Chicago, IL (PRWEB) February 28, 2012
Clopton Capital, a provider of business loans, working capital and SBA loans is announcing the arrival fixed rates on both SBA 504 and SBA 7a loans. These small business loans are believed by the firm to be more advantageous and less risky for the borrower since it will be easier to predict the total cost of borrowing business capital or working capital on a fixed SBA loan. They believe this will help drive more business to their firm that they had previously been unable to acquire. This announcement is being made via their SBA loan website, SBABusinessLoanSource.com, CloptonCapital.com and this press release. They believe that it is necessary to establish themselves as soon as possible as a source for fixed interest rate working capital business loans since they believe many of their competitors are soon to do the same. “Being able to provide fixed interest rate SBA loans is definitely a breakthrough for us. I can safely say that this change will benefit us and even more so our clients”, said Jake Clopton, the founder of Clopton Capital.
Clopton Capital states that these fixed interest rate SBA loans have been made available roughly one week before the publishing of this release and that they are fully capable of accepting new SBA loan requests immediately. “This is really exciting to be able to offer these SBA loans as there have been few times in history when they were needed more. I imagine there will be a significant spike in business immediately following our current prospects and clients learning of this”, said Matt Reed, an associate of Clopton Capital.
For more information about Clopton Capital’s business loan services visit their website dedicated to them at CloptonCapital.com. To join their financial link exchange visit CloptonCapital.com/link.
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2012年2月28日星期二
Private Equity, Finance Lawyer Melinda Rishkofski Joins Baker Botts L.L.P. as Partner in Moscow
MOSCOW, February 28, 2012 /PRNewswire/ –
Melinda Rishkofski, who has represented private equity fund managers, international financial institutions and portfolio companies in Russia, Eastern Europe, the UK and the US, has joined Baker Botts L.L.P. as a partner in the firm´s Moscow office.
(Photo: http://photos.prnewswire.com/prnh/20120228/DA58239)
(Logo: http://photos.prnewswire.com/prnh/20100503/BAKERBOTTSLOGO)
Rishkofski´s experience includes working with Russian and Eastern European privatization policies, policy advice and drafting laws for the new Russian economy, development of Russian corporate securities and regulatory structures. She also worked on regulatory and legislative matters with representatives for the U.S. and Russian governments.
“Melinda adds depth to our international transactional resources, ” said Baker Botts Managing Partner Walt Smith. “Her focus on the Russian market and her extensive private equity experience are significant additions to our client offerings.”
Prior to joining Baker Botts, Rishkofski was general counsel for Russian-based Baring Vostok Capital Partners. As principal advisor, negotiator and transaction counsel, she provided legal support to financial institutions, multilateral development banks, private equity fund managers and Russian companies with respect to debt and equity financing transactions, mergers and acquisitions, restructurings, employee incentive programs, dispute resolution and general corporate matters.
In this role, Rishkofski has worked with and served more than 35 investee companies and the legal needs of private equity investment funds with more than $2 billion in capital and assets. She has also worked extensively with the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD) and the Overseas Private Investment Corporation (OPIC) on secured credit and debt and equity financing transactions.
“Melinda´s extensive knowledge of the private equity and funds sector in Russia and the CIS, a market sector where we expect to see significant increased activity in 2012, will provide our clients working in or entering into this sector an expertise not currently available from legal consultants in the region, ” said Steven Wardlaw, Partner in Charge of Baker Botts´ Moscow office.
Rishkofski obtained a BS from the Pennsylvania State University in the U.S., a J.D. from the Dickinson School of Law (now part of the Pennsylvania State University), and an LL.M in International Business and Finance from the University of London, Kings College in the UK.
About Baker Botts L.L.P.
Baker Botts is an international law firm with over 725 lawyers and a network of 13 offices around the globe. Based on our experience and knowledge of our clients´ industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Throughout our 172-year history, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit http://www.bakerbotts.com/.
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2012年2月25日星期六
China issues green-credit guideline for banks
The Chinese government introduced a “green credit” guideline for commercial lenders on Friday to facilitate economic restructuring in a manner that’s environmentally friendly and saves energy.
The China Banking Regulatory Commission, the top banking regulator, ordered lenders to cut loans to industries with high-energy consumption and high levels of pollution or excessive capacity, and to strengthen financial support for green industries and projects.
The CBRC encouraged banks to evaluate, classify and rate the environmental and social risks inherent in their clients’ businesses and take the results as a key reference in their ratings and access to credit.
“Through credit controls, banks can have an influence on businesses’ awareness of energy savings, emissions-reductions and the benefits to the public,” said Yan Yanfei, deputy director-general of the statistics department at the CBRC.
He said that in the next step, the CBRC will set up some key indexes to make the guideline more specific and try to include adherence to the plan in the rating system.
Lenders also need to improve management of any overseas projects that they support, to ensure that the initiators of those projects comply with local environmental, land, healthcare and security legislation, according to the guideline.
Zhang Rong, the programme manager of environment and social standards at the International Finance Corporation of the World Bank Group, said the guideline is welcome, especially given the increased involvement of Chinese enterprises in the global market, and the increasing number of calls urging the overseas projects to take more care of the local environment and to reduce energy use.
“Actually Chinese banks have already made very good attempts at green credit, and they can learn from the mature technology and management systems that their international counterparts have already been using for some time,” Zhang said.
China Development Bank Corp, which makes nearly half of the total loans supporting overseas projects of Chinese enterprises, has just provided credit to a Chinese company that operates an iron ore mine in Africa. The funds will help the company move surface soil to a place of safety to protect the seeds of local plants, according to Lu Hanwen, deputy director-general of CDB’s Project Appraisal Department II.
By the end of 2011, CDB had lent 658 billion yuan ($104 billion) to support environmental protection, energy-saving and emissions-reduction projects, accounting for 12.7 per cent of the bank’s total outstanding loans.
Yang Bin, deputy general manager of Corporate & Investment Banking at Shanghai Pudong Development Bank Co Ltd, said banks have enough motivation to lend green credits because the demand from clients that they undertake green initiatives has been rising constantly.
Such loans have a lower non-performance ratio than other lending because enterprises can usually obtain strong incentives for green projects from the government to repay the loans, he said.
“And the rate of return against cost for green credits is much higher than other lending,” said Yang, adding that evaluating the environmental impact and energy-consumption of their clients will cost the banks little.
“But State-owned enterprises should also be ordered to implement green policies if the government wishes to achieve its energy-saving and emissions-reduction goals,” Yang said.
http://tourism9.com/ http://vkins.com/
The China Banking Regulatory Commission, the top banking regulator, ordered lenders to cut loans to industries with high-energy consumption and high levels of pollution or excessive capacity, and to strengthen financial support for green industries and projects.
The CBRC encouraged banks to evaluate, classify and rate the environmental and social risks inherent in their clients’ businesses and take the results as a key reference in their ratings and access to credit.
“Through credit controls, banks can have an influence on businesses’ awareness of energy savings, emissions-reductions and the benefits to the public,” said Yan Yanfei, deputy director-general of the statistics department at the CBRC.
He said that in the next step, the CBRC will set up some key indexes to make the guideline more specific and try to include adherence to the plan in the rating system.
Lenders also need to improve management of any overseas projects that they support, to ensure that the initiators of those projects comply with local environmental, land, healthcare and security legislation, according to the guideline.
Zhang Rong, the programme manager of environment and social standards at the International Finance Corporation of the World Bank Group, said the guideline is welcome, especially given the increased involvement of Chinese enterprises in the global market, and the increasing number of calls urging the overseas projects to take more care of the local environment and to reduce energy use.
“Actually Chinese banks have already made very good attempts at green credit, and they can learn from the mature technology and management systems that their international counterparts have already been using for some time,” Zhang said.
China Development Bank Corp, which makes nearly half of the total loans supporting overseas projects of Chinese enterprises, has just provided credit to a Chinese company that operates an iron ore mine in Africa. The funds will help the company move surface soil to a place of safety to protect the seeds of local plants, according to Lu Hanwen, deputy director-general of CDB’s Project Appraisal Department II.
By the end of 2011, CDB had lent 658 billion yuan ($104 billion) to support environmental protection, energy-saving and emissions-reduction projects, accounting for 12.7 per cent of the bank’s total outstanding loans.
Yang Bin, deputy general manager of Corporate & Investment Banking at Shanghai Pudong Development Bank Co Ltd, said banks have enough motivation to lend green credits because the demand from clients that they undertake green initiatives has been rising constantly.
Such loans have a lower non-performance ratio than other lending because enterprises can usually obtain strong incentives for green projects from the government to repay the loans, he said.
“And the rate of return against cost for green credits is much higher than other lending,” said Yang, adding that evaluating the environmental impact and energy-consumption of their clients will cost the banks little.
“But State-owned enterprises should also be ordered to implement green policies if the government wishes to achieve its energy-saving and emissions-reduction goals,” Yang said.
http://tourism9.com/ http://vkins.com/
2012年2月17日星期五
Microfinance Operations Office; Associate Operations Officer/Operations Officer
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit www.ifc.org.
IFC Advisory Services in Vietnam helps Vietnamese firms make their operations more efficient and client-friendly, and raise their international competitiveness by improving social, environmental, and corporate governance practices. We support Vietnam’s sustainable development by helping to attract international investment to vital sectors such as infrastructure, renewable energy, and microfinance. Our Advisory Services are structured into four business lines: Access to Finance, Investment Climate, Sustainable Business Advisory, and Public-Private Partnerships. In the Mekong region covering Cambodia, Lao PDR, and Vietnam, our advisory services are delivered in partnership with the European Union, Finland, Ireland, the Netherlands, New Zealand, and Switzerland.
Their operations in Vietnam will be expanding in 2012, and we are looking for qualified applicants for the following three positions. All positions will be expected to lead existing and potential assistance projects in their Business Line and the IFC portfolio, including developing excellent client relations, designing and implementing projects for meaningful development impact, and ensuring IFC procedures are respected. In addition, all positions are expected to contribute to the development of IFC’s Vietnam Program by actively identifying new opportunities for IFC, providing input to IFC’s strategy for their Business Lines and building relationships with industry stakeholders.
1. Microfinance Operations Officer, Access to Finance – A2F (position no.120038)
IFC intends to support the development of Vietnam’s nascent commercial microfinance sector and increase access to microfinance services to urban and rural poor by creating an enabling environment and a financial sector that can create and manage sustainable private sector institutions to serve a large number of low-income households.
The Microfinance Operations Officer is a local 2 year term appointment based in Hanoi or Ho Chi Minh City. S/he will work closely with and under the supervision of the A2F Vietnam Program Manager. S/he will be primarily responsible for the implementation of A2F Microfinance (MF) projects in Vietnam. S/he must be an experienced professional whose knowledge and skills enable him/her to undertake project design, project implementation, and knowledge management initiatives with limited direct supervision.
Specific duties and accountabilities:
- Lead the MF project development by addressing all key aspects (scope of work, terms, deliverables, etc.), monitoring results, benchmarking against best practice, and consulting with the relevant stakeholders.
- Prepare project work plans, budgets and project operational documents, consistent with overall IFC objectives, plans and budgets. Ensure project(s) compliance with IFC’s overall financial market strategy and IFC procedures.
- Prepare terms-of-reference and help identify, select, and schedule consultant assignments; guide consultants in the effective delivery of their services, including monitoring their work to ensure that agreed deliverables are met and that they are captured in appropriate reports.
- Analyze developmental impact of the project(s). Document progress, resolve issues, and initiate improvements when needed.
- Pro-actively and effectively develop and nurture working relationship with government partners and private sector partners including, but not limited to, banks and MFIs.
- Communicate the progress of the project(s) and overall program to IFC and related partners, and proactively engage with IFC communications to ensure external and internal communications issues are well addressed.
- Liaise and work closely with the IFC investment in joint appraisal teams working on existing or new advisory and investment projects.
- Identify key lessons learned to be shared with the wider IFC A2F team, and develop IFC Smart Lessons and other internal knowledge management documents in Microfinance.
- Contribute to raising external funding and donor relations.
- Contribute to A2F strategy for Vietnam to maximize IFC’s financial and social returns in both investment and advisory services.
- Travel as necessary to support project design and development, and implementation.
Selection criteria:
- Master’s degree in Finance/Economics/Business Administration/Law or equivalent degree from a recognized institution.
- At least 5 years of relevant working experience in financial sector, preferably with hands on experience in Microfinance.
- Proven experience in managing a project, preferably donor-funded, including project design, implementation and completion.
- Ability to work independently, multi-task, deal with conflicting priorities and deliver high quality work on schedule.
- Excellent analytical skills, including ability to evaluate projects and business operations on technical, commercial, managerial, and financial grounds.
- Proven Relationship Management experience: ability to establish strong credibility among senior clients including government and private sector clients.
- Strong interpersonal skills and proven ability to build cooperative networks.
·- Ability to communicate ideas clearly and confidently, articulate issues and recommend practical solutions.
- Strong oral and written English skills, including ability to write and edit project/program documents.
- Ability and willingness to travel in Vietnam.
2. Associate Operations Officer/Operations Officer, Investment Climate (position no.120040)
IFC’s Investment Climate (IC) work focuses on improving the policies, laws, and regulations that affect domestic and foreign investors and influence their decisions to invest. Our East Asia and the Pacific portfolio consists of more than 20 projects with a total volume of more than $20 million, and more than 30 staff working in 9 offices throughout the region.
The Associate Operations Officer/Operations Officer position is a local 2 year term appointment based in Hanoi, with possible renewable extension subject to business need and satisfactory performance. S/he will support the Regional Business Line Leader in building and managing IFC’s regional portfolio of the business line’s respective advisory initiatives in the East Asia and Pacific (EAP) Region and the program in Vietnam. S/he will work in close collaboration with regional colleagues and global experts, and regional departments. S/he is expected to participate in and contribute to IFC strategy discussions, new project development, and donor relations.
Specific duties and accountabilities:
- Maintain IC pipeline activities in line with regional and business line strategies
- Prepare portfolio or topical reviews or analyses and financial projections and present results.
- Manage project reporting cycles, ensuring high quality and on-time (i) Project Supervision Reports (PSRs), (ii) Donor Reports and Presentations, and (iii) Project Completion Reports (PCRs).
- Maintain deadlines for submission and completion of initial review of all reports and ensure project compliance with all IFC and donor requirements.
- Oversee updates to project/pipeline activities in line with management/business line network/portfolio review discussions.
- Serve as proxy to the Regional Business Line Leader in project processing activities.
- Support PMs as necessary with program and administrative needs.
- Prepare documents such as donor/partner concept papers and proposals; monitor program/project funding gaps/needs.
- Coordinate recruitment of business line staff; assist and coordinate selection and monitoring of consultants including the preparation of Terms of Reference, negotiation of fees, processing of contracts; work alongside consultants in technical assistance assignments.
- Coordinate and deliver on (ad-hoc) IFC regional management or head office requests for data or information on IC projects in the region.
- Lead coordination and preparation of business line specific meetings, conferences, study tours and other events.
- Proactively seek out international best practice, national/corporate compliance requirements and internal advice, share information, and work in teams with other colleagues.
- Travel as necessary in the region.
Selection criteria:
- Masters in Business Administration, Law, Economics, Finance or Development or equivalent professional qualification.
- Minimum 5 years of relevant experience, preferably including overseas study/work.
- Experience with international and/or bilateral/multilateral development institutions, as well as prior work in advisory/consulting in private sector development.
- Knowledge of the institutional, legal, regulatory framework and business practices in Vietnam.
- Strong administrative and organizational skills.
- Strong working knowledge of Microsoft Office software, particularly Excel and PowerPoint.
Interested candidates please review the complete job description and apply on-line at http://www.ifc.org/careers and choose the relevant vacancy number. Please note that you need to register before submitting your application. The closing date is 20th February 2012. Only applicants selected for interview will be contacted.
http://tourism9.cm/ http://vkins.com/
IFC Advisory Services in Vietnam helps Vietnamese firms make their operations more efficient and client-friendly, and raise their international competitiveness by improving social, environmental, and corporate governance practices. We support Vietnam’s sustainable development by helping to attract international investment to vital sectors such as infrastructure, renewable energy, and microfinance. Our Advisory Services are structured into four business lines: Access to Finance, Investment Climate, Sustainable Business Advisory, and Public-Private Partnerships. In the Mekong region covering Cambodia, Lao PDR, and Vietnam, our advisory services are delivered in partnership with the European Union, Finland, Ireland, the Netherlands, New Zealand, and Switzerland.
Their operations in Vietnam will be expanding in 2012, and we are looking for qualified applicants for the following three positions. All positions will be expected to lead existing and potential assistance projects in their Business Line and the IFC portfolio, including developing excellent client relations, designing and implementing projects for meaningful development impact, and ensuring IFC procedures are respected. In addition, all positions are expected to contribute to the development of IFC’s Vietnam Program by actively identifying new opportunities for IFC, providing input to IFC’s strategy for their Business Lines and building relationships with industry stakeholders.
1. Microfinance Operations Officer, Access to Finance – A2F (position no.120038)
IFC intends to support the development of Vietnam’s nascent commercial microfinance sector and increase access to microfinance services to urban and rural poor by creating an enabling environment and a financial sector that can create and manage sustainable private sector institutions to serve a large number of low-income households.
The Microfinance Operations Officer is a local 2 year term appointment based in Hanoi or Ho Chi Minh City. S/he will work closely with and under the supervision of the A2F Vietnam Program Manager. S/he will be primarily responsible for the implementation of A2F Microfinance (MF) projects in Vietnam. S/he must be an experienced professional whose knowledge and skills enable him/her to undertake project design, project implementation, and knowledge management initiatives with limited direct supervision.
Specific duties and accountabilities:
- Lead the MF project development by addressing all key aspects (scope of work, terms, deliverables, etc.), monitoring results, benchmarking against best practice, and consulting with the relevant stakeholders.
- Prepare project work plans, budgets and project operational documents, consistent with overall IFC objectives, plans and budgets. Ensure project(s) compliance with IFC’s overall financial market strategy and IFC procedures.
- Prepare terms-of-reference and help identify, select, and schedule consultant assignments; guide consultants in the effective delivery of their services, including monitoring their work to ensure that agreed deliverables are met and that they are captured in appropriate reports.
- Analyze developmental impact of the project(s). Document progress, resolve issues, and initiate improvements when needed.
- Pro-actively and effectively develop and nurture working relationship with government partners and private sector partners including, but not limited to, banks and MFIs.
- Communicate the progress of the project(s) and overall program to IFC and related partners, and proactively engage with IFC communications to ensure external and internal communications issues are well addressed.
- Liaise and work closely with the IFC investment in joint appraisal teams working on existing or new advisory and investment projects.
- Identify key lessons learned to be shared with the wider IFC A2F team, and develop IFC Smart Lessons and other internal knowledge management documents in Microfinance.
- Contribute to raising external funding and donor relations.
- Contribute to A2F strategy for Vietnam to maximize IFC’s financial and social returns in both investment and advisory services.
- Travel as necessary to support project design and development, and implementation.
Selection criteria:
- Master’s degree in Finance/Economics/Business Administration/Law or equivalent degree from a recognized institution.
- At least 5 years of relevant working experience in financial sector, preferably with hands on experience in Microfinance.
- Proven experience in managing a project, preferably donor-funded, including project design, implementation and completion.
- Ability to work independently, multi-task, deal with conflicting priorities and deliver high quality work on schedule.
- Excellent analytical skills, including ability to evaluate projects and business operations on technical, commercial, managerial, and financial grounds.
- Proven Relationship Management experience: ability to establish strong credibility among senior clients including government and private sector clients.
- Strong interpersonal skills and proven ability to build cooperative networks.
·- Ability to communicate ideas clearly and confidently, articulate issues and recommend practical solutions.
- Strong oral and written English skills, including ability to write and edit project/program documents.
- Ability and willingness to travel in Vietnam.
2. Associate Operations Officer/Operations Officer, Investment Climate (position no.120040)
IFC’s Investment Climate (IC) work focuses on improving the policies, laws, and regulations that affect domestic and foreign investors and influence their decisions to invest. Our East Asia and the Pacific portfolio consists of more than 20 projects with a total volume of more than $20 million, and more than 30 staff working in 9 offices throughout the region.
The Associate Operations Officer/Operations Officer position is a local 2 year term appointment based in Hanoi, with possible renewable extension subject to business need and satisfactory performance. S/he will support the Regional Business Line Leader in building and managing IFC’s regional portfolio of the business line’s respective advisory initiatives in the East Asia and Pacific (EAP) Region and the program in Vietnam. S/he will work in close collaboration with regional colleagues and global experts, and regional departments. S/he is expected to participate in and contribute to IFC strategy discussions, new project development, and donor relations.
Specific duties and accountabilities:
- Maintain IC pipeline activities in line with regional and business line strategies
- Prepare portfolio or topical reviews or analyses and financial projections and present results.
- Manage project reporting cycles, ensuring high quality and on-time (i) Project Supervision Reports (PSRs), (ii) Donor Reports and Presentations, and (iii) Project Completion Reports (PCRs).
- Maintain deadlines for submission and completion of initial review of all reports and ensure project compliance with all IFC and donor requirements.
- Oversee updates to project/pipeline activities in line with management/business line network/portfolio review discussions.
- Serve as proxy to the Regional Business Line Leader in project processing activities.
- Support PMs as necessary with program and administrative needs.
- Prepare documents such as donor/partner concept papers and proposals; monitor program/project funding gaps/needs.
- Coordinate recruitment of business line staff; assist and coordinate selection and monitoring of consultants including the preparation of Terms of Reference, negotiation of fees, processing of contracts; work alongside consultants in technical assistance assignments.
- Coordinate and deliver on (ad-hoc) IFC regional management or head office requests for data or information on IC projects in the region.
- Lead coordination and preparation of business line specific meetings, conferences, study tours and other events.
- Proactively seek out international best practice, national/corporate compliance requirements and internal advice, share information, and work in teams with other colleagues.
- Travel as necessary in the region.
Selection criteria:
- Masters in Business Administration, Law, Economics, Finance or Development or equivalent professional qualification.
- Minimum 5 years of relevant experience, preferably including overseas study/work.
- Experience with international and/or bilateral/multilateral development institutions, as well as prior work in advisory/consulting in private sector development.
- Knowledge of the institutional, legal, regulatory framework and business practices in Vietnam.
- Strong administrative and organizational skills.
- Strong working knowledge of Microsoft Office software, particularly Excel and PowerPoint.
Interested candidates please review the complete job description and apply on-line at http://www.ifc.org/careers and choose the relevant vacancy number. Please note that you need to register before submitting your application. The closing date is 20th February 2012. Only applicants selected for interview will be contacted.
http://tourism9.cm/ http://vkins.com/
2012年2月7日星期二
Private-Equity Lobbying Helped Protect Romney’s Tax Benefits
February 07, 2012, 7:18 AM EST
By Steven Sloan
Feb. 7 (Bloomberg) — The largest U.S. private-equity funds and venture capital firms have relied on a five-year, multimillion-dollar lobbying campaign to protect the carried interest tax break that helped drive presidential candidate Mitt Romney’s 2010 effective tax rate below 14 percent.
With the issue gaining attention in this year’s U.S. presidential election campaign, the investment industry is again girding to defend its preferential tax treatment. Blackstone Group LP alone spent $5 million in 2011 lobbying Congress on issues including the tax treatment of carried interest.
“If anything preserves the status quo, it will be the very heavy lobbying campaign,” said Edward Kleinbard, a law professor at the University of Southern California. “There’s no other reason for the subsidy to survive.”
Opponents of the tax rate for carried interest see this as an opportunity to press for change. Romney released his 2010 tax returns on Jan. 24, revealing he paid an effective tax rate of 13.9 percent on income of $21.6 million.
Romney, a former Republican governor of Massachusetts and co-founder of Bain Capital LLC, has come to personify the debate over whether the carried interest paid to private-equity managers should be taxed at the capital gains rate of 15 percent while ordinary income is taxed at rates as high as 35 percent.
Tax Fairness Debate
Democrats view the carried interest issue as an element of the tax fairness theme that President Barack Obama is highlighting in his re-election campaign. Representative Sander Levin of Michigan, the top Democrat on the House Ways and Means Committee, plans to introduce a bill as soon as this week that would tax carried interest at the same rate as regular income, according to spokesman Josh Drobnyk. The bill probably won’t advance in the Republican-controlled chamber this year.
Carried interest is the profits-based compensation that private-equity managers, real estate investors and members of oil and gas partnerships often receive. They get a portion of their clients’ earnings as investment income if the underlying earnings are treated that way. Levin and Obama call carried interest compensation for work, which they say should be viewed like wages for tax purposes.
Private-equity firms invested more than $148 billion in 1,234 U.S.-based companies in 2010, according to the Private Equity Growth Capital Council. The industry says it employs more than 8 million people.
Washington Lobbyists
Companies opposed to changing the tax treatment of carried interest have hired veteran Washington lobbyists to make their case. Wayne Berman of Ogilvy Government Relations is Blackstone’s top lobbyist on the issue. He was an assistant commerce secretary during George H.W. Bush’s administration. Other Ogilvy lobbyists working for Blackstone include Drew Maloney, who was a staffer for former House Majority Whip Tom DeLay, a Texas Republican, and Moses Mercado, the former House Democratic Leader Richard Gephardt’s deputy chief of staff.
Kohlberg Kravis Roberts & Co. hired former Representative Vic Fazio, a California Democrat, to work with Congress on “tax issues affecting private-equity firms and their portfolio companies,” according to lobbying records. The New York-based private-equity company spent $150,000 in the fourth quarter on lobbyists from Akin Gump Strauss Hauer & Feld to work on issues that included tax policy.
Bain spent $80,000 during the fourth quarter to hire lobbyists from Public Strategies Washington Inc. to “monitor tax reform developments,” lobbying records show. Joseph O’Neill and Paul Snyder are lobbying for Romney’s former company.
O’Neill was chief of staff to former Senate Finance Committee Chairman Lloyd Bentsen and helped run the late Texas Democrat’s 1988 vice presidential bid. Snyder was a legislative assistant to former House Speaker Tip O’Neill, the late Massachusetts Democrat.
Budget Deficit
Raising taxes on carried interest compensation wouldn’t do much to narrow the U.S. budget deficit. In its fiscal 2012 budget request, the Obama administration said the proposal to tax carried interest as ordinary income would generate $14.8 billion over 10 years. In December, the deficit stood at almost $1.3 trillion.
The issue has divided Congress along mostly partisan lines. The last time the Senate considered a bill that would have increased taxes on carried interest — in June 2010 — every Republican voted against it, preventing the bill from advancing. Senator Ben Nelson of Nebraska was the only Democrat to oppose the legislation.
Few Defections
The same bill was passed in the House that year with 15 lawmakers in each party voting against their leaders.
As the debate over carried-interest taxation advanced in Congress, the Private Equity Growth Capital Council was formed in February 2007 so the industry could make its case more directly to lawmakers.
The group, whose members include the Carlyle Group LP, based in Washington, and New York-based Blackstone spent about $2.5 million that year lobbying Congress on issues that included measures to tax carried interest at the same rate as ordinary income. It spent $2.2 million on lobbying in 2011.
“We believe that tax policy should incentivize the kind of entrepreneurial risk-taking that private-equity firms take every day,” said Ken Spain, a spokesman for the Private Equity Growth Capital Council, a trade group based in Washington. “We remain vigilant in respect to this issue. Private equity as an asset class is going to be a topic of discussion throughout 2012.”
Spain is a former communications director for the National Republican Congressional Committee.
Comprehensive Overhaul
While the issue will be a central one in the presidential campaign and on Capitol Hill, the taxation of carried interest probably won’t change until Congress considers a comprehensive tax-code overhaul. That would be difficult to enact before 2013.
One potential challenge for private equity is something that otherwise would be seen as a favorable development for the industry: a Romney administration. Ending the preferential treatment of capital gains if Romney wins the presidency could dissolve notions that he is a captive to his former industry, said Martin Sullivan, a contributing editor at Tax Analysts, a nonprofit organization in Falls Church, Virginia.
“It will be much easier to repeal if Mitt Romney becomes president than if Mr. Obama remains president,” he said.
Still, Romney adviser Eric Fehrnstrom told reporters last month that the Republican presidential candidate thinks carried interest should be taxed at the same rate as a capital gain. The candidate has proposed eliminating the tax on capital gains for those with adjusted gross incomes of less than $200,000 a year.
‘Convoluted’ Code
Private-equity executives also rely on fairness arguments to make their case. In a Jan. 27 appearance on Bloomberg Television, Steve Pagliuca, the managing partner of Bain Capital, said the tax code is “convoluted” and “almost unintelligible.”
“We’ve got to have a fair tax code,” he said. “We don’t wake up every day saying ‘Well, what’s the tax code?’ We wake up trying to build great businesses and we pay all of the taxes that are necessary.”
Mark Heesen, president of the National Venture Capital Association, an industry trade group based in Arlington, Virginia, said his industry often reminds lawmakers of its differences from other investors such as private-equity firms. Venture capital firms typically invest in early-stage companies and don’t use as much leverage as private-equity investors do.
Creating Something
“We are able to demonstrate our belief that quintessential capital gains are all about creating something out of nothing,” he said. “That’s what venture capital does.”
Heesen said his message to Congress is that it’s important to maintain the link between carried interest and capital gains, even if the capital gains tax rate increases. Unless Congress acts, such gains will be taxed at 20 percent in 2013. High earners will face an additional 3.8 percent tax on capital gains and other unearned income as part of the 2010 health-care law.
On the other side of the issue is the AFL-CIO, which has lobbied in favor of changing how carried interest is taxed, and is prepared to do so again. Damon Silvers, the policy director for the labor organization in Washington, called the treatment of carried interest a “tax subsidy for leveraged buyouts.”
“We are going to be pressing the carried interest issue at whatever opportunity we get,” he said. “Mitt Romney’s tax returns are the world’s greatest educational tool about the impact of the carried-interest loophole.”
The AFL-CIO spent $1.1 million in 2007 to lobby Congress on issues that included a Senate bill to raise taxes on carried interest.
Lobbying on the carried-interest debate is only part of the reason the tax break has survived, said David Donnelly, the national campaigns director at the Public Campaign Action Fund, a Washington nonprofit group that tracks political contributions. Investors who are paid in carried interest are often the well-heeled donors that members of both parties turn to for campaign contributions, he said.
“I don’t think it’s simply the lobbying,” Donnelly said. “The people who are interested in this particular provision are high net-worth individuals. That’s a constituency that Congress always cares about when they have to raise money to fund their campaigns.”
–With assistance from Richard Rubin in Washington and Cristina Alesci in New York. Editors: Jodi Schneider, Robin Meszoly
To contact the reporter on this story: Steven Sloan in Washington at ssloan7@bloomberg.net
To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net
http://tourism9.com/ http://vkins.com/
By Steven Sloan
Feb. 7 (Bloomberg) — The largest U.S. private-equity funds and venture capital firms have relied on a five-year, multimillion-dollar lobbying campaign to protect the carried interest tax break that helped drive presidential candidate Mitt Romney’s 2010 effective tax rate below 14 percent.
With the issue gaining attention in this year’s U.S. presidential election campaign, the investment industry is again girding to defend its preferential tax treatment. Blackstone Group LP alone spent $5 million in 2011 lobbying Congress on issues including the tax treatment of carried interest.
“If anything preserves the status quo, it will be the very heavy lobbying campaign,” said Edward Kleinbard, a law professor at the University of Southern California. “There’s no other reason for the subsidy to survive.”
Opponents of the tax rate for carried interest see this as an opportunity to press for change. Romney released his 2010 tax returns on Jan. 24, revealing he paid an effective tax rate of 13.9 percent on income of $21.6 million.
Romney, a former Republican governor of Massachusetts and co-founder of Bain Capital LLC, has come to personify the debate over whether the carried interest paid to private-equity managers should be taxed at the capital gains rate of 15 percent while ordinary income is taxed at rates as high as 35 percent.
Tax Fairness Debate
Democrats view the carried interest issue as an element of the tax fairness theme that President Barack Obama is highlighting in his re-election campaign. Representative Sander Levin of Michigan, the top Democrat on the House Ways and Means Committee, plans to introduce a bill as soon as this week that would tax carried interest at the same rate as regular income, according to spokesman Josh Drobnyk. The bill probably won’t advance in the Republican-controlled chamber this year.
Carried interest is the profits-based compensation that private-equity managers, real estate investors and members of oil and gas partnerships often receive. They get a portion of their clients’ earnings as investment income if the underlying earnings are treated that way. Levin and Obama call carried interest compensation for work, which they say should be viewed like wages for tax purposes.
Private-equity firms invested more than $148 billion in 1,234 U.S.-based companies in 2010, according to the Private Equity Growth Capital Council. The industry says it employs more than 8 million people.
Washington Lobbyists
Companies opposed to changing the tax treatment of carried interest have hired veteran Washington lobbyists to make their case. Wayne Berman of Ogilvy Government Relations is Blackstone’s top lobbyist on the issue. He was an assistant commerce secretary during George H.W. Bush’s administration. Other Ogilvy lobbyists working for Blackstone include Drew Maloney, who was a staffer for former House Majority Whip Tom DeLay, a Texas Republican, and Moses Mercado, the former House Democratic Leader Richard Gephardt’s deputy chief of staff.
Kohlberg Kravis Roberts & Co. hired former Representative Vic Fazio, a California Democrat, to work with Congress on “tax issues affecting private-equity firms and their portfolio companies,” according to lobbying records. The New York-based private-equity company spent $150,000 in the fourth quarter on lobbyists from Akin Gump Strauss Hauer & Feld to work on issues that included tax policy.
Bain spent $80,000 during the fourth quarter to hire lobbyists from Public Strategies Washington Inc. to “monitor tax reform developments,” lobbying records show. Joseph O’Neill and Paul Snyder are lobbying for Romney’s former company.
O’Neill was chief of staff to former Senate Finance Committee Chairman Lloyd Bentsen and helped run the late Texas Democrat’s 1988 vice presidential bid. Snyder was a legislative assistant to former House Speaker Tip O’Neill, the late Massachusetts Democrat.
Budget Deficit
Raising taxes on carried interest compensation wouldn’t do much to narrow the U.S. budget deficit. In its fiscal 2012 budget request, the Obama administration said the proposal to tax carried interest as ordinary income would generate $14.8 billion over 10 years. In December, the deficit stood at almost $1.3 trillion.
The issue has divided Congress along mostly partisan lines. The last time the Senate considered a bill that would have increased taxes on carried interest — in June 2010 — every Republican voted against it, preventing the bill from advancing. Senator Ben Nelson of Nebraska was the only Democrat to oppose the legislation.
Few Defections
The same bill was passed in the House that year with 15 lawmakers in each party voting against their leaders.
As the debate over carried-interest taxation advanced in Congress, the Private Equity Growth Capital Council was formed in February 2007 so the industry could make its case more directly to lawmakers.
The group, whose members include the Carlyle Group LP, based in Washington, and New York-based Blackstone spent about $2.5 million that year lobbying Congress on issues that included measures to tax carried interest at the same rate as ordinary income. It spent $2.2 million on lobbying in 2011.
“We believe that tax policy should incentivize the kind of entrepreneurial risk-taking that private-equity firms take every day,” said Ken Spain, a spokesman for the Private Equity Growth Capital Council, a trade group based in Washington. “We remain vigilant in respect to this issue. Private equity as an asset class is going to be a topic of discussion throughout 2012.”
Spain is a former communications director for the National Republican Congressional Committee.
Comprehensive Overhaul
While the issue will be a central one in the presidential campaign and on Capitol Hill, the taxation of carried interest probably won’t change until Congress considers a comprehensive tax-code overhaul. That would be difficult to enact before 2013.
One potential challenge for private equity is something that otherwise would be seen as a favorable development for the industry: a Romney administration. Ending the preferential treatment of capital gains if Romney wins the presidency could dissolve notions that he is a captive to his former industry, said Martin Sullivan, a contributing editor at Tax Analysts, a nonprofit organization in Falls Church, Virginia.
“It will be much easier to repeal if Mitt Romney becomes president than if Mr. Obama remains president,” he said.
Still, Romney adviser Eric Fehrnstrom told reporters last month that the Republican presidential candidate thinks carried interest should be taxed at the same rate as a capital gain. The candidate has proposed eliminating the tax on capital gains for those with adjusted gross incomes of less than $200,000 a year.
‘Convoluted’ Code
Private-equity executives also rely on fairness arguments to make their case. In a Jan. 27 appearance on Bloomberg Television, Steve Pagliuca, the managing partner of Bain Capital, said the tax code is “convoluted” and “almost unintelligible.”
“We’ve got to have a fair tax code,” he said. “We don’t wake up every day saying ‘Well, what’s the tax code?’ We wake up trying to build great businesses and we pay all of the taxes that are necessary.”
Mark Heesen, president of the National Venture Capital Association, an industry trade group based in Arlington, Virginia, said his industry often reminds lawmakers of its differences from other investors such as private-equity firms. Venture capital firms typically invest in early-stage companies and don’t use as much leverage as private-equity investors do.
Creating Something
“We are able to demonstrate our belief that quintessential capital gains are all about creating something out of nothing,” he said. “That’s what venture capital does.”
Heesen said his message to Congress is that it’s important to maintain the link between carried interest and capital gains, even if the capital gains tax rate increases. Unless Congress acts, such gains will be taxed at 20 percent in 2013. High earners will face an additional 3.8 percent tax on capital gains and other unearned income as part of the 2010 health-care law.
On the other side of the issue is the AFL-CIO, which has lobbied in favor of changing how carried interest is taxed, and is prepared to do so again. Damon Silvers, the policy director for the labor organization in Washington, called the treatment of carried interest a “tax subsidy for leveraged buyouts.”
“We are going to be pressing the carried interest issue at whatever opportunity we get,” he said. “Mitt Romney’s tax returns are the world’s greatest educational tool about the impact of the carried-interest loophole.”
The AFL-CIO spent $1.1 million in 2007 to lobby Congress on issues that included a Senate bill to raise taxes on carried interest.
Lobbying on the carried-interest debate is only part of the reason the tax break has survived, said David Donnelly, the national campaigns director at the Public Campaign Action Fund, a Washington nonprofit group that tracks political contributions. Investors who are paid in carried interest are often the well-heeled donors that members of both parties turn to for campaign contributions, he said.
“I don’t think it’s simply the lobbying,” Donnelly said. “The people who are interested in this particular provision are high net-worth individuals. That’s a constituency that Congress always cares about when they have to raise money to fund their campaigns.”
–With assistance from Richard Rubin in Washington and Cristina Alesci in New York. Editors: Jodi Schneider, Robin Meszoly
To contact the reporter on this story: Steven Sloan in Washington at ssloan7@bloomberg.net
To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net
http://tourism9.com/ http://vkins.com/
2012年2月6日星期一
Spot profit-eating investment fees
Investing » Don’t Let Investment Fees Strangle Profits
Investors are understandably eager to earn high returns. But nothing erodes that eagerness or kills the investor’s confidence in his or her advisers like a plethora of investment fees that eat away at those gains.
That’s one reason investors are paying a lot more attention to fees these days, according to Ram Subramaniam, head of products at TD Ameritrade, an online stock brokerage firm in Omaha, Neb.
“Any fee is getting more scrutiny, partly because the market returns aren’t as attractive as they were,” he says. “People are conscious and aware of what they’re paying. What you pay in fees eventually impacts your return.”
Here’s what to look for in investment fees and what to do about it.
Investment fees can be structured as a flat rate per month, per year, per trade or as a percentage of account assets or the transaction amount. For example, an annual account maintenance fee might be $100 or 1 percent of assets. A trade might cost $9.95 or involve a commission based on the price and number of shares. Some companies charge lower fees for trades entered online and higher fees for trades placed with the assistance of a telephone operator or stockbroker, according to a Bankrate chart of brokerage companies’ charges.
“When you’re buying a mutual fund, you have to pay for professional management, and there are commissions to buy or sell. Those could be as little as $8 or as much as 2 percent, or 5 percent for a load fund,” Krane says.
The term “load” means the investor pays the fund company an upfront and/or back-end percentage in addition to the broker’s transaction fee or commission, if any. These deals typically are highlighted on lists of so-called select or premium funds.
A no transaction-fee fund might be a good choice, but investors should understand that fund companies also typically pay a promotional fee to the brokerage company. As a result, that fund’s expense ratio might be higher because those behind-the-scenes fees are wrapped into the fund’s costs, Krane says.
Krane says some advisers earn commissions on the products they sell you, others are only paid a fee by their clients, and still others collect commissions and fees. Financial advisers who act solely in their client’s interest generally are compensated on a fee-only basis. The term “fee-based” generally means the adviser receives a mix of fees and commission.
“The client needs to know,” Krane says. “Granted, I’m paying you a fee, but in what capacity am I paying you? Are you operating as a fiduciary or salesperson? The financial planning community is going for a fee-only model. The Wall Street community wants fee-based.”
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Investors are understandably eager to earn high returns. But nothing erodes that eagerness or kills the investor’s confidence in his or her advisers like a plethora of investment fees that eat away at those gains.
That’s one reason investors are paying a lot more attention to fees these days, according to Ram Subramaniam, head of products at TD Ameritrade, an online stock brokerage firm in Omaha, Neb.
“Any fee is getting more scrutiny, partly because the market returns aren’t as attractive as they were,” he says. “People are conscious and aware of what they’re paying. What you pay in fees eventually impacts your return.”
Here’s what to look for in investment fees and what to do about it.
Investment fees
Examples include account maintenance fees, mutual fund management fees, trading fees or commissions, and investment management fees. Some are for services such as investment advice. Others are tied to activities such as buying or selling stocks, bonds or options. Still others are charged “just for the privilege of keeping your money there,” Subramaniam says.Investment fees can be structured as a flat rate per month, per year, per trade or as a percentage of account assets or the transaction amount. For example, an annual account maintenance fee might be $100 or 1 percent of assets. A trade might cost $9.95 or involve a commission based on the price and number of shares. Some companies charge lower fees for trades entered online and higher fees for trades placed with the assistance of a telephone operator or stockbroker, according to a Bankrate chart of brokerage companies’ charges.
Fund fees
Mutual fund companies also charge fees that vary in structure and amount, according to Justin Krane, president of Krane Financial Solutions, a financial planning firm in Los Angeles.“When you’re buying a mutual fund, you have to pay for professional management, and there are commissions to buy or sell. Those could be as little as $8 or as much as 2 percent, or 5 percent for a load fund,” Krane says.
The term “load” means the investor pays the fund company an upfront and/or back-end percentage in addition to the broker’s transaction fee or commission, if any. These deals typically are highlighted on lists of so-called select or premium funds.
A no transaction-fee fund might be a good choice, but investors should understand that fund companies also typically pay a promotional fee to the brokerage company. As a result, that fund’s expense ratio might be higher because those behind-the-scenes fees are wrapped into the fund’s costs, Krane says.
Fee-only or fee-based?
Many investors also pay additional investment fees to financial advisers.Krane says some advisers earn commissions on the products they sell you, others are only paid a fee by their clients, and still others collect commissions and fees. Financial advisers who act solely in their client’s interest generally are compensated on a fee-only basis. The term “fee-based” generally means the adviser receives a mix of fees and commission.
“The client needs to know,” Krane says. “Granted, I’m paying you a fee, but in what capacity am I paying you? Are you operating as a fiduciary or salesperson? The financial planning community is going for a fee-only model. The Wall Street community wants fee-based.”
Fee-saving tips
Savvy investors can save money on fees. Here are four tips:Tips to save money on fees
- Do your homework. Investors who dig into the brokerage company’s website or make a phone call and ask about investment fees can get a lot of useful information. Always find out how much an account or trade will cost before you make a commitment. “The more information and power investors have, the better decisions they will make about fees,” Subramaniam says.
- Compare your options. Actively managed mutual, international or global funds and funds from certain brands or brokerage companies tend to involve higher investment fees. Index funds and exchange-traded funds typically have lower fees, Subramaniam says. Still, fees shouldn’t be your only consideration but rather part of your investment decision.
- Do the math. Don’t assume a mutual fund being sold with no transaction fee is a better investment than one that costs a few bucks to buy. At times, a nominal transaction fee might be immaterial in the context of a large investment and expected high return. “If there is a better fund where there is a lower expense ratio and where you can pay the $35 versus something that has a lower fee, maybe you should do that,” Krane says.
- Add it up. Just as banks offer investment services, investment houses offer checking and savings accounts, debit cards, credit cards, mortgages, and other banking products. Subramaniam suggests companies offering cheap investment services might make up the difference on bank fees or visa versa. Consider the company’s entire fee schedule before you consolidate your accounts.
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2012年1月27日星期五
Piper Jaffray Companies Announces 2011 Fourth Quarter and Full-Year Results
MINNEAPOLIS–(BUSINESS WIRE)– Piper Jaffray Companies (NYSE: PJC – News) today announced non-GAAP net income of $2.1 million(1), or $0.11(1) per diluted common share, for the quarter ended Dec. 31, 2011. On a GAAP basis, the net loss was $116.4 million, or $7.38 per diluted common share. The non-GAAP figures exclude the $118.4 million after-tax goodwill impairment charge that the firm disclosed on Jan. 10. For the fourth quarter of 2010, net income was $9.4 million, or $0.49 per diluted common share. For the third quarter of 2011, results were a net loss of $3.6 million, or $0.23 per diluted common share.
Net revenues for the fourth quarter of 2011 were $99.2 million, compared to a record of $176.4 million in the year-ago period, and $98.2 million for the third quarter of 2011.
“It was a difficult second half to 2011, and our fourth quarter results were similar to the third quarter, with modest profitability(1),” said Andrew S. Duff, chairman and chief executive officer. “Asset management and investment banking revenues improved compared to the third quarter, and M&A revenues, while down, were solid. Institutional brokerage revenues were lower.”
Duff added “We navigated reasonably well against a challenging and volatile operating environment in 2011, achieving positive pre-tax earnings in each quarter during the year, on a non-GAAP basis(1). We remain focused on our key objective to increase the proportion of higher-margin, higher-return businesses—public finance, M&A and asset management— in order to improve our return on equity. We remain committed to our strategy to accomplish this goal and we executed against it in 2011: 1) made solid progress in building a national public finance franchise; 2) selectively added M&A talent and transitioned European investment banking operations to an M&A-only model; and 3) maintained competitive performance in key investment strategies, and grew mutual fund and MLP assets. As we head into 2012, we are well-positioned to serve our clients and compete in the marketplace.”
Fourth Quarter
Consolidated Expenses
For the fourth quarter of 2011, compensation and benefits expenses were $63.9 million, down 40 percent compared to $106.4 million in the fourth quarter of 2010. The decrease was primarily due to lower performance. Compensation and benefits expenses decreased 2 percent compared to the third quarter of 2011.
For the fourth quarter of 2011, compensation and benefits expenses as a percentage of net revenues were 64.4 percent, compared to 60.3 percent for the fourth quarter of 2010. The increase was primarily due to the impact of fixed components of compensation costs on a reduced revenue base. The compensation ratio declined from 66.5 percent in the third quarter of 2011, mainly due to lower variable compensation.
On a non-GAAP basis, non-compensation expenses were $33.7(2) million for the fourth quarter, down 28 percent compared to the fourth quarter of 2010. On a GAAP basis, non-compensation expenses were $154.0 million. The decrease on a non-GAAP basis was attributable to a $9.5 million restructuring charge recorded in the year-ago period and actions implemented during 2011 to reduce costs given the current operating environment. Non-GAAP, non-compensation expenses increased 3 percent compared to the third quarter of 2011.
Fourth Quarter
Business Segment Results
The firm has two reportable business segments: Capital Markets and Asset Management. Consolidated net revenues and expenses are fully allocated to these two segments.
Capital Markets
For the fourth quarter, Capital Markets recorded a non-GAAP, pre-tax operating loss of $3.1 million(3), compared to pre-tax operating income of $16.1 million in the year-ago period and a pre-tax operating loss of $0.4 million in the third quarter of 2011. On a GAAP basis, this segment generated a pre-tax operating loss of $123.4 million.
Net revenues were $80.4 million, down 47 percent compared to the year-ago period, which was very strong across all products. Revenues declined 5 percent compared to the sequential third quarter, with stronger investment banking results more than offset by lower institutional brokerage performance.
For the quarter ended Dec. 31, 2011, asset management generated pre-tax operating income of $4.7 million, down 34 percent compared to the fourth quarter of 2010 and up from $0.7 million in the third quarter of 2011. Net revenues were $18.8 million, down 26 percent compared to the year-ago period, mainly due to lower performance fees. Net revenues rose 37 percent compared to the third quarter of 2011, mainly due to improved management fees from higher assets under management, and improved performance in the firm’s new Municipal Opportunities Fund.
In the fourth quarter of 2011, $6.0 million, or 293,829 shares, of the firm’s common stock was repurchased pursuant to a share repurchase authorization. The average price per share repurchased was $20.40. The firm has $51.4 million remaining on the share repurchase authorization which expires on Sept. 30, 2012.
Full-Year 2011
For the year ended Dec. 31, 2011, non-GAAP net income was $16.4(1) million, or $0.86(1) per diluted common share. On a GAAP basis, results were a net loss of $102.0 million, or $6.51 per diluted common share. For 2010, net income was $24.4 million, or $1.23 per diluted common share. For 2011, net revenues were $458.1 million, down 14 percent compared to the prior year, resulting primarily from lower investment banking and institutional brokerage revenues.
Full-Year 2011
Consolidated Expenses
For 2011, compensation and benefits expenses were $288.1 million, down 9 percent compared to $315.2 million in 2010. The decrease was primarily driven by lower variable compensation due to lower performance. Compensation and benefits expenses as a percentage of net revenues were 62.9 percent, compared to 59.5 percent for 2010. The higher compensation ratio was mainly driven by the impact of fixed compensation costs on a reduced revenue base.
For 2011, non-compensation expenses were $139.4(2) million on a non-GAAP basis. On a GAAP basis, non-compensation expenses were $259.7 million. This amount compared to $157.6 million in 2010, which included $10.9 million of restructuring charges, mainly due to the re-organization of the firm’s European operations. The additional decrease in expenses was driven by the lower cost of the streamlined European operations and other cost-saving initiatives.
Full-Year 2011
Business Segment Results
Capital Markets
Capital Markets generated non-GAAP, pre-tax operating income of $16.0(3) million compared to $41.2 million in 2010. On a GAAP basis, this segment generated a pre-tax operating loss of $104.3 million. Net revenues were $386.9 million, down 16 percent compared to 2010, mainly attributable to macroeconomic issues and volatility, which negatively impacted capital raising — particularly in Asia — and institutional brokerage.
Non-GAAP operating expenses for the year were $370.9(4) million, down 12 percent compared to 2010. On a GAAP basis with the goodwill impairment charge, operating expenses for the year were $491.2 million. The decline on a non-GAAP basis was driven by both lower compensation and non-compensation expenses. For the year, segment pre-tax operating margin was 4.1(3) percent, on a non-GAAP basis, and compared to 8.9 percent in 2010.
The following is a recap of completed deal information for 2011:
For 2011, asset management generated pre-tax operating income of $14.6 million, down 10 percent compared to 2010. Net revenues were $71.2 million, up 6 percent compared to 2010. Management fees increased 16 percent, partially offset by lower performance fees.
Operating expenses for the year were $56.6 million, up 11 percent compared to 2010, attributable to both higher compensation and non-compensation expenses. For the year, segment pre-tax operating margin was 20.5 percent compared to 24.0 percent in 2010. The lower margin was mainly driven by lower performance fees for the year.
Other Matters
For the full year, $26.5 million, or 803,500 shares, of the firm’s common stock was acquired, 509,671 of which was related to employee tax obligations on vesting of equity awards.
Additional Shareholder Information
Conference Call
Andrew S. Duff, chairman and chief executive officer, and Debbra L. Schoneman, chief financial officer, will hold a conference call to review the financial results Wed., Jan. 25 at 9 a.m. ET (8 a.m. CT). To view a copy of the earnings release on or after Jan. 25, please visit www.piperjaffray.com. The call can be accessed via live audio webcast available through the firm’s Web site at www.piperjaffray.com or by dialing (888)810-0209 (domestic) or (706)902-1361 (international). The reservation number is 96211034. Callers should dial in at least 15 minutes early to receive instructions. A replay of the conference call will be available beginning at approximately 11 a.m. ET Jan. 25 at the same Web address or by calling (855) 859-2056 and referencing reservation number 96211034.
About Piper Jaffray
Piper Jaffray is an investment bank and asset management firm serving clients in the U.S. and internationally. Proven advisory teams combine deep industry, product and sector expertise with ready access to global capital. Founded in 1895, the firm is headquartered in Minneapolis and has offices across the United States and in London, Hong Kong and Zurich. www.piperjaffray.com
Cautionary Note Regarding Forward-Looking Statements
This press release and the conference call to discuss the contents of this press release contain forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are subject to significant risks and uncertainties that are difficult to predict. These forward-looking statements cover, among other things, statements made about general economic and market conditions, our strategic priorities (including growth in public finance, asset management, and corporate advisory), the amount and timing of cost reduction measures and our quarterly run-rate for non-compensation expenses, anticipated financial results generally (including expectations regarding revenue levels, operating margins, earnings per share, and return on equity), the environment and prospects for capital markets transactions (including for our Asia-based business), current deal pipelines (or backlogs) or other similar matters. These statements involve inherent risks and uncertainties, both known and unknown, and important factors could cause actual results to differ materially from those anticipated or discussed in the forward-looking statements, including (1) market and economic conditions or developments may be unfavorable, including in specific sectors in which we operate, and these conditions or developments, such as market fluctuations or volatility, may adversely affect our business, revenue levels and profitability, (2) the volume of anticipated investment banking transactions as reflected in our deal pipelines (and the net revenues we earn from such transactions) may differ from expected results if any transactions are delayed or not completed at all or if the terms of any transactions are modified, (3) we may not be able to compete successfully with other companies in the financial services industry, which may impact our ability to achieve our growth priorities and objectives, (4) our ability to manage expenses may be limited by the fixed nature of certain expenses as well as the impact from unanticipated expenses, (5) our stock price may fluctuate as a result of several factors, including but not limited to, changes in our revenues and operating results, (6) the business operations that we conduct outside of the United States, including in Asia, subject us to unique risks, (7) hiring of additional senior talent may not yield the benefits we anticipate or yield them within expected timeframes, and (8) the other factors described under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2010 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2010, and updated in our subsequent reports filed with the SEC (available at our Web site at www.piperjaffray.com and at the SEC Web site at www.sec.gov). Forward-looking statements speak only as of the date they are made, and readers are cautioned not to place undue reliance on them. We undertake no obligation to update them in light of new information or future events.
© 2011 Piper Jaffray Companies, 800 Nicollet Mall, Suite 800, Minneapolis, Minnesota 55402-7020
(1) Net income applicable to Piper Jaffray Companies is the total net income earned by the Company. Piper Jaffray Companies calculates earnings per common share using the two-class method, which requires the allocation of consolidated net income between common shareholders and participating security holders, which in the case of Piper Jaffray Companies, represents unvested restricted stock with dividend rights.
(2) Earnings per diluted common share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss is incurred.
N/M – Not meaningful
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Net revenues for the fourth quarter of 2011 were $99.2 million, compared to a record of $176.4 million in the year-ago period, and $98.2 million for the third quarter of 2011.
“It was a difficult second half to 2011, and our fourth quarter results were similar to the third quarter, with modest profitability(1),” said Andrew S. Duff, chairman and chief executive officer. “Asset management and investment banking revenues improved compared to the third quarter, and M&A revenues, while down, were solid. Institutional brokerage revenues were lower.”
Duff added “We navigated reasonably well against a challenging and volatile operating environment in 2011, achieving positive pre-tax earnings in each quarter during the year, on a non-GAAP basis(1). We remain focused on our key objective to increase the proportion of higher-margin, higher-return businesses—public finance, M&A and asset management— in order to improve our return on equity. We remain committed to our strategy to accomplish this goal and we executed against it in 2011: 1) made solid progress in building a national public finance franchise; 2) selectively added M&A talent and transitioned European investment banking operations to an M&A-only model; and 3) maintained competitive performance in key investment strategies, and grew mutual fund and MLP assets. As we head into 2012, we are well-positioned to serve our clients and compete in the marketplace.”
Fourth Quarter
Consolidated Expenses
For the fourth quarter of 2011, compensation and benefits expenses were $63.9 million, down 40 percent compared to $106.4 million in the fourth quarter of 2010. The decrease was primarily due to lower performance. Compensation and benefits expenses decreased 2 percent compared to the third quarter of 2011.
For the fourth quarter of 2011, compensation and benefits expenses as a percentage of net revenues were 64.4 percent, compared to 60.3 percent for the fourth quarter of 2010. The increase was primarily due to the impact of fixed components of compensation costs on a reduced revenue base. The compensation ratio declined from 66.5 percent in the third quarter of 2011, mainly due to lower variable compensation.
On a non-GAAP basis, non-compensation expenses were $33.7(2) million for the fourth quarter, down 28 percent compared to the fourth quarter of 2010. On a GAAP basis, non-compensation expenses were $154.0 million. The decrease on a non-GAAP basis was attributable to a $9.5 million restructuring charge recorded in the year-ago period and actions implemented during 2011 to reduce costs given the current operating environment. Non-GAAP, non-compensation expenses increased 3 percent compared to the third quarter of 2011.
Fourth Quarter
Business Segment Results
The firm has two reportable business segments: Capital Markets and Asset Management. Consolidated net revenues and expenses are fully allocated to these two segments.
Capital Markets
For the fourth quarter, Capital Markets recorded a non-GAAP, pre-tax operating loss of $3.1 million(3), compared to pre-tax operating income of $16.1 million in the year-ago period and a pre-tax operating loss of $0.4 million in the third quarter of 2011. On a GAAP basis, this segment generated a pre-tax operating loss of $123.4 million.
Net revenues were $80.4 million, down 47 percent compared to the year-ago period, which was very strong across all products. Revenues declined 5 percent compared to the sequential third quarter, with stronger investment banking results more than offset by lower institutional brokerage performance.
- Equity financing revenues of $17.0 million decreased 60 percent compared to the very strong fourth quarter of 2010. Industry-wide equity market volatility and uncertainty curtailed capital raising, particularly IPOs, in the U.S. and in Hong Kong. Revenues increased 146 percent compared to the low results in the third quarter of 2011, primarily driven by higher revenues in the U.S. and, to a lesser extent, Hong Kong.
- Fixed income financing revenues were $15.2 million, down 24 percent compared to the robust fourth quarter of 2010. Revenues increased 37 percent compared to the third quarter of 2011, driven by an increase in completed public finance transactions with higher average revenue per transaction.
- Advisory services revenues were $19.8 million, down 43 percent compared to the very strong year-ago period, and down 27 percent compared to the third quarter of 2011. The declines were due to a smaller transaction size and a lower transaction fee, on average.
- Equity institutional brokerage revenues were $21.9 million, down 21 percent and 7 percent, compared to the fourth quarter of 2010 and the third quarter of 2011, respectively. The declines were primarily due to lower client activity in the U.S. and Hong Kong.
- Fixed income institutional brokerage revenues were $9.7 million, down 57 percent and 33 percent, compared to the fourth quarter of 2010 and the third quarter of 2011, respectively. The declines were mainly due to lower results in taxable and municipal products, and lower strategic trading results.
- Non-GAAP operating expenses for the quarter were $83.4(4) million, down 38 percent compared to the fourth quarter of 2010, resulting from both significantly lower compensation and non-compensation expenses. On a GAAP basis with the goodwill impairment charge, operating expenses were $203.7 million. Operating expenses on a non-GAAP basis decreased 2 percent compared to the third quarter 2011, due to lower compensation expenses. Non-GAAP segment pre-tax operating margin was a negative 3.8(3) percent, compared to 10.6 percent in the year-ago quarter and a negative 0.4 percent in the third quarter of 2011.
- 12 equity financings raising a total of $2.8 billion of capital.
- 144 tax-exempt issues with a total par value of $2.2 billion.
- 13 merger and acquisition transactions with an aggregate enterprise value of $1.4 billion. (The number of deals and the enterprise value include disclosed and undisclosed transactions.)
For the quarter ended Dec. 31, 2011, asset management generated pre-tax operating income of $4.7 million, down 34 percent compared to the fourth quarter of 2010 and up from $0.7 million in the third quarter of 2011. Net revenues were $18.8 million, down 26 percent compared to the year-ago period, mainly due to lower performance fees. Net revenues rose 37 percent compared to the third quarter of 2011, mainly due to improved management fees from higher assets under management, and improved performance in the firm’s new Municipal Opportunities Fund.
- Operating expenses for the quarter were $14.1 million, including $2.1 million of intangible amortization expense, down 22 percent compared to the fourth quarter of 2010. The decrease was mainly attributable to lower compensation expenses. Operating expenses increased 8 percent compared to the third quarter of 2011. Segment pre-tax operating margin was 25.0 percent, compared to 28.1 percent in the year-ago period. The decline was mainly due to essentially the same level of non-compensation expenses over a lower revenue base, partially offset by a lower compensation ratio. The segment pre-tax operating margin was 4.9 percent in the third quarter of 2011. The significant improvement compared to the sequential third quarter resulted from higher revenues.
- Assets under management (AUM) were $12.2 billion compared to $12.3 billion in the year-ago period and $11.2 billion in the third quarter of 2011. The improvement compared to the sequential third quarter was mainly due to improved equity market appreciation.
In the fourth quarter of 2011, $6.0 million, or 293,829 shares, of the firm’s common stock was repurchased pursuant to a share repurchase authorization. The average price per share repurchased was $20.40. The firm has $51.4 million remaining on the share repurchase authorization which expires on Sept. 30, 2012.
Full-Year 2011
For the year ended Dec. 31, 2011, non-GAAP net income was $16.4(1) million, or $0.86(1) per diluted common share. On a GAAP basis, results were a net loss of $102.0 million, or $6.51 per diluted common share. For 2010, net income was $24.4 million, or $1.23 per diluted common share. For 2011, net revenues were $458.1 million, down 14 percent compared to the prior year, resulting primarily from lower investment banking and institutional brokerage revenues.
Full-Year 2011
Consolidated Expenses
For 2011, compensation and benefits expenses were $288.1 million, down 9 percent compared to $315.2 million in 2010. The decrease was primarily driven by lower variable compensation due to lower performance. Compensation and benefits expenses as a percentage of net revenues were 62.9 percent, compared to 59.5 percent for 2010. The higher compensation ratio was mainly driven by the impact of fixed compensation costs on a reduced revenue base.
For 2011, non-compensation expenses were $139.4(2) million on a non-GAAP basis. On a GAAP basis, non-compensation expenses were $259.7 million. This amount compared to $157.6 million in 2010, which included $10.9 million of restructuring charges, mainly due to the re-organization of the firm’s European operations. The additional decrease in expenses was driven by the lower cost of the streamlined European operations and other cost-saving initiatives.
Full-Year 2011
Business Segment Results
Capital Markets
Capital Markets generated non-GAAP, pre-tax operating income of $16.0(3) million compared to $41.2 million in 2010. On a GAAP basis, this segment generated a pre-tax operating loss of $104.3 million. Net revenues were $386.9 million, down 16 percent compared to 2010, mainly attributable to macroeconomic issues and volatility, which negatively impacted capital raising — particularly in Asia — and institutional brokerage.
Non-GAAP operating expenses for the year were $370.9(4) million, down 12 percent compared to 2010. On a GAAP basis with the goodwill impairment charge, operating expenses for the year were $491.2 million. The decline on a non-GAAP basis was driven by both lower compensation and non-compensation expenses. For the year, segment pre-tax operating margin was 4.1(3) percent, on a non-GAAP basis, and compared to 8.9 percent in 2010.
The following is a recap of completed deal information for 2011:
- 64 equity financings raising a total of $13.0 billion of capital.
- 520 tax-exempt issues with a total par value of $6.9 billion.
- 43 merger and acquisition transactions with an aggregate enterprise value of $5.6 billion. (The number of deals and the enterprise value include disclosed and undisclosed transactions.)
For 2011, asset management generated pre-tax operating income of $14.6 million, down 10 percent compared to 2010. Net revenues were $71.2 million, up 6 percent compared to 2010. Management fees increased 16 percent, partially offset by lower performance fees.
Operating expenses for the year were $56.6 million, up 11 percent compared to 2010, attributable to both higher compensation and non-compensation expenses. For the year, segment pre-tax operating margin was 20.5 percent compared to 24.0 percent in 2010. The lower margin was mainly driven by lower performance fees for the year.
Other Matters
For the full year, $26.5 million, or 803,500 shares, of the firm’s common stock was acquired, 509,671 of which was related to employee tax obligations on vesting of equity awards.
Additional Shareholder Information
| As of Dec. 31, 2011 | As of Sept. 30, 2011 | As of Dec. 31, 2010 | ||||
| Number of employees: | 1,011 | 1,035 | 1,031 | |||
| Asset Management AUM: | $12.2 billion | $11.2 billion | $12.3 billion | |||
| Common Shareholders’ equity: | $718.4 million | $839.1 million | $813.3 million | |||
| Annualized Qtrly. | ||||||
| Return on Avg. | 1.1%(6) | (1.9)%(5) | 5.4%(5) | |||
| Adjusted Common | ||||||
| Shareholders’ Equity | ||||||
| Book value per share: | $45.61 | $52.73 | $55.50 | |||
| Tangible book value per share(7): | $29.51 | $29.10 | $29.42 | |||
Conference Call
Andrew S. Duff, chairman and chief executive officer, and Debbra L. Schoneman, chief financial officer, will hold a conference call to review the financial results Wed., Jan. 25 at 9 a.m. ET (8 a.m. CT). To view a copy of the earnings release on or after Jan. 25, please visit www.piperjaffray.com. The call can be accessed via live audio webcast available through the firm’s Web site at www.piperjaffray.com or by dialing (888)810-0209 (domestic) or (706)902-1361 (international). The reservation number is 96211034. Callers should dial in at least 15 minutes early to receive instructions. A replay of the conference call will be available beginning at approximately 11 a.m. ET Jan. 25 at the same Web address or by calling (855) 859-2056 and referencing reservation number 96211034.
About Piper Jaffray
Piper Jaffray is an investment bank and asset management firm serving clients in the U.S. and internationally. Proven advisory teams combine deep industry, product and sector expertise with ready access to global capital. Founded in 1895, the firm is headquartered in Minneapolis and has offices across the United States and in London, Hong Kong and Zurich. www.piperjaffray.com
Cautionary Note Regarding Forward-Looking Statements
This press release and the conference call to discuss the contents of this press release contain forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are subject to significant risks and uncertainties that are difficult to predict. These forward-looking statements cover, among other things, statements made about general economic and market conditions, our strategic priorities (including growth in public finance, asset management, and corporate advisory), the amount and timing of cost reduction measures and our quarterly run-rate for non-compensation expenses, anticipated financial results generally (including expectations regarding revenue levels, operating margins, earnings per share, and return on equity), the environment and prospects for capital markets transactions (including for our Asia-based business), current deal pipelines (or backlogs) or other similar matters. These statements involve inherent risks and uncertainties, both known and unknown, and important factors could cause actual results to differ materially from those anticipated or discussed in the forward-looking statements, including (1) market and economic conditions or developments may be unfavorable, including in specific sectors in which we operate, and these conditions or developments, such as market fluctuations or volatility, may adversely affect our business, revenue levels and profitability, (2) the volume of anticipated investment banking transactions as reflected in our deal pipelines (and the net revenues we earn from such transactions) may differ from expected results if any transactions are delayed or not completed at all or if the terms of any transactions are modified, (3) we may not be able to compete successfully with other companies in the financial services industry, which may impact our ability to achieve our growth priorities and objectives, (4) our ability to manage expenses may be limited by the fixed nature of certain expenses as well as the impact from unanticipated expenses, (5) our stock price may fluctuate as a result of several factors, including but not limited to, changes in our revenues and operating results, (6) the business operations that we conduct outside of the United States, including in Asia, subject us to unique risks, (7) hiring of additional senior talent may not yield the benefits we anticipate or yield them within expected timeframes, and (8) the other factors described under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2010 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2010, and updated in our subsequent reports filed with the SEC (available at our Web site at www.piperjaffray.com and at the SEC Web site at www.sec.gov). Forward-looking statements speak only as of the date they are made, and readers are cautioned not to place undue reliance on them. We undertake no obligation to update them in light of new information or future events.
© 2011 Piper Jaffray Companies, 800 Nicollet Mall, Suite 800, Minneapolis, Minnesota 55402-7020
| Piper Jaffray Companies | |||||||||||||||||||||||||||||||||||||||||
| Preliminary Unaudited Results of Operations | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Percent Inc/(Dec) | Twelve Months Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Dec. 31, | 4Q ’11 | 4Q ’11 | Dec. 31, | Dec. 31, | Percent | ||||||||||||||||||||||||||||||||||
| (Amounts in thousands, except per share data) | 2011 | 2011 | 2010 | vs. 3Q ’11 | vs. 4Q ’10 | 2011 | 2010 | Inc/(Dec) | |||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||
| Investment banking | $ | 51,422 | $ | 44,729 | $ | 94,650 | 15.0 | % | (45.7 | ) | % | $ | 210,254 | $ | 266,386 | (21.1 | ) | % | |||||||||||||||||||||||
| Institutional brokerage | 25,374 | 31,533 | 46,343 | (19.5 | ) | (45.2 | ) | 142,308 | 167,954 | (15.3 | ) | ||||||||||||||||||||||||||||||
| Asset management | 17,115 | 15,205 | 24,988 | 12.6 | (31.5 | ) | 69,889 | 66,827 | 4.6 | ||||||||||||||||||||||||||||||||
| Interest | 13,060 | 15,162 | 12,592 | (13.9 | ) | 3.7 | 55,595 | 51,851 | 7.2 | ||||||||||||||||||||||||||||||||
| Other income/(loss) | (922 | ) | 441 | 5,989 | N/M | N/M | 11,656 | 12,043 | (3.2 | ) | |||||||||||||||||||||||||||||||
| Total revenues | 106,049 | 107,070 | 184,562 | (1.0 | ) | (42.5 | ) | 489,702 | 565,061 | (13.3 | ) | ||||||||||||||||||||||||||||||
| Interest expense | 6,829 | 8,894 | 8,190 | (23.2 | ) | (16.6 | ) | 31,577 | 34,987 | (9.7 | ) | ||||||||||||||||||||||||||||||
| Net revenues | 99,220 | 98,176 | 176,372 | 1.1 | (43.7 | ) | 458,125 | 530,074 | (13.6 | ) | |||||||||||||||||||||||||||||||
| Non-interest expenses: | |||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | 63,901 | 65,307 | 106,371 | (2.2 | ) | (39.9 | ) | 288,129 | 315,203 | (8.6 | ) | ||||||||||||||||||||||||||||||
| Occupancy and equipment | 7,533 | 7,477 | 9,019 | 0.7 | (16.5 | ) | 32,450 | 33,597 | (3.4 | ) | |||||||||||||||||||||||||||||||
| Communications | 5,680 | 5,978 | 5,983 | (5.0 | ) | (5.1 | ) | 24,472 | 24,614 | (0.6 | ) | ||||||||||||||||||||||||||||||
| Floor brokerage and clearance | 2,322 | 2,233 | 2,823 | 4.0 | (17.7 | ) | 9,240 | 11,626 | (20.5 | ) | |||||||||||||||||||||||||||||||
| Marketing and business development | 6,388 | 5,708 | 6,435 | 11.9 | (0.7 | ) | 25,031 | 23,715 | 5.5 | ||||||||||||||||||||||||||||||||
| Outside services | 7,917 | 6,664 | 8,436 | 18.8 | (6.2 | ) | 29,506 | 32,120 | (8.1 | ) | |||||||||||||||||||||||||||||||
| Restructuring-related expense | - | - | 9,530 | N/M | (100.0 | ) | - | 10,863 | (100.0 | ) | |||||||||||||||||||||||||||||||
| Goodwill impairment | 120,298 | - | - | N/M | N/M | 120,298 | - | N/M | |||||||||||||||||||||||||||||||||
| Intangible asset amortization expense | 2,069 | 2,069 | 2,183 | - | (5.2 | ) | 8,276 | 7,546 | 9.7 | ||||||||||||||||||||||||||||||||
| Other operating expenses | 1,761 | 2,440 | 2,430 | (27.8 | ) | (27.5 | ) | 10,404 | 13,506 | (23.0 | ) | ||||||||||||||||||||||||||||||
| Total non-interest expenses | 217,869 | 97,876 | 153,210 | 122.6 | 42.2 | % | 547,806 | 472,790 | 15.9 | ||||||||||||||||||||||||||||||||
| Income/(loss) before income tax expense/(benefit) | (118,649 | ) | 300 | 23,162 | N/M | N/M | (89,681 | ) | 57,284 | N/M | |||||||||||||||||||||||||||||||
| Income tax expense/(benefit) | (2,902 | ) | 3,676 | 13,727 | N/M | N/M | 10,876 | 33,354 | (67.4 | ) | % | ||||||||||||||||||||||||||||||
| Net income/(loss) | (115,747 | ) | (3,376 | ) | 9,435 | N/M | N/M | (100,557 | ) | 23,930 | N/M | ||||||||||||||||||||||||||||||
| Net income/(loss) applicable to noncontrolling interests | 617 | 207 | 15 | 198.1 | % | N/M | 1,463 | (432 | ) | N/M | |||||||||||||||||||||||||||||||
| Net income/(loss) applicable to Piper Jaffray Companies (1) | (116,364 | ) | (3,583 | ) | 9,420 | N/M | N/M | (102,020 | ) | 24,362 | N/M | ||||||||||||||||||||||||||||||
| Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders (1) | $ | (116,364 | ) | $ | (3,583 | ) | $ | 7,198 | N/M | N/M | $ | (102,020 | ) | $ | 18,929 | N/M | |||||||||||||||||||||||||
| Earnings/(loss) per common share | |||||||||||||||||||||||||||||||||||||||||
| Basic | $ | (7.38 | ) | $ | (0.23 | ) | $ | 0.49 | N/M | N/M | $ | (6.51 | ) | $ | 1.23 | N/M | |||||||||||||||||||||||||
| Diluted | $ | (7.38 | ) | (2) | $ | (0.23 | ) | (2) | $ | 0.49 | N/M | N/M | $ | (6.51 | ) | (2 | ) | $ | 1.23 | N/M | |||||||||||||||||||||
| Weighted average number of common shares outstanding | |||||||||||||||||||||||||||||||||||||||||
| Basic | 15,773 | 15,889 | 14,635 | (0.7 | ) | % | 7.8 | % | 15,672 | 15,348 | 2.1 | % | |||||||||||||||||||||||||||||
| Diluted | 15,773 | (2) | 15,889 | (2) | 14,639 | (0.7 | ) | % | 7.7 | % | 15,672 | (2 | ) | 15,378 | 1.9 | % | |||||||||||||||||||||||||
(1) Net income applicable to Piper Jaffray Companies is the total net income earned by the Company. Piper Jaffray Companies calculates earnings per common share using the two-class method, which requires the allocation of consolidated net income between common shareholders and participating security holders, which in the case of Piper Jaffray Companies, represents unvested restricted stock with dividend rights.
(2) Earnings per diluted common share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss is incurred.
N/M – Not meaningful
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| Piper Jaffray Companies | |||||||||||||||||||||||||||||||||||
| Preliminary Unaudited Segment Data | |||||||||||||||||||||||||||||||||||
| Three Months Ended | Percent Inc/(Dec) | Twelve Months Ended | |||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Dec. 31, | 4Q ’11 | 4Q ’11 | Dec. 31, | Dec. 31, | Percent | ||||||||||||||||||||||||||||
| (Dollars in thousands) | 2011 | 2011 | 2010 | vs. 3Q ’11 | vs. 4Q ’10 | 2011 | 2010 | Inc/(Dec) | |||||||||||||||||||||||||||
| Capital Markets | |||||||||||||||||||||||||||||||||||
| Investment banking | |||||||||||||||||||||||||||||||||||
| Financing | |||||||||||||||||||||||||||||||||||
| Equities | $ | 17,010 | $ | 6,923 | $ | 42,108 | 145.7 | % | (59.6 | ) | % | $ | 79,600 | $ | 113,711 | (30.0 | ) | % | |||||||||||||||||
| Debt | 15,211 | 11,106 | 19,936 | 37.0 | (23.7 | ) | 54,566 | 65,958 | (17.3 | ) | |||||||||||||||||||||||||
| Advisory services | 19,832 | 27,294 | 34,629 | (27.3 | ) | (42.7 | ) | 78,684 | 90,396 | (13.0 | ) | ||||||||||||||||||||||||
| Total investment banking | 52,053 | 45,323 | 96,673 | 14.8 | (46.2 | ) | 212,850 | 270,065 | (21.2 | ) | |||||||||||||||||||||||||
| Institutional sales and trading | |||||||||||||||||||||||||||||||||||
| Equities | 21,850 | 23,482 | 27,486 | (7.0 | ) | (20.5 | ) | 92,412 | 106,206 | (13.0 | ) | ||||||||||||||||||||||||
| Fixed income | 9,715 | 14,496 | 22,565 | (33.0 | ) | (56.9 | ) | 75,794 | 79,833 | (5.1 | ) | ||||||||||||||||||||||||
| Total institutional sales and trading | 31,565 | 37,978 | 50,051 | (16.9 | ) | (36.9 | ) | 168,206 | 186,039 | (9.6 | ) | ||||||||||||||||||||||||
| Other income/(loss) | (3,243 | ) | 1,157 | 4,311 | N/M | N/M | 5,882 | 6,763 | (13.0 | ) | |||||||||||||||||||||||||
| Net revenues | 80,375 | 84,458 | 151,035 | (4.8 | ) | (46.8 | ) | 386,938 | 462,867 | (16.4 | ) | ||||||||||||||||||||||||
| Non-interest expenses | |||||||||||||||||||||||||||||||||||
| Goodwill impairment | 120,298 | - | - | N/M | N/M | 120,298 | - | N/M | |||||||||||||||||||||||||||
| Operating expenses | 83,431 | 84,828 | 134,984 | (1.6 | ) | (38.2 | ) | 370,918 | 421,707 | (12.0 | ) | ||||||||||||||||||||||||
| Total non-interest expenses | 203,729 | 84,828 | 134,984 | 140.2 | % | 50.9 | % | 491,216 | 421,707 | 16.5 | % | ||||||||||||||||||||||||
| Segment pre-tax operating income/(loss) | $ | (123,354 | ) | $ | (370 | ) | $ | 16,051 | N/M | N/M | $ | (104,278 | ) | $ | 41,160 | N/M | |||||||||||||||||||
| Segment pre-tax operating margin | (153.5 | )% | (0.4 | )% | 10.6 | % | (26.9 | )% | 8.9 | % | |||||||||||||||||||||||||
| Asset Management | |||||||||||||||||||||||||||||||||||
| Management and performance fees | |||||||||||||||||||||||||||||||||||
| Management fees | $ | 16,578 | $ | 15,205 | $ | 17,418 | 9.0 | % | (4.8 | ) | % | $ | 67,606 | $ | 58,080 | 16.4 | % | ||||||||||||||||||
| Performance fees | 537 | - | 7,570 | N/M | (92.9 | ) | 2,283 | 8,747 | (73.9 | ) | |||||||||||||||||||||||||
| Total management and performance fees | 17,115 | 15,205 | 24,988 | 12.6 | (31.5 | ) | 69,889 | 66,827 | 4.6 | ||||||||||||||||||||||||||
| Other income/(loss) | 1,730 | (1,487 | ) | 349 | N/M | 395.7 | 1,298 | 380 | 241.6 | ||||||||||||||||||||||||||
| Net revenues | 18,845 | 13,718 | 25,337 | 37.4 | (25.6 | ) | 71,187 | 67,207 | 5.9 | ||||||||||||||||||||||||||
| Operating expenses | 14,140 | 13,048 | 18,226 | 8.4 | (22.4 | ) | 56,590 | 51,083 | 10.8 | ||||||||||||||||||||||||||
| Segment pre-tax operating income | $ | 4,705 | $ | 670 | $ | 7,111 | 602.2 | % | (33.8 | ) | % | $ | 14,597 | $ | 16,124 | (9.5 | ) | % | |||||||||||||||||
| Segment pre-tax operating margin | 25.0 | % | 4.9 | % | 28.1 | % | 20.5 | % | 24.0 | % | |||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||
| Net revenues | $ | 99,220 | $ | 98,176 | $ | 176,372 | 1.1 | % | (43.7 | ) | % | $ | 458,125 | $ | 530,074 | (13.6 | ) | % | |||||||||||||||||
| Non-interest expenses | |||||||||||||||||||||||||||||||||||
| Goodwill impairment | 120,298 | - | - | N/M | N/M | 120,298 | - | N/M | |||||||||||||||||||||||||||
| Operating expenses | 97,571 | 97,876 | 153,210 | (0.3 | ) | (36.3 | ) | 427,508 | 472,790 | (9.6 | ) | ||||||||||||||||||||||||
| Total non-interest expenses | 217,869 | 97,876 | 153,210 | 122.6 | % | 42.2 | % | 547,806 | 472,790 | 15.9 | % | ||||||||||||||||||||||||
| Total segment pre-tax operating income/(loss) | $ | (118,649 | ) | $ | 300 | $ | 23,162 | N/M | N/M | $ | (89,681 | ) | $ | 57,284 | N/M | ||||||||||||||||||||
| Pre-tax operating margin | (119.6 | )% | 0.3 | % | 13.1 | % | (19.6 | )% | 10.8 | % | |||||||||||||||||||||||||
| N/M – Not meaningful | |||||||||||||||||||||||||||||||||||
| FOOTNOTES | |||||||||||||||
| The press release includes the use of non-GAAP financial measures that are not prepared in accordance with U.S. generally accepted accounting principles and that exclude the effects of a goodwill impairment charge recognized in the fourth quarter of 2011. These non-GAAP financial measures should not be considered a substitute for measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures have been used in this press release because management believes they are useful to investors by providing greater transparency to Piper Jaffray’s operating performance. | |||||||||||||||
| (1) | Net income/(loss) applicable to Piper Jaffray Companies and earnings per share | ||||||||||||||
| Three Months Ended | For the Year Ended | ||||||||||||||
| (Amounts in thousands, except per share data) | December 31, 2011 | December 31, 2011 | |||||||||||||
| Net loss applicable to Piper Jaffray Companies | $ | (116,364 | ) | $ | (102,020 | ) | |||||||||
| Adjustment to exclude the goodwill impairment charge, net of income tax | 118,448 | 118,448 | |||||||||||||
| Net income applicable to Piper Jaffray Companies, excluding the goodwill impairment charge | $ | 2,084 | $ | 16,428 | |||||||||||
| Net income applicable to Piper Jaffray Companies common shareholders, excluding | |||||||||||||||
| the goodwill impairment charge | $ | 1,729 | $ | 13,411 | |||||||||||
| Diluted earnings per common share, excluding the goodwill impairment charge | $ | 0.11 | $ | 0.86 | |||||||||||
| Weighted average number of common share outstanding – diluted | 15,773 | 15,685 | |||||||||||||
| (2) | Consolidated non-compensation expenses | ||||||||||||||
| Three Months Ended | For the Year Ended | ||||||||||||||
| (Amounts in thousands) | December 31, 2011 | December 31, 2011 | |||||||||||||
| Non-compensation expenses | $ | 153,968 | $ | 259,677 | |||||||||||
| Adjustment to exclude the goodwill impairment charge | (120,298 | ) | (120,298 | ) | |||||||||||
| Non-compensation expenses, excluding the goodwill impairment charge | $ | 33,670 | $ | 139,379 | |||||||||||
| (3) | Capital Markets pre-tax operating income and pre-tax margin | ||||||||||||||
| Three Months Ended | For the Year Ended | ||||||||||||||
| (Amounts in thousands) | December 31, 2011 | December 31, 2011 | |||||||||||||
| Capital Markets pre-tax operating loss | $ | (123,354 | ) | $ | (104,278 | ) | |||||||||
| Adjustment to exclude the goodwill impairment charge | 120,298 | 120,298 | |||||||||||||
| Capital Markets pre-tax operating income/(loss), excluding the goodwill impairment charge | $ | (3,056 | ) | $ | 16,020 | ||||||||||
| Capital Markets pre-tax operating margin | (153.5 | ) | % | (26.9 | ) | % | |||||||||
| Capital Markets pre-tax operating margin, excluding the goodwill impairment charge | (3.8 | ) | % | 4.1 | % | ||||||||||
| (4) | Capital Markets operating expenses | ||||||||||||||
| Three Months Ended | For the Year Ended | ||||||||||||||
| (Amounts in thousands) | December 31, 2011 | December 31, 2011 | |||||||||||||
| Capital Markets operating expenses | $ | 203,729 | $ | 491,216 | |||||||||||
| Adjustment to exclude the goodwill impairment charge | (120,298 | ) | (120,298 | ) | |||||||||||
| Capital Markets operating expenses, excluding the goodwill impairment charge | $ | 83,431 | $ | 370,918 | |||||||||||
| (5) | Adjusted common shareholders’ equity | ||||||||||||||
| Adjusted common shareholders’ equity equals total common shareholders’ equity, including goodwill associated with acquisitions, less goodwill resulting from the 1998 acquisition of our predecessor company, Piper Jaffray Companies Inc., by U.S. Bancorp. Annualized return on average adjusted common shareholders’ equity is computed by dividing annualized net income by average monthly adjusted common shareholders’ equity. Management believes that annualized return on adjusted common shareholders’ equity is a meaningful measure of performance because it reflects equity deployed in our businesses after our spin off from U.S. Bancorp on December 31, 2003. The following table sets forth a reconciliation of common shareholders’ equity to adjusted common shareholders’ equity. Common shareholders’ equity is the most directly comparable GAAP financial measure to adjusted common shareholders’ equity. | |||||||||||||||
| Average for the | Average for the | ||||||||||||||
| Three Months Ended | Three Months Ended | ||||||||||||||
| (Amounts in thousands) | Sept. 30, 2011 | Dec. 31, 2010 | |||||||||||||
| Common shareholders’ equity | $ | 842,515 | $ | 809,154 | |||||||||||
| Deduct: goodwill attributable to PJC Inc. acquisition by USB | 105,522 | 105,522 | |||||||||||||
| Adjusted common shareholders’ equity | $ | 736,993 | $ | 703,632 | |||||||||||
| (6) | Annualized quarterly return on average adjusted common shareholders’ equity | ||||||||||||||
| Management believes that the annualized quarterly return on average adjusted common shareholders’ equity excluding the impact of the goodwill impairment charge is a meaningful measure and aids comparison to the other quarters presented. | |||||||||||||||
| Average for the | Average for the | ||||||||||||||
| Three Months Ended | Three Months Ended | ||||||||||||||
| Dec. 31, 2011, Including the | Dec. 31, 2011, Excluding the | ||||||||||||||
| (Amounts in thousands) | Goodwill Impairment Charge | Goodwill Impairment Charge | |||||||||||||
| Common shareholders’ equity | $ | 808,079 | $ | 837,691 | |||||||||||
| Deduct: goodwill attributable to PJC Inc. acquisition by USB | 79,141 | 105,522 | |||||||||||||
| Adjusted common shareholders’ equity | $ | 728,938 | $ | 732,169 | |||||||||||
| Annualized net income applicable to Piper Jaffray Companies | N/M | $ | 8,337 | ||||||||||||
| Annualized quarterly return on average adjusted common shareholders’ equity | N/M | 1.1 | % | ||||||||||||
| (7) | Tangible common shareholders’ equity | ||||||||||||||
| Tangible shareholders’ equity equals total shareholders’ equity less all goodwill and identifiable intangible assets. Tangible book value per share is computed by dividing tangible shareholders’ equity by common shares outstanding. Management believes that tangible book value per share is a more meaningful measure of our book value per share. Shareholders’ equity is the most directly comparable GAAP financial measure to tangible shareholders’ equity. The following is a reconciliation of shareholders’ equity to tangible shareholders’ equity: | |||||||||||||||
| As of | As of | As of | |||||||||||||
| (Amounts in thousands) | Dec. 31, 2011 | Sept. 30, 2011 | Dec. 31, 2010 | ||||||||||||
| Common shareholders’ equity | $ | 718,391 | $ | 839,139 | $ | 813,312 | |||||||||
| Deduct: goodwill and identifiable intangible assets | 253,656 | 376,022 | 382,174 | ||||||||||||
| Tangible common shareholders’ equity | $ | 464,735 | $ | 463,117 | $ | 431,138 | |||||||||
| N/M – Not meaningful | |||||||||||||||
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