Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 28, 2020 | Jun. 28, 2019 | |
Document Information [Line Items] | |||
Entity Registrant Name | Victory Capital Holdings, Inc. | ||
Entity Central Index Key | 0001570827 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 258 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Ex Transition Period | false | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Title of 12(b) Security | Class A Common Stock, $0.01 Par Value | ||
Trading Symbol | VCTR | ||
Security Exchange Name | NASDAQ | ||
Entity Tax Identification Number | 32-0402956 | ||
Entity File Number | 001-38388 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 15935 La Cantera Parkway | ||
Entity Address, City or Town | San Antonio | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 78256 | ||
City Area Code | 216 | ||
Local Phone Number | 898-2400 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | Portions of the registrant’s proxy statement related to its 2020 Annual Stockholders’ Meeting to be filed within 120 days of the end of the fiscal year ended December 31, 2019, are incorporated by reference into Part III hereof. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, the registrant’s proxy statement is not deemed to be filed as part hereof. | ||
Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 16,636,811 | ||
Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 51,256,188 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 37,121 | $ 51,491 |
Investment management fees receivable | 74,321 | 37,980 |
Fund administration and distribution fees receivable | 19,313 | 3,153 |
Other receivables | 1,459 | 2,987 |
Prepaid expenses | 4,852 | 2,664 |
Available-for-sale securities, at fair value | 771 | 601 |
Trading securities, at fair value | 18,305 | 12,719 |
Property and equipment, net | 13,240 | 8,780 |
Goodwill | 404,750 | 284,108 |
Other intangible assets, net | 1,175,471 | 387,679 |
Other assets | 3,706 | 9,349 |
Total assets | 1,753,309 | 801,511 |
Liabilities and stockholders' equity | ||
Accounts payable | 271 | 607 |
Accrued compensation and benefits | 54,842 | 30,228 |
Accrued expenses | 88,932 | 19,743 |
Consideration payable for acquisition of business | 118,700 | 5,838 |
Deferred compensation plan liability | 18,305 | 12,719 |
Deferred tax liability, net | 5,486 | 6,212 |
Other liabilities | 4,363 | 1,759 |
Long-term debt, net | 924,539 | 268,857 |
Total liabilities | 1,215,438 | 345,963 |
Stockholders' equity | ||
Additional paid-in capital | 624,766 | 604,401 |
Accumulated other comprehensive loss | (86) | |
Retained deficit | (34,705) | (119,709) |
Total stockholders' equity | 537,871 | 455,548 |
Total liabilities and stockholders' equity | 1,753,309 | 801,511 |
Class A | ||
Stockholders' equity | ||
Common stock | 181 | 153 |
Treasury stock, at cost | (21,524) | (8,045) |
Class B | ||
Stockholders' equity | ||
Common stock | 539 | 553 |
Treasury stock, at cost | $ (31,386) | $ (21,719) |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, par value | $ 0.01 | |
Class A | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 18,099,772 | 15,280,833 |
Common stock, shares outstanding | 16,414,617 | 14,424,558 |
Treasury stock, shares | 1,685,155 | 856,275 |
Class B | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 53,937,394 | 55,284,408 |
Common stock, shares outstanding | 51,281,512 | 53,137,428 |
Treasury stock, shares | 2,655,882 | 2,146,980 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | |||
Total revenue | $ 612,373 | $ 413,412 | $ 409,629 |
Expenses | |||
Personnel compensation and benefits | 179,809 | 145,880 | 144,111 |
Distribution and other asset-based expenses | 146,622 | 94,680 | 103,439 |
General and administrative | 46,568 | 30,005 | 33,996 |
Depreciation and amortization | 23,873 | 23,277 | 29,910 |
Change in value of consideration payable for acquisition of business | 19,886 | (37) | (294) |
Acquisition-related costs | 22,317 | 4,346 | 2,094 |
Restructuring and integration costs | 8,678 | 742 | 6,205 |
Total operating expenses | 447,753 | 298,893 | 319,461 |
Income from operations | 164,620 | 114,519 | 90,168 |
Other income (expense) | |||
Interest income and other income (expense) | 6,829 | (2,856) | (2,913) |
Interest expense and other financing costs | (40,901) | (20,694) | (48,467) |
Loss on debt extinguishment | (9,860) | (6,058) | (330) |
Total other expense, net | (43,932) | (29,608) | (51,710) |
Income before income taxes | 120,688 | 84,911 | 38,458 |
Income tax expense | (28,197) | (21,207) | (12,632) |
Net income | $ 92,491 | $ 63,704 | $ 25,826 |
Earnings per share of common stock | |||
Basic | $ 1.37 | $ 0.96 | $ 0.47 |
Diluted | $ 1.26 | $ 0.90 | $ 0.43 |
Weighted average number of shares outstanding | |||
Basic | 67,616 | 66,295 | 54,931 |
Diluted | 73,466 | 70,511 | 59,577 |
Dividends declared per share of common stock | $ 0.10 | $ 2.42 | |
Investment Management Fees | |||
Revenue | |||
Total revenue | $ 466,802 | $ 352,683 | $ 343,811 |
Fund Administration and Distribution Fees | |||
Revenue | |||
Total revenue | $ 145,571 | $ 60,729 | $ 65,818 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 92,491 | $ 63,704 | $ 25,826 |
Other comprehensive income (loss), net of tax | |||
Net unrealized (loss) gain on available-for-sale securities | (110) | 64 | |
Net unrealized gain on cash flow hedges | 462 | ||
Net unrealized gain (loss) on foreign currency translation | 24 | (40) | 75 |
Total other comprehensive income (loss), net of tax | 24 | (150) | 601 |
Comprehensive income | $ 92,515 | $ 63,554 | $ 26,427 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common StockClass A | Common StockClass B | Common StockPre-IPO | Treasury StockClass A | Treasury StockClass B | Treasury StockPre-IPO | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Deficit |
Balance at beginning of period at Dec. 31, 2016 | $ 330,998 | $ 565 | $ (16,245) | $ 421,747 | $ (537) | $ (74,532) | ||||
Balance at beginning of period (in shares) at Dec. 31, 2016 | 56,505 | (1,720) | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Issuance of common stock | 3,193 | $ 3 | 3,190 | |||||||
Issuance of common stock (in shares) | 296 | |||||||||
Vesting of restricted share grants | $ 4 | (4) | ||||||||
Vesting of restricted share grants (in shares) | 389 | (344) | ||||||||
Common stock repurchased | (4,654) | $ (4,654) | ||||||||
Equity awards modified to liabilities | (1,553) | (1,553) | ||||||||
Equity awards modified to liabilities (in shares) | (8) | |||||||||
Other comprehensive income (loss) | 601 | 601 | ||||||||
Share-based compensation | 11,693 | 11,693 | ||||||||
Dividends paid | (135,171) | (135,171) | ||||||||
Excess tax benefits realized on share-based compensation | 261 | 261 | ||||||||
Other | (11) | (11) | ||||||||
Net income | 25,826 | 25,826 | ||||||||
Balance at end of period at Dec. 31, 2017 | 231,183 | $ 572 | $ (20,899) | 435,334 | 64 | (183,888) | ||||
Balance at end of period (in shares) at Dec. 31, 2017 | 57,182 | (2,064) | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Issuance of common stock | 156,549 | $ 128 | 156,421 | |||||||
Issuance of common stock (in shares) | 12,811 | |||||||||
Class A common stock offering costs | (4,553) | (4,553) | ||||||||
Redesignation of common stock | $ 572 | $ (572) | $ (20,899) | $ 20,899 | ||||||
Redesignation of common stock, (in shares) | 57,185 | (57,184) | (2,064) | 2,064 | ||||||
Share conversion - Class B to A | $ 25 | $ (25) | ||||||||
Share conversion - Class B to A (in shares) | 2,467 | (2,467) | ||||||||
Repurchase of shares | (8,045) | $ (8,045) | ||||||||
Repurchase of shares | (856) | (83) | ||||||||
Shares withheld related to net settlement of equity awards | (820) | $ (820) | ||||||||
Vesting of restricted share grants | $ 2 | (2) | ||||||||
Vesting of restricted share grants (in shares) | 215 | 2 | ||||||||
Exercise of options | 1,252 | $ 4 | 1,248 | |||||||
Exercise of options (in shares) | 351 | |||||||||
Shares issued under 2018 ESPP | 26 | 26 | ||||||||
Shares issued under 2018 ESPP (in shares) | 3 | |||||||||
Fractional shares retired | (2) | (2) | ||||||||
Cumulative effect adjustment for adoption of ASU 2016-09, 2016-01 and 2018-02 | 1,818 | 512 | 1,306 | |||||||
Other comprehensive income (loss) | (150) | (150) | ||||||||
Share-based compensation | 15,417 | 15,417 | ||||||||
Dividends paid | (831) | (831) | ||||||||
Net income | 63,704 | 63,704 | ||||||||
Balance at end of period at Dec. 31, 2018 | 455,548 | $ 153 | $ 553 | $ (8,045) | $ (21,719) | 604,401 | (86) | (119,709) | ||
Balance at end of period (in shares) at Dec. 31, 2018 | 15,281 | 55,284 | (856) | (2,147) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Issuance of common stock | 62 | 62 | ||||||||
Issuance of common stock (in shares) | 4 | |||||||||
Share conversion - Class B to A | $ 28 | $ (28) | ||||||||
Share conversion - Class B to A (in shares) | 2,815 | (2,815) | ||||||||
Repurchase of shares | (13,479) | $ (13,479) | ||||||||
Repurchase of shares | (829) | |||||||||
Shares withheld related to net settlement of equity awards | (9,667) | $ (9,667) | ||||||||
Shares withheld related to net settlement of equity awards (in shares) | (509) | |||||||||
Vesting of restricted share grants | $ 4 | (4) | ||||||||
Vesting of restricted share grants (in shares) | 522 | |||||||||
Exercise of options | 4,014 | $ 10 | 4,004 | |||||||
Exercise of options (in shares) | 946 | |||||||||
Cumulative effect adjustment for adoption of ASU 2016-09, 2016-01 and 2018-02 | 62 | (62) | ||||||||
Other comprehensive income (loss) | 24 | $ 24 | ||||||||
Share-based compensation | 16,303 | 16,303 | ||||||||
Dividends paid | (7,425) | (7,425) | ||||||||
Net income | 92,491 | 92,491 | ||||||||
Balance at end of period at Dec. 31, 2019 | $ 537,871 | $ 181 | $ 539 | $ (21,524) | $ (31,386) | $ 624,766 | $ (34,705) | |||
Balance at end of period (in shares) at Dec. 31, 2019 | 18,100 | 53,937 | (1,685) | (2,656) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net income | $ 92,491 | $ 63,704 | $ 25,826 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for deferred income taxes | (745) | 4,116 | 11,191 |
Depreciation and amortization | 23,873 | 23,277 | 29,910 |
Amortization of deferred financing fees and accretion expense | 3,892 | 2,875 | 6,606 |
Share-based and deferred compensation | 22,124 | 17,346 | 17,179 |
Change in fair value of contingent consideration obligations | 19,886 | (37) | (294) |
Loss on other receivable | 998 | 4,429 | |
Unrealized (appreciation) depreciation on investments | (1,887) | 2,872 | (620) |
Net (gain) loss on equity method investment | (2,683) | 730 | 427 |
Loss on debt extinguishment | 9,860 | 6,058 | 330 |
Changes in operating assets and liabilities: | |||
Investment management fees receivable | (10,988) | 4,284 | 1,333 |
Fund administration and distribution fees receivable | (11,380) | 772 | 679 |
Other receivables | 322 | 5,640 | 21,456 |
Prepaid expenses | (2,141) | (215) | (1,231) |
Other assets | (836) | 57 | 79 |
Accounts payable | (336) | 278 | (3,550) |
Accrued compensation and benefits | 18,700 | 931 | (10,607) |
Accrued expenses | 64,597 | 261 | (5,701) |
Deferred compensation plan liability | (236) | (48) | (181) |
Other liabilities | 2,871 | 446 | (1,092) |
Net cash provided by operating activities | 227,384 | 134,345 | 96,169 |
Cash flows from investing activities | |||
Purchases of property and equipment | (5,239) | (2,546) | (5,105) |
Disposal of property and equipment due to restructuring | 3,006 | ||
Purchases of trading securities | (6,594) | (7,704) | (9,567) |
Proceeds from sales of trading securities | 2,749 | 2,772 | 5,166 |
Purchases of available-for-sale securities | (182) | (71) | (111) |
Proceeds from sales of available-for-sale securities | 158 | 79 | |
Proceeds from (investments in) equity method investment | 10,572 | (4,000) | (2,000) |
Acquisition of business | (851,276) | ||
Net cash used in investing activities | (849,812) | (11,549) | (8,532) |
Cash flows from financing activities | |||
Issuance of common stock, net of costs | 3,193 | ||
Repurchase of common stock | (15,535) | (8,178) | (4,654) |
Payments of taxes related to net share settlement of equity awards | (7,659) | (510) | |
Issuance of Class A common stock under 2018 ESPP | 26 | ||
Payment of equity awards modified to liabilities | (1,836) | ||
Excess tax benefits on share-based compensation | 261 | ||
Proceeds from long-term senior debt | 1,088,503 | 359,100 | 125,000 |
Repayment of draw on line of credit | (3,500) | ||
Payment of debt financing fees | (19,820) | (2,508) | (1,733) |
Repayment of long-term senior debt | (428,000) | (579,750) | (63,877) |
Repayment of promissory note | (96) | (575) | (575) |
Payment of dividends | (7,436) | (831) | (135,171) |
Payment of consideration for acquisition | (6,017) | (4,447) | (8,381) |
Net cash provided by (used in) financing activities | 608,016 | (84,161) | (91,273) |
Effect of changes of foreign exchange rate on cash and cash equivalents | 42 | (65) | 116 |
Net (decrease) increase in cash and cash equivalents | (14,370) | 38,570 | (3,520) |
Cash and cash equivalents, beginning of period | 51,491 | 12,921 | 16,441 |
Cash and cash equivalents, end of period | 37,121 | 51,491 | 12,921 |
Supplemental cash flow information | |||
Cash paid for interest | 23,454 | 17,530 | 41,489 |
Cash paid for income taxes | 24,634 | 17,993 | $ 758 |
Class A | |||
Cash flows from financing activities | |||
Issuance of common stock, net of costs | 62 | 156,549 | |
Payment of Class A common stock deferred offering costs | (4,287) | ||
Class B | |||
Cash flows from financing activities | |||
Issuance of common stock, net of costs | $ 4,014 | 1,250 | |
Payment of Class A common stock deferred offering costs | $ (4,300) |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Nature of Business | NOTE 1. Organization and Nature of Business Victory Capital Holdings, Inc., a Delaware corporation (along with its wholly-owned subsidiaries, collectively referred to as “the Company” or “Victory”) was formed on February 13, 2013 for the purpose of acquiring Victory Capital Management Inc. (“VCM”) and Victory Capital Advisers, Inc. (“VCA”), which occurred on August 1, 2013. On and effective July 1, 2019, the Company completed the acquisition (the “USAA AMCO Acquisition” or “USAA AMCO”) of USAA Asset Management Company (“USAA Adviser”) and Victory Capital Transfer Agency, Inc. (“VCTA”), formally known as the USAA Transfer Agency Company d/b/a USAA Shareholder Account Services. The USAA AMCO Acquisition includes USAA’s mutual fund and exchange traded fund (“ETF”) businesses and its 529 College Savings Plan (collectively, the “USAA Mutual Fund Business”). Refer to Note 4, Acquisitions, for further details on the acquisition. VCM is a registered investment adviser managing assets through open-end mutual funds, separately managed accounts, unified management accounts, ETFs, collective trust funds, wrap separate account programs and UCITs. VCM also provides mutual fund administrative services for the Victory Portfolios, Victory Variable Insurance Funds and the mutual fund series of the Victory Portfolios II (collectively, the “Victory Funds”), a family of open-end mutual funds, the VictoryShares (the Company’s ETF brand), as well as the USAA Mutual Fund Business, which includes the USAA Mutual Fund Trust, a family of open-end mutual funds (the “USAA Funds”). Additionally, VCM employs all of the Company’s United States investment professionals across its Franchises and Solutions, which are not separate legal entities. VCM’s three wholly-owned subsidiaries include RS Investment Management (Singapore) Pte. Ltd., RS Investments (Hong Kong) Limited, and RS Investments (UK) Limited. VCA is registered with the SEC as an introducing broker-dealer and serves as distributor and underwriter for the Victory Funds and USAA Funds. VCTA is registered with the SEC as a transfer agent for the USAA Funds. Changes in Capital Structure On February 12, 2018, the Company completed the initial public offering (“IPO”) of its Class A common stock. The Company issued 11,700,000 shares of Class A common stock at a price of $13.00 per share at the closing of the IPO. On March 13, 2018, the Company issued an additional 1,110,860 shares of Class A common stock pursuant to the underwriters’ exercise of their option. The net proceeds totaled $156.5 million: $143.0 million received at the closing of the IPO and $13.5 million received at the subsequent closing of the underwriters’ exercise of their option, after deducting in each case underwriting discounts. All shares of common stock outstanding prior to the IPO were immediately converted into Class B common stock at a one-to-one ratio. On February 12, 2018, concurrently with the closing of the IPO, the Company entered into a credit agreement (the “2018 Credit Agreement”) under which the Company received seven-year term loans in an original aggregate principal amount of $360.0 million and established a five-year revolving credit facility (which was unfunded as of closing) with original aggregate commitments of $50.0 million. Net proceeds received from the IPO and the 2018 Credit Agreement together with cash on hand were used to repay all indebtedness outstanding under the credit agreement dated as of October 31, 2014 (as amended) (the “2014 Credit Agreement”) on February 12, 2018. On May 3, 2018, the 2018 Credit Agreement was amended to increase aggregate commitments for the revolving credit facility from $50.0 million to $100.0 million. On July 1, 2019, concurrent with the USAA AMCO Acquisition, the Company (i) entered into the 2019 Credit Agreement, (ii) repaid all indebtedness outstanding under the 2018 Credit Agreement and (iii) terminated the 2018 Credit Agreement. The 2019 Credit Agreement was entered into among the Company, as borrower, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, pursuant to which the Company obtained a seven-year term loan in an aggregate principal amount of $1.1 billion and established a five-year revolving credit facility (which was unfunded as of the closing date) with aggregate commitments of $100.0 million. On January 17, 2020, the Company entered into the First Amendment to the 2019 Credit Agreement. Pursuant to the First Amendment, the Company refinanced the existing term loans (the “Existing Term Loans”) with replacement term loans (the “Repriced Term Loans”) in an aggregate principal amount of $952.0 million. The Repriced Term Loans provide for substantially the same terms as the Existing Term Loans, including the same maturity date of June 2026, except that the Repriced Term Loans provide for a reduced applicable margin on LIBOR of 75 basis points. The applicable margin on LIBOR under the Repriced Term Loans is 2.50%, compared to 3.25% under the Existing Term Loans. Refer to Note 4, Acquisitions, for further information on the USAA AMCO Acquisition and Note 11, Debt, for additional information on the Company’s debt structure. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2. Significant Accounting Policies Basis of Presentation The Company prepares its consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All dollar amounts, except per share data in the text and tables herein, are stated in thousands unless otherwise indicated. Retroactive Adjustments for Common Stock Split The Company's Board of Directors and stockholders approved a 175.194 for 1 stock split of the Company's common stock on February 1, 2018. All common share and common per share amounts in the consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this stock split (refer to Note 14, Equity, Note 15, Share Based Compensation, and Note 18, Earnings Per Share). Principles of Consolidation The consolidated financial statements include the operations of the Company and its wholly‑owned subsidiaries, after elimination of all significant intercompany transactions and balances. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company evaluates entities in which it invests and investment funds that it sponsors to determine whether the Company has a controlling financial interest in these entities and is required to consolidate them. A controlling financial interest generally exists if 1) the Company holds greater than 50% voting interest in entities controlled through voting interests or if 2) the Company has the ability to direct significant activities of a fund not controlled through voting interests (a variable interest entity or VIE) and the obligation to absorb losses of and/or the right to receive benefits from the VIE that could potentially be significant to the VIE. Our involvement with non‑consolidated sponsored investment funds that are considered VIEs include providing investment advisory services, fund administration, fund compliance, fund transfer agent and fund distribution services and/or holding a minority interest. At December 31, 2019, 2018 and 2017, the Company's investments in and maximum risk of loss related to unconsolidated sponsored VIE investment funds totaled $18.7 million, $12.9 million and $10.9 million respectively which are included in available‑for‑sale securities and trading securities in the Consolidated Balance Sheets. The Company has not provided financial support to these entities outside the ordinary course of business, which includes assuming operating expenses of funds for competitive or contractual reasons through fee waivers and fund expense reimbursements. We do not consolidate the sponsored investment funds in which we have an equity investment as we hold a minority interest, do not direct significant activities of these funds and do not have the right to receive benefits nor the obligation to absorb losses that could potentially be significant to these funds. During 2019 and 2018, the Company’s involvement with other non‑consolidated VIEs included an equity method investment and put and call option arrangements with Cerebellum Capital, LLC (“Cerebellum”). The put and call option arrangements ended in the first quarter of 2018. The Company sold 100% of its equity investment in Cerebellum in the third quarter of 2019. Refer to Note 13, Equity Method Investment, for further information. The Company applies the equity method of accounting to investments where it does not hold a controlling equity interest, but has the ability to exercise significant influence over operating and financial matters. In the event that management identifies an other than temporary decline in the estimated fair value of an equity method investment to an amount below its carrying value, the investment is written down to its estimated fair value. Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may ultimately differ from those estimates and the differences may be material. Revenue Recognition We account for revenue in accordance with Accounting Standards Update (“ASU”) 2019-04, Revenue from Contracts with Customers, which was adopted on January 1, 2019 using the modified retrospective transition method. The Company’s revenue includes fees earned from providing investment management services, fund administration services, fund compliance, fund transfer agent services and fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For further information on our various streams of revenue, refer to Note 3, Revenue. Distribution and Other Asset‑Based Expenses Distribution and other asset‑based expenses include (i) broker dealer distribution fees, (ii) platform distribution fees, (iii) sub‑administration, third party sub-transfer agent and sub‑advisory expenses. These expenses are accrued on a monthly basis and are generally calculated as a percentage of AUM and vary as levels of AUM change from inflows, outflows and market movement and with the number of days in the month. Also included in distribution and other asset‑based expenses are middle office expenses. Middle office expenses are accrued on a monthly basis and vary with changes in mutual fund, institutional and wrap separate account AUM levels, the number of accounts and volume of account transaction activity. Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. These costs include severance‑related expenses related to one‑time benefit arrangements and contract termination costs. A liability for restructuring costs is recognized only after management has developed a formal plan to which it has committed. The costs included in the restructuring liability are those costs that are either incremental or incurred as a direct result of the plan, or are the result of a continuing contractual obligation with no continuing economic benefit to the Company, or a penalty incurred to cancel the contractual obligation. Severance expense is recorded when management has committed to a plan for a reduction in workforce, the plan has been communicated to employees and it is unlikely that there will be significant changes to the plan. Contract termination liabilities are recorded for contract termination costs when the Company terminates a contract or stops using the product or service covered by the contract. Contract termination liabilities are recognized and measured at fair value. Contract termination costs are recorded in restructuring and integration costs in the Consolidated Statements of Operations. Cash and Cash Equivalents Cash and cash equivalents consist of cash at banks, money market accounts and funds and short‑term liquid investments with original maturities of three months or less at the time of purchase. For the Company and certain subsidiaries, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. Investments Available‑For‑Sale Securities Available‑for‑sale securities include investments in affiliated mutual funds and are recorded in available‑for‑sale securities in the Consolidated Balance Sheets. Investments in available‑for‑sale securities are carried at fair value. Following the adoption of ASU 2016-01 on January 1, 2019, changes in fair value are recognized in other income (expense) in the Consolidated Statements of Operations. The cost of securities sold is determined using the specific identification method. Dividend income is accrued on the declaration date and is included in other income in the Consolidated Statements of Operations. Transactions are recorded on a trade‑date basis. The Company periodically reviews each individual security that is in an unrealized loss position to determine if the impairment is other‑than‑temporary. Factors that are considered in determining whether other‑than‑temporary declines in value have occurred include the severity and duration of the unrealized loss and our ability and intent to hold the security for a length of time sufficient to allow for recovery of such unrealized losses. Impairment charges are recorded in other income (expense) in the Consolidated Statements of Operations. No impairments were recognized as a result of such review in the years ended December 31, 2019, 2018 and 2017. Trading Securities Trading securities include investments in affiliated and third party mutual funds held in a rabbi trust under a deferred compensation plan. Trading securities are recorded at fair value in the Consolidated Balance Sheets. Changes in value in trading securities are recognized by the Company in other income (expense) in the Consolidated Statements of Operations. The Company's available‑for‑sale and trading securities are valued through the use of quoted market prices available in an active market, which is the net asset value of the funds. Derivative Financial Instruments From time to time the Company enters into swap contracts for interest rate cap derivatives to manage interest rate risk related to a portion of its long-term debt, which are designated as cash flow hedges. The Company evaluates financial instruments and other contracts to determine if the arrangement meets the characteristics of a derivative under ASC 815, Derivatives and Hedging, and the criteria to use hedge accounting. Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is computed using the straight‑line method over the estimated useful lives of the related assets, generally three to ten years. Improvements to leased property are amortized on a straight‑line basis over the lesser of the useful life of the improvements or the term of the applicable lease. When assets are sold or retired, the related cost and accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in other income (expense) in the Consolidated Statements of Operations. Gains and losses resulting from the sale or disposal of assets as part of a restructuring plan are included in restructuring and integration costs in the Consolidated Statements of Operations. The cost of repairs and maintenance are expensed as incurred. Equipment and leasehold improvements are tested for impairment whenever changes in facts or circumstances indicate that the carrying amount of an asset may not be recoverable. Segment Reporting The Company operates in one business segment that provides investment management services and products to institutional, intermediary, retirement platforms and individual investors. Our determination that we had one operating segment is based on the fact that the Chief Operating Decision Maker reviews the Company's financial performance on an aggregate level. Goodwill Goodwill represents the excess cost of the acquisition over the fair value of net assets acquired in a business combination. For goodwill impairment testing purposes, the Company has determined that there is only one reporting unit. The Company tests goodwill for impairment on an annual basis, or more frequently if facts and circumstances indicate that goodwill may be impaired. Factors that could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the Company's use of the acquired assets in a business combination or strategy for the Company's overall business, and significant negative industry or economic trends. The Company conducts the annual impairment assessment as of October 1st. We use a qualitative approach to test for potential impairment of goodwill. If, after considering various factors, management determines that it is more likely than not that goodwill is impaired, a two‑step process to test for and measure impairment is performed which begins with an estimation of the fair value of the Company by considering discounted cash flows. The assumptions used to estimate fair value include management's estimates of future growth rates, operating cash flows, discount rates and terminal value. These assumptions and estimates can change in future periods based on market movement and factors impacting the expected business performance. Changes in assumptions or estimates could materially affect the determination of our fair value. If the present value of future expected cash flows falls below the recorded book value of equity, our goodwill would be considered impaired. Intangible Assets Intangible assets acquired in a business combination are initially recognized and measured at fair value. Intangible assets acquired by the Company outside of a business combination are initially recognized and measured based on the Company's cost to acquire the intangible assets. If a group of assets is acquired, the cost is allocated to individual assets based on their relative fair value. In valuing these assets, we make assumptions regarding useful lives and projected growth rates, and significant judgment is required. Definite‑lived intangible assets represent the value of acquired customer relationships in institutional separate accounts, collective funds, intermediary wrap separate account (wrap SMA) and unified managed account/model (UMA) programs. Definite‑lived intangible assets also include intellectual property, advisory contracts that do not have a sufficient history of annual renewal, definite-lived trade name assets, lease-related assets and non‑competition agreements. The Company amortizes definite‑lived identifiable intangible assets on a straight‑line basis over a period that is shorter than the asset's economic life as the pattern of economic benefit cannot be reliably determined. Management periodically evaluates the remaining useful lives and carrying values of the intangible assets to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include a decline in the level of managed assets, changes to contractual provisions underlying certain intangible assets and reductions in underlying operating cash flows. Should there be an indication of a change in the useful life or impairment in value of the definite‑lived intangible assets, we compare the carrying value of the asset to the projected undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to its fair value determined using discounted cash flows. The Company writes off the cost and accumulated amortization balances for all fully amortized intangible assets. Indefinite‑lived intangible assets include trade names and contracts for fund advisory, distribution and transfer agent services where the Company expects to, and has the ability to continue to manage these funds indefinitely, the contracts have annual renewal provisions, and there is a high likelihood of continued renewal based on historical experience. Trade names are considered indefinite‑lived intangible assets when they are expected to generate cash flows indefinitely. Indefinite‑lived intangible assets are reviewed for impairment annually as of October 1st using a qualitative approach which requires that positive and negative evidence collected as a result of considering various factors be weighed in order to determine whether it is more likely than not that an indefinite‑lived intangible asset is impaired. In addition, periodically management reconsiders whether events or circumstances continue to support an indefinite useful life. Indicators monitored by management that may indicate an indefinite useful life is no longer supported include a significant decline in the level of managed assets, changes to legal, regulatory or contractual provisions of the renewable investment advisory contracts and reductions in underlying operating cash flows. Indefinite-lived intangible assets are combined into a single unit of accounting for purposes of testing impairment if they operate as a single asset and represent as a group the highest and best use of the assets. If the qualitative approach indicates that it is more likely than not that an indefinite-lived intangible asset is impaired, the Company estimates the fair value of the indefinite‑lived intangible asset and compares it to the book value of the asset to determine whether an impairment charge is necessary. Impairment is indicated when the carrying value of the intangible asset exceeds its fair value. Investment Management Fees Receivable and Fund Administration and Distribution Fees Receivable Investment management fees receivable include investment management fees due from the Victory Funds, USAA Funds and VictoryShares and investment management fees due from non-affiliated parties. Fund administration and distribution fees receivable include administration, compliance and distribution fees due from the Victory Funds, USAA Funds and VictoryShares and transfer agent fees due from the USAA Funds. Provision for credit losses on these receivables is made in amounts required to maintain an adequate allowance to cover anticipated losses. All investment management fees receivable and fund administration and distribution fees receivable were determined to be collectible as of December 31, 2019, 2018 and 2017, and accordingly, no reserve for credit losses and no provision for credit losses were recognized as of and for the years ended December 31, 2019, 2018 and 2017. Other Receivables Other receivables primarily include income and other taxes receivable and were determined to be collectible as of December 31, 2019, 2018 and 2017. Share‑Based Compensation Arrangements Compensation expense related to share‑based payments is measured at the grant date based on the fair value of the award. The fair value of each option granted is estimated using the Black‑Scholes option valuation model. The Black‑Scholes option valuation model incorporates assumptions as to dividend yield, expected volatility, an appropriate risk‑free interest rate and the expected life of the option. The fair value of restricted share awards with service based vesting conditions and performance based vesting conditions is based on the market price of our stock on the date of grant. The fair value of restricted share awards subject to market conditions is estimated based on a probability-weighted expected value analysis. Compensation expense is recognized on a straight‑line basis over the total vesting period of the award for the service portion of restricted share awards and stock option awards. Compensation expense is recognized on an accelerated basis over the derived service period for awards that vest based on market conditions and on an accelerated basis over the requisite service period for awards with performance conditions if it is probable that the performance conditions will be satisfied. Compensation expense is adjusted for actual forfeitures in the period the forfeiture occurs. The corresponding credit for restricted share and stock option compensation expense is recorded to additional paid in capital. When changes are made to the terms of an equity award that result in a change in the fair value of the equity award immediately before and after the change, the Company applies modification accounting, treating the change as an exchange of the original award for a new award. The calculation of the incremental value associated with the modified award is based on the excess of the fair value of the modified award over the fair value of the original award measured immediately before its terms are modified. Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of shares of the Company’s common stock, Class A common stock and Class B common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of all classes of the Company’s common stock. The Company had vested and unvested stock options and unvested restricted stock grants outstanding during the periods presented and applies the treasury stock method to these securities in its calculation of diluted earnings per share. The treasury stock method assumes that the proceeds of exercise are used to purchase common stock at the average market price for the period. The Company does not have any participating securities that would require the use of the two‑class method of computing earnings per share. Deferred Financing Fees The costs of obtaining term loan financing are capitalized in long‑term debt in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations over the term of the respective financing using the effective interest method. The costs of obtaining revolving line of credit financing are capitalized in other assets in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations on a straight‑line basis over the term of the facility. The Company has established a policy of expensing the portion of unamortized debt financing costs associated with paydowns of principal in excess of required loan amortization payments. Management considers this debt to be partially settled. Deferred financing costs expensed due to partial settlements of debt are recorded in loss on debt extinguishment in the Consolidated Statements of Operations. Debt Modification Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred and generally are included in general and administrative expense in the Consolidated Statements of Operations. The Company expensed $4.4 million and $1.9 million in costs related to debt modifications in 2019 and 2018 upon entering into the 2019 Credit Agreement and 2018 Credit Agreement, respectively. In 2017, the Company expensed $2.2 million in costs related to debt modifications and refinancing. The analysis as to whether a modification of debt is an extinguishment or modification is performed on a creditor‑by‑creditor basis. Refer to Note 11, Debt, for further information on debt refinancings and modifications. Leases The Company currently leases office space and equipment under various leasing arrangements. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Leases are classified as either capital leases or operating leases, as appropriate. Lease agreements that are classified as operating leases may contain renewal options, rent escalation clauses or other inducements provided by the landlord. Rent expense is accrued to recognize lease escalation provisions and inducements provided by the landlord, if any, on a straight‑line basis over the lease term commencing when we obtain the right to control the use of the leased property. Rent expense is included in general and administrative expense in the Consolidated Statements of Operations. Treasury Stock Acquisitions of treasury stock are recorded at cost. Treasury stock held is reported as a deduction from stockholders' equity in the Consolidated Balance Sheets. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a specific‑identification basis. Additional paid‑in capital from treasury stock transactions is increased as the Company reissues treasury stock for more than the cost of the shares. If the Company issues treasury stock for less than its cost, additional paid‑in capital from treasury stock transactions is reduced to no less than zero. Once this account is at zero, any further required reductions are recorded to retained deficit in the Consolidated Balance Sheets. Foreign Currency Transactions The financial statements of the Company’s subsidiaries which operate outside of the United States (U.S.) are measured using the local currency as the functional currency. Adjustments to translate those statements into U.S. dollars are recorded in other comprehensive income (loss), which were immaterial in amount at December 31, 2019, 2018 and 2017. Transactions denominated in currencies other than the functional currency are recorded using the exchange rate on the date of the transaction. Exchange differences arising on the settlement of financial assets and liabilities are recorded in other income (expense) in the Consolidated Statements of Operations. Foreign exchange gains and losses for the years ended December 31, 2019, 2018 and 2017 were immaterial. Income Taxes Income taxes are accounted for using the assets and liability method as required by ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax liabilities are generally attributable to indefinite‑lived intangible assets and depreciation. Deferred tax assets are generally attributable to definite‑lived intangible assets, stock compensation, deferred compensation and the benefit of uncertain tax positions. 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. The Company assesses whether a valuation allowance should be established against its deferred income tax assets based on consideration of all available evidence, both positive and negative, using a more likely than not standard. The assessment considers, among other matters, recent operating results, forecasts of future profitability, the duration of statutory carry back and carry forward periods and the Company's experience with tax attributes expiring unused. Changes in circumstances could cause the Company to revalue its deferred tax balances with the resulting change impacting the Consolidated Statements of Operations in the period of the change. The Company records income tax liabilities pursuant to ASC 740, Income Taxes, which prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de‑recognition, classification of interest and penalties, accounting in interim periods, disclosure and transition. For tax positions meeting a "more‑likely‑than‑not" threshold, the amount recognized in the financial statements is the largest amount of benefit greater than 50% likely of being sustained. The more‑likely‑than‑not threshold must continue to be met in each reporting period to support continued recognition of the benefit. The Company's accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as income taxes. Certain income tax effects of the Tax Cuts and Jobs Act enacted in December 2017 ("Tax Act") were reflected in the Company’s financial results in accordance with Staff Accounting Bulletin No. 118 (SAB 118), which provides SEC staff guidance regarding the application of ASC Topic 740, Income Taxes, in the reporting period in which the Tax Act became law. Refer to Note 10, Income Taxes. Loss Contingencies The Company continuously reviews investor, client, employee or vendor complaints and pending or threatened litigation. The Company evaluates the likelihood that a loss contingency exists under the criteria of applicable accounting standards through consultation with legal counsel and records a loss contingency, inclusive of legal costs, if the contingency is probable and reasonably estimable at the date of the financial statements. Business Combinations We account for business combinations under the acquisition method of accounting and allocate the purchase price to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values are determined in accordance with the guidance in ASC 820, Fair Value Measurement, based on valuations performed by the Company and independent valuation specialists. Contingent and Deferred Payment Arrangements The Company periodically enters into contingent and/or deferred payment arrangements in connection with its business combinations. Liabilities under contingent and deferred payment arrangements are recorded in consideration payable for acquisition of business in the Consolidated Balance Sheets. In contingent payment arrangements, the Company agrees to pay additional consideration to the sellers based on future performance, such as future net revenue levels. The Company estimates the fair value of these potential future obligations at the time a business combination is consummated and records a liability in the Consolidated Balance Sheets at estimated fair value. In deferred payment arrangements, the Company records a liability in the Consolidated Balance Sheets at the time a business combination is consummated for the present value, which is the estimated fair value, of the future fixed dollar contractual payments. Contingent payment obligations are remeasured at fair value each reporting date taking into consideration changes in expected payments, and the change in fair value is recorded in the current period as a gain or loss. Gains and losses resulting from changes in the fair value of contingent payment obligations are reflected in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The Company accretes obligations under deferred payment arrangements to their expected payment amounts over the period covered by the arrangement. Accretion expense related to deferred payment obligations is reflected in interest expense and other financing costs in the Consolidated Statements of Operations and totaled $0.2 million, $0.5 million and $0.6 million in 2019, 2018 and 2017, respectively. New Accounting Pronouncements Accounting Standards Adopted in 2019 • Changes in Stockholders’ Equity for Interim Periods: Effective January 1, 2019, the Company adopted final SEC rules that extend to interim periods the annual disclosure requirement in Regulation S-X, Rule 3-04, of presenting the changes in stockholders’ equity for the current and comparative quarter in its accompanying financial statements. • Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income: Effective January 1, 2019, the Company adopted ASU 2018-02 which provides the optional election for the reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The adoption of ASU 2018-02 resulted in a reclassification between accumulated other comprehensive income/(loss) and retained earnings of $0.1 million, and had no impact on the Consolidated Statements of Operations. • |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | NOTE 3. Revenue In accordance with the new revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Year Ended December 31, (in thousands) 2019 2018 2017 Investment management fees Mutual funds (Victory/USAA Funds) $ 355,969 $ 248,771 $ 246,722 ETFs (VictoryShares) 10,422 8,999 4,936 Separate accounts and other vehicles 99,726 93,043 90,963 Performance-based fees Separate accounts and other vehicles 685 1,870 1,190 Total investment management fees $ 466,802 $ 352,683 $ 343,811 Fund administration and distribution fees Administration fees Mutual funds (Victory/USAA Funds) $ 71,131 $ 22,527 $ 21,820 ETFs (VictoryShares) 1,317 949 463 Distribution fees Mutual funds (Victory/USAA Funds) 30,356 37,253 43,535 Transfer agent fees Mutual funds (USAA Funds) 42,767 — — Total fund administration and distribution fees $ 145,571 $ 60,729 $ 65,818 Total revenue $ 612,373 $ 413,412 $ 409,629 Beginning on January 1, 2019, and as a result of adopting ASU 2014-09, fund expense reimbursements are presented as a reduction of investment management fees. This change in presentation reduced revenue, and operating expenses, by $18.7 million year for the ended December 31, 2019. The following table presents balances of receivables: (in thousands) December 31, 2019 December 31, 2018 Customer receivables Mutual funds (Victory/USAA Funds) $ 64,407 $ 21,025 ETFs (VictoryShares) 1,391 909 Separate accounts and other vehicles 27,836 19,199 Receivables from contracts with customers 93,634 41,133 Non-customer receivables 1,459 2,987 Total receivables $ 95,093 $ 44,120 Investment management fees receivable $ 74,321 $ 37,980 Fund administration and distribution fees receivable 19,313 3,153 Other receivables 1,459 2,987 Total receivables $ 95,093 $ 44,120 Revenue The Company’s revenue includes fees earned from providing; • investment management services, • fund administration services, • fund transfer agent services, and • fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Investment management, fund administration and fund distribution fees are generally considered variable consideration as they are typically calculated as a percentage of AUM. Fund transfer agent fees are also considered variable consideration as they are calculated as a percentage of AUM or based on the number of accounts in the fund. In such cases, the amount of fees earned is subject to factors outside of the Company’s control including customer or underlying investor contributions and redemptions and financial market volatility. These fees are considered constrained and are excluded from the transaction price until the asset values or number of accounts on which the customer is billed are calculated and the value of consideration is measurable. The Company has contractual arrangements with third parties to provide certain advisory, administration, transfer agent and distribution services. Management considers whether we are acting as the principal service provider or as an agent to determine whether revenue should be recorded based on the gross amount payable by the customer or net of payments to third-party service providers, respectively. Victory is considered a principal service provider if we control the service that is transferred to the customer. We are considered an agent when we arrange for the service to be provided by another party and do not control the service. Investment Management Fees Investment management fees are received in exchange for investment management services that represent a series of distinct incremental days of investment management service. Control of investment management services is transferred to the customers over time as these customers receive and consume the benefits provided by these services. Investment management fees are calculated as a contractual percentage of AUM and are generally paid in arrears on a monthly or quarterly basis. Investment management fees are recognized as revenue using a time-based output method to measure progress. Revenue is recorded at month end or quarter end when the value of consideration is measured. The amount of investment management fee revenue varies from one reporting period to another as levels of AUM change (from inflows, outflows and market movements) and as the number of days in the reporting period change. The Company may waive certain fees for investment management services provided to the Victory Funds, USAA Funds and VictoryShares and may subsidize certain share classes of the Victory Funds, USAA Funds and VictoryShares to ensure that specified operating expenses attributable to such share classes do not exceed a specified percentage. These waivers and reimbursements reduce the transaction price allocated to investment management services and are recognized as a reduction to investment management fees revenue. The amounts due to the Victory Funds, USAA Funds and VictoryShares for waivers and expense reimbursements represent consideration payable to customers, which is recorded in “Accounts payable and accrued expenses” in the Consolidated Balance Sheets, and no distinct services are received in exchange for these payments. Performance‑based investment management fees, which include fees under performance fee and fulcrum fee arrangements, are included in the transaction price for providing investment management services. Performance-based investment management fees are calculated as a percentage of investment performance on a client’s account versus a specified benchmark or hurdle based on the terms of the contract with the customer. Performance-based investment management fees are variable consideration and are recognized as revenue when it is probable that a significant reversal of the cumulative revenue for the contractual performance period will not occur. Performance-based investment management fees recognized as revenue in the current period may pertain to performance obligations satisfied in prior periods. Fund Administration Fees The Company recognizes fund administration fees as revenue using a time-based output method to measure progress. Fund administration fees are determined based on the contractual rate applied to average daily net assets of the Victory Funds, USAA Funds and VictoryShares for which administration services are provided. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets and constraints are removed. The Company has contractual arrangements with a third party to provide certain sub-administration services. We are the primary obligor under the contracts with the Victory Funds, USAA Funds and VictoryShares and have the ability to select the service provider and establish pricing. As a result, fund administration fees and sub-administration expenses are recorded on a gross basis. Fund Transfer Agent Fees The Company recognizes fund transfer agent fees using a time-based output method to measure progress. Fund transfer agent fees are determined based on the contractual rate applied to either the average daily net assets of the USAA Funds for which transfer agent services are provided or number of accounts in the USAA Funds. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets or actual number of accounts and constraints are removed. The Company has contractual arrangements with a third party to provide certain sub-transfer agent services. We are the primary obligor under the transfer agency contracts with the USAA Funds and have the ability to select the service provider and establish pricing. As a result, fund transfer agent fees and sub-transfer agent expenses are recorded on a gross basis. Fund Distribution Fees The Company receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds and USAA Funds. Revenue is measured in an amount that reflects the consideration to which the Company expects to be entitled in exchange for providing distribution services. Distribution fees are generally calculated as a percentage of average net assets in the Victory Funds and USAA Funds. The Company’s performance obligation is satisfied at the point in time when control of the services is transferred to customers, which is upon investor subscription or redemption. Based on the nature of the calculation, the revenue for these services is accounted for as variable consideration, the Company may recognize distribution fee revenue in the current period that pertains to performance obligations satisfied in prior periods, as it represents variable consideration and is recognized as uncertainties are resolved. The Company’s distribution fee revenue is recorded in fund administration and distribution fees in the Consolidated Statements of Operations. The Company has contractual arrangements with third parties to provide certain distribution services. The Company is the primary obligor under the contracts with the Victory Funds and USAA Funds and has the ability to select the service provider and establish pricing. Substantially all of the Company’s revenue is recorded gross of payments made to third parties. Costs Incurred to Obtain or Fulfill Customer Contracts The Company is required to capitalize certain costs directly related to the acquisition or fulfillment of a contact with a customer. Victory has not identified any sales-based compensation or similar costs that meet the definition of an incremental cost to acquire a contract and as such we have no intangible assets related to contract acquisitions. Direct costs incurred to fulfill services under the Company’s distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. The Company may pay upfront sales commissions to dealers and institutions that sell Class C shares of the participating Victory Funds at the time of such sale. Upfront sales commission payments with respect to Class C shares equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution. When the Company makes an upfront payment to a dealer or institution for the sale of Class C shares, the Company capitalizes the cost of such payment, which is recorded in “Prepaid expenses” in the Consolidated Balance Sheets and amortizes the cost over a 12-month period, the estimated period of benefit. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 4. Acquisitions USAA AMCO Acquisition On and effective July 1, 2019, the Company completed the acquisition of USAA Adviser and VCTA (collectively, the “USAA Acquired Companies”), which includes the USAA Mutual Fund Business, and executed Amendment No. 1 (the “Amendment”) to the stock purchase agreement (the “Stock Purchase Agreement”). The Amendment amended the Stock Purchase Agreement entered into on November 6, 2018 between the Company, USAA Investment Corporation, and for certain limited purposes, USAA Capital Corporation. The assets acquired and liabilities assumed and results of the USAA Mutual Fund Business are reflected in the consolidated financial statements from the closing date of July 1, 2019. The USAA AMCO Acquisition expands and diversifies the Company’s investment platform, particularly in the fixed income and solutions asset classes, and increases the Company’s size and scale. Additional products added to the investments platform include target date and target risk strategies, managed volatility mutual funds, active fixed income ETFs, sub-advised and multi-manager equity funds. The acquisition also added to the Company’s lineup of asset allocation portfolios and smart beta equity ETFs and provided the Company the rights to offer products and services using the USAA brand and the opportunity to offer its products to USAA members through a direct member-channel. Purchase Price The Company purchased 100% of the outstanding common stock of the USAA Acquired Companies. Total consideration is $950.1 million, comprised of $851.3 million of cash paid at closing (which included restricted cash of $71.9 million) plus $98.8 million in contingent consideration due to sellers. The purchase price remains subject to certain customary post-closing adjustments. A maximum of $150.0 million ($37.5 million per year) in contingent payments is payable to sellers based on the annual revenue of USAA Adviser attributable to all “non-managed money”-related AUM in each of the first four years following the closing. To receive any contingent payment in respect of “non-managed money”-related assets for a given year, annual revenue from “non-managed money”-related assets must be at least 80% of the revenue run-rate (as calculated under the Stock Purchase Agreement) of the USAA Adviser’s “non-managed money”-related assets under management as of the Closing, and to achieve the maximum contingent payment for a given year, such annual revenue must total at least 100% of that Closing revenue run-rate. Annual contingent payments in respect of “non-managed money”-related assets are subject to certain “catch-up” provisions set forth in the USAA Stock Purchase Agreement. The Company accounted for the acquisition in accordance with ASC 805, Business Combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the USAA AMCO Acquisition. We used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below. The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $120.6 million was recorded to goodwill in the audited Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes. The goodwill arising from the acquisition primarily results from expected future earnings and cash flows, as well as the expected synergies created by the integration of the USAA Acquired Companies within our organization. The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Cash and cash equivalents $ 17,473 Investment management fees receivable 25,353 Fund administration and distribution fees receivable 4,779 Other receivables and prepaid expenses 948 Property and equipment 1,165 Other intangible assets (1) 808,670 Goodwill 120,643 Accounts payable and accrued expenses (5,575 ) Accrued compensation and benefits (5,907 ) Payable to members and custodians (17,473 ) Contingent consideration payable to sellers (98,800 ) Cash paid at closing $ 851,276 (1) Includes $750.2 million for indefinite-lived investment advisory contracts, $19.1 million for indefinite-lived transfer agent contracts, $0.8 million for indefinite-lived distribution contracts, $38.2 million for definite-lived trade name assets and $0.4 million for definite-lived lease-related assets, all of which are recorded in other intangible assets, net on the Consolidated Balance Sheets. As of December 31, 2019, the purchase price allocation for the USAA AMCO Acquisition is preliminary as customary post-closing purchase adjustments have not been finalized. The final purchase price allocation may reflect changes to the preliminary valuations for other receivables and prepaid expenses, accounts payable and accrued expenses and accrued compensation and benefits for net working capital adjustments. Adjustments will be made, as necessary, during the measurement period of up to one year after the closing date. Contingent Consideration The acquisition date fair value of contingent consideration payable to sellers was $98.8 million and was estimated using the real options method. Revenue related to “non-managed money” assets was simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which were then discounted from the expected payment dates at the relevant cost of debt. Significant assumptions and inputs include the “non-managed money” revenue projected annual growth rate, the market price of risk, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The projected annual growth rate for “non-managed money” revenue was approximately 3%. The market price of risk and revenue volatility of approximately 4% and 20%, respectively, were based on data for comparable companies. As the contingent consideration represents a subordinate, unsecured claim of the Company, we have assessed a discount rate of approximately 7%, which incorporates adjustments for credit risk and the subordination of the contingent consideration. Total undiscounted earn out payments ranged from $119 million to $150 million, the maximum amount payable to sellers. The fair value of contingent consideration payable to sellers was estimated at $118.7 million at December 31, 2019, an increase of $19.9 million from the acquisition date, which was recorded in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The market price of risk and revenue volatility inputs were similar to those used at the acquisition date valuation. The projected annual growth rate for “non-managed money” revenue during the earn out period was approximately 4%, and the discount rate was approximately 5%. Total estimated undiscounted earn out payments ranged from $133 million to $150 million. USAA Acquired Companies In 2019, the Company incurred Revenue of the USAA Acquired Companies subsequent to the effective closing date of July 1, 2019 for the six months ended December 31, 2019, was as follows: Unaudited Six Months Ended (in millions) December 31, 2019 Revenue $ 244.5 Net income attributable to the USAA Acquired Companies for the six months ended December 31, 2019 is impractical to determine as the Company does not prepare discrete financial information at that level. The Company’s consolidated financial statements for the year ended December 31, 2019 include the operating results of the USAA Acquired Companies for the period from July 1, 2019 to December 31, 2019. The historical consolidated financial information of Victory and the USAA Acquired Companies have been adjusted to give effect to unaudited pro forma events that are directly attributable to the transaction, factually supportable and expected to have continuing impact on the combined results. These amounts have been calculated after adjusting the results of the USAA Acquired Companies to reflect additional interest expense, distribution costs, share-based compensation expense, income taxes and intangible asset amortization that would have been expensed assuming the fair value adjustments had been applied on January 1, 2018. In addition, Victory’s and the USAA Acquired Companies’ results were adjusted to remove incentive compensation, legal fees and mutual fund proxy costs directly attributable to the acquisition. The following Unaudited Pro Forma Condensed Combined Statements of Operations are provided for illustrative purposes only and assume that the acquisition occurred on January 1, 2018. This unaudited information should not be relied upon as indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future. Unaudited Twelve Months Ended December 31, (in thousands, except per share amount) 2019 2018 Revenue $ 851,440 $ 906,844 Net income 114,988 71,471 Earnings per share of common stock Basic $ 1.70 $ 1.08 Diluted $ 1.56 $ 1.01 Weighted average number of shares outstanding Basic 67,693 66,295 Diluted 73,612 70,511 Harvest Transaction On September 21, 2018, the Company entered into the Harvest Purchase Agreement, whereby the Company agreed to purchase 100% of the equity interests of Harvest, an asset management company specializing in yield enhancement overlay, risk reduction, alternative beta and absolute return investment strategies. The transaction was subject to the receipt of a specified level of client consents, termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other closing conditions. The Harvest Purchase Agreement contained customary termination rights for the Company and Harvest. On April 22, 2019, the Company, Harvest and the Members’ Representative entered into an agreement to mutually terminate the Harvest Purchase Agreement as of April 22, 2019. Neither Victory nor Harvest was responsible for any termination fee to the other party as a result of the termination. CEMP Acquisition Under the terms of the acquisition of Compass Efficient Model Portfolios, LLC (the “CEMP Acquisition”), we paid cash related to base payments and contingent earnouts annually following each of the first four anniversaries of the CEMP Acquisition. Each annual base payment was fixed in amount, with the amounts increasing over the four-year period. The earn‑out payments were calculated as a fixed percentage of the net revenue earned by the Company on the CEMP business over the twelve-month period ending on each of the first four anniversaries of the CEMP closing date. In the third quarter of 2019, we paid the fourth and final payment of $6.0 million in cash to the sellers. The Company paid sellers a total of $6.0 million, $4.4 million and $2.7 million, respectively, in base payments and earn out payments in 2019, 2018 and 2017. Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. The following table presents a rollforward of restructuring and integration liabilities: (in millions) 2019 2018 2017 Liability balance, beginning of period $ 0.1 $ 0.1 $ 7.4 Severance expense USAA AMCO Acquisition 6.2 — — RS Investments — — 0.5 Other — 0.7 0.3 Contract termination expense RS Investments — — 5.0 USAA AMCO Acquisition 0.2 — — Integration costs 2.3 — 0.4 Restructuring and integration costs 8.7 0.7 6.2 Settlement of liabilities (5.8 ) (0.7 ) (13.5 ) Liability balance, end of period $ 3.0 $ 0.1 $ 0.1 Accrued expenses $ 2.9 $ 0.1 $ 0.1 Other liabilities 0.1 — — Liability balance, end of period $ 3.0 $ 0.1 $ 0.1 Acquisition-related costs Costs related to acquisitions are summarized below and include legal and filing fees, advisory services, mutual fund proxy voting costs and other one‑time expenses related to the transactions. These costs were expensed in 2019, 2018 and 2017 and are included in acquisition‑related costs in the Consolidated Statements of Operations. Acquisition-related costs (in thousands) 2019 2018 2017 USAA AMCO $ 21,333 $ 3,180 $ - Harvest 895 1,116 - RS Investments - - 355 Other 89 50 1,739 $ 22,317 $ 4,346 $ 2,094 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 5. Fair Value Measurements The Company determines the fair value of certain financial and nonfinancial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value determinations utilize a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the fair value hierarchy contains three levels: • Level 1—Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. • Level 2—Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the asset or liability being measured. • Level 3—Valuation inputs are unobservable and significant to the fair value measurement. These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the asset or liability. The following table presents financial liabilities measured at fair value on a recurring basis: As of December 31, 2019 (in thousands) Total Level 1 Level 2 Level 3 Contingent consideration arrangements $ (118,700 ) $ - $ - $ (118,700 ) As of December 31, 2018 (in thousands) Total Level 1 Level 2 Level 3 Contingent consideration arrangements $ (716 ) $ - $ - $ (716 ) Contingent consideration arrangements at December 31, 2019 consist of the USAA AMCO earn-out payment liability, which is included in the consideration payable for acquisition of business in the Consolidated Balance Sheets. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the USAA AMCO Acquisition earn-out payment liability include the “non-managed money” revenue projected growth rate, revenue volatility, market price of risk and discount rate. For the year ended December 31, 2018, contingent consideration arrangements were primarily related to the CEMP earn‑out payment liability, which was included in consideration payable for acquisition of business in the Consolidated Balance Sheets. Level 3 inputs were utilized to determine fair value, or the present value of the expected future settlement, of the contingent consideration arrangement. Changes in the fair value of contingent consideration arrangement liabilities are recorded in earnings in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The following table presents the balance of the contingent consideration arrangement liabilities at December 31, 2019, 2018 and 2017, respectively. (in thousands) Contingent Consideration Liabilities Balance, December 31, 2017 $ (1,195 ) CEMP change in fair value measurement 37 CEMP year 3 earn-out payment 442 Balance, December 31, 2018 $ (716 ) CEMP change in fair value measurement 14 CEMP year 4 earn-out payment 702 USAA AMCO estimated liability as of closing date (98,800 ) USAA AMCO change in fair value measurement (19,900 ) Balance, December 31, 2019 $ (118,700 ) There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy for the years ended December 31, 2019 and 2018. The Company recognizes transfers at the end of the reporting period. The net carrying value of accounts receivable and accounts payable approximates fair value due to the short‑term nature of these assets and liabilities. The fair value of our long-term debt at December 31, 2019 is considered to be its carrying value as the interest rate on the bank debt is variable and approximates current market rates. As a result, Level 2 inputs are utilized to determine the fair value of our long‑term debt. The fair value of the Company’s money market investment ($10.1 million within cash and cash equivalents), available-for-sale investments and trading securities are measured using Level 1 inputs, which are the market prices for shares in these open-end mutual funds. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 6. Related‑Party Transactions The Company considers certain funds that it manages, including the Victory Funds, the USAA Funds, the VictoryShares and collective trust funds that it sponsors (the “Victory Collective Funds”), to be related parties as a result of our advisory relationship. The Company receives investment management, administrative, distribution and compliance fees in accordance with contracts that VCM and VCA have with the Victory Funds and the USAA Funds and has invested a portion of its balance sheet cash in the USAA Treasury Money Market Fund and earns interest on the amount invested in this fund. We also receive investment management fees from the VictoryShares and Victory Collective Funds under VCM’s advisory contracts with these funds and administrative fees from the VictoryShares. In addition, we receive transfer agent fees in accordance with a contract that VCTA has with the USAA Funds. In 2018 and 2017, under the terms of monitoring agreements with affiliates of two shareholders of the Company, we paid fees for monitoring services, which are included in general and administrative in the Consolidated Statements of Operations. These monitoring agreements terminated upon the completion of the IPO. The table below presents balances and transactions involving related parties included in the Consolidated Balance Sheets and Consolidated Statements of Operations. • Included in cash and cash equivalents is cash held in the USAA Treasury Money Market Fund. • Included in receivables (fund administration and distribution fees) are amounts due from the Victory Funds and USAA Funds for compliance services and amounts due from the USAA Funds for transfer agent services. • Included in revenue (fund administration and distribution fees) are amounts earned for compliance services and transfer agent services. • Realized and unrealized gains and losses and dividend income on investments in the Victory Funds classified as available-for-sale securities and investments in the Victory Funds and USAA Funds classified as trading securities and dividend income on investments in the USAA Treasury Money Market Fund are recorded in interest income and other income (expense) in the Consolidated Statements of Operations. • Amounts due to the Victory Funds, USAA Funds and VictoryShares for waivers of investment management fees and reimbursements of fund operating expenses are included in accounts payable and accrued expenses in the Consolidated Balance Sheets and represent consideration payable to customers. • Included in other liabilities at December 31, 2018 was the remaining amount payable for a promissory note for amounts due upon repurchase of Company common stock from a shareholder. (in thousands) 2019 2018 Related party assets Cash and cash equivalents $ 10,060 $ — Receivables (investment management fees) 47,872 19,612 Receivables (fund administration and distribution fees) 19,313 3,153 Investments (available-for-sale securities, fair value) 771 601 Investments (trading securities, fair value) 17,914 12,343 Total $ 95,930 $ 35,709 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 4,316 $ 2,300 Other liabilities (promissory note) — 96 Total $ 4,316 $ 2,396 Year ended December 31, (in thousands) 2019 2018 2017 Related party revenue Investment management fees (1) $ 371,807 $ 261,538 $ 254,318 Fund administration and distribution fees 145,571 60,729 65,818 Total $ 517,378 $ 322,267 $ 320,136 Related party expense Distribution and other asset-based expenses (fund reimbursements) (1) $ — $ 12,902 $ 11,896 General and administrative — 135 1,203 Total $ — $ 13,037 $ 13,099 Related party other income (expense) Interest income (expense) and other income (expense) $ 2,693 $ (2,834 ) $ 589 Interest expense and other financing costs (promissory note) (1 ) (18 ) (39 ) Total $ 2,692 $ (2,852 ) $ 550 (1) Effective January 1, 2019, upon the adoption of ASU 2014-09, expense reimbursements have been reclassified to investment management fees. This change in presentation reduced revenue, and operating expenses, by $18.7 million year for the ended December 31, 2019. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | NOTE 7. Investments As of December 31, 2019 and 2018, the Company held both available‑for‑sale securities and trading securities. Available‑for‑sale investments consist entirely of seed capital investments in certain Victory Funds. Trading securities are held under a deferred compensation plan and include Victory Funds, USAA Funds and third party mutual funds. Available‑For‑Sale Securities The following table presents a summary of the cost and fair value of investments classified as available-for-sale: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2019 $ 696 $ 85 $ (10 ) $ 771 As of December 31, 2018 666 6 (71 ) 601 Following the adoption of ASU 2016-01 on January 1, 2019, unrealized gains and losses on available-for-sale investments are recorded in net income in other income (expense) in the Consolidated Statements of Operations. In 2018 and 2017, unrealized gains and losses on available-for-sale investments were recorded, net of tax, in accumulated other comprehensive income (loss). Refer to Note 20, Accumulated Other Income (Loss), for further information on unrealized gains and losses on available-for-sale investments. Upon sale, accrued unrealized gains or losses were reclassed out of accumulated comprehensive income (loss). Realized gains and losses are recognized in the Consolidated Statements of Operations as other income (expense). The following table presents proceeds and realized gains and losses recognized during the years ended December 31, 2019, 2018 and 2017: Sale Realized (in thousands) Proceeds Gains (Losses) For the year ending December 31, 2019 $ 158 $ 6 $ — For the year ending December 31, 2018 — — — For the year ending December 31, 2017 79 15 — Trading Securities The following table presents a summary of the cost and fair value of investments classified as trading securities: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2019 $ 18,670 $ 733 $ (1,098 ) $ 18,305 As of December 31, 2018 14,874 5 (2,160 ) 12,719 Unrealized gains and losses on trading securities are recorded in earnings in other income (expense). Sales of trading investments throughout the year result in realized gains or losses that are recognized in the Consolidated Statements of Operations as other income (expense). The following table presents proceeds and realized gains and losses recognized during the years ended December 31, 2019, 2018 and 2017: Sale Realized Proceeds Gains (Losses) For the year ending December 31, 2019 $ 2,749 $ 22 $ (71 ) For the year ending December 31, 2018 2,772 37 (73 ) For the year ending December 31, 2017 5,166 159 (34 ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | NOTE 8. Property and Equipment The following table presents property and equipment as of December 31, 2019 and 2018: As of December 31, (in thousands) 2019 2018 Equipment, purchased software and implementation costs $ 21,548 $ 17,071 Leasehold improvements 2,854 3,209 Furniture and fixtures 2,631 1,541 Total 27,033 21,821 Accumulated depreciation and amortization (13,793 ) (13,041 ) Total property and equipment, net $ 13,240 $ 8,780 Depreciation and amortization expense for property and equipment was $3.0 million, $3.0 million, and $3.6 million for the years ended December 31, 2019, 2018, and 2017, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | NOTE During 2019, the Company acquired USAA AMCO and recorded $120.6 million in goodwill related to this acquisition in the Consolidated Balance Sheets. The goodwill arising from the USAA AMCO Acquisition primarily results from expected future earnings and cash flows, as well as the expected synergies created by the integration of the USAA Acquired Companies within our organization. The following table presents changes in the goodwill balance from December 31, 2018 to December 31, 2019: As of December 31, (in thousands) 2019 2018 Balance, beginning of period $ 284,108 $ 284,108 Goodwill recorded in acquisition 120,642 — Balance, end of period $ 404,750 $ 284,108 There were no impairments to goodwill recognized during the years ended December 31, 2019, 2018 or 2017. Identifiable Intangible Assets During 2019, and as part of the USAA AMCO Acquisition, the Company recorded indefinite-lived and definite-lived intangible assets of $770.1 million and $38.6 million, respectively, primarily related to investment advisory and administration service contracts and tradenames. The following table presents a summary of definite‑lived intangible assets by type: Fund Intellectual Customer Advisory Trade Property/ (in thousands) Relationships Contracts Names Other Totals Gross book value - December 31, 2018 $ 123,200 $ 2,368 $ 1,132 $ 7,177 $ 133,877 Accumulated amortization (103,207 ) (2,368 ) (283 ) (6,940 ) (112,798 ) Net book value - December 31, 2018 $ 19,993 $ — $ 849 $ 237 $ 21,079 Weighted average useful life (yrs) 0.8 — 1.5 0.2 0.8 Gross book value - December 31, 2019 $ 123,200 $ 2,368 $ 39,332 $ 7,547 $ 172,447 Accumulated amortization (118,577 ) (2,368 ) (5,607 ) (7,124 ) (133,676 ) Net book value - December 31, 2019 $ 4,623 $ — $ 33,725 $ 423 $ 38,771 Weighted average useful life (yrs) 0.2 — 3.1 0.1 3.4 Amortization expense for definite‑lived intangible assets for the years ended December 31, 2019, 2018 and 2017, was $20.9 million, $20.3 million and $26.3 million, respectively, and is recorded in depreciation and amortization within the Consolidated Statements of Operations. There were no impairments to definite-lived intangible assets recognized in 2019, 2018 or 2017. The following table presents estimated amortization expense for definite‑lived intangible assets for each of the five succeeding years and thereafter: 2020 $ 12,830 2021 11,271 2022 9,568 2023 4,855 2024 143 Thereafter 104 Total $ 38,771 The following table presents a summary of indefinite‑lived intangible assets by type: Fund Advisory, Transfer Agent and Distribution Trade (in thousands) Contracts Names Totals December 31, 2017 balance $ 342,900 $ 24,832 $ 367,732 Additions or transfers — (1,132 ) (1,132 ) December 31, 2018 balance $ 342,900 $ 23,700 $ 366,600 Additions or transfers 770,100 — 770,100 December 31, 2019 balance $ 1,113,000 $ 23,700 $ 1,136,700 There were no impairments to indefinite-lived intangible assets recognized in 2019, 2018 or 2017. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10. Income Taxes The following table presents the provision for income taxes for the years ended December 31, 2019, 2018 and 2017: (in thousands) 2019 2018 2017 Current tax expense (benefit): Federal $ 22,234 $ 13,130 $ 640 State 6,656 3,944 779 Foreign 52 17 22 Total current tax expense (benefit) 28,942 17,091 1,441 Deferred tax expense (benefit): Federal (449 ) 3,577 9,162 State (289 ) 549 2,010 Foreign (7 ) (10 ) 19 Total deferred tax expense (benefit) (745 ) 4,116 11,191 Income tax expense $ 28,197 $ 21,207 $ 12,632 During 2019, the Company recorded a liability for $2.9 million ($2.3 million net of federal benefit) for unrecognized tax benefits, which included $0.2 million of interest and penalties. As of December 31, 2019, the liability for gross unrecognized tax benefits and interest and penalties totaled $2.9 million which is included in “Other liabilities” in the Consolidated Balance Sheets. It is expected that the amount of unrecognized tax benefits will change in the next 12 months; however, we do not expect the change to have a material impact on our consolidated financial statements. We did not record any amounts in 2018 or 2017 related to uncertain tax positions or tax contingencies. In December 2017, the Tax Cuts and Jobs Act ("Tax Act") was enacted. The Tax Act significantly revised the United States corporate income tax law by, among other things, decreasing the federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result of the reduction in the corporate income tax rate, the Company remeasured its deferred tax assets and deferred tax liabilities on the enactment date using the new lower rate. At December 31, 2017, the Company’s accounting for the income tax effects of the Tax Act was not complete, as it had yet to collect all the necessary data to complete the analysis of the effect of the Tax Act on the underlying deferred taxes. In 2017, we applied the guidance in Staff Accounting Bulletin 118 and recorded a provisional credit to federal tax expense of $2.4 million from remeasuring deferred tax assets and deferred tax liabilities due to the Tax Act. We completed the accounting for the tax effects of the Tax Act in 2018, and no adjustments to the provisional amounts recorded in 2017 were necessary. The effective tax rate for the years ended December 31, 2019 and 2018 differs from the United States federal statutory rate primarily as a result of state and local income taxes and excess tax benefits on share-based compensation, and for 2019, expense related to recording an uncertain tax position (“UTP”) liability for unrecognized tax benefits. In 2017, the effective tax rate differed from the United States federal statutory rate primarily as a result of state and local income taxes and the remeasurement of net deferred tax liabilities upon enactment of the Tax Act. The following table presents the tax rates for the years ended December 31, 2019, 2018 and 2017. 2019 2018 2017 Federal income tax at U.S. statutory rate 21.0 % 21.0 % 35.0 % State income tax rate, net of federal tax benefit 3.3 % 4.1 % 4.0 % UTP liability 1.9 % — % — % Excess tax benefits on share-based compensation (2.8 ) % (0.5 ) % — % Remeasurement of deferred taxes due to Tax Act — % — % (6.3 ) % Foreign taxes and other — % 0.4 % 0.2 % Income tax expense 23.4 % 25.0 % 32.9 % Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax reporting purposes. In assessing the realization of deferred tax assets, management considers the reversal of deferred tax liabilities as well as projections of future taxable income during the periods in which temporary differences are expected to reverse. Based on the consideration of these facts, the Company believes it is more likely than not that all of its gross deferred tax assets will be realized in the future, and as a result has not recorded a valuation allowance on these amounts as of December 31, 2019 and 2018. The following table presents the components of deferred income tax assets and deferred tax liabilities at December 31, 2019 and 2018: (in thousands) 2019 2018 Deferred tax assets: Definite-lived intangibles $ 20,560 $ 18,725 Share-based compensation expense 10,242 9,041 Acquisition-related costs 7,368 4,483 Change in value of consideration payable for acquisition of business 4,366 — Deferred compensation 4,429 3,185 Restructuring expenses 3,256 962 Contingent consideration arrangements 219 248 Goodwill 982 574 Debt issuance costs 1,336 — Unrealized loss on deferred compensation investments 85 536 Loss on equity method investment — 283 Other 23 92 Total deferred tax assets 52,866 38,129 Deferred tax liabilities: Indefinite-lived intangibles 56,365 41,302 Debt issuance costs — 1,101 Depreciation 1,801 1,282 Prepaid expenses 186 161 CEMP base payments interest expense — 36 Change in value of consideration payable for acquisition of business — 459 Total deferred tax liabilities 58,352 44,341 Net deferred tax asset/(liability) $ (5,486 ) $ (6,212 ) As of December 31, 2019 and 2018, the Company had no net operating loss carryforwards. As of December 31, 2017, for federal tax purposes, we had net operating loss carryforwards of $5.5 million all of which were utilized during 2018. In the normal course of business, the Company is subject to examination by federal and certain state and local tax regulators. As of December 31, 2019, U.S. federal income tax returns for 2018 are open and therefore subject to examination. State and local income tax returns filed are generally subject to examination from 2013 to 2018. We have analyzed our tax positions for all open years and have concluded that no additional provision for income tax is required in the consolidated financial statements. The following table presents the changes in gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2019, 2018 and 2017. (in thousands) 2019 2018 2017 Beginning balance $ - $ - $ - Additions for tax positions of prior years 1,703 - - Additions based on tax positions related to current year 879 - - Ending balance $ 2,582 $ - $ - The Company recognized $0.2 million in interest and penalties related to the liability for unrecognized tax benefits in its income tax provision for the year ended December 31, 2019 ($0 in 2018 and 2017). We believe it is reasonably possible that substantially all of our $2.6 million in currently remaining unrecognized tax benefits may be recognized within the next 12 months as a result of settlements with state taxing authorities. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 11. Debt 2018 Credit Agreement and Debt Refinancing On February 12, 2018, concurrently with the closing of the IPO, the Company entered into the 2018 Credit Agreement under which we received seven‑year term loans in an original aggregate principal amount of $360.0 million and established a five‑year revolving credit facility (which was unfunded as of closing) with original aggregate commitments of $50.0 million. On May 3, 2018, the 2018 Credit Agreement was amended to increase aggregate commitments for the revolving credit facility from $50.0 million to $100.0 million. Net proceeds of $355.9 million from the term loans under the 2018 Credit Agreement and $143.0 million from the IPO, as well as cash on hand of $0.8 million, were used to repay all of the indebtedness outstanding under the 2014 Credit Agreement ($499.7 million of term loans) on February 12, 2018. The 2014 Credit Agreement was terminated on this date. Original issue discount was $0.9 million for the term loans under the 2018 Credit Agreement and $0.3 million for the revolving credit facility under the 2018 Credit Agreement. The Company incurred a total of $3.7 million in arranger fees and other third party costs related to the 2018 Credit Agreement: $1.8 million was recorded as debt issuance costs and $1.9 million was expensed in general and administrative expense in the consolidated statements of operations as costs related to modified debt. The Company recognized a $6.1 million loss on debt extinguishment, which consisted of the write-off of $4.2 million in unamortized debt issuance costs and $1.9 million in unamortized debt discount. In conjunction with the May 3, 2018 amendment to the 2018 Credit Agreement, the Company incurred $0.4 million in original issue discount and legal and other fees which were recorded as debt issuance costs in other assets in the Consolidated Balance Sheets. 2019 Credit Agreement On July 1, 2019, concurrent with the USAA AMCO Acquisition, the Company (i) entered into the 2019 Credit Agreement, (ii) repaid all indebtedness outstanding under the 2018 Credit Agreement, and (iii) terminated the 2018 Credit Agreement. The 2019 Credit Agreement was entered into among Victory, as borrower, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, pursuant to which we obtained a seven-year term loan in an aggregate principal amount of $1.1 billion and established a five-year revolving credit facility (which was unfunded as of the closing date) with aggregate commitments of $100.0 million (with a $10.0 million sub-limit for the issuance of letters of credit). Amounts outstanding under the 2019 Credit Agreement bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves) plus a margin of 3.25% or an alternate base rate plus a margin of 2.25%. The obligations of the Company under the 2019 Credit Agreement are guaranteed by the USAA Acquired Companies and all of our other domestic subsidiaries (other than VCA) (the “Guarantors”) and secured by substantially all of the assets of the Company and the Guarantors, subject in each case to certain customary exceptions. The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the 2019 Credit Agreement contains a financial performance covenant, requiring a maximum first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 3.80 to 1.00. As of December 31, 2019, there were no outstanding borrowings under the revolving credit facility and we were in compliance with our financial performance covenant. Original issue discount was $11.5 million for the term loans under the 2019 Credit Agreement and $1.5 million for the revolving credit facility under the 2019 Credit Agreement. The Company incurred a total of $22.8 million in other third party costs related to the 2019 Credit Agreement and recorded $18.0 million as term loan debt issuance costs, $0.3 million as revolving credit facility debt issuance cost and $4.5 million as expense related to modified debt in general and administrative in the Consolidated Statements of Operations. A total of approximately $148.0 million of the outstanding term loans under the 2019 Credit Agreement was repaid in 2019. Subsequent to December 31, 2019, we repaid an additional $38.0 million, for a total principal debt reduction of approximately $186.0 million since July 1, 2019, thus satisfying the required principal payment of 1.00% of the original principal amount per year through the term of the loan, June 2026. During the year ended December 31, 2019, we recognized a $9.9 million loss on debt extinguishment, which consisted of the write-off of $6.3 million and $3.6 million of unamortized debt issuance costs and debt discount, respectively, due to the termination of the previous credit agreement and repayments of term loan principal. Debt extinguishment costs relating to the termination of the 2018 Credit Agreement and repayments of term loan principal under the 2019 Credit Agreement totaled $5.5 million and $4.4 million, respectively. 2020 Debt Refinancing On January 17, 2020, we entered into the First Amendment (the “First Amendment”) to the 2019 Credit Agreement Pursuant to the First Amendment, the Company refinanced the existing term loans (the “Existing Term Loans”) with replacement term loans in an aggregate principal amount of $952.0 (the “Repriced Term Loans”). The Repriced Term Loans provide for substantially the same terms as the Existing Term Loans, including the same maturity date of June 2026, except that the Repriced Term Loans provide for a reduced applicable margin on LIBOR of 75 basis points. The applicable margin on LIBOR under the Repriced Term Loans is 2.50%, compared to 3.25% under the Existing Term Loans. The following table presents the components of long-term debt in the Consolidated Balance Sheets at December 31, 2019 and 2018. Effective (in thousands) 2019 2018 Interest Rate Term Loans Due February 2025, 5.55% interest rate $ — $ 280,000 6.22 % Due June 2026, 5.35% interest rate 952,000 — 5.79 % Term loan principal outstanding 952,000 280,000 Unamortized debt issuance costs (17,230 ) (7,629 ) Unamortized debt discount (10,231 ) (3,514 ) Long-term debt $ 924,539 $ 268,857 As of December 31, 2019, the outstanding term loans under the 2019 Credit Agreement had an interest rate of 5.35% per annum. Including the impact of amortization of debt issuance costs and original issue discount described herein, the effective yield for term loans under the 2019 Credit Agreement as of December 31, 2019 was 5.79% per annum. Debt issuance costs related to the Term Loans totaled $39.6 million and $21.6 million at December 31, 2019 and 2018 and are reflected net of accumulated amortization and loss on debt extinguishment of $22.4 million and $14.0 million, respectively. Debt issuance costs of $3.7 million and $2.0 million related to the revolving credit facility are included in other assets in the Consolidated Balance Sheets and are reflected net of accumulated amortization and loss on debt extinguishment of $1.5 million and $1.2 million as of December 31, 2019 and 2018, respectively. Debt discount related to the Term Loans totaled $20.7 million and $9.2 million at December 31, 2019 and 2018 and is reflected net of accumulated amortization and loss on debt extinguishment of $10.5 million and $5.7 million, respectively. The following table presents the components of interest expense and other financing costs on the Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017. (in thousands) 2019 2018 2017 Interest expense $ 36,423 $ 17,289 $ 41,569 Amortization of debt issuance costs 2,499 1,708 3,657 Amortization of debt discount 1,200 700 1,544 Interest rate cap expense — — 767 CEMP base payment accretion expense 193 467 638 Other 586 530 292 Total $ 40,901 $ 20,694 $ 48,467 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | NOTE 12. Derivatives From time to time the Company entered into swap contracts for interest rate cap derivatives to manage interest rate risk related to a portion of its long-term debt, which were designated as cash flow hedges. The Company evaluates financial instruments and other contracts to determine if the arrangement meets the characteristics of a derivative under ASC 815, Derivatives and Hedging, and the criteria to use hedge accounting. The Company had no swap contracts for the years ended December 31, 2018 and 2019. During the year ended December 31, 2017, the Company used interest rate cap derivatives to manage interest rate risk related to a portion of its long-term debt. $0.8 million of interest expense was recognized in the Consolidated Statement of Operations for the year ended December 31, 2017 related to that interest rate cap derivative. |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Equity Method Investment | NOTE 13. Equity Method Investment On August 30, 2019, the Company sold 100% of its equity investment in Cerebellum for $10.6 million in cash and recognized $2.9 million on the gain on sale, which was recorded in interest income and other income (expense) in the Consolidated Statements of Operations. For the years ended December 31, 2019 and 2018, losses from equity method investments recorded in interest income and other income (expense) in the Consolidated Statements of Operations were not material to our consolidated results of operations. Equity method investments were recorded in other assets in the Consolidated Balance Sheets. At December 31, 2019, the Company no longer held an equity investment in Cerebellum, compared to $7.9 million, net of cumulative losses of $1.1 million, as of December 31, 2018. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity | NOTE 14. Equity Equity Structure Until the closing of the Company’s IPO on February 12, 2018, we had one class of common stock with a par value of $0.01 per share. Holders of this common stock were entitled to one vote per share. With the closing of the Company’s IPO, we authorized capital stock consisting of 400,000,000 shares of Class A common stock, $0.01 par value per share, 200,000,000 shares of Class B common stock, $0.01 par value per share, and 10,000,000 shares of “blank check” preferred stock, $0.01 par value per share. The Company incurred offering costs of $4.6 million related to the IPO and underwriter option exercise, of which $2.9 million of legal, accounting and other costs were included in prepaid expenses in the consolidated balance sheets at December 31, 2017 and were subsequently reclassified to equity issuance costs upon closing of the IPO. The Company paid $4.3 million of these offering costs in 2018. All shares of common stock outstanding, all shares of common stock held as treasury stock and all unvested restricted shares of common stock outstanding prior to the IPO were redesignated as shares of Class B common stock with a par value of $0.01 per share upon completion of the IPO. The first shares of Class A common stock were issued in the IPO; no shares of preferred stock were issued as of December 31, 2019. The rights of the holders of Class A common stock and Class B common stock are identical, except voting and conversion rights. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to ten votes. Holders of the Company’s Class A common stock and Class B common stock will generally vote together as a single class, unless otherwise required by law or the Company’s amended and restated certificate of incorporation. Each share of our Class B common stock is convertible into one share of the Company’s Class A common stock at any time, at the option of the holder, and will convert automatically upon termination of employment by an employee shareholder and upon transfers (subject to certain exceptions). Shares of our Class B common stock will convert automatically into shares of our Class A common stock at a one to one ratio upon the date the number of shares of Class B common stock then outstanding (including unvested restricted shares) is less than 10% of the aggregate number of shares of Class A common stock and Class B common stock outstanding (including unvested restricted shares). Share Rollforward The following tables present the changes in the number of shares of common stock issued and repurchased (in thousands): Shares of Common Stock Shares of Treasury Stock Class A Class B Pre-IPO Class A Class B Pre-IPO Balance, December 31, 2016 — — 56,505 — — (1,720) Issuance of common stock — — 296 — — — Vesting of restricted share grants — — 389 — — (344) Equity awards modified to liabilities — — (8) — — — Balance, December 31, 2017 — — 57,182 — — (2,064) Issuance of Class A common stock 12,811 — — — — — Redesignation of common stock — 57,185 (57,184) — (2,064) 2,064 Share conversion - Class B to A 2,467 (2,467) — — — — Repurchase of shares — — — (856) (83) — Vesting of restricted share grants — 215 2 — — — Exercise of options — 351 — — — — Shares issued under 2018 ESPP 3 — — — — — Fractional shares retired — — — — — — Balance, December 31, 2018 15,281 55,284 — (856) (2,147) — Issuance of shares 4 — — — — — Share conversion - Class B to A 2,815 (2,815) — — — — Repurchase of shares — — — (829) — — Vesting of restricted share grants — 522 — — — — Exercise of options — 946 — — — — Shares withheld related to net settlement of equity awards — — — — (509) — Balance, December 31, 2019 18,100 53,937 — (1,685) (2,656) — Share Repurchase Program The share repurchase program authorized in 2018 for $15.0 million of the Company’s Class A common stock was completed in September 2019. In August 2019, our board of directors authorized us to repurchase up to an additional $15.0 million of the Company’s Class A common stock in the open market or in privately negotiated transactions. The amount and timing of the purchases under the new program (“2019 Share Repurchase Program”) will depend on a number of factors including the price and availability of our shares, trading volume, capital availability, our performance and general economic and market conditions. The 2019 Share Repurchase Program can be suspended or discontinued at any time. As of December 31, 2019, a total of 1,685,155 shares of Class A common stock have been repurchased under the initial share repurchase program and the 2019 Share Repurchase Program at a total cost of $21.5 million for an average price of $12.77 per share. As of December 31, 2019, $8.5 million was available for future repurchases. The 2019 Share Repurchase Program expires on December 31, 2020. |
Share Based Compensation
Share Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share Based Compensation | NOTE 15. Share‑Based Compensation Equity Incentive Plans Until the IPO was completed in 2018, equity-based awards were issued to executives, directors and key employees of the Company under the Victory Capital Holdings, Inc. Equity Incentive Plan (the “2013 Plan”) and the Outside Director Equity Incentive Plan (the “Director Plan”). In connection with the IPO, the Company’s board of directors adopted, and the Company’s stockholders approved, the Victory Capital Holdings, Inc. 2018 Stock Incentive Plan (the “2018 Plan”), and the Victory Capital Holdings, Inc. 2018 Employee Stock Purchase Plan (the “2018 ESPP Plan”), each of which became effective upon the completion of the IPO. The 2018 Plan authorizes the grant of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards and other awards that may be settled in or based upon shares of our Class A common stock or Class B common stock (collectively, the “Shares”), though the Company currently intends to grant these awards based upon shares of Class B common stock. As the 2018 Plan took effect upon completion of the IPO, no further grants will be made under the 2013 Plan. A total of 1,928,987 shares outstanding out of 3,372,484 of either Class A or Class B common stock, or any combination thereof, as determined by the Compensation Committee are reserved for and available for issuance under the 2018 Plan. Shares underlying awards that are settled in cash, expire or are canceled, forfeited or otherwise terminated without delivery to a participant will again be available for issuance under the 2018 Plan. Shares withheld or surrendered in connection with the payment of an exercise price of an award or to satisfy tax withholding will again become available for issuance under the 2018 Plan. In June 2018, the Compensation Committee of the Company’s board of directors approved the terms and conditions for the first offering under the 2018 ESPP Plan. A total of 350,388 shares of Class A common stock was available to issue under the 2018 ESPP Plan. The first offering ran for eighteen months, from July 1, 2018 to December 31, 2019, and included three, six month offering periods. In October 2019, the Compensation Committee of the Company’s board of directors approved the terms and conditions for a second offering under the 2018 ESPP Plan. The second offering will run for twenty-four months from January 1, 2020 to December 31, 2021 and will include four, six month offering periods. For both the first and second offerings under the 2018 ESPP Plan, shares of Class A common stock are available for purchase at three month calendar intervals at a 5 percent discount from the market price on the purchase date, which is the last day of each calendar quarter during the offering. Amounts purchased by an individual cannot exceed $25,000 worth of stock in any given calendar year. The 2018 ESPP Plan is a non-compensatory plan and includes no option features other than employees may change their contributions or withdraw from the plan once during each six month offering period during a specified time approved by the Company. All U.S.-based employees are eligible to participate in the 2018 ESPP. As of December 31, 2019, 1,442,768 restricted share grants and 33,540 stock option awards had been issued under the 2018 Plan, and 6,716 shares of Class A common stock had been issued under the 2018 ESPP Plan. All stock option awards are considered non‑qualified. Shares of common stock subject to stock option awards granted in 2019 vest based on service over a three year period. Sixty percent of the shares of common stock subject to stock option awards granted prior to 2019 generally vest based on service; the remaining forty percent of the shares of common stock subject to each option vest upon satisfaction of various performance conditions. For certain stock option awards granted on July 29, 2016, fifty percent of the shares of common stock subject to each option vest based on service and the remaining fifty percent of the shares of common stock subject to each option vest upon satisfaction of various performance conditions. As of December 31, 2019, stock option awards to purchase an aggregate of 7,880,167 shares of common stock had been granted and were outstanding, and restricted share awards for 3,215,619 shares of common stock had been granted and were unvested. As of December 31, 2018, stock option awards to purchase an aggregate of 9,070,052 shares of common stock and restricted share awards for 2,997,856 shares of common stock had been granted and were outstanding. As of December 31, 2017, stock option awards to purchase an aggregate of 9,078,728 shares of common stock and restricted share awards for 1,293,107 shares of common stock had been granted and were outstanding. Grant Activity In 2019, the Company issued grants for 1,196,820 restricted shares of common stock and stock option awards for 31,178 shares of common stock under the 2018 Plan. The 2019 grants of restricted shares included grants for 18,943 restricted shares of common stock that were fully vested on the grant date, grants for 1,144,589 restricted shares of common stock that vest over three years and 33,288 restricted shares of common stock that vest over five years. Shares of common stock subject to the option awards granted in 2019 vest based on service over a three year period. The following tables presents activity during the years ended December 31, 2019, 2018 and 2017 related to stock option awards and restricted stock awards. Shares Subject to Stock Option Awards Year to Date Ended December 31, 2019 2018 2017 Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise grant-date exercise fair value price Units fair value price Units fair value price Units Outstanding at beginning of period $ 3.79 $ 6.12 9,070,052 $ 3.66 $ 5.71 9,078,728 $ 3.40 $ 4.90 8,669,475 Granted 7.25 17.64 31,178 6.51 14.25 359,618 6.14 13.52 774,357 Forfeited 5.01 9.68 (274,774 ) 6.39 14.00 (16,791 ) 3.02 3.81 (132,972 ) Exercised 3.19 4.24 (946,289 ) 3.01 3.56 (351,503 ) 2.54 2.45 (73,406 ) Modified to liability to be cash settled — — — — — — 2.61 2.62 (158,726 ) Outstanding at end of the period $ 3.83 $ 6.27 7,880,167 $ 3.79 $ 6.12 9,070,052 $ 3.66 $ 5.71 9,078,728 Vested $ 3.61 $ 5.59 6,724,030 $ 3.35 $ 4.76 6,653,228 $ 3.17 $ 4.19 5,731,647 Unvested 5.10 10.25 1,156,137 5.00 9.88 2,416,824 4.49 8.31 3,347,081 Total intrinsic value of stock options exercised in 2019, 2018 and 2017 was $12.8 million, $2.3 million and $0.8 million, respectively. Restricted Stock Awards For Year Ended December 31, 2019 2018 2017 Avg wtd Avg wtd Avg wtd fair value Units fair value Units fair value Units Unvested at beginning of period $ 13.17 2,997,856 $ 11.82 1,293,107 $ 9.48 1,018,228 Granted 16.27 1,196,820 13.77 1,924,691 13.52 623,165 Vested 12.83 (521,701 ) 10.42 (217,630 ) 7.99 (339,701 ) Forfeited 13.42 (457,356 ) 14.27 (2,312 ) 8.81 (8,585 ) Unvested at end of period $ 14.29 3,215,619 $ 13.17 2,997,856 $ 11.82 1,293,107 Director Plan Restricted Stock Awards For Year Ended December 31, 2019 2018 2017 Avg wtd Avg wtd Avg wtd fair value Units fair value Units fair value Units Unvested at beginning of period $ — — $ — — $ 5.71 49,230 Granted — — — — — — Vested — — — — 5.71 (49,230 ) Forfeited — — — — — — Unvested at end of period $ — — $ — — $ 5.71 — Share‑based compensation expense for equity awards is measured at the grant date, based on the estimated fair value of the award, and recognized over the requisite employee service period. Stock option awards have a ten year contractual life. In 2018, prior to the IPO, the Company issued grants for 1,678,743 restricted shares of common stock and stock option awards for 357,256 shares of common stock under the 2013 Plan. Grants for 1,609,857 restricted shares of common stock consisted of time-vested restricted shares (50%) and restricted shares that vest in three equal installments based on market conditions (achievement of certain share price targets) (50%). The time-vested portion of the restricted share awards vest over a three to five year period. For the remaining grants of 68,886 restricted shares of common stock, the shares vest based on service over a four year period. For the grants of restricted shares with market conditions, the shares vest over the derived service period of three to five years. For the stock option awards granted on January 1, 2018, sixty percent of the shares of common stock subject to each option vest based on service over a four year period; the remaining forty percent of the shares of common stock subject to each option vest upon satisfaction of various performance conditions. In 2018, after the IPO, the Company issued grants for 30,834 restricted shares of common stock that were fully vested on the grant date, grants for 202,883 restricted shares of common stock that vest over three years and 12,231 restricted shares of common stock that vest over four years. In addition, we issued stock option awards for 2,362 shares of common stock. Fifty percent of the shares of common stock subject to this option award vest based on service over a three year period; the remaining fifty percent of the shares of common stock subject to this option award vest upon achievement of certain performance and market conditions. For awards granted after the IPO, the Company used the Class A common stock closing price on the grant date as the grant date fair value of the stock. The fair value of stock option awards was determined using a number of inputs including expected volatility, which was based on a consideration of the average volatility of companies in the same or similar lines of business adjusted for differing levels of leverage and our volatility for the post-IPO period. For restricted share awards granted on March 31, 2017 and July 1, 2017, fifty percent of the shares vest on the third anniversary of the grant date and the remaining fifty percent vest upon achievement of certain share prices for the Company's stock. For restricted share awards granted on July 29, 2016 and certain stock option awards granted on July 31, 2017 and July 29, 2016, the restricted shares and the service portion of the stock option awards vest ratably at 20% per year over a five‑year period. The remaining restricted stock awards issued prior to 2019, including restricted stock awards granted on March 10, 2017, and service portion of all other stock option awards vest ratably at 25% over a four‑year period from date of grant. The performance portion of certain stock option awards granted on July 31, 2017 and July 29, 2016 vest based on achievement of revenue and AUM levels related to specific investment franchises. For all other stock option awards awarded prior to 2018, the performance portion of the awards vests upon the Company's achievement of certain revenue, assets under management, and earnings before interest, taxes, depreciation and amortization levels. The grant date fair value of stock option awards with service and performance conditions is computed using Black‑Scholes option pricing framework. The following table presents the grant date fair value of stock option awards granted during the years ended December 31, 2019, 2018 and 2017 computed using the following assumptions: 2019 2018 2017 Stock price at time of grant $ 17.64 $ 14.27 $ 13.51 Exercise price $ 17.64 $ 14.27 $ 13.51 Expected volatility 40 % 50 % 50 % Risk free rate 1.85 % 2.27 % 2.22 % Expected average years to exit 6 5 5 The fair value of stock option awards granted in 2019 was determined using a number of inputs including expected volatility, which was based on a consideration of the average volatility of companies in the same or similar lines of business adjusted for differing levels of leverage and the Company’s volatility for the post-IPO period. The expected term was determined using the simplified method detailed in SEC Staff Accounting Bulletin No. 10. For awards granted post-IPO in 2018, the Company used the Class A common stock closing price on the grant date as the grant date fair value of the stock. Prior to the IPO, the Company used both a market approach and income approach to estimate the current stock price used in the valuation of restricted share and stock option awards. The market approach considered the then current EBITDA multiples and price/earnings multiples of comparable public companies. The income approach considered management's forecast of operating results, a long-term growth rate and a discount rate. The results of the market and income approach were weighted in developing the estimate of fair value. The expected life of the options granted in 2017 was based on the average holding period for a private equity investment. The risk free interest rate was based on the yield for the U.S. Treasury coupon strip with a maturity date equal to the expected life of the award. As the Company's common shares were not publicly traded in 2017, we calculated expected volatility based on an average volatility of companies in the same or similar lines of business adjusted for differing levels of leverage. Award Modifications In 2018 and 2017, the Company's board of directors approved modifications to a limited number of stock option awards to revise performance conditions to be achieved for vesting. These modifications resulted in an adjustment to share-based compensation expense of an immaterial amount. Also in 2018 and 2017, we revised the estimate of time it expected to take to achieve the performance conditions on certain performance-vested restricted share awards. Cumulative catch up adjustments were recorded in each case so that the cumulative recognized share-based compensation cost on the performance options was equal to what would have been recognized had the new estimate been used since the grant date. Dividend Payments In February 2017, the Company declared and paid a special dividend (the “2017 Special Dividend”) of $2.19 per share. Holders of restricted shares that were unvested at the time the 2017 Special Dividend was declared are paid the 2017 Special Dividend when the restricted shares vest. The strike price per share for all stock option awards granted prior to February 2017 was reduced by $2.19 under the anti-dilution provisions of the stock option grant agreements. In December 2017, we declared a dividend of $0.23 per share (December 2017 Dividend). Holders of restricted stock awards that were unvested at the time the December 2017 Dividend was declared are paid the December 2017 Dividend when the restricted stock vests. Holders of stock options that were unvested at the time the December 2017 Dividend was declared receive a cash bonus equivalent of $0.23 per share when the stock options vest. In August 2019, the Company announced the initiation of quarterly cash dividends and paid the first quarterly dividends in September and December 2019. Holders of restricted stock awards that are unvested at the time the quarterly dividends are declared are entitled to be paid these dividends as and when the restricted stock vests. As of December 31, 2019, 2018 and 2017, the amount of cash bonuses and distributions related to dividends previously declared on restricted shares and options expected to vest in the future totaled $1.3 million, $1.8 million and $2.0 million, respectively, which is not recorded as a liability as of the balance sheet date. A liability will be recorded for these cash bonuses and dividends when the restricted shares and options vest. Share-based Compensation Expense In 2019, the Company recorded $16.3 million of share-based compensation expense related to the 2018 Plan. In 2018, the Company recorded $15.2 million of share-based compensation expense related to the 2013 Plan and 2018 Plan and in 2017, $11.8 million of share-based compensation expense related to the 2013 Plan. Share-based compensation expense is recorded in personnel compensation and benefits in the Consolidated Statements of Operations. The related tax benefits were $4.0 million, $3.8 million and $4.6 million for the fiscal years 2019, 2018, and 2017, respectively. In 2019 and 2018, we did not recognize any share-based compensation expense related to the Director Plan. In 2017, we recognized Director Plan share-based compensation expense of $0.2 million, which is recorded in general and administrative expense. As of December 31, 2019, the Company expects to recognize total share-based compensation expense of $32.6 million over a weighted average period of 1.7 years. The total fair value of restricted share awards vested during the years ended December 31, 2019, 2018 and 2017 was $9.7 million, $2.0 million and $4.6 million respectively; the fair value of restricted share awards vested under the Director Plan was $0.7 million in 2017. The aggregate intrinsic value of stock options currently exercisable at December 31, 2019, 2018 and 2017 was $103.4 million, $36.3 million and $57.8 million respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | NOTE 16. Commitments The Company leases office space and equipment under operating leases expiring at various dates. We have the right to renew or extend the leases under the agreements for certain non‑headquarter office spaces. Future calendar year minimum lease payments under the leases are as follows (in thousands): Gross Operating Net Operating Lease Commitments Sub-Leases Lease Commitments 2020 $ 7,148 $ 706 $ 6,442 2021 5,251 422 4,829 2022 4,235 432 3,803 2023 3,125 437 2,688 2024 2,258 454 1,804 Thereafter 4,370 962 3,408 Total $ 26,387 $ 3,413 $ 22,974 Rent expense for the years ended December 31, 2019, 2018 and 2017 was $4.9 million, $4.6 million, and $7.3 million, respectively, and is included in general and administrative expense in the Consolidated Statements of Operations. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | NOTE 17. Employee Benefit Plans The Company maintains a defined contribution 401(k) Plan (the “401(k) Plan”), covering substantially all employees who have met the eligibility requirements. The 401(k) Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 and the Economic Growth and Tax Relief Reconciliation Act of 2001. In 2019, 2018 and 2017 we recognized expense of $3.3 million, $2.5 million and $2.4 million in employer matched contributions, respectively. The Company sponsors a deferred compensation plan for key investment professionals and executives as a means to reward and motivate them. We purchase mutual funds as directed by the plan participants to fund its related obligations. Such securities are held in a rabbi trust for the participants, and under the terms of the trust agreement, the assets of the trust are available to satisfy the claims of our general creditors in the event of bankruptcy. In 2019, the Company created a deferred compensation plan for non-employee members of our board of directors (the “Director DC Plan”) with an effective date of January 1, 2020. Benefits payable under the Director DC Plan will be paid from our general assets. Amounts contributed under the Director DC Plan and earnings on those amounts will be subject to the claims of our general creditors. Gains and losses from fluctuations in value of deferred compensation plan investments are included in interest income and other income (expense) in the Consolidated Statements of Operations and are offset entirely by the corresponding changes in value of the deferred compensation liability, which are included in personnel compensation and benefits in the Consolidated Statements of Operations. Investments held under the deferred compensation plan are recorded as trading securities in the Consolidated Balance Sheets. The following table presents components of deferred compensation plan-related expense. (in thousands) 2019 2018 2017 Employee compensation $ 2,202 $ 3,011 $ 3,144 Employer contributions 1,017 746 791 Change in value of deferred compensation plan liability 2,603 (1,649 ) 1,267 Total $ 5,822 $ 2,108 $ 5,202 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 18. Earnings Per Share The following table sets forth the computation of basic earnings per share and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, (in thousands, except per share amounts) 2019 2018 2017 Net income $ 92,491 $ 63,704 $ 25,826 Shares: Basic weighted average common shares outstanding 67,616 66,295 54,931 Assumed conversion of dilutive instruments 5,850 4,216 4,646 Diluted weighted average common shares outstanding 73,466 70,511 59,577 Earnings per share Basic: $ 1.37 $ 0.96 $ 0.47 Diluted: $ 1.26 $ 0.90 $ 0.43 For the years ended December 31, 2019, 2018 and 2017, there were 821,544, 1,738,813 and 434,656 outstanding instruments, respectively, excluded from the above computations of weighted average shares for diluted earnings per share because the effects would be anti‑dilutive. Holders of non‑vested share‑based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards. |
Net Capital Requirements
Net Capital Requirements | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Capital Requirements [Abstract] | |
Net Capital Requirements | NOTE 19. Net Capital Requirements VCA is subject to the SEC Uniform Net Capital Rule (Rule 15c3‑1 under the Exchange Act) administered by the SEC and FINRA, which requires the maintenance of minimum net capital, as defined, and requires that the ratio of aggregate indebtedness to net capital, cannot exceed 15 to 1. Net capital and the related net capital requirement may fluctuate on a daily basis. At December 31, 2019, VCA had net capital under the Rule 15c3‑1 of $2.0 million which was $1.8 million in excess of its minimum required net capital of $0.2 million. At December 31, 2018, VCA had net capital under the Rule 15c3‑1 of $2.3 million which was $2.1 million in excess of its minimum required net capital of $0.2 million. The Company's ratio of aggregate indebtedness to net capital at December 31, 2019 and 2018 was 1.26 to 1 and 1.14 to 1 respectively. Capital requirements may limit the amount of cash available for dividend from VCA to the parent company. VCA's cash and cash equivalents are generally not available for corporate purposes. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | NOTE 20. Accumulated Other Comprehensive INCOME (Loss) The following table presents changes in accumulated other comprehensive income (loss) by component for the years ending December 31, 2019, 2018, and 2017. Available- Cumulative for-sale Cash Flow Translation (in thousands) Securities (a) Hedges (b) Adjustment Total Balance, December 31, 2016 $ (13 ) $ (462 ) $ (62 ) $ (537 ) Other comprehensive income (loss) before reclassification and tax 121 (20 ) 122 223 Tax impact (48 ) 7 (47 ) (88 ) Reclassification adjustments, before tax (15 ) 767 — 752 Tax impact 6 (292 ) — (286 ) Net current period other comprehensive income 64 462 75 601 Balance, December 31, 2017 $ 51 $ — $ 13 $ 64 Other comprehensive loss before reclassification and tax (147 ) — (53 ) (200 ) Tax impact 37 — 13 50 Reclassification adjustments, before tax — — — — Tax impact — — — — Net current period other comprehensive loss (110 ) — (40 ) (150 ) Balance, December 31, 2018 $ (59 ) $ — $ (27 ) $ (86 ) Other comprehensive income before reclassification and tax — — 32 32 Tax impact — — (8 ) (8 ) Reclassification adjustments, before tax — — — — Tax impact — — — — Net current period other comprehensive income — — 24 24 Cumulative effect of adoption of ASU 2016-01 and 2018-02 59 3 62 Balance, December 31, 2019 $ — $ — $ — $ — (1) Reclassifications out of AOCL related to available-for-sale securities are recorded in interest income and other income (expense) (2) Reclassifications out of AOCL related to cash flow hedges are recorded in interest expense and other financing costs |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | NOTE 21. Selected Quarterly Financial Data (Unaudited) The following tables present select unaudited quarterly financial results for the years ended December 31, 2019 and 2018 (in thousands, except per share amounts). Quarterly earnings per share may not always sum to the full year amounts due to the averaging of common shares outstanding. For the Quarters Ended March 31, 2019 June 30, 2019 Sep 30, 2019 Dec 31, 2019 Total revenue $ 87,479 $ 91,360 $ 214,980 $ 218,554 Operating expenses $ 65,354 $ 68,635 $ 159,407 $ 154,357 Income from operations $ 22,125 $ 22,725 $ 55,573 $ 64,197 Net income $ 14,527 $ 14,383 $ 25,992 $ 37,589 Basic earnings per share $ 0.22 $ 0.21 $ 0.38 $ 0.56 Diluted earnings per share $ 0.20 $ 0.20 $ 0.35 $ 0.51 For the Quarters Ended March 31, 2018 June 30, 2018 Sep 30, 2018 Dec 31, 2018 Total revenue $ 104,964 $ 104,399 $ 108,082 $ 95,967 Operating expenses $ 77,696 $ 74,715 $ 76,272 $ 70,210 Income from operations $ 27,268 $ 29,684 $ 31,810 $ 25,757 Net income $ 10,524 $ 18,675 $ 20,590 $ 13,915 Basic earnings per share $ 0.17 $ 0.27 $ 0.30 $ 0.21 Diluted earnings per share $ 0.16 $ 0.26 $ 0.29 $ 0.19 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 22. Subsequent Events On January 17, 2020, the Company entered into the First Amendment by and among Victory Capital Holdings, Inc., Barclays Bank PLC, as administrative agent, and the Royal Bank of Canada as fronting bank. The First Amendment refinanced the existing loan terms with replacement loan terms, which reduced the applicable margin on LIBOR by 75 basis points. Refer to Note 11, Debt, for further information on the First Amendment. Subsequent to December 31, 2019, we repaid an additional $38.0 million of the outstanding term loans under the 2019 Credit Agreement, for a total debt reduction of $186.0 million since July 1, 2019. On February 12, 2020, our Board of Directors declared a quarterly cash dividend of $0.05 per share on Victory common stock. The dividend is payable on March 25, 2020, to stockholders of record on March 10, 2020. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company prepares its consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All dollar amounts, except per share data in the text and tables herein, are stated in thousands unless otherwise indicated. |
Retroactive Adjustments for Common Stock Split | Retroactive Adjustments for Common Stock Split The Company's Board of Directors and stockholders approved a 175.194 for 1 stock split of the Company's common stock on February 1, 2018. All common share and common per share amounts in the consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this stock split (refer to Note 14, Equity, Note 15, Share Based Compensation, and Note 18, Earnings Per Share). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the operations of the Company and its wholly‑owned subsidiaries, after elimination of all significant intercompany transactions and balances. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company evaluates entities in which it invests and investment funds that it sponsors to determine whether the Company has a controlling financial interest in these entities and is required to consolidate them. A controlling financial interest generally exists if 1) the Company holds greater than 50% voting interest in entities controlled through voting interests or if 2) the Company has the ability to direct significant activities of a fund not controlled through voting interests (a variable interest entity or VIE) and the obligation to absorb losses of and/or the right to receive benefits from the VIE that could potentially be significant to the VIE. Our involvement with non‑consolidated sponsored investment funds that are considered VIEs include providing investment advisory services, fund administration, fund compliance, fund transfer agent and fund distribution services and/or holding a minority interest. At December 31, 2019, 2018 and 2017, the Company's investments in and maximum risk of loss related to unconsolidated sponsored VIE investment funds totaled $18.7 million, $12.9 million and $10.9 million respectively which are included in available‑for‑sale securities and trading securities in the Consolidated Balance Sheets. The Company has not provided financial support to these entities outside the ordinary course of business, which includes assuming operating expenses of funds for competitive or contractual reasons through fee waivers and fund expense reimbursements. We do not consolidate the sponsored investment funds in which we have an equity investment as we hold a minority interest, do not direct significant activities of these funds and do not have the right to receive benefits nor the obligation to absorb losses that could potentially be significant to these funds. During 2019 and 2018, the Company’s involvement with other non‑consolidated VIEs included an equity method investment and put and call option arrangements with Cerebellum Capital, LLC (“Cerebellum”). The put and call option arrangements ended in the first quarter of 2018. The Company sold 100% of its equity investment in Cerebellum in the third quarter of 2019. Refer to Note 13, Equity Method Investment, for further information. The Company applies the equity method of accounting to investments where it does not hold a controlling equity interest, but has the ability to exercise significant influence over operating and financial matters. In the event that management identifies an other than temporary decline in the estimated fair value of an equity method investment to an amount below its carrying value, the investment is written down to its estimated fair value. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may ultimately differ from those estimates and the differences may be material. |
Revenue Recognition | Revenue Recognition We account for revenue in accordance with Accounting Standards Update (“ASU”) 2019-04, Revenue from Contracts with Customers, which was adopted on January 1, 2019 using the modified retrospective transition method. The Company’s revenue includes fees earned from providing investment management services, fund administration services, fund compliance, fund transfer agent services and fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For further information on our various streams of revenue, refer to Note 3, Revenue. |
Distribution and Other Asset Based Expenses | Distribution and Other Asset‑Based Expenses Distribution and other asset‑based expenses include (i) broker dealer distribution fees, (ii) platform distribution fees, (iii) sub‑administration, third party sub-transfer agent and sub‑advisory expenses. These expenses are accrued on a monthly basis and are generally calculated as a percentage of AUM and vary as levels of AUM change from inflows, outflows and market movement and with the number of days in the month. Also included in distribution and other asset‑based expenses are middle office expenses. Middle office expenses are accrued on a monthly basis and vary with changes in mutual fund, institutional and wrap separate account AUM levels, the number of accounts and volume of account transaction activity. |
Restructuring and Integration Costs | Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. These costs include severance‑related expenses related to one‑time benefit arrangements and contract termination costs. A liability for restructuring costs is recognized only after management has developed a formal plan to which it has committed. The costs included in the restructuring liability are those costs that are either incremental or incurred as a direct result of the plan, or are the result of a continuing contractual obligation with no continuing economic benefit to the Company, or a penalty incurred to cancel the contractual obligation. Severance expense is recorded when management has committed to a plan for a reduction in workforce, the plan has been communicated to employees and it is unlikely that there will be significant changes to the plan. Contract termination liabilities are recorded for contract termination costs when the Company terminates a contract or stops using the product or service covered by the contract. Contract termination liabilities are recognized and measured at fair value. Contract termination costs are recorded in restructuring and integration costs in the Consolidated Statements of Operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash at banks, money market accounts and funds and short‑term liquid investments with original maturities of three months or less at the time of purchase. For the Company and certain subsidiaries, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. |
Investments | Investments Available‑For‑Sale Securities Available‑for‑sale securities include investments in affiliated mutual funds and are recorded in available‑for‑sale securities in the Consolidated Balance Sheets. Investments in available‑for‑sale securities are carried at fair value. Following the adoption of ASU 2016-01 on January 1, 2019, changes in fair value are recognized in other income (expense) in the Consolidated Statements of Operations. The cost of securities sold is determined using the specific identification method. Dividend income is accrued on the declaration date and is included in other income in the Consolidated Statements of Operations. Transactions are recorded on a trade‑date basis. The Company periodically reviews each individual security that is in an unrealized loss position to determine if the impairment is other‑than‑temporary. Factors that are considered in determining whether other‑than‑temporary declines in value have occurred include the severity and duration of the unrealized loss and our ability and intent to hold the security for a length of time sufficient to allow for recovery of such unrealized losses. Impairment charges are recorded in other income (expense) in the Consolidated Statements of Operations. No impairments were recognized as a result of such review in the years ended December 31, 2019, 2018 and 2017. Trading Securities Trading securities include investments in affiliated and third party mutual funds held in a rabbi trust under a deferred compensation plan. Trading securities are recorded at fair value in the Consolidated Balance Sheets. Changes in value in trading securities are recognized by the Company in other income (expense) in the Consolidated Statements of Operations. The Company's available‑for‑sale and trading securities are valued through the use of quoted market prices available in an active market, which is the net asset value of the funds. |
Derivative Financial Instruments | Derivative Financial Instruments From time to time the Company enters into swap contracts for interest rate cap derivatives to manage interest rate risk related to a portion of its long-term debt, which are designated as cash flow hedges. The Company evaluates financial instruments and other contracts to determine if the arrangement meets the characteristics of a derivative under ASC 815, Derivatives and Hedging, and the criteria to use hedge accounting. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is computed using the straight‑line method over the estimated useful lives of the related assets, generally three to ten years. Improvements to leased property are amortized on a straight‑line basis over the lesser of the useful life of the improvements or the term of the applicable lease. When assets are sold or retired, the related cost and accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in other income (expense) in the Consolidated Statements of Operations. Gains and losses resulting from the sale or disposal of assets as part of a restructuring plan are included in restructuring and integration costs in the Consolidated Statements of Operations. The cost of repairs and maintenance are expensed as incurred. Equipment and leasehold improvements are tested for impairment whenever changes in facts or circumstances indicate that the carrying amount of an asset may not be recoverable. |
Segment Reporting | Segment Reporting The Company operates in one business segment that provides investment management services and products to institutional, intermediary, retirement platforms and individual investors. Our determination that we had one operating segment is based on the fact that the Chief Operating Decision Maker reviews the Company's financial performance on an aggregate level. |
Goodwill | Goodwill Goodwill represents the excess cost of the acquisition over the fair value of net assets acquired in a business combination. For goodwill impairment testing purposes, the Company has determined that there is only one reporting unit. The Company tests goodwill for impairment on an annual basis, or more frequently if facts and circumstances indicate that goodwill may be impaired. Factors that could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the Company's use of the acquired assets in a business combination or strategy for the Company's overall business, and significant negative industry or economic trends. The Company conducts the annual impairment assessment as of October 1st. We use a qualitative approach to test for potential impairment of goodwill. If, after considering various factors, management determines that it is more likely than not that goodwill is impaired, a two‑step process to test for and measure impairment is performed which begins with an estimation of the fair value of the Company by considering discounted cash flows. The assumptions used to estimate fair value include management's estimates of future growth rates, operating cash flows, discount rates and terminal value. These assumptions and estimates can change in future periods based on market movement and factors impacting the expected business performance. Changes in assumptions or estimates could materially affect the determination of our fair value. If the present value of future expected cash flows falls below the recorded book value of equity, our goodwill would be considered impaired. |
Intangible Assets | Intangible Assets Intangible assets acquired in a business combination are initially recognized and measured at fair value. Intangible assets acquired by the Company outside of a business combination are initially recognized and measured based on the Company's cost to acquire the intangible assets. If a group of assets is acquired, the cost is allocated to individual assets based on their relative fair value. In valuing these assets, we make assumptions regarding useful lives and projected growth rates, and significant judgment is required. Definite‑lived intangible assets represent the value of acquired customer relationships in institutional separate accounts, collective funds, intermediary wrap separate account (wrap SMA) and unified managed account/model (UMA) programs. Definite‑lived intangible assets also include intellectual property, advisory contracts that do not have a sufficient history of annual renewal, definite-lived trade name assets, lease-related assets and non‑competition agreements. The Company amortizes definite‑lived identifiable intangible assets on a straight‑line basis over a period that is shorter than the asset's economic life as the pattern of economic benefit cannot be reliably determined. Management periodically evaluates the remaining useful lives and carrying values of the intangible assets to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include a decline in the level of managed assets, changes to contractual provisions underlying certain intangible assets and reductions in underlying operating cash flows. Should there be an indication of a change in the useful life or impairment in value of the definite‑lived intangible assets, we compare the carrying value of the asset to the projected undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to its fair value determined using discounted cash flows. The Company writes off the cost and accumulated amortization balances for all fully amortized intangible assets. Indefinite‑lived intangible assets include trade names and contracts for fund advisory, distribution and transfer agent services where the Company expects to, and has the ability to continue to manage these funds indefinitely, the contracts have annual renewal provisions, and there is a high likelihood of continued renewal based on historical experience. Trade names are considered indefinite‑lived intangible assets when they are expected to generate cash flows indefinitely. Indefinite‑lived intangible assets are reviewed for impairment annually as of October 1st using a qualitative approach which requires that positive and negative evidence collected as a result of considering various factors be weighed in order to determine whether it is more likely than not that an indefinite‑lived intangible asset is impaired. In addition, periodically management reconsiders whether events or circumstances continue to support an indefinite useful life. Indicators monitored by management that may indicate an indefinite useful life is no longer supported include a significant decline in the level of managed assets, changes to legal, regulatory or contractual provisions of the renewable investment advisory contracts and reductions in underlying operating cash flows. Indefinite-lived intangible assets are combined into a single unit of accounting for purposes of testing impairment if they operate as a single asset and represent as a group the highest and best use of the assets. If the qualitative approach indicates that it is more likely than not that an indefinite-lived intangible asset is impaired, the Company estimates the fair value of the indefinite‑lived intangible asset and compares it to the book value of the asset to determine whether an impairment charge is necessary. Impairment is indicated when the carrying value of the intangible asset exceeds its fair value. |
Investment Management Fees Receivable and Fund Administration and Distribution Fees Receivable | Investment Management Fees Receivable and Fund Administration and Distribution Fees Receivable Investment management fees receivable include investment management fees due from the Victory Funds, USAA Funds and VictoryShares and investment management fees due from non-affiliated parties. Fund administration and distribution fees receivable include administration, compliance and distribution fees due from the Victory Funds, USAA Funds and VictoryShares and transfer agent fees due from the USAA Funds. Provision for credit losses on these receivables is made in amounts required to maintain an adequate allowance to cover anticipated losses. All investment management fees receivable and fund administration and distribution fees receivable were determined to be collectible as of December 31, 2019, 2018 and 2017, and accordingly, no reserve for credit losses and no provision for credit losses were recognized as of and for the years ended December 31, 2019, 2018 and 2017. |
Other Receivables | Other Receivables Other receivables primarily include income and other taxes receivable and were determined to be collectible as of December 31, 2019, 2018 and 2017. |
Share Based Compensation Arrangements | Share‑Based Compensation Arrangements Compensation expense related to share‑based payments is measured at the grant date based on the fair value of the award. The fair value of each option granted is estimated using the Black‑Scholes option valuation model. The Black‑Scholes option valuation model incorporates assumptions as to dividend yield, expected volatility, an appropriate risk‑free interest rate and the expected life of the option. The fair value of restricted share awards with service based vesting conditions and performance based vesting conditions is based on the market price of our stock on the date of grant. The fair value of restricted share awards subject to market conditions is estimated based on a probability-weighted expected value analysis. Compensation expense is recognized on a straight‑line basis over the total vesting period of the award for the service portion of restricted share awards and stock option awards. Compensation expense is recognized on an accelerated basis over the derived service period for awards that vest based on market conditions and on an accelerated basis over the requisite service period for awards with performance conditions if it is probable that the performance conditions will be satisfied. Compensation expense is adjusted for actual forfeitures in the period the forfeiture occurs. The corresponding credit for restricted share and stock option compensation expense is recorded to additional paid in capital. When changes are made to the terms of an equity award that result in a change in the fair value of the equity award immediately before and after the change, the Company applies modification accounting, treating the change as an exchange of the original award for a new award. The calculation of the incremental value associated with the modified award is based on the excess of the fair value of the modified award over the fair value of the original award measured immediately before its terms are modified. |
Earnings Per Share | Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of shares of the Company’s common stock, Class A common stock and Class B common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of all classes of the Company’s common stock. The Company had vested and unvested stock options and unvested restricted stock grants outstanding during the periods presented and applies the treasury stock method to these securities in its calculation of diluted earnings per share. The treasury stock method assumes that the proceeds of exercise are used to purchase common stock at the average market price for the period. The Company does not have any participating securities that would require the use of the two‑class method of computing earnings per share. |
Deferred Financing Fees | Deferred Financing Fees The costs of obtaining term loan financing are capitalized in long‑term debt in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations over the term of the respective financing using the effective interest method. The costs of obtaining revolving line of credit financing are capitalized in other assets in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations on a straight‑line basis over the term of the facility. The Company has established a policy of expensing the portion of unamortized debt financing costs associated with paydowns of principal in excess of required loan amortization payments. Management considers this debt to be partially settled. Deferred financing costs expensed due to partial settlements of debt are recorded in loss on debt extinguishment in the Consolidated Statements of Operations. |
Debt Modification | Debt Modification Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred and generally are included in general and administrative expense in the Consolidated Statements of Operations. The Company expensed $4.4 million and $1.9 million in costs related to debt modifications in 2019 and 2018 upon entering into the 2019 Credit Agreement and 2018 Credit Agreement, respectively. In 2017, the Company expensed $2.2 million in costs related to debt modifications and refinancing. The analysis as to whether a modification of debt is an extinguishment or modification is performed on a creditor‑by‑creditor basis. Refer to Note 11, Debt, for further information on debt refinancings and modifications. |
Leases | Leases The Company currently leases office space and equipment under various leasing arrangements. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Leases are classified as either capital leases or operating leases, as appropriate. Lease agreements that are classified as operating leases may contain renewal options, rent escalation clauses or other inducements provided by the landlord. Rent expense is accrued to recognize lease escalation provisions and inducements provided by the landlord, if any, on a straight‑line basis over the lease term commencing when we obtain the right to control the use of the leased property. Rent expense is included in general and administrative expense in the Consolidated Statements of Operations. |
Treasury Stock | Treasury Stock Acquisitions of treasury stock are recorded at cost. Treasury stock held is reported as a deduction from stockholders' equity in the Consolidated Balance Sheets. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a specific‑identification basis. Additional paid‑in capital from treasury stock transactions is increased as the Company reissues treasury stock for more than the cost of the shares. If the Company issues treasury stock for less than its cost, additional paid‑in capital from treasury stock transactions is reduced to no less than zero. Once this account is at zero, any further required reductions are recorded to retained deficit in the Consolidated Balance Sheets. |
Foreign Currency Transactions | Foreign Currency Transactions The financial statements of the Company’s subsidiaries which operate outside of the United States (U.S.) are measured using the local currency as the functional currency. Adjustments to translate those statements into U.S. dollars are recorded in other comprehensive income (loss), which were immaterial in amount at December 31, 2019, 2018 and 2017. Transactions denominated in currencies other than the functional currency are recorded using the exchange rate on the date of the transaction. Exchange differences arising on the settlement of financial assets and liabilities are recorded in other income (expense) in the Consolidated Statements of Operations. Foreign exchange gains and losses for the years ended December 31, 2019, 2018 and 2017 were immaterial. |
Income Taxes | Income Taxes Income taxes are accounted for using the assets and liability method as required by ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax liabilities are generally attributable to indefinite‑lived intangible assets and depreciation. Deferred tax assets are generally attributable to definite‑lived intangible assets, stock compensation, deferred compensation and the benefit of uncertain tax positions. 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. The Company assesses whether a valuation allowance should be established against its deferred income tax assets based on consideration of all available evidence, both positive and negative, using a more likely than not standard. The assessment considers, among other matters, recent operating results, forecasts of future profitability, the duration of statutory carry back and carry forward periods and the Company's experience with tax attributes expiring unused. Changes in circumstances could cause the Company to revalue its deferred tax balances with the resulting change impacting the Consolidated Statements of Operations in the period of the change. The Company records income tax liabilities pursuant to ASC 740, Income Taxes, which prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de‑recognition, classification of interest and penalties, accounting in interim periods, disclosure and transition. For tax positions meeting a "more‑likely‑than‑not" threshold, the amount recognized in the financial statements is the largest amount of benefit greater than 50% likely of being sustained. The more‑likely‑than‑not threshold must continue to be met in each reporting period to support continued recognition of the benefit. The Company's accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as income taxes. Certain income tax effects of the Tax Cuts and Jobs Act enacted in December 2017 ("Tax Act") were reflected in the Company’s financial results in accordance with Staff Accounting Bulletin No. 118 (SAB 118), which provides SEC staff guidance regarding the application of ASC Topic 740, Income Taxes, in the reporting period in which the Tax Act became law. Refer to Note 10, Income Taxes. |
Loss Contingencies | Loss Contingencies The Company continuously reviews investor, client, employee or vendor complaints and pending or threatened litigation. The Company evaluates the likelihood that a loss contingency exists under the criteria of applicable accounting standards through consultation with legal counsel and records a loss contingency, inclusive of legal costs, if the contingency is probable and reasonably estimable at the date of the financial statements. |
Business Combinations | Business Combinations We account for business combinations under the acquisition method of accounting and allocate the purchase price to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values are determined in accordance with the guidance in ASC 820, Fair Value Measurement, based on valuations performed by the Company and independent valuation specialists. |
Contingent and Deferred Payment Arrangements | Contingent and Deferred Payment Arrangements The Company periodically enters into contingent and/or deferred payment arrangements in connection with its business combinations. Liabilities under contingent and deferred payment arrangements are recorded in consideration payable for acquisition of business in the Consolidated Balance Sheets. In contingent payment arrangements, the Company agrees to pay additional consideration to the sellers based on future performance, such as future net revenue levels. The Company estimates the fair value of these potential future obligations at the time a business combination is consummated and records a liability in the Consolidated Balance Sheets at estimated fair value. In deferred payment arrangements, the Company records a liability in the Consolidated Balance Sheets at the time a business combination is consummated for the present value, which is the estimated fair value, of the future fixed dollar contractual payments. Contingent payment obligations are remeasured at fair value each reporting date taking into consideration changes in expected payments, and the change in fair value is recorded in the current period as a gain or loss. Gains and losses resulting from changes in the fair value of contingent payment obligations are reflected in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The Company accretes obligations under deferred payment arrangements to their expected payment amounts over the period covered by the arrangement. Accretion expense related to deferred payment obligations is reflected in interest expense and other financing costs in the Consolidated Statements of Operations and totaled $0.2 million, $0.5 million and $0.6 million in 2019, 2018 and 2017, respectively. |
Changes, Adoption of New Accounting Standards and Recent Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Adopted in 2019 • Changes in Stockholders’ Equity for Interim Periods: Effective January 1, 2019, the Company adopted final SEC rules that extend to interim periods the annual disclosure requirement in Regulation S-X, Rule 3-04, of presenting the changes in stockholders’ equity for the current and comparative quarter in its accompanying financial statements. • Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income: Effective January 1, 2019, the Company adopted ASU 2018-02 which provides the optional election for the reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The adoption of ASU 2018-02 resulted in a reclassification between accumulated other comprehensive income/(loss) and retained earnings of $0.1 million, and had no impact on the Consolidated Statements of Operations. • Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments: Effective January 1, 2019, the Company adopted ASU 2016‑15 which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The application of this guidance did not have an impact on the presentation of our Consolidated Statements of Cash Flows. • Recognition and Measurement of Financial Assets and Liabilities: Effective January 1, 2019, the Company adopted ASU 2016‑01 which requires equity securities to be measured at fair value with the changes in fair value recognized in net income. The adoption of ASU 2016-01 did not have a material impact on our financial condition, results of operations or cash flows. • Revenue from Contracts with Customers: Effective January 1, 2019, the Company adopted ASU 2014-09 which requires the evaluation of contracts based on the following five-step model: (i) identify the contract with the customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue as each performance obligation is satisfied. We adopted ASU 2014-09 using the modified retrospective transition method. No cumulative effect adjustment was required to be recorded and the comparative information has not been restated. We determined that ASU 2014-09 did not have a material impact on the timing of revenue recognition. The most significant impact from adoption was a change to the net presentation of certain fund expense reimbursements which were previously presented on a gross basis. For further discussion on the effects of the changes in the presentation of fund expense reimbursements, refer to Note 3, Revenue Recognition. Recently Issued Accounting Standards • Subsequent Measurement of Goodwill: In January 2017, the Financial Accounting Standards Board (the “FASB”) issued ASU 2017-04 which simplifies the test for goodwill impairment. ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill (step two) to measure a goodwill impairment charge. Goodwill impairment will be based upon the results of step one of the impairment test, which is defined as the excess of the carrying amount of a reporting unit over its fair value, not to exceed the carrying amount of goodwill allocated to that reporting unit. The effective date for calendar-year public business entities was January 1, 2020. The new guidance will be effective for the Company’s fiscal year that begins on January 1, 2021 and requires a prospective approach to adoption. Early adoption is permitted for interim or annual goodwill impairment tests. The impact of this new guidance will depend upon the performance of our one reporting unit and the market conditions impacting the fair value. • Leases: In February 2016, the FASB issued ASU 2016‑02, “Leases (Topic 842)” (the “New Lease Standard”) which supersedes previous lease guidance, Accounting Standards Codification (“ASC”) Topic 840. The New Lease Standard requires lessees to recognize a right-of-use asset and a lease liability for all leases (with the exception of short-term leases) on their balance sheet at the commencement date and recognize expenses on their income statement similar to ASC Topic 840 guidance. In addition, the FASB issued ASU 2018-11, “Leases Targeted Improvements” which provides a package of practical expedients for entities to apply upon adoption. The Company is currently assessing and evaluating our portfolio of active real estate leases and surveying our business for other leases. Additionally, we are analyzing various lease accounting software solutions to support the new reporting requirements. The effective date for calendar-year public business entities was January 1, 2019. In November 2019, the FASB deferred the effective date of the New Lease Standard for private companies and other companies who had not yet been required to adopt the standard. As a result, the Company will adopt the New Lease Standard on January 1, 2021. We have approximately $23 million in undiscounted, future minimum cash commitments under net operating leases at December 31, 2019. The New Lease Standard is expected to result in a gross up on our Consolidated Balance Sheets and to have no material impact to our Consolidated Statements of Operations, our liquidity or our debt covenant compliance under our current credit agreement. • Expected Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments. ASU 2016-13 creates a new model for determining current expected credit losses (“CECL”) on trade and other receivables, net investments in leases, contract assets and long-term receivables. The CECL impairment model requires companies to consider the risk of loss even if it is remote and to include forecasts of future economic conditions as well as information about past events and current conditions. The effective date for calendar-year public business entities is January 1, 2020. The Company will adopt ASU 2016-13 on January 1, 2021. We are currently reviewing the effect of this new standard on our consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Type and Product | Year Ended December 31, (in thousands) 2019 2018 2017 Investment management fees Mutual funds (Victory/USAA Funds) $ 355,969 $ 248,771 $ 246,722 ETFs (VictoryShares) 10,422 8,999 4,936 Separate accounts and other vehicles 99,726 93,043 90,963 Performance-based fees Separate accounts and other vehicles 685 1,870 1,190 Total investment management fees $ 466,802 $ 352,683 $ 343,811 Fund administration and distribution fees Administration fees Mutual funds (Victory/USAA Funds) $ 71,131 $ 22,527 $ 21,820 ETFs (VictoryShares) 1,317 949 463 Distribution fees Mutual funds (Victory/USAA Funds) 30,356 37,253 43,535 Transfer agent fees Mutual funds (USAA Funds) 42,767 — — Total fund administration and distribution fees $ 145,571 $ 60,729 $ 65,818 Total revenue $ 612,373 $ 413,412 $ 409,629 |
Schedule of Balances of Receivables from Contracts with Customers | (in thousands) December 31, 2019 December 31, 2018 Customer receivables Mutual funds (Victory/USAA Funds) $ 64,407 $ 21,025 ETFs (VictoryShares) 1,391 909 Separate accounts and other vehicles 27,836 19,199 Receivables from contracts with customers 93,634 41,133 Non-customer receivables 1,459 2,987 Total receivables $ 95,093 $ 44,120 Investment management fees receivable $ 74,321 $ 37,980 Fund administration and distribution fees receivable 19,313 3,153 Other receivables 1,459 2,987 Total receivables $ 95,093 $ 44,120 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions | |
Summary of Revenue Subsequent to Acquisition | Revenue of the USAA Acquired Companies subsequent to the effective closing date of July 1, 2019 for the six months ended December 31, 2019, was as follows: Unaudited Six Months Ended (in millions) December 31, 2019 Revenue $ 244.5 |
Summary of Unaudited Pro Forma Information | Unaudited Twelve Months Ended December 31, (in thousands, except per share amount) 2019 2018 Revenue $ 851,440 $ 906,844 Net income 114,988 71,471 Earnings per share of common stock Basic $ 1.70 $ 1.08 Diluted $ 1.56 $ 1.01 Weighted average number of shares outstanding Basic 67,693 66,295 Diluted 73,612 70,511 |
Summary of Rollforward of Restructuring and Integration Liabilities | The following table presents a rollforward of restructuring and integration liabilities: (in millions) 2019 2018 2017 Liability balance, beginning of period $ 0.1 $ 0.1 $ 7.4 Severance expense USAA AMCO Acquisition 6.2 — — RS Investments — — 0.5 Other — 0.7 0.3 Contract termination expense RS Investments — — 5.0 USAA AMCO Acquisition 0.2 — — Integration costs 2.3 — 0.4 Restructuring and integration costs 8.7 0.7 6.2 Settlement of liabilities (5.8 ) (0.7 ) (13.5 ) Liability balance, end of period $ 3.0 $ 0.1 $ 0.1 Accrued expenses $ 2.9 $ 0.1 $ 0.1 Other liabilities 0.1 — — Liability balance, end of period $ 3.0 $ 0.1 $ 0.1 |
Summary of Business Acquisition Related Cost | Acquisition-related costs (in thousands) 2019 2018 2017 USAA AMCO $ 21,333 $ 3,180 $ - Harvest 895 1,116 - RS Investments - - 355 Other 89 50 1,739 $ 22,317 $ 4,346 $ 2,094 |
USAA AMCO | |
Acquisitions | |
Summary of Allocation of Purchase Price | The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Cash and cash equivalents $ 17,473 Investment management fees receivable 25,353 Fund administration and distribution fees receivable 4,779 Other receivables and prepaid expenses 948 Property and equipment 1,165 Other intangible assets (1) 808,670 Goodwill 120,643 Accounts payable and accrued expenses (5,575 ) Accrued compensation and benefits (5,907 ) Payable to members and custodians (17,473 ) Contingent consideration payable to sellers (98,800 ) Cash paid at closing $ 851,276 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Measured at Fair Value on Recurring Basis | The following table presents financial liabilities measured at fair value on a recurring basis: As of December 31, 2019 (in thousands) Total Level 1 Level 2 Level 3 Contingent consideration arrangements $ (118,700 ) $ - $ - $ (118,700 ) As of December 31, 2018 (in thousands) Total Level 1 Level 2 Level 3 Contingent consideration arrangements $ (716 ) $ - $ - $ (716 ) |
Summary of Contingent Consideration | The following table presents the balance of the contingent consideration arrangement liabilities at December 31, 2019, 2018 and 2017, respectively. (in thousands) Contingent Consideration Liabilities Balance, December 31, 2017 $ (1,195 ) CEMP change in fair value measurement 37 CEMP year 3 earn-out payment 442 Balance, December 31, 2018 $ (716 ) CEMP change in fair value measurement 14 CEMP year 4 earn-out payment 702 USAA AMCO estimated liability as of closing date (98,800 ) USAA AMCO change in fair value measurement (19,900 ) Balance, December 31, 2019 $ (118,700 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | (in thousands) 2019 2018 Related party assets Cash and cash equivalents $ 10,060 $ — Receivables (investment management fees) 47,872 19,612 Receivables (fund administration and distribution fees) 19,313 3,153 Investments (available-for-sale securities, fair value) 771 601 Investments (trading securities, fair value) 17,914 12,343 Total $ 95,930 $ 35,709 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 4,316 $ 2,300 Other liabilities (promissory note) — 96 Total $ 4,316 $ 2,396 Year ended December 31, (in thousands) 2019 2018 2017 Related party revenue Investment management fees (1) $ 371,807 $ 261,538 $ 254,318 Fund administration and distribution fees 145,571 60,729 65,818 Total $ 517,378 $ 322,267 $ 320,136 Related party expense Distribution and other asset-based expenses (fund reimbursements) (1) $ — $ 12,902 $ 11,896 General and administrative — 135 1,203 Total $ — $ 13,037 $ 13,099 Related party other income (expense) Interest income (expense) and other income (expense) $ 2,693 $ (2,834 ) $ 589 Interest expense and other financing costs (promissory note) (1 ) (18 ) (39 ) Total $ 2,692 $ (2,852 ) $ 550 (1) Effective January 1, 2019, upon the adoption of ASU 2014-09, expense reimbursements have been reclassified to investment management fees. This change in presentation reduced revenue, and operating expenses, by $18.7 million year for the ended December 31, 2019. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Available For Sale Securities | |
Gain (Loss) on Securities [Line Items] | |
Summary of Cost and Fair Value of Investments | The following table presents a summary of the cost and fair value of investments classified as available-for-sale: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2019 $ 696 $ 85 $ (10 ) $ 771 As of December 31, 2018 666 6 (71 ) 601 |
Summary of Proceeds and Realized Gains and Losses | The following table presents proceeds and realized gains and losses recognized during the years ended December 31, 2019, 2018 and 2017: Sale Realized (in thousands) Proceeds Gains (Losses) For the year ending December 31, 2019 $ 158 $ 6 $ — For the year ending December 31, 2018 — — — For the year ending December 31, 2017 79 15 — |
Trading Securities | |
Gain (Loss) on Securities [Line Items] | |
Summary of Cost and Fair Value of Investments | The following table presents a summary of the cost and fair value of investments classified as trading securities: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2019 $ 18,670 $ 733 $ (1,098 ) $ 18,305 As of December 31, 2018 14,874 5 (2,160 ) 12,719 |
Summary of Proceeds and Realized Gains and Losses | The following table presents proceeds and realized gains and losses recognized during the years ended December 31, 2019, 2018 and 2017: Sale Realized Proceeds Gains (Losses) For the year ending December 31, 2019 $ 2,749 $ 22 $ (71 ) For the year ending December 31, 2018 2,772 37 (73 ) For the year ending December 31, 2017 5,166 159 (34 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | The following table presents property and equipment as of December 31, 2019 and 2018: As of December 31, (in thousands) 2019 2018 Equipment, purchased software and implementation costs $ 21,548 $ 17,071 Leasehold improvements 2,854 3,209 Furniture and fixtures 2,631 1,541 Total 27,033 21,821 Accumulated depreciation and amortization (13,793 ) (13,041 ) Total property and equipment, net $ 13,240 $ 8,780 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The following table presents changes in the goodwill balance from December 31, 2018 to December 31, 2019: As of December 31, (in thousands) 2019 2018 Balance, beginning of period $ 284,108 $ 284,108 Goodwill recorded in acquisition 120,642 — Balance, end of period $ 404,750 $ 284,108 |
Summary of Definite Lived Intangible Assets | The following table presents a summary of definite‑lived intangible assets by type: Fund Intellectual Customer Advisory Trade Property/ (in thousands) Relationships Contracts Names Other Totals Gross book value - December 31, 2018 $ 123,200 $ 2,368 $ 1,132 $ 7,177 $ 133,877 Accumulated amortization (103,207 ) (2,368 ) (283 ) (6,940 ) (112,798 ) Net book value - December 31, 2018 $ 19,993 $ — $ 849 $ 237 $ 21,079 Weighted average useful life (yrs) 0.8 — 1.5 0.2 0.8 Gross book value - December 31, 2019 $ 123,200 $ 2,368 $ 39,332 $ 7,547 $ 172,447 Accumulated amortization (118,577 ) (2,368 ) (5,607 ) (7,124 ) (133,676 ) Net book value - December 31, 2019 $ 4,623 $ — $ 33,725 $ 423 $ 38,771 Weighted average useful life (yrs) 0.2 — 3.1 0.1 3.4 |
Summary of Estimated Amortization Expense for Definite Lived Intangible Assets | The following table presents estimated amortization expense for definite‑lived intangible assets for each of the five succeeding years and thereafter: 2020 $ 12,830 2021 11,271 2022 9,568 2023 4,855 2024 143 Thereafter 104 Total $ 38,771 |
Schedule of Indefinite-lived Intangible Assets by Type | The following table presents a summary of indefinite‑lived intangible assets by type: Fund Advisory, Transfer Agent and Distribution Trade (in thousands) Contracts Names Totals December 31, 2017 balance $ 342,900 $ 24,832 $ 367,732 Additions or transfers — (1,132 ) (1,132 ) December 31, 2018 balance $ 342,900 $ 23,700 $ 366,600 Additions or transfers 770,100 — 770,100 December 31, 2019 balance $ 1,113,000 $ 23,700 $ 1,136,700 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Income Taxes | The following table presents the provision for income taxes for the years ended December 31, 2019, 2018 and 2017: (in thousands) 2019 2018 2017 Current tax expense (benefit): Federal $ 22,234 $ 13,130 $ 640 State 6,656 3,944 779 Foreign 52 17 22 Total current tax expense (benefit) 28,942 17,091 1,441 Deferred tax expense (benefit): Federal (449 ) 3,577 9,162 State (289 ) 549 2,010 Foreign (7 ) (10 ) 19 Total deferred tax expense (benefit) (745 ) 4,116 11,191 Income tax expense $ 28,197 $ 21,207 $ 12,632 |
Summary of Effective Tax Rate | The effective tax rate for the years ended December 31, 2019 and 2018 differs from the United States federal statutory rate primarily as a result of state and local income taxes and excess tax benefits on share-based compensation, and for 2019, expense related to recording an uncertain tax position (“UTP”) liability for unrecognized tax benefits. In 2017, the effective tax rate differed from the United States federal statutory rate primarily as a result of state and local income taxes and the remeasurement of net deferred tax liabilities upon enactment of the Tax Act. The following table presents the tax rates for the years ended December 31, 2019, 2018 and 2017. 2019 2018 2017 Federal income tax at U.S. statutory rate 21.0 % 21.0 % 35.0 % State income tax rate, net of federal tax benefit 3.3 % 4.1 % 4.0 % UTP liability 1.9 % — % — % Excess tax benefits on share-based compensation (2.8 ) % (0.5 ) % — % Remeasurement of deferred taxes due to Tax Act — % — % (6.3 ) % Foreign taxes and other — % 0.4 % 0.2 % Income tax expense 23.4 % 25.0 % 32.9 % |
Summary of Components of Deferred Income Tax Assets and Liabilities | The following table presents the components of deferred income tax assets and deferred tax liabilities at December 31, 2019 and 2018: (in thousands) 2019 2018 Deferred tax assets: Definite-lived intangibles $ 20,560 $ 18,725 Share-based compensation expense 10,242 9,041 Acquisition-related costs 7,368 4,483 Change in value of consideration payable for acquisition of business 4,366 — Deferred compensation 4,429 3,185 Restructuring expenses 3,256 962 Contingent consideration arrangements 219 248 Goodwill 982 574 Debt issuance costs 1,336 — Unrealized loss on deferred compensation investments 85 536 Loss on equity method investment — 283 Other 23 92 Total deferred tax assets 52,866 38,129 Deferred tax liabilities: Indefinite-lived intangibles 56,365 41,302 Debt issuance costs — 1,101 Depreciation 1,801 1,282 Prepaid expenses 186 161 CEMP base payments interest expense — 36 Change in value of consideration payable for acquisition of business — 459 Total deferred tax liabilities 58,352 44,341 Net deferred tax asset/(liability) $ (5,486 ) $ (6,212 ) |
Schedule of Changes in Gross Unrecognized Tax Benefits Excluding Interest And Penalties | The following table presents the changes in gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2019, 2018 and 2017. (in thousands) 2019 2018 2017 Beginning balance $ - $ - $ - Additions for tax positions of prior years 1,703 - - Additions based on tax positions related to current year 879 - - Ending balance $ 2,582 $ - $ - |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Long-Term Debt | Effective (in thousands) 2019 2018 Interest Rate Term Loans Due February 2025, 5.55% interest rate $ — $ 280,000 6.22 % Due June 2026, 5.35% interest rate 952,000 — 5.79 % Term loan principal outstanding 952,000 280,000 Unamortized debt issuance costs (17,230 ) (7,629 ) Unamortized debt discount (10,231 ) (3,514 ) Long-term debt $ 924,539 $ 268,857 |
Schedule of Components of Interest Expense and Other Financing Costs | (in thousands) 2019 2018 2017 Interest expense $ 36,423 $ 17,289 $ 41,569 Amortization of debt issuance costs 2,499 1,708 3,657 Amortization of debt discount 1,200 700 1,544 Interest rate cap expense — — 767 CEMP base payment accretion expense 193 467 638 Other 586 530 292 Total $ 40,901 $ 20,694 $ 48,467 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased | The following tables present the changes in the number of shares of common stock issued and repurchased (in thousands): Shares of Common Stock Shares of Treasury Stock Class A Class B Pre-IPO Class A Class B Pre-IPO Balance, December 31, 2016 — — 56,505 — — (1,720) Issuance of common stock — — 296 — — — Vesting of restricted share grants — — 389 — — (344) Equity awards modified to liabilities — — (8) — — — Balance, December 31, 2017 — — 57,182 — — (2,064) Issuance of Class A common stock 12,811 — — — — — Redesignation of common stock — 57,185 (57,184) — (2,064) 2,064 Share conversion - Class B to A 2,467 (2,467) — — — — Repurchase of shares — — — (856) (83) — Vesting of restricted share grants — 215 2 — — — Exercise of options — 351 — — — — Shares issued under 2018 ESPP 3 — — — — — Fractional shares retired — — — — — — Balance, December 31, 2018 15,281 55,284 — (856) (2,147) — Issuance of shares 4 — — — — — Share conversion - Class B to A 2,815 (2,815) — — — — Repurchase of shares — — — (829) — — Vesting of restricted share grants — 522 — — — — Exercise of options — 946 — — — — Shares withheld related to net settlement of equity awards — — — — (509) — Balance, December 31, 2019 18,100 53,937 — (1,685) (2,656) — |
Share Based Compensation (Table
Share Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Activity Related to Stock Options Awards, Restricted Stock Awards and Director Plan Restricted Stock Awards | The following tables presents activity during the years ended December 31, 2019, 2018 and 2017 related to stock option awards and restricted stock awards. Shares Subject to Stock Option Awards Year to Date Ended December 31, 2019 2018 2017 Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise grant-date exercise fair value price Units fair value price Units fair value price Units Outstanding at beginning of period $ 3.79 $ 6.12 9,070,052 $ 3.66 $ 5.71 9,078,728 $ 3.40 $ 4.90 8,669,475 Granted 7.25 17.64 31,178 6.51 14.25 359,618 6.14 13.52 774,357 Forfeited 5.01 9.68 (274,774 ) 6.39 14.00 (16,791 ) 3.02 3.81 (132,972 ) Exercised 3.19 4.24 (946,289 ) 3.01 3.56 (351,503 ) 2.54 2.45 (73,406 ) Modified to liability to be cash settled — — — — — — 2.61 2.62 (158,726 ) Outstanding at end of the period $ 3.83 $ 6.27 7,880,167 $ 3.79 $ 6.12 9,070,052 $ 3.66 $ 5.71 9,078,728 Vested $ 3.61 $ 5.59 6,724,030 $ 3.35 $ 4.76 6,653,228 $ 3.17 $ 4.19 5,731,647 Unvested 5.10 10.25 1,156,137 5.00 9.88 2,416,824 4.49 8.31 3,347,081 Total intrinsic value of stock options exercised in 2019, 2018 and 2017 was $12.8 million, $2.3 million and $0.8 million, respectively. Restricted Stock Awards For Year Ended December 31, 2019 2018 2017 Avg wtd Avg wtd Avg wtd fair value Units fair value Units fair value Units Unvested at beginning of period $ 13.17 2,997,856 $ 11.82 1,293,107 $ 9.48 1,018,228 Granted 16.27 1,196,820 13.77 1,924,691 13.52 623,165 Vested 12.83 (521,701 ) 10.42 (217,630 ) 7.99 (339,701 ) Forfeited 13.42 (457,356 ) 14.27 (2,312 ) 8.81 (8,585 ) Unvested at end of period $ 14.29 3,215,619 $ 13.17 2,997,856 $ 11.82 1,293,107 Director Plan Restricted Stock Awards For Year Ended December 31, 2019 2018 2017 Avg wtd Avg wtd Avg wtd fair value Units fair value Units fair value Units Unvested at beginning of period $ — — $ — — $ 5.71 49,230 Granted — — — — — — Vested — — — — 5.71 (49,230 ) Forfeited — — — — — — Unvested at end of period $ — — $ — — $ 5.71 — |
Summary of Grant Date Fair Value of Stock Option Awards | The following table presents the grant date fair value of stock option awards granted during the years ended December 31, 2019, 2018 and 2017 computed using the following assumptions: 2019 2018 2017 Stock price at time of grant $ 17.64 $ 14.27 $ 13.51 Exercise price $ 17.64 $ 14.27 $ 13.51 Expected volatility 40 % 50 % 50 % Risk free rate 1.85 % 2.27 % 2.22 % Expected average years to exit 6 5 5 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Future Calendar Year Minimum Lease Payments | Future calendar year minimum lease payments under the leases are as follows (in thousands): Gross Operating Net Operating Lease Commitments Sub-Leases Lease Commitments 2020 $ 7,148 $ 706 $ 6,442 2021 5,251 422 4,829 2022 4,235 432 3,803 2023 3,125 437 2,688 2024 2,258 454 1,804 Thereafter 4,370 962 3,408 Total $ 26,387 $ 3,413 $ 22,974 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Summary of components of deferred compensation plan-related expense | The following table presents components of deferred compensation plan-related expense. (in thousands) 2019 2018 2017 Employee compensation $ 2,202 $ 3,011 $ 3,144 Employer contributions 1,017 746 791 Change in value of deferred compensation plan liability 2,603 (1,649 ) 1,267 Total $ 5,822 $ 2,108 $ 5,202 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic Earnings Per Share and Diluted Earnings Per Share | The following table sets forth the computation of basic earnings per share and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, (in thousands, except per share amounts) 2019 2018 2017 Net income $ 92,491 $ 63,704 $ 25,826 Shares: Basic weighted average common shares outstanding 67,616 66,295 54,931 Assumed conversion of dilutive instruments 5,850 4,216 4,646 Diluted weighted average common shares outstanding 73,466 70,511 59,577 Earnings per share Basic: $ 1.37 $ 0.96 $ 0.47 Diluted: $ 1.26 $ 0.90 $ 0.43 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income/(Loss) by Component | The following table presents changes in accumulated other comprehensive income (loss) by component for the years ending December 31, 2019, 2018, and 2017. Available- Cumulative for-sale Cash Flow Translation (in thousands) Securities (a) Hedges (b) Adjustment Total Balance, December 31, 2016 $ (13 ) $ (462 ) $ (62 ) $ (537 ) Other comprehensive income (loss) before reclassification and tax 121 (20 ) 122 223 Tax impact (48 ) 7 (47 ) (88 ) Reclassification adjustments, before tax (15 ) 767 — 752 Tax impact 6 (292 ) — (286 ) Net current period other comprehensive income 64 462 75 601 Balance, December 31, 2017 $ 51 $ — $ 13 $ 64 Other comprehensive loss before reclassification and tax (147 ) — (53 ) (200 ) Tax impact 37 — 13 50 Reclassification adjustments, before tax — — — — Tax impact — — — — Net current period other comprehensive loss (110 ) — (40 ) (150 ) Balance, December 31, 2018 $ (59 ) $ — $ (27 ) $ (86 ) Other comprehensive income before reclassification and tax — — 32 32 Tax impact — — (8 ) (8 ) Reclassification adjustments, before tax — — — — Tax impact — — — — Net current period other comprehensive income — — 24 24 Cumulative effect of adoption of ASU 2016-01 and 2018-02 59 3 62 Balance, December 31, 2019 $ — $ — $ — $ — (1) Reclassifications out of AOCL related to available-for-sale securities are recorded in interest income and other income (expense) (2) Reclassifications out of AOCL related to cash flow hedges are recorded in interest expense and other financing costs |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
Summary of Unaudited Quarterly Financial Results | Quarterly earnings per share may not always sum to the full year amounts due to the averaging of common shares outstanding. For the Quarters Ended March 31, 2019 June 30, 2019 Sep 30, 2019 Dec 31, 2019 Total revenue $ 87,479 $ 91,360 $ 214,980 $ 218,554 Operating expenses $ 65,354 $ 68,635 $ 159,407 $ 154,357 Income from operations $ 22,125 $ 22,725 $ 55,573 $ 64,197 Net income $ 14,527 $ 14,383 $ 25,992 $ 37,589 Basic earnings per share $ 0.22 $ 0.21 $ 0.38 $ 0.56 Diluted earnings per share $ 0.20 $ 0.20 $ 0.35 $ 0.51 For the Quarters Ended March 31, 2018 June 30, 2018 Sep 30, 2018 Dec 31, 2018 Total revenue $ 104,964 $ 104,399 $ 108,082 $ 95,967 Operating expenses $ 77,696 $ 74,715 $ 76,272 $ 70,210 Income from operations $ 27,268 $ 29,684 $ 31,810 $ 25,757 Net income $ 10,524 $ 18,675 $ 20,590 $ 13,915 Basic earnings per share $ 0.17 $ 0.27 $ 0.30 $ 0.21 Diluted earnings per share $ 0.16 $ 0.26 $ 0.29 $ 0.19 |
Organization and Nature of Bu_2
Organization and Nature of Business - Additional Information (Details) $ / shares in Units, $ in Millions | Jan. 17, 2020USD ($) | Jul. 01, 2019USD ($) | Mar. 13, 2018USD ($)shares | Feb. 12, 2018USD ($)$ / sharesshares | Dec. 31, 2019$ / shares | Dec. 31, 2018$ / shares | May 03, 2018USD ($) | Dec. 31, 2017$ / shares |
Subsidiary Sale Of Stock [Line Items] | ||||||||
Share price | $ / shares | $ 17.64 | $ 14.27 | $ 13.51 | |||||
Subsequent Event | London Interbank Offered Rate (LIBOR) | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Base spread (as a percent) | 0.75% | |||||||
Term Loans | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Debt Term | 7 years | 7 years | ||||||
Principal amount | $ 1,100 | $ 360 | ||||||
Term Loans | London Interbank Offered Rate (LIBOR) | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Base spread (as a percent) | 3.25% | |||||||
Revolving Credit Facility | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Debt Term | 5 years | 5 years | ||||||
Amount of revolving credit facility | $ 100 | $ 50 | $ 100 | |||||
Repriced Term Loans | Subsequent Event | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Principal amount | $ 952 | |||||||
Basis spread on variable rate, increase (decrease) | 0.75% | |||||||
Debt instrument interest rate description | Repriced Term Loans provide for a reduced applicable margin on LIBOR of 75 basis points. | |||||||
Debt maturity date | 2026-06 | |||||||
Repriced Term Loans | Subsequent Event | London Interbank Offered Rate (LIBOR) | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Base spread (as a percent) | 2.50% | |||||||
IPO | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Proceeds received from issuance of shares | $ 156.5 | |||||||
Conversion ratio of common stock to Class B common stock | 1 | |||||||
IPO | Class A | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Number of shares issued | shares | 11,700,000 | |||||||
Share price | $ / shares | $ 13 | |||||||
Proceeds received from issuance of shares | $ 143 | |||||||
Underwriter's Option | Class A | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Number of shares issued | shares | 1,110,860 | |||||||
Proceeds received from issuance of shares | $ 13.5 |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Details) | Jan. 01, 2019USD ($) | Feb. 01, 2018 | Sep. 30, 2019 | Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Significant Accounting Policies [Line Items] | ||||||
Stock split | 1.75194 | |||||
Maximum risk of loss related to unconsolidated sponsored VIE investment funds | $ 18,700,000 | $ 12,900,000 | $ 10,900,000 | |||
Impairments of investments | $ 0 | 0 | 0 | |||
Number of operating segments | Segment | 1 | |||||
Reserve for credit losses | $ 0 | 0 | 0 | |||
Provision for credit losses | 0 | 0 | 0 | |||
Costs expensed related to debt modifications and refinancing | 2,200,000 | |||||
Accretion expense related to deferred payment obligations | 200,000 | 500,000 | $ 600,000 | |||
Cumulative effect of adoption of ASU | $ 1,818,000 | |||||
Future minimum cash commitments under operating leases | 22,974,000 | |||||
ASU 2018-02 | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cumulative effect of adoption of ASU | $ 100,000 | |||||
2019 Credit Agreement | ||||||
Significant Accounting Policies [Line Items] | ||||||
Costs expensed related to debt modifications | 4,400,000 | |||||
2018 Credit Agreement | ||||||
Significant Accounting Policies [Line Items] | ||||||
Costs expensed related to debt modifications | $ 1,900,000 | |||||
Cerebellum Capital, LLC | ||||||
Significant Accounting Policies [Line Items] | ||||||
Percentage of equity method investment sold | 100.00% |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue by Type and Product (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of revenue | |||
Total revenue | $ 612,373 | $ 413,412 | $ 409,629 |
Investment Management Fees | |||
Disaggregation of revenue | |||
Total revenue | 466,802 | 352,683 | 343,811 |
Investment Management Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 355,969 | 248,771 | 246,722 |
Investment Management Fees | ETF's | |||
Disaggregation of revenue | |||
Total revenue | 10,422 | 8,999 | 4,936 |
Investment Management Fees | Separate Accounts and Other Vehicles | |||
Disaggregation of revenue | |||
Total revenue | 99,726 | 93,043 | 90,963 |
Performance-based Investment Fees | Separate Accounts and Other Vehicles | |||
Disaggregation of revenue | |||
Total revenue | 685 | 1,870 | 1,190 |
Administration Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 71,131 | 22,527 | 21,820 |
Administration Fees | ETF's | |||
Disaggregation of revenue | |||
Total revenue | 1,317 | 949 | 463 |
Fund Distribution Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 30,356 | 37,253 | 43,535 |
Transfer Agent Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 42,767 | ||
Fund Administration and Distribution Fees | |||
Disaggregation of revenue | |||
Total revenue | $ 145,571 | $ 60,729 | $ 65,818 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Class C | |
Disaggregation of revenue | |
Upfront sales commission percentage | 1.00% |
ASU 2014-09 | |
Disaggregation of revenue | |
Change in revenue | $ 18.7 |
Change in operating expense | $ 18.7 |
Revenue - Schedule of Balances
Revenue - Schedule of Balances of Receivables from Contracts with Customers (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 93,634 | $ 41,133 |
Non-customer receivables | 1,459 | 2,987 |
Total receivables | 95,093 | 44,120 |
Investment management fees receivable | 74,321 | 37,980 |
Fund administration and distribution fees receivable | 19,313 | 3,153 |
Other receivables | 1,459 | 2,987 |
Mutual Funds | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 64,407 | 21,025 |
ETF's | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 1,391 | 909 |
Separate Accounts and Other Vehicles | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 27,836 | $ 19,199 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | Jul. 01, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 21, 2018 |
Acquisitions | ||||||
Contingent consideration liability | $ 98,800,000 | $ 118,700,000 | $ 716,000 | $ 1,195,000 | ||
Goodwill | $ 404,750,000 | 284,108,000 | 284,108,000 | |||
Percentage of projected annual growth rate for non managed money revenue | 3.00% | |||||
Percentage of market price risk | 4.00% | |||||
Percentage of revenue volatility | 20.00% | |||||
Discount rate | 7.00% | 5.00% | ||||
Change in fair value of contingent consideration obligations | $ 19,886,000 | (37,000) | (294,000) | |||
Percentage of projected annual growth rate for non managed money revenue during earn out period | 4.00% | |||||
Acquisition-related costs | $ 2,300,000 | 400,000 | ||||
Minimum | ||||||
Acquisitions | ||||||
Undiscounted earn out payments | $ 119,000,000 | |||||
Estimated undiscounted earn out payments | 133,000,000 | |||||
Maximum | ||||||
Acquisitions | ||||||
Undiscounted earn out payments | $ 150,000,000 | |||||
Estimated undiscounted earn out payments | 150,000,000 | |||||
USAA AMCO | ||||||
Acquisitions | ||||||
Percentage of outstanding common stock acquired | 100.00% | |||||
Total consideration | $ 950,100,000 | |||||
Payments to acquire business | 851,300,000 | |||||
Payments to acquire business, restricted cash | 71,900,000 | |||||
Contingent consideration liability | 98,800,000 | |||||
Maximum aggregate contingent payment | 150,000,000 | |||||
Maximum annual contingent payment | $ 37,500,000 | |||||
Period of time over which contingent payments will be made | 4 years | |||||
Contingent consideration threshold percentage | 80.00% | |||||
Annual revenue percentage requirement to achieve the maximum contingent payment | 100.00% | |||||
Goodwill | $ 120,643,000 | $ 120,600,000 | ||||
Post-closing adjustment period | 1 year | |||||
Change in fair value of contingent consideration obligations | $ (19,900,000) | |||||
Acquisition-related costs | 8,700,000 | 0 | 0 | |||
Harvest | ||||||
Acquisitions | ||||||
Equity interest to be acquired (as a percent) | 100.00% | |||||
CEMP | ||||||
Acquisitions | ||||||
Change in fair value of contingent consideration obligations | $ 14,000 | 37,000 | ||||
Earnout period | 4 years | |||||
Base and earn-out payments made | $ 6,000,000 | $ 6,000,000 | $ 4,400,000 | $ 2,700,000 |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jul. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Acquisitions | ||||
Goodwill | $ 404,750 | $ 284,108 | $ 284,108 | |
Contingent consideration payable to sellers | (118,700) | $ (98,800) | $ (716) | $ (1,195) |
USAA AMCO | ||||
Acquisitions | ||||
Cash and cash equivalents | 17,473 | |||
Investment management fees receivable | 25,353 | |||
Fund administration and distribution fees receivable | 4,779 | |||
Other receivables and prepaid expenses | 948 | |||
Property and equipment | 1,165 | |||
Other intangible assets | 808,670 | |||
Goodwill | $ 120,600 | 120,643 | ||
Accounts payable and accrued expenses | (5,575) | |||
Accrued compensation and benefits | (5,907) | |||
Payable to members and custodians | (17,473) | |||
Contingent consideration payable to sellers | (98,800) | |||
Cash paid at closing | $ 851,276 |
Acquisitions - Summary of All_2
Acquisitions - Summary of Allocation of Purchase Price (Parenthetical) (Details) - USAA AMCO $ in Thousands | Jul. 01, 2019USD ($) |
Acquisitions | |
Other intangible assets, net | $ 808,670 |
Trade Name | |
Acquisitions | |
Other intangible assets, net | 38,200 |
Lease-Related Assets | |
Acquisitions | |
Other intangible assets, net | 400 |
Investment Advisory Contracts | |
Acquisitions | |
Other intangible assets, net | 750,200 |
Transfer Agent Contracts | |
Acquisitions | |
Other intangible assets, net | 19,100 |
Distribution Contracts | |
Acquisitions | |
Other intangible assets, net | $ 800 |
Acquisitions - Summary of Reven
Acquisitions - Summary of Revenue Subsequent to Acquisition (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2019USD ($) | |
USAA AMCO | |
Acquisitions | |
Revenue | $ 244.5 |
Acquisitions - Summary of Unaud
Acquisitions - Summary of Unaudited Pro Forma Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Combinations [Abstract] | ||
Revenue | $ 851,440 | $ 906,844 |
Net income | $ 114,988 | $ 71,471 |
Basic | $ 1.70 | $ 1.08 |
Diluted | $ 1.56 | $ 1.01 |
Basic | 67,693 | 66,295 |
Diluted | 73,612 | 70,511 |
Acquisitions - Summary of Rollf
Acquisitions - Summary of Rollforward of Restructuring and Integration Liabilities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Rollforward of restructuring and integration liabilities | |||
Liability balance, beginning of year | $ 100,000 | $ 100,000 | $ 7,400,000 |
Integration costs | 2,300,000 | 400,000 | |
Restructuring and integration costs | 8,678,000 | 742,000 | 6,205,000 |
Settlement of liabilities | (5,800,000) | (700,000) | (13,500,000) |
Liability balance, end of year | 3,000,000 | 100,000 | 100,000 |
Accrued expenses | |||
Rollforward of restructuring and integration liabilities | |||
Liability balance, beginning of year | 100,000 | 100,000 | |
Liability balance, end of year | 2,900,000 | 100,000 | 100,000 |
Other liabilities | |||
Rollforward of restructuring and integration liabilities | |||
Liability balance, end of year | 100,000 | ||
USAA AMCO | |||
Rollforward of restructuring and integration liabilities | |||
Integration costs | 8,700,000 | 0 | 0 |
Severance expense | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | $ 700,000 | 300,000 | |
Severance expense | USAA AMCO | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | 6,200,000 | ||
Severance expense | RS Investments | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | 500,000 | ||
Contract termination expense | USAA AMCO | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | $ 200,000 | ||
Contract termination expense | RS Investments | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | $ 5,000,000 |
Acquisitions - Summary of Acqui
Acquisitions - Summary of Acquisition Related Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Acquisitions | |||
Acquisition-related costs | $ 22,317 | $ 4,346 | $ 2,094 |
USAA AMCO | |||
Acquisitions | |||
Acquisition-related costs | 21,333 | 3,180 | |
Harvest | |||
Acquisitions | |||
Acquisition-related costs | 895 | 1,116 | |
RS Investments | |||
Acquisitions | |||
Acquisition-related costs | 355 | ||
Other | |||
Acquisitions | |||
Acquisition-related costs | $ 89 | $ 50 | $ 1,739 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jul. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Contingent consideration payable to sellers | $ (118,700) | $ (98,800) | $ (716) | $ (1,195) |
Level 3 | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Contingent consideration payable to sellers | $ (118,700) | $ (716) |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Contingent Consideration Arrangement Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | $ (716) | $ (1,195) | |
Change in fair value of contingent consideration obligations | 19,886 | (37) | $ (294) |
Ending balance | (118,700) | (716) | $ (1,195) |
CEMP | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Change in fair value of contingent consideration obligations | 14 | 37 | |
Earn-out payment | 702 | $ 442 | |
USAA AMCO | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Estimated liability as of closing date | (98,800) | ||
Change in fair value of contingent consideration obligations | $ (19,900) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Transfers between levels | $ 0 | $ 0 |
Cash and Cash Equivalents | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, fair value | $ 10,100,000 |
Related Party Transactions -Sum
Related Party Transactions -Summary of Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related party assets | |||
Cash and cash equivalents | $ 37,121 | $ 51,491 | |
Receivables (investment management fees) | 74,321 | 37,980 | |
Receivables (fund administration and distribution fees) | 19,313 | 3,153 | |
Investments (available-for-sale securities, fair value) | 771 | 601 | |
Investments (trading securities, fair value) | 18,305 | 12,719 | |
Related party liabilities | |||
Accounts payable and accrued expenses (fund reimbursements) | 88,932 | 19,743 | |
Other liabilities (promissory note) | 4,363 | 1,759 | |
Related party revenue | |||
Total revenue | 612,373 | 413,412 | $ 409,629 |
Investment Management Fees | |||
Related party revenue | |||
Total revenue | 466,802 | 352,683 | 343,811 |
Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | 145,571 | 60,729 | 65,818 |
VCH | |||
Related party assets | |||
Cash and cash equivalents | 10,060 | ||
Receivables (investment management fees) | 47,872 | 19,612 | |
Receivables (fund administration and distribution fees) | 19,313 | 3,153 | |
Investments (available-for-sale securities, fair value) | 771 | 601 | |
Investments (trading securities, fair value) | 17,914 | 12,343 | |
Total | 95,930 | 35,709 | |
Related party liabilities | |||
Accounts payable and accrued expenses (fund reimbursements) | 4,316 | 2,300 | |
Other liabilities (promissory note) | 96 | ||
Total | 4,316 | 2,396 | |
Related party revenue | |||
Total revenue | 517,378 | 322,267 | 320,136 |
Related party expense | |||
Distribution and other asset-based expenses (fund reimbursements) | 12,902 | 11,896 | |
General and administrative | 135 | 1,203 | |
Total | 13,037 | 13,099 | |
Related party other income (expense) | |||
Interest income (expense) and other income (expense) | 2,693 | (2,834) | 589 |
Interest expense and other financing costs (promissory note) | (1) | (18) | (39) |
Total | 2,692 | (2,852) | 550 |
VCH | Investment Management Fees | |||
Related party revenue | |||
Total revenue | 371,807 | 261,538 | 254,318 |
VCH | Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | $ 145,571 | $ 60,729 | $ 65,818 |
Related Party Transactions -S_2
Related Party Transactions -Summary of Related Party Transactions (Parenthetical) (Details) - ASU 2014-09 $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |
Change in revenue | $ 18.7 |
Change in operating expense | $ 18.7 |
Investments - Summary of Cost a
Investments - Summary of Cost and Fair Value of Investments Classified as Available-for-sale (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale securities, at fair value | $ 771 | $ 601 |
Available For Sale Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 696 | 666 |
Gross Unrealized gains | 85 | 6 |
Gross Unrealized losses | (10) | (71) |
Available-for-sale securities, at fair value | $ 771 | $ 601 |
Investments - Summary of Procee
Investments - Summary of Proceeds and Realized Gains and Losses Classified as Available-for-sale (Details) - Available For Sale Securities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2017 | |
Proceeds and realized gains and losses recognized | ||
Sale Proceeds | $ 158 | $ 79 |
Realized gains | $ 6 | $ 15 |
Investments - Summary of Cost_2
Investments - Summary of Cost and Fair Value of Investments Classified as Trading Securities (Details) - Trading Securities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Cost | $ 18,670 | $ 14,874 |
Gross unrealized gains | 733 | 5 |
Gross unrealized losses | (1,098) | (2,160) |
Trading securities, at fair value | $ 18,305 | $ 12,719 |
Investments - Summary of Proc_2
Investments - Summary of Proceeds and Realized Gains and Losses Classified as Trading Securities (Details) - Trading Securities - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Proceeds and realized gains and losses recognized | |||
Sale Proceeds | $ 2,749 | $ 2,772 | $ 5,166 |
Realized Gains | 22 | 37 | 159 |
Realized losses | $ (71) | $ (73) | $ (34) |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 27,033 | $ 21,821 |
Accumulated depreciation and amortization | (13,793) | (13,041) |
Total property and equipment, net | 13,240 | 8,780 |
Equipment, Purchased Software and Implementation Costs | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 21,548 | 17,071 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 2,854 | 3,209 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 2,631 | $ 1,541 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |||
Depreciation | $ 3 | $ 3 | $ 3.6 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Additional information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Indefinite-lived Intangible Assets | |||
Goodwill recorded in acquisition | $ 120,642,000 | ||
Impairments to definite lived intangible assets | 0 | $ 0 | $ 0 |
Amortization expense for definite lived intangible assets | 20,900,000 | 20,300,000 | 26,300,000 |
Impairments to indefinite lived intangible assets | 0 | $ 0 | $ 0 |
USAA AMCO | |||
Indefinite-lived Intangible Assets | |||
Goodwill recorded in acquisition | 120,600,000 | ||
Indefinite lived intangible assets | 770,100,000 | ||
Finite lived intangible assets | $ 38,600,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Summary of Changes in Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Changes in the goodwill balance | |
Balance, beginning of period | $ 284,108 |
Goodwill recorded in acquisition | 120,642 |
Balance, end of period | $ 404,750 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Summary of Definite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Identifiable Intangible Assets | ||
Net book value | $ 38,771 | |
USAA AMCO | ||
Identifiable Intangible Assets | ||
Gross book value | 172,447 | $ 133,877 |
Accumulated amortization | (133,676) | (112,798) |
Net book value | $ 38,771 | $ 21,079 |
Weighted average useful life (yrs) | 3 years 4 months 24 days | 9 months 18 days |
USAA AMCO | Customer Relationships | ||
Identifiable Intangible Assets | ||
Gross book value | $ 123,200 | $ 123,200 |
Accumulated amortization | (118,577) | (103,207) |
Net book value | $ 4,623 | $ 19,993 |
Weighted average useful life (yrs) | 2 months 12 days | 9 months 18 days |
USAA AMCO | Advisory and distribution contracts with Victory Funds | ||
Identifiable Intangible Assets | ||
Gross book value | $ 2,368 | $ 2,368 |
Accumulated amortization | (2,368) | (2,368) |
USAA AMCO | Trade Name | ||
Identifiable Intangible Assets | ||
Gross book value | 39,332 | 1,132 |
Accumulated amortization | (5,607) | (283) |
Net book value | $ 33,725 | $ 849 |
Weighted average useful life (yrs) | 3 years 1 month 6 days | 1 year 6 months |
USAA AMCO | Intellectual Property/Other | ||
Identifiable Intangible Assets | ||
Gross book value | $ 7,547 | $ 7,177 |
Accumulated amortization | (7,124) | (6,940) |
Net book value | $ 423 | $ 237 |
Weighted average useful life (yrs) | 1 month 6 days | 2 months 12 days |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Summary of Estimated Amortization Expense for Definite Lived Intangible Assets (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Estimated amortization expense for definite lived intangible assets | |
2020 | $ 12,830 |
2021 | 11,271 |
2022 | 9,568 |
2023 | 4,855 |
2024 | 143 |
Thereafter | 104 |
Net book value | $ 38,771 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Schedule of Indefinite-lived Intangible Assets by Type (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets, Beginning balance | $ 366,600 | $ 367,732 |
Additions or transfers | 770,100 | (1,132) |
Indefinite-lived intangible assets, Ending balance | 1,136,700 | 366,600 |
Fund Advisory, Transfer Agent and Distribution Contracts [Member] | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets, Beginning balance | 342,900 | 342,900 |
Additions or transfers | 770,100 | |
Indefinite-lived intangible assets, Ending balance | 1,113,000 | 342,900 |
Trade Name | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets, Beginning balance | 23,700 | 24,832 |
Additions or transfers | (1,132) | |
Indefinite-lived intangible assets, Ending balance | $ 23,700 | $ 23,700 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax expense (benefit): | |||
Federal | $ 22,234 | $ 13,130 | $ 640 |
State | 6,656 | 3,944 | 779 |
Foreign | 52 | 17 | 22 |
Total current tax expense (benefit) | 28,942 | 17,091 | 1,441 |
Deferred tax expense (benefit): | |||
Federal | (449) | 3,577 | 9,162 |
State | (289) | 549 | 2,010 |
Foreign | (7) | (10) | 19 |
Total deferred tax expense (benefit) | (745) | 4,116 | 11,191 |
Income tax expense | $ 28,197 | $ 21,207 | $ 12,632 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||
Unrecognized tax benefits | $ 2,900,000 | ||
Unrecognized tax benefits, net of federal benefit | 2,300,000 | ||
Accrual for interest and penalties | $ 200,000 | $ 0 | $ 0 |
Federal income tax at U.S. statutory rate | 21.00% | 21.00% | 35.00% |
Provisional credit to federal tax expense | $ 2,400,000 | ||
Net operating loss carryforward balance | $ 0 | $ 0 | $ 5,500,000 |
Settlement With State Taxing Authorities | |||
Income Taxes [Line Items] | |||
Unrecognized tax benefits may be recognized within the next 12 months | 2,600,000 | ||
Other liabilities | |||
Income Taxes [Line Items] | |||
Accrual for interest and penalties | $ 2,900,000 |
Income Taxes - Summary of Effec
Income Taxes - Summary of Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax at U.S. statutory rate | 21.00% | 21.00% | 35.00% |
State income tax rate, net of federal tax benefit | 3.30% | 4.10% | 4.00% |
UTP liability | 1.90% | ||
Excess tax benefits on share-based compensation | (2.80%) | (0.50%) | |
Remeasurement of deferred taxes due to Tax Act | (0.063) | ||
Foreign taxes and other | 0.40% | 0.20% | |
Income tax expense | 23.40% | 25.00% | 32.90% |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Definite-lived intangibles | $ 20,560 | $ 18,725 |
Share-based compensation expense | 10,242 | 9,041 |
Acquisition-related costs | 7,368 | 4,483 |
Change in value of consideration payable for acquisition of business | 4,366 | |
Deferred compensation | 4,429 | 3,185 |
Restructuring expenses | 3,256 | 962 |
Contingent consideration arrangements | 219 | 248 |
Goodwill | 982 | 574 |
Debt issuance costs | 1,336 | |
Unrealized loss on deferred compensation investments | 85 | 536 |
Loss on equity method investment | 283 | |
Other | 23 | 92 |
Total deferred tax assets | 52,866 | 38,129 |
Deferred tax liabilities: | ||
Indefinite-lived intangibles | 56,365 | 41,302 |
Debt issuance costs | 1,101 | |
Depreciation | 1,801 | 1,282 |
Prepaid expenses | 186 | 161 |
CEMP base payments interest expense | 36 | |
Change in value of consideration payable for acquisition of business | 459 | |
Total deferred tax liabilities | 58,352 | 44,341 |
Net deferred tax asset/(liability) | $ (5,486) | $ (6,212) |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Gross Unrecognized Tax Benefits Excluding Interest and Penalties (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Additions for tax positions of prior years | $ 1,703 |
Additions based on tax positions related to current year | 879 |
Ending balance | $ 2,582 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | Jan. 17, 2020 | Jul. 01, 2019 | May 03, 2018 | Mar. 13, 2018 | Feb. 12, 2018 | Mar. 13, 2020 | Dec. 31, 2019 | Mar. 13, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||||||||
Original issue discount | $ 10,231 | $ 10,231 | $ 3,514 | ||||||||
Debt Issuance cost expensed | 2,499 | 1,708 | $ 3,657 | ||||||||
Loss on debt extinguishment | 9,860 | 6,058 | $ 330 | ||||||||
London Interbank Offered Rate (LIBOR) | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Base spread (as a percent) | 0.75% | ||||||||||
Standby Letters of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 10,000 | ||||||||||
IPO | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds received from issuance of shares | $ 156,500 | ||||||||||
Class A | IPO | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds received from issuance of shares | $ 143,000 | ||||||||||
Term Loans | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Term | 7 years | 7 years | |||||||||
Principal amount | $ 1,100,000 | $ 360,000 | |||||||||
Net proceeds from issuance of debt | 355,900 | ||||||||||
Cash on hand for term loan repayment | 800 | ||||||||||
Repayments of debt | 186,000 | 148,000 | |||||||||
Original issue discount | 11,500 | 900 | |||||||||
Arranger and legal costs expensed | 3,700 | ||||||||||
Debt Issuance cost capitalized | $ 400 | 1,800 | |||||||||
Debt issuance costs, gross | $ 18,000 | $ 39,600 | $ 39,600 | 21,600 | |||||||
Annual principal payment percentage | 1.00% | 1.00% | |||||||||
Accumulated amortization and loss on debt extinguishment | $ 22,400 | $ 22,400 | 14,000 | ||||||||
Term Loans | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of debt | $ 38,000 | $ 186,000 | |||||||||
Term Loans | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Base spread (as a percent) | 3.25% | ||||||||||
Term Loans | General and Administrative Expense | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Issuance cost expensed | $ 1,900 | ||||||||||
Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Term | 5 years | 5 years | |||||||||
Maximum borrowing capacity | $ 100,000 | $ 100,000 | $ 50,000 | ||||||||
Original issue discount | 1,500 | 300 | |||||||||
Outstanding borrowing | 0 | 0 | |||||||||
Debt issuance costs, gross | 300 | 3,700 | 3,700 | 2,000 | |||||||
Accumulated amortization and loss on debt extinguishment | $ 1,500 | 1,500 | 1,200 | ||||||||
Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of debt | 499,700 | 4,400 | |||||||||
Debt Issuance cost expensed | $ 4,500 | ||||||||||
Loss on debt extinguishment | 6,100 | ||||||||||
Write-off of unamortized debt discount and debt issuance costs | 4,200 | ||||||||||
Write-off of unamortized debt discount | $ 1,900 | ||||||||||
Maximum percentage of borrowings for revolving credit facility as a percent of total commitments | 35.00% | ||||||||||
Maximum first lien leverage ratio on last day of quarter (as a percent) | 380.00% | ||||||||||
Debt issuance costs, gross | $ 22,800 | ||||||||||
Debt extinguishment costs | $ 5,500 | ||||||||||
Average effective interest rate (as a percent) | 5.35% | ||||||||||
Effective interest rate (as a percent) | 5.79% | 5.79% | |||||||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Base spread (as a percent) | 3.25% | ||||||||||
Credit Agreement | Adjusted London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Base spread (as a percent) | 3.25% | ||||||||||
Credit Agreement | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Base spread (as a percent) | 2.25% | ||||||||||
Previous Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on debt extinguishment | $ 6,300 | ||||||||||
Previous Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on debt extinguishment | 3,600 | ||||||||||
Repriced Term Loans | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | $ 952,000 | ||||||||||
Debt maturity date | 2026-06 | ||||||||||
Debt instrument interest rate description | Repriced Term Loans provide for a reduced applicable margin on LIBOR of 75 basis points. | ||||||||||
Basis spread on variable rate, increase (decrease) | 0.75% | ||||||||||
Repriced Term Loans | London Interbank Offered Rate (LIBOR) | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Base spread (as a percent) | 2.50% | ||||||||||
Due June 2026, 5.35% interest rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Original issue discount | $ 20,700 | $ 20,700 | |||||||||
Effective interest rate (as a percent) | 5.79% | 5.79% | |||||||||
Accumulated amortization and loss on debt extinguishment | $ 10,500 | $ 10,500 | |||||||||
Due February 2025, 5.55% interest rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Original issue discount | $ 9,200 | ||||||||||
Effective interest rate (as a percent) | 6.22% | ||||||||||
Accumulated amortization and loss on debt extinguishment | $ 5,700 |
Debt - Schedule of Components o
Debt - Schedule of Components of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jul. 01, 2019 | Dec. 31, 2018 | Feb. 12, 2018 |
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ (17,230) | $ (7,629) | ||
Unamortized debt discount | (10,231) | (3,514) | ||
Long-term debt | 924,539 | 268,857 | ||
Due February 2025, 5.55% interest rate | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding | 280,000 | |||
Unamortized debt discount | $ (9,200) | |||
Effective interest rate (as a percent) | 6.22% | |||
Due June 2026, 5.35% interest rate | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding | 952,000 | |||
Unamortized debt discount | $ (20,700) | |||
Effective interest rate (as a percent) | 5.79% | |||
Term Loans | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding | $ 952,000 | $ 280,000 | ||
Unamortized debt discount | $ (11,500) | $ (900) |
Debt - Schedule of Components_2
Debt - Schedule of Components of Long-Term Debt (Parenthetical) (Details) | Dec. 31, 2019 | Dec. 31, 2018 |
Due February 2025, 5.55% interest rate | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (as a percent) | 5.55% | |
Due June 2026, 5.35% interest rate | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (as a percent) | 5.35% |
Debt - Schedule of Components_3
Debt - Schedule of Components of Interest Expense and Other Financing Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Interest expense | $ 36,423 | $ 17,289 | $ 41,569 |
Amortization of debt issuance costs | 2,499 | 1,708 | 3,657 |
Amortization of debt discount | 1,200 | 700 | 1,544 |
Interest rate cap expense | 767 | ||
CEMP base payment accretion expense | 193 | 467 | 638 |
Other | 586 | 530 | 292 |
Total | $ 40,901 | $ 20,694 | $ 48,467 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) $ in Thousands, SwapContract in Millions | 12 Months Ended | ||
Dec. 31, 2019SwapContract | Dec. 31, 2018SwapContract | Dec. 31, 2017USD ($) | |
Derivative [Line Items] | |||
Interest rate cap expense | $ 767 | ||
Derivative Swap Contracts | SwapContract | 0 | 0 | |
Interest Rate Caps | |||
Derivative [Line Items] | |||
Interest rate cap expense | $ 800 |
Equity Method Investment - Addi
Equity Method Investment - Additional Information (Details) - Cerebellum - USD ($) | Aug. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Equity Method Investments [Line Items] | |||
Proceeds from sale of equity method investment | $ 10,600,000 | ||
Percentage of equity method investment sold | 100.00% | ||
Equity method investment | $ 0 | $ 7,900,000 | |
Cumulative losses of equity method investment | $ 1,100,000 | ||
Interest Income and Other Income (Expense) | |||
Schedule Of Equity Method Investments [Line Items] | |||
Gain on sale of equity method investment | $ 2,900,000 |
Equity - Additional Information
Equity - Additional Information (Details) | Feb. 12, 2018USD ($)Item$ / sharesshares | Dec. 31, 2019USD ($)Item$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Aug. 31, 2019USD ($) | Mar. 22, 2019USD ($) | Dec. 31, 2017USD ($) |
Pre-IPO Number of classes of common stock | Item | 1 | |||||
Common stock, par value | $ / shares | $ 0.01 | |||||
Preferred stock, shares authorized | shares | 10,000,000 | |||||
Preferred stock, par value | $ / shares | $ 0.01 | |||||
Stock issuance costs included in prepaid expenses | $ 2,900,000 | |||||
Preferred stock, shares issued | shares | 0 | |||||
Conversion basis of Class B Shares into Class A shares | $ 1,000 | |||||
Threshold for number of class B shares as a percent of the aggregate class A shares for conversion | 10.00% | |||||
Number of shares acquired | shares | 1,685,155 | |||||
Average cost of acquired shares (in dollars per share) | $ / shares | $ 12.77 | |||||
Cost of acquired shares | $ 21,500,000 | |||||
Remaining authorized amount for share repurchase program | $ 8,500,000 | |||||
IPO | ||||||
Legal, accounting and other costs included in offering costs | $ 4,600,000 | |||||
Class A | ||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized | shares | 400,000,000 | 400,000,000 | 400,000,000 | |||
Offering costs | $ 4,287,000 | |||||
Number of votes for each share of common stock | Item | 1 | |||||
Authorized amount for share repurchase program | $ 15,000,000 | $ 15,000,000 | ||||
Class B | ||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized | shares | 200,000,000 | 200,000,000 | 200,000,000 | |||
Offering costs | $ 4,300,000 | |||||
Number of votes for each share of common stock | Item | 10 |
Equity - Schedule of Changes in
Equity - Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common Stock | Class A | |||
Balance at beginning of period (in shares) | 15,281 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Issuance of common stock (in shares) | 4 | 12,811 | |
Share conversion - Class B to A (in shares) | 2,815 | 2,467 | |
Shares issued under 2018 ESPP (in shares) | 3 | ||
Balance at end of period (in shares) | 18,100 | 15,281 | |
Common Stock | Class B | |||
Balance at beginning of period (in shares) | 55,284 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Redesignation of common stock, (in shares) | 57,185 | ||
Share conversion - Class B to A (in shares) | (2,815) | (2,467) | |
Vesting of restricted share grants (in shares) | 522 | 215 | |
Exercise of options (in shares) | 946 | 351 | |
Balance at end of period (in shares) | 53,937 | 55,284 | |
Common Stock | Pre-IPO | |||
Balance at beginning of period (in shares) | 57,182 | 56,505 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Issuance of common stock (in shares) | 296 | ||
Redesignation of common stock, (in shares) | (57,184) | ||
Vesting of restricted share grants (in shares) | 2 | 389 | |
Equity awards modified to liabilities (in shares) | (8) | ||
Balance at end of period (in shares) | 57,182 | ||
Treasury Stock | Class A | |||
Balance at beginning of period (in shares) | (856) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Repurchase of shares | (829) | (856) | |
Balance at end of period (in shares) | (1,685) | (856) | |
Treasury Stock | Class B | |||
Balance at beginning of period (in shares) | (2,147) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Redesignation of common stock, (in shares) | (2,064) | ||
Repurchase of shares | (83) | ||
Shares withheld related to net settlement of equity awards (in shares) | (509) | ||
Balance at end of period (in shares) | (2,656) | (2,147) | |
Treasury Stock | Pre-IPO | |||
Balance at beginning of period (in shares) | (2,064) | (1,720) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Redesignation of common stock, (in shares) | 2,064 | ||
Vesting of restricted share grants (in shares) | (344) | ||
Balance at end of period (in shares) | (2,064) |
Share Based Compensation - Addi
Share Based Compensation - Additional Information (Details) | Jan. 01, 2018 | Jul. 31, 2017 | Jul. 01, 2017 | Mar. 31, 2017 | Mar. 10, 2017 | Jul. 29, 2016 | Oct. 30, 2019Item | Jun. 30, 2018USD ($)Itemshares | Dec. 31, 2017USD ($)$ / sharesshares | Feb. 28, 2017$ / shares | Dec. 31, 2018USD ($)Itemshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)Itemshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2016shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total intrinsic value of options exercised | $ | $ 12,800,000 | $ 2,300,000 | $ 800,000 | |||||||||||||
Common stock, dividends declared | $ / shares | $ 0.10 | $ 2.42 | ||||||||||||||
Amount of cash bonuses and distributions related to all dividends previously declared on unvested shares | $ | $ 1,300,000 | $ 1,800,000 | $ 2,000,000 | |||||||||||||
Total share based compensation expense expects to recognize | $ | $ 32,600,000 | $ 32,600,000 | ||||||||||||||
Share based compensation, weighted average period | 1 year 8 months 12 days | |||||||||||||||
Restricted Shares | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 1,196,820 | 1,924,691 | 623,165 | |||||||||||||
Vesting period from grant date | 4 years | |||||||||||||||
Vesting percentage | 25.00% | |||||||||||||||
Restricted stock granted and unvested | 1,293,107 | 2,997,856 | 3,215,619 | 2,997,856 | 1,293,107 | 3,215,619 | 1,018,228 | |||||||||
Total number of restricted shares granted | 521,701 | 217,630 | 339,701 | |||||||||||||
Time-based vesting percent based on 3 years from issue date | 50.00% | 50.00% | ||||||||||||||
Performance-based vesting percent based on issue date | 50.00% | 50.00% | ||||||||||||||
Special dividend paid | $ / shares | $ 2.19 | |||||||||||||||
Common stock, dividends declared | $ / shares | $ 0.23 | 2.19 | ||||||||||||||
Reduction in strike price per share | $ / shares | $ 2.19 | |||||||||||||||
Cash bonus equivalent | $ / shares | $ 0.23 | $ 0.23 | ||||||||||||||
Total fair value of restricted share awards vested | $ | $ 9,700,000 | $ 2,000,000 | $ 4,600,000 | |||||||||||||
Stock Options | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period from grant date | 4 years | 3 years | ||||||||||||||
Vesting percentage | 25.00% | |||||||||||||||
Stock options granted and outstanding | 9,078,728 | 9,070,052 | 7,880,167 | 9,070,052 | 9,078,728 | 7,880,167 | 8,669,475 | |||||||||
Total number of options granted | 31,178 | 359,618 | 774,357 | |||||||||||||
Contractual life | 10 years | |||||||||||||||
Aggregate intrinsic value of stock options currently exercisable | $ | $ 57,800,000 | $ 36,300,000 | $ 103,400,000 | $ 36,300,000 | $ 57,800,000 | $ 103,400,000 | ||||||||||
Stock Options | Vesting Based on Service | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period from grant date | 3 years | |||||||||||||||
Vesting percentage | 50.00% | 50.00% | 60.00% | |||||||||||||
Stock Options | Vesting Based on Performance | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting percentage | 50.00% | 50.00% | 40.00% | |||||||||||||
Certain Restricted Shares and Stock Option Awards | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period from grant date | 5 years | 5 years | ||||||||||||||
Certain Restricted Shares and Stock Option Awards | Restricted Share Awards Granted on July 29, 2016 and Certain Stock Option Awards Granted on July 31, 2017 and July 29, 2016 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting percentage | 20.00% | 20.00% | ||||||||||||||
2018 Plan | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of shares outstanding | 1,928,987 | 1,928,987 | ||||||||||||||
Number of shares authorized | 3,372,484 | 3,372,484 | ||||||||||||||
Total number of options granted | 31,178 | |||||||||||||||
Stock based compensation expense | $ | $ 16,300,000 | |||||||||||||||
2018 Plan | Vest Over Four Years | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period from grant date | 4 years | |||||||||||||||
2018 Plan | Restricted Shares | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 1,442,768 | |||||||||||||||
2018 Plan | Restricted Shares | Cliff Vesting | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 30,834 | |||||||||||||||
Total number of restricted shares granted | 18,943 | |||||||||||||||
2018 Plan | Restricted Shares | Vest Over Three Years | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 202,883 | 1,144,589 | ||||||||||||||
Vesting period from grant date | 3 years | 3 years | ||||||||||||||
2018 Plan | Restricted Shares | Vest Over Five Years | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 33,288 | |||||||||||||||
Vesting period from grant date | 5 years | |||||||||||||||
2018 Plan | Restricted Shares | Vest Over Four Years | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 12,231 | |||||||||||||||
2018 Plan | Stock Options | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of options granted | 2,362 | 33,540 | ||||||||||||||
Vesting period from grant date | 3 years | |||||||||||||||
2018 Plan | Restricted Shares of Common Stock | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 1,196,820 | |||||||||||||||
2018 ESPP | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of shares authorized | 350,388 | |||||||||||||||
Term of the offering period | 24 months | 18 months | ||||||||||||||
Number of offering periods | Item | 4 | 3 | ||||||||||||||
Term of individual offering periods | 6 months | 6 months | ||||||||||||||
Term established for purchasing stock under the employee stock purchase plan | 3 months | |||||||||||||||
Discount percentage | 5.00% | |||||||||||||||
Maximum dollar amount of shares that can be purchased by an individual in any given calendar year | $ | $ 25,000,000 | |||||||||||||||
Number of shares issued | 6,716 | |||||||||||||||
2013 Plan | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Stock based compensation expense | $ | 11,800,000 | |||||||||||||||
2013 Plan | Restricted Shares | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 1,678,743 | |||||||||||||||
2013 Plan | Restricted Shares | Vesting Based on Service | Minimum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period from grant date | 3 years | |||||||||||||||
2013 Plan | Restricted Shares | Vesting Based on Service | Maximum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period from grant date | 5 years | |||||||||||||||
2013 Plan | Restricted Shares | Vesting Based on Performance | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting percentage | 50.00% | |||||||||||||||
Vesting installments | Item | 3 | 3 | ||||||||||||||
2013 Plan | Restricted Shares | Time-Vested and Performance-Vested | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 1,609,857 | |||||||||||||||
2013 Plan | Restricted Shares | Vesting Based on Time | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting percentage | 50.00% | |||||||||||||||
2013 Plan | Restricted Shares | Vesting Based on Time | Minimum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period from grant date | 3 years | |||||||||||||||
2013 Plan | Restricted Shares | Vesting Based on Time | Maximum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period from grant date | 5 years | |||||||||||||||
2013 Plan | Stock Options | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of options granted | 357,256 | |||||||||||||||
2013 Plan | Stock Options | Vesting Based on Service | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period from grant date | 4 years | |||||||||||||||
Vesting percentage | 60.00% | |||||||||||||||
2013 Plan | Stock Options | Vesting Based on Performance | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting percentage | 40.00% | |||||||||||||||
2013 Plan | Restricted Shares Remaining | Vesting Based on Service | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total number of restricted shares granted | 68,886 | |||||||||||||||
Vesting period from grant date | 4 years | |||||||||||||||
2018 and 2013 Plans | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Stock based compensation expense | $ | $ 15,200,000 | |||||||||||||||
Tax benefit related to stock-based compensation | $ | $ 4,000,000 | 3,800,000 | 4,600,000 | |||||||||||||
Director Plan | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Stock based compensation expense | $ | $ 0 | $ 0 | ||||||||||||||
Director Plan | General and Administrative Expense | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Stock based compensation expense | $ | $ 200,000 | |||||||||||||||
Director Plan | Restricted Shares | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Restricted stock granted and unvested | 49,230 | |||||||||||||||
Total number of restricted shares granted | 49,230 | |||||||||||||||
Total fair value of restricted share awards vested | $ | $ 700,000 |
Share Based Compensation - Sche
Share Based Compensation - Schedule of Activity Related to Stock Options Awards, Restricted Stock Awards and Director Plan Restricted Stock Awards (Details) | 12 Months Ended | ||
Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares | |
Stock Options | |||
Avg wtd grant-date fair value | |||
Outstanding at beginning of period | $ 3.79 | $ 3.66 | $ 3.40 |
Granted | 7.25 | 6.51 | 6.14 |
Forfeited | 5.01 | 6.39 | 3.02 |
Exercised | 3.19 | 3.01 | 2.54 |
Modified to liability to be cash settled | 2.61 | ||
Outstanding at end of the period | 3.83 | 3.79 | 3.66 |
Vested | 3.61 | 3.35 | 3.17 |
Unvested | 5.10 | 5 | 4.49 |
Avg wtd exercise price | |||
Outstanding at beginning of period | 6.12 | 5.71 | 4.90 |
Granted | 17.64 | 14.25 | 13.52 |
Forfeited | 9.68 | 14 | 3.81 |
Exercised | 4.24 | 3.56 | 2.45 |
Modified to liability to be cash settled | 2.62 | ||
Outstanding at end of the period | 6.27 | 6.12 | 5.71 |
Vested | 5.59 | 4.76 | 4.19 |
Unvested | $ 10.25 | $ 9.88 | $ 8.31 |
Units | |||
Outstanding at beginning of period | shares | 9,070,052 | 9,078,728 | 8,669,475 |
Total number of options granted | shares | 31,178 | 359,618 | 774,357 |
Forfeited | shares | (274,774) | (16,791) | (132,972) |
Exercised | shares | (946,289) | (351,503) | (73,406) |
Modified to liability to be cash settled | shares | (158,726) | ||
Outstanding at end of the period | shares | 7,880,167 | 9,070,052 | 9,078,728 |
Vested | shares | 6,724,030 | 6,653,228 | 5,731,647 |
Unvested | shares | 1,156,137 | 2,416,824 | 3,347,081 |
Restricted Shares | |||
Avg wtd grant-date fair value | |||
Unvested at beginning of period | $ 13.17 | $ 11.82 | $ 9.48 |
Granted | 16.27 | 13.77 | 13.52 |
Vested | 12.83 | 10.42 | 7.99 |
Forfeited | 13.42 | 14.27 | 8.81 |
Unvested at end of period | $ 14.29 | $ 13.17 | $ 11.82 |
Units | |||
Unvested at beginning of period | shares | 2,997,856 | 1,293,107 | 1,018,228 |
Granted | shares | 1,196,820 | 1,924,691 | 623,165 |
Vested | shares | (521,701) | (217,630) | (339,701) |
Forfeited | shares | (457,356) | (2,312) | (8,585) |
Unvested at end of period | shares | 3,215,619 | 2,997,856 | 1,293,107 |
Restricted Shares | Director Plan | |||
Avg wtd grant-date fair value | |||
Unvested at beginning of period | $ 5.71 | $ 5.71 | |
Vested | 5.71 | ||
Unvested at end of period | $ 5.71 | ||
Units | |||
Unvested at beginning of period | shares | 49,230 | ||
Vested | shares | (49,230) |
Share Based Compensation - Summ
Share Based Compensation - Summary of Grant Date Fair Value of Stock Option Awards (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Stock price at time of grant | $ 17.64 | $ 14.27 | $ 13.51 |
Exercise price | $ 17.64 | $ 14.27 | $ 13.51 |
Expected volatility | 40.00% | 50.00% | 50.00% |
Risk free rate | 1.85% | 2.27% | 2.22% |
Expected average years to exit | 6 years | 5 years | 5 years |
Commitments - Summary of Future
Commitments - Summary of Future Calendar Year Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Gross Operating Lease Commitments, 2020 | $ 7,148 |
Gross Operating Lease Commitments, 2021 | 5,251 |
Gross Operating Lease Commitments, 2022 | 4,235 |
Gross Operating Lease Commitments, 2023 | 3,125 |
Gross Operating Lease Commitments, 2024 | 2,258 |
Gross Operating Lease Commitments, Thereafter | 4,370 |
Gross Operating Lease Commitments, Total | 26,387 |
Sub-Leases, 2020 | 706 |
Sub-Leases, 2021 | 422 |
Sub-Leases, 2022 | 432 |
Sub-Leases, 2023 | 437 |
Sub-Leases, 2024 | 454 |
Sub-Leases, Thereafter | 962 |
Sub-Leases, Total | 3,413 |
Future calendar year minimum lease payments | |
Net Operating Lease Commitments, 2020 | 6,442 |
Net Operating Lease Commitments, 2021 | 4,829 |
Net Operating Lease Commitments, 2022 | 3,803 |
Net Operating Lease Commitments, 2023 | 2,688 |
Net Operating Lease Commitments, 2024 | 1,804 |
Net Operating Lease Commitments, Thereafter | 3,408 |
Net Operating Lease Commitments, Total | $ 22,974 |
Commitments - Additional Inform
Commitments - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Rent expense | $ 4.9 | $ 4.6 | $ 7.3 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |||
Expense of employer matched contributions | $ 3.3 | $ 2.5 | $ 2.4 |
Employee Benefit Plans - Deferr
Employee Benefit Plans - Deferred Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Compensation Arrangement | |||
Change in value of deferred compensation plan liability | $ (236) | $ (48) | $ (181) |
Deferred Compensation Plan | |||
Deferred Compensation Arrangement | |||
Employee compensation | 2,202 | 3,011 | 3,144 |
Employer contributions | 1,017 | 746 | 791 |
Change in value of deferred compensation plan liability | 2,603 | (1,649) | 1,267 |
Total | $ 5,822 | $ 2,108 | $ 5,202 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic Earnings Per Share and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Computation of basic and diluted earnings per share | |||||||||||
Net income | $ 92,491 | $ 63,704 | $ 25,826 | ||||||||
Shares: | |||||||||||
Basic weighted average common shares outstanding | 67,616 | 66,295 | 54,931 | ||||||||
Assumed conversion of dilutive instruments | 5,850 | 4,216 | 4,646 | ||||||||
Diluted weighted average common shares outstanding | 73,466 | 70,511 | 59,577 | ||||||||
Earnings per share | |||||||||||
Basic: | $ 0.56 | $ 0.38 | $ 0.21 | $ 0.22 | $ 0.21 | $ 0.30 | $ 0.27 | $ 0.17 | $ 1.37 | $ 0.96 | $ 0.47 |
Diluted: | $ 0.51 | $ 0.35 | $ 0.20 | $ 0.20 | $ 0.19 | $ 0.29 | $ 0.26 | $ 0.16 | $ 1.26 | $ 0.90 | $ 0.43 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Number of shares excluded from the computations of weighted average shares for diluted earnings per share because the effects would be anti dilutive | 821,544 | 1,738,813 | 434,656 |
Net Capital Requirements - Addi
Net Capital Requirements - Additional Information (Details) $ in Millions | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Regulatory Capital Requirements [Abstract] | ||
Net capital | $ 2 | $ 2.3 |
Excess net capital | 1.8 | 2.1 |
Minimum net capital requirement | $ 0.2 | $ 0.2 |
Ratio of aggregated indebtedness to net capital | 1.26 | 1.14 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income/(Loss) by Component (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | $ 455,548 | $ 231,183 | $ 330,998 |
Total other comprehensive income (loss), net of tax | 24 | (150) | 601 |
Cumulative effect adjustment for adoption of ASU 2016-09, 2016-01 and 2018-02 | 1,818 | ||
Balance at end of period | 537,871 | 455,548 | 231,183 |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | (86) | 64 | (537) |
Other comprehensive income (loss) before reclassification and tax | 32 | (200) | 223 |
Tax impact | (8) | 50 | (88) |
Reclassification adjustments, before tax | 752 | ||
Tax impact | (286) | ||
Total other comprehensive income (loss), net of tax | 24 | (150) | 601 |
Cumulative effect adjustment for adoption of ASU 2016-09, 2016-01 and 2018-02 | 62 | ||
Balance at end of period | (86) | 64 | |
Available-for-sale Securities | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | (59) | 51 | (13) |
Other comprehensive income (loss) before reclassification and tax | (147) | 121 | |
Tax impact | 37 | (48) | |
Reclassification adjustments, before tax | (15) | ||
Tax impact | 6 | ||
Total other comprehensive income (loss), net of tax | (110) | 64 | |
Cumulative effect adjustment for adoption of ASU 2016-09, 2016-01 and 2018-02 | 59 | ||
Balance at end of period | (59) | 51 | |
Cash Flow Hedges | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | (462) | ||
Other comprehensive income (loss) before reclassification and tax | (20) | ||
Tax impact | 7 | ||
Reclassification adjustments, before tax | 767 | ||
Tax impact | (292) | ||
Total other comprehensive income (loss), net of tax | 462 | ||
Cumulative Translation Adjustment | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | (27) | 13 | (62) |
Other comprehensive income (loss) before reclassification and tax | 32 | (53) | 122 |
Tax impact | (8) | 13 | (47) |
Total other comprehensive income (loss), net of tax | 24 | (40) | 75 |
Cumulative effect adjustment for adoption of ASU 2016-09, 2016-01 and 2018-02 | $ 3 | ||
Balance at end of period | $ (27) | $ 13 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) -Summary of Unaudited Quarterly Financial Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unaudited quarterly financial results | |||||||||||
Total revenue | $ 218,554 | $ 214,980 | $ 91,360 | $ 87,479 | $ 95,967 | $ 108,082 | $ 104,399 | $ 104,964 | |||
Operating expenses | 154,357 | 159,407 | 68,635 | 65,354 | 70,210 | 76,272 | 74,715 | 77,696 | $ 447,753 | $ 298,893 | $ 319,461 |
Income from operations | 64,197 | 55,573 | 22,725 | 22,125 | 25,757 | 31,810 | 29,684 | 27,268 | 164,620 | 114,519 | 90,168 |
Net income | $ 37,589 | $ 25,992 | $ 14,383 | $ 14,527 | $ 13,915 | $ 20,590 | $ 18,675 | $ 10,524 | $ 92,491 | $ 63,704 | $ 25,826 |
Basic earnings per share | $ 0.56 | $ 0.38 | $ 0.21 | $ 0.22 | $ 0.21 | $ 0.30 | $ 0.27 | $ 0.17 | $ 1.37 | $ 0.96 | $ 0.47 |
Diluted earnings per share | $ 0.51 | $ 0.35 | $ 0.20 | $ 0.20 | $ 0.19 | $ 0.29 | $ 0.26 | $ 0.16 | $ 1.26 | $ 0.90 | $ 0.43 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 12, 2020 | Jan. 17, 2020 | Jul. 01, 2019 | Mar. 13, 2020 | Dec. 31, 2019 | Mar. 13, 2020 | Dec. 31, 2019 | Dec. 31, 2017 |
Subsequent Event [Line Items] | ||||||||
Dividends declared per share of common stock | $ 0.10 | $ 2.42 | ||||||
Term Loans | ||||||||
Subsequent Event [Line Items] | ||||||||
Repayments of debt | $ 186 | $ 148 | ||||||
LIBOR | Term Loans | ||||||||
Subsequent Event [Line Items] | ||||||||
Base spread (as a percent) | 3.25% | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends declared per share of common stock | $ 0.05 | |||||||
Dividends, date of declared | Feb. 12, 2020 | |||||||
Dividends payable date | Mar. 25, 2020 | |||||||
Dividends payable, date of record | Mar. 10, 2020 | |||||||
Subsequent Event | Term Loans | ||||||||
Subsequent Event [Line Items] | ||||||||
Repayments of debt | $ 38 | $ 186 | ||||||
Subsequent Event | LIBOR | ||||||||
Subsequent Event [Line Items] | ||||||||
Base spread (as a percent) | 0.75% |