Delaware | 001-34516 | 27-0423711 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibit | |
Press Release issued by the Company dated June 30, 2018 |
COWEN INC. | ||||
By: | /s/ Owen S. Littman | |||
Name: | Owen S. Littman | |||
Date: | July 26, 2018 | Title: | General Counsel | |
• | Revenue rose 46% year over year to $234.6 million compared to $160.5 million in the prior year period. |
• | Net income attributable to common stockholders was $3.7 million or $0.12 per diluted common share compared to $5.7 million or $0.19 per diluted common share in the prior year period. |
• | Revenue increased 36% year over year to $234.3 million compared to $171.9 million in the prior year period. |
• | The Company also generated Economic Income of $21.7 million or $0.71 per diluted share compared to Economic Income of $11.5 million or $0.39 per diluted share in the prior year period. |
• | On a GAAP and Economic Income basis, investment banking revenue increased 32% and 25% from the second quarter 2017 to $84.8 million and $80.0 million, respectively. The quarter was again led by strong performance in equity financings as well as a growing contribution from advisory and non-healthcare sectors. |
• | Brokerage revenue rose 62% and 69% from the second quarter 2017 to $103.3 million and $113.2 million on a GAAP and Economic Income basis, respectively. The increase was primarily attributable to the acquisition of Convergex in June 2017. |
• | As of July 1, 2018, assets under management were $10.9 billion, a $40 million increase from April 1, 2018. |
• | On a GAAP basis, the compensation to revenue ratio was 47%, unchanged versus the prior year period. On an Economic Income basis, the compensation to revenue ratio declined to 56% from 58% due to a shift in business mix as a result of the Convergex acquisition. |
• | Book value per share increased to $23.37 as of June 30, 2018, compared to $21.82 as of December 31, 2017. Tangible book value per share grew to $20.40 as of June 30, 2018, compared to $18.77 as of December 31, 2017. |
(Dollar amounts in millions, except per share information) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | March 31, | June 30, | ||||||||||||||||||||||||||
2018 | 2017 | % | 2018 | % | 2018 | 2017 | % | |||||||||||||||||||||
GAAP: | ||||||||||||||||||||||||||||
Revenue | $ | 234.6 | $ | 160.5 | 46 | % | $ | 251.4 | (7 | )% | $ | 486.0 | $ | 275.5 | 76 | % | ||||||||||||
Net income (loss) attributable to Cowen common stockholders | $ | 3.7 | $ | 5.7 | (36 | )% | $ | 15.2 | (76 | )% | $ | 18.9 | $ | 7.0 | 168 | % | ||||||||||||
Earnings (loss) per share (diluted) | $ | 0.12 | $ | 0.19 | (38 | )% | $ | 0.50 | (76 | )% | $ | 0.62 | $ | 0.24 | 154 | % | ||||||||||||
Economic Income (non-GAAP): | ||||||||||||||||||||||||||||
Economic income revenue | $ | 234.3 | $ | 171.9 | 36 | % | $ | 241.5 | (3 | )% | $ | 475.8 | $ | 300.5 | 58 | % | ||||||||||||
Economic income (loss) attributable to Cowen | $ | 21.7 | $ | 11.5 | 88 | % | $ | 24.1 | (10 | )% | $ | 45.8 | $ | 17.0 | 169 | % | ||||||||||||
Economic income per share (diluted) | $ | 0.71 | $ | 0.39 | 81 | % | $ | 0.79 | (10 | )% | $ | 1.50 | $ | 0.59 | 155 | % | ||||||||||||
Note: Amounts may not add due to rounding. A reconciliation of Economic Income (Loss) to net income appears under the section, "Summary Economic Income (Loss) to GAAP Reconciliation." |
(Dollar amounts in millions, except per share information) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | March 31, | June 30, | ||||||||||||||||||||||||||
2018 | 2017 | % | 2018 | % | 2018 | 2017 | % | |||||||||||||||||||||
Revenue | $ | 234.6 | $ | 160.5 | 46 | % | $ | 251.4 | (7 | )% | $ | 486.0 | $ | 275.5 | 76 | % | ||||||||||||
Net income (loss) attributable to Cowen | $ | 5.4 | $ | 7.4 | (27 | )% | $ | 16.9 | (68 | )% | $ | 22.3 | $ | 10.4 | 113 | % | ||||||||||||
Preferred stock dividends | $ | 1.7 | $ | 1.7 | — | % | $ | 1.7 | — | % | $ | 3.4 | $ | 3.4 | — | % | ||||||||||||
Net income (loss) attributable to Cowen common stockholders | $ | 3.7 | $ | 5.7 | (36 | )% | $ | 15.2 | (76 | )% | $ | 18.9 | $ | 7.0 | 168 | % | ||||||||||||
Earnings (loss) per share (diluted) | $0.12 | $0.19 | (38 | )% | $0.50 | (76 | )% | $ | 0.62 | $ | 0.24 | 154 | % | |||||||||||||||
Note: Amounts may not add due to rounding. |
(Amounts in millions, except per share information) | June 30, | Dec. 31, | June 30, | |||||
2018 | 2017 | 2017 | ||||||
Cowen Inc. stockholders' equity | $793.2 | $748.0 | $833.9 | |||||
Common equity (CE) | $691.9 | $646.7 | $732.6 | |||||
Tangible common equity (TCE) | $604.0 | $556.1 | $638.5 | |||||
Book value per share (CE/CSO) | $23.37 | $21.82 | $23.58 | |||||
Tangible book value per share (TCE/CSO) | $20.40 | $18.77 | $20.55 | |||||
Common shares outstanding (CSO) | 29.6 | 29.6 | 31.1 | |||||
Reconciliation of GAAP Cowen Inc. stockholders' equity to tangible common equity: | ||||||||
Cowen Inc. stockholders' equity | $793.2 | $748.0 | $833.9 | |||||
Less: | ||||||||
Preferred stock | 101.3 | 101.3 | 101.3 | |||||
Common equity (CE) | $691.9 | $646.7 | $732.6 | |||||
Less: | ||||||||
Goodwill & intangibles | 87.9 | 90.6 | 94.1 | |||||
Tangible common equity (TCE) | $604.0 | $556.1 | $638.5 | |||||
Note: Amounts may not add due to rounding. |
(Dollar amounts in millions, except per share information) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
June 30, | March 31, | June 30, | ||||||||||||||||||||||||||
2018 | 2017 | % | 2018 | % | 2018 | 2017 | % | |||||||||||||||||||||
Revenue | $ | 234.3 | $ | 171.9 | 36 | % | $ | 241.5 | (3 | )% | $ | 475.8 | $ | 300.5 | 58 | % | ||||||||||||
Economic Income (Loss) | $ | 21.7 | $ | 11.5 | 88 | % | $ | 24.1 | (10 | )% | $ | 45.8 | $ | 17.0 | 169 | % | ||||||||||||
Economic Income (Loss) per share (diluted) | $ | 0.71 | $ | 0.39 | 81 | % | $ | 0.79 | (10 | )% | $ | 1.50 | $ | 0.59 | 155 | % | ||||||||||||
Note: Amounts may not add due to rounding. NM indicates not meaningful. |
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | March 31, | June 30, | |||||||||||||||||
(Per share information) | 2018 | 2017 | 2018 | 2018 | 2017 | ||||||||||||||
Economic Income (Loss) per share (diluted) | $ | 0.71 | $ | 0.39 | $ | 0.79 | $ | 1.50 | $ | 0.59 | |||||||||
Adjustments: | |||||||||||||||||||
Preferred dividends | (0.06 | ) | (0.06 | ) | (0.06 | ) | (0.11 | ) | (0.12 | ) | |||||||||
Income Taxes | (0.14 | ) | 0.03 | (0.22 | ) | (0.36 | ) | (0.04 | ) | ||||||||||
Uncrystallized incentive fees | (0.05 | ) | — | (0.01 | ) | (0.07 | ) | — | |||||||||||
Amortization of discount on convertible debt | (0.06 | ) | — | — | (0.06 | ) | — | ||||||||||||
Debt extinguishment costs | (0.02 | ) | — | — | (0.02 | ) | — | ||||||||||||
Unrealized gain (loss) on conversion option (a) | (0.26 | ) | — | 0.01 | (0.25 | ) | — | ||||||||||||
Restructuring | — | (0.29 | ) | — | — | (0.29 | ) | ||||||||||||
Bargain purchase gain | — | 0.26 | — | — | 0.27 | ||||||||||||||
Transaction-related and other costs | — | (0.14 | ) | (0.01 | ) | (0.01 | ) | (0.17 | ) | ||||||||||
GAAP earnings (loss) per share (diluted) | $ | 0.12 | $ | 0.19 | $ | 0.50 | $ | 0.62 | $ | 0.24 | |||||||||
Note: Amounts may not add due to rounding. |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
June 30, | March 31, | June 30, | ||||||||||||||||||||||||||
(Dollar amounts in millions) | 2018 | 2017 | % | 2018 | % | 2018 | 2017 | % | ||||||||||||||||||||
Investment banking | $ | 80.0 | $ | 64.1 | 25 | % | $ | 93.9 | (15 | )% | $ | 174.0 | 100.7 | 73 | % | |||||||||||||
Brokerage | 113.2 | 67.0 | 69 | % | 114.1 | (1 | )% | 227.3 | 119.3 | 90 | % | |||||||||||||||||
Management fees | 12.5 | 14.4 | (13 | )% | 13.1 | (5 | )% | 25.6 | 28.3 | (10 | )% | |||||||||||||||||
Incentive income | 9.4 | 11.0 | (15 | )% | 5.2 | 80 | % | 14.6 | 14.0 | 4 | % | |||||||||||||||||
Investment income (loss) | 20.0 | 14.2 | 41 | % | 14.3 | 40 | % | 34.3 | 35.8 | (4 | )% | |||||||||||||||||
Other revenues | (0.7 | ) | 1.3 | (157 | )% | 0.9 | (181 | )% | 0.2 | 2.4 | (93 | )% | ||||||||||||||||
Total Revenue | $ | 234.3 | $ | 171.9 | 36 | % | $ | 241.5 | (3 | )% | $ | 475.8 | $ | 300.5 | 58 | % | ||||||||||||
Note: Amounts may not add due to rounding. |
• | Compensation and benefits expense was $131.3 million compared to $100.4 million in the second quarter 2017. The increase was due to higher revenue during the 2018 period as compared to 2017, which resulted in a higher compensation and benefits accrual. The compensation to revenue ratio was 56% compared to 58% for the prior year period. The lower compensation to Economic Income revenue ratio |
• | Fixed non-compensation expenses increased 17% year over year to $34.9 million from $29.8 million. The increase was attributable to the acquisition of Convergex in June 2017. |
• | Variable non-compensation expenses were $37.2 million compared to $21.9 million in the second quarter 2017. The increase was primarily related to higher floor brokerage and trade execution costs related to the acquisition of Convergex in June 2017, which included a mix of higher variable cost businesses (as a percentage of revenue). |
• | Reimbursements from affiliates, which relate to the investment management segment, decreased $0.2 million to $0.4 million for the three months ended June 30, 2018, compared to $0.6 million in the prior year period. |
• | Net income attributable to redeemable non-controlling interests increased by $0.5 million to $2.5 million for the three months ended June 30, 2018 compared with $2.0 million in the prior year period. Non-controlling interest represents the portion of net income or loss attributable to certain non-wholly owned subsidiaries that is allocated to the Company's partners in those subsidiaries. |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
(Dollar amounts in millions) | 2018 | 2017 | 2018 | 2017 | |||||||
Equity Underwriting | $64.5 | $56.1 | $143.8 | $88.2 | |||||||
Debt Underwriting | 1.0 | — | 1.3 | (0.1 | ) | ||||||
Advisory | 14.5 | 8.0 | 28.9 | 12.5 | |||||||
Total | $80.0 | $64.1 | $174.0 | $100.7 |
Three Months Ended | Six Months Ended | ||||||
June 30, | June 30, | ||||||
2018 | 2017 | 2018 | 2017 | ||||
Equity Underwriting | 30 | 31 | 66 | 54 | |||
Of which bookrun: | 22 | 18 | 50 | 32 | |||
Debt Underwriting | 1 | — | 2 | — | |||
Advisory | 10 | 2 | 15 | 4 | |||
Total | 41 | 33 | 83 | 58 |
Cowen Inc. | |||||||||||||||
GAAP Preliminary Unaudited Condensed Consolidated Statements of Operations | |||||||||||||||
(Dollar amounts in thousands, except per share data) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | |||||||||||||||
Investment banking | $ | 84,826 | $ | 64,146 | $ | 182,814 | $ | 100,699 | |||||||
Brokerage | 103,285 | 63,845 | 209,018 | 114,379 | |||||||||||
Management fees | 7,373 | 8,656 | 14,790 | 17,364 | |||||||||||
Incentive income | 48 | 3,726 | 64 | 4,272 | |||||||||||
Interest and dividends | 25,109 | 7,917 | 51,063 | 13,006 | |||||||||||
Reimbursement from affiliates | 336 | 495 | 713 | 2,147 | |||||||||||
Aircraft lease revenue | 419 | 1,043 | 1,134 | 2,102 | |||||||||||
Reinsurance premiums | 9,226 | 7,682 | 17,873 | 14,771 | |||||||||||
Other | 876 | 1,345 | 2,212 | 2,745 | |||||||||||
Consolidated Funds revenues | 3,075 | 1,675 | 6,276 | 4,016 | |||||||||||
Total revenue | 234,573 | 160,530 | 485,957 | 275,501 | |||||||||||
Interest and dividends | 24,306 | 12,211 | 48,846 | 22,141 | |||||||||||
Total net revenue | 210,267 | 148,319 | 437,111 | 253,360 | |||||||||||
Expenses | |||||||||||||||
Employee compensation and benefits | 131,845 | 102,111 | 266,985 | 178,784 | |||||||||||
Reinsurance claims, commissions and amortization of deferred acquisition costs | 9,924 | 7,275 | 18,655 | 13,453 | |||||||||||
Operating, general, administrative and other expenses | 75,304 | 53,990 | 151,523 | 93,591 | |||||||||||
Depreciation and amortization expense | 3,194 | 3,132 | 6,419 | 6,160 | |||||||||||
Restructuring costs | — | 8,541 | — | 8,541 | |||||||||||
Consolidated Funds expenses | 3,149 | 2,748 | 5,580 | 7,711 | |||||||||||
Total expenses | 223,416 | 177,797 | 449,162 | 308,240 | |||||||||||
Other income (loss) | |||||||||||||||
Net (losses) gains on securities, derivatives and other investments | 16,719 | 18,719 | 32,688 | 44,775 | |||||||||||
Bargain purchase gain | — | 7,946 | — | 7,946 | |||||||||||
Gain/(loss) on debt extinguishment | (556 | ) | — | (556 | ) | — | |||||||||
Consolidated Funds net (losses) gains | 30,985 | 30,613 | 48,850 | 43,959 | |||||||||||
Total other income (loss) | 47,148 | 57,278 | 80,982 | 96,680 | |||||||||||
Income (loss) before income taxes | 33,999 | 27,800 | 68,931 | 41,800 | |||||||||||
Income tax expense/(benefit) | 3,993 | (785 | ) | 10,916 | 1,126 | ||||||||||
Net income (loss) | 30,006 | 28,585 | 58,015 | 40,674 | |||||||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 24,607 | 21,145 | 35,763 | 30,250 | |||||||||||
Net income (loss) attributable to Cowen Inc. | 5,399 | 7,440 | 22,252 | 10,424 | |||||||||||
Preferred stock dividends | 1,698 | 1,698 | 3,396 | 3,396 | |||||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | $ | 3,701 | $ | 5,742 | $ | 18,856 | $ | 7,028 | |||||||
Earnings (loss) per share: | |||||||||||||||
Basic | $ | 0.12 | $ | 0.20 | $ | 0.64 | $ | 0.25 | |||||||
Diluted | $ | 0.12 | $ | 0.19 | $ | 0.62 | $ | 0.24 | |||||||
Weighted average shares used in per share data: | |||||||||||||||
Basic | 29,769 | 28,634 | 29,688 | 27,852 | |||||||||||
Diluted | 30,720 | 29,474 | 30,460 | 28,860 |
Cowen Inc. | |||||||||||||||
Unaudited Reconciliation of GAAP and Economic Revenue for the Three Months Ended June 30, 2018 | |||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||
Adjustments | |||||||||||||||
Other | Funds | Economic | |||||||||||||
GAAP | Adjustments (1) | Consolidation (2) | Income | ||||||||||||
Revenue | |||||||||||||||
Investment banking | $ | 84,826 | $ | (4,784 | ) | (g) | $ | — | $ | 80,042 | |||||
Brokerage | 103,285 | 9,901 | (b) | — | 113,186 | ||||||||||
Management fees | 7,373 | 4,500 | (a) | 613 | 12,486 | ||||||||||
Incentive income | 48 | 9,306 | (a)(g) | 8 | 9,363 | ||||||||||
Investment income | — | 19,954 | (c)(f) | — | 19,954 | ||||||||||
Interest and dividends | 25,109 | (25,109 | ) | (c) | — | — | |||||||||
Reimbursement from affiliates | 336 | (401 | ) | (e) | 65 | — | |||||||||
Aircraft lease revenue | 419 | (419 | ) | (f) | — | — | |||||||||
Reinsurance premiums | 9,226 | (9,226 | ) | (d) | — | — | |||||||||
Other revenues | 876 | (1,596 | ) | (d) | — | (721 | ) | ||||||||
Consolidated Funds | 3,075 | — | (3,075 | ) | — | ||||||||||
Total revenue | $ | 234,573 | $ | 2,126 | $ | (2,389 | ) | $ | 234,310 | ||||||
Note: The following is a summary of the adjustments made to US GAAP revenue to Economic Income revenue: | |||||||||||||||
(1) Other adjustments include reclassifications between other income (loss), redeemable non-controlling interests and interest and non-interest expenses based on the nature of the respective line item | |||||||||||||||
(2) Fund consolidation includes the impact of consolidation. The related elimination entries of the Consolidated Funds are not included in Economic Income. Adjustments include elimination of incentive income and management fees earned from the Consolidated Funds. | |||||||||||||||
Other Adjustments: | |||||||||||||||
(a) Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents and (ii) our proportionate share of management and incentive fees of certain real estate operating entities and the activist business. | |||||||||||||||
(b) Economic Income (Loss) brokerage revenues included net securities borrowed and securities loaned activities. | |||||||||||||||
(c) Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends). | |||||||||||||||
(d) Economic Income (Loss) recognizes underwriting income from the Company's insurance related activities, net of expenses, within other revenue. | |||||||||||||||
(e) Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of revenues under US GAAP. | |||||||||||||||
(f) Aircraft lease revenue is shown net of expenses in other revenue for Economic Income (Loss). | |||||||||||||||
(g) Economic Income (Loss) presents underwriting expenses net of investment banking revenues and records income from uncrystallized incentive fees. |
Cowen Inc. | |||||||||||||||
Unaudited Reconciliation of GAAP and Economic Revenue for the Three Months Ended June 30, 2017 | |||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||
Adjustments | |||||||||||||||
Other | Funds | Economic | |||||||||||||
GAAP | Adjustments (1) | Consolidation (2) | Income | ||||||||||||
Revenue | |||||||||||||||
Investment banking | $ | 64,146 | $ | — | $ | — | $ | 64,146 | |||||||
Brokerage | 63,845 | 3,148 | (b) | — | 66,993 | ||||||||||
Management fees | 8,656 | 5,094 | (a) | 605 | 14,355 | ||||||||||
Incentive income | 3,726 | 4,464 | (a) | 2,779 | 10,969 | ||||||||||
Investment income | — | 14,192 | (c)(f) | — | 14,192 | ||||||||||
Interest and dividends | 7,917 | (7,917 | ) | (c) | — | ||||||||||
Reimbursement from affiliates | 495 | (570 | ) | (e) | 75 | — | |||||||||
Aircraft lease revenue | 1,043 | (1,043 | ) | (f) | — | — | |||||||||
Reinsurance premiums | 7,682 | (7,682 | ) | (d) | — | — | |||||||||
Other revenues | 1,345 | (72 | ) | (d) | — | 1,273 | |||||||||
Consolidated Funds | 1,675 | (1,675 | ) | — | |||||||||||
Total revenue | $ | 160,530 | $ | 9,614 | $ | 1,784 | $ | 171,928 | |||||||
Note: The following is a summary of the adjustments made to US GAAP revenue to Economic Income revenue: | |||||||||||||||
(1) Other adjustments include reclassifications between other income (loss), redeemable non-controlling interests and interest and non-interest expenses based on the nature of the respective line item | |||||||||||||||
(2) Fund consolidation includes the impact of consolidation. The related elimination entries of the Consolidated Funds are not included in Economic Income. Adjustments include elimination of incentive income and management fees earned from the Consolidated Funds. | |||||||||||||||
Other Adjustments: | |||||||||||||||
(a) Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents and (ii) our proportionate share of management and incentive fees of certain real estate operating entities and the activist business. | |||||||||||||||
(b) Economic Income (Loss) brokerage revenues included net securities borrowed and securities loaned activities. | |||||||||||||||
(c) Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends). | |||||||||||||||
(d) Economic Income (Loss) recognizes underwriting income from the Company's insurance related activities, net of expenses, within other revenue. | |||||||||||||||
(e) Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of revenues under US GAAP. | |||||||||||||||
(f) Aircraft lease revenue is shown net of expenses in other revenue for Economic Income (Loss). |
Cowen Inc. | |||||||||||||||
Unaudited Reconciliation of GAAP and Economic Revenue for the Six Months Ended June 30, 2018 | |||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||
Adjustments | |||||||||||||||
Other | Funds | Economic | |||||||||||||
GAAP | Adjustments (1) | Consolidation (2) | Income | ||||||||||||
Revenue | |||||||||||||||
Investment banking | $ | 182,814 | $ | (8,848 | ) | (g) | $ | — | $ | 173,966 | |||||
Brokerage | 209,018 | 18,239 | (b) | — | 227,257 | ||||||||||
Management fees | 14,790 | 9,006 | (a) | 1,816 | 25,613 | ||||||||||
Incentive income | 64 | 14,478 | (a)(g) | 17 | 14,559 | ||||||||||
Investment income | — | 34,255 | (c)(f) | — | 34,256 | ||||||||||
Interest and dividends | 51,063 | (51,063 | ) | (c) | — | — | |||||||||
Reimbursement from affiliates | 713 | (846 | ) | (e) | 133 | — | |||||||||
Aircraft lease revenue | 1,134 | (1,134 | ) | (f) | — | — | |||||||||
Reinsurance premiums | 17,873 | (17,873 | ) | (d) | — | — | |||||||||
Other revenues | 2,212 | (2,045 | ) | (d) | — | 166 | |||||||||
Consolidated Funds | 6,276 | — | (6,276 | ) | — | ||||||||||
Total revenue | $ | 485,957 | $ | (5,831 | ) | $ | (4,310 | ) | $ | 475,817 | |||||
Note: The following is a summary of the adjustments made to US GAAP revenue to Economic Income revenue: | |||||||||||||||
(1) Other adjustments include reclassifications between other income (loss), redeemable non-controlling interests and interest and non-interest expenses based on the nature of the respective line item | |||||||||||||||
(2) Fund consolidation includes the impact of consolidation. The related elimination entries of the Consolidated Funds are not included in Economic Income. Adjustments include elimination of incentive income and management fees earned from the Consolidated Funds. | |||||||||||||||
Other Adjustments: | |||||||||||||||
(a) Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents and (ii) our proportionate share of management and incentive fees of certain real estate operating entities and the activist business. | |||||||||||||||
(b) Economic Income (Loss) brokerage revenues included net securities borrowed and securities loaned activities. | |||||||||||||||
(c) Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends). | |||||||||||||||
(d) Economic Income (Loss) recognizes underwriting income from the Company's insurance related activities, net of expenses, within other revenue. | |||||||||||||||
(e) Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of revenues under US GAAP. | |||||||||||||||
(f) Aircraft lease revenue is shown net of expenses in other revenue for Economic Income (Loss). | |||||||||||||||
(g) Economic Income (Loss) presents underwriting expenses net of investment banking revenues and records income from uncrystallized incentive fees. |
Cowen Inc. | |||||||||||||||
Unaudited Reconciliation of GAAP and Economic Revenue for the Six Months Ended June 30, 2017 | |||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||
Adjustments | |||||||||||||||
Other | Funds | Economic | |||||||||||||
GAAP | Adjustments (1) | Consolidation (2) | Income | ||||||||||||
Revenue | |||||||||||||||
Investment banking | $ | 100,699 | $ | — | $ | — | $ | 100,699 | |||||||
Brokerage | 114,379 | 4,927 | (b) | — | 119,306 | ||||||||||
Management fees | 17,364 | 9,805 | (a) | 1,133 | 28,302 | ||||||||||
Incentive income | 4,272 | 6,490 | (a) | 3,267 | 14,029 | ||||||||||
Investment income | — | 35,816 | (c)(f) | — | 35,816 | ||||||||||
Interest and dividends | 13,006 | (13,006 | ) | (c) | — | — | |||||||||
Reimbursement from affiliates | 2,147 | (2,300 | ) | (e) | 153 | — | |||||||||
Aircraft lease revenue | 2,102 | (2,102 | ) | (f) | — | — | |||||||||
Reinsurance premiums | 14,771 | (14,771 | ) | (d) | — | — | |||||||||
Other revenues | 2,745 | (367 | ) | (d) | — | 2,378 | |||||||||
Consolidated Funds | 4,016 | — | (4,016 | ) | — | ||||||||||
Total revenue | $ | 275,501 | $ | 24,492 | $ | 537 | $ | 300,530 | |||||||
Note: The following is a summary of the adjustments made to US GAAP revenue to Economic Income revenue: | |||||||||||||||
(1) Other adjustments include reclassifications between other income (loss), redeemable non-controlling interests and interest and non-interest expenses based on the nature of the respective line item | |||||||||||||||
(2) Fund consolidation includes the impact of consolidation. The related elimination entries of the Consolidated Funds are not included in Economic Income. Adjustments include elimination of incentive income and management fees earned from the Consolidated Funds. | |||||||||||||||
Other Adjustments: | |||||||||||||||
(a) Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents and (ii) our proportionate share of management and incentive fees of certain real estate operating entities and the activist business. | |||||||||||||||
(b) Economic Income (Loss) brokerage revenues included net securities borrowed and securities loaned activities. | |||||||||||||||
(c) Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends). | |||||||||||||||
(d) Economic Income (Loss) recognizes underwriting income from the Company's insurance related activities, net of expenses, within other revenue. | |||||||||||||||
(e) Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of revenues under US GAAP. | |||||||||||||||
(f) Aircraft lease revenue is shown net of expenses in other revenue for Economic Income (Loss). |
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