Final CNS AR 2020 - Flipbook - Page 46
Expenses
Years Ended December 31,
(in thousands)
2020
Employee compensation and benefits . . . . . . . . . . . . . . . . . . . . . $
Distribution and service fees . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
156,457
115,084
56,286
4,652
332,479
2019
$
$
143,431
55,237
47,632
4,396
250,696
$ Change
$
% Change
13,026
59,847
8,654
256
81,783
$
9.1
108.3
18.2
5.8
32.6
%
%
%
%
%
Employee compensation and benefits for the year ended December 31, 2020 increased primarily due to higher salaries
of $3.7 million, an increase in incentive compensation of $3.4 million, an increase in severance expenses of $1.8 million,
higher payroll taxes of $1.2 million and commissions of $1.1 million.
Distribution and service fees expense for the year ended December 31, 2020 increased primarily due to costs
associated with the initial public offering of PTA of $57.8 million.
General and administrative expenses for the year ended December 31, 2020 increased primarily due to costs associated
with the RQI rights offering of $11.7 million, partially offset by lower travel and entertainment expenses of $3.3 million.
Operating Margin
Operating margin for the year ended December 31, 2020 decreased to 22.2% from 39.0% for the year ended
December 31, 2019. The decrease was primarily due to higher expenses associated with the initial public offering of PTA and
the RQI rights offering for the year ended December 31, 2020. Operating margin represents the ratio of operating income to
revenue.
Non-operating Income (Loss)
Years Ended December 31,
2020
(in thousands)
Seed
Investments
Interest and dividend income—net . . . $
Gain (loss) from investments—net . . .
Foreign currency gains (losses)—net . .
Total non-operating income (loss) . . $
2,358
(4,116)
(399)
(2,157)
2019
Other
$
(1)
$
1,004
—
(517)
487
Total
$
$
3,362
(4,116)
(916)
(1,670)
Seed
Investments
3,052
21,673
381
$ 25,106
Other
$
$
(1)
$
3,664
—
(1,355)
2,309
Total
$
6,716
21,673
(974)
$ 27,415
_________________________
(1) Seed investments included net loss of $1.4 million and net income of $12.4 million attributable to third-party interests for the years
ended December 31, 2020 and 2019, respectively.
Income Taxes
Years Ended December 31,
(in thousands, except percentages)
2020
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,222
$
19.2 %
2019
40,565
$
23.2 %
$ Change
(22,343)
% Change
(55.1)%
The effective tax rate for the year ended December 31, 2020 differed from the U.S. federal statutory rate of 21.0%
primarily due to state, local and foreign taxes as well as the effect of certain permanent differences, the most significant of
which related to limitations on the deductibility of executive compensation. These were more than offset by discrete tax
items, primarily related to the appreciated value of restricted stock units delivered in January 2020. The effective tax rate for
the year ended December 31, 2019 differed from the U.S. federal statutory rate of 21.0% primarily due to state, local and
foreign taxes, partially offset by the reversal of certain liabilities associated with unrecognized tax benefits, the release of a
portion of the valuation allowance associated with unrealized gains on the Company's seed investments and a discrete tax
item related to the appreciated value of restricted stock units delivered in January 2019.
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