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Medley Management Inc. Reports Third Quarter 2015 Results and Declares $0.20 Per Share Dividend

NEW YORK, Nov. 16, 2015 (GLOBE NEWSWIRE) -- Medley Management Inc. (NYSE:MDLY) today reported its financial results for the three months ended September 30, 2015.

Highlights

  • Total assets under management were $4.0 billion
  • Fee earning assets under management were $3.4 billion
  • Core Net Income Per Share was $0.01 for Q3 2015
  • U.S. GAAP net income attributable to Medley Management Inc. was $0.04 per share for Q3 2015
  • Declared $0.20 per share dividend for Q3 2015 payable on December 4, 2015
  • Raised over $500 million of new institutional AUM following quarter-end


“We are pleased with our performance at Medley over the past year. We now have over $4.5 billion of AUM at the firm, having raised over $500 million from institutional investors already this current quarter,” said Seth Taube, Co-Chief Executive Officer of Medley Management Inc. “For the September quarter, our overall financial results were impacted by significant market volatility. Despite the challenging market environment, our underlying business remains strong, and this same market volatility is creating an increasingly attractive backdrop to deploy capital.”

Standalone Results of Operations for the Three Months Ended September 30, 2015

Management fees increased by 3%, or $0.5 million, to $18.1 million for the three months ended September 30, 2015 as compared to $17.6 million for the same period in 2014. This increase was offset by a reversal in performance fee revenue and a decrease in other income and fees to $(12.7) million for the three months ended September 30, 2015 compared to $6.2 million for the same period in 2014. The decrease of performance fee revenue was due primarily to the reversal of performance fees of our private funds as a result of a decrease in the asset values within their underlying portfolios. Total revenues decreased by 77%, or $18.4 million, to $5.4 million for the three months ended September 30, 2015 compared to $23.8 million for the same period in 2014. Exclusive of the impact of performance fees, total revenues would have decreased by 2%, or $0.4 million, to $20.0 million for the three months ended September 30, 2015 compared to $20.4 million for the same period in 2014.

Total expenses decreased by 53%, or $4.3 million, to $3.9 million for the three months ended September 30, 2015 compared to $8.2 million for the same period in 2014. The decrease was due primarily to reversals in performance fee compensation. Exclusive of performance fee compensation, total expenses would have decreased by 17%, or $1.6 million, to $7.5 million for the three months ended September 30, 2015 compared to $9.1 million for the same period in 2014.

Total other expense, net increased by $0.9 million to $2.8 million for the three months ended September 30, 2015 compared to $1.9 million for the same period in 2014. The increase was due primarily to a $0.8 million increase in other expenses.

Pre-Tax Core Net Income decreased by $12.8 million, to $0.5 million for the three months ended September 30, 2015 compared to the same period in 2014. Core Net Income Per Share was $0.01 per share for the three months ended September 30, 2015, compared to $0.25 per share for the same period in 2014. Exclusive of the impact of performance fees1, Pre-Tax Core Net Income would have decreased by $1.3 million, to $8.3 million for the three months ended September 30, 2015 compared to the same period in 2014. Exclusive of the impact of performance fees1, Core Net Income Per Share would have been $0.16 per share for the three months ended September 30, 2015, compared to $0.18 per share for the same period in 2014.

Core EBITDA decreased by $12.6 million, to $2.8 million for the three months ended September 30, 2015 compared to $15.4 million for the same period in 2014. Exclusive of the impact of performance fees1, Core EBITDA would have decreased by $1.2 million, to $10.5 million for the three months ended September 30, 2015 compared to $11.7 million for the same period in 2014.

Standalone Results of Operations for the Nine Months Ended September 30, 2015

Management fees increased by 19%, or $9.1 million, to $56.6 million for the nine months ended September 30, 2015 compared to $47.5 million for the same period in 2014. This increase was offset by a decrease in performance fee revenue and other income and fees to $(5.1) million for the nine months ended September 30, 2015 compared to $18.7 million for the same period in 2014. Total revenues decreased by 22%, or $14.7 million, to $51.4 million for the nine months ended September 30, 2015 compared to $66.2 million for the same period in 2014. Exclusive of performance fees, total revenues would have increased by 13%, or $7.4 million, to $62.1 million for the nine months ended September 30, 2015 compared to $54.7 million for the same period in 2014.

Total expenses decreased by 14% or, $4.4 million, to $25.7 million for the nine months ended September 30, 2015 compared to $30.1 million for the same period in 2014. The variance was due primarily to reversals in performance fee compensation. Exclusive of performance fee compensation, total expenses would have increased by 9% or $2.5 million to $30.3 million for the nine months ended September 30, 2015 compared to $27.8 million for the same period in 2014.

Total other expense, net increased by $2.3 million to $6.8 million for the nine months ended September 30, 2015 compared to $4.4 million for the same period in 2014. The increase was due primarily to a $3.0 million increase in interest expense.

Pre-Tax Core Net Income decreased by 18%, or $5.5 million, to $25.4 million for the nine months ended September 30, 2015 compared to $30.9 million for the same period in 2014. Core Net Income Per Share decreased by 17% to $0.48 per share for the nine months ended September 30, 2015, compared to $0.58 per share for the same period in 2014. Exclusive of the impact of performance fees1, Pre-Tax Core Net Income would have increased by 20%, or $4.7 million, to $28.6 million for the nine months ended September 30, 2015 compared to $23.9 million for the same period in 2014. Exclusive of the impact of performance fees1, Core Net Income Per Share would have increased by 18% to $0.53 per share for the nine months ended September 30, 2015, compared to $0.45 per share for the same period in 2014.

Core EBITDA decreased by $2.5 million to $32.1 million for the nine months ended September 30, 2015 compared to $34.6 million for the same period in 2014. Exclusive of the impact of performance fees1, Core EBITDA would have increased by $7.7 million to $35.2 million for the nine months ended September 30, 2015 compared to $27.5 million for the same period in 2014.

Investor Contact Media Contact
Sam Anderson Liz Bruce – Fitzroy Communications
212.759.0777 212.498.9197

_________________________

1 The impact of performance fees on our standalone income statement includes the impact of performance fee revenue, performance fee compensation and the portion of net income attributable to non-controlling interests in consolidated subsidiaries relating to performance fee revenue.

Medley has also provided additional information in its Third Quarter 2015 Earnings Presentation, which can be viewed at www.mdly.com under “Investor Relations – Events/Investor Presentations.”

Note: The financial results prior to September 29, 2014 reflect those of our operating subsidiaries, Medley LLC and Medley GP Holdings LLC and their consolidated subsidiaries prior to our initial public offering (“IPO”) and the related reorganization.

Key Performance Indicators:
For the Three Months Ended
For the Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2015 2014 2015 2014
(Amounts in thousands, except AUM, share and per share data)
Consolidated Financial Data:
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC $ 1,057 $ 12,513 $ 18,161 $ 28,482
Standalone Data:
Pre-Tax Core Net Income (1) $ 540 $ 13,297 $ 25,434 $ 30,925
Core Net Income (1) 701 12,713 22,877 29,858
Core EBITDA (2) 2,790 15,416 32,110 34,594
Core Net Income Per Share (3) $ 0.01 $ 0.25 $ 0.48 $ 0.58
Core Net Income Margin (4) 5.7% 31.8% 28.2% 26.6%
Pro-Forma Weighted Average Shares Outstanding (5) 30,455,796 30,484,637 30,456,326 30,484,693
Other Data (at period end, in millions):
AUM $ 4,002 $ 3,635 $ 4,002 $ 3,635
Fee Earning AUM 3,401 3,036 3,401 3,036
(1) Pre-Tax Core Net Income is calculated as Core Net Income before income taxes. Core Net Income reflects standalone net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC adjusted to exclude reimbursable expenses associated with the launch of funds, certain one-time severance costs and stock-based compensation associated with restricted stock units that were granted in connection with our IPO. In addition, for the three and nine months ended September 30, 2014, Core Net Income includes the pro-forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense, that, prior to our reorganization and IPO, were recorded as distributions from members’ capital. Please refer to the reconciliation of Core Net Income to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC in Exhibit B for additional details.
(2) Core EBITDA is calculated as Core Net Income before interest expense, income taxes and depreciation. Please refer to the reconciliation of Core EBITDA to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC in Exhibit B for additional details.
(3) Core Net Income Per Share is calculated as Core Net Income, adjusted for the income tax effect of assuming that all of our pre-tax earnings are subject to federal, state and local corporate income taxes, divided by Pro-Forma Weighted Average Shares Outstanding (as defined below). We assumed an effective corporate tax rate of 43.0% for all periods presented. Please refer to the calculation of Core Net Income Per Share in Exhibit B and C for additional details.
(4) Core Net Income Margin equals Core Net Income Per Share divided by total standalone revenue per share for the respective periods presented.
(5) The calculation of Pro-Forma Weighted Average Shares Outstanding assumes the conversion by the pre-IPO holders of 23,333,333 Medley LLC units for 23,333,333 shares of Class A common stock at the beginning of each period presented and, at the beginning of each period in 2014, the issuance of 6,000,000 shares of Class A common stock in connection with our IPO and the grant of 1,151,389 restricted stock units in connection with our IPO, adjusted for actual forfeitures and additional grants during the period.


Fee Earning AUM

The table below presents the quarter to date roll forward of our total fee earning AUM:
% of AUM
Permanent Long-dated Permanent Long-dated
Capital Private Funds Capital Private Funds
Vehicles and SMAs Total Vehicles and SMAs
(Dollars in millions)
Beginning balance, June 30, 2015$ 2,241 $ 1,109 $ 3,350 67% 33%
Commitments 143 21 164
Capital reduction (12) - (12)
Distributions (32) (18) (50)
Change in fund value (34) (17) (51)
Ending balance, September 30, 2015$ 2,306 $ 1,095 $ 3,401 68% 32%


Total fee earning AUM increased by 2%, or $51 million, to $3.4 billion at September 30, 2015 compared to June 30, 2015. The permanent capital vehicles’ share of fee earning AUM increased to 68% at September 30, 2015 compared to 67% at June 30, 2015.

The table below presents the year-to-date roll forward of our total fee earning AUM:
% of AUM
Permanent Long-dated Permanent Long-dated
Capital Private Funds Capital Private Funds
Vehicles and SMAs Total Vehicles and SMAs
(Dollars in millions)
Beginning balance, December 31, 2014$ 2,047 $ 1,011 $ 3,058 67% 33%
Commitments 360 209 569
Capital reduction (22) (17) (39)
Distributions (104) (86) (190)
Change in fund value 25 (22) 3
Ending balance, September 30, 2015$ 2,306 $ 1,095 $ 3,401 68% 32%


Total fee earning AUM increased by 11%, or $342 million, to $3.4 billion at September 30, 2015 compared to December 31, 2014. The permanent capital vehicles’ share of fee earning AUM increased to 68% at September 30, 2015 compared to 67% at December 31, 2014.

Dividend Declaration

On November 12, 2015, the Company’s Board of Directors declared a quarterly dividend of $0.20 per share of Class A common stock, for the third quarter 2015, payable on December 4, 2015, to shareholders of record of the Company’s Class A common stock as of the close of business on November 25, 2015.

Subsequent Event

Following quarter end, Medley executed investment management agreements with new and existing institutional investors, increasing AUM by in excess of $500 million. These commitments increased our assets under management to over $4.5 billion.

Conference Call and Webcast Information

We will host an earnings conference call and audio webcast at 10:00 a.m. (Eastern Time) on Monday, November 16, 2015 to discuss our third quarter 2015 financial results.

All interested parties may participate in the conference call by dialing (877) 474-9504 approximately 5-10 minutes prior to the call. International callers should dial (857) 244-7557. Participants should reference Medley Management Inc. and the participant passcode of 77294151 when prompted. Following the call you may access a replay of the event via audio webcast. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through the Company's website, http://www.mdly.com. To listen to the live call, please go to the Company's website at least 15 minutes prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the Company's website.

About Medley

Medley is an asset management firm offering yield solutions to retail and institutional investors. Medley's national direct origination franchise, with over 80 people, is a premier provider of capital to the middle market in the U.S. As of November 11, 2015, Medley had in excess of $4.5 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE:MCC), the Sierra Income Corporation, as well as private investment vehicles. Over the past 13 years, we have invested in excess of $6.0 billion to help over 300 companies grow across 35 industries in North America. For additional information, please visit Medley Management Inc. at www.mdly.com.

Forward-Looking Statements

Statements included herein may contain "forward-looking statements". Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission, including those described in the section “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Except as required by law, the Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements made herein speak only as of the date of this press release.

This press release does not constitute an offer for any Medley fund.

Available Information

Medley Management Inc.’s filings with the Securities and Exchange Commission, press releases, earnings releases and other financial information are available at www.mdly.com.

Exhibit A. Standalone Statements of Operations of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2015 2014 2015 2014
(Amounts in thousands)
Revenues
Management fees$ 18,135 $ 17,616 $ 56,578 $ 47,516
Performance fees (14,595) 3,395 (10,627) 11,471
Other revenues and fees 1,891 2,787 5,496 7,183
Total revenues 5,431 23,798 51,447 66,170
Expenses
Compensation and benefits 5,914 5,677 19,532 15,010
Performance fee compensation (3,660) (921) (4,578) 2,237
General, administrative and other expenses 1,626 3,458 10,756 12,821
Total expenses 3,880 8,214 25,710 30,068
Other income (expense)
Dividend income 222 222 665 665
Interest expense (2,141) (2,016) (6,335) (3,380)
Other expenses, net (838) (87) (1,087) (1,707)
Total other expense, net (2,757) (1,881) (6,757) (4,422)
Income before income taxes$ (1,206) $ 13,703 $ 18,980 $ 31,680
Provision for (benefit from) income taxes (113) 578 1,953 1,026
Net income (loss) (1,093) 13,125 17,027 30,654
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries (2,150) 612 (1,134) 2,172
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC$ 1,057 $ 12,513 $ 18,161 $ 28,482


Exhibit B. Reconciliation of Standalone Core Net Income and Core EBITDA to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2015 2014 2015 2014
(Amounts in thousands)
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC$ 1,057 $ 12,513 $ 18,161 $ 28,482
Reimbursable fund startup expenses (1) (943) 1,195 2,751 4,591
Severance expense (1) - - 121 (5)
IPO date award stock-based compensation (1) 587 74 1,844 74
Adjustment for pre-IPO guaranteed payments to members (1)(2) - (1,069) - (3,284)
Core Net Income$ 701 $ 12,713 $ 22,877 $ 29,858
Interest expense 2,141 2,016 6,335 3,380
Income taxes (161) 584 2,557 1,067
Depreciation and amortization 109 103 341 289
Core EBITDA$ 2,790 $ 15,416 $ 32,110 $ 34,594
(1) Amounts are presented net of income taxes.
(2) Represents a pro-forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense, that, prior to our reorganization and IPO, were treated as distributions from members’ capital.


Exhibit C. Calculation of Core Net Income Per Share (Standalone)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2015 2014 2015 2014
(Amounts in thousands, except share and per share amounts)
Numerator
Core Net Income$ 701 $ 12,713 $ 22,877 $ 29,858
Add: Income taxes (161) 584 2,557 1,067
Pre-Tax Core Net Income 540 13,297 25,434 30,925
Denominator
Class A shares 6,000,211 6,000,000 6,000,071 6,000,000
Conversion of LLC Units to Class A shares 23,333,333 23,333,333 23,333,333 23,333,333
Restricted stock units (1) 1,122,252 1,151,304 1,122,922 1,151,360
Pro-Forma Weighted Average Shares Outstanding (1) 30,455,796 30,484,637 30,456,326 30,484,693
Pre-Tax Core Net Income Per Share$ 0.02 $ 0.44 $ 0.84 $ 1.01
Less: corporate income taxes per share (2) (0.01) (0.19) (0.36) (0.43)
Core Net Income Per Share$ 0.01 $ 0.25 $ 0.48 $ 0.58
(1) The calculation of Pro-Forma Weighted Average Shares Outstanding assumes the conversion by the pre-IPO holders of 23,333,333 Medley LLC units for 23,333,333 shares of Class A common stock at the beginning of each period presented and, at the beginning of each period in 2014, the issuance of 6,000,000 shares of Class A common stock in connection with our IPO and the grant of 1,151,389 restricted stock units in connection with our IPO, adjusted for actual forfeitures and additional grants during the period.
(2) Represents a per share adjustment for income taxes assuming that all of our standalone pre-tax earnings were subject to federal, state and local income taxes. We assumed an effective corporate tax rate of 43.0% for all periods presented.


Exhibit D. Condensed Consolidated Statements of Operations of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)
For the Three Months Ended
For the Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2015 2014 2015 2014
(Amounts in thousands, except share and per share data)
Revenues
Management fees$ 15,870 $ 17,013 $ 52,280 $ 43,466
Performance fees (1,948) 965 920 3,337
Other revenues and fees 1,891 2,787 5,496 7,183
Total revenues 15,813 20,765 58,696 53,986
Expenses
Compensation and benefits 5,914 5,677 19,532 15,010
Performance fee compensation (3,660) (921) (4,578) 2,237
Consolidated Funds expenses 542 296 1,969 1,129
General, administrative and other expenses 1,626 3,458 10,756 12,821
Total expenses 4,422 8,510 27,679 31,197
Other income (expense)
Dividend income 222 222 665 665
Interest expense (2,141) (2,016) (6,335) (3,380)
Other expenses, net (865) (268) (1,317) (1,586)
Interest and other income of Consolidated Funds 21,843 17,880 61,739 51,476
Interest expense of Consolidated Funds (3,804) (2,524) (11,418) (5,586)
Net realized gain (loss) on investments of Consolidated Funds (31,965) (499) (31,013) 789
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds 16,011 (2,369) 13,616 (9,540)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds 1,610 1,300 1,112 103
Total other income, net 911 11,726 27,049 32,941
Income before income taxes 12,302 23,981 58,066 55,730
Provision for (benefit from) income taxes (77) 923 2,864 2,174
Net income 12,379 23,058 55,202 53,556
Net income attributable to non-controlling interests in Consolidated Funds 13,472 9,933 38,175 22,902
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries (2,150) 612 (1,134) 2,172
Net income attributable to non-controlling interests in Medley LLC 785 $ 12,135 15,576 $ 28,104
Net income attributable to Medley Management Inc.$ 272 378 $ 2,585 378
Net income per Class A common stock:
Basic$ 0.04 $ 0.05(1) $ 0.38 $ 0.05(1)
Diluted$ 0.04 $ 0.05(1) $ 0.38 $ 0.05(1)
Weighted average shares - Basic and Diluted 6,000,211 6,000,000 6,000,071 6,000,000
(1) Based on net income attributed to Medley Management Inc. from September 29, 2014 to September 30, 2014


Exhibit E. Condensed Consolidated Balance Sheets of Medley Management Inc.
As of
September 30, As of
2015 December 31,
(unaudited) 2014
(Amounts in thousands)
Assets
Cash and cash equivalents$ 63,754 $ 87,206
Investments, at fair value 10,884 9,901
Management fees receivable 14,800 15,173
Performance fees receivable 6,493 5,573
Other assets 13,966 9,230
Assets of Consolidated Funds:
Cash and cash equivalents 105,122 38,111
Investments, at fair value 778,971 734,870
Interest and dividends receivable 6,124 6,654
Other assets 3,803 3,681
Total assets$ 1,003,917 $ 910,399
Liabilities and Equity
Loans payable$ 102,697 $ 103,057
Accounts payable, accrued expenses and other liabilities 20,739 27,583
Performance fee compensation payable 5,759 11,807
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities 2,199 5,767
Secured borrowings 134,047 141,135
Total liabilities 265,441 289,349
Equity
Class A Common Stock 60 60
Class B Common Stock - -
Capital deficit (8) (2,384)
Retained earnings 108 272
Total stockholders' equity (deficit), Medley Management Inc. 160 (2,052)
Non-controlling interests in Consolidated Funds 755,827 625,548
Non-controlling interests in consolidated subsidiaries (708) 1,526
Non-controlling interests in Medley LLC (16,803) (3,972)
Total equity 738,476 621,050
Total liabilities and equity$ 1,003,917 $ 910,399


Exhibit F. Condensed Consolidating Statements of Operations and Consolidated Balance Sheets of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)
For the Three Months Ended September 30, 2015
(unaudited)
Consolidated
Standalone Funds Eliminations Consolidated
(Amounts in thousands)
Revenues:
Management fees$ 18,135 $ - $ (2,265) $ 15,870
Performance fees (14,595) - 12,647 (1,948)
Other revenues and fees 1,891 - - 1,891
Total revenues 5,431 - 10,382 15,813
Expenses:
Compensation and benefits 5,914 - - 5,914
Performance fee compensation (3,660) - - (3,660)
Consolidated Funds expenses - 2,807 (2,265) 542
General, administrative and other expenses 1,626 - - 1,626
Total expenses 3,880 2,807 (2,265) 4,422
Other income (expense):
Dividend income 222 - - 222
Interest expense (2,141) - - (2,141)
Other income (expenses), net (838) - (27) (865)
Interest and other income of Consolidated Funds - 21,843 - 21,843
Interest expense of Consolidated Funds - (3,804) - (3,804)
Net realized gain (loss) on investments of Consolidated Funds - (31,965) - (31,965)
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds - 16,011 - 16,011
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds - 1,610 - 1,610
Total other income (expense), net (2,757) 3,695 (27) 911
Income (loss) before income taxes (1,206) 888 12,620 12,302
Provision for (benefit from) income taxes (113) 36 - (77)
Net income (loss) (1,093) 852 12,620 12,379
Net income attributable to non-controlling interests in Consolidated Funds - - 13,472 13,472
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries (2,150) - - (2,150)
Net income attributable to non-controlling interests in Medley LLC 785 - - 785
Net income attributable to Medley Management Inc.$ 272 $ 852 $ (852) $ 272


For the Nine Months Ended September 30, 2015
(unaudited)
Consolidated
Standalone Funds Eliminations Consolidated
(Amounts in thousands)
Revenues:
Management fees$ 56,578 $ - $ (4,298) $ 52,280
Performance fees (10,627) - 11,547 920
Other revenues and fees 5,496 - - 5,496
Total revenues 51,447 - 7,249 58,696
Expenses:
Compensation and benefits 19,532 - - 19,532
Performance fee compensation (4,578) - - (4,578)
Consolidated Funds expenses - 6,267 (4,298) 1,969
General, administrative and other expenses 10,756 - - 10,756
Total expenses 25,710 6,267 (4,298) 27,679
Other income (expense):
Dividend income 665 - - 665
Interest expense (6,335) - - (6,335)
Other income (expenses), net (1,087) - (230) (1,317)
Interest and other income of Consolidated Funds - 61,739 - 61,739
Interest expense of Consolidated Funds - (11,418) - (11,418)
Net realized gain (loss) on investments of Consolidated Funds - (31,013) - (31,013)
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds - 13,616 - 13,616
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds - 1,112 - 1,112
Total other income (expense), net (6,757) 34,036 (230) 27,049
Income before income taxes 18,980 27,769 11,317 58,066
Provision for income taxes 1,953 911 - 2,864
Net income 17,027 26,858 11,317 55,202
Net income attributable to non-controlling interests in Consolidated Funds - - 38,175 38,175
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries (1,134) - - (1,134)
Net income attributable to non-controlling interests in Medley LLC 15,576 - - 15,576
Net income attributable to Medley Management Inc.$ 2,585 $ 26,858 $ (26,858) $ 2,585


For the Three Months Ended September 30, 2014
(unaudited)
Consolidated
Standalone Funds Eliminations Consolidated
(Amounts in thousands)
Revenues:
Management fees$ 17,616 $ - $ (603) $ 17,013
Performance fees 3,395 - (2,430) 965
Other revenues and fees 2,787 - - 2,787
Total revenues 23,798 - (3,033) 20,765
Expenses:
Compensation and benefits 5,677 - - 5,677
Performance fee compensation (921) - - (921)
Consolidated Funds expenses - 899 (603) 296
General, administrative and other expenses 3,458 - - 3,458
Total expenses 8,214 899 (603) 8,510
Other income (expense):
Dividend income 222 - - 222
Interest expense (2,016) - - (2,016)
Other income (expenses), net (87) - (181) (268)
Interest and other income of Consolidated Funds - 17,880 - 17,880
Interest expense of Consolidated Funds - (2,524) - (2,524)
Net realized gain (loss) on investments of Consolidated Funds - (499) - (499)
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds - (2,369) - (2,369)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds - 1,300 - 1,300
Total other income (expense), net (1,881) 13,788 (181) 11,726
Income before income taxes 13,703 12,889 (2,611) 23,981
Provision for income taxes 578 345 - 923
Net income 13,125 12,544 (2,611) 23,058
Net income attributable to non-controlling interests in Consolidated Funds - - 9,933 9,933
Net income attributable to non-controlling interests in consolidated subsidiaries 612 - - 612
Net income attributable to non-controlling interests in Medley LLC 12,135 - - 12,135
Net income attributable to Medley LLC$ 378 $ 12,544 $ (12,544) $ 378



For the Nine Months Ended September 30, 2014
(unaudited)
Consolidated
Standalone Funds Eliminations Consolidated
(Amounts in thousands)
Revenues:
Management fees$ 47,516 $ - $ (4,050) $ 43,466
Performance fees 11,471 - (8,134) 3,337
Other revenues and fees 7,183 - - 7,183
Total revenues 66,170 - (12,184) 53,986
Expenses:
Compensation and benefits 15,010 - - 15,010
Performance fee compensation 2,237 - - 2,237
Consolidated Funds expenses - 5,179 (4,050) 1,129
General, administrative and other expenses 12,821 - - 12,821
Total expenses 30,068 5,179 (4,050) 31,197
Other income (expense):
Dividend income 665 - - 665
Interest expense (3,380) - - (3,380)
Other income (expenses), net (1,707) - 121 (1,586)
Interest and other income of Consolidated Funds - 51,476 - 51,476
Interest expense of Consolidated Funds - (5,586) - (5,586)
Net realized gain (loss) on investments of Consolidated Funds - 789 - 789
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds - (9,540) - (9,540)
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds - 103 - 103
Total other income (expense), net (4,422) 37,242 121 32,941
Income before income taxes 31,680 32,063 (8,013) 55,730
Provision for income taxes 1,026 1,148 - 2,174
Net income 30,654 30,915 (8,013) 53,556
Net income attributable to non-controlling interests in Consolidated Funds - - 22,902 22,902
Net income attributable to non-controlling interests in consolidated subsidiaries 2,172 - - 2,172
Net income attributable to non-controlling interests in Medley LLC 28,104 - - 28,104
Net income attributable to Medley LLC$ 378 $ 30,915 $ (30,915) $ 378


As of September 30, 2015
(unaudited)
Consolidated
Standalone Funds Eliminations Consolidated
(Amounts in thousands)
Assets
Cash and cash equivalents$ 63,754 $ - $ - $ 63,754
Investments, at fair value 11,114 - (230) 10,884
Management fees receivable 15,215 - (415) 14,800
Performance fees receivable 6,493 - - 6,493
Other assets 15,268 - (1,302) 13,966
Assets of Consolidated Funds:
Cash and cash equivalents - 105,122 - 105,122
Investments, at fair value - 778,971 - 778,971
Interest and dividends receivable - 6,124 - 6,124
Other assets - 3,803 - 3,803
Total assets$ 111,844 $ 894,020 $ (1,947) $ 1,003,917
Liabilities and equity
Loans payable$ 102,697 $ - $ - $ 102,697
Accounts payable, accrued expenses and other liabilities 20,739 - - 20,739
Performance fee compensation payable 5,759 - - 5,759
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities - 3,916 (1,717) 2,199
Secured borrowings - 134,047 - 134,047
Total liabilities 129,195 137,963 (1,717) 265,441
Equity
Class A Common Stock 60 - - 60
Class B Common Stock - - - -
Capital deficit (8) - - (8)
Retained earnings 108 - - 108
Total stockholders' equity (deficit), Medley Management Inc. 160 - - 160
Non-controlling interests in Consolidated Funds - - 755,827 755,827
Non-controlling interests in consolidated subsidiaries (708) - - (708)
Non-controlling interests in Medley LLC (16,803) - - (16,803)
Members' equity of consolidated funds - 756,057 (756,057) -
Total (deficit) equity (17,351) 756,057 (230) 738,476
Total liabilities and equity$ 111,844 $ 894,020 $ (1,947) $ 1,003,917


As of December 31, 2014
Consolidated
Standalone Funds Eliminations Consolidated
(Amounts in thousands)
Assets
Cash and cash equivalents$ 87,206 $ - $ - $ 87,206
Investments, at fair value 22,143 - (12,242) 9,901
Management fees receivable 15,173 - - 15,173
Performance fees receivable 5,573 - - 5,573
Other assets 9,230 - - 9,230
Assets of Consolidated Funds:
Cash and cash equivalents - 38,111 - 38,111
Investments, at fair value - 734,870 - 734,870
Interest and dividends receivable - 6,654 - 6,654
Other assets - 5,057 (1,376) 3,681
Total assets$ 139,325 $ 784,692 $ (13,618) $ 910,399
Liabilities and equity
Loans payable$ 103,057 $ - $ - $ 103,057
Accounts payable, accrued expenses and other liabilities 28,959 - (1,376) 27,583
Performance fee compensation payable 11,807 - - 11,807
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities - 5,767 - 5,767
Secured borrowings - 141,135 - 141,135
Total liabilities 143,823 146,902 (1,376) 289,349
Equity
Class A Common Stock 60 - - 60
Class B Common Stock - - - -
Capital deficit (2,384) - - (2,384)
Retained earnings 272 - - 272
Total stockholders' equity (deficit), Medley Management Inc. (2,052) - - (2,052)
Non-controlling interests in Consolidated Funds - - 625,548 625,548
Non-controlling interests in consolidated subsidiaries 1,526 - - 1,526
Non-controlling interests in Medley LLC (3,972) - - (3,972)
Members' equity of consolidated funds - 637,790 (637,790) -
Total (deficit) equity (4,498) 637,790 (12,242) 621,050
Total liabilities and equity$ 139,325 $ 784,692 $ (13,618) $ 910,399


Source:Medley Management Inc