Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 06, 2015 |
Document Information [Line Items] | |||
Entity Registrant Name | RCS Capital Corp | ||
Entity Central Index Key | 1568832 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $696.30 | ||
Common Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 73,657,002 | ||
Common Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 1 |
Consolidated_Statements_of_Fin
Consolidated Statements of Financial Condition (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Assets | ||
Cash and cash equivalents | $199,435,000 | $70,059,000 |
Cash and securities segregated under federal and other regulations | 19,030,000 | 0 |
Available-for-sale securities | 11,473,000 | 8,528,000 |
Trading securities | 10,242,000 | 7,708,000 |
Fees and commissions receivable: | ||
Due from related parties | 701,000 | 1,072,000 |
Due from non-related parties | 85,492,000 | 13,565,000 |
Reimbursable expenses: | ||
Due from related parties | 17,570,000 | 18,772,000 |
Due from non-related parties | 3,352,000 | 584,000 |
Receivable from customers | 17,224,000 | 0 |
Investment banking fees receivable: | ||
Due from related parties | 11,054,000 | 21,420,000 |
Due from non-related parties | 1,376,000 | 0 |
Receivables from brokers, dealers, clearing organizations and other | 33,865,000 | 4,383,000 |
Due from RCAP Holdings and other related parties | 2,255,000 | 8,151,000 |
Prepaid expenses and other assets | 85,674,000 | 4,139,000 |
Property and equipment (net of accumulated depreciation of $5,488 and $350, respectively) | 24,746,000 | 1,883,000 |
Deferred compensation plan investments | 83,456,000 | 0 |
Notes receivable (net of allowance of $914 and $424, respectively) | 68,989,000 | 13,270,000 |
Deferred financing fees | 27,808,000 | 0 |
Intangible assets (net of accumulated amortization of $68,106 and $1,892, respectively) | 1,243,525,000 | 83,005,000 |
Goodwill | 519,361,000 | 79,986,000 |
Total assets | 2,466,628,000 | 336,525,000 |
Liabilities, Mezzanine Equity and Stockholders’ Equity | ||
Payable to customers | 13,832,000 | 0 |
Payable to broker-dealers | 1,240,000 | 1,259,000 |
Commissions payable | 100,816,000 | 17,440,000 |
Accrued expenses and accounts payable: | ||
Due to related parties | 2,479,000 | 5,894,000 |
Due to non-related parties | 93,898,000 | 31,602,000 |
Deferred revenue: | ||
Due to related parties | 2,247,000 | 2,567,000 |
Due to non-related parties | 9,271,000 | 1,602,000 |
Derivative contracts | 81,032,000 | 0 |
Other liabilities | 25,518,000 | 758,000 |
Deferred compensation plan accrued liabilities | 84,963,000 | 0 |
Net deferred tax liability | 266,202,000 | 23,567,000 |
Contingent and deferred consideration | 145,430,000 | 2,180,000 |
Long-term debt | 804,411,000 | 33,302,000 |
Total liabilities | 1,631,339,000 | 120,171,000 |
Commitments and contingencies — See Note 17 for more information. | 0 | 0 |
Additional paid-in capital | 723,113,000 | 180,528,000 |
Accumulated other comprehensive loss | -120,000 | -46,000 |
Retained earnings | -179,804,000 | 1,164,000 |
Total stockholders’ equity | 543,260,000 | 181,684,000 |
Non-controlling interests | 34,041,000 | 34,670,000 |
Total liabilities, mezzanine and equity | 2,466,628,000 | 336,525,000 |
Series B Preferred Stock | ||
Deferred revenue: | ||
Convertible preferred stock | 146,700,000 | 0 |
Series C Preferred Stock | ||
Deferred revenue: | ||
Convertible preferred stock | 111,288,000 | 0 |
Common Class A | ||
Deferred revenue: | ||
Common stock | 71,000 | 14,000 |
Common Class B | ||
Deferred revenue: | ||
Common stock | $0 | $24,000 |
Consolidated_Statements_of_Fin1
Consolidated Statements of Financial Condition (Parenthetical) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Property and equipment, accumulated depreciation | $5,488 | $350 |
Notes receivable, allowance for credit losses | 914 | 424 |
Intangible assets, accumulated amortization | $68,106 | $1,892 |
Series B Preferred Stock | ||
Preferred Stock, Dividend Rate, Percentage | 11.00% | 0.00% |
Convertible preferred, par value | $0.00 | $0 |
Convertible preferred, shares authorized | 100,000,000 | 0 |
Convertible preferred, shares issued | 5,800,000 | 0 |
Convertible preferred, shares outstanding | 5,800,000 | 0 |
Series C Preferred Stock | ||
Preferred Stock, Dividend Rate, Percentage | 7.00% | 0.00% |
Convertible preferred, par value | $0.00 | $0 |
Convertible preferred, shares authorized | 100,000,000 | 0 |
Convertible preferred, shares issued | 4,400,000 | 0 |
Convertible preferred, shares outstanding | 4,400,000 | 0 |
Common Class A | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 70,571,540 | 13,764,929 |
Common stock, shares outstanding | 70,571,540 | 13,764,929 |
Common Class B | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 1 | 24,000,000 |
Common stock, shares outstanding | 1 | 24,000,000 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Selling commissions: | |||
Related party products | $445,704 | $400,560 | $161,370 |
Non-related party products | 11,485 | 116,074 | 19,111 |
Dealer manager fees: | |||
Related party products | 208,509 | 227,420 | 94,761 |
Non-related party products | 5,579 | 56,381 | 10,100 |
Retail commissions | 752,875 | 47,936 | 0 |
Investment banking fees: | |||
Related party products | 62,560 | 45,484 | 0 |
Non-related party products | 3,375 | 0 | 925 |
Advisory and asset-based fees (non-related party) | 436,008 | 36,526 | 0 |
Transfer agency revenue (related party products) | 17,182 | 8,667 | 0 |
Services revenue: | |||
Related party products | 34,361 | 29,185 | 970 |
Non-related party products | 4,429 | 496 | 54 |
Reimbursable expenses: | |||
Related party products | 9,194 | 2,126 | 186 |
Non-related party products | 230 | 100 | -25 |
Investment fee revenue | 30,129 | 0 | 0 |
Transaction fees | 121,151 | 4,137 | 0 |
Other revenue | -40,576 | -25 | 45 |
Total revenues | 2,102,195 | 975,067 | 287,497 |
Wholesale commissions: | |||
Related party products | 374,767 | 395,859 | 161,399 |
Non-related party products | 11,010 | 115,610 | 19,111 |
Wholesale reallowance: | |||
Related party products | 59,451 | 63,964 | 24,385 |
Non-related party products | 1,863 | 19,462 | 2,464 |
Retail commissions and advisory | 1,068,191 | 69,009 | 0 |
Investment fee expense | 16,070 | 0 | 0 |
Internal commissions, payroll and benefits | 292,494 | 128,751 | 45,865 |
Conferences and seminars | 37,207 | 27,460 | 14,938 |
Travel | 13,896 | 6,203 | 6,235 |
Marketing and advertising | 14,379 | 8,575 | 2,680 |
Professional fees | 41,782 | 5,812 | 1,567 |
Data processing | 35,519 | 8,974 | 0 |
Quarterly fee (related party) | 2,030 | 5,996 | 0 |
Acquisition-related costs | 19,740 | 4,587 | 0 |
Interest expense | 49,154 | 241 | 0 |
Occupancy | 23,291 | 6,092 | 0 |
Depreciation and amortization | 71,447 | 2,208 | 31 |
Clearing and exchange fees | 23,603 | 2,426 | 0 |
Outperformance bonus (related party) | 9,709 | 492 | 0 |
Legal settlement | 60,000 | 0 | 0 |
Other expenses | 42,717 | 3,488 | 1,410 |
Total expenses | 2,268,320 | 875,209 | 280,085 |
Income (loss) before taxes | -166,125 | 99,858 | 7,412 |
Provision (benefit) for (from) income taxes | -46,485 | 1,843 | 0 |
Net (loss) income | -119,640 | 98,015 | 7,412 |
Less: net income attributable to non-controlling interests | 8,925 | 95,749 | 0 |
Less: preferred dividends and deemed dividends | 147,121 | 0 | 0 |
Net (loss) income attributable to Class A common stockholders | ($275,686) | $2,266 | $7,412 |
Per Share Data | |||
Basic earnings per share (in dollars per share) | ($5.55) | $0.29 | |
Diluted earnings per share (in dollars per share) | ($5.55) | $0.28 | |
Weighted average number of shares outstanding, basic (in shares) | 49,765,160 | 7,885,186 | |
Weighted average number of shares outstanding, diluted (in shares) | 49,765,160 | 8,025,208 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | ($119,640) | $98,015 | $7,412 |
Other comprehensive loss, net of tax: | |||
Unrealized gain (loss) on available-for-sale securities, net of tax ($(82), $21 and $0, respectively) | 381 | -489 | 0 |
Total other comprehensive loss, net of tax | 381 | -489 | 0 |
Total comprehensive income (loss) | -119,259 | 97,526 | 7,412 |
Less: Net comprehensive income attributable to non-controlling interests | 9,380 | 95,306 | 0 |
Less: preferred dividends and deemed dividends | 147,121 | 0 | 0 |
Net comprehensive income (loss) attributable to RCS Capital Corporation | ($275,760) | $2,220 | $7,412 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Unrealized loss on available for sale securities tax | ($82) | $21 | $0 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive Income | Parent | Noncontrolling Interest | Member’s Equity | Common Class A | Common Class A | Common Class A | Common Class A | Common Class A | Common Class B | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | LTIP Units | LTIP Units | IPO | IPO | IPO | IPO | IPO | First Allied acquisition | First Allied acquisition | First Allied acquisition | First Allied acquisition | Private Placement | Private Placement | Private Placement | Private Placement | Summit Financial Services Group | Summit Financial Services Group | Summit Financial Services Group | Summit Financial Services Group | JP Turner & Company, LLC | JP Turner & Company, LLC | JP Turner & Company, LLC | JP Turner & Company, LLC | ICH acquisition | ICH acquisition | ICH acquisition | ICH acquisition | Trupoly acquisition | Trupoly acquisition | Trupoly acquisition | Trupoly acquisition | StratCap | StratCap | StratCap | StratCap | Stock Purchase Program | Stock Purchase Program | Stock Purchase Program | Stock Purchase Program | |
In Thousands, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Common Stock | Additional Paid-in Capital | Retained Deficit | Parent | Common Stock | USD ($) | Common Stock | Additional Paid-in Capital | Retained Deficit | Parent | USD ($) | Noncontrolling Interest | USD ($) | Additional Paid-in Capital | Parent | Common Class A | Common Class A | USD ($) | Additional Paid-in Capital | Parent | Common Class A | USD ($) | Additional Paid-in Capital | Parent | Common Class A | USD ($) | Additional Paid-in Capital | Parent | Common Class A | USD ($) | Additional Paid-in Capital | Parent | Common Class A | USD ($) | Additional Paid-in Capital | Parent | Common Class A | USD ($) | Additional Paid-in Capital | Parent | Common Class A | USD ($) | Additional Paid-in Capital | Parent | Common Class A | USD ($) | Additional Paid-in Capital | Parent | Common Class A | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Common Stock | USD ($) | USD ($) | Common Stock | USD ($) | USD ($) | Common Stock | USD ($) | USD ($) | Common Stock | USD ($) | USD ($) | Common Stock | USD ($) | USD ($) | Common Stock | USD ($) | USD ($) | Common Stock | USD ($) | USD ($) | Common Stock | USD ($) | USD ($) | Common Stock | |||||||||||||||||||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2012 | $5,726 | $0 | $0 | $0 | $0 | $0 | $5,726 | $0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance, shares at Dec. 31, 2012 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 47,454 | -165 | -165 | 47,619 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | -19,650 | -19,650 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Jun. 09, 2013 | 33,530 | -165 | -165 | 33,695 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance, shares at Jun. 09, 2013 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, shares | 2,500,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Jun. 10, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Jun. 09, 2013 | 33,530 | 0 | -165 | 0 | -165 | 0 | 33,695 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance, shares at Jun. 09, 2013 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 50,561 | 2,266 | 2,266 | 48,295 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reorganization, shares | 24,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reorganization | 0 | 165 | 189 | 33,506 | -33,695 | 24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 492 | 0 | 492 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on available-for-sale securities, net of tax | -489 | -46 | -46 | -443 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, shares | 2,500,000 | 11,264,929 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | 11 | 43,627 | 43,624 | 43,627 | 3 | 137,163 | 137,152 | 137,163 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared on LTIP units | -47,180 | -47,180 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less: Dividend equivalents on Restricted Stock | -1,350 | -248 | -1,102 | -1,350 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2013 | 216,354 | 180,528 | 1,164 | -46 | 181,684 | 34,670 | 0 | 14 | 24 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance, shares at Dec. 31, 2013 | 13,764,929 | 24,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 9,757 | 917 | 917 | 8,840 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 210 | 0 | 210 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on available-for-sale securities, net of tax | 502 | 47 | 47 | 455 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Feb. 10, 2014 | 226,823 | 2,081 | 1 | 182,648 | 44,175 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2013 | 216,354 | 180,528 | 0 | 14 | 24 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance, shares at Dec. 31, 2013 | 13,764,929 | 24,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | -119,640 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on available-for-sale securities, net of tax | 381 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less: Dividend equivalents on Restricted Stock | -100 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Dec. 31, 2014 | 577,301 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Feb. 10, 2014 | 226,823 | 180,528 | 2,081 | 1 | 182,648 | 44,175 | 0 | 14 | 24 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance, shares at Feb. 10, 2014 | 13,764,929 | 24,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | -276,518 | -111,041 | -165,562 | -276,603 | 85 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | -719 | -719 | -719 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 9,499 | 9,499 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on available-for-sale securities, net of tax | -121 | -121 | -121 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, shares | 23,999,999 | -23,999,999 | 2,336,525 | 19,870,248 | 2,469,136 | 498,884 | 239,362 | 2,027,966 | 33,652 | 464,317 | 1,191,996 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | 1,727 | 45,200 | [1] | 45,200 | -43,473 | 24 | -24 | 19,459 | 2 | 24,700 | -5,243 | 19,459 | 373,883 | 373,863 | 373,883 | 20 | 47,727 | 47,725 | 47,727 | 2 | 10,431 | 10,431 | 10,431 | 4,860 | 4,860 | 4,860 | 44,095 | 44,093 | 44,095 | 2 | 725 | 725 | 725 | 0 | 10,000 | 9,999 | 10,000 | 1 | 22,091 | 22,090 | 22,091 | 1 | |||||||||||||||||
Preferred stock conversion, shares | 3,363,579 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock conversion | 65,578 | 65,574 | 65,578 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
LTIP Units Exchanged, shares | 310,947 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LTIP Units Exchanged | 0 | 10,200 | 10,201 | -10,201 | 1 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Docupace acquisition | 34,236 | 34,236 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared on LTIP units | -280 | -280 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less: Dividend equivalents on Restricted Stock | -15,728 | -4,770 | -10,958 | -15,728 | -467 | -345 | -122 | -467 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Dec. 31, 2014 | 577,301 | 723,113 | -179,804 | -120 | 543,260 | 34,041 | 0 | 71 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance, shares at Dec. 31, 2014 | 70,571,540 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Dec. 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, shares | 468,762 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Dec. 31, 2014 | $0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[1] | Includes deferred tax impact of $1.7 million due to the Exchange. |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) (USD $) | 1 Months Ended | ||
Jun. 30, 2013 | Jun. 10, 2013 | Feb. 10, 2014 | |
Common stock | $100 | ||
Unclassified Stock | |||
Issuance of common stock, shares | 100 | ||
Common stock, par value (in dollars per share) | $0.01 | ||
Exchange Transaction | Additional Paid-in Capital | |||
Deferred tax impact | $1,700,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | ($119,640) | $98,015 | $7,412 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 5,233 | 316 | 31 |
Amortization | 66,214 | 1,892 | 0 |
Equity-based compensation | 29,169 | 1,268 | 0 |
Deferred income taxes | -44,139 | -416 | 0 |
Gain on the sale of available-for-sale securities | -171 | 59 | 0 |
Change in contingent and deferred consideration | 8,865 | 10 | 0 |
Loss on derivative contracts | 45,213 | 0 | 0 |
Deferred compensation plan investments, net | 1,862 | 0 | 0 |
Non-cash legal settlement | 15,300 | 0 | 0 |
Forgiveness of notes receivable | 8,031 | 573 | 0 |
Change in fair value of trading securities | 1,158 | 138 | 0 |
Deferred financing fees amortization | 7,935 | 0 | 0 |
Other | 875 | 145 | 0 |
Increase (decrease) resulting from changes in: | |||
Cash and securities segregated under federal and other regulations | -11,031 | 0 | 0 |
Trading securities | -210 | -5,854 | 0 |
Fees and commissions receivable: | |||
Due from related parties | 371 | 104 | -1,024 |
Due from related parties | -28,242 | 257 | -96 |
Reimbursable expenses receivable: | |||
Due from related parties | 1,202 | -17,282 | -1,011 |
Due from non-related parties | -2,768 | -523 | -33 |
Receivable from customers | 9,473 | 0 | 0 |
Investment banking fees receivable: | |||
Due from related parties | 10,366 | -21,420 | 0 |
Due from non-related parties | -1,376 | 0 | 0 |
Receivables from broker, dealers, clearing organizations and other | -19,934 | 1,449 | 0 |
Due from RCAP Holdings and related parties | 5,896 | -7,156 | 0 |
Prepaid expenses and other assets | -20,057 | -122 | 99 |
Notes receivable | -20,808 | -6,292 | 77 |
Payable to customers | -13,666 | 0 | 0 |
Payable to broker-dealers | -1,892 | -3,748 | 4,158 |
Commissions payable | 11,016 | 2,944 | 0 |
Accrued expenses and accounts payable: | |||
Due to related parties | -3,415 | 16,736 | 0 |
Due to non-related parties | 12,554 | -14,838 | 3,789 |
Due to related parties | -320 | 2,567 | 0 |
Due to non-related parties | -54,021 | -1,101 | 0 |
Other liabilities | -34,717 | 0 | 0 |
Net cash (used in) provided by operating activities | -135,674 | 47,721 | 13,402 |
Cash flows from investing activities: | |||
Purchases of available-for-sale securities | -11,484 | -10,097 | 0 |
Proceeds from the sale of available-for-sale securities | 9,013 | 1,000 | 0 |
Purchase of property and equipment | -8,781 | -685 | -106 |
Proceeds from the written put option | 21,217 | 0 | 0 |
Payments to acquire businesses, net of cash acquired | -19,041 | 0 | 0 |
Payment for acquisition of intellectual property | -600 | 0 | 0 |
Net cash (used in) provided by investing activities | -1,041,282 | 30,911 | -106 |
Cash flows from financing activities: | |||
Proceeds from the issuance of term loans | 685,106 | 4,502 | 0 |
Payments on long-term debt | -48,844 | -1,645 | 0 |
Payment of contingent and deferred consideration | -23,258 | -10 | 0 |
Net proceeds from the issuance of convertible notes (including embedded derivative) | 83,551 | 43,627 | 0 |
Net proceeds from issuance of Series A convertible preferred stock (including embedded derivative) | 197,504 | 0 | 0 |
Net proceeds from issuance of common stock | 437,981 | 0 | 0 |
Contributions | 0 | 0 | 3,646 |
Distributions | 0 | -66,830 | -8,200 |
Dividends paid | -25,622 | -900 | 0 |
Other | -86 | 0 | 0 |
Net cash provided by (used in) financing activities | 1,306,332 | -21,256 | -4,554 |
Net increase in cash | 129,376 | 57,376 | 8,742 |
Cash and cash equivalents, beginning of period | 70,059 | 12,683 | 3,941 |
Cash and cash equivalents, end of period | 199,435 | 70,059 | 12,683 |
Non-cash: | |||
Dividends declared but not yet paid | 1,183 | 450 | 0 |
Conversion of Series A convertible preferred stock to Class A common stock | 65,577 | 0 | 0 |
Issuance of stock for compensation and acquisitions | 99,279 | 137,655 | 0 |
Cash: | |||
Cash paid for income taxes | 27,303 | 203 | 0 |
Cash paid for interest | 39,897 | 442 | 0 |
Cetera Financial Group | |||
Cash flows from investing activities: | |||
Payments to acquire businesses, net of cash acquired | -891,101 | 0 | 0 |
Summit Financial Services Group | |||
Cash flows from investing activities: | |||
Payments to acquire businesses, net of cash acquired | -33,374 | 0 | 0 |
Hatteras Funds Group | |||
Cash flows from investing activities: | |||
Payments to acquire businesses, net of cash acquired | -29,195 | 0 | 0 |
JP Turner & Company, LLC | |||
Cash flows from investing activities: | |||
Payments to acquire businesses, net of cash acquired | -2,615 | 0 | 0 |
SK Research | |||
Cash flows from investing activities: | |||
Payments to acquire businesses, net of cash acquired | -10,092 | 0 | 0 |
ICH acquisition | |||
Cash flows from investing activities: | |||
Payments to acquire businesses, net of cash acquired | -1,531 | 0 | 0 |
StratCap | |||
Cash flows from investing activities: | |||
Payments to acquire businesses, net of cash acquired | -62,988 | 0 | 0 |
Trupoly acquisition | |||
Cash flows from investing activities: | |||
Payments to acquire businesses, net of cash acquired | -710 | 0 | 0 |
First Allied acquisition | |||
Cash flows from investing activities: | |||
Payments to acquire businesses, net of cash acquired | $0 | $40,693 | $0 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Statement of Cash Flows [Abstract] | |
Noncash settlement expense | $15,300 |
Organization_and_Description_o
Organization and Description of the Company | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of the Company | Organization and Description of the Company |
Formation | |
RCS Capital Corporation (“we”, “us”, “our company” or the “Company”) is a holding company incorporated under the laws of the State of Delaware on December 27, 2012, originally named 405 Holding Corporation. On February 19, 2013, 405 Holding Corporation changed its name to RCS Capital Corporation. The Company was initially formed to hold Realty Capital Securities, LLC (“Realty Capital Securities”), RCS Advisory Services, LLC (“RCS Advisory”) and American National Stock Transfer, LLC (“ANST” and together with Realty Capital Securities and RCS Advisory, the “Original Operating Subsidiaries”) and to grow business lines under the Original Operating Subsidiaries. | |
Initial Public Offering | |
On June 10, 2013, the Company closed its initial public offering (the “IPO”) of Class A common stock, par value $0.001 per share (“Class A common stock”), in which it sold 2,500,000 shares of Class A common stock at $20.00 per share, resulting in net proceeds after offering costs and underwriting discounts and commissions of $43.6 million. Class A common stock entitles holders to one vote per share and full economic rights (including rights to dividends, if any, and distributions upon liquidation). Holders of Class A common stock hold 100% of the economic rights and a portion of the voting rights of the Company. Concurrently with the closing of the IPO on June 10, 2013, the Company underwent a reorganization, in which RCAP Holdings, LLC (“RCAP Holdings”) received 24,000,000 shares of Class B common stock, par value $0.001 per share (“Class B common stock”), in exchange for 100 unclassified shares in the Company previously purchased by RCAP Holdings. | |
Concurrently with the commencement of the IPO, the Original Operating Subsidiaries also underwent a reorganization (the “subsidiary reorganization”), in which a new class of units in the Original Operating Subsidiaries called “Class A Units,” which entitle the holders thereof to voting and economic rights, were issued to the Company, and a new class of operating subsidiary units called “Class B Units,” which entitle the holder thereof to economic rights but not voting rights, were issued to RCAP Holdings. Also created were “Class C Units” and “LTIP Units.” After the subsidiary reorganization and IPO, through their ownership of Class A Units and Class B Units, the Company owned a 9.4% economic interest in the Original Operating Subsidiaries and RCAP Holdings owned a 90.6% economic interest in the Original Operating Subsidiaries. Prior to the subsidiary reorganization and the IPO, RCAP Holdings held a 100% interest in each of the Original Operating Subsidiaries and the Company. | |
Upon completion of the subsidiary reorganization and the IPO in June 2013, the Company became the managing member of the Original Operating Subsidiaries and the Company assumed the exclusive right to manage and conduct the business and affairs of the Original Operating Subsidiaries and to take any and all actions on their behalf in such capacity. As a result, the Company consolidated the financial results of the Original Operating Subsidiaries with its own financial results. Net profits and net losses of the Original Operating Subsidiaries were allocated to their members pro rata in accordance with the respective percentages of their membership interests in the Original Operating Subsidiaries. Because the Company and the Original Operating Subsidiaries were under common control at the time of the subsidiary reorganization, the Company’s acquisition of control of the Original Operating Subsidiaries was accounted for at historical cost in the accompanying consolidated financial statements. Accordingly, the operating results of the Original Operating Subsidiaries have been included in the Company’s consolidated financial statements from the date of common control. | |
Restructuring Transactions | |
On February 11, 2014, the Company entered into certain additional corporate restructuring transactions (the “Restructuring Transactions”) involving the Company, RCAP Holdings, the Original Operating Subsidiaries, and RCS Capital Management, LLC (“RCS Capital Management”) to help simplify the Company’s corporate structure. | |
As an initial step in the Restructuring Transactions, on February 11, 2014, the Company entered into a First Amendment to the Exchange Agreement (the “Amendment”) with RCAP Holdings. The purpose of the Amendment was to amend the Exchange Agreement dated as of June 10, 2013 so as to permit an exchange by RCAP Holdings of one Class B Unit of each of the Original Operating Subsidiaries (each such unit, an “Original Operating Subsidiaries Unit”) for shares of Class A common stock and the related cancellation of a corresponding number of shares of Class B common stock. | |
On February 11, 2014, also as part of the Restructuring Transactions, RCAP Holdings elected to exchange 23,999,999 Original Operating Subsidiaries Units for 23,999,999 shares of Class A common stock (the “Exchange”). After giving effect to the Exchange, as of February 11, 2014, RCAP Holdings held 24,051,499 shares of Class A common stock and one share of Class B common stock, which entitled RCAP Holdings, in the aggregate, to 90.76% of the economic rights in the Company and 95.38% of the voting power of the Class A common stock and Class B common stock voting together as a single class. | |
Following receipt of stockholder consent, the Company amended the Company’s certificate of incorporation effective July 2, 2014 and amended the Exchange Agreement on August 5, 2014 to permit RCAP Holdings to continue to hold one share of Class B common stock without holding one Original Operating Subsidiaries Unit. Following this amendment, the remaining Original Operating Subsidiaries Unit owned by RCAP Holdings was exchanged for one share of Class A common stock, which was not issued as RCAP Holdings waived the right to receive it. | |
Also in connection with the Restructuring Transactions, the Company formed RCS Capital Holdings, LLC (“RCS Holdings”), a Delaware limited liability company. Pursuant to the Limited Liability Company Agreement of RCS Holdings (the “LLC Agreement”), there are three authorized classes of equity interests in RCS Holdings, designated as “Class A Units” (“Class A RCS Holdings Units”), “Class C Units” (“Class C RCS Holdings Units) and “LTIP Units” (“RCS Holdings LTIP Units”). In connection with the execution of the LLC Agreement, 100% of the Class A RCS Holdings Units were issued to the Company and 100% of the RCS Holdings LTIP Units were issued to RCS Capital Management. The Class A RCS Holdings Units issued to the Company were fully vested, are not subject to any put and call rights, and entitled the holder thereof to voting and economic rights (including rights to dividends and distributions upon liquidation). | |
In connection with the formation of RCS Holdings, on February 11, 2014, (a) the Company entered into a Contribution and Exchange Agreement with RCS Capital Management and RCS Holdings, pursuant to which the Company contributed to RCS Holdings 26,499,999 Class A Units of each of the Original Operating Subsidiaries (collectively, the “Class A Operating Subsidiary Units”) in exchange for 26,499,999 Class A RCS Holdings Units, and (b) RCS Capital Management contributed to RCS Holdings an aggregate of 3,975,000 LTIP Units of the Original Operating Subsidiaries in exchange for 1,325,000 RCS Holdings LTIP Units. | |
On April 28, 2014, the Amended and Restated 2013 Manager Multi-Year Outperformance Agreement among the Company, RCS Holdings and RCS Capital Management, dated as of February 11, 2014 (the “OPP”) was amended which resulted in RCS Capital Management earning 310,947 RCS Holdings LTIP Units and forfeiting 1,014,053 RCS Holdings LTIP Units. Immediately prior to the acquisition by Luxor Capital Group, LP and certain of its affiliates (collectively, “Luxor”) of an interest in RCS Capital Management, RCS Capital Management distributed 310,947 earned RCS Holdings LTIP Units (the “Earned LTIP Units”) to its then current members, each of whom is also a member of RCAP Holdings (the “Members”). Prior to December 31, 2014, the interests of the LTIP Units were included in non-controlling interest. | |
On December 31, 2014, the Company, RCS Capital Management, and RCS Holdings, entered into an amendment (“Amendment No. 2”) to the OPP. Amendment No. 2 provided for the early vesting of the Earned LTIP Units such that all of the Earned LTIP Units became fully vested on December 31, 2014. Under the OPP and the LLC Agreement, RCS Holdings LTIP Units automatically converted, upon vesting and after achieving economic equivalence with Class A RCS Holdings Units (which had already been achieved), into Class C RCS Holdings Units on a one-for-one basis. A holder of Class C RCS Holdings Units may elect to convert such units, on a one-for-one basis, into shares of Class A common stock, or, at the option of the Company, a cash equivalent. | |
Pursuant to a Redemption and Exchange Agreement entered into December 31, 2014 among the Company, RCS Holdings and the Members in connection with Amendment No. 2 (the “Redemption and Exchange Agreement”), each of the Members exchanged their Class C RCS Holdings Units (which were received upon the automatic conversion of their Earned LTIP Units into Class C RCS Holdings Units due to the early vesting of the Earned LTIP Units) for shares of Class A common stock in accordance with the terms of the LLC Agreement and all applicable notice and delivery waiting period requirements were waived. Accordingly, 310,947 shares of Class A common stock were issued to the Members on December 31, 2014. As a result, no RCS Holdings LTIP Units were outstanding as of December 31, 2014, thus eliminating the non-controlling interest in RCS Holdings related to the existence of the RCS Holdings LTIP Units. This enables the Company to be entitled to a 100% dividends received deduction with respect to dividends from its corporate subsidiaries and further streamlines the capital structure of the Company and its subsidiaries. See Note 19 for more information. | |
2014 Public Offering and Concurrent Private Offering | |
On June 10, 2014, the Company issued 19,000,000 shares of Class A common stock in a public offering (the “public offering”). In connection with the public offering, the Company granted the underwriters the option to purchase up to 3,600,000 additional shares of Class A common stock to cover over-allotments, if any, for a period of 30 days. On June 18, 2014, the underwriters purchased an additional 870,248 shares at the public offering price per share pursuant to the over-allotment option. | |
On June 10, 2014, the Company issued 2,469,136 shares of Class A common stock at the public offering price of $20.25 per share to Luxor in a private offering. | |
Recent and Pending Acquisitions | |
During the year ended December 31, 2014, the Company completed the acquisitions (collectively, the “recent acquisitions”) of Cetera Financial Holdings, Inc. (“Cetera”), Summit Financial Services Group, Inc. (“Summit”), J.P. Turner & Company, LLC and J.P. Turner & Company Capital Management, LLC (together, “J.P. Turner”), Hatteras Funds Group (“Hatteras”), First Allied Holdings Inc. (“First Allied”), Investors Capital Holdings, Ltd. (“ICH”), Validus/Strategic Capital Partners, LLC (“StratCap”), Trupoly, LLC (“Trupoly”) and Docupace Technologies, LLC (“Docupace”) (collectively, the “acquired businesses”). As of December 31, 2014, the acquisitions of VSR Group, Inc. (“VSR”) and Girard Securities, Inc. (“Girard”) were pending (collectively, the “pending acquisitions” and together with the recent acquisitions the “recent and pending acquisitions”). See Note 2 for more information. All of the recent and pending acquisitions have been or will be accounted for using the purchase method of accounting except for the First Allied acquisition. | |
The First Allied acquisition, which closed on June 30, 2014, was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings at the time of the acquisition of First Allied by RCAP Holdings. Beginning with the Company’s financial statements for the quarter ended June 30, 2014, the Company has presented recast financial information for the relevant periods to reflect the results of operations and financial position of First Allied as if the Company had acquired it on September 25, 2013, the date that First Allied was acquired by RCAP Holdings. Therefore, First Allied’s results from September 25, 2013 through December 31, 2013 and First Allied’s results for the entire year ended December 31, 2014 are included in the Company’s results. See Notes 2 and 3 for more information. | |
The Company’s results of operations only include the results of operations of Cetera, Summit, J.P. Turner, Hatteras, ICH, StratCap, Trupoly and Docupace beginning on the date of each respective acquisition. See Note 2 for more information on each of the recent acquisitions. | |
Operating Subsidiaries other than the Recent Acquisitions | |
Realty Capital Securities, a limited liability company organized in Delaware, is a wholesale broker-dealer registered with the U.S. Securities and Exchange Commission (the “SEC”) and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and is the securities broker-dealer for proprietary products sponsored by AR Capital, LLC (an entity under common control) and other entities under common control, consisting primarily of non-traded real estate investment trusts (“REITs”), as well as a closed-end real estate securities fund, an open-end real estate securities fund and non-traded business development company (“BDC”) funds and, from time to time, programs not sponsored by AR Capital, LLC. Realty Capital Securities also provides investment banking advisory services and capital markets services to related and non-related party issuers of public securities in connection with strategic alternatives related to potential liquidity events and other transactions. Realty Capital Securities markets securities throughout the United States by means of a national network of selling-group members consisting of broker-dealers and their registered representatives. | |
RCS Advisory was organized in Delaware in December 2012 as a limited liability company and commenced operations in January 2013 as a transaction management services business. RCS Advisory provides a range of services to alternative investment programs and other investment vehicles, including offering registration and blue sky filings advice with respect to SEC and FINRA registration maintenance, transaction management, marketing support, due diligence advice and related meetings, events, training and education, conference management and strategic advice in connection with liquidity events and other strategic transactions. | |
ANST was organized in Delaware in November 2012 as a limited liability company and commenced operations in January 2013 as an SEC-registered transfer agent. ANST, using a third-party service provider to act as a registrar, provides record-keeping services and executes the transfer, issuance and cancellation of shares or other securities in connection with offerings conducted by issuers sponsored, co-sponsored or advised directly or indirectly by AR Capital, LLC. | |
SK Research, LLC (“SK Research”) was organized in Delaware in March 2014. On March 10, 2014, the Company announced the hiring of due diligence and research professionals Todd D. Snyder and John F. Kearney, formerly of Snyder Kearney, LLC, as part of an initiative to launch a new division of RCAP’s research platform dedicated to alternative investment programs. SK Research provides focused intelligence and due diligence on non-traditional investment products. The Company has made an upfront payment to acquire the rights to use the business name and web-based publications of Messrs. Snyder and Kearney and certain related property and equipment. The Company has also entered into employment agreements with Messrs. Snyder and Kearney and with certain members of their team. |
Recent_and_Pending_Acquisition
Recent and Pending Acquisitions | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Business Combinations [Abstract] | ||||||||
Recent and Pending Acquisitions | Recent and Pending Acquisitions | |||||||
During the year ended December 31, 2014, the Company completed the acquisitions of Cetera, Summit, J.P. Turner, Hatteras, First Allied, ICH, StratCap, Trupoly and Docupace. The recent acquisitions were made in order for the Company to diversify its revenue stream and product offerings. The resulting goodwill associated with the recent acquisitions is made up of synergies related to higher strategic partner revenues as well as expense synergies associated with back office management, technology efficiencies, savings from the renegotiation of the Company’s clearing contracts, the elimination of duplicative public company expenses and other factors. | ||||||||
As of December 31, 2014, the acquisitions of VSR and Girard were pending. | ||||||||
Details of each recent and pending acquisition are as follows: | ||||||||
Cetera Financial Holdings | ||||||||
On April 29, 2014, the Company completed the acquisition of Cetera. The purchase price was $1.15 billion (subject to certain adjustments), and the Company paid $1.13 billion in cash after adjustments. Cetera is a financial services holding company formed in 2010 that provides independent broker-dealer services and investment advisory services through four distinct independent broker-dealer platforms: Cetera Advisors, Cetera Advisor Networks, Cetera Investment Services and Cetera Financial Specialists. The acquisition, including related costs, was financed with a $575.0 million senior secured first lien term loan, a $150.0 million senior secured second lien term loan (together, with a $25.0 million senior secured first lien revolving credit facility, the “Bank Facilities”), the issuance of $120.0 million (aggregate principal amount) of convertible notes and $270.0 million (aggregate stated liquidation value) of 7% Series A Convertible Preferred Stock, $0.001 par value per share (“Series A Preferred Stock”), as described in further detail in Notes 9 and 11, and cash on hand. | ||||||||
The preliminary assignment of the total consideration for the Cetera acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 241,641 | ||||||
Cash and segregated securities | 7,999 | |||||||
Trading securities | 741 | |||||||
Receivables | 49,883 | |||||||
Property and equipment | 17,735 | |||||||
Prepaid expenses | 15,083 | |||||||
Deferred compensation plan investments | 76,010 | |||||||
Notes receivable | 38,805 | |||||||
Other assets | 37,096 | |||||||
Accounts payable | (94,074 | ) | ||||||
Accrued expenses | (32,421 | ) | ||||||
Other liabilities | (112,977 | ) | ||||||
Deferred compensation plan accrued liabilities | (75,294 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 170,227 | |||||||
Goodwill | 290,262 | |||||||
Intangible assets | 944,542 | |||||||
Deferred tax liability | (272,289 | ) | ||||||
Total consideration | $ | 1,132,742 | ||||||
The assignment of the total consideration for the Cetera acquisition remains preliminary and is subject to the finalization of goodwill, other assets, other liabilities and deferred tax liabilities. | ||||||||
As of December 31, 2014, approximately $8.3 million of the goodwill from Cetera’s historic pre-acquisition goodwill is deductible for income tax purposes. | ||||||||
The total Cetera consideration consisted of the following (in thousands): | ||||||||
Contractual purchase price | $ | 1,150,000 | ||||||
Purchase price adjustments | 17,258 | |||||||
Total consideration | $ | 1,132,742 | ||||||
The results of operations of the Company include the results of operations of Cetera from April 29, 2014, the acquisition date, to December 31, 2014, which reflects $829.1 million in revenues and a $10.5 million loss before taxes. | ||||||||
The Company’s supplemental pro forma results of operations for Cetera for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 1,214.10 | $ | 1,123.90 | ||||
Loss before taxes | (36.9 | ) | (73.3 | ) | ||||
The supplemental pro forma results of operations include adjustments which reflect a full year of amortization of intangible assets in connection with the closing of the acquisition of Cetera on April 29, 2014. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. For the year ended December 31, 2014, the Company adjusted the pro forma results to exclude acquisition-related expenses of $25.0 million and the year ended December 31, 2013 were adjusted to include those expenses. Acquisition-related costs are costs incurred by the acquiree to engage in a business combination. Such costs may include accounting fees, valuation fees, consulting fees and legal fees. | ||||||||
Summit Financial Services Group | ||||||||
On June 11, 2014, the Company completed the acquisition of Summit. Summit was a public company that had financial advisors providing securities brokerage and investment retail advice in the United States with its common stock listed on the OTC Markets Group, Inc. under the symbol “SFNS.” | ||||||||
Pursuant to the merger agreement, each share of Summit common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive $1.588 in merger consideration, which consisted of cash and Class A common stock. Summit shareholders who received merger consideration were also entitled to receive the pro rata portion of certain tax refunds generated after the closing of the merger as a result of certain net operating losses expected to be incurred by Summit in 2014 and which were not acquired by the Company pursuant to the merger agreement. The aggregate amount of these refunds is currently estimated to be approximately $2.5 million, or approximately $0.06 per share of Summit common stock, and will be paid (without interest) no later than June 30, 2015. | ||||||||
As consideration in the merger, the Company issued 498,884 shares of Class A common stock pursuant to a registration statement on Form S-4 and paid consideration in cash of $38.6 million, which does not include cash distributed by Summit to its shareholders. The aggregate cash consideration paid was $46.7 million which is inclusive of the cash distributed by Summit. | ||||||||
The assignment of the total consideration for the Summit acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 13,353 | ||||||
Receivables | 3,147 | |||||||
Property and equipment | 362 | |||||||
Prepaid expenses | 1,531 | |||||||
Notes receivable | 1,092 | |||||||
Other assets | 2,366 | |||||||
Accounts payable | (9,973 | ) | ||||||
Accrued expenses | (3,100 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 8,778 | |||||||
Goodwill | 23,891 | |||||||
Intangible assets | 31,240 | |||||||
Deferred tax liability | (6,751 | ) | ||||||
Total consideration | $ | 57,158 | ||||||
As of December 31, 2014, approximately $0.3 million of the goodwill from Summit’s historic pre-acquisition goodwill is deductible for income tax purposes. | ||||||||
The total Summit consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 46,727 | ||||||
Stock issued by the Company | 10,431 | |||||||
Total consideration | $ | 57,158 | ||||||
The results of operations of the Company include the results of operations of Summit from June 11, 2014, the acquisition date, to December 31, 2014, which reflects $58.3 million in revenues and a $1.9 million loss before taxes. | ||||||||
The Company’s supplemental pro forma results of operations for Summit for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 100.5 | $ | 82.8 | ||||
Income (loss) before taxes | (5.5 | ) | (0.2 | ) | ||||
The supplemental pro forma results of operations include adjustments which reflect a full year of amortization of intangible assets. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. For the year ended December 31, 2014, the Company adjusted the pro forma results to exclude acquisition-related expenses of $0.8 million and the year ended December 31, 2013 were adjusted to include those expenses. Acquisition-related costs are costs incurred by the acquiree to engage in a business combination. Such costs may include accounting fees, valuation fees, consulting fees and legal fees. | ||||||||
J.P. Turner & Company | ||||||||
On June 12, 2014, the Company completed the acquisition of J.P. Turner for cash in the aggregate amount of $12.8 million, subject to post-closing adjustments, plus 239,362 shares of Class A common stock in a private placement offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). J.P. Turner is a retail broker-dealer and investment adviser which also offers a variety of other services, including investment banking. | ||||||||
Pursuant to the purchase agreement, on June 12, 2015 (the one-year anniversary of the closing date of the J.P. Turner acquisition), the Company agreed to an additional aggregate cash payment of $7.6 million to the sellers and issue to the sellers an aggregate number of shares of Class A common stock equal to (i) $3.2 million divided by (ii) the average of the per share closing price of Class A common stock for the five trading days ending on the trading day immediately prior to June 12, 2015. | ||||||||
Pursuant to the purchase agreement, the Company also agreed to make earn-out payments to the sellers with respect to each of the fiscal years ending December 31, 2014, December 31, 2015 and December 31, 2016, based on the achievement of certain agreed-upon revenue or earnings before interest, taxes and depreciation and amortization (“EBITDA”) performance targets in those years (subject to an annual combined minimum performance hurdle of 8.0% and an annual dollar cap of $2.5 million). Each earn-out payment, if any, was to be made by the Company 50% in cash and 50% in the form of Class A common stock (unless the sellers elect to receive a greater amount of Class A common stock). On the date of the acquisition, the Company recorded liabilities for contingent consideration and deferred payments, at fair value, of $4.5 million and $10.6 million, respectively. As of December 31, 2014, the fair value of the contingent consideration was $6.2 million. The change in the fair value of the contingent consideration was recorded in other expenses on the consolidated statement of income. The fair value was determined by an independent third-party valuation firm using probability weightings and discounted cash flow analysis which was reviewed by the Company. | ||||||||
The assignment of the total consideration for the J.P. Turner acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 10,171 | ||||||
Receivables | 712 | |||||||
Property and equipment | 232 | |||||||
Prepaid expenses | 892 | |||||||
Notes receivable | 1,660 | |||||||
Other assets | 2,171 | |||||||
Accounts payable | (1,710 | ) | ||||||
Accrued expenses | (8,543 | ) | ||||||
Other liabilities | (656 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 4,929 | |||||||
Goodwill | 13,579 | |||||||
Intangible assets | 14,200 | |||||||
Total consideration | $ | 32,708 | ||||||
As of December 31, 2014, approximately $3.5 million of the goodwill from the J.P. Turner acquisition is deductible for income tax purposes. | ||||||||
The total J.P. Turner consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 12,786 | ||||||
Stock issued by the Company | 4,860 | |||||||
Contingent consideration | 4,500 | |||||||
Deferred consideration | 10,562 | |||||||
Total consideration | $ | 32,708 | ||||||
On March 4, 2015, the Company amended its agreement with J.P. Turner to settle the remaining contingent and deferred consideration. As part of the amendment, the Company paid an aggregate consideration of $9.1 million, which consisted of $6.4 million in cash and 245,813 shares of Class A common stock, or an aggregate share value of $2.7 million. | ||||||||
The contingent and deferred consideration in the table above represents the fair value which includes discounting for the time value of money. The estimated range of undiscounted outcomes of the contingent consideration as of December 31, 2014 was as follows (in thousands): | ||||||||
Low Case(1) | High Case(1) | |||||||
Estimated contingent consideration amount | $ | 7,551 | $ | 7,551 | ||||
________________________ | ||||||||
(1) The contingent consideration amount for J.P. Turner was to be based on the achievement of certain agreed-upon revenue or EBITDA performance targets for fiscal years ending December 31, 2014, December 31, 2015 and December 31, 2016, which were subject to an annual cap of $2.5 million. Based on the independent valuation company’s projections, which were reviewed by the Company, the earn-outs for the fiscal years ending December 31, 2014, December 31, 2015 and December 31, 2016 were expected to be subject to that cap in both the low and high case. | ||||||||
The results of operations of the Company include the results of operations of J.P. Turner from June 12, 2014, the acquisition date, to December 31, 2014, which reflects $30.9 million in revenues and a $0.1 million loss before taxes. | ||||||||
The Company’s supplemental pro forma results of operations with J.P. Turner for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 52.8 | $ | 57.8 | ||||
Income (loss) before taxes | 1.5 | (4.8 | ) | |||||
The supplemental pro forma results of operations include adjustments which reflect a full year of amortization of intangible assets. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. | ||||||||
Hatteras Funds Group | ||||||||
On June 30, 2014, the Company completed the purchase of substantially all the assets related to the business and operations of Hatteras and assumed certain liabilities of Hatteras. Hatteras was a private company, and it is the sponsor of, investment advisor to and distributor for the Hatteras Funds complex, a family of alternative investment funds registered as investment companies with the SEC. | ||||||||
Pursuant to the purchase agreement, the aggregate initial purchase price was $40.0 million (subject to certain adjustments for net working capital, net assets under management and consolidated pre-tax net income) payable as follows: (A) 75.0% was paid on the closing date of the Hatteras acquisition; (B) 7.5% will be payable on June 30, 2015, the first anniversary of the closing date of the Hatteras acquisition; (C) 7.5% will be payable on June 30, 2016, the second anniversary of the closing date of the Hatteras acquisition; and (D) 10.0% will be payable on June 30, 2017, the third anniversary of the closing date of the Hatteras acquisition. Additionally, pursuant to the purchase agreement, the Company will pay additional consideration calculated and payable based on the consolidated pre-tax net operating income generated by the businesses of Hatteras in the fiscal years ending December 31, 2016 and December 31, 2018. On the date of the acquisition, the Company recorded liabilities for contingent consideration and deferred payments, at fair value, of $24.9 million and $9.4 million, respectively. As of December 31, 2014 the fair value of the contingent consideration was $28.3 million. The change in the fair value of the contingent consideration was recorded in other expenses on the consolidated statement of income. The fair value was determined by an independent third-party valuation firm using projected pre-tax net income and discounted cash flow analysis which was reviewed by the Company. | ||||||||
The assignment of the total consideration for the Hatteras acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 805 | ||||||
Receivables | 7,747 | |||||||
Property and equipment | 192 | |||||||
Prepaid expenses | 326 | |||||||
Other assets | 120 | |||||||
Accounts payable | (3,721 | ) | ||||||
Accrued expenses | (5,277 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 192 | |||||||
Goodwill | 15,348 | |||||||
Intangible assets | 48,770 | |||||||
Total consideration | $ | 64,310 | ||||||
As of December 31, 2014, the goodwill from the Hatteras acquisition is not deductible for income tax purposes. | ||||||||
The total Hatteras consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 30,000 | ||||||
Contingent consideration | 24,880 | |||||||
Deferred consideration | 9,430 | |||||||
Total consideration | $ | 64,310 | ||||||
The contingent and deferred consideration in the table above represents the fair value which includes discounting for the time value of money. The estimated range of undiscounted outcomes of the contingent consideration as of December 31, 2014 was as follows (in thousands): | ||||||||
Low Case | High Case | |||||||
Estimated contingent consideration amount | $ | 14,716 | $ | 94,454 | ||||
The results of operations of the Company include the results of operations of Hatteras from June 30, 2014, the acquisition date, to December 31, 2014, which reflects $31.8 million in revenues and $4.2 million in income before taxes. | ||||||||
The Company’s supplemental pro forma results of operations for Hatteras for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 62.3 | $ | 47.6 | ||||
Income before taxes | 7.2 | 1.2 | ||||||
The supplemental pro forma results of operations include adjustments which reflect a full year of amortization of intangible assets. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. For the year ended December 31, 2014, the Company adjusted the pro forma results to exclude acquisition-related expenses of $0.6 million and the year ended December 31, 2013 were adjusted to include those expenses. Acquisition-related costs are costs incurred by the acquiree to engage in a business combination. Such costs may include accounting fees, valuation fees, consulting fees and legal fees. | ||||||||
First Allied Holdings | ||||||||
On June 30, 2014, RCAP Holdings contributed all its equity interests in First Allied to the Company. As consideration for the contribution, 11,264,929 shares of Class A common stock were issued to RCAP Holdings in a private placement offering exempt from registration under the Securities Act. First Allied is an independent broker-dealer with financial advisors in branch offices across the United States. First Allied was acquired by RCAP Holdings through a merger transaction on September 25, 2013 for an effective cost of $177.0 million, consisting of $145.0 million in merger consideration (including exchangeable notes issued by RCAP Holdings in the initial aggregate principal amount of $26.0 million (the “First Allied notes”)) paid to the former owners of First Allied and $32.0 million in bank indebtedness of First Allied outstanding immediately following consummation of the merger. | ||||||||
The number of shares issued as consideration was determined based on a value of $207.5 million for the equity of First Allied and the one-day volume weighted average price (“VWAP”) of Class A common stock on January 15, 2014, the day prior to the announcement of the signing of the Cetera merger agreement. The value of $207.5 million for the equity of First Allied established by the Company’s board of directors in January 2014 was determined as the effective cost to RCAP Holdings for First Allied of $177.0 million (consisting of $145.0 million in merger consideration (including First Allied notes) paid by RCAP Holdings to the former owners of First Allied and $32.0 million in bank indebtedness of First Allied outstanding immediately following consummation of the merger), minus indebtedness (net of cash) of First Allied of $7.0 million plus a carrying cost of $37.5 million. The value of the shares of Class A common stock issued by the Company as consideration in the First Allied acquisition was $239.2 million, based on the closing price for Class A common stock of $21.23 per share on June 30, 2014, the date of the consummation of the contribution. Accordingly, the effective cost to the Company for the First Allied acquisition was $271.2 million (including $32.0 million of First Allied indebtedness), which is $94.2 million more than the effective cost to RCAP Holdings for First Allied on September 25, 2013 under the terms of the original First Allied merger agreement. As of September 25, 2013, the date of common control, the Company recorded $137.2 million of net assets related to First Allied as a result of the contribution. | ||||||||
In addition, following consummation of the contribution, $32.0 million of First Allied indebtedness was outstanding. On July 28, 2014, the First Allied outstanding indebtedness was repaid by the Company as required by the terms of the Bank Facilities, which the Company entered into in connection with the acquisition of Cetera on April 29, 2014. | ||||||||
The Company’s acquisition of First Allied was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings immediately following the acquisition of First Allied by RCAP Holdings on September 25, 2013. See Note 3 for additional detail. | ||||||||
As of December 31, 2014, approximately $8.0 million of the goodwill from First Allied’s historic pre-acquisition goodwill was deductible for income tax purposes. | ||||||||
Investors Capital Holdings | ||||||||
On July 11, 2014, the Company completed the acquisition of ICH. ICH was a public company with its common stock listed on the NYSE MKT under the symbol “ICH”. ICH provides broker-dealer services to investors in support of trading and investment in securities, alternative investments and variable life insurance as well as investment advisory and asset management services. | ||||||||
The aggregate consideration was $52.5 million. The Company issued 2,027,966 shares of Class A common stock (2,029,261 shares issued on July 11, 2014, of which 1,295 shares were subsequently canceled on October 6, 2014 as an adjustment to the final consideration) pursuant to a registration statement on Form S-4 and paid aggregate consideration in cash of $8.4 million. | ||||||||
The assignment of the total consideration for the ICH acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 6,881 | ||||||
Short term investments and securities owned | 499 | |||||||
Receivables | 7,500 | |||||||
Property and equipment | 275 | |||||||
Notes receivable | 1,875 | |||||||
Deferred compensation | 2,250 | |||||||
Deferred tax asset | 2,613 | |||||||
Other assets | 1,055 | |||||||
Accounts payable and accrued expenses | (1,945 | ) | ||||||
Other liabilities | (7,593 | ) | ||||||
Notes payable and long-term debt | (2,918 | ) | ||||||
Non-qualified deferred compensation | (2,611 | ) | ||||||
Total fair value excluding goodwill, intangible assets, and deferred tax liability | 7,881 | |||||||
Goodwill | 26,680 | |||||||
Intangible assets | 30,100 | |||||||
Deferred tax liability | (12,152 | ) | ||||||
Total consideration | $ | 52,509 | ||||||
As of December 31, 2014, the goodwill from the ICH acquisition is not deductible for income tax purposes. | ||||||||
The total ICH consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 8,412 | ||||||
Stock issued by the Company | 44,097 | |||||||
Total consideration | $ | 52,509 | ||||||
The results of operations of the Company include the results of operations of ICH from July 11, 2014, the acquisition date, to December 31, 2014, which reflects $45.7 million in revenues and $1.3 million loss before taxes. | ||||||||
The Company’s supplemental pro forma results of operations for ICH for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 94.8 | $ | 87.8 | ||||
Loss before taxes | (3.7 | ) | (5.0 | ) | ||||
The supplemental pro forma results of operations include adjustments which reflect a full year of amortization of intangible assets. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. | ||||||||
Validus/Strategic Capital Partners | ||||||||
On August 29, 2014, the Company completed the acquisition of StratCap. StratCap, through its subsidiaries, is a wholesale distributor of alternative investment programs. StratCap’s subsidiaries distribute a platform of offerings consisting of two non-traded REITS, a non-traded BDC and two public, non-traded limited liability companies. StratCap holds minority interests in four of the investment programs that it distributes, and is a joint venture partner along with the sponsor to the fifth investment program. | ||||||||
The aggregate consideration paid on the date of the acquisition was $76.4 million. The Company issued 464,317 shares of Class A common stock in a private placement offering exempt from registration under the Securities Act and $67.5 million paid in cash. Additionally, the Company paid $10.0 million in cash on December 1, 2014 and will pay earn-out payments in 2015 and 2016 based on the achievement of certain agreed-upon EBITDA performance targets. On the date of the acquisition, the Company recorded liabilities for contingent consideration and deferred payments, at fair value, of $67.3 million and $10.0 million, respectively. As of December 31, 2014, the fair value of the contingent consideration was $68.2 million. The change in the fair value of the contingent consideration was recorded in other expenses on the consolidated statement of income. The fair value was determined by an independent third-party valuation firm using projected pre-tax net income and discounted cash flow analysis which was reviewed by the Company. | ||||||||
The assignment of the total consideration for the StratCap acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 4,522 | ||||||
Short term investments and securities owned | 2,239 | |||||||
Receivables | 4,858 | |||||||
Property and equipment | 96 | |||||||
Prepaid expenses and other assets | 629 | |||||||
Accounts payable | (706 | ) | ||||||
Accrued expenses | (201 | ) | ||||||
Other liabilities | (908 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 10,529 | |||||||
Goodwill | 22,871 | |||||||
Intangible assets | 121,380 | |||||||
Total consideration | $ | 154,780 | ||||||
As of December 31, 2014, the goodwill from the StratCap acquisition is not deductible for income tax purposes. | ||||||||
The total StratCap consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 67,510 | ||||||
Stock issued by the Company | 10,000 | |||||||
Contingent consideration | 67,300 | |||||||
Deferred consideration | 9,970 | |||||||
Total consideration | $ | 154,780 | ||||||
The contingent and deferred consideration in the table above represents the fair value which includes discounting for the time value of money. The estimated range of undiscounted outcomes for the contingent consideration are as follows (in thousands): | ||||||||
Low Case | High Case | |||||||
Estimated contingent consideration amount | $ | 70,840 | $ | 125,920 | ||||
The results of operations of the Company include the results of operations of StratCap from August 29, 2014, the acquisition date, to December 31, 2014, which reflects $19.9 million in revenues and $3.9 million loss before taxes. | ||||||||
The Company’s supplemental pro forma results of operations for StratCap for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 143.3 | $ | 66.2 | ||||
Loss before taxes | (5.2 | ) | (15.3 | ) | ||||
The supplemental pro forma results of operations include adjustments which reflect a full year of amortization of intangible assets. For the year ended December 31, 2014, the Company adjusted the pro forma results to exclude acquisition-related expenses of $0.2 million and the year ended December 31, 2013 were adjusted to include those expenses. Acquisition-related costs are costs incurred by the acquiree to engage in a business combination. Such costs may include accounting fees, valuation fees, consulting fees and legal fees. | ||||||||
Trupoly | ||||||||
On July 21, 2014, the Company announced that it is establishing a crowdfunding investment platform which it has branded under the name, “We Are Crowdfunding.” In connection with this initiative, the Company acquired substantially all the assets of New York based Trupoly, a white-label investor relationship management portal, which will be integrated into the Company’s new crowdfunding investment platform. The assets of Trupoly primarily consist of intangible assets related to existing technology and a non-compete agreement. | ||||||||
On the closing date of the Trupoly acquisition, the Company issued shares of Class A common stock in a private placement offering exempt from registration under the Securities Act and paid the remaining consideration in cash. The Company will also pay 50.0% of the deferred consideration in shares of Class A common stock and 50.0% in cash on July 21, 2015, the one-year anniversary of the closing date. | ||||||||
As of December 31, 2014, approximately $0.7 million of the goodwill from the Trupoly acquisition is deductible for income tax purposes. | ||||||||
Docupace | ||||||||
On November 21, 2014, the Company completed the acquisition of a controlling financial interest in Docupace, a provider of integrated, electronic processing technologies and systems for financial institutions and wealth management firms. | ||||||||
The aggregate consideration on the date of the acquisition was $35.4 million, including $0.3 million of accrued interest on the deferred payment. On the closing date, the Company paid cash consideration of $18.8 million to the seller of Docupace and acquired a 51.0% ownership interest. | ||||||||
In addition, the Company made a $4.0 million capital contribution, which increased its total ownership interest to 53.525%. The Company is required to make additional capital contributions of up to $28.0 million in cash and up to$20.0 million in cash during the years ended December 31, 2015 and 2016, respectively. The Company expects to pay post-closing consideration of $16.6 million in cash, Class A common stock or a combination thereof. The Company has delayed making the contingent payment that was due to the sellers of Docupace on February 20, 2015 because the Company and the sellers have not finalized the calculation of the amount of that payment. | ||||||||
The total fair value of Docupace on the date of the acquisition subsequent to the capital contribution was $73.6 million. The fair value of the non-controlling interest as of the date of the acquisition was $34.2 million. The fair value of the non-controlling interest was determined based on the fair value of the controlling interest held by the Company grossed-up to 100% value in order to derive a per-share price to be applied to the non-controlling shares. This method assumes that the non-controlling shareholder will participate equally with the controlling shareholder in the economic benefits of the post combination entity. | ||||||||
Based on preliminary estimates, approximately $22.8 million of the goodwill from the Docupace acquisition is deductible for income tax purposes as of December 31, 2014. | ||||||||
Consolidated pro forma results | ||||||||
The Company’s supplemental pro forma results of operations, which include the Original Operating Subsidiaries, Cetera, Summit, J.P. Turner, Hatteras, First Allied, ICH and StratCap for the year ended December 31, 2014 and 2013, are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 2,729.50 | $ | 2,682.50 | ||||
Loss before taxes | (196.1 | ) | (78.3 | ) | ||||
Benefit from income taxes(1) | (78.5 | ) | (31.3 | ) | ||||
Net loss | (117.6 | ) | (47.0 | ) | ||||
Less: income attributable to non-controlling interest | 8.9 | — | ||||||
Less: preferred dividends and deemed dividend | 153.3 | 18.9 | ||||||
Net loss attributable to Class A common stockholders | $ | (279.8 | ) | $ | (65.9 | ) | ||
Per share data | ||||||||
Pro forma basic and diluted loss per share(2) | $ | (5.18 | ) | $ | (1.61 | ) | ||
Pro forma weighted average basic and diluted shares | 54,155,046 | 40,995,457 | ||||||
________________________ | ||||||||
(1) Reflects pro forma adjustment to record the income tax provision based on the assumed 40% tax rate. | ||||||||
(2) For the year ended December 31, 2014, the numerator for the pro forma basic and diluted earnings per share calculation was reduced by $0.7 million for allocation of earnings to nonvested restricted stock units holders. | ||||||||
The consolidated supplemental pro forma results of operations do not include pro forma results for Trupoly and Docupace as they would have had an immaterial impact. The consolidated supplemental pro forma results of operations include adjustments which reflect a full year of amortization of intangible assets, interest expense and pro forma incentive fee. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses and quarterly fee. For the year ended December 31, 2014, the Company adjusted the pro forma results to exclude acquisition-related expenses of $44.5 million and the year ended December 31, 2013 were adjusted to include those expenses. Acquisition-related costs are costs incurred by the acquiree or the Company to engage in a business combination. Such costs may include accounting fees, valuation fees, consulting fees and legal fees. | ||||||||
Pending acquisitions | ||||||||
On August 6, 2014, the Company entered into an agreement to purchase VSR, an independent broker-dealer. The transaction is expected to close in the first quarter of 2015 subject to customary closing conditions. | ||||||||
On August 14, 2014, the Company entered into an agreement to purchase Girard, an independent broker-dealer. The transaction is expected to close in the first quarter of 2015 subject to customary closing conditions. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | |
Basis of Presentation | ||
The consolidated financial statements include the accounts of the Company, Realty Capital Securities, RCS Advisory, ANST, SK Research, Cetera, Summit, J.P. Turner, Hatteras, ICH, StratCap, Trupoly and Docupace for the periods since acquisition and of First Allied for the periods since it was under the control of RCAP Holdings. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and Regulation S-X. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results. | ||
The Company’s acquisition of First Allied was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings at the time of the acquisition of First Allied by RCAP Holdings. Beginning with the Company’s financial statements for the quarter ended June 30, 2014, the Company has presented recast financial information, including the elimination of transactions between the Company and First Allied, for the relevant periods to reflect the results of operations and financial position of First Allied as if the Company had acquired it on September 25, 2013, the date that First Allied was acquired by RCAP Holdings. The acquisition of First Allied by RCAP Holdings was accounted for by RCAP Holdings using the purchase method of accounting; therefore, the purchase price was allocated to First Allied’s assets and liabilities at fair value and any excess purchase price was then attributed to intangible assets and goodwill. When the Company acquired First Allied from RCAP Holdings, no additional intangible assets or goodwill was recorded. | ||
Reclassifications | ||
Certain reclassifications have been made to the prior period financial statement presentation to conform to the current period presentation primarily as a result of the need to harmonize the financial statements of the Company with those of the entities acquired during 2014. | ||
Use of Estimates | ||
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates, and these differences could be material. | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents include all highly liquid instruments purchased with original maturities of 90 days or less. The Company had $148.8 million and $66.4 million in cash balances as of December 31, 2014 and December 31, 2013, respectively, that were in excess of the FDIC insured limits. | ||
Cash and Segregated Securities | ||
Cash and segregated securities represents cash and securities deposited by customers and funds accruing to customers as a result of trades or contracts that the Company’s registered broker-dealers segregate in separate accounts on behalf of customers pursuant to the requirements of SEC Rule 15c3-3. | ||
Available-For-Sale Securities | ||
The Company has investments in mutual funds that are advised by related parties. The Company treats these securities as available-for-sale securities with unrealized gains (losses) recorded in other comprehensive income (loss) and realized gains (losses) recorded in earnings. See Notes 4 and 5 for more information. | ||
Trading Securities | ||
The Company’s trading securities are carried at fair value with realized and unrealized gains and losses recognized in other revenue in the consolidated statement of income. Trading securities are recorded on a trade date basis. Dividend income on trading securities is recorded when declared. Interest income on trading securities is recorded when earned. See Note 4 for more information. | ||
Fees and Commissions Receivable | ||
Fees and commissions receivable includes selling commission receivables and dealer manager receivables from the Company’s wholesale distribution business. Additionally, fees and commissions receivable includes commissions from mutual funds, variable annuities, insurance product purchases transacted directly with the product manufacturers, and mutual fund and annuity trailers from the Company’s retail business. | ||
Receivables from Brokers, Dealers and Clearing Organizations and Other | ||
Receivables from brokers, dealers and clearing organizations and other include receivables that arise in the ordinary course of the Company’s brokerage activities. | ||
Receivables for Reimbursable Expenses and Investment Banking Fees | ||
Reimbursable expenses and investment banking fees represent fees receivable for services provided to related parties and non-related party entities related to investment banking, capital markets and related advisory services performed. | ||
Receivables from Customers | ||
Receivable from customers includes amounts due on cash and margin transactions. Certain of the Company’s broker-dealers extend credit to their customers to finance their purchases of securities on margin. Securities owned by customers are held as collateral for margin receivables. Additionally, receivable from customers includes advisory, service and incentive fee receivables from the investment management business. | ||
Property and Equipment | ||
Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Office furniture and equipment and computer hardware and software are depreciated on a straight-line basis over the estimated useful life which ranges from one to ten years. Leasehold improvements are amortized over the lesser of their useful lives or the term of the lease. See Note 7 for more information. | ||
Deferred Compensation Plan Investments and Accrued Liabilities | ||
The Company offers a plan to certain of its financial advisors which allows them to defer a portion of their compensation which earns a rate of return based on the financial advisor’s selection of investments. In order to economically hedge this exposure, the Company invests in money market, international, U.S. equity and U.S. fixed income funds which are measured at fair value. The liability to the financial advisors is recorded in deferred compensation plan accrued liabilities and the related economic hedges are recorded in deferred compensation plan investments in the consolidated statement of financial condition. See Notes 4 and 20 for more information. | ||
Notes Receivable | ||
The Company loans money to certain of its financial advisors under two types of promissory note agreements, which bear interest at various rates and have various maturities. Such agreements include forgivable promissory notes and payback promissory notes. Management establishes an allowance that it believes is sufficient to cover any probable losses. When establishing this allowance, management considers a number of factors, including its ability to collect from the financial advisor and the Company’s historical experience in collecting on such transactions. The Company has determined that the notes receivable acquired through the recent acquisitions and subsequent originations were not impaired. See Note 6 for more information. | ||
Deferred Financing Fees | ||
The Company incurs expenses in connection with registering and issuing debt securities and bank debt and equity securities to finance its recent and pending acquisitions. For debt issuances, direct costs are deferred until the debt is issued at which point they are amortized over the contractual terms of the debt using the effective interest rate method. For equity issuances, direct costs are deferred until the equity is issued at which point they are recorded as a reduction of the proceeds in additional paid-in capital. | ||
Goodwill and Identifiable Intangible Assets | ||
Goodwill represents the amount by which the purchase price exceeds the fair value of the net tangible and intangible assets of an acquired company on the date of acquisition. Intangible assets, primarily financial advisor relationships, trade names and non-compete agreements, are recorded at their fair value at the completion of an acquisition. Goodwill is reviewed annually for impairment as of October 31. Intangible assets that are definite-lived are amortized over their useful lives and reviewed for impairment annually. The Company performed a quantitative goodwill impairment test and determined that as of October 31, 2014, the goodwill was not impaired. The Company also determined that there was no impairment of its definite-lived intangible assets during any of the periods presented. | ||
The goodwill and intangible assets from each acquisition were determined by an independent valuation company and reviewed by the Company using estimates such as future revenues attributable to financial advisors and the financial advisors’ client retention rates which were used to derive economic cash flows that were fair valued at an appropriate rate of return over their respective useful lives. The valuation results were reviewed by the Company. See Note 8 for more information. | ||
Derivative Contracts | ||
During the second quarter of 2014, the Company entered into a series of contemporaneous transactions that qualify as derivative contracts or include derivative contracts. These derivative contracts include a put/call agreement, which is a free-standing derivative contract, and embedded derivative contracts related to the Company’s issuance of convertible notes and Series A Preferred Stock (“hybrid instruments”). | ||
The embedded derivative contracts’ features require separate accounting as derivative instruments; therefore, the issuance proceeds for the convertible note and Series A Preferred Stock were first allocated to the fair value of the put/call agreement and then, on a relative fair value basis, to the hybrid instruments. The proceeds allocated to each hybrid instrument were then attributed between the host contract and the embedded derivative contracts. These derivative contracts are carried at their fair value with changes in fair value reflected in other revenues in the consolidated statements of income. | ||
On November 18, 2014 and December 12, 2014, a portion of the Series A Preferred Stock was submitted for conversion, and on December 10, 2014, December 19, 2014 and February 23, 2015, shares of Class A common stock were issued on account of such conversions. Accordingly, the bifurcated derivatives associated with the converted Series A Preferred Stock were adjusted to their fair value on the date of each submission for conversion, with the changes in fair value reflected in other revenues in the consolidated statement of income. The bifurcated derivatives associated with the converted Series A Preferred Stock were then written off against additional paid-in capital. | ||
On December 19, 2014, the remaining Series A Preferred Stock was exchanged for shares of its new series of 11% Series B Preferred Stock, $0.001 par value per share (“Series B Preferred Stock”), and shares of its new series of 7% Series C Convertible Preferred Stock, $0.001 par value per share (“Series C Preferred Stock”). Accordingly, the bifurcated derivatives associated with the remaining Series A Preferred Stock were adjusted to their fair value as measured on the date of the exchange, with the change in fair value reflected in other revenues in the consolidated statement of income. The remaining bifurcated derivatives associated with the Series A Preferred Stock, which were exchanged, were written off against additional paid-in capital. | ||
The Series B Preferred Stock and Series C Preferred Stock also have embedded derivative contract features that require separate accounting as derivative instruments. These derivative contracts are carried at their fair value with changes in fair value reflected in other revenues in the consolidated statements of income. | ||
See Notes 4, 10 and 11 for more information. | ||
Contingent and Deferred Consideration | ||
Contingent consideration, also referred to as earn-outs, and deferred payments represent future payments of cash or equity interests to the former owners of the businesses acquired in the recent acquisitions and are initially recorded at fair value in the consolidated statements of financial condition. Contingent consideration is subsequently remeasured each reporting period at fair value with the change in the fair value recorded in other expenses on the consolidated statement of income. The discount on the deferred consideration is accreted into earnings in other expenses on the consolidated statement of income. | ||
Preferred Stock | ||
On April 29, 2014, the Company issued shares of Series A Preferred Stock in a private placement. Based on the Series A Preferred Stock’s redemption and conversion features, the Company classified the Series A Preferred Stock as mezzanine equity on the statement of financial condition. The Series A Preferred Stock was convertible, at the holder’s option, into shares of Class A common stock. | ||
On November 18, 2014 and December 12, 2014, a portion of the Series A Preferred Stock was submitted for conversion, and on December 10, 2014, December 19, 2014 and February 23, 2015, shares of Class A common stock were issued on account of such conversions. On December 12, 2014, the Company entered into the Securities Exchange Agreement (the “Securities Exchange Agreement”) to exchange the remaining shares of Series A Preferred Stock for shares of its new series of Series B Preferred Stock and shares of its new series of Series C Preferred Stock. On December 19, 2014, this exchange was completed. Based on the Series B Preferred Stock’s and Series C Preferred Stock’s redemption and conversion features, the Company has classified the Series B Preferred Stock and Series C Preferred Stock as mezzanine equity on the statement of financial condition. The Series B Preferred Stock is not convertible. The Series C Preferred Stock is convertible, at the holder’s option, into shares of Class A common stock. See Notes 10 and 11 for more information. | ||
Acquisition Accounting | ||
The Company accounts for its acquisitions using the purchase method of accounting except for the First Allied acquisition which was accounted for at historical cost. | ||
Under the purchase method of accounting the purchase price is preliminarily allocated to the acquiree’s assets and liabilities at fair value and any excess purchase price is then attributed to identifiable intangible assets and goodwill. The preliminary purchase price allocation may be modified as more information is obtained for a period of no more than one year. For acquisitions accounted for under the purchase method, the results of operations of the acquiree are included in the Company’s results from the day after the acquisition closed and prior period financial statements are not restated. | ||
The Company’s acquisition of First Allied was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings immediately following the acquisition of First Allied by RCAP Holdings. Beginning with the Company’s financial statements for the quarter ended June 30, 2014, the Company has presented recast financial information for the relevant periods to reflect the results of operations and financial position of First Allied as if the Company had acquired it on September 25, 2013, the date that First Allied was acquired by RCAP Holdings. The acquisition of First Allied by RCAP Holdings was accounted for by RCAP Holdings using the purchase method of accounting; therefore, the purchase price was allocated to First Allied’s assets and liabilities at fair value and any excess purchase price was then attributed to intangible assets and goodwill. When the Company acquired First Allied from RCAP Holdings, no additional intangible assets or goodwill was recorded. | ||
Revenue Recognition | ||
The Company recognizes revenue generally when it is earned and realized or realizable, when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. | ||
Selling Commissions and Dealer Manager Fees | ||
The Company, through certain of its broker-dealer subsidiaries, receives selling commissions and dealer manager fees from related party and non-related party sponsors for its wholesale distribution efforts. The commission and dealer manager fee rates are established jointly in a single contract negotiated with each individual issuer. The Company generally receives commissions of up to 7.0% of gross offering proceeds for funds raised in connection with sales of publicly registered, non-traded securities, all of which are reallowed as commissions, and 4.0% in connection with sales of open-end and closed-end mutual funds through the participating independent broker-dealer channel in accordance with industry practices. Commission percentages are generally established in the issuers’ offering documents leaving the Company no discretion as to the payment of commissions. Commission revenues and related expenses are recorded on a trade date basis as securities transactions occur. | ||
The Company, serving as a dealer manager, receives fees and compensation in connection with the wholesale distribution of registered non-traded securities, such as non-traded REIT and non-traded BDC funds. The Company contracts directly with broker-dealers and RIAs to solicit share subscriptions. The non-traded securities are offered on a “best efforts” basis and the Company is not obligated to underwrite or purchase any shares for its own account. The Company generally receives up to 3.0% of the gross proceeds from the sale of common stock as a dealer manager fee and also receives fees from the sale of common stock through RIAs. The Company has sole discretion as to reallowance of dealer manager fees to participating broker-dealers, based on such factors as the volume of shares sold and marketing support incurred by respective participating broker-dealers as compared to those of other participating broker-dealers. Dealer manager fees and reallowance are recorded on a trade date basis as securities transactions occur. | ||
For open and close-end mutual funds, the Company contracts directly with broker-dealers and RIAs to solicit shares of registered investment company funds. The funds are offered on a “best efforts” basis and the Company is not obligated to underwrite or purchase any shares of the funds for its own account. The Company generally receives up to 50 basis points of the gross proceeds from the shares of the fund and also may receive fees from the shares of the funds from broker-dealers and RIAs. | ||
The Company analyzes contractual arrangements to determine whether to report revenue on a gross basis or a net basis. The analysis considers multiple indicators regarding the services provided to their customers and the services received from its distributors. The goal of the analysis is to determine which entity is the primary obligor in the arrangement. After weighing many indicators, including the Company’s position as the exclusive distributor or dealer manager primarily responsible for the distribution of its customers’ shares, its discretion in supplier selection, that our distributors bear no credit risk and that the commission and dealer manager fee rates are agreed to with each participating broker-dealer, the Company concluded that the gross basis of accounting for its commission and fee revenues is appropriate. | ||
Retail Commissions | ||
The Company records commissions received from securities transactions on a trade-date basis. Commissions from mutual funds, variable annuities, and insurance product purchases transacted directly with the product manufacturers, as well as mutual fund and annuity trailers are estimated for each accounting period. Commissions payable related to these transactions are recorded based upon estimated payout ratios for each product as commission revenue is accrued. | ||
Investment Banking Fees | ||
The Company, through its investment banking and capital markets division, receives fees and compensation for providing investment banking, capital markets and related advisory services. Such fees are charged based on agreements entered into with related party and non-related party public and private issuers of securities and their sponsors and advisors, on a negotiated basis. Fees and expenses that are unpaid are recorded in investment banking fees receivable and reimbursable expenses receivable in the statement of financial condition. Investment banking agreements either have a fixed fee or a percentage of the total deal value which are typically contingent upon the consummation of the transaction; these agreements may also include a minimum fee that will be paid even in the event the transaction is not consummated provided that services have been rendered. Income from investment banking agreements is generally recognized upon consummation of the transaction. However, in certain cases, we recognize income from investment banking agreements prior to the consummation of the transaction if services have been rendered and there are no substantive remaining contingencies as of the reporting date. Income from certain investment banking agreements is recorded as deferred revenue in the statement of financial condition and is recognized over the remaining life of the offering. These fees are typically a fixed dollar amount. | ||
Advisory Fees and Asset-Based Fees | ||
The Company provides investment advisory services to clients. Fees for the services are based on the value of the clients’ portfolios and are generally billed in advance at the beginning of each quarter. The fees are then recognized ratably over the period earned. Asset-based fees include amounts earned related to client sweep account investments, omnibus processing and networking services, and reimbursements and allowances from product providers related to the sale and custody of their products and are recognized when earned. | ||
Transfer Agency Revenue | ||
ANST receives fees for providing transfer agency and related services. Such fees are charged based on agreements entered into with related party issuers of securities on a negotiated basis. Certain fees are billed and recorded monthly based on account activity, such as new account establishment fees and call fees. Other fees, such as account maintenance fees, are billed and recorded monthly. | ||
Services Revenue | ||
The Company receives fees for providing transaction management, marketing support, due diligence advice, events, training and education services, conference management, investor relations and public relations services and strategic advice. Such fees are charged at hourly billing rates for the services provided, based on agreements entered into with related party and non-related party issuers of securities on a negotiated basis. Such fees are billed and recorded monthly based on services rendered. | ||
Reimbursable Expenses | ||
The Company includes all reimbursable expenses in gross revenue because the Company as the primary obligor has discretion in selecting a supplier, and bears the credit risk of paying the supplier prior to receiving reimbursement from the customer. | ||
Investment Fee Revenue | ||
The Company earns management and servicing fees from the investment companies for which it serves as investment adviser. Management and servicing fees are recognized when earned and are calculated monthly or quarterly, as applicable, as a percentage of the aggregate net assets of the funds under management. | ||
Transaction Fees | ||
The Company charges transaction fees for executing transactions on client accounts. Transaction-related charges are recognized on a trade-date basis. Other fee revenue includes fees charged to clients such as individual retirement account maintenance fees, margin interest and confirmation fees, as well as fees charged to financial advisors for contracted services such as affiliation and transaction fees. Other fees are recognized as earned. | ||
Other Revenues | ||
Other revenues include changes in the fair value of the Company’s derivatives contracts, the deferred compensation plan investments and trading securities. See Notes 4 and 10 for more information. | ||
Share-Based Compensation | ||
The Company grants awards of restricted shares of Class A common stock to certain employees under the RCS Capital Corporation Equity Plan (the “RCAP Equity Plan”) which are subject to forfeiture until vested. The Company recognizes the expense in internal commissions, payroll and benefits expense in the consolidated statement of income on a straight-line basis for these awards over the vesting period that ranges from 3 to 5 years based on grant date fair value of the awards. | ||
The Company has also granted restricted stock awards to certain employees of related parties under the RCAP Equity Plan for services performed on behalf of the Company during prior periods. The Company recognizes the entire charge for these awards immediately in retained earnings as a dividend with an offset to additional paid-in capital. These awards were for services already performed and are subject to vesting of 4 years. | ||
An entity that was previously a related party granted restricted stock awards with vesting provisions related to continued employment of the grantees at the Company to certain employees of the Company for services performed by such employees on behalf of such entity. The Company recognizes compensation expense for these awards over the vesting period that ranges from 3 to 5 years and remeasures the fair value of the awards at each reporting date, at which time the amortization of the award is adjusted. The offset to internal commissions, payroll and benefits expense is reflected as a capital contribution in additional paid-in capital. | ||
On June 10, 2014, RCAP Holdings and RCAP Equity, LLC, as the holders of 68.97% of the combined voting power of the Company’s then outstanding common stock, approved the Company’s 2014 Stock Purchase Program (the “2014 Stock Purchase Program”). The 2014 Stock Purchase Program became effective on June 30, 2014. Subject to the terms and conditions of the 2014 Stock Purchase Program, select employees, financial advisors and executive officers of the Company and its affiliates and of certain subsidiaries of the Company were eligible to participate and had the opportunity to elect to purchase shares of Class A common stock. Such participants were also automatically granted one warrant to purchase one share of Class A common stock for each three shares purchased, at an exercise price equal to the purchase price per share purchased. The Company recognizes the expense in internal commissions, payroll and benefits expense in the consolidated statement of income on a straight line basis over the three-year vesting period based on the grant date fair value of warrants issued to employees. For warrants issued to non-employees, the Company remeasures the fair value at each reporting date and the amortization of the expense is adjusted accordingly and recognized over the remaining vesting period. | ||
The First Allied Holdings 2013 Restricted Unit Plan (the “FA RSU Plan”) provides for the grant of phantom stock which was issued to certain employees in connection with the acquisition of First Allied by RCAP Holdings. Pursuant to the terms of the FA RSU Plan, the phantom stock vests equally on each of the first three anniversaries of the acquisition of First Allied by RCAP Holdings. The FA RSU Plan is accounted for using the liability method. | ||
See Note 13 for more information on the Company’s share-based compensation. | ||
Marketing and Advertising | ||
The Company expenses the cost of marketing and advertising as incurred. | ||
Interest Expense | ||
Interest expense includes interest expense and amortization of debt issuance costs on the Company’s bank debt and convertible notes which were issued at a discount. The Company amortizes the discount using the effective interest rate method. See Note 9 for more information. | ||
Income Taxes | ||
The Company files federal and state income tax returns. Realty Capital Securities, ANST and RCS Advisory were treated as disregarded entities up to the date of the subsidiary reorganization (June 10, 2013) and as partnerships for federal and state income tax purposes through the date of the amendment to the Exchange Agreement (August 5, 2014). All income and expense earned by Realty Capital Securities, ANST and RCS Advisory flowed through to their owner through the date of reorganization. The Company was a 9.4% owner of these partnerships from the date of the subsidiary reorganization on June 10, 2013 through the date of the Restructuring Transactions (February 11, 2014). From the date of the Restructuring Transactions (February 11, 2014) through the date of the amendment to the Exchange Agreement (August 5, 2014), the Company was an owner of all but a de minimis amount of these partnerships. As part of the amendment to the Exchange Agreement, no more Class B Units in any of Realty Capital Securities, ANST and RCS Advisory are outstanding and 100% of the voting and economics interests in the Original Operating Subsidiaries are now held by the Company, indirectly, through RCS Holdings’ ownership of the Class A Units. Following the conversion of all outstanding LTIP Units pursuant to Amendment No. 2 to the OPP and related transactions that occurred on December 31, 2014, the Company now files a consolidated federal income tax return and allocates federal income taxes to certain of its subsidiaries pursuant to a tax sharing agreement. | ||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards which relate to the Company’s investment in its subsidiaries. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Current tax liabilities or assets are recognized for the estimated taxes payable or refundable on tax returns for the current year. | ||
A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. This determination is based upon a review of all available evidence, both positive and negative, including the Company’s earnings history, the timing, character and amount of future earnings potential, the reversal of taxable temporary differences and the tax planning strategies available. | ||
The Company has adopted the authoritative guidance within ASC 740 relating to accounting for uncertainty in income taxes. The guidance prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken by the Company. See Note 14 for more information. | ||
Reportable Segments | ||
The Company’s internal reporting is organized into six segments as follows: | ||
• | Independent Retail Advice, which is comprised of Cetera, Summit, J.P. Turner, First Allied and ICH (following the completion of the VSR and Girard acquisitions, this segment will also include VSR and Girard); | |
• | Wholesale Distribution, which is comprised of Realty Capital Securities, excluding its investment banking division, and StratCap; | |
• | Investment Banking, Capital Markets and Transaction Management Services, which is comprised of the investment banking division of Realty Capital Securities, RCS Advisory, ANST and Docupace; | |
• | Investment Management, which is comprised of Hatteras; | |
• | Investment Research, which is comprised of SK Research; and | |
• | Corporate and Other. | |
See Note 21 for more information on the Company’s segments. | ||
Recently Issued Accounting Pronouncements | ||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) to clarify the principles for recognizing revenue and to develop a common revenue standard for US GAAP and International Financial Reporting Standards. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is still evaluating the impact of ASU 2014-09. | ||
In November 2014, the FASB issued Accounting Standards Update 2014-16, “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity” (“ASU 2014-16”), which requires an entity to determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract, when evaluating whether the host contract is more akin to debt or equity. The amendments in ASU 2014-16 did not change the current criteria in US GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required but rather clarified how US GAAP should be interpreted in concluding on the nature of the host contract. The Company adopted ASU 2014-16 during the fourth quarter of 2014. The adoption of ASU 2014-16 did not have an impact on the Company’s previously reported financial condition or results of operations. | ||
In February 2015, the FASB issued Accounting Standards Update 2015-02, “Amendments to the Consolidation Analysis” (“ASU 2015-02”). The new guidance applies to entities in all industries and amends the current consolidation guidance. The amendments are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal periods beginning after December 15, 2017. Early application is permitted. The Company is still evaluating the impact of ASU 2015-02. |
Fair_Value_Disclosures
Fair Value Disclosures | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||
Fair Value Disclosures | Fair Value Disclosures | |||||||||||||||||||||||||||
The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. U.S. GAAP defines three levels of inputs that may be used to measure fair value: | ||||||||||||||||||||||||||||
Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date | ||||||||||||||||||||||||||||
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability | ||||||||||||||||||||||||||||
Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the data inputs that market participants would use in the pricing of the asset or liability and are consequently not based on market activity | ||||||||||||||||||||||||||||
The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is the most significant to the fair value measurement in its entirety. | ||||||||||||||||||||||||||||
A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. The Company assumes all transfers occur at the beginning of the quarterly reporting period in which they occur. For the years ended December 31, 2014 and December 31, 2013 there were no transfers between Levels 1, 2 and 3. | ||||||||||||||||||||||||||||
Cash equivalents include money market mutual fund instruments, which are short term in nature with readily determinable values derived from active markets. Mutual funds, substantially all deferred compensation plan investments and publicly traded securities with sufficient trading volume are fair valued by management using quoted prices for identical instruments in active markets. Accordingly, these securities are primarily classified within Level 1. Government bonds, U.S. Treasury securities, corporate bonds, certificates of deposit and mutual funds in the deferred compensation plan are fair valued by management using references to prices for similar instruments, quoted prices or recent transactions in less active markets and these securities are primarily classified within Level 2. The Company’s free-standing and embedded derivative contracts are not traded on an exchange. Consequently, the fair value was determined by a third-party valuation company and reviewed by the Company. A binomial lattice model was used to derive the fair value for the embedded derivatives related to the Series C preferred stock while the embedded derivatives related to the convertible notes and the put/call were based on a Monte Carlo simulation that incorporates assumptions including duration, probability of redemption, the volatility of the market price of Class A common stock, the risk free rate of interest and the discount rate. The derivative contracts are classified as Level 3 in the Company’s fair value hierarchy. | ||||||||||||||||||||||||||||
The fair value of the Company’s investments in private equity funds is based on the net asset value (“NAV”) as a practical expedient since there is no readily available market. Adjustments to the NAV would be considered if it was probable that the private equity funds would be sold at a value materially different than the reported NAV. The private equity funds do not have notice periods, or restrictions on redemptions. The private equity funds primarily invest in nonpublic companies and other private equity funds, and distributions from will be received as the underlying investments of the funds are liquidated. The Company also holds an investment in a REIT whose fair value is based on NAV. Given the use of unobservable inputs used in the valuation, investments in private equity funds and the REIT are classified as Level 3 in the Company’s fair value hierarchy. | ||||||||||||||||||||||||||||
Pursuant to the terms of the related purchase agreements, the Company is obligated to pay contingent consideration to the sellers of J.P. Turner, Hatteras and StratCap and contingent consideration related to acquisitions made by First Allied prior to its acquisition by RCAP Holdings in September 2013. During the year ended December 31, 2014, the Company settled the contingent consideration related to acquisitions made by Cetera prior to its acquisition by the Company. As of December 31, 2014, the Company estimated the fair value of future payments of contingent consideration to be $107.3 million. See Note 2 and 3 for more information. As of December 31, 2013, the Company had an estimated $2.2 million in contingent consideration related to acquisitions made by First Allied. | ||||||||||||||||||||||||||||
The Company estimated the fair value of the contingent consideration at the close of the transactions using discounted cash flows. The fair value of the contingent consideration was based on financial forecasts determined by management that included assumptions about growth in assets under administration, assets under management, earnings, financial advisor retention and discount rates. The financial targets are sensitive to financial advisor retention, market fluctuations and the ability of financial advisors to grow their businesses. The Company evaluates the actual progress toward achieving the financial targets quarterly and adjusts the estimated fair value of the contingent consideration based on the probability of achievement, with any changes in fair value recognized in earnings. Given the significant unobservable inputs used in the valuation the contingent consideration is classified as Level 3 in the Company’s fair value hierarchy. | ||||||||||||||||||||||||||||
The Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis by product category as of December 31, 2014 are as follows (in thousands): | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Cash equivalents - money market funds | $ | 82,973 | $ | — | $ | — | $ | 82,973 | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||
Mutual funds | 11,473 | — | — | 11,473 | ||||||||||||||||||||||||
Total available-for-sale | 11,473 | — | — | 11,473 | ||||||||||||||||||||||||
Trading securities: | ||||||||||||||||||||||||||||
Equity securities | 262 | — | — | 262 | ||||||||||||||||||||||||
Mutual funds | 9,457 | — | — | 9,457 | ||||||||||||||||||||||||
U.S. government bonds | 2 | 10 | — | 12 | ||||||||||||||||||||||||
Other | 41 | — | 470 | 511 | ||||||||||||||||||||||||
Total trading securities | 9,762 | 10 | 470 | 10,242 | ||||||||||||||||||||||||
Deferred compensation plan investments: | ||||||||||||||||||||||||||||
Money market fund | 6,246 | — | — | 6,246 | ||||||||||||||||||||||||
International global funds | 17,722 | — | — | 17,722 | ||||||||||||||||||||||||
U.S. equity funds | 46,999 | — | — | 46,999 | ||||||||||||||||||||||||
U.S. fixed-income funds | 9,787 | — | — | 9,787 | ||||||||||||||||||||||||
Mutual funds | — | 2,702 | — | 2,702 | ||||||||||||||||||||||||
Total deferred compensation plan investments | 80,754 | 2,702 | — | 83,456 | ||||||||||||||||||||||||
Prepaid expenses and other assets - oil and gas interests | — | — | 151 | 151 | ||||||||||||||||||||||||
Total | $ | 184,962 | $ | 2,712 | $ | 621 | $ | 188,295 | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Derivative contracts | $ | — | $ | — | $ | 102,908 | (1) | $ | 102,908 | |||||||||||||||||||
Other liabilities: | ||||||||||||||||||||||||||||
Equity securities | 161 | — | — | 161 | ||||||||||||||||||||||||
Mutual funds and unit investment trusts | 4 | — | — | 4 | ||||||||||||||||||||||||
State and municipal government obligations | 222 | — | — | 222 | ||||||||||||||||||||||||
Contingent consideration | — | — | 107,278 | (2) | 107,278 | |||||||||||||||||||||||
Total | $ | 387 | $ | — | $ | 210,186 | $ | 210,573 | ||||||||||||||||||||
_____________________ | ||||||||||||||||||||||||||||
(1) Includes $21.9 million of derivatives classified in long-term debt. | ||||||||||||||||||||||||||||
(2) Excludes deferred payments, which are measured on non-recurring basis. | ||||||||||||||||||||||||||||
The Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis by product category as of December 31, 2013 are as follows (in thousands): | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||
Mutual funds | $ | 8,528 | $ | — | $ | — | $ | 8,528 | ||||||||||||||||||||
Total available-for-sale | 8,528 | — | — | 8,528 | ||||||||||||||||||||||||
Trading securities: | ||||||||||||||||||||||||||||
Mutual funds | 7,708 | — | — | 7,708 | ||||||||||||||||||||||||
Total trading securities | 7,708 | — | — | 7,708 | ||||||||||||||||||||||||
Total | $ | 16,236 | $ | — | $ | — | $ | 16,236 | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Other liabilities: | ||||||||||||||||||||||||||||
Equity securities | $ | 238 | $ | — | $ | — | $ | 238 | ||||||||||||||||||||
State and municipal government obligations | 51 | — | — | 51 | ||||||||||||||||||||||||
Certificates of deposit | 20 | — | — | 20 | ||||||||||||||||||||||||
Contingent consideration | — | — | 2,180 | 2,180 | ||||||||||||||||||||||||
Total | $ | 309 | $ | — | $ | 2,180 | $ | 2,489 | ||||||||||||||||||||
The following table presents changes during the year ended December 31, 2014 in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains and losses related to the Level 3 assets and liabilities in the statement of financial condition as of December 31, 2014 (in thousands): | ||||||||||||||||||||||||||||
Fair value as of | Net realized and unrealized gains/(losses) | Purchases | Issuances | Sales | Settlements | Fair value as of | ||||||||||||||||||||||
31-Dec-13 | 31-Dec-14 | |||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Trading securities- other | $ | — | $ | 4 | $ | 477 | $ | — | $ | (11 | ) | $ | — | $ | 470 | |||||||||||||
Prepaid expenses and other assets - oil and gas interests | — | (166 | ) | 372 | — | — | (55 | ) | 151 | |||||||||||||||||||
Total | $ | — | $ | (162 | ) | $ | 849 | $ | — | $ | (11 | ) | $ | (55 | ) | $ | 621 | |||||||||||
Fair value as of | Net realized and unrealized (gains)/losses | Purchases | Issuances | Sales | Settlements | Fair value as of | ||||||||||||||||||||||
31-Dec-13 | 31-Dec-14 | |||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Derivative contracts | $ | — | $ | 45,213 | $ | — | $ | 233,189 | $ | — | $ | (175,494 | ) | $ | 102,908 | |||||||||||||
Contingent consideration | 2,180 | 8,808 | 12,868 | 96,680 | — | (13,258 | ) | 107,278 | ||||||||||||||||||||
Total | $ | 2,180 | $ | 54,021 | $ | 12,868 | $ | 329,869 | $ | — | $ | (188,752 | ) | $ | 210,186 | |||||||||||||
The following table presents changes during the year ended December 31, 2013 in Level 3 liabilities measured at fair value on a recurring basis, and the realized and unrealized gains and losses related to the Level 3 liabilities in the statement of financial condition as of December 31, 2013 (in thousands): | ||||||||||||||||||||||||||||
Fair value as of | Net realized and unrealized (gains)/losses | Purchases | Issuances | Settlements | Fair value as of | |||||||||||||||||||||||
31-Dec-12 | 31-Dec-13 | |||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Contingent consideration | $ | — | $ | 9 | $ | 2,181 | $ | — | $ | (10 | ) | $ | 2,180 | |||||||||||||||
Total | $ | — | $ | 9 | $ | 2,181 | $ | — | $ | (10 | ) | $ | 2,180 | |||||||||||||||
The realized and unrealized gains and losses on derivative contracts and contingent consideration are included in other revenues and other expenses, respectively, in the consolidated statements of income. | ||||||||||||||||||||||||||||
The change in unrealized gain relating to Level 3 assets and liabilities held as of December 31, 2014 was $9.9 million. The Company did not have any unrealized gains or losses relating to Level 3 assets and liabilities held as of December 31, 2013. | ||||||||||||||||||||||||||||
The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments as of December 31, 2014 (dollars in thousands): | ||||||||||||||||||||||||||||
Fair value | Valuation technique | Unobservable inputs | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Trading securities- other- private equity fund | $ | 113 | Net asset value (NAV) | Net asset value (NAV) | ||||||||||||||||||||||||
Trading securities- other- REIT | $ | 357 | Net asset value (NAV) | Net asset value (NAV) | ||||||||||||||||||||||||
Prepaid expenses and other assets - oil and gas interests | $ | 151 | Discounted cash flows | 10% discount rate | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Derivative contracts | $ | 102,908 | Monte Carlo & binomial lattice (Series C) | Inputs for convertible notes, Series B and Series C preferred stock respectively: | ||||||||||||||||||||||||
- Duration: 6.8 years, 8.0 years, 8.0 years | ||||||||||||||||||||||||||||
- Volatility: 30%, N/A, 30.0% | ||||||||||||||||||||||||||||
- Risk free rate of interest: 1.95%, 2.1%, 2.1% | ||||||||||||||||||||||||||||
- Discount rate: 12.95%, 15.1%, 15.1% | ||||||||||||||||||||||||||||
- Dividend assumptions: N/A, 12.5% (first 18 months only; subsequently reverts to 11%), 8.0% (first 18 months only; subsequently reverts to 7%) | ||||||||||||||||||||||||||||
Inputs for the put option: | ||||||||||||||||||||||||||||
- Volatility: 30% | ||||||||||||||||||||||||||||
- Exercise date: June 10, 2033 | ||||||||||||||||||||||||||||
- Risk free rate: 2.43% | ||||||||||||||||||||||||||||
Contingent consideration - J.P. Turner | $ | 6,200 | Discounted cash flow | J.P. Turner: | ||||||||||||||||||||||||
- Probability exceeding percentage threshold: 99.7% to 100% | ||||||||||||||||||||||||||||
- Present value factor: 0.71 to 0.95 | ||||||||||||||||||||||||||||
- Time until payments: 0.4 years to 2.4 years | ||||||||||||||||||||||||||||
Contingent consideration - Hatteras | $ | 28,310 | Discounted cash flow | Hatteras: | ||||||||||||||||||||||||
- Projected earnings: $11.0 million to $17.3 million, December 31, 2016 and 2018, respectively | ||||||||||||||||||||||||||||
- Discounted rates based on the estimated weighted average cost of capital (WACC): 0.50 to 0.70 | ||||||||||||||||||||||||||||
Contingent consideration - StratCap | $ | 68,200 | Discounted cash flow | StratCap: | ||||||||||||||||||||||||
- Projected earn-out payments: EBITDA multiples for 2015 and 2016. | ||||||||||||||||||||||||||||
- Present value factor: 0.65 to 0.787 | ||||||||||||||||||||||||||||
- Probability adjustment: 25.0%, 50%, 25.0% for Low Case, Base Case, and High Case, respectively. | ||||||||||||||||||||||||||||
Contingent consideration - First Allied and Cetera | $ | 4,568 | Discounted cash flow | - Revenue achievement | ||||||||||||||||||||||||
- WACC 0.20 | ||||||||||||||||||||||||||||
The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments as of December 31, 2013 (dollars in thousands): | ||||||||||||||||||||||||||||
Fair value | Valuation technique | Unobservable inputs | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Contingent consideration | $ | 2,180 | Discounted cash flow | 2.5% discount rate | ||||||||||||||||||||||||
The following table presents information related to the Company’s investments that calculate NAV per share as of December 31, 2014. For these investments, which are measured at fair value on a recurring basis, the Company used the NAV per share as a practical expedient to measure fair value (in thousands): | ||||||||||||||||||||||||||||
Investment Category Includes | Fair Value Using Net Asset Value Per Share | Unfunded Commitments | ||||||||||||||||||||||||||
Trading securities- other- private equity fund | Investments in private equity funds | $ | 113 | $ | 9 | |||||||||||||||||||||||
Trading securities- other- REIT | Investment in a REIT | 357 | — | |||||||||||||||||||||||||
The following table presents information about the carrying values and fair values by fair value hierarchy for convertible notes, Series B Preferred Stock and Series C Preferred Stock, first and second lien term loan facility, promissory note and subordinated borrowings where the ending balance was carried at amortized cost as of December 31, 2014. There were no such instruments as of December 31, 2013. | ||||||||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||||||||
Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Convertible notes | $ | 61,632 | $ | — | $ | — | $ | 78,005 | ||||||||||||||||||||
Series B Preferred Stock | 146,700 | — | — | 117,367 | ||||||||||||||||||||||||
Series C Preferred Stock | 111,288 | — | — | 136,242 | ||||||||||||||||||||||||
First lien term facility | 555,700 | — | — | 530,491 | ||||||||||||||||||||||||
Second lien term facility | 147,903 | — | — | 142,500 | ||||||||||||||||||||||||
Promissory note (legal settlement) | 15,300 | — | 15,300 | — | ||||||||||||||||||||||||
Subordinated borrowings | 2,000 | — | — | 2,000 | ||||||||||||||||||||||||
Total | $ | 1,040,523 | $ | — | $ | 15,300 | $ | 1,006,605 | ||||||||||||||||||||
The fair value of the convertible notes, the Series B Preferred Stock and the Series C Preferred Stock were determined by an independent valuation company and reviewed by the Company. The fair value of the convertible notes, the Series B Preferred Stock and the Series C Preferred Stock as of December 31, 2014 was determined using inputs such as conversion price, conversion period, equity volatility, risk-free rate, credit spread, and discount rate. The convertible notes, the Series B Preferred Stock and the Series C Preferred Stock are classified as Level 3 in the Company’s fair value hierarchy. The fair value of the Company’s first and second lien term debt facilities were determined based upon indicative market data obtained from a third party that makes markets in these financial instruments. As of December 31, 2014, the first and second lien term debt facilities were classified as Level 3 of the fair value hierarchy due to a lack of adequate observable market activity related to these financial instruments. The promissory note, which was entered into in the fourth quarter between the Company and ARCP, has been classified as Level 2 in the Company’s fair value hierarchy. | ||||||||||||||||||||||||||||
The carrying value of accounts receivable and notes receivable approximates the fair value as they have limited credit risk and short-term maturities. Additionally, a substantial portion of the notes receivable balance related to acquisitions that closed during 2014 and were fair valued by an independent valuation company during 2014. Therefore, customer and notes receivables are classified as Level 2 in the non-recurring fair value hierarchy. | ||||||||||||||||||||||||||||
Goodwill and intangible assets established upon each acquisition were fair valued and were classified as Level 3 in the non-recurring fair value hierarchy. See Note 8 for more information. |
AvailableforSale_Securities
Available-for-Sale Securities | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||
Available-for-Sale Securities | Available-for-Sale Securities | |||||||||||||||||||||||||||
The following table presents information about the Company’s available-for-sale securities as of December 31, 2014 and December 31, 2013 (in thousands): | ||||||||||||||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||||||
Fair value at December 31, 2013 | Purchases(1) | Sales | Realized Gains/ (Losses) | Unrealized Gains/ (Losses) | Fair value at December 31, 2014 | Cost | ||||||||||||||||||||||
Mutual funds | $ | 8,528 | $ | 11,484 | $ | (9,013 | ) | $ | 171 | $ | 303 | $ | 11,473 | $ | 11,684 | |||||||||||||
_____________________ | ||||||||||||||||||||||||||||
(1) Includes $0.3 million of purchases under dividend reinvestment programs. | ||||||||||||||||||||||||||||
The following table presents information about the Company’s available-for-sale securities as of December 31, 2013 and December 31, 2012 (amounts in thousands): | ||||||||||||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||||||||||
Fair value at December 31, 2012 | Purchases | Sales | Realized Gains/ (Losses) | Unrealized Gains/ (Losses) | Fair value at December 31, 2013 | Cost | ||||||||||||||||||||||
Mutual funds | $ | — | $ | 10,097 | $ | (1,000 | ) | $ | (59 | ) | $ | (510 | ) | $ | 8,528 | $ | 9,038 | |||||||||||
The Company’s basis on which the cost of security sold or the amount reclassified out of accumulated other comprehensive income into earnings is determined using specific identification. The Company did not recognize any other-than-temporary impairments for the year ended December 31, 2014, December 31, 2013 and December 31, 2012. |
Note_Receivable
Note Receivable | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||
Notes receivable | Notes Receivable | |||||||||||||||||||||||
The Company loans money to certain of its financial advisors under two types of promissory note agreements, which bear interest at various rates and have various maturities. Such agreements include forgivable notes and payback notes. Management establishes an allowance that it believes is sufficient to cover any probable losses. When establishing this allowance, management considers a number of factors, including its ability to collect from the financial advisor and the Company’s historical experience in collecting on such transactions. | ||||||||||||||||||||||||
Payback notes are promissory notes extended primarily to financial advisors with the obligation to pay back the principal and accrued interest. | ||||||||||||||||||||||||
The forgivable notes contain provisions for forgiveness of principal and accrued interest if the financial advisor meets specified revenue production levels or length of service. The forgiveness determination is made at specified intervals that coincide with scheduled principal and interest payments. The Company amortizes the principal balance of the forgivable notes along with accrued interest as commission expense ratably over the contractual term of the notes. In the event the financial advisor does not meet the specified production level, the scheduled principal and interest are due. The Company intends to hold the notes for the term of the agreements. | ||||||||||||||||||||||||
The Company monitors its outstanding notes on a monthly basis to identify potential credit loss and impairment. Notes receivable are considered impaired when, based upon current information and events, management estimates it is probable that the Company will be unable to collect amounts due according to the terms of the promissory note. Criteria used to determine if impairment exists include, but are not limited to: historical payment and collection experience of the individual loan, historical production levels, the probability of default on the loan, status of the representative’s affiliation agreement with the Company, and, or any regulatory or legal action related to the representative. | ||||||||||||||||||||||||
The Company’s notes receivable for the year ended December 31, 2014 and the year ended December 31, 2013, were as follows (in thousands): | ||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||
Forgivable loans | Payback loans | Total | Forgivable loans | Payback loans | Total | |||||||||||||||||||
Beginning balance | $ | 11,104 | $ | 2,166 | $ | 13,270 | $ | 6,633 | $ | 1,914 | $ | 8,547 | ||||||||||||
Originated and acquired loans | 16,747 | 52,200 | 68,947 | 5,286 | 350 | 5,636 | ||||||||||||||||||
Collections | (1,672 | ) | (8,805 | ) | (10,477 | ) | (157 | ) | (206 | ) | (363 | ) | ||||||||||||
Forgiveness | (8,329 | ) | 298 | (8,031 | ) | (661 | ) | 88 | (573 | ) | ||||||||||||||
Accretion | 5,368 | 402 | 5,770 | 3 | 3 | 6 | ||||||||||||||||||
Allowance | (143 | ) | (347 | ) | (490 | ) | — | 17 | 17 | |||||||||||||||
Ending balance | $ | 23,075 | $ | 45,914 | $ | 68,989 | $ | 11,104 | $ | 2,166 | $ | 13,270 | ||||||||||||
All of the Company’s outstanding notes receivable as of December 31, 2013 relate to First Allied. | ||||||||||||||||||||||||
The following table presents the Company’s allowance for uncollectible amounts due from financial advisors for the year ended December 31, 2014 and the year ended December 31, 2013 (in thousands): | ||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||
Forgivable loans | Payback loans | Total | Forgivable loans | Payback loans | Total | |||||||||||||||||||
Beginning balance | $ | 368 | $ | 56 | $ | 424 | $ | 368 | $ | 73 | $ | 441 | ||||||||||||
Provision for bad debt | 327 | 735 | 1,062 | — | — | — | ||||||||||||||||||
Charge off - net of recoveries | (184 | ) | (388 | ) | (572 | ) | — | (17 | ) | (17 | ) | |||||||||||||
Total change | 143 | 347 | 490 | — | (17 | ) | (17 | ) | ||||||||||||||||
Ending balance | $ | 511 | $ | 403 | $ | 914 | $ | 368 | $ | 56 | $ | 424 | ||||||||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property and Equipment | Property and Equipment | |||||||
The Company’s property and equipment as of December 31, 2014 and December 31, 2013 consisted of the following (in thousands): | ||||||||
31-Dec-14 | 31-Dec-13 | |||||||
Office furniture and equipment | $ | 3,650 | $ | 1,007 | ||||
Computer software and hardware | 22,971 | 854 | ||||||
Leasehold improvements | 3,613 | 372 | ||||||
Total property and equipment | 30,234 | 2,233 | ||||||
Less: Accumulated depreciation and amortization | 5,488 | 350 | ||||||
Property and equipment - net | $ | 24,746 | $ | 1,883 | ||||
For the years ended December 31, 2014, 2013 and 2012, the Company recorded $5.2 million, $0.3 million and $0.03 million, respectively, in depreciation and amortization expense. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | |||||||||||||
Goodwill | ||||||||||||||
Goodwill associated with each acquisition is allocated to the segments, based on how the Company manages its segments. The following table presents the goodwill by segment (in thousands): | ||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||
Independent Retail Advice | $ | 434,398 | $ | 79,986 | ||||||||||
Wholesale Distribution | 22,871 | — | ||||||||||||
Investment Management | 15,348 | — | ||||||||||||
Investment Banking and Capital Markets | 45,989 | — | ||||||||||||
Corporate and Other | 755 | — | ||||||||||||
Total goodwill | $ | 519,361 | $ | 79,986 | ||||||||||
The following table presents the carrying amount of goodwill as of December 31, 2014 and December 31, 2013 by acquisition (in thousands): | ||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||
First Allied acquisition | $ | 79,986 | $ | 79,986 | ||||||||||
Cetera acquisition | 290,262 | — | ||||||||||||
Summit acquisition | 23,891 | — | ||||||||||||
J.P. Turner acquisition | 13,579 | — | ||||||||||||
Hatteras acquisition | 15,348 | — | ||||||||||||
ICH acquisition | 26,680 | — | ||||||||||||
StratCap acquisition | 22,871 | — | ||||||||||||
Trupoly acquisition | 755 | — | ||||||||||||
Docupace acquisition (preliminary) | 45,989 | — | ||||||||||||
Total goodwill | $ | 519,361 | $ | 79,986 | ||||||||||
For the years ended December 31, 2014, 2013 and 2012 there was no impairment of goodwill. | ||||||||||||||
Intangible Assets | ||||||||||||||
The components of intangible assets as of December 31, 2014 are as follows (dollars in thousands): | ||||||||||||||
Weighted-Average Life Remaining | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||
(in years) | ||||||||||||||
Finite-lived intangible assets: | ||||||||||||||
Financial advisor relationships | 13 | $ | 1,019,353 | $ | 52,070 | $ | 967,283 | |||||||
Sponsor relationships | 9 | 113,000 | 4,186 | 108,814 | ||||||||||
Trade names | 29 | 65,192 | 1,638 | 63,554 | ||||||||||
Investment management agreements | 12 | 47,390 | 1,966 | 45,424 | ||||||||||
Customer relationships | 11 | 20,686 | 1,473 | 19,213 | ||||||||||
Internally developed software and technologies | 7 | 22,510 | 779 | 21,731 | ||||||||||
Intellectual property | 9 | 10,642 | 849 | 9,793 | ||||||||||
Non-competition agreements | 2 | 9,648 | 5,136 | 4,512 | ||||||||||
Distribution networks(1) | 40 | 3,210 | 9 | 3,201 | ||||||||||
Total finite-lived intangible assets | $ | 1,311,631 | $ | 68,106 | $ | 1,243,525 | ||||||||
________________ | ||||||||||||||
(1) The Company previously classified its distribution networks as indefinite-lived intangible assets. The Company finalized its assessment of the useful life of the distribution networks and concluded that they were finite-lived rather than indefinite-lived intangible assets. | ||||||||||||||
The Company’s intangible assets as of December 31, 2013 relate to First Allied. The components of intangible assets as of December 31, 2013 are as follows (dollars in thousands): | ||||||||||||||
Weighted-Average Life Remaining | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||
(in years) | ||||||||||||||
Finite-lived intangible assets: | ||||||||||||||
Financial advisor relationships | 13 | $ | 71,185 | $ | 1,487 | $ | 69,698 | |||||||
Customer relationships | 13 | 12,686 | 277 | 12,409 | ||||||||||
Non-competition agreements | 2 | 1,026 | 128 | 898 | ||||||||||
Total finite-lived intangible assets | $ | 84,897 | $ | 1,892 | $ | 83,005 | ||||||||
Total amortization expense for finite-lived intangible assets was $66.2 million for the year ended December 31, 2014. Total amortization expense for finite-lived intangible assets was $1.9 million for the year ended December 31, 2013. The Company did not have any amortization expense for the year ended December 31, 2012. Future amortization expense is estimated as follows (in thousands): | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | $ | 102,820 | ||||||||||||
2015 | 100,090 | |||||||||||||
2016 | 99,937 | |||||||||||||
2017 | 99,858 | |||||||||||||
2018 | 98,529 | |||||||||||||
Thereafter | 742,291 | |||||||||||||
Total | $ | 1,243,525 | ||||||||||||
Goodwill and intangible assets established upon each acquisition were fair valued and were classified as Level 3 in the non-recurring fair value hierarchy. A substantial portion of the goodwill and intangible assets relate to acquisitions that closed during 2014. The results of these acquisitions are broadly consistent with their original expectations. Additionally, the Company performed a quantitative goodwill impairment test and determined that the goodwill was not impaired. As a result, the carrying value of goodwill and intangible assets as of December 31, 2014 closely approximates fair value. Unobservable inputs considered in determining fair value at the acquisition date include the estimate and probability of future revenues attributable to financial advisors and retention rates which were used to derive economic cash flows that are present valued at an appropriate rate of return over their respective useful lives. |
LongTerm_Debt
Long-Term Debt | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Long-Term Debt | Long-Term Debt | |||||||||||
Concurrently with the closing of the Cetera acquisition on April 29, 2014, the Company entered into the Bank Facilities: a $575.0 million senior secured first lien term loan facility, a $150.0 million senior secured second lien term loan facility and a $25.0 million senior secured first lien revolving credit facility. During the year ended December 31, 2014, the Company repaid $14.4 million of the senior secured first lien term loan facility as a regularly scheduled principal repayment. | ||||||||||||
The proceeds of the term facilities were used by the Company to pay a portion of the consideration paid in the Cetera acquisition, to refinance certain existing indebtedness and to pay related fees and expenses. The proceeds of the revolving facility are expected to be used for permitted capital expenditures, to provide for the ongoing working capital requirements and for general corporate purposes. On July 21, 2014, the Company utilized $1.1 million from the revolving credit facility in the form of a backstop letter of credit. | ||||||||||||
On April 29, 2014, the Company also issued $120.0 million aggregate principal amount of convertible notes in a private placement. The convertible notes are senior unsecured obligations that are effectively subordinate to the Bank Facilities, which are secured facilities, and any refinancing thereof. The convertible notes are convertible in $1,000 increments at the option of the holder, to the extent permitted by the Bank Facilities, into shares of Class A common stock, at a conversion price equal to $21.18 per share of Class A common stock, subject to adjustment. | ||||||||||||
Additionally, the Company also assumed $32.0 million in debt when it acquired First Allied. First Allied entered into an $18.0 million loan facility with Fifth Third Bank on November 1, 2011, of which $12.0 million was a term loan (the “FA Term Loan”) and $6.0 million is a revolving line of credit (the “FA Revolver”). The FA Revolver was also available for letters of credit. The FA Term Loan was amended and increased by $20.0 million to $32.0 million on January 2, 2013 in order to facilitate the purchase of Legend Group Holdings LLC. On July 28, 2014, the First Allied outstanding indebtedness including the FA Term Loan, the FA Revolver, unpaid interest and fees totaling $32.0 million was repaid by the Company as required by the terms of the Bank Facilities. | ||||||||||||
The Company also assumed $2.0 million in subordinated debt when it acquired ICH. The subordinated borrowings are covered by an agreement with ICH’s clearing firm approved by FINRA on March 8, 2013 and are thus available for computing net capital under the SEC’s uniform net capital rule. To the extent that such borrowings are required for ICH’s continued compliance with minimum net capital requirements, they may not be repaid. The subordinated borrowings mature on March 8, 2016. | ||||||||||||
On December 4, 2014, the Company issued a $15.3 million two-year promissory note bearing interest at a rate of 8% per annum pursuant to the terms of a litigation settlement. The principal amount of the promissory note is due in three payments of $7.7 million, $3.8 million and $3.8 million on March 31, 2016, September 30, 2016 and March 31, 2017, respectively. See Note 17 for more information. | ||||||||||||
The following table presents the Company’s long-term borrowings as of December 31, 2014 and December 31, 2013 and their contractual interest rates (dollars in thousands): | ||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Balance | Interest Rate | Balance | Interest Rate | |||||||||
First lien term facility | $ | 555,700 | 6.50% | $ | — | |||||||
Second lien term facility | 147,903 | 10.50% | — | |||||||||
Convertible notes | 83,508 | (1) | 5.00% | — | ||||||||
Promissory note | 15,300 | 8.00% | — | |||||||||
Subordinated borrowings | 2,000 | 8.25% | — | |||||||||
Other | — | 33,302 | (2) | 2.42% | ||||||||
Total borrowings | 804,411 | 33,302 | ||||||||||
Less: Current portion of borrowings | 43,891 | 3,200 | ||||||||||
Total long-term debt, net of current portion | $ | 760,520 | $ | 30,102 | ||||||||
_____________________ | ||||||||||||
(1) The Company’s convertible notes balance includes the fair value of the compound derivative of $21.9 million. | ||||||||||||
(2) The Company’s long-term borrowings as of December 31, 2013 relate to First Allied, of which, $28.8 million was outstanding under the FA Term Loan and $4.5 million was outstanding under the FA Revolver. | ||||||||||||
As of December 31, 2014, no amounts were outstanding under the senior secured first lien revolving facility (other than the backstop letter of credit). This revolving facility has a term of three years and an initial interest rate equal to LIBOR plus 5.50% per annum, which may be reduced to 5.25% if the First Lien Leverage Ratio (as defined in the Bank Facilities) is less than or equal to 1.25 to 1.00. In the case of both term facilities and this revolving facility, LIBOR can be no less than 1.00% per annum. | ||||||||||||
The following table presents the contractual maturities of long-term debt, net of the current portion and inclusive of the fair value of the compound derivative of $21.9 million, as of December 31, 2014 (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2016 | $ | 63,627 | ||||||||||
2017 | 74,466 | |||||||||||
2018 | 76,597 | |||||||||||
2019 | 277,217 | |||||||||||
Thereafter(1) | 268,613 | |||||||||||
Total long-term debt, net of current portion | $ | 760,520 | ||||||||||
_____________________ | ||||||||||||
(1) Includes the fair value of the compound derivative of $21.9 million. | ||||||||||||
The following table presents the scheduled contractual maturities of the current portion of long-term debt as of December 31, 2014 (in thousands): | ||||||||||||
31-Mar-15 | $ | 5,668 | ||||||||||
30-Jun-15 | 12,797 | |||||||||||
30-Sep-15 | 12,740 | |||||||||||
31-Dec-15 | 12,686 | |||||||||||
Total current portion of long-term debt | $ | 43,891 | ||||||||||
The Bank Facilities are subject to: (i) certain mandatory prepayment requirements, including asset sales, insurance/condemnation proceeds, incurrence of certain indebtedness and excess cash flow (as described in more detail below); (ii) certain agreed prepayment premiums; (iii) customary affirmative covenants; (iv) certain negative covenants, including limitations on incurrence of indebtedness, liens, investments, restricted payments (as described in more detail below), asset dispositions, acquisitions and transactions with affiliates; and (v) financial covenants of a maximum total leverage ratio, a minimum fixed charge coverage ratio and minimum regulatory net capital. | ||||||||||||
The Bank Facilities include the requirement to prepay the aggregate principal amount of the Bank Facilities in the amount of 50% of “Excess Cash Flow” (as defined in the Bank Facilities) which represents cash flow after certain permitted expenditures, subject to reduction based on the ratio of First Lien Net Debt on such date to Consolidated EBITDA (the “First Lien Leverage Ratio”). | ||||||||||||
The Company’s obligations under the Bank Facilities are guaranteed, subject to certain other customary or agreed-upon exceptions, by RCS Capital Management, RCAP Holdings and each of its direct or indirect domestic subsidiaries that are not SEC-registered broker-dealers. The Company, together with the guarantors, has pledged substantially all of their assets to secure the Bank Facilities, subject to certain exceptions. Subsidiaries that have been acquired must become guarantors and pledge their assets no later than 60 days after such acquisition. | ||||||||||||
The restricted payments covenant prohibits payment of dividends by the Company, subject to certain exceptions, including, among others, payments in an aggregate amount not to exceed a dollar cap of $10.0 million, plus a basket comprised of a portion of retained excess cash flow, returns on certain investments, and certain other amounts available to the Company under the terms of the Bank Facilities, subject to a leverage test of 1.00 to 1.00 (with respect to dividends to affiliates) and 1.25 to 1.00 (with respect to dividends to non-affiliates) and other payments not exceeding the pre-closing retained earnings amount of $11.2 million, subject to a cap and a leverage test. The Company paid cash dividends to its Class A stockholders in July 2014 (with respect to the second quarter of 2014) out of funds available to pay dividends under the exceptions referred to in the preceding sentence. At the present time, the Company does not expect to pay quarterly dividends on Class A common stock (including Class A common stock issued pursuant to restricted stock awards) or on Series B Preferred Stock or Series C Preferred Stock in the near term, as the Company’s ability to pay cash dividends is restricted due to the negative covenants described above. | ||||||||||||
The convertible notes contain customary events of default and negative covenants, including limitations on incurrence of indebtedness, liens, investments, restricted payments (with similar, but less restrictive, exceptions as the Bank Facilities), asset dispositions, acquisitions and transactions with affiliates. The convertible notes are not redeemable by the Company prior to their maturity date without the consent of the holder of convertible notes. | ||||||||||||
On January 9, 2015, the Company issued a letter of credit in the amount of $0.1 million on behalf of First Allied. The letter of credit was issued to the lessor on a lease entered into by First Allied. |
Derivative_Contracts
Derivative Contracts | 12 Months Ended |
Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative contracts | Derivative Contracts |
During the second quarter of 2014, the Company entered into a series of contemporaneous transactions that qualify as derivative contracts or include derivative contracts. These derivative contracts include a put/call agreement, which is a free-standing derivative contract, and embedded derivative contracts related to the Company’s issuance of convertible notes and Series A Preferred Stock (“hybrid instruments”). | |
The embedded derivative contracts’ features require separate accounting as derivative instruments; therefore, the issuance proceeds for the convertible note and Series A Preferred Stock were first allocated to the fair value of the put/call agreement and then, on a relative fair value basis, to the hybrid instruments. The proceeds allocated to each hybrid instrument were then attributed between the host contract and the embedded derivative contracts. These derivative contracts are carried at their fair value with changes in fair value reflected in other revenues in the consolidated statements of income. | |
On November 18, 2014 and December 12, 2014, a portion of the Series A Preferred Stock was submitted for conversion, and on December 10, 2014, December 19, 2014 and February 23, 2015, shares of Class A common stock were issued on account of such conversions. Accordingly, the bifurcated derivatives associated with the converted Series A Preferred Stock were adjusted to their fair value on the date of each submission for conversion, with the changes in fair value reflected in other revenues in the consolidated statement of income. The bifurcated derivatives associated with the converted Series A Preferred Stock were then written off against additional paid-in capital. | |
On December 19, 2014, the remaining Series A Preferred Stock was exchanged for Series B Preferred Stock and Series C Preferred Stock. Accordingly, the bifurcated derivatives associated with the remaining Series A Preferred Stock were adjusted to their fair value as measured on the date of the exchange, with the change in fair value reflected in other revenues in the consolidated statement of income. The remaining bifurcated derivatives associated with the Series A Preferred Stock, which were exchanged, were written off against additional paid-in capital. | |
The Series B Preferred Stock and Series C Preferred Stock also have embedded derivative contracts features that require separate accounting as derivative instruments. These derivative contracts are carried at their fair value with changes in fair value reflected in other revenues in the consolidated statements of income. | |
Put/Call | |
On April 29, 2014, the Company entered into a put/call agreement with Luxor, which was amended on December 19, 2014 in connection with the exchange of Series A Preferred Stock for Series B Preferred Stock and Series C Preferred Stock. Under this agreement, subject to certain conditions, (i) the Company has the right to repurchase Luxor’s 19.46% interest in RCS Capital Management (the “Luxor percentage interest”) from Luxor in exchange for its fair market value (as determined by the Company and Luxor pursuant to the agreement) in shares of Class A common stock (or, at the Company’s option, a cash equivalent); and (ii) Luxor has the right to require the Company to purchase the Luxor percentage interest in exchange for a number of shares of Class A common stock (or, at the Company’s option, a cash equivalent) that is equal to 15.00% multiplied by the Luxor percentage interest multiplied by the then outstanding number of shares of Class A common stock (assuming the conversion immediately prior thereto of the then outstanding convertible notes and Series C Preferred Stock). | |
The put/call agreement also provides that the members of RCS Capital Management may elect to purchase all the Luxor percentage interest offered to the Company for an amount equal to the value of the Class A common stock required to be delivered by the Company for cash, shares of Class A common stock or a combination thereof. If the Company is prohibited by the Bank Facilities from purchasing the Luxor percentage interest, the members of RCS Capital Management will be required to purchase the Luxor percentage interest under the same terms. As of December 31, 2014, the fair value of the put right was approximately $11.6 million and was recorded in derivative contracts in the consolidated statements of financial condition. As of December 31, 2014, the call right did not have any value. The Company recorded a gain of approximately $9.6 million for the period from issuance to December 31, 2014 related to the put right in other revenues in the consolidated statements of income. | |
Embedded derivatives related to the preferred stock and convertible notes | |
The Company’s Series A Preferred Stock was convertible, at the option of the holders of the Company’s Series A Preferred Stock, into shares of Class A common stock. The convertible features and other features were considered embedded derivatives that were not clearly and closely related to the host instrument. As a result, these features were bifurcated and accounted for as a separate compound derivative. | |
The Company recognized a loss of $3.5 million from the date of issuance through the submission for conversion date on November 18, 2014 on the embedded derivatives related to 902,000 shares of Series A Preferred Stock. The remaining fair values of the bifurcated derivatives related to the Series A Preferred Stock submitted for conversion on November 18, 2014 of $10.7 million, were written off against additional paid-in capital. | |
The Company recognized a loss of $8.7 million from the date of issuance through the submission for conversion date on December 12, 2014 on the embedded derivatives related to 2,171,553 shares of Series A Preferred Stock. The remaining fair values of the bifurcated derivatives related to the Series A Preferred Stock submitted for conversion on December 12, 2014 of $26.0 million were written off against additional paid-in capital. | |
The Company recognized a loss of $46.5 million from the date of issuance until the date of the submission for conversion on December 12, 2014 on the embedded derivatives related to the remaining 11,584,427 shares of Series A Preferred Stock exchanged for Series B Preferred Stock and Series C Preferred Stock. The remaining fair value of the bifurcated derivatives associated with the exchanged Series A Preferred Stock of $138.8 million, as measured on December 12, 2014, were written off against additional paid-in capital. | |
The Series B Preferred Stock is not convertible but includes an option for the Company to call the instrument in connection with a consolidation or merger of our company with one or more entities that are not its affiliates which results in a Change of Control (as defined in the Series B COD) and as a result of which the Company is not the surviving entity that is considered an embedded derivative that is not clearly and closely related to the host instrument. As a result, this feature must be bifurcated and accounted for as a separate compound derivative. As of the issuance date and as of December 31, 2014, the compound derivative had no value. | |
The Series C Preferred Stock is convertible, at the option of the holder, into shares of Class A common stock The convertible features and other features are considered embedded derivatives that are not clearly and closely related to the host instrument. As a result, these features must be bifurcated and accounted for as a separate compound derivative. As of December 31, 2014, the fair value of the compound derivative was approximately $69.4 million and was recorded in derivative contracts in the consolidated statements of financial condition. The Company adjusts the carrying value of the compound derivative to fair value at each reporting date, or the date of conversion, and recognizes the change in fair value in the consolidated statements of income. The Company recorded a gain of approximately $1.2 million for the period from issuance to December 31, 2014 in other revenues in the consolidated statements of income as a result of the change in fair value of the derivatives embedded in the Series C Preferred Stock. | |
The Company’s convertible notes are convertible, at the option of the holders of the Company’s convertible notes, into shares of Class A common stock. The convertible feature and other features are considered embedded derivatives that are not clearly and closely related to the host instrument. As a result, these features must be bifurcated and accounted for as a separate compound derivative. As of December 31, 2014, the fair value of the compound derivative was approximately $21.9 million and was recorded in long-term debt in the consolidated statements of financial condition. The Company adjusts the carrying value of the compound derivative to fair value at each reporting date, or the date of conversion, and recognizes the change in fair value in the statements of income. The Company recorded a gain of approximately $2.7 million for the period from issuance to December 31, 2014 in other revenues in the consolidated statements of income as a result of the change in fair value of the derivatives embedded in the convertible notes. |
Preferred_Stock
Preferred Stock | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||
Preferred Stock | Preferred Stock | ||||||||||||||||||||||
Series A Preferred Stock. On April 29, 2014, the Company issued 14,657,980 shares of Series A Preferred Stock to affiliates of Luxor in a private placement. The shares of Series A Preferred Stock were entitled to a dividend of 7% of the liquidation preference in cash and a dividend of 8% of the liquidation preference if a quarterly dividend was not paid in cash on the dividend payment date. The shares of Series A Preferred Stock were convertible, at the option of the holders of the Series A Preferred Stock, into shares of Class A common stock, at the lower of (i) a 2% discount to VWAP of Class A common stock for the ten trading days prior to the date of the holder’s election to convert; (ii) a 2% discount to the closing price of Class A common stock on the date of the holder’s election to convert; and (iii) $20.26, the fixed conversion price. If both the one-day VWAP and the daily closing price of Class A common stock for the prior 30 consecutive trading days exceeded 2.5 times the fixed conversion price, or $50.65, and at least $10.0 million of Class A common stock was traded each day for 30 consecutive days at any time after the first two years from the issuance date of the Series A Preferred Stock, then the Company may have required the holders to convert the Series A Preferred Stock into shares of Class A common stock at the same price as set forth above. Accrued and unpaid dividends on the Series A Preferred Stock were also entitled to the same liquidation preference and were convertible into additional shares of Class A common stock on the same terms as actual shares of Series A Preferred Stock. | |||||||||||||||||||||||
The terms of the Series A Preferred Stock set forth in the related certificate of designation included negative covenants relating to the issuance of additional preferred securities, amending the provisions of certificate of designation, affiliate transactions and the incurrence of indebtedness. The certificate of designation relating to the Series A Preferred Stock and the indenture governing the convertible notes provided that, without the advance approval of FINRA, the aggregate number of shares of Class A common stock issued upon conversion of the Series A Preferred Stock, upon conversion of the convertible notes or pursuant to the June 10, 2014 private offering of Class A common stock, in which the Company issued 2,469,136 shares, could not exceed 24.9% of the number of common shares outstanding on the trading day immediately preceding the date of issuance of such Class A common stock. | |||||||||||||||||||||||
In addition, the certificate of designation relating to the Series A Preferred Stock and the indenture governing the convertible notes provided that the aggregate number of shares of Class A common stock issued to Luxor and its affiliates (including shares of Class A common stock obtained upon conversion of the Series A Preferred Stock, the convertible notes or any other shares of Class A common stock otherwise beneficially owned by such entity) could not exceed 9.9% of the number of shares of Class A common stock outstanding on the trading day immediately preceding the date of issuance of shares of Class A common stock upon conversion. This provision could have been waived by Luxor and its affiliates on 65 days’ notice to the Company. | |||||||||||||||||||||||
In the event of any liquidation, before any payment or distribution of the assets of the Company was made to or set apart for the holders of Company’s common stock, the holders would have been entitled to receive an amount equal to the greater of (i) $18.42 in cash per Series A Preferred Stock plus dividends accrued and unpaid to the date of the final distribution to the holders or (ii) an amount per Series A Preferred Stock share equal to the amount of consideration which would have been payable had each Series A Preferred Stock share been converted into shares of Class A common stock immediately prior to such liquidation. Until the holders have been paid the greater amount of alternative (i) or (ii) in full, no payment would have been made to the holders of the Company’s common stock upon liquidation. | |||||||||||||||||||||||
During the year ended December 31, 2014, the Company declared $8.0 million in dividends on its Series A Preferred Stock. The Company paid cash dividends to the Series A Preferred Stock of $3.3 million on July 10, 2014, and $4.7 million on October 9, 2014. | |||||||||||||||||||||||
The Company also recognized a deemed dividend of $68.5 million in connection with the issuance of the Series A Preferred Stock. This deemed dividend represents the difference between redemption value of the Series A Preferred Stock (based on the if-converted price) and the amount of the proceeds that were allocated to the Series A Preferred Stock excluding the embedded derivative. The Series A Preferred Stock could have been settled in cash in certain situations; therefore, the Company was required to accrete up to the redemption value. This accretion was recognized in its entirety resulting in a reduction in the income attributable to the common stockholders. See Note 15 for more information. | |||||||||||||||||||||||
During the year ended December 31, 2014, Luxor elected to convert 3,073,553 shares of Series A Preferred Stock into 5,405,601 shares of Class A common stock. The following table presents the details of the conversions (in thousands, except share and per share data): | |||||||||||||||||||||||
Date of Submission For Conversion | Preferred Shares Converted | Liquidation Preference Converted(1) | Conversion Price Per Share(2) | Class A Common Stock Issued | Close Price Per Share on the Date of Conversion | Aggregate Market Value of Class A Common Issued | |||||||||||||||||
18-Nov-14 | 902,000 | $ | 16,770 | $ | 11.1 | 1,511,004 | $ | 12.96 | $ | 19,583 | |||||||||||||
December 12, 2014(3) | 2,171,553 | 40,560 | 10.41 | 3,894,597 | 11.81 | 45,995 | |||||||||||||||||
Total(4) | 3,073,553 | $ | 57,330 | $ | 10.61 | 5,405,601 | $ | 12.13 | $ | 65,578 | |||||||||||||
_____________________ | |||||||||||||||||||||||
(1) The liquidation preference is determined by multiplying the number of shares being converted by $18.42 then adding the unpaid dividends on such shares. | |||||||||||||||||||||||
(2) Both conversions were calculated using a 2% discount to VWAP of Class A common stock for the ten trading days prior to the date of the holder’s election to convert. | |||||||||||||||||||||||
(3) To comply with ownership limitations applicable to Luxor under the terms of the Series A Preferred Stock, 1,852,575 shares of Class A common stock were issued on December 19, 2014 and 2,042,022 shares of Class A common stock were issued on February 23, 2015. See Note 15 for more information. | |||||||||||||||||||||||
(4) Per share totals are expressed as weighted averages. | |||||||||||||||||||||||
Exchange of Series A Preferred Stock. On December 19, 2014 the Company exchanged the remaining 11,584,427 shares of Series A Preferred Stock for 5,800,000 shares of Series B Preferred Stock and 4,400,000 shares of Series C Preferred Stock. $3.0 million of accrued and unpaid dividends on Series A Preferred Stock through December 12, 2014, the date of submission for conversion, were proportionately added to the amount of dividends due on the Series B Preferred Stock and the Series C Preferred Stock on January 12, 2015, the first dividend payment date. | |||||||||||||||||||||||
Series B Preferred Stock. On December 19, 2014, the Company issued 5,800,000 of Series B Preferred Stock to affiliates of Luxor. | |||||||||||||||||||||||
If paid in cash, dividends on shares of Series B Preferred Stock accrue quarterly at 11.00% per annum of the liquidation preference. To the extent a quarterly dividend is not paid in cash on the applicable dividend payment date, then such dividend not paid in cash for such period will accrue at 12.50% per annum of the liquidation preference. | |||||||||||||||||||||||
The initial liquidation preference of shares of Series B Preferred Stock was $25.00 per share. Any dividends that are not paid in cash on an applicable dividend payment date are automatically added to the aggregate liquidation preference on such applicable dividend payment date. | |||||||||||||||||||||||
The holders of Series B Preferred Stock have no conversion rights. | |||||||||||||||||||||||
At any time prior to June 12, 2016, the Company has the right to redeem all (and not less than all) of the outstanding shares of Series B Preferred Stock for cash at a redemption price equal to the aggregate liquidation preference plus accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of redemption. | |||||||||||||||||||||||
Starting on December 12, 2022, the Company will have a right to redeem, and holders of shares of Series B Preferred Stock will have a right to cause the Company to redeem, all or a part of the outstanding shares of Series B Preferred Stock for cash at a redemption price equal to the aggregate liquidation preference plus accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of redemption. If any redemption by the Company would result in less than $35.0 million in aggregate liquidation preference of Series B Preferred Stock remaining outstanding, then the Company will be required to redeem all (and not less than all) of the outstanding shares of Series B Preferred Stock. | |||||||||||||||||||||||
The shares of Series B Preferred Stock are also redeemable in connection with a consolidation or merger of the Company with one or more entities that are not its affiliates which results in a change of control and as a result of which the Company is not the surviving entity. | |||||||||||||||||||||||
The Series B Preferred Stock ranks pari passu with the Series C Preferred Stock. | |||||||||||||||||||||||
In the event of (A) a dissolution or winding up of our company, whether voluntary or involuntary, (B) a consolidation or merger of the Company with and into one or more entities which are not our affiliates which results in a change of control, or (C) a sale or transfer of all or substantially all of the Company’s assets other than to an affiliate of the Company, before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of equity securities junior to the Series B Preferred Stock, the holders of shares of Series B Preferred Stock are entitled (subject to the redemption rights of such holders in connection with a consolidation or merger of the Company with one or more entities that are not its affiliates which results in a change of control and as a result of which our company is not the surviving entity) to receive an amount equal to the liquidation preference plus an amount equal to all accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of the final distribution to such holder. | |||||||||||||||||||||||
The terms of the Series B Preferred Stock set forth in the related certificate of designation include voting rights relating to the issuance of additional preferred securities, amending the provisions of the related certificate of designation, affiliate transactions and the incurrence of indebtedness. | |||||||||||||||||||||||
During the year ended December 31, 2014, the Company accrued $0.8 million in dividends on its Series B Preferred Stock. The Company also recognized a deemed dividend of $26.7 million, which included 56.9% of the accrued and unpaid dividends on the shares of Series A Preferred Stock that were exchanged in connection with the issuance of the Series B Preferred Stock. This deemed dividend represents the difference between redemption value of the Series B Preferred Stock (based on the if-converted price) and the amount of the proceeds that were allocated to the Series B Preferred Stock excluding the embedded derivative. The Series B Preferred Stock can be settled in cash in certain situations; therefore, the Company elected to accrete the Series B Preferred Stock up to the redemption value on the date of issuance. This accretion was recognized in its entirety resulting in a reduction in the income attributable to the common stockholders. During the first quarter of 2015 to reflect dividends accrued through December 31, 2014, the liquidation preference of the Series B Preferred Stock was increased by $2.8 million, which included 56.9% of the accrued and unpaid dividends on the exchanged shares of Series A Preferred Stock. Since the quarterly dividend was not paid in cash on the dividend payment date, the 12.5% dividend rate took effect. | |||||||||||||||||||||||
Series C Preferred Stock. On December 19, 2014, the Company issued 4,400,000 of Series C Preferred Stock to affiliates of Luxor. If paid in cash, dividends on shares of Series C Preferred Stock will accrue quarterly at 7.00% per annum of the liquidation preference. To the extent a quarterly dividend is not paid in cash on the applicable dividend payment date, then such dividend not paid in cash for such period will accrue at 8.00% per annum of the liquidation preference. | |||||||||||||||||||||||
The initial liquidation preference of shares of Series C Preferred Stock was $25.00 per share. Any dividends that are not paid in cash on an applicable dividend payment date are automatically added to the aggregate liquidation preference on such applicable dividend payment date. | |||||||||||||||||||||||
The shares of Series C Preferred Stock are convertible, at the option of the holders of the Series C Preferred Stock, into shares of Class A common stock, at $13.00, which conversion price is subject to anti-dilution adjustments upon the occurrence of certain events and transactions. If both the one-day VWAP and the daily closing price of Class A common stock for the prior 30 consecutive trading days exceeds $50.66 and at least $10.0 million of Class A common stock is traded each day for 30 consecutive days at any time after the first two years from the issuance date of the Series C Preferred Stock, then the Company may require the holders to convert the Series C Preferred Stock into shares of Class A common stock at the same price as set forth above. | |||||||||||||||||||||||
The following limitations on the ownership of Class A common stock, which will be adjusted as appropriate for share splits, share dividends, combinations, recapitalizations and the like and taking into account the number of shares of Class A common stock resulting from such conversion, are contained in the certificate of designation related to the Series C Preferred Stock. | |||||||||||||||||||||||
At any time when a holder of Series C Preferred Stock then beneficially owns 9.9% or less, but greater than 4.9%, of the shares of Class A common stock outstanding, in no event will such holder be allowed to accept shares of Class A common stock issuable upon conversion of Series C Preferred Stock that, when taken together with the shares of Class A common stock otherwise beneficially owned, collectively exceeds 9.9% of the shares of Class A common stock outstanding on the trading day immediately preceding the election to convert such Series C Preferred Stock. This ownership limitation can be waived by any holder of Series C Preferred Stock on 65 days prior written notice to the Company. | |||||||||||||||||||||||
At any time when a holder of Series C Preferred Stock then beneficially owns 4.9% or less of the shares of Class A common stock outstanding, in no event will such holder be allowed to accept shares of Class A common stock obtained upon conversion of Series C Preferred Stock that, when taken together with the shares of Class A common stock otherwise held, collectively exceeds 4.9% of the shares of Class A common stock outstanding on the trading day immediately preceding the election to convert such Series C Preferred Stock. This ownership limitation can be waived by any holder of Series C Preferred Stock on 65 days prior written notice to the Company. | |||||||||||||||||||||||
In no event will a holder of Series C Preferred Stock be allowed to accept shares of Class A common stock issuable upon conversion of Series C Preferred Stock that that would result in that holder owning an aggregate number of shares of Class A common stock, when taken together with any other shares of Class A common stock then held by such holder and persons aggregated with such holder under the rules of the FINRA, in excess of 24.9% of the shares of Class A common stock outstanding on the trading day immediately preceding the election to convert such Series C Preferred Stock, unless such ownership of shares of Class A common stock in excess of 24.9% is duly approved in advance by FINRA. | |||||||||||||||||||||||
The ownership limitations described above are identical to the limitations contained in the indenture governing the convertible notes and the put/call agreement governing Luxor’s right to exchange its membership interest in RCS Capital Management for shares of Class A common stock. | |||||||||||||||||||||||
Starting on December 12, 2022, the Company will have a right to redeem, and holders of shares of Series C Preferred Stock will have a right to cause the Company to redeem, all or a part of the outstanding shares of Series C Preferred Stock for cash at a redemption price equal to the aggregate liquidation preference plus accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of redemption. If any redemption by the Company would result in less than $35.0 million in aggregate liquidation preference of Series C Preferred Stock remaining outstanding, then the Company will be required to redeem all (and not less than all) of the outstanding shares of Series C Preferred Stock. | |||||||||||||||||||||||
The shares of Series C Preferred Stock are also redeemable in connection with a consolidation or merger of the Company with one or more entities that are not its affiliates which results in a change of control and as a result of which the Company is not the surviving entity. | |||||||||||||||||||||||
The Series C Preferred Stock ranks pari passu with the Series B Preferred Stock. | |||||||||||||||||||||||
In the event of (A) a dissolution or winding up of our company, whether voluntary or involuntary, (B) a consolidation or merger of the Company with and into one or more entities which are not our affiliates which results in a change of control, or (C) a sale or transfer of all or substantially all the Company’s assets other than to an affiliate of the Company, before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of equity securities junior to the Series C Preferred Stock, the holders of shares of Series C Preferred Stock are entitled (subject to the redemption rights of such holders in connection with a consolidation or merger of the Company with one or more entities that are not its affiliates which results in a change of control and as a result of which our company is not the surviving entity) to receive an amount equal to the greater of: (i) the liquidation preference plus an amount equal to all accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of the final distribution to such holder; and (ii) an amount per share of Series C Preferred Stock equal to the amount or consideration which would have been payable had each share of Series C Preferred Stock been converted into shares of Class A common stock. | |||||||||||||||||||||||
The terms of the Series C Preferred Stock set forth in the related certificate of designation include voting rights relating to the issuance of additional preferred securities, amending the provisions of the related certificate of designation, affiliate transactions and the incurrence of indebtedness. | |||||||||||||||||||||||
During the year ended December 31, 2014, the Company accrued $0.4 million in dividends on its Series C Preferred Stock. The Company also recognized a deemed dividend of $42.8 million, which includes 43.1% of the accrued and unpaid dividends on the shares of Series A Preferred Stock exchanged in connection with the issuance of the Series C Preferred Stock. This deemed dividend represents the difference between the redemption value of the Series C Preferred Stock (based on the if-converted price) and the amount of the proceeds that were allocated to the Series C Preferred Stock excluding the embedded derivative. The Series C Preferred Stock can be settled in cash in certain situations; therefore, the Company elected to accrete the Series C Preferred Stock up to the redemption value on the date of issuance. This accretion was recognized in its entirety resulting in a reduction in the income attributable to the common stockholders. During the first quarter of 2015 to reflect dividends accrued through December 31, 2014, the liquidation preference of the Series C Preferred Stock was increased by $1.9 million, which included 43.1% of the accrued and unpaid dividends on exchanged shares of Series A Preferred Stock. Since the quarterly dividend was not paid in cash on the dividend payment date, the 8% dividend rate took effect. | |||||||||||||||||||||||
Stockholders’ Equity | |||||||||||||||||||||||
As of December 31, 2014, the Company had the following classes of common stock and non-controlling interests: | |||||||||||||||||||||||
Class A common stock. 2,500,000 shares of Class A common stock were issued to the public in the IPO. Class A common stock entitles holders to one vote per share and economic rights (including rights to dividends, if any, and distributions upon liquidation). Holders of Class A common stock hold a portion of the voting rights of the Company. | |||||||||||||||||||||||
On February 11, 2014, as part of the Restructuring Transactions and pursuant to the Exchange Agreement, RCAP Holdings’ exchanged 23,999,999 Original Operating Subsidiaries Units for 23,999,999 shares of Class A common stock. | |||||||||||||||||||||||
After giving effect to the Exchange, as of February 11, 2014, RCAP Holdings held 24,051,499 shares of Class A common stock and one share of Class B common stock. | |||||||||||||||||||||||
On June 10, 2014, the Company issued 19,000,000 shares of Class A common stock in a public offering at a price of $20.25 per share. In connection with the public offering, the Company granted the underwriters the option to purchase up to 3,600,000 additional shares of Class A common stock to cover over-allotments, if any, for a period of 30 days. On June 18, 2014, the underwriters purchased an additional 870,248 shares pursuant to the over-allotment option at the public offering price of $20.25 per share. | |||||||||||||||||||||||
On June 10, 2014, the Company issued 2,469,136 shares of Class A common stock at the public offering price of $20.25 per share to Luxor in a private offering. | |||||||||||||||||||||||
During 2014, the Class A common stock issued as consideration in connection with the acquisitions of Summit, J.P. Turner, First Allied, ICH, Trupoly, and StratCap was 498,884 shares, 239,362 shares, 11,264,929 shares, 2,027,966 shares (2,029,261 shares issued on July 11, 2014, of which 1,295 shares were subsequently canceled on October 6, 2014 as an adjustment to the final consideration), 33,652 shares and 464,317 shares, respectively. In March 2015, the Company amended its agreement with J.P. Turner to settle the remaining contingent and deferred consideration for the J.P. Turner acquisition and issued 245,813 shares of Class A common stock. See Note 2 for more information. | |||||||||||||||||||||||
During the year ended December 31, 2014, the Company granted 2,624,027 shares, net of forfeited and retired grants, of its Class A common stock in the form of restricted stock awards under the RCAP Equity Plan and upon exchange of the Earned LTIP Units. See Notes 1 and 13 for more information. | |||||||||||||||||||||||
On September 30, 2014, the Company issued 723,234 shares of its Class A common stock and 241,078 warrants to purchase shares of Class A common stock under the 2014 Stock Purchase Program. On December 31, 2014, the Company issued 468,762 shares of its Class A common stock and 156,254 warrants to purchase shares of Class A common stock under the 2014 Stock Purchase Program. See Note 13 for more information. | |||||||||||||||||||||||
On December 10, 2014, December 19, 2014 and February 23, 2015, the Company issued 1,511,004 shares, 1,852,575 shares and 2,042,022 shares, respectively, of its Class A common stock pursuant to the conversion of a portion of the Company’s outstanding Series A Preferred Stock. See Note 11 for more information. | |||||||||||||||||||||||
In addition to 287,502 issued under the RCAP Equity Plan, the Company issued 23,445 shares of its Class A common stock in a private placement pursuant to the exchange of the Company’s outstanding Earned LTIP Units on December 31, 2014. See Notes 1 and 13 for more information. | |||||||||||||||||||||||
On March 20, 2014, the Company’s Board of Directors authorized, and the Company declared, a cash dividend for the first quarter of 2014 for its Class A common stock. The cash dividend was paid on April 10, 2014 to record holders of Class A common stock at the close of business on March 31, 2014 in an amount equal to $0.18 per share, consistent with the cash dividend declared and paid with respect to the fourth quarter of 2013. | |||||||||||||||||||||||
On June 17, 2014, the Company’s Board of Directors authorized and the Company declared a cash dividend for the quarter ended June 30, 2014 for its Class A common stock. The cash dividend was paid on July 10, 2014 to record holders of Class A common stock at the close of business on June 30, 2014 in an amount equal to $0.18 per share, consistent with the cash dividend declared and paid with respect to the first quarter of 2014. At the present time, the Company does not expect to pay quarterly dividends on Class A common stock (including Class A common stock issued pursuant to restricted stock awards) or on Series B Preferred Stock and Series C Preferred Stock in the near term, as the Company’s ability to pay cash dividends is restricted due to negative covenants in the Bank Facilities. See Note 9 for more information. | |||||||||||||||||||||||
Class B common stock. As of December 31, 2014, RCAP Holdings owns the sole outstanding share of Class B common stock, which entitles it to one vote more than 50% of the voting rights of the Company, and thereby controls the Company. Class B common stockholders have no economic rights (including no rights to dividends and distributions upon liquidation). | |||||||||||||||||||||||
LTIP Units. On April 28, 2014, the OPP was amended which resulted in RCS Capital Management earning 310,947 Earned LTIP Units and forfeiting 1,014,053 RCS Holdings LTIP Units. Immediately prior to the acquisition by Luxor of an interest in RCS Capital Management on April 29, 2014, RCS Capital Management distributed its 310,947 Earned LTIP Units to its then current members, each of whom is also a member of RCS Holdings. Prior to December 31, 2014, the interests of the RCS Holdings LTIP Units were included in non-controlling interests. | |||||||||||||||||||||||
On December 31, 2014, the Company, RCS Capital Management, and RCS Holdings, entered into a series of agreements providing that all the Earned LTIP Units became fully vested on December 31, 2014 and were converted and exchanged for 310,947 shares of Class A common stock. As a result, no RCS Holdings LTIP Units were outstanding as of December 31, 2014, thus eliminating the non-controlling interest in RCS Holdings related to the existence of the RCS Holdings LTIP Units. See Note 1 for more information. | |||||||||||||||||||||||
Docupace non-controlling interest. The non-controlling shareholder of Docupace participates equally with the Company in the economic benefits of the post combination entity. Accordingly, the Company included the appropriate portion of Docupace’s net assets and operating loss that it does not own in non-controlling interests on the consolidated statement of financial condition and the consolidated statements of income, respectively. See Note 2 for more information. | |||||||||||||||||||||||
Subsidiary dividends. Cash dividends paid to the Company by its consolidated subsidiaries were $102.5 million and $4.9 million for the year ended December 31, 2014 and 2013, respectively. There were no dividends paid to the Company by its consolidated subsidiaries for the year ended December 31, 2012. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||
Stockholders' Equity | Preferred Stock | ||||||||||||||||||||||
Series A Preferred Stock. On April 29, 2014, the Company issued 14,657,980 shares of Series A Preferred Stock to affiliates of Luxor in a private placement. The shares of Series A Preferred Stock were entitled to a dividend of 7% of the liquidation preference in cash and a dividend of 8% of the liquidation preference if a quarterly dividend was not paid in cash on the dividend payment date. The shares of Series A Preferred Stock were convertible, at the option of the holders of the Series A Preferred Stock, into shares of Class A common stock, at the lower of (i) a 2% discount to VWAP of Class A common stock for the ten trading days prior to the date of the holder’s election to convert; (ii) a 2% discount to the closing price of Class A common stock on the date of the holder’s election to convert; and (iii) $20.26, the fixed conversion price. If both the one-day VWAP and the daily closing price of Class A common stock for the prior 30 consecutive trading days exceeded 2.5 times the fixed conversion price, or $50.65, and at least $10.0 million of Class A common stock was traded each day for 30 consecutive days at any time after the first two years from the issuance date of the Series A Preferred Stock, then the Company may have required the holders to convert the Series A Preferred Stock into shares of Class A common stock at the same price as set forth above. Accrued and unpaid dividends on the Series A Preferred Stock were also entitled to the same liquidation preference and were convertible into additional shares of Class A common stock on the same terms as actual shares of Series A Preferred Stock. | |||||||||||||||||||||||
The terms of the Series A Preferred Stock set forth in the related certificate of designation included negative covenants relating to the issuance of additional preferred securities, amending the provisions of certificate of designation, affiliate transactions and the incurrence of indebtedness. The certificate of designation relating to the Series A Preferred Stock and the indenture governing the convertible notes provided that, without the advance approval of FINRA, the aggregate number of shares of Class A common stock issued upon conversion of the Series A Preferred Stock, upon conversion of the convertible notes or pursuant to the June 10, 2014 private offering of Class A common stock, in which the Company issued 2,469,136 shares, could not exceed 24.9% of the number of common shares outstanding on the trading day immediately preceding the date of issuance of such Class A common stock. | |||||||||||||||||||||||
In addition, the certificate of designation relating to the Series A Preferred Stock and the indenture governing the convertible notes provided that the aggregate number of shares of Class A common stock issued to Luxor and its affiliates (including shares of Class A common stock obtained upon conversion of the Series A Preferred Stock, the convertible notes or any other shares of Class A common stock otherwise beneficially owned by such entity) could not exceed 9.9% of the number of shares of Class A common stock outstanding on the trading day immediately preceding the date of issuance of shares of Class A common stock upon conversion. This provision could have been waived by Luxor and its affiliates on 65 days’ notice to the Company. | |||||||||||||||||||||||
In the event of any liquidation, before any payment or distribution of the assets of the Company was made to or set apart for the holders of Company’s common stock, the holders would have been entitled to receive an amount equal to the greater of (i) $18.42 in cash per Series A Preferred Stock plus dividends accrued and unpaid to the date of the final distribution to the holders or (ii) an amount per Series A Preferred Stock share equal to the amount of consideration which would have been payable had each Series A Preferred Stock share been converted into shares of Class A common stock immediately prior to such liquidation. Until the holders have been paid the greater amount of alternative (i) or (ii) in full, no payment would have been made to the holders of the Company’s common stock upon liquidation. | |||||||||||||||||||||||
During the year ended December 31, 2014, the Company declared $8.0 million in dividends on its Series A Preferred Stock. The Company paid cash dividends to the Series A Preferred Stock of $3.3 million on July 10, 2014, and $4.7 million on October 9, 2014. | |||||||||||||||||||||||
The Company also recognized a deemed dividend of $68.5 million in connection with the issuance of the Series A Preferred Stock. This deemed dividend represents the difference between redemption value of the Series A Preferred Stock (based on the if-converted price) and the amount of the proceeds that were allocated to the Series A Preferred Stock excluding the embedded derivative. The Series A Preferred Stock could have been settled in cash in certain situations; therefore, the Company was required to accrete up to the redemption value. This accretion was recognized in its entirety resulting in a reduction in the income attributable to the common stockholders. See Note 15 for more information. | |||||||||||||||||||||||
During the year ended December 31, 2014, Luxor elected to convert 3,073,553 shares of Series A Preferred Stock into 5,405,601 shares of Class A common stock. The following table presents the details of the conversions (in thousands, except share and per share data): | |||||||||||||||||||||||
Date of Submission For Conversion | Preferred Shares Converted | Liquidation Preference Converted(1) | Conversion Price Per Share(2) | Class A Common Stock Issued | Close Price Per Share on the Date of Conversion | Aggregate Market Value of Class A Common Issued | |||||||||||||||||
18-Nov-14 | 902,000 | $ | 16,770 | $ | 11.1 | 1,511,004 | $ | 12.96 | $ | 19,583 | |||||||||||||
December 12, 2014(3) | 2,171,553 | 40,560 | 10.41 | 3,894,597 | 11.81 | 45,995 | |||||||||||||||||
Total(4) | 3,073,553 | $ | 57,330 | $ | 10.61 | 5,405,601 | $ | 12.13 | $ | 65,578 | |||||||||||||
_____________________ | |||||||||||||||||||||||
(1) The liquidation preference is determined by multiplying the number of shares being converted by $18.42 then adding the unpaid dividends on such shares. | |||||||||||||||||||||||
(2) Both conversions were calculated using a 2% discount to VWAP of Class A common stock for the ten trading days prior to the date of the holder’s election to convert. | |||||||||||||||||||||||
(3) To comply with ownership limitations applicable to Luxor under the terms of the Series A Preferred Stock, 1,852,575 shares of Class A common stock were issued on December 19, 2014 and 2,042,022 shares of Class A common stock were issued on February 23, 2015. See Note 15 for more information. | |||||||||||||||||||||||
(4) Per share totals are expressed as weighted averages. | |||||||||||||||||||||||
Exchange of Series A Preferred Stock. On December 19, 2014 the Company exchanged the remaining 11,584,427 shares of Series A Preferred Stock for 5,800,000 shares of Series B Preferred Stock and 4,400,000 shares of Series C Preferred Stock. $3.0 million of accrued and unpaid dividends on Series A Preferred Stock through December 12, 2014, the date of submission for conversion, were proportionately added to the amount of dividends due on the Series B Preferred Stock and the Series C Preferred Stock on January 12, 2015, the first dividend payment date. | |||||||||||||||||||||||
Series B Preferred Stock. On December 19, 2014, the Company issued 5,800,000 of Series B Preferred Stock to affiliates of Luxor. | |||||||||||||||||||||||
If paid in cash, dividends on shares of Series B Preferred Stock accrue quarterly at 11.00% per annum of the liquidation preference. To the extent a quarterly dividend is not paid in cash on the applicable dividend payment date, then such dividend not paid in cash for such period will accrue at 12.50% per annum of the liquidation preference. | |||||||||||||||||||||||
The initial liquidation preference of shares of Series B Preferred Stock was $25.00 per share. Any dividends that are not paid in cash on an applicable dividend payment date are automatically added to the aggregate liquidation preference on such applicable dividend payment date. | |||||||||||||||||||||||
The holders of Series B Preferred Stock have no conversion rights. | |||||||||||||||||||||||
At any time prior to June 12, 2016, the Company has the right to redeem all (and not less than all) of the outstanding shares of Series B Preferred Stock for cash at a redemption price equal to the aggregate liquidation preference plus accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of redemption. | |||||||||||||||||||||||
Starting on December 12, 2022, the Company will have a right to redeem, and holders of shares of Series B Preferred Stock will have a right to cause the Company to redeem, all or a part of the outstanding shares of Series B Preferred Stock for cash at a redemption price equal to the aggregate liquidation preference plus accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of redemption. If any redemption by the Company would result in less than $35.0 million in aggregate liquidation preference of Series B Preferred Stock remaining outstanding, then the Company will be required to redeem all (and not less than all) of the outstanding shares of Series B Preferred Stock. | |||||||||||||||||||||||
The shares of Series B Preferred Stock are also redeemable in connection with a consolidation or merger of the Company with one or more entities that are not its affiliates which results in a change of control and as a result of which the Company is not the surviving entity. | |||||||||||||||||||||||
The Series B Preferred Stock ranks pari passu with the Series C Preferred Stock. | |||||||||||||||||||||||
In the event of (A) a dissolution or winding up of our company, whether voluntary or involuntary, (B) a consolidation or merger of the Company with and into one or more entities which are not our affiliates which results in a change of control, or (C) a sale or transfer of all or substantially all of the Company’s assets other than to an affiliate of the Company, before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of equity securities junior to the Series B Preferred Stock, the holders of shares of Series B Preferred Stock are entitled (subject to the redemption rights of such holders in connection with a consolidation or merger of the Company with one or more entities that are not its affiliates which results in a change of control and as a result of which our company is not the surviving entity) to receive an amount equal to the liquidation preference plus an amount equal to all accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of the final distribution to such holder. | |||||||||||||||||||||||
The terms of the Series B Preferred Stock set forth in the related certificate of designation include voting rights relating to the issuance of additional preferred securities, amending the provisions of the related certificate of designation, affiliate transactions and the incurrence of indebtedness. | |||||||||||||||||||||||
During the year ended December 31, 2014, the Company accrued $0.8 million in dividends on its Series B Preferred Stock. The Company also recognized a deemed dividend of $26.7 million, which included 56.9% of the accrued and unpaid dividends on the shares of Series A Preferred Stock that were exchanged in connection with the issuance of the Series B Preferred Stock. This deemed dividend represents the difference between redemption value of the Series B Preferred Stock (based on the if-converted price) and the amount of the proceeds that were allocated to the Series B Preferred Stock excluding the embedded derivative. The Series B Preferred Stock can be settled in cash in certain situations; therefore, the Company elected to accrete the Series B Preferred Stock up to the redemption value on the date of issuance. This accretion was recognized in its entirety resulting in a reduction in the income attributable to the common stockholders. During the first quarter of 2015 to reflect dividends accrued through December 31, 2014, the liquidation preference of the Series B Preferred Stock was increased by $2.8 million, which included 56.9% of the accrued and unpaid dividends on the exchanged shares of Series A Preferred Stock. Since the quarterly dividend was not paid in cash on the dividend payment date, the 12.5% dividend rate took effect. | |||||||||||||||||||||||
Series C Preferred Stock. On December 19, 2014, the Company issued 4,400,000 of Series C Preferred Stock to affiliates of Luxor. If paid in cash, dividends on shares of Series C Preferred Stock will accrue quarterly at 7.00% per annum of the liquidation preference. To the extent a quarterly dividend is not paid in cash on the applicable dividend payment date, then such dividend not paid in cash for such period will accrue at 8.00% per annum of the liquidation preference. | |||||||||||||||||||||||
The initial liquidation preference of shares of Series C Preferred Stock was $25.00 per share. Any dividends that are not paid in cash on an applicable dividend payment date are automatically added to the aggregate liquidation preference on such applicable dividend payment date. | |||||||||||||||||||||||
The shares of Series C Preferred Stock are convertible, at the option of the holders of the Series C Preferred Stock, into shares of Class A common stock, at $13.00, which conversion price is subject to anti-dilution adjustments upon the occurrence of certain events and transactions. If both the one-day VWAP and the daily closing price of Class A common stock for the prior 30 consecutive trading days exceeds $50.66 and at least $10.0 million of Class A common stock is traded each day for 30 consecutive days at any time after the first two years from the issuance date of the Series C Preferred Stock, then the Company may require the holders to convert the Series C Preferred Stock into shares of Class A common stock at the same price as set forth above. | |||||||||||||||||||||||
The following limitations on the ownership of Class A common stock, which will be adjusted as appropriate for share splits, share dividends, combinations, recapitalizations and the like and taking into account the number of shares of Class A common stock resulting from such conversion, are contained in the certificate of designation related to the Series C Preferred Stock. | |||||||||||||||||||||||
At any time when a holder of Series C Preferred Stock then beneficially owns 9.9% or less, but greater than 4.9%, of the shares of Class A common stock outstanding, in no event will such holder be allowed to accept shares of Class A common stock issuable upon conversion of Series C Preferred Stock that, when taken together with the shares of Class A common stock otherwise beneficially owned, collectively exceeds 9.9% of the shares of Class A common stock outstanding on the trading day immediately preceding the election to convert such Series C Preferred Stock. This ownership limitation can be waived by any holder of Series C Preferred Stock on 65 days prior written notice to the Company. | |||||||||||||||||||||||
At any time when a holder of Series C Preferred Stock then beneficially owns 4.9% or less of the shares of Class A common stock outstanding, in no event will such holder be allowed to accept shares of Class A common stock obtained upon conversion of Series C Preferred Stock that, when taken together with the shares of Class A common stock otherwise held, collectively exceeds 4.9% of the shares of Class A common stock outstanding on the trading day immediately preceding the election to convert such Series C Preferred Stock. This ownership limitation can be waived by any holder of Series C Preferred Stock on 65 days prior written notice to the Company. | |||||||||||||||||||||||
In no event will a holder of Series C Preferred Stock be allowed to accept shares of Class A common stock issuable upon conversion of Series C Preferred Stock that that would result in that holder owning an aggregate number of shares of Class A common stock, when taken together with any other shares of Class A common stock then held by such holder and persons aggregated with such holder under the rules of the FINRA, in excess of 24.9% of the shares of Class A common stock outstanding on the trading day immediately preceding the election to convert such Series C Preferred Stock, unless such ownership of shares of Class A common stock in excess of 24.9% is duly approved in advance by FINRA. | |||||||||||||||||||||||
The ownership limitations described above are identical to the limitations contained in the indenture governing the convertible notes and the put/call agreement governing Luxor’s right to exchange its membership interest in RCS Capital Management for shares of Class A common stock. | |||||||||||||||||||||||
Starting on December 12, 2022, the Company will have a right to redeem, and holders of shares of Series C Preferred Stock will have a right to cause the Company to redeem, all or a part of the outstanding shares of Series C Preferred Stock for cash at a redemption price equal to the aggregate liquidation preference plus accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of redemption. If any redemption by the Company would result in less than $35.0 million in aggregate liquidation preference of Series C Preferred Stock remaining outstanding, then the Company will be required to redeem all (and not less than all) of the outstanding shares of Series C Preferred Stock. | |||||||||||||||||||||||
The shares of Series C Preferred Stock are also redeemable in connection with a consolidation or merger of the Company with one or more entities that are not its affiliates which results in a change of control and as a result of which the Company is not the surviving entity. | |||||||||||||||||||||||
The Series C Preferred Stock ranks pari passu with the Series B Preferred Stock. | |||||||||||||||||||||||
In the event of (A) a dissolution or winding up of our company, whether voluntary or involuntary, (B) a consolidation or merger of the Company with and into one or more entities which are not our affiliates which results in a change of control, or (C) a sale or transfer of all or substantially all the Company’s assets other than to an affiliate of the Company, before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of equity securities junior to the Series C Preferred Stock, the holders of shares of Series C Preferred Stock are entitled (subject to the redemption rights of such holders in connection with a consolidation or merger of the Company with one or more entities that are not its affiliates which results in a change of control and as a result of which our company is not the surviving entity) to receive an amount equal to the greater of: (i) the liquidation preference plus an amount equal to all accrued and unpaid dividends from the date immediately following the immediately preceding dividend payment date to the date of the final distribution to such holder; and (ii) an amount per share of Series C Preferred Stock equal to the amount or consideration which would have been payable had each share of Series C Preferred Stock been converted into shares of Class A common stock. | |||||||||||||||||||||||
The terms of the Series C Preferred Stock set forth in the related certificate of designation include voting rights relating to the issuance of additional preferred securities, amending the provisions of the related certificate of designation, affiliate transactions and the incurrence of indebtedness. | |||||||||||||||||||||||
During the year ended December 31, 2014, the Company accrued $0.4 million in dividends on its Series C Preferred Stock. The Company also recognized a deemed dividend of $42.8 million, which includes 43.1% of the accrued and unpaid dividends on the shares of Series A Preferred Stock exchanged in connection with the issuance of the Series C Preferred Stock. This deemed dividend represents the difference between the redemption value of the Series C Preferred Stock (based on the if-converted price) and the amount of the proceeds that were allocated to the Series C Preferred Stock excluding the embedded derivative. The Series C Preferred Stock can be settled in cash in certain situations; therefore, the Company elected to accrete the Series C Preferred Stock up to the redemption value on the date of issuance. This accretion was recognized in its entirety resulting in a reduction in the income attributable to the common stockholders. During the first quarter of 2015 to reflect dividends accrued through December 31, 2014, the liquidation preference of the Series C Preferred Stock was increased by $1.9 million, which included 43.1% of the accrued and unpaid dividends on exchanged shares of Series A Preferred Stock. Since the quarterly dividend was not paid in cash on the dividend payment date, the 8% dividend rate took effect. | |||||||||||||||||||||||
Stockholders’ Equity | |||||||||||||||||||||||
As of December 31, 2014, the Company had the following classes of common stock and non-controlling interests: | |||||||||||||||||||||||
Class A common stock. 2,500,000 shares of Class A common stock were issued to the public in the IPO. Class A common stock entitles holders to one vote per share and economic rights (including rights to dividends, if any, and distributions upon liquidation). Holders of Class A common stock hold a portion of the voting rights of the Company. | |||||||||||||||||||||||
On February 11, 2014, as part of the Restructuring Transactions and pursuant to the Exchange Agreement, RCAP Holdings’ exchanged 23,999,999 Original Operating Subsidiaries Units for 23,999,999 shares of Class A common stock. | |||||||||||||||||||||||
After giving effect to the Exchange, as of February 11, 2014, RCAP Holdings held 24,051,499 shares of Class A common stock and one share of Class B common stock. | |||||||||||||||||||||||
On June 10, 2014, the Company issued 19,000,000 shares of Class A common stock in a public offering at a price of $20.25 per share. In connection with the public offering, the Company granted the underwriters the option to purchase up to 3,600,000 additional shares of Class A common stock to cover over-allotments, if any, for a period of 30 days. On June 18, 2014, the underwriters purchased an additional 870,248 shares pursuant to the over-allotment option at the public offering price of $20.25 per share. | |||||||||||||||||||||||
On June 10, 2014, the Company issued 2,469,136 shares of Class A common stock at the public offering price of $20.25 per share to Luxor in a private offering. | |||||||||||||||||||||||
During 2014, the Class A common stock issued as consideration in connection with the acquisitions of Summit, J.P. Turner, First Allied, ICH, Trupoly, and StratCap was 498,884 shares, 239,362 shares, 11,264,929 shares, 2,027,966 shares (2,029,261 shares issued on July 11, 2014, of which 1,295 shares were subsequently canceled on October 6, 2014 as an adjustment to the final consideration), 33,652 shares and 464,317 shares, respectively. In March 2015, the Company amended its agreement with J.P. Turner to settle the remaining contingent and deferred consideration for the J.P. Turner acquisition and issued 245,813 shares of Class A common stock. See Note 2 for more information. | |||||||||||||||||||||||
During the year ended December 31, 2014, the Company granted 2,624,027 shares, net of forfeited and retired grants, of its Class A common stock in the form of restricted stock awards under the RCAP Equity Plan and upon exchange of the Earned LTIP Units. See Notes 1 and 13 for more information. | |||||||||||||||||||||||
On September 30, 2014, the Company issued 723,234 shares of its Class A common stock and 241,078 warrants to purchase shares of Class A common stock under the 2014 Stock Purchase Program. On December 31, 2014, the Company issued 468,762 shares of its Class A common stock and 156,254 warrants to purchase shares of Class A common stock under the 2014 Stock Purchase Program. See Note 13 for more information. | |||||||||||||||||||||||
On December 10, 2014, December 19, 2014 and February 23, 2015, the Company issued 1,511,004 shares, 1,852,575 shares and 2,042,022 shares, respectively, of its Class A common stock pursuant to the conversion of a portion of the Company’s outstanding Series A Preferred Stock. See Note 11 for more information. | |||||||||||||||||||||||
In addition to 287,502 issued under the RCAP Equity Plan, the Company issued 23,445 shares of its Class A common stock in a private placement pursuant to the exchange of the Company’s outstanding Earned LTIP Units on December 31, 2014. See Notes 1 and 13 for more information. | |||||||||||||||||||||||
On March 20, 2014, the Company’s Board of Directors authorized, and the Company declared, a cash dividend for the first quarter of 2014 for its Class A common stock. The cash dividend was paid on April 10, 2014 to record holders of Class A common stock at the close of business on March 31, 2014 in an amount equal to $0.18 per share, consistent with the cash dividend declared and paid with respect to the fourth quarter of 2013. | |||||||||||||||||||||||
On June 17, 2014, the Company’s Board of Directors authorized and the Company declared a cash dividend for the quarter ended June 30, 2014 for its Class A common stock. The cash dividend was paid on July 10, 2014 to record holders of Class A common stock at the close of business on June 30, 2014 in an amount equal to $0.18 per share, consistent with the cash dividend declared and paid with respect to the first quarter of 2014. At the present time, the Company does not expect to pay quarterly dividends on Class A common stock (including Class A common stock issued pursuant to restricted stock awards) or on Series B Preferred Stock and Series C Preferred Stock in the near term, as the Company’s ability to pay cash dividends is restricted due to negative covenants in the Bank Facilities. See Note 9 for more information. | |||||||||||||||||||||||
Class B common stock. As of December 31, 2014, RCAP Holdings owns the sole outstanding share of Class B common stock, which entitles it to one vote more than 50% of the voting rights of the Company, and thereby controls the Company. Class B common stockholders have no economic rights (including no rights to dividends and distributions upon liquidation). | |||||||||||||||||||||||
LTIP Units. On April 28, 2014, the OPP was amended which resulted in RCS Capital Management earning 310,947 Earned LTIP Units and forfeiting 1,014,053 RCS Holdings LTIP Units. Immediately prior to the acquisition by Luxor of an interest in RCS Capital Management on April 29, 2014, RCS Capital Management distributed its 310,947 Earned LTIP Units to its then current members, each of whom is also a member of RCS Holdings. Prior to December 31, 2014, the interests of the RCS Holdings LTIP Units were included in non-controlling interests. | |||||||||||||||||||||||
On December 31, 2014, the Company, RCS Capital Management, and RCS Holdings, entered into a series of agreements providing that all the Earned LTIP Units became fully vested on December 31, 2014 and were converted and exchanged for 310,947 shares of Class A common stock. As a result, no RCS Holdings LTIP Units were outstanding as of December 31, 2014, thus eliminating the non-controlling interest in RCS Holdings related to the existence of the RCS Holdings LTIP Units. See Note 1 for more information. | |||||||||||||||||||||||
Docupace non-controlling interest. The non-controlling shareholder of Docupace participates equally with the Company in the economic benefits of the post combination entity. Accordingly, the Company included the appropriate portion of Docupace’s net assets and operating loss that it does not own in non-controlling interests on the consolidated statement of financial condition and the consolidated statements of income, respectively. See Note 2 for more information. | |||||||||||||||||||||||
Subsidiary dividends. Cash dividends paid to the Company by its consolidated subsidiaries were $102.5 million and $4.9 million for the year ended December 31, 2014 and 2013, respectively. There were no dividends paid to the Company by its consolidated subsidiaries for the year ended December 31, 2012. |
EquityBased_Compensation
Equity-Based Compensation | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||
Equity-Based Compensation | Equity-Based Compensation | |||||||||||||||||||||
RCAP Equity Plan | ||||||||||||||||||||||
The RCAP Equity Plan provides for the grant of stock options, stock appreciation rights, restricted shares of Class A common stock, restricted stock units, dividend equivalent rights and other stock-based awards (which may include grants of shares of Class A common stock in payment of the amounts due under a plan or arrangement sponsored or maintained by the Company or an affiliate) to individuals who are, as of the date of grant, non-executive directors, officers and other employees of the Company or its affiliates, to certain advisors or consultants of the Company or any of its affiliates who are providing services to the Company or the affiliate, or, subject the Services Agreement (as defined below) remaining in effect on the date of grant, to RCS Capital Management, an entity under common control with RCAP Holdings, and individuals who are, as of the date of grant, employees, officers or directors of RCS Capital Management or one of its affiliates. The maximum number of shares of Class A common stock that may be granted pursuant to awards under the equity plan was initially 250,000 shares of Class A common stock. Following any increase in the number of issued and outstanding shares of Class A common stock, the maximum number of shares of Class A common stock that may be granted pursuant to awards under the equity plan will be a number of shares of Class A common stock equal to the greater of (x) 250,000 shares and (y) 10% of the total number of issued and outstanding shares of Class A common stock (on a diluted basis) at any time following such increase (subject to the registration of the increased number of available shares). Pursuant to Registration Statements on Form S-8 filed on February 19, 2014 and January 9, 2015, a total of 6,980,124 shares of Class A common stock may be granted pursuant to awards under the RCAP Equity Plan. As of December 31, 2014 and March 6, 2015, 2,624,027 and 3,421,815 shares of Class A common stock, respectively, had been granted pursuant to awards under the RCAP Equity Plan, net of forfeited and retired grants. Subject to the filing of a registration statement on Form S-8, approximately 2,289,058 additional shares could become available for grant under the RCAP Equity Plan as of March 6, 2015. | ||||||||||||||||||||||
The following table details the restricted shares activity during the year ended December 31, 2014: | ||||||||||||||||||||||
Shares of Restricted Common Stock | Weighted-Average Issue Price | Aggregate Value (in thousands) | Weighted-Average Vesting Period Remaining (years) | |||||||||||||||||||
Nonvested, December 31, 2013 | — | $ | — | $ | — | — | ||||||||||||||||
Granted(1) | 2,368,203 | 34.71 | 82,200 | 3.82 | ||||||||||||||||||
Less: vested(2) | 59,812 | 27.73 | 1,659 | N/A | ||||||||||||||||||
Less: forfeited | 26,086 | 38.1 | 994 | N/A | ||||||||||||||||||
Less: retired | 5,592 | 30.73 | 172 | N/A | ||||||||||||||||||
Nonvested, December 31, 2014 | 2,276,713 | $ | 34.86 | $ | 79,375 | 3.09 | ||||||||||||||||
_____________________ | ||||||||||||||||||||||
(1) Does not include 287,502 shares of Class A common stock issued to individual members of RCS Capital Management that were issued as awards under the RCAP Equity Plan on December 31, 2014 following conversion and exchange of Earned LTIP units. | ||||||||||||||||||||||
(2) The shares that vested during the year ended December 31, 2014 had an aggregate fair market value of $1.6 million on the vesting dates. | ||||||||||||||||||||||
During the year ended December 31, 2014, the Company recorded $16.4 million of stock-based compensation expenses pursuant to the RCAP Equity Plan which is included in internal commissions, payroll and benefits expense in the consolidated statements of income. The Company did not incur expenses pursuant to the RCAP Equity Plan during the years ended December 31, 2013 and 2012. The tax benefit generated by the RCAP Equity Plan during the year ended December 31, 2014 was $4.6 million. | ||||||||||||||||||||||
During the year ended December 31, 2014, the Company granted 171,567 restricted stock awards, net of forfeited and retired awards, to certain employees of related parties under the RCAP Equity Plan with a weighted average grant date fair value of $36.72. During the year ended December 31, 2014, 3,038 shares granted to employees of related parties vested. The Company recognized the entire charge of $6.4 million for these restricted stock awards immediately in retained earnings as a dividend with an offset to additional paid-in capital. The restricted stock awards have rights to non-forfeitable dividends for which the Company recognized $0.1 million derived from the grants to employees of related parties for the year ended December 31, 2014. | ||||||||||||||||||||||
Restricted Stock Awards Granted by an Entity that was Previously a Related Party | ||||||||||||||||||||||
An entity that was previously a related party also granted restricted stock awards (of the related party’s stock) to certain employees of the Company for services provided by Company employees on behalf of such related party. The Company re-measures the fair value of the awards at each reporting date based on such entity’s stock price, at which time the amortization of the award is adjusted. During the year ended December 31, 2014, the Company recorded $3.1 million of stock-based compensation expenses derived from these grants which is included in internal commissions, payroll and benefits expense in the consolidated statements of income. The Company did not have any stock-based compensation during the years ended December 31, 2013 and 2012. The tax benefit generated by these grants during the year ended December 31, 2014 was $0.9 million. | ||||||||||||||||||||||
The following table details the restricted shares activity related to restricted stock awards of an entity that was previously a related party granted to RCAP employees during the year ended December 31, 2014: | ||||||||||||||||||||||
Shares of Restricted Common Stock of a Related Party | Weighted-Average Fair Value Per Share | Aggregate Value (in thousands) | Weighted-Average Vesting Period Remaining (years) | |||||||||||||||||||
Nonvested, December 31, 2013 | — | $ | — | $ | — | — | ||||||||||||||||
Granted | 512,430 | 10.39 | 5,324 | 4.05 | ||||||||||||||||||
Less: vested | 143,805 | 13.83 | 1,989 | N/A | ||||||||||||||||||
Less: forfeited | — | — | — | N/A | ||||||||||||||||||
Nonvested, December 31, 2014 | 368,625 | $ | 9.05 | $ | 3,335 | 2.83 | ||||||||||||||||
FA RSU Plan | ||||||||||||||||||||||
439,356 restricted units were issued to certain employees under the FA RSU Plan to provide for the grant of phantom stock in connection with the acquisition of First Allied by RCAP Holdings. Pursuant to the terms of the FA RSU Plan, phantom stock vests equally on each of the first three anniversaries of the acquisition of First Allied by RCAP Holdings, which occurred on September 25, 2013. The first tranche of restricted units that vested on September 25, 2014 had a non-fluctuating value of $20.00 per unit and were settled by a $2.8 million payment made by the Company in cash in October 2014. The restricted units of the second and third tranches each represent one phantom share of Class A common stock and can be settled in either shares of the Class A common stock or a then equivalent amount of cash, at the Company’s option. As of December 31, 2014, there were 211,498 nonvested units outstanding. | ||||||||||||||||||||||
The FA RSU Plan is being accounted for on the liability method with the first tranche expensed ratably over the first vesting period. The second and third tranche will be expensed over the second and third vesting periods, respectively, based on the current fair market value of the Class A common stock. During the year ended December 31, 2014 and the period September 25, 2013 through December 31, 2013, the Company recorded $3.9 million and $0.7 million, respectively, of stock-based compensation pursuant to the FA RSU Plan which is included in internal commissions, payroll and benefits expense in the consolidated statements of income. The Company did not incur expenses pursuant to the FA RSU Plan during the year ended December 31, 2012. As of December 31, 2014, the weighted-average vesting period remaining for the restricted units granted under the FA RSU Plan is 1.75 years. The tax benefits generated by the FA RSU plan during the years ended December 31, 2014 and 2013 were $1.1 million and $0.01 million, respectively. | ||||||||||||||||||||||
2014 Stock Purchase Program | ||||||||||||||||||||||
Select employees, financial advisors and executive officers of the Company and its affiliates and of certain subsidiaries of the Company were eligible to participate in the 2014 Stock Purchase Program (the “Program”). Subject to the terms and conditions of the Program, eligible individuals had the opportunity on specified dates in 2014 to elect to purchase shares of Class A common stock and were automatically granted one warrant to purchase one share of Class A common stock for each three shares purchased. Each warrant granted gave the holder the right to purchase one additional share of Class A common stock at an exercise price equal to the purchase price per share purchased under the Program, and will vest and become exercisable, subject to continuous service from the grant date to the three-year anniversary of the grant. Such warrants may be exercised by the holder until the earliest of the 30th day following the date the holder’s service is terminated for any reason other than for cause and the 10-year anniversary of the issuance. Upon a termination of service for any reason, all outstanding nonvested warrants held by a warrant holder will expire and terminate immediately. Upon a termination of service for cause, all outstanding warrants, vested or nonvested, held by a warrant holder will expire and terminate immediately. The Program was not intended to qualify as an “employee stock purchase plan” under Section 423 of the Code, and any warrants granted under the Program were not intended to qualify as “incentive stock options” under Section 422 of the Code. | ||||||||||||||||||||||
On September 30, 2014, 723,234 shares of Class A common stock were purchased at a price of $22.52 per share and 241,078 warrants were granted under the Program. On December 31, 2014, 468,762 shares of Class A common stock were purchased at a price of $12.24 per share and 156,254 warrants were granted under the Program. | ||||||||||||||||||||||
The following table presents the details for the inputs and valuations of the warrants using a Black-Scholes option pricing model: | ||||||||||||||||||||||
Date of Issuance | Valuation Date | Exercise Price | Fair Value | Volatility(1) | Risk-Free Rate of Interest | Dividend Yield | Time to Expiration (years)(2) | |||||||||||||||
September 30, 2014 | September 30, 2014 | $ | 22.52 | $ | 7.88 | 30 | % | 2.23 | % | — | % | 6.5 | ||||||||||
September 30, 2014 | December 31, 2014 | $ | 22.52 | $ | 1.75 | 30 | % | 1.95 | % | — | % | 6.25 | ||||||||||
December 31, 2014 | December 31, 2014 | $ | 12.24 | $ | 4.2 | 30 | % | 1.95 | % | — | % | 6.5 | ||||||||||
_____________________ | ||||||||||||||||||||||
(1) Volatility was based on the historical and implied volatility of a peer group of companies. | ||||||||||||||||||||||
(2) Time to expiration was calculated using the simplified method to estimate the expected term assumption for “plain vanilla” options. | ||||||||||||||||||||||
The following table details the warrant activity during the year ended December 31, 2014: | ||||||||||||||||||||||
Warrants | Weighted-Average Fair Value | Aggregate Value (in thousands) | Weighted-Average Vesting Period Remaining (years) | |||||||||||||||||||
Nonvested, December 31, 2013 | — | $ | — | $ | — | — | ||||||||||||||||
Issued | 397,332 | 3.44 | 1,367 | 3 | ||||||||||||||||||
Less: vested | — | — | — | N/A | ||||||||||||||||||
Less: forfeited | 1,915 | 7.88 | 15 | N/A | ||||||||||||||||||
Nonvested, December 31, 2014 | 395,417 | $ | 3.42 | $ | 1,352 | 2.85 | ||||||||||||||||
Warrants issued to employees of the Company are expensed over the three-year vesting period using the grant date fair value as calculated by the Black-Scholes option pricing model. Warrants issued to individuals that are not deemed employees of the Company are expensed over the three-year vesting period using the fair value on the reporting date as calculated by the Black-Scholes option pricing model. The expenses recognized for the year ended December 31, 2014 included in internal commissions, payroll and benefits in the consolidated statements of income were immaterial. The Company did not incur expenses pursuant to the 2014 Stock Purchase Program during the years ended December 31, 2013 and 2012. The tax benefit generated by the warrants during the year ended December 31, 2014 was $0.02 million. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
During the year ended December 31, 2012, Realty Capital Securities was the only one of the Company’s operating subsidiaries that was in operation. As a limited liability company it was not subject to income taxes, accordingly, Realty Capital Securities did not record income tax expense (benefit). | ||||||||||||
The components of income tax expense/(benefit) included in the consolidated statements of income for the years ended December 31, 2014, 2013 and 2012 were as follows (dollars in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current income tax expense | ||||||||||||
U.S. federal | $ | (1,630 | ) | $ | 1,630 | $ | — | |||||
State and local | (196 | ) | 677 | — | ||||||||
Total current income tax expense | (1,826 | ) | 2,307 | — | ||||||||
Deferred income tax benefit | ||||||||||||
U.S. federal | (33,351 | ) | (390 | ) | — | |||||||
State and local | (11,308 | ) | (74 | ) | — | |||||||
Total deferred income tax benefit | (44,659 | ) | (464 | ) | — | |||||||
Total income tax expense | $ | (46,485 | ) | $ | 1,843 | $ | — | |||||
The reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rates for the years ended December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | — | % | ||||||
Increase (decrease) in tax rate resulting from: | ||||||||||||
State and local income taxes net of federal benefit | 4.82 | % | 0.39 | % | — | % | ||||||
Fair value adjustments on derivatives | (10.10 | )% | — | % | ||||||||
Transaction costs | (1.92 | )% | — | % | — | % | ||||||
Non-controlling interests | 1.81 | % | (33.63 | )% | — | % | ||||||
Other | (1.63 | )% | 0.09 | % | — | % | ||||||
Effective income tax rate | 27.98 | % | 1.85 | % | — | % | ||||||
As the Company was in a pre-tax income position in 2013 and a pre-tax loss position in 2014, the effective income tax rate for 2013 represents a tax expense and the effective income tax rate for 2014 represents a tax benefit. | ||||||||||||
Deferred income tax expense (benefits) result from differences between assets and liabilities measured for financial reporting purposes versus income tax return purposes. Deferred income tax assets are recognized if, in the Company’s judgment, their realizability is determined to be more likely than not. If a deferred tax asset is determined to be unrealizable, the Company records a valuation allowance. The components of the deferred income taxes as of December 31, 2014 and 2013 were as follows (dollars in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets | ||||||||||||
Net operating loss carryforward | 46,551 | $ | 1 | |||||||||
Deferred compensation | 26,916 | 21 | ||||||||||
Accrued liabilities and reserves | 15,971 | 104 | ||||||||||
Stock-based compensation | 9,763 | 6,717 | ||||||||||
Amortization | 5,011 | — | ||||||||||
Deferred revenue | 3,443 | 1,815 | ||||||||||
Other | 1,268 | 840 | ||||||||||
Gross deferred tax assets | $ | 108,923 | $ | 9,498 | ||||||||
Valuation allowance | (256 | ) | — | |||||||||
Deferred tax assets, net of valuation allowance | 108,667 | 9,498 | ||||||||||
Deferred tax liabilities | ||||||||||||
Intangible assets | 372,947 | $ | 33,013 | |||||||||
Convertible notes basis | 1,922 | — | ||||||||||
Fixed assets | — | 52 | ||||||||||
Total deferred tax liabilities | $ | 374,869 | $ | 33,065 | ||||||||
Net deferred tax liability | $ | 266,202 | $ | 23,567 | ||||||||
The Company believes that, as of December 31, 2014, it had no material uncertain tax positions. Interest and penalties relating to unrecognized tax expenses (benefits) are recognized in income tax expense, when applicable. There was no liability for interest or penalties accrued as of December 31, 2014. | ||||||||||||
As of December 31, 2014, the Company had US federal net operating loss carryforwards of $111.9 million, which begin to expire in 2023. As of December 31, 2014, the Company had an income tax receivable of $40.4 million. | ||||||||||||
The Company files tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is open to audit under the statute of limitations by the Internal Revenue Service for 2013. The Company or its subsidiaries’ federal and state income tax returns are open to audit under the statute of limitations for 2011 to 2013. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Earnings Per Share [Abstract] | |||||||||||
Earnings Per Share | Earnings Per Share | ||||||||||
The Company computes earnings per share using the two-class method which requires that all earnings be allocated to each class of common stock and any participating securities. LTIP Units, nonvested restricted shares of Class A common stock, shares issuable under the second and third tranches of the FA RSU Plan, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, each of which contains non-forfeitable rights to dividends, are considered participating securities. Other potentially dilutive common shares including incremental restricted shares and warrants as calculated under the treasury stock method, shares issuable under the terms of Luxor’s put option under the put/call agreement as calculated under the if-converted method, shares issuable under the terms of the convertible notes, Series A Preferred Stock and Series C Preferred Stock as calculated under the if-converted method and shares contingently issuable as consideration for the certain recent acquisitions are considered when calculating diluted EPS. Basic and diluted earnings per share for the year ended December 31, 2014 were calculated assuming that the 11,264,929 shares issued on June 30, 2014 in connection with the closing of the First Allied acquisition were outstanding for the entire period. Basic and diluted earnings per share for the year ended December 31, 2013 were calculated assuming that the 2,500,000 shares issued on June 10, 2013 in connection to the IPO were outstanding for the entire period and the 11,264,929 shares issued on June 30, 2014 in connection to the closing of the First Allied acquisition were outstanding beginning on September 25, 2013. | |||||||||||
The following tables present the calculation of basic and diluted earnings per share for the year ended December 31, 2014 and 2013 (in thousands, except share and per share data): | |||||||||||
Year Ended December 31, 2014 | |||||||||||
Income (Numerator) | Weighted Average Shares (Denominator) | Per Share Amount | |||||||||
Net loss attributable to Class A common stockholders (1) | $ | (275,686 | ) | 49,765,160 | $ | (5.540 | ) | ||||
Allocation of earnings to participating securities: | |||||||||||
Allocation of earnings to nonvested RSU holders | (467 | ) | — | (0.009 | ) | ||||||
Basic and diluted earnings: | |||||||||||
Net loss attributable to Class A common stockholders | $ | (276,153 | ) | 49,765,160 | $ | (5.549 | ) | ||||
_____________________ | |||||||||||
(1) Included in net loss attributable to common stock is a net deemed dividend of $68.5 million and dividends of $8.0 million declared to Series A Preferred Stock shareholders, a deemed dividend of $26.7 million and dividends of $0.8 million declared to Series B Preferred Stock shareholders and a deemed dividend of $42.8 million and dividends of $0.4 million declared to Series C Preferred Stock shareholders. See Note 11 for more information. | |||||||||||
(2) 2,042,022 shares of Class A common stock issued on February 23, 2015 pursuant to the submission for conversion of Series A preferred stock on December 12, 2014 are included in the weighted average shares outstanding assuming issuance on the date of submission for conversion. See Note 11 for more information. | |||||||||||
Year Ended December 31, 2013 | |||||||||||
Income (Numerator) | Weighted Average Shares (Denominator) | Per Share Amount | |||||||||
Net income attributable to the Company | 2,266 | 7,885,186 | 0.287 | ||||||||
Allocation of earnings to participating securities: | |||||||||||
Allocation of earnings to FA RSU holders | (19 | ) | — | (0.002 | ) | ||||||
Basic earnings: | |||||||||||
Net income attributable to Class A common stockholders | $ | 2,247 | 7,885,186 | $ | 0.285 | ||||||
Effect of dilutive securities: | |||||||||||
Shares issuable to FA RSU holders | 19 | 140,022 | (0.003 | ) | |||||||
Diluted earnings: | |||||||||||
Net income attributable to Class A common stockholders | $ | 2,266 | 8,025,208 | $ | 0.282 | ||||||
For the year ended December 31, 2014, the Company excluded the LTIP Units, incremental restricted shares, shares issuable under the terms of the convertible notes and Luxor’s put option, the Series A Preferred Stock and Series C Preferred Stock, shares issuable under the second and third tranches of the FA RSU plan, shares contingently issuable as consideration for certain recent acquisitions and outstanding warrants issued under the 2014 Stock Purchase Program from the calculation of diluted earnings per share as the effect was antidilutive. For the year ended December 31, 2013 the Company excluded shares of Class B common stock from the calculation of diluted earnings per share as the effect was antidilutive. | |||||||||||
As of December 31, 2013, there were 3,975,000 LTIP Units of the Original Operating Subsidiaries outstanding under the OPP. See Note 19, “Amended and Restated 2013 Manager Multi-Year Outperformance Agreement.” There were no distributions paid to the LTIP Unit holders during 2013. | |||||||||||
In addition, as of December 31, 2013, the Company did not meet (a) the threshold of total return to shareholders as measured against a peer group of companies, (b) nor did the LTIP Units capital account achieve economic equivalence with the capital balance of Class A Units of the Original Operating Subsidiaries, at the end of the reporting period; therefore, the LTIP Units are excluded from the diluted earnings per share computation. |
OffBalance_Sheet_Risk_and_Conc
Off-Balance Sheet Risk and Concentrations | 12 Months Ended |
Dec. 31, 2014 | |
Risks and Uncertainties [Abstract] | |
Off-Balance Sheet Risk and Concentrations | Off-Balance Sheet Risk and Concentrations |
The Company is engaged in various trading, brokerage activities and capital raising with counterparties primarily including broker-dealers, banks, direct investment programs and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty. It is the Company’s policy to review, as necessary, the credit standing of each counterparty. As of December 31, 2014, the Company had 34% of reimbursable expenses, investment banking fees, services fees and transfer agent fees receivable concentrated in two related party entities, and 51% of the total wholesale commissions and dealer manager fees receivable concentrated in one non-related party. As of December 31, 2013, the Company had 63% of the reimbursable expenses, investment banking fees, services fees and transfer agent fees receivable concentrated in one related party REIT, and 93% of the total commissions and dealer manager fees receivable concentrated in three related party REITs. | |
The Company’s customer activities involve the execution, settlement, and financing of various securities transactions. These activities are transacted on either a cash or margin basis. In margin transactions, the Company extends credit to the customer, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the customer’s account. In connection with these activities, the Company executes and clears customer transactions involving the sale of securities not yet purchased and the writing of options contracts. Such transactions may expose the Company to off-balance sheet risk in the event that margin requirements are not sufficient to fully cover losses that customers incur or counterparties are unable to meet the terms of the contracted obligations. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty with which it conducts business. | |
In the event a customer or broker fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at prevailing market prices in order to fulfill the customer’s obligations. The Company seeks to control the risk associated with its customer activities by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company monitors required margin levels daily and, pursuant to such guidelines, requires customers to deposit additional collateral or reduce positions, when necessary. | |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and temporary cash investments in bank deposit and other accounts, the balances of which, at times, may exceed federally insured limits. Exposure to credit risk is reduced by maintaining the Company’s banking and brokerage relationships with high credit quality financial institutions. | |
The Company holds securities that can potentially subject the Company to market risk. The amount of potential gain or loss depends on the securities performance and overall market activity. The Company monitors its securities positions on a monthly basis to evaluate its positions, and, if applicable, may elect to sell all or a portion to limit the loss |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Commitments and Contingencies | Commitments and Contingencies | |||||||
Leases — The Company leases certain facilities and equipment under various operating leases. These leases are generally subject to scheduled base rent and maintenance cost increases, which are recognized on a straight-line basis over the period of the leases. Total rent expense for all operating leases was approximately $8.8 million, $1.3 million and $0.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. The following table shows the future annual minimum rental payments due (in thousands): | ||||||||
Year Ended December 31, | ||||||||
2015 | $ | 10,900 | ||||||
2016 | 10,186 | |||||||
2017 | 9,181 | |||||||
2018 | 7,917 | |||||||
2019 | 6,651 | |||||||
Thereafter | 24,353 | |||||||
Total | $ | 69,188 | ||||||
Service contracts — The Company has contracted with third parties to perform back-office processing services. The following table shows the future annual minimum payments due (in thousands): | ||||||||
Year Ended December 31, | ||||||||
2015 | $ | 9,897 | ||||||
2016 | 9,253 | |||||||
2017 | 7,242 | |||||||
2018 | 6,567 | |||||||
2019 | 6,567 | |||||||
Thereafter | 3,978 | |||||||
Total | $ | 43,504 | ||||||
Lines of credit — As of December 31, 2014, the Company had three lines of credit. The first line of credit pursuant to the Bank Facilities is for $25.0 million with no maturity date and was unfunded as of December 31, 2014. The second line of credit, which was acquired in the Cetera acquisition, is for $50.0 million with no maturity date and was unfunded as of December 31, 2014. The third line of credit, which was acquired in the ICH acquisition, is for $1.0 million with no maturity date and was unfunded as of December 31, 2014. | ||||||||
Private equity commitment — As of December 31, 2014, the Company had a commitment to invest up to $0.01 million in private equity funds. | ||||||||
Acquisition commitments — In addition to the contingent and deferred consideration related to commitments discussed in Note 2, as of December 31, 2014, the Company had commitments to distribute cash and issue Class A common stock pursuant to agreements entered into for pending acquisitions. The following table shows the future annual acquisition commitments (in thousands): | ||||||||
Year Ended December 31, | ||||||||
Cash | Class A Common Stock | |||||||
2015 | $ | 46,050 | $ | 38,910 | ||||
2016 | — | 2,440 | ||||||
2017 | 5,000 | 5,000 | ||||||
Total | $ | 51,050 | $ | 46,350 | ||||
Legal proceedings related to business operations — The Company and its subsidiaries are involved in legal proceedings from time to time arising out of their business operations and other matters, including arbitrations and lawsuits involving private claimants, and subpoenas, investigations and other actions by government authorities and self-regulatory organizations. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages, the Company cannot estimate what the possible loss or range of loss related to such matters will be. The Company recognizes a liability with regard to a legal proceeding when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, however, the Company accrues the minimum amount in the range. The Company maintains insurance coverage, including general liability, directors and officers, errors and omissions, excess entity errors and omissions and fidelity bond insurance. The Company records legal reserves and related insurance recoveries on a gross basis. As of December 31, 2014, the Company recorded legal reserves related to several matters of $4.6 million in other liabilities in the consolidated statement of financial condition. | ||||||||
Defense costs with regard to legal proceedings are expensed as incurred and classified as professional services within the consolidated statements of income. When there is indemnification or insurance, the Company may engage in defense or settlement and subsequently seek reimbursement for such matters. | ||||||||
There are several cases that are “reasonably possible” but for which we cannot provide a reasonable estimate. These generally are arbitrations or other matters brought against various broker-dealers now owned by the Company. | ||||||||
ARCP Litigation | ||||||||
On September 30, 2014, the Company entered into a definitive agreement to acquire Cole Capital Partners LLC and Cole Capital Advisors, Inc. (“Cole Capital “) from ARC Properties Operating Partnership, L.P. (“ARCP OP”), a subsidiary and the operating partnership of ARCP for $700.0 million plus contingent consideration. Cole Capital is the private capital management business of ARCP, which includes a broker-dealer, wholesale distribution, and a non-traded REIT sponsor and advisory businesses. | ||||||||
The definitive agreement provided that the acquisition of Cole Capital would be consummated in two closings. | ||||||||
At the first closing (the “First Closing”) on October 22, 2014, subsidiaries of the Company entered into interim sub-advisory arrangements with the current advisors (which are subsidiaries of ARCP) of the five non-traded REITs sponsored and advised by Cole Capital. | ||||||||
In addition, Realty Capital Securities entered into wholesaling agreements whereby a subsidiary of Cole Capital engaged Realty Capital Securities as its distribution agent for the three non-traded REITs for which it then served as “dealer-manager.” Realty Capital Securities was entitled to receive a sourcing fee on sales through dealers it sourced. | ||||||||
The Company paid a portion of the purchase price equal to $10.0 million at the First Closing. | ||||||||
On October 29, 2014, ARCP announced that its audit committee had concluded that the previously issued financial statements and other financial information contained in certain public filings should no longer be relied upon. ARCP reported that this conclusion was based on the preliminary findings of an investigation conducted by ARCP’s audit committee which concluded that certain accounting errors were made by ARCP personnel that were not corrected after being discovered, resulting in an overstatement of adjusted funds from operations and an understatement of ARCP’s net loss for the three and six months ended June 30, 2014. ARCP also announced the resignation of its chief accounting officer and its chief financial officer, who is a member of RCAP Holdings and AR Capital, LLC, and served as the Company’s chief financial officer until December 2013. This individual also served as a member of the board of directors of the Company until July 2014 and had also served as an executive and director of non-traded REITs sponsored by AR Capital, LLC. This individual does not have a role in the management of the Company’s business. Although ARCP was previously sponsored by an entity under common control with RCAP Holdings and was advised by such entity until January 2014, ARCP is a separate company that is no longer sponsored or advised by an entity under common control with RCAP Holdings. | ||||||||
On November 3, 2014, the Company announced that it had terminated the previously disclosed definitive agreement to acquire Cole Capital from ARCP OP. Also on November 3, 2014, ARCP issued a press release asserting that, in its view, the Company had no basis to terminate the agreement and that the Company’s termination of the agreement was itself breach of the agreement. On November 11, 2014, ARCP filed suit for specific performance, injunctive relief and other relief against the Company in the Court of Chancery of the State of Delaware, (the “ARCP Action”) and, on November 12, 2014, ARCP issued a press release asserting that the Company’s termination of the agreement constituted a breach of contract. | ||||||||
On December 4, 2014, the Company entered into a binding term sheet with ARCP to settle the ARCP Action. Pursuant to the terms of the settlement, the Company paid ARCP a negotiated break-up fee consisting of a cash payment of $32.7 million and a $15.3 million, two-year promissory note bearing interest at a rate of 8% per annum, and ARCP dismissed with prejudice its lawsuit against the Company and, accordingly, the acquisition of Cole Capital did not proceed. The promissory note is recorded in long-term debt on the consolidated statements of financial condition, and the principal amount of the promissory note is due in three payments of $7.7 million, $3.8 million and $3.8 million on March 31, 2016, September 30, 2016 and March 31, 2017, respectively. The Company and ARCP also agreed, among other things, that ARCP would keep the $10.0 million payment delivered by RCS Capital in connection with the First Closing and the Company would release ARCP from its obligation to pay $2.0 million in respect of structuring services provided by Realty Capital Securities in connection with ARCP’s May 2014 equity offering. As part of the binding term sheet, we agreed with ARCP to work together in good faith to terminate any remaining transactions, and this process is ongoing. | ||||||||
Summit Litigation | ||||||||
Summit, its board of directors, the Company and a wholly owned subsidiary formed by our company in connection with the Summit acquisition are named as defendants in two purported class action lawsuits (now consolidated and amended) filed by alleged Summit shareholders on November 27, 2013 and December 12, 2013 in Palm Beach County, Florida challenging the Summit acquisition. These lawsuits alleged, among other things, that: (i) each member of Summit’s board of directors breached his fiduciary duties to Summit and its shareholders in authorizing the Summit acquisition; (ii) the Summit acquisition did not maximize value to Summit shareholders; and (iii) we and our acquisition subsidiary aided and abetted the breaches of fiduciary duty allegedly committed by the members of Summit’s board of directors. On May 9, 2014, the plaintiff shareholders moved for leave to file an amended complaint under seal. The amended complaint asserted claims similar to those in the original complaint, added allegations relating to the amendment of the Summit merger agreement on March 17, 2014, and also challenged the adequacy of the disclosures in the registration statement related to the issuance of shares of our Class A common stock as consideration in the Summit acquisition, the background of the transaction, the fairness opinion issued to the Summit special committee, and Summit’s financial projections. The consolidated lawsuits sought class-action certification, equitable relief, including an injunction against consummation of the Summit acquisition on the agreed-upon terms, and damages. | ||||||||
On May 27, 2014, the parties to the consolidated action entered into a Memorandum of Understanding setting forth their agreement in principle to settle the consolidated action and, on September 15, 2014, the parties signed a stipulation of settlement and the Company recorded a provision, for its portion of the negotiated attorney’s fees payment. The same day, plaintiffs filed a motion seeking preliminary approval of the settlement and, on October 6, 2014, the Court entered the preliminary approval order. The Final Judgment and Order of Dismissal were issued by the Court on January 9, 2015. | ||||||||
American Realty Capital Healthcare Trust Litigation | ||||||||
In connection with the proposed acquisition by Ventas, Inc. (“Ventas”) of all the outstanding stock of American Realty Capital Healthcare Trust, Inc. (“ARCH”), purported shareholders of ARCH have filed multiple class action lawsuits in the Circuit Court for Baltimore City, Maryland and other jurisdictions. Two of these actions named Realty Capital Securities among others, as a defendant. The actions are: Shine v. American Realty Capital Healthcare Trust, Inc. et al filed June 13, 2014 and Abbassi, et al. v. American Realty Capital Healthcare Trust, Inc. et al. filed July 9, 2014. The actions also assert derivative claims on behalf of ARCH against Realty Capital Securities. On October 10, 2014, lead plaintiffs in the Maryland state court action filed a “Consolidated Amended Derivative and Direct Class Action Complaint,” asserting direct and derivative claims of aiding and abetting a breach of fiduciary duty against multiple defendants, including Realty Capital Securities, arising from their roles providing services to ARCH in connection with the proposed acquisition of ARCH by Ventas and seek (i) to enjoin the proposed acquisition and (ii) recover damages if the proposed acquisition is completed. A similar shareholder action, Rosenzweig v. American Realty Capital Healthcare Trust, Inc. et al, 1:14-cv-02019-GLR, was filed in federal court for the District of Maryland. | ||||||||
On January 2, 2015 and January 5, 2015, the parties to the consolidated state court action and the Rosenzweig action executed separate memoranda of understanding regarding settlement of all claims asserted on behalf of each alleged class of ARCH stockholders in each case. In connection with the settlement contemplated by that memoranda of understanding, each action and all claims asserted therein will be dismissed, subject to approval by each applicable court. Pursuant to the executed memoranda of understanding, ARCH made certain additional disclosures related to the Ventas transaction. The memoranda of understanding further contemplate that the parties will enter into a stipulation of settlement, which will be subject to customary conditions, upon the conclusion of confirmatory discovery and court approval following notice to ARCH’s stockholders. If the parties enter into a stipulation of settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties will ultimately enter into a stipulation of settlement, that the applicable court will approve any proposed settlement, or that any eventual settlement will be under the same terms as those contemplated by the memorandum of understanding. | ||||||||
The Company believes that such lawsuits are without merit, but the ultimate outcome of the matter cannot be predicted with certainty. Neither the outcome of the lawsuits nor an estimate of a probable loss or any reasonable possible losses is determinable at this time. No provisions for any losses related to the lawsuits have been recorded in the accompanying consolidated financial statements for the year ended December 31, 2014. An adverse judgment for monetary damages could have a material adverse effect on the operations and liquidity of the Company. All defendants have stated in court filings that they believe that the claims are without merit and are defending against them vigorously. | ||||||||
RCAP Shareholder Class Action Litigation | ||||||||
On or about December 29, 2014, a securities law class action lawsuit was filed in federal court in the Southern District of New York (Weston v. RCS Capital Corporation et al, 14 CV 10136) against the Company and certain former or current officers and directors of the Company. The lawsuit asserts the Company and the individual defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934 by making materially false and misleading public statements pertaining to the Company’s financial position and future business and acquisition prospects. Specifically, plaintiffs allege that defendants made false and/or misleading statements and/or failed to disclose that: (i) the financial statements of ARCP were material false and misleading as a result of accounting irregularities that were disclosed by ARCP on October 29, 2014; (ii) the Company’s announced acquisition of Cole Capital Partners LLC and Cole Capital Advisors was at serious risk due to the accounting issues at ARCP; and (iii) the Company’s revenue stream from its relationship with ARCP was in jeopardy as a result of the accounting issues at ARCP announced on October 1, 2014. There have not been any other material court filings involving the Company or Realty Capital Securities, LLC. | ||||||||
The Company believes the Weston complaint is without merit and intends to vigorously defend itself against its allegations. | ||||||||
ARCP Shareholder Class Action Litigation | ||||||||
The Company was named as a defendant in a consolidated federal securities law class action (Teachers Insurance and Annuity Association of America, et al. v. American Realty Capital Properties, Inc. et al, Civ. A. 15-cv-00421) filed in federal court in New York on January 21, 2015 brought on behalf of all persons who purchased or otherwise acquired securities of ARCP between May 6, 2013 and October 29, 2014, including ARCP common stock, preferred stock and debt securities. The lawsuit’s claims, premised on Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 14(a), 10(b) and 20(a) of the Securities Exchange Act of 1934, allege generally that defendants issued or assisted in the issuance of false and misleading statements to the investing public, including in registration statements, prospectuses, proxies and other public statements and press releases, concerning ARCP’s financial results as part of a scheme to artificially inflate the value of ARCP’s securities. | ||||||||
More specifically, the complaint alleges that the Company is a “control person” of ARCP under the securities laws and thus plaintiffs seek to hold the Company responsible for the alleged misstatements of ARCP and its officers and directors. The Company is also alleged to be a “structuring advisor” to ARCP. Realty Capital Securities, LLC, a subsidiary of the Company is named as a defendant based on its role as a co-manager of ARCP’s July 2013 convertible notes offering. | ||||||||
There have not been any other material court filings involving the Company or Realty Capital Securities, LLC. | ||||||||
The Company believes the Teachers complaint is without merit and intends to vigorously defend itself against the allegations contained in the complaint. | ||||||||
Massachusetts Securities Division Subpoenas | ||||||||
On November 7, 2014 and December 19, 2014, Realty Capital Securities received subpoenas from the Massachusetts Secretary of the Commonwealth, Securities Division (the “Division”), requiring the production of certain documents and other materials, dated from January 1, 2014 to the present, relating to sales by Realty Capital Securities of certain non-traded REITs and similar products sponsored, co-sponsored or advised by AR Capital, LLC and the organizational structure of Realty Capital Securities. Realty Capital Securities has complied with the subpoenas. | ||||||||
On December 19, 2014, the Company received a subpoena from the Massachusetts Secretary of the Commonwealth, Securities Division (the “Division”), requiring the production of certain documents and other materials, dated from January 1, 2014 to the present, relating the Company’s organizational structure. The Company has complied with the subpoena. |
Net_Capital_Requirements
Net Capital Requirements | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Regulatory Capital Requirements [Abstract] | ||||||||
Net Capital Requirements | Net Capital Requirements | |||||||
The Company’s broker-dealers are subject to the SEC Uniform Net Capital Rule 15c3-1. SEC Uniform Net Capital Rule 15c3-1 requires the maintenance of the greater of the minimum dollar amount of net capital required, which is based on the nature of the broker-dealer’s business, or 1/15th of the aggregate indebtedness, as defined, and requires that the ratio of aggregate indebtedness to net capital, both as defined, not exceed 15 to 1. Certain of the Company’s broker-dealers have elected to use the alternative method of computing net capital which requires the maintenance of minimum net capital of the greater of $250,000 or 2% of aggregate debit items. The table below provides the net capital requirements for each of the Company’s broker-dealers as of December 31, 2014 and the net capital requirements for those broker-dealers which were either under the control of the Company or under common control as of December 31, 2013 (in thousands, except ratios and percentages). | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Realty Capital Securities: | ||||||||
Net capital | $ | 18,770 | $ | 25,627 | ||||
Required net capital | 1,174 | 1,294 | ||||||
Net capital in excess of required net capital | $ | 17,596 | $ | 24,333 | ||||
Aggregate indebtedness to net capital ratio | 0.94 to 1 | 0.76 to 1 | ||||||
First Allied Securities, Inc. (alternative method): | ||||||||
Net capital | $ | 3,431 | $ | 4,777 | ||||
Required net capital | 250 | 250 | ||||||
Net capital in excess of required net capital | $ | 3,181 | $ | 4,527 | ||||
Net capital as a percentage of aggregate debit items evaluation | in compliance(1) | in compliance(1) | ||||||
Legend Equities Corporation: | ||||||||
Net capital | $ | 2,067 | $ | 2,684 | ||||
Required net capital | 187 | 224 | ||||||
Net capital in excess of required net capital | $ | 1,880 | $ | 2,460 | ||||
Aggregate indebtedness to net capital ratio | 1.36 to 1 | 1.25 to 1 | ||||||
Cetera Advisor Networks LLC (alternative method)(2): | ||||||||
Net capital | $ | 13,785 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 13,535 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
Cetera Advisors LLC (alternative method)(2): | ||||||||
Net capital | $ | 9,294 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 9,044 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
Cetera Financial Specialists LLC (alternative method)(2): | ||||||||
Net capital | $ | 5,018 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 4,768 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
Cetera Investment Services LLC (alternative method)(2): | ||||||||
Net capital | $ | 17,190 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 16,940 | ||||||
Net capital as a percentage of aggregate debit items | 192% | |||||||
Hatteras Capital Distributors, LLC(2): | ||||||||
Net capital | $ | 2,145 | ||||||
Required net capital | 5 | |||||||
Net capital in excess of required net capital | $ | 2,140 | ||||||
Aggregate indebtedness to net capital ratio | 0.02 to 1 | |||||||
December 31, 2014 | December 31, 2013 | |||||||
J.P. Turner & Company LLC(2): | ||||||||
Net capital | $ | 3,379 | ||||||
Required net capital | 442 | |||||||
Net capital in excess of required net capital | $ | 2,937 | ||||||
Aggregate indebtedness to net capital ratio | 1.96 to 1 | |||||||
Summit Brokerage Services, Inc.(2): | ||||||||
Net capital | $ | 5,878 | ||||||
Required net capital | 506 | |||||||
Net capital in excess of required net capital | $ | 5,372 | ||||||
Aggregate indebtedness to net capital ratio | 1.29 to 1 | |||||||
Investors Capital Corporation (alternative method)(2): | ||||||||
Net capital | $ | 3,817 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 3,567 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
Advisor Direct, Inc.(2): | ||||||||
Net capital | $ | 12 | ||||||
Required net capital | 5 | |||||||
Net capital in excess of required net capital | $ | 7 | ||||||
Aggregate indebtedness to net capital ratio | 5.67 to 1 | |||||||
SC Distributors LLC (alternative method)(2): | ||||||||
Net capital | $ | 2,004 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 1,754 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
_____________________ | ||||||||
(1) The entity was determined to be in compliance as of the date stated as its net capital was in excess of the minimum $250,000. | ||||||||
(2) The entity was not under the control of, or under common control with, the Company as of December 31, 2013. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions |
A significant portion of the Company’s revenues relate to fees earned from transactions with or on behalf of AR Capital, LLC and its affiliates or related parties as well as certain transactions that are co-sponsored by an affiliate or related party of ARC Capital LLC, including investment banking fees, services fees, transfer agent fees and wholesale broker-dealer commissions and concessions, in the ordinary course of its trade or business. During the years ended December 31, 2014, 2013 and 2012, the Company earned revenues of $777.5 million, $713.4 million and $257.3 million, respectively, from related party transactions. As of December 31, 2014 and December 31, 2013, the receivables for such revenues were $31.6 million and $49.4 million, respectively. | |
The Original Operating Subsidiaries were initially capitalized and funded by RCAP Holdings. During the year ended December 31, 2012, Realty Capital Securities received financial support from RCAP Holdings through capital contributions and expense allocation agreements. Through an agreement with an affiliate, Realty Capital Securities was allocated certain operating expenses including occupancy, professional services, communications and data processing, advertising and employee benefits. The total expense allocation for the year ended December 31, 2012 was approximately $0.8 million. | |
Pursuant to a shared services agreement, beginning on January 1, 2013, AR Capital, LLC charges the Company for the services of information technology, human resources, accounting services and office services and facilities. For these services, the Company incurred expenses of $5.5 million and $3.5 million for the years ended December 31, 2014 and 2013, respectively. As of December 31, 2014 and December 31, 2013, the payables for such expenses were $0.5 million and $0.3 million, respectively. | |
The Company incurs expenses directly for certain services. The Company either allocates certain of these expenses to its operating subsidiaries or causes RCAP Holdings to pay its portion based on RCAP Holdings’ ownership interest. Expenses that are directly attributable to a specific subsidiary are allocated to the appropriate subsidiary at 100%. Expenses that are not specific to a subsidiary are allocated on a reasonable basis, as determined by the Company its sole discretion. Interest expense on the Company’s long-term debt, share-based compensation related to the Company’s board of directors, expenses related to the OPP plan, changes in the fair value of the Company’s derivative contracts and acquisition-related expenses are not allocated to the subsidiaries. The intercompany receivables and payables for the allocated expenses are eliminated in consolidation and are settled quarterly. During the year ended December 31, 2014, the Company’s operating subsidiaries incurred $14.7 million, respectively, related to such expenses. The Original Operating Subsidiaries and First Allied did not incur any such expenses for the year ended December 31, 2013. There were no expenses payable by RCAP Holdings as of December 31, 2014 and December 31, 2013. | |
As of December 31, 2014, the members of RCAP Holdings owned 43.34% of Class A common stock outstanding primarily obtained as a result of the Exchange Transaction and the contribution of First Allied. As of December 31, 2013, RCAP Holdings owned 2.06% of Class A common stock outstanding and all 24,000,000 shares of Class B common stock outstanding. From time to time, RCAP Holdings, or the members of RCAP Holdings may purchase shares of Class A common stock in the secondary market. | |
In March 2014, Realty Capital Securities leased a lodging facility in Newport, Rhode Island from a related party, ARC HTNEWRI001, LLC. Realty Capital Securities also entered into an agreement with another affiliate, Crestline Hotels and Resorts, LLC (“Crestline”) to manage and operate the lodging facility. Crestline remits the lodging facility’s revenue to the Company, net of the fees from Crestline. During the year ended December 31, 2014, the Company incurred $0.1 million in rent expense in connection with this lease. The Company did not earn any revenue from the Crestline agreement during the year ended December 31, 2014. | |
Services Agreement (formerly the Management Agreement). Pursuant to the management agreement which was amended and restated in connection with the Restructuring Transactions and is now known as the Amended and Restated Services Agreement (the “Services Agreement”), RCS Capital Management provides business strategy services, and performs executive and management services for the Company and its operating subsidiaries, subject to oversight, directly or indirectly, by the Company’s Board of Directors. | |
The Company pays RCS Capital Management a quarterly fee in an amount equal to 10% of its aggregate pre-tax U.S. GAAP net income, not including the quarterly fee, calculated and payable quarterly in arrears, subject to its aggregate U.S. GAAP net income being positive for the current and three preceding calendar quarters. The Company received a waiver to exclude unrealized gains on derivatives from the calculation of the quarterly fee for the three months ended June 30, 2014. | |
In addition, from June 10, 2013 to February 11, 2014, the Company paid RCS Capital Management incentive fees, calculated and payable quarterly in arrears, that were based on the Company’s earnings and stock price. The incentive fee was an amount (if such amount is a positive number) equal to the difference between: (1) the product of (x) 20% and (y) the difference between (i) the Company’s Core Earnings, as defined below, for the previous 12-month period, and (ii) the product of (A) the weighted average of the issue price per share of the Company’s common stock of all of the Company’s public offerings multiplied by the weighted average number of all shares of common stock outstanding (including any restricted shares of Class A common stock and any other shares of Class A common stock underlying awards granted under the Company’s equity plan) in the previous 12-month period, and (B) 8%; and (2) the sum of any incentive fee paid to RCS Capital Management with respect to the first three calendar quarters of such previous 12-month period; provided, however, that no incentive fee was payable with respect to any calendar quarter unless the Company’s Core Earnings for the 12 most recently completed calendar months is greater than zero. | |
Core Earnings is a non-U.S. GAAP measure and from June 10, 2013 to February 11, 2014 was defined as U.S. GAAP net income (loss) of the Company, excluding non-cash equity compensation expense, management fees, incentive fees, acquisition fees, depreciation and amortization, any unrealized gains, losses or other non-cash items recorded in net income for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income. The amount will be adjusted to exclude one-time events pursuant to changes in U.S. GAAP and certain other non-cash charges after discussions between RCS Capital Management and the independent directors and after approval by a majority of the independent directors. | |
Beginning on February 11, 2014, the incentive fee was amended whereby the Company pays RCS Capital Management an incentive fee, calculated and payable quarterly in arrears, that is based on the Company’s earnings and stock price. The incentive fee is an amount (if such amount is a positive number) equal to the difference between: (1) the product of (x) 20% and (y) the difference between (i) the Company’s Core Earnings, as defined below, for the previous 12-month period, and (ii) the product of (A) (X) the weighted average of the issue price per share (or deemed price per share) of the Company’s common stock of all of the Company’s cash and non-cash issuances of common stock from and after June 5, 2013 multiplied by (Y) the weighted average number of all shares of common stock outstanding (including any restricted shares of Class A common stock and any other shares of Class A common stock underlying awards granted under the Company’s equity plan) in the case of this clause (Y), in the previous 12-month period, and (B) 8%; and (2) the sum of any incentive fee paid to RCS Capital Management with respect to the first three calendar quarters of such previous 12-month period; provided, however, that no incentive fee is payable with respect to any calendar quarter unless the Company’s cash flows for the 12 most recently completed calendar quarters is greater than zero. Core Earnings is a non-GAAP measure and is now defined as the after-tax GAAP net income (loss) of RCS Capital Corporation, before the incentive fee plus non-cash equity compensation expense, depreciation and amortization, any unrealized gains, losses or other non-cash items recorded in net income for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss). The amount may be adjusted to include one-time events pursuant to changes in GAAP and certain other non-cash charges after discussions between RCS Capital Management and the Company’s independent directors and after approval by a majority of the Company’s independent directors. | |
Such quarterly and incentive fee calculations commenced on June 10, 2013, the date the Company’s initial public offering was completed. For periods less than four quarters or 12 months, the calculations are based on a pro rata concept starting with the quarter ended June 30, 2013. | |
The quarterly fee earned by RCS Capital Management for the years ended December 31, 2014 and 2013 were $2.0 million and $6.0 million, respectively, which are the expenses recorded by the Company. The payable for such expense is included in accrued expenses and accounts payable - due to related parties within the accompanying consolidated statements of financial condition. | |
The Company did not incur an incentive fee for the year ended December 31, 2014. The incentive fee earned by RCS Capital Management for the period June 10, 2013 (commencement date of the agreement) to December 31, 2013 was $0.3 million. As of December 31, 2013, the payable of $0.3 million for such expense is included in accrued expenses and accounts payable - due to related parties within the accompanying consolidated statements of financial condition. | |
Amended and Restated 2013 Manager Multi-Year Outperformance Agreement. The Company entered into the OPP, as of June 10, 2013, with the Original Operating Subsidiaries and RCS Capital Management. The OPP provided a performance-based bonus award to RCS Capital Management intended to further align RCS Capital Management’s interests with those of the Company and its stockholders. | |
Under the OPP, RCS Capital Management was issued LTIP Units of the Original Operating Subsidiaries that were structured as profits interests therein, with a maximum award value equal to approximately 5% of the Company’s initial market capitalization on the date of the IPO (the “OPP Cap”). In connection with the Restructuring Transaction, RCS Capital Management contributed all of its LTIP Units in the Original Operating Subsidiaries to RCS Holdings in exchange for 1,325,000 RCS Holdings LTIP Units structured as profits interests in RCS Holdings. Subject to the OPP Cap, RCS Capital Management was eligible to earn a number of LTIP Units under the OPP determined based on the Company’s level of achievement of total return to stockholders which included both share price appreciation and common stock dividends, as measured against a peer group of companies for the three-year performance period commencing on June 4, 2013 (the “Commencement Date”), which period is referred to as the Three-Year Period, with valuation dates on which a portion of the LTIP Units up to a specified amount of the OPP Cap could be earned on the last day of each 12-month period during the Three-Year Period and the initial 24-month period of the Three-Year Period. | |
The Company, RCS Holdings and RCS Capital Management amended the OPP to provide that the first valuation date would be April 28, 2014 and that any RCS Holdings LTIP Units not earned as of such date were forfeited without payment of compensation. The board determined that as of such valuation date 310,947 RCS Holdings LTIP Units were earned (the “Earned LTIP Units”), and 1,014,053 RCS Holdings LTIP Units were forfeited. The amendment further provided that, subject to RCS Capital Management’s continued service through each vesting date, 1/3 of the Earned LTIP Units would become vested on each of the third, fourth and fifth anniversaries of the Commencement Date. No additional LTIP Units may be earned under the OPP. The Earned LTIP Units were distributed to the members of RCS Capital Management (the “Members”) immediately prior to the acquisition by Luxor of an interest in RCS Capital Management. The Earned LTIP Units were entitled to a catch-up distribution and the same distributions as the Class A Units of RCS Holdings. At the time RCS Capital Management’s capital account with respect to the Earned LTIP Units would become economically equivalent to the average capital account balance of the Class A Units and Class C Units of RCS Holdings and had been vested for 30 days, the Earned LTIP Units would have automatically converted into Class C Units of RCS Holdings on a one-to-one basis. A holder of Class C Units may elect to convert its Class C Units, on a one-for-one basis, into shares of the Class A common stock, or, at the option of the Company, a cash equivalent. | |
On December 31, 2014, the Company, RCS Capital Management, and RCS Holdings, entered into Amendment No. 2 to the OPP. Amendment No. 2 provided for the early vesting of the Earned LTIP Units such that all the Earned LTIP Units became fully vested on December 31, 2014. | |
Pursuant to a Redemption and Exchange Agreement entered into December 31, 2014 among the Company, RCS Holdings and the Members in connection with Amendment No. 2, each of the Members exchanged their Class C RCS Holdings Units (which were received upon the automatic conversion of their Earned LTIP Units into Class C Units in RCS Holdings due to the early vesting of the Earned LTIP Units) for shares of Class A common stock in accordance with the terms of the LLC Agreement and all applicable notice and delivery waiting period requirements were waived. Accordingly, 310,947 shares of Class A common stock were issued to the Members on December 31, 2014. As a result, no RCS Holdings LTIP Units were outstanding as of December 31, 2014, thus eliminating the non-controlling interest in RCS Holdings related to the existence of the RCS Holdings LTIP Units. See Note 1 for more information. | |
For the year ended December 31, 2014 and 2013, the Company recognized $9.7 million and $0.5 million, respectively for the award under the OPP. Prior to December 31, 2014, the award under the OPP was included in the consolidated statements of income, with an offset recorded to non-controlling interest. | |
RCS Advisory Services, LLC — AR Capital, LLC Services Agreement. On June 10, 2013, RCS Advisory entered into a services agreement with AR Capital, LLC, pursuant to which it provides AR Capital, LLC and its subsidiaries with transaction management services (including, transaction management, compliance, due diligence, event coordination and marketing services, among others), in connection with the performance of services to certain AR Capital, LLC sponsored companies. | |
Registration Rights Agreement. In connection with the Company’s initial public offering, the Company entered into a registration rights agreement with RCAP Holdings and RCS Capital Management pursuant to which the Company granted (i) RCAP Holdings, its affiliates and certain of its transferees the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act, as amended, shares of Class A common stock issuable upon exchange of the Original Operating Subsidiaries Units held or acquired by them; and (ii) RCS Capital Management, its affiliates and certain of its transferees the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act any equity-based awards granted to RCS Capital Management under the Company’s equity plan. Under the registration rights agreement, the shareholders party thereto have the right to request us to register the sale of its shares and also may require us to make available shelf registration statements, at such time as the Company may be eligible to file shelf registration statements, permitting sales of shares into the market from time to time over an extended period. In addition, the agreement gives the shareholders party thereto the ability to exercise certain piggyback registration rights in connection with registered offerings requested by the shareholders party thereto or initiated by us. As part of the Restructuring Transaction, pursuant to the Company’s exchange agreement with RCAP Holdings on February 11, 2014, RCAP Holdings exchanged all of its shares of Class B common stock and Original Operating Subsidiaries Units except for one share of Class B common stock and one Original Operating Subsidiaries Unit for a total of 23,999,999 shares of Class A common stock. See “Exchange Agreement.” | |
Exchange Agreement. RCAP Holdings entered into the Exchange Agreement with the Company under which RCAP Holdings has the right, from time to time, to exchange its Original Operating Subsidiaries Units for shares of Class A common stock of the Company on a one-for-one basis. | |
As an initial step in the Restructuring Transactions, on February 11, 2014, the Company entered into a First Amendment to the Exchange Agreement (the “Amendment”) with RCAP Holdings, the holder of (a) all the Original Operating Subsidiaries Units, and (b) all the outstanding shares of Class B common stock. The purpose of the Amendment was to permit an exchange by RCAP Holdings of its Original Operating Subsidiaries Units for shares of Class A common stock and the related cancellation of a corresponding number of shares of Class B common stock thereunder, to be treated as a contribution by RCAP Holdings of its equity interests in each of the Original Operating Subsidiaries to the Company in a transaction intending to qualify as tax-free under Section 351 of the Code. | |
On February 11, 2014, as part of the Restructuring Transactions, RCAP Holdings exchanged 23,999,999 Original Operating Subsidiaries Units for 23,999,999 shares of Class A common stock. | |
The Company issued the Class A common stock in the Exchange to RCAP Holdings in a private placement exempt from registration under the Securities Act. RCAP Holdings was an existing holder of Class A common stock and the Class B common stock, and the Company did not, directly or indirectly, pay or give any commission or other remuneration to any party for soliciting the exchange. | |
Following receipt of stockholder consent, the Company amended the Company’s certificate of incorporation effective July 2, 2014 and amended the Exchange Agreement on August 5, 2014 to permit RCAP Holdings to continue to hold one share of Class B common stock without holding one Original Operating Subsidiaries Unit. Following this amendment, the remaining Original Operating Subsidiaries Unit owned by RCAP Holdings was exchanged for one share of Class A common stock, which was not issued as RCAP Holdings waived the right to receive it. | |
Limited Liability Company Agreement of RCS Holdings. On February 10, 2014, the Company formed RCS Holdings. Pursuant to the limited liability company agreement of RCS Holdings, there are three classes of equity interests in RCS Holdings, called “Class A Units,” “Class C Units” and “LTIP Units.” In connection with the Restructuring Transaction, RCS Capital Management contributed all its LTIP Units in the Original Operating Subsidiaries to RCS Holdings in exchange for LTIP Units representing units of equity ownership in RCS Holdings that are structured as profits interest therein. In connection with the execution of the RCS Holdings limited liability company agreement, 100% of the Class A Units of RCS Holdings were issued to the Company and 100% of the LTIP Units of RCS Holdings were issued to RCS Capital Management. The Class A Units of RCS Holdings issued to the Company are fully vested, are not subject to any put and call rights, and entitle the holder thereof to voting and economic rights (including rights to dividends and distributions upon liquidation). The LTIP Units of RCS Holdings issued to RCS Capital Management are structured as a profits interest in RCS Holdings with all the rights, privileges and obligations associated with Class A Units of RCS Holdings, subject to certain exceptions. The LTIP Units of RCS Holdings are subject to vesting, forfeiture and restrictions on transfers as provided in the OPP, as amended in connection with the Restructuring Transactions. See “—Amended and Restated 2013 Manager Multi-Year Outperformance Agreement.” The Company, RCS Holdings and RCS Capital Management further amended the OPP to provide that the first valuation date would be April 28, 2014 and that any LTIP Units not earned as of such date were forfeited without payment of compensation. The board determined that as of such valuation date 310,947 LTIP Units were earned (the “Earned LTIP Units”), and 1,014,053 LTIP Units were forfeited. No additional LTIP Units may be earned under the OPP. The Earned LTIP Units were distributed to the members of RCS Capital Management immediately prior to the acquisition by Luxor of an interest in RCS Capital Management. Because the LTIP Units of RCS Holdings are fully earned, they are entitled to a catch-up distribution and then the same distributions as Class A Units of RCS Holdings. At the time RCS Capital Management’s capital account with respect to the LTIP Units of RCS Holdings is economically equivalent to the average capital account balance of the Class A Units and the Class C Units of RCS Holdings, has been earned and has been vested for 30 days, the LTIP Units of RCS Holdings will automatically convert into Class C Units on a one-to-one basis. The Class C Units have the same rights, privileges and obligations associated with Class A Units of RCS Holdings (other than voting) but will be exchangeable for shares of Class A common stock on a one-to-one basis pursuant to an exchange agreement to be entered into. Pursuant to the limited liability company agreement of RCS Holdings, the Company, as the managing member of RCS Holdings, controls RCS Holdings’ affairs and decision making. | |
Amended and Restated Limited Liability Company Agreements of the Original Operating Subsidiaries. Under the amended and restated operating agreements of the Company’s Original Operating Subsidiaries, there are two classes of units of each such Original Operating Subsidiary called “Class A Units” and “Class B Units.” Class A Units confer substantially all the economic rights and all the voting rights in each Original Operating Subsidiary. No Class B Units are outstanding. | |
As part of the Restructuring Transaction, pursuant to the Company’s exchange agreement with RCAP Holdings on February 11, 2014, RCAP Holdings exchanged all of its shares of Class B common stock in the Company and Class B Units in each of the Original Operating Subsidiaries (each such unit, an “Original Operating Subsidiaries Unit”) except for one share of Class B common stock and one Original Operating Subsidiaries Unit for a total of 23,999,999 shares of Class A common stock, also in a private placement exempt from registration under the Securities Act. Following receipt of stockholder consent, the Company amended the Company’s certificate of incorporation effective July 2, 2014 and amended the Exchange Agreement on August 5, 2014 to permit RCAP Holdings to continue to hold one share of Class B common stock without holding one Original Operating Subsidiaries Unit. Following this amendment, the remaining Original Operating Subsidiaries Unit owned by RCAP Holdings was exchanged for one share of Class A common stock, which was not issued as RCAP Holdings waived the right to receive it. Accordingly, no more Original Operating Subsidiaries Units are outstanding and the voting and economic interests in the Original Operating Subsidiaries are now held by the Company, indirectly, through RCS Holdings’ ownership of the Class A Units. | |
American National Stock Transfer, LLC - Transfer Agent Services Agreement. ANST has entered into a services agreement with AR Capital, LLC, pursuant to which it will provide transfer agent services to AR Capital, LLC sponsored REITs. The agreement provides for an initial term of ten years. The agreement provides that each REIT must pay a minimum monthly fee as well as additional ad hoc service fees and related expense reimbursements. | |
Tax Receivable Agreement. The Company entered into a tax receivable agreement with RCAP Holdings requiring the Company to pay to RCAP Holdings 85% of the amount of the reduction, if any, in U.S. federal, state and local income tax liabilities that the Company realizes (or is deemed to realize upon early termination of the tax receivable agreement or change of control) as a result of the increases in tax basis of its tangible and intangible assets created by RCAP Holdings’ exchanges of its Original Operating Subsidiaries Units for shares of Class A common stock (with a cancellation of its corresponding shares of Class B common stock) pursuant to the exchange agreement. Cash payments pursuant to the tax receivable agreement will be the Company’s obligation. The initial public offering did not generate tax benefits and did not require payments pursuant to this agreement. In general, the Company’s payments under the tax receivable agreement will not be due until after the Company has filed its tax returns for a year in which the Company realizes a tax benefit resulting from an exchange; however, the timing of payments could be accelerated upon an early termination of the tax receivable agreement or change in control which could require payment prior to the Company’s ability to claim the tax benefit on its tax returns. Furthermore, RCAP Holdings will not be required to reimburse the Company for any payments previously made under the tax receivable agreement even if the IRS were to successfully challenge the increase in tax basis resulting from an exchange and, as a result, increase the Company’s tax liability. The accelerated timing of payments and the increase in the Company’s tax liability without reimbursement could affect the cash available to it and could impact its ability to pay dividends. | |
Pursuant to the exchange agreement described above, RCAP Holdings exchanged substantially all of its Original Operating Subsidiaries Units for shares of Class A common stock along with the cancellation of a corresponding number of shares of Class B common stock held by RCAP Holdings. It is the intention of the parties to the exchange that it, as part of an overall plan to restructure the Company’s ownership that includes the exchange, public securities offerings, the financing of the acquisition of Cetera and the completion of the recent and pending acquisitions, qualify as a tax-free contribution to us under Section 351 of the Code. If the exchange by RCAP Holdings qualifies as a tax-free contribution to us under Section 351 of the Code, the Company would obtain carryover tax basis in the tangible and intangible assets of the Original Operating Subsidiaries connected with such Original Operating Subsidiaries Units. As there will be no increase in tax basis created if the exchange qualifies as tax free Section 351 contribution, there will be no reduction in the Company’s tax liability, and as such the Company would not be required to make any payments under the tax receivable agreement. However, if the exchange were treated as a taxable transaction, each of the Original Operating Subsidiaries intends to have an election under Section 754 of the Code which would result in us receiving a step up in the tax basis in tangible and intangible assets of the Original Operating Subsidiaries with respect to such Original Operating Subsidiaries Units acquired by us in such exchanges. This increase in tax basis is likely to increase (for tax purposes) depreciation and amortization allocable to us from each operating subsidiary and therefore reduce the amount of income tax the Company would otherwise be required to pay in the future. This increase in tax basis may also decrease gain (or increase loss) on future dispositions of certain capital assets to the extent increased tax basis is allocated to those capital assets. | |
Mutual Funds. As of December 31, 2014 and December 31, 2013, the Company had investments in mutual funds of $19.0 million and $14.4 million, respectively, that are advised by related parties. During the years ended December 31, 2014 and 2013, the Company recognized gains of $2.2 million and $0.2 million, respectively, relating to these investments which are recorded in other income in the statement of income. The Company did not incur gains or losses from these mutual funds during the year ended December 31, 2012. | |
Luxor Arrangements. On April 29, 2014, the Company issued to Luxor $120.0 million (face amount) of convertible notes, issued at a price of $666.67 per $1,000 of par value (for gross proceeds to the Company upon issuance of $80.0 million) and $270.0 million (aggregate liquidation preference) of Series A Preferred Stock, issued at a price of 88.89% of the liquidation preference per share (for gross proceeds to the Company upon issuance of $240.0 million). Pursuant to the Securities Exchange Agreement entered into on December 12, 2014, on December 19, 2014, the Company exchanged the $213.4 million of remaining aggregate liquidation preference of Series A Preferred Stock for $145.0 million (aggregate initial liquidation preference) of Series B Preferred Stock and $110.0 million (aggregate initial liquidation preference) of Series C Preferred Stock. See Note 11 for more information. | |
Also on April 29, 2014, the Company entered into a put/call agreement with Luxor, which was amended December 19, 2014. Under this agreement, subject to certain conditions, (i) the Company has the right to repurchase Luxor’s 19.46% interest in RCS Capital Management (the “Luxor percentage interest”) from Luxor in exchange for its fair market value (as determined by the Company and Luxor pursuant to the agreement) in shares of Class A common stock (or, at the Company’s option, a cash equivalent); and (ii) Luxor has the right to require the Company to purchase the Luxor percentage interest in exchange for a number of shares of Class A common stock (or, at the Company’s option, a cash equivalent) that is equal to 15.00% multiplied by the Luxor percentage interest multiplied by the then outstanding number of shares of Class A common stock (assuming the conversion immediately prior thereto of the then outstanding convertible notes and Series C Preferred Stock). | |
The put/call agreement also provides that the members of RCS Capital Management (who are also the members of RCAP Holdings, AR Capital, LLC, RCS Holdings and RCAP Equity, LLC) may elect to purchase all the Luxor percentage interest offered to the Company for an amount equal to the value of the Class A common stock required to be delivered by the Company for cash, shares of Class A common stock or a combination thereof. If the Company is prohibited by the Bank Facilities from purchasing the Luxor percentage interest, the members of RCS Capital Management will be required to purchase the Luxor percentage interest under the same terms. | |
On June 10, 2014 the Company issued 2,469,136 shares of Class A common stock at the public offering price of $20.25 per share to Luxor in a private offering. | |
In connection with securities issuances and arrangements described above, the Company agreed to file with the SEC a continuously effective resale registration statement with respect to certain securities owned and beneficially owned by Luxor that were acquired in April 2014 or June 2014 by July 1, 2014. A Registration Statement on Form S-3 (File No. 333-197148) in fulfillment of this obligation was filed with the SEC on July 1, 2014 and became effective on July 16, 2014. In connection with the issuance of the Series B Preferred Stock and the Series C Preferred Stock pursuant to the Securities Exchange Agreement, the Company agreed to file with the SEC a continuously effective resale registration statement by February 2, 2015. A Registration Statement on Form S-3 (File No. 333- 201763) in fulfillment of this obligation was filed with the SEC on January 30, 2015 and became effective on February 12, 2015. |
Employee_Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefits | Employee Benefits |
401(k) and Health and Welfare Benefit Plan for Employees - The Company has several 401(k) and health and welfare defined contribution plans which have various eligibility standards, vesting requirements, and guidelines for matching. For the years ended December 31, 2014 and 2013, the Company recorded expenses of $12.8 million and $3.7 million, respectively, in the consolidated statements of income in internal commissions, payroll and benefits. During the year ended December 31, 2012, the Company did not incur expenses for the 401(k) or health and welfare defined contribution plans. | |
Deferred Compensation Plans for Financial Advisors - The Company offers a plan to certain of its financial advisors which allows them to defer a portion of their compensation which earns a rate of return based on the financial advisor’s selection of investments. In order to economically hedge this exposure, the Company invests in money market, international, U.S. equity and U.S. fixed income funds. The liability to the financial advisor is recorded in deferred compensation plan accrued liabilities and the related economic hedges are recorded in deferred compensation plan investments in the consolidated statement of financial condition. | |
For the year ended December 31, 2014 the Company recorded expenses of $2.3 million in the consolidated statements of income in internal commissions, payroll and benefits. For the year ended December 31, 2014, the Company recorded revenue of $2.2 million from the economic hedges in the consolidated statements of income in other revenue. For the years ended December 31, 2013 and December 31, 2012, the Company did not record any revenues or expenses related to this deferred compensation plan because the plan relates to one of the recent acquisitions and, therefore, those results are not included in the Company’s results prior to the acquisition date. | |
Additionally, the Company offers a deferred compensation plan in connection with a Rabbi Trust Agreement to certain of its financial advisors. For this plan, the Company recorded expenses of $0.2 million for the year ended December 31, 2014 in the consolidated statements of income in internal commissions, payroll and benefits. For the years ended December 31, 2013 and December 31, 2012, the Company did not record any revenues or expenses related to this deferred compensation plan because the plan relates to one of the recent acquisitions and, therefore, those results are not included in the Company’s results prior to the acquisition date. |
Segment_Reporting
Segment Reporting | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Segment Reporting | Segment Reporting | |||||||||||
The Company operates through its operating subsidiaries in six principal segments: Independent Retail Advice; Wholesale Distribution; Investment Banking, Capital Markets and Transaction Management Services; Investment Management; Investment Research; and Corporate and Other. | ||||||||||||
The Independent Retail Advice segment offers financial advice and investment solutions to investors through the broad network of financial advisors. Cetera, Summit, J.P. Turner, First Allied and ICH operate as independent subsidiaries under their own brand and management. | ||||||||||||
The Wholesale Distribution segment includes the Company’s alternative investment program activities and Realty Capital Securities’ operations as the distributor or dealer manager consisting of nine public, non-traded REITs, two public, non-traded BDCs and an oil and gas program. Proprietary programs are sponsored directly or indirectly by AR Capital, LLC, an affiliate. Realty Capital Securities distributes these securities through selling groups comprised of FINRA member broker-dealers located throughout the United States. The Wholesale Distribution segment also includes StratCap, which through its broker-dealer subsidiary, distributes a platform of offerings consisting of two non-traded REITS, a non-traded BDC and two public, non-traded limited liability companies through a selling group comprised of FINRA member broker-dealers and RIAs. | ||||||||||||
The Investment Banking, Capital Markets and Transaction Management Services segment provides comprehensive strategic advisory services focused on direct investment programs, particularly non-traded REITs through RCS Advisory, ANST and the investment banking division of Realty Capital Securities. These strategic advisory services include mergers and acquisitions advisory, capital markets activities, registration management, and other transaction support services. This segment also includes the results from the Company’s majority interest in Docupace, a provider of integrated, electronic processing technologies and systems for financial institutions and wealth management firms. | ||||||||||||
The Investment Management segment, which primarily consists of mutual fund and other registered investment products, provides investment advisory, distribution and other services to the Hatteras family of funds. | ||||||||||||
The Investment Research segment provides focused research, consulting, training and education, and due diligence on traditional and non-traditional investment products through SK Research. | ||||||||||||
Corporate and Other primarily includes interest expense on the Company’s long-term debt, share-based compensation related to the Company’s board of directors, expenses related to the OPP plan, changes in the fair value of the Company’s derivative contracts, certain acquisition-related expenses, certain public company expenses and the results of operations for the Company’s Crowdfunding platform and Trupoly. | ||||||||||||
The reportable business segment information is prepared using the following methodologies: | ||||||||||||
• | Net revenues and expenses directly associated with each reportable business segment are included in determining earnings before taxes. | |||||||||||
• | Net revenues and expenses not directly associated with specific reportable business segments are allocated based on the most relevant measures applicable, including each reportable business segment’s net revenues, time spent and other factors. | |||||||||||
Reportable business segment assets include an allocation of indirect corporate assets that have been fully allocated to the Company’s reportable business segments, generally based on each reportable business segment’s capital utilization. | ||||||||||||
The following table presents the Company’s net revenues, expenses and income before taxes by segment for the year ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||||
Year Ended | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Independent retail advice(1): | ||||||||||||
Revenues | $ | 1,395,262 | $ | 94,930 | $ | — | ||||||
Expenses | 1,416,529 | 95,624 | — | |||||||||
Loss | $ | (21,267 | ) | $ | (694 | ) | $ | — | ||||
Wholesale distribution: | ||||||||||||
Revenues | $ | 681,624 | $ | 802,965 | $ | 286,572 | ||||||
Expenses | 702,455 | 757,792 | 280,085 | |||||||||
Income (loss) | $ | (20,831 | ) | $ | 45,173 | $ | 6,487 | |||||
Investment banking, capital markets and transaction management services: | ||||||||||||
Revenues | $ | 126,670 | $ | 84,810 | $ | 925 | ||||||
Expenses | 60,288 | 29,213 | — | |||||||||
Income | $ | 66,382 | $ | 55,597 | $ | 925 | ||||||
Investment management: | ||||||||||||
Revenues | $ | 31,829 | $ | — | $ | — | ||||||
Expenses | 27,652 | — | — | |||||||||
Income | $ | 4,177 | $ | — | $ | — | ||||||
Investment research: | ||||||||||||
Revenues | $ | 2,721 | $ | — | $ | — | ||||||
Expenses | 11,762 | — | — | |||||||||
Loss | $ | (9,041 | ) | $ | — | $ | — | |||||
Corporate and other: | ||||||||||||
Revenues | $ | (44,848 | ) | $ | — | $ | — | |||||
Expenses | 140,559 | 218 | — | |||||||||
Loss | $ | (185,407 | ) | $ | (218 | ) | $ | — | ||||
Revenue reconciliation | ||||||||||||
Total revenues for reportable segments | $ | 2,193,258 | $ | 982,705 | $ | 287,497 | ||||||
Less: intercompany revenues | 91,063 | 7,638 | — | |||||||||
Total revenues | $ | 2,102,195 | $ | 975,067 | $ | 287,497 | ||||||
Income reconciliation | ||||||||||||
Total income (loss) before taxes for reportable segments | $ | (165,987 | ) | $ | 99,858 | $ | 7,412 | |||||
Reconciling items | (138 | ) | — | — | ||||||||
Income (loss) before income taxes | $ | (166,125 | ) | $ | 99,858 | $ | 7,412 | |||||
_____________________ | ||||||||||||
(1) Includes First Allied’s operating results from September 25, 2013, the date First Allied was acquired by RCAP Holdings. | ||||||||||||
The following table presents the Company’s total assets by segment as of December 31, 2014 and 2013 (in thousands): | ||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Segment assets: | ||||||||||||
Independent retail advice | $ | 1,980,614 | $ | 225,623 | ||||||||
Wholesale distribution | 192,669 | 32,058 | ||||||||||
Investment banking, capital markets and transaction management services | 116,980 | 75,358 | ||||||||||
Investment management | 79,343 | — | ||||||||||
Investment research | 12,291 | — | ||||||||||
Corporate and other (1) | 112,423 | 3,585 | ||||||||||
Total assets for reportable segments | $ | 2,494,320 | $ | 336,624 | ||||||||
Assets reconciliation: | ||||||||||||
Total assets for reportable segments | $ | 2,494,320 | $ | 336,624 | ||||||||
Less: intercompany eliminations | 27,692 | 99 | ||||||||||
Total consolidated assets | $ | 2,466,628 | $ | 336,525 | ||||||||
_____________________ | ||||||||||||
(1) Excludes amounts related to investment in subsidiaries. |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (unaudited) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (unaudited) | |||||||||||
Presented below is the unaudited financial data for the year ended December 31, 2014: | ||||||||||||
2014 | ||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Revenues | 273,368 | 645,019 | 678,578 | 505,230 | ||||||||
Net income (loss) | 12,149 | 48,472 | (32,269 | ) | (147,992 | ) | ||||||
Net (loss) income attributable to Class A common stockholders | 3,285 | (149,861 | ) | (36,994 | ) | (92,116 | ) | |||||
Basic earnings per share | 0.11 | (3.49 | ) | (0.59 | ) | (1.40 | ) | |||||
Diluted earnings per share | 0.11 | (3.59 | ) | (0.59 | ) | (1.68 | ) | |||||
The results for the first quarter of 2014 presented in the table above do not reflect the results reported on the Form 10-Q filed on May 15, 2014. The table below presents a reconciliation of the difference: | ||||||||||||
2014 First Quarter Reconciliation | ||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||
As Reported on Form 10-Q | Inclusion of First Allied(1) | As Adjusted | ||||||||||
Revenues | 187,205 | 86,163 | 273,368 | |||||||||
Net income (loss) | 12,656 | (507 | ) | 12,149 | ||||||||
Net (loss) income attributable to Class A common stockholders | 3,792 | (507 | ) | 3,285 | ||||||||
Basic earnings per share | 0.22 | (0.11 | ) | 0.11 | ||||||||
Diluted earnings per share | 0.22 | (0.11 | ) | 0.11 | ||||||||
_____________________ | ||||||||||||
(1) On June 30, 2014, RCAP Holdings contributed all its equity interests in First Allied to the Company. The Company’s acquisition of First Allied was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings immediately following the acquisition of First Allied by RCAP Holdings on September 25, 2013. | ||||||||||||
The results for the second quarter of 2014 presented in the table above do not reflect the results reported on the Form 10-Q filed on August 14, 2014. The table below presents a reconciliation of the difference: | ||||||||||||
2014 Second Quarter Reconciliation | ||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||
As Reported on Form 10-Q | Inclusion of First Allied(1) | As Adjusted | ||||||||||
Revenues | 638,425 | 6,594 | 645,019 | |||||||||
_____________________ | ||||||||||||
(1) The results reported for the three months ended June 30, 2014 erroneously included $6.6 million of intercompany eliminations derived from transactions with First Allied that pertained to the three months ended March 31, 2014. This did not impact pre-tax net income or net income for the three months ended June 30, 2014 as the same elimination was made to both total revenues and expenses. The Company has evaluated this item and determined that it was not material to the previously issued unaudited financial statements for the three months ended June 30, 2014. The income statement for the three months ended June 30, 2014 will be revised in the Company’s unaudited financial statements as of and for the six months ended June 30, 2015 to reflect the ‘as adjusted’ revenues presented above and the corresponding change in expenses. There was no impact on total revenue or total expenses reported for the six months ended June 30, 2014. | ||||||||||||
Presented below is the unaudited financial data for the year ended December 31, 2013: | ||||||||||||
2013 | ||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Revenues | 218,631 | 230,016 | 229,527 | 296,893 | ||||||||
Net income | 26,747 | 26,444 | 11,100 | 33,724 | ||||||||
Net (loss) income attributable to Class A common stockholders | — | 202 | 559 | 1,505 | ||||||||
Basic earnings per share | — | 0.08 | 0.17 | 0.11 | ||||||||
Diluted earnings per share | — | 0.08 | 0.17 | 0.11 | ||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events |
On March 4, 2015, the Company amended its agreement with J.P. Turner to settle the remaining contingent and deferred consideration for the J.P. Turner acquisition. As part of the amendment, the Company paid an aggregate consideration of $9.1 million, which consisted of $6.4 million in cash and 245,813 shares of Class A common stock, or an aggregate share value of $2.7 million. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Basis of presentation | Basis of Presentation | |
The consolidated financial statements include the accounts of the Company, Realty Capital Securities, RCS Advisory, ANST, SK Research, Cetera, Summit, J.P. Turner, Hatteras, ICH, StratCap, Trupoly and Docupace for the periods since acquisition and of First Allied for the periods since it was under the control of RCAP Holdings. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and Regulation S-X. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results. | ||
The Company’s acquisition of First Allied was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings at the time of the acquisition of First Allied by RCAP Holdings. Beginning with the Company’s financial statements for the quarter ended June 30, 2014, the Company has presented recast financial information, including the elimination of transactions between the Company and First Allied, for the relevant periods to reflect the results of operations and financial position of First Allied as if the Company had acquired it on September 25, 2013, the date that First Allied was acquired by RCAP Holdings. The acquisition of First Allied by RCAP Holdings was accounted for by RCAP Holdings using the purchase method of accounting; therefore, the purchase price was allocated to First Allied’s assets and liabilities at fair value and any excess purchase price was then attributed to intangible assets and goodwill. When the Company acquired First Allied from RCAP Holdings, no additional intangible assets or goodwill was recorded. | ||
Reclassifications | Reclassifications | |
Certain reclassifications have been made to the prior period financial statement presentation to conform to the current period presentation primarily as a result of the need to harmonize the financial statements of the Company with those of the entities acquired during 2014. | ||
Use of Estimates | Use of Estimates | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates, and these differences could be material. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents | |
Cash and cash equivalents include all highly liquid instruments purchased with original maturities of 90 days or less. | ||
Cash and Segregated Securities | Cash and Segregated Securities | |
Cash and segregated securities represents cash and securities deposited by customers and funds accruing to customers as a result of trades or contracts that the Company’s registered broker-dealers segregate in separate accounts on behalf of customers pursuant to the requirements of SEC Rule 15c3-3. | ||
Available-For-Sale Securities | Available-For-Sale Securities | |
The Company has investments in mutual funds that are advised by related parties. The Company treats these securities as available-for-sale securities with unrealized gains (losses) recorded in other comprehensive income (loss) and realized gains (losses) recorded in earnings. See Notes 4 and 5 for more information. | ||
Trading Securities | Trading Securities | |
The Company’s trading securities are carried at fair value with realized and unrealized gains and losses recognized in other revenue in the consolidated statement of income. Trading securities are recorded on a trade date basis. Dividend income on trading securities is recorded when declared. Interest income on trading securities is recorded when earned. See Note 4 for more information. | ||
Fees and Commissions and Customers Receivable | Fees and Commissions Receivable | |
Fees and commissions receivable includes selling commission receivables and dealer manager receivables from the Company’s wholesale distribution business. Additionally, fees and commissions receivable includes commissions from mutual funds, variable annuities, insurance product purchases transacted directly with the product manufacturers, and mutual fund and annuity trailers from the Company’s retail business. | ||
Receivables from Customers | ||
Receivable from customers includes amounts due on cash and margin transactions. Certain of the Company’s broker-dealers extend credit to their customers to finance their purchases of securities on margin. Securities owned by customers are held as collateral for margin receivables. Additionally, receivable from customers includes advisory, service and incentive fee receivables from the investment management business. | ||
Receivables from Broker Dealers and Clearing Organizations and Other | Receivables from Brokers, Dealers and Clearing Organizations and Other | |
Receivables from brokers, dealers and clearing organizations and other include receivables that arise in the ordinary course of the Company’s brokerage activities. | ||
Reimbursable Expenses and Investment Banking Fees | Receivables for Reimbursable Expenses and Investment Banking Fees | |
Reimbursable expenses and investment banking fees represent fees receivable for services provided to related parties and non-related party entities related to investment banking, capital markets and related advisory services performed. | ||
Property and Equipment | Property and Equipment | |
Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Office furniture and equipment and computer hardware and software are depreciated on a straight-line basis over the estimated useful life which ranges from one to ten years. Leasehold improvements are amortized over the lesser of their useful lives or the term of the lease. See Note 7 for more information. | ||
Deferred Compensation Plan Investments and Accrued Liabilities | Deferred Compensation Plan Investments and Accrued Liabilities | |
The Company offers a plan to certain of its financial advisors which allows them to defer a portion of their compensation which earns a rate of return based on the financial advisor’s selection of investments. In order to economically hedge this exposure, the Company invests in money market, international, U.S. equity and U.S. fixed income funds which are measured at fair value. The liability to the financial advisors is recorded in deferred compensation plan accrued liabilities and the related economic hedges are recorded in deferred compensation plan investments in the consolidated statement of financial condition. See Notes 4 and 20 for more information. | ||
Notes Receivable | Notes Receivable | |
The Company loans money to certain of its financial advisors under two types of promissory note agreements, which bear interest at various rates and have various maturities. Such agreements include forgivable promissory notes and payback promissory notes. Management establishes an allowance that it believes is sufficient to cover any probable losses. When establishing this allowance, management considers a number of factors, including its ability to collect from the financial advisor and the Company’s historical experience in collecting on such transactions. The Company has determined that the notes receivable acquired through the recent acquisitions and subsequent originations were not impaired. See Note 6 for more information. | ||
Deferred Financing Fees | Deferred Financing Fees | |
The Company incurs expenses in connection with registering and issuing debt securities and bank debt and equity securities to finance its recent and pending acquisitions. For debt issuances, direct costs are deferred until the debt is issued at which point they are amortized over the contractual terms of the debt using the effective interest rate method. For equity issuances, direct costs are deferred until the equity is issued at which point they are recorded as a reduction of the proceeds in additional paid-in capital. | ||
Goodwill and Identifiable Intangible Assets | Goodwill and Identifiable Intangible Assets | |
Goodwill represents the amount by which the purchase price exceeds the fair value of the net tangible and intangible assets of an acquired company on the date of acquisition. Intangible assets, primarily financial advisor relationships, trade names and non-compete agreements, are recorded at their fair value at the completion of an acquisition. Goodwill is reviewed annually for impairment as of October 31. Intangible assets that are definite-lived are amortized over their useful lives and reviewed for impairment annually. The Company performed a quantitative goodwill impairment test and determined that as of October 31, 2014, the goodwill was not impaired. The Company also determined that there was no impairment of its definite-lived intangible assets during any of the periods presented. | ||
The goodwill and intangible assets from each acquisition were determined by an independent valuation company and reviewed by the Company using estimates such as future revenues attributable to financial advisors and the financial advisors’ client retention rates which were used to derive economic cash flows that were fair valued at an appropriate rate of return over their respective useful lives. The valuation results were reviewed by the Company. See Note 8 for more information. | ||
Derivative Contracts | Derivative Contracts | |
During the second quarter of 2014, the Company entered into a series of contemporaneous transactions that qualify as derivative contracts or include derivative contracts. These derivative contracts include a put/call agreement, which is a free-standing derivative contract, and embedded derivative contracts related to the Company’s issuance of convertible notes and Series A Preferred Stock (“hybrid instruments”). | ||
The embedded derivative contracts’ features require separate accounting as derivative instruments; therefore, the issuance proceeds for the convertible note and Series A Preferred Stock were first allocated to the fair value of the put/call agreement and then, on a relative fair value basis, to the hybrid instruments. The proceeds allocated to each hybrid instrument were then attributed between the host contract and the embedded derivative contracts. These derivative contracts are carried at their fair value with changes in fair value reflected in other revenues in the consolidated statements of income. | ||
On November 18, 2014 and December 12, 2014, a portion of the Series A Preferred Stock was submitted for conversion, and on December 10, 2014, December 19, 2014 and February 23, 2015, shares of Class A common stock were issued on account of such conversions. Accordingly, the bifurcated derivatives associated with the converted Series A Preferred Stock were adjusted to their fair value on the date of each submission for conversion, with the changes in fair value reflected in other revenues in the consolidated statement of income. The bifurcated derivatives associated with the converted Series A Preferred Stock were then written off against additional paid-in capital. | ||
On December 19, 2014, the remaining Series A Preferred Stock was exchanged for shares of its new series of 11% Series B Preferred Stock, $0.001 par value per share (“Series B Preferred Stock”), and shares of its new series of 7% Series C Convertible Preferred Stock, $0.001 par value per share (“Series C Preferred Stock”). Accordingly, the bifurcated derivatives associated with the remaining Series A Preferred Stock were adjusted to their fair value as measured on the date of the exchange, with the change in fair value reflected in other revenues in the consolidated statement of income. The remaining bifurcated derivatives associated with the Series A Preferred Stock, which were exchanged, were written off against additional paid-in capital. | ||
The Series B Preferred Stock and Series C Preferred Stock also have embedded derivative contract features that require separate accounting as derivative instruments. These derivative contracts are carried at their fair value with changes in fair value reflected in other revenues in the consolidated statements of income. | ||
See Notes 4, 10 and 11 for more information. | ||
Contingent and Deferred Consideration | Contingent and Deferred Consideration | |
Contingent consideration, also referred to as earn-outs, and deferred payments represent future payments of cash or equity interests to the former owners of the businesses acquired in the recent acquisitions and are initially recorded at fair value in the consolidated statements of financial condition. Contingent consideration is subsequently remeasured each reporting period at fair value with the change in the fair value recorded in other expenses on the consolidated statement of income. The discount on the deferred consideration is accreted into earnings in other expenses on the consolidated statement of income. | ||
Preferred Stock | Preferred Stock | |
On April 29, 2014, the Company issued shares of Series A Preferred Stock in a private placement. Based on the Series A Preferred Stock’s redemption and conversion features, the Company classified the Series A Preferred Stock as mezzanine equity on the statement of financial condition. The Series A Preferred Stock was convertible, at the holder’s option, into shares of Class A common stock. | ||
On November 18, 2014 and December 12, 2014, a portion of the Series A Preferred Stock was submitted for conversion, and on December 10, 2014, December 19, 2014 and February 23, 2015, shares of Class A common stock were issued on account of such conversions. On December 12, 2014, the Company entered into the Securities Exchange Agreement (the “Securities Exchange Agreement”) to exchange the remaining shares of Series A Preferred Stock for shares of its new series of Series B Preferred Stock and shares of its new series of Series C Preferred Stock. On December 19, 2014, this exchange was completed. Based on the Series B Preferred Stock’s and Series C Preferred Stock’s redemption and conversion features, the Company has classified the Series B Preferred Stock and Series C Preferred Stock as mezzanine equity on the statement of financial condition. The Series B Preferred Stock is not convertible. The Series C Preferred Stock is convertible, at the holder’s option, into shares of Class A common stock. See Notes 10 and 11 for more information. | ||
Acquisition Accounting | Acquisition Accounting | |
The Company accounts for its acquisitions using the purchase method of accounting except for the First Allied acquisition which was accounted for at historical cost. | ||
Under the purchase method of accounting the purchase price is preliminarily allocated to the acquiree’s assets and liabilities at fair value and any excess purchase price is then attributed to identifiable intangible assets and goodwill. The preliminary purchase price allocation may be modified as more information is obtained for a period of no more than one year. For acquisitions accounted for under the purchase method, the results of operations of the acquiree are included in the Company’s results from the day after the acquisition closed and prior period financial statements are not restated. | ||
The Company’s acquisition of First Allied was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings immediately following the acquisition of First Allied by RCAP Holdings. Beginning with the Company’s financial statements for the quarter ended June 30, 2014, the Company has presented recast financial information for the relevant periods to reflect the results of operations and financial position of First Allied as if the Company had acquired it on September 25, 2013, the date that First Allied was acquired by RCAP Holdings. The acquisition of First Allied by RCAP Holdings was accounted for by RCAP Holdings using the purchase method of accounting; therefore, the purchase price was allocated to First Allied’s assets and liabilities at fair value and any excess purchase price was then attributed to intangible assets and goodwill. When the Company acquired First Allied from RCAP Holdings, no additional intangible assets or goodwill was recorded. | ||
Revenue Recognition | Revenue Recognition | |
The Company recognizes revenue generally when it is earned and realized or realizable, when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. | ||
Selling Commissions and Dealer Manager Fees | ||
The Company, through certain of its broker-dealer subsidiaries, receives selling commissions and dealer manager fees from related party and non-related party sponsors for its wholesale distribution efforts. The commission and dealer manager fee rates are established jointly in a single contract negotiated with each individual issuer. The Company generally receives commissions of up to 7.0% of gross offering proceeds for funds raised in connection with sales of publicly registered, non-traded securities, all of which are reallowed as commissions, and 4.0% in connection with sales of open-end and closed-end mutual funds through the participating independent broker-dealer channel in accordance with industry practices. Commission percentages are generally established in the issuers’ offering documents leaving the Company no discretion as to the payment of commissions. Commission revenues and related expenses are recorded on a trade date basis as securities transactions occur. | ||
The Company, serving as a dealer manager, receives fees and compensation in connection with the wholesale distribution of registered non-traded securities, such as non-traded REIT and non-traded BDC funds. The Company contracts directly with broker-dealers and RIAs to solicit share subscriptions. The non-traded securities are offered on a “best efforts” basis and the Company is not obligated to underwrite or purchase any shares for its own account. The Company generally receives up to 3.0% of the gross proceeds from the sale of common stock as a dealer manager fee and also receives fees from the sale of common stock through RIAs. The Company has sole discretion as to reallowance of dealer manager fees to participating broker-dealers, based on such factors as the volume of shares sold and marketing support incurred by respective participating broker-dealers as compared to those of other participating broker-dealers. Dealer manager fees and reallowance are recorded on a trade date basis as securities transactions occur. | ||
For open and close-end mutual funds, the Company contracts directly with broker-dealers and RIAs to solicit shares of registered investment company funds. The funds are offered on a “best efforts” basis and the Company is not obligated to underwrite or purchase any shares of the funds for its own account. The Company generally receives up to 50 basis points of the gross proceeds from the shares of the fund and also may receive fees from the shares of the funds from broker-dealers and RIAs. | ||
The Company analyzes contractual arrangements to determine whether to report revenue on a gross basis or a net basis. The analysis considers multiple indicators regarding the services provided to their customers and the services received from its distributors. The goal of the analysis is to determine which entity is the primary obligor in the arrangement. After weighing many indicators, including the Company’s position as the exclusive distributor or dealer manager primarily responsible for the distribution of its customers’ shares, its discretion in supplier selection, that our distributors bear no credit risk and that the commission and dealer manager fee rates are agreed to with each participating broker-dealer, the Company concluded that the gross basis of accounting for its commission and fee revenues is appropriate. | ||
Retail Commissions | ||
The Company records commissions received from securities transactions on a trade-date basis. Commissions from mutual funds, variable annuities, and insurance product purchases transacted directly with the product manufacturers, as well as mutual fund and annuity trailers are estimated for each accounting period. Commissions payable related to these transactions are recorded based upon estimated payout ratios for each product as commission revenue is accrued. | ||
Investment Banking Fees | ||
The Company, through its investment banking and capital markets division, receives fees and compensation for providing investment banking, capital markets and related advisory services. Such fees are charged based on agreements entered into with related party and non-related party public and private issuers of securities and their sponsors and advisors, on a negotiated basis. Fees and expenses that are unpaid are recorded in investment banking fees receivable and reimbursable expenses receivable in the statement of financial condition. Investment banking agreements either have a fixed fee or a percentage of the total deal value which are typically contingent upon the consummation of the transaction; these agreements may also include a minimum fee that will be paid even in the event the transaction is not consummated provided that services have been rendered. Income from investment banking agreements is generally recognized upon consummation of the transaction. However, in certain cases, we recognize income from investment banking agreements prior to the consummation of the transaction if services have been rendered and there are no substantive remaining contingencies as of the reporting date. Income from certain investment banking agreements is recorded as deferred revenue in the statement of financial condition and is recognized over the remaining life of the offering. These fees are typically a fixed dollar amount. | ||
Advisory Fees and Asset-Based Fees | ||
The Company provides investment advisory services to clients. Fees for the services are based on the value of the clients’ portfolios and are generally billed in advance at the beginning of each quarter. The fees are then recognized ratably over the period earned. Asset-based fees include amounts earned related to client sweep account investments, omnibus processing and networking services, and reimbursements and allowances from product providers related to the sale and custody of their products and are recognized when earned. | ||
Transfer Agency Revenue | ||
ANST receives fees for providing transfer agency and related services. Such fees are charged based on agreements entered into with related party issuers of securities on a negotiated basis. Certain fees are billed and recorded monthly based on account activity, such as new account establishment fees and call fees. Other fees, such as account maintenance fees, are billed and recorded monthly. | ||
Services Revenue | ||
The Company receives fees for providing transaction management, marketing support, due diligence advice, events, training and education services, conference management, investor relations and public relations services and strategic advice. Such fees are charged at hourly billing rates for the services provided, based on agreements entered into with related party and non-related party issuers of securities on a negotiated basis. Such fees are billed and recorded monthly based on services rendered. | ||
Reimbursable Expenses | ||
The Company includes all reimbursable expenses in gross revenue because the Company as the primary obligor has discretion in selecting a supplier, and bears the credit risk of paying the supplier prior to receiving reimbursement from the customer. | ||
Investment Fee Revenue | ||
The Company earns management and servicing fees from the investment companies for which it serves as investment adviser. Management and servicing fees are recognized when earned and are calculated monthly or quarterly, as applicable, as a percentage of the aggregate net assets of the funds under management. | ||
Transaction Fees | ||
The Company charges transaction fees for executing transactions on client accounts. Transaction-related charges are recognized on a trade-date basis. Other fee revenue includes fees charged to clients such as individual retirement account maintenance fees, margin interest and confirmation fees, as well as fees charged to financial advisors for contracted services such as affiliation and transaction fees. Other fees are recognized as earned. | ||
Other Revenues | ||
Other revenues include changes in the fair value of the Company’s derivatives contracts, the deferred compensation plan investments and trading securities. See Notes 4 and 10 for more information. | ||
Share-Based Compensation | Share-Based Compensation | |
The Company grants awards of restricted shares of Class A common stock to certain employees under the RCS Capital Corporation Equity Plan (the “RCAP Equity Plan”) which are subject to forfeiture until vested. The Company recognizes the expense in internal commissions, payroll and benefits expense in the consolidated statement of income on a straight-line basis for these awards over the vesting period that ranges from 3 to 5 years based on grant date fair value of the awards. | ||
The Company has also granted restricted stock awards to certain employees of related parties under the RCAP Equity Plan for services performed on behalf of the Company during prior periods. The Company recognizes the entire charge for these awards immediately in retained earnings as a dividend with an offset to additional paid-in capital. These awards were for services already performed and are subject to vesting of 4 years. | ||
An entity that was previously a related party granted restricted stock awards with vesting provisions related to continued employment of the grantees at the Company to certain employees of the Company for services performed by such employees on behalf of such entity. The Company recognizes compensation expense for these awards over the vesting period that ranges from 3 to 5 years and remeasures the fair value of the awards at each reporting date, at which time the amortization of the award is adjusted. The offset to internal commissions, payroll and benefits expense is reflected as a capital contribution in additional paid-in capital. | ||
On June 10, 2014, RCAP Holdings and RCAP Equity, LLC, as the holders of 68.97% of the combined voting power of the Company’s then outstanding common stock, approved the Company’s 2014 Stock Purchase Program (the “2014 Stock Purchase Program”). The 2014 Stock Purchase Program became effective on June 30, 2014. Subject to the terms and conditions of the 2014 Stock Purchase Program, select employees, financial advisors and executive officers of the Company and its affiliates and of certain subsidiaries of the Company were eligible to participate and had the opportunity to elect to purchase shares of Class A common stock. Such participants were also automatically granted one warrant to purchase one share of Class A common stock for each three shares purchased, at an exercise price equal to the purchase price per share purchased. The Company recognizes the expense in internal commissions, payroll and benefits expense in the consolidated statement of income on a straight line basis over the three-year vesting period based on the grant date fair value of warrants issued to employees. For warrants issued to non-employees, the Company remeasures the fair value at each reporting date and the amortization of the expense is adjusted accordingly and recognized over the remaining vesting period. | ||
The First Allied Holdings 2013 Restricted Unit Plan (the “FA RSU Plan”) provides for the grant of phantom stock which was issued to certain employees in connection with the acquisition of First Allied by RCAP Holdings. Pursuant to the terms of the FA RSU Plan, the phantom stock vests equally on each of the first three anniversaries of the acquisition of First Allied by RCAP Holdings. The FA RSU Plan is accounted for using the liability method. | ||
See Note 13 for more information on the Company’s share-based compensation. | ||
Marketing and Advertising | Marketing and Advertising | |
The Company expenses the cost of marketing and advertising as incurred. | ||
Interest Expense | Interest Expense | |
Interest expense includes interest expense and amortization of debt issuance costs on the Company’s bank debt and convertible notes which were issued at a discount. The Company amortizes the discount using the effective interest rate method. See Note 9 for more information. | ||
Income Taxes | Income Taxes | |
The Company files federal and state income tax returns. Realty Capital Securities, ANST and RCS Advisory were treated as disregarded entities up to the date of the subsidiary reorganization (June 10, 2013) and as partnerships for federal and state income tax purposes through the date of the amendment to the Exchange Agreement (August 5, 2014). All income and expense earned by Realty Capital Securities, ANST and RCS Advisory flowed through to their owner through the date of reorganization. The Company was a 9.4% owner of these partnerships from the date of the subsidiary reorganization on June 10, 2013 through the date of the Restructuring Transactions (February 11, 2014). From the date of the Restructuring Transactions (February 11, 2014) through the date of the amendment to the Exchange Agreement (August 5, 2014), the Company was an owner of all but a de minimis amount of these partnerships. As part of the amendment to the Exchange Agreement, no more Class B Units in any of Realty Capital Securities, ANST and RCS Advisory are outstanding and 100% of the voting and economics interests in the Original Operating Subsidiaries are now held by the Company, indirectly, through RCS Holdings’ ownership of the Class A Units. Following the conversion of all outstanding LTIP Units pursuant to Amendment No. 2 to the OPP and related transactions that occurred on December 31, 2014, the Company now files a consolidated federal income tax return and allocates federal income taxes to certain of its subsidiaries pursuant to a tax sharing agreement. | ||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards which relate to the Company’s investment in its subsidiaries. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Current tax liabilities or assets are recognized for the estimated taxes payable or refundable on tax returns for the current year. | ||
A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. This determination is based upon a review of all available evidence, both positive and negative, including the Company’s earnings history, the timing, character and amount of future earnings potential, the reversal of taxable temporary differences and the tax planning strategies available. | ||
The Company has adopted the authoritative guidance within ASC 740 relating to accounting for uncertainty in income taxes. The guidance prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken by the Company. See Note 14 for more information. | ||
Reportable Segments | Reportable Segments | |
The Company’s internal reporting is organized into six segments as follows: | ||
• | Independent Retail Advice, which is comprised of Cetera, Summit, J.P. Turner, First Allied and ICH (following the completion of the VSR and Girard acquisitions, this segment will also include VSR and Girard); | |
• | Wholesale Distribution, which is comprised of Realty Capital Securities, excluding its investment banking division, and StratCap; | |
• | Investment Banking, Capital Markets and Transaction Management Services, which is comprised of the investment banking division of Realty Capital Securities, RCS Advisory, ANST and Docupace; | |
• | Investment Management, which is comprised of Hatteras; | |
• | Investment Research, which is comprised of SK Research; and | |
• | Corporate and Other. | |
See Note 21 for more information on the Company’s segments. | ||
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) to clarify the principles for recognizing revenue and to develop a common revenue standard for US GAAP and International Financial Reporting Standards. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is still evaluating the impact of ASU 2014-09. | ||
In November 2014, the FASB issued Accounting Standards Update 2014-16, “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity” (“ASU 2014-16”), which requires an entity to determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract, when evaluating whether the host contract is more akin to debt or equity. The amendments in ASU 2014-16 did not change the current criteria in US GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required but rather clarified how US GAAP should be interpreted in concluding on the nature of the host contract. The Company adopted ASU 2014-16 during the fourth quarter of 2014. The adoption of ASU 2014-16 did not have an impact on the Company’s previously reported financial condition or results of operations. | ||
In February 2015, the FASB issued Accounting Standards Update 2015-02, “Amendments to the Consolidation Analysis” (“ASU 2015-02”). The new guidance applies to entities in all industries and amends the current consolidation guidance. The amendments are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal periods beginning after December 15, 2017. Early application is permitted. The Company is still evaluating the impact of ASU 2015-02. |
Recent_and_Pending_Acquisition1
Recent and Pending Acquisitions (Table) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Business Combinations [Abstract] | ||||||||
Schedule of Business Acquisitions, by Acquisition | The assignment of the total consideration for the StratCap acquisition as of the date of the acquisition was as follows (in thousands): | |||||||
Cash and cash equivalents | $ | 4,522 | ||||||
Short term investments and securities owned | 2,239 | |||||||
Receivables | 4,858 | |||||||
Property and equipment | 96 | |||||||
Prepaid expenses and other assets | 629 | |||||||
Accounts payable | (706 | ) | ||||||
Accrued expenses | (201 | ) | ||||||
Other liabilities | (908 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 10,529 | |||||||
Goodwill | 22,871 | |||||||
Intangible assets | 121,380 | |||||||
Total consideration | $ | 154,780 | ||||||
The total ICH consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 8,412 | ||||||
Stock issued by the Company | 44,097 | |||||||
Total consideration | $ | 52,509 | ||||||
The estimated range of undiscounted outcomes of the contingent consideration as of December 31, 2014 was as follows (in thousands): | ||||||||
Low Case | High Case | |||||||
Estimated contingent consideration amount | $ | 14,716 | $ | 94,454 | ||||
The total Summit consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 46,727 | ||||||
Stock issued by the Company | 10,431 | |||||||
Total consideration | $ | 57,158 | ||||||
The estimated range of undiscounted outcomes of the contingent consideration as of December 31, 2014 was as follows (in thousands): | ||||||||
Low Case(1) | High Case(1) | |||||||
Estimated contingent consideration amount | $ | 7,551 | $ | 7,551 | ||||
________________________ | ||||||||
(1) The contingent consideration amount for J.P. Turner was to be based on the achievement of certain agreed-upon revenue or EBITDA performance targets for fiscal years ending December 31, 2014, December 31, 2015 and December 31, 2016, which were subject to an annual cap of $2.5 million. Based on the independent valuation company’s projections, which were reviewed by the Company, the earn-outs for the fiscal years ending December 31, 2014, December 31, 2015 and December 31, 2016 were expected to be subject to that cap in both the low and high case. | ||||||||
The preliminary assignment of the total consideration for the Cetera acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 241,641 | ||||||
Cash and segregated securities | 7,999 | |||||||
Trading securities | 741 | |||||||
Receivables | 49,883 | |||||||
Property and equipment | 17,735 | |||||||
Prepaid expenses | 15,083 | |||||||
Deferred compensation plan investments | 76,010 | |||||||
Notes receivable | 38,805 | |||||||
Other assets | 37,096 | |||||||
Accounts payable | (94,074 | ) | ||||||
Accrued expenses | (32,421 | ) | ||||||
Other liabilities | (112,977 | ) | ||||||
Deferred compensation plan accrued liabilities | (75,294 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 170,227 | |||||||
Goodwill | 290,262 | |||||||
Intangible assets | 944,542 | |||||||
Deferred tax liability | (272,289 | ) | ||||||
Total consideration | $ | 1,132,742 | ||||||
The total Hatteras consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 30,000 | ||||||
Contingent consideration | 24,880 | |||||||
Deferred consideration | 9,430 | |||||||
Total consideration | $ | 64,310 | ||||||
The assignment of the total consideration for the J.P. Turner acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 10,171 | ||||||
Receivables | 712 | |||||||
Property and equipment | 232 | |||||||
Prepaid expenses | 892 | |||||||
Notes receivable | 1,660 | |||||||
Other assets | 2,171 | |||||||
Accounts payable | (1,710 | ) | ||||||
Accrued expenses | (8,543 | ) | ||||||
Other liabilities | (656 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 4,929 | |||||||
Goodwill | 13,579 | |||||||
Intangible assets | 14,200 | |||||||
Total consideration | $ | 32,708 | ||||||
The assignment of the total consideration for the ICH acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 6,881 | ||||||
Short term investments and securities owned | 499 | |||||||
Receivables | 7,500 | |||||||
Property and equipment | 275 | |||||||
Notes receivable | 1,875 | |||||||
Deferred compensation | 2,250 | |||||||
Deferred tax asset | 2,613 | |||||||
Other assets | 1,055 | |||||||
Accounts payable and accrued expenses | (1,945 | ) | ||||||
Other liabilities | (7,593 | ) | ||||||
Notes payable and long-term debt | (2,918 | ) | ||||||
Non-qualified deferred compensation | (2,611 | ) | ||||||
Total fair value excluding goodwill, intangible assets, and deferred tax liability | 7,881 | |||||||
Goodwill | 26,680 | |||||||
Intangible assets | 30,100 | |||||||
Deferred tax liability | (12,152 | ) | ||||||
Total consideration | $ | 52,509 | ||||||
The total J.P. Turner consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 12,786 | ||||||
Stock issued by the Company | 4,860 | |||||||
Contingent consideration | 4,500 | |||||||
Deferred consideration | 10,562 | |||||||
Total consideration | $ | 32,708 | ||||||
The total Cetera consideration consisted of the following (in thousands): | ||||||||
Contractual purchase price | $ | 1,150,000 | ||||||
Purchase price adjustments | 17,258 | |||||||
Total consideration | $ | 1,132,742 | ||||||
The assignment of the total consideration for the Summit acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 13,353 | ||||||
Receivables | 3,147 | |||||||
Property and equipment | 362 | |||||||
Prepaid expenses | 1,531 | |||||||
Notes receivable | 1,092 | |||||||
Other assets | 2,366 | |||||||
Accounts payable | (9,973 | ) | ||||||
Accrued expenses | (3,100 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 8,778 | |||||||
Goodwill | 23,891 | |||||||
Intangible assets | 31,240 | |||||||
Deferred tax liability | (6,751 | ) | ||||||
Total consideration | $ | 57,158 | ||||||
The total StratCap consideration consisted of the following (in thousands): | ||||||||
Cash paid by the Company | $ | 67,510 | ||||||
Stock issued by the Company | 10,000 | |||||||
Contingent consideration | 67,300 | |||||||
Deferred consideration | 9,970 | |||||||
Total consideration | $ | 154,780 | ||||||
The estimated range of undiscounted outcomes for the contingent consideration are as follows (in thousands): | ||||||||
Low Case | High Case | |||||||
Estimated contingent consideration amount | $ | 70,840 | $ | 125,920 | ||||
The assignment of the total consideration for the Hatteras acquisition as of the date of the acquisition was as follows (in thousands): | ||||||||
Cash and cash equivalents | $ | 805 | ||||||
Receivables | 7,747 | |||||||
Property and equipment | 192 | |||||||
Prepaid expenses | 326 | |||||||
Other assets | 120 | |||||||
Accounts payable | (3,721 | ) | ||||||
Accrued expenses | (5,277 | ) | ||||||
Total fair value excluding goodwill and intangible assets | 192 | |||||||
Goodwill | 15,348 | |||||||
Intangible assets | 48,770 | |||||||
Total consideration | $ | 64,310 | ||||||
Business Acquisition, Pro Forma Information | The Company’s supplemental pro forma results of operations for Hatteras for the year ended December 31, 2014 and 2013 are as follows (in millions): | |||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 62.3 | $ | 47.6 | ||||
Income before taxes | 7.2 | 1.2 | ||||||
The Company’s supplemental pro forma results of operations for StratCap for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 143.3 | $ | 66.2 | ||||
Loss before taxes | (5.2 | ) | (15.3 | ) | ||||
The Company’s supplemental pro forma results of operations, which include the Original Operating Subsidiaries, Cetera, Summit, J.P. Turner, Hatteras, First Allied, ICH and StratCap for the year ended December 31, 2014 and 2013, are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 2,729.50 | $ | 2,682.50 | ||||
Loss before taxes | (196.1 | ) | (78.3 | ) | ||||
Benefit from income taxes(1) | (78.5 | ) | (31.3 | ) | ||||
Net loss | (117.6 | ) | (47.0 | ) | ||||
Less: income attributable to non-controlling interest | 8.9 | — | ||||||
Less: preferred dividends and deemed dividend | 153.3 | 18.9 | ||||||
Net loss attributable to Class A common stockholders | $ | (279.8 | ) | $ | (65.9 | ) | ||
Per share data | ||||||||
Pro forma basic and diluted loss per share(2) | $ | (5.18 | ) | $ | (1.61 | ) | ||
Pro forma weighted average basic and diluted shares | 54,155,046 | 40,995,457 | ||||||
________________________ | ||||||||
(1) Reflects pro forma adjustment to record the income tax provision based on the assumed 40% tax rate. | ||||||||
(2) For the year ended December 31, 2014, the numerator for the pro forma basic and diluted earnings per share calculation was reduced by $0.7 million for allocation of earnings to nonvested restricted stock units holders. | ||||||||
The Company’s supplemental pro forma results of operations for Summit for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 100.5 | $ | 82.8 | ||||
Income (loss) before taxes | (5.5 | ) | (0.2 | ) | ||||
The Company’s supplemental pro forma results of operations with J.P. Turner for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 52.8 | $ | 57.8 | ||||
Income (loss) before taxes | 1.5 | (4.8 | ) | |||||
The Company’s supplemental pro forma results of operations for Cetera for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 1,214.10 | $ | 1,123.90 | ||||
Loss before taxes | (36.9 | ) | (73.3 | ) | ||||
The Company’s supplemental pro forma results of operations for ICH for the year ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||
Unaudited | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 94.8 | $ | 87.8 | ||||
Loss before taxes | (3.7 | ) | (5.0 | ) |
Fair_Value_Disclosures_Fair_Va
Fair Value Disclosures Fair Value Disclosures (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis by product category as of December 31, 2014 are as follows (in thousands): | |||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Cash equivalents - money market funds | $ | 82,973 | $ | — | $ | — | $ | 82,973 | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||
Mutual funds | 11,473 | — | — | 11,473 | ||||||||||||||||||||||||
Total available-for-sale | 11,473 | — | — | 11,473 | ||||||||||||||||||||||||
Trading securities: | ||||||||||||||||||||||||||||
Equity securities | 262 | — | — | 262 | ||||||||||||||||||||||||
Mutual funds | 9,457 | — | — | 9,457 | ||||||||||||||||||||||||
U.S. government bonds | 2 | 10 | — | 12 | ||||||||||||||||||||||||
Other | 41 | — | 470 | 511 | ||||||||||||||||||||||||
Total trading securities | 9,762 | 10 | 470 | 10,242 | ||||||||||||||||||||||||
Deferred compensation plan investments: | ||||||||||||||||||||||||||||
Money market fund | 6,246 | — | — | 6,246 | ||||||||||||||||||||||||
International global funds | 17,722 | — | — | 17,722 | ||||||||||||||||||||||||
U.S. equity funds | 46,999 | — | — | 46,999 | ||||||||||||||||||||||||
U.S. fixed-income funds | 9,787 | — | — | 9,787 | ||||||||||||||||||||||||
Mutual funds | — | 2,702 | — | 2,702 | ||||||||||||||||||||||||
Total deferred compensation plan investments | 80,754 | 2,702 | — | 83,456 | ||||||||||||||||||||||||
Prepaid expenses and other assets - oil and gas interests | — | — | 151 | 151 | ||||||||||||||||||||||||
Total | $ | 184,962 | $ | 2,712 | $ | 621 | $ | 188,295 | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Derivative contracts | $ | — | $ | — | $ | 102,908 | (1) | $ | 102,908 | |||||||||||||||||||
Other liabilities: | ||||||||||||||||||||||||||||
Equity securities | 161 | — | — | 161 | ||||||||||||||||||||||||
Mutual funds and unit investment trusts | 4 | — | — | 4 | ||||||||||||||||||||||||
State and municipal government obligations | 222 | — | — | 222 | ||||||||||||||||||||||||
Contingent consideration | — | — | 107,278 | (2) | 107,278 | |||||||||||||||||||||||
Total | $ | 387 | $ | — | $ | 210,186 | $ | 210,573 | ||||||||||||||||||||
_____________________ | ||||||||||||||||||||||||||||
(1) Includes $21.9 million of derivatives classified in long-term debt. | ||||||||||||||||||||||||||||
(2) Excludes deferred payments, which are measured on non-recurring basis. | ||||||||||||||||||||||||||||
The Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis by product category as of December 31, 2013 are as follows (in thousands): | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||
Mutual funds | $ | 8,528 | $ | — | $ | — | $ | 8,528 | ||||||||||||||||||||
Total available-for-sale | 8,528 | — | — | 8,528 | ||||||||||||||||||||||||
Trading securities: | ||||||||||||||||||||||||||||
Mutual funds | 7,708 | — | — | 7,708 | ||||||||||||||||||||||||
Total trading securities | 7,708 | — | — | 7,708 | ||||||||||||||||||||||||
Total | $ | 16,236 | $ | — | $ | — | $ | 16,236 | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Other liabilities: | ||||||||||||||||||||||||||||
Equity securities | $ | 238 | $ | — | $ | — | $ | 238 | ||||||||||||||||||||
State and municipal government obligations | 51 | — | — | 51 | ||||||||||||||||||||||||
Certificates of deposit | 20 | — | — | 20 | ||||||||||||||||||||||||
Contingent consideration | — | — | 2,180 | 2,180 | ||||||||||||||||||||||||
Total | $ | 309 | $ | — | $ | 2,180 | $ | 2,489 | ||||||||||||||||||||
Fair Value, Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table presents changes during the year ended December 31, 2014 in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains and losses related to the Level 3 assets and liabilities in the statement of financial condition as of December 31, 2014 (in thousands): | |||||||||||||||||||||||||||
Fair value as of | Net realized and unrealized gains/(losses) | Purchases | Issuances | Sales | Settlements | Fair value as of | ||||||||||||||||||||||
31-Dec-13 | 31-Dec-14 | |||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Trading securities- other | $ | — | $ | 4 | $ | 477 | $ | — | $ | (11 | ) | $ | — | $ | 470 | |||||||||||||
Prepaid expenses and other assets - oil and gas interests | — | (166 | ) | 372 | — | — | (55 | ) | 151 | |||||||||||||||||||
Total | $ | — | $ | (162 | ) | $ | 849 | $ | — | $ | (11 | ) | $ | (55 | ) | $ | 621 | |||||||||||
Fair value as of | Net realized and unrealized (gains)/losses | Purchases | Issuances | Sales | Settlements | Fair value as of | ||||||||||||||||||||||
31-Dec-13 | 31-Dec-14 | |||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Derivative contracts | $ | — | $ | 45,213 | $ | — | $ | 233,189 | $ | — | $ | (175,494 | ) | $ | 102,908 | |||||||||||||
Contingent consideration | 2,180 | 8,808 | 12,868 | 96,680 | — | (13,258 | ) | 107,278 | ||||||||||||||||||||
Total | $ | 2,180 | $ | 54,021 | $ | 12,868 | $ | 329,869 | $ | — | $ | (188,752 | ) | $ | 210,186 | |||||||||||||
The following table presents changes during the year ended December 31, 2013 in Level 3 liabilities measured at fair value on a recurring basis, and the realized and unrealized gains and losses related to the Level 3 liabilities in the statement of financial condition as of December 31, 2013 (in thousands): | ||||||||||||||||||||||||||||
Fair value as of | Net realized and unrealized (gains)/losses | Purchases | Issuances | Settlements | Fair value as of | |||||||||||||||||||||||
31-Dec-12 | 31-Dec-13 | |||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Contingent consideration | $ | — | $ | 9 | $ | 2,181 | $ | — | $ | (10 | ) | $ | 2,180 | |||||||||||||||
Total | $ | — | $ | 9 | $ | 2,181 | $ | — | $ | (10 | ) | $ | 2,180 | |||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments as of December 31, 2014 (dollars in thousands): | |||||||||||||||||||||||||||
Fair value | Valuation technique | Unobservable inputs | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Trading securities- other- private equity fund | $ | 113 | Net asset value (NAV) | Net asset value (NAV) | ||||||||||||||||||||||||
Trading securities- other- REIT | $ | 357 | Net asset value (NAV) | Net asset value (NAV) | ||||||||||||||||||||||||
Prepaid expenses and other assets - oil and gas interests | $ | 151 | Discounted cash flows | 10% discount rate | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Derivative contracts | $ | 102,908 | Monte Carlo & binomial lattice (Series C) | Inputs for convertible notes, Series B and Series C preferred stock respectively: | ||||||||||||||||||||||||
- Duration: 6.8 years, 8.0 years, 8.0 years | ||||||||||||||||||||||||||||
- Volatility: 30%, N/A, 30.0% | ||||||||||||||||||||||||||||
- Risk free rate of interest: 1.95%, 2.1%, 2.1% | ||||||||||||||||||||||||||||
- Discount rate: 12.95%, 15.1%, 15.1% | ||||||||||||||||||||||||||||
- Dividend assumptions: N/A, 12.5% (first 18 months only; subsequently reverts to 11%), 8.0% (first 18 months only; subsequently reverts to 7%) | ||||||||||||||||||||||||||||
Inputs for the put option: | ||||||||||||||||||||||||||||
- Volatility: 30% | ||||||||||||||||||||||||||||
- Exercise date: June 10, 2033 | ||||||||||||||||||||||||||||
- Risk free rate: 2.43% | ||||||||||||||||||||||||||||
Contingent consideration - J.P. Turner | $ | 6,200 | Discounted cash flow | J.P. Turner: | ||||||||||||||||||||||||
- Probability exceeding percentage threshold: 99.7% to 100% | ||||||||||||||||||||||||||||
- Present value factor: 0.71 to 0.95 | ||||||||||||||||||||||||||||
- Time until payments: 0.4 years to 2.4 years | ||||||||||||||||||||||||||||
Contingent consideration - Hatteras | $ | 28,310 | Discounted cash flow | Hatteras: | ||||||||||||||||||||||||
- Projected earnings: $11.0 million to $17.3 million, December 31, 2016 and 2018, respectively | ||||||||||||||||||||||||||||
- Discounted rates based on the estimated weighted average cost of capital (WACC): 0.50 to 0.70 | ||||||||||||||||||||||||||||
Contingent consideration - StratCap | $ | 68,200 | Discounted cash flow | StratCap: | ||||||||||||||||||||||||
- Projected earn-out payments: EBITDA multiples for 2015 and 2016. | ||||||||||||||||||||||||||||
- Present value factor: 0.65 to 0.787 | ||||||||||||||||||||||||||||
- Probability adjustment: 25.0%, 50%, 25.0% for Low Case, Base Case, and High Case, respectively. | ||||||||||||||||||||||||||||
Contingent consideration - First Allied and Cetera | $ | 4,568 | Discounted cash flow | - Revenue achievement | ||||||||||||||||||||||||
- WACC 0.20 | ||||||||||||||||||||||||||||
The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments as of December 31, 2013 (dollars in thousands): | ||||||||||||||||||||||||||||
Fair value | Valuation technique | Unobservable inputs | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Contingent consideration | $ | 2,180 | Discounted cash flow | 2.5% discount rate | ||||||||||||||||||||||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share | The following table presents information related to the Company’s investments that calculate NAV per share as of December 31, 2014. For these investments, which are measured at fair value on a recurring basis, the Company used the NAV per share as a practical expedient to measure fair value (in thousands): | |||||||||||||||||||||||||||
Investment Category Includes | Fair Value Using Net Asset Value Per Share | Unfunded Commitments | ||||||||||||||||||||||||||
Trading securities- other- private equity fund | Investments in private equity funds | $ | 113 | $ | 9 | |||||||||||||||||||||||
Trading securities- other- REIT | Investment in a REIT | 357 | — | |||||||||||||||||||||||||
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table presents information about the carrying values and fair values by fair value hierarchy for convertible notes, Series B Preferred Stock and Series C Preferred Stock, first and second lien term loan facility, promissory note and subordinated borrowings where the ending balance was carried at amortized cost as of December 31, 2014. There were no such instruments as of December 31, 2013. | |||||||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||||||||
Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Convertible notes | $ | 61,632 | $ | — | $ | — | $ | 78,005 | ||||||||||||||||||||
Series B Preferred Stock | 146,700 | — | — | 117,367 | ||||||||||||||||||||||||
Series C Preferred Stock | 111,288 | — | — | 136,242 | ||||||||||||||||||||||||
First lien term facility | 555,700 | — | — | 530,491 | ||||||||||||||||||||||||
Second lien term facility | 147,903 | — | — | 142,500 | ||||||||||||||||||||||||
Promissory note (legal settlement) | 15,300 | — | 15,300 | — | ||||||||||||||||||||||||
Subordinated borrowings | 2,000 | — | — | 2,000 | ||||||||||||||||||||||||
Total | $ | 1,040,523 | $ | — | $ | 15,300 | $ | 1,006,605 | ||||||||||||||||||||
AvailableforSale_Securities_Ta
Available-for-Sale Securities (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||
Disclosure of RCS Advisory's Investments | The following table presents information about the Company’s available-for-sale securities as of December 31, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||||||
Fair value at December 31, 2013 | Purchases(1) | Sales | Realized Gains/ (Losses) | Unrealized Gains/ (Losses) | Fair value at December 31, 2014 | Cost | ||||||||||||||||||||||
Mutual funds | $ | 8,528 | $ | 11,484 | $ | (9,013 | ) | $ | 171 | $ | 303 | $ | 11,473 | $ | 11,684 | |||||||||||||
_____________________ | ||||||||||||||||||||||||||||
(1) Includes $0.3 million of purchases under dividend reinvestment programs. | ||||||||||||||||||||||||||||
The following table presents information about the Company’s available-for-sale securities as of December 31, 2013 and December 31, 2012 (amounts in thousands): | ||||||||||||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||||||||||
Fair value at December 31, 2012 | Purchases | Sales | Realized Gains/ (Losses) | Unrealized Gains/ (Losses) | Fair value at December 31, 2013 | Cost | ||||||||||||||||||||||
Mutual funds | $ | — | $ | 10,097 | $ | (1,000 | ) | $ | (59 | ) | $ | (510 | ) | $ | 8,528 | $ | 9,038 | |||||||||||
Note_Receivable_Tables
Note Receivable (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | The Company’s notes receivable for the year ended December 31, 2014 and the year ended December 31, 2013, were as follows (in thousands): | |||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||
Forgivable loans | Payback loans | Total | Forgivable loans | Payback loans | Total | |||||||||||||||||||
Beginning balance | $ | 11,104 | $ | 2,166 | $ | 13,270 | $ | 6,633 | $ | 1,914 | $ | 8,547 | ||||||||||||
Originated and acquired loans | 16,747 | 52,200 | 68,947 | 5,286 | 350 | 5,636 | ||||||||||||||||||
Collections | (1,672 | ) | (8,805 | ) | (10,477 | ) | (157 | ) | (206 | ) | (363 | ) | ||||||||||||
Forgiveness | (8,329 | ) | 298 | (8,031 | ) | (661 | ) | 88 | (573 | ) | ||||||||||||||
Accretion | 5,368 | 402 | 5,770 | 3 | 3 | 6 | ||||||||||||||||||
Allowance | (143 | ) | (347 | ) | (490 | ) | — | 17 | 17 | |||||||||||||||
Ending balance | $ | 23,075 | $ | 45,914 | $ | 68,989 | $ | 11,104 | $ | 2,166 | $ | 13,270 | ||||||||||||
Allowance for Credit Losses on Financing Receivables | The following table presents the Company’s allowance for uncollectible amounts due from financial advisors for the year ended December 31, 2014 and the year ended December 31, 2013 (in thousands): | |||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||
Forgivable loans | Payback loans | Total | Forgivable loans | Payback loans | Total | |||||||||||||||||||
Beginning balance | $ | 368 | $ | 56 | $ | 424 | $ | 368 | $ | 73 | $ | 441 | ||||||||||||
Provision for bad debt | 327 | 735 | 1,062 | — | — | — | ||||||||||||||||||
Charge off - net of recoveries | (184 | ) | (388 | ) | (572 | ) | — | (17 | ) | (17 | ) | |||||||||||||
Total change | 143 | 347 | 490 | — | (17 | ) | (17 | ) | ||||||||||||||||
Ending balance | $ | 511 | $ | 403 | $ | 914 | $ | 368 | $ | 56 | $ | 424 | ||||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property, Plant and Equipment | The Company’s property and equipment as of December 31, 2014 and December 31, 2013 consisted of the following (in thousands): | |||||||
31-Dec-14 | 31-Dec-13 | |||||||
Office furniture and equipment | $ | 3,650 | $ | 1,007 | ||||
Computer software and hardware | 22,971 | 854 | ||||||
Leasehold improvements | 3,613 | 372 | ||||||
Total property and equipment | 30,234 | 2,233 | ||||||
Less: Accumulated depreciation and amortization | 5,488 | 350 | ||||||
Property and equipment - net | $ | 24,746 | $ | 1,883 | ||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Schedule of Intangible Assets and Goodwill | The following table presents the goodwill by segment (in thousands): | |||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||
Independent Retail Advice | $ | 434,398 | $ | 79,986 | ||||||||||
Wholesale Distribution | 22,871 | — | ||||||||||||
Investment Management | 15,348 | — | ||||||||||||
Investment Banking and Capital Markets | 45,989 | — | ||||||||||||
Corporate and Other | 755 | — | ||||||||||||
Total goodwill | $ | 519,361 | $ | 79,986 | ||||||||||
Schedule of Goodwill | The following table presents the carrying amount of goodwill as of December 31, 2014 and December 31, 2013 by acquisition (in thousands): | |||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||
First Allied acquisition | $ | 79,986 | $ | 79,986 | ||||||||||
Cetera acquisition | 290,262 | — | ||||||||||||
Summit acquisition | 23,891 | — | ||||||||||||
J.P. Turner acquisition | 13,579 | — | ||||||||||||
Hatteras acquisition | 15,348 | — | ||||||||||||
ICH acquisition | 26,680 | — | ||||||||||||
StratCap acquisition | 22,871 | — | ||||||||||||
Trupoly acquisition | 755 | — | ||||||||||||
Docupace acquisition (preliminary) | 45,989 | — | ||||||||||||
Total goodwill | $ | 519,361 | $ | 79,986 | ||||||||||
Schedule of Finite-Lived Intangible Assets | The components of intangible assets as of December 31, 2014 are as follows (dollars in thousands): | |||||||||||||
Weighted-Average Life Remaining | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||
(in years) | ||||||||||||||
Finite-lived intangible assets: | ||||||||||||||
Financial advisor relationships | 13 | $ | 1,019,353 | $ | 52,070 | $ | 967,283 | |||||||
Sponsor relationships | 9 | 113,000 | 4,186 | 108,814 | ||||||||||
Trade names | 29 | 65,192 | 1,638 | 63,554 | ||||||||||
Investment management agreements | 12 | 47,390 | 1,966 | 45,424 | ||||||||||
Customer relationships | 11 | 20,686 | 1,473 | 19,213 | ||||||||||
Internally developed software and technologies | 7 | 22,510 | 779 | 21,731 | ||||||||||
Intellectual property | 9 | 10,642 | 849 | 9,793 | ||||||||||
Non-competition agreements | 2 | 9,648 | 5,136 | 4,512 | ||||||||||
Distribution networks(1) | 40 | 3,210 | 9 | 3,201 | ||||||||||
Total finite-lived intangible assets | $ | 1,311,631 | $ | 68,106 | $ | 1,243,525 | ||||||||
________________ | ||||||||||||||
(1) The Company previously classified its distribution networks as indefinite-lived intangible assets. The Company finalized its assessment of the useful life of the distribution networks and concluded that they were finite-lived rather than indefinite-lived intangible assets. | ||||||||||||||
The Company’s intangible assets as of December 31, 2013 relate to First Allied. The components of intangible assets as of December 31, 2013 are as follows (dollars in thousands): | ||||||||||||||
Weighted-Average Life Remaining | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||
(in years) | ||||||||||||||
Finite-lived intangible assets: | ||||||||||||||
Financial advisor relationships | 13 | $ | 71,185 | $ | 1,487 | $ | 69,698 | |||||||
Customer relationships | 13 | 12,686 | 277 | 12,409 | ||||||||||
Non-competition agreements | 2 | 1,026 | 128 | 898 | ||||||||||
Total finite-lived intangible assets | $ | 84,897 | $ | 1,892 | $ | 83,005 | ||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Total amortization expense for finite-lived intangible assets was $66.2 million for the year ended December 31, 2014. Total amortization expense for finite-lived intangible assets was $1.9 million for the year ended December 31, 2013. The Company did not have any amortization expense for the year ended December 31, 2012. Future amortization expense is estimated as follows (in thousands): | |||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | $ | 102,820 | ||||||||||||
2015 | 100,090 | |||||||||||||
2016 | 99,937 | |||||||||||||
2017 | 99,858 | |||||||||||||
2018 | 98,529 | |||||||||||||
Thereafter | 742,291 | |||||||||||||
Total | $ | 1,243,525 | ||||||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Schedule of Long-term Debt Instruments | The following table presents the Company’s long-term borrowings as of December 31, 2014 and December 31, 2013 and their contractual interest rates (dollars in thousands): | |||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Balance | Interest Rate | Balance | Interest Rate | |||||||||
First lien term facility | $ | 555,700 | 6.50% | $ | — | |||||||
Second lien term facility | 147,903 | 10.50% | — | |||||||||
Convertible notes | 83,508 | (1) | 5.00% | — | ||||||||
Promissory note | 15,300 | 8.00% | — | |||||||||
Subordinated borrowings | 2,000 | 8.25% | — | |||||||||
Other | — | 33,302 | (2) | 2.42% | ||||||||
Total borrowings | 804,411 | 33,302 | ||||||||||
Less: Current portion of borrowings | 43,891 | 3,200 | ||||||||||
Total long-term debt, net of current portion | $ | 760,520 | $ | 30,102 | ||||||||
_____________________ | ||||||||||||
(1) The Company’s convertible notes balance includes the fair value of the compound derivative of $21.9 million. | ||||||||||||
(2) The Company’s long-term borrowings as of December 31, 2013 relate to First Allied, of which, $28.8 million was outstanding under the FA Term Loan and $4.5 million was outstanding under the FA Revolver. | ||||||||||||
Schedule of Maturities of Long-term Debt | The following table presents the contractual maturities of long-term debt, net of the current portion and inclusive of the fair value of the compound derivative of $21.9 million, as of December 31, 2014 (in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2016 | $ | 63,627 | ||||||||||
2017 | 74,466 | |||||||||||
2018 | 76,597 | |||||||||||
2019 | 277,217 | |||||||||||
Thereafter(1) | 268,613 | |||||||||||
Total long-term debt, net of current portion | $ | 760,520 | ||||||||||
_____________________ | ||||||||||||
(1) Includes the fair value of the compound derivative of $21.9 million. | ||||||||||||
Schedule of Short-term Debt | The following table presents the scheduled contractual maturities of the current portion of long-term debt as of December 31, 2014 (in thousands): | |||||||||||
31-Mar-15 | $ | 5,668 | ||||||||||
30-Jun-15 | 12,797 | |||||||||||
30-Sep-15 | 12,740 | |||||||||||
31-Dec-15 | 12,686 | |||||||||||
Total current portion of long-term debt | $ | 43,891 | ||||||||||
Preferred_Stock_Tables
Preferred Stock - (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||
Schedule of Conversions of Stock | The following table presents the details of the conversions (in thousands, except share and per share data): | ||||||||||||||||||||||
Date of Submission For Conversion | Preferred Shares Converted | Liquidation Preference Converted(1) | Conversion Price Per Share(2) | Class A Common Stock Issued | Close Price Per Share on the Date of Conversion | Aggregate Market Value of Class A Common Issued | |||||||||||||||||
18-Nov-14 | 902,000 | $ | 16,770 | $ | 11.1 | 1,511,004 | $ | 12.96 | $ | 19,583 | |||||||||||||
December 12, 2014(3) | 2,171,553 | 40,560 | 10.41 | 3,894,597 | 11.81 | 45,995 | |||||||||||||||||
Total(4) | 3,073,553 | $ | 57,330 | $ | 10.61 | 5,405,601 | $ | 12.13 | $ | 65,578 | |||||||||||||
_____________________ | |||||||||||||||||||||||
(1) The liquidation preference is determined by multiplying the number of shares being converted by $18.42 then adding the unpaid dividends on such shares. | |||||||||||||||||||||||
(2) Both conversions were calculated using a 2% discount to VWAP of Class A common stock for the ten trading days prior to the date of the holder’s election to convert. | |||||||||||||||||||||||
(3) To comply with ownership limitations applicable to Luxor under the terms of the Series A Preferred Stock, 1,852,575 shares of Class A common stock were issued on December 19, 2014 and 2,042,022 shares of Class A common stock were issued on February 23, 2015. See Note 15 for more information. | |||||||||||||||||||||||
(4) Per share totals are expressed as weighted averages. |
EquityBased_Compensation_Table
Equity-Based Compensation (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||
Nonvested Restricted Stock Shares Activity | The following table details the restricted shares activity related to restricted stock awards of an entity that was previously a related party granted to RCAP employees during the year ended December 31, 2014: | |||||||||||||||||||||
Shares of Restricted Common Stock of a Related Party | Weighted-Average Fair Value Per Share | Aggregate Value (in thousands) | Weighted-Average Vesting Period Remaining (years) | |||||||||||||||||||
Nonvested, December 31, 2013 | — | $ | — | $ | — | — | ||||||||||||||||
Granted | 512,430 | 10.39 | 5,324 | 4.05 | ||||||||||||||||||
Less: vested | 143,805 | 13.83 | 1,989 | N/A | ||||||||||||||||||
Less: forfeited | — | — | — | N/A | ||||||||||||||||||
Nonvested, December 31, 2014 | 368,625 | $ | 9.05 | $ | 3,335 | 2.83 | ||||||||||||||||
The following table details the restricted shares activity during the year ended December 31, 2014: | ||||||||||||||||||||||
Shares of Restricted Common Stock | Weighted-Average Issue Price | Aggregate Value (in thousands) | Weighted-Average Vesting Period Remaining (years) | |||||||||||||||||||
Nonvested, December 31, 2013 | — | $ | — | $ | — | — | ||||||||||||||||
Granted(1) | 2,368,203 | 34.71 | 82,200 | 3.82 | ||||||||||||||||||
Less: vested(2) | 59,812 | 27.73 | 1,659 | N/A | ||||||||||||||||||
Less: forfeited | 26,086 | 38.1 | 994 | N/A | ||||||||||||||||||
Less: retired | 5,592 | 30.73 | 172 | N/A | ||||||||||||||||||
Nonvested, December 31, 2014 | 2,276,713 | $ | 34.86 | $ | 79,375 | 3.09 | ||||||||||||||||
_____________________ | ||||||||||||||||||||||
(1) Does not include 287,502 shares of Class A common stock issued to individual members of RCS Capital Management that were issued as awards under the RCAP Equity Plan on December 31, 2014 following conversion and exchange of Earned LTIP units. | ||||||||||||||||||||||
(2) The shares that vested during the year ended December 31, 2014 had an aggregate fair market value of $1.6 million on the vesting dates. | ||||||||||||||||||||||
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | The following table presents the details for the inputs and valuations of the warrants using a Black-Scholes option pricing model: | |||||||||||||||||||||
Date of Issuance | Valuation Date | Exercise Price | Fair Value | Volatility(1) | Risk-Free Rate of Interest | Dividend Yield | Time to Expiration (years)(2) | |||||||||||||||
September 30, 2014 | September 30, 2014 | $ | 22.52 | $ | 7.88 | 30 | % | 2.23 | % | — | % | 6.5 | ||||||||||
September 30, 2014 | December 31, 2014 | $ | 22.52 | $ | 1.75 | 30 | % | 1.95 | % | — | % | 6.25 | ||||||||||
December 31, 2014 | December 31, 2014 | $ | 12.24 | $ | 4.2 | 30 | % | 1.95 | % | — | % | 6.5 | ||||||||||
_____________________ | ||||||||||||||||||||||
(1) Volatility was based on the historical and implied volatility of a peer group of companies. | ||||||||||||||||||||||
(2) Time to expiration was calculated using the simplified method to estimate the expected term assumption for “plain vanilla” options. | ||||||||||||||||||||||
Schedule of Nonvested Share Activity | The following table details the warrant activity during the year ended December 31, 2014: | |||||||||||||||||||||
Warrants | Weighted-Average Fair Value | Aggregate Value (in thousands) | Weighted-Average Vesting Period Remaining (years) | |||||||||||||||||||
Nonvested, December 31, 2013 | — | $ | — | $ | — | — | ||||||||||||||||
Issued | 397,332 | 3.44 | 1,367 | 3 | ||||||||||||||||||
Less: vested | — | — | — | N/A | ||||||||||||||||||
Less: forfeited | 1,915 | 7.88 | 15 | N/A | ||||||||||||||||||
Nonvested, December 31, 2014 | 395,417 | $ | 3.42 | $ | 1,352 | 2.85 | ||||||||||||||||
Income_Taxes_Income_Taxes_Tabl
Income Taxes Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense/(benefit) included in the consolidated statements of income for the years ended December 31, 2014, 2013 and 2012 were as follows (dollars in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current income tax expense | ||||||||||||
U.S. federal | $ | (1,630 | ) | $ | 1,630 | $ | — | |||||
State and local | (196 | ) | 677 | — | ||||||||
Total current income tax expense | (1,826 | ) | 2,307 | — | ||||||||
Deferred income tax benefit | ||||||||||||
U.S. federal | (33,351 | ) | (390 | ) | — | |||||||
State and local | (11,308 | ) | (74 | ) | — | |||||||
Total deferred income tax benefit | (44,659 | ) | (464 | ) | — | |||||||
Total income tax expense | $ | (46,485 | ) | $ | 1,843 | $ | — | |||||
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rates for the years ended December 31, 2014, 2013 and 2012 were as follows: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | — | % | ||||||
Increase (decrease) in tax rate resulting from: | ||||||||||||
State and local income taxes net of federal benefit | 4.82 | % | 0.39 | % | — | % | ||||||
Fair value adjustments on derivatives | (10.10 | )% | — | % | ||||||||
Transaction costs | (1.92 | )% | — | % | — | % | ||||||
Non-controlling interests | 1.81 | % | (33.63 | )% | — | % | ||||||
Other | (1.63 | )% | 0.09 | % | — | % | ||||||
Effective income tax rate | 27.98 | % | 1.85 | % | — | % | ||||||
Schedule of Deferred Tax Assets and Liabilities | The components of the deferred income taxes as of December 31, 2014 and 2013 were as follows (dollars in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets | ||||||||||||
Net operating loss carryforward | 46,551 | $ | 1 | |||||||||
Deferred compensation | 26,916 | 21 | ||||||||||
Accrued liabilities and reserves | 15,971 | 104 | ||||||||||
Stock-based compensation | 9,763 | 6,717 | ||||||||||
Amortization | 5,011 | — | ||||||||||
Deferred revenue | 3,443 | 1,815 | ||||||||||
Other | 1,268 | 840 | ||||||||||
Gross deferred tax assets | $ | 108,923 | $ | 9,498 | ||||||||
Valuation allowance | (256 | ) | — | |||||||||
Deferred tax assets, net of valuation allowance | 108,667 | 9,498 | ||||||||||
Deferred tax liabilities | ||||||||||||
Intangible assets | 372,947 | $ | 33,013 | |||||||||
Convertible notes basis | 1,922 | — | ||||||||||
Fixed assets | — | 52 | ||||||||||
Total deferred tax liabilities | $ | 374,869 | $ | 33,065 | ||||||||
Net deferred tax liability | $ | 266,202 | $ | 23,567 | ||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Earnings Per Share [Abstract] | |||||||||||
Basic and diluted earnings per share | The following tables present the calculation of basic and diluted earnings per share for the year ended December 31, 2014 and 2013 (in thousands, except share and per share data): | ||||||||||
Year Ended December 31, 2014 | |||||||||||
Income (Numerator) | Weighted Average Shares (Denominator) | Per Share Amount | |||||||||
Net loss attributable to Class A common stockholders (1) | $ | (275,686 | ) | 49,765,160 | $ | (5.540 | ) | ||||
Allocation of earnings to participating securities: | |||||||||||
Allocation of earnings to nonvested RSU holders | (467 | ) | — | (0.009 | ) | ||||||
Basic and diluted earnings: | |||||||||||
Net loss attributable to Class A common stockholders | $ | (276,153 | ) | 49,765,160 | $ | (5.549 | ) | ||||
_____________________ | |||||||||||
(1) Included in net loss attributable to common stock is a net deemed dividend of $68.5 million and dividends of $8.0 million declared to Series A Preferred Stock shareholders, a deemed dividend of $26.7 million and dividends of $0.8 million declared to Series B Preferred Stock shareholders and a deemed dividend of $42.8 million and dividends of $0.4 million declared to Series C Preferred Stock shareholders. See Note 11 for more information. | |||||||||||
(2) 2,042,022 shares of Class A common stock issued on February 23, 2015 pursuant to the submission for conversion of Series A preferred stock on December 12, 2014 are included in the weighted average shares outstanding assuming issuance on the date of submission for conversion. See Note 11 for more information. | |||||||||||
Year Ended December 31, 2013 | |||||||||||
Income (Numerator) | Weighted Average Shares (Denominator) | Per Share Amount | |||||||||
Net income attributable to the Company | 2,266 | 7,885,186 | 0.287 | ||||||||
Allocation of earnings to participating securities: | |||||||||||
Allocation of earnings to FA RSU holders | (19 | ) | — | (0.002 | ) | ||||||
Basic earnings: | |||||||||||
Net income attributable to Class A common stockholders | $ | 2,247 | 7,885,186 | $ | 0.285 | ||||||
Effect of dilutive securities: | |||||||||||
Shares issuable to FA RSU holders | 19 | 140,022 | (0.003 | ) | |||||||
Diluted earnings: | |||||||||||
Net income attributable to Class A common stockholders | $ | 2,266 | 8,025,208 | $ | 0.282 | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | The following table shows the future annual minimum rental payments due (in thousands): | |||||||
Year Ended December 31, | ||||||||
2015 | $ | 10,900 | ||||||
2016 | 10,186 | |||||||
2017 | 9,181 | |||||||
2018 | 7,917 | |||||||
2019 | 6,651 | |||||||
Thereafter | 24,353 | |||||||
Total | $ | 69,188 | ||||||
Contractual Obligation, Fiscal Year Maturity Schedule | The following table shows the future annual minimum payments due (in thousands): | |||||||
Year Ended December 31, | ||||||||
2015 | $ | 9,897 | ||||||
2016 | 9,253 | |||||||
2017 | 7,242 | |||||||
2018 | 6,567 | |||||||
2019 | 6,567 | |||||||
Thereafter | 3,978 | |||||||
Total | $ | 43,504 | ||||||
Schedule of Future Annual Acquisition Commitments | The following table shows the future annual acquisition commitments (in thousands): | |||||||
Year Ended December 31, | ||||||||
Cash | Class A Common Stock | |||||||
2015 | $ | 46,050 | $ | 38,910 | ||||
2016 | — | 2,440 | ||||||
2017 | 5,000 | 5,000 | ||||||
Total | $ | 51,050 | $ | 46,350 | ||||
Net_Capital_Requirements_Table
Net Capital Requirements (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Regulatory Capital Requirements [Abstract] | ||||||||
Computation of Net Capital under Securities and Exchange Commission Regulation | The table below provides the net capital requirements for each of the Company’s broker-dealers as of December 31, 2014 and the net capital requirements for those broker-dealers which were either under the control of the Company or under common control as of December 31, 2013 (in thousands, except ratios and percentages). | |||||||
December 31, 2014 | December 31, 2013 | |||||||
Realty Capital Securities: | ||||||||
Net capital | $ | 18,770 | $ | 25,627 | ||||
Required net capital | 1,174 | 1,294 | ||||||
Net capital in excess of required net capital | $ | 17,596 | $ | 24,333 | ||||
Aggregate indebtedness to net capital ratio | 0.94 to 1 | 0.76 to 1 | ||||||
First Allied Securities, Inc. (alternative method): | ||||||||
Net capital | $ | 3,431 | $ | 4,777 | ||||
Required net capital | 250 | 250 | ||||||
Net capital in excess of required net capital | $ | 3,181 | $ | 4,527 | ||||
Net capital as a percentage of aggregate debit items evaluation | in compliance(1) | in compliance(1) | ||||||
Legend Equities Corporation: | ||||||||
Net capital | $ | 2,067 | $ | 2,684 | ||||
Required net capital | 187 | 224 | ||||||
Net capital in excess of required net capital | $ | 1,880 | $ | 2,460 | ||||
Aggregate indebtedness to net capital ratio | 1.36 to 1 | 1.25 to 1 | ||||||
Cetera Advisor Networks LLC (alternative method)(2): | ||||||||
Net capital | $ | 13,785 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 13,535 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
Cetera Advisors LLC (alternative method)(2): | ||||||||
Net capital | $ | 9,294 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 9,044 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
Cetera Financial Specialists LLC (alternative method)(2): | ||||||||
Net capital | $ | 5,018 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 4,768 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
Cetera Investment Services LLC (alternative method)(2): | ||||||||
Net capital | $ | 17,190 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 16,940 | ||||||
Net capital as a percentage of aggregate debit items | 192% | |||||||
Hatteras Capital Distributors, LLC(2): | ||||||||
Net capital | $ | 2,145 | ||||||
Required net capital | 5 | |||||||
Net capital in excess of required net capital | $ | 2,140 | ||||||
Aggregate indebtedness to net capital ratio | 0.02 to 1 | |||||||
December 31, 2014 | December 31, 2013 | |||||||
J.P. Turner & Company LLC(2): | ||||||||
Net capital | $ | 3,379 | ||||||
Required net capital | 442 | |||||||
Net capital in excess of required net capital | $ | 2,937 | ||||||
Aggregate indebtedness to net capital ratio | 1.96 to 1 | |||||||
Summit Brokerage Services, Inc.(2): | ||||||||
Net capital | $ | 5,878 | ||||||
Required net capital | 506 | |||||||
Net capital in excess of required net capital | $ | 5,372 | ||||||
Aggregate indebtedness to net capital ratio | 1.29 to 1 | |||||||
Investors Capital Corporation (alternative method)(2): | ||||||||
Net capital | $ | 3,817 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 3,567 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
Advisor Direct, Inc.(2): | ||||||||
Net capital | $ | 12 | ||||||
Required net capital | 5 | |||||||
Net capital in excess of required net capital | $ | 7 | ||||||
Aggregate indebtedness to net capital ratio | 5.67 to 1 | |||||||
SC Distributors LLC (alternative method)(2): | ||||||||
Net capital | $ | 2,004 | ||||||
Required net capital | 250 | |||||||
Net capital in excess of required net capital | $ | 1,754 | ||||||
Net capital as a percentage of aggregate debit items | in compliance(1) | |||||||
_____________________ | ||||||||
(1) The entity was determined to be in compliance as of the date stated as its net capital was in excess of the minimum $250,000. | ||||||||
(2) The entity was not under the control of, or under common control with, the Company as of December 31, 2013. |
Segment_Reporting_Tables
Segment Reporting (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Schedule of Revenue, Expenses, and Assets by Segment | The following table presents the Company’s net revenues, expenses and income before taxes by segment for the year ended December 31, 2014, 2013 and 2012 (in thousands): | |||||||||||
Year Ended | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Independent retail advice(1): | ||||||||||||
Revenues | $ | 1,395,262 | $ | 94,930 | $ | — | ||||||
Expenses | 1,416,529 | 95,624 | — | |||||||||
Loss | $ | (21,267 | ) | $ | (694 | ) | $ | — | ||||
Wholesale distribution: | ||||||||||||
Revenues | $ | 681,624 | $ | 802,965 | $ | 286,572 | ||||||
Expenses | 702,455 | 757,792 | 280,085 | |||||||||
Income (loss) | $ | (20,831 | ) | $ | 45,173 | $ | 6,487 | |||||
Investment banking, capital markets and transaction management services: | ||||||||||||
Revenues | $ | 126,670 | $ | 84,810 | $ | 925 | ||||||
Expenses | 60,288 | 29,213 | — | |||||||||
Income | $ | 66,382 | $ | 55,597 | $ | 925 | ||||||
Investment management: | ||||||||||||
Revenues | $ | 31,829 | $ | — | $ | — | ||||||
Expenses | 27,652 | — | — | |||||||||
Income | $ | 4,177 | $ | — | $ | — | ||||||
Investment research: | ||||||||||||
Revenues | $ | 2,721 | $ | — | $ | — | ||||||
Expenses | 11,762 | — | — | |||||||||
Loss | $ | (9,041 | ) | $ | — | $ | — | |||||
Corporate and other: | ||||||||||||
Revenues | $ | (44,848 | ) | $ | — | $ | — | |||||
Expenses | 140,559 | 218 | — | |||||||||
Loss | $ | (185,407 | ) | $ | (218 | ) | $ | — | ||||
Revenue reconciliation | ||||||||||||
Total revenues for reportable segments | $ | 2,193,258 | $ | 982,705 | $ | 287,497 | ||||||
Less: intercompany revenues | 91,063 | 7,638 | — | |||||||||
Total revenues | $ | 2,102,195 | $ | 975,067 | $ | 287,497 | ||||||
Income reconciliation | ||||||||||||
Total income (loss) before taxes for reportable segments | $ | (165,987 | ) | $ | 99,858 | $ | 7,412 | |||||
Reconciling items | (138 | ) | — | — | ||||||||
Income (loss) before income taxes | $ | (166,125 | ) | $ | 99,858 | $ | 7,412 | |||||
_____________________ | ||||||||||||
(1) Includes First Allied’s operating results from September 25, 2013, the date First Allied was acquired by RCAP Holdings. | ||||||||||||
Reconciliation of Assets from Segment to Consolidated | The following table presents the Company’s total assets by segment as of December 31, 2014 and 2013 (in thousands): | |||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Segment assets: | ||||||||||||
Independent retail advice | $ | 1,980,614 | $ | 225,623 | ||||||||
Wholesale distribution | 192,669 | 32,058 | ||||||||||
Investment banking, capital markets and transaction management services | 116,980 | 75,358 | ||||||||||
Investment management | 79,343 | — | ||||||||||
Investment research | 12,291 | — | ||||||||||
Corporate and other (1) | 112,423 | 3,585 | ||||||||||
Total assets for reportable segments | $ | 2,494,320 | $ | 336,624 | ||||||||
Assets reconciliation: | ||||||||||||
Total assets for reportable segments | $ | 2,494,320 | $ | 336,624 | ||||||||
Less: intercompany eliminations | 27,692 | 99 | ||||||||||
Total consolidated assets | $ | 2,466,628 | $ | 336,525 | ||||||||
_____________________ | ||||||||||||
(1) Excludes amounts related to investment in subsidiaries. |
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Schedule of Quarterly Financial Information | Presented below is the unaudited financial data for the year ended December 31, 2014: | |||||||||||
2014 | ||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Revenues | 273,368 | 645,019 | 678,578 | 505,230 | ||||||||
Net income (loss) | 12,149 | 48,472 | (32,269 | ) | (147,992 | ) | ||||||
Net (loss) income attributable to Class A common stockholders | 3,285 | (149,861 | ) | (36,994 | ) | (92,116 | ) | |||||
Basic earnings per share | 0.11 | (3.49 | ) | (0.59 | ) | (1.40 | ) | |||||
Diluted earnings per share | 0.11 | (3.59 | ) | (0.59 | ) | (1.68 | ) | |||||
Presented below is the unaudited financial data for the year ended December 31, 2013: | ||||||||||||
2013 | ||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Revenues | 218,631 | 230,016 | 229,527 | 296,893 | ||||||||
Net income | 26,747 | 26,444 | 11,100 | 33,724 | ||||||||
Net (loss) income attributable to Class A common stockholders | — | 202 | 559 | 1,505 | ||||||||
Basic earnings per share | — | 0.08 | 0.17 | 0.11 | ||||||||
Diluted earnings per share | — | 0.08 | 0.17 | 0.11 | ||||||||
Schedule of Error Corrections and Prior Period Adjustments | The results for the second quarter of 2014 presented in the table above do not reflect the results reported on the Form 10-Q filed on August 14, 2014. The table below presents a reconciliation of the difference: | |||||||||||
2014 Second Quarter Reconciliation | ||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||
As Reported on Form 10-Q | Inclusion of First Allied(1) | As Adjusted | ||||||||||
Revenues | 638,425 | 6,594 | 645,019 | |||||||||
_____________________ | ||||||||||||
(1) The results reported for the three months ended June 30, 2014 erroneously included $6.6 million of intercompany eliminations derived from transactions with First Allied that pertained to the three months ended March 31, 2014. This did not impact pre-tax net income or net income for the three months ended June 30, 2014 as the same elimination was made to both total revenues and expenses. The Company has evaluated this item and determined that it was not material to the previously issued unaudited financial statements for the three months ended June 30, 2014. The income statement for the three months ended June 30, 2014 will be revised in the Company’s unaudited financial statements as of and for the six months ended June 30, 2015 to reflect the ‘as adjusted’ revenues presented above and the corresponding change in expenses. There was no impact on total revenue or total expenses reported for the six months ended June 30, 2014. | ||||||||||||
The results for the first quarter of 2014 presented in the table above do not reflect the results reported on the Form 10-Q filed on May 15, 2014. The table below presents a reconciliation of the difference: | ||||||||||||
2014 First Quarter Reconciliation | ||||||||||||
(Dollars in thousands, except share and per share data) | ||||||||||||
As Reported on Form 10-Q | Inclusion of First Allied(1) | As Adjusted | ||||||||||
Revenues | 187,205 | 86,163 | 273,368 | |||||||||
Net income (loss) | 12,656 | (507 | ) | 12,149 | ||||||||
Net (loss) income attributable to Class A common stockholders | 3,792 | (507 | ) | 3,285 | ||||||||
Basic earnings per share | 0.22 | (0.11 | ) | 0.11 | ||||||||
Diluted earnings per share | 0.22 | (0.11 | ) | 0.11 | ||||||||
_____________________ | ||||||||||||
(1) On June 30, 2014, RCAP Holdings contributed all its equity interests in First Allied to the Company. The Company’s acquisition of First Allied was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings immediately following the acquisition of First Allied by RCAP Holdings on September 25, 2013. |
Organization_and_Description_o1
Organization and Description of the Company (Details) (USD $) | 0 Months Ended | 11 Months Ended | 4 Months Ended | |||||||
In Millions, except Share data, unless otherwise specified | Jun. 10, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Feb. 11, 2014 | Jun. 10, 2013 | Dec. 31, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Apr. 28, 2014 | Jun. 18, 2014 |
program | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Minority ownership percent in operating subsidiaries | 9.40% | |||||||||
Ownership interest by Parent of subsidiaries | 90.60% | |||||||||
Class A RCS holdings units received | 100.00% | |||||||||
RCS Holdings LTIP Units issued to RCS Capital Management | 100.00% | 100.00% | 100.00% | |||||||
Class A operating subsidiary units contributed to RCS holdings (in shares) | 26,499,999 | |||||||||
Class A RCS Holdings Units received by the company (in shares) | 26,499,999 | |||||||||
Operating subsidiary LTIP units contributed to RCS Holdings from RCS capital management (in shares) | 3,975,000 | 3,975,000 | ||||||||
Units contributed to subsidiary (in units) | 1,325,000 | |||||||||
Period in force | 30 days | |||||||||
Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Common stock, par value (in dollars per share) | 20.25 | $0.00 | 0.001 | 0.001 | ||||||
Issuance of common stock, shares | 19,000,000 | 468,762 | 723,234 | |||||||
Common stock, shares issued (in shares) | 70,571,540 | 70,571,540 | 13,764,929 | |||||||
LTIP Units | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
LTIP Units earned (in shares) | 310,947 | 310,947 | 310,947 | |||||||
LTIP Units forfeited (in shares) | 1,014,053 | |||||||||
LTIP Units distributed to members (in shares) | 310,947 | |||||||||
Common Class B | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Common stock, par value (in dollars per share) | $0.00 | 0.001 | 0.001 | |||||||
Common stock, shares issued (in shares) | 1 | 1 | 24,000,000 | |||||||
RCAP Holdings, LLC | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Ownership interest by Parent of subsidiaries | 100.00% | |||||||||
Operating subsidiary units exchanged under the exchange agreement (in shares) | 23,999,999 | |||||||||
Class A shares received under the exchange agreement (in shares) | 23,999,999 | |||||||||
Class A Common stock held by related party (in shares) | 24,051,499 | |||||||||
Authorized classes of equity | 3 | |||||||||
RCAP Holdings, LLC | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Shares held by a related party (in shares) | 24,051,499 | |||||||||
RCAP Holdings, LLC | Common Class B | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Shares held by a related party (in shares) | 1 | |||||||||
IPO | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Issuance of common stock, shares | 2,500,000 | |||||||||
Share price per share issued (in dollars per share) | $20 | |||||||||
Proceeds from initial public offering | $43.60 | |||||||||
Over-Allotment Option | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Option to purchase additional shares (in shares) | 3,600,000 | |||||||||
Common stock, shares issued (in shares) | 870,248 | |||||||||
Private Placement | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Share Price (in dollars per share) | 20.25 | 20.25 | ||||||||
Majority Shareholder | Common Class B | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Shares received in reorganization (in shares) | 24,000,000 | |||||||||
Majority Shareholder | Unclassified Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Unclassified shares received (in shares) | 100 | |||||||||
Economic rights | RCAP Holdings, LLC | RCAP Holdings, LLC | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Economic rights held by related party | 90.76% | |||||||||
Voting power | RCAP Holdings, LLC | RCAP Holdings, LLC | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Voting rights held by related party | 95.38% | |||||||||
IPO | IPO | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Common stock, par value (in dollars per share) | 0.001 | |||||||||
IPO | IPO | Common Class B | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Common stock, par value (in dollars per share) | 0.001 | |||||||||
Common Stock | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Issuance of common stock, shares | 23,999,999 | |||||||||
Common Stock | Common Class B | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Issuance of common stock, shares | -23,999,999 | |||||||||
Common Stock | IPO | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Issuance of common stock, shares | 19,870,248 | 2,500,000 | ||||||||
Common Stock | Private Placement | Common Class A | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Issuance of common stock, shares | 2,469,136 | 2,469,136 |
Recent_and_Pending_Acquisition2
Recent and Pending Acquisitions - Cetera (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 8 Months Ended | ||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 29, 2014 | Dec. 31, 2014 | Jan. 02, 2013 | |
Business Acquisition [Line Items] | ||||||||||||||
Net proceeds from issuance of Series A convertible preferred stock (including embedded derivative) | $197,504,000 | $0 | $0 | |||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||
Cash and segregated securities | 19,030,000 | 0 | 19,030,000 | 0 | 19,030,000 | |||||||||
Goodwill | 519,361,000 | 79,986,000 | 519,361,000 | 79,986,000 | 519,361,000 | |||||||||
Business Combination, Consideration Transferred [Abstract] | ||||||||||||||
Revenues | 505,230,000 | 678,578,000 | 645,019,000 | 273,368,000 | 296,893,000 | 229,527,000 | 230,016,000 | 218,631,000 | 2,102,195,000 | 975,067,000 | 287,497,000 | |||
Income before taxes | -166,125,000 | 99,858,000 | 7,412,000 | |||||||||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||||||||||
Total revenues | 2,729,500,000 | 2,682,500,000 | ||||||||||||
Acquisition-related costs | 19,740,000 | 4,587,000 | 0 | |||||||||||
Cetera Financial Group | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Net proceeds from issuance of Series A convertible preferred stock (including embedded derivative) | 270,000,000 | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||
Cash and cash equivalents | 241,641,000 | |||||||||||||
Cash and segregated securities | 7,999,000 | |||||||||||||
Trading securities | 741,000 | |||||||||||||
Receivables | 49,883,000 | |||||||||||||
Property and equipment | 17,735,000 | |||||||||||||
Prepaid expenses | 15,083,000 | |||||||||||||
Deferred compensation plan investments | 76,010,000 | |||||||||||||
Notes receivable | 38,805,000 | |||||||||||||
Other assets | 37,096,000 | |||||||||||||
Accounts payable | -94,074,000 | |||||||||||||
Accrued expenses | -32,421,000 | |||||||||||||
Other liabilities | -112,977,000 | |||||||||||||
Deferred compensation plan accrued liabilities | -75,294,000 | |||||||||||||
Total fair value excluding goodwill and intangible assets | 170,227,000 | |||||||||||||
Goodwill | 290,262,000 | 0 | 290,262,000 | 0 | 290,262,000 | 290,262,000 | ||||||||
Intangible assets | 944,542,000 | |||||||||||||
Deferred tax liability | -272,289,000 | |||||||||||||
Total consideration | 1,132,742,000 | |||||||||||||
Expected tax deductible amount | 8,300,000 | 8,300,000 | 8,300,000 | |||||||||||
Business Combination, Consideration Transferred [Abstract] | ||||||||||||||
Contractual purchase price | 1,150,000,000 | |||||||||||||
Purchase price adjustments | 17,258,000 | |||||||||||||
Total consideration | 1,132,742,000 | |||||||||||||
Revenues | 829,100,000 | |||||||||||||
Income before taxes | -10,500,000 | |||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||||||||||
Total revenues | 1,214,100,000 | 1,123,900,000 | ||||||||||||
Loss before taxes | -36,900,000 | -73,300,000 | ||||||||||||
Acquisition-related costs | 25,000,000 | |||||||||||||
Convertible Debt | Cetera Financial Group | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Convertible notes, face value | 120,000,000 | |||||||||||||
Senior Secured Second Lien Term Loan | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Interest rate | 10.50% | 10.50% | 10.50% | |||||||||||
Senior Secured Second Lien Term Loan | Secured Debt | Barclays Bank PLC and Bank of America | Cetera Financial Group | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Convertible notes, face value | 150,000,000 | 32,000,000 | ||||||||||||
Senior Secured First Lien Term Loan | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Interest rate | 6.50% | 6.50% | 6.50% | |||||||||||
Senior Secured First Lien Term Loan | Secured Debt | Barclays Bank PLC and Bank of America | Cetera Financial Group | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Convertible notes, face value | 575,000,000 | |||||||||||||
Senior Secured First Lien Revolving Credit Facility | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Secured debt, commitment | $25,000,000 | |||||||||||||
Series C Preferred Stock | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Convertible preferred, par value (in dollars per share) | $0.00 | $0 | $0.00 | $0 | $0.00 | $0.00 | ||||||||
Series C Preferred Stock | Convertible Debt | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Interest rate | 7.00% | 7.00% | 7.00% | 7.00% |
Recent_and_Pending_Acquisition3
Recent and Pending Acquisitions - Summit (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 7 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 11, 2014 | Dec. 31, 2014 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||||||||
Goodwill | $519,361,000 | $79,986,000 | $519,361,000 | $79,986,000 | $519,361,000 | ||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||
Revenues | 505,230,000 | 678,578,000 | 645,019,000 | 273,368,000 | 296,893,000 | 229,527,000 | 230,016,000 | 218,631,000 | 2,102,195,000 | 975,067,000 | 287,497,000 | ||
Income before taxes | -166,125,000 | 99,858,000 | 7,412,000 | ||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||
Total revenues | 2,729,500,000 | 2,682,500,000 | |||||||||||
Acquisition-related costs | 19,740,000 | 4,587,000 | 0 | ||||||||||
Summit Financial Services Group | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Pro rata share of tax refunds | 2,500,000 | ||||||||||||
Excluding cash distributed in shareholders | 38,600,000 | ||||||||||||
Contractual purchase price | 46,727,000 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||||||||
Cash and cash equivalents | 13,353,000 | ||||||||||||
Receivables | 3,147,000 | ||||||||||||
Property and equipment | 362,000 | ||||||||||||
Prepaid expenses | 1,531,000 | ||||||||||||
Notes receivable | 1,092,000 | ||||||||||||
Other assets | 2,366,000 | ||||||||||||
Accounts payable | -9,973,000 | ||||||||||||
Accrued expenses | -3,100,000 | ||||||||||||
Total fair value excluding goodwill and intangible assets | 8,778,000 | ||||||||||||
Goodwill | 23,891,000 | 0 | 23,891,000 | 0 | 23,891,000 | 23,891,000 | |||||||
Intangible assets | 31,240,000 | ||||||||||||
Deferred tax liability | -6,751,000 | ||||||||||||
Total consideration | 57,158,000 | ||||||||||||
Expected tax deductible amount | 300,000 | 300,000 | 300,000 | ||||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||
Contractual purchase price | 46,727,000 | ||||||||||||
Stock issued by the Company | 10,431,000 | ||||||||||||
Total consideration | 57,158,000 | ||||||||||||
Revenues | 58,300,000 | ||||||||||||
Income before taxes | -1,900,000 | ||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||
Total revenues | 100,500,000 | 82,800,000 | |||||||||||
Income (loss) before taxes | -5,500,000 | -200,000 | |||||||||||
Acquisition-related costs | 800,000 | ||||||||||||
Summit Financial Services Group | Common Class A | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Right to receive merger consideration rights | $1.59 | ||||||||||||
Business acquisition, equity interest issued, number of shares | 498,884 | 498,884 | |||||||||||
Summit Financial Services Group | Common Stock | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquisition share price (in dollars per share) | $0.06 |
Recent_and_Pending_Acquisition4
Recent and Pending Acquisitions - J.P. Turner (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 7 Months Ended | 0 Months Ended | ||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 12, 2014 | Dec. 31, 2014 | Mar. 04, 2015 | ||||
Business Acquisition [Line Items] | |||||||||||||||||
Contingent and deferred consideration | $145,430,000 | $2,180,000 | $145,430,000 | $2,180,000 | $145,430,000 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||||||||||||
Goodwill | 519,361,000 | 79,986,000 | 519,361,000 | 79,986,000 | 519,361,000 | ||||||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||||||
Revenues | 505,230,000 | 678,578,000 | 645,019,000 | 273,368,000 | 296,893,000 | 229,527,000 | 230,016,000 | 218,631,000 | 2,102,195,000 | 975,067,000 | 287,497,000 | ||||||
Income before taxes | -166,125,000 | 99,858,000 | 7,412,000 | ||||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||||||
Total revenues | 2,729,500,000 | 2,682,500,000 | |||||||||||||||
JP Turner & Company, LLC | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Contingent and deferred consideration | 7,600,000 | ||||||||||||||||
Minimum performance hurdle | 8.00% | ||||||||||||||||
Performance Annual Dollar Cap | 2,500,000 | ||||||||||||||||
Earn-out contingency based on acquiree's future revenues | 50.00% | ||||||||||||||||
Increase in contingent consideration | 6,200,000 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||||||||||||
Cash and cash equivalents | 10,171,000 | ||||||||||||||||
Receivables | 712,000 | ||||||||||||||||
Property and equipment | 232,000 | ||||||||||||||||
Prepaid expenses | 892,000 | ||||||||||||||||
Notes receivable | 1,660,000 | ||||||||||||||||
Other assets | 2,171,000 | ||||||||||||||||
Accounts payable | -1,710,000 | ||||||||||||||||
Accrued expenses | -8,543,000 | ||||||||||||||||
Other liabilities | -656,000 | ||||||||||||||||
Total fair value excluding goodwill and intangible assets | 4,929,000 | ||||||||||||||||
Goodwill | 13,579,000 | 0 | 13,579,000 | 0 | 13,579,000 | 13,579,000 | |||||||||||
Intangible assets | 14,200,000 | ||||||||||||||||
Total consideration | 32,708,000 | ||||||||||||||||
Expected tax deductible amount | 3,500,000 | 3,500,000 | 3,500,000 | ||||||||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||||||
Cash paid by the Company | 12,786,000 | ||||||||||||||||
Stock issued by the Company | 4,860,000 | ||||||||||||||||
Contingent consideration | 4,500,000 | ||||||||||||||||
Deferred consideration | 10,562,000 | ||||||||||||||||
Total consideration | 32,708,000 | ||||||||||||||||
Revenues | 30,900,000 | ||||||||||||||||
Income before taxes | -100,000 | ||||||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||||||
Total revenues | 52,800,000 | 57,800,000 | |||||||||||||||
Loss before taxes | 1,500,000 | -4,800,000 | |||||||||||||||
JP Turner & Company, LLC | Common Class A | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Business acquisition, equity interest issued, number of shares | 239,362 | 239,362 | |||||||||||||||
Contingent and deferred consideration | 3,200,000 | ||||||||||||||||
Earn-out contingency based on acquiree's future revenues | 50.00% | ||||||||||||||||
Minimum | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Contingent and deferred consideration | 14,716,000 | 14,716,000 | 14,716,000 | ||||||||||||||
Minimum | JP Turner & Company, LLC | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Contingent and deferred consideration | 7,551,000 | [1] | 7,551,000 | [1] | 7,551,000 | [1] | |||||||||||
Maximum | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Contingent and deferred consideration | 94,454,000 | 94,454,000 | 94,454,000 | ||||||||||||||
Maximum | JP Turner & Company, LLC | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Contingent and deferred consideration | 7,551,000 | [1] | 7,551,000 | [1] | 7,551,000 | [1] | |||||||||||
Subsequent Event | JP Turner & Company, LLC | |||||||||||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||||||
Cash paid by the Company | 6,400,000 | ||||||||||||||||
Total consideration | 9,100,000 | ||||||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||||||
Equity interests value assigned | $2,700,000 | ||||||||||||||||
Subsequent Event | JP Turner & Company, LLC | Common Class A | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Business acquisition, equity interest issued, number of shares | 245,813 | ||||||||||||||||
[1] | The contingent consideration amount for J.P. Turner was to be based on the achievement of certain agreed-upon revenue or EBITDA performance targets for fiscal years ending December 31, 2014, December 31, 2015 and December 31, 2016, which were subject to an annual cap of $2.5 million. Based on the independent valuation company’s projections, which were reviewed by the Company, the earn-outs for the fiscal years ending December 31, 2014, December 31, 2015 and December 31, 2016 were expected to be subject to that cap in both the low and high case. |
Recent_and_Pending_Acquisition5
Recent and Pending Acquisitions - Hatteras (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||||||||||||
Estimated contingent consideration amount | $145,430,000 | $2,180,000 | $145,430,000 | $2,180,000 | $145,430,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||||||||
Goodwill | 519,361,000 | 79,986,000 | 519,361,000 | 79,986,000 | 519,361,000 | ||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||
Revenues | 505,230,000 | 678,578,000 | 645,019,000 | 273,368,000 | 296,893,000 | 229,527,000 | 230,016,000 | 218,631,000 | 2,102,195,000 | 975,067,000 | 287,497,000 | ||
Income before taxes | -166,125,000 | 99,858,000 | 7,412,000 | ||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||
Total revenues | 2,729,500,000 | 2,682,500,000 | |||||||||||
Acquisition-related costs | 19,740,000 | 4,587,000 | 0 | ||||||||||
Hatteras Funds Group | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Initial accounting incomplete adjustment | 40,000,000 | ||||||||||||
Estimated contingent consideration amount | 28,300,000 | 28,300,000 | 28,300,000 | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||||||||
Cash and cash equivalents | 805,000 | 805,000 | |||||||||||
Receivables | 7,747,000 | 7,747,000 | |||||||||||
Property and equipment | 192,000 | 192,000 | |||||||||||
Prepaid expenses | 326,000 | 326,000 | |||||||||||
Other assets | 120,000 | 120,000 | |||||||||||
Accounts payable | -3,721,000 | -3,721,000 | |||||||||||
Accrued expenses | -5,277,000 | -5,277,000 | |||||||||||
Total fair value excluding goodwill and intangible assets | 192,000 | 192,000 | |||||||||||
Goodwill | 15,348,000 | 15,348,000 | 0 | 15,348,000 | 0 | 15,348,000 | 15,348,000 | ||||||
Intangible assets | 48,770,000 | 48,770,000 | |||||||||||
Total consideration | 64,310,000 | 64,310,000 | |||||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||
Cash paid by the Company | 30,000,000 | ||||||||||||
Contingent consideration | 24,880,000 | ||||||||||||
Deferred consideration | 9,430,000 | ||||||||||||
Total consideration | 64,310,000 | ||||||||||||
Revenues | 31,800,000 | ||||||||||||
Income before taxes | 4,200,000 | ||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||
Total revenues | 62,300,000 | 47,600,000 | |||||||||||
Income (loss) before taxes | 7,200,000 | 1,200,000 | |||||||||||
Acquisition-related costs | 600,000 | ||||||||||||
Closing Date | Hatteras Funds Group | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to acquire business | 75.00% | ||||||||||||
First Anniversary of the Closing Date | Hatteras Funds Group | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to acquire business | 7.50% | ||||||||||||
Second Anniversary of the Closing Date | Hatteras Funds Group | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to acquire business | 7.50% | ||||||||||||
Third Anniversary of the Closing Date | Hatteras Funds Group | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to acquire business | 10.00% | ||||||||||||
Minimum | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Estimated contingent consideration amount | 14,716,000 | 14,716,000 | 14,716,000 | ||||||||||
Maximum | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Estimated contingent consideration amount | $94,454,000 | $94,454,000 | $94,454,000 |
Recent_and_Pending_Acquisition6
Recent and Pending Acquisitions - First Allied (Details) (USD $) | 11 Months Ended | 0 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Jun. 30, 2014 | Jan. 15, 2014 | Sep. 25, 2013 | Dec. 31, 2014 | Nov. 01, 2011 | |
Business Acquisition [Line Items] | ||||||
Issuance of common stock | $1,727,000 | |||||
First Allied acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Issuance of common stock | 239,200,000 | |||||
Expected tax deductible amount | 8,000,000 | 8,000,000 | ||||
First Allied acquisition | Common Class A | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition share price (in dollars per share) | $21.23 | |||||
RCAP Holdings, LLC | First Allied acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Cost of acquired entities throughout period | 177,000,000 | 177,000,000 | ||||
Total consideration | 271,200,000 | 145,000,000 | 145,000,000 | |||
Convertible notes, face value | 94,200,000 | 94,200,000 | ||||
Debt acquired | 7,000,000 | |||||
Debt carrying amount acquired | 37,500,000 | |||||
Equity interests value assigned | 207,500,000 | |||||
Total fair value excluding goodwill and intangible assets | 137,200,000 | |||||
RCAP Holdings, LLC | First Allied acquisition | Common Class A | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, equity interest issued, number of shares | 11,264,929 | 11,264,929 | ||||
Secured Debt | RCAP Holdings, LLC | First Allied acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Convertible notes, face value | 26,000,000 | |||||
First Allied notes | Secured Debt | RCAP Holdings, LLC | First Allied acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Convertible notes, face value | $32,000,000 | $32,000,000 |
Recent_and_Pending_Acquisition7
Recent and Pending Acquisitions - ICH (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 11, 2014 | Dec. 31, 2014 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | |||||||||||||
Goodwill | $519,361,000 | $79,986,000 | $519,361,000 | $79,986,000 | $519,361,000 | ||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||
Revenues | 505,230,000 | 678,578,000 | 645,019,000 | 273,368,000 | 296,893,000 | 229,527,000 | 230,016,000 | 218,631,000 | 2,102,195,000 | 975,067,000 | 287,497,000 | ||
Income before taxes | -166,125,000 | 99,858,000 | 7,412,000 | ||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||
Total revenues | 2,729,500,000 | 2,682,500,000 | |||||||||||
Investors Capital Holdings | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | |||||||||||||
Cash and cash equivalents | 6,881,000 | ||||||||||||
Short term investments and securities owned | 499,000 | ||||||||||||
Receivables | 7,500,000 | ||||||||||||
Property and equipment | 275,000 | ||||||||||||
Notes receivable | 1,875,000 | ||||||||||||
Deferred compensation plan investments | 2,250,000 | ||||||||||||
Deferred tax asset | 2,613,000 | ||||||||||||
Other assets | 1,055,000 | ||||||||||||
Accounts payable | -1,945,000 | ||||||||||||
Other liabilities | -7,593,000 | ||||||||||||
Notes payable and long-term debt | -2,918,000 | ||||||||||||
Non-qualified deferred compensation | -2,611,000 | ||||||||||||
Total fair value excluding goodwill and intangible assets | 7,881,000 | ||||||||||||
Goodwill | 26,680,000 | ||||||||||||
Intangible assets | 30,100,000 | ||||||||||||
Deferred tax liability | -12,152,000 | ||||||||||||
Total consideration | 52,509,000 | ||||||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||
Cash paid by the Company | 8,412,000 | ||||||||||||
Contingent consideration | 44,097,000 | ||||||||||||
Total consideration | 52,509,000 | ||||||||||||
Revenues | 45,700,000 | ||||||||||||
Income before taxes | -1,300,000 | ||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||
Total revenues | 94,800,000 | 87,800,000 | |||||||||||
Loss before taxes | ($3,700,000) | ($5,000,000) | |||||||||||
Investors Capital Holdings | Common Class A | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Shares issued (in share) | 2,027,966 | ||||||||||||
Business acquisition, equity interest issued, number of shares | 2,029,261 | ||||||||||||
Equity interests canceled (in shares) | 1,295 |
Recent_and_Pending_Acquisition8
Recent and Pending Acquisitions - Validus/Strategic Capital Partners (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 4 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 29, 2014 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||||||||||||
Contingent and deferred consideration | $145,430,000 | $2,180,000 | $145,430,000 | $2,180,000 | $145,430,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||||||||||
Goodwill | 519,361,000 | 79,986,000 | 519,361,000 | 79,986,000 | 519,361,000 | ||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||
Revenues | 505,230,000 | 678,578,000 | 645,019,000 | 273,368,000 | 296,893,000 | 229,527,000 | 230,016,000 | 218,631,000 | 2,102,195,000 | 975,067,000 | 287,497,000 | ||
Income before taxes | -166,125,000 | 99,858,000 | 7,412,000 | ||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||
Total revenues | 2,729,500,000 | 2,682,500,000 | |||||||||||
Acquisition-related costs | 19,740,000 | 4,587,000 | 0 | ||||||||||
StratCap | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Considered transferred, less contingent consideration | 76,400,000 | ||||||||||||
Business acquisition, equity interest issued, number of shares | 464,317 | ||||||||||||
Contingent and deferred consideration | 68,200,000 | 68,200,000 | 68,200,000 | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||||||||||
Cash and cash equivalents | 4,522,000 | ||||||||||||
Short term investments and securities owned | 2,239,000 | ||||||||||||
Receivables | 4,858,000 | ||||||||||||
Property and equipment | 96,000 | ||||||||||||
Other assets | 629,000 | ||||||||||||
Accounts payable | -706,000 | ||||||||||||
Accrued expenses | -201,000 | ||||||||||||
Other liabilities | -908,000 | ||||||||||||
Total fair value excluding goodwill and intangible assets | 10,529,000 | ||||||||||||
Goodwill | 22,871,000 | 0 | 22,871,000 | 0 | 22,871,000 | 22,871,000 | |||||||
Intangible assets | 121,380,000 | ||||||||||||
Total consideration | 154,780,000 | ||||||||||||
Business Combination, Consideration Transferred [Abstract] | |||||||||||||
Cash paid by the Company | 67,510,000 | ||||||||||||
Stock issued by the Company | 10,000,000 | ||||||||||||
Contingent consideration | 67,300,000 | ||||||||||||
Deferred consideration | 9,970,000 | ||||||||||||
Total consideration | 154,780,000 | ||||||||||||
Revenues | 19,900,000 | ||||||||||||
Income before taxes | -3,900,000 | ||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||
Total revenues | 143,300,000 | 66,200,000 | |||||||||||
Loss before taxes | -5,200,000 | -15,300,000 | |||||||||||
Acquisition-related costs | 200,000 | ||||||||||||
Minimum | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent and deferred consideration | 14,716,000 | 14,716,000 | 14,716,000 | ||||||||||
Minimum | StratCap | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent and deferred consideration | 70,840,000 | 70,840,000 | 70,840,000 | ||||||||||
Maximum | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent and deferred consideration | 94,454,000 | 94,454,000 | 94,454,000 | ||||||||||
Maximum | StratCap | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent and deferred consideration | $125,920,000 | $125,920,000 | $125,920,000 |
Recent_and_Pending_Acquisition9
Recent and Pending Acquisitions - Trupoly (Details) (Trupoly acquisition, USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Jul. 21, 2014 | Dec. 31, 2014 |
Trupoly acquisition | ||
Business Acquisition [Line Items] | ||
Percentage of deferred consideration | 50.00% | |
Expected tax deductible amount | $0.70 |
Recovered_Sheet1
Recent and Pending Acquisitions - Docupace (Details) (Docupace [Member], USD $) | 0 Months Ended | ||
Dec. 31, 2014 | Nov. 21, 2014 | Mar. 01, 2015 | |
Business Acquisition [Line Items] | |||
Total consideration | $35,400,000 | ||
Accrued expenses | 300,000 | ||
Cash paid by the Company | 18,800,000 | ||
Voting interests acquired | 53.53% | 51.00% | |
Required additional capital contributions in year one | 28,000,000 | ||
Required additional capital contributions in year two | 20,000,000 | ||
Post-closing consideration | 4,000,000 | ||
Fair value of assets acquired | 73,600,000 | ||
Fair value of non-controlling interest | 34,200,000 | ||
Expected tax deductible amount | 22,800,000 | ||
Subsequent Event | |||
Business Acquisition [Line Items] | |||
Post-closing consideration | $16,600,000 |
Recovered_Sheet2
Recent and Pending Acquisitions - Consolidated pro forma results (Details) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Business Acquisition [Line Items] | ||||
Total revenues | $2,729.50 | $2,682.50 | ||
Loss before taxes | -196.1 | -78.3 | ||
Provision for income taxes (40%) | -78.5 | [1] | -31.3 | [1] |
Net loss | -117.6 | -47 | ||
Less: income attributable to non-controlling interest | 8.9 | 0 | ||
Less: preferred dividends and deemed dividend | 153.3 | 18.9 | ||
Net loss attributable to Class A common stockholders | -279.8 | -65.9 | ||
Pro forma earnings per share (in dollars per share) | ($5.18) | [2] | ($1.61) | [2] |
Pro forma weighted average basic shares (in shares) | 54,155,046 | 40,995,457 | ||
Pro forma statutory tax rate | 40.00% | |||
Proforma acquisition related costs | 44.5 | |||
First Allied acquisition | ||||
Business Acquisition [Line Items] | ||||
Allocation of Earnings to Unvested Shares | $0.70 | |||
[1] | Reflects pro forma adjustment to record the income tax provision based on the assumed 40% tax rate. | |||
[2] | For the year ended December 31, 2014, the numerator for the pro forma basic and diluted earnings per share calculation was reduced by $0.7 million for allocation of earnings to nonvested restricted stock units holders. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Jun. 10, 2014 | Dec. 31, 2013 | Apr. 29, 2014 |
segment | ||||
Class of Stock [Line Items] | ||||
Cash definition | 90 days | |||
Cash, uninsured amount | $148.80 | $66.40 | ||
Minority ownership percent in operating subsidiaries | 9.40% | |||
Number of operating segments | 6 | |||
Realty Capital | ||||
Class of Stock [Line Items] | ||||
Gross proceeds from the shares of funds percentage | 0.50% | |||
Minimum | ||||
Class of Stock [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years 0 months 0 days | |||
Maximum | ||||
Class of Stock [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 5 years 0 months 0 days | |||
Maximum | Realty Capital | ||||
Class of Stock [Line Items] | ||||
Sales commissions earned by related percentage of benchmark | 7.00% | |||
Gross proceeds from the sales of common stock, before allowances, percentage of benchmark | 3.00% | |||
Related party's share based compensation plan | Minimum | ||||
Class of Stock [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years 0 months 0 days | |||
Related party's share based compensation plan | Maximum | ||||
Class of Stock [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 5 years 0 months 0 days | |||
Share-based goods and nonemployee services compensation | ||||
Class of Stock [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 4 years 0 months 0 days | |||
Series B Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Convertible preferred, par value (in dollars per share) | $0.00 | $0 | ||
Series C Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Convertible preferred, par value (in dollars per share) | $0.00 | $0 | $0.00 | |
Voting power | RCAP Equity, LLC | Common Class A | RCAP Holdings, LLC | ||||
Class of Stock [Line Items] | ||||
Voting rights held by related party | 68.97% | |||
Closed End Mutual Funds | Maximum | Realty Capital | ||||
Class of Stock [Line Items] | ||||
Sales commissions earned by related percentage of benchmark | 4.00% | |||
Convertible Debt | Series B Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Interest rate | 11.00% | |||
Convertible Debt | Series C Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Interest rate | 7.00% | 7.00% |
Fair_Value_Disclosures_Narrati
Fair Value Disclosures - Narrative (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | ||
Contingent and deferred consideration | $145,430,000 | $2,180,000 |
First Allied acquisition | ||
Business Acquisition [Line Items] | ||
Contingent and deferred consideration | 107,300,000 | |
Level 3 | ||
Business Acquisition [Line Items] | ||
Unrealized gain derivatives | $9,900,000 |
Recovered_Sheet3
Fair Value Disclosures - Fair value Hierarchy (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | $11,473 | $8,528 | ||
Trading securities | 10,242 | 7,708 | ||
Derivative contracts | 81,032 | 0 | ||
Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | 11,473 | 8,528 | ||
Trading securities | 10,242 | 7,708 | ||
Deferred compensation plan investments: | 83,456 | |||
Total | 188,295 | 16,236 | ||
Contingent consideration | 107,278 | 2,180 | ||
Total | 210,573 | 2,489 | ||
Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | 11,473 | 8,528 | ||
Trading securities | 9,762 | 7,708 | ||
Deferred compensation plan investments: | 80,754 | |||
Total | 184,962 | 16,236 | ||
Contingent consideration | 0 | 0 | ||
Total | 387 | 309 | ||
Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | 0 | 0 | ||
Trading securities | 10 | 0 | ||
Deferred compensation plan investments: | 2,702 | |||
Total | 2,712 | 0 | ||
Contingent consideration | 0 | 0 | ||
Total | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | 0 | 0 | ||
Trading securities | 470 | 0 | ||
Deferred compensation plan investments: | 0 | |||
Total | 621 | 0 | ||
Contingent consideration | 107,278 | [1] | 2,180 | |
Total | 210,186 | 2,180 | ||
Money market fund | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents - money market funds | 82,973 | |||
Deferred compensation plan investments: | 6,246 | |||
Money market fund | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents - money market funds | 82,973 | |||
Deferred compensation plan investments: | 6,246 | |||
Money market fund | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents - money market funds | 0 | |||
Deferred compensation plan investments: | 0 | |||
Money market fund | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents - money market funds | 0 | |||
Deferred compensation plan investments: | 0 | |||
Mutual funds | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | 11,473 | 8,528 | ||
Trading securities | 9,457 | 7,708 | ||
Deferred compensation plan investments: | 2,702 | |||
Mutual funds | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | 11,473 | 8,528 | ||
Trading securities | 9,457 | 7,708 | ||
Deferred compensation plan investments: | 0 | |||
Mutual funds | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | 0 | 0 | ||
Trading securities | 0 | 0 | ||
Deferred compensation plan investments: | 2,702 | |||
Mutual funds | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | 0 | 0 | ||
Trading securities | 0 | 0 | ||
Deferred compensation plan investments: | 0 | |||
Equity securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | 11,473 | 8,528 | 0 | |
Equity securities | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 262 | |||
Other liabilities: | 161 | 238 | ||
Equity securities | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 262 | |||
Other liabilities: | 161 | 238 | ||
Equity securities | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 0 | |||
Other liabilities: | 0 | 0 | ||
Equity securities | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 0 | |||
Other liabilities: | 0 | 0 | ||
U.S. government bonds | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 12 | |||
U.S. government bonds | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 2 | |||
U.S. government bonds | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 10 | |||
U.S. government bonds | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 0 | |||
State and municipal bonds | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 222 | 51 | ||
State and municipal bonds | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 222 | 51 | ||
State and municipal bonds | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 0 | 0 | ||
State and municipal bonds | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 0 | 0 | ||
Other | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 511 | |||
Other | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 41 | |||
Other | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 0 | |||
Other | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Trading securities | 470 | |||
International global funds | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 17,722 | |||
International global funds | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 17,722 | |||
International global funds | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 0 | |||
International global funds | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 0 | |||
U.S. equity funds | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 46,999 | |||
U.S. equity funds | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 46,999 | |||
U.S. equity funds | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 0 | |||
U.S. equity funds | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 0 | |||
U.S. fixed-income funds | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 9,787 | |||
U.S. fixed-income funds | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 9,787 | |||
U.S. fixed-income funds | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 0 | |||
U.S. fixed-income funds | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan investments: | 0 | |||
Prepaid expenses and other assets - oil and gas interests | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Prepaid expenses and other assets - oil and gas interests | 151 | |||
Prepaid expenses and other assets - oil and gas interests | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Prepaid expenses and other assets - oil and gas interests | 0 | |||
Prepaid expenses and other assets - oil and gas interests | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Prepaid expenses and other assets - oil and gas interests | 0 | |||
Prepaid expenses and other assets - oil and gas interests | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Prepaid expenses and other assets - oil and gas interests | 151 | |||
Derivative contracts | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative contracts | 102,908 | |||
Derivative contracts | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative contracts | 0 | |||
Derivative contracts | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative contracts | 0 | |||
Derivative contracts | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative contracts | 102,908 | [2] | ||
Mutual funds and unit investment trusts | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 4 | |||
Mutual funds and unit investment trusts | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 4 | |||
Mutual funds and unit investment trusts | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 0 | |||
Mutual funds and unit investment trusts | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 0 | |||
Certificates of Deposit | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 20 | |||
Certificates of Deposit | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 20 | |||
Certificates of Deposit | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 0 | |||
Certificates of Deposit | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other liabilities: | 0 | |||
Long-term Debt | Derivative contracts | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative contracts | $21,900 | |||
[1] | Excludes deferred payments, which are measured on non-recurring basis. | |||
[2] | Includes $21.9 million of derivatives classified in long-term debt. |
Fair_Value_Disclosures_Realize
Fair Value Disclosures - Realized and Unrealized Gains and Losses Level 3 (Details) (Fair Value, Measurements, Recurring, Level 3, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $2,180 | $0 |
Net realized and unrealized (gains)/losses | 54,021 | 9 |
Purchases | 12,868 | 2,181 |
Issuances | 329,869 | 0 |
Sales | 0 | |
Settlements | -188,752 | -10 |
Ending balance | 210,186 | 2,180 |
Trading securities- other | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 0 | |
Net realized and unrealized (gains)/losses | 4 | |
Purchases | 477 | |
Issuances | 0 | |
Sales | -11 | |
Settlements | 0 | |
Ending balance | 470 | |
Prepaid expenses and other assets - oil and gas interests | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 0 | |
Net realized and unrealized (gains)/losses | -166 | |
Purchases | 372 | |
Issuances | 0 | |
Sales | 0 | |
Settlements | -55 | |
Ending balance | 151 | |
Other Assets | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 0 | |
Net realized and unrealized (gains)/losses | -162 | |
Purchases | 849 | |
Issuances | 0 | |
Sales | -11 | |
Settlements | -55 | |
Ending balance | 621 | |
Derivative contracts | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 0 | |
Net realized and unrealized (gains)/losses | 45,213 | |
Purchases | 0 | |
Issuances | 233,189 | |
Sales | 0 | |
Settlements | -175,494 | |
Ending balance | 102,908 | |
Contingent consideration | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 2,180 | 0 |
Net realized and unrealized (gains)/losses | 8,808 | 9 |
Purchases | 12,868 | 2,181 |
Issuances | 96,680 | 0 |
Sales | 0 | |
Settlements | -13,258 | -10 |
Ending balance | $107,278 | $2,180 |
Fair_Value_Disclosures_Level_3
Fair Value Disclosures - Level 3 Valuation (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
Apr. 29, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative contracts | $81,032,000 | $0 | ||
Debt term | 2 years | |||
Derivative contracts | Fair Value, Measurements, Recurring | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative contracts | 102,908,000 | |||
Derivative contracts | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative contracts | 102,908,000 | [1] | ||
Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative contracts | 102,908,000 | |||
Volatility | 30.00% | |||
Risk free rate of interest | 2.10% | |||
Derivative contracts | Fair Value, Measurements, Recurring | Discounted Cash Flow | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative contracts | 2,180,000 | |||
Discount Rate | 2.50% | |||
JP Turner & Company, LLC | Derivative contracts | Fair Value, Measurements, Recurring | Discounted Cash Flow | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative contracts | 6,200,000 | |||
Hatteras Funds Group | Derivative contracts | Fair Value, Measurements, Recurring | Discounted Cash Flow | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative contracts | 28,310,000 | |||
StratCap | Derivative contracts | Fair Value, Measurements, Recurring | Discounted Cash Flow | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative contracts | 68,200,000 | |||
First Allied acquisition | Derivative contracts | Fair Value, Measurements, Recurring | Discounted Cash Flow | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative contracts | 4,568,000 | |||
First Allied And Centaras | Derivative contracts | Fair Value, Measurements, Recurring | Discounted Cash Flow | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Discounted rates based on estimated average cost of capital | 0.20% | |||
Trading Securities | Fair Value, Measurements, Recurring | Net asset value (NAV) | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Prepaid expenses and other assets - oil and gas interests | 113,000 | |||
Real Estate Funds | Fair Value, Measurements, Recurring | Net asset value (NAV) | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Prepaid expenses and other assets - oil and gas interests | 357,000 | |||
Prepaid expenses and other assets - oil and gas interests | Fair Value, Measurements, Recurring | Net asset value (NAV) | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Prepaid expenses and other assets - oil and gas interests | 151,000 | |||
Discount rate | 10.00% | |||
Low Case | StratCap | Fair Value, Measurements, Recurring | Income Approach Valuation Technique | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Present value factor | 0.65% | |||
Probability Adjustment | 25.00% | |||
Case Base | StratCap | Fair Value, Measurements, Recurring | Income Approach Valuation Technique | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Present value factor | 0.79% | |||
Probability Adjustment | 50.00% | |||
High Case | StratCap | Fair Value, Measurements, Recurring | Income Approach Valuation Technique | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Probability Adjustment | 25.00% | |||
Convertible Notes Payable | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Debt term | 6 years 9 months 18 days | |||
Volatility | 30.00% | |||
Risk free rate of interest | 1.95% | |||
Discount rate | 12.95% | |||
Convertible Preferred Stock | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Risk free rate of interest | 2.10% | |||
Put Option | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Volatility | 30.00% | |||
Risk free rate of interest | 2.43% | |||
Minimum | JP Turner & Company, LLC | Fair Value, Measurements, Recurring | Income Approach Valuation Technique | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Probability exceeding percentage threshold | 99.70% | |||
Present value factor | 0.71% | |||
Time until payments | 4 months 24 days | |||
Minimum | Hatteras Funds Group | Fair Value, Measurements, Recurring | Income Approach Valuation Technique | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Projected earnings | 11,000,000 | |||
Discounted rates based on estimated average cost of capital | 5.00% | |||
Maximum | JP Turner & Company, LLC | Fair Value, Measurements, Recurring | Income Approach Valuation Technique | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Probability exceeding percentage threshold | 100.00% | |||
Present value factor | 0.95% | |||
Time until payments | 2 years 4 months 24 days | |||
Maximum | Hatteras Funds Group | Fair Value, Measurements, Recurring | Income Approach Valuation Technique | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Projected earnings | $17,300,000 | |||
Discounted rates based on estimated average cost of capital | 7.00% | |||
Series B Preferred Stock | Convertible Notes Payable | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Debt term | 8 years | |||
Series B Preferred Stock | Convertible Preferred Stock | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Discount rate | 15.10% | |||
Series C Preferred Stock | Convertible Notes Payable | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Debt term | 8 years | |||
Series C Preferred Stock | Convertible Preferred Stock | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Discount rate | 15.10% | |||
Period One | Series B Preferred Stock | Convertible Preferred Stock | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Dividend Assumptions | 11.00% | |||
Period One | Series C Preferred Stock | Convertible Preferred Stock | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Dividend Assumptions | 8.00% | |||
Period Two | Series B Preferred Stock | Convertible Preferred Stock | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Dividend Assumptions | 8.00% | |||
Period Two | Series C Preferred Stock | Convertible Preferred Stock | Derivative contracts | Fair Value, Measurements, Recurring | Monte Carlo | Level 3 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Dividend Assumptions | 7.00% | |||
[1] | Includes $21.9 million of derivatives classified in long-term debt. |
Fair_Value_Disclosures_Net_Ass
Fair Value Disclosures - Net Asset Value Per Share(Details) (Fair Value, Measurements, Recurring, Level 3, USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Prepaid expenses and other assets - oil and gas interests | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Prepaid expenses and other assets - oil and gas interests | $113 |
Unfunded Commitments | 9 |
Real Estate Funds | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Prepaid expenses and other assets - oil and gas interests | 357 |
Unfunded Commitments | $0 |
Fair_Value_Disclosures_Debt_in
Fair Value Disclosures - Debt instruments (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Carrying Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | $1,040,523 |
Fair Value | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Fair Value | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 15,300 |
Fair Value | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 1,006,605 |
Convertible Debt | Carrying Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 61,632 |
Convertible Debt | Fair Value | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Convertible Debt | Fair Value | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Convertible Debt | Fair Value | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 78,005 |
First lien term facility | Carrying Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 555,700 |
First lien term facility | Fair Value | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
First lien term facility | Fair Value | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
First lien term facility | Fair Value | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 530,491 |
Second lien term facility | Carrying Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 147,903 |
Second lien term facility | Fair Value | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Second lien term facility | Fair Value | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Second lien term facility | Fair Value | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 142,500 |
Promissory note (legal settlement) | Carrying Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 15,300 |
Promissory note (legal settlement) | Fair Value | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Promissory note (legal settlement) | Fair Value | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 15,300 |
Promissory note (legal settlement) | Fair Value | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Subordinated borrowings | Carrying Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 2,000 |
Subordinated borrowings | Fair Value | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Subordinated borrowings | Fair Value | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Subordinated borrowings | Fair Value | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 2,000 |
Series B Preferred Stock | Carrying Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 146,700 |
Series B Preferred Stock | Fair Value | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Series B Preferred Stock | Fair Value | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Series B Preferred Stock | Fair Value | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 117,367 |
Series C Preferred Stock | Carrying Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 111,288 |
Series C Preferred Stock | Fair Value | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Series C Preferred Stock | Fair Value | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | 0 |
Series C Preferred Stock | Fair Value | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt, fair value | $136,242 |
AvailableforSale_Securities_De
Available-for-Sale Securities (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | |
Available-for-Sale Securities [Roll Forward] | |||
Ending balance | $11,473 | $8,528 | |
Equity securities | |||
Available-for-Sale Securities [Roll Forward] | |||
Beginning balance | 8,528 | 0 | |
Purchases | 11,484 | [1] | 10,097 |
Sales | -9,013 | -1,000 | |
Realized Gains/ (Losses) | 171 | -59 | |
Unrealized Gains/ (Losses) | 303 | -510 | |
Ending balance | 11,473 | 8,528 | |
Cost | 11,684 | 9,038 | |
Dividend Reinvestment Plan | |||
Available-for-Sale Securities [Roll Forward] | |||
Purchases | $300 | ||
[1] | Includes $0.3 million of purchases under dividend reinvestment programs. |
Note_Receivable_Details
Note Receivable (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Financing Receivable [Roll Forward] | ||
Beginning balance | $13,270 | $8,547 |
Originated and acquired loans | 68,947 | 5,636 |
Collections | -10,477 | -363 |
Forgiveness | -8,031 | -573 |
Accretion | 5,770 | 6 |
Allowance | -490 | 17 |
Ending balance | 68,989 | 13,270 |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 424 | 441 |
Provision for bad debt | 1,062 | 0 |
Charge off - net of recoveries | -572 | -17 |
Total change | 490 | -17 |
Ending balance | 914 | 424 |
Forgivable loans | ||
Financing Receivable [Roll Forward] | ||
Beginning balance | 11,104 | 6,633 |
Originated and acquired loans | 16,747 | 5,286 |
Collections | -1,672 | -157 |
Forgiveness | -8,329 | -661 |
Accretion | 5,368 | 3 |
Allowance | -143 | 0 |
Ending balance | 23,075 | 11,104 |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 368 | 368 |
Provision for bad debt | 327 | 0 |
Charge off - net of recoveries | -184 | 0 |
Total change | 143 | 0 |
Ending balance | 511 | 368 |
Payback loans | ||
Financing Receivable [Roll Forward] | ||
Beginning balance | 2,166 | 1,914 |
Originated and acquired loans | 52,200 | 350 |
Collections | -8,805 | -206 |
Forgiveness | 298 | 88 |
Accretion | 402 | 3 |
Allowance | -347 | 17 |
Ending balance | 45,914 | 2,166 |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 56 | 73 |
Provision for bad debt | 735 | 0 |
Charge off - net of recoveries | -388 | -17 |
Total change | 347 | -17 |
Ending balance | $403 | $56 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $30,234 | $2,233 |
Less: Accumulated depreciation and amortization | 5,488 | 350 |
Fixed assets - net | 24,746 | 1,883 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 3,650 | 1,007 |
Computer software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 22,971 | 854 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $3,613 | $372 |
Property_and_Equipment_Depreci
Property and Equipment- Depreciation and Amortization (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $5.20 | $0.30 | $0.03 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets Goodwill by segment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Goodwill [Line Items] | ||
Goodwill | $519,361 | $79,986 |
Independent Retail Advice | ||
Goodwill [Line Items] | ||
Goodwill | 434,398 | 79,986 |
Wholesale distribution: | ||
Goodwill [Line Items] | ||
Goodwill | 22,871 | 0 |
Investment Management | ||
Goodwill [Line Items] | ||
Goodwill | 15,348 | 0 |
Investment Banking and Capital Markets | ||
Goodwill [Line Items] | ||
Goodwill | 45,989 | 0 |
Corporate and other: | ||
Goodwill [Line Items] | ||
Goodwill | $755 | $0 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets Goodwill by Carrying Amount (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 29, 2014 | Jun. 11, 2014 | Jun. 12, 2014 | Jun. 30, 2014 | Aug. 29, 2014 |
In Thousands, unless otherwise specified | |||||||
Goodwill [Line Items] | |||||||
Goodwill | $519,361 | $79,986 | |||||
First Allied acquisition | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 79,986 | 79,986 | |||||
Cetera acquisition | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 290,262 | 0 | 290,262 | ||||
Summit acquisition | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 23,891 | 0 | 23,891 | ||||
J.P. Turner acquisition | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 13,579 | 0 | 13,579 | ||||
Hatteras acquisition | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 15,348 | 0 | 15,348 | ||||
ICH acquisition | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 26,680 | 0 | |||||
Trupoly acquisition | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 755 | 0 | |||||
Total goodwill | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 22,871 | 0 | 22,871 | ||||
Docupace [Member] | |||||||
Goodwill [Line Items] | |||||||
Goodwill | $45,989 | $0 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets Finite-lived Intangible Assets (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $1,311,631,000 | $84,897,000 | |
Accumulated Amortization | 68,106,000 | 1,892,000 | |
Finite-lived intangible assets, net | 1,243,525,000 | 83,005,000 | |
Amortization of intangible assets | 66,200,000 | 1,900,000 | |
Financial advisor relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Life Remaining (in years) | 13 years | 13 years | |
Gross Carrying Value | 1,019,353,000 | 71,185,000 | |
Accumulated Amortization | 52,070,000 | 1,487,000 | |
Finite-lived intangible assets, net | 967,283,000 | 69,698,000 | |
Sponsor relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Life Remaining (in years) | 9 years | ||
Gross Carrying Value | 113,000,000 | ||
Accumulated Amortization | 4,186,000 | ||
Finite-lived intangible assets, net | 108,814,000 | ||
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Life Remaining (in years) | 29 years | ||
Gross Carrying Value | 65,192,000 | ||
Accumulated Amortization | 1,638,000 | ||
Finite-lived intangible assets, net | 63,554,000 | ||
Investment management agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Life Remaining (in years) | 12 years | ||
Gross Carrying Value | 47,390,000 | ||
Accumulated Amortization | 1,966,000 | ||
Finite-lived intangible assets, net | 45,424,000 | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Life Remaining (in years) | 11 years | 13 years | |
Gross Carrying Value | 20,686,000 | 12,686,000 | |
Accumulated Amortization | 1,473,000 | 277,000 | |
Finite-lived intangible assets, net | 19,213,000 | 12,409,000 | |
Intellectual property and internally developed software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Life Remaining (in years) | 7 years | ||
Gross Carrying Value | 22,510,000 | ||
Accumulated Amortization | 779,000 | ||
Finite-lived intangible assets, net | 21,731,000 | ||
Intellectual property | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Life Remaining (in years) | 9 years | ||
Gross Carrying Value | 10,642,000 | ||
Accumulated Amortization | 849,000 | ||
Finite-lived intangible assets, net | 9,793,000 | ||
Non-competition agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Life Remaining (in years) | 2 years | 2 years | |
Gross Carrying Value | 9,648,000 | 1,026,000 | |
Accumulated Amortization | 5,136,000 | 128,000 | |
Finite-lived intangible assets, net | 4,512,000 | 898,000 | |
Distribution Networks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Life Remaining (in years) | 40 years | [1] | |
Gross Carrying Value | 3,210,000 | [1] | |
Accumulated Amortization | 9,000 | [1] | |
Finite-lived intangible assets, net | $3,201,000 | [1] | |
[1] | The Company previously classified its distribution networks as indefinite-lived intangible assets. The Company finalized its assessment of the useful life of the distribution networks and concluded that they were finite-lived rather than indefinite-lived intangible assets. |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets Future Amortization (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2014 | $102,820 | |
2015 | 100,090 | |
2016 | 99,937 | |
2017 | 99,858 | |
2018 | 98,529 | |
Thereafter | 742,291 | |
Finite-lived intangible assets, net | $1,243,525 | $83,005 |
Longterm_Debt_Narrative_Detail
Long-term Debt - Narrative (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||||||
Apr. 29, 2014 | Dec. 31, 2014 | Jan. 02, 2013 | Jul. 28, 2014 | Dec. 04, 2014 | Nov. 01, 2011 | Jul. 21, 2014 | Sep. 25, 2013 | Jul. 11, 2014 | Jan. 09, 2015 | |
Line of Credit Facility [Line Items] | ||||||||||
Convertible notes payable | $1,000 | |||||||||
Payment in year two | 63,627,000 | |||||||||
Payment in year three | 74,466,000 | |||||||||
Debt term | 2 years | |||||||||
Variable rate | 1.25 to 1.00 | |||||||||
Senior Secured First Lien Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Secured debt, commitment | 25,000,000 | |||||||||
Repayments of Senior Debt | 14,400,000 | |||||||||
FA Term Loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt increase | 20,000,000 | |||||||||
Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt term | 3 years | |||||||||
Barclays Bank PLC and Bank of America | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Leverage ratio | 1.00% | |||||||||
Leverage ratio, related party | 1.25% | |||||||||
Retained earnings ratio | 11,200,000 | |||||||||
Fifth Third Bank | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Long-term line of credit | 18,000,000 | |||||||||
Fifth Third Bank | FA Term Loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Long-term line of credit | 12,000,000 | |||||||||
Fifth Third Bank | FA Revolver | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Long-term line of credit | 6,000,000 | |||||||||
Common Class A | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Conversion price (in dollars per share) | $21.18 | |||||||||
Maximum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Payments for deposits applied | 10,000,000 | |||||||||
Senior Secured Second Lien Term Loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 10.50% | |||||||||
Senior Secured First Lien Term Loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 6.50% | |||||||||
Senior Secured First Lien Term Loan | Maximum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 5.50% | |||||||||
London Interbank Offered Rate (LIBOR) | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Minimum interest rate | 1.00% | |||||||||
London Interbank Offered Rate (LIBOR) | Senior Secured First Lien Term Loan | Minimum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 5.25% | |||||||||
London Interbank Offered Rate (LIBOR) | Senior Secured First Lien Term Loan | Maximum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 1.25% | |||||||||
Letter of Credit | Backstop Letter of Credit | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Long-term line of credit | 1,100,000 | |||||||||
Cetera Financial Group | Secured Debt | Senior Secured Second Lien Term Loan | Barclays Bank PLC and Bank of America | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Convertible notes, face value | 150,000,000 | 32,000,000 | ||||||||
Cetera Financial Group | Secured Debt | Senior Secured First Lien Term Loan | Barclays Bank PLC and Bank of America | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Convertible notes, face value | 575,000,000 | |||||||||
Cetera Financial Group | Convertible Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Convertible notes, face value | 120,000,000 | |||||||||
First Allied acquisition | RCAP Holdings, LLC | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Convertible notes, face value | 94,200,000 | |||||||||
Repayments of debt | 32,000,000 | |||||||||
Debt acquired | 7,000,000 | |||||||||
First Allied acquisition | Secured Debt | RCAP Holdings, LLC | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Convertible notes, face value | 26,000,000 | |||||||||
First Allied acquisition | Secured Debt | First Allied notes | RCAP Holdings, LLC | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Convertible notes, face value | 32,000,000 | 32,000,000 | ||||||||
Investors Capital Holdings | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt acquired | 2,918,000 | |||||||||
Investors Capital Holdings | Subordinated Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt acquired | 2,000,000 | |||||||||
Convertible Notes Payable | Call Option | Convertible Preferred Stock | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Fair value of embedded derivative | 21,900,000 | |||||||||
Subsequent Event | Letter of Credit | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Long-term Line of Credit | 100,000 | |||||||||
ARCP | Promissory note (legal settlement) | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Convertible notes, face value | 15,300,000 | |||||||||
Interest rate | 8.00% | |||||||||
Payment in year one | 7,700,000 | |||||||||
Payment in year two | 3,800,000 | |||||||||
Payment in year three | $3,800,000 | |||||||||
Debt term | 2 years |
Longterm_Debt_Longterm_Borrowi
Long-term Debt - Long-term Borrowings and Contractual Interest Rates (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Debt Instrument [Line Items] | ||||
Total borrowings | $804,411,000 | $33,302,000 | ||
Less: Current portion of borrowings | 43,891,000 | 3,200,000 | ||
Total long-term debt, net of current portion | 760,520,000 | 30,102,000 | ||
Senior Secured First Lien Term Loan | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.50% | |||
Total borrowings | 555,700,000 | 0 | ||
Senior Secured Second Lien Term Loan | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 10.50% | |||
Total borrowings | 147,903,000 | 0 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.00% | |||
Total borrowings | 83,508,000 | [1] | 0 | |
Promissory note (legal settlement) | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 8.00% | |||
Total borrowings | 15,300,000 | 0 | ||
Subordinated Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 8.25% | |||
Total borrowings | 2,000,000 | 0 | ||
Other | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.42% | |||
Total borrowings | 0 | 33,302,000 | [2] | |
Convertible Notes Payable | Convertible Preferred Stock | Call Option | ||||
Debt Instrument [Line Items] | ||||
Fair value of embedded derivative | 21,900,000 | |||
First Allied acquisition | RCAP Holdings, LLC | FA Term Loan | ||||
Debt Instrument [Line Items] | ||||
Total borrowings | 28,800,000 | |||
First Allied acquisition | RCAP Holdings, LLC | FA Revolver | ||||
Debt Instrument [Line Items] | ||||
Total borrowings | $4,500,000 | |||
[1] | The Company’s convertible notes balance includes the fair value of the compound derivative of $21.9 million. | |||
[2] | The Company’s long-term borrowings as of December 31, 2013 relate to First Allied, of which, $28.8 million was outstanding under the FA Term Loan and $4.5 million was outstanding under the FA Revolver. |
LongTerm_Debt_Maturities_of_Lo
Long-Term Debt Maturities of Long-term Debt (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Debt Instrument [Line Items] | |||
2016 | $63,627 | ||
2017 | 74,466 | ||
2018 | 76,597 | ||
2019 | 277,217 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 268,613 | [1] | |
Total long-term debt, net of current portion | $760,520 | $30,102 | |
[1] | Includes the fair value of the compound derivative of $21.9 million. |
LongTerm_Debt_Contractual_Matu
Long-Term Debt - Contractual Maturities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | $43,891 | $3,200 |
31-Mar-15 | ||
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | 5,668 | |
30-Jun-15 | ||
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | 12,797 | |
30-Sep-15 | ||
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | 12,740 | |
31-Dec-15 | ||
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | $12,686 |
Derivative_Contracts_Details
Derivative Contracts (Details) (USD $) | 8 Months Ended | 0 Months Ended | 12 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 19, 2014 | Dec. 12, 2014 | Nov. 18, 2014 | Dec. 31, 2014 | Apr. 29, 2014 | ||
Derivative [Line Items] | ||||||||
Interest rate | 15.00% | |||||||
Put Option | ||||||||
Derivative [Line Items] | ||||||||
Gross liability | $11.60 | 11.6 | ||||||
Derivative, gain on derivative | 9.6 | |||||||
Series A Preferred Stock | ||||||||
Derivative [Line Items] | ||||||||
Loss on embedded derivative | 8.7 | 3.5 | ||||||
Shares converted (in shares) | 11,584,427 | 2,171,553 | [1] | 902,000 | 3,073,553 | [2] | ||
Loss on embedded derivative exchanged | 46.5 | |||||||
Bifurcated derivatives, fair value | 138.8 | |||||||
Fair value of embedded derivative | 26 | 10.7 | ||||||
Series C Preferred Stock | ||||||||
Derivative [Line Items] | ||||||||
Embedded derivative, gain (loss) on embedded derivative | 1.2 | |||||||
Luxor Capital Group, LP | ||||||||
Derivative [Line Items] | ||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 19.46% | |||||||
Convertible Notes Payable | Convertible Preferred Stock | Call Option | ||||||||
Derivative [Line Items] | ||||||||
Fair value of embedded derivative | 21.9 | 21.9 | ||||||
Embedded derivative, gain (loss) on embedded derivative | 2.7 | |||||||
Derivative Contracts | Series C Preferred Stock | ||||||||
Derivative [Line Items] | ||||||||
Compound derivative, fair value | $69.40 | 69.4 | ||||||
[1] | To comply with ownership limitations applicable to Luxor under the terms of the Series A Preferred Stock, 1,852,575 shares of Class A common stock were issued on December 19, 2014 and 2,042,022 shares of Class A common stock were issued on February 23, 2015. See Note 15 for more information. | |||||||
[2] | Per share totals are expressed as weighted averages. |
Preferred_Stock_Details
Preferred Stock (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 11 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||||||||
Apr. 29, 2014 | Dec. 31, 2014 | Oct. 09, 2014 | Jul. 10, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 10, 2014 | Dec. 19, 2014 | Dec. 12, 2014 | Dec. 10, 2014 | Nov. 18, 2014 | Dec. 31, 2014 | Feb. 23, 2015 | Mar. 31, 2015 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Shares issued upon conversion (in shares) | 14,657,980 | ||||||||||||||||||||
Threshold consecutive trading days | 30 days | ||||||||||||||||||||
Conversion price ratio | 2.5 | ||||||||||||||||||||
Debt term | 2 years | ||||||||||||||||||||
Maximum percent of convertible preferred stock as a percent of shares outstanding | 24.90% | 24.90% | 24.90% | ||||||||||||||||||
Maximum percent of convertible preferred stock as a percent of shares outstanding preceding a trading day | 9.90% | 9.90% | 9.90% | ||||||||||||||||||
Written notice period for ownership limitation requirement | 65 days | ||||||||||||||||||||
Dividends declared but not yet paid | $1,183,000 | 1,183,000 | 1,183,000 | $450,000 | $0 | ||||||||||||||||
Conversion Price One | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Conversion price (in dollars per share) | 20.26 | ||||||||||||||||||||
Conversion Price Two | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Conversion price (in dollars per share) | 50.65 | ||||||||||||||||||||
Threshold shares traded | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||||||
Stock trigger price (in dollars per share) | $50.66 | ||||||||||||||||||||
Convertible Preferred Stock | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Dividend rate cash | 7.00% | ||||||||||||||||||||
Dividend rate | 8.00% | 8.00% | |||||||||||||||||||
Par value (in dollars per share) | $18.42 | 18.42 | 18.42 | ||||||||||||||||||
Dividends declared | 4,700,000 | 3,300,000 | |||||||||||||||||||
Common Class A | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Discount on shares | 2.00% | 2.00% | 2.00% | 2.00% | |||||||||||||||||
Conversion price (in dollars per share) | 21.18 | ||||||||||||||||||||
Threshold consecutive trading days | 10 days | ||||||||||||||||||||
Issuance of common stock, shares | 468,762 | 723,234 | 19,000,000 | ||||||||||||||||||
Minimum percent of convertible preferred stock as a percent of shares outstanding preceding a trading day | 4.90% | 4.90% | 4.90% | ||||||||||||||||||
Preferred stock ownership percentage minimum to be allowed to accept common shares | 24.90% | 24.90% | 24.90% | ||||||||||||||||||
Series A Preferred Stock | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Shares issued upon conversion (in shares) | 5,405,601 | [1] | 5,405,601 | [1] | 3,894,597.09 | [2] | 1,511,004.32 | 5,405,601 | [1] | ||||||||||||
Conversion price (in dollars per share) | $10.61 | [1],[3] | 10.60566623 | [1],[3] | $10.41 | [2],[3] | $11.10 | [3] | 10.60566623 | [1],[3] | |||||||||||
Issuance of common stock, shares | 1,852,575 | 1,511,004 | |||||||||||||||||||
Dividends declared | 8,000,000 | ||||||||||||||||||||
Deemed dividend | 68,500,000 | ||||||||||||||||||||
Shares converted (in shares) | 3,073,553 | [1] | 11,584,427 | 2,171,553 | [2] | 902,000 | |||||||||||||||
Dividends declared but not yet paid | 3,000,000 | ||||||||||||||||||||
Accrued interest and unpaid dividends as a percent of deemed dividends | 43.10% | 43.10% | 43.10% | ||||||||||||||||||
Series B Preferred Stock | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Dividend rate cash | 11.00% | ||||||||||||||||||||
Dividend rate | 12.50% | 12.50% | 12.50% | ||||||||||||||||||
Issuance of common stock, shares | 5,800,000 | ||||||||||||||||||||
Dividends declared | 800,000 | ||||||||||||||||||||
Deemed dividend | 26,700,000 | ||||||||||||||||||||
Dividends declared but not yet paid | 800,000 | 800,000 | 800,000 | ||||||||||||||||||
Liquidation price (in dollars per share) | 25 | ||||||||||||||||||||
Future aggregate liquidation minimum amount, required to not redeem all | 35,000,000 | 35,000,000 | 35,000,000 | ||||||||||||||||||
Accrued interest and unpaid dividends as a percent of deemed dividends | 56.90% | 56.90% | 56.90% | ||||||||||||||||||
Series C Preferred Stock | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Dividend rate cash | 7.00% | ||||||||||||||||||||
Conversion price (in dollars per share) | $13 | 13 | 13 | ||||||||||||||||||
Dividends declared | 400,000 | ||||||||||||||||||||
Deemed dividend | 42,800,000 | ||||||||||||||||||||
Shares issued in conversation (in shares) | 4,400,000 | ||||||||||||||||||||
Dividends declared but not yet paid | 400,000 | 400,000 | 400,000 | ||||||||||||||||||
Liquidation price (in dollars per share) | $25 | 25 | 25 | ||||||||||||||||||
Future aggregate liquidation minimum amount, required to not redeem all | 35,000,000 | 35,000,000 | 35,000,000 | ||||||||||||||||||
Common Stock | Common Class A | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Issuance of common stock, shares | 23,999,999 | ||||||||||||||||||||
Private Placement | Common Stock | Common Class A | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Issuance of common stock, shares | 2,469,136 | 2,469,136 | |||||||||||||||||||
Subsequent Event | Series A Preferred Stock | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Issuance of common stock, shares | 2,042,022 | ||||||||||||||||||||
Scenario, Forecast | Series B Preferred Stock | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Preferred stock, increase in liquidation preference | 2,800,000 | ||||||||||||||||||||
Scenario, Forecast | Series C Preferred Stock | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Preferred stock, increase in liquidation preference | $1,900,000 | ||||||||||||||||||||
[1] | Per share totals are expressed as weighted averages. | ||||||||||||||||||||
[2] | To comply with ownership limitations applicable to Luxor under the terms of the Series A Preferred Stock, 1,852,575 shares of Class A common stock were issued on December 19, 2014 and 2,042,022 shares of Class A common stock were issued on February 23, 2015. See Note 15 for more information. | ||||||||||||||||||||
[3] | Both conversions were calculated using a 2% discount to VWAP of Class A common stock for the ten trading days prior to the date of the holder’s election to convert. |
Preferred_Stock_Convertible_St
Preferred Stock - Convertible Stock (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 10, 2014 | Dec. 31, 2014 | Dec. 19, 2014 | Dec. 12, 2014 | Dec. 10, 2014 | Nov. 18, 2014 | Feb. 23, 2015 | Apr. 29, 2014 | ||||
Class of Stock [Line Items] | ||||||||||||||
Class A Common Stock Issued (in shares) | 14,657,980 | |||||||||||||
Common Class A | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Conversion price (in dollars per share) | 21.18 | |||||||||||||
Discount on shares | 2.00% | 2.00% | 2.00% | |||||||||||
Trading days to election of convert | 10 days | |||||||||||||
Issuance of common stock, shares | 468,762 | 723,234 | 19,000,000 | |||||||||||
Convertible Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Par value (in dollars per share) | 18.42 | 18.42 | ||||||||||||
Series A Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares converted (in shares) | 3,073,553 | [1] | 11,584,427 | 2,171,553 | [2] | 902,000 | ||||||||
Liquidation Preference Converted | 57,330 | [1],[3] | 57,330 | [1],[3] | $40,560 | [2],[3] | $16,770 | [3] | ||||||
Conversion price (in dollars per share) | 10.60566623 | [1],[4] | 10.60566623 | [1],[4] | $10.41 | [2],[4] | $11.10 | [4] | ||||||
Class A Common Stock Issued (in shares) | 5,405,601 | [1] | 5,405,601 | [1] | 3,894,597 | [2] | 1,511,004 | |||||||
Share Price (in dollars per share) | 12.13149102 | [1] | 12.13149102 | [1] | $11.81 | [2] | $12.96 | |||||||
Aggregate Market Value of Class A Common Issued | 65,578 | [1] | 65,578 | [1] | $45,995 | [2] | $19,583 | |||||||
Issuance of common stock, shares | 1,852,575 | 1,511,004 | ||||||||||||
Subsequent Event | Series A Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Issuance of common stock, shares | 2,042,022 | |||||||||||||
[1] | Per share totals are expressed as weighted averages. | |||||||||||||
[2] | To comply with ownership limitations applicable to Luxor under the terms of the Series A Preferred Stock, 1,852,575 shares of Class A common stock were issued on December 19, 2014 and 2,042,022 shares of Class A common stock were issued on February 23, 2015. See Note 15 for more information. | |||||||||||||
[3] | The liquidation preference is determined by multiplying the number of shares being converted by $18.42 then adding the unpaid dividends on such shares. | |||||||||||||
[4] | Both conversions were calculated using a 2% discount to VWAP of Class A common stock for the ten trading days prior to the date of the holder’s election to convert. |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 11 Months Ended | 4 Months Ended | 0 Months Ended | |||||||||||||||||||||||
In Millions, except Share data, unless otherwise specified | Jun. 10, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 29, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 17, 2014 | Mar. 20, 2014 | Jun. 11, 2014 | Jun. 12, 2014 | Jun. 30, 2014 | Jul. 11, 2014 | Jun. 10, 2013 | Dec. 19, 2014 | Dec. 10, 2014 | Dec. 31, 2014 | Sep. 30, 2013 | Mar. 06, 2015 | Mar. 04, 2015 | Feb. 23, 2015 | Feb. 11, 2014 | Jun. 18, 2014 | Dec. 12, 2014 | Nov. 18, 2014 | Apr. 28, 2014 | ||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Period in force | 30 days | ||||||||||||||||||||||||||||
Cash dividends paid to parent company | $102.50 | $4.90 | |||||||||||||||||||||||||||
Restricted Stock | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Restricted shares, grants in period | 2,368,203 | [1] | |||||||||||||||||||||||||||
StratCap | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Business acquisition, equity interest issued, number of shares | 464,317 | ||||||||||||||||||||||||||||
RCAP Holdings, LLC | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Operating subsidiary units exchanged under the exchange agreement (in shares) | 23,999,999 | ||||||||||||||||||||||||||||
Class A shares common stock | 23,999,999 | ||||||||||||||||||||||||||||
RCAP Holdings, LLC | Restricted Stock | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Restricted shares, grants in period | 512,430 | ||||||||||||||||||||||||||||
Common Class A | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Issuance of common stock, shares | 19,000,000 | 468,762 | 723,234 | ||||||||||||||||||||||||||
Common stock, par value (in dollars per share) | 20.25 | $0.00 | $0.00 | $0.00 | 0.001 | ||||||||||||||||||||||||
Common stock, shares issued (in shares) | 70,571,540 | 13,764,929 | 70,571,540 | 70,571,540 | |||||||||||||||||||||||||
Cash dividend declared per common share (in dollars per share) | $0.18 | $0.18 | |||||||||||||||||||||||||||
Common Class A | Restricted Stock | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Restricted shares, grants in period | 23,445 | ||||||||||||||||||||||||||||
Common Class A | RCAP Equity Plan | Restricted Stock | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Share-based payment award, options, grants in period, net of forfeitures (in shares) | 2,624,027 | ||||||||||||||||||||||||||||
Common Class A | Stock Purchase Program | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Shares acquired (in shares) | 468,762 | 723,234 | |||||||||||||||||||||||||||
Common Class A | Summit Financial Services Group | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Business acquisition, equity interest issued, number of shares | 498,884 | 498,884 | |||||||||||||||||||||||||||
Common Class A | JP Turner & Company, LLC | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Business acquisition, equity interest issued, number of shares | 239,362 | 239,362 | |||||||||||||||||||||||||||
Common Class A | First Allied acquisition | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Issuance of common stock, shares | 11,264,929 | ||||||||||||||||||||||||||||
Common Class A | Investors Capital Holdings | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Business acquisition, equity interest issued, number of shares | 2,029,261 | ||||||||||||||||||||||||||||
Equity interests canceled (in shares) | 1,295 | ||||||||||||||||||||||||||||
Shares issued (in share) | 2,027,966 | ||||||||||||||||||||||||||||
Common Class A | Trupoly acquisition | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Shares issued (in share) | 33,652 | ||||||||||||||||||||||||||||
Common Class A | StratCap | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Shares issued (in share) | 464,317 | ||||||||||||||||||||||||||||
Common Class A | IPO | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Issuance of common stock, shares | 2,500,000 | ||||||||||||||||||||||||||||
Common Class A | Over-Allotment Option | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Share-based payment award, options, grants in period, gross | 3,600,000 | ||||||||||||||||||||||||||||
Common stock, shares issued (in shares) | 870,248 | ||||||||||||||||||||||||||||
Common Class A | Private Placement | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Share Price (in dollars per share) | 20.25 | 20.25 | |||||||||||||||||||||||||||
Common Class A | RCAP Holdings, LLC | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Shares held by a related party (in shares) | 24,051,499 | ||||||||||||||||||||||||||||
Common Class A | RCAP Holdings, LLC | Restricted Stock | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Restricted shares, grants in period | 287,502 | ||||||||||||||||||||||||||||
Common Class A | RCAP Holdings, LLC | First Allied acquisition | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Business acquisition, equity interest issued, number of shares | 11,264,929 | 11,264,929 | |||||||||||||||||||||||||||
Common Class A | IPO | IPO | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Common stock, par value (in dollars per share) | 0.001 | ||||||||||||||||||||||||||||
Series A Preferred Stock | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Issuance of common stock, shares | 1,852,575 | 1,511,004 | |||||||||||||||||||||||||||
Share Price (in dollars per share) | $12.13 | [2] | $12.13 | [2] | 12.13149102 | [2] | $11.81 | [3] | $12.96 | ||||||||||||||||||||
Common Class B | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Common stock, par value (in dollars per share) | $0.00 | $0.00 | $0.00 | 0.001 | |||||||||||||||||||||||||
Common stock, shares issued (in shares) | 1 | 24,000,000 | 1 | 1 | |||||||||||||||||||||||||
Common Class B | Majority Shareholder | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Number of Votes Per Share | 1 | 1 | 1 | ||||||||||||||||||||||||||
Economic rights held by affiliated entity | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||||||||
Common Class B | RCAP Holdings, LLC | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Shares held by a related party (in shares) | 1 | ||||||||||||||||||||||||||||
Common Class B | IPO | IPO | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Common stock, par value (in dollars per share) | 0.001 | ||||||||||||||||||||||||||||
LTIP Units | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
LTIP Units earned (in shares) | 310,947 | 310,947 | 310,947 | 310,947 | |||||||||||||||||||||||||
LTIP Units forfeited (in shares) | 1,014,053 | ||||||||||||||||||||||||||||
LTIP Units distributed to members (in shares) | 310,947 | ||||||||||||||||||||||||||||
Common Stock | Common Class A | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Issuance of common stock, shares | 23,999,999 | ||||||||||||||||||||||||||||
Common Stock | Common Class A | IPO | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Issuance of common stock, shares | 19,870,248 | 2,500,000 | |||||||||||||||||||||||||||
Common Stock | Common Class A | Private Placement | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Issuance of common stock, shares | 2,469,136 | 2,469,136 | |||||||||||||||||||||||||||
Common Stock | Common Class B | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Issuance of common stock, shares | -23,999,999 | ||||||||||||||||||||||||||||
Warrant | Common Class A | Stock Purchase Program | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Shares acquired (in shares) | 156,254 | 241,078 | |||||||||||||||||||||||||||
Subsequent Event | Common Class A | RCAP Equity Plan | Restricted Stock | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Share-based payment award, options, grants in period, net of forfeitures (in shares) | 3,421,815 | ||||||||||||||||||||||||||||
Subsequent Event | Common Class A | JP Turner & Company, LLC | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Business acquisition, equity interest issued, number of shares | 245,813 | ||||||||||||||||||||||||||||
Subsequent Event | Series A Preferred Stock | |||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||
Issuance of common stock, shares | 2,042,022 | ||||||||||||||||||||||||||||
[1] | Does not include 287,502 shares of Class A common stock issued to individual members of RCS Capital Management that were issued as awards under the RCAP Equity Plan on December 31, 2014 following conversion and exchange of Earned LTIP units. | ||||||||||||||||||||||||||||
[2] | Per share totals are expressed as weighted averages. | ||||||||||||||||||||||||||||
[3] | To comply with ownership limitations applicable to Luxor under the terms of the Series A Preferred Stock, 1,852,575 shares of Class A common stock were issued on December 19, 2014 and 2,042,022 shares of Class A common stock were issued on February 23, 2015. See Note 15 for more information. |
EquityBased_Compensation_Narra
Equity-Based Compensation - Narrative (Details) (USD $) | 4 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 11 Months Ended | 3 Months Ended | 0 Months Ended | |||||||
Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 10, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 06, 2015 | Sep. 25, 2013 | Mar. 05, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Restricted shares, vested in period (in shares) | 3,038 | |||||||||||||
Dividends | $1,350,000 | |||||||||||||
Warrant | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Tax benefit from compensation expense | 20,000 | |||||||||||||
Restricted shares, vested in period (in shares) | 0 | |||||||||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||||||||||||
Nonvested shares (in shares) | 395,417 | 0 | 395,417 | 395,417 | 0 | |||||||||
Restricted shares weighted average vesting period | 2 years 10 months 6 days | 0 years | ||||||||||||
Restricted Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share-based compensation | 3,100,000 | |||||||||||||
Tax benefit from compensation expense | 900,000 | |||||||||||||
Restricted shares, vested in period (in shares) | 59,812 | [1] | ||||||||||||
Share-based compensation, recognition | 6,400,000 | |||||||||||||
Nonvested shares (in shares) | 2,276,713 | 0 | 2,276,713 | 2,276,713 | 0 | |||||||||
Restricted shares weighted average vesting period | 3 years 1 month 2 days | 0 years | ||||||||||||
Restricted Stock | RCAP Holdings, LLC | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share-based compensation | 16,400,000 | 0 | 0 | |||||||||||
Tax benefit from compensation expense | 4,600,000 | |||||||||||||
Restricted shares, vested in period (in shares) | 143,805 | |||||||||||||
Nonvested shares (in shares) | 368,625 | 0 | 368,625 | 368,625 | 0 | |||||||||
Restricted shares weighted average vesting period | 2 years 9 months 29 days | 0 years | ||||||||||||
RCAP Equity Plan | Restricted Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options, grants in period, net of forfeitures (in shares) | 171,567 | |||||||||||||
Grants in period, weighted average grant date fair value (in dollars per share) | 36.72 | |||||||||||||
FA RSU Plan | Restricted Stock Units (RSUs) | RCAP Holdings, LLC | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share-based compensation | 2,800,000 | |||||||||||||
Issuance of common stock, shares | 439,356 | |||||||||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||||||||||||
Common stock, par value (in dollars per share) | $20 | |||||||||||||
Nonvested shares (in shares) | 211,498 | 211,498 | 211,498 | |||||||||||
Common Class A | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares outstanding to determine awards (in shares) | 250,000 | 250,000 | 250,000 | |||||||||||
Shares outstanding to determine awards | 10.00% | 10.00% | 10.00% | |||||||||||
Issuance of common stock, shares | 468,762 | 723,234 | 19,000,000 | |||||||||||
Dividends | 15,728,000 | |||||||||||||
Common stock, par value (in dollars per share) | 0.001 | 0.001 | $0.00 | $20.25 | $0.00 | $0.00 | ||||||||
Common Class A | RCAP Equity Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares available for grant (in shares) | 6,980,124 | 6,980,124 | 6,980,124 | |||||||||||
Common Class A | RCAP Equity Plan | Restricted Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share-based payment award, options, grants in period, net of forfeitures (in shares) | 2,624,027 | |||||||||||||
Common Class A | Stock Purchase Program | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Shares acquired (in shares) | 468,762 | 723,234 | ||||||||||||
Share price acquired (in dollars per share) | $12.24 | 22.52 | ||||||||||||
Restricted Stock Units (RSUs) | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Dividends | 100,000 | 467,000 | ||||||||||||
Maximum | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 5 years 0 months 0 days | |||||||||||||
Maximum | Common Class A | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares available for grant (in shares) | 250,000 | 250,000 | 250,000 | |||||||||||
Internal Commissions, Payroll and Benefits | FA RSU Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share-based compensation | 3,900,000 | 700,000 | ||||||||||||
Tax benefit from compensation expense | 1,100,000 | 10,000 | ||||||||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||||||||||||
Restricted shares weighted average vesting period | 21 months | |||||||||||||
Warrant | Common Class A | Stock Purchase Program | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Shares acquired (in shares) | 156,254 | 241,078 | ||||||||||||
Subsequent Event | Common Class A | RCAP Equity Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Additional shares available for issuance (in shares) | 2,289,058 | |||||||||||||
Subsequent Event | Common Class A | RCAP Equity Plan | Restricted Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share-based payment award, options, grants in period, net of forfeitures (in shares) | 3,421,815 | |||||||||||||
[1] | The shares that vested during the year ended December 31, 2014 had an aggregate fair market value of $1.6 million on the vesting dates. |
Equitybased_Compensation_Restr
Equity-based Compensation - Restricted Share Activity (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Restricted shares, vested in period | 3,038 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Nonvested, Weighted-Average Issue Price [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, weighted-average issue price | $0 | ||
Restricted shares, grants in period, weighted-average issue price | $3.44 | ||
Restricted shares, vested in period, weighted-average issue price | $0 | ||
Restricted shares, forfeited in period, weighted-average issue price | $7.88 | ||
Ending balance, restricted shares, nonvested, weighted-average issue price | $3.42 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |||
Beginning balance, restricted shares, aggregate intrinsic value, nonvested | $0 | ||
Restricted shares, aggregate intrinsic value, granted | 1,367,000 | ||
Restricted shares, aggregate intrinsic value, vested | 0 | ||
Restricted shares, aggregate intrinsic value, forfeited | 15,000 | ||
Ending balance, restricted shares, aggregate intrinsic value, nonvested | 1,352,000 | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, number | 0 | ||
Restricted shares, grants in period | 2,368,203 | [1] | |
Restricted shares, vested in period | 59,812 | [2] | |
Restricted shares, forfeited in period | 26,086 | ||
Restricted shares, retired in period | 5,592 | ||
Ending balance, restricted shares, nonvested, number | 2,276,713 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Nonvested, Weighted-Average Issue Price [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, weighted-average issue price | $0 | ||
Restricted shares, grants in period, weighted-average issue price | $34.71 | [1] | |
Restricted shares, vested in period, weighted-average issue price | $27.73 | [2] | |
Restricted shares, forfeited in period, weighted-average issue price | $38.10 | ||
Restricted shares, aggregate intrinsic value, retired | $30.73 | ||
Ending balance, restricted shares, nonvested, weighted-average issue price | $34.86 | $0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |||
Beginning balance, restricted shares, aggregate intrinsic value, nonvested | 0 | ||
Restricted shares, aggregate intrinsic value, granted | 82,200,000 | [1] | |
Restricted shares, aggregate intrinsic value, vested | 1,659,000 | [2] | |
Restricted shares, aggregate intrinsic value, forfeited | 994,000 | ||
Restricted shares, aggregate intrinsic value, retired | 172,000 | ||
Ending balance, restricted shares, aggregate intrinsic value, nonvested | 79,375,000 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Beginning Balance, Restricted shares weighted average vesting period | 3 years 1 month 2 days | 0 years | |
Restricted shares, grants in period, weighted average vesting period | 3 years 9 months 26 days | [1] | |
Restricted shares, forfeits in period, weighted average vesting period | 4 years | ||
Ending balance, restricted shares, nonvested, weighted average vesting period | 3 years 1 month 2 days | 0 years | |
Aggregate fair market value | 1,600,000 | ||
RCAP Holdings, LLC | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, number | 0 | ||
Restricted shares, grants in period | 512,430 | ||
Restricted shares, vested in period | 143,805 | ||
Restricted shares, forfeited in period | 0 | ||
Ending balance, restricted shares, nonvested, number | 368,625 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Nonvested, Weighted-Average Issue Price [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, weighted-average issue price | $0 | ||
Restricted shares, grants in period, weighted-average issue price | $10.39 | ||
Restricted shares, vested in period, weighted-average issue price | $13.83 | ||
Restricted shares, forfeited in period, weighted-average issue price | $0 | ||
Ending balance, restricted shares, nonvested, weighted-average issue price | $9.05 | $0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |||
Beginning balance, restricted shares, aggregate intrinsic value, nonvested | 0 | ||
Restricted shares, aggregate intrinsic value, granted | 5,324,000 | ||
Restricted shares, aggregate intrinsic value, vested | 1,989,000 | ||
Restricted shares, aggregate intrinsic value, forfeited | 0 | ||
Ending balance, restricted shares, aggregate intrinsic value, nonvested | $3,335,000 | $0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Beginning Balance, Restricted shares weighted average vesting period | 2 years 9 months 29 days | 0 years | |
Restricted shares, grants in period, weighted average vesting period | 4 years 0 months 18 days | ||
Restricted shares, forfeits in period, weighted average vesting period | 0 years | ||
Ending balance, restricted shares, nonvested, weighted average vesting period | 2 years 9 months 29 days | 0 years | |
[1] | Does not include 287,502 shares of Class A common stock issued to individual members of RCS Capital Management that were issued as awards under the RCAP Equity Plan on December 31, 2014 following conversion and exchange of Earned LTIP units. | ||
[2] | The shares that vested during the year ended December 31, 2014 had an aggregate fair market value of $1.6 million on the vesting dates. |
Equitybased_Compensation_Restr1
Equity-based Compensation - Restricted Shares Activity Granted to RCAP (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Restricted shares, vested in period | 3,038 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Nonvested, Weighted-Average Issue Price [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, weighted-average issue price | $0 | ||
Restricted shares, grants in period, weighted-average issue price | $3.44 | ||
Restricted shares, vested in period, weighted-average issue price | $0 | ||
Restricted shares, forfeited in period, weighted-average issue price | $7.88 | ||
Ending balance, restricted shares, nonvested, weighted-average issue price | $3.42 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |||
Beginning balance, restricted shares, aggregate intrinsic value, nonvested | $0 | ||
Restricted shares, aggregate intrinsic value, granted | 1,367 | ||
Restricted shares, aggregate intrinsic value, vested | 0 | ||
Restricted shares, aggregate intrinsic value, forfeited | 15 | ||
Ending balance, restricted shares, aggregate intrinsic value, nonvested | 1,352 | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, number | 0 | ||
Restricted shares, grants in period | 2,368,203 | [1] | |
Restricted shares, vested in period | 59,812 | [2] | |
Restricted shares, forfeited in period | 26,086 | ||
Ending balance, restricted shares, nonvested, number | 2,276,713 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Nonvested, Weighted-Average Issue Price [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, weighted-average issue price | $0 | ||
Restricted shares, grants in period, weighted-average issue price | $34.71 | [1] | |
Restricted shares, vested in period, weighted-average issue price | $27.73 | [2] | |
Restricted shares, forfeited in period, weighted-average issue price | $38.10 | ||
Ending balance, restricted shares, nonvested, weighted-average issue price | $34.86 | $0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |||
Beginning balance, restricted shares, aggregate intrinsic value, nonvested | 0 | ||
Restricted shares, aggregate intrinsic value, granted | 82,200 | [1] | |
Restricted shares, aggregate intrinsic value, vested | 1,659 | [2] | |
Restricted shares, aggregate intrinsic value, forfeited | 994 | ||
Ending balance, restricted shares, aggregate intrinsic value, nonvested | 79,375 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Beginning Balance, Restricted shares weighted average vesting period | 3 years 1 month 2 days | 0 years | |
Restricted shares, grants in period, weighted average vesting period | 3 years 9 months 26 days | [1] | |
Restricted shares, forfeits in period, weighted average vesting period | 4 years | ||
Ending balance, restricted shares, nonvested, weighted average vesting period | 3 years 1 month 2 days | 0 years | |
RCAP Holdings, LLC | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, number | 0 | ||
Restricted shares, grants in period | 512,430 | ||
Restricted shares, vested in period | 143,805 | ||
Restricted shares, forfeited in period | 0 | ||
Ending balance, restricted shares, nonvested, number | 368,625 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Nonvested, Weighted-Average Issue Price [Roll Forward] | |||
Beginning balance, restricted shares, nonvested, weighted-average issue price | $0 | ||
Restricted shares, grants in period, weighted-average issue price | $10.39 | ||
Restricted shares, vested in period, weighted-average issue price | $13.83 | ||
Restricted shares, forfeited in period, weighted-average issue price | $0 | ||
Ending balance, restricted shares, nonvested, weighted-average issue price | $9.05 | $0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |||
Beginning balance, restricted shares, aggregate intrinsic value, nonvested | 0 | ||
Restricted shares, aggregate intrinsic value, granted | 5,324 | ||
Restricted shares, aggregate intrinsic value, vested | 1,989 | ||
Restricted shares, aggregate intrinsic value, forfeited | 0 | ||
Ending balance, restricted shares, aggregate intrinsic value, nonvested | $3,335 | $0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Beginning Balance, Restricted shares weighted average vesting period | 2 years 9 months 29 days | 0 years | |
Restricted shares, grants in period, weighted average vesting period | 4 years 0 months 18 days | ||
Restricted shares, forfeits in period, weighted average vesting period | 0 years | ||
Ending balance, restricted shares, nonvested, weighted average vesting period | 2 years 9 months 29 days | 0 years | |
[1] | Does not include 287,502 shares of Class A common stock issued to individual members of RCS Capital Management that were issued as awards under the RCAP Equity Plan on December 31, 2014 following conversion and exchange of Earned LTIP units. | ||
[2] | The shares that vested during the year ended December 31, 2014 had an aggregate fair market value of $1.6 million on the vesting dates. |
EquityBased_Compensation_Input
Equity-Based Compensation - Inputs and Valuations (Details) (Warrant, Stock Purchase Program, USD $) | 0 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2014 | |||
Valuation Period One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrant exercise price (in dollars per share) | $22.52 | |||
Exercise price assumption (in dollars per share) | $7.88 | |||
Volatility rate | 30.00% | [1] | ||
Risk-Free Rate of Interest | 2.23% | |||
Dividend Yield | $0 | |||
Time to Expiration (years) | 6 years 6 months | [2] | ||
Valuation Period Two [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrant exercise price (in dollars per share) | $22.52 | |||
Exercise price assumption (in dollars per share) | $1.75 | |||
Volatility rate | 30.00% | [1] | ||
Risk-Free Rate of Interest | 1.95% | |||
Dividend Yield | 0 | |||
Time to Expiration (years) | 6 years 3 months | [2] | ||
Valuation Period Three [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrant exercise price (in dollars per share) | $12.24 | |||
Exercise price assumption (in dollars per share) | $4.20 | |||
Volatility rate | 30.00% | [1] | ||
Risk-Free Rate of Interest | 1.95% | |||
Dividend Yield | $0 | |||
Time to Expiration (years) | 6 years 6 months | [2] | ||
[1] | Volatility was based on the historical and implied volatility of a peer group of companies. | |||
[2] | Time to expiration was calculated using the simplified method to estimate the expected term assumption for “plain vanilla†options. |
EquityBased_Compensation_Warra
Equity-Based Compensation - Warrant Activity (Details) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Restricted shares, vested in period (in shares) | 3,038 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Nonvested, Weighted-Average Issue Price [Roll Forward] | ||
Beginning balance, restricted shares, nonvested, weighted-average issue price | 0 | |
Restricted shares, grants in period, weighted-average issue price | 3.44 | |
Restricted shares, vested in period, weighted-average issue price | 0 | |
Restricted shares, forfeited in period, weighted-average issue price | 7.88 | |
Ending balance, restricted shares, nonvested, weighted-average issue price | 3.42 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | ||
Beginning balance, restricted shares, aggregate intrinsic value, nonvested | 0 | |
Restricted shares, aggregate intrinsic value, granted | 1,367 | |
Restricted shares, aggregate intrinsic value, vested | 0 | |
Restricted shares, aggregate intrinsic value, forfeited | 15 | |
Ending balance, restricted shares, aggregate intrinsic value, nonvested | 1,352 | |
Warrant | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Beginning balance, restricted shares, nonvested, number | 0 | |
Restricted shares, grants in period | 397,332 | |
Restricted shares, vested in period (in shares) | 0 | |
Restricted shares, forfeited in period | 1,915 | |
Ending balance, restricted shares, nonvested, number | 395,417 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Beginning Balance, Restricted shares weighted average vesting period | 2 years 10 months 6 days | 0 years |
Restricted shares, grants in period, weighted average vesting period | 3 years | |
Ending balance, restricted shares, nonvested, weighted average vesting period | 2 years 10 months 6 days | 0 years |
Income_Taxes_Income_Tax_Expens
Income Taxes - Income Tax Expense (Benefit) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current income tax expense | |||
U.S. federal | ($1,630) | $1,630 | $0 |
State and local | -196 | 677 | 0 |
Total current income tax expense | -1,826 | 2,307 | 0 |
Deferred income tax benefit | |||
U.S. federal | -33,351 | -390 | 0 |
State and local | -11,308 | -74 | 0 |
Total deferred income tax benefit | -44,659 | -464 | 0 |
Total income tax expense | ($46,485) | $1,843 | $0 |
Income_Taxes_Tax_Rate_Reconcil
Income Taxes - Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 35.00% | 35.00% | 0.00% |
State and local income taxes net of federal benefit | 4.82% | 0.39% | 0.00% |
Fair value adjustments on derivatives | -10.10% | 0.00% | |
Transaction costs | -1.92% | 0.00% | 0.00% |
Non-controlling interests | 1.81% | -33.63% | 0.00% |
Other | -1.63% | 0.09% | 0.00% |
Effective income tax rate | 27.98% | 1.85% | 0.00% |
Income_Taxes_Deferred_Tax_Asse
Income Taxes - Deferred Tax Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets | ||
Net operating loss carryforward | $46,551 | $1 |
Deferred compensation | 26,916 | 21 |
Accrued liabilities and reserves | 15,971 | 104 |
Stock-based compensation | 9,763 | 6,717 |
Amortization | 5,011 | 0 |
Deferred revenue | 3,443 | 1,815 |
Other | 1,268 | 840 |
Gross deferred tax assets | 108,923 | 9,498 |
Valuation allowance | -256 | 0 |
Deferred tax assets, net of valuation allowance | 108,667 | 9,498 |
Deferred tax liabilities | ||
Intangible assets | 372,947 | 33,013 |
Convertible notes basis | 1,922 | 0 |
Deferred Tax Liabilities, Other | 0 | 52 |
Total deferred tax liabilities | 374,869 | 33,065 |
Net deferred tax liability | $266,202 | $23,567 |
Income_Taxes_Details
Income Taxes (Details) (Domestic Tax Authority [Member], USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Domestic Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $111.90 |
Income taxes receivable | $40.40 |
Earnings_Per_Share_Narrative_D
Earnings Per Share - Narrative (Details) | Feb. 11, 2014 | Dec. 31, 2013 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Operating subsidiary LTIP units contributed to RCS Holdings from RCS capital management (in shares) | 3,975,000 | 3,975,000 |
Earnings_Per_Share_Basic_and_D
Earnings Per Share - Basic and Diluted Calculation (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 10, 2014 | Dec. 19, 2014 | Dec. 10, 2014 | Feb. 23, 2015 | ||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||
Net income (loss) attributable to common stock | ($92,116,000) | ($36,994,000) | ($149,861,000) | $3,285,000 | $1,505,000 | $559,000 | $202,000 | $0 | ($275,686,000) | $2,266,000 | $7,412,000 | |||||||
Weighted average number of shares outstanding, basic (in shares) | 49,765,160 | 7,885,186 | ||||||||||||||||
Basic earnings per share (in dollars per share) | ($1.40) | ($0.59) | ($3.49) | $0.11 | $0.11 | $0.17 | $0.08 | $0 | ($5.55) | $0.29 | ||||||||
Net income attributable to Class A common stockholders | 2,266,000 | |||||||||||||||||
Weighted average number of shares outstanding, diluted (in shares) | 49,765,160 | 8,025,208 | ||||||||||||||||
Diluted earnings per share (in dollars per share) | ($1.68) | ($0.59) | ($3.59) | $0.11 | $0.11 | $0.17 | $0.08 | $0 | ($5.55) | $0.28 | ||||||||
Restricted Stock Units (RSUs) | ||||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||
Dividend equivalents on restricted stock | -467,000 | -19,000 | ||||||||||||||||
Weighted average number of shares outstanding, basic (in shares) | 0 | 0 | ||||||||||||||||
Basic earnings per share (in dollars per share) | ($0.01) | ($0.00) | ||||||||||||||||
Common Class A | ||||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||
Net income (loss) attributable to common stock | -275,686,000 | [1],[2] | 2,266,000 | |||||||||||||||
Weighted average number of shares outstanding, basic and diluted (in shares) | 49,765,160 | [1],[2] | 7,885,186 | |||||||||||||||
Earnings per share, basic and diluted (in dollars per shares) | ($5.54) | [1],[2] | $0.29 | |||||||||||||||
Dividend equivalents on restricted stock | 2,247,000 | |||||||||||||||||
Weighted average number of shares outstanding, basic (in shares) | 7,885,186 | |||||||||||||||||
Net income (loss) available to common stockholders, basic | -276,153,000 | |||||||||||||||||
Basic earnings per share (in dollars per share) | ($5.55) | $0.28 | ||||||||||||||||
Issuance of common stock, shares | 468,762 | 723,234 | 19,000,000 | |||||||||||||||
Series A Preferred Stock | ||||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||
Dividends declared | 8,000,000 | |||||||||||||||||
Deemed dividend | 68,500,000 | |||||||||||||||||
Issuance of common stock, shares | 1,852,575 | 1,511,004 | ||||||||||||||||
Series B Preferred Stock | ||||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||
Dividends declared | 800,000 | |||||||||||||||||
Deemed dividend | 26,700,000 | |||||||||||||||||
Issuance of common stock, shares | 5,800,000 | |||||||||||||||||
Series C Preferred Stock | ||||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||
Dividends declared | 400,000 | |||||||||||||||||
Deemed dividend | 42,800,000 | |||||||||||||||||
FA RSU Plan | Restricted Stock Units (RSUs) | ||||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||
Dividend equivalents on restricted stock | 19,000 | |||||||||||||||||
Restricted units produced in hypothetical buy back of FA RSUs (in shares) | $140,022 | |||||||||||||||||
Earnings per share, diluted (in dollars per share) | ($0.00) | |||||||||||||||||
Subsequent Event | Series A Preferred Stock | ||||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||
Issuance of common stock, shares | 2,042,022 | |||||||||||||||||
[1] | Included in net loss attributable to common stock is a net deemed dividend of $68.5 million and dividends of $8.0 million declared to Series A Preferred Stock shareholders, a deemed dividend of $26.7 million and dividends of $0.8 million declared to Series B Preferred Stock shareholders and a deemed dividend of $42.8 million and dividends of $0.4 million declared to Series C Preferred Stock shareholders. | |||||||||||||||||
[2] | 2,042,022 shares of Class A common stock issued on February 23, 2015 pursuant to the submission for conversion of Series A preferred stock on December 12, 2014 are included in the weighted average shares outstanding assuming issuance on the date of submission for conversion. See Note 11 for more information. |
OffBalance_Sheet_Risk_and_Conc1
Off-Balance Sheet Risk and Concentrations (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
investor | program | program | |
program | |||
Risks and Uncertainties [Abstract] | |||
Percentage of reimbursable and investment fees concentrated in affiliated investment programs | 34.00% | 34.00% | 63.00% |
Number of affiliate investment programs | 1 | 2 | 3 |
Number of direct investment programs | 1 | ||
Percentage of receivables from affiliated direct investment programs | 51.00% | 51.00% | 93.00% |
Commitment_and_Contingencies_N
Commitment and Contingencies - Narrative (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||
Apr. 29, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 04, 2014 | |
line | ||||||
Line of Credit Facility [Line Items] | ||||||
Rental expense | $8,800,000 | $1,300,000 | $300,000 | |||
Number of business lines | 3 | |||||
Accrued litigation | 4,600,000 | |||||
Debt term | 2 years | |||||
Payment in year two | 63,627,000 | |||||
Payment in year three | 74,466,000 | |||||
First Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Long-term line of credit | 25,000,000 | |||||
Second Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Long-term line of credit | 50,000,000 | |||||
ICH acquisition | ||||||
Line of Credit Facility [Line Items] | ||||||
Long-term line of credit | 1,000,000 | |||||
Cole Capital | ||||||
Line of Credit Facility [Line Items] | ||||||
Total consideration | 700,000,000 | |||||
Partial payment | 10,000,000 | |||||
Level 3 | Prepaid expenses and other assets - oil and gas interests | Fair Value, Measurements, Recurring | ||||||
Line of Credit Facility [Line Items] | ||||||
Unfunded Commitments | 9,000 | |||||
ARCP | ||||||
Line of Credit Facility [Line Items] | ||||||
Settlement amount | 32,700,000 | |||||
Closing costs retained from legal settlement | 10,000,000 | |||||
Amount released from contract | 2,000,000 | |||||
Promissory note (legal settlement) | ARCP | ||||||
Line of Credit Facility [Line Items] | ||||||
Convertible notes, face value | 15,300,000 | |||||
Debt term | 2 years | |||||
Interest rate | 8.00% | |||||
Payment in year one | 7,700,000 | |||||
Payment in year two | 3,800,000 | |||||
Payment in year three | $3,800,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Leases (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
2015 | $10,900 |
2016 | 10,186 |
2017 | 9,181 |
2018 | 7,917 |
2019 | 6,651 |
Thereafter | 24,353 |
Total | $69,188 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Service Contract (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
2015 | $9,897 |
2016 | 9,253 |
2017 | 7,242 |
2018 | 6,567 |
2019 | 6,567 |
Thereafter | 3,978 |
Total | $43,504 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Future Annual Acquisition Comments (Details) (VSR and Girard, USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Business Acquisition [Line Items] | |
Cash payments in year one | $46,050 |
Cash payments in years two | 0 |
Cash payments in years three | 5,000 |
Total cash payments | $51,050 |
Common Class A | |
Business Acquisition [Line Items] | |
Share payments in year one | 38,910 |
Share payments in year two | 2,440 |
Share payments in year three | 5,000 |
Share payments | 46,350 |
Net_Capital_Requirements_Narra
Net Capital Requirements - Narrative (Details) (USD $) | Dec. 31, 2014 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Minimum ratio of aggregate indebtedness to net capital | 15 |
Minimum net capital as a percent of aggregate indebtedness | 2.00% |
Event One | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Minimum net capital required | 250,000 |
Minimum net capital as a percent of aggregate indebtedness | 0.07% |
Net_Capital_Requirements_Detai
Net Capital Requirements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Required net capital | $250,000 | |||
Realty Capital Securities: | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 18,770,000 | 25,627,000 | ||
Required net capital | 1,174,000 | 1,294,000 | ||
Net capital in excess of required net capital | 17,596,000 | 24,333,000 | ||
Ratio of indebtedness to net capital | 0.94 | 0.76 | ||
First Allied Securities, Inc. | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 3,431,000 | 4,777,000 | ||
Computation of Net Capital Requirement, Alternative Standard [Abstract] | ||||
Required net capital | 250,000 | 250,000 | ||
Alternative Excess Net Capital | 3,181,000 | [1] | 4,527,000 | [1] |
Legend Equities Corporation: | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 2,067,000 | 2,684,000 | ||
Required net capital | 187,000 | 224,000 | ||
Ratio of indebtedness to net capital | 1.36 | 1.25 | ||
Computation of Net Capital Requirement, Alternative Standard [Abstract] | ||||
Alternative Excess Net Capital | 1,880,000 | 2,460,000 | ||
Cetera Advisor Networks LLC | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 13,785,000 | [2] | ||
Computation of Net Capital Requirement, Alternative Standard [Abstract] | ||||
Required net capital | 250,000 | [2] | ||
Alternative Excess Net Capital | 13,535,000 | [1],[2] | ||
Cetera Advisors LLC | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 9,294,000 | [2] | ||
Computation of Net Capital Requirement, Alternative Standard [Abstract] | ||||
Required net capital | 250,000 | [2] | ||
Alternative Excess Net Capital | 9,044,000 | [2] | ||
Cetera Financial Specialists LLC | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 5,018,000 | [2] | ||
Computation of Net Capital Requirement, Alternative Standard [Abstract] | ||||
Required net capital | 250,000 | [2] | ||
Alternative Excess Net Capital | 4,768,000 | [2] | ||
Cetera Investment Services LLC | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 17,190,000 | [2] | ||
Required net capital | 250,000 | [2] | ||
Net capital in excess of required net capital | 16,940,000 | [2] | ||
Net capital as a percentage of aggregate debit items | 192.00% | [2] | ||
Hatteras Capital Distributors, LLC | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 2,145,000 | [2] | ||
Required net capital | 5,000 | [2] | ||
Net capital in excess of required net capital | 2,140,000 | [2] | ||
Ratio of indebtedness to net capital | 0.02 | |||
JP Turner & Company, LLC | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 3,379,000 | [2] | ||
Required net capital | 442,000 | [2] | ||
Net capital in excess of required net capital | 2,937,000 | [2] | ||
Ratio of indebtedness to net capital | 1.96 | |||
Summit Brokerage Services, Inc. | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 5,878,000 | [2] | ||
Required net capital | 506,000 | [2] | ||
Net capital in excess of required net capital | 5,372,000 | [2] | ||
Ratio of indebtedness to net capital | 1.29 | |||
Investors Capital Corporation | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 3,817,000 | [2] | ||
Required net capital | 250,000 | [2] | ||
Net capital in excess of required net capital | 3,567,000 | [2] | ||
Advisor Direct, Inc | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 12,000 | [2] | ||
Required net capital | 5,000 | [2] | ||
Net capital in excess of required net capital | 7,000 | [2] | ||
Ratio of indebtedness to net capital | 5.67 | |||
SC Distributors LLC | ||||
Computation of Net Capital Requirement, Aggregate Indebtedness Standard [Abstract] | ||||
Net capital | 2,004,000 | [2] | ||
Required net capital | 250,000 | [2] | ||
Net capital in excess of required net capital | $1,754,000 | [1],[2] | ||
[1] | The entity was determined to be in compliance as of the date stated as its net capital was in excess of the minimum $250,000. | |||
[2] | The entity was not under the control of, or under common control with, the Company as of December 31, 2013. |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 7 Months Ended | 12 Months Ended | 0 Months Ended | 11 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 29, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 10, 2014 | Jun. 10, 2013 | Dec. 19, 2014 | Dec. 10, 2014 | Feb. 10, 2014 | Feb. 11, 2014 | Dec. 31, 2014 | Apr. 28, 2014 | Dec. 12, 2014 | Nov. 18, 2014 | Jun. 18, 2014 | |||||
program | program | ||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Allocation to operating subsidiaries | 100.00% | ||||||||||||||||||||||
Expenses allocated to the operating subsidiaries from the company | $14,700,000 | $0 | |||||||||||||||||||||
Management fee | 10.00% | ||||||||||||||||||||||
Quarterly fee (related party) | 2,030,000 | 5,996,000 | 0 | ||||||||||||||||||||
Incentive fee | 300,000 | ||||||||||||||||||||||
Maximum award opportunity, percentage of equity market capitalization | 5.00% | 5.00% | 5.00% | ||||||||||||||||||||
Units contributed to subsidiary (in units) | 1,325,000 | ||||||||||||||||||||||
Outperformance bonus | 9,709,000 | 492,000 | 0 | ||||||||||||||||||||
LTIP vested period conversion threshold | 30 days | ||||||||||||||||||||||
Net proceeds from the issuance of convertible notes (including embedded derivative) | 83,551,000 | 43,627,000 | 0 | ||||||||||||||||||||
Net proceeds from issuance of Series A convertible preferred stock (including embedded derivative) | 197,504,000 | 0 | 0 | ||||||||||||||||||||
Interest rate | 15.00% | ||||||||||||||||||||||
Crestline Hotels and Resorts, LLC | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Rent expense | 100,000 | ||||||||||||||||||||||
American Realty Capital | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Revenue from related parties | 777,500,000 | 713,400,000 | 257,300,000 | ||||||||||||||||||||
Total consolidated assets | 49,400,000 | 31,600,000 | 49,400,000 | 31,600,000 | 31,600,000 | ||||||||||||||||||
Parent | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Allocated operating expenses | 3,500,000 | 800,000 | |||||||||||||||||||||
Tax liability share agreement percent | 85.00% | ||||||||||||||||||||||
ARC Advisory Services, LLC | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Allocated operating expenses | 5,500,000 | ||||||||||||||||||||||
Allocated operating expenses payable | 300,000 | 500,000 | 300,000 | 500,000 | 500,000 | ||||||||||||||||||
American National Stock Transfer | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Transfer agency services agreement term | 10 years | ||||||||||||||||||||||
Luxor Capital Group, LP | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 19.46% | ||||||||||||||||||||||
Conversion price (in dollars per share) | $666.67 | ||||||||||||||||||||||
Net proceeds from the issuance of convertible notes (including embedded derivative) | 80,000,000 | ||||||||||||||||||||||
Convertible Preferred Stock, face value | 270,000,000 | ||||||||||||||||||||||
Convertible preferred stock, percentage of liquidation preference per share | 88.89% | ||||||||||||||||||||||
Net proceeds from issuance of Series A convertible preferred stock (including embedded derivative) | 240,000,000 | ||||||||||||||||||||||
Interest rate | 15.00% | ||||||||||||||||||||||
Affiliated Entity | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Money Market Funds, at Carrying Value | 14,400,000 | 19,000,000 | 14,400,000 | 19,000,000 | 19,000,000 | ||||||||||||||||||
Realized Investment Gains (Losses) | 2,200,000 | 200,000 | |||||||||||||||||||||
OPP Award | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Annual vesting percentage | 33.30% | ||||||||||||||||||||||
Incentive Fee Benchmark One | Manager | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Calculated incentive fee percentage, of the difference in product and core earnings | 20.00% | ||||||||||||||||||||||
Incentive Fee Benchmark Two | Manager | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Percentage fee for incentive calculation | 8.00% | ||||||||||||||||||||||
Common Class A | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Issuance of common stock, shares | 468,762 | 723,234 | 19,000,000 | ||||||||||||||||||||
LTIP Units | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
LTIP Units earned (in shares) | 310,947 | 310,947 | 310,947 | 310,947 | |||||||||||||||||||
LTIP Units forfeited (in shares) | 1,014,053 | ||||||||||||||||||||||
Common Class B | Majority Shareholder | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Shares received in reorganization (in shares) | 24,000,000 | ||||||||||||||||||||||
Series A Preferred Stock | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Conversion of Stock, Amount Converted | 213,400,000 | ||||||||||||||||||||||
Issuance of common stock, shares | 1,852,575 | 1,511,004 | |||||||||||||||||||||
Common stock, par value (in dollars per share) | $12.13 | [1] | 12.13149102 | [1] | 12.13149102 | [1] | $11.81 | [2] | $12.96 | ||||||||||||||
Series B Preferred Stock | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Conversion of Stock, Amount Issued | 145,000,000 | ||||||||||||||||||||||
Issuance of common stock, shares | 5,800,000 | ||||||||||||||||||||||
Series C Preferred Stock | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Conversion of Stock, Amount Issued | 110,000,000 | ||||||||||||||||||||||
RCS Holdings, LLC | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Authorized classes of equity | 3 | ||||||||||||||||||||||
RCAP Holdings, LLC | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Class A shares received under the exchange agreement (in shares) | 23,999,999 | ||||||||||||||||||||||
Operating subsidiary units exchanged under the exchange agreement (in shares) | 23,999,999 | ||||||||||||||||||||||
Authorized classes of equity | 3 | ||||||||||||||||||||||
RCAP Holdings, LLC | Common Class A | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 2.06% | 2.06% | |||||||||||||||||||||
Shares held by a related party (in shares) | 24,051,499 | ||||||||||||||||||||||
RCAP Holdings, LLC | Common Class B | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Shares held by a related party (in shares) | 1 | ||||||||||||||||||||||
RCAP Holdings, LLC | Class B Operating Subsidiary Units | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Shares held by a related party (in shares) | 1 | ||||||||||||||||||||||
Luxor Capital Group, LP | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 19.46% | ||||||||||||||||||||||
Economic rights | RCAP Holdings, LLC | Common Class A | RCAP Holdings, LLC | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 43.34% | 43.34% | 43.34% | ||||||||||||||||||||
Subsidiary of common parent | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Authorized classes of equity | 2 | ||||||||||||||||||||||
Private Placement | Common Class A | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Common stock, par value (in dollars per share) | 20.25 | $20.25 | |||||||||||||||||||||
Convertible Debt | Luxor Capital Group, LP | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Convertible notes, face value | 120,000,000 | ||||||||||||||||||||||
Common Stock | Common Class A | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Issuance of common stock, shares | 23,999,999 | ||||||||||||||||||||||
Common Stock | Common Class B | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Issuance of common stock, shares | -23,999,999 | ||||||||||||||||||||||
Common Stock | Private Placement | Common Class A | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Issuance of common stock, shares | 2,469,136 | 2,469,136 | |||||||||||||||||||||
Accounts Payable and Accrued Liabilities | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Due to Affiliate | $300,000 | $300,000 | |||||||||||||||||||||
[1] | Per share totals are expressed as weighted averages. | ||||||||||||||||||||||
[2] | To comply with ownership limitations applicable to Luxor under the terms of the Series A Preferred Stock, 1,852,575 shares of Class A common stock were issued on December 19, 2014 and 2,042,022 shares of Class A common stock were issued on February 23, 2015. See Note 15 for more information. |
Employee_Benefits_Details
Employee Benefits (Details) (Other Postretirement Benefit Plan, USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Internal Commissions, Payroll and Benefits | 401K and Health and Welfare Benefit Plan for Employees | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Internal commissions and payroll benefits | $12.80 | $3.70 |
Internal Commissions, Payroll and Benefits | Deferred Compensation Plans for Financial Advisors | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Deferred compensation costs | 2.3 | |
Internal Commissions, Payroll and Benefits | Rabbi Trust Agreement | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Deferred compensation costs | 0.2 | |
Other Revenue | Deferred Compensation Plans for Financial Advisors | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Gain on hedge | $2.20 |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
segment | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Number of operating segments | 6 | |||||||||||||||
Revenues | $505,230 | $678,578 | $645,019 | $273,368 | $296,893 | $229,527 | $230,016 | $218,631 | $2,102,195 | $975,067 | $287,497 | |||||
Expenses | 2,268,320 | 875,209 | 280,085 | |||||||||||||
Income (loss) before taxes | -166,125 | 99,858 | 7,412 | |||||||||||||
Assets | 2,466,628 | 336,525 | 2,466,628 | 336,525 | ||||||||||||
Independent retail advice: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 1,395,262 | [1] | 94,930 | [1] | 0 | [1] | ||||||||||
Expenses | 1,416,529 | [1] | 95,624 | [1] | 0 | [1] | ||||||||||
Income (loss) before taxes | -21,267 | [1] | -694 | [1] | 0 | [1] | ||||||||||
Wholesale distribution: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 681,624 | 802,965 | 286,572 | |||||||||||||
Expenses | 702,455 | 757,792 | 280,085 | |||||||||||||
Income (loss) before taxes | -20,831 | 45,173 | 6,487 | |||||||||||||
Investment banking, capital markets and transaction management services: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 126,670 | 84,810 | 925 | |||||||||||||
Expenses | 60,288 | 29,213 | 0 | |||||||||||||
Income (loss) before taxes | 66,382 | 55,597 | 925 | |||||||||||||
Investment management: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 31,829 | 0 | 0 | |||||||||||||
Expenses | 27,652 | 0 | 0 | |||||||||||||
Income (loss) before taxes | 4,177 | 0 | 0 | |||||||||||||
Investment research: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 2,721 | 0 | 0 | |||||||||||||
Expenses | 11,762 | 0 | 0 | |||||||||||||
Income (loss) before taxes | -9,041 | 0 | 0 | |||||||||||||
Corporate and other: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | -44,848 | 0 | 0 | |||||||||||||
Expenses | 140,559 | 218 | 0 | |||||||||||||
Income (loss) before taxes | -185,407 | -218 | 0 | |||||||||||||
Total revenues for reportable segments | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 2,193,258 | 982,705 | 287,497 | |||||||||||||
Income (loss) before taxes | -165,987 | 99,858 | 7,412 | |||||||||||||
Assets | 2,494,320 | 336,624 | 2,494,320 | 336,624 | ||||||||||||
Total revenues for reportable segments | Independent retail advice: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Assets | 1,980,614 | 225,623 | 1,980,614 | 225,623 | ||||||||||||
Total revenues for reportable segments | Wholesale distribution: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Assets | 192,669 | 32,058 | 192,669 | 32,058 | ||||||||||||
Total revenues for reportable segments | Investment research: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Assets | 12,291 | 0 | 12,291 | 0 | ||||||||||||
Total revenues for reportable segments | Corporate and other: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Assets | 112,423 | [2] | 3,585 | [2] | 112,423 | [2] | 3,585 | [2] | ||||||||
Total revenues for reportable segments | Investment banking, capital markets and transaction management services: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Assets | 116,980 | 75,358 | 116,980 | 75,358 | ||||||||||||
Total revenues for reportable segments | Investment management: | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Assets | 79,343 | 0 | 79,343 | 0 | ||||||||||||
Intercompany revenues | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 91,063 | 7,638 | 0 | |||||||||||||
Total consolidated assets | 2,466,628 | 336,525 | 2,466,628 | 336,525 | ||||||||||||
Less: intercompany eliminations | ||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Income (loss) before taxes | -138 | 0 | 0 | |||||||||||||
Other assets and intercompany investments and receivables | $27,692 | $99 | $27,692 | $99 | ||||||||||||
[1] | Includes First Allied’s operating results from September 25, 2013, the date First Allied was acquired by RCAP Holdings. | |||||||||||||||
[2] | Excludes amounts related to investment in subsidiaries. |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (unaudited) (Details) (USD $) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 5 Months Ended | 11 Months Ended | 12 Months Ended | |||||||||||
In Thousands, except Per Share data, unless otherwise specified | Feb. 10, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Jun. 09, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Revenues | $505,230 | $678,578 | $645,019 | $273,368 | $296,893 | $229,527 | $230,016 | $218,631 | $2,102,195 | $975,067 | $287,497 | ||||||
Net income (loss) | 9,757 | -147,992 | -32,269 | 48,472 | 12,149 | 33,724 | 11,100 | 26,444 | 26,747 | 50,561 | 47,454 | -276,518 | -119,640 | 98,015 | 7,412 | ||
Net income (loss) attributable to common stock | -92,116 | -36,994 | -149,861 | 3,285 | 1,505 | 559 | 202 | 0 | -275,686 | 2,266 | 7,412 | ||||||
Basic earnings per share (in dollars per share) | ($1.40) | ($0.59) | ($3.49) | $0.11 | $0.11 | $0.17 | $0.08 | $0 | ($5.55) | $0.29 | |||||||
Diluted earnings per share (in dollars per share) | ($1.68) | ($0.59) | ($3.59) | $0.11 | $0.11 | $0.17 | $0.08 | $0 | ($5.55) | $0.28 | |||||||
Scenario, Previously Reported | |||||||||||||||||
Revenues | 638,425 | 187,205 | |||||||||||||||
Net income (loss) | 12,656 | ||||||||||||||||
Net income (loss) attributable to common stock | 3,792 | ||||||||||||||||
Basic earnings per share (in dollars per share) | $0.22 | ||||||||||||||||
Diluted earnings per share (in dollars per share) | $0.22 | ||||||||||||||||
Restatement Adjustment | |||||||||||||||||
Revenues | 6,594 | [1] | 86,163 | [2] | |||||||||||||
Net income (loss) | -507 | [2] | |||||||||||||||
Net income (loss) attributable to common stock | ($507) | [2] | |||||||||||||||
Basic earnings per share (in dollars per share) | ($0.11) | [2] | |||||||||||||||
Diluted earnings per share (in dollars per share) | ($0.11) | [2] | |||||||||||||||
[1] | The results reported for the three months ended June 30, 2014 erroneously included $6.6 million of intercompany eliminations derived from transactions with First Allied that pertained to the three months ended March 31, 2014. This did not impact pre-tax net income or net income for the three months ended June 30, 2014 as the same elimination was made to both total revenues and expenses. The Company has evaluated this item and determined that it was not material to the previously issued unaudited financial statements for the three months ended June 30, 2014. The income statement for the three months ended June 30, 2014 will be revised in the Company’s unaudited financial statements as of and for the six months ended June 30, 2015 to reflect the ‘as adjusted’ revenues presented above and the corresponding change in expenses. There was no impact on total revenue or total expenses reported for the six months ended June 30, 2014. | ||||||||||||||||
[2] | On June 30, 2014, RCAP Holdings contributed all its equity interests in First Allied to the Company. The Company’s acquisition of First Allied was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings immediately following the acquisition of First Allied by RCAP Holdings on September 25, 2013. |
Subsequent_Events_Details
Subsequent Events - (Details) (JP Turner & Company, LLC, USD $) | 0 Months Ended | 12 Months Ended | |
Jun. 12, 2014 | Mar. 04, 2015 | Dec. 31, 2014 | |
Subsequent Event [Line Items] | |||
Total consideration | $32,708,000 | ||
Contractual purchase price | 12,786,000 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Total consideration | 9,100,000 | ||
Contractual purchase price | 6,400,000 | ||
Equity interests value assigned | $2,700,000 | ||
Common Class A | |||
Subsequent Event [Line Items] | |||
Business acquisition, equity interest issued, number of shares | 239,362 | 239,362 | |
Common Class A | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Business acquisition, equity interest issued, number of shares | 245,813 |