Operating Results (GAAP) | Economic Operating Income (Non-GAAP) | |||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||
($ in millions, except per share information) | 2021 | 2020 | Δ % | 2021 | 2020 | Δ % | ||||||
Revenue/Economic Proceeds (Non-GAAP) | $ | 458.8 | $ | 646.2 | (29) | % | $ | 390.1 | $ | 558.7 | (30) | % |
Net income (loss) attributable to common stockholders/Economic Operating Income (Non-GAAP) | $ | 43.6 | $ | 112.1 | (61) | % | $ | 50.8 | $ | 166.9 | (70) | % |
Earnings (loss) per common share (diluted) | $ | 1.29 | $ | 3.83 | (66) | % | $ | 1.50 | $ | 5.69 | (74) | % |
Note: Throughout this press release the Company presents non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States of America ('US GAAP'). A reconciliation of these non-GAAP measures appears under the section, 'Reconciliation of US GAAP (Unaudited) to Non-GAAP Measures.' 2Q21 Economic Operating Income (Loss) is calculated net of associated taxes. The Company has utilized all available federal net operating losses not subject to limitation during 2020. 2Q20 Economic Operating Income included $64.9 million from an unrealized gain on the Nikola investment.
|
(Amounts in millions, except per share information) | ||
June 30, 2021 | December 31, 2020 | |
Cowen Inc. stockholders' equity | $1,097.3 | $969.5 |
Common equity (CE) | $996.0 | $868.2 |
Tangible common equity (TCE) | $822.0 | $696.7 |
Book value per share (CE/CSO) | $34.35 | $32.34 |
Tangible book value per share (TCE/CSO) | $28.35 | $25.95 |
Common shares outstanding (CSO) | 29.0 | 26.8 |
Note: Common Equity (CE) is calculated as Cowen Inc, stockholders' equity less our preferred stock issuance. Tangible common equity (TCE) is calculated as common equity (CE) less goodwill and net intangible assets. |
Cowen Inc. | ||||||||
US GAAP Preliminary Unaudited Condensed Consolidated Statements of Operations | ||||||||
(Dollar and share amounts in thousands, except per share data) | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30 | June 30 | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Revenue | ||||||||
Investment banking | $ | 224,981 | $ | 203,982 | $ | 529,815 | $ | 309,010 |
Brokerage | 139,060 | 130,209 | 312,797 | 271,586 | ||||
Investment income (loss) | ||||||||
Securities principal transactions, net | 40,572 | 157,588 | 104,537 | 126,543 | ||||
Portfolio fund principal transactions, net | (1,882) | 12,094 | 13,521 | 9,276 | ||||
Carried interest allocations | (35,530) | 37,757 | 61,239 | 26,213 | ||||
Total investment income (loss) | 3,160 | 207,439 | 179,297 | 162,032 | ||||
Management fees | 14,995 | 11,653 | 40,737 | 23,257 | ||||
Incentive income | 169 | - | 2,427 | - | ||||
Interest and dividends | 62,173 | 47,918 | 121,561 | 89,995 | ||||
Insurance and reinsurance premiums | 11,493 | 5,967 | 18,610 | 16,438 | ||||
Other | 2,031 | 1,286 | 3,690 | 2,868 | ||||
Consolidated Funds revenues | 695 | 37,730 | (2,652) | (32,279) | ||||
Total revenue | 458,757 | 646,184 | 1,206,282 | 842,907 | ||||
Interest and dividends expense | 63,073 | 49,304 | 120,714 | 88,096 | ||||
Total net revenue | 395,684 | 596,880 | 1,085,568 | 754,811 | ||||
Expenses | ||||||||
Employee compensation and benefits | 219,186 | 305,282 | 607,382 | 429,710 | ||||
Insurance and reinsurance claims, commissions and amortization of deferred acquisition costs | 5,216 | 6,434 | 11,671 | 16,864 | ||||
Operating, general, administrative and other expenses | 104,001 | 92,027 | 200,077 | 180,166 | ||||
Depreciation and amortization expense | 4,565 | 6,200 | 8,919 | 11,642 | ||||
Consolidated Funds expenses | 124 | 1,585 | 395 | 4,299 | ||||
Total expenses | 333,092 | 411,528 | 828,444 | 642,681 | ||||
Other income (loss) | ||||||||
Net (losses) gains on other investments | 6,730 | 6,528 | 19,375 | 6,466 | ||||
Bargain purchase gain, net of tax | - | - | 3,855 | - | ||||
Gain/(loss) on debt extinguishment | - | - | (4,538) | - | ||||
Total other income (loss) | 6,730 | 6,528 | 18,692 | 6,466 | ||||
Income (loss) before income taxes | 69,322 | 191,880 | 275,816 | 118,596 | ||||
Income tax expense/(benefit) | 10,244 | 44,932 | 64,672 | 43,759 | ||||
Net income (loss) | 59,078 | 146,948 | 211,144 | 74,837 | ||||
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries and funds | 13,755 | 33,113 | 18,317 | (29,075) | ||||
Net income (loss) attributable to Cowen Inc. | 45,323 | 113,835 | 192,827 | 103,912 | ||||
Less: Preferred stock dividends | 1,698 | 1,698 | 3,396 | 3,396 | ||||
Net income (loss) attributable to Cowen Inc. common stockholders | $ | 43,625 | $ | 112,137 | $ | 189,431 | $ | 100,516 |
Earnings (loss) per share: | ||||||||
Basic | $ | 1.62 | $ | 4.01 | $ | 6.98 | $ | 3.55 |
Diluted | $ | 1.29 | $ | 3.83 | $ | 5.62 | $ | 3.39 |
Weighted average shares used in per share data: | ||||||||
Basic | 26,903 | 27,983 | 27,130 | 28,289 | ||||
Diluted | 33,858 | 29,316 | 33,703 | 29,644 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||||||||||
(Dollar amounts in thousands) | Op Co | Asset Co | Total | Op Co | Asset Co | Total | Op Co | Asset Co | Total | Op Co | Asset Co | Total | ||||||||||||
Economic Proceeds | ||||||||||||||||||||||||
Investment banking | $ | 214,427 | $ | - | $ | 214,427 | $ | 190,429 | $ | - | $ | 190,429 | $ | 507,914 | $ | - | $ | 507,914 | $ | 289,627 | $ | - | $ | 289,627 |
Brokerage | 175,845 | - | 175,845 | 167,067 | - | 167,067 | 397,692 | - | 397,692 | 299,739 | - | 299,739 | ||||||||||||
Management fees | 17,825 | 299 | 18,124 | 14,234 | 168 | 14,402 | 44,709 | 616 | 45,325 | 27,351 | 372 | 27,723 | ||||||||||||
Incentive income | (31,566) | 514 | (31,052) | 45,392 | 983 | 46,375 | 78,359 | (701) | 77,658 | 43,449 | (1,161) | 42,288 | ||||||||||||
Investment income (loss) | 5,595 | (117) | 5,478 | 142,379 | (1,893) | 140,486 | 37,514 | 2,973 | 40,487 | 122,931 | (13,548) | 109,383 | ||||||||||||
Other economic proceeds | 7,307 | - | 7,307 | (62) | 2 | (60) | 8,471 | (1) | 8,470 | 498 | 2 | 500 | ||||||||||||
Total: Economic Proceeds | 389,433 | 696 | 390,129 | 559,439 | (740) | 558,699 | 1,074,659 | 2,887 | 1,077,546 | 783,595 | (14,335) | 769,260 | ||||||||||||
Economic Interest Expense | 7,423 | 1,174 | 8,597 | 6,102 | 1,469 | 7,571 | 13,366 | 2,261 | 15,627 | 12,445 | 2,904 | 15,349 | ||||||||||||
Net Economic Proceeds | $ | 382,010 | $ | (478) | $ | 381,532 | $ | 553,337 | $ | (2,209) | $ | 551,128 | $ | 1,061,293 | $ | 626 | $ | 1,061,919 | $ | 771,150 | $ | (17,239) | $ | 753,911 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||||||||||
(Dollar amounts in thousands) | Op Co | Asset Co | Total | Op Co | Asset Co | Total | Op Co | Asset Co | Total | Op Co | Asset Co | Total | ||||||||||||
Economic Expenses | ||||||||||||||||||||||||
Compensation & Benefits | $ | 216,280 | $ | 4,133 | $ | 220,413 | $ | 304,644 | $ | 438 | $ | 305,082 | $ | 601,858 | $ | 6,951 | $ | 608,809 | $ | 429,650 | $ | 1,136 | $ | 430,786 |
Non-Compensation Expenses | 87,811 | 53 | 87,864 | 75,572 | 109 | 75,681 | 177,226 | (24) | 177,202 | 156,203 | 263 | 156,466 | ||||||||||||
Depreciation & Amortization | 4,561 | 4 | 4,565 | 5,657 | 6 | 5,663 | 8,910 | 9 | 8,919 | 11,085 | 12 | 11,097 | ||||||||||||
Non-Controlling Interest | 1,488 | - | 1,488 | 1,739 | - | 1,739 | 2,955 | - | 2,955 | 3,479 | - | 3,479 | ||||||||||||
Total: Economic Expenses | $ | 310,140 | $ | 4,190 | $ | 314,330 | $ | 387,612 | $ | 553 | $ | 388,165 | $ | 790,949 | $ | 6,936 | $ | 797,885 | $ | 600,417 | $ | 1,411 | $ | 601,828 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||||||||||
(Dollar amounts in thousands) | Op Co | Asset Co | Total | Op Co | Asset Co | Total | Op Co | Asset Co | Total | Op Co | Asset Co | Total | ||||||||||||
Pre-tax Economic Income (Loss) | $ | 71,870 | $ | (4,668) | $ | 67,202 | $ | 165,725 | $ | (2,762) | $ | 162,963 | $ | 270,344 | $ | (6,310) | $ | 264,034 | $ | 170,733 | $ | (18,650) | $ | 152,083 |
Economic income tax expense * | 19,261 | (1,251) | 18,010 | - | - | - | 72,451 | (1,691) | 70,760 | - | - | - | ||||||||||||
Preferred dividends | 1,460 | 238 | 1,698 | 1,387 | 311 | 1,698 | 2,887 | 509 | 3,396 | 2,745 | 651 | 3,396 | ||||||||||||
Economic Income (Loss) * | $ | 51,149 | $ | (3,655) | $ | 47,494 | $ | 164,338 | $ | (3,073) | $ | 161,265 | 195,006 | (5,128) | 189,878 | 167,988 | (19,301) | 148,687 | ||||||
Add back: Depreciation and amortization expense, net of taxes | 3,339 | 3 | 3,342 | 5,657 | 6 | 5,663 | 6,522 | 6 | 6,528 | 11,085 | 12 | 11,097 | ||||||||||||
Economic Operating Income (Loss) | $ | 54,488 | $ | (3,652) | $ | 50,836 | $ | 169,995 | $ | (3,067) | $ | 166,928 | $ | 201,528 | $ | (5,122) | $ | 196,406 | $ | 179,073 | $ | (19,289) | $ | 159,784 |
Economic Income per common share | $ | 1.51 | $ | (0.11) | $ | 1.40 | $ | 5.61 | $ | (0.10) | $ | 5.50 | $ | 5.79 | $ | (0.15) | $ | 5.63 | $ | 5.67 | $ | (0.65) | $ | 5.02 |
Economic Operating Income per common share | $ | 1.61 | $ | (0.11) | $ | 1.50 | $ | 5.80 | $ | (0.10) | $ | 5.69 | $ | 5.98 | $ | (0.15) | $ | 5.83 | $ | 6.04 | $ | (0.65) | $ | 5.40 |
For the three months ended June 30, 2021
(Dollar amounts in thousands)
| Investment Banking | Brokerage | Investment Income | Management Fees | Incentive Income | Interest and Dividends | Reinsurance premiums | Other revenues | Consolidated Funds Revenues | Other Income (Loss) | Total | |||||||||||
Total US GAAP Revenues and Other Income (Loss) | $ | 224,981 | $ | 139,060 | $ | 3,160 | $ | 14,995 | $ | 169 | $ | 62,173 | $ | 11,493 | $ | 2,031 | $ | 695 | $ | 6,730 | $ | 465,487 |
Management Presentation Reclassifications: | ||||||||||||||||||||||
Underwriting expenses | a | (6,152) | - | - | - | - | - | - | - | - | - | (6,152) | ||||||||||
Reimbursable client expenses | b | (4,402) | - | - | - | - | - | - | (295) | - | - | (4,697) | ||||||||||
Securities financing interest expense | c | - | 6,132 | - | - | - | (48,854) | - | - | - | - | (42,722) | ||||||||||
Fund start-up costs, distribution and other fees | d | - | (107) | - | (449) | - | - | - | (666) | - | - | (1,222) | ||||||||||
Certain equity method investments | e | - | - | - | 3,523 | 4,358 | - | - | - | - | (5,894) | 1,987 | ||||||||||
Carried interest | f | - | - | 35,530 | - | (35,686) | - | - | - | - | - | (156) | ||||||||||
Proprietary trading, interest and dividends | g | - | 10,245 | (32,710) | - | 275 | (2,262) | - | (34) | - | 10,616 | (13,870) | ||||||||||
Insurance related activities expenses | h | - | - | - | - | - | - | (11,493) | 6,271 | - | 1 | (5,221) | ||||||||||
Facilitation trading gains and losses | i | - | 20,515 | (1,554) | - | - | (11,057) | - | - | - | (11,453) | (3,549) | ||||||||||
Total Management Presentation Reclassifications: | (10,554) | 36,785 | 1,266 | 3,074 | (31,053) | (62,173) | (11,493) | 5,276 | - | (6,730) | (75,602) | |||||||||||
Fund Consolidated Reclassifications | l | - | - | 1,052 | 55 | (168) | - | - | - | (695) | - | 244 | ||||||||||
Total Economic Proceeds | $ | 214,427 | $ | 175,845 | $ | 5,478 | $ | 18,124 | $ | (31,052) | $ | - | $ | - | $ | 7,307 | $ | - | $ | - | $ | 390,129 |
For the three months ended June 30, 2020
(Dollar amounts in thousands)
| Investment Banking | Brokerage | Investment Income | Management Fees | Incentive Income | Interest and Dividends | Reinsurance premiums | Other revenues | Consolidated Funds Revenues | Other Income (Loss) | Total | |||||||||||
Total US GAAP Revenues and Other Income (Loss) | $ | 203,982 | $ | 130,209 | $ | 207,439 | $ | 11,653 | $ | - | $ | 47,918 | $ | 5,967 | $ | 1,286 | $ | 37,730 | $ | 6,528 | $ | 652,712 |
Management Presentation Reclassifications: | ||||||||||||||||||||||
Underwriting expenses | a | (8,871) | - | - | - | - | - | - | - | - | - | (8,871) | ||||||||||
Reimbursable client expenses | b | (4,682) | - | - | - | - | - | - | (271) | - | - | (4,953) | ||||||||||
Securities financing interest expense | c | - | 4,939 | - | - | - | (40,517) | - | - | - | - | (35,578) | ||||||||||
Fund start-up costs, distribution and other fees | d | - | - | - | (800) | - | - | - | (259) | - | - | (1,059) | ||||||||||
Certain equity method investments | e | - | - | - | 2,914 | 8,365 | - | - | - | - | (9,390) | 1,889 | ||||||||||
Carried interest | f | - | - | (38,277) | - | 38,010 | - | - | - | - | - | (267) | ||||||||||
Proprietary trading, interest and dividends | g | - | 22,351 | (28,102) | - | - | (2,919) | - | (364) | - | 2,862 | (6,172) | ||||||||||
Insurance related activities expenses | h | - | - | - | - | - | - | (5,967) | (459) | - | - | (6,426) | ||||||||||
Facilitation trading gains and losses | i | - | 9,568 | (6,067) | - | - | (4,482) | - | - | - | - | (981) | ||||||||||
Total Management Presentation Reclassifications: | (13,553) | 36,858 | (72,446) | 2,114 | 46,375 | (47,918) | (5,967) | (1,353) | - | (6,528) | (62,418) | |||||||||||
Fund Consolidated Reclassifications | l | - | - | 5,493 | 635 | - | - | - | 7 | (37,730) | - | (31,595) | ||||||||||
Total Economic Proceeds | $ | 190,429 | $ | 167,067 | $ | 140,486 | $ | 14,402 | $ | 46,375 | $ | - | $ | - | $ | (60) | $ | - | $ | - | $ | 558,699 |
For the six months ended June 30, 2021
(Dollar amounts in thousands)
| Investment Banking | Brokerage | Investment Income | Management Fees | Incentive Income | Interest and Dividends | Reinsurance premiums | Other revenues | Consolidated Funds Revenues | Other Income (Loss) | Total | |||||||||||
Total US GAAP Revenues and Other Income (Loss) | $ | 529,815 | $ | 312,797 | $ | 179,297 | $ | 40,737 | $ | 2,427 | $ | 121,561 | $ | 18,610 | $ | 3,690 | $ | (2,652) | $ | 18,692 | $ | 1,224,974 |
Management Presentation Reclassifications: | ||||||||||||||||||||||
Underwriting expenses | a | (13,067) | - | - | - | - | - | - | - | - | - | (13,067) | ||||||||||
Reimbursable client expenses | b | (8,834) | - | - | - | - | - | - | (583) | - | - | (9,417) | ||||||||||
Securities financing interest expense | c | - | 7,566 | - | - | - | (90,655) | - | - | - | - | (83,089) | ||||||||||
Fund start-up costs, distribution and other fees | d | - | (266) | - | (4,523) | - | - | - | (1,305) | - | - | (6,094) | ||||||||||
Certain equity method investments | e | - | - | - | 7,003 | 13,999 | - | - | - | - | (16,723) | 4,279 | ||||||||||
Carried interest | f | - | - | (61,239) | - | 61,353 | - | - | - | - | - | 114 | ||||||||||
Proprietary trading gains and losses | g | - | 26,347 | (65,436) | - | (51) | (6,358) | - | (271) | - | 21,766 | (24,003) | ||||||||||
Insurance related activities expenses | h | - | - | - | 1 | - | - | (18,610) | 6,939 | - | - | (11,670) | ||||||||||
Facilitation trading gains and losses | i | - | 51,248 | (10,522) | - | - | (24,548) | - | - | - | (24,418) | (8,240) | ||||||||||
Total Management Presentation Reclassifications: | (21,901) | 84,895 | (137,197) | 2,481 | 75,301 | (121,561) | (18,610) | 4,780 | - | (19,375) | (151,187) | |||||||||||
Fund Consolidated Reclassifications | l | - | - | (1,613) | 2,107 | (70) | - | - | - | 2,652 | - | 3,076 | ||||||||||
Income Statement Adjustments | ||||||||||||||||||||||
Bargain purchase gain | n | - | - | - | - | - | - | - | - | - | (3,855) | (3,855) | ||||||||||
Debt extinguishment | p | - | - | - | - | - | - | - | - | - | 4,538 | 4,538 | ||||||||||
Total Income Statement Adjustments: | - | - | - | - | - | - | - | - | - | 683 | $ | 683 | ||||||||||
Total Economic Proceeds | $ | 507,914 | $ | 397,692 | $ | 40,487 | $ | 45,325 | $ | 77,658 | $ | - | $ | - | $ | 8,470 | $ | - | $ | - | $ | 1,077,546 |
For the six months ended June 30, 2020
(Dollar amounts in thousands)
| Investment Banking | Brokerage | Investment Income | Management Fees | Incentive Income | Interest and Dividends | Reinsurance premiums | Other revenues | Consolidated Funds Revenues | Other Income (Loss) | Total | |||||||||||
Total US GAAP Revenues and Other Income (Loss) | $ | 309,010 | $ | 271,586 | $ | 162,032 | $ | 23,257 | $ | - | $ | 89,995 | $ | 16,438 | $ | 2,868 | $ | (32,279) | $ | 6,466 | $ | 849,373 |
Management Presentation Reclassifications: | ||||||||||||||||||||||
Underwriting expenses | a | (12,511) | - | - | - | - | - | - | - | - | - | (12,511) | ||||||||||
Reimbursable client expenses | b | (6,872) | - | - | - | - | - | - | (558) | - | - | (7,430) | ||||||||||
Securities financing interest expense | c | - | 10,222 | - | - | - | (67,707) | - | - | - | - | (57,485) | ||||||||||
Fund start-up costs, distribution and other fees | d | - | - | - | (2,810) | - | - | - | (520) | - | - | (3,330) | ||||||||||
Certain equity method investments | e | - | - | - | 5,964 | 14,965 | - | - | - | - | (17,303) | 3,626 | ||||||||||
Carried interest | f | - | - | (27,192) | - | 27,323 | - | - | - | - | - | 131 | ||||||||||
Proprietary trading gains and losses | g | - | 25,495 | (36,202) | - | - | (10,829) | - | (897) | - | 10,837 | (11,596) | ||||||||||
Insurance related activities expenses | h | - | - | - | - | - | - | (16,438) | (425) | - | - | (16,863) | ||||||||||
Facilitation trading gains and losses | i | - | (7,564) | 16,361 | - | - | (11,459) | - | - | - | - | (2,662) | ||||||||||
Total Management Presentation Reclassifications: | (19,383) | 28,153 | (47,033) | 3,154 | 42,288 | (89,995) | (16,438) | (2,400) | - | (6,466) | (108,120) | |||||||||||
Fund Consolidated Reclassifications | l | - | - | (5,616) | 1,312 | - | - | - | 32 | 32,279 | - | 28,007 | ||||||||||
Total Economic Proceeds | $ | 289,627 | $ | 299,739 | $ | 109,383 | $ | 27,723 | $ | 42,288 | $ | - | $ | - | $ | 500 | $ | - | $ | - | $ | 769,260 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
(Dollar amounts in thousands)
| 2021 | 2020 | 2021 | 2020 | ||||
Total US GAAP Interest & Dividend Expense | $ | 63,073 | $ | 49,304 | $ | 120,714 | $ | 88,096 |
Management Presentation Reclassifications: | ||||||||
Securities financing interest expense | c | (42,722) | (35,578) | (83,089) | (57,485) | |||
Fund start-up costs, distribution and other fees | d | (628) | - | (1,171) | - | |||
Proprietary trading gains and losses | g | (1,248) | (4,043) | (5,486) | (10,358) | |||
Facilitation trading gains and losses | i | (3,549) | (981) | (8,240) | (2,662) | |||
Total Management Presentation Reclassifications: | (48,147) | (40,602) | (97,986) | (70,505) | ||||
Income Statement Adjustments: | ||||||||
Accelerated debt costs | p | (5,557) | - | (5,557) | - | |||
Amortization of discount/(premium) on debt | m | (772) | (1,131) | (1,544) | (2,242) | |||
Total Income Statement Adjustments: | (6,329) | (1,131) | (7,101) | (2,242) | ||||
Total Economic Interest Expense | $ | 8,597 | $ | 7,571 | $ | 15,627 | $ | 15,349 |
Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | |||||||||||||||
(Dollar amounts in thousands)
| Employee Compensation and Benefits | Non-compensation US GAAP Expenses (including Depreciation and Amortization) | Net income (loss) attributable to non-controlling interests in consolidated subsidiaries and investment funds | Total | Employee Compensation and Benefits | Non-compensation US GAAP Expenses (including Depreciation and Amortization) | Net income (loss) attributable to non-controlling interests in consolidated subsidiaries and investment funds | Total | ||||||||
Total US GAAP | $ | 219,186 | $ | 113,906 | $ | 13,755 | $ | 346,847 | $ | 305,282 | $ | 106,246 | $ | 33,113 | $ | 444,641 |
Management Presentation Reclassifications: | - | |||||||||||||||
Underwriting expenses | a | - | (6,152) | - | (6,152) | - | (8,871) | - | (8,871) | |||||||
Reimbursable client expenses | b | - | (4,697) | - | (4,697) | - | (4,953) | - | (4,953) | |||||||
Securities financing interest expense | c | - | - | - | - | - | - | - | - | |||||||
Fund start-up costs, distribution and other fees | d | - | (594) | - | (594) | - | (1,059) | - | (1,059) | |||||||
Certain equity method investments | e | - | 1,987 | - | 1,987 | - | 1,889 | - | 1,889 | |||||||
Carried interest | f | - | (156) | - | (156) | - | (267) | - | (267) | |||||||
Proprietary trading gains and losses | g | - | 1,501 | (14,123) | (12,622) | - | 974 | (3,103) | (2,129) | |||||||
Insurance related activities expenses | h | - | (5,221) | - | (5,221) | - | (6,426) | - | (6,426) | |||||||
Facilitation trading gains and losses | i | - | - | - | - | - | - | - | - | |||||||
Associated partner/banker compensation | j | 1,574 | (1,574) | - | - | 140 | (140) | - | - | |||||||
Management company non-Controlling interest | k | (347) | (1,141) | 1,488 | - | (340) | (1,399) | 1,739 | - | |||||||
Total Management Presentation Reclassifications: | 1,227 | (16,047) | (12,635) | (27,455) | (200) | (20,252) | (1,364) | (21,816) | ||||||||
Fund Consolidated Reclassifications | l | - | (124) | 368 | 244 | - | (1,585) | (30,010) | (31,595) | |||||||
Income Statement Adjustments: | ||||||||||||||||
Acquisition related adjustments | n | - | (76) | - | (76) | - | 76 | - | 76 | |||||||
Contingent liability adjustments | n | - | (5,230) | - | (5,230) | - | (2,596) | - | (2,596) | |||||||
Goodwill and/or other impairment | r | - | - | - | - | - | (545) | - | (545) | |||||||
Total Income Statement Adjustments: | - | (5,306) | - | (5,306) | - | (3,065) | - | (3,065) | ||||||||
Total Economic Expenses | $ | 220,413 | $ | 92,429 | $ | 1,488 | $ | 314,330 | $ | 305,082 | $ | 81,344 | $ | 1,739 | $ | 388,165 |
Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |||||||||||||||
(Dollar amounts in thousands)
| Employee Compensation and Benefits | Non-compensation US GAAP Expenses (including Depreciation and Amortization) | Net income (loss) attributable to non-controlling interests in consolidated subsidiaries and investment funds | Total | Employee Compensation and Benefits | Non-compensation US GAAP Expenses (including Depreciation and Amortization) | Net income (loss) attributable to non-controlling interests in consolidated subsidiaries and investment funds | Total | ||||||||
Total US GAAP | $ | 607,382 | $ | 221,062 | $ | 18,317 | $ | 846,761 | $ | 429,710 | $ | 212,971 | $ | (29,075) | $ | 613,606 |
Management Presentation Reclassifications: | ||||||||||||||||
Underwriting expenses | a | - | (13,067) | - | (13,067) | - | (12,511) | - | (12,511) | |||||||
Reimbursable client expenses | b | - | (9,417) | - | (9,417) | - | (7,430) | - | (7,430) | |||||||
Fund start-up costs, distribution and other fees | d | - | (4,923) | - | (4,923) | - | (3,330) | - | (3,330) | |||||||
Certain equity method investments | e | - | 4,279 | - | 4,279 | - | 3,626 | - | 3,626 | |||||||
Carried interest | f | - | 114 | - | 114 | - | 131 | - | 131 | |||||||
Proprietary trading gains and losses | g | - | 3,271 | (21,788) | (18,517) | - | 1,993 | (3,231) | (1,238) | |||||||
Insurance related activities expenses | h | - | (11,670) | - | (11,670) | - | (16,863) | - | (16,863) | |||||||
Associated partner/banker compensation | j | 2,122 | (2,122) | - | - | 1,764 | (1,764) | - | - | |||||||
Management company non-Controlling interest | k | (695) | (2,260) | 2,955 | - | (688) | (2,791) | 3,479 | - | |||||||
Total Management Presentation Reclassifications: | 1,427 | (35,795) | (18,833) | (53,201) | 1,076 | (38,939) | 248 | (37,615) | ||||||||
Fund Consolidated Reclassifications | l | - | (395) | 3,471 | 3,076 | - | (4,299) | 32,306 | 28,007 | |||||||
Income Statement Adjustments: | ||||||||||||||||
Acquisition related amounts | n | - | (317) | - | (317) | - | 133 | - | 133 | |||||||
Contingent liability adjustments | n | - | 1,566 | - | 1,566 | - | (1,758) | - | (1,758) | |||||||
Goodwill and/or other impairment | r | - | - | - | - | - | (545) | - | (545) | |||||||
Total Income Statement Adjustments: | - | 1,249 | - | 1,249 | - | (2,170) | - | (2,170) | ||||||||
Total Economic Expenses | $ | 608,809 | $ | 186,121 | $ | 2,955 | $ | 797,885 | $ | 430,786 | $ | 167,563 | $ | 3,479 | $ | 601,828 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
(Dollar amounts in thousands)
| 2021 | 2020 | 2021 | 2020 | ||||
US GAAP Net income (loss) attributable to Cowen Inc. common stockholders | $ | 43,625 | $ | 112,137 | $ | 189,431 | $ | 100,516 |
Income Statement Adjustments: | ||||||||
US GAAP Income tax expense (benefit) | o | 10,244 | 44,932 | 64,672 | 43,759 | |||
Amortization of discount (premium) on debt | m | 772 | 1,131 | 1,544 | 2,242 | |||
Goodwill and/or other impairment | r | - | 545 | - | 545 | |||
Debt extinguishment gain (loss) and/or accelerated debt costs | p | 5,557 | - | 10,095 | - | |||
Bargain purchase gain | n | - | - | (3,855) | - | |||
Contingent liability adjustments | n | 5,230 | 2,596 | (1,566) | 1,758 | |||
Acquisition related amounts | n | 76 | (76) | 317 | (133) | |||
Preferred dividends | q | 1,698 | 1,698 | 3,396 | 3,396 | |||
Pre-tax Economic Income (Loss) | 67,202 | 162,963 | 264,034 | 152,083 | ||||
Economic income tax expense | (18,010) | - | (70,760) | - | ||||
Preferred dividends | (1,698) | (1,698) | (3,396) | (3,396) | ||||
Economic Income (Loss) | 47,494 | 161,265 | 189,878 | 148,687 | ||||
Add back: Depreciation and amortization expense, net of taxes | 3,342 | 5,663 | 6,528 | 11,097 | ||||
Economic Operating Income (Loss) | $ | 50,836 | $ | 166,928 | $ | 196,406 | $ | 159,784 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
(Dollars per share) | 2021 | 2020 | 2021 | 2020 | ||||
US GAAP Net income (loss) attributable to Cowen Inc. common stockholders | $ | 1.29 | $ | 3.83 | $ | 5.62 | $ | 3.39 |
Income Statement Adjustments: | ||||||||
US GAAP Income tax expense (benefit) | o | 0.30 | 1.53 | 1.92 | 1.48 | |||
Amortization of discount (premium) on debt | m | 0.02 | 0.04 | 0.05 | 0.08 | |||
Goodwill and/or other impairment | r | - | 0.02 | - | 0.02 | |||
Debt extinguishment gain (loss) and accelerated debt costs | p | 0.16 | - | 0.30 | - | |||
Bargain purchase gain | n | - | - | (0.11) | - | |||
Contingent liability adjustments | n | 0.15 | 0.09 | (0.05) | 0.05 | |||
Acquisition related amounts | n | - | - | 0.01 | - | |||
Preferred dividends | q | 0.05 | 0.06 | 0.10 | 0.11 | |||
Pre-tax Economic Income (Loss) per common share (diluted) | 1.98 | 5.56 | 7.83 | 5.13 | ||||
Economic income tax expense | (0.53) | - | (2.10) | - | ||||
Preferred dividends | (0.05) | (0.06) | (0.10) | (0.11) | ||||
Economic income (Loss) per common share (diluted) | 1.40 | 5.50 | 5.63 | 5.02 | ||||
Add back: Depreciation and amortization expense, net of taxes | 0.10 | 0.19 | 0.20 | 0.38 | ||||
Economic Operating Income (Loss) per common share (diluted) | $ | 1.50 | $ | 5.69 | $ | 5.83 | $ | 5.40 |
Management Reclassifications | |
Management reclassification adjustments and fund consolidation reclassification adjustments have no effect on Economic Operating Income (Loss). These adjustments are reclassifications to change the location of certain line items. | |
a | Underwriting expenses: Economic Proceeds presents investment banking revenues net of underwriting expenses. |
b | Reimbursable client expenses: Economic Proceeds presents expenses reimbursed from clients and affiliates within their respective expense category but is included as a part of revenues under US GAAP. |
c | Securities financing interest expense: Brokerage Economic Proceeds included net securities borrowed and securities loaned activities which are shown gross in interest income and interest expense for US GAAP. |
d | Fund start-up costs, distribution and other fees: Economic Proceeds and Economic Interest Expense are net of fund start-up costs and distribution fees paid to agents and other debt service costs. |
e | Certain equity method investments: Economic Proceeds and Economic Expenses recognize the Company's proportionate share of management and incentive fees and associated share of expenses on a gross basis for equity method investments within the activist business, real estate operating entities and the healthcare royalty business. The Company applies the equity method of accounting to these entities and accordingly the results from these businesses are recorded within Other Income (Loss) for US GAAP. |
f | Carried interest: The Company applies an equity ownership model to carried interest which is recorded in Investment income - Carried interest allocation for US GAAP. The Company presents carried interest as Incentive Income Economic Proceeds. |
g | Proprietary trading, interest and dividends: Economic Proceeds presents interest and dividends from the Company's proprietary trading in investment income. |
h | Insurance related activities expenses: Economic Proceeds presents underwriting income from the Company's insurance related activities, net of expenses, within other revenue. The costs are recorded within expenses for US GAAP reporting. |
i | Facilitation trading gains and losses: Economic Brokerage Proceeds presents gains and losses on investments held as part of the Company's facilitation and trading business within brokerage revenues as these investments are directly related to the markets business activities while these are presented in Investment income - Securities principal transactions, net for US GAAP reporting. |
j | Associated partner/banker compensation reclassification: Economic Compensation Expense presents certain payments to associated banking partners as compensation rather than non-compensation expenses. |
k | Management company non-controlling interest: Economic Expenses non-controlling interest represents only operating entities that are not wholly owned by the Company. The Company also presents non-controlling interests within total expenses for Economic Income (Loss). |
Fund Consolidation Reclassifications | |
l | The impacts of consolidation and the related elimination entries of the Consolidated Funds are not included in Economic Income (Loss). Adjustments to reconcile to US GAAP Net Income (Loss) included elimination of incentive income and management fees earned from the Consolidated Funds and addition of investment fund expenses excluding management fees paid, investment fund revenues and investment income (loss). |
Income Statement Adjustments | |
m | Pre-tax Economic Income (Loss) excludes the amortization of discount (premium) on debt. |
n | Pre-tax Economic Income (Loss) excludes acquisition related adjustments (including bargain purchase gain and contingent liability adjustments). |
o | Pre-tax Economic Income (Loss) excludes US GAAP income taxes. |
p | Pre-tax Economic Income (Loss) excludes gain/(loss) on debt extinguishment and accelerated debt costs. |
q | Pre-tax Economic income (Loss) excludes preferred dividends. |
r | Economic Income (Loss) excludes goodwill and other impairments. |
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Cowen Inc. published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 11:13:04 UTC.