(Mark
One) |
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x |
Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the quarterly period ended July 31, 2009 |
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or |
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o |
Transition Report Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934 For the transition period from _____________ to ____________ |
Maryland (State or other jurisdiction of incorporation or organization) |
04-2718215 (I.R.S. Employer Identification No.) |
Large accelerated
filer |
x |
Accelerated filer |
o |
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Non-accelerated
filer |
o (Do not check if smaller reporting company) |
Smaller reporting company |
o |
Required Information |
|
|
Page Number Reference |
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---|---|---|---|---|---|---|---|---|---|---|
Part I |
Financial Information |
|||||||||
Item 1. |
Consolidated Financial Statements |
3 | ||||||||
Item 2. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
29 | ||||||||
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
58 | ||||||||
Item 4. |
Controls and Procedures |
58 | ||||||||
Part II |
Other Information |
|||||||||
Item 1. |
Legal Proceedings |
58 | ||||||||
Item 1A. |
Risk Factors |
58 | ||||||||
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
60 | ||||||||
Item 4. |
Submission of Matters to a Vote of Security Holders |
61 | ||||||||
Item 6. |
Exhibits |
61 | ||||||||
Signatures |
62 |
(in thousands) | |
July 31, 2009 |
|
October 31, 2008 |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Assets |
||||||||||
Current
Assets: |
||||||||||
Cash and cash
equivalents |
$ | 283,796 | $ | 196,923 | ||||||
Short-term
investments |
49,440 | 169,943 | ||||||||
Investment
advisory fees and other receivables |
95,140 | 108,644 | ||||||||
Note
receivable from affiliate |
15,000 | | ||||||||
Other current
assets |
10,631 | 9,291 | ||||||||
Total current
assets |
454,007 | 484,801 | ||||||||
Other
Assets: |
||||||||||
Deferred
sales commissions |
54,578 | 73,116 | ||||||||
Goodwill |
135,788 | 122,234 | ||||||||
Other
intangible assets, net |
82,788 | 39,810 | ||||||||
Long-term
investments |
122,251 | 116,191 | ||||||||
Deferred
income taxes |
93,926 | 66,357 | ||||||||
Equipment and
leasehold improvements, net |
77,414 | 51,115 | ||||||||
Note
receivable from affiliate |
| 10,000 | ||||||||
Other
assets |
4,630 | 4,731 | ||||||||
Total other
assets |
571,375 | 483,554 | ||||||||
Total
assets |
$ | 1,025,382 | $ | 968,355 |
(in thousands, except share figures) | |
July 31, 2009 |
|
October 31, 2008 |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Liabilities, Non-Controlling Interests and Shareholders Equity |
||||||||||
Current
Liabilities: |
||||||||||
Accrued
compensation |
$ | 61,594 | $ | 93,134 | ||||||
Accounts
payable and accrued expenses |
55,283 | 55,322 | ||||||||
Dividend
payable |
18,208 | 17,948 | ||||||||
Taxes
payable |
| 848 | ||||||||
Deferred
income taxes |
16,866 | 20,862 | ||||||||
Contingent
purchase price liability |
14,046 | | ||||||||
Other current
liabilities |
2,714 | 3,317 | ||||||||
Total current
liabilities |
168,711 | 191,431 | ||||||||
Long-Term
Liabilities: |
||||||||||
Long-term
debt |
500,000 | 500,000 | ||||||||
Other
long-term liabilities |
34,296 | 26,269 | ||||||||
Total
long-term liabilities |
534,296 | 526,269 | ||||||||
Total
liabilities |
703,007 | 717,700 | ||||||||
Non-controlling interests |
3,260 | 10,528 | ||||||||
Commitments
and contingencies (See Note 19) |
| | ||||||||
Shareholders Equity: |
||||||||||
Voting Common
Stock, par value $0.00390625 per share: |
||||||||||
Authorized,
1,280,000 shares |
||||||||||
Issued and outstanding, 431,790 and 390,009 shares, respectively |
2 | 2 | ||||||||
Non-Voting
Common Stock, par value $0.00390625 per share: |
||||||||||
Authorized,
190,720,000 shares |
||||||||||
Issued and outstanding, 117,029,169 and 115,421,762 shares, respectively |
457 | 451 | ||||||||
Notes
receivable from stock option exercises |
(3,172 | ) | (4,704 | ) | ||||||
Accumulated
other comprehensive loss |
(1,935 | ) | (5,135 | ) | ||||||
Retained
earnings |
323,763 | 249,513 | ||||||||
Total
shareholders equity |
319,115 | 240,127 | ||||||||
Total liabilities, non-controlling interests and shareholders equity |
$ | 1,025,382 | $ | 968,355 |
Three Months Ended July 31, |
Nine Months Ended July 31, |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands, except per share figures) | |
2009 |
|
2008 |
|
2009 |
|
2008 |
||||||||||
Revenue: |
||||||||||||||||||
Investment
advisory and administration fees |
$ | 175,167 | $ | 211,311 | $ | 488,837 | $ | 623,735 | ||||||||||
Distribution
and underwriter fees |
21,719 | 31,305 | 61,521 | 100,841 | ||||||||||||||
Service
fees |
29,862 | 40,348 | 83,103 | 119,208 | ||||||||||||||
Other
revenue |
1,625 | (152 | ) | 2,772 | 2,250 | |||||||||||||
Total
revenue |
228,373 | 282,812 | 636,233 | 846,034 | ||||||||||||||
Expenses: |
||||||||||||||||||
Compensation
of officers and employees |
77,316 | 79,495 | 214,179 | 236,666 | ||||||||||||||
Distribution
expense |
25,386 | 31,591 | 68,893 | 93,929 | ||||||||||||||
Service fee
expense |
24,151 | 33,923 | 68,027 | 98,821 | ||||||||||||||
Amortization
of deferred sales commissions |
8,319 | 11,391 | 27,399 | 37,009 | ||||||||||||||
Fund
expenses |
5,230 | 6,521 | 14,646 | 18,947 | ||||||||||||||
Other
expenses |
28,738 | 27,806 | 86,734 | 73,265 | ||||||||||||||
Total
expenses |
169,140 | 190,727 | 479,878 | 558,637 | ||||||||||||||
Operating
income |
59,233 | 92,085 | 156,355 | 287,397 | ||||||||||||||
Other
Income (Expense): |
||||||||||||||||||
Interest
income |
857 | 2,376 | 2,956 | 9,501 | ||||||||||||||
Interest
expense |
(8,446 | ) | (8,411 | ) | (25,269 | ) | (25,230 | ) | ||||||||||
Realized
losses on investments |
(375 | ) | (332 | ) | (2,761 | ) | (97 | ) | ||||||||||
Unrealized
gains (losses) on investments |
3,499 | (259 | ) | 6,652 | (696 | ) | ||||||||||||
Foreign
currency gains (losses) |
93 | (58 | ) | 129 | (90 | ) | ||||||||||||
Impairment
losses on investments |
(369 | ) | | (1,637 | ) | | ||||||||||||
Income before
income taxes, non-controlling interest and equity in net income (loss) of affiliates |
54,492 | 85,401 | 136,425 | 270,785 | ||||||||||||||
Income
taxes |
(21,507 | ) | (34,620 | ) | (49,833 | ) | (105,552 | ) | ||||||||||
Non-controlling interest |
(1,599 | ) | (1,445 | ) | (3,415 | ) | (6,849 | ) | ||||||||||
Equity in net
income (loss) of affiliates, net of tax |
(163 | ) | 285 | (1,504 | ) | 2,327 | ||||||||||||
Net
income |
$ | 31,223 | $ | 49,621 | $ | 81,673 | $ | 160,711 | ||||||||||
Earnings
Per Share: |
||||||||||||||||||
Basic |
$ | 0.27 | $ | 0.43 | $ | 0.70 | $ | 1.39 | ||||||||||
Diluted |
$ | 0.26 | $ | 0.40 | $ | 0.68 | $ | 1.28 | ||||||||||
Weighted
Average Shares Outstanding: |
||||||||||||||||||
Basic |
116,410 | 115,926 | 116,092 | 115,848 | ||||||||||||||
Diluted |
122,016 | 125,325 | 120,020 | 125,088 | ||||||||||||||
Dividends
Declared Per Share |
$ | 0.155 | $ | 0.150 | $ | 0.465 | $ | 0.450 |
Nine Months Ended July 31, |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
(in thousands) | |
2009 |
|
2008 |
||||||
Cash and cash
equivalents, beginning of period |
$ | 196,923 | $ | 434,957 | ||||||
Cash Flows
from Operating Activities: |
||||||||||
Net
income |
81,673 | 160,711 | ||||||||
Adjustments
to reconcile net income to net cash provided by operating activities: |
||||||||||
(Gains)
losses on investments |
(3,006 | ) | 2,686 | |||||||
Amortization
of long-term investments |
1,847 | 1,348 | ||||||||
Equity in net
loss (income) of affiliates |
2,388 | (3,628 | ) | |||||||
Dividends
received from affiliates |
2,944 | 3,995 | ||||||||
Non-controlling interest |
3,415 | 6,849 | ||||||||
Amortization
of debt issuance costs |
529 | 924 | ||||||||
Deferred
income taxes |
(33,403 | ) | (31,262 | ) | ||||||
Stock-based
compensation |
31,473 | 30,374 | ||||||||
Depreciation
and other amortization |
15,285 | 9,808 | ||||||||
Amortization
of deferred sales commissions |
27,399 | 37,009 | ||||||||
Payment of
capitalized sales commissions |
(15,072 | ) | (26,851 | ) | ||||||
Contingent
deferred sales charges received |
6,203 | 9,250 | ||||||||
Proceeds from
the sale of trading investments |
35,720 | 17,696 | ||||||||
Purchase of
trading investments |
(38,151 | ) | (53,275 | ) | ||||||
Changes in
other assets and liabilities: |
||||||||||
Investment
advisory fees and other receivables |
17,068 | 5,107 | ||||||||
Other current
assets |
1,982 | (930 | ) | |||||||
Other
assets |
(427 | ) | (95 | ) | ||||||
Accrued
compensation |
(31,723 | ) | (22,267 | ) | ||||||
Accounts
payable and accrued expenses |
(447 | ) | (13,352 | ) | ||||||
Taxes payable
current |
(4,161 | ) | (27,285 | ) | ||||||
Other current
liabilities |
1,708 | 5,891 | ||||||||
Taxes payable
long-term |
| 1,039 | ||||||||
Other
long-term liabilities |
6,797 | | ||||||||
Net cash
provided by operating activities |
110,041 | 113,742 | ||||||||
Cash Flows
From Investing Activities: |
||||||||||
Additions to
equipment and leasehold improvements |
(42,075 | ) | (6,958 | ) | ||||||
Net cash paid
in acquisition |
(29,017 | ) | | |||||||
Purchase of
non-controlling interests |
(17,075 | ) | (26,465 | ) | ||||||
Proceeds from
the sale of available-for-sale investments and investments in affiliates |
122,975 | 16,482 | ||||||||
Purchase of
available-for-sale investments |
(9,902 | ) | (11,820 | ) | ||||||
Net cash
provided by (used for) investing activities |
24,906 | (28,761 | ) |
Nine Months Ended July 31, |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
(in thousands) | |
2009 |
|
2008 |
||||||
Cash Flows
From Financing Activities: |
||||||||||
Distributions
to minority shareholders |
(4,248 | ) | (6,143 | ) | ||||||
Issuance of
short-term note receivable to affiliate |
(5,000 | ) | | |||||||
Excess tax
benefit of stock option exercises |
9,671 | 9,532 | ||||||||
Proceeds from
issuance of Voting Common Stock |
86 | 36 | ||||||||
Proceeds from
issuance of Non-Voting Common Stock |
17,402 | 30,374 | ||||||||
Repurchase of
Non-Voting Common Stock |
(12,403 | ) | (173,087 | ) | ||||||
Principal
repayments on notes receivable from stock option exercises |
2,520 | 929 | ||||||||
Dividends
paid |
(54,219 | ) | (52,500 | ) | ||||||
Proceeds from
the issuance of mutual fund subsidiaries capital stock |
2,034 | 945 | ||||||||
Redemption of
mutual fund subsidiaries capital stock |
(3,654 | ) | (95 | ) | ||||||
Net cash used
for financing activities |
(47,811 | ) | (190,009 | ) | ||||||
Effect of
currency rate changes on cash and cash equivalents |
(263 | ) | (48 | ) | ||||||
Net increase
(decrease) in cash and cash equivalents |
86,873 | (105,076 | ) | |||||||
Cash and cash
equivalents, end of period |
$ | 283,796 | $ | 329,881 | ||||||
Supplemental Cash Flow Information: |
||||||||||
Interest
paid |
$ | 24,481 | $ | 24,481 | ||||||
Income taxes
paid |
$ | 76,837 | $ | 154,835 | ||||||
Supplemental Non-Cash Flow Information: |
||||||||||
Decrease in
investments due to net deconsolidations of sponsored investment funds |
$ | (4,442 | ) | $ | (38 | ) | ||||
Decrease in
non-controlling interests due to net deconsolidations of sponsored investment funds |
$ | (4,461 | ) | $ | (468 | ) | ||||
Exercise of
stock options through issuance of notes receivable |
$ | 989 | $ | 3,096 |
1. |
Basis of Presentation |
2. |
Principles of Consolidation |
3. |
Reclassifications and Presentation |
4. |
Adoption of New Accounting Standards |
6. |
Acquisitions |
7. |
Other Intangible Assets |
(dollars in thousands) | |
Weighted- average amortization period (in years) |
|
Gross carrying amount |
|
Accumulated amortization |
|
Net carrying amount |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortizing
intangible assets: |
||||||||||||||||||
Client
relationships acquired |
10.0 | $ | 109,177 | $ | (33,097 | ) | $ | 76,080 | ||||||||||
Non-amortizing intangible assets: |
||||||||||||||||||
Mutual fund management contract acquired |
6,708 | | 6,708 | |||||||||||||||
Total |
$ | 115,885 | $ | (33,097 | ) | $ | 82,788 |
8. |
Investments |
(in thousands) | |
July 31, 2009 |
|
October 31, 2008 |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Short-term
investments: |
||||||||||
Consolidated
funds: |
||||||||||
Commercial
paper |
$ | 12,899 | $ | 43,006 | ||||||
Debt
securities |
36,541 | 7,372 | ||||||||
Investment in affiliate |
| 119,565 | ||||||||
Total |
$ | 49,440 | $ | 169,943 | ||||||
Long-term
investments: |
||||||||||
Consolidated
funds: |
||||||||||
Debt
securities |
$ | 14,837 | $ | 13,839 | ||||||
Equity
securities |
1,877 | 17,880 | ||||||||
Separately
managed accounts: |
||||||||||
Debt
securities |
29,402 | 17,739 | ||||||||
Equity
securities |
11,029 | 13,966 | ||||||||
Sponsored
funds |
34,816 | 24,898 | ||||||||
Collateralized
debt obligation entities |
2,270 | 4,118 | ||||||||
Investments in
affiliates |
20,511 | 22,786 | ||||||||
Other investments |
7,509 | 965 | ||||||||
Total |
$ | 122,251 | $ | 116,191 |
July 31, 2009 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
(in thousands) | |
Cost |
|
Fair Value |
||||||
Short-term
investments: |
||||||||||
Commercial
paper |
$ | 12,899 | $ | 12,899 | ||||||
Debt securities |
37,283 | 36,541 | ||||||||
Total |
$ | 50,182 | $ | 49,440 | ||||||
Long-term
investments: |
||||||||||
Debt
securities |
$ | 42,554 | $ | 44,239 | ||||||
Equity securities |
11,885 | 12,906 | ||||||||
Total |
$ | 54,439 | $ | 57,145 |
October 31, 2008 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
(in thousands) | |
Cost |
|
Fair Value |
||||||
Short-term
investments: |
||||||||||
Commercial
paper |
$ | 41,833 | $ | 43,006 | ||||||
Debt securities |
8,223 | 7,372 | ||||||||
Total |
$ | 50,056 | $ | 50,378 | ||||||
Long-term
investments: |
||||||||||
Debt
securities |
$ | 34,731 | $ | 31,578 | ||||||
Equity securities |
40,351 | 31,846 | ||||||||
Total |
$ | 75,082 | $ | 63,424 |
July 31, 2009 |
Gross Unrealized |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) | |
Cost |
|
Gains |
|
Losses |
|
Fair Value |
||||||||||
Long-term
investments: |
||||||||||||||||||
Sponsored funds |
$ | 33,685 | $ | 2,610 | $ | (1,479 | ) | $ | 34,816 | |||||||||
Total |
$ | 33,685 | $ | 2,610 | $ | (1,479 | ) | $ | 34,816 |
October 31, 2008 |
Gross Unrealized |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) | |
Cost |
|
Gains |
|
Losses |
|
Fair Value |
||||||||||
Long-term
investments: |
||||||||||||||||||
Sponsored funds |
$ | 28,158 | $ | 312 | $ | (3,572 | ) | $ | 24,898 | |||||||||
Total |
$ | 28,158 | $ | 312 | $ | (3,572 | ) | $ | 24,898 |
Three Months Ended July 31, |
Nine Months Ended July 31, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) | |
2009 |
|
2008 |
|
2009 |
|
2008 |
|||||||||||
Gains |
$ | 703 | $ | | $ | 703 | $ | 353 | |||||||||||
Losses |
(131 | ) | (1 | ) | (365 | ) | (1 | ) | |||||||||||
Net realized gains (losses) |
$ | 572 | $ | (1 | ) | $ | 338 | $ | 352 |
9. |
Fair Value Measurements |
Level
1 |
Investments valued using unadjusted quoted market prices in active markets for identical assets at the reporting date. Assets classified as
Level 1 include debt and equity securities held in the portfolios of consolidated funds and separate accounts, which are classified as trading, and
investments in sponsored mutual funds which are classified as available-for-sale. |
|||||
Level
2 |
Investments valued using observable inputs other than Level 1 unadjusted quoted market prices, such as quoted market prices for similar assets
or liabilities in active markets, quoted prices for identical or similar assets or liabilities that are not active, and inputs other than quoted prices
that are observable or corroborated by observable market data. Investments in this category include commercial paper, certain debt securities and
investments in sponsored privately offered equity funds, which are not listed but have a net asset value that is comparable to listed mutual
funds. |
Level
3 |
Investments valued using unobservable inputs that are supported by little or no market activity. Level 3 valuations are derived primarily from
model-based valuation techniques that require significant management judgment or estimation based on assumptions that the Company believes market
participants would use in pricing the asset or liability. Investments in this category include investments in CDO entities that are measured at fair
value on a non-recurring basis when facts and circumstances indicate the investment has been impaired. The fair values of CDOs are derived from models
created to estimate cash flows using key inputs such as default and recovery rates for the underlying portfolio of loans or other securities. CDOs
measured at fair value on a non-recurring basis are classified as Level 3 because at least one of the significant inputs used in the determination of
fair value is not observable. |
(in thousands) | |
Level 1 |
|
Level 2 |
|
Level 3 |
|
Other Assets not held at Fair Value (1) |
|
Total |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash equivalents |
$ | 34,936 | $ | 150,250 | $ | | $ | | $ | 185,186 | ||||||||||||
Total |
$ | 34,936 | $ | 150,250 | $ | | $ | | $ | 185,186 | ||||||||||||
Short-term
investments: |
||||||||||||||||||||||
Consolidated
funds: |
||||||||||||||||||||||
Commercial
paper |
$ | | $ | 12,899 | $ | | $ | | $ | 12,899 | ||||||||||||
Debt securities |
| 36,541 | | | 36,541 | |||||||||||||||||
Total |
$ | | $ | 49,440 | $ | | $ | | $ | 49,440 | ||||||||||||
Long-term
investments: |
||||||||||||||||||||||
Consolidated
funds: |
||||||||||||||||||||||
Debt
securities |
$ | 14,837 | $ | | $ | | $ | | $ | 14,837 | ||||||||||||
Equity
securities |
1,877 | | | | 1,877 | |||||||||||||||||
Separately
managed accounts: |
||||||||||||||||||||||
Debt
securities |
10,118 | 19,284 | | | 29,402 | |||||||||||||||||
Equity
securities |
11,029 | | | | 11,029 | |||||||||||||||||
Sponsored
funds |
32,324 | 2,492 | | | 34,816 | |||||||||||||||||
Collateralized debt obligation entities |
| | | 1,358 | 1,358 | |||||||||||||||||
Investments
in affiliates |
| | | 20,511 | 20,511 | |||||||||||||||||
Other investments |
| 38 | | 7,471 | 7,509 | |||||||||||||||||
Total |
$ | 70,185 | $ | 21,814 | $ | | $ | 29,340 | $ | 121,339 |
(1) |
Includes investments in equity method investees and other investments carried at cost which, in accordance with GAAP, are not measured at fair value. |
(in thousands) | |
Total Level 3 |
|
Total Losses |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Collateralized debt obligation entities |
$ | 912 | $ | 1,637 | ||||||
Total |
$ | 912 | $ | 1,637 |
10. |
Fair Value Measurements of Other Financial Instruments |
July 31, 2009 |
|
October 31, 2008 |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) | |
Carrying Value |
|
Fair Value |
|
Carrying Value |
|
Fair Value |
|||||||||||
Other investments |
$ | 7,509 | $ | 7,509 | $ | 965 | $ | 965 | |||||||||||
Note receivable from affiliate |
$ | 15,000 | $ | 15,000 | $ | 10,000 | $ | 10,000 | |||||||||||
Notes receivable from stock option exercises |
$ | 3,172 | $ | 3,172 | $ | 4,704 | $ | 4,704 | |||||||||||
Long-term debt |
$ | 500,000 | $ | 493,618 | $ | 500,000 | $ | 485,728 |
11. |
Variable Interest Entities |
12. |
Related Party Transactions |
13. |
Stock-Based Compensation Plans |
Three Months Ended July 31, |
Nine Months Ended July 31, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) | |
2009 |
|
2008 |
|
2009 |
|
2008 |
|||||||||||
2008
Plan: |
|||||||||||||||||||
Stock
options |
$ | 8,372 | $ | 8,751 | $ | 25,703 | $ | 27,527 | |||||||||||
Restricted
shares |
1,526 | 352 | 4,415 | 1,057 | |||||||||||||||
Phantom stock
units |
44 | | 155 | | |||||||||||||||
Employee
Stock Purchase Plan |
651 | 387 | 897 | 1,144 | |||||||||||||||
Incentive
Plan Stock Alternative |
153 | 217 | 153 | 646 | |||||||||||||||
ACM Plan |
50 | | 150 | | |||||||||||||||
Total stock-based compensation expense |
$ | 10,796 | $ | 9,707 | $ | 31,473 | $ | 30,374 |
|
2009 |
|
2008 |
|||||||
---|---|---|---|---|---|---|---|---|---|---|
Weighted-average grant date fair value of options granted |
$6.72 | $14.79 | ||||||||
Assumptions: |
||||||||||
Dividend
yield |
2.3% to 3.1% | 1.2% to 1.9% | ||||||||
Volatility |
32% to 34% | 25% to 29% | ||||||||
Risk-free
interest rate |
2.9% to 4.6% | 3.6% to 4.4% | ||||||||
Expected life
of options |
7.4 years | 6.8 to 7.8 years |
(share and intrinsic value figures in
thousands) | |
Shares |
|
Weighted- Average Exercise Price |
|
Weighted- Average Remaining Contractual Term |
|
Aggregate Intrinsic Value |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Options
outstanding, beginning of period |
28,878 | $ | 23.49 | |||||||||||||||
Granted |
3,127 | 22.03 | ||||||||||||||||
Exercised |
(781 | ) | 13.68 | |||||||||||||||
Forfeited/expired |
(391 | ) | 32.17 | |||||||||||||||
Options outstanding, end of period |
30,833 | $ | 23.48 | 5.5 | $ | 228,580 | ||||||||||||
Options exercisable, end of period |
19,466 | $ | 19.02 | 4.1 | $ | 196,306 | ||||||||||||
Vested or expected to vest |
30,379 | $ | 23.36 | 5.4 | $ | 227,289 |
(share figures in thousands) | |
Shares |
|
Weighted- Average Grant Date Fair Value |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Unvested,
beginning of period |
149 | $ | 28.21 | |||||||
Granted |
973 | 22.04 | ||||||||
Vested |
(77 | ) | 20.92 | |||||||
Forfeited/expired |
(29 | ) | 28.02 | |||||||
Unvested, end of period |
1,016 | $ | 22.86 |
14. |
Common Stock Repurchases |
15. |
Income Taxes |
16. |
Comprehensive Income |
(in thousands) | |
2009 |
|
2008 |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Net
income |
$ | 81,673 | $ | 160,711 | ||||||
Net unrealized gains (losses) on available-for-sale securities, net of income tax (expense) benefit of $(1,613) and $1,912, respectively |
2,780 | (3,583 | ) | |||||||
Foreign currency translation adjustments, net of income taxes of $(110) and $62, respectively |
203 | (110 | ) | |||||||
Change in unamortized loss on derivative instrument, net of income tax of $118 |
217 | 217 | ||||||||
Comprehensive income |
$ | 84,873 | $ | 157,235 |
17. |
Earnings per Share |
Three Months Ended July 31, |
Nine Months Ended July 31, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands, except per share data) | |
2009 |
|
2008 |
|
2009 |
|
2008 |
|||||||||||
Weighted-average shares outstanding basic |
116,410 | 115,926 | 116,092 | 115,848 | |||||||||||||||
Incremental common shares from stock options and restricted share awards |
5,606 | 9,399 | 3,928 | 9,240 | |||||||||||||||
Weighted-average shares outstanding diluted |
122,016 | 125,325 | 120,020 | 125,088 | |||||||||||||||
Earnings per
share: |
|||||||||||||||||||
Basic |
$ | 0.27 | $ | 0.43 | $ | 0.70 | $ | 1.39 | |||||||||||
Diluted |
$ | 0.26 | $ | 0.40 | $ | 0.68 | $ | 1.28 |
18. |
Derivative Financial Instruments |
19. |
Commitments and Contingencies |
20. |
Regulatory Requirements |
21. |
Subsequent Events |
Item 2. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
July 31, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) | |
2009 |
|
% of Total |
|
2008 |
|
% of Total |
|
% Change |
||||||||||||
Equity |
$ | 88,125 | 61 | % | $ | 104,911 | 67 | % | 16 | % | ||||||||||||
Fixed
income |
38,798 | 27 | % | 31,859 | 21 | % | 22 | % | ||||||||||||||
Floating-rate bank loan |
16,789 | 12 | % | 19,028 | 12 | % | 12 | % | ||||||||||||||
Total |
$ | 143,712 | 100 | % | $ | 155,798 | 100 | % | 8 | % |
(1) |
Includes funds and separate accounts. |
For the Three Months Ended July 31, |
% |
For the Nine Months Ended July 31, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) | |
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
|||||||||||||||
Long-term
funds: |
|||||||||||||||||||||||||||
Open-end
funds |
$ | 1,825 | $ | 3,104 | 41 | % | $ | 6,303 | $ | 7,261 | 13% | ||||||||||||||||
Closed-end
funds |
458 | 28 | NM | (2) | (116 | ) | 122 | NM | |||||||||||||||||||
Private funds |
(550 | ) | (168 | ) | 227 | % | (3,213 | ) | (293 | ) | NM | ||||||||||||||||
Total long-term fund net inflows |
1,733 | 2,964 | 42 | % | 2,974 | 7,090 | 58% | ||||||||||||||||||||
HNW and
institutional accounts (1) |
1,164 | 1,228 | 5 | % | 3,500 | 2,789 | 25% | ||||||||||||||||||||
Retail managed accounts |
966 | 1,646 | 41 | % | 1,447 | 4,479 | 68% | ||||||||||||||||||||
Total separate account net inflows |
2,130 | 2,874 | 26 | % | 4,947 | 7,268 | 32% | ||||||||||||||||||||
Total net inflows |
$ | 3,863 | $ | 5,838 | 34 | % | $ | 7,921 | $ | 14,358 | 45% |
(1) |
High-net-worth (HNW) |
(2) |
Not meaningful (NM) |
For the Three Months Ended July 31, |
% |
For the Nine Months Ended July 31, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) |
2009 | 2008 | Change | 2009 | 2008 | Change | |||||||||||||||||||||
Equity fund
assets beginning |
$ | 47,137 | $ | 70,547 | 33% | $ | 51,956 | $ | 72,928 | 29% | |||||||||||||||||
Sales/inflows |
2,887 | 4,692 | 38% | 11,189 | 13,753 | 19% | |||||||||||||||||||||
Redemptions/outflows |
(2,587 | ) | (2,285 | ) | 13% | (9,614 | ) | (6,691 | ) | 44% | |||||||||||||||||
Exchanges |
27 | (16 | ) | NM | (60 | ) | (84 | ) | 29% | ||||||||||||||||||
Market value change |
5,409 | (5,774 | ) | NM | (598 | ) | (12,742 | ) | 95% | ||||||||||||||||||
Equity fund assets ending |
52,873 | 67,164 | 21% | 52,873 | 67,164 | 21% | |||||||||||||||||||||
Fixed income
fund assets beginning |
21,251 | 24,187 | 12% | 20,382 | 24,617 | 17% | |||||||||||||||||||||
Sales/inflows |
1,903 | 1,441 | 32% | 4,689 | 4,598 | 2% | |||||||||||||||||||||
Redemptions/outflows |
(893 | ) | (1,105 | ) | 19% | (3,335 | ) | (3,787 | ) | 12% | |||||||||||||||||
Exchanges |
14 | 2 | 600% | 100 | 160 | 38% | |||||||||||||||||||||
Market value change |
803 | (670 | ) | NM | 1,242 | (1,733 | ) | NM | |||||||||||||||||||
Fixed income fund assets ending |
23,078 | 23,855 | 3% | 23,078 | 23,855 | 3% | |||||||||||||||||||||
Floating-rate bank loan fund assets beginning |
13,786 | 17,977 | 23% | 13,806 | 20,381 | 32% | |||||||||||||||||||||
Sales/inflows |
1,267 | 951 | 33% | 3,012 | 3,095 | 3% | |||||||||||||||||||||
Redemptions/outflows |
(844 | ) | (730 | ) | 16% | (2,967 | ) | (3,878 | ) | 23% | |||||||||||||||||
Exchanges |
14 | (9 | ) | NM | 6 | (293 | ) | NM | |||||||||||||||||||
Market value change |
1,624 | (168 | ) | NM | 1,990 | (1,284 | ) | NM | |||||||||||||||||||
Floating-rate bank loan fund assets ending |
15,847 | 18,021 | 12% | 15,847 | 18,021 | 12% | |||||||||||||||||||||
Total
long-term fund assets beginning |
82,174 | 112,711 | 27% | 86,144 | 117,926 | 27% | |||||||||||||||||||||
Sales/inflows |
6,057 | 7,084 | 14% | 18,890 | 21,446 | 12% | |||||||||||||||||||||
Redemptions/outflows |
(4,324 | ) | (4,120 | ) | 5% | (15,916 | ) | (14,356 | ) | 11% | |||||||||||||||||
Exchanges |
55 | (23 | ) | NM | 46 | (217 | ) | NM | |||||||||||||||||||
Market value change |
7,836 | (6,612 | ) | NM | 2,634 | (15,759 | ) | NM | |||||||||||||||||||
Total long-term fund assets ending |
91,798 | 109,040 | 16% | 91,798 | 109,040 | 16% | |||||||||||||||||||||
Separate
accounts beginning |
44,282 | 44,390 | 0% | 35,831 | 42,159 | 15% | |||||||||||||||||||||
Inflows
HNW and institutional |
2,331 | 1,983 | 18% | 7,342 | 6,300 | 17% | |||||||||||||||||||||
Outflows
HNW and institutional |
(1,167 | ) | (755 | ) | 55% | (3,842 | ) | (3,511 | ) | 9% | |||||||||||||||||
Inflows
retail managed accounts |
2,167 | 2,718 | 20% | 6,225 | 7,280 | 14% | |||||||||||||||||||||
Outflows
retail managed accounts |
(1,201 | ) | (1,072 | ) | 12% | (4,778 | ) | (2,801 | ) | 71% | |||||||||||||||||
Market value
change |
4,040 | (2,223 | ) | NM | 2,821 | (4,386 | ) | NM | |||||||||||||||||||
Assets acquired |
| | NM | 6,853 | | NM | |||||||||||||||||||||
Separate accounts ending |
50,452 | 45,041 | 12% | 50,452 | 45,041 | 12% | |||||||||||||||||||||
Cash management fund assets ending |
1,462 | 1,717 | 15% | 1,462 | 1,717 | 15% | |||||||||||||||||||||
Assets under management ending |
$ | 143,712 | $ | 155,798 | 8% | $ | 143,712 | $ | 155,798 | 8% |
July 31, |
||||||||||||||||||||||
(in millions) |
|
2009 |
|
% of Total |
|
2008 |
|
% of Total |
|
% Change |
||||||||||||
Open-end
funds: |
||||||||||||||||||||||
Class
A |
$ | 33,942 | 23 | % | $ | 36,554 | 23 | % | 7 | % | ||||||||||||
Class
B |
2,370 | 2 | % | 3,861 | 2 | % | 39 | % | ||||||||||||||
Class
C |
7,539 | 5 | % | 9,030 | 6 | % | 17 | % | ||||||||||||||
Class
I |
8,136 | 6 | % | 4,360 | 3 | % | 87 | % | ||||||||||||||
Other(1) |
1,150 | 1 | % | 1,574 | 1 | % | 27 | % | ||||||||||||||
Total open-end funds |
53,137 | 37 | % | 55,379 | 35 | % | 4 | % | ||||||||||||||
Private
funds(2) |
17,720 | 12 | % | 26,251 | 17 | % | 32 | % | ||||||||||||||
Closed-end funds |
22,403 | 16 | % | 29,127 | 19 | % | 23 | % | ||||||||||||||
Total fund assets |
93,260 | 65 | % | 110,757 | 71 | % | 16 | % | ||||||||||||||
HNW and
institutional account assets |
31,477 | 22 | % | 27,787 | 18 | % | 13 | % | ||||||||||||||
Retail managed account assets |
18,975 | 13 | % | 17,254 | 11 | % | 10 | % | ||||||||||||||
Total separate account assets |
50,452 | 35 | % | 45,041 | 29 | % | 12 | % | ||||||||||||||
Total |
$ | 143,712 | 100 | % | $ | 155,798 | 100 | % | 8 | % |
(1) |
Includes other classes of Eaton Vance open-end funds. |
(2) |
Includes privately offered equity and bank loan funds and CDO entities. |
For the Three Months Ended July 31, |
For the Nine Months Ended July 31, |
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) |
|
2009 |
|
2008 |
|
% Change |
|
2009 |
|
2008 |
|
% Change |
||||||||||||||
Open-end
funds: |
||||||||||||||||||||||||||
Class
A |
$ | 32,092 | $ | 37,104 | 14 | % | $ | 29,238 | $ | 35,565 | 18 | % | ||||||||||||||
Class
B |
2,344 | 4,114 | 43 | % | 2,419 | 4,924 | 51 | % | ||||||||||||||||||
Class
C |
7,139 | 9,257 | 23 | % | 6,694 | 9,404 | 29 | % | ||||||||||||||||||
Class
I |
7,279 | 4,171 | 75 | % | 5,725 | 3,718 | 54 | % | ||||||||||||||||||
Other(1) |
1,161 | 1,500 | 23 | % | 1,182 | 1,069 | 11 | % | ||||||||||||||||||
Total open-end funds |
50,015 | 56,146 | 11 | % | 45,258 | 54,680 | 17 | % | ||||||||||||||||||
Private
funds(2) |
17,424 | 27,078 | 36 | % | 17,955 | 27,881 | 36 | % | ||||||||||||||||||
Closed-end funds |
21,392 | 30,350 | 30 | % | 20,732 | 31,147 | 33 | % | ||||||||||||||||||
Total fund assets |
88,831 | 113,574 | 22 | % | 83,945 | 113,708 | 26 | % | ||||||||||||||||||
HNW and
institutional account asset |
29,506 | 27,986 | 5 | % | 26,477 | 27,244 | 3 | % | ||||||||||||||||||
Retail managed account assets |
17,658 | 17,175 | 3 | % | 16,105 | 15,812 | 2 | % | ||||||||||||||||||
Total separate account assets |
47,164 | 45,161 | 4 | % | 42,582 | 43,056 | 1 | % | ||||||||||||||||||
Total |
$ | 135,995 | $ | 158,735 | 14 | % | $ | 126,527 | $ | 156,764 | 19 | % |
(1) |
Includes other classes of Eaton Vance open-end funds. |
(2) |
Includes privately offered equity and bank loan funds and CDO entities. |
For the Three Months Ended July 31, |
For the Nine Months Ended July 31, |
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands, except per share data) |
|
2009 |
|
2008 |
|
% Change |
|
2009 |
|
2008 |
|
% Change |
||||||||||||||
Net
income |
$ | 31,223 | $ | 49,621 | 37 | % | $ | 81,673 | $ | 160,711 | 49 | % | ||||||||||||||
Earnings per
share: |
||||||||||||||||||||||||||
Basic |
$ | 0.27 | $ | 0.43 | 37 | % | $ | 0.70 | $ | 1.39 | 50 | % | ||||||||||||||
Diluted |
$ | 0.26 | $ | 0.40 | 35 | % | $ | 0.68 | $ | 1.28 | 47 | % | ||||||||||||||
Operating
margin |
26% | 33% | 25% | 34% |
|
A decrease in revenue of $54.4 million, or 19 percent, primarily due to the 14 percent decrease in average assets under management and a decrease in our annualized effective fee rate to 67 basis points in the third quarter of fiscal 2009 from 71 basis points in the third quarter of fiscal 2008. The decrease in our annualized effective fee rate can be attributed to the increase in average separate account assets under management as a percentage of total average assets under management primarily as a result of the TABS acquisition in December 2008. |
|
A decrease in expenses of $21.6 million, or 11 percent, due to decreases in compensation expense, distribution expense, service fee expense, fund expenses and the amortization of deferred sales commissions, primarily reflecting decreases in both average assets under management and revenue. |
|
A decrease in interest income of $1.5 million, or 64 percent, reflecting a decrease in average cash balances and a decrease in effective interest rates over the last twelve months. |
|
An increase in unrealized gains on investments in separate accounts of $3.8 million, reflecting improving equity markets in the third quarter of fiscal 2009. |
|
Impairment losses on investments of $0.4 million associated with investments in CDO entities. |
|
A decrease in income taxes of $13.1 million, or 38 percent, reflecting the 36 percent decrease in taxable income year-over-year and a modest decrease in our effective tax rate. |
|
A decrease in weighted average diluted shares outstanding of 3.3 million shares, or 3 percent, primarily reflecting a decrease in the number of in-the-money share options included in the calculation of weighted average diluted shares outstanding and modest stock buybacks over the last twelve months. |
|
A decrease in revenue of $209.8 million, or 25 percent, primarily due to the 19 percent decrease in average assets under management and a decrease in our annualized effective fee rate to 67 basis points in the first nine months of fiscal 2009 from 72 basis points in the first nine months of fiscal 2008. The decrease in our annualized effective fee rate can be attributed to the increase in average separate account assets under management as a percentage of total average assets under management, primarily as a result of the TABS acquisition in December 2008. |
|
A decrease in expenses of $78.8 million, or 14 percent, due to decreases in compensation expense, distribution expense, service fee expense, fund expenses and the amortization of deferred sales commissions, primarily reflecting decreases in both average assets under management and revenue. These decreases were partially offset by an increase in other expenses, primarily reflecting increases in facilities and technology expense associated with our move to new corporate offices in the second quarter of fiscal 2009. |
|
A decrease in interest income of $6.5 million, or 69 percent, reflecting a decrease in average cash balances and a decrease in effective interest rates. |
|
An increase in net realized and unrealized gains on investments in separate accounts of $4.7 million, reflecting improving equity markets. |
|
Impairment losses on investments of $1.6 million associated with investments in CDO entities. |
|
A decrease in income taxes of $55.7 million, or 53 percent, reflecting the 50 percent decrease in taxable income year-over-year and the execution of a state tax voluntary disclosure agreement in the second quarter of fiscal 2009 that resulted in a net reduction in income tax expense of $2.7 million. |
|
A decrease in non-controlling interest of $3.4 million, primarily reflecting a $2.8 million adjustment to non-controlling interest made in the second quarter of fiscal 2008. |
|
A decrease in equity in net income (loss) of affiliates of $3.8 million due to losses recognized by a private equity partnership in which we invest. |
|
A decrease in weighted average diluted shares outstanding of 5.1 million shares, or 4 percent, primarily reflecting a decrease in the number of in-the-money share options included in the calculation of weighted average diluted shares outstanding and modest stock buybacks over the last twelve months. |
For the Three Months Ended July 31, |
For the Nine Months Ended July 31, |
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|
% Change |
|
2009 |
|
2008 |
|
% Change |
||||||||||||||
Operating
income |
$ | 59,233 | $ | 92,085 | 36% | $ | 156,355 | $ | 287,397 | 46% | ||||||||||||||||
Adjusted
for: |
||||||||||||||||||||||||||
Closed-end
fund structuring fees |
2,677 | | NM | 2,677 | | NM | ||||||||||||||||||||
Operating
(income) losses of consolidated funds |
(620 | ) | 1,202 | NM | (563 | ) | 1,117 | NM | ||||||||||||||||||
Stock-based compensation |
10,796 | 9,707 | 11% | 31,473 | 30,374 | 4% | ||||||||||||||||||||
Adjusted operating income |
$ | 72,086 | $ | 102,994 | 30% | $ | 189,942 | $ | 318,888 | 40% | ||||||||||||||||
Adjusted operating margin |
32% | 36% | 30% | 38% |
For the Three Months Ended July 31, |
For the Nine Months Ended July 31, |
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|
% Change |
|
2009 |
|
2008 |
|
% Change |
||||||||||||||
Investment
advisory and administration fees |
$ | 175,167 | $ | 211,311 | 17% | $ | 488,837 | $ | 623,735 | 22 | % | |||||||||||||||
Distribution
and underwriter fees |
21,719 | 31,305 | 31% | 61,521 | 100,841 | 39 | % | |||||||||||||||||||
Service
fees |
29,862 | 40,348 | 26% | 83,103 | 119,208 | 30 | % | |||||||||||||||||||
Other revenue |
1,625 | (152 | ) | NM | 2,772 | 2,250 | 23 | % | ||||||||||||||||||
Total revenue |
$ | 228,373 | $ | 282,812 | 19% | $ | 636,233 | $ | 846,034 | 25 | % |
For the Three Months Ended July 31, |
For the Nine Months Ended July 31, |
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|
% Change |
|
2009 |
|
2008 |
|
% Change |
||||||||||||||
Compensation
of officers and employees: |
||||||||||||||||||||||||||
Cash
compensation |
$ | 66,520 | $ | 69,788 | 5 | % | $ | 182,706 | $ | 206,292 | 11 | % | ||||||||||||||
Stock-based compensation |
10,796 | 9,707 | 11 | % | 31,473 | 30,374 | 4 | % | ||||||||||||||||||
Total compensation of officers and employees |
77,316 | 79,495 | 3 | % | 214,179 | 236,666 | 10 | % | ||||||||||||||||||
Distribution
expense(1) |
25,386 | 31,591 | 20 | % | 68,893 | 93,929 | 27 | % | ||||||||||||||||||
Service fee
expense |
24,151 | 33,923 | 29 | % | 68,027 | 98,821 | 31 | % | ||||||||||||||||||
Amortization
of deferred sales commissions |
8,319 | 11,391 | 27 | % | 27,399 | 37,009 | 26 | % | ||||||||||||||||||
Fund
expenses |
5,230 | 6,521 | 20 | % | 14,646 | 18,947 | 23 | % | ||||||||||||||||||
Other expenses(1) |
28,738 | 27,806 | 3 | % | 86,734 | 73,265 | 18 | % | ||||||||||||||||||
Total expenses |
$ | 169,140 | $ | 190,727 | 11 | % | $ | 479,878 | $ | 558,637 | 14 | % |
(1) |
Certain amounts from prior quarters have been reclassified to conform to current year presentation. See Note 3 in Item 1 for further discussion of this change. |
For the Three Months Ended July 31, |
For the Nine Months Ended July31, |
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|
% Change |
|
2009 |
|
2008 |
|
% Change |
||||||||||||||
Interest
income |
$ | 857 | $ | 2,376 | 64% | $ | 2,956 | $ | 9,501 | 69% | ||||||||||||||||
Interest
expense |
(8,446 | ) | (8,411 | ) | 0% | (25,269 | ) | (25,230 | ) | 0% | ||||||||||||||||
Realized
losses on investments |
(375 | ) | (332 | ) | 13% | (2,761 | ) | (97 | ) | NM | ||||||||||||||||
Unrealized
gains (losses) on investments |
3,499 | (259 | ) | NM | 6,652 | (696 | ) | NM | ||||||||||||||||||
Foreign
currency gains (losses) |
93 | (58 | ) | NM | 129 | (90 | ) | NM | ||||||||||||||||||
Impairment losses on investments |
(369 | ) | | NM | (1,637 | ) | | NM | ||||||||||||||||||
Total other income (expense) |
$ | (4,741 | ) | $ | (6,684 | ) | 29% | $ | (19,930 | ) | $ | (16,612 | ) | 20% |