Artio Global Investors Reports Fourth Quarter And Full Year 2011 Results; Announces Quarterly Dividend Of $0.06 Per Share

Artio Global Investors Inc. (NYSE: ART) (“Artio Global Investors”, together with its subsidiaries, “Artio Global” or the “Company”) today reported its results for the quarter and year ended December 31, 2011.

Financial Update
  • Adjusted1 net income attributable to Artio Global Investors of $10.0 million, or $0.17 per diluted share, for the fourth quarter of 2011 (GAAP net income attributable to Artio Global Investors of $8.3 million, or $0.14 per diluted share)
  • Assets under management of $30.4 billion as of December 31, 2011
  • Investment management fees of $51.6 million for the fourth quarter of 2011 and $277.2 million for the full year 2011
  • Effective fee rate2 of 61.3 basis points for the fourth quarter of 2011
  • Adjusted operating margin of 34.5% for the fourth quarter of 2011 and 47.5% for the full year 2011
  • Quarterly dividend of $0.06 per share on Class A common stock

The Company’s adjusted results for all periods assume the Principals’ 3 non-controlling interests have been fully exchanged for shares of Class A common stock and exclude the amortization of restricted stock units (“RSUs”) granted at the time of the Company’s initial public offering (“IPO”). In addition, the Company’s adjusted results for the third quarter and full year 2011 exclude a compensation charge (the “Compensation Charge”) of $7.6 million related to organizational changes. Adjusted results are presented to provide more meaningful comparisons between periods.

For the fourth quarter of 2011, adjusted net income attributable to Artio Global Investors was $10.0 million, or $0.17 per diluted share, a decrease in each case of 37% from adjusted net income attributable to Artio Global Investors of $15.9 million, or $0.27 per diluted share, for the third quarter of 2011, and a decrease of 64% and 63%, respectively, from adjusted net income attributable to Artio Global Investors of $27.8 million, or $0.46 per diluted share, for the fourth quarter of 2010.

On a GAAP basis, net income attributable to Artio Global Investors for the fourth quarter of 2011 was $8.3 million, or $0.14 per diluted share, an increase of 29% and 27%, respectively, from net income attributable to Artio Global Investors of $6.4 million, or $0.11 per diluted share, for the third quarter of 2011, and a decrease in each case of 68% from net income attributable to Artio Global Investors of $25.7 million, or $0.44 per diluted share, for the fourth quarter of 2010.

For the full year 2011, adjusted net income attributable to Artio Global Investors was $73.4 million, or $1.23 per diluted share, a decrease of 29% and 28%, respectively, from adjusted net income attributable to Artio Global Investors of $103.5 million, or $1.72 per diluted share, for the full year 2010.

On a GAAP basis, net income attributable to Artio Global Investors for the full year 2011 was $57.9 million, or $0.99 per diluted share, a decrease of 31% and 37%, respectively, from net income attributable to Artio Global Investors of $83.6 million, or $1.58 per diluted share, for the full year 2010.

The following tables compare the Company’s GAAP results and adjusted results. See Exhibits 3 – 5 of this news release for a reconciliation of the Company’s GAAP results to adjusted results.
           
      Three Months Ended

(unaudited, in millions, except per share amounts)

Dec. 31, 2011
 

Dec. 31, 2010
 

% Change
   

Sep. 30, 2011
 

% Change
 

Revenue4, GAAP
$ 51.9 $ 85.2 (39 %) $ 63.8 (19 %)
Operating income, GAAP $ 15.5 $ 45.0 (65 %) $ 21.2 (27 %)
Operating income, adjusted $ 17.9 $ 47.7 (62 %) $ 31.9 (44 %)
Net income attributable to Artio Global Investors, GAAP

$

8.3

$

25.7

(68

%)

$

6.4

29

%
Net income attributable to Artio Global Investors, adjusted

$

10.0

$

27.8

(64

%)

$

15.9

(37

%)
Diluted EPS, GAAP $ 0.14 $ 0.44 (68 %) $ 0.11 27 %
Diluted EPS, adjusted $ 0.17 $ 0.46 (63 %) $ 0.27 (37 %)
 

Year Ended

(unaudited, in millions, except per share amounts)

Dec. 31, 2011

Dec. 31, 2010

% Change
 

Revenue4, GAAP
$ 276.0 $ 335.1 (18 %)
Operating income, GAAP $ 112.7 $ 173.2 (35 %)
Operating income, adjusted $ 131.0 $ 184.3 (29 %)
Net income attributable to Artio Global Investors, GAAP

$

57.9

$

83.6

(31

%)
Net income attributable to Artio Global Investors, adjusted

$

73.4

$

103.5

(29

%)
Diluted EPS, GAAP $ 0.99 $ 1.58 (37 %)
Diluted EPS, adjusted       $ 1.23   $ 1.72   (28 %)        
 

Business Update 5
  • Four of the Company’s nine eligible mutual funds6 were in the top quartile of Lipper performance rankings for the three-year period ended December 31, 2011
  • Four of the Company’s nine eligible mutual funds7 were in the top quartile of Lipper performance rankings for the five-year period ended December 31, 2011
  • Net client cash outflows were $4.8 billion for the fourth quarter of 2011 and $16.7 billion for full year 2011, driven primarily by our International Equity I and II strategies.

Management Commentary

“The fourth quarter concluded a disappointing year for Artio Global, as underperformance in our International Equity strategies further impacted net client cash flows, revenues and earnings,” said Richard Pell, Chairman, Chief Executive Officer and Chief Investment Officer.

“Looking ahead to 2012, we will remain vigilant on costs and seek to maintain a prudent approach to capital management. Despite expectations of further outflows from our International Equity strategies in the near-term, we also see opportunities for long-term growth. Our High Grade, High Yield and US Equity strategies are all well-positioned to gather additional assets, which over time should bring greater diversity and stability to our revenues.”

Fourth Quarter of 2011 Comparison with Fourth Quarter of 2010

Assets Under Management and Net Client Cash Flows

Assets under management were $30.4 billion as of December 31, 2011, down $23.0 billion, or 43%, from $53.4 billion as of December 31, 2010, due to net client cash outflows and market depreciation.

Net client cash outflows for the fourth quarter of 2011 were $4.8 billion, driven primarily by net client cash outflows from our International Equity I and II strategies. 8

Revenues and Other Operating Income

Revenues and other operating income for the fourth quarter of 2011 totaled $51.9 million, down 39% from $85.2 million for the fourth quarter of 2010. The decrease was driven primarily by lower investment management fees of $51.6 million for the fourth quarter of 2011, down 39% from $84.7 million for the fourth quarter of 2010, due primarily to lower average assets under management.

Expenses

Employee Compensation and Benefits

For the fourth quarter of 2011, adjusted employee compensation and benefits expenses were $20.6 million, down 5% from $21.7 million for the fourth quarter of 2010. The decrease was due primarily to lower incentive compensation accruals, partly offset by accruals related to the Company’s long-term incentive plan implemented in 2011.

GAAP employee compensation and benefits expenses for the fourth quarter of 2011 were $23.0 million, down 6% from $24.4 million for the fourth quarter of 2010, due primarily to the reasons noted above.

Shareholder Servicing and Marketing Expenses

Shareholder servicing and marketing expenses for the fourth quarter of 2011 were $3.9 million, down 21% from $4.9 million for the fourth quarter of 2010, driven primarily by lower platform costs reflecting a decrease in average assets under management in proprietary funds.

General and Administrative Expenses

General and administrative expenses for the fourth quarter of 2011 were $9.5 million, a decrease of 13% from $10.9 million for the fourth quarter of 2010, due primarily to a decline in costs across several categories.

Income Taxes

For the fourth quarter of 2011, the adjusted effective tax rate was 44.3%, 2.0 percentage points higher than the 42.3% adjusted effective tax rate for the fourth quarter of 2010. The increase was due primarily to true-ups related to 2010 tax expense recorded in the fourth quarter of 2011, partly offset by a lower apportionment of income for state and local tax purposes in the fourth quarter of 2011.

The GAAP effective tax rate was 45.0% for the fourth quarter of 2011, 3.6 percentage points higher than the 41.4% GAAP effective tax rate for the fourth quarter of 2010 due primarily to the reasons noted above.

Fourth Quarter of 2011 Comparison with Third Quarter of 2011

Assets Under Management

Assets under management were $30.4 billion as of December 31, 2011, a decrease of $3.9 billion, or 11%, from $34.3 billion as of September 30, 2011, due to net client cash outflows, partly offset by market appreciation.

Revenues and Other Operating Income

Revenues and other operating income for the fourth quarter of 2011 totaled $51.9 million, down 19% from $63.8 million for the third quarter of 2011, driven primarily by lower investment management fees. Investment management fees were $51.6 million for the fourth quarter of 2011, down 21% from $65.6 million for the third quarter of 2011, due primarily to a decrease in average assets under management.

Expenses

Employee Compensation and Benefits

For the fourth quarter of 2011, adjusted employee compensation and benefits expenses were $20.6 million, an increase of 16% from $17.7 million for the third quarter of 2011. The increase was due primarily to a year-to-date reduction of incentive compensation accruals in the third quarter of 2011 reflecting the impact of organizational changes, partly offset by lower salaries and benefits expenses in the fourth quarter of 2011 reflecting a decline in headcount.

GAAP employee compensation and benefits expenses for the fourth quarter of 2011 were $23.0 million, down 19% from $28.4 million for the third quarter of 2011, due primarily to the Compensation Charge recorded in the third quarter of 2011, partly offset by the reasons noted above.

Shareholder Servicing and Marketing Expenses

Shareholder servicing and marketing expenses for the fourth quarter of 2011 were $3.9 million, a decrease of 17% from $4.7 million for the third quarter of 2011, due primarily to lower platform costs, reflecting a decrease in average assets under management in proprietary funds.

General and Administrative Expenses

General and administrative expenses were $9.5 million for the fourth quarter of 2011, unchanged from the third quarter of 2011.

Income Taxes

For the fourth quarter of 2011, the adjusted effective tax rate was 44.3%, 2.9 percentage points higher than the 41.4% adjusted effective tax rate for the third quarter of 2011 due primarily to true-ups related to 2010 tax expense recorded in the fourth quarter of 2011.

The GAAP effective tax rate was 45.0% for the fourth quarter of 2011, 19.9 percentage points lower than the 64.9% GAAP effective tax rate for the third quarter of 2011. The decrease was due primarily to the write-off of a deferred tax asset in the third quarter of 2011 related to the vesting of RSUs granted at the time of the IPO, at a price below their grant date fair value, and the inability to record a tax benefit in the third quarter of 2011 on non-operating losses attributable to the non-controlling interests’ economic ownership in the Consolidated Investment Products.

Full Year 2011 Comparison to Full Year 2010

Net Client Cash Flows

Net client cash outflows for full year 2011 were $16.7 billion, driven primarily by net client cash outflows from our International Equity I and II strategies 8.

Revenues and Other Operating Income

Revenues and other operating income for 2011 totaled $276.0 million, down 18% from $335.1 million for 2010, driven primarily by lower investment management fees. Investment management fees were $277.2 million for 2011, down 17% from $334.0 million for 2010, due primarily to lower average assets under management.

Expenses

Employee Compensation and Benefits

For 2011, adjusted employee compensation and benefits expenses were $86.9 million, down 1% from $87.9 million for 2010. The decrease was due primarily to lower accruals for incentive compensation, partly offset by accruals related to the Company’s long-term incentive plan implemented in 2011 and higher costs related to the amortization of deferred incentive compensation awards.

GAAP employee compensation and benefits expenses were $105.2 million for 2011, an increase of 6% from $99.0 million for 2010, due primarily to the Compensation Charge recorded in 2011, partly offset by the reasons noted above.

Shareholder Servicing and Marketing Expenses

Shareholder servicing and marketing expenses for 2011 were $18.7 million, down 7% from $20.1 million for 2010, driven primarily by lower custody and platform costs, and a decrease in marketing expenses.

General and Administrative Expenses

General and administrative expenses were $39.5 million for 2011, a decrease of 8% from $42.8 million for 2010, driven primarily by lower costs across several categories.

Income Taxes

For 2011, the adjusted effective tax rate was 42.1%, 1.3 percentage points lower than 43.4% for 2010, due primarily to a lower apportionment of income for state and local tax purposes.

The GAAP effective tax rate was 45.2% for 2011, 5.5 percentage points higher than the 39.7% GAAP effective tax rate for 2010. The increase was due primarily to an increase in the proportion of pre-tax income subject to federal and state taxes 9, the inability to record a tax benefit in 2011 on non-operating losses attributable to the non-controlling interests’ economic ownership in the Consolidated Investment Products, and a larger impact in 2011 from the write-off of a deferred tax asset related to the vesting of RSUs at prices below their grant date fair value, partly offset by the reason noted above.

Liquidity and Capital

As of December 31, 2011, the Company had cash and cash equivalents (excluding amounts held in consolidated investment products) of $108.5 million, investments held for deferred compensation of $10.2 million and an undrawn $100.0 million committed revolving credit facility. During the fourth quarter of 2011, in accordance with the terms of the Company’s credit agreement, the Company repaid $4.5 million of its term debt facility, reducing the outstanding balance to $37.5 million.

Total stockholders’ equity on the Statement of Financial Position was $162.8 million as of December 31, 2011, compared to $103.6 million as of December 31, 2010.

Share Repurchase

No shares were repurchased during the fourth quarter of 2011. As of December 31, 2011, the Company retains authorization to repurchase 2,226,061 shares of its common stock through December 31, 2013.

Shares

As of December 31, 2011, the total number of shares of Class A and Class B common stock outstanding was 59,251,113.

For purposes of calculating adjusted earnings per diluted share, the Principals’ New Class A Units, held in the intermediate holding company as of the beginning of the period, are assumed to have been fully exchanged into shares of Class A common stock on the first day of the period.

Dividend

On January 23, 2012, the Board of Directors declared a dividend of $0.06 per share on the Class A common stock for the fourth quarter of 2011, which is payable on February 28, 2012, to stockholders of record as of the close of business on February 15, 2012.

* * * *

Teleconference and Webcast Details

The Company will host a conference call for analysts and investors to review fourth quarter and full year 2011 results, today, January 26, 2012, beginning at 8:00 a.m. (Eastern Time). The call will be open to the public and can be accessed by dialing +1-888-680-0860 (inside the United States) or +1-617-213-4852 (outside the United States). The number should be dialed at least ten minutes prior to the start of the call. The passcode for the call will be 68510682. A simultaneous webcast of the call (on a listen-only basis), as well as an audio replay, will be available at www.ir.artioglobal.com.

* * * *

About Us

Artio Global Investors Inc. is the indirect holding company of Artio Global Management LLC ("Artio Global"), a registered investment adviser that actively invests in global equity and fixed income markets, primarily for institutional and intermediary clients. Headquartered in New York, Artio Global also has offices in Los Angeles, Toronto, London and Sydney.

In addition to International Equity, Artio Global offers a select group of other equity and fixed income strategies, including Global Equity, a series of US Equity strategies, High Grade Fixed Income, High Yield and Local Emerging Markets Debt. Access to these strategies is offered through a variety of investment vehicles, including separate accounts, commingled funds and mutual funds.

For more information, please visit www.artioglobal.com.

* * * *

Cautionary Note Regarding Forward-Looking Statements

In addition to historical information, this news release may, and the related remarks do, contain forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the intrinsic value of our common stock, investor behavior, net client cash flows, our compensation costs and adjusted compensation ratio, future tax rate, use of our free cash flow, potential share repurchases and declaration of dividends. These forward‐looking statements are based on the Company’s current assumptions, expectations and projections about future events. Words like “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project”, and similar expressions are used to identify forward‐looking statements, although not all forward-looking statements contain these words. These forward‐looking statements discuss matters that necessarily involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward‐looking statements.

Among the factors that could cause actual results to differ from those expressed or implied by a forward‐looking statement are those described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s report on Form 10‐K (File No. 001‐34457) filed with the Securities and Exchange Commission on February 25, 2011. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results, performance, or achievements.

Any forward‐looking statements in this news release and the related remarks speak only as of the date of this news release. The related remarks may contain information about the Company subsequent to December 31, 2011. The Company is not under any obligation and does not intend to make publicly available any update or other revisions to any forward‐looking statements to reflect circumstances existing after the date of this news release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward‐looking statements will not be realized.

Fund Performance and Other Disclaimers

Lipper rankings are for Class I mutual fund shares with three- and five-year track records only. Other classes may have different performance characteristics. 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.

Morningstar rankings are for Class I mutual fund shares with a minimum three-year track record. 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, and should not be considered, sales material and is not an offer or a solicitation for any securities.

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 and Global Equities, are collectively referred to as the “Principals”.
 

4

Represents total revenues and other operating income.
 

5

See section entitled “Fund Performance and Other Disclaimers” and Exhibit 8 of this news release for further information about Lipper and Morningstar rankings.
 

6

Class I mutual fund shares with a three-year track record; other classes may have different performance characteristics.
 

7

Class I mutual fund shares with a five-year track record; other classes may have different performance characteristics.
 

8

See Exhibit 7 for more information on “Assets under Management by Investment Strategy”.
 

9

Following the Principals’ exchanges in 2010 of an aggregate of 14,400,000 New Class A Units for 14,400,000 shares of Class A common stock, Artio Global Investors’ economic ownership in Artio Global Holdings LLC increased from approximately 74% to approximately 98%.
                   
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 Year Ended % Change From
Dec. 31, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2010
Revenues and other operating income:
Investment management fees $ 51,589 $ 84,736 $ 65,576 (39%) (21%) $ 277,150 $ 334,037 (17%)
Net gains (losses) on securities held for deferred compensation 376 495 (1,798 ) (24%) 121% (1,059 ) 1,077 (198%)
Foreign currency gains (losses)   (55 )   2     6   NM NM   (69 )   15   NM
Total revenues and other operating income   51,910     85,233     63,784   (39%) (19%)   276,022     335,129   (18%)
 
Expenses:
Employee compensation and benefits 22,984 24,393 28,387 (6%) (19%) 105,201 98,981 6%
Shareholder servicing and marketing 3,917 4,948 4,708 (21%) (17%) 18,653 20,125 (7%)
General and administrative   9,461     10,853     9,470   (13%) 0%   39,460     42,807   (8%)
Total expenses   36,362     40,194     42,565   (10%) (15%)   163,314     161,913   1%
 
Operating income before income tax expense 15,548 45,039 21,219 (65%) (27%) 112,708 173,216 (35%)
 
Non-operating income (loss)   76     445     (6,190 ) (83%) 101%   (5,705 )   (1,295 ) NM
Income before income tax expense 15,624 45,484 15,029 (66%) 4% 107,003 171,921 (38%)
 
Income taxes   7,024     18,817     9,753   (63%) (28%)   48,397     68,193   (29%)
Net income 8,600 26,667 5,276 (68%) 63% 58,606 103,728 (44%)
 
Net income attributable to non-controlling interests in AGH (1) 307 884 319 (65%) (4%) 2,114 20,123 (89%)
Net income (loss) attributable to non-controlling interests in CIP (2)   35     44     (1,456 ) (20%) 102%   (1,361 )   44   NM
Net income attributable to Artio Global Investors $ 8,258   $ 25,739   $ 6,413   (68%) 29% $ 57,853   $ 83,561   (31%)
 
Net income per share attributable to Artio Global Investors:
Basic $ 0.14 $ 0.44 $ 0.11 (68%) 27% $ 0.99 $ 1.58 (37%)
Diluted $ 0.14 $ 0.44 $ 0.11 (68%) 27% $ 0.99 $ 1.58 (37%)
 
Weighted average shares used in net income per share
attributable to Artio Global Investors:
Basic 58,051,113 58,535,264 58,157,478 (1%) 0% 58,237,744 52,829,546 10%
Diluted (3) 58,296,731 59,783,668 58,403,338 (2%) 0% 58,332,338 53,002,615 10%
 
NM - Not Meaningful
                                     
 
Assets under management ($ in millions) $ 30,359 $ 53,407 $ 34,252 (43%) (11%) $ 30,359 $ 53,407 (43%)
 
Average assets under management ($ in millions) (4) $ 33,380 $ 53,125 $ 41,670 (37%) (20%) $ 44,427 $ 52,930 (16%)
 
Effective fee rate (basis points) (5) 61.3 63.3 62.4 62.4 63.1
 
Effective tax rate 45.0 % 41.4 % 64.9 % 45.2 % 39.7 %
 
Employee compensation and benefits as a percentage of total
revenues and other operating income (6) 44.3 % 28.6 % 44.5 % 38.1 % 29.5 %
 
Operating margin (7) 30.0 % 52.8 % 33.3 % 40.8 % 51.7 %
                                     

 
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 was antidilutive for the three months ended Dec. 31, 2011 and Sep. 30, 2011 and the years ended Dec. 31, 2011 and 2010.
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 Year Ended % Change From
Dec. 31, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2010
Revenues and other operating income:
Investment management fees $ 51,589 $ 84,736 $ 65,576 (39%) (21%) $ 277,150 $ 334,037 (17%)
Net gains (losses) on securities held for deferred compensation 376 495 (1,798 ) (24%) 121% (1,059 ) 1,077 (198%)
Foreign currency gains (losses)   (55 )   2     6   NM NM   (69 )   15   NM
Total revenues and other operating income   51,910     85,233     63,784   (39%) (19%)   276,022     335,129   (18%)
 
Expenses:
Employee compensation and benefits 20,618 21,703 17,714 (5%) 16% 86,894 87,925 (1%)
Shareholder servicing and marketing 3,917 4,948 4,708 (21%) (17%) 18,653 20,125 (7%)
General and administrative   9,461     10,853     9,470   (13%) 0%   39,460     42,807   (8%)
Total expenses   33,996     37,504     31,892   (9%) 7%   145,007     150,857   (4%)
 
Operating income before income tax expense 17,914 47,729 31,892 (62%) (44%) 131,015 184,272 (29%)
 
Non-operating income (loss)   41     401     (4,734 ) (90%) 101%   (4,344 )   (1,339 ) NM
Income before income tax expense 17,955 48,130 27,158 (63%) (34%) 126,671 182,933 (31%)
 
Income taxes   7,951     20,351     11,245   (61%) (29%)   53,301     79,472   (33%)
Net income 10,004 27,779 15,913 (64%) (37%) 73,370 103,461 (29%)
 
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 $ 10,004   $ 27,779   $ 15,913   (64%) (37%) $ 73,370   $ 103,461   (29%)
 
Net income per diluted share attributable to Artio Global Investors $ 0.17 $ 0.46 $ 0.27 (63%) (37%) $ 1.23 $ 1.72 (28%)
 
Weighted average diluted shares used in net income per share
attributable to Artio Global Investors 59,496,731 59,783,668 59,603,338 0% 0% 59,532,338 60,113,847 (1%)
 
NM - Not Meaningful
                                     
 
Assets under management ($ in millions) $ 30,359 $ 53,407 $ 34,252 (43%) (11%) $ 30,359 $ 53,407 (43%)
 
Average assets under management ($ in millions) (3) $ 33,380 $ 53,125 $ 41,670 (37%) (20%) $ 44,427 $ 52,930 (16%)
 
Effective fee rate (basis points) (4) 61.3 63.3 62.4 62.4 63.1
 
Effective tax rate 44.3 % 42.3 % 41.4 % 42.1 % 43.4 %
 
Employee compensation and benefits as a percentage of total
revenues and other operating income (5) 39.7 % 25.5 % 27.8 % 31.5 % 26.2 %
 
Operating margin (6) 34.5 % 56.0 % 50.0 % 47.5 % 55.0 %
                                     

 
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 Dec. 31, 2011 Three Months Ended Dec. 31, 2010 Three Months Ended Sep. 30, 2011
GAAP Adjustments Adjusted GAAP Adjustments Adjusted GAAP Adjustments Adjusted
Revenues and other operating income:
Investment management fees $ 51,589 $ - $ 51,589 $ 84,736 $ - $ 84,736 $ 65,576 $ - $ 65,576
Net gains (losses) on securities held for deferred compensation 376 - 376 495 - 495 (1,798 ) - (1,798 )
Foreign currency gains (losses)   (55 )   -     (55 )   2   -     2   6     -     6  
Total revenues and other operating income   51,910     -     51,910     85,233   -     85,233   63,784     -     63,784  
 
Expenses:
Employee compensation and benefits 22,984 (2,366 ) (a) 20,618 24,393 (2,690 ) (a) 21,703 28,387 (10,673 ) (a) 17,714
Shareholder servicing and marketing 3,917 - 3,917 4,948 - 4,948 4,708 - 4,708
General and administrative   9,461     -     9,461     10,853   -     10,853   9,470     -     9,470  
Total expenses   36,362     (2,366 )   33,996     40,194   (2,690 )   37,504   42,565     (10,673 )   31,892  
 
Operating income before income tax expense 15,548 2,366 17,914 45,039 2,690 47,729 21,219 10,673 31,892
 
Non-operating income (loss)   76     (35 ) (e)   41     445   (44 ) (e)   401   (6,190 )   1,456   (e)   (4,734 )
Income before income tax expense 15,624 2,331 17,955 45,484 2,646 48,130 15,029 12,129 27,158
 
Income taxes   7,024     927   (b)   7,951     18,817   1,534   (b)   20,351   9,753     1,492   (b)   11,245  
Net income 8,600 1,404 10,004 26,667 1,112 27,779 5,276 10,637 15,913
 
Net income attributable to non-controlling interests in AGH 307 (307 ) (c) - 884 (884 ) (c) - 319 (319 ) (c) -
Net income (loss) attributable to non-controlling interests in CIP   35     (35 ) (e)   -     44   (44 ) (e)   -   (1,456 )   1,456   (e)   -  
Net income attributable to Artio Global Investors $ 8,258   $ 1,746   $ 10,004   $ 25,739 $ 2,040   $ 27,779 $ 6,413   $ 9,500   $ 15,913  
 
 
Net income per diluted share attributable to Artio Global
Investors $ 0.14 $ 0.17 $ 0.44 $ 0.46 $ 0.11 $ 0.27
 
Weighted average diluted shares used in net income per
share attributable to Artio Global Investors 58,296,731 1,200,000 (d) 59,496,731 59,783,668 - 59,783,668 58,403,338 1,200,000 (d) 59,603,338
 
                     
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.
 
 
Year Ended Dec. 31, 2011 Year Ended Dec. 31, 2010
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
Revenues and other operating income:
Investment management fees $ 277,150 $ - $ 277,150 $ 334,037 $ - $ 334,037
Net gains (losses) on securities held for deferred compensation (1,059 ) - (1,059 ) 1,077 - 1,077
Foreign currency gains (losses)   (69 )   -     (69 )   15     -     15  
Total revenues and other operating income   276,022     -     276,022     335,129     -     335,129  
 
Expenses:
Employee compensation and benefits 105,201 (18,307 ) (a) 86,894 98,981 (11,056 ) (a) 87,925
Shareholder servicing and marketing 18,653 - 18,653 20,125 - 20,125
General and administrative   39,460     -     39,460     42,807     -     42,807  
Total expenses   163,314     (18,307 )   145,007     161,913     (11,056 )   150,857  
 
Operating income before income tax expense 112,708 18,307 131,015 173,216 11,056 184,272
 
Non-operating income (loss)   (5,705 )   1,361   (e)   (4,344 )   (1,295 )   (44 ) (e)   (1,339 )
Income before income tax expense 107,003 19,668 126,671 171,921 11,012 182,933
 
Income taxes   48,397     4,904   (b)   53,301     68,193     11,279   (b)   79,472  
Net income 58,606 14,764 73,370 103,728 (267 ) 103,461
 
Net income attributable to non-controlling interests in AGH 2,114 (2,114 ) (c) - 20,123 (20,123 ) (c) -
Net income (loss) attributable to non-controlling interests in CIP   (1,361 )   1,361   (e)   -     44     (44 ) (e)   -  
Net income attributable to Artio Global Investors $ 57,853   $ 15,517   $ 73,370   $ 83,561   $ 19,900   $ 103,461  
 
 
Net income per diluted share attributable to Artio Global
Investors $ 0.99 $ 1.23 $ 1.58 $ 1.72
 
Weighted average diluted shares used in net income per
share attributable to Artio Global Investors 58,332,338 1,200,000 (d) 59,532,338 53,002,615 7,111,232 (d) 60,113,847
 
 

Exhibit - 5
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

 
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 relating 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 Sep. 30, 2011 and the year ended Dec. 31, 2011 also exclude the Compensation Charge, as this was non-recurring.
 
(b)

The adjustments to income taxes for all periods presented 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 Sep. 30, 2011 and the year ended Dec. 31, 2011 also include an adjustment to reflect the tax effect of excluding the Compensation Charge.
 
(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 assumes the Principals have fully exchanged their New Class A Units in Artio Global Holdings LLC for 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 (loss) attributable to non-controlling interests in the Consolidated Investment Products and Non-operating income (loss). Management believes these adjustments provide a more useful measure for comparing Non-operating loss between periods.

 
             
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 6
Assets under Management by Investment Vehicle
(unaudited, in millions)
     
Three Months Ended % Change From Year Ended % Change From
Dec. 31, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2010
 
Proprietary Funds
Beginning assets under management $ 15,464 $ 22,765 $ 21,192 (32%) (27%) $ 23,013 $ 24,482 (6%)
Gross client cash inflows 1,311 1,151 1,085 14% 21% 5,320 5,989 (11%)
Gross client cash outflows (3,734) (2,035) (2,887) (83%) (29%) (11,833) (8,919) (33%)
Net client cash flows (2,423) (884) (1,802) (174%) (34%) (6,513) (2,930) (122%)
Transfers between investment vehicles - - (38) NM 100% (38) - NM
Total client cash flows (2,423) (884) (1,840) (174%) (32%) (6,551) (2,930) (124%)
Market appreciation (depreciation) 325 1,132 (3,888) (71%) 108% (3,096) 1,461 NM
Ending assets under management 13,366 23,013 15,464 (42%) (14%) 13,366 23,013 (42%)
 
 
Institutional Commingled Funds
Beginning assets under management 5,769 8,894 8,285 (35%) (30%) 9,236 9,198 0%
Gross client cash inflows 103 135 60 (24%) 72% 420 802 (48%)
Gross client cash outflows (1,174) (353) (919) NM (28%) (3,666) (1,451) (153%)
Net client cash flows (1,071) (218) (859) NM (25%) (3,246) (649) NM
Transfers between investment vehicles 11 - 38 NM (71%) 237 22 NM
Total client cash flows (1,060) (218) (821) NM (29%) (3,009) (627) NM
Market appreciation (depreciation) 203 560 (1,695) (64%) 112% (1,315) 665 NM
Ending assets under management 4,912 9,236 5,769 (47%) (15%) 4,912 9,236 (47%)
 
 
Separate Accounts
Beginning assets under management 10,838 17,611 14,221 (38%) (24%) 16,801 17,854 (6%)
Gross client cash inflows 121 110 111 10% 9% 398 1,521 (74%)
Gross client cash outflows (1,440) (1,751) (1,232) 18% (17%) (5,589) (3,912) (43%)
Net client cash flows (1,319) (1,641) (1,121) 20% (18%) (5,191) (2,391) (117%)
Transfers between investment vehicles (11) - - NM NM (199) (22) NM
Total client cash flows (1,330) (1,641) (1,121) 19% (19%) (5,390) (2,413) (123%)
Market appreciation (depreciation) 291 831 (2,262) (65%) 113% (1,612) 1,360 NM
Ending assets under management 9,799 16,801 10,838 (42%) (10%) 9,799 16,801 (42%)
 
 
Sub-advisory Accounts
Beginning assets under management 2,181 4,590 3,137 (52%) (30%) 4,357 4,459 (2%)
Gross client cash inflows 140 27 33 NM NM 390 904 (57%)
Gross client cash outflows (83) (431) (434) 81% 81% (2,137) (1,221) (75%)
Net client cash flows 57 (404) (401) 114% 114% (1,747) (317) NM
Transfers between investment vehicles - - - NM NM - - NM
Total client cash flows 57 (404) (401) 114% 114% (1,747) (317) NM
Market appreciation (depreciation) 44 171 (555) (74%) 108% (328) 215 NM
Ending assets under management 2,282 4,357 2,181 (48%) 5% 2,282 4,357 (48%)
 
 
Total Assets under Management
Beginning assets under management 34,252 53,860 46,835 (36%) (27%) 53,407 55,993 (5%)
Gross client cash inflows 1,675 1,423 1,289 18% 30% 6,528 9,216 (29%)
Gross client cash outflows (6,431) (4,570) (5,472) (41%) (18%) (23,225) (15,503) (50%)
Net client cash flows (4,756) (3,147) (4,183) (51%) (14%) (16,697) (6,287) (166%)
Transfers between investment vehicles - - - NM NM - - NM
Total client cash flows (4,756) (3,147) (4,183) (51%) (14%) (16,697) (6,287) (166%)
Market appreciation (depreciation) 863 2,694 (8,400) (68%) 110% (6,351) 3,701 NM
Ending assets under management $ 30,359 $ 53,407 $ 34,252 (43%) (11%) $ 30,359 $ 53,407 (43%)
 
           
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 7
Assets under Management by Investment Strategy
(unaudited, in millions)
       
Three Months Ended % Change From Year Ended % Change From
Dec. 31, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2010
 
International Equity I
Beginning assets under management $ 10,779 $ 19,194 $ 15,768 (44%) (32%) $ 18,781 $ 21,656 (13%)
Gross client cash inflows 152 277 186 (45%) (18%) 952 1,345 (29%)
Gross client cash outflows   (2,504 )   (1,844 )   (1,767 ) (36%) (42%)   (8,176 )   (5,520 ) (48%)
Net client cash flows (2,352 ) (1,567 ) (1,581 ) (50%) (49%) (7,224 ) (4,175 ) (73%)
Transfers between investment strategies   -     -     -   NM NM   -     -   NM
Total client cash flows (2,352 ) (1,567 ) (1,581 ) (50%) (49%) (7,224 ) (4,175 ) (73%)
Market appreciation (depreciation)   253     1,154     (3,408 ) (78%) 107%   (2,877 )   1,300   NM
Ending assets under management   8,680     18,781     10,779   (54%) (19%)   8,680     18,781   (54%)
 
International Equity II
Beginning assets under management 13,045 22,999 19,546 (43%) (33%) 23,272 24,716 (6%)
Gross client cash inflows 388 521 361 (26%) 7% 2,015 3,229 (38%)
Gross client cash outflows   (2,859 )   (1,610 )   (2,507 ) (78%) (14%)   (10,781 )   (6,187 ) (74%)
Net client cash flows (2,471 ) (1,089 ) (2,146 ) (127%) (15%) (8,766 ) (2,958 ) (196%)
Transfers between investment strategies   -     -     (39 ) NM 100%   (39 )   50   (178%)
Total client cash flows (2,471 ) (1,089 ) (2,185 ) (127%) (13%) (8,805 ) (2,908 ) NM
Market appreciation (depreciation)   323     1,362     (4,316 ) (76%) 107%   (3,570 )   1,464   NM
Ending assets under management   10,897     23,272     13,045   (53%) (16%)   10,897     23,272   (53%)
 
High Grade Fixed Income
Beginning assets under management 5,158 5,466 4,885 (6%) 6% 5,088 5,293 (4%)
Gross client cash inflows 492 143 305 NM 61% 1,174 922 27%
Gross client cash outflows   (167 )   (460 )   (185 ) 64% 10%   (1,179 )   (1,537 ) 23%
Net client cash flows 325 (317 ) 120 NM 171% (5 ) (615 ) 99%
Transfers between investment strategies   (57 )   -     1   NM NM   43     10   NM
Total client cash flows 268 (317 ) 121 185% 121% 38 (605 ) 106%
Market appreciation (depreciation)   77     (61 )   152   NM (49%)   377     400   (6%)
Ending assets under management   5,503     5,088     5,158   8% 7%   5,503     5,088   8%
 
High Yield
Beginning assets under management 4,165 4,920 5,246 (15%) (21%) 4,907 3,516 40%
Gross client cash inflows 621 462 409 34% 52% 2,241 3,066 (27%)
Gross client cash outflows   (682 )   (568 )   (962 ) (20%) 29%   (2,712 )   (2,017 ) (34%)
Net client cash flows (61 ) (106 ) (553 ) 42% 89% (471 ) 1,049 (145%)
Transfers between investment strategies   57     -     (1 ) NM NM   (43 )   (10 ) NM
Total client cash flows (4 ) (106 ) (554 ) 96% 99% (514 ) 1,039 (149%)
Market appreciation (depreciation)   134     93     (527 ) 44% 125%   (98 )   352   (128%)
Ending assets under management   4,295     4,907     4,165   (12%) 3%   4,295     4,907   (12%)
 
Global Equity
Beginning assets under management 854 991 1,037 (14%) (18%) 1,025 618 66%
Gross client cash inflows 14 6 14 133% 0% 55 460 (88%)
Gross client cash outflows   (191 )   (77 )   (16 ) (148%) NM   (241 )   (141 ) (71%)
Net client cash flows (177 ) (71 ) (2 ) (149%) NM (186 ) 319 (158%)
Transfers between investment strategies   -     -     39   NM (100%)   39     (50 ) 178%
Total client cash flows (177 ) (71 ) 37 (149%) NM (147 ) 269 (155%)
Market appreciation (depreciation)   44     105     (220 ) (58%) 120%   (157 )   138   NM
Ending assets under management   721     1,025     854   (30%) (16%)   721     1,025   (30%)
 
             
ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 7
Assets under Management by Investment Strategy
(unaudited, in millions)
     
Three Months Ended % Change From Year Ended % Change From
Dec. 31, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2010 Sep. 30, 2011 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2010
 
US Equity
Beginning assets under management 169 190 235 (11%) (28%) 227 81 180%
Gross client cash inflows 7 14 12 (50%) (42%) 78 194 (60%)
Gross client cash outflows (27) (11) (21) (145%) (29%) (115) (88) (31%)
Net client cash flows (20) 3 (9) NM (122%) (37) 106 (135%)
Transfers between investment strategies - - - NM NM - - NM
Total client cash flows (20) 3 (9) NM (122%) (37) 106 (135%)
Market appreciation (depreciation) 29 34 (57) (15%) 151% (12) 40 (130%)
Ending assets under management 178 227 169 (22%) 5% 178 227 (22%)
 
Other (1)
Beginning assets under management 82 100 118 (18%) (31%) 107 113 (5%)
Gross client cash inflows 1 - 2 NM (50%) 13 - NM
Gross client cash outflows (1) - (14) NM 93% (21) (13) (62%)
Net client cash flows - - (12) NM 100% (8) (13) 38%
Transfers between investment strategies - - - NM NM - - NM
Total client cash flows - - (12) NM 100% (8) (13) 38%
Market appreciation (depreciation) 3 7 (24) (57%) 113% (14) 7 NM
Ending assets under management 85 107 82 (21%) 4% 85 107 (21%)
 
Total Assets under Management
Beginning assets under management 34,252 53,860 46,835 (36%) (27%) 53,407 55,993 (5%)
Gross client cash inflows 1,675 1,423 1,289 18% 30% 6,528 9,216 (29%)
Gross client cash outflows (6,431) (4,570) (5,472) (41%) (18%) (23,225) (15,503) (50%)
Net client cash flows (4,756) (3,147) (4,183) (51%) (14%) (16,697) (6,287) (166%)
Transfers between investment strategies - - - NM NM - - NM
Total client cash flows (4,756) (3,147) (4,183) (51%) (14%) (16,697) (6,287) (166%)
Market appreciation (depreciation) 863 2,694 (8,400) (68%) 110% (6,351) 3,701 NM
Ending assets under management 30,359 53,407 34,252 (43%) (11%) 30,359 53,407 (43%)
 
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 - 8
Mutual Fund Performance Data (1)
     
 
Morningstar Ratings /
Funds in Total Universe (# of Funds)   Lipper Percentile Rankings (PR) / Funds in Total Universe (# of Funds)  
1-Year 3-Year 5-Year 10-Year
# of # of # of # of # of
Fund (3) Rating Funds Category PR Funds PR Funds PR Funds PR Funds Classification  
 
Artio International Equity Fund, Class A (2) 3 853 Foreign Large Blend 100 339 100 302 89 243 17 145 International Large-Cap Core
Artio International Equity Fund, Class I (2) 3 853 Foreign Large Blend 100 339 100 302 87 243 13 145 International Large-Cap Core
 
Artio International Equity II Fund, Class A 2 853 Foreign Large Blend 100 339 97 302 79 243 NA NA International Large-Cap Core
Artio International Equity II Fund, Class I 2 853 Foreign Large Blend 99 339 97 302 76 243 NA NA International Large-Cap Core
 
Artio Global Equity Fund, Class A 3 957 World Stock 100 101 87 87 73 73 NA NA Global Large-Cap Growth
Artio Global Equity Fund, Class I 3 957 World Stock 99 101 81 87 71 73 NA NA Global Large-Cap Growth
 
Artio Microcap Fund, Class A 2 791 Small Growth 89 692 2 632 56 499 NA NA Small-Cap Core
Artio Microcap Fund, Class I 2 791 Small Growth 89 692 2 632 52 499 NA NA Small-Cap Core
 
Artio Smallcap Fund, Class A 3 791 Small Growth 77 692 5 632 11 499 NA NA Small-Cap Core
Artio Smallcap Fund, Class I 3 791 Small Growth 74 692 4 632 9 499 NA NA Small-Cap Core
 
Artio Midcap Fund, Class A 4 768 Mid-Cap Growth 4 312 2 274 41 234 NA NA Mid-Cap Core
Artio Midcap Fund, Class I 4 768 Mid-Cap Growth 4 312 1 274 34 234 NA NA Mid-Cap Core
 
Artio Multicap Fund, Class A 3 1,748 Large Growth 47 774 11 674 28 590 NA NA Multi-Cap Core
Artio Multicap Fund, Class I 3 1,748 Large Growth 43 774 9 674 21 590 NA NA Multi-Cap Core
 
Artio Global High Income Fund, Class A 4 600 High Yield Bond 90 487 53 420 22 355 NA NA High Current Yield
Artio Global High Income Fund, Class I 4 600 High Yield Bond 88 487 47 420 17 355 NA NA High Current Yield
 
Artio Total Return Bond Fund, Class A 4 1,238 Intermediate Term Bond 11 589 59 506 24 420 3 290 Intermediate Investment Grade Debt
Artio Total Return Bond Fund, Class I 4 1,238 Intermediate Term Bond 5 589 53 506 18 420 2 290 Intermediate Investment Grade Debt
 
 
Note: Data as of December 31, 2011
 
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, and should not be considered, sales material and is not an offer or a solicitation for any securities.
 

2.

Closed to new investors.
 

3.

The Artio Local Emerging Markets Debt Fund was launched in May 2011 and is not yet ranked or rated in any of the above categories.

Copyright Business Wire 2010

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