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Artio Global Investors Reports Second Quarter 2012 Results; Announces Dividend Of $0.02 Per Share

Stocks in this article: ART

Data presented reflect past performance, which is no guarantee of future results. © 2012 Morningstar, Inc. All Rights Reserved.

This news release is not sales material, nor is it an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which any such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

1 See Exhibits 3 - 5 of this news release for a reconciliation of the Company’s U.S. GAAP results to its non-GAAP adjusted results (“adjusted”).

2 Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period.

3 Richard Pell, Chairman, Chief Executive Officer and Chief Investment Officer, and Rudolph-Riad Younes, Head of International Equity, are collectively referred to as the “Principals”.

4 On April 24, 2012, each of the Principals exchanged their remaining 600,000 New Class A Units, held in the intermediate holding company, for an equivalent amount of shares of Class A common stock.

5 Represents total revenues and other operating income.

6 See Exhibit 6 for a reconciliation of Net Income to Adjusted EBITDA.

7 See section entitled “Fund Performance and Other Disclaimers” and Exhibit 9 of this news release for further information about Lipper and Morningstar rankings.

8 See Exhibit 8 for more information on “Assets under Management by Investment Strategy”.

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 1
Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts or as noted)
 
      Three Months Ended         % Change From       Six Months Ended     % Change From
Jun. 30, 2012       Jun. 30, 2011       Mar. 31, 2012   Jun. 30, 2011     Mar. 31, 2012

Jun. 30, 2012

    Jun. 30, 2011 Jun. 30, 2011
Revenues and other operating income:
Investment management fees $ 33,320 $ 78,209 $ 42,771 (57 %) (22 %) $ 76,091 $ 159,985 (52 %)
Net gains (losses) on securities held for deferred compensation (546 ) (56 ) 1,160 NM (147 %) 614 363 69 %
Foreign currency losses   (60 )   (2 )   (1 ) NM NM   (61 )   (20 ) NM
Total revenues and other operating income   32,714     78,151     43,930   (58 %) (26 %)   76,644     160,328   (52 %)
 
Expenses:
Employee compensation and benefits 19,417 25,812 22,334 (25 %) (13 %) 41,751 53,830 (22 %)
Shareholder servicing and marketing 3,043 5,163 3,624 (41 %) (16 %) 6,667 10,028 (34 %)
General and administrative   7,748     10,357     9,738   (25 %) (20 %)   17,486     20,529   (15 %)
Total expenses   30,208     41,332     35,696   (27 %) (15 %)   65,904     84,387   (22 %)
 
Operating income before income tax expense 2,506 36,819 8,234 (93 %) (70 %) 10,740 75,941 (86 %)
 
Non-operating income (loss)   (1,387 )   (156 )   2,556   NM (154 %)   1,169     409   186 %
Income before income tax expense 1,119 36,663 10,790 (97 %) (90 %) 11,909 76,350 (84 %)
 
Income taxes   (287 )   14,869     5,322   (102 %) (105 %)   5,035     31,620   (84 %)
Net income 1,406 21,794 5,468 (94 %) (74 %) 6,874 44,730 (85 %)
 
Net income attributable to non-controlling interests in AGH (1) 12 719 190 (98 %) (94 %) 202 1,488 (86 %)
Net income (loss) attributable to non-controlling interests in CIP (2)   (141 )   (75 )   678   (88 %) (121 %)   537     60   NM
Net income attributable to Artio Global Investors $ 1,535   $ 21,150   $ 4,600   (93 %) (67 %) $ 6,135   $ 43,182   (86 %)
 
Net income per share attributable to Artio Global Investors:
Basic $ 0.03 $ 0.36 $ 0.08 (92 %) (63 %) $ 0.10 $ 0.74 (86 %)
Diluted $ 0.03 $ 0.36 $ 0.08 (92 %) (63 %) $ 0.10 $ 0.74 (86 %)
 
Weighted average shares used in net income per share
attributable to Artio Global Investors:
Basic 59,212,847 58,392,969 58,192,573 1 % 2 % 58,702,710 58,373,404 1 %
Diluted (3) 59,814,290 58,576,859 58,474,697 2 % 2 % 58,991,691 58,475,249 1 %
 
NM - Not Meaningful
                                                                   
 
Assets under management ($ in millions) $ 21,156 $ 46,835 $ 26,645 (55 %) (21 %) $ 21,156 $ 46,835 (55 %)
 
Average assets under management ($ in millions) (4) $ 23,616 $ 49,783 $ 28,551 (53 %) (17 %) $ 26,003 $ 51,206 (49 %)
 
Effective fee rate (basis points) (5) 56.7 63.0 60.3 58.8 63.0
 
Effective tax rate NM 40.6 % 49.3 % 42.3 % 41.4 %
 
Employee compensation and benefits as a percentage of total
revenues and other operating income (6) 59.4 % 33.0 % 50.8 % 54.5 % 33.6 %
 
Operating margin (7) 7.7 % 47.1 % 18.7 % 14.0 % 47.4 %
 
 

1.

 

Represents non-controlling interests in Artio Global Holdings LLC.

2.

Represents non-controlling interests in Consolidated Investment Products.

3.

The effect of the assumed conversion of the Principals' New Class A Units (prior to the Principals' exchanges on April 24, 2012) was antidilutive for the six months ended Jun. 30, 2011 and 2012, and the three months ended Mar. 31, 2012 and Jun. 30, 2011.

4.

Average assets under management for a period is computed on the beginning-of-first-month balance and all end-of-month balances in the period.

5.

Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period.

6.

Calculated as employee compensation and benefits expense divided by total revenues and other operating income.

7.

Calculated as operating income before income tax expense divided by total revenues and other operating income.

 
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 2
Non-GAAP Adjusted Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts or as noted)
 
        Three Months Ended       % Change From       Six Months Ended     % Change From
Jun. 30, 2012     Jun. 30, 2011       Mar. 31, 2012 Jun. 30, 2011       Mar. 31, 2012 Jun. 30, 2012     Jun. 30, 2011 Jun. 30, 2011
Revenues and other operating income:  
Investment management fees $ 33,320 $ 78,209 $ 42,771 (57 %) (22 %) $ 76,091 $ 159,985 (52 %)
Net gains (losses) on securities held for deferred compensation (546 ) (56 ) 1,160 NM (147 %) 614 363 69 %
Foreign currency losses   (60 )   (2 )   (1 ) NM NM   (61 )   (20 ) NM
Total revenues and other operating income   32,714     78,151     43,930   (58 %) (26 %)   76,644     160,328   (52 %)
 
Expenses:
Employee compensation and benefits 16,541 23,168 19,912 (29 %) (17 %) 36,453 48,562 (25 %)
Shareholder servicing and marketing 3,043 5,163 3,624 (41 %) (16 %) 6,667 10,028 (34 %)
General and administrative   7,748     10,357     9,616   (25 %) (19 %)   17,364     20,529   (15 %)
Total expenses   27,332     38,688     33,152   (29 %) (18 %)   60,484     79,119   (24 %)
 
Operating income before income tax expense 5,382 39,463 10,778 (86 %) (50 %) 16,160 81,209 (80 %)
 
Non-operating income (loss)   (1,246 )   (81 )   1,949   NM (164 %)   703     349   101 %
Income before income tax expense 4,136 39,382 12,727 (89 %) (68 %) 16,863 81,558 (79 %)
 
Income taxes   908     16,109     6,266   (94 %) (86 %)   7,174     34,105   (79 %)
Net income 3,228 23,273 6,461 (86 %) (50 %) 9,689 47,453 (80 %)
 
Net income attributable to non-controlling interests in AGH (1) - - - NM NM - - NM
Net income (loss) attributable to non-controlling interests in CIP (2)   -     -     -   NM NM   -     -   NM
Net income attributable to Artio Global Investors $ 3,228   $ 23,273   $ 6,461   (86 %) (50 %) $ 9,689   $ 47,453   (80 %)
 
Net income per diluted share attributable to Artio Global Investors $ 0.05 $ 0.39 $ 0.11 (87 %) (55 %) $ 0.16 $ 0.80 (80 %)
 
Weighted average diluted shares used in net income per share
attributable to Artio Global Investors 59,814,290 59,776,859 59,674,697 0 % 0 % 59,743,339 59,675,249 0 %
 
NM - Not Meaningful
                                                                   
 
Assets under management ($ in millions) $ 21,156 $ 46,835 $ 26,645 (55 %) (21 %) $ 21,156 $ 46,835 (55 %)
 
Average assets under management ($ in millions) (3) $ 23,616 $ 49,783 $ 28,551 (53 %) (17 %) $ 26,003 $ 51,206 (49 %)
 
Effective fee rate (basis points) (4) 56.7 63.0 60.3 58.8 63.0
 
Effective tax rate 22.0 % 40.9 % 49.2 % 42.5 % 41.8 %
 
Employee compensation and benefits as a percentage of total
revenues and other operating income (5) 50.6 % 29.6 % 45.3 % 47.6 % 30.3 %
 
Operating margin (6) 16.5 % 50.5 % 24.5 % 21.1 % 50.7 %
 
 

1.

 

Represents non-controlling interests in Artio Global Holdings LLC.

2.

Represents non-controlling interests in Consolidated Investment Products.

3.

Average assets under management for a period is computed on the beginning-of-first-month balance and all end-of-month balances in the period.

4.

Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period.

5.

Calculated as employee compensation and benefits expense divided by total revenues and other operating income.

6.

Calculated as operating income before income tax expense divided by total revenues and other operating income.

 
 
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 3
Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts)
 
See Exhibit 5 for notes describing adjustments set forth below.
 
 
        Three Months Ended Jun. 30, 2012         Three Months Ended Jun. 30, 2011     Three Months Ended Mar. 31, 2012
GAAP       Adjustments     Adjusted GAAP       Adjustments       Adjusted GAAP       Adjustments Adjusted
Revenues and other operating income:          
Investment management fees $ 33,320 $ - $ 33,320 $ 78,209 $ - $ 78,209 $ 42,771 $ - $ 42,771
Net gains (losses) on securities held for deferred compensation (546 ) - (546 ) (56 ) - (56 ) 1,160 - 1,160
Foreign currency losses   (60 )   -     (60 )   (2 )   -     (2 )   (1 )   -     (1 )
Total revenues and other operating income   32,714     -     32,714     78,151     -     78,151     43,930     -     43,930  
 
Expenses:
Employee compensation and benefits 19,417 (2,876 ) (a) 16,541 25,812 (2,644 ) (a) 23,168 22,334 (2,422 ) (a) 19,912
Shareholder servicing and marketing 3,043 - 3,043 5,163 - 5,163 3,624 - 3,624
General and administrative   7,748     -     7,748     10,357     -     10,357     9,738     (122 ) (f)   9,616  
Total expenses   30,208     (2,876 )   27,332     41,332     (2,644 )   38,688     35,696     (2,544 )   33,152  
 
Operating income before income tax expense 2,506 2,876 5,382 36,819 2,644 39,463 8,234 2,544 10,778
 
Non-operating income (loss)   (1,387 )   141   (e)   (1,246 )   (156 )   75   (e)   (81 )   2,556     (607 ) (e,f)   1,949  
Income before income tax expense 1,119 3,017 4,136 36,663 2,719 39,382 10,790 1,937 12,727
 
Income taxes   (287 )   1,195   (b)   908     14,869     1,240   (b)   16,109     5,322     944   (b)   6,266  
Net income 1,406 1,822 3,228 21,794 1,479 23,273 5,468 993 6,461
 
Net income attributable to non-controlling interests in AGH 12 (12 ) (c) - 719 (719 ) (c) - 190 (190 ) (c) -
Net income (loss) attributable to non-controlling interests in CIP   (141 )   141   (e)   -     (75 )   75   (e)   -     678     (678 ) (e)   -  

Net income attributable to Artio Global Investors

$ 1,535   $ 1,693   $ 3,228   $ 21,150   $ 2,123   $ 23,273   $ 4,600   $ 1,861   $ 6,461  
 
 
Net income per diluted share attributable to Artio Global
Investors $ 0.03 $ 0.05 $ 0.36 $ 0.39 $ 0.08 $ 0.11
 
Weighted average diluted shares used in net income per
share attributable to Artio Global Investors 59,814,290 - 59,814,290 58,576,859 1,200,000 (d) 59,776,859 58,474,697 1,200,000 (d) 59,674,697
 
 
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 4
Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts)
 
See Exhibit 5 for notes describing adjustments set forth below.
 
 
        Six Months Ended Jun. 30, 2012     Six Months Ended Jun. 30, 2011
GAAP       Adjustments     Adjusted GAAP       Adjustments     Adjusted
Revenues and other operating income:
Investment management fees $ 76,091 $ - $ 76,091 $ 159,985 $ - $ 159,985
Net gains (losses) on securities held for deferred compensation 614 - 614 363 - 363
Foreign currency losses   (61 )   -     (61 )   (20 )   -     (20 )
Total revenues and other operating income   76,644     -     76,644     160,328     -     160,328  
 
Expenses:
Employee compensation and benefits 41,751 (5,298 ) (a) 36,453 53,830 (5,268 ) (a) 48,562
Shareholder servicing and marketing 6,667 - 6,667 10,028 - 10,028
General and administrative   17,486     (122 ) (f)   17,364     20,529     -     20,529  
Total expenses   65,904     (5,420 )   60,484     84,387     (5,268 )   79,119  
 
Operating income before income tax expense 10,740 5,420 16,160 75,941 5,268 81,209
 
Non-operating income (loss)   1,169     (466 ) (e,f)   703     409     (60 ) (e)   349  
Income before income tax expense 11,909 4,954 16,863 76,350 5,208 81,558
 
Income taxes   5,035     2,139   (b)   7,174     31,620     2,485   (b)   34,105  
Net income 6,874 2,815 9,689 44,730 2,723 47,453
 
Net income attributable to non-controlling interests in AGH 202 (202 ) (c) - 1,488 (1,488 ) (c) -
Net income (loss) attributable to non-controlling interests in CIP   537     (537 ) (e)   -     60     (60 ) (e)   -  
Net income attributable to Artio Global Investors $ 6,135   $ 3,554   $ 9,689   $ 43,182   $ 4,271   $ 47,453  
 
 
Net income per diluted share attributable to Artio Global
Investors $ 0.10 $ 0.16 $ 0.74 $ 0.80
 
Weighted average diluted shares used in net income per
share attributable to Artio Global Investors 58,991,691 751,648 (d) 59,743,339 58,475,249 1,200,000 (d) 59,675,249
 
 

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Exhibit - 5

Notes to Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Income
 
  Management believes the Non-GAAP adjustments set forth below provide more meaningful comparisons between periods. Additional information on the reorganization of the Company's ownership structure and the related non-recurring items are discussed in the Company's prospectus dated September 23, 2009.
 
 

(a)

Adjustments to exclude the amortization expense associated with the RSUs awarded at the time of the IPO from all periods presented, as the granting of the awards was one-time in nature.

 
 
The three months ended Mar. 31, 2012, and the three and six months ended Jun. 30, 2012, also exclude certain costs associated with organizational changes.
 
 

(b)

The adjustments to income taxes for all periods presented prior to the Principals' exchanges on April 24, 2012, reflect the tax effect of the assumed full exchange of the Principals' non-controlling interests for Class A common stock on the first day of the respective period, since prior to such exchange, income tax expense excludes the U.S. federal and state taxes for the income attributable to the Principals and an adjustment to reflect the tax effects of excluding the amortization expense associated with the RSUs awarded at the time of the IPO.

 

 

 

The three months ended Mar. 31, 2012, and the three and six months ended Jun. 30, 2012, also include adjustments to reflect the tax effect of excluding costs associated with organizational changes.

 
The three months ended Mar. 31, 2012, and the six months ended Jun. 30, 2012, also include an adjustment to reflect the tax effect of excluding the one-time write-off of unamortized debt issuance costs in connection with the early repayment of the Company's term debt.
 
 

(c)

Adjustment to eliminate the Principals' non-controlling interests, which are assumed to be exchanged for Class A common stock on the first day of the respective period.

 
 

(d)

Diluted shares outstanding, for periods prior to the Principals' exchanges on April 24, 2012, assumes the Principals have fully exchanged their New Class A Units in Artio Global Holdings LLC for an equivalent amount of shares of the Company's Class A common stock.

 
 

(e)

Adjustments to eliminate third party investors' economic interests in the Consolidated Investment Products from both Net income attributable to non-controlling interests in the Consolidated Investment Products and Non-operating income. Management believes these adjustments provide a more useful measure for comparing Non-operating income between periods.

 
 

(f)

Adjustments to eliminate the one-time write-off of unamortized debt issuance costs in connection with the early repayment of the Company's term debt.

 
 
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 6
Reconciliation of Net Income to Adjusted EBITDA
(unaudited, in thousands)
 
        Three Months Ended       % Change From       Six Months Ended     % Change From
Jun. 30, 2012     Jun. 30, 2011       Mar. 31, 2012 Jun. 30, 2011     Mar. 31, 2012 Jun. 30, 2012     Jun. 30, 2011 Jun. 30, 2011
 
Net Income $ 1,406 $ 21,794 $ 5,468 $ 6,874 $ 44,730
Add: Interest, taxes, depreciation and amortization   4,544     20,149     9,889     14,433     42,029  
EBITDA $ 5,950 $ 41,943 $ 15,357 (86 %) (61 %) $ 21,307 $ 86,759 (75 %)
 
Add: Other non-operating (income) loss 2,142 383 (2,057 ) 85 (141 )
Add: Compensation adjustments associated with organizational changes 652 - 213 865 -
Add: Write-off of unamortized debt issuance costs   -     -     122     122     -  
Adjusted EBITDA $ 8,744 $ 42,326 $ 13,635 (79 %) (36 %) $ 22,379 $ 86,618 (74 %)
 
Adjusted EBITDA margin 1 26.7 % 54.2 % 31.0 % 29.2 % 54.0 %
 
1. Calculated as Adjusted EBITDA divided by total revenues and other operating income.
 
 
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 7
Assets under Management by Investment Vehicle
(unaudited, in millions)
 
        Three Months Ended       % Change From       Six Month Ended     % Change From
Jun. 30, 2012       Jun. 30, 2011       Mar. 31, 2012 Jun. 30, 2011     Mar. 31, 2012 Jun. 30, 2012     Jun. 30, 2011 Jun. 30, 2011
 
Proprietary Funds
Beginning assets under management $ 12,862 $ 22,854 $ 13,366 (44 %) (4 %) $ 13,366 $ 23,013 (42 %)
Gross client cash inflows 784 1,136 1,235 (31 %) (37 %) 2,019 2,924 (31 %)
Gross client cash outflows   (3,043 )   (2,739 )   (2,712 ) (11 %) (12 %)   (5,755 )   (5,212 ) (10 %)
Net client cash flows (2,259 ) (1,603 ) (1,477 ) (41 %) (53 %) (3,736 ) (2,288 ) (63 %)
Transfers between investment vehicles   -     -     52   NM (100 %)   52     -   NM
Total client cash flows (2,259 ) (1,603 ) (1,425 ) (41 %) (59 %) (3,684 ) (2,288 ) (61 %)
Market appreciation (depreciation)   (516 )   (59 )   921   NM (156 %)   405     467   (13 %)
Ending assets under management   10,087     21,192     12,862   (52 %) (22 %)   10,087     21,192   (52 %)
 
 
Institutional Commingled Funds
Beginning assets under management 4,346 9,374 4,912 (54 %) (12 %) 4,912 9,236 (47 %)
Gross client cash inflows 92 104 32 (12 %) 188 % 124 257 (52 %)
Gross client cash outflows   (1,091 )   (1,149 )   (1,107 ) 5 % 1 %   (2,198 )   (1,573 ) (40 %)
Net client cash flows (999 ) (1,045 ) (1,075 ) 4 % 7 % (2,074 ) (1,316 ) (58 %)
Transfers between investment vehicles   -     (22 )   13   100 % (100 %)   13     188   (93 %)
Total client cash flows (999 ) (1,067 ) (1,062 ) 6 % 6 % (2,061 ) (1,128 ) (83 %)
Market appreciation (depreciation)   (212 )   (22 )   496   NM (143 %)   284     177   60 %
Ending assets under management   3,135     8,285     4,346   (62 %) (28 %)   3,135     8,285   (62 %)
 
 
Separate Accounts
Beginning assets under management 7,858 14,768 9,799 (47 %) (20 %) 9,799 16,801 (42 %)
Gross client cash inflows 53 31 101 71 % (48 %) 154 166 (7 %)
Gross client cash outflows   (1,232 )   (677 )   (2,694 ) (82 %) 54 %   (3,926 )   (2,917 ) (35 %)
Net client cash flows (1,179 ) (646 ) (2,593 ) (83 %) 55 % (3,772 ) (2,751 ) (37 %)
Transfers between investment vehicles   -     22     (65 ) (100 %) 100 %   (65 )   (188 ) 65 %
Total client cash flows (1,179 ) (624 ) (2,658 ) (89 %) 56 % (3,837 ) (2,939 ) (31 %)
Market appreciation (depreciation)   (214 )   77     717   NM (130 %)   503     359   40 %
Ending assets under management   6,465     14,221     7,858   (55 %) (18 %)   6,465     14,221   (55 %)
 
 
Sub-advisory Accounts
Beginning assets under management 1,579 4,332 2,282 (64 %) (31 %) 2,282 4,357 (48 %)
Gross client cash inflows 26 66 39 (61 %) (33 %) 65 217 (70 %)
Gross client cash outflows   (58 )   (1,300 )   (889 ) 96 % 93 %   (947 )   (1,620 ) 42 %
Net client cash flows (32 ) (1,234 ) (850 ) 97 % 96 % (882 ) (1,403 ) 37 %
Transfers between investment vehicles   -     -     -   NM NM   -     -   NM
Total client cash flows (32 ) (1,234 ) (850 ) 97 % 96 % (882 ) (1,403 ) 37 %
Market appreciation (depreciation)   (78 )   39     147   NM (153 %)   69     183   (62 %)
Ending assets under management   1,469     3,137     1,579   (53 %) (7 %)   1,469     3,137   (53 %)
 
 
Total Assets under Management
Beginning assets under management 26,645 51,328 30,359 (48 %) (12 %) 30,359 53,407 (43 %)
Gross client cash inflows 955 1,337 1,407 (29 %) (32 %) 2,362 3,564 (34 %)
Gross client cash outflows   (5,424 )   (5,865 )   (7,402 ) 8 % 27 %   (12,826 )   (11,322 ) (13 %)
Net client cash flows (4,469 ) (4,528 ) (5,995 ) 1 % 25 % (10,464 ) (7,758 ) (35 %)
Transfers between investment vehicles   -     -     -   NM NM   -     -   NM
Total client cash flows (4,469 ) (4,528 ) (5,995 ) 1 % 25 % (10,464 ) (7,758 ) (35 %)
Market appreciation (depreciation)   (1,020 )   35     2,281   NM (145 %)   1,261     1,186   6 %
Ending assets under management $ 21,156   $ 46,835   $ 26,645   (55 %) (21 %) $ 21,156   $ 46,835   (55 %)
 
 
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 8
Assets under Management by Investment Strategy
(unaudited, in millions)
 
        Three Months Ended       % Change From       Six Month Ended     % Change From
Jun. 30, 2012     Jun. 30, 2011       Mar. 31, 2012 Jun. 30, 2011     Mar. 31, 2012 Jun. 30, 2012     Jun. 30, 2011 Jun. 30, 2011
 
International Equity I
Beginning assets under management $ 6,470 $ 17,298 $ 8,680 (63 %) (25 %) $ 8,680 $ 18,781 (54 %)
Gross client cash inflows 78 182 131 (57 %) (40 %) 209 614 (66 %)
Gross client cash outflows   (1,258 )   (1,643 )   (3,108 ) 23 % 60 %   (4,366 )   (3,905 ) (12 %)
Net client cash flows (1,180 ) (1,461 ) (2,977 ) 19 % 60 % (4,157 ) (3,291 ) (26 %)
Transfers between investment strategies   -     -     -   NM NM   -     -   NM
Total client cash flows (1,180 ) (1,461 ) (2,977 ) 19 % 60 % (4,157 ) (3,291 ) (26 %)
Market appreciation (depreciation)   (464 )   (69 )   767   NM (160 %)   303     278   9 %
Ending assets under management   4,826     15,768     6,470   (69 %) (25 %)   4,826     15,768   (69 %)
 
International Equity II
Beginning assets under management 8,505 22,243 10,897 (62 %) (22 %) 10,897 23,272 (53 %)
Gross client cash inflows 156 384 191 (59 %) (18 %) 347 1,266 (73 %)
Gross client cash outflows   (2,742 )   (3,053 )   (3,621 ) 10 % 24 %   (6,363 )   (5,415 ) (18 %)
Net client cash flows (2,586 ) (2,669 ) (3,430 ) 3 % 25 % (6,016 ) (4,149 ) (45 %)
Transfers between investment strategies   -     -     -   NM NM   -     -   NM
Total client cash flows (2,586 ) (2,669 ) (3,430 ) 3 % 25 % (6,016 ) (4,149 ) (45 %)
Market appreciation (depreciation)   (536 )   (28 )   1,038   NM (152 %)   502     423   19 %
Ending assets under management   5,383     19,546     8,505   (72 %) (37 %)   5,383     19,546   (72 %)
 
High Grade Fixed Income
Beginning assets under management 5,714 5,036 5,503 13 % 4 % 5,503 5,088 8 %
Gross client cash inflows 303 229 332 32 % (9 %) 635 377 68 %
Gross client cash outflows   (290 )   (594 )   (204 ) 51 % (42 %)   (494 )   (827 ) 40 %
Net client cash flows 13 (365 ) 128 104 % (90 %) 141 (450 ) 131 %
Transfers between investment strategies   -     104     -   (100 %) NM   -     99   (100 %)
Total client cash flows 13 (261 ) 128 105 % (90 %) 141 (351 ) 140 %
Market appreciation (depreciation)   96     110     83   (13 %) 16 %   179     148   21 %
Ending assets under management   5,823     4,885     5,714   19 % 2 %   5,823     4,885   19 %
 
High Yield
Beginning assets under management 4,967 5,304 4,295 (6 %) 16 % 4,295 4,907 (12 %)
Gross client cash inflows 398 502 730 (21 %) (45 %) 1,128 1,211 (7 %)
Gross client cash outflows   (910 )   (499 )   (317 ) (82 %) (187 %)   (1,227 )   (1,068 ) (15 %)
Net client cash flows (512 ) 3 413 NM NM (99 ) 143 (169 %)
Transfers between investment strategies   -     (104 )   -   100 % NM   -     (99 ) 100 %
Total client cash flows (512 ) (101 ) 413 NM NM (99 ) 44 NM
Market appreciation (depreciation)   (34 )   43     259   (179 %) (113 %)   225     295   (24 %)
Ending assets under management   4,421     5,246     4,967   (16 %) (11 %)   4,421     5,246   (16 %)
 
Global Equity
Beginning assets under management 678 1,066 721 (36 %) (6 %) 721 1,025 (30 %)
Gross client cash inflows 2 8 1 (75 %) 100 % 3 27 (89 %)
Gross client cash outflows   (126 )   (20 )   (137 ) NM 8 %   (263 )   (34 ) NM
Net client cash flows (124 ) (12 ) (136 ) NM 9 % (260 ) (7 ) NM
Transfers between investment strategies   -     -     -   NM NM   -     -   NM
Total client cash flows (124 ) (12 ) (136 ) NM 9 % (260 ) (7 ) NM
Market appreciation (depreciation)   (48 )   (17 )   93   (182 %) (152 %)   45     19   137 %
Ending assets under management   506     1,037     678   (51 %) (25 %)   506     1,037   (51 %)
 
 
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 8
Assets under Management by Investment Strategy
(unaudited, in millions)
 
        Three Months Ended       % Change From       Six Month Ended     % Change From
Jun. 30, 2012     Jun. 30, 2011       Mar. 31, 2012 Jun. 30, 2011     Mar. 31, 2012 Jun. 30, 2012     Jun. 30, 2011 Jun. 30, 2011
 
US Equity
Beginning assets under management 220 274 178 (20%) 24% 178 227 (22%)
Gross client cash inflows 18 23 21 (22%) (14%) 39 59 (34%)
Gross client cash outflows (70) (56) (11) (25%) NM (81) (67) (21%)
Net client cash flows (52) (33) 10 (58%) NM (42) (8) NM
Transfers between investment strategies - - - NM NM - - NM
Total client cash flows (52) (33) 10 (58%) NM (42) (8) NM
Market appreciation (depreciation) (25) (6) 32 NM (178%) 7 16 (56%)
Ending assets under management 143 235 220 (39%) (35%) 143 235 (39%)
 

Other (1)

Beginning assets under management 91 107 85 (15%) 7% 85 107 (21%)
Gross client cash inflows - 9 1 (100%) (100%) 1 10 (90%)
Gross client cash outflows (28) - (4) NM NM (32) (6) NM
Net client cash flows (28) 9 (3) NM NM (31) 4 NM
Transfers between investment strategies - - - NM NM - - NM
Total client cash flows (28) 9 (3) NM NM (31) 4 NM
Market appreciation (depreciation) (9) 2 9 NM (200%) - 7 (100%)
Ending assets under management 54 118 91 (54%) (41%) 54 118 (54%)
 

Total Assets under Management

Beginning assets under management 26,645 51,328 30,359 (48%) (12%) 30,359 53,407 (43%)
Gross client cash inflows 955 1,337 1,407 (29%) (32%) 2,362 3,564 (34%)
Gross client cash outflows (5,424) (5,865) (7,402) 8% 27% (12,826) (11,322) (13%)
Net client cash flows (4,469) (4,528) (5,995) 1% 25% (10,464) (7,758) (35%)
Transfers between investment strategies - - - NM NM - - NM
Total client cash flows (4,469) (4,528) (5,995) 1% 25% (10,464) (7,758) (35%)
Market appreciation (depreciation) (1,020) 35 2,281 NM (145%) 1,261 1,186 6%
Ending assets under management 21,156 46,835 26,645 (55%) (21%) 21,156 46,835 (55%)
 
1. Other includes the Local Emerging Markets Debt Fund, Global Credit Opportunities Fund, Other International Equity and Other strategies.
 
 

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Exhibit - 9

Mutual Fund Performance Data (1)

 
 
        Morningstar Ratings /    
Funds in Total Universe (# of Funds)   Lipper Percentile Rankings (PR) / Funds in Total Universe (# of Funds)
        Year-to-Date     1-Year     3-Year     5-Year     10-Year    
# of     # of     # of     # of     # of     # of
Fund Rating Funds Category PR Funds PR Funds PR Funds PR Funds PR Funds Classification
 
Artio International Equity Fund, Class A (2) 3 798 Foreign Large Blend 49 326 100 323 98 280 94 232 28 140 International Large-Cap Core
Artio International Equity Fund, Class I (2) 3 798 Foreign Large Blend 45 326 100 323 97 280 93 232 18 140 International Large-Cap Core
 
Artio International Equity II Fund, Class A 2 798 Foreign Large Blend 37 326 99 323 96 280 81 232 N/A N/A International Large-Cap Core
Artio International Equity II Fund, Class I 2 798 Foreign Large Blend 34 326 98 323 96 280 79 232 N/A N/A International Large-Cap Core
 
Artio Global Equity Fund, Class A 3 983 World Stock 92 114 100 110 88 87 73 72 N/A N/A Global Large-Cap Growth
Artio Global Equity Fund, Class I 3 983 World Stock 91 114 99 110 87 87 70 72 N/A N/A Global Large-Cap Growth
 
Artio Microcap Fund, Class A 2 778 Small Growth 20 680 94 663 12 599 35 505 N/A N/A Small-Cap Core
Artio Microcap Fund, Class I 2 778 Small Growth 16 680 94 663 9 599 30 505 N/A N/A Small-Cap Core
 
Artio Smallcap Fund, Class A 3 778 Small Growth 75 680 82 663 66 599 10 505 N/A N/A Small-Cap Core
Artio Smallcap Fund, Class I 3 778 Small Growth 75 680 80 663 62 599 9 505 N/A N/A Small-Cap Core
 
Artio Midcap Fund, Class A 3 781 Mid-Cap Growth 99 317 77 304 28 278 42 228 N/A N/A Mid-Cap Core
Artio Midcap Fund, Class I 3 781 Mid-Cap Growth 99 317 75 304 22 278 35 228 N/A N/A Mid-Cap Core
 
Artio Multicap Fund, Class A 2 1762 Large Growth 60 721 75 703 32 613 15 528 N/A N/A Multi-Cap Core
Artio Multicap Fund, Class I 3 1762 Large Growth 56 721 73 703 28 613 13 528 N/A N/A Multi-Cap Core
 
Artio Global High Income Fund, Class A 3 606 High Yield Bond 68 506 94 484 87 417 33 362 N/A N/A High Current Yield
Artio Global High Income Fund, Class I 3 606 High Yield Bond 62 506 94 484 83 417 27 362 N/A N/A High Current Yield
 
Artio Total Return Bond Fund, Class A 4 1248 Intermediate Term Bond 73 592 39 586 47 508 29 433 10 307 Intermediate Investment Grade Debt
Artio Total Return Bond Fund, Class I 4 1248 Intermediate Term Bond 67 592 27 586 39 508 24 433 5 307 Intermediate Investment Grade Debt
 
Artio Local Emerging Markets Debt Fund, Class A NA NA Emerging Markets Bond 99 189 82 163 N/A N/A N/A N/A N/A N/A Emerging Markets Debt
Artio Local Emerging Markets Debt Fund, Class I NA NA Emerging Markets Bond 98 189 77 163 N/A N/A N/A N/A N/A N/A Emerging Markets Debt
 
 
 
Note: Data as of June 30, 2012
 
NA: Not applicable
 
1.   Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds and fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested and do not include the effect of loads. If an expense waiver was in effect, it may have had a material effect on the total return or yield for the period.
 
For each mutual fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ 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. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a mutual fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. A fund's independent Morningstar Rating metric is then compared against the mutual fund universe breakpoints to determine its hypothetical rating. The information contained herein: (1) is proprietary to Morningstar; (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. Data presented reflect past performance, which is no guarantee of future results. © 2012 Morningstar, Inc. All Rights Reserved. This news release is not sales material, nor is it an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which any such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
 
2. Closed to new investors.
 




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