UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): August 3, 2016

 

MOELIS & COMPANY

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-36418

 

46-4500216

(State or other jurisdiction of
incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

399 Park Avenue, 5 th  Floor

 

 

New York, New York

 

10022

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code (212) 883-3800

 

 

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02               Results of Operations and Financial Condition

 

On August 3, 2016, Moelis & Company issued a press release announcing financial results for its second quarter ended June 30, 2016.

 

A copy of the press release is attached hereto as Exhibit 99.1. All information in the press release is furnished but not filed.

 

Item 9.01               Financial Statements and Exhibits

 

(d)                                  Exhibits:

 

Exhibit
Number

 

Description

99.1

 

Press release of Moelis & Company dated August 3, 2016.

 

2



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

MOELIS & COMPANY

 

 

 

 

 

 

 

By:

/s/ Joseph Simon

 

 

Name: Joseph Simon

 

 

Title: Chief Financial Officer

 

Date: August 3, 2016

 

3



 

EXHIBIT INDEX

 

Exhibit
Number

 

Description

99.1

 

Press release of Moelis & Company dated August 3, 2016.

 

4


Exhibit 99.1

 

GRAPHIC

 

Moelis & Company Reports Second Quarter 2016 Financial Results;
Increases Quarterly Dividend to $0.32 Per Share

 

Record Second Quarter and First Half Revenues

 

·                   Second quarter revenues of $131.7 million, up 5% from the second quarter of 2015; first half revenues of $258.1 million, up 15% from the same period of 2015

·                   GAAP net income of $0.29 per share (diluted) for the second quarter and $0.60 per share (diluted) for the first half of 2016; Adjusted net income of $0.35 per share (diluted) and $0.69 per share (diluted) for the second quarter and first half of 2016, respectively

·                   Board of Directors approved 7% increase in quarterly dividend to $0.32 per share

·                   Strong balance sheet with $176.1 million of cash and short-term investments and no debt at quarter-end

·                   Continued to execute on organic growth strategy

·                   Recruited two Managing Directors in the U.S. to enhance industry expertise in oil & gas and diversified industrials

·                   Announced one Managing Director hire in Frankfurt to advise clients in Europe’s German speaking countries

 

NEW YORK, August 3, 2016 — Moelis & Company (“we” or the “Firm”) (NYSE: MC) today reported financial results for the second quarter ended June 30, 2016.  The Firm’s total revenues for the second quarter were a record $131.7 million, representing an increase of 5% from the prior year period.  The Firm reported second quarter 2016 GAAP net income of $26.2 million, or $0.29 per share (diluted).  On an Adjusted basis, the Firm reported net income of $19.8 million or $0.35 per share (diluted) for the second quarter of 2016, as compared with $20.6 million or $0.37 per share (diluted) in the prior year period.

 

First half 2016 total revenues were $258.1 million as compared with $225.3 million in the first half of 2015, representing our largest first half of revenues on record and an increase of 15% from the prior year period.  GAAP net income for the period was $51.8 million, or $0.60 per share (diluted).  On an Adjusted basis, the Firm reported net income of $39.5 million or $0.69 per share (diluted) for the first half of 2016, as compared with $36.0 million or $0.65 per share (diluted) in the prior year period.

 

1



 

“Our record second quarter revenues represent the fourth consecutive quarter of year over year revenue growth and demonstrate the strength of our model against the backdrop of a slower global M&A environment.  Our M&A-related activity was strong during the quarter, and our restructuring activity continues to grow, contributing to a solid pipeline of clients who are evaluating strategic alternatives,” said Ken Moelis, Chairman and Chief Executive Officer.

 

“Today we announced a 7% increase in our quarterly dividend to $0.32 per share, representing the third increase in our regular dividend from the time of our IPO.  We also invested in the firm with the recent announcements of three new MD hires.  Our model is durable, our advisory practice is diverse, and our balance sheet is strong.  As a result, we remain confident in our ability to grow the franchise while continuing to distribute earnings to our shareholders.”

 

The Firm’s revenues and net income can fluctuate materially depending on the number, size and timing of completed transactions on which it advised as well as other factors.  Accordingly, financial results in any particular quarter may not be representative of future results over a longer period of time.

 

Currently 38% of the operating partnership (Moelis & Company Group LP) is owned by the corporate partner (Moelis & Company) and is subject to corporate U.S. federal and state income tax. The remaining 62% is owned by other partners of Moelis & Company Group LP and is primarily subject to tax at the partner level (except for certain state and local and foreign income taxes). The Adjusted results included herein remove the impact of compensation expenses specifically related to the Firm’s IPO awards, and apply the corporate tax rate to all earnings under the assumption that all outstanding Class A partnership units of Moelis & Company Group LP have been exchanged into Class A common stock of Moelis & Company.

 

The Firm has modified the description of its unaudited non-generally accepted accounting principles (“non-GAAP”) measure presented in its quarterly earnings release and other supplementary information from “Adjusted Pro Forma” to “Adjusted.” This modification impacted the descriptions only. The amounts and principles used to derive the Adjusted data have been consistently applied.   We believe the Adjusted results, when presented together with comparable GAAP results, are useful to investors to compare our performance across periods and to better understand our operating results. A reconciliation between our GAAP results and our Adjusted results is presented in the Appendix to this press release.

 

2



 

GAAP and Adjusted (non-GAAP) Selected Financial Data (Unaudited)

 

 

 

U.S. GAAP

 

Adjusted (non-GAAP)*

 

 

 

Three Months Ended June 30,

 

($ in thousands except per share data)

 

2016

 

2015

 

2016 vs.
2015
Variance

 

2016

 

2015

 

2016 vs.
2015
Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

131,725

 

$

125,873

 

5

%

$

131,725

 

$

125,873

 

5

%

Income (loss) before income taxes

 

30,926

 

32,934

 

-6

%

32,788

 

34,321

 

-4

%

Provision for income taxes

 

4,721

 

6,079

 

-22

%

12,951

 

13,729

 

-6

%

Net income (loss)

 

26,205

 

26,855

 

-2

%

19,837

 

20,592

 

-4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

19,312

 

19,724

 

-2

%

 

 

N/M

 

Net income (loss) attributable to Moelis & Company

 

$

6,893

 

$

7,131

 

-3

%

$

19,837

 

$

20,592

 

-4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.29

 

$

0.34

 

-15

%

$

0.35

 

$

0.37

 

-5

%

 


N/M = not meaningful

* See Appendix for a reconciliation of GAAP to Adjusted (non-GAAP)

 

 

 

U.S. GAAP

 

Adjusted (non-GAAP)*

 

 

 

Six Months Ended June 30,

 

($ in thousands except per share data)

 

2016

 

2015

 

2016 vs.
2015
Variance

 

2016

 

2015

 

2016 vs.
2015
Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

258,089

 

$

225,285

 

15

%

$

258,089

 

$

225,285

 

15

%

Income (loss) before income taxes

 

61,989

 

57,195

 

8

%

65,225

 

60,042

 

9

%

Provision for income taxes

 

10,165

 

10,379

 

-2

%

25,764

 

24,017

 

7

%

Net income (loss)

 

51,824

 

46,816

 

11

%

39,461

 

36,025

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

37,961

 

34,349

 

11

%

 

 

N/M

 

Net income (loss) attributable to Moelis & Company

 

$

13,863

 

$

12,467

 

11

%

$

39,461

 

$

36,025

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.60

 

$

0.59

 

2

%

$

0.69

 

$

0.65

 

6

%

 


N/M = not meaningful

* See Appendix for a reconciliation of GAAP to Adjusted (non-GAAP)

 

Revenues

 

For the second quarter of 2016, revenues were $131.7 million as compared with $125.9 million in the second quarter of 2015, representing an increase of 5%. This compares favorably with a 23% decrease in the number of global completed M&A transactions in the same period(1). The increase in revenues was primarily driven by strong M&A activity, including higher average fees earned per completed M&A transaction.

 


(1)  Source: Thomson Financial as of July 6, 2016; includes all transactions greater than $100 million in value

 

3



 

For the first half of 2016, revenues were $258.1 million as compared with $225.3 million in the same period in 2015, representing an increase of 15%.  We advised 184 total clients in the first half of 2016 as compared with 168 clients during the same period in the prior year.

 

We continued to execute on our strategy of profitable expansion.  Since our last earnings release, we hired two Managing Directors in the U.S. who will strengthen our industry expertise in oil & gas and diversified industrials.  We also strengthened our regional coverage with a senior hire in Frankfurt who will provide financial and strategic advice to clients across the German-speaking region and the rest of Europe.  These individuals will join the Firm in the third quarter of 2016.

 

Expenses

 

The following tables set forth information relating to the Firm’s operating expenses, which are reported net of client expense reimbursements.

 

 

 

U.S. GAAP

 

Adjusted (non-GAAP)*

 

 

 

Three Months Ended June 30,

 

($ in thousands)

 

2016

 

2015

 

2016 vs.
2015
Variance

 

2016

 

2015

 

2016 vs.
2015
Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

$

78,198

 

$

69,663

 

12

%

$

76,336

 

$

68,276

 

12

%

% of revenues

 

59

%

55

%

 

 

58

%

54

%

 

 

Non-compensation expenses

 

$

22,968

 

$

23,438

 

-2

%

$

22,968

 

$

23,438

 

-2

%

% of revenues

 

17

%

19

%

 

 

17

%

19

%

 

 

Total operating expenses

 

$

101,166

 

$

93,101

 

9

%

$

99,304

 

$

91,714

 

8

%

% of revenues

 

77

%

74

%

 

 

75

%

73

%

 

 

 


* See Appendix for a reconciliation of GAAP to Adjusted (non-GAAP)

 

 

 

U.S. GAAP

 

Adjusted (non-GAAP)*

 

 

 

Six Months Ended June 30,

 

($ in thousands)

 

2016

 

2015

 

2016 vs.
2015
Variance

 

2016

 

2015

 

2016 vs.
2015
Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

$

152,866

 

$

125,056

 

22

%

$

149,630

 

$

122,209

 

22

%

% of revenues

 

59

%

56

%

 

 

58

%

54

%

 

 

Non-compensation expenses

 

$

45,773

 

$

46,076

 

-1

%

$

45,773

 

$

46,076

 

-1

%

% of revenues

 

18

%

20

%

 

 

18

%

20

%

 

 

Total operating expenses

 

$

198,639

 

$

171,132

 

16

%

$

195,403

 

$

168,285

 

16

%

% of revenues

 

77

%

76

%

 

 

76

%

75

%

 

 

 


* See Appendix for a reconciliation of GAAP to Adjusted (non-GAAP)

 

4



 

Total operating expenses on a GAAP basis were $101.2 million for the second quarter and $198.6 million for the first half of 2016.  On an Adjusted basis, operating expenses were $99.3 million for the second quarter of 2016 as compared with $91.7 million for the second quarter of 2015, and $195.4 million for the first half as compared with $168.3 million in the prior year period.  The increase in operating expenses in 2016 resulted from increased compensation and benefits expenses.

 

Compensation and benefits expenses were $78.2 million on a GAAP basis in the second quarter and $152.9 million for the first half of 2016.  Adjusted compensation and benefits expenses (which exclude the amortization of IPO awards for both 2015 and 2016) were $76.3 million and $149.6 million for the second quarter and first half of 2016, respectively, as compared with $68.3 million and $122.2 million for the second quarter and first half of 2015, respectively. The Adjusted compensation and benefits ratio increased from 54% in the second quarter and first half of 2015 to 58% of revenues in the current year periods. The increased compensation ratio reflects an additional tranche of equity amortization expense arising from the 2015 equity incentive grants made in early 2016 as well as modified vesting terms associated with that equity.  We remain committed to our targeted long-term compensation ratio level of 58% of revenues.

 

Non-compensation expenses on a GAAP and Adjusted basis were $23.0 million for the second quarter of 2016 as compared with $23.4 million for the second quarter of 2015.  Our  non-compensation expense ratio decreased to 17% from 19% in the same period of the prior year.  For the first half of 2016, GAAP and Adjusted non-compensation expenses were $45.8 million as compared with $46.1 million for the same period of the prior year, and the non-compensation expense ratio decreased to 18% from 20%, driven by increased revenues.

 

Provision for Income Taxes

 

The corporate partner (Moelis & Company) currently owns 38% of the operating partnership (Moelis & Company Group LP) and is subject to corporate U.S. federal and state income tax.  Income on the remaining 62% continues to be subject to New York City unincorporated business tax and certain foreign income taxes and is accounted for at the partner level through the non-controlling interests line item.  For Adjusted purposes, we have assumed all outstanding Class A partnership units of Moelis & Company Group LP to have been exchanged into Class A common stock of Moelis & Company such that 100% of the Firm’s second quarter 2016 income was taxed at our corporate effective tax rate of 39.5%, versus 40.0% in the prior year period.

 

Capital Management and Balance Sheet

 

Moelis & Company continues to maintain a strong financial position, and as of June 30, 2016, we held cash and short term investments of $176.1 million and had no debt or goodwill on our balance sheet.

 

5



 

The Board of Directors of Moelis & Company has declared a quarterly dividend of $0.32 per share to be paid on September 6, 2016 to common stockholders of record on August 22, 2016.

 

Earnings Call

 

We will host a conference call beginning at 5:00pm ET on Wednesday, August 3, 2016, accessible via telephone and the internet.  Ken Moelis, Chairman and Chief Executive Officer, and Joe Simon, Chief Financial Officer, will review our second quarter 2016 financial results. Following the review, there will be a question and answer session.

 

Investors and analysts may participate in the live conference call by dialing 1-877-510-3938 (domestic) or 1-412-902-4137 (international) and referencing the Moelis & Company Second Quarter 2016 Earnings Call.  Please dial in 15 minutes before the conference call begins. The conference call will also be accessible as a listen-only audio webcast through the Investor Relations section of the Moelis & Company website at www.moelis.com.

 

For those unable to listen to the live broadcast, a replay of the call will be available for one month via telephone starting approximately one hour after the live call ends. The replay can be accessed at 1-877-344-7529 (domestic) or 1-412-317-0088 (international); the conference number is 10088331.

 

About Moelis & Company

 

Moelis & Company is a leading global independent investment bank that provides innovative strategic advice and solutions to a diverse client base, including corporations, governments and financial sponsors.  The Firm assists its clients in achieving their strategic goals by offering comprehensive integrated financial advisory services across all major industry sectors.  Moelis & Company’s experienced professionals advise clients on their most critical decisions, including mergers and acquisitions, recapitalizations and restructurings, capital markets transactions and other corporate finance matters.  The Firm serves its clients with about 650 employees based in 17 offices in North and South America, Europe, the Middle East, Asia and Australia.  For further information about Moelis & Company, please visit www.moelis.com.

 

Forward-Looking Statements

 

This press release contains forward-looking statements, which reflect the Firm’s current views with respect to, among other things, its operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “target,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. For a further discussion of such factors, you should read the Firm’s filings with the Securities and Exchange Commission. The Firm undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

 

6



 

Non-GAAP Financial Measures

 

Adjusted results are a non-GAAP measure which better reflect management’s view of operating results.  We believe that the disclosed Adjusted measures and any adjustments thereto, when presented in conjunction with comparable GAAP measures, are useful to investors to understand the Firm’s operating results by removing the significant accounting impact of one-time charges associated with the Firm’s IPO and assuming all Class A partnership units have been exchanged into Class A common stock.  These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of GAAP results to Adjusted results is presented in the Appendix.

 

Contacts

 

Investor Relations Contact:

Media Contact:

 

Michele Miyakawa

Andrea Hurst

 

Moelis & Company

Moelis & Company

 

t: + 1 310 443 2344

t: + 1 212 883 3666

 

michele.miyakawa@moelis.com

m: +1 347 583 9705

 

 

andrea.hurst@moelis.com

 

 

7



 

Appendix

 

GAAP Consolidated Statement of Operations (Unaudited)

 

GAAP Reconciliation to Adjusted (non-GAAP) Financial Information (Unaudited)

 



 

Moelis & Company

GAAP Consolidated Statement of Operations

Unaudited

(dollars in thousands, except for share and per share data)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

131,725

 

$

125,873

 

$

258,089

 

$

225,285

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

78,198

 

69,663

 

152,866

 

125,056

 

Occupancy

 

6,287

 

3,715

 

10,845

 

7,392

 

Professional fees

 

2,511

 

4,143

 

4,747

 

7,697

 

Communication, technology and information services

 

5,309

 

4,440

 

10,605

 

8,541

 

Travel and related expenses

 

5,831

 

5,131

 

11,962

 

10,744

 

Depreciation and amortization

 

806

 

688

 

1,542

 

1,308

 

Other expenses

 

2,224

 

5,321

 

6,072

 

10,394

 

Total expenses

 

101,166

 

93,101

 

198,639

 

171,132

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

30,559

 

32,772

 

59,450

 

54,153

 

Other income (expenses)

 

101

 

(33

)

204

 

(18

)

Income (loss) from equity method investments

 

266

 

195

 

2,335

 

3,060

 

Income (loss) before income taxes

 

30,926

 

32,934

 

61,989

 

57,195

 

Provision for income taxes

 

4,721

 

6,079

 

10,165

 

10,379

 

Net income (loss)

 

26,205

 

26,855

 

51,824

 

46,816

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

19,312

 

19,724

 

37,961

 

34,349

 

Net income (loss) attributable to Moelis & Company

 

$

6,893

 

$

7,131

 

$

13,863

 

$

12,467

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding

 

 

 

 

 

 

 

 

 

Basic

 

20,745,043

 

19,978,108

 

20,654,657

 

19,961,286

 

Diluted

 

23,618,093

 

21,088,220

 

23,052,255

 

21,144,161

 

Net income (loss) attributable to holders of shares of Class A common stock per share

 

 

 

 

 

 

 

 

 

Basic

 

$

0.33

 

$

0.36

 

$

0.67

 

$

0.62

 

Diluted

 

$

0.29

 

$

0.34

 

$

0.60

 

$

0.59

 

 

A- 1



 

Moelis & Company

Reconciliation of GAAP to Adjusted (non-GAAP) Financial Information

Unaudited

(dollars in thousands, except share and per share data)

 

 

 

Three Months Ended June 30, 2016

 

Adjusted Items

 

GAAP

 

Adjustments

 

Adjusted
(non-GAAP)

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

$

78,198

 

$

(1,862

)(a)

$

76,336

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

30,926

 

1,862

 

32,788

 

Provision for income taxes

 

4,721

 

8,230

(b)

12,951

 

Net income (loss)

 

26,205

 

(6,368

)

19,837

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

19,312

 

(19,312

)

 

Net income (loss) attributable to Moelis & Company

 

$

6,893

 

$

12,944

 

$

19,837

 

 

 

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding

 

 

 

 

 

 

 

Basic

 

20,745,043

 

33,768,672

(b)

54,513,715

 

Diluted

 

23,618,093

 

33,768,672

(b)

57,386,765

 

Net income (loss) attributable to holders of shares of Class A common stock per share

 

 

 

 

 

 

 

Basic

 

$

0.33

 

 

 

$

0.36

 

Diluted

 

$

0.29

 

 

 

$

0.35

 

 


(a)      Expense associated with the amortization of Restricted Stock Units (“RSUs”) and stock options granted in connection with the IPO.  In accordance with GAAP, amortization expense of RSUs and stock options granted in connection with the IPO will be recognized over the five year vesting period; we will continue to adjust for this expense due to the one-time nature of the grant.

 

(b)      Assumes all outstanding Class A partnership units have been exchanged into Class A common stock.  Accordingly, an adjustment has been made such that 100% of the Firm’s income is taxed at the corporate effective tax rate of 39.5% for the period presented.

 

A- 2



 

 

 

Three Months Ended June 30, 2015

 

Adjusted Items

 

GAAP

 

Adjustments

 

Adjusted
(non-GAAP)

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

$

69,663

 

$

(1,387

)(a)

$

68,276

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

32,934

 

1,387

 

34,321

 

Provision for income taxes

 

6,079

 

7,650

(b)

13,729

 

Net income (loss)

 

26,855

 

(6,263

)

20,592

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

19,724

 

(19,724

)

 

Net income (loss) attributable to Moelis & Company

 

$

7,131

 

$

13,461

 

$

20,592

 

 

 

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding

 

 

 

 

 

 

 

Basic

 

19,978,108

 

34,160,239

(b)

54,138,347

 

Diluted

 

21,088,220

 

34,160,239

(b)

55,248,459

 

Net income (loss) attributable to holders of shares of Class A common stock per share

 

 

 

 

 

 

 

Basic

 

$

0.36

 

 

 

$

0.38

 

Diluted

 

$

0.34

 

 

 

$

0.37

 

 


(a)      Expense associated with the amortization of RSUs and stock options granted in connection with the IPO.  In accordance with GAAP, amortization expense of RSUs and stock options granted in connection with the IPO will be recognized over the five year vesting period; we will continue to adjust for this expense due to the one-time nature of the grant.

 

(b)      Assumes all outstanding Class A partnership units have been exchanged into Class A common stock.   Accordingly, an adjustment has been made such that 100% of the Firm’s income is taxed at the corporate effective tax rate of 40.0% for the period presented.

 

A- 3



 

 

 

Six Months Ended June 30, 2016

 

Adjusted Items

 

GAAP

 

Adjustments

 

Adjusted
(non-GAAP)

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

$

152,866

 

$

(3,236

)(a)

$

149,630

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

61,989

 

3,236

 

65,225

 

Provision for income taxes

 

10,165

 

15,599

(b)

25,764

 

Net income (loss)

 

51,824

 

(12,363

)

39,461

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

37,961

 

(37,961

)

 

Net income (loss) attributable to Moelis & Company

 

$

13,863

 

$

25,598

 

$

39,461

 

 

 

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding

 

 

 

 

 

 

 

Basic

 

20,654,657

 

33,859,058

(b)

54,513,715

 

Diluted

 

23,052,255

 

33,859,058

(b)

56,911,313

 

Net income (loss) attributable to holders of shares of Class A common stock per share

 

 

 

 

 

 

 

Basic

 

$

0.67

 

 

 

$

0.72

 

Diluted

 

$

0.60

 

 

 

$

0.69

 

 


(a)      Expense associated with the amortization of RSUs and stock options granted in connection with the IPO.  In accordance with GAAP, amortization expense of RSUs and stock options granted in connection with the IPO will be recognized over the five year vesting period; we will continue to adjust for this expense due to the one-time nature of the grant.

 

(b)      Assumes all outstanding Class A partnership units have been exchanged into Class A common stock.  Accordingly, an adjustment has been made such that 100% of the Firm’s income is taxed at the corporate effective tax rate of 39.5% for the period presented.

 

A- 4



 

 

 

Six Months Ended June 30, 2015

 

Adjusted Items

 

GAAP

 

Adjustments

 

Adjusted
(non-GAAP)

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

$

125,056

 

$

(2,847

)(a)

$

122,209

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

57,195

 

2,847

 

60,042

 

Provision for income taxes

 

10,379

 

13,638

(b)

24,017

 

Net income (loss)

 

46,816

 

(10,791

)

36,025

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

34,349

 

(34,349

)

 

Net income (loss) attributable to Moelis & Company

 

$

12,467

 

$

23,558

 

$

36,025

 

 

 

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding

 

 

 

 

 

 

 

Basic

 

19,961,286

 

34,177,061

(b)

54,138,347

 

Diluted

 

21,144,161

 

34,177,061

(b)

55,321,222

 

Net income (loss) attributable to holders of shares of Class A common stock per share

 

 

 

 

 

 

 

Basic

 

$

0.62

 

 

 

$

0.67

 

Diluted

 

$

0.59

 

 

 

$

0.65

 

 


(a)      Expense associated with the amortization of RSUs and stock options granted in connection with the IPO.  In accordance with GAAP, amortization expense of RSUs and stock options granted in connection with the IPO will be recognized over the five year vesting period; we will continue to adjust for this expense due to the one-time nature of the grant.

 

(b)      Assumes all outstanding Class A partnership units have been exchanged into Class A common stock.  Accordingly, an adjustment has been made such that 100% of the Firm’s income is taxed at the corporate effective tax rate of 40.0% for the period presented.

 

A- 5