 | $ | 5,456 | |||||
Common stocks | 10,176 | — | 10,176 | ||||||||
Company-sponsored mutual funds | 3,818 | — | 3,818 | ||||||||
Total investments, available-for-sale | $ | 15,025 | $ | 4,425 | $ | 19,450 |
Level 1 | Level 2 | Total | |||||||||
Cash equivalents* | $ | 84,197 | $ | — | $ | 84,197 | |||||
Equity investments | $ | 5,771 | $ | 38,208 | $ | 43,979 | |||||
Investments, available-for-sale | |||||||||||
Perpetual preferred securities | $ | 992 | $ | 4,922 | $ | 5,914 | |||||
Common stocks | 6,897 | — | 6,897 | ||||||||
Company-sponsored mutual funds | 4,143 | — | 4,143 | ||||||||
Total investments, available-for-sale | $ | 12,032 | $ | 4,922 | $ | 16,954 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income | $ | 15,759 | $ | 11,601 | $ | 28,661 | $ | 20,491 | |||||||
Less: Net (income) loss attributable to redeemable noncontrolling interest | (80 | ) | 2 | (7 | ) | (8 | ) | ||||||||
Net income attributable to common shareholders | $ | 15,679 | $ | 11,603 | $ | 28,654 | $ | 20,483 | |||||||
Basic weighted average shares outstanding | 43,220 | 42,730 | 43,136 | 42,665 | |||||||||||
Dilutive potential shares from restricted stock units | 620 | 413 | 675 | 375 | |||||||||||
Diluted weighted average shares outstanding | 43,840 | 43,143 | 43,811 | 43,040 | |||||||||||
Basic earnings per share attributable to common shareholders | $ | 0.36 | $ | 0.27 | $ | 0.66 | $ | 0.48 | |||||||
Diluted earnings per share attributable to common shareholders | $ | 0.36 | $ | 0.27 | $ | 0.65 | $ | 0.48 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Investment advisory and administration fees | $ | 34,703 | $ | 26,211 | $ | 66,284 | $ | 50,524 | |||||||
Distribution and service fees | 2,586 | 2,236 | 5,001 | 4,400 | |||||||||||
$ | 37,289 | $ | 28,447 | $ | 71,285 | $ | 54,924 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Proceeds from sales | $ | 109 | $ | 3,726 | $ | 109 | $ | 3,726 | |||||||
Gross realized gains | 5 | 700 | 5 | 700 | |||||||||||
Dividend income | 4 | 30 | 17 | 62 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Institutional Accounts | |||||||||||||||
Assets under management, beginning of period | $ | 21,931 | $ | 14,503 | $ | 19,625 | $ | 12,954 | |||||||
Inflows | 4,997 | 1,471 | 6,526 | 2,865 | |||||||||||
Outflows | (430 | ) | (417 | ) | (751 | ) | (937 | ) | |||||||
Net inflows | 4,567 | 1,054 | 5,775 | 1,928 | |||||||||||
Market appreciation (depreciation) | 794 | (1,225 | ) | 1,892 | (550 | ) | |||||||||
Total increase (decrease) | 5,361 | (171 | ) | 7,667 | 1,378 | ||||||||||
Assets under management, end of period(1) | $ | 27,292 | $ | 14,332 | $ | 27,292 | $ | 14,332 | |||||||
Average assets under management for period | $ | 24,293 | $ | 14,726 | $ | 22,482 | $ | 13,935 | |||||||
Open-End Mutual Funds | |||||||||||||||
Assets under management, beginning of period | $ | 9,390 | $ | 6,958 | $ | 8,484 | $ | 6,285 | |||||||
Inflows | 1,175 | 684 | 2,322 | 1,394 | |||||||||||
Outflows | (642 | ) | (509 | ) | (1,282 | ) | (962 | ) | |||||||
Net inflows | 533 | 175 | 1,040 | 432 | |||||||||||
Market appreciation (depreciation) | 290 | (538 | ) | 689 | (122 | ) | |||||||||
Total increase (decrease) | 823 | (363 | ) | 1,729 | 310 | ||||||||||
Assets under management, end of period | $ | 10,213 | $ | 6,595 | $ | 10,213 | $ | 6,595 | |||||||
Average assets under management for period | $ | 9,822 | $ | 6,672 | $ | 9,313 | $ | 6,451 | |||||||
Closed-End Mutual Funds | |||||||||||||||
Assets under management, beginning of period | $ | 6,709 | $ | 5,736 | $ | 6,353 | $ | 5,546 | |||||||
Inflows | 24 | — | 153 | — | |||||||||||
Outflows | — | (7 | ) | — | (7 | ) | |||||||||
Net inflows (outflows) | 24 | (7 | ) | 153 | (7 | ) | |||||||||
Market appreciation (depreciation) | 76 | (414 | ) | 303 | (224 | ) | |||||||||
Total increase (decrease) | 100 | (421 | ) | 456 | (231 | ) | |||||||||
Assets under management, end of period | $ | 6,809 | $ | 5,315 | $ | 6,809 | $ | 5,315 | |||||||
Average assets under management for period | $ | 6,818 | $ | 5,633 | $ | 6,715 | $ | 5,585 | |||||||
Total | |||||||||||||||
Assets under management, beginning of period | $ | 38,030 | $ | 27,197 | $ | 34,462 | $ | 24,785 | |||||||
Inflows | 6,196 | 2,155 | 9,001 | 4,259 | |||||||||||
Outflows | (1,072 | ) | (933 | ) | (2,033 | ) | (1,906 | ) | |||||||
Net inflows | 5,124 | 1,222 | 6,968 | 2,353 | |||||||||||
Market appreciation (depreciation) | 1,160 | (2,177 | ) | 2,884 | (896 | ) | |||||||||
Total increase (decrease) | 6,284 | (955 | ) | 9,852 | 1,457 | ||||||||||
Assets under management, end of period | $ | 44,314 | $ | 26,242 | $ | 44,314 | $ | 26,242 | |||||||
Average assets under management for period | $ | 40,933 | $ | 27,031 | $ | 38,510 | $ | 25,971 |
(1) | As of June 30, 2011 and June 30, 2010, assets under management in institutional accounts included $176 million and $217 million, respectively, of assets invested in our alternative strategy. |
Three Months Ended June 30, | |||||||
(in thousands) | 2011 | 2010 | |||||
Results of operations | |||||||
Total revenue | $ | 61,459 | $ | 44,232 | |||
Total expenses | (38,564 | ) | (30,900 | ) | |||
Total non-operating income | 1,306 | 2,050 | |||||
Income before provision for income taxes | $ | 24,201 | $ | 15,382 |
Six Months Ended June 30, 2011 | |||||||
(in thousands) | 2011 | 2010 | |||||
Results of operations | |||||||
Total revenue | $ | 116,214 | $ | 85,576 | |||
Total expenses | (74,406 | ) | (59,815 | ) | |||
Total non-operating income | 2,281 | 3,085 | |||||
Income before provision for income taxes | $ | 44,089 | $ | 28,846 |
2011 | 2012 | 2013 | 2014 | 2015 | 2016 and after | Total | |||||||||||||||||||||
Operating leases | $ | 3,854 | $ | 7,876 | $ | 8,080 | $ | 1,523 | (1) | $ | 541 | $ | 297 | $ | 22,171 |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs | ||||||||
April 1 through April 30, 2011 | 618 | (1) | $ | 29.29 | — | — | ||||||
May 1 through May 31, 2011 | 943 | (1) | $ | 29.93 | — | — | ||||||
June 1 through June 30, 2011 | 2,846 | (1) | $ | 29.57 | — | — | ||||||
Total | 4,407 | $ | 29.61 | — | — |
(1) | Purchases made by us to satisfy the income tax withholding obligations of certain employees. |
Exhibit No. | Description | ||
3.1 | —Form of Amended and Restated Certificate of Incorporation of the Registrant(1) | ||
3.2 | —Form of Amended and Restated Bylaws of the Registrant(2) | ||
4.1 | —Specimen Common Stock Certificate(1) | ||
4.2 | —Form of Registration Rights Agreement among the Registrant, Martin Cohen, Robert H. Steers, The Martin Cohen 1998 Family Trust and Robert H. Steers Family Trust(1) | ||
31.1 | —Certification of the Co-Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | ||
31.2 | —Certification of the Co-Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | ||
31.3 | —Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | ||
32.1 | —Certification of the Co-Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). | ||
32.2 | —Certification of the Co-Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). | ||
32.3 | —Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). | ||
101 | The following financial statements from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 are furnished herewith, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Financial Condition as of June 30, 2011 and December 31, 2010, (ii) the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2011 and 2010, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2011 and 2010, (iv) the Condensed Consolidated Statement of Changes in Stockholders' Equity and Redeemable Noncontrolling Interest for the six months ended June 30, 2011, (v) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010, and (vi) the Notes to the Condensed Consolidated Finance Statements. |
(1) | Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (Registration No. 333-114027), as amended, originally filed with the Securities and Exchange Commission on March 30, 2004. |
(2) | Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-32236) for the quarter ended June 30, 2008. |
Date: | August 8, 2011 | Cohen & Steers, Inc. | ||
/s/ Matthew S. Stadler | ||||
Name: Matthew S. Stadler | ||||
Title: Executive Vice President & Chief Financial Officer |
Date: | August 8, 2011 | Cohen & Steers, Inc. | ||
/s/ Bernard M. Doucette | ||||
Name: Bernard M. Doucette | ||||
Title: Senior Vice President & Chief Accounting Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2011 of Cohen & Steers, Inc. (the “Registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and |
5. | The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. |
Dated: | August 8, 2011 | /s/ Martin Cohen | |
Martin Cohen | |||
Co-Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2011 of Cohen & Steers, Inc. (the “Registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and |
5. | The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. |
Dated: | August 8, 2011 | /s/ Robert H. Steers | |
Robert H. Steers | |||
Co-Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2011 of Cohen & Steers, Inc. (the “Registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and |
5. | The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. |
Dated: | August 8, 2011 | /s/ Matthew S. Stadler | |
Matthew S. Stadler | |||
Executive Vice President & Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | August 8, 2011 | /s/ Martin Cohen | |
Martin Cohen | |||
Co-Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | August 8, 2011 | /s/ Robert H. Steers | |
Robert H. Steers | |||
Co-Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | August 8, 2011 | /s/ Matthew S. Stadler | |
Matthew S. Stadler | |||
Executive Vice President & Chief Financial Officer |
Condensed Consolidated Statements of Financial Condition Parentheticals (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 46,121,999 | 45,395,084 |
Common stock, shares outstanding | 43,140,607 | 42,640,388 |
Treasury stock, shares | 2,981,392 | 2,754,696 |
Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Revenue: | Â | Â | Â | Â |
Investment advisory and administration fees | $ 57,469 | $ 40,835 | $ 108,521 | $ 78,927 |
Distribution and service fees | 2,586 | 2,236 | 5,001 | 4,400 |
Portfolio consulting and other | 1,404 | 1,161 | 2,692 | 2,249 |
Total revenue | 61,459 | 44,232 | 116,214 | 85,576 |
Expenses: | Â | Â | Â | Â |
Employee compensation and benefits | 21,818 | 17,251 | 41,804 | 33,375 |
Distribution and service fees | 6,150 | 4,831 | 11,904 | 9,141 |
General and administrative | 8,886 | 7,473 | 17,459 | 14,610 |
Depreciation and amortization | 1,295 | 1,113 | 2,481 | 2,267 |
Amortization, deferred commissions | 415 | 232 | 758 | 422 |
Total expenses | 38,564 | 30,900 | 74,406 | 59,815 |
Operating income | 22,895 | 13,332 | 41,808 | 25,761 |
Non-operating income: | Â | Â | Â | Â |
Interest and dividend income—net | 355 | 366 | 539 | 561 |
Loss from trading securities—net | (99) | (371) | (477) | (182) |
Gain from available-for-sale securities—net | 232 | 3,281 | 590 | 3,479 |
Equity in earnings (losses) of affiliates | 627 | (1,361) | 613 | (820) |
Other | 191 | 135 | 1,016 | 47 |
Total non-operating income | 1,306 | 2,050 | 2,281 | 3,085 |
Income before provision for income taxes | 24,201 | 15,382 | 44,089 | 28,846 |
Provision for income taxes | 8,442 | 3,781 | 15,428 | 8,355 |
Net income | 15,759 | 11,601 | 28,661 | 20,491 |
Less: Net (income) loss attributable to redeemable noncontrolling interest | (80) | 2 | (7) | (8) |
Net income attributable to common shareholders | $ 15,679 | $ 11,603 | $ 28,654 | $ 20,483 |
Earnings per share attributable to common shareholders: | Â | Â | Â | Â |
Basic | $ 0.36 | $ 0.27 | $ 0.66 | $ 0.48 |
Diluted | $ 0.36 | $ 0.27 | $ 0.65 | $ 0.48 |
Weighted average shares outstanding: | Â | Â | Â | Â |
Basic | 43,220 | 42,730 | 43,136 | 42,665 |
Diluted | 43,840 | 43,143 | 43,811 | 43,040 |
Document and Entity Information Document
|
3 Months Ended | |
---|---|---|
Mar. 31, 2011
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Jun. 30, 2011
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Entity Information [Line Items] | Â | Â |
Entity Registrant Name | COHEN & STEERS INC | Â |
Entity Central Index Key | 0001284812 | Â |
Current Fiscal Year End Date | --12-31 | Â |
Entity Filer Category | Accelerated Filer | Â |
Document Type | 10-Q | Â |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q2 | Â |
Amendment Flag | false | Â |
Entity Common Stock, Shares Outstanding | Â | 43,150,026 |
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Note 4. Investments
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Jun. 30, 2011
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Investments [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Holdings [Text Block] | Investments Trading During the fourth quarter of 2009, the Company launched Cohen & Steers Global Listed Infrastructure Fund (“GLIF”). The Company accounted for its investment in GLIF using the equity method of accounting until February 23, 2011 as the Company did not have a controlling financial interest, but had significant influence over the financial decisions of the fund. As of February 23, 2011, the Company owned over 50% of the voting interest in GLIF. Accordingly, the underlying assets and liabilities of GLIF have been included in the Company's condensed consolidated financial statements with the third party interests classified as redeemable noncontrolling interest. As a result of consolidating GLIF, the Company recorded approximately $10,146,000 of securities owned as of June 30, 2011, which were comprised primarily of equities. For the six months ended June 30, 2011, the Company recorded approximately $477,000 of net loss from trading securities from the consolidation of GLIF. Equity investments The offshore global real estate long-short fund (the “Offshore Fund”), launched by the Company in 2008, is structured as a partnership and the Company is the general partner and investment manager for which it receives a management fee and a performance fee. The Company’s equity interest in the Offshore Fund represents a seed investment to launch the fund, adjusted for the Company’s proportionate share of the fund’s earnings. At June 30, 2011 and December 31, 2010, the Company had equity investments of approximately $11,394,000 and $11,245,000 in the Offshore Fund, respectively. As the general partner of the Offshore Fund, the Company has significant influence over the fund's financial decisions and therefore accounts for its investment in the fund using the equity method of accounting. The Company’s risk with respect to its investment in the Offshore Fund is limited to its equity ownership and any uncollected management fees. During 2008, the Company launched an onshore global real estate long-short fund (the “Onshore Fund”). Until January 31, 2010, the Company and certain of its employees owned 100% of the voting interest in the Onshore Fund. Accordingly, the assets, liabilities and the results of operations of the Onshore Fund were included in the Company’s condensed consolidated financial statements with the third party interests classified as redeemable noncontrolling interest. As the redeemable noncontrolling interests were owned by certain employees of the Company, no management or performance fees were charged. Beginning February 1, 2010, the Company accounted for its investment in the Onshore Fund using the equity method of accounting as the Company no longer had a controlling financial interest, but, as the general partner, had significant influence over the fund's financial decisions. At June 30, 2011 and December 31, 2010, the Company had equity investments of approximately $27,362,000 and $26,963,000 in the Onshore Fund, respectively. The Company recorded a gain from trading securities of approximately $189,000 from the consolidation of the Onshore Fund for the six months ended June 30, 2010. For the three and six months ended June 30, 2011, the Company recognized earnings of approximately $627,000 and $613,000, respectively, under the equity method of accounting, which is included in equity in earnings of affiliates in the condensed consolidated statements of operations. For the three and six months ended June 30, 2010, the Company recognized losses of approximately $1,361,000 and $820,000, respectively, under the equity method of accounting. Available-for-sale The following is a summary of the cost, gross unrealized gains, gross unrealized losses and fair value of investments, available-for-sale as of June 30, 2011 and December 31, 2010 (in thousands):
Unrealized losses on investments, available-for-sale as of June 30, 2011 were generally caused by market conditions. When evaluating whether an unrealized loss on an investment, available-for-sale is other than temporary, the Company reviews such factors as extent and duration of the loss, deterioration in the issuer’s credit quality, reduction or cessation of dividend payments and overall financial strength of the issuer. As of June 30, 2011, the Company determined that it had the ability and intent to hold the remaining investments for which no other-than-temporary impairment has occurred until a recovery of fair value. Accordingly, impairment of these investments is considered temporary. Sales proceeds, gross realized gains and losses from investments, available-for-sale for the three and six months ended June 30, 2011 and 2010 are summarized below (in thousands):
Fair Value The Codification Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value and enhances disclosures about instruments carried at fair value, but does not change existing guidance as to whether or not an instrument should be carried at fair value. ASC 820 specifies a hierarchy of valuation classifications based on whether the inputs to the valuation techniques used in each valuation classification are observable or unobservable. These classifications are summarized in the three broad levels listed below:
Inputs used to measure fair value might fall in different levels of the fair value hierarchy, in which case the Company defaults to the lowest level input that is significant to the fair value measurement in its entirety. These levels are not necessarily an indication of the risk or liquidity associated with the investments. In determining the appropriate levels, the Company performed a detailed analysis of the assets and liabilities that are subject to ASC 820. The following table presents fair value measurements as of June 30, 2011 (in thousands):
_________________________ * Cash equivalents were comprised of investments in money market funds which are included in cash and cash equivalents on the Company's condensed consolidated statements of financial condition. The following table presents fair value measurements as of December 31, 2010 (in thousands):
_________________________ * Cash equivalents were comprised of investments in money market funds which are included in cash and cash equivalents on the Company's condensed consolidated statements of financial condition. Equity investments classified as level 2 in the above tables represent the fair value measurement of equity investments in the Onshore Fund and the Offshore Fund, which are measured at fair value based on the funds' net asset value. The funds make long and short investments in real estate securities to maximize absolute and risk-adjusted returns with modest volatility. The Company has the ability to redeem the funds monthly at net asset value per share with prior written notice of 30 days and no significant restrictions to redemption. Investments, available-for-sale classified as level 2 in the above tables were comprised of primarily auction rate preferred securities, which were measured at fair value based on the quoted prices for identical or similar instruments in markets that are not active. |
Note 9. Commitments and Contingencies
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6 Months Ended |
---|---|
Jun. 30, 2011
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Commitments and Contingencies [Abstract] | Â |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies From time to time, the Company is involved in legal matters relating to claims arising in the ordinary course of business. There are currently no such matters pending that the Company believes could have a material adverse effect on its business or financial condition. |
Cash Flow Supplemental Schedule (USD $)
In Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2011
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Jun. 30, 2010
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Taxes paid | $ (12,557) | $ (5,310) |
Fully vested RSUs issued | 533 | 323 |
Restricted stock dividend equivalents issued | $ 290 | $ 131 |
Note 6. Income Taxes
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Income Taxes [Abstract] | Â |
Income Tax Disclosure [Text Block] | Income Taxes The provision for income taxes for the three and six months ended June 30, 2011 includes U.S. federal, state, local and foreign taxes at an approximate effective tax rate of 35%. The effective tax rate for the three and six months ended June 30, 2010 was approximately 25% and 29%, respectively, which included discrete items, the most significant of which was attributable to the sale of previously impaired securities. Excluding the discrete items, the effective tax rate for the three and six months ended June 30, 2010 was approximately 34%. The Company expects the tax rate for the full year 2011 to approximate 35%, excluding discrete items. Deferred income taxes represent the tax effects of the temporary differences between book and tax bases and are measured using enacted tax rates that will be in effect when such items are expected to reverse. The Company's net deferred tax asset is primarily comprised of future income tax deductions attributable to the delivery of unvested restricted stock units. The Company records a valuation allowance, when necessary, to reduce deferred tax assets to an amount that more likely than not will be realized. |
Note 11. Subsequent Event
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6 Months Ended |
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Jun. 30, 2011
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Subsequent Event [Abstract] | Â |
Schedule of Subsequent Events [Text Block] | Subsequent Events On August 4, 2011, CNS declared quarterly and special cash dividends on its common stock in the amount of $0.15 and $1.00 per share, respectively. These dividends will be payable on September 28, 2011 to stockholders of record at the close of business on September 7, 2011. |
Note 7. Regulatory Requirements
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6 Months Ended |
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Jun. 30, 2011
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Regulatory Requirements [Abstract] | Â |
Regulatory Capital Requirements under Banking Regulations [Text Block] | Regulatory Requirements Securities, a registered broker/dealer in the U.S., is subject to the SEC’s Uniform Net Capital Rule 15c3-1 (the “Rule”), which requires that broker/dealers maintain a minimum level of net capital, as defined. As of June 30, 2011, Securities had net capital of approximately $1,397,000, which exceeded its requirements by approximately $1,338,000. The Rule also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital of a broker/dealer is less than the amount required under the Rule and requires prior notice to the SEC for certain withdrawals of capital. Securities does not carry customer accounts and is exempt from the SEC’s Rule 15c3-3 pursuant to provisions (k)(1) of such rule. The non-U.S. subsidiaries of the Company are regulated outside the U.S. by the Hong Kong Securities and Futures Commission, the United Kingdom Financial Securities Authority, and the Belgium Financial Services and Markets Authority (collectively, the “Foreign Regulated Entities”). As of June 30, 2011, the Foreign Regulated Entities had aggregate regulatory capital of approximately $57,181,000, which exceeded requirements by approximately $55,864,000. |
Note 5. Earnings Per Share
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Jun. 30, 2011
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Earnings Per Share [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | Earnings Per Share Basic earnings per share are calculated by dividing net income attributable to common shareholders by the weighted average shares outstanding. Diluted earnings per share are calculated by dividing net income attributable to common shareholders by the total weighted average shares of common stock outstanding and common stock equivalents. Common stock equivalents are comprised of dilutive potential shares from restricted stock unit awards. Common stock equivalents are excluded from the computation if their effect is anti-dilutive. Diluted earnings per share are computed using the treasury stock method. Anti-dilutive common stock equivalents of approximately 5,000 and 4,000 shares, respectively, were excluded from the computation for the three and six months ended June 30, 2011. Anti-dilutive common stock equivalents of approximately 53,000 and 64,000 shares, respectively, were excluded from the computation for the three and six months ended June 30, 2010. The following is a reconciliation of the income and share data used in the basic and diluted earnings per share computations for the three and six months ended June 30, 2011 and 2010 (in thousands, except per share data):
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Note 1. Organization and Description of Business
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6 Months Ended |
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Jun. 30, 2011
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Organization and Description of Business [Abstract] | Â |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Organization and Description of Business Cohen & Steers, Inc. (“CNS”) was organized as a Delaware corporation on March 17, 2004. CNS was formed to be the holding company for Cohen & Steers Capital Management, Inc. (“CSCM”), a New York corporation, and to allow for the issuance of common stock to the public. The condensed consolidated financial statements set forth herein include the accounts of CNS and its direct and indirect subsidiaries. CNS’s wholly-owned subsidiaries are CSCM, Cohen & Steers Securities, LLC (“Securities”), Cohen & Steers Asia Limited, Cohen & Steers UK Limited and Cohen & Steers Europe S.A. (collectively, the “Company”). All material intercompany balances and transactions have been eliminated in consolidation. Through CSCM, a registered investment advisor under the Investment Advisers Act of 1940 (the “Advisers Act”), the Company provides investment management services to individual and institutional investors through a broad range of investment vehicles. The Company manages portfolios specializing in U.S. and international real estate securities, large cap value stocks, listed infrastructure and utilities, and preferred securities. The Company also manages alternative investment strategies such as hedged real estate securities portfolios and private real estate multimanager strategies for qualified investors. Its clients include Company-sponsored open-end and closed-end mutual funds, U.S. and non-U.S. pension plans, endowment funds, foundations and sub-advised funds for other financial institutions. Through Securities, its registered broker/dealer, the Company provides distribution services for certain of its funds. |
Note 2. Basis of Presentation and Significant Accounting Policies
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6 Months Ended |
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Jun. 30, 2011
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Basis of Presentation and Significant Accounting Policies [Abstract] | Â |
Significant Accounting Policies [Text Block] | Basis of Presentation and Significant Accounting Policies The condensed consolidated financial statements of the Company included herein are unaudited and have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the interim results have been made. The Company’s condensed consolidated financial statements and the related notes should be read together with the consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. Accounting Estimates—The preparation of the condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes the estimates used in preparing the condensed consolidated financial statements are reasonable and prudent. Actual results could differ from those estimates. Reclassifications—Certain prior year amounts have been reclassified to conform to the current year presentation. The amounts related to these reclassifications are not material to the Company’s condensed consolidated financial statements. Consolidation—The Company consolidates operating entities deemed to be voting interest entities if the Company owns a majority of the voting interest. The equity method of accounting is used for investments in non-controlled affiliates in which the Company’s ownership ranges from 20 to 50 percent, or in instances in which the Company is able to exercise significant influence but not control. The Company also consolidates any variable interest entities (“VIEs”) in which the Company is the primary beneficiary. The Company provides for noncontrolling interests in consolidated subsidiaries for which the Company’s ownership is less than 100 percent. A VIE is an entity in which either (a) the equity investment at risk is not sufficient to permit the entity to finance its own activities without additional financial support or (b) the group of holders of the equity investment at risk lack certain characteristics of a controlling financial interest. The primary beneficiary is the entity that has the obligation to absorb a majority of the expected losses or the right to receive the majority of the residual returns. The Company evaluates whether entities in which it has an interest are VIEs and whether the Company is the primary beneficiary of any VIEs identified in its analysis. See Note 4 for further discussion about the Company’s investments. Cash and Cash Equivalents—Cash equivalents consist of short-term, highly liquid investments, which are readily convertible into cash and have original maturities of three months or less. Investments—Management of the Company determines the appropriate classification of its investments at the time of purchase and re-evaluates such determination at each statement of financial condition date. Securities owned and securities sold but not yet purchased are classified as trading securities and are measured at fair value based on quoted market prices, market prices obtained from independent pricing services engaged by management or as determined by the Company’s fair value committee, with unrealized gains and losses recorded as gain (loss) from trading securities reported in the Company’s condensed consolidated statements of operations. Investments classified as equity investments are accounted for using the equity method, under which the Company recognizes its respective share of the investee’s net income for the period. The carrying amounts of these investments approximate their fair value. Investments classified as available-for-sale are comprised of equity securities, investment-grade preferred instruments and investments in Company-sponsored open-end and closed-end mutual funds. These investments are carried at fair value based on quoted market prices or market prices obtained from independent pricing services engaged by management, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income. The Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other than temporary. If the Company believes an impairment of a security position is other than temporary, the loss will be recognized in the Company’s condensed consolidated statements of operations. Goodwill and Intangible Assets—Goodwill represents the excess of the cost of the Company’s investment in the net assets of an acquired company over the fair value of the underlying identifiable net assets at the date of acquisition. Goodwill and indefinite lived intangible assets are not amortized but are tested at least annually for impairment by comparing the fair value to their carrying amounts. Finite lived intangible assets are amortized over their useful lives. See Note 3 for further discussion about the Company’s goodwill and intangible assets. Investment Advisory and Administration Fees—The Company earns revenue by providing asset management services to institutional accounts and to Company-sponsored open-end and closed-end mutual funds. This revenue is earned pursuant to the terms of the underlying advisory contract, and is based on a contractual investment advisory fee applied to the assets in the client’s portfolio, net of applicable waivers. The Company also earns revenue from administration fees paid by certain Company-sponsored open-end and closed-end mutual funds, based on the average assets under management of such funds. This revenue is recognized as such fees are earned. Distribution and Service Fees—Distribution and service fee revenue is earned as the services are performed, based on contractually-predetermined percentages of the average assets under management of the open-end load mutual funds. Distribution and service fee revenue is recorded gross of any third-party distribution and service fee expense arrangements. The expenses associated with these third-party distribution and service fee arrangements are recorded as incurred. Stock-based Compensation—The Company recognizes compensation expense for the grant-date fair value of awards of equity instruments granted to employees. This expense is recognized over the period during which employees are required to provide service. The Company also estimates forfeitures. Income Taxes—The Company records the current and deferred tax consequences of all transactions that have been recognized in the condensed consolidated financial statements in accordance with the provisions of the enacted tax laws. Deferred tax assets are recognized for temporary differences that will result in deductible amounts in future years. Deferred tax liabilities are recognized for temporary differences that will result in taxable income in future years. The Company records a valuation allowance, when necessary, to reduce deferred tax assets to an amount that more likely than not will be realized. The effective tax rate for interim periods represents the Company’s best estimate of the effective tax rate expected to be applied to the full fiscal year. Currency Translation and Transactions—Assets and liabilities of subsidiaries having non-U.S. dollar functional currencies are translated at exchange rates at the applicable condensed consolidated statement of financial condition date. Revenues and expenses are translated at average exchange rates during the period. The gains or losses resulting from translating non-U.S. dollar functional currency into U.S. dollars are included in the Company's condensed consolidated statements of comprehensive income, a component of stockholders’ equity. Gains or losses resulting from non-U.S. dollar currency transactions are included in other non-operating income in the condensed consolidated statements of operations. Recently Issued Accounting Pronouncements—In June 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. The new guidance requires changes to the components of net income and comprehensive income in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. The new guidance should be applied retrospectively. This new guidance is effective for the Company's first quarter of 2012. The Company does not anticipate the adoption of this new guidance to have a material impact on the Company's condensed consolidated financial statements. In May 2011, the FASB issued new guidance regarding fair value measurement and disclosures. The new guidance results in common fair value measurement and disclosure requirements in U.S. Generally Accepted Accounting Principles ("GAAP") and International Financial Reporting Requirements. This new guidance changed the wording used to describe many of the requirements for measuring fair value and for disclosing information about fair value measurements. This new guidance is effective for the Company's first quarter of 2012. The Company does not anticipate the adoption of this new guidance to have a material impact on the Company's condensed consolidated financial statements. |
Note 10. Concentration of Credit Risk
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6 Months Ended |
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Jun. 30, 2011
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Concentration of Credit Risk [Abstract] | Â |
Concentration Risk Disclosure [Text Block] | Concentration of Credit Risk The Company's cash is principally on deposit with three major financial institutions. The Company is subject to credit risk should these financial institutions be unable to fulfill their obligations. A third party institutional account client, for which the Company acts as subadvisor to certain foreign retail funds sponsored by this client, accounted for $17,626,000 or 15 percent of the total revenue of the Company during the six months ended June 30, 2011. |
Note 3. Goodwill and intangible Assets
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Jun. 30, 2011
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Goodwill and Intangible Assets [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill and Intangible Assets Goodwill Goodwill represents the excess of purchase price over the net tangible assets and identifiable intangible assets of an acquired business. At June 30, 2011 and December 31, 2010, goodwill was approximately $21,337,000 and $20,334,000, respectively. The Company’s goodwill increased by $1,003,000 in the six months ended June 30, 2011 as a result of foreign currency revaluation. Intangible Assets The following table details the gross carrying amounts and accumulated amortization for the intangible assets at June 30, 2011 and December 31, 2010 (in thousands):
Amortization expense related to the intangible assets was approximately $22,000 and $23,000 for the three months ended June 30, 2011 and 2010, respectively, and approximately $44,000 and $45,000 for the six months ended June 30, 2011 and 2010, respectively. Estimated future amortization expense is as follows (in thousands):
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Condensed Consolidated Statements of Comprehensive Income (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Net income attributable to common shareholders | $ 15,679 | $ 11,603 | $ 28,654 | $ 20,483 |
Foreign currency translation gain (loss) | 1,419 | (2,394) | 3,129 | (4,108) |
Net unrealized gain (loss) from available-for-sale securities, net of tax | 260 | (4,163) | 401 | (3,299) |
Reclassification to statements of operations of gain from available-for-sale securities, net of tax | (232) | (3,281) | (590) | (3,479) |
Total comprehensive income attributable to common shareholders | $ 17,126 | $ 1,765 | $ 31,594 | $ 9,597 |
Note 8. Related Party Transactions
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Jun. 30, 2011
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Related Party Transactions [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions Disclosure [Text Block] | Related Party Transactions The Company is an investment advisor to, and has administrative agreements with, affiliated open-end and closed-end mutual funds for which certain employees are officers and/or directors. The following table sets forth the amount of revenue the Company earned from these affiliated funds for the three and six months ended June 30, 2011 and 2010 (in thousands):
For the three months ended June 30, 2011 and 2010, the Company had investment advisory agreements with certain affiliated closed-end mutual funds, pursuant to which the Company contractually waived approximately $397,000 and $637,000, respectively, of advisory fees it was otherwise entitled to receive. For the six months ended June 30, 2011 and 2010, the Company waived approximately $1,081,000 and $1,576,000 of advisory fees, respectively. These investment advisory agreements contractually require the Company to waive a portion of the advisory fees the Company otherwise would charge for up to ten years from the respective fund's inception date. The board of directors of these mutual funds must approve the renewal of the advisory agreements each year, including any reduction in advisory fee waivers scheduled to take effect during that year. As of June 30, 2011, such scheduled reductions in advisory fee waivers were effective for two funds. Sales proceeds, gross realized gains and dividend income from investments, available-for-sale in Company-sponsored mutual funds for the three and six months ended June 30, 2011 and 2010 are summarized below (in thousands):
The Company has agreements with certain affiliated open-end and closed-end mutual funds to reimburse certain fund expenses. For the three months ended June 30, 2011 and 2010, expenses of approximately $1,743,000 and $1,228,000, respectively, were incurred by the Company pursuant to these agreements and are included in general and administrative expenses. For the six months ended June 30, 2011 and 2010, expenses of approximately $3,313,000 and $2,136,000, respectively, were incurred. Included in accounts receivable at June 30, 2011 and December 31, 2010 are receivables due from Company-sponsored mutual funds of approximately $13,456,000 and $11,495,000, respectively. |
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