When compared to September 30, 2011, AUM increased by $5.5 billion from $38.8 billion, including an increase of $2.8 billion, or 13%, in separate account AUM and an increase of $2.7 billion, or 16%,in mutual fund and collective investment trust AUM.Balance Sheet Review As of September 30, 2012, cash and cash equivalents was $97.0 million, compared with $95.1 million as of June 30, 2012. The Company had no debt outstanding as of September 30, 2012. Conference Call Manning & Napier will host a conference call to discuss its third quarter earnings results on Thursday, November 1, 2012, at 8:00 a.m. ET. To access the teleconference, please dial 706-758-9224 (domestic and international) approximately ten minutes before the teleconference’s scheduled start time and reference ID # 39311889. A live webcast will also be available on the investor relations portion of Manning & Napier’s website at http://ir.manning-napier.com/. If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call’s completion and available through November 8, 2012. The teleconference replay can be accessed by dialing 404-537-3406 (domestic and international) and entering the ID# 39311889. A webcast replay will also be available on the investor relations portion of Manning & Napier’s website at http://ir.manning-napier.com/. Non-GAAP Financial Measures To provide investors with greater insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, the Company supplements its combined consolidated statements of income presented on a GAAP basis with non-GAAP financial measures of earnings. Please refer to the schedule in this release for a reconciliation of non-GAAP financial measures to GAAP measures. Management uses economic income, economic net income and economic net income per adjusted share as financial measures to evaluate the profitability and efficiency of the Company’s business model. Economic income, economic net income and economic net income per adjusted share are not presented in accordance with GAAP. Economic income excludes from income before provision for income taxes:
- the non-cash interest expense associated with the liability for shares subject to mandatory redemption. Upon consummation of the initial public offering, such mandatory redemption obligation terminated and the Company no longer reflects in its financial statements non-cash interest expense or the liability related to such obligation; and
- the reorganization-related share-based compensation, which results in non-cash compensation expense reported over the vesting period. In addition, upon the consummation of the initial public offering, the vesting terms related to the ownership of its employees were modified, including the Company’s named executive officers, other than William Manning. Such individuals were entitled to 15% of their ownership interests upon the consummation of the offering, and 15% of their ownership interests over the subsequent three years. The remaining ownership interests are subject to performance-based vesting over such three-year period. Such new vesting terms will not result in dilution to the number of outstanding shares of the Company’s Class A common stock. As a result of such vesting requirements, the Company will recognize non-cash compensation charges through 2014.