Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Jul. 25, 2014 | |
Document Documentand Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Trading Symbol | 'GHL | ' |
Entity Registrant Name | 'GREENHILL & CO INC | ' |
Entity Central Index Key | '0001282977 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 28,312,111 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Financial Condition (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents ($4.9 million and $5.1 million restricted from use at June 30, 2014 and December 31, 2013, respectively) | $29,160 | $42,679 |
Advisory fees receivable, net of allowance for doubtful accounts of $0.0 million at June 30, 2014 and December 31, 2013 | 74,606 | 85,236 |
Other receivables | 6,087 | 2,877 |
Property and equipment, net of accumulated depreciation of $58.7 million and $57.0 million at June 30, 2014 and December 31, 2013, respectively | 11,246 | 11,500 |
Investments in merchant banking funds | 4,525 | 11,745 |
Goodwill | 150,075 | 142,972 |
Deferred tax asset, net | 41,679 | 54,202 |
Other assets | 4,190 | 2,235 |
Total assets | 321,568 | 353,446 |
Liabilities and Equity | ' | ' |
Compensation payable | 10,036 | 13,851 |
Accounts payable and accrued expenses | 10,516 | 13,346 |
Current income taxes payable | 6,805 | 15,345 |
Bank loan payable | 37,450 | 30,849 |
Deferred tax liability | 903 | 2,345 |
Total liabilities | 65,710 | 75,736 |
Common stock, par value $0.01 per share; 100,000,000 shares authorized, 38,767,519 and 37,872,756 shares issued as of June 30, 2014 and December 31, 2013, respectively; 28,310,803 and 27,767,702 shares outstanding as of June 30, 2014 and December 31, 2013, respectively | 388 | 379 |
Contingent convertible preferred stock, par value $0.01 per share; 10,000,000 shares authorized and 1,099,877 shares issued as of June 30, 2014 and December 31, 2013 and 439,951 shares outstanding as of June 30, 2014 and December 31, 2013 | 14,446 | 14,446 |
Restricted stock units | 74,916 | 117,258 |
Additional paid-in capital | 588,140 | 534,533 |
Exchangeable shares of subsidiary; 257,156 shares issued as of June 30, 2014 and December 31, 2013; 32,804 shares outstanding as of June 30, 2014 and December 31, 2013 | 1,958 | 1,958 |
Retained earnings | 133,046 | 152,412 |
Accumulated other comprehensive income (loss) | -4,539 | -9,361 |
Treasury stock, at cost, par value $0.01 per share; 10,456,716 and 10,105,054 shares as of June 30, 2014 and December 31, 2013, respectively | -553,191 | -534,957 |
Stockholders’ equity | 255,164 | 276,668 |
Noncontrolling interests | 694 | 1,042 |
Total equity | 255,858 | 277,710 |
Total liabilities and equity | $321,568 | $353,446 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Financial Condition (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Cash and cash equivalents, restricted from use | $4.90 | $5.10 |
Advisory fees receivable, allowance for doubtful accounts | 0 | 0 |
Property and equipment, accumulated depreciation | $58.70 | $57 |
Common stock, par value (usd per share) | $0.01 | $0.01 |
Common stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (shares) | 38,767,519 | 37,872,756 |
Common stock, shares outstanding (shares) | 28,310,803 | 27,767,702 |
Contingent convertible preferred stock, par value (usd per share) | $0.01 | $0.01 |
Contingent convertible preferred stock, shares authorized (shares) | 10,000,000 | 10,000,000 |
Contingent convertible preferred stock, shares issued (shares) | 1,099,877 | 1,099,877 |
Contingent convertible preferred stock, shares outstanding (shares) | 439,951 | 439,951 |
Exchangeable shares of subsidiary, shares issued (shares) | 257,156 | 257,156 |
Exchangeable shares of subsidiary, shares outstanding (shares) | 32,804 | 32,804 |
Treasury stock, par value (usd per share) | $0.01 | $0.01 |
Treasury stock, shares (shares) | 10,456,716 | 10,105,054 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues | ' | ' | ' | ' |
Advisory revenues | $63,987 | $83,066 | $112,442 | $164,513 |
Investment revenues (losses) | -964 | 3,624 | -5,850 | 1,767 |
Total revenues | 63,023 | 86,690 | 106,592 | 166,280 |
Expenses | ' | ' | ' | ' |
Employee compensation and benefits | 35,135 | 45,946 | 63,978 | 88,128 |
Occupancy and equipment rental | 4,818 | 4,330 | 9,132 | 8,650 |
Depreciation and amortization | 830 | 1,024 | 1,643 | 2,752 |
Information services | 2,170 | 1,913 | 4,199 | 3,977 |
Professional fees | 1,447 | 1,639 | 2,625 | 2,753 |
Travel related expenses | 3,293 | 3,237 | 6,309 | 6,481 |
Interest expense | 311 | 247 | 576 | 528 |
Other operating expenses | 2,495 | 2,940 | 5,242 | 5,924 |
Total expenses | 50,499 | 61,276 | 93,704 | 119,193 |
Income before taxes | 12,524 | 25,414 | 12,888 | 47,087 |
Provision for taxes | 4,470 | 9,927 | 4,596 | 17,983 |
Consolidated net income | 8,054 | 15,487 | 8,292 | 29,104 |
Less: Net income allocated to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income allocated to common stockholders | $8,054 | $15,487 | $8,292 | $29,104 |
Average shares outstanding: | ' | ' | ' | ' |
Basic (shares) | 29,954,291 | 29,912,161 | 30,218,513 | 30,131,291 |
Diluted (shares) | 29,961,023 | 29,920,179 | 30,254,549 | 30,171,500 |
Earnings per share: | ' | ' | ' | ' |
Basic (usd per share) | $0.27 | $0.52 | $0.27 | $0.97 |
Diluted (usd per share) | $0.27 | $0.52 | $0.27 | $0.96 |
Dividends declared and paid per share (usd per share) | $0.45 | $0.45 | $0.90 | $0.90 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Consolidated net income | $8,054 | $15,487 | $8,292 | $29,104 |
Currency translation adjustment, net of tax | 2,110 | -13,145 | 4,822 | -14,603 |
Comprehensive income | 10,164 | 2,342 | 13,114 | 14,501 |
Less: Net income allocated to noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income allocated to common stockholders | $10,164 | $2,342 | $13,114 | $14,501 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Changes in Equity (USD $) | Total | Common Stock | Contingent Convertible Preferred Stock | Restricted Stock Units | Additional Paid-in Capital | Exchangeable Shares of Subsidiary | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Parent | Noncontrolling Interests |
In Thousands, unless otherwise specified | |||||||||||
Beginning Balance at Dec. 31, 2012 | ' | $365 | $46,950 | $107,253 | $458,642 | $1,958 | $159,918 | $6,624 | ($479,551) | ' | $1,353 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued | ' | 14 | ' | ' | 77,920 | ' | ' | ' | ' | ' | ' |
Convertible Preferred Stock Converted to Other Securities | ' | ' | -32,504 | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock units recognized, net of forfeitures | ' | ' | ' | 56,100 | ' | ' | ' | ' | ' | ' | ' |
Restricted stock units delivered | ' | ' | ' | -46,095 | ' | ' | ' | ' | ' | ' | ' |
Tax (expense) from the delivery of restricted stock units | ' | ' | ' | ' | -2,029 | ' | ' | ' | ' | ' | ' |
Exchangeable shares of subsidiary delivered | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' |
Dividends | ' | ' | ' | ' | ' | ' | -56,225 | ' | ' | ' | ' |
Tax benefit from payment of restricted stock unit dividends | ' | ' | ' | ' | ' | ' | 2,037 | ' | ' | ' | ' |
Net income allocated to common stockholders | ' | ' | ' | ' | ' | ' | 46,682 | ' | ' | ' | ' |
Currency translation adjustment, net of tax | ' | ' | ' | ' | ' | ' | ' | -15,985 | ' | ' | ' |
Repurchased | ' | ' | ' | ' | ' | ' | ' | ' | -55,406 | ' | ' |
Net income allocated to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Distributions to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -311 |
Increases (decreases) in noncontrolling interests | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ending Balance at Dec. 31, 2013 | 277,710 | 379 | 14,446 | 117,258 | 534,533 | 1,958 | 152,412 | -9,361 | -534,957 | 276,668 | 1,042 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued | ' | 9 | ' | ' | 57,233 | ' | ' | ' | ' | ' | ' |
Convertible Preferred Stock Converted to Other Securities | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock units recognized, net of forfeitures | ' | ' | ' | 15,160 | ' | ' | ' | ' | ' | ' | ' |
Restricted stock units delivered | ' | ' | ' | -57,502 | ' | ' | ' | ' | ' | ' | ' |
Tax (expense) from the delivery of restricted stock units | ' | ' | ' | ' | -3,626 | ' | ' | ' | ' | ' | ' |
Exchangeable shares of subsidiary delivered | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' |
Dividends | ' | ' | ' | ' | ' | ' | -28,575 | ' | ' | ' | ' |
Tax benefit from payment of restricted stock unit dividends | ' | ' | ' | ' | ' | ' | 917 | ' | ' | ' | ' |
Net income allocated to common stockholders | 8,292 | ' | ' | ' | ' | ' | 8,292 | ' | ' | ' | ' |
Currency translation adjustment, net of tax | 4,822 | ' | ' | ' | ' | ' | ' | 4,822 | ' | ' | ' |
Repurchased | ' | ' | ' | ' | ' | ' | ' | ' | -18,234 | ' | ' |
Net income allocated to noncontrolling interests | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Distributions to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Increases (decreases) in noncontrolling interests | -348 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ending Balance at Jun. 30, 2014 | $255,858 | $388 | $14,446 | $74,916 | $588,140 | $1,958 | $133,046 | ($4,539) | ($553,191) | $255,164 | $694 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Changes in Equity (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Common stock, par value (usd per share) | $0.01 | $0.01 |
Contingent convertible preferred stock, par value (usd per share) | $0.01 | $0.01 |
Treasury stock, par value (usd per share) | $0.01 | $0.01 |
Common Stock | ' | ' |
Common stock, par value (usd per share) | $0.01 | $0.01 |
Contingent Convertible Preferred Stock | ' | ' |
Contingent convertible preferred stock, par value (usd per share) | $0.01 | $0.01 |
Treasury Stock | ' | ' |
Treasury stock, par value (usd per share) | $0.01 | $0.01 |
Condensed_Consolidated_Stateme5
Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating activities: | ' | ' |
Consolidated net income | $8,292 | $29,104 |
Non-cash items included in consolidated net income: | ' | ' |
Depreciation and amortization | 1,643 | 2,752 |
Net investment (gains) losses | 6,531 | -1,217 |
Restricted stock units recognized and common stock issued | 15,160 | 28,596 |
Deferred taxes | 5,042 | 2,064 |
Deferred gain on sale of certain merchant banking assets | -97 | -97 |
Changes in operating assets and liabilities: | ' | ' |
Advisory fees receivable | 10,630 | -2,571 |
Other receivables and assets | -5,166 | -1,757 |
Compensation payable | -3,815 | -6,070 |
Accounts payable and accrued expenses | 664 | 1,748 |
Current income taxes payable | -8,540 | -7,197 |
Net cash provided by operating activities | 30,344 | 45,355 |
Investing activities: | ' | ' |
Purchases of investments | -28 | -500 |
Proceeds from sales of investments | 0 | 11,751 |
Distributions from investments | 370 | 922 |
Purchases of property and equipment | -1,311 | -802 |
Net cash used in investing activities | -969 | 11,371 |
Financing activities: | ' | ' |
Proceeds from revolving bank loan | 33,851 | 70,675 |
Repayment of revolving bank loan | -27,250 | -67,550 |
Distributions to noncontrolling interests | 0 | -311 |
Dividends paid | -28,575 | -28,121 |
Purchase of treasury stock | -18,234 | -45,631 |
Payments Related to Tax Withholding for Share-based Compensation | -2,708 | -682 |
Net cash used in financing activities | -42,916 | -71,620 |
Effect of exchange rate changes on cash and cash equivalents | 22 | -1,897 |
Net decrease in cash and cash equivalents | -13,519 | -16,791 |
Cash and cash equivalents, beginning of period | 42,679 | 50,324 |
Cash and cash equivalents, end of period | 29,160 | 33,533 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for interest | 568 | 427 |
Cash paid for taxes, net of refunds | $9,878 | $24,132 |
Organization
Organization | 6 Months Ended | |
Jun. 30, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Organization | ' | |
Organization | ||
Greenhill & Co., Inc., a Delaware corporation, together with its subsidiaries (collectively, the “Company”), is a leading independent investment bank focused on providing financial advice on significant mergers, acquisitions, restructurings, financings and capital raisings to corporations, partnerships, institutions and governments. The Company acts for clients located throughout the world from its offices located in the United States, United Kingdom, Germany, Canada, Japan, Australia, Sweden and Brazil. | ||
The Company's activities as an investment banking firm constitute one business segment, with two principal sources of revenue: | ||
• | Advisory, which includes engagements relating to mergers and acquisitions, financing advisory and restructuring, and private equity and real estate capital advisory services; and | |
• | Investments, which includes the Company's principal investments in certain merchant banking funds and interest income. | |
The Company's wholly-owned subsidiaries provide advisory services in various jurisdictions. Our most significant operating entities include: Greenhill & Co., LLC (“G&Co”), Greenhill & Co. International LLP (“GCI”) and Greenhill & Co. Australia Pty Limited (“Greenhill Australia”). | ||
G&Co is engaged in investment banking activities principally in the United States. G&Co is registered as a broker-dealer with the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”), and is licensed in all 50 states and the District of Columbia. GCI is engaged in investment banking activities in the United Kingdom and is subject to regulation by the U.K. Financial Conduct Authority (“FCA”). Greenhill Australia engages in investment banking activities in Australia and New Zealand and is licensed and subject to regulation by the Australian Securities and Investment Commission (“ASIC”). | ||
The Company also operates in other locations throughout the world which are subject to regulation by other governmental and regulatory bodies and self-regulatory authorities. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | |
Basis of Financial Information | |
These condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP), which require management to make estimates and assumptions regarding future events that affect the amounts reported in our financial statements and these footnotes, including investment valuations, compensation accruals and other matters. Management believes that the estimates used in preparing its condensed consolidated financial statements are reasonable and prudent. Actual results could differ materially from those estimates. | |
The condensed consolidated financial statements of the Company include all consolidated accounts of Greenhill & Co., Inc. and all other entities in which the Company has a controlling interest after eliminations of all significant inter-company accounts and transactions. In accordance with the accounting pronouncements related to consolidation of variable interest entities, the Company consolidates the general partners of certain merchant banking funds in which it has a majority of the economic interest and control. The general partners account for their investments in these merchant banking funds under the equity method of accounting. As such, the general partners record their proportionate shares of income (loss) from the underlying merchant banking funds. As these merchant banking funds follow investment company accounting, and generally record all their assets and liabilities at fair value, the general partners’ investment in these merchant banking funds represents an estimation of fair value. The Company does not consolidate the merchant banking funds since the Company, through its general partner and limited partner interests, does not have a majority of the economic interest in such funds and the limited partners have certain rights to remove the general partner by a simple majority vote of unaffiliated third-party investors. | |
These condensed consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2013 included in the Company's Annual Report on Form 10-K filed with the SEC. The condensed consolidated financial information as of December 31, 2013 has been derived from audited consolidated financial statements not included herein. The results of operations for interim periods are not necessarily indicative of results for the entire year. | |
Revenue Recognition | |
Advisory Revenues | |
It is the Company's accounting policy to recognize revenue when (i) there is persuasive evidence of an arrangement with a client, (ii) the agreed-upon services have been completed and delivered to the client or the transaction or events noted in the engagement letter are determined to be substantially complete, (iii) fees are fixed and determinable, and (iv) collection is reasonably assured. | |
The Company recognizes advisory fee revenues for mergers and acquisitions or financing advisory and restructuring engagements when the services related to the underlying transactions are completed in accordance with the terms of the engagement letter and all other requirements for revenue recognition are satisfied. | |
The Company recognizes private equity and real estate capital advisory fees at the time of the client's acceptance of capital or capital commitments to a fund in accordance with the terms of the engagement letter. Generally, fee revenue is determined based upon a fixed percentage of capital committed to the fund. For multiple closings, revenue is recognized at each interim closing based on the amount of capital committed at each closing at the fixed fee percentage. At the final closing, revenue is recognized at the fixed percentage for the amount of capital committed since the last interim closing. | |
While the majority of the Company's fee revenue is earned at the conclusion of a transaction or closing of a fund, on-going retainer fees, substantially all of which relate to non-success based strategic advisory and financing advisory and restructuring assignments, are also earned and recognized as advisory fee revenue over the period in which the related service is rendered. | |
The Company’s clients reimburse certain expenses incurred by the Company in the conduct of advisory engagements. Expenses are reported net of such client reimbursements. Client reimbursements totaled $1.0 million and $1.6 million for the three months ended June 30, 2014 and 2013, respectively, and $1.7 million and $3.5 million for the six months ended June 30, 2014 and 2013, respectively. | |
Investment Revenues | |
Investment revenues consist of (i) gains (or losses) on the Company's investments in certain merchant banking funds, Iridium Communications Inc. ("Iridium") (prior to the sale of the Company's entire investment that was completed in December 2013) and other investments and (ii) interest income. | |
The Company recognizes revenue on its investments in merchant banking funds based on its allocable share of realized and unrealized gains (or losses) reported by such funds. The Company recognizes revenue on its other investments, including Iridium, after considering the Company's influence or control of the investee, based on gains and losses on investment positions held, which arise from sales or changes in the fair value of investments. The amount of gains or losses are not predictable and can cause periodic fluctuations in net income and therefore subject the Company to market and credit risk. | |
Cash and Cash Equivalents | |
The Company’s cash and cash equivalents consist of (i) cash held on deposit with financial institutions, (ii) cash equivalents and (iii) restricted cash. The Company maintains its cash and cash equivalents with financial institutions with high credit ratings. The Company considers all highly liquid investments with a maturity date of three months or less, when purchased, to be cash equivalents. Cash equivalents primarily consist of money market funds and overnight deposits. | |
Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. See "Note 3 — Cash and Cash Equivalents". | |
Advisory Fees Receivables | |
Receivables are stated net of an allowance for doubtful accounts. The estimate for the allowance for doubtful accounts is derived by the Company by utilizing past client transaction history and an assessment of the client’s creditworthiness. The Company did not record a charge for bad debt expense for either of the three or six month periods ended June 30, 2014 or 2013. | |
Included in the advisory fees receivable balance were $40.1 million and $34.0 million of long term receivables at June 30, 2014 and December 31, 2013, respectively, which relate to private equity and real estate capital advisory engagements that are generally paid in installments over a period of three years. | |
Included as a component of investment revenues on the condensed consolidated statements of income is interest income related to capital advisory engagements of $0.2 million for each of the three month periods ended June 30, 2014 and 2013, and $0.4 million and $0.3 million for the six month periods ended June 30, 2014 and 2013, respectively. | |
Credit risk related to advisory fees receivable is disbursed across a large number of clients located in various geographic areas. The Company controls credit risk through credit approvals and monitoring procedures but does not require collateral to support accounts receivable. | |
Investments | |
The Company's investments in merchant banking funds are recorded under the equity method of accounting based upon the Company's proportionate share of the estimated fair value of the underlying merchant banking fund's net assets. The value of merchant banking fund investments in privately held companies is determined by the management of the fund after giving consideration to the cost of the security, the pricing of other sales of securities by the portfolio company, the price of securities of other companies comparable to the portfolio company, purchase multiples paid in other comparable third-party transactions, the original purchase price multiple, market conditions, liquidity, operating results and other qualitative and quantitative factors. Discounts may be applied to the funds' privately held investments to reflect the lack of liquidity and other transfer restrictions. Because of the inherent uncertainty of valuations as well as the discounts applied, the estimated fair values of investments in privately held companies may differ significantly from the values that would have been used had a ready market for the securities existed. The value of merchant banking fund investments in publicly traded securities is determined using quoted market prices discounted for any legal or contractual restrictions on sale. The values at which the Company's investments are carried on its condensed consolidated statements of financial condition are adjusted to estimated fair value at the end of each quarter, and the volatility in general economic conditions, stock markets and commodity prices may result in significant changes in the estimated fair value of the investments from period to period. | |
Goodwill | |
Goodwill is the cost of acquired companies in excess of the fair value of identifiable net assets at acquisition date. The Company tests its goodwill for impairment at least annually. An impairment loss is triggered if the estimated fair value of an operating unit is less than estimated net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. | |
Goodwill is translated at the rate of exchange prevailing at the end of the periods presented in accordance with the accounting guidance for foreign currency translation. Any translation gain or loss is included in the foreign currency translation adjustment, which is included as a component of other comprehensive income in the condensed consolidated statements of changes in equity. At June 30, 2014, goodwill increased by $7.1 million from the beginning of the year as a result of the foreign currency translation adjustment. | |
Restricted Stock Units | |
The Company accounts for its share-based compensation payments by recording the fair value of restricted stock units granted to employees as compensation expense. The restricted stock units are generally amortized over a five year service period following the date of grant. Compensation expense is determined based upon the fair market value of the Company’s common stock at the date of grant. As the Company expenses the awards, the restricted stock units recognized are recorded within equity. The restricted stock units are reclassified into common stock and additional paid-in capital upon vesting. The Company records as treasury stock the repurchase of stock delivered to its employees in settlement of tax liabilities incurred upon the vesting of restricted stock units. The Company records dividend equivalent payments, net of forfeitures, on outstanding restricted stock units as a dividend payment and a charge to equity. | |
Earnings per Share | |
The Company calculates basic earnings per share (“EPS”) by dividing net income allocated to common stockholders by the sum of (i) the weighted average number of shares outstanding for the period and (ii) the weighted average number of shares deemed issuable due to the vesting of restricted stock units for accounting purposes. In addition, the outstanding contingent convertible preferred shares will be included in the weighted average number of shares to the extent the performance target is deemed to have been met. | |
The Company calculates diluted EPS by dividing net income allocated to common stockholders by the sum of (i) basic shares per above and (ii) the dilutive effect of the common stock deliverable pursuant to restricted stock units for which future service is required. Under the treasury method, the number of shares issuable upon the vesting of restricted stock units included in the calculation of diluted EPS is the excess, if any, of the number of shares expected to be issued, less the number of shares that could be purchased by the Company with the proceeds to be received upon settlement at the average market closing price during the reporting period. See "Note 8 — Earnings per Share". | |
Provision for Taxes | |
The Company accounts for taxes in accordance with the accounting guidance for income taxes which requires the recognition of tax benefits or expenses on the temporary differences between the financial reporting and tax bases of its assets and liabilities. | |
The Company follows the guidance for income taxes in recognizing, measuring, presenting and disclosing in its financial statements uncertain tax positions taken or expected to be taken on its income tax returns. Income tax expense is based on pre-tax accounting income, including adjustments made for the recognition or derecognition related to uncertain tax positions. The recognition or derecognition of income tax expense related to uncertain tax positions is determined under the guidance. | |
Deferred tax assets and liabilities are recognized for the future tax attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period of change. Management applies the “more-likely-than-not criteria” when determining tax benefits. | |
Foreign Currency Translation | |
Assets and liabilities denominated in foreign currencies have been translated at rates of exchange prevailing at the end of the periods presented in accordance with the accounting guidance for foreign currency translation. Income and expenses transacted in foreign currency have been translated at average monthly exchange rates during the period. Translation gains and losses are included in the foreign currency translation adjustment, which is included as a component of other comprehensive income in the condensed consolidated statements of changes in equity. Foreign currency transaction gains and losses are included in the condensed consolidated statements of income. | |
Fair Value of Other Financial Instruments | |
The Company believes that the carrying values of financial instruments presented in the condensed consolidated statements of financial condition approximate their fair value generally due to their short-term nature and generally negligible credit risk. These fair value measurements would be categorized as Level 2 within the fair value hierarchy. | |
Noncontrolling Interests | |
The Company records the noncontrolling interests of other entities as equity in the condensed consolidated statements of financial condition. Additionally, the condensed consolidated statements of income separately present income allocated to both noncontrolling interests and common stockholders. | |
The portion of the consolidated interests in the general partners of certain of the merchant banking funds not held by the Company is presented as noncontrolling interest in equity. See "Note 4 — Investments — Merchant Banking Funds". | |
Property and Equipment | |
Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the life of the assets. Amortization of leasehold improvements is computed using the straight-line method over the lesser of the life of the asset or the remaining term of the lease. Estimated useful lives of the Company’s fixed assets are generally as follows: | |
Aircraft – 7 years | |
Equipment – 5 years | |
Furniture and fixtures – 7 years | |
Leasehold improvements – the lesser of 10 years or the remaining lease term | |
Accounting Developments | |
In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition - Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition. Management is currently evaluating the impact of the future adoption of ASC 606 on the Company’s consolidated financial statements. The new guidance is effective for fiscal years beginning after December 15, 2016. |
Cash_and_Cash_Equivalents
Cash and Cash Equivalents | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Cash and Cash Equivalents [Abstract] | ' | |||||||
Cash and Cash Equivalents | ' | |||||||
Cash and Cash Equivalents | ||||||||
The carrying values of the Company's cash and cash equivalents are as follows: | ||||||||
As of June 30, | As of December 31, | |||||||
2014 | 2013 | |||||||
(in thousands, unaudited) | ||||||||
Cash | $ | 23,513 | $ | 34,099 | ||||
Cash equivalents | 788 | 3,484 | ||||||
Restricted cash - deferred compensation plan | 535 | 867 | ||||||
Restricted cash - letters of credit | 4,324 | 4,229 | ||||||
Total cash and cash equivalents | $ | 29,160 | $ | 42,679 | ||||
The carrying value of the Company's cash equivalents approximates fair value. Cash is restricted for the payout of Greenhill Australia's deferred compensation plan, which is being distributed over a 7 year period ending in 2016. A deferred compensation liability relating to the plan of $0.5 million and $0.9 million as of June 30, 2014 and December 31, 2013, respectively, has been recorded on the condensed consolidated statements of financial condition as a component of compensation payable. | ||||||||
Letters of credit are secured by cash held on deposit. |
Related_Parties
Related Parties | 6 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Parties | ' |
Related Parties | |
At June 30, 2014 and December 31, 2013, the Company had no amounts receivable or payable to related parties. | |
The Company subleases airplane and aircraft hangar space to a firm owned by the Chairman of the Company. The Company recognized rent reimbursements of $19,200 and $18,300 for the three month periods ended June 30, 2014 and 2013, respectively, and $38,400 and $36,600 for the six month periods ended June 30, 2014 and 2013, respectively, which are included as a reduction of occupancy and equipment rental on the condensed consolidated statements of income. |
Revolving_Bank_Loan_Facility
Revolving Bank Loan Facility | 6 Months Ended |
Jun. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Revolving Bank Loan Facility | ' |
Revolving Bank Loan Facility | |
At June 30, 2014, the Company had a $45.0 million revolving loan facility from a U.S. banking institution to provide for working capital needs and for other general corporate purposes. The loan facility, which was renewed in April 2014, has a maturity date of April 30, 2015. The revolving loan facility is secured by any cash distributed in respect of the Company’s investment in the U.S. based merchant banking funds and cash distributions from G&Co. In addition, the revolving loan facility has a prohibition on the incurrence of additional indebtedness without the prior approval of the lender and the Company is required to comply with certain financial and liquidity covenants. The weighted average daily borrowings outstanding under the revolving loan facility were approximately $35.0 million and $31.8 million for the six months ended June 30, 2014 and 2013, respectively. The weighted average interest rate was 3.25% for the six months ended June 30, 2014 and 2013. At June 30, 2014 and December 31, 2013, the Company was compliant with all loan covenants. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2014 | |
Stockholders' Equity Note [Abstract] | ' |
Equity | ' |
Equity | |
On June 18, 2014, a dividend of $0.45 per share was paid to stockholders of record on June 4, 2014. Dividends include dividend equivalents of $3.1 million, which were paid on outstanding restricted stock units for each of the six months ended June 30, 2014 and 2013. | |
During the six months ended June 30, 2014, 892,038 restricted stock units vested and were issued as common stock of which the Company is deemed to have repurchased 351,662 shares at an average price of $51.85 per share in conjunction with the payment of tax liabilities in respect of stock delivered to its employees in settlement of restricted stock units. | |
During the six months ended June 30, 2013, 581,546 restricted stock units vested and were issued as common stock of which the Company is deemed to have repurchased 180,667 shares at an average price of $58.69 per share in conjunction with the payment of tax liabilities in respect of stock delivered to its employees in settlement of restricted stock units. In addition, during the six months ended June 30, 2013, the Company repurchased in open market transactions 701,367 shares of its common stock at an average price of $49.94 per share. | |
In connection with the acquisition of Greenhill Australia in April 2010, the Company issued 1,099,877 shares of contingent convertible preferred stock ("Performance Stock"). The Performance Stock does not pay dividends, was issued in tranches of 659,926 shares and 439,951 shares, and will convert to shares of the Company's common stock on a one for one basis promptly after the third and fifth anniversary of the closing of the acquisition, respectively, if certain separate revenue targets are achieved. The revenue target for the first tranche was achieved on April 1, 2013, the third anniversary of the closing, and 659,926 shares of Performance Stock, which had a fair value of $32.5 million at the acquisition date, were converted to common stock. If the revenue target for the second tranche is achieved, the Performance Stock in that tranche will be converted to common stock on April 1, 2015. If the revenue target for the second tranche is not achieved, the Performance Stock in that tranche will be canceled. |
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Earnings Per Share | ' | |||||||||||||||
Earnings Per Share | ||||||||||||||||
The computations of basic and diluted EPS are set forth below: | ||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in thousands, except per share amounts, unaudited) | ||||||||||||||||
Numerator for basic and diluted EPS — net income allocated to common stockholders | $ | 8,054 | $ | 15,487 | $ | 8,292 | $ | 29,104 | ||||||||
Denominator for basic EPS — weighted average number of shares | 29,954 | 29,912 | 30,219 | 30,131 | ||||||||||||
Add — dilutive effect of: | ||||||||||||||||
Weighted average number of incremental shares issuable from restricted stock units | 7 | 8 | 36 | 40 | ||||||||||||
Denominator for diluted EPS — weighted average number of shares and dilutive potential shares | 29,961 | 29,920 | 30,255 | 30,171 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.27 | $ | 0.52 | $ | 0.27 | $ | 0.97 | ||||||||
Diluted | $ | 0.27 | $ | 0.52 | $ | 0.27 | $ | 0.96 | ||||||||
The weighted number of shares and dilutive potential shares for the three and six month periods ended June 30, 2014 and 2013 includes the conversion of the first tranche of Performance Stock to common stock. The weighted average number of shares and dilutive potential shares for the three and six month periods ended June 30, 2014 and 2013 do not include the shares of the second tranche, since the revenue target has not been achieved. If the revenue target for the second tranche is achieved, the shares related to that tranche will be included in the Company's share count at the time the revenue target is met. If the revenue target for the second tranche is not achieved, the Performance Stock in that tranche will be canceled. |
Income_Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
The Company's effective tax rate will vary depending on the source of the income. Investment and certain foreign sourced income are taxed at a lower effective rate than U.S. trade or business income. | |
Under the requirements of ASC 740, the Company provides residual U.S. deferred tax for the earnings of non-U.S. subsidiaries not considered to be permanently invested outside the United States to the extent these earnings cannot be repatriated in a tax-free manner. As of the second quarter of 2014, the Company has not incurred any additional tax liabilities, net of credits for foreign taxes paid, on these non-U.S. subsidiary earnings. | |
The Company believes it is more likely than not that the deferred tax asset, which relates principally to compensation expense deducted for book purposes but not yet deducted for tax purposes, will be realized as offsets to: (i) the realization of its deferred tax liabilities and (ii) future taxable income. | |
Any gain or loss resulting from the translation of deferred taxes for foreign affiliates is included in the foreign currency translation adjustment incorporated as a component of other comprehensive income, net of tax, in the condensed consolidated statements of changes in equity and the condensed consolidated statements of comprehensive income. | |
The Company's income tax returns are routinely examined by the U.S. federal, U.S. state, and international tax authorities. The Company regularly assesses its tax positions with respect to applicable income tax issues for open tax years in each respective jurisdiction in which the Company operates. As of June 30, 2014, the Company does not believe the resolution of any current ongoing income tax examinations will have a material adverse impact on the financial position of the Company. |
Regulatory_Requirements
Regulatory Requirements | 6 Months Ended |
Jun. 30, 2014 | |
Regulatory Capital Requirements [Abstract] | ' |
Regulatory Requirements | ' |
Regulatory Requirements | |
Certain subsidiaries of the Company are subject to various regulatory requirements in the United States, United Kingdom, Australia and certain other jurisdictions, which specify, among other requirements, minimum net capital requirements for registered broker-dealers. | |
G&Co is subject to the SEC’s Uniform Net Capital requirements under Rule 15c3-1 (the “Rule”), which specifies, among other requirements, minimum net capital requirements for registered broker-dealers. The Rule requires G&Co to maintain a minimum net capital of the greater of $5,000 or 1/15 of aggregate indebtedness, as defined in the Rule. As of June 30, 2014, G&Co’s net capital was $5.2 million, which exceeded its requirement by $4.7 million. G&Co’s aggregate indebtedness to net capital ratio was 1.4 to 1 at June 30, 2014. Certain distributions and other capital withdrawals of G&Co are subject to certain notifications and restrictive provisions of the Rule. | |
GCI is subject to capital requirements of the FCA. Greenhill Australia is subject to capital requirements of the ASIC. We are also subject to certain capital regulatory requirements in other jurisdictions. As of June 30, 2014, GCI, Greenhill Australia, and our other regulated operations were in compliance with local capital adequacy requirements. |
Business_Information
Business Information | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Business Information | ' | |||||||||||||
Business Information | ||||||||||||||
The Company's activities as an investment banking firm constitute one business segment, with two principal sources of revenue: | ||||||||||||||
• | Advisory, which includes engagements relating to mergers and acquisitions, financing advisory and restructuring, and private equity and real estate capital advisory services; and | |||||||||||||
• | Investments, which includes the Company's principal investments in merchant banking funds and interest. | |||||||||||||
The following provides a breakdown of our revenues by source for the three and six month periods ended June 30, 2014 and 2013, respectively: | ||||||||||||||
For the Three Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | |||||||||||||
Amount | % of Total | Amount | % of Total | |||||||||||
(in millions, unaudited) | ||||||||||||||
Advisory revenues | $ | 64 | 102 | % | $ | 83.1 | 96 | % | ||||||
Investment revenues (losses) | (1.0 | ) | (2 | )% | 3.6 | 4 | % | |||||||
Total revenues | $ | 63 | 100 | % | $ | 86.7 | 100 | % | ||||||
For the Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | |||||||||||||
Amount | % of Total | Amount | % of Total | |||||||||||
(in millions, unaudited) | ||||||||||||||
Advisory revenues | $ | 112.4 | 105 | % | $ | 164.5 | 99 | % | ||||||
Investment revenues (losses) | (5.8 | ) | (5 | )% | 1.8 | 1 | % | |||||||
Total revenues | $ | 106.6 | 100 | % | $ | 166.3 | 100 | % | ||||||
In reporting to management, the Company distinguishes the sources of its revenues between advisory and investment revenues. However, management does not evaluate other financial data or operating results such as operating expenses, profit and loss or assets by its advisory and investment activities. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
The Company evaluates subsequent events through the date on which the financial statements are issued. | |
On July 24, 2014, the Board of Directors of the Company declared a quarterly dividend of $0.45 per share. The dividend will be payable on September 17, 2014 to the common stockholders of record on September 3, 2014. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Financial Information | ' |
Basis of Financial Information | |
These condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP), which require management to make estimates and assumptions regarding future events that affect the amounts reported in our financial statements and these footnotes, including investment valuations, compensation accruals and other matters. Management believes that the estimates used in preparing its condensed consolidated financial statements are reasonable and prudent. Actual results could differ materially from those estimates. | |
The condensed consolidated financial statements of the Company include all consolidated accounts of Greenhill & Co., Inc. and all other entities in which the Company has a controlling interest after eliminations of all significant inter-company accounts and transactions. In accordance with the accounting pronouncements related to consolidation of variable interest entities, the Company consolidates the general partners of certain merchant banking funds in which it has a majority of the economic interest and control. The general partners account for their investments in these merchant banking funds under the equity method of accounting. As such, the general partners record their proportionate shares of income (loss) from the underlying merchant banking funds. As these merchant banking funds follow investment company accounting, and generally record all their assets and liabilities at fair value, the general partners’ investment in these merchant banking funds represents an estimation of fair value. The Company does not consolidate the merchant banking funds since the Company, through its general partner and limited partner interests, does not have a majority of the economic interest in such funds and the limited partners have certain rights to remove the general partner by a simple majority vote of unaffiliated third-party investors. | |
These condensed consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2013 included in the Company's Annual Report on Form 10-K filed with the SEC. The condensed consolidated financial information as of December 31, 2013 has been derived from audited consolidated financial statements not included herein. The results of operations for interim periods are not necessarily indicative of results for the entire year. | |
Revenue Recognition | ' |
Revenue Recognition | |
Advisory Revenues | |
It is the Company's accounting policy to recognize revenue when (i) there is persuasive evidence of an arrangement with a client, (ii) the agreed-upon services have been completed and delivered to the client or the transaction or events noted in the engagement letter are determined to be substantially complete, (iii) fees are fixed and determinable, and (iv) collection is reasonably assured. | |
The Company recognizes advisory fee revenues for mergers and acquisitions or financing advisory and restructuring engagements when the services related to the underlying transactions are completed in accordance with the terms of the engagement letter and all other requirements for revenue recognition are satisfied. | |
The Company recognizes private equity and real estate capital advisory fees at the time of the client's acceptance of capital or capital commitments to a fund in accordance with the terms of the engagement letter. Generally, fee revenue is determined based upon a fixed percentage of capital committed to the fund. For multiple closings, revenue is recognized at each interim closing based on the amount of capital committed at each closing at the fixed fee percentage. At the final closing, revenue is recognized at the fixed percentage for the amount of capital committed since the last interim closing. | |
While the majority of the Company's fee revenue is earned at the conclusion of a transaction or closing of a fund, on-going retainer fees, substantially all of which relate to non-success based strategic advisory and financing advisory and restructuring assignments, are also earned and recognized as advisory fee revenue over the period in which the related service is rendered. | |
The Company’s clients reimburse certain expenses incurred by the Company in the conduct of advisory engagements. Expenses are reported net of such client reimbursements. Client reimbursements totaled $1.0 million and $1.6 million for the three months ended June 30, 2014 and 2013, respectively, and $1.7 million and $3.5 million for the six months ended June 30, 2014 and 2013, respectively. | |
Investment Revenues | |
Investment revenues consist of (i) gains (or losses) on the Company's investments in certain merchant banking funds, Iridium Communications Inc. ("Iridium") (prior to the sale of the Company's entire investment that was completed in December 2013) and other investments and (ii) interest income. | |
The Company recognizes revenue on its investments in merchant banking funds based on its allocable share of realized and unrealized gains (or losses) reported by such funds. The Company recognizes revenue on its other investments, including Iridium, after considering the Company's influence or control of the investee, based on gains and losses on investment positions held, which arise from sales or changes in the fair value of investments. The amount of gains or losses are not predictable and can cause periodic fluctuations in net income and therefore subject the Company to market and credit risk. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
The Company’s cash and cash equivalents consist of (i) cash held on deposit with financial institutions, (ii) cash equivalents and (iii) restricted cash. The Company maintains its cash and cash equivalents with financial institutions with high credit ratings. The Company considers all highly liquid investments with a maturity date of three months or less, when purchased, to be cash equivalents. Cash equivalents primarily consist of money market funds and overnight deposits. | |
Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. See "Note 3 — Cash and Cash Equivalents". | |
Advisory Fees Receivables | ' |
Advisory Fees Receivables | |
Receivables are stated net of an allowance for doubtful accounts. The estimate for the allowance for doubtful accounts is derived by the Company by utilizing past client transaction history and an assessment of the client’s creditworthiness. The Company did not record a charge for bad debt expense for either of the three or six month periods ended June 30, 2014 or 2013. | |
Included in the advisory fees receivable balance were $40.1 million and $34.0 million of long term receivables at June 30, 2014 and December 31, 2013, respectively, which relate to private equity and real estate capital advisory engagements that are generally paid in installments over a period of three years. | |
Included as a component of investment revenues on the condensed consolidated statements of income is interest income related to capital advisory engagements of $0.2 million for each of the three month periods ended June 30, 2014 and 2013, and $0.4 million and $0.3 million for the six month periods ended June 30, 2014 and 2013, respectively. | |
Credit risk related to advisory fees receivable is disbursed across a large number of clients located in various geographic areas. The Company controls credit risk through credit approvals and monitoring procedures but does not require collateral to support accounts receivable. | |
Investments | ' |
Investments | |
The Company's investments in merchant banking funds are recorded under the equity method of accounting based upon the Company's proportionate share of the estimated fair value of the underlying merchant banking fund's net assets. The value of merchant banking fund investments in privately held companies is determined by the management of the fund after giving consideration to the cost of the security, the pricing of other sales of securities by the portfolio company, the price of securities of other companies comparable to the portfolio company, purchase multiples paid in other comparable third-party transactions, the original purchase price multiple, market conditions, liquidity, operating results and other qualitative and quantitative factors. Discounts may be applied to the funds' privately held investments to reflect the lack of liquidity and other transfer restrictions. Because of the inherent uncertainty of valuations as well as the discounts applied, the estimated fair values of investments in privately held companies may differ significantly from the values that would have been used had a ready market for the securities existed. The value of merchant banking fund investments in publicly traded securities is determined using quoted market prices discounted for any legal or contractual restrictions on sale. The values at which the Company's investments are carried on its condensed consolidated statements of financial condition are adjusted to estimated fair value at the end of each quarter, and the volatility in general economic conditions, stock markets and commodity prices may result in significant changes in the estimated fair value of the investments from period to period. | |
Goodwill | ' |
Goodwill | |
Goodwill is the cost of acquired companies in excess of the fair value of identifiable net assets at acquisition date. The Company tests its goodwill for impairment at least annually. An impairment loss is triggered if the estimated fair value of an operating unit is less than estimated net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. | |
Goodwill is translated at the rate of exchange prevailing at the end of the periods presented in accordance with the accounting guidance for foreign currency translation. Any translation gain or loss is included in the foreign currency translation adjustment, which is included as a component of other comprehensive income in the condensed consolidated statements of changes in equity. | |
Restricted Stock Units | ' |
Restricted Stock Units | |
The Company accounts for its share-based compensation payments by recording the fair value of restricted stock units granted to employees as compensation expense. The restricted stock units are generally amortized over a five year service period following the date of grant. Compensation expense is determined based upon the fair market value of the Company’s common stock at the date of grant. As the Company expenses the awards, the restricted stock units recognized are recorded within equity. The restricted stock units are reclassified into common stock and additional paid-in capital upon vesting. The Company records as treasury stock the repurchase of stock delivered to its employees in settlement of tax liabilities incurred upon the vesting of restricted stock units. The Company records dividend equivalent payments, net of forfeitures, on outstanding restricted stock units as a dividend payment and a charge to equity. | |
Earnings per Share | ' |
Earnings per Share | |
The Company calculates basic earnings per share (“EPS”) by dividing net income allocated to common stockholders by the sum of (i) the weighted average number of shares outstanding for the period and (ii) the weighted average number of shares deemed issuable due to the vesting of restricted stock units for accounting purposes. In addition, the outstanding contingent convertible preferred shares will be included in the weighted average number of shares to the extent the performance target is deemed to have been met. | |
The Company calculates diluted EPS by dividing net income allocated to common stockholders by the sum of (i) basic shares per above and (ii) the dilutive effect of the common stock deliverable pursuant to restricted stock units for which future service is required. Under the treasury method, the number of shares issuable upon the vesting of restricted stock units included in the calculation of diluted EPS is the excess, if any, of the number of shares expected to be issued, less the number of shares that could be purchased by the Company with the proceeds to be received upon settlement at the average market closing price during the reporting period. | |
Provision for Taxes | ' |
Provision for Taxes | |
The Company accounts for taxes in accordance with the accounting guidance for income taxes which requires the recognition of tax benefits or expenses on the temporary differences between the financial reporting and tax bases of its assets and liabilities. | |
The Company follows the guidance for income taxes in recognizing, measuring, presenting and disclosing in its financial statements uncertain tax positions taken or expected to be taken on its income tax returns. Income tax expense is based on pre-tax accounting income, including adjustments made for the recognition or derecognition related to uncertain tax positions. The recognition or derecognition of income tax expense related to uncertain tax positions is determined under the guidance. | |
Deferred tax assets and liabilities are recognized for the future tax attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period of change. Management applies the “more-likely-than-not criteria” when determining tax benefits. | |
Foreign Currency Translation | ' |
Foreign Currency Translation | |
Assets and liabilities denominated in foreign currencies have been translated at rates of exchange prevailing at the end of the periods presented in accordance with the accounting guidance for foreign currency translation. Income and expenses transacted in foreign currency have been translated at average monthly exchange rates during the period. Translation gains and losses are included in the foreign currency translation adjustment, which is included as a component of other comprehensive income in the condensed consolidated statements of changes in equity. Foreign currency transaction gains and losses are included in the condensed consolidated statements of income. | |
Fair Value of Other Financial Instruments | ' |
Fair Value of Other Financial Instruments | |
The Company believes that the carrying values of financial instruments presented in the condensed consolidated statements of financial condition approximate their fair value generally due to their short-term nature and generally negligible credit risk. These fair value measurements would be categorized as Level 2 within the fair value hierarchy. | |
Noncontrolling Interests | ' |
Noncontrolling Interests | |
The Company records the noncontrolling interests of other entities as equity in the condensed consolidated statements of financial condition. Additionally, the condensed consolidated statements of income separately present income allocated to both noncontrolling interests and common stockholders. | |
The portion of the consolidated interests in the general partners of certain of the merchant banking funds not held by the Company is presented as noncontrolling interest in equity. See "Note 4 — Investments — Merchant Banking Funds". | |
Property and Equipment | ' |
Property and Equipment | |
Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the life of the assets. Amortization of leasehold improvements is computed using the straight-line method over the lesser of the life of the asset or the remaining term of the lease. Estimated useful lives of the Company’s fixed assets are generally as follows: | |
Aircraft – 7 years | |
Equipment – 5 years | |
Furniture and fixtures – 7 years | |
Leasehold improvements – the lesser of 10 years or the remaining lease term |
Cash_and_Cash_Equivalents_Tabl
Cash and Cash Equivalents (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Cash and Cash Equivalents [Abstract] | ' | |||||||
Cash and cash equivalents | ' | |||||||
The carrying values of the Company's cash and cash equivalents are as follows: | ||||||||
As of June 30, | As of December 31, | |||||||
2014 | 2013 | |||||||
(in thousands, unaudited) | ||||||||
Cash | $ | 23,513 | $ | 34,099 | ||||
Cash equivalents | 788 | 3,484 | ||||||
Restricted cash - deferred compensation plan | 535 | 867 | ||||||
Restricted cash - letters of credit | 4,324 | 4,229 | ||||||
Total cash and cash equivalents | $ | 29,160 | $ | 42,679 | ||||
Investments_Tables
Investments (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Schedule of Investments [Abstract] | ' | |||||||||||||||
Carrying Value of Investments in Merchant Banking Funds | ' | |||||||||||||||
The carrying value of the Company’s investments in merchant banking funds are as follows: | ||||||||||||||||
As of June 30, | As of December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(in thousands, unaudited) | ||||||||||||||||
Investment in GCP I | $ | 1,826 | $ | 2,257 | ||||||||||||
Investment in GCP II | 907 | 7,690 | ||||||||||||||
Investment in other merchant banking funds | 1,792 | 1,798 | ||||||||||||||
Total investments in merchant banking funds | $ | 4,525 | $ | 11,745 | ||||||||||||
Investment Revenues by Source | ' | |||||||||||||||
The Company’s investment revenues, by source, are as follows: | ||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in thousands, unaudited) | ||||||||||||||||
Net realized and unrealized gains (losses) on investments in merchant banking funds | $ | (1,299 | ) | $ | (3,354 | ) | $ | (6,503 | ) | $ | (3,354 | ) | ||||
Net realized and unrealized gains on investment in Iridium | — | 6,652 | — | 4,570 | ||||||||||||
Deferred gain on sale of certain merchant banking assets | 49 | 49 | 97 | 98 | ||||||||||||
Interest income | 286 | 277 | 556 | 453 | ||||||||||||
Total investment revenues (losses) | $ | (964 | ) | $ | 3,624 | $ | (5,850 | ) | $ | 1,767 | ||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Computations of Basic and Diluted Earnings Per Share | ' | |||||||||||||||
The computations of basic and diluted EPS are set forth below: | ||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in thousands, except per share amounts, unaudited) | ||||||||||||||||
Numerator for basic and diluted EPS — net income allocated to common stockholders | $ | 8,054 | $ | 15,487 | $ | 8,292 | $ | 29,104 | ||||||||
Denominator for basic EPS — weighted average number of shares | 29,954 | 29,912 | 30,219 | 30,131 | ||||||||||||
Add — dilutive effect of: | ||||||||||||||||
Weighted average number of incremental shares issuable from restricted stock units | 7 | 8 | 36 | 40 | ||||||||||||
Denominator for diluted EPS — weighted average number of shares and dilutive potential shares | 29,961 | 29,920 | 30,255 | 30,171 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.27 | $ | 0.52 | $ | 0.27 | $ | 0.97 | ||||||||
Diluted | $ | 0.27 | $ | 0.52 | $ | 0.27 | $ | 0.96 | ||||||||
Business_Information_Tables
Business Information (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Revenues by Source | ' | |||||||||||||
The following provides a breakdown of our revenues by source for the three and six month periods ended June 30, 2014 and 2013, respectively: | ||||||||||||||
For the Three Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | |||||||||||||
Amount | % of Total | Amount | % of Total | |||||||||||
(in millions, unaudited) | ||||||||||||||
Advisory revenues | $ | 64 | 102 | % | $ | 83.1 | 96 | % | ||||||
Investment revenues (losses) | (1.0 | ) | (2 | )% | 3.6 | 4 | % | |||||||
Total revenues | $ | 63 | 100 | % | $ | 86.7 | 100 | % | ||||||
For the Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | |||||||||||||
Amount | % of Total | Amount | % of Total | |||||||||||
(in millions, unaudited) | ||||||||||||||
Advisory revenues | $ | 112.4 | 105 | % | $ | 164.5 | 99 | % | ||||||
Investment revenues (losses) | (5.8 | ) | (5 | )% | 1.8 | 1 | % | |||||||
Total revenues | $ | 106.6 | 100 | % | $ | 166.3 | 100 | % | ||||||
Organization_Business_Informat
Organization- Business Information (Details) | 6 Months Ended |
Jun. 30, 2014 | |
sources | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of reportable segments (segments) | 1 |
Number of principal sources of revenue (source of revenue) | 2 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Client reimbursements | $1 | $1.60 | $1.70 | $3.50 | ' |
Long term receivables related to private equity and real estate capital advisory engagements | 40.1 | ' | 40.1 | ' | 34 |
Installments period | ' | ' | '3 years | ' | ' |
Increase to goodwill from translation adjustments | ' | ' | -7.1 | ' | ' |
Depreciation and amortization of property and equipment | ' | ' | 'Depreciation is computed using the straight-line method over the life of the assets. Amortization of leasehold improvements is computed using the straight-line method over the lesser of the life of the asset or the remaining term of the lease. | ' | ' |
Aircraft | ' | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Estimated useful lives of fixed assets (in years) | ' | ' | '7 years | ' | ' |
Equipment | ' | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Estimated useful lives of fixed assets (in years) | ' | ' | '5 years | ' | ' |
Furniture and Fixtures | ' | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Estimated useful lives of fixed assets (in years) | ' | ' | '7 years | ' | ' |
Leasehold Improvements | ' | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Estimated useful lives of fixed assets (in years) | ' | ' | '10 years | ' | ' |
Description of estimated useful lives | ' | ' | 'Lesser of 10Â years or the remaining lease term | ' | ' |
Capital advisory engagements | ' | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Interest income on long term receivables | $0.20 | $0.20 | $0.40 | $0.30 | ' |
Cash_and_Cash_Equivalents_Deta
Cash and Cash Equivalents (Details) (USD $) | 6 Months Ended | |||
Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ' | ' | ' | ' |
Cash | $23,513,000 | $34,099,000 | ' | ' |
Cash equivalents | 788,000 | 3,484,000 | ' | ' |
Restricted cash | 4,900,000 | 5,100,000 | ' | ' |
Total cash and cash equivalents | 29,160,000 | 42,679,000 | 33,533,000 | 50,324,000 |
Distribution period | '7 years | ' | ' | ' |
Deferred compensation liability | 500,000 | 900,000 | ' | ' |
Deferred compensation plan | ' | ' | ' | ' |
Restricted Cash and Cash Equivalents Items [Line Items] | ' | ' | ' | ' |
Restricted cash | 535,000 | 867,000 | ' | ' |
Letter of Credit | ' | ' | ' | ' |
Restricted Cash and Cash Equivalents Items [Line Items] | ' | ' | ' | ' |
Restricted cash | $4,324,000 | $4,229,000 | ' | ' |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
GCP I | ' | ' |
Fair Value, Measurement Inputs, Disclosure [Line Items] | ' | ' |
Investment related to noncontrolling interests | $0.10 | $0.10 |
GCP II | ' | ' |
Fair Value, Measurement Inputs, Disclosure [Line Items] | ' | ' |
Investment related to noncontrolling interests | 0.6 | 0.9 |
Barrow Street | ' | ' |
Fair Value, Measurement Inputs, Disclosure [Line Items] | ' | ' |
Other commitment | $0.30 | ' |
Investments_Carrying_Value_of_
Investments - Carrying Value of Investments in Merchant Banking Funds (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments in and Advances to Affiliates [Line Items] | ' | ' |
Investments in merchant banking funds | $4,525 | $11,745 |
GCP I | ' | ' |
Investments in and Advances to Affiliates [Line Items] | ' | ' |
Investments in merchant banking funds | 1,826 | 2,257 |
GCP II | ' | ' |
Investments in and Advances to Affiliates [Line Items] | ' | ' |
Investments in merchant banking funds | 907 | 7,690 |
Other Merchant Banking Funds | ' | ' |
Investments in and Advances to Affiliates [Line Items] | ' | ' |
Investments in merchant banking funds | $1,792 | $1,798 |
Investments_Investment_Revenue
Investments - Investment Revenues (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Principal Transaction Revenue [Line Items] | ' | ' | ' | ' |
Net realized and unrealized gains (losses) | ' | ' | ($6,531) | $1,217 |
Interest income | 286 | 277 | 556 | 453 |
Total investment revenues (losses) | -964 | 3,624 | -5,850 | 1,767 |
Iridium | ' | ' | ' | ' |
Principal Transaction Revenue [Line Items] | ' | ' | ' | ' |
Net realized and unrealized gains (losses) | 0 | 6,652 | 0 | 4,570 |
Merchant Banking Funds | ' | ' | ' | ' |
Principal Transaction Revenue [Line Items] | ' | ' | ' | ' |
Net realized and unrealized gains (losses) | -1,299 | -3,354 | -6,503 | -3,354 |
Deferred gain on sale of certain merchant banking assets | $49 | $49 | $97 | $98 |
Related_Parties_Additional_Inf
Related Parties - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Related Party Transactions [Abstract] | ' | ' | ' | ' |
Tenant Reimbursements | $19,200 | $18,300 | $38,400 | $36,600 |
Revolving_Bank_Loan_Facility_A
Revolving Bank Loan Facility - Additional Information (Detail) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Line of Credit Facility [Line Items] | ' | ' |
Weighted average daily borrowings outstanding under the loan facility | $35 | $31.80 |
Weighted average interest rate (percent) | 3.25% | 3.25% |
Line of Credit | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Revolving loan facility, borrowing capacity | $45 | ' |
Equity_Additional_Information_
Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | ||||||||
In Millions, except Share data, unless otherwise specified | Jun. 18, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Apr. 30, 2010 | Apr. 30, 2013 | Apr. 30, 2010 |
Common Stock | Common Stock | Restricted Stock Units | Restricted Stock Units | Caliburn Acquisition | Tranche One - Performance Stock | Tranche Two - Performance Stock | ||||||
Contingent Convertible Preferred Stock | Caliburn Acquisition | Caliburn Acquisition | ||||||||||
Contingent Convertible Preferred Stock | Contingent Convertible Preferred Stock | |||||||||||
Stockholders Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends declared per common share (in USD per share) | $0.45 | $0.45 | $0.45 | $0.90 | $0.90 | ' | ' | ' | ' | ' | ' | ' |
Dividend equivalents paid on outstanding restricted stock units | ' | ' | ' | $3.10 | $3.10 | ' | ' | ' | ' | ' | ' | ' |
Restricted stock units vested and issued as common stock (shares) | ' | ' | ' | ' | ' | ' | ' | 892,038 | 581,546 | ' | ' | ' |
Repurchased shares for award (shares) | ' | ' | ' | ' | ' | 351,662 | 180,667 | ' | ' | ' | ' | ' |
Average repurchase price of shares for award (USD per share) | ' | ' | ' | ' | ' | $51.85 | $58.69 | ' | ' | ' | ' | ' |
Repurchased common stock (shares) | ' | ' | ' | ' | ' | ' | 701,367 | ' | ' | ' | ' | ' |
Average repurchase price of common stock (in USD per share) | ' | ' | ' | ' | ' | ' | $49.94 | ' | ' | ' | ' | ' |
Conversion to common stock shares if revenue targets are achieved (shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,099,877 | ' | 439,951 |
Conversion of Stock (shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 659,926 | ' |
Performance stock fair value at acquisition date | ' | ' | ' | ' | ' | ' | ' | ' | ' | $32.50 | ' | ' |
Earnings_Per_Share_Reconciliat
Earnings Per Share - Reconciliation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Numerator for basic and diluted EPS — net income allocated to common stockholders | $8,054 | $15,487 | $8,292 | $29,104 |
Denominator for basic EPS — weighted average number of shares (shares) | 29,954,291 | 29,912,161 | 30,218,513 | 30,131,291 |
Add — dilutive effect of: | ' | ' | ' | ' |
Weighted average number of incremental shares issuable from restricted stock units (shares) | 6,732 | 8,018 | 36,036 | 40,209 |
Denominator for diluted EPS — weighted average number of shares and dilutive potential shares (shares) | 29,961,023 | 29,920,179 | 30,254,549 | 30,171,500 |
Earnings per share: | ' | ' | ' | ' |
Basic (usd per share) | $0.27 | $0.52 | $0.27 | $0.97 |
Diluted (usd per share) | $0.27 | $0.52 | $0.27 | $0.96 |
Regulatory_Requirements_Additi
Regulatory Requirements - Additional Information (Detail) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Regulatory Capital Requirements [Abstract] | ' |
Minimum net capital required | $5,000 |
Minimum net capital requirements (percent) | 6.67% |
Description of minimum net capital requirements | 'The greater of $5,000 or 1/15 of aggregate indebtedness |
Net capital | 5,200,000 |
Excess net capital | $4,700,000 |
Aggregate indebtedness to net capital ratio (percent) | 1.4 |
Business_Information_Additiona
Business Information - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
sources | ||||
Segment | ||||
Segment Reporting Information | ' | ' | ' | ' |
Number of reportable segments (segments) | ' | ' | 1 | ' |
Number of principal sources of revenue (source of revenue) | ' | ' | 2 | ' |
Advisory revenues | $63,987 | $83,066 | $112,442 | $164,513 |
Investment revenues (losses) | -964 | 3,624 | -5,850 | 1,767 |
Revenues as a percentage of total revenue (percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Total revenues | $63,023 | $86,690 | $106,592 | $166,280 |
Advisory revenues | ' | ' | ' | ' |
Segment Reporting Information | ' | ' | ' | ' |
Revenues as a percentage of total revenue (percent) | 102.00% | 96.00% | 105.00% | 99.00% |
Investment Revenues | ' | ' | ' | ' |
Segment Reporting Information | ' | ' | ' | ' |
Revenues as a percentage of total revenue (percent) | -2.00% | 4.00% | -5.00% | 1.00% |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (Subsequent Event, USD $) | 0 Months Ended |
Jul. 24, 2014 | |
Subsequent Event | ' |
Subsequent Event [Line Items] | ' |
Subsequent event description | 'The Board of Directors of the Company declared a quarterly dividend |
Dividends declared per common share (in USD per share) | $0.45 |
Dividend payable date | 17-Sep-14 |
Dividend record date | 3-Sep-14 |