Consolidated Sponsored Investment Products (Tables)

6 Months Ended

Jun. 30, 2014

Balances of Consolidated Sponsored Investment Products

The following table presents the balances of the consolidated sponsored investment products that were reflected in the Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013:

	As of
	June 30, 2014			December 31, 2013
($ in thousands)
Total cash	$	12,319		$	531
Total investments		207,279			139,054
All other assets		3,285			9,595
Total liabilities		(16,011	)		(8,435	)
Redeemable noncontrolling interests		(10,397	)		(42,186	)
The Company’s net interests in consolidated sponsored investment products	$	196,475		$	98,559

Condensed Consolidated Balance Sheets

The following tables reflect the impact of the consolidated sponsored investment products in the Condensed Consolidated Balance Sheets as of June, 30, 2014 and December 31, 2013 and the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2014 and 2013, respectively:

As of June 30, 2014

	Balance Before Consolidation of Investment Products			Consolidated Sponsored Investment Products		Eliminations and Adjustments (a)			Balances as Reported in Consolidated Balance Sheet
($ in thousands)
Total cash	$	170,367		$	12,319	$	—		$	182,686
Total investments		261,414			207,279		(196,315	)		272,378
All other assets		182,490			3,285		(160	)		185,615
Total assets	$	614,271		$	222,883	$	(196,475	)	$	640,679
Total liabilities	$	99,844		$	16,171	$	(160	)	$	115,855
Redeemable noncontrolling interests		—			—		10,397			10,397
Equity attributable to stockholders of the Company		514,529			206,712		(206,712	)		514,529
Non-redeemable noncontrolling interests		(102	)		—		—			(102	)
Total liabilities and equity	$	614,271		$	222,883	$	(196,475	)	$	640,679

As of December 31, 2013

	Balance Before Consolidation of Investment Products			Consolidated Sponsored Investment Products		Eliminations and Adjustments (a)			Balances as Reported in Consolidated Balance Sheet
($ in thousands)
Total cash	$	271,014		$	531	$	—		$	271,545
Total investments		135,692			139,054		(98,434	)		176,312
All other assets		187,627			9,595		(125	)		197,097
Total assets	$	594,333		$	149,180	$	(98,559	)	$	644,954
Total liabilities	$	101,465		$	8,560	$	(125	)	$	109,900
Redeemable noncontrolling interests		—			—		42,186			42,186
Equity attributable to stockholders of the Company		492,930			140,620		(140,620	)		492,930
Non-redeemable noncontrolling interests		(62	)		—		—			(62	)
Total liabilities and equity	$	594,333		$	149,180	$	(98,559	)	$	644,954

(a) Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and equity and recording of any noncontrolling interest.

Condensed Consolidated Statement of Operations

The following table reflects the impact of the consolidated sponsored investment products in the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2014 and 2013:

For the Three Months Ended June 30, 2014

	Balance Before Consolidation of Investment Products		Consolidated Sponsored Investment Products			Eliminations and Adjustments (a)			Balances as Reported in Condensed Consolidated Statement of Operations
($ in thousands)
Total operating revenues	$	112,871	$	—		$	(122	)	$	112,749
Total operating expenses		89,450		919			(122	)		90,247
Operating income (loss)		23,421		(919	)		—			22,502
Total other non-operating income		8,198		8,082			(6,884	)		9,396
Income before income tax expense		31,619		7,163			(6,884	)		31,898
Income tax expense		12,106		—			—			12,106
Net income		19,513		7,163			(6,884	)		19,792
Noncontrolling interests		30		—			(279	)		(249	)
Net income attributable to the Company	$	19,543	$	7,163		$	(7,163	)	$	19,543

For the Three Months Ended June 30, 2013

	Balance Before Consolidation of Investment Products			Consolidated Investment Products			Eliminations and Adjustments (a)		Balances as Reported in Condensed Consolidated Statement of Operations
($ in thousands)
Total operating revenues	$	96,135		$	—		$	5	$	96,140
Total operating expenses		69,125			128			5		69,258
Operating income (loss)		27,010			(128	)		—		26,882
Total other non-operating (expense) income		(2,321	)		(2,543	)		2,083		(2,781	)
Income (loss) before income tax expense		24,689			(2,671	)		2,083		24,101
Income tax expense		9,318			—			—		9,318
Net income (loss)		15,371			(2,671	)		2,083		14,783
Noncontrolling interests		14			—			588		602
Net income (loss) attributable to the Company	$	15,385		$	(2,671	)	$	2,671	$	15,385

For the Six Months Ended June 30, 2014

	Balance Before Consolidation of Investment Products		Consolidated Sponsored Investment Products			Eliminations and Adjustments (a)			Balances as Reported in Condensed Consolidated Statement of Operations
($ in thousands)
Total operating revenues	$	220,726	$	—		$	(106	)	$	220,620
Total operating expenses		164,364		1,234			(106	)		165,492
Operating income (loss)		56,362		(1,234	)		—			55,128
Total other non-operating income		11,195		8,992			(7,640	)		12,547
Income before income tax expense		67,557		7,758			(7,640	)		67,675
Income tax expense		26,116		—			—			26,116
Net income		41,441		7,758			(7,640	)		41,559
Noncontrolling interests		40		—			(118	)		(78	)
Net income attributable to the Company	$	41,481	$	7,758		$	(7,758	)	$	41,481

For the Six Months Ended June 30, 2013

	Balance Before Consolidation of Investment Products			Consolidated Investment Products			Eliminations and Adjustments (a)		Balances as Reported in Condensed Consolidated Statement of Operations
($ in thousands)
Total operating revenues	$	182,256		$	—		$	52	$	182,308
Total operating expenses		134,010			264			52		134,326
Operating income (loss)		48,246			(264	)		—		47,982
Total other non-operating expense		(1,165	)		(1,691	)		1,610		(1,246	)
Income (loss) before income tax expense		47,081			(1,955	)		1,610		46,736
Income tax expense		17,768			—			—		17,768
Net income (loss)		29,313			(1,955	)		1,610		28,968
Noncontrolling interests		32			—			345		377
Net income (loss) attributable to the Company	$	29,345		$	(1,955	)	$	1,955	$	29,345

(a) Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and equity and recording of any noncontrolling interest.

Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis

The assets and liabilities of the consolidated sponsored investment products measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 by fair value hierarchy level were as follows:

June 30, 2014

	Level 1		Level 2		Level 3		Total
($ in thousands)
Assets
Debt securities	$	—	$	112,333	$	450	$	112,783
Equity securities		93,332		1,164		—		94,496
Derivatives		15		31		—		46
Total Assets Measured at Fair Value	$	93,347	$	113,528	$	450	$	207,325
Liabilities
Short sales	$	9,024	$	2,020	$	—	$	11,044

December 31, 2013

	Level 1		Level 2		Level 3		Total
($ in thousands)
Assets
Debt securities	$	—	$	47,114	$	—	$	47,114
Equity securities		91,940		—		—		91,940
Total Assets Measured at Fair Value	$	91,940	$	47,114	$	—	$	139,054

Consolidated Sponsored Investment Products [Member]

Reconciliation of Assets Related to Consolidated Sponsored Investment Products

The following table is a reconciliation of assets of consolidated sponsored investment products for Level 3 investments for which significant unobservable inputs were used to determine fair value.

	Debt securities (a)
Balance at December 31, 2013	$	—
Purchases		450
Balance at June 30, 2014	$	450

(a) None of the securities in the above table are internally fair valued at June 30, 2014.