DUFF & PHELPS
DUFF & PHELPS REPORTS 2009
FULL YEAR AND FOURTH QUARTER FINANCIAL RESULTS
AND DECLARES QUARTERLY DIVIDEND
FULL YEAR HIGHLIGHTS:
| | · | Full year revenues of $382.0 million including reimbursable expenses and $370.9 million excluding reimbursable expenses |
| | · | Adjusted EBITDA(1) of $66.6 million, representing a 17.9% margin |
| | · | Adjusted pro forma net income per share(1) of $0.88 |
FOURTH QUARTER HIGHLIGHTS:
| | · | Fourth quarter revenues of $101.4 million including reimbursable expenses and $98.3 million excluding reimbursable expenses |
| | · | Overall quarterly revenue up 4.4% with Investment Banking revenue up 29.4% compared to the prior year quarter |
| | · | Adjusted EBITDA(1) of $18.1 million, representing an 18.4% margin |
| | · | Adjusted pro forma net income per share(1) of $0.24 |
| | · | Declares quarterly dividend of $0.05 per share of Class A common stock |
NEW YORK, February 23, 2010 – Duff & Phelps Corporation (NYSE: DUF), a leading independent provider of financial advisory and investment banking services, today announced financial results for its 2009 fourth quarter and full year, and declared a quarterly dividend.
Results
For the year ended December 31, 2009, Duff & Phelps generated revenues excluding reimbursable expenses of $370.9 million, a decrease of 2.8% compared to $381.5 million in the prior year. Adjusted EBITDA(1) for the period was $66.6 million, representing 17.9% of revenues excluding reimbursable expenses, compared to $73.6 million for the prior year, representing 19.3% of revenues excluding reimbursable expenses. Fully diluted net income per share of Class A common stock was $0.54, compared to $0.36 for the prior year. Adjusted pro forma net income(1) was $32.7 million, or $0.88 per share on a fully exchanged, fully diluted basis, compared to $36.0 million, or $1.05 per share, for the prior year.
For the quarter ended December 31, 2009, Duff & Phelps generated revenues excluding reimbursable expenses of $98.3 million, an increase of 4.4% compared to $94.2 million for the corresponding prior year quarter. Adjusted EBITDA(1) for the quarter was $18.1 million, representing 18.4% of revenues excluding reimbursable expenses, compared to $20.7 million for the corresponding prior year quarter, representing 22.0% of revenues excluding reimbursable expenses. Fully diluted net income per share of Class A common stock was $0.18, compared to $0.17 for the corresponding prior year quarter. Adjusted pro forma net income(1) was $9.3 million, or $0.24 per share on a fully exchanged, fully diluted basis, compared to $9.8 million, or $0.28 per share, for the corresponding prior year quarter.
“Our 2009 results reflect growth in several key areas of our business, particularly portfolio valuation, dispute consulting and global restructuring,” commented Noah Gottdiener, chairman and chief executive officer. “We believe the environment for these services will remain strong due to the continuation of secular trends that drive our business. Furthermore, we are well positioned to grow in our M&A related and other non-cyclical businesses as we enter what appears to be a period of economic recovery.”
“Over the past year, we have strengthened our balance sheet by paying down all debt and increasing our cash balances, and we have worked diligently to align our cost structure with top-line performance,” said Gerry Creagh, president. “These efforts will prove beneficial as markets improve and we make additional strategic investments in our business.”
Declaration of Quarterly Dividend
The Company also announced today that its board of directors has declared a quarterly dividend of $0.05 per share on its outstanding Class A common stock. The dividend is payable on March 26, 2010 to shareholders of record on March 16, 2010.
| (1) | Adjusted EBITDA, adjusted pro forma net income and adjusted pro forma net income per share are non-GAAP financial measures. See definitions and disclosures herein. |
Earnings Call Webcast
As previously announced, Duff & Phelps will host a conference call today, February 23, 2010, at 5:00 p.m. EST to discuss the Company’s financial results. Interested parties can access the webcast for this call through http://ir.duffandphelps.com/events.cfm.
About Duff & Phelps
As a leading global independent provider of financial advisory and investment banking services, Duff & Phelps delivers trusted advice to our clients principally in the areas of valuation, transactions, financial restructuring, dispute and taxation. Our world class capabilities and resources, combined with an agile and responsive delivery, distinguish our clients' experience in working with us. With more than 1,100 employees serving clients worldwide through offices in North America, Europe and Asia, Duff & Phelps is committed to fulfilling its mission to protect, recover and maximize value for its clients. Investment banking services in North America are provided by Duff & Phelps Securities, LLC. Investment banking services in Europe are provided by Duff & Phelps Securities Ltd. Duff & Phelps Securities Ltd. is authorized and regulated by the Financial Services Authority. Investment Banking services in France are provided by Duff & Phelps SAS. For more information, visit www.duffandphelps.com. (NYSE: DUF)
Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP financial measure and is reconciled as follows (in thousands):
| | | Quarter Ended | | | Year Ended | |
| | | December 31, | | | December 31, | | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Revenues (excluding reimbursable expenses) | | $ | 98,345 | | | $ | 94,208 | | | $ | 370,903 | | | $ | 381,476 | |
| | | | | | | | | | | | | | | | | |
| Net income attributable to Duff & Phelps Corporation | | $ | 4,617 | | | $ | 2,397 | | | $ | 11,568 | | | $ | 5,225 | |
| Net income attributable to the noncontrolling interest | | | 4,683 | | | | 5,864 | | | | 17,100 | | | | 19,068 | |
| Provision for income taxes | | | 4,732 | | | | 4,276 | | | | 12,264 | | | | 10,619 | |
| Other expense/(income), net | | | 37 | | | | 1,382 | | | | 2,956 | | | | 3,205 | |
| Depreciation and amortization | | | 2,532 | | | | 2,913 | | | | 10,244 | | | | 9,816 | |
| Equity-based compensation associated with Legacy Units and IPO Options | | | 1,474 | | | | 3,886 | | | | 12,437 | | | | 24,906 | |
| Acquisition retention expenses | | | - | | | | 11 | | | | - | | | | 793 | |
| Adjusted EBITDA | | $ | 18,075 | | | $ | 20,729 | | | $ | 66,569 | | | $ | 73,632 | |
| Adjusted EBITDA as a percentage of revenues | | | 18.4 | % | | | 22.0 | % | | | 17.9 | % | | | 19.3 | % |
Adjusted EBITDA is a non-GAAP financial measure. We believe that Adjusted EBITDA provides a relevant and useful alternative measure of our ongoing profitability and performance, when viewed in conjunction with GAAP measures, as it adjusts net income or loss for (a) interest expense and depreciation and amortization (a significant portion of which relates to debt and capital investments that have been incurred as the result of acquisitions and investments in stand-alone infrastructure which we do not expect to incur at the same levels in the future), (b) equity-based compensation associated with the Legacy Units of D&P Acquisitions, a significant portion of which is due to certain one-time grants associated with Predecessor acquisitions, and options to purchase shares of the Company’s Class A common stock granted in connection with the IPO (“IPO Options”), (c) acquisition retention expenses and other merger and acquisition costs, which are generally non-recurring in nature or are related to deferred payments associated with prior acquisitions and (d) net income or loss attributable to the noncontrolling interest.
Given the level of acquisition activity during the Predecessor period, and related capital investments and one time equity grants associated with acquisitions during the Predecessor period (which we do not expect to incur at the same levels in Successor periods) and the IPO, and our belief that, as a professional services organization, our operations are not capital intensive on an ongoing basis, we believe the Adjusted EBITDA measure, in addition to GAAP financial measures, provides a relevant and useful benchmark for investors, in order to assess our financial performance and comparability to other companies in our industry. The Adjusted EBITDA measure is utilized by our senior management to evaluate our overall performance and operating expense characteristics and to compare our performance to that of certain of our competitors. A measure similar to Adjusted EBITDA is the principal measure that determines the compensation of our senior management team. In addition, a measure similar to Adjusted EBITDA is a key measure that determines compliance with certain financial covenants under our credit facility. Management compensates for the inherent limitations associated with using the Adjusted EBITDA measure through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income or loss. Furthermore, management also reviews GAAP measures, and evaluates individual measures that are not included in Adjusted EBITDA such as our level of capital expenditures, equity issuance and interest expense, among other measures.
Adjusted EBITDA, as defined by the Company, consists of net income or loss before (a) interest income and expense, (b) provision for income taxes, (c) other expense, net, (d) depreciation and amortization, (e) acquisition retention expenses, (f) equity-based compensation associated with Legacy Units and IPO Options included in compensation and benefits, (g) equity-based compensation associated with Legacy Units and IPO Options included in selling, general and administrative expenses, (h) merger and acquisition costs and (i) net income or loss attributable to the noncontrolling interest.
Adjusted pro forma net income, as defined by Duff & Phelps, consists of Adjusted EBITDA (as defined above), less depreciation and amortization, interest income and expense (excluding a non-recurring charge from the repayment and subsequent termination of our former credit agreement), other income and pro forma corporate income tax applied at an assumed rate as specified in the calculations (such assumed pro forma corporate income tax rate may fluctuate between periods and may include true-ups relating to prior periods, based on management estimates and judgments). Adjusted pro forma net income per share, as defined by Duff & Phelps, consists of adjusted pro forma net income divided by the weighted average number of the Company's Class A and Class B shares for the applicable period, giving effect to the dilutive impact, if any, of stock options and restricted stock awards.
Both Adjusted EBITDA and adjusted pro forma net income are non-GAAP financial measures which are not prepared in accordance with, and should not be considered alternatives to, measurements required by GAAP, such as operating income, net income or loss, net income or loss per share, cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance with GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, it should be noted that companies calculate Adjusted EBITDA and adjusted pro forma net income differently and, therefore, Adjusted EBITDA and adjusted pro forma net income as presented for us may not be comparable to Adjusted EBITDA and adjusted pro forma net income reported by other companies.
Disclosure Regarding Forward-Looking Statements
Statements in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), which reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this discussion are based upon our historical performance and on our current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us, or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and the risk factors section that are included in our Annual Report on Form 10-K for the year ended December 31, 2009 to be filed with the Securities and Exchange Commission (“SEC”). The forward-looking statements included in this press release are made only as of the date of this filing with the SEC. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Investor and Media Relations
Marty Dauer
+ 1 212 871 7700
investor.relations@duffandphelps.com
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| | | Quarter Ended | | | Year Ended | |
| | | December 31, | | | December 31, | | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | | | | | | | | | |
| Revenues | | $ | 98,345 | | | $ | 94,208 | | | $ | 370,903 | | | $ | 381,476 | |
| Reimbursable expenses | | | 3,026 | | | | 2,600 | | | | 11,083 | | | | 10,546 | |
| Total revenues | | | 101,371 | | | | 96,808 | | | | 381,986 | | | | 392,022 | |
| Direct client service costs | | | | | | | | | | | | | | | | |
| Compensation and benefits (includes $2,801 and $3,356 of equity-based compensation for the quarters ended December 31, 2009 and 2008; and $16,432 and $20,537 for the years ended December 31, 2009 and 2008) | | | 55,187 | | | | 49,861 | | | | 210,302 | | | | 216,137 | |
| Other direct client service costs | | | 1,431 | | | | 2,396 | | | | 7,232 | | | | 8,224 | |
| Acquisition retention expenses | | | - | | | | 11 | | | | - | | | | 793 | |
| Reimbursable expenses | | | 3,038 | | | | 2,697 | | | | 11,158 | | | | 10,623 | |
| | | | 59,656 | | | | 54,965 | | | | 228,692 | | | | 235,777 | |
| Operating expenses | | | | | | | | | | | | | | | | |
| Selling, general and administrative (includes $1,649 and $2,639 of equity-based compensation for the quarters ended December 31, 2009 and 2008; and $7,223 and $10,803 for the years ended December 31, 2009 and 2008) | | | 25,114 | | | | 25,011 | | | | 99,162 | | | | 108,312 | |
| Depreciation and amortization | | | 2,532 | | | | 2,913 | | | | 10,244 | | | | 9,816 | |
| | | | 27,646 | | | | 27,924 | | | | 109,406 | | | | 118,128 | |
| Operating income | | | 14,069 | | | | 13,919 | | | | 43,888 | | | | 38,117 | |
| | | | | | | | | | | | | | | | | |
| Other expense | | | | | | | | | | | | | | | | |
| Interest income | | | (19 | ) | | | (14 | ) | | | (53 | ) | | | (668 | ) |
| Interest expense | | | 52 | | | | 906 | | | | 1,131 | | | | 3,475 | |
| Loss on early extinguishment of debt | | | - | | | | - | | | | 1,737 | | | | - | |
| Other expense | | | 4 | | | | 490 | | | | 141 | | | | 398 | |
| | | | 37 | | | | 1,382 | | | | 2,956 | | | | 3,205 | |
| Income before income taxes | | | 14,032 | | | | 12,537 | | | | 40,932 | | | | 34,912 | |
| Provision for income taxes | | | 4,732 | | | | 4,276 | | | | 12,264 | | | | 10,619 | |
| Net income | | | 9,300 | | | | 8,261 | | | | 28,668 | | | | 24,293 | |
| Less: Net income attributable to noncontrolling interest | | | 4,683 | | | | 5,864 | | | | 17,100 | | | | 19,068 | |
| Net income attributable to Duff & Phelps Corporation | | $ | 4,617 | | | $ | 2,397 | | | $ | 11,568 | | | $ | 5,225 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares of Class A common stock outstanding | | | | | | | | | | | | | | | | |
| Basic | | | 23,451 | | | | 13,403 | | | | 19,013 | | | | 13,225 | |
| Diluted | | | 24,375 | | | | 13,805 | | | | 19,795 | | | | 13,501 | |
| | | | | | | | | | | | | | | | | |
| Net income per share attributable to stockholders of Class A common stock of Duff & Phelps Corporation | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.57 | | | $ | 0.37 | |
| Diluted | | $ | 0.18 | | | $ | 0.17 | | | $ | 0.54 | | | $ | 0.36 | |
| | | | | | | | | | | | | | | | | |
| Cash dividends declared per common share | | $ | 0.05 | | | | - | | | $ | 0.15 | | | | - | |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
YEAR-OVER-YEAR SUMMARY OF REVENUE BY SEGMENT
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | Variance | | | Variance | |
| | | 2008 | | | 2009 | | | Q4 2008 vs Q4 2009 | | | 2008 vs 2009 | |
| | | Q4 | | | Total | | | Q4 | | | Total | | | Dollar | | | Percent | | | Dollar | | | Percent | |
| Financial Advisory | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Valuation Advisory | | $ | 42,462 | | | $ | 178,799 | | | $ | 34,676 | | | $ | 138,510 | | | $ | (7,786 | ) | | | -18.3 | % | | $ | (40,289 | ) | | | -22.5 | % |
| Tax Services | | | 11,524 | | | | 44,965 | | | | 10,007 | | | | 47,902 | | | | (1,517 | ) | | | -13.2 | % | | | 2,937 | | | | 6.5 | % |
| Dispute & Legal Management Consulting | | | 7,264 | | | | 29,405 | | | | 12,518 | | | | 47,220 | | | | 5,254 | | | | 72.3 | % | | | 17,815 | | | | 60.6 | % |
| | | | 61,250 | | | | 253,169 | | | | 57,201 | | | | 233,632 | | | | (4,049 | ) | | | -6.6 | % | | | (19,537 | ) | | | -7.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Corporate Finance Consulting | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio Valuation | | | 3,592 | | | | 15,224 | | | | 5,662 | | | | 22,153 | | | | 2,070 | | | | 57.6 | % | | | 6,929 | | | | 45.5 | % |
| Financial Engineering | | | 3,838 | | | | 14,495 | | | | 4,663 | | | | 19,171 | | | | 825 | | | | 21.5 | % | | | 4,676 | | | | 32.3 | % |
| Strategic Value Advisory | | | 3,130 | | | | 12,009 | | | | 3,208 | | | | 13,450 | | | | 78 | | | | 2.5 | % | | | 1,441 | | | | 12.0 | % |
| Due Diligence | | | 2,898 | | | | 14,766 | | | | 2,384 | | | | 8,182 | | | | (514 | ) | | | -17.7 | % | | | (6,584 | ) | | | -44.6 | % |
| | | | 13,458 | | | | 56,494 | | | | 15,917 | | | | 62,956 | | | | 2,459 | | | | 18.3 | % | | | 6,462 | | | | 11.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment Banking | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Global Restructuring Advisory | | | 5,947 | | | | 17,653 | | | | 12,164 | | | | 37,394 | | | | 6,217 | | | | 104.5 | % | | | 19,741 | | | | 111.8 | % |
| Transaction Opinions | | | 8,812 | | | | 36,185 | | | | 6,081 | | | | 21,076 | | | | (2,731 | ) | | | -31.0 | % | | | (15,109 | ) | | | -41.8 | % |
| M&A Advisory | | | 4,741 | | | | 17,975 | | | | 6,982 | | | | 15,845 | | | | 2,241 | | | | 47.3 | % | | | (2,130 | ) | | | -11.8 | % |
| | | | 19,500 | | | | 71,813 | | | | 25,227 | | | | 74,315 | | | | 5,727 | | | | 29.4 | % | | | 2,502 | | | | 3.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total revenues | | $ | 94,208 | | | $ | 381,476 | | | $ | 98,345 | | | $ | 370,903 | | | $ | 4,137 | | | | 4.4 | % | | $ | (10,573 | ) | | | -2.8 | % |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
SEQUENTIAL SUMMARY OF REVENUE BY SEGMENT
(In thousands)
(Unaudited)
| | | 2008 | | 2009 | |
| | | Q1 | | Q2 | | Q3 | | Q4 | | Total | | Q1 | | Q2 | | Q3 | | Q4 | | Total | |
| Financial Advisory | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Valuation Advisory | | $ | 46,861 | | $ | 45,699 | | $ | 43,777 | | $ | 42,462 | | $ | 178,799 | | $ | 40,370 | | $ | 33,772 | | $ | 29,692 | | $ | 34,676 | | $ | 138,510 | |
| Tax Services | | | 8,889 | | | 11,852 | | | 12,700 | | | 11,524 | | | 44,965 | | | 10,878 | | | 11,972 | | | 15,045 | | | 10,007 | | | 47,902 | |
| Dispute & Legal Management Consulting | | | 5,687 | | | 7,909 | | | 8,545 | | | 7,264 | | | 29,405 | | | 9,643 | | | 12,162 | | | 12,897 | | | 12,518 | | | 47,220 | |
| | | | 61,437 | | | 65,460 | | | 65,022 | | | 61,250 | | | 253,169 | | | 60,891 | | | 57,906 | | | 57,634 | | | 57,201 | | | 233,632 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Corporate Finance Consulting | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio Valuation | | | 2,382 | | | 4,240 | | | 5,010 | | | 3,592 | | | 15,224 | | | 6,295 | | | 4,338 | | | 5,858 | | | 5,662 | | | 22,153 | |
| Financial Engineering | | | 3,318 | | | 4,271 | | | 3,068 | | | 3,838 | | | 14,495 | | | 4,148 | | | 5,159 | | | 5,201 | | | 4,663 | | | 19,171 | |
| Strategic Value Advisory | | | 2,262 | | | 3,302 | | | 3,315 | | | 3,130 | | | 12,009 | | | 2,620 | | | 3,588 | | | 4,034 | | | 3,208 | | | 13,450 | |
| Due Diligence | | | 4,460 | | | 3,590 | | | 3,818 | | | 2,898 | | | 14,766 | | | 1,553 | | | 1,893 | | | 2,352 | | | 2,384 | | | 8,182 | |
| | | | 12,422 | | | 15,403 | | | 15,211 | | | 13,458 | | | 56,494 | | | 14,616 | | | 14,978 | | | 17,445 | | | 15,917 | | | 62,956 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment Banking | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Global Restructuring Advisory | | | 2,834 | | | 4,047 | | | 4,825 | | | 5,947 | | | 17,653 | | | 5,578 | | | 8,614 | | | 11,038 | | | 12,164 | | | 37,394 | |
| Transaction Opinions | | | 10,928 | | | 10,078 | | | 6,367 | | | 8,812 | | | 36,185 | | | 6,101 | | | 6,180 | | | 2,714 | | | 6,081 | | | 21,076 | |
| M&A Advisory | | | 5,532 | | | 2,813 | | | 4,889 | | | 4,741 | | | 17,975 | | | 2,079 | | | 2,375 | | | 4,409 | | | 6,982 | | | 15,845 | |
| | | | 19,294 | | | 16,938 | | | 16,081 | | | 19,500 | | | 71,813 | | | 13,758 | | | 17,169 | | | 18,161 | | | 25,227 | | | 74,315 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total revenues | | $ | 93,153 | | $ | 97,801 | | $ | 96,314 | | $ | 94,208 | | $ | 381,476 | | $ | 89,265 | | $ | 90,053 | | $ | 93,240 | | $ | 98,345 | | $ | 370,903 | |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
SEQUENTIAL SUMMARY OF REVENUE AND OPERATING INCOME BY SEGMENT
(In thousands)
(Unaudited)
| | | 2008 | | | 2009 | |
| | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | Total | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | Total | |
| Segment Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Advisory | | $ | 61,437 | | | $ | 65,460 | | | $ | 65,022 | | | $ | 61,250 | | | $ | 253,169 | | | $ | 60,891 | | | $ | 57,906 | | | $ | 57,634 | | | $ | 57,201 | | | $ | 233,632 | |
| Corporate Finance Consulting | | | 12,422 | | | | 15,403 | | | | 15,211 | | | | 13,458 | | | | 56,494 | | | | 14,616 | | | | 14,978 | | | | 17,445 | | | | 15,917 | | | | 62,956 | |
| Investment Banking | | | 19,294 | | | | 16,938 | | | | 16,081 | | | | 19,500 | | | | 71,813 | | | | 13,758 | | | | 17,169 | | | | 18,161 | | | | 25,227 | | | | 74,315 | |
| | | $ | 93,153 | | | $ | 97,801 | | | $ | 96,314 | | | $ | 94,208 | | | $ | 381,476 | | | $ | 89,265 | | | $ | 90,053 | | | $ | 93,240 | | | $ | 98,345 | | | $ | 370,903 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Segment Operating Income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Advisory | | $ | 9,455 | | | $ | 11,455 | | | $ | 8,717 | | | $ | 13,189 | | | $ | 42,816 | | | $ | 10,349 | | | $ | 10,339 | | | $ | 8,855 | | | $ | 8,014 | | | $ | 37,557 | |
| Corporate Finance Consulting | | | 2,901 | | | | 3,760 | | | | 3,080 | | | | 3,479 | | | | 13,220 | | | | 3,252 | | | | 3,178 | | | | 5,389 | | | | 2,035 | | | | 13,854 | |
| Investment Banking | | | 6,377 | | | | 3,145 | | | | 3,994 | | | | 4,157 | | | | 17,673 | | | | 1,543 | | | | 3,288 | | | | 2,364 | | | | 8,038 | | | | 15,233 | |
| | | $ | 18,733 | | | $ | 18,360 | | | $ | 15,791 | | | $ | 20,825 | | | $ | 73,709 | | | $ | 15,144 | | | $ | 16,805 | | | $ | 16,608 | | | $ | 18,087 | | | $ | 66,644 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Reconciliation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Segment Operating Income | | $ | 18,733 | | | $ | 18,360 | | | $ | 15,791 | | | $ | 20,825 | | | $ | 73,709 | | | $ | 15,144 | | | $ | 16,805 | | | $ | 16,608 | | | $ | 18,087 | | | $ | 66,644 | |
| Net client reimbursable expenses | | | 59 | | | | (7 | ) | | | (32 | ) | | | (97 | ) | | | (77 | ) | | | 22 | | | | (11 | ) | | | (74 | ) | | | (12 | ) | | | (75 | ) |
Equity-based compensation associated with Legacy Units and IPO Options | | | (6,269 | ) | | | (6,047 | ) | | | (8,705 | ) | | | (3,885 | ) | | | (24,906 | ) | | | (3,253 | ) | | | (4,481 | ) | | | (3,229 | ) | | | (1,474 | ) | | | (12,437 | ) |
| Depreciation and amortization | | | (2,176 | ) | | | (2,281 | ) | | | (2,446 | ) | | | (2,913 | ) | | | (9,816 | ) | | | (2,562 | ) | | | (2,556 | ) | | | (2,594 | ) | | | (2,532 | ) | | | (10,244 | ) |
| Acquisition retention expense | | | (310 | ) | | | (266 | ) | | | (206 | ) | | | (11 | ) | | | (793 | ) | | | - | | | | - | | | | - | | | | - | | | | - | |
| Operating Income | | $ | 10,037 | | | $ | 9,759 | | | $ | 4,402 | | | $ | 13,919 | | | $ | 38,117 | | | $ | 9,351 | | | $ | 9,757 | | | $ | 10,711 | | | $ | 14,069 | | | $ | 43,888 | |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
OTHER QUARTERLY OPERATING DATA BY SEGMENT
(In thousands)
(Unaudited)
| | | 2008 | | | 2009 | |
| | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | YTD | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | YTD | |
| Average Client Service Professionals | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Advisory | | | 665 | | | | 671 | | | | 701 | | | | 715 | | | | 688 | | | | 700 | | | | 658 | | | | 642 | | | | 627 | | | | 657 | |
| Corporate Finance Consulting | | | 112 | | | | 126 | | | | 137 | | | | 135 | | | | 127 | | | | 131 | | | | 134 | | | | 133 | | | | 130 | | | | 132 | |
| Investment Banking | | | 102 | | | | 118 | | | | 125 | | | | 131 | | | | 119 | | | | 136 | | | | 135 | | | | 130 | | | | 131 | | | | 133 | |
| | | | 879 | | | | 915 | | | | 963 | | | | 981 | | | | 934 | | | | 967 | | | | 927 | | | | 905 | | | | 888 | | | | 922 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| End of Period Client Service Professionals | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Advisory | | | 681 | | | | 663 | | | | 722 | | | | 710 | | | | | | | | 681 | | | | 640 | | | | 641 | | | | 618 | | | | | |
| Corporate Finance Consulting | | | 124 | | | | 125 | | | | 142 | | | | 131 | | | | | | | | 130 | | | | 136 | | | | 131 | | | | 129 | | | | | |
| Investment Banking | | | 109 | | | | 121 | | | | 129 | | | | 134 | | | | | | | | 137 | | | | 131 | | | | 130 | | | | 131 | | | | | |
| | | | 914 | | | | 909 | | | | 993 | | | | 975 | | | | | | | | 948 | | | | 907 | | | | 902 | | | | 878 | | | | | |
| | | 2008 | | | 2009 | |
| | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | YTD | | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | YTD | |
| Average Managing Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Advisory | | | 84 | | | | 94 | | | | 103 | | | | 104 | | | | 96 | | | | 101 | | | | 99 | | | | 95 | | | | 93 | | | | 97 | |
| Corporate Finance Consulting | | | 19 | | | | 25 | | | | 28 | | | | 29 | | | | 25 | | | | 30 | | | | 30 | | | | 31 | | | | 29 | | | | 30 | |
| Investment Banking | | | 30 | | | | 32 | | | | 33 | | | | 34 | | | | 32 | | | | 36 | | | | 39 | | | | 40 | | | | 40 | | | | 39 | |
| | | | 133 | | | | 151 | | | | 164 | | | | 167 | | | | 153 | | | | 167 | | | | 168 | | | | 166 | | | | 162 | | | | 166 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| End of Period Managing Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Advisory | | | 84 | | | | 98 | | | | 105 | | | | 105 | | | | | | | | 101 | | | | 96 | | | | 93 | | | | 93 | | | | | |
| Corporate Finance Consulting | | | 21 | | | | 26 | | | | 29 | | | | 28 | | | | | | | | 30 | | | | 31 | | | | 29 | | | | 30 | | | | | |
| Investment Banking | | | 30 | | | | 33 | | | | 34 | | | | 35 | | | | | | | | 38 | | | | 38 | | | | 40 | | | | 40 | | | | | |
| | | | 135 | | | | 157 | | | | 168 | | | | 168 | | | | | | | | 169 | | | | 165 | | | | 162 | | | | 163 | | | | | |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(In thousands, except headcount data)
(Unaudited)
| | | Quarter Ended | | | Year Ended | |
| | | December 31, | | | December 31, | | | December��31, | | | December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Financial Advisory | | | | | | | | | | | | |
| Revenues (excluding reimbursables) | | $ | 57,201 | | | $ | 61,250 | | | $ | 233,632 | | | $ | 253,169 | |
| Segment operating income | | $ | 8,014 | | | $ | 13,189 | | | $ | 37,557 | | | $ | 42,816 | |
| Segment operating income margin | | | 14.0 | % | | | 21.5 | % | | | 16.1 | % | | | 16.9 | % |
| | | | | | | | | | | | | | | | | |
| Corporate Finance Consulting | | | | | | | | | | | | | | | | |
| Revenues (excluding reimbursables) | | $ | 15,917 | | | $ | 13,458 | | | $ | 62,956 | | | $ | 56,494 | |
| Segment operating income | | $ | 2,035 | | | $ | 3,479 | | | $ | 13,854 | | | $ | 13,220 | |
| Segment operating income margin | | | 12.8 | % | | | 25.9 | % | | | 22.0 | % | | | 23.4 | % |
| | | | | | | | | | | | | | | | | |
| Investment Banking | | | | | | | | | | | | | | | | |
| Revenues (excluding reimbursables) | | $ | 25,227 | | | $ | 19,500 | | | $ | 74,315 | | | $ | 71,813 | |
| Segment operating income | | $ | 8,038 | | | $ | 4,157 | | | $ | 15,233 | | | $ | 17,673 | |
| Segment operating income margin | | | 31.9 | % | | | 21.3 | % | | | 20.5 | % | | | 24.6 | % |
| | | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | | | | | | | |
| Revenues (excluding reimbursables) | | $ | 98,345 | | | $ | 94,208 | | | $ | 370,903 | | | $ | 381,476 | |
| | | | | | | | | | | | | | | | | |
| Segment operating income | | $ | 18,087 | | | $ | 20,825 | | | $ | 66,644 | | | $ | 73,709 | |
| Net client reimbursable expenses | | | (12 | ) | | | (97 | ) | | | (75 | ) | | | (77 | ) |
| Equity-based compensation from | | | | | | | | | | | | | | | | |
| Legacy Units and IPO Options | | | (1,474 | ) | | | (3,885 | ) | | | (12,437 | ) | | | (24,906 | ) |
| Depreciation and amortization | | | (2,532 | ) | | | (2,913 | ) | | | (10,244 | ) | | | (9,816 | ) |
| Acquisition retention expenses | | | - | | | | (11 | ) | | | - | | | | (793 | ) |
| Operating income | | $ | 14,069 | | | $ | 13,919 | | | $ | 43,888 | | | $ | 38,117 | |
| | | | | | | | | | | | | | | | | |
| Average Client Service Professionals | | | | | | | | | | | | | | | | |
| Financial Advisory | | | 627 | | | | 715 | | | | 657 | | | | 688 | |
| Corporate Finance Consulting | | | 130 | | | | 135 | | | | 132 | | | | 127 | |
| Investment Banking | | | 131 | | | | 131 | | | | 133 | | | | 119 | |
| Total | | | 888 | | | | 981 | | | | 922 | | | | 934 | |
| | | | | | | | | | | | | | | | | |
| End of Period Client Service Professionals | | | | | | | | | | | | | |
| Financial Advisory | | | 618 | | | | 710 | | | | 618 | | | | 710 | |
| Corporate Finance Consulting | | | 129 | | | | 131 | | | | 129 | | | | 131 | |
| Investment Banking | | | 131 | | | | 134 | | | | 131 | | | | 134 | |
| Total | | | 878 | | | | 975 | | | | 878 | | | | 975 | |
| | | | | | | | | | | | | | | | | |
| Revenue per Client Service Professional | | | | | | | | | | | | | |
| Financial Advisory | | $ | 91 | | | $ | 86 | | | $ | 356 | | | $ | 368 | |
| Corporate Finance Consulting | | $ | 122 | | | $ | 100 | | | $ | 477 | | | $ | 445 | |
| Investment Banking | | $ | 193 | | | $ | 149 | | | $ | 559 | | | $ | 603 | |
| Total | | $ | 111 | | | $ | 96 | | | $ | 402 | | | $ | 408 | |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT – CONTINUED
(In thousands, except rate-per-hour and headcount data)
(Unaudited)
| | | Quarter Ended | | | Year Ended | |
| | | December 31, | | | December 31, | | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Utilization(1) | | | | | | | | | | | | |
| Financial Advisory | | | 71.3 | % | | | 67.0 | % | | | 65.7 | % | | | 64.2 | % |
| Corporate Finance Consulting | | | 70.4 | % | | | 54.2 | % | | | 64.0 | % | | | 57.8 | % |
| | | | | | | | | | | | | | | | | |
Rate-Per-Hour(2) | | | | | | | | | | | | | | | | |
| Financial Advisory | | $ | 316 | | | $ | 309 | | | $ | 321 | | | $ | 333 | |
| Corporate Finance Consulting | | $ | 385 | | | $ | 406 | | | $ | 401 | | | $ | 397 | |
| | | | | | | | | | | | | | | | | |
| Revenues (excluding reimbursables) | | | | | | | | | | | | | | | | |
| Financial Advisory | | $ | 57,201 | | | $ | 61,250 | | | $ | 233,632 | | | $ | 253,169 | |
| Corporate Finance Consulting | | | 15,917 | | | | 13,458 | | | | 62,956 | | | | 56,494 | |
| Investment Banking | | | 25,227 | | | | 19,500 | | | | 74,315 | | | | 71,813 | |
| Total | | $ | 98,345 | | | $ | 94,208 | | | $ | 370,903 | | | $ | 381,476 | |
| | | | | | | | | | | | | | | | | |
| Average Number of Managing Directors | | | | | | | | | | | | | |
| Financial Advisory | | | 93 | | | | 104 | | | | 97 | | | | 96 | |
| Corporate Finance Consulting | | | 29 | | | | 29 | | | | 30 | | | | 25 | |
| Investment Banking | | | 40 | | | | 34 | | | | 39 | | | | 32 | |
| Total | | | 162 | | | | 167 | | | | 166 | | | | 153 | |
| | | | | | | | | | | | | | | | | |
| End of Period Managing Directors | | | | | | | | | | | | | | | | |
| Financial Advisory | | | 93 | | | | 105 | | | | 93 | | | | 105 | |
| Corporate Finance Consulting | | | 30 | | | | 28 | | | | 30 | | | | 28 | |
| Investment Banking | | | 40 | | | | 35 | | | | 40 | | | | 35 | |
| Total | | | 163 | | | | 168 | | | | 163 | | | | 168 | |
| | | | | | | | | | | | | | | | | |
| Revenue per Managing Director | | | | | | | | | | | | | | | | |
| Financial Advisory | | $ | 615 | | | $ | 589 | | | $ | 2,409 | | | $ | 2,637 | |
| Corporate Finance Consulting | | $ | 549 | | | $ | 464 | | | $ | 2,099 | | | $ | 2,260 | |
| Investment Banking | | $ | 631 | | | $ | 574 | | | $ | 1,906 | | | $ | 2,244 | |
| Total | | $ | 607 | | | $ | 564 | | | $ | 2,234 | | | $ | 2,493 | |
| (1) | The utilization rate for any given period is calculated by dividing the number of hours incurred by client service professionals who worked on client assignments (including internal projects for the Company) during the period by the total available working hours for all of such client service professionals during the same period, assuming a 40 hour work week, less paid holidays and vacation days. Financial Advisory utilization excludes approximately 60 client service professionals associated with Rash & Associates, L.P. (“Rash”), a wholly-owned subsidiary of the Company, due to the nature of the work performed. |
| (2) | Average billing rate-per-hour is calculated by dividing applicable revenues for the period by the number of hours worked on client assignments (including internal projects for the Company) during the same period. Financial Advisory revenues used to calculate rate-per-hour exclude approximately $2,246 and $2,424 of revenues associated with Rash in the three months ended December 31, 2009 and 2008, respectively, and $9,311 and $9,338 of revenues associated with Rash in the year ended December 31, 2009 and 2008, respectively. |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | |
| ASSETS | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 107,311 | | | $ | 81,381 | |
| Accounts receivable, net | | | 55,079 | | | | 55,876 | |
| Unbilled services | | | 22,456 | | | | 17,938 | |
| Prepaid expenses and other current assets | | | 6,100 | | | | 6,599 | |
| Net deferred income taxes, current | | | 4,601 | | | | 4,304 | |
| Total current assets | | | 195,547 | | | | 166,098 | |
| | | | | | | | | |
| Property and equipment, net | | | 27,413 | | | | 28,350 | |
| Goodwill | | | 122,876 | | | | 116,456 | |
| Intangible assets, net | | | 27,907 | | | | 32,197 | |
| Other assets | | | 3,218 | | | | 3,541 | |
| Investments related to deferred compensation plan | | | 17,807 | | | | 7,946 | |
| Net deferred income taxes, non-current | | | 112,265 | | | | 61,609 | |
| Total non-current assets | | | 311,486 | | | | 250,099 | |
| | | | | | | | | |
| Total assets | | $ | 507,033 | | | $ | 416,197 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable | | $ | 2,459 | | | $ | 3,692 | |
| Accrued expenses | | | 11,609 | | | | 4,424 | |
| Accrued compensation and benefits | | | 35,730 | | | | 39,282 | |
| Other current liabilities | | | 4,626 | | | | 4,395 | |
| Current portion of long-term debt | | | - | | | | 794 | |
| Current portion due to noncontrolling unitholders | | | 4,303 | | | | 3,148 | |
| Total current liabilities | | | 58,727 | | | | 55,735 | |
| | | | | | | | | |
| Long-term debt, less current portion | | | - | | | | 42,178 | |
| Liability related to deferred compensation plan | | | 18,051 | | | | 8,479 | |
| Other long-term liabilities | | | 15,400 | | | | 16,715 | |
| Due to noncontrolling unitholders, less current portion | | | 101,098 | | | | 55,331 | |
| Total non-current liabilities | | | 134,549 | | | | 122,703 | |
| | | | | | | | | |
| Total liabilities | | | 193,276 | | | | 178,438 | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| Stockholders' equity | | | | | | | | |
| Preferred stock (50,000 shares authorized; zero issued and outstanding) | | | - | | | | - | |
| Class A common stock, par value $0.01 per share (100,000 shares authorized; 27,290 | | | | | | | | |
| and 14,719 shares issued and outstanding at December 31, 2009 and 2008, respectively) | | | 273 | | | | 147 | |
| Class B common stock, par value $0.0001 per share (50,000 shares authorized; 12,974 | | | | | | | | |
| and 20,889 shares issued and outstanding at December 31, 2009 and 2008, respectively) | | | 1 | | | | 2 | |
| Additional paid-in capital | | | 207,210 | | | | 100,985 | |
| Accumulated other comprehensive income | | | 693 | | | | 122 | |
| Retained earnings/(accumulated deficit) | | | 6,709 | | | | (1,127 | ) |
| Total stockholders' equity of Duff & Phelps Corporation | | | 214,886 | | | | 100,129 | |
| Noncontrolling interest | | | 98,871 | | | | 137,630 | |
| Total stockholders' equity | | | 313,757 | | | | 237,759 | |
| Total liabilities and stockholders' equity | | $ | 507,033 | | | $ | 416,197 | |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | Successor | | | Predecessor | |
| | | | | | | | | Period from | | | Period from | |
| | | Year Ended | | | Year Ended | | | October 4 to | | | January 1 to | |
| | | December 31, | | | December 31, | | | December 31, | | | October 3, | |
| | | 2009 | | | 2008 | | | 2007 | | | 2007 | |
| Cash flows from operating activities: | | | | | | | | | | | | |
| Net income/(loss) | | $ | 28,668 | | | $ | 24,293 | | | $ | (14,577 | ) | | $ | 6,898 | |
| | | | | | | | | | | | | | | | | |
| Adjustments to reconcile net income/(loss) | | | | | | | | | | | | | | | | |
| to net cash provided by operating activities: | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 10,244 | | | | 9,816 | | | | 2,384 | | | | 6,754 | |
| Equity-based compensation | | | 23,655 | | | | 31,340 | | | | 26,662 | | | | 31,428 | |
| Bad debt expense | | | 2,386 | | | | 1,604 | | | | 450 | | | | 266 | |
| Net deferred income taxes | | | (941 | ) | | | (384 | ) | | | (4,015 | ) | | | 242 | |
| Loss on early extinguishment of debt | | | 1,674 | | | | - | | | | - | | | | - | |
| Other | | | 368 | | | | 2,353 | | | | 708 | | | | 880 | |
| Changes in assets and liabilities providing/(using) cash: | | | | | | | | | | | | | | | | |
| Accounts receivable | | | (1,492 | ) | | | (9,030 | ) | | | 6,240 | | | | (8,701 | ) |
| Unbilled services | | | (4,518 | ) | | | 5,427 | | | | (4,919 | ) | | | (3,796 | ) |
| Prepaid expenses and other current assets | | | 452 | | | | (237 | ) | | | 2,813 | | | | (3,322 | ) |
| Other assets | | | (3,639 | ) | | | 2,916 | | | | 9,699 | | | | (5,123 | ) |
| Accounts payable and accrued expenses | | | 4,515 | | | | (4,108 | ) | | | (3,564 | ) | | | 15,437 | |
| Accrued compensation and benefits | | | 9,839 | | | | (20,088 | ) | | | 15,815 | | | | 3,836 | |
| Deferred revenues | | | 352 | | | | (5,051 | ) | | | 2,388 | | | | (247 | ) |
| Other liabilities | | | (1,487 | ) | | | 1,536 | | | | 2,802 | | | | 4,981 | |
| Due from affiliates | | | - | | | | - | | | | - | | | | (20,063 | ) |
| Net cash provided by operating activities | | | 70,076 | | | | 40,387 | | | | 42,886 | | | | 29,470 | |
| | | | | | | | | | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | | | | | | | | | |
| Purchase of property and equipment | | | (5,517 | ) | | | (11,836 | ) | | | (4,247 | ) | | | (9,636 | ) |
| Business acquisitions, net of cash acquired | | | (5,291 | ) | | | (16,520 | ) | | | (8,065 | ) | | | 513 | |
| Purchase of investments for deferred compensation plan | | | (6,658 | ) | | | (10,466 | ) | | | (1,789 | ) | | | - | |
| Proceeds from sale of investments in deferred compensation plan | | | - | | | | 1,692 | | | | - | | | | - | |
| Net cash used in investing activities | | | (17,466 | ) | | | (37,130 | ) | | | (14,101 | ) | | | (9,123 | ) |
| | | | | | | | | | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | | | | | | | | | |
| Net proceeds from sale of Class A common stock | | | 148,840 | | | | - | | | | 186,718 | | | | - | |
| Proceeds from exercise of IPO Options | | | 1,202 | | | | 69 | | | | - | | | | - | |
| Redemption of noncontrolling unitholders | | | (104,612 | ) | | | - | | | | (140,498 | ) | | | - | |
| Repayments of debt | | | (42,763 | ) | | | (794 | ) | | | (35,000 | ) | | | (793 | ) |
| Distributions and other payments to noncontrolling unitholders | | | (25,066 | ) | | | (10,544 | ) | | | (575 | ) | | | (28,374 | ) |
| Dividends | | | (3,757 | ) | | | - | | | | - | | | | - | |
| Repurchases of Class A common stock | | | (915 | ) | | | - | | | | - | | | | - | |
| Payment of costs for debt issuance and extinguishment | | | (471 | ) | | | (589 | ) | | | - | | | | - | |
| Principal payments under capital lease obligation | | | - | | | | - | | | | (62 | ) | | | (187 | ) |
| Repurchase of equity units | | | - | | | | - | | | | - | | | | (343 | ) |
| Net cash provided by/(used in) financing activities | | | (27,542 | ) | | | (11,858 | ) | | | 10,583 | | | | (29,697 | ) |
| | | | | | | | | | | | | | | | | |
| Effect of exchange rate on cash and cash equivalents | | | 862 | | | | (261 | ) | | | 337 | | | | 756 | |
| | | | | | | | | | | | | | | | | |
| Net increase/(decrease) in cash and cash equivalents | | | 25,930 | | | | (8,862 | ) | | | 39,705 | | | | (8,594 | ) |
| Cash and cash equivalents at beginning of period | | | 81,381 | | | | 90,243 | | | | 50,538 | | | | 59,132 | |
| Cash and cash equivalents at end of period | | $ | 107,311 | | | $ | 81,381 | | | $ | 90,243 | | | $ | 50,538 | |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| | | Quarter Ended December 31, 2009 | |
| | | As | | | | | | Adjusted | |
| | | Reported | | | Adjustments | | | Pro Forma | |
| | | | | | | | | | |
| Revenues | | $ | 98,345 | | | $ | - | | | $ | 98,345 | |
| Reimbursable expenses | | | 3,026 | | | | - | | | | 3,026 | |
| Total revenues | | | 101,371 | | | | - | | | | 101,371 | |
| | | | | | | | | | | | | |
| Direct client service costs | | | | | | | | | | | | |
| Compensation and benefits | | | 55,187 | | | | (732 | ) (a) | | | 54,455 | |
| Other direct client service costs | | | 1,431 | | | | - | | | | 1,431 | |
| Reimbursable expenses | | | 3,038 | | | | - | | | | 3,038 | |
| | | | 59,656 | | | | (732 | ) | | | 58,924 | |
| | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | |
| Selling, general and administrative | | | 25,114 | | | | (742 | ) (a) | | | 24,372 | |
| Depreciation and amortization | | | 2,532 | | | | - | | | | 2,532 | |
| | | | 27,646 | | | | (742 | ) | | | 26,904 | |
| | | | | | | | | | | | | |
| Operating income | | | 14,069 | | | | 1,474 | | | | 15,543 | |
| | | | | | | | | | | | | |
| Other expense/(income) | | | | | | | | | | | | |
| Interest income | | | (19 | ) | | | - | | | | (19 | ) |
| Interest expense | | | 52 | | | | - | | | | 52 | |
| Loss on early extinguishment of debt | | | - | | | | - | | | | - | |
| Other expense | | | 4 | | | | - | | | | 4 | |
| | | | 37 | | | | - | | | | 37 | |
| Income before income taxes | | | 14,032 | | | | 1,474 | | | | 15,506 | |
| Provision for income taxes | | | 4,732 | | | | 1,506 | (b) | | | 6,238 | |
| Net income | | | 9,300 | | | | (32 | ) | | | 9,268 | |
| Less: Net income attributable to the noncontrolling interest | | | 4,683 | | | | (4,683 | ) (c) | | | - | |
| Net income attributable to Duff & Phelps Corporation | | $ | 4,617 | | | $ | 4,651 | | | $ | 9,268 | |
| | | | | | | | | | | | | |
| Pro forma fully exchanged, fully diluted shares outstanding | (d) | | | 38,829 | |
| | | | | | | | | | | | | |
| Adjusted pro forma net income per fully exchanged, fully diluted shares outstanding | | | $ | 0.24 | |
| (a) | Represents elimination of equity-based compensation associated with Legacy Units and IPO Options. |
| (b) | Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.6% for the full year, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. For the quarter ended December 31, 2009, the pro forma tax rate of 40.2% reflects a true-up adjustment relating to the nine months ended September 30, 2009. Assumes full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company. |
| (c) | Represents elimination of the noncontrolling interest associated with the ownership by existing unitholders of D&P Acquisitions (excluding D&P Corporation), as if such unitholders had fully exchanged their partnership units and Class B common stock of the Company for shares of Class A common stock of the Company. |
| (d) | Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding, excluding Ongoing RSAs, and dilutive effect of Ongoing RSAs for the quarter ended December 31, 2009. The Company believes that IPO Options would not be considered dilutive when applying the treasury method. |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| | | Quarter Ended December 31, 2008 | |
| | | As | | | | | | Adjusted | |
| | | Reported | | | Adjustments | | | Pro Forma | |
| | | | | | | | | | |
| Revenues | | $ | 94,208 | | | $ | - | | | $ | 94,208 | |
| Reimbursable expenses | | | 2,600 | | | | - | | | | 2,600 | |
| Total revenues | | | 96,808 | | | | - | | | | 96,808 | |
| | | | | | | | | | | | | |
| Direct client service costs | | | | | | | | | | | | |
| Compensation and benefits | | | 49,861 | | | | (2,352 | ) (a) | | | 47,509 | |
| Other direct client service costs | | | 2,396 | | | | - | | | | 2,396 | |
| Acquisition retention expenses | | | 11 | | | | (11 | ) (b) | | | - | |
| Reimbursable expenses | | | 2,697 | | | | - | | | | 2,697 | |
| | | | 54,965 | | | | (2,363 | ) | | | 52,602 | |
| | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | |
| Selling, general and administrative | | | 25,011 | | | | (1,534 | ) (a) | | | 23,477 | |
| Depreciation and amortization | | | 2,913 | | | | - | | | | 2,913 | |
| | | | 27,924 | | | | (1,534 | ) | | | 26,390 | |
| | | | | | | | | | | | | |
| Operating income | | | 13,919 | | | | 3,897 | | | | 17,816 | |
| | | | | | | | | | | | | |
| Other expense/(income) | | | | | | | | | | | | |
| Interest income | | | (14 | ) | | | - | | | | (14 | ) |
| Interest expense | | | 906 | | | | - | | | | 906 | |
| Other expense | | | 490 | | | | - | | | | 490 | |
| | | | 1,382 | | | | - | | | | 1,382 | |
| Income before income taxes | | | 12,537 | | | | 3,897 | | | | 16,434 | |
| Provision for income taxes | | | 4,276 | | | | 2,396 | (c) | | | 6,672 | |
| Net income | | | 8,261 | | | | 1,501 | | | | 9,762 | |
| Less: Net income attributable to the noncontrolling interest | | | 5,864 | | | | (5,864 | ) (d) | | | - | |
| Net income attributable to Duff & Phelps Corporation | | $ | 2,397 | | | $ | 7,365 | | | $ | 9,762 | |
| | | | | | | | | | | | | |
| Pro forma fully exchanged, fully diluted shares outstanding | (e) | | | 34,613 | |
| | | | | | | | | | | | | |
| Adjusted pro forma net income per fully exchanged, fully diluted shares outstanding | | | $ | 0.28 | |
| (a) | Represents elimination of equity-based compensation associated with Legacy Units and IPO Options. |
| (b) | Represents elimination of expense associated with deferred payments made in connection with the acquisition of Standard & Poor’s Corporate Value Consulting business in September 2005. |
| (c) | Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.6% for the full year, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. Assumes full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company. |
| (d) | Represents elimination of the noncontrolling interest associated with the ownership by existing unitholders of D&P Acquisitions (excluding D&P Corporation), as if such unitholders had fully exchanged their partnership units and Class B common stock of the Company for shares of Class A common stock of the Company. |
| (e) | Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding, excluding Ongoing RSAs, and dilutive effect of Ongoing RSAs for the quarter ended December 31, 2008. The Company believes that IPO Options would not be considered dilutive when applying the treasury method. |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| | | Year Ended December 31, 2009 | |
| | | As | | | | | | Adjusted | |
| | | Reported | | | Adjustments | | | Pro Forma | |
| | | | | | | | | | |
| Revenues | | $ | 370,903 | | | $ | - | | | $ | 370,903 | |
| Reimbursable expenses | | | 11,083 | | | | - | | | | 11,083 | |
| Total revenues | | | 381,986 | | | | - | | | | 381,986 | |
| | | | | | | | | | | | | |
| Direct client service costs | | | | | | | | | | | | |
| Compensation and benefits | | | 210,302 | | | | (8,736 | ) (a) | | | 201,566 | |
| Other direct client service costs | | | 7,232 | | | | - | | | | 7,232 | |
| Reimbursable expenses | | | 11,158 | | | | - | | | | 11,158 | |
| | | | 228,692 | | | | (8,736 | ) | | | 219,956 | |
| | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | |
| Selling, general and administrative | | | 99,162 | | | | (3,701 | ) (a) | | | 95,461 | |
| Depreciation and amortization | | | 10,244 | | | | - | | | | 10,244 | |
| | | | 109,406 | | | | (3,701 | ) | | | 105,705 | |
| | | | | | | | | | | | | |
| Operating income | | | 43,888 | | | | 12,437 | | | | 56,325 | |
| | | | | | | | | | | | | |
| Other expense/(income) | | | | | | | | | | | | |
| Interest income | | | (53 | ) | | | - | | | | (53 | ) |
| Interest expense | | | 1,131 | | | | - | | | | 1,131 | |
| Loss on early extinguishment of debt | | | 1,737 | | | | (1,737 | ) (b) | | | - | |
| Other expense | | | 141 | | | | - | | | | 141 | |
| | | | 2,956 | | | | (1,737 | ) | | | 1,219 | |
| Income before income taxes | | | 40,932 | | | | 14,174 | | | | 55,106 | |
| Provision for income taxes | | | 12,264 | | | | 10,131 | (c) | | | 22,395 | |
| Net income | | | 28,668 | | | | 4,043 | | | | 32,711 | |
| Less: Net income attributable to the noncontrolling interest | | | 17,100 | | | | (17,100 | ) (d) | | | - | |
| Net income attributable to Duff & Phelps Corporation | | $ | 11,568 | | | $ | 21,143 | | | $ | 32,711 | |
| | | | | | | | | | | | | |
| Pro forma fully exchanged, fully diluted shares outstanding | (e) | | | 37,338 | |
| | | | | | | | | | | | | |
| Adjusted pro forma net income per fully exchanged, fully diluted shares outstanding | | | $ | 0.88 | |
| (a) | Represents elimination of equity-based compensation associated with Legacy Units and IPO Options. |
| (b) | Represents a non-recurring charge from the repayment and subsequent termination of our credit agreement. |
| (c) | Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.6% for the full year, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. The pro forma tax rate has declined from prior levels as a result of true-up adjustments. Assumes full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company. |
| (d) | Represents elimination of the noncontrolling interest associated with the ownership by existing unitholders of D&P Acquisitions (excluding D&P Corporation), as if such unitholders had fully exchanged their partnership units and Class B common stock of the Company for shares of Class A common stock of the Company. |
| (e) | Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding, excluding Ongoing RSAs, and dilutive effect of Ongoing RSAs for the year ended December 31, 2009. The Company believes that IPO Options would not be considered dilutive when applying the treasury method. |
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| | | Year Ended December 31, 2008 | |
| | | As | | | | | | Adjusted | |
| | | Reported | | | Adjustments | | | Pro Forma | |
| | | | | | | | | | |
| Revenues | | $ | 381,476 | | | $ | - | | | $ | 381,476 | |
| Reimbursable expenses | | | 10,546 | | | | - | | | | 10,546 | |
| Total revenues | | | 392,022 | | | | - | | | | 392,022 | |
| | | | | | | | | | | | | |
| Direct client service costs | | | | | | | | | | | | |
| Compensation and benefits | | | 216,137 | | | | (17,442 | ) (a) | | | 198,695 | |
| Other direct client service costs | | | 8,224 | | | | - | | | | 8,224 | |
| Acquisition retention expenses | | | 793 | | | | (793 | ) (b) | | | - | |
| Reimbursable expenses | | | 10,623 | | | | - | | | | 10,623 | |
| | | | 235,777 | | | | (18,235 | ) | | | 217,542 | |
| | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | |
| Selling, general and administrative | | | 108,312 | | | | (7,464 | ) (a) | | | 100,848 | |
| Depreciation and amortization | | | 9,816 | | | | - | | | | 9,816 | |
| | | | 118,128 | | | | (7,464 | ) | | | 110,664 | |
| | | | | | | | | | | | | |
| Operating income | | | 38,117 | | | | 25,699 | | | | 63,816 | |
| | | | | | | | | | | | | |
| Other expense/(income) | | | | | | | | | | | | |
| Interest income | | | (668 | ) | | | - | | | | (668 | ) |
| Interest expense | | | 3,475 | | | | - | | | | 3,475 | |
| Other expense | | | 398 | | | | - | | | | 398 | |
| | | | 3,205 | | | | - | | | | 3,205 | |
| Income before income taxes | | | 34,912 | | | | 25,699 | | | | 60,611 | |
| Provision for income taxes | | | 10,619 | | | | 13,989 | (c) | | | 24,608 | |
| Net income | | | 24,293 | | | | 11,710 | | | | 36,003 | |
| Less: Net income attributable to the noncontrolling interest | | | 19,068 | | | | (19,068 | ) (d) | | | - | |
| Net income attributable to Duff & Phelps Corporation | | $ | 5,225 | | | $ | 30,778 | | | $ | 36,003 | |
| | | | | | | | | | | | | |
| Pro forma fully exchanged, fully diluted shares outstanding | (e) | | | 34,346 | |
| | | | | | | | | | | | | |
| Adjusted pro forma net income per fully exchanged, fully diluted shares outstanding | | | $ | 1.05 | |
| (a) | Represents elimination of equity-based compensation associated with Legacy Units and IPO Options. |
| (b) | Represents elimination of expense associated with deferred payments made in connection with the acquisition of Standard & Poor’s Corporate Value Consulting business in September 2005. |
| (c) | Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.6% for the full year, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. Assumes full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company. |
| (d) | Represents elimination of the noncontrolling interest associated with the ownership by existing unitholders of D&P Acquisitions (excluding D&P Corporation), as if such unitholders had fully exchanged their partnership units and Class B common stock of the Company for shares of Class A common stock of the Company. |
| (e) | Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding, excluding Ongoing RSAs, and dilutive effect of Ongoing RSAs for the year ended December 31, 2008. The Company believes that IPO Options would not be considered dilutive when applying the treasury method. |
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