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Moelis & Company Reports Fourth Quarter and Full Year 2019 Financial Results; Declares Special Dividend of $0.75 Per Share and Increases Regular Quarterly Dividend to $0.51 Per Share

Moelis & Company (NYSE: MC) today reported financial results for the fourth quarter and fiscal year ended December 31, 2019. The Firm’s fourth quarter revenues of $223.5 million decreased 6% over the prior year period. The Firm reported fourth quarter 2019 GAAP net income of $27.2 million, or $0.38 per share (diluted). On an Adjusted basis, the Firm reported net income of $26.4 million or $0.38 per share (diluted) for the fourth quarter of 2019, which compares with $52.0 million of net income or $0.77 per share (diluted) in the prior year period.

The Firm’s fiscal year 2019 revenues of $746.5 million represented a decrease of 16% over the prior year. GAAP net income for the period was $135.7 million, or $1.89 per share (diluted), compared with $208.0 million or $2.78 per share in the prior year period. On an Adjusted basis, the Firm reported net income of $134.2 million for fiscal year 2019 as compared with $202.3 million in the prior year. On a per share basis, the Firm reported Adjusted net income of $1.96 per share (diluted) for fiscal year 2019, which compares to $3.00 per share (diluted) reported in the prior year period.

“We continued our momentum from the third quarter into the fourth quarter, resulting in a strong second half of revenues. During 2019 we provided discreet and exceptional advice on some of the world’s most complex and largest transactions, and our restructuring franchise achieved record revenues, surpassing last year’s peak level of activity. We achieved an increase in our average fees earned per completed transaction for the fourth consecutive year, as our global platform continues to mature,” said Ken Moelis, Chairman and Chief Executive Officer.

“During 2019, Moelis & Company added 11 managing directors through internal promotion and key external hires, enhancing our capabilities in important products, regions and sectors. Our ability to attract, develop and retain best-in-class talent, has led to increased client dialogue versus the same time last year. By continuing to invest in our talent, we are well positioned to execute on increased levels of activity.”

“As part of our ongoing commitment in creating shareholder value, we increased our regular dividend for the seventh time, and announced our eighth special dividend. Coupled with record levels of share repurchases totaling 1.3 million shares, we will have returned approximately $225 million with respect to the 2019 performance year. We remain committed to returning our excess capital to shareholders, while continuing to invest in our business.”

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 79% 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 21% is owned by other partners of Moelis & Company Group LP and is primarily subject to U.S. federal tax at the partner level (certain state and local and foreign income taxes are incurred at the company level). The Adjusted results included herein apply certain adjustments from our GAAP results, including the assumption that 100% of the Firm’s fourth quarter and full year 2019 income was taxed at our corporate effective tax rate. 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.

 

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

US. GAAP

Adjusted (non-GAAP)*

Three Months Ended December 31,

($ in thousands except per share data)

2019

2018

2019 vs. 2018 Variance

2019

2018

2019 vs. 2018 Variance

Revenues

$

223,528

$

238,294

-6

%

$

223,528

$

238,294

-6

%

Income (loss) before income taxes

28,301

68,222

-59

%

28,301

68,903

-59

%

Provision for income taxes

1,151

12,217

-91

%

1,896

16,911

-89

%

Net income (loss)

27,150

56,005

-52

%

26,405

51,992

-49

%

Net income (loss) attributable to noncontrolling interests

5,699

16,789

-66

%

-

-

N/M

Net income (loss) attributable to Moelis & Company

$

21,451

$

39,216

-45

%

$

26,405

$

51,992

-49

%

Diluted earnings per share

$

0.38

$

0.72

-47

%

$

0.38

$

0.77

-51

%

N/M = not meaningful

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

US. GAAP

Adjusted (non-GAAP)*

Twelve Months Ended December 31,

($ in thousands except per share data)

2019

2018

2019 vs. 2018 Variance

2019

2018

2019 vs. 2018 Variance

Revenues

$

746,534

$

885,840

-16

%

$

746,534

$

885,840

-16

%

Income (loss) before income taxes

147,505

238,452

-38

%

148,605

242,052

-39

%

Provision (benefit) for income taxes

11,813

30,448

-61

%

14,423

39,764

-64

%

Net income (loss)

135,692

208,004

-35

%

134,182

202,288

-34

%

Net income (loss) attributable to noncontrolling interests

30,597

67,324

-55

%

-

-

N/M

Net income (loss) attributable to Moelis & Company

$

105,095

$

140,680

-25

%

$

134,182

$

202,288

-34

%

Diluted earnings per share

$

1.89

$

2.78

-32

%

$

1.96

$

3.00

-35

%

N/M = not meaningful

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

Revenues

We earned revenues of $223.5 million in the fourth quarter of 2019, as compared with $238.3 million in the prior year period, which is the largest quarter of revenues on record. This compares favorably with a 17% decrease in the number of global completed M&A transactions in the same period1. The decrease in quarterly revenues was driven by a decrease in transaction completions, partially offset by a meaningful increase in average fees earned per completed transaction as compared with the prior year period.

For the year ended December 31, 2019, revenues were $746.5 million as compared with $885.8 million in 2018, or a decrease of 16%. The decrease in full year revenues reflects fewer M&A transaction completions, partially offset by strength in our Restructuring activity over the prior year period. We earned higher average fees per completed transaction across all transactions, including both M&A and Restructuring, as compared with the prior year period.

Our second half of the year ended December 31, 2019 revenues were $455.2 as compared with $446.0 in the second half of 2018, an increase of 2% and our strongest six month period of revenue in the Firm’s history.

We continued to execute on our strategy of organic growth through internal talent development. In early 2020 we promoted five of our advisory professionals to Managing Director: Rohan Choudhary (EMEA/Restructuring and Recapitalization), Wouter Leemhuis (EMEA/Oilfield Services), Adam Steinberg (U.S./Restructuring and Recapitalization), Suraj Tolani (U.S./M&A) and Taryn Widén (U.S./FinTech). We have a robust pipeline of Managing Director hires for 2020.

1 Source: Thomson Financial as of January 3, 2020; includes all transactions greater than $100 million in value

 

Expenses

The following tables set forth information relating to the Firm’s operating expenses

US. GAAP

Adjusted (non-GAAP)*

Three Months Ended December 31,

($ in thousands)

2019

2018

2019 vs. 2018
Variance

2019

2018

2019 vs. 2018
Variance

Expenses:

Compensation and benefits

$

172,096

$

137,876

25

%

$

166,916

$

136,963

22

%

% of revenues

77.0

%

57.9

%

74.7

%

57.5

%

Non-compensation expenses

$

34,680

$

37,263

-7

%

$

34,680

$

37,263

-7

%

% of revenues

15.5

%

15.6

%

15.5

%

15.6

%

Total operating expenses

$

206,776

$

175,139

18

%

$

201,596

$

174,226

16

%

% of revenues

92.5

%

73.5

%

90.2

%

73.1

%

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

US. GAAP

Adjusted (non-GAAP)*

Twelve Months Ended December 31,

($ in thousands)

2019

2018

2019 vs. 2018
Variance

2019

2018

2019 vs. 2018
Variance

Expenses:

Compensation and benefits

$

488,439

$

513,863

-5

%

$

470,254

$

509,302

-8

%

% of revenues

65.4

%

58.0

%

63.0

%

57.5

%

Non-compensation expenses

$

143,552

$

145,196

-1

%

$

143,552

$

145,196

-1

%

% of revenues

19.2

%

16.4

%

19.2

%

16.4

%

Total operating expenses

$

631,991

$

659,059

-4

%

$

613,806

$

654,498

-6

%

% of revenues

84.7

%

74.4

%

82.2

%

73.9

%

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

Total operating expenses on a GAAP basis were $206.8 million for the fourth quarter and $632.0 million for the full year ended December 31, 2019. On an Adjusted basis, operating expenses were $201.6 million for the fourth quarter of 2019 as compared with $174.2 million in the prior year period and $613.8 million for fiscal year 2019 as compared with $654.5 million in 2018. The decrease in operating expenses for the full year is associated with decreased revenues, which drove a decline in compensation and benefits expenses. Through continued expense discipline, we achieved lower non-compensation expenses for fiscal year 2019.

Compensation and benefits expenses on a GAAP basis were $172.1 million in the fourth quarter and $488.4 million in the fiscal year ended December 31, 2019, respectively. Adjusted compensation and benefits expenses were $166.9 million and $470.3 million for the fourth quarter and fiscal year ended December 31, 2019, respectively. This compares with $137.0 million and $509.3 million for the fourth quarter and fiscal year ended December 31, 2018, respectively. The Adjusted compensation and benefits ratio for the current quarter was 74.7%, and for the fiscal year 2019 was 63.0%.

Non-compensation expenses on a GAAP and Adjusted basis were $34.7 million for the fourth quarter of 2019 as compared with $37.3 million in the same period of the prior year, and the non-compensation expense ratio decreased to 15.5% from 15.6%. For the fiscal year of 2019, GAAP and Adjusted non-compensation expenses were $143.6 million as compared with $145.2 million in the prior year period, representing a decrease of 1%.

 

Other Income (Expenses)

US. GAAP

Adjusted (non-GAAP)*

Three Months Ended December 31,

($ in thousands)

2019

2018

2019 vs. 2018
Variance

2019

2018

2019 vs. 2018
Variance

Other income (expenses)

$

11,549

$

5,067

N/M

$

6,369

$

4,835

N/M

N/M = not meaningful

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

US. GAAP

Adjusted (non-GAAP)*

Twelve Months Ended December 31,

($ in thousands)

2019

2018

2019 vs. 2018
Variance

2019

2018

2019 vs. 2018
Variance

Other income (expenses)

$

32,962

$

11,671

N/M

$

15,877

$

10,710

N/M

N/M = not meaningful

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

Other income (expenses) on a GAAP basis was $11.5 million in the fourth quarter and $33.0 million for fiscal year 2019. On an Adjusted basis, other income (expenses) was $6.4 million in the fourth quarter of 2019 as compared with $4.8 million in the prior year period. In the fourth quarter of 2019, we recorded a GAAP gain of $8.1 million related to the November 2019 share sale of our investment in Moelis Australia. Compensation expense associated with this gain was reclassified from compensation and benefits to other income (expenses) on an Adjusted basis. As a result, the net gain associated with the share sale of our investment in Australia included in Adjusted other income (expenses) was $3.1 million.

For the year ended December 31, 2019, other income (expenses) on an Adjusted basis was $15.9 million as compared with $10.7 million for the prior year period. Other income (expenses) on an Adjusted basis for the fiscal year 2019 includes the fourth quarter gain mentioned above, in addition to the $5.4 net gain related to the September 2019 share sale of our investment in Moelis Australia.

Provision for Income Taxes

The corporate partner (Moelis & Company) currently owns 79% of the operating partnership (Moelis & Company Group LP) and is subject to corporate U.S. federal and state income tax. Income on the remaining 21% 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 that 100% of the Firm’s fourth quarter and full year 2019 income was taxed at our corporate effective tax rate of 6.7% and 9.7% respectively, versus 24.5% and 16.4% in both prior year periods.

Capital Management and Balance Sheet

Moelis & Company continues to maintain a strong financial position, and as of December 31, 2019, we held cash and liquid investments of $341.8 million and had no debt or goodwill on our balance sheet.

On February 4, 2020, the Board of Directors of Moelis & Company declared a special dividend of $0.75 per share and increased the regular quarterly dividend to $0.51 per share. The $1.26 per share will be paid on March 27, 2020 to common stockholders of record on February 18, 2020.

During the fiscal year ended December 31, 2019, we repurchased 1.3 million shares of our common stock for a total cost of $51.2 million.

Earnings Call

We will host a conference call beginning at 5:00pm ET on Wednesday, February 5, 2020, accessible via telephone and the internet. Ken Moelis, Chairman and Chief Executive Officer, and Joe Simon, Chief Financial Officer, will review our fourth quarter and full year 2019 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 Fourth Quarter 2019 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 10138064.

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 from 20 geographic locations in North and South America, Europe, the Middle East, Asia and Australia. For further information, please visit: www.moelis.com or follow us on Twitter @Moelis.

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.

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 adjusting the accounting impact of certain items 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.

Appendix

GAAP Consolidated Statement of Operations (Unaudited)

Reconciliation of GAAP 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

December 31,

Twelve Months Ended

December 31,

2019

2018

2019

2018

Revenues

$

223,528

$

238,294

$

746,534

$

885,840

Expenses

Compensation and benefits

172,096

137,876

488,439

513,863

Occupancy

5,823

4,843

20,209

18,952

Professional fees

4,307

7,182

19,229

25,311

Communication, technology and information services

7,907

7,883

31,590

29,747

Travel and related expenses

9,797

10,468

41,496

42,264

Depreciation and amortization

1,236

1,335

4,965

4,625

Other expenses

5,610

5,552

26,063

24,297

Total Expenses

206,776

175,139

631,991

659,059

Operating income (loss)

16,752

63,155

114,543

226,781

Other income (expenses)

11,549

5,067

32,962

11,671

Income (loss) before income taxes

28,301

68,222

147,505

238,452

Provision (benefit) for income taxes

1,151

12,217

11,813

30,448

Net income (loss)

27,150

56,005

135,692

208,004

Net income (loss) attributable to noncontrolling interests

5,699

16,789

30,597

67,324

Net income (loss) attributable to Moelis & Company

$

21,451

$

39,216

$

105,095

$

140,680

Weighted-average shares of Class A common stock outstanding

Basic

51,648,050

47,629,634

50,373,874

43,216,358

Diluted

56,316,374

54,609,318

55,513,149

50,690,528

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

Basic

$

0.42

$

0.82

$

2.09

$

3.26

Diluted

$

0.38

$

0.72

$

1.89

$

2.78

 

Moelis & Company

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

Unaudited

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

Three Months Ended December 31, 2019

Adjusted items

GAAP

Adjustments

Adjusted

(non-GAAP)

Compensation and benefits

$

172,096

(5,180

)

(a)(b)

$

166,916

Other income (expenses)

11,549

(5,180

)

(a)(b)

6,369

Income (loss) before income taxes

28,301

-

28,301

Provision for income taxes

1,151

745

(c)

1,896

Net income (loss)

27,150

(745

)

26,405

Net income (loss) attributable to noncontrolling interests

5,699

(5,699

)

(d)

-

Net income (loss) attributable to Moelis & Company

$

21,451

$

4,954

$

26,405

Weighted-average shares of Class A common stock outstanding

Basic

51,648,050

12,958,022

(d)

64,606,072

Diluted

56,316,374

12,958,022

(d)

69,274,396

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

Basic

$

0.42

$

0.41

Diluted

$

0.38

$

0.38

 

(a) Reflects a reclassification of $0.2 million of other income to compensation and benefits expense associated with the forfeiture of fully vested awards and enforcement of non-compete provisions.
(b) Reflects the reclassification of $5.0 million of compensation and benefits expense associated with the Firm's $8.1 million gain on its sale of 8.0 million shares of Moelis Australia. The net gain remaining within other income (expenses) associated with this sale is $3.1 million.
(c) An adjustment has been made to illustrate the result as if 100% of the Firm’s income is being taxed at our corporate effective tax rate of 6.7% for the period stated. Our tax provision includes an excess tax benefit related to the settlement of share-based awards of $4.9 million; excluding such discrete benefit, our effective tax rate for the period presented would have been 24.1%.
(d) Assumes all outstanding Class A partnership units have been exchanged into Class A common stock.

 

Three Months Ended December 31, 2018

 

Adjusted items

 

GAAP

 

 

Adjustments

 

 

Adjusted

(non-GAAP)

 

 

 

Compensation and benefits

$

137,876

$

(913

)

(a)

$

136,963

Other income (expenses)

5,067

(232

)

(b)

4,835

Income (loss) before income taxes

68,222

681

68,903

Provision for income taxes

 

12,217

4,694

(b)(c)

16,911

Net income (loss)

56,005

(4,013

)

51,992

 

Net income (loss) attributable to noncontrolling interests

 

16,789

(16,789

)

 (d)

-

Net income (loss) attributable to Moelis & Company

 

$

39,216

$

12,776

$

51,992

Weighted-average shares of Class A common stock outstanding

      Basic

47,629,634

13,053,465

(d)

60,683,099

      Diluted

54,609,318

13,053,465

(d)

67,662,783

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

      Basic

$

0.82

$

0.86

      Diluted

$

0.72

$

0.77

(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.
(b)     Reflects the netting of $0.2 million of GAAP adjustments made to the amount pursuant to the Company's Tax Receivable Agreement against provision for income taxes.
(c)     An adjustment has been made to illustrate the result as if 100% of the Firm’s income is being taxed at our corporate effective tax rate of 24.5% for the period stated, which includes tax benefits of $1.0 million primarily related to the settlement of share-based awards.  Excluding such benefits, our effective tax rate for the period presented would have been 26.1%.
(d)     Assumes all outstanding Class A partnership units have been exchanged into Class A common stock.

 

Twelve Months Ended December 31, 2019

 

Adjusted items

 

GAAP

 

 

Adjustments

 

 

Adjusted

(non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

$

488,439

$

(18,185

)

(a)(b)(c)

$

470,254

Other income (expenses)

32,962

(17,085

)

(b)(c)

15,877

Income (loss) before income taxes

147,505

1,100

148,605

Provision (benefit) for income taxes

 

11,813

2,610

(d)

14,423

Net income (loss)

135,692

(1,510

)

134,182

 

Net income (loss) attributable to noncontrolling interests

 

30,597

(30,597

)

(e)

-

Net income (loss) attributable to Moelis & Company

 

$

105,095

$

29,087

$

134,182

Weighted-average shares of Class A common stock outstanding

Basic

50,373,874

13,003,248

(e)

63,377,122

Diluted

55,513,149

13,003,248

(e)

68,516,397

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

Basic

$

2.09

$

2.12

Diluted

$

1.89

$

1.96

(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; as of April 2019 such awards have been fully expensed.
(b)     Reflects a reclassification of $4.8 million of other income to compensation and benefits expense associated with the forfeiture of fully vested awards and enforcement of non-compete provisions.
(c)     Reflects the reclassification of $12.3 million of compensation and benefits expense associated with the Firm's $20.7 million gain on its sale of 20.5 million shares of Moelis Australia. The net gain remaining within other income (expenses) associated with this sale is $8.4 million.
(d)    An adjustment has been made to illustrate the result as if 100% of the Firm’s income is being taxed at our corporate effective tax rate of 9.7% for the period stated. Our tax provision includes an excess tax benefit related to the settlement of share-based awards of $22.7 million; excluding such discrete benefit, our effective tax rate for the period presented would have been 25.0%.
(e)     Assumes all outstanding Class A partnership units have been exchanged into Class A common stock.

 

Twelve Months Ended December 31, 2018

 

Adjusted items

 

GAAP

 

 

Adjustments

 

 

Adjusted

(non-GAAP)

 

 

 

Compensation and benefits

$

513,863

$

(4,561

)

(a)(b)

$

509,302

Other income (expenses)

11,671

(961

)

(b)(c)

10,710

Income (loss) before income taxes

238,452

3,600

242,052

Provision for income taxes

 

30,448

9,316

(c)(d)

39,764

Net income (loss)

208,004

(5,716

)

202,288

 

Net income (loss) attributable to noncontrolling interests

 

67,324

(67,324

)

 (e)

-

Net income (loss) attributable to Moelis & Company

 

$

140,680

$

61,608

$

202,288

Weighted-average shares of Class A common stock outstanding

     Basic

43,216,358

16,649,446

(e)

59,865,804

     Diluted

50,690,528

16,649,446

(e)

67,339,974

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

     Basic

$

3.26

$

3.38

     Diluted

$

2.78

$

3.00

(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.
(b)     Reflects a reclassification of $1.0 million of other income to compensation and benefits expense associated with enforcement of non-compete provisions.
(c)     Reflects the netting of $0.1 million of GAAP adjustments made to the amount pursuant to the Company's Tax Receivable Agreement against provision for income taxes.
(d)     An adjustment has been made to illustrate the result as if 100% of the Firm’s income is being taxed at our corporate effective tax rate of 16.4% for the period stated, which includes tax benefits of $21.5 million primarily related to the settlement of share-based awards.  Excluding such benefits, our effective tax rate for the period presented would have been 25.3%.  Our corporate effective tax rate of 16.4% excludes any benefits or costs relating to the adjustment to the step-up in tax basis in Group LP assets in connection with the partnership unit exchanges and offerings.  Such adjustment was a net economic benefit of $1.0 million which is not included in the corporate effective tax rate for the period presented.
(e)   Assumes all outstanding Class A partnership units have been exchanged into Class A common stock.

Contacts:

Investors: 
Michele Miyakawa 
Moelis & Company 
t: + 1 310 443 2344 
michele.miyakawa@moelis.com

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