AMENDMENT AND WAIVER TO CREDIT AND GUARANTY AGREEMENT
Exhibit 10.1
AMENDMENT AND WAIVER
TO
This AMENDMENT AND WAIVER TO CREDIT AND GUARANTY AGREEMENT (this “Amendment”) is dated as of March 13, 2014 and is entered into by and among OZ MANAGEMENT LP, a Delaware limited partnership (“Borrower”), the GUARANTORS listed on the signature pages hereto (together with Borrower, the “Credit Parties”), XXXXXXX XXXXX LENDING PARTNERS LLC, as Administrative Agent (together with its permitted successors in such capacity, “Administrative Agent”), and the LENDERS listed on the signature pages hereto, and is made with reference to the Credit Agreement, dated as of November 15, 2011 (as amended, amended and restated, supplemented or otherwise modified through the date hereof, the “Credit Agreement”), among Borrower, the Guarantors, Administrative Agent, the Collateral Administrative Agent, the Lenders and the other parties thereto. Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement (as modified by this Amendment).
RECITALS
WHEREAS, Och-Ziff Capital Management Group LLC (the “Issuer”) has undertaken a review of its accounting policies in response to comments that the Issuer received from the staff of the Securities and Exchange Commission’s Division of Corporation Finance (the “Staff”), predominately focused on the Issuer’s accounting policies related to the nonconsolidation of the collateralized loan obligation vehicles it manages and deferral of certain income attributable to its consolidated funds;
WHEREAS, based upon this ongoing review, the Issuer has determined to make certain changes in respect of these accounting policies and as a result of such changes the Issuer’s Annual Report on Form 10-K for the Fiscal Year ending December 31, 2013 will reflect a restatement of the Issuer’s previously issued financial statements for each period inclusive of September 30, 2012 through September 30, 2013, and the Issuer is making certain other adjustments to all prior periods reflected therein to conform to the changes in these accounting policies (each as described in the notes to financial statements set forth on Exhibit A hereto and as further described in the Issuer’s Annual Report on Form 10-K for the Fiscal Year ending 2013, the “Restatements”); and
WHEREAS, the Borrower and the other Credit Parties have requested that the Lenders waive any breach or violation of any provision, and agree to amend certain provisions, of the Credit Agreement or any other Credit Document that may result from the Restatements, including any Defaults or Events of Default that might result therefrom (including by way of cross-default) and the Requisite Lenders have agreed, subject to the terms and conditions hereinafter set forth, to grant such waivers;
WHEREAS, subject to the terms and conditions set forth herein, Requisite Lenders are willing to agree to such amendments and waivers to the Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto hereby agree as follows:
SECTION I. WAIVER
Upon the Amendment Effective Date (defined below), each of the Lenders party hereto hereby waives any breach or violation of any provision of the Credit Agreement or any other Credit Document that may result from the Restatements (including, without limitation, any inaccuracy contained in Issuer’s previously issued financial statements or the financial calculations or the Financial Officer Certifications based upon such financial statements), including any Defaults or Events of Default that might result therefrom (including by way of cross-default).
SECTION II. AMENDMENTS
The first sentence of Section 5.1(d) is hereby amended by amending and restating such sentence in its entirety as follows:
“(d) Statements of Reconciliation. If, as a result of any change in accounting principles and policies from those used in the preparation of the Historical Financial Statements, the consolidated financial statements of Issuer delivered pursuant to Section 5.1(a) or 5.1(b) will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements, and for each subsequent delivery pursuant to Section 5.1(a) or 5.1(b), after such change, one or more statements of reconciliation with respect to “Economic Income”, in form and substance satisfactory to Administrative Agent.”
SECTION III. LIMITATION OF WAIVERS AND AMENDMENTS
This Amendment shall be limited precisely as written and relate solely to the amendment and waiver of the provisions of the Credit Agreement in the manner and to the extent described in Section I and Section II above, and nothing in this Amendment, nor any actions taken or not taken by any Administrative Agent or any Lender pursuant to this Amendment or any other Credit Document, shall or shall be deemed to:
(i) | constitute an amendment or waiver of compliance by Borrower or any other Credit Party with respect to any other term, provision or condition of the Credit Agreement, any other Credit Document or any other instrument or agreement referred to therein; or |
(ii) | except as expressly waived hereby, prejudice any right or remedy that any Agent or Lender may now have or may have in the future under or in connection with the Credit Agreement, any other Credit Document or any other instrument or agreement referred to therein. |
Except as expressly set forth herein, the terms, provisions and conditions of the Credit Agreement and the other Credit Documents shall remain in full force and effect and in all other respects are hereby ratified and confirmed.
SECTION IV. CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective as of the date hereof only upon Administrative Agent having received a counterpart signature page of this Amendment duly executed by Borrower, each of the other Credit Parties party hereto and Lenders comprising Requisite Lenders (the date of such effectiveness being the “Amendment Effective Date”).
SECTION V. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Amendment and to amend and waive certain provisions of the Credit Agreement in the manner provided herein, each Credit Party that is a party hereto represents and warrants to each Lender that the following statements are true and correct in all material respects:
A. Requisite Power and Authority. Each Credit Party has all requisite power and authority to enter into this Amendment and to carry out the transactions contemplated by, and perform its obligations under, this Amendment, the Credit Agreement (as modified by this Amendment) and the other Credit Documents.
B. Authorization of Agreements. The execution and delivery by each Credit Party of this Amendment, and the performance by each Credit Party of its obligations under this Amendment, the Credit Agreement (as modified by this Amendment) and the other Credit Documents, have been duly authorized by all necessary action on the part of each Credit Party.
C. No Conflict. The execution and delivery by each Credit Party of this Amendment, the performance by each Credit Party of its obligations under this Amendment, under the Credit Agreement (as modified by this Amendment) and under the other Credit Documents to which they are parties and the consummation of the transactions contemplated by this Amendment, the Credit Agreement (as modified by this Amendment) and the other Credit Documents do not and will not violate (a) any provision of any law or any governmental rule or regulation applicable to such Credit Party, (b) any of the Organizational Documents of such Credit Party, or (c) any order, judgment or decree of any court or other agency of government binding such Credit Party, in each case, except to the extent such violation would not reasonably be expected to have a Material Adverse Effect.
D. Binding Obligation. This Amendment has been duly executed and delivered by each Credit Party that is a party hereto and thereto, and is the legally valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.
E. Absence of Default. Except as waived hereby, no event has occurred and is continuing that would constitute an Event of Default or a Default.
F. Material Indebtedness. No Credit Party is obligated under any Indebtedness in an aggregate principal amount of $50,000,000 or more with respect to which a material default could reasonably be expected to result from the Restatements (including, without limitation, any inaccuracy contained in Issuer’s previously issued financial statements or the financial calculations or the Financial Officer Certifications based upon such financial statements), other than Indebtedness under the Credit Agreement and permitted or arising under Sections 6.1(n) and 6.1(o) of the Credit Agreement.
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SECTION VI. ACKNOWLEDGMENT AND CONSENT
Each Guarantor hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Amendment and consents to the amendment and waiver of the Credit Agreement effected pursuant to this Amendment. Each “Grantor” under and as defined in the applicable Collateral Documents and each Guarantor hereby confirms that each Credit Document to which it is a party or by which it is otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Credit Documents the payment and performance of all “Obligations” under each of the Credit Documents to which it is a party (in each case as such terms are defined in the applicable Credit Document).
Each Guarantor acknowledges and agrees that, except as specifically modified by this Amendment, each of the Credit Documents to which it is a party or by which it is otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment.
Each Guarantor acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not required by the terms of the Credit Agreement or any other Credit Document to consent to the amendments and waivers to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Credit Document shall be deemed to require the consent of such Guarantor to any amendments or any future waivers to the Credit Agreement.
SECTION VII. MISCELLANEOUS
A. Effect on the Credit Agreement and the Other Credit Documents.
(i) Except as specifically (and solely to the limited extent) modified by this Amendment, the Credit Agreement and the other Credit Documents (including any exhibits, schedules and annexes thereto) shall remain in full force and effect and are hereby ratified and confirmed.
(ii) Except as expressly set forth in Section I hereof, the execution, delivery and performance of this Amendment shall not constitute an amendment or waiver of any provision of, or operate as an amendment or waiver of any right, power or remedy of the Administrative Agent or any Lender under, the Credit Agreement or any of the other Credit Documents.
(iii) This Amendment is a Credit Document.
B. Headings. Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.
C. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
D. Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.
E. Confidentiality. The parties hereto hereby acknowledge and agree that this Amendment and the transactions contemplated hereby shall be subject to the confidentiality provisions of the Credit Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
OZ MANAGEMENT LP |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OZ ADVISORS LP |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OZ ADVISORS II LP |
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By: Och-Ziff Holding LLC, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OCH-ZIFF HOLDING II LLC |
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By: OZ Management LP, its member |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
OZ MANAGEMENT II LP |
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By: Och-Ziff Holding II LLC, |
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By: OZ Management LP, its member |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OZSC GP, LLC |
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By: OZ Advisors LP, its member |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OZSC GP, L.P. |
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By: OZSC GP, LLC, its general partner |
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By: OZ Advisors LP, its member |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
OZ EUREKA FUND GP, L.P. |
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By: OZ Eureka Fund GP, LLC, |
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By: OZ Advisors LP, its member |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OZ STRUCTURED PRODUCTS OVERSEAS FUND GP, L.P. |
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By: OZ Structured Products Overseas Fund GP, LLC, |
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By: OZ Advisors II LP, its member |
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By: Och-Ziff Holding LLC, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OZ STRUCTURED PRODUCTS FUND GP, L.P. |
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By: OZ Structured Products Fund GP, LLC, |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
OCH-ZIFF ENERGY FUND GP, L.P. |
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By: Och-Ziff Energy Fund GP, LLC, |
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By: OZ Advisors LP, its managing member |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OZ STRUCTURED PRODUCTS FUND II GP, L.P. |
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By: OZ Structured Products Fund II GP, LLC, |
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By: OZ Advisors LP, its member |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OZ STRUCTURED PRODUCTS OVERSEAS FUND II GP, L.P. |
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By: OZ Structured Products Overseas Fund II GP, LLC, |
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By: Och-Ziff Holding LLC, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
OZ AGC XX XX, L.P. |
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By: AGC XX XX, LLC, its general partner |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Secretary and Treasurer |
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OZ CREDIT OPPORTUNITIES OVERSEAS FUND GP, L.P. |
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By: OZ Credit Opportunities Overseas Fund GP, LLC, |
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By: OZ Advisors II LP, its member |
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By: Och-Ziff Holding LLC, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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CH MEZZANINE INVESTMENT GP, LTD. |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Secretary & Treasurer |
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OZ PARTNER AI FEEDER GP, LTD. |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Director |
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OZ INDIA REAL ESTATE FUND GP LTD. |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Secretary & Treasurer |
OCH-ZIFF LOAN MANAGEMENT LP |
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By: OCH-ZIFF LOAN MANAGEMENT LLC |
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By: OZ Management LP, its Member |
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By: Och-Ziff Holding Corporation, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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OZ EUROPEAN CREDIT OPPORTUNITIES |
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By: OZ EUROPEAN CREDIT OPPORTUNITIES FUND GP, LLC |
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its General Partner |
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By: OZ Advisors LP, its Member |
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its General Partner |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
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oz EUROPEAN CREDIT OPPORTUNITIES OVERSEAS fund gp, l.p. |
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By: OZ EUROPEAN CREDIT OPPORTUNITIES |
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its General Partner |
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By: OZ Advisors II LP, its Member |
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By: Och-Ziff Holding LLC, |
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By: |
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/s/ Xxxx X. Xxxxx |
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Name: |
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Xxxx X. Xxxxx |
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Title: |
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Chief Financial Officer |
XXXXXXX XXXXX LENDING PARTNERS LLC, |
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By: |
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/s/ Xxxxxx Xxxxxxxxxxx |
Name: |
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Xxxxxx Xxxxxxxxxxx |
Title: |
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Authorized Signatory |
XXXXXXX SACHS LENDING PARTNERS LLC, |
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By: |
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/s/ Xxxxxxx Xxxxxx |
Name: |
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Xxxxxxx Xxxxxx |
Title: |
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Authorized Signatory |
Bank of America, N.A., as a Lender |
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By: |
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/s/ Xxxxxxx X. Xxxxxxx |
Name: |
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Xxxxxxx X. Xxxxxxx |
Title: |
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Director |
Xxxxxx Xxxxxxx Senior Funding, Inc., as a Lender |
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By: |
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/s/ Xxxxx Xxxxxxxxx |
Name: |
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Xxxxx Xxxxxxxxx |
Title: |
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Vice President |
EXHIBIT A
NOTES TO FINANCIAL STATEMENTS
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). All intercompany transactions and balances have been eliminated in consolidation.
Restatements
Following a periodic review performed by the staff of the U.S. Securities and Exchange Commission (the “Staff”), the Company determined that it should have been consolidating the CLOs it manages. The Company launched its first CLO in the third quarter of 2012. Consolidating the CLOs has resulted in material adjustments to the Company’s previously issued annual and interim financial statements from the third quarter of 2012 through the third quarter of 2013. The consolidation of these CLOs resulted in an increase in the assets and liabilities of consolidated Och-Ziff funds in the consolidated balance sheets for these periods, as well as an increase in the income, expenses and net gains of consolidated Och-Ziff funds in the consolidated statements of comprehensive income (loss), but did not impact net income (loss) allocated to Class A Shareholders.
In addition, the Company determined that amounts previously deferred related to incentive income allocations from the consolidated Och-Ziff funds that remained subject to clawback, to the extent there are future losses, should have been allocated to the Company and to noncontrolling interests based on the contractual terms of the relevant fund documents rather than deferring these amounts until clawback contingencies were resolved. The Company has adjusted the prior periods to conform to the current period presentation. Specifically, amounts previously reported within the change in deferred income of consolidated Och-Ziff funds in the statements of comprehensive income (loss) have been reclassified to consolidated net income (loss) allocated to noncontrolling interests and consolidated net income (loss) allocated to Class A Shareholders. The Company also adjusted the related deferred income of consolidated Och-Ziff funds liability previously included within other liabilities in the consolidated balance sheets to shareholders’ equity attributable to noncontrolling interests and shareholders’ deficit attributable to Class A Shareholders.
The tables below present the effect of these corrections, as well as the reclassifications discussed below in “—Reclassifications,” on the affected line items in the Company’s consolidated balance sheet and statements of comprehensive income (loss) as reported in the Company’s annual report on Form 10-K for the year ended December 31, 2012.
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
Consolidated Balance Sheet
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December 31, 2012 |
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As Previously |
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Adjustments |
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As Restated |
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(dollars in thousands) |
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Income and fees receivable |
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$ |
593,504 |
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$ |
(1,553 |
) |
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$ |
591,951 |
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Deferred income tax assets |
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920,877 |
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(3,776 |
) |
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917,101 |
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Assets of consolidated Och-Ziff funds: |
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Investments, at fair value |
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1,744,626 |
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1,034,832 |
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2,779,458 |
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Other assets of Och-Ziff funds |
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38,188 |
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33,108 |
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71,296 |
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Total assets |
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3,535,065 |
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1,062,611 |
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4,597,676 |
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Due to related parties |
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741,773 |
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(7 |
) |
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741,766 |
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Other liabilities |
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119,529 |
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(78,994 |
) |
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40,535 |
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Liabilities of consolidated Och-Ziff funds: |
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Notes payable of consolidated CLOs, at fair value |
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- |
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1,061,545 |
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1,061,545 |
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Other liabilities of Och-Ziff funds |
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3,538 |
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8,470 |
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12,008 |
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Total liabilities |
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1,686,481 |
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991,014 |
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2,677,495 |
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Redeemable noncontrolling interests |
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|
- |
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8,692 |
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|
8,692 |
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Paid-in capital |
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2,900,109 |
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|
138 |
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2,900,247 |
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Appropriated retained earnings (deficit) |
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|
- |
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(3,627 |
) |
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|
(3,627 |
) |
Accumulated deficit |
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(3,150,644 |
) |
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|
5,103 |
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|
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(3,145,541 |
) |
Shareholders’ deficit attributable to Class A Shareholders |
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(250,535 |
) |
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|
1,614 |
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|
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(248,921 |
) |
Shareholders’ equity attributable to noncontrolling interests |
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|
2,099,119 |
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|
|
61,291 |
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|
|
2,160,410 |
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Total shareholders’ equity |
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|
1,848,584 |
|
|
|
62,905 |
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|
|
1,911,489 |
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Total liabilities, redeemable noncontrolling interests and shareholders’ equity |
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|
3,535,065 |
|
|
|
1,062,611 |
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|
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4,597,676 |
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OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013
Consolidated Statements of Operations
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Year Ended December 31, 2012 |
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As Previously |
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Adjustments |
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As Restated |
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(dollars in thousands) |
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Management fees |
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$ |
505,948 |
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|
$ |
(1,553 |
) |
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$ |
504,395 |
|
Income of consolidated Och-Ziff funds |
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|
108,684 |
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|
16,758 |
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|
125,442 |
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General, administrative and other |
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|
116,880 |
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|
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(7 |
) |
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|
116,873 |
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Expenses of consolidated Och-Ziff funds |
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10,440 |
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|
20,869 |
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|
|
31,309 |
|
Change in deferred income of consolidated Och-Ziff funds |
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|
(52,256 |
) |
|
|
52,256 |
|
|
|
- |
|
Net gains of consolidated Och-Ziff funds |
|
|
215,081 |
|
|
|
(2,371 |
) |
|
|
212,710 |
|
Income taxes |
|
|
79,085 |
|
|
|
3,776 |
|
|
|
82,861 |
|
Consolidated net loss |
|
|
(624,006 |
) |
|
|
40,452 |
|
|
|
(583,554 |
) |
Total comprehensive loss |
|
|
(623,777 |
) |
|
|
40,452 |
|
|
|
(583,325 |
) |
Allocation of Consolidated Net Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shareholders |
|
|
(315,826 |
) |
|
|
5,103 |
|
|
|
(310,723 |
) |
Noncontrolling interests |
|
|
(308,180 |
) |
|
|
33,657 |
|
|
|
(274,523 |
) |
Redeemable noncontrolling interests |
|
|
- |
|
|
|
1,692 |
|
|
|
1,692 |
|
Allocation of Total Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shareholders |
|
|
(315,777 |
) |
|
|
5,103 |
|
|
|
(310,674 |
) |
Noncontrolling interests |
|
|
(308,000 |
) |
|
|
33,657 |
|
|
|
(274,343 |
) |
Redeemable noncontrolling interests |
|
|
- |
|
|
|
1,692 |
|
|
|
1,692 |
|
Earnings (Loss) Per Class A Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.21 |
) |
|
$ |
0.04 |
|
|
$ |
(2.17 |
) |
Diluted |
|
$ |
(2.21 |
) |
|
$ |
0.04 |
|
|
$ |
(2.17 |
) |
|
|
Year Ended December 31, 2011 |
|
|||||||||
|
|
As Previously |
|
|
Adjustments |
|
|
As Restated |
|
|||
|
|
(dollars in thousands) |
|
|||||||||
Change in deferred income of consolidated Och-Ziff funds |
|
$ |
(7,117 |
) |
|
$ |
7,117 |
|
|
$ |
- |
|
Consolidated net loss |
|
|
(1,470,805 |
) |
|
|
7,117 |
|
|
|
(1,463,688 |
) |
Total comprehensive loss |
|
|
(1,470,800 |
) |
|
|
7,117 |
|
|
|
(1,463,683 |
) |
Allocation of consolidated net loss to noncontrolling interests |
|
|
(1,051,815 |
) |
|
|
7,117 |
|
|
|
(1,044,698 |
) |
Allocation of total comprehensive loss to noncontrolling interests |
|
|
(1,051,811 |
) |
|
|
7,117 |
|
|
|
(1,044,694 |
) |
Reclassifications
The Company consolidates a credit hedge fund that allows fund investors to redeem their interests upon the expiration of a lockup period. These amounts were deemed immaterial for separate presentation as redeemable noncontrolling interests in 2012, and therefore were included within noncontrolling interests in the consolidated balance sheets and statements of comprehensive income (loss). Due to growth in this consolidated fund in 2013, the Company started to report these amounts separately in the consolidated balance sheets and statements of comprehensive income (loss). As a result, the Company has reclassified the 2012 amounts to conform to the current period presentation.
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
SUPPLEMENTAL FINANCIAL INFORMATION
QUARTERLY RESULTS — UNAUDITED
The following tables present the Company’s unaudited, summarized quarterly results and balance sheet information for the years ended December 31, 2013 and 2012:
|
|
Year Ended December 31, 2013 |
|
|||||||||||||
|
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
||||
|
|
(dollars in thousands, except per share amounts) |
|
|||||||||||||
Selected Operating Statement Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
286,211 |
|
|
$ |
229,164 |
|
|
$ |
279,767 |
|
|
$ |
1,100,781 |
|
Total expenses |
|
|
120,383 |
|
|
|
150,259 |
|
|
|
142,455 |
|
|
|
442,321 |
|
Total other income |
|
|
107,555 |
|
|
|
36,180 |
|
|
|
43,612 |
|
|
|
95,121 |
|
Income taxes |
|
|
25,295 |
|
|
|
13,103 |
|
|
|
11,996 |
|
|
|
45,293 |
|
Consolidated Net Income |
|
$ |
248,088 |
|
|
$ |
101,982 |
|
|
$ |
168,928 |
|
|
$ |
708,288 |
|
Allocation of Consolidated Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shareholders |
|
$ |
30,035 |
|
|
$ |
3,818 |
|
|
$ |
28,852 |
|
|
$ |
199,062 |
|
Noncontrolling interests |
|
|
215,774 |
|
|
|
97,734 |
|
|
|
137,643 |
|
|
|
506,133 |
|
Redeemable noncontrolling interests |
|
|
2,279 |
|
|
|
430 |
|
|
|
2,433 |
|
|
|
3,093 |
|
|
|
$ |
248,088 |
|
|
$ |
101,982 |
|
|
$ |
168,928 |
|
|
$ |
708,288 |
|
Earnings Per Class A Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.20 |
|
|
$ |
0.03 |
|
|
$ |
0.18 |
|
|
$ |
1.21 |
|
Diluted |
|
$ |
0.20 |
|
|
$ |
0.02 |
|
|
$ |
0.15 |
|
|
$ |
1.13 |
|
Weighted-Average Class A Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
150,646,754 |
|
|
|
152,016,631 |
|
|
|
156,752,496 |
|
|
|
164,402,184 |
|
Diluted |
|
|
151,625,895 |
|
|
|
155,900,015 |
|
|
|
475,281,312 |
|
|
|
478,231,474 |
|
Selected Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
225,072 |
|
|
$ |
242,181 |
|
|
$ |
283,241 |
|
|
$ |
189,974 |
|
Assets of consolidated Och-Ziff funds |
|
|
3,565,272 |
|
|
|
4,346,853 |
|
|
|
4,299,177 |
|
|
|
4,711,189 |
|
Total assets |
|
|
4,876,877 |
|
|
|
5,599,317 |
|
|
|
5,676,873 |
|
|
|
6,869,274 |
|
Debt obligations |
|
|
387,073 |
|
|
|
386,105 |
|
|
|
385,140 |
|
|
|
384,177 |
|
Liabilities of consolidated Och-Ziff funds |
|
|
2,011,924 |
|
|
|
2,644,240 |
|
|
|
2,608,218 |
|
|
|
3,042,395 |
|
Total liabilities |
|
|
3,192,475 |
|
|
|
3,829,921 |
|
|
|
3,846,721 |
|
|
|
4,577,667 |
|
Redeemable noncontrolling interests |
|
|
29,709 |
|
|
|
42,973 |
|
|
|
67,675 |
|
|
|
76,583 |
|
Shareholders’ deficit attributable to Class A Shareholders |
|
|
(317,965 |
) |
|
|
(352,146 |
) |
|
|
(318,934 |
) |
|
|
(133,721 |
) |
Shareholders’ equity attributable to noncontrolling interests |
|
|
1,972,658 |
|
|
|
2,078,569 |
|
|
|
2,081,411 |
|
|
|
2,348,745 |
|
Total shareholders’ equity |
|
|
1,654,693 |
|
|
|
1,726,423 |
|
|
|
1,762,477 |
|
|
|
2,215,024 |
|
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
SUPPLEMENTAL FINANCIAL INFORMATION
QUARTERLY RESULTS — UNAUDITED
|
|
Year Ended December 31, 2012 |
|
|||||||||||||
|
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
||||
|
|
(dollars in thousands, except per share amounts) |
|
|||||||||||||
Selected Operating Statement Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
140,924 |
|
|
$ |
178,422 |
|
|
$ |
172,545 |
|
|
$ |
734,711 |
|
Total expenses |
|
|
471,589 |
|
|
|
476,140 |
|
|
|
486,797 |
|
|
|
505,753 |
|
Total other income |
|
|
76,506 |
|
|
|
8,482 |
|
|
|
56,775 |
|
|
|
71,221 |
|
Income taxes |
|
|
15,134 |
|
|
|
14,175 |
|
|
|
19,920 |
|
|
|
33,632 |
|
Consolidated Net Income (Loss) |
|
$ |
(269,293 |
) |
|
$ |
(303,411 |
) |
|
$ |
(277,397 |
) |
|
$ |
266,547 |
|
Allocation of Consolidated Net Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shareholders |
|
$ |
(121,732 |
) |
|
$ |
(113,957 |
) |
|
$ |
(126,475 |
) |
|
$ |
51,441 |
|
Noncontrolling interests |
|
|
(147,561 |
) |
|
|
(189,454 |
) |
|
|
(151,742 |
) |
|
|
214,234 |
|
Redeemable noncontrolling interests |
|
|
- |
|
|
|
- |
|
|
|
820 |
|
|
|
872 |
|
|
|
$ |
(269,293 |
) |
|
$ |
(303,411 |
) |
|
$ |
(277,397 |
) |
|
$ |
266,547 |
|
Earnings (Loss) Per Class A Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.86 |
) |
|
$ |
(0.80 |
) |
|
$ |
(0.88 |
) |
|
$ |
0.35 |
|
Diluted |
|
$ |
(0.86 |
) |
|
$ |
(0.80 |
) |
|
$ |
(0.88 |
) |
|
$ |
0.35 |
|
Weighted-Average Class A Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
140,894,185 |
|
|
|
141,722,881 |
|
|
|
143,477,776 |
|
|
|
145,751,664 |
|
Diluted |
|
|
140,894,185 |
|
|
|
141,722,881 |
|
|
|
143,477,776 |
|
|
|
445,740,036 |
|
Selected Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
149,667 |
|
|
$ |
171,207 |
|
|
$ |
185,333 |
|
|
$ |
162,485 |
|
Assets of consolidated Och-Ziff funds |
|
|
943,910 |
|
|
|
1,106,705 |
|
|
|
1,911,592 |
|
|
|
2,850,754 |
|
Total assets |
|
|
2,140,550 |
|
|
|
2,337,765 |
|
|
|
3,136,980 |
|
|
|
4,597,676 |
|
Debt obligations |
|
|
381,793 |
|
|
|
389,990 |
|
|
|
389,015 |
|
|
|
388,043 |
|
Liabilities of consolidated Och-Ziff funds |
|
|
125,406 |
|
|
|
183,849 |
|
|
|
693,697 |
|
|
|
1,297,096 |
|
Total liabilities |
|
|
1,299,282 |
|
|
|
1,371,402 |
|
|
|
1,896,646 |
|
|
|
2,677,495 |
|
Redeemable noncontrolling interests |
|
|
- |
|
|
|
- |
|
|
|
7,820 |
|
|
|
8,692 |
|
Shareholders’ deficit attributable to Class A Shareholders |
|
|
(352,005 |
) |
|
|
(345,472 |
) |
|
|
(357,526 |
) |
|
|
(248,921 |
) |
Shareholders’ equity attributable to noncontrolling interests |
|
|
1,193,273 |
|
|
|
1,311,835 |
|
|
|
1,590,040 |
|
|
|
2,160,410 |
|
Total shareholders’ equity |
|
|
841,268 |
|
|
|
966,363 |
|
|
|
1,232,514 |
|
|
|
1,911,489 |
|
These results were prepared in accordance with GAAP and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results.
The Company generally does not recognize incentive income during the first three quarters of the year other than amounts earned as a result of fund investor redemptions during the period or amounts earned from fund investors with measurement periods longer than one year. Additionally, compensation and benefits generally comprise a significant portion of total expenses, with discretionary cash bonuses comprising a large portion of total compensation and benefits expense. These cash bonuses are based on total annual revenues, which are significantly influenced by incentive income earned by the Company at the end of the year. Annual discretionary bonuses are generally determined and expensed in the fourth quarter each year.
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
SUPPLEMENTAL FINANCIAL INFORMATION
QUARTERLY RESULTS — UNAUDITED
Restatements and Reclassifications
As discussed in Note 2 to the Company’s consolidated financial statements included in this annual report, the Company restated the quarterly amounts previously reported in its 2012 third quarter and 2013 first through third quarters Form 10-Qs and in its 2012 Form 10-K due to material adjustments necessary to give effect to the consolidation of the Company’s CLOs. In addition, due to a change related to the accounting for previously deferred incentive income allocations from the consolidated Och-Ziff funds that remained subject to clawback, as well as the presentation of redeemable noncontrolling interests, the Company adjusted the prior period amounts presented above to conform to the current period presentation. See Note 2 for additional information.
