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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Duff & Phelps Corp. Class A | NYSE:DUF | NYSE | Ordinary Share |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 15.54 | 0.00 | 00:00:00 |
From Dec 2019 to Dec 2024
Duff & Phelps Corporation (NYSE: DUF), a leading independent financial advisory and investment banking firm, today announced its fourth quarter 2012 financial results and declared a quarterly dividend.
Results
For the quarter ended December 31, 2012, revenue excluding reimbursable expenses increased $20.9 million or 17.6% to $139.9 million, compared to $119.0 million for the corresponding prior year quarter. Adjusted EBITDA(1) for the quarter was $27.1 million, representing 19.3% of revenue excluding reimbursable expenses, compared to $24.2 million for the corresponding prior year quarter, representing 20.3% of revenue excluding reimbursable expenses. Net income attributable to Duff & Phelps Corporation was $6.1 million, or $0.16 per share of Class A common stock on a fully diluted basis, compared to $7.0 million, or $0.23 per share for the corresponding prior year quarter. Adjusted Pro Forma Net Income(1) was $13.4 million, or $0.34 per share on a fully exchanged, fully diluted basis, compared to $12.4 million, or $0.32 per share, for the corresponding prior year quarter.
For the year ended December 31, 2012, revenue excluding reimbursable expenses increased $85.2 million or 22.2% to $469.2 million, compared to $383.9 million for the prior year. Adjusted EBITDA(1) for the year was $83.7 million, representing 17.9% of revenue excluding reimbursable expenses, compared to $64.7 million for the prior year, representing 16.9% of revenue excluding reimbursable expenses. Net income attributable to Duff & Phelps Corporation was $22.3 million, or $0.62 per share of Class A common stock on a fully diluted basis, compared to $18.6 million, or $0.63 per share for the prior year. Adjusted Pro Forma Net Income(1) was $39.3 million, or $1.01 per share on a fully exchanged, fully diluted basis, compared to $31.7 million, or $0.82 per share, for the prior year.
"The strong fourth quarter results reflect continued momentum in several of our businesses including dispute consulting, complex asset valuations and middle market investment banking, as well as the positive impact specifically related to the anticipated tax changes resulting from the fiscal cliff discussions—such as transaction opinions provided for dividend recapitalizations," commented Noah Gottdiener, chief executive officer. "Overall, I am pleased with our 2012 results."
_______________
(1) Adjusted EBITDA, Adjusted Pro Forma Net Income and Adjusted Pro Forma Net Income per share are non-GAAP financial measures. See definitions and disclosures herein.
Declaration of Quarterly Dividend
The Company also announced today that its board of directors has declared a quarterly dividend of $0.09 per share on its outstanding Class A common stock. The dividend is payable on March 19, 2013 to shareholders of record on March 8, 2013.
About Duff & Phelps
As a leading global financial advisory and investment banking firm, Duff & Phelps balances analytical skills, deep market insight and independence to help clients make sound decisions. The firm provides expertise in the areas of valuation, transactions, financial restructuring, alternative assets, disputes and taxation, with more than 1,000 employees serving clients from offices in North America, Europe and Asia. Investment banking services in the United States are provided by Duff & Phelps Securities, LLC; Pagemill Partners; and GCP Securities, LLC. Member FINRA/SIPC. M&A advisory services in the United Kingdom and Germany are provided by Duff & Phelps Securities Ltd. Duff & Phelps Securities Ltd. is authorized and regulated by the Financial Services Authority. For more information, visit www.duffandphelps.com. (NYSE: DUF)
Earnings Call Webcast
As a result of the pending merger, the Company will not be holding an earnings conference call. Please refer to the Company's Annual Report on Form 10-K that will be filed subsequent to this press release for additional discussion of the Company's results.
Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted Pro Forma Net Income, and Adjusted Pro Forma Net Income per share are non-GAAP financial measures. We believe these measures provide a relevant and useful alternative measure of our ongoing profitability and performance. We believe the Adjusted EBITDA, Adjusted Pro Forma Net Income, and Adjusted Pro Forma Net Income per share, in addition to GAAP financial measures, provide a relevant and useful benchmark for investors, in order to assess our financial performance, ongoing operating results and comparability to other companies in our industry. These measures are utilized by our senior management to evaluate our overall performance.
We define Adjusted EBITDA as operating income before depreciation and amortization, equity-based compensation originating prior to our IPO and associated with grants of ownership units of D&P Acquisitions and stock options granted in conjunction with our IPO and other items which are generally not part of our ongoing operations, including but not limited to restructuring charges and acquisition related expenses. We define Adjusted Pro Forma Net Income as net income before equity compensation associated with grants of ownership units of D&P Acquisitions and stock options granted in conjunction with our IPO, and certain items which are generally not part of our ongoing operations, including but not limited to restructuring charges and acquisition related expenses, less pro forma corporate income tax applied at an assumed effective corporate tax rate. Adjusted Pro Forma Net Income per share consists of Adjusted Pro Forma Net Income divided by the fully dilutive weighted average number of the Company's Class A and Class B shares for the applicable period. These measures are reconciled in the tables below.
Adjusted EBITDA, Adjusted Pro Forma Net Income and Adjusted Pro Forma Net Income per share are non-GAAP financial measures which are not prepared in accordance with, and should not be considered a substitute for or superior to measurements required by GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, these non-GAAP measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies.
Reconciliation of Adjusted EBITDAQuarter Ended
Year Ended
December 31,2012 December 31,2011 December 31,2012 December 31,2011 Net income attributable to Duff & Phelps Corporation $ 6,065 $ 7,045 $ 22,264 $ 18,614 Net income attributable to noncontrolling interest 590 4,110 4,037 11,115 Provision for income taxes 7,630 5,566 20,022 13,841 Other expense/(income), net (292 ) 1,591 1,069 1,703 Operating income 13,993 18,312 47,392 45,273 Depreciation and amortization 5,128 3,230 18,138 11,164 Equity-based compensation associated with Legacy Units and IPO Options(1) — (34 ) 22 207 Acquisition retention expenses(2) 3,029 1,024 9,536 1,624 Restructuring charges(3) (28 ) 95 1,796 4,090 Acquisition, integration and corporate development costs(4) 4,951 1,571 6,865 2,372 Adjusted EBITDA $ 27,073 $ 24,198 $ 83,749 $ 64,730 Reconciliation of Adjusted Pro Forma Net IncomeQuarter Ended
Year Ended
December 31,2012 December 31,2011 December 31,2012 December 31,2011 Net income attributable to Duff & Phelps Corporation $ 6,065 $ 7,045 $ 22,264 $ 18,614 Net income attributable to noncontrolling interest 590 4,110 4,037 11,115 Equity-based compensation associated with Legacy Units and IPO Options(1) — (34 ) 22 207 Acquisition retention expenses(2) 3,029 1,024 9,536 1,624 Restructuring charges(3) (28 ) 95 1,796 4,090 Acquisition, integration and corporate development costs(4) 4,951 1,571 6,865 2,372 Loss from the write off of an investment(5) — 1,500 376 1,500 Adjustment to provision for income taxes(6) (1,197 ) (2,910 ) (5,621 ) (7,824 ) Adjusted Pro Forma Net Income, as defined $ 13,410 $ 12,401 $ 39,275 $ 31,698 Fully diluted weighted average shares of Class A common stock 37,245 27,674 34,585 27,832 Weighted average New Class A Units outstanding 2,002 10,650 4,466 10,883 Pro forma fully exchanged, fully diluted shares outstanding 39,247 38,324 39,051 38,715 Adjusted Pro Forma Net Income per fully exchanged, fully diluted share outstanding $ 0.34 $ 0.32 $ 1.01 $ 0.82 _______________ (1)Represents elimination of equity-compensation expense from Legacy Units associated with ownership units of D&P Acquisitions ("Legacy Units") and stock options granted in conjunction with our IPO ("IPO Options"). See further detail in the Notes to the Consolidated Financial Statements.
(2)Acquisition retention expenses include expense associated with equity or cash-based retention incentives to certain individuals who became employees of the Company through an acquisition. Equity-based incentives are typically subject to certain annual or cliff vesting provisions over three years contingent upon certain conditions which include employment. Cash-based incentives are generally subject to certain annual or cliff vesting provisions up to four years contingent upon certain conditions which may include employment. Cash-based retentive incentives may also include incentives paid to acquired employees upon the closing of an acquisition. These incentives may be in addition to future grants or cash bonuses awarded as a component of ongoing incentive compensation.
(3) In June 2011, the Company identified opportunities for cost savings through office consolidations of underutilized space and workforce reductions of non-client service professionals. The Company incurred restructuring charges of $4,090 during the year ended December 31, 2011 related to these initiatives. In March 2012, the Company identified opportunities for cost savings through the elimination of our M&A Advisory practice in France and certain Investment Banking positions in France. The Company incurred restructuring charges of $1,796 during the year ended December 31, 2012 related to these initiatives and for changes in estimates of original assumptions. (4) Acquisition, integration and corporate development costs include fees and charges associated with acquisitions and ongoing corporate development initiatives, including costs resulting from the pending merger. These costs are primarily comprised of (i) professional fees from legal, accounting, investment banking and other services, (ii) integration costs principally related to marketing, information technology, finance and real estate that are incremental and one-time in nature, (iii) gains or losses resulting from the recalculation of contingent consideration, (iv) foreign currency gains or losses from the translation of acquisition-related intercompany loans and (v) other charges such as regulatory filing fees and travel and entertainment expenses that are incremental in nature. (5) Reflects a charge from the write off of a minority investment. The charge is reflected in "Other expense" on the Company's Consolidated Statements of Operations. (6) Represents an adjustment to reflect an assumed annual effective corporate tax rate of approximately 39.5% and 40.6% as applied to the years ended December 31, 2012 and 2011, respectively, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. Assumes (i) full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company, (ii) the Company has adopted a conventional corporate tax structure and is taxed as a C Corporation in the U.S. at prevailing corporate rates and (iii) all deferred tax assets related to foreign operations are fully realizable.Disclosure Regarding Forward-Looking Statements
Statements in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), which reflect the Company's current views with respect to, among other things, future events and financial performance. The Company generally identifies forward looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this discussion are based upon our historical performance and on our current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us, or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and the risk factors section that are included in our Annual Report on Form 10-K for the year ended December 31, 2012 and any subsequent filings of our Quarterly Reports on Form 10-Q. The forward-looking statements included in this press release are made only as of the date this press release was issued. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended
Year Ended
December 31,2012 December 31,2011 December 31,2012 December 31,2011 Revenue $ 139,917 $ 118,980 $ 469,164 $ 383,940 Reimbursable expenses 5,218 5,573 15,537 12,934 Total revenue 145,135 124,553 484,701 396,874 Direct client service costsCompensation and benefits (includes $4,259 and $3,705 of equity-based compensation for the quarters ended December 31, 2012 and2011, respectively, and $19,098 and $17,086 for the years endedDecember 31, 2012 and 2011, respectively)
77,070 62,934 256,089 209,606 Other direct client service costs 4,476 4,089 13,119 9,048Acquisition retention expenses (includes $734 and $454 of equity-based compensation for the quarters ended December 31, 2012 and2011, respectively, and $2,908 and $1,054 for the years endedDecember 31, 2012 and 2011, respectively)
3,029 1,024 9,536 1,624 Reimbursable expenses 5,361 5,589 15,734 13,073 89,936 73,636 294,478 233,351 Operating expensesSelling, general and administrative (includes $824 and $633 ofequity-based compensation for the quarters ended December 31,2012 and 2011, respectively, and $3,531 and $3,744 for the yearsended December 31, 2012 and 2011, respectively)
31,155 27,709 116,032 100,624 Depreciation and amortization 5,128 3,230 18,138 11,164 Restructuring charges (28 ) 95 1,796 4,090 Acquisition, integration and corporate development costs 4,951 1,571 6,865 2,372 41,206 32,605 142,831 118,250 Operating income 13,993 18,312 47,392 45,273 Other expense/(income), net Interest income (22 ) (8 ) (59 ) (77 ) Interest expense 256 97 748 275 Other expense/(income) (526 ) 1,502 380 1,505 (292 ) 1,591 1,069 1,703 Income before income taxes 14,285 16,721 46,323 43,570 Provision for income taxes 7,630 5,566 20,022 13,841 Net income 6,655 11,155 26,301 29,729 Less: Net income attributable to noncontrolling interest 590 4,110 4,037 11,115 Net income attributable to Duff & Phelps Corporation $ 6,065 $ 7,045 $ 22,264 $ 18,614 Weighted average shares of Class A common stock outstanding Basic 35,704 26,685 33,267 26,958 Diluted 37,245 27,674 34,585 27,832Net income per share attributable to stockholders of Class A commonstock of Duff & Phelps Corporation
Basic $ 0.16 $ 0.24 $ 0.64 $ 0.65 Diluted $ 0.16 $ 0.23 $ 0.62 $ 0.63 Cash dividends declared per common share $ 0.09 $ 0.08 $ 0.36 $ 0.32DUFF & PHELPS CORPORATION AND SUBSIDIARIES
QUARTERLY REVENUE BY SEGMENT
(In thousands)
(Unaudited)
2011
2012
VarianceQ4 2011 vs Q4 2012
Variance 2011 vs 2012
Q1Q2
Q3 Q4 Total Q1 Q2 Q3 Q4 Total Dollar Percent Dollar Percent Financial Advisory Valuation Advisory(a) $ 37,614 $ 32,604 $ 33,887 $ 39,046 $ 143,151 $ 39,490 $ 33,610 $ 33,895 $ 43,334 $ 150,329 $ 4,288 11.0 % $ 7,178 5.0 % Tax Services(b) 7,547 15,128 9,572 8,698 40,945 5,488 13,035 11,008 10,295 39,826 1,597 18.4 % (1,119 ) (2.7 )% Dispute & Legal Management Consulting(c) 13,436 13,005 18,319 22,032 66,792 14,675 19,979 22,708 24,430 81,792 2,398 10.9 % 15,000 22.5 % 58,597 60,737 61,778 69,776 250,888 59,653 66,624 67,611 78,059 271,947 8,283 11.9 % 21,059 8.4 % Alternative Asset Advisory Portfolio Valuation 6,519 6,220 6,730 6,272 25,741 7,622 6,059 6,417 5,725 25,823 (547 ) (8.7 )% 82 0.3 % Complex Asset Solutions 5,321 4,125 3,998 4,631 18,075 4,904 4,048 6,270 5,828 21,050 1,197 25.8 % 2,975 16.5 % Due Diligence 1,645 4,070 2,643 3,492 11,850 2,423 2,312 2,516 2,926 10,177 (566 ) (16.2 )% (1,673 ) (14.1 )% 13,485 14,415 13,371 14,395 55,666 14,949 12,419 15,203 14,479 57,050 84 0.6 % 1,384 2.5 % Investment Banking M&A Advisory(d) 1,450 1,853 5,741 16,568 25,612 9,354 14,953 8,145 18,537 50,989 1,969 11.9 % 25,377 99.1 % Transaction Opinions 8,231 7,266 7,466 5,811 28,774 6,742 8,171 5,957 13,830 34,700 8,019 138.0 % 5,926 20.6 % Global Restructuring Advisory(e) 3,283 3,615 3,672 12,430 23,000 15,647 12,322 11,497 15,012 54,478 2,582 20.8 % 31,478 136.9 % 12,964 12,734 16,879 34,809 77,386 31,743 35,446 25,599 47,379 140,167 12,570 36.1 % 62,781 81.1 % Total Revenue (excluding reimbursables) $ 85,046 $ 87,886 $ 92,028 $ 118,980 $ 383,940 $ 106,345 $ 114,489 $ 108,413 $ 139,917 $ 469,164 $ 20,937 17.6 % $ 85,224 22.2 % _______________ (a) For the year ended December 31, 2012, Valuation Advisory includes $2,362 of incremental revenue from our acquisition of Ceteris from the effective date of the acquisition (October 18, 2012) through the end of the year. Ceteris is an independent provider of transfer pricing and valuation advisory services. (d) For the year ended December 31, 2012, M&A Advisory includes $2,846 of incremental revenue from our acquisition of Growth Capital Partners from the beginning of the year through June 30, 2012, the one year anniversary of the acquisition. For the year ended December 31, 2011, M&A Advisory includes $7,507 of incremental revenue from the effective date of the acquisition (June 30, 2011) through the end of the year. Growth Capital Partners is a Houston-based investment banking firm focused on transactions in the middle market. (b) For the year ended December 31, 2012, Tax Services includes $279 of incremental revenue from our acquisition of Growth Capital Partners from the beginning of the year through June 30, 2012, the one year anniversary of the acquisition. For the year ended December 31, 2011, Tax Services includes $543 of incremental revenue from the effective date of the acquisition (June 30, 2011) through the end of the year. Growth Capital Partners is a Houston-based investment banking firm focused on transactions in the middle market. For the year ended December 31, 2012, M&A Advisory also includes $17,023 of incremental revenue from our acquisition of Pagemill Partners from the beginning of the year through December 31, 2012, the one year anniversary of the acquisition. Pagemill Partners is a Silicon Valley-based investment banking firm. (c) For the year ended December 31, 2012, Dispute & Legal Management Consulting includes $891 of incremental revenue from our acquisition of iEnvision Technology from the effective date of the acquisition (October 4, 2012) through the end of the year. iEnvision Technology is an advisory firm that assists law firms and corporate legal departments with implementation of document and data management systems. (e) For the year ended December 31, 2012, Global Restructuring Advisory includes $28,520 of incremental revenue from our acquisition of MCR from the beginning of the year through October 31, 2012, the one year anniversary of the acquisition. For the year ended December 31, 2011, Global Restructuring Advisory includes $4,726 of incremental revenue from the effective date of the acquisition (October 31, 2011) through the end of the year. MCR is a United Kingdom-based partnership specializing in insolvency, turnaround and restructuring services. For the year ended December 31, 2012, Global Restructuring Advisory includes $7,405 of incremental revenue from our acquisition of the Toronto-based financial restructuring practice of RSM Ricther from the beginning of the year through December 9, 2012, the one year anniversary of the acquisition. For the year ended December 31, 2011, Global Restructuring Advisory includes $321 of incremental revenue from the effective date of the acquisition (December 9, 2011) through the end of the year.DUFF & PHELPS CORPORATION AND SUBSIDIARIESRESULTS OF OPERATIONS BY SEGMENT(In thousands, except headcount data)(Unaudited)
Quarter Ended
Year Ended
December 31,2012
December 31,2011 December 31,2012 December 31,2011 Financial Advisory Revenue (excluding reimbursables) $ 78,059 $ 69,776 $ 271,947 $ 250,888 Segment operating income $ 13,118 $ 14,848 $ 50,778 $ 45,212 Segment operating income margin 16.8 % 21.3 % 18.7 % 18.0 % Alternative Asset Advisory Revenue (excluding reimbursables) $ 14,479 $ 14,395 $ 57,050 $ 55,666 Segment operating income $ 2,108 $ 3,545 $ 12,759 $ 12,890 Segment operating income margin 14.6 % 24.6 % 22.4 % 23.2 % Investment Banking Revenue (excluding reimbursables) $ 47,379 $ 34,809 $ 140,167 $ 77,386 Segment operating income $ 11,990 $ 5,821 $ 20,409 $ 6,767 Segment operating income margin 25.3 % 16.7 % 14.6 % 8.7 % Totals Revenue (excluding reimbursables) $ 139,917 $ 118,980 $ 469,164 $ 383,940 Segment operating income $ 27,216 $ 24,214 $ 83,946 $ 64,869 Net client reimbursable expenses (143 ) (16 ) (197 ) (139 ) Equity-based compensation from Legacy Units and IPO Options — 34 (22 ) (207 ) Depreciation and amortization (5,128 ) (3,230 ) (18,138 ) (11,164 ) Acquisition retention expenses (3,029 ) (1,024 ) (9,536 ) (1,624 ) Restructuring charges 28 (95 ) (1,796 ) (4,090 ) Acquisition, integration and corporate development costs (4,951 ) (1,571 ) (6,865 ) (2,372 ) Operating income $ 13,993 $ 18,312 $ 47,392 $ 45,273 Average Client Service Professionals Financial Advisory 691 584 640 575 Alternative Asset Advisory 106 99 103 94 Investment Banking 315 213 306 158 Total 1,112 896 1,049 827 End of Period Client Service Professionals Financial Advisory 704 590 704 590 Alternative Asset Advisory 105 100 105 100 Investment Banking 311 303 311 303 Total 1,120 993 1,120 993DUFF & PHELPS CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT - CONTINUED
(In thousands, except headcount data)
(Unaudited)
Quarter Ended
Year Ended
December 31,2012
December 31,2011
December 31,2012
December 31,2011
Revenue per Client Service Professional Financial Advisory $ 113 $ 119 $ 425 $ 436 Alternative Asset Advisory $ 137 $ 145 $ 554 $ 592 Investment Banking $ 150 $ 163 $ 458 $ 490 Total $ 126 $ 133 $ 447 $ 464 Utilization(a) Financial Advisory 75.4 % 81.7 % 73.1 % 73.8 % Alternative Asset Advisory 62.5 % 63.0 % 60.2 % 61.2 % Rate-Per-Hour(b) Financial Advisory $ 372 $ 356 $ 344 $ 343 Alternative Asset Advisory $ 487 $ 516 $ 501 $ 515 Revenue (excluding reimbursables) Financial Advisory $ 78,059 $ 69,776 $ 271,947 $ 250,888 Alternative Asset Advisory 14,479 14,395 57,050 55,666 Investment Banking 47,379 34,809 140,167 77,386 Total $ 139,917 $ 118,980 $ 469,164 $ 383,940 Average Managing Directors Financial Advisory 106 90 97 92 Alternative Asset Advisory 23 24 23 25 Investment Banking 73 58 74 47 Total 202 172 194 164 End of Period Managing Directors Financial Advisory 110 92 110 92 Alternative Asset Advisory 23 24 23 24 Investment Banking 71 76 71 76 Total 204 192 204 192 Revenue per Managing Director Financial Advisory $ 736 $ 775 $ 2,804 $ 2,727 Alternative Asset Advisory $ 630 $ 600 $ 2,480 $ 2,227 Investment Banking $ 649 $ 600 $ 1,894 $ 1,647 Total $ 693 $ 692 $ 2,418 $ 2,341DUFF & PHELPS CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(In thousands, except headcount data)
(Unaudited)
_______________ (a) The utilization rate for any given period is calculated by dividing the number of hours incurred by client service professionals who worked on client assignments (including internal projects for the Company) during the period by the total available working hours for all of such client service professionals during the same period, assuming a 40 hour work week, less paid holidays and vacation days. Utilization excludes client service professionals associated with certain property tax services due to the nature of the work performed and client service professionals from certain acquisitions prior to their transition to the Company's financial system. (b) Average billing rate-per-hour is calculated by dividing revenue for the period by the number of hours worked on client assignments (including internal projects for the Company) during the same period. Financial Advisory revenue used to calculate rate-per-hour exclude revenue associated with certain property tax engagements. The average billing rate excludes certain hours from our acquisitions prior to their transition to the Company's financial system.DUFF & PHELPS CORPORATION AND SUBSIDIARIES
SUMMARY OF CLIENT SERVICE PROFESSIONALS
(Unaudited)
2011
2012
Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD Average Client Service ProfessionalsFinancial Advisory 574 562 576 584 575 600 612 646 691 640 Alternative Asset Advisory 87 94 98 99 94 99 101 106 106 103 Investment Banking 129 128 147 213 158 302 291 310 315 306 790 784 821 896 827 1,001 1,004 1,062 1,112 1,049
End of Period Client Service Professionals
Financial Advisory 571 552 580 590 605 612 657 704 Alternative Asset Advisory 90 97 100 100 94 103 106 105 Investment Banking 127 131 149 303 294 292 311 311 788 780 829 993 993 1,007 1,074 1,1202011
2012
Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTDAverage Managing Directors
Financial Advisory 94 93 91 90 92 92 95 96 106 97 Alternative Asset Advisory 26 25 25 24 25 23 23 24 23 23 Investment Banking 39 41 48 58 47 76 74 73 73 74 159 159 164 172 164 191 192 193 202 194End of Period Managing Directors
Financial Advisory 94 91 90 92 95 95 96 110 Alternative Asset Advisory 26 25 25 24 23 23 24 23 Investment Banking 39 43 50 76 73 73 73 71 159 159 165 192 191 191 193 204DUFF & PHELPS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)
December 31,2012 December 31,2011 ASSETS Current assets Cash and cash equivalents $ 68,732 $ 38,986
Accounts receivable (net of allowance for doubtful accounts of $2,037 and $1,753 at December 31,2012 and 2011, respectively)
79,360 77,795 Unbilled services 54,159 51,427 Prepaid expenses and other current assets 10,980 8,257 Net deferred income taxes, current 1,819 2,545 Total current assets 215,050 179,010Property and equipment (net of accumulated depreciation of $39,534 and $32,516 at December 31, 2012and 2011, respectively)
49,926 33,632 Goodwill 205,653 192,970Intangible assets (net of accumulated amortization of $35,144 and $25,626 at December 31, 2012 and2011, respectively)
38,201 40,977 Other assets 16,969 13,942 Investments related to deferred compensation plan 28,775 23,542 Net deferred income taxes, less current portion 161,339 115,826 Total non-current assets 500,863 420,889 Total assets $ 715,913 $ 599,899 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 5,131 $ 4,148 Accrued expenses 23,939 22,612 Accrued compensation and benefits 54,315 41,518 Liability related to deferred compensation plan, current portion 506 646 Deferred revenues 6,388 4,185 Due to noncontrolling unitholders, current portion 7,623 6,209 Total current liabilities 97,902 79,318 Long-term debt 22,500 — Liability related to deferred compensation plan, less current portion 28,361 23,083 Other long-term liabilities 36,511 32,248 Due to noncontrolling unitholders, less current portion 140,458 101,557 Total non-current liabilities 227,830 156,888 Total liabilities 325,732 236,206 Commitments and contingencies Stockholders' equity Preferred stock (50,000 shares authorized; zero issued and outstanding) — —Class A common stock, par value $0.01 per share (100,000 shares authorized; 42,420 and 31,646 sharesissued and outstanding at December 31, 2012 and 2011, respectively)
424 316Class B common stock, par value $0.0001 per share (50,000 shares authorized; zero and 10,488 sharesissued and outstanding at December 31, 2012 and 2011, respectively)
— 1 Additional paid-in capital 352,858 252,572 Accumulated other comprehensive income 2,620 287 Retained earnings 34,279 25,631 Total stockholders' equity of Duff & Phelps Corporation 390,181 278,807 Noncontrolling interest — 84,886 Total stockholders' equity 390,181 363,693 Total liabilities and stockholders' equity $ 715,913 $ 599,899DUFF & PHELPS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended
December 31,2012 December 31,2011 Cash flows from operating activities: Net income $ 26,301 $ 29,729 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,138 11,164 Equity-based compensation 25,537 21,884 Bad debt expense 1,628 3,363 Net deferred income taxes6,432
4,811 Other 3,385 3,295 Changes in assets and liabilities providing/(using) cash, net of acquired balances: Accounts receivable 387 (19,821 ) Unbilled services (1,015 ) (14,471 ) Prepaid expenses and other current assets (2,591 ) 1,399 Other assets (4,339 ) (146 ) Accounts payable and accrued expenses 4,698 5,527 Accrued compensation and benefits18,363
4,379 Deferred revenues 2,069 1,756 Other liabilities (2,916 ) (869 ) Due to noncontrolling unitholders from payments pursuant to the Tax Receivable Agreement (6,033 ) (5,536 ) Net cash provided by operating activities 90,044 46,464 Cash flows from investing activities: Purchases of property and equipment (23,706 ) (8,057 ) Business acquisitions, net of cash acquired (13,614 ) (53,464 ) Purchases of investments (3,150 ) (6,200 ) Increase in restricted cash — (6,400 ) Net cash used in investing activities (40,470 ) (74,121 ) Cash flows from financing activities: Borrowings under revolving line of credit 35,000 — Repayments of revolving line of credit (12,500 ) — Net proceeds from sale of Class A common stock 49,244 — Redemption of noncontrolling unitholders (58,972 ) — Dividends (13,683 ) (9,989 ) Repurchases of Class A common stock (9,284 ) (28,891 ) Payments of contingent consideration related to acquisitions (6,550 ) — Distributions and other payments to noncontrolling unitholders (4,082 ) (8,447 ) Payments of debt issuance costs — (302 ) Proceeds from exercises of stock options 16 267 Excess tax benefit from equity-based compensation 836 963 Net cash used in financing activities (19,975 ) (46,399 ) Effect of exchange rate on cash and cash equivalents 147 (286 ) Net increase/(decrease) in cash and cash equivalents 29,746 (74,342 ) Cash and cash equivalents at beginning of year 38,986 113,328 Cash and cash equivalents at end of period $ 68,732 $ 38,986DUFF & PHELPS CORPORATION AND SUBSIDIARIES
ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended December 31, 2012
As Reported AdjustmentsAdjusted ProForma
Revenue $ 139,917 $ — $ 139,917 Reimbursable expenses 5,218 — 5,218 Total revenue 145,135 — 145,135 Direct client service costs Compensation and benefits 77,070 — 77,070 Other direct client service costs 4,476 — 4,476 Acquisition retention expenses 3,029 (3,029 ) (2) — Reimbursable expenses 5,361 — 5,361 89,936 (3,029 ) 86,907 Operating expenses Selling, general and administrative 31,155 — 31,155 Depreciation and amortization 5,128 — 5,128 Restructuring charges (28 ) 28 (3) — Acquisition, integration and corporate development costs 4,951 (4,951 ) (4) — 41,206 (4,923 ) 36,283 Operating income 13,993 7,952 21,945 Other expense/(income), net Interest income (22 ) — (22 ) Interest expense 256 — 256 Other expense/(income) (526 ) — (526 ) (292 ) — (292 ) Income before income taxes 14,285 7,952 22,237 Provision for income taxes 7,630 1,197 (6) 8,827 Net income 6,655 6,755 13,410 Less: Net income attributable to noncontrolling interest 590 (590 ) — Net income attributable to Duff & Phelps Corporation $ 6,065 $ 7,345 $ 13,410 Pro forma fully exchanged, fully diluted shares outstanding 39,247 Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding $ 0.34See definition of Adjusted Pro Forma Net Income andaccompanying footnotes in the preceding section of this press release.
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended December 31, 2011
As Reported AdjustmentsAdjusted ProForma
Revenue $ 118,980 $ — $ 118,980 Reimbursable expenses 5,573 — 5,573 Total revenue 124,553 — 124,553 Direct client service costs Compensation and benefits 62,934 32(1)
62,966 Other direct client service costs 4,089 — 4,089 Acquisition retention expenses 1,024 (1,024 )
(2)
— Reimbursable expenses 5,589 — 5,589 73,636 (992 ) 72,644 Operating expenses Selling, general and administrative 27,709 2
(1)
27,711 Depreciation and amortization 3,230 — 3,230 Restructuring charges 95 (95 )
(3)
— Acquisition, integration and corporate development costs 1,571 (1,571 )
(4)
— 32,605 (1,664 ) 30,941 Operating income 18,312 2,656 20,968 Other expense/(income), net Interest income (8 ) — (8 ) Interest expense 97 — 97 Other expense 1,502 (1,500 )
(5)
2 1,591 (1,500 ) 91 Income before income taxes 16,721 4,156 20,877 Provision for income taxes 5,566 2,910
(6)
8,476 Net income 11,155 1,246 12,401 Less: Net income attributable to noncontrolling interest 4,110 (4,110 ) — Net income attributable to Duff & Phelps Corporation $ 7,045 $ 5,356 $ 12,401 Pro forma fully exchanged, fully diluted shares outstanding 38,324 Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding $ 0.32
See definition of Adjusted Pro Forma Net Income andaccompanying footnotes in the preceding section of this press release.
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Year Ended December 31, 2012
As Reported AdjustmentsAdjusted ProForma
Revenue $ 469,164 $ — $ 469,164 Reimbursable expenses 15,537 — 15,537 Total revenue 484,701 — 484,701 Direct client service costs Compensation and benefits 256,089 43(1)
256,132 Other direct client service costs 13,119 — 13,119 Acquisition retention expenses 9,536 (9,536 )
(2)
— Reimbursable expenses 15,734 — 15,734 294,478 (9,493 ) 284,985 Operating expenses Selling, general and administrative 116,032 (65 )
(1)
115,967 Depreciation and amortization 18,138 — 18,138 Restructuring charges 1,796 (1,796 )
(3)
— Acquisition, integration and corporate development costs 6,865 (6,865 )
(4)
— 142,831 (8,726 ) 134,105 Operating income 47,392 18,219 65,611 Other expense/(income), net Interest income (59 ) — (59 ) Interest expense 748 — 748 Other expense 380 (376 )
(5)
4 1,069 (376 ) 693 Income before income taxes 46,323 18,595 64,918 Provision for income taxes 20,022 5,621
(6)
25,643 Net income 26,301 12,974 39,275 Less: Net income attributable to noncontrolling interest 4,037 (4,037 ) — Net income attributable to Duff & Phelps Corporation $ 22,264 $ 17,011 $ 39,275 Pro forma fully exchanged, fully diluted shares outstanding 39,051 Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding $ 1.01
See definition of Adjusted Pro Forma Net Income andaccompanying footnotes in the preceding section of this press release.
DUFF & PHELPS CORPORATION AND SUBSIDIARIES
ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Year Ended December 31, 2011
As Reported AdjustmentsAdjusted ProForma
Revenue $ 383,940 $ — $ 383,940 Reimbursable expenses 12,934 — 12,934 Total revenue 396,874 — 396,874 Direct client service costs Compensation and benefits 209,606 273(1)
209,879 Other direct client service costs 9,048 — 9,048 Acquisition retention expenses 1,624 (1,624 )
(2)
— Reimbursable expenses 13,073 — 13,073 233,351 (1,351 ) 232,000 Operating expenses Selling, general and administrative 100,624 (480 )
(1)
100,144 Depreciation and amortization 11,164 — 11,164 Restructuring charges 4,090 (4,090 )
(3)
— Acquisition, integration and corporate development costs 2,372 (2,372 )
(4)
— 118,250 (6,942 ) 111,308 Operating income 45,273 8,293 53,566 Other expense/(income), net Interest income (77 ) — (77 ) Interest expense 275 — 275 Other expense 1,505 (1,500 )
(5)
5 1,703 (1,500 ) 203 Income before income taxes 43,570 9,793 53,363 Provision for income taxes 13,841 7,824
(6)
21,665 Net income 29,729 1,969 31,698 Less: Net income attributable to noncontrolling interest 11,115 (11,115 ) — Net income attributable to Duff & Phelps Corporation $ 18,614 $ 13,084 $ 31,698 Pro forma fully exchanged, fully diluted shares outstanding 38,715 Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding $ 0.82
See definition of Adjusted Pro Forma Net Income andaccompanying footnotes in the preceding section of this press release.
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