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UNITED STATES FORM 8-K CURRENT REPORT Date of Report (Date of earliest event reported): October 26, 2004 COHEN & STEERS, INC. Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
001-32236
(Commission
File Number)
14-1904657
(IRS Employer
Identification No.)
757 Third Avenue, New York, New York
(Address of principal executive offices)
10017
(Zip Code)
Registrant's telephone number, including area code: (212) 832-3232
(Former name or former address, if changed since last report.)
Item 2.02. Results of Operations and Financial Condition On October 26, 2004, Cohen & Steers, Inc. (the “Company”) issued a press release reporting results for the third quarter of 2004. A copy of the press release issued by the Company is attached as Exhibit 99.1. All information in the press release is furnished, but not filed.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: October 26, 2004
Cohen & Steers, Inc.
(Registrant)
By: /s/ Victor Gomez
Victor Gomez
Chief Financial Officer (Principal
Financial and Accounting Officer)
EXHIBIT INDEX 99.1
Press release dated October 26, 2004 issued by the Company reporting results for the third quarter of 2004.
For Immediate Release
COHEN & STEERS, INC. REPORTS THIRD QUARTER RESULTS
New York, October 26, 2004—Cohen & Steers, Inc. (NYSE: CNS), a manager of income-oriented equity portfolios, today reported 2004 third quarter pro forma net income of $6.3 million, or $0.16 pro forma diluted earnings per share. The company reported an actual net loss of $20.6 million, or ($0.60) per diluted share for the third quarter ended September 30, 2004.
Third quarter 2004 revenue increased 67% to $29.1 million compared to revenue of $17.4 million in the third quarter of 2003. Sequentially, revenue increased 14% compared to revenue of $25.6 million in the quarter ended June 30, 2004. For the nine months ended September 30, 2004, revenue increased 79% to $82.1 million, compared to $45.9 million in the nine months ended September 30, 2003.
“Our performance reflects the strength of our income-oriented investment approach and the solid returns this investment strategy continues to deliver to investors in a low-return environment,” said Martin Cohen, co-chairman and co-chief executive officer of Cohen & Steers. “In terms of relative performance, asset growth and revenues, we are having one of the best years ever in our firm's 18 year history.”
Cohen & Steers believes that the pro forma results provide a more meaningful basis for comparison of the company's results among present periods, considering that the company's initial public offering occurred during the quarter on August 12, 2004. Actual third quarter 2004 results included a one-time non-cash, compensation charge of $46.0 million and a one-time expense of $1.0 million related to the termination of a stock appreciation rights plan Cohen & Steers maintained as a private company and the simultaneous grant of fully vested restricted stock units to certain employees coincident with the company's initial public offering. In addition, these one-time charges generated a $19.3 million deferred income tax asset that the company will begin to realize in 2006. These and other pro forma adjustments to the operating expenses are described in greater detail in the footnotes to the accompanying condensed financial statements.
Assets Under Management
Assets under management increased 53% over the 12 month period ended September 30, 2004 to $16.1 billion, compared to $10.5 billion at September 30, 2003. Sequentially, assets under management increased 7%, or $1.1 billion, from June 30, 2004. The majority of asset growth in the most recent quarter is attributable to the $1.0 billion in appreciation in value across Cohen & Steers' mutual fund and institutional client portfolios, which reflected the continued strength of the publicly traded real estate securities and utility securities markets. Net flows were modestly positive in the third quarter of 2004 and totaled $92.9 million. Net flows in the nine months ended September 30, 2004 were $3.0 billion, increasing assets under management by 26% from December 31, 2003, and were largely due to the company's successful offerings of two leveraged closed-end mutual funds during the first and second quarters of 2004.
Closed-end mutual funds represented 50% of total assets under management at September 30, 2004, compared to 42% at September 30, 2003. Real estate common stocks represented 74% of Cohen & Steers' assets under management at September 30, 2004, compared to 84% at September 30, 2003, as the company has expanded its investment capabilities to include utility and corporate preferred securities. Business Highlights On August 18, 2004, Cohen & Steers closed its initial public offering of 7.5 million shares of common stock at $13 per share and received net proceeds of $90.7 million. On August 25, 2004, the company sold an additional 1.125 million shares of common stock pursuant to the underwriters' exercise of their over-allotment option. Cohen & Steers received net proceeds of $13.6 million for these additional shares. “Our successful initial public offering in August is a significant milestone in the history of our firm and reflects the strength of our investment capabilities and products,” said Robert Steers, co-chairman and co-chief executive officer of Cohen & Steers. “We look forward to capitalizing on the company's enhanced visibility as a publicly held company to deliver new products, expand our distribution channels and attract new talent, and thereby create value for our shareholders.” Other quarterly highlights included:
•
Filing of registration statements for five existing closed-end mutual funds for the purpose of re-setting each fund's leverage to the level specified by each fund's prospectus. These auction market preferred share offerings are expected to raise an aggregate $323 million based on current net assets. The ability of each fund to complete the proposed issuance will depend on market conditions at that time. One of these offerings, $55.0 million for Cohen & Steers REIT and Preferred Income Fund, closed on October 14, 2004. If successful, the company expects these offerings to close by the beginning of the first quarter of 2005.*
•
Filing of a registration statement for Cohen & Steers Dividend Majors Fund, a new closed-end mutual fund that will invest in a combination of REIT and non-REIT dividend paying common stocks.*
•
The company continued expanding its external retail sales capabilities by recruiting additional wholesalers, representing a significant increase in its external sales force.
•
Cohen & Steers continued to make progress with its planned acquisition of a 50% interest in Houlihan Rovers SA, a Brussels-based real estate securities money manager with assets under management of $483 million as of September 30, 2004. The company has conducted the necessary due diligence and filed for regulatory approval of the acquisition with Belgian regulators. Cohen & Steers expects to close this transaction by the end of this year.
Results of Operations Revenue increased 67% to $29.1 million in the third quarter of 2004, from $17.4 million in the third quarter of 2003. Sequentially, revenue increased 14% compared to revenue of $25.6 million in the quarter ended June 30, 2004. Asset Management revenue was $27.2 million and Investment Banking revenue was $1.9 million in the third quarter of 2004. Total revenue in the nine months ended September 30, 2004 increased 79% to $82.1 million from $45.9 million in the nine months ended September 30, 2003. For the quarter, closed-end mutual fund revenue was $12.6 million and included the first full quarter of revenue generated from the completion of two new funds during the first and second quarter of this year. On a pro forma basis, operating expenses were $18.8 million in the third quarter of 2004, which reflects what Cohen & Steers believes would have been a full quarter's normal operating expense had it been a public company for the entire period. Actual operating expenses in the third quarter 2004, including one-time effects related to the initial public offering, were $66.9 million, which generated a $17.0 million income tax benefit during the period. Operating expenses in the third quarter 2004 also included a one-time cash payment of $1.7 million to retire ongoing fee obligations to broker dealers for certain of the company's closed-end mutual funds. On October 11, 2004, the company's Compensation Committee canceled 404,971 fully vested restricted stock units previously granted to an employee that resigned from the company. Reversal of the expenses related to these forfeited restricted stock units will be reflected in the company's fourth quarter 2004 financial statements, and is expected to have an approximate $2.3 million positive effect on after-tax earnings. Liquidity and Capital Resources The company's strong operating cash flow in the nine months ended September 30, 2004 allowed it to fund normal business operations and repay in full and terminate its line of credit prior to the initial public offering. Additionally, the company paid $37.7 million in S-corporation distributions to the S-corporation stockholders during the first three quarters of 2004, including a final distribution payment of $20.7 million on September 29, 2004, which included all of the previously undistributed taxable operating income
•
The company converted its Morningstar five-star fund, Cohen & Steers Realty Focus Fund, formerly Cohen & Steers Special Equity Fund, from a no-load fund to a multiple-class load fund on September 30, 2004. The Morningstar rating is an overall rating as of September 30, 2004 among 144 funds in the specialty-real estate category.**
•
Van Kampen Investments launched two additional REIT and corporate preferred Unit Investment Trusts (“UITs”) for which the company provides portfolio consulting services. As of September 30, 2004, Cohen & Steers provided such advisory consulting services to thirteen Van Kampen UITs. Assets associated with these trusts are not included in the Cohen & Steers' assets under management.
earned by the company prior the revocation of the company's S-corporation election. Net working capital was $100.5 million at September 30, 2004. Dividends On October 11, 2004, the company paid an initial quarterly cash dividend of $0.10 per share to its stockholders of record at the close of business on September 27, 2004. Conference Call Information Cohen & Steers will hold a conference call tomorrow, October 27th at 10:00 a.m. Eastern Standard Time to discuss the company's third quarter 2004 results. Investors and analysts can access the live conference call by dialing (877) 234-1973 (domestic) and (973) 582-2749 (international) and asking for the Cohen & Steers conference call. A replay of the call will be available for two weeks starting at approximately 12:00 p.m. (ET) on October 27, 2004 and can be accessed at (877) 519-4471 (domestic) and (973) 341-3080 (international); PIN: 5304800. Internet access to the webcast, which includes audio (listen-only), will be available on the company's Web site at cohenandsteers.com under “Corporate Info.” The webcast will be archived on Cohen & Steers' Web site for two weeks. Participants should plan to register at least 10 minutes
before the conference call begins. About Cohen & Steers, Inc. Cohen & Steers is a manager of income-oriented equity portfolios and specializes in common and preferred stocks of REITs and utilities, as well as other preferred securities. Based in New York City, the firm serves individual and institutional investors through a wide range of open-end funds, closed-end funds and separate accounts. Forward Looking Statements This press release and other statements that Cohen & Steers may make contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect the company's current views with respect to, among other things, its operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative versions of these words or other comparable words. Such forward-looking
statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. The company believes that these factors include, but are not limited to, those described in the “Risk Factors” section of the company's Prospectus, dated August 12, 2004, filed with the SEC pursuant to Rule 424(b) (File No. 333-114027) and accessible on the SEC's Web site at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release. The company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
* For more complete information about the fund, including charges and expenses, please call (800) 330-7348 for a prospectus. There are special risks associated with an investment in the fund. These risks are described in the prospectus, which you should read carefully before you invest or send money. A registration statement relating to these securities has been filed with the Securities and Exchange Commission, but has not yet become effective. The information in this document is not complete and may be changed. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any such state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of any state. ** Cohen & Steers Realty Focus Fund (Class I Shares) received a five star rating for the three and five year periods ended September 30, 2004 out of 144 and 118 funds, respectively, in the specialty—real estate category, as well as an overall five star rating. For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and
the bottom 10% receive 1 star. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Morningstar Rating is for the Class I share class only; other classes may have different performance characteristics. Ratings are subject to change every month. (c) 2004 Morningstar, Inc. All Rights Reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Effective September 30, 2004, the fund converted to a multiple class structure, and outstanding shares on such date were reclassified as Class I shares. The fund also offers other share classes that have different sales and distribution charges. Had sales charges and distribution expenses to which the fund's other share classes are subject been applicable to Class I shares, returns would have been lower. In addition, during the periods presented the fund's advisor has waived a portion of the fund's advisory fee and/or reimbursed the fund's expenses so as to limit the fund's total expense ratio. In the absence of this waiver and reimbursement, the fund's performance would have been lower. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Please consider the fund's investment objective, risks, charges and expenses carefully before investing. This and other information may be obtained by calling 1-800-330-7348 or visiting cohenandsteers.com and requesting a prospectus. Please read the prospectus carefully before investing. There are special risks associated with investing in this fund because of its concentration in real estate securities. Real estate securities risks include falling property values due to increasing vacancies and declining rents resulting from economic, legal or technological developments. These risks are more fully described in the fund's prospectus. Cohen & Steers Securities, LLC is the distributor of the fund. Contact: Salvatore Rappa, vice president and associate general counsel Cohen & Steers, Inc.
212-832-3232
757 Third Avenue
New York, New York 10017
cohenandsteers.com
COHEN & STEERS, INC. AND SUBSIDIARIES Revenue: Investment advisory and administration fees: Closed-end funds Open-end funds Institutional separate accounts Total investment advisory and administration fees Distribution and service fee revenue Portfolio consulting and other Investment banking fees Total revenues Expenses: Employee compensation and benefits Stock based compensation General and administrative Distribution and service fee expense Amortization, deferred commissions Amortization, intangible assets Depreciation and amortization Total expenses Operating income (loss) Non-operating income (expense): Interest and dividend income Interest expense Total non-operating income Income (loss) before income taxes Income tax expense (benefit) Net Income (loss) Earnings per share: Basic Fully Diluted Weighted average shares outstanding: Basic Fully Diluted
(SUCCESSOR TO THE OPERATIONS OF
COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES)
ACTUAL AND PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended September 30, 2004 and 2003
($ in thousands, except per share data)
(Unaudited)
Actual
Three Months Ended
September 30,
2004
Pro Forma
Adjustments
Pro forma
Three Months Ended
September 30,
2004
Actual
Three Months Ended
September 30,
2003
$
12,584
12,584
$
5,784
8,529
8,529
6,473
3,061
3,061
2,269
24,174
24,174
14,526
2,554
2,554
1,624
512
512
591
1,881
1,881
621
29,121
29,121
17,362
6,809
(5
)
6,804
(a)
7,984
48,374
(47,114
)
1,260
(b)
328
2,789
138
2,927
(c)
2,191
7,072
(1,730
)
5,342
(d)
2,657
1,005
1,005
754
585
526
1,111
(e)
—
304
304
233
66,938
(48,185
)
18,753
14,147
(37,817
)
48,185
10,368
3,215
302
273
575
(f)
99
(30
)
(30
)
(40
)
272
273
545
59
(37,545
)
48,458
10,913
3,274
(16,956
)
21,539
4,583
(g)
(6
)
$
(20,589
)
$
26,919
$
6,330
$
3,280
$
(0.60
)
$
0.16
$
0.12
$
(0.60
)
$
0.16
$
0.12
34,067,882
40,232,845
(h)
26,700,000
34,138,124
40,281,728
(h)
26,700,000
See footnotes to the following table.
COHEN & STEERS, INC. AND SUBSIDIARIES Asset Management: Total revenue Total operating expenses Operating income (loss) Total non-operating income Income (loss) before income taxes Income tax expense (benefit) Net income (loss) Investment Banking: Total revenue Total operating expenses Operating income (loss) Total non-operating income Income (loss) before income taxes Income tax benefit Net income (loss) Notes: (a) The pro forma adjustment to employee compensation and benefits expense gives effect to: (b) The pro forma adjustment to stock-based compensation gives effect to:
(SUCCESSOR TO THE OPERATIONS OF
COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES)
ACTUAL AND PRO FORMA SEGMENT INCOME STATEMENT DATA
Three Months Ended September 30, 2004
($ in thousands)
(Unaudited)
Actual
Three Months Ended
September 30,
2004
Pro forma
Adjustments
Pro forma
Three Months Ended
September 30,
2004
$
27,240
$
27,240
$
62,420
$
(45,623
)
$
16,797
(a,b,c,d,e)
$
(35,180
)
$
45,623
$
10,443
$
257
$
273
$
530
(f)
$
(34,923
)
$
45,896
$
10,973
$
(15,631
)
$
20,239
$
4,608
(g)
$
(19,292
)
$
25,657
$
6,365
$
1,881
$
1,881
$
4,518
$
(2,562
)
$
1,956
(b,c,e,i)
$
(2,637
)
$
2,562
$
(75
)
$
15
$
15
$
(2,622
)
$
2,562
$
(60
)
$
(1,325
)
$
1,300
$
(25
)
(g)
$
(1,297
)
$
1,262
$
(35
)
1) A decrease in the salaries from $1,040,000 to $500,000 for each of the company's co-chief-executive officers and co-chairmen in conjunction with the conversion from an S to C corporation as well as a bonus limit of $1,000,000 each for 2004. This attempts to show what their compensation would have been had the company been a C corporation for the entire period;
2) Incentive compensation assuming a full quarter's effect of the mandatory deferred compensation plan. Senior executives and officers will receive 10-15% of their annual incentive compensation, or bonus, in the form of restricted stock units (“RSUs”). These RSUs will cliff vest after 3 years and will receive a 25% match by the company. Compensation and benefits expense was reduced by this amount; and,
3) A full quarter's non-cash compensation expense associated with the employees' voluntary deferred compensation plan.
This plan, implemented in conjunction with the company's initial public offering, allows employees to defer a portion of their annual cash compensation and receive it in RSUs. This additional amount was reclassified to stock-based compensation expense from employee compensation and benefits expense.
1) A reversal of a one-time $46.0 million non-cash compensation expense which was recorded in connection with the grant of fully vested restricted stock units at the time of the initial public offering. These RSUs will be delivered as follows: 20% in January 2006, and 40% each in January of 2007 and 2008. This future delivery has created a deferred tax asset equal to $19.3 million, or 42% (effective tax rate) of the one time charge. The charge is allocated to the segments based on the segment's actual RSU grants;
2) A reversal of a one-time
increase in medicare taxes of $1.0 million due to the grant of fully vested
RSUs at the completion of the company's initial public offering. The
Medicare taxes are allocated to each segment based on the actual amount
of the Medicare taxes calculated on individual RSU grants to each segment;
(c) The pro forma adjustment to general and administrative expenses gives effect to the expected additional general and administrative expenses incurred had the company been a public company for the entire quarter. (d) The pro forma adjustment to distribution and service fee expense gives effect to the reversal of a one time payment of $1.7 million to retire servicing fee obligations to broker dealers for certain of the company's closed-end mutual funds. (e) The pro forma adjustment to amortization, intangible asset gives effect to the additional non-cash amortization of the intangible asset associated with the grant of fully vested RSUs that the company would have incurred if the plan had been in effect for the full quarter. The value of these non-compete agreements has been independently valued at $15.4 million and will be amortized on a straight line basis to coincide with the delivery schedule of the fully vested RSUs. The amortization of the intangible asset has been allocated to the segments based on their pro rata portion of the $15.4 million in non-compete agreements. (f) The pro forma adjustment to interest and dividend income gives effect to a full quarter's return on cash raised from the initial public offering. At quarter-end, these proceeds were invested in short-term instruments yielding 1.7%. (g) Effective with the conversion from S-Corporation to C-Corporation status, the company became subject to U.S. federal and certain income taxes which it had not been subject to previously. Pro forma income taxes reflect an assumed effective tax rate of 42%. (h) The pro forma adjustment to basic and diluted weighted average shares outstanding gives effect to the offering as if it had occurred at the beginning of the third quarter of 2004. (i) The pro forma adjustment to compensation and benefits expense for the Investment Banking segment gives effect to:
3)The current period's recognized portion of the non-cash compensation expense associated with the $8.4 million RSUs which were granted to certain employees at the time of the initial public offering and to the non-cash compensation expense associated with the company's former stock appreciation rights plan (“SAR plan”). The newly granted RSUs were issued coincident with the company's initial public offering and cliff vest in January 2008. This adjustment depicts what the non-cash expense would have been for the quarter, if the newly issued RSUs had been in place for the entire period and the former SAR plan had been terminated for the entire quarter; and,
4) A full quarter's non-cash compensation expense associated with the employees' voluntary deferred compensation plan.
This plan, implemented in conjunction with the company's initial public offering, allows employees to defer a portion of their annual cash compensation and receive it in RSUs. This additional amount was reclassified from employee compensation and benefits expense to stock-based compensation expense.
1) Incentive compensation assuming a full quarter's effect of the mandatory deferred compensation plan;
2) A decrease in Investment Banking bonuses to its principals as a result of the pro forma adjustment for a full quarter's effect of general and administrative expenses and the pro forma adjustment for a full quarter's effect of the mandatory deferred compensation plan; and,
3) A full quarter's non-cash compensation expense associated with the employees' voluntary deferred compensation plan. This plan, implemented in conjunction with the Company's initial public offering, allows employees to defer a portion of their annual cash compensation and receive it in RSUs. This additional amount was reclassified to stock based compensation expense.
COHEN & STEERS, INC. AND SUBSIDIARIES Revenue: Investment advisory and administration fees: Closed-end funds Open-end funds Institutional separate accounts Total investment advisory and administration fees Distribution and service fee revenue Portfolio consulting and other Investment banking fees Total revenues Expenses: Employee compensation and benefits Stock based compensation General and administrative Distribution and service fee expense Amortization, deferred commissions Amortization, intangible assets Depreciation and amortization Total expenses Operating income (loss) Nonoperating income (expense): Interest and dividend income Interest expense Total non-operating income Income (loss) before income taxes Income tax expense (benefit) Net Income (loss) Earnings per share: Basic Fully Diluted Weighted average shares outstanding: Basic Fully Diluted
(SUCCESSOR TO THE OPERATIONS OF
COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30, 2004 and 2003
($ in thousands, except per share data)
(Unaudited)
Nine months ended
September 30,
2004
2003
$
32,954
$
11,602
24,585
16,823
8,538
6,340
66,077
34,765
7,246
3,857
2,136
1,162
6,599
6,156
82,058
45,940
21,933
25,698
49,073
986
8,916
5,796
16,202
5,972
3,295
2,200
585
—-
869
700
100,873
41,352
(18,815
)
4,588
515
298
(111
)
(115
)
404
183
(18,411
)
4,771
(15,753
)
(29
)
$
(2,658
)
$
4,800
$
(0.09
)
$
0.18
$
(0.09
)
$
0.18
29,155,961
26,700,000
29,226,203
26,700,000
COHEN & STEERS, INC. AND SUBSIDIARIES Assets Current assets: Cash and cash equivalents Accounts receivable: Company-sponsored mutual funds Other Marketable securities available-for-sale Due from affiliates Income tax refunds receivable Deferred initial public offering costs Prepaid expenses and other current assets Total current assets Property and equipment-net Intangible asset-net Other assets: Deferred commissions-net Deferred income tax asset Deposits Total other assets Total assets Liabilities and stockholders' equity Current liabilities: Accrued expenses and compensation Dividends payable Current portion of long-term debt Current portion of obligations under capital leases Deferred income tax liability Other current liabilities Total current liabilities Long-term liabilities: Deferred income tax liability Bank line of credit Long-term debt Obligations under capital leases and other long-term liabilities Total long-term liabilities Commitments and contingencies Stockholders' equity: Common stock Additional paid-in capital Retained earnings (deficit) Accumulated other comprehensive income Total stockholders' equity Total liabilities and stockholders' equity
(SUCCESSOR TO THE OPERATIONS OF
COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
September 30, 2004 and December 31, 2003
($ in thousands)
September 30,
2004
December 31,
2003
(Unaudited)
$
47,350
$
7,526
7,331
5,179
3,500
3,669
63,848
6,497
52
282
395
441
—
139
2,254
864
124,730
24,597
2,830
3,361
14,815
—
5,885
6,523
17,073
—
42
42
23,000
6,565
$
165,375
$
34,523
$
19,021
$
6,626
4,023
—
109
120
13
16
876
126
178
129
24,220
7,017
—
240
—
4,713
1,583
1,661
90
118
1,673
6,732
—
—
353
267
165,248
3,692
(27,530
)
15,195
1,411
1,620
139,482
20,774
$
165,375
$
34,523
Assets under Management (AUM) Breakdown by Account Type Closed-end Mutual Funds Open-end Mutual Funds Institutional Separate Accounts Total AUM Breakdown by Security Type Real Estate Common Stocks Utility Common Stocks Real Estate Preferred Stocks Corporate Preferred Stocks Fixed Income (1) Cash and Short Term Investments Total AUM (1) Includes corporate bonds.
($ in millions)
September 30,
2004
% of
assets
December 31,
2003
% of
assets
September 30,
2003
% of
assets
$
8,005.4
50
%
$
4,790.6
41
%
$
4,429.1
42
%
4,465.1
28
%
3,897.1
33
%
3,378.1
32
%
3,596.7
22
%
2,992.4
26
%
2,682.9
26
%
$
16,067.2
100
%
$
11,680.1
100
%
$
10,490.1
100
%
$
11,866.4
74
%
$
9,892.6
85
%
$
8,789.2
84
%
1,695.9
11
%
—
0
%
—
0
%
1,224.1
8
%
836.0
7
%
744.3
7
%
899.7
5
%
683.9
6
%
471.4
4
%
137.8
1
%
109.1
1
%
79.7
1
%
243.3
1
%
158.5
1
%
405.5
4
%
$
16,067.2
100
%
$
11,680.1
100
%
$
10,490.1
100
%
Net Flows and Appreciation of Assets Under Management (AUM) Total Accounts: Beginning total AUM Net flows Net appreciation Ending total AUM Closed-end mutual funds Beginning closed-end mutual fund AUM Net flows Net appreciation Ending closed-end mutual fund AUM Open-end mutual funds Beginning open-end mutual fund AUM Subscriptions Redemptions Net appreciation Ending open-end mutual fund AUM Separate accounts Beginning institutional separate account AUM Inflows Outflows Net appreciation Ending institutional separate account AUM Ending total AUM Total net flows/beginning AUM (%) Change in total AUM (%)
($ in millions)
Three months ended
September 30,
Nine months ended
September 30,
2004
2003
2004
2003
$
14,980.0
$
8,714.3
$
11,680.1
$
6,623.8
92.9
1,119.8
3,038.7
2,371.5
994.3
656.0
1,348.4
1,494.8
16,067.2
10,490.1
16,067.2
10,490.1
$
7,670.5
$
3,348.7
$
4,790.6
$
2,114.3
0.0
904.8
2,931.5
1,923.3
334.9
175.6
283.3
391.5
8,005.4
4,429.1
8,005.4
4,429.1
4,029.3
2,936.9
3,897.1
2,452.4
314.6
367.7
997.8
859.0
(214.5
)
(169.3
)
(962.7
)
(501.1
)
335.7
242.8
532.9
567.8
4,465.1
3,378.1
4,465.1
3,378.1
3,280.2
2,428.7
2,992.4
2,057.1
75.2
49.4
359.4
153.8
(82.4
)
(32.8
)
(287.3
)
(63.5
)
323.7
237.6
532.2
535.5
3,596.7
2,682.9
3,596.7
2,682.9
$
16,067.2
$
10,490.1
$
16,067.2
$
10,490.1
0.6%
12.9%
26.0%
35.8%
7.3%
20.4%
37.6%
58.4%