##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED: March 31, 2011
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 Commission File Number: 000-51003
 
 CALAMOS ASSET MANAGEMENT, INC.
 (Exact Name of Registrant as Specified in its Charter)
 
 Delaware
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    32-0122554
(I.R.S. Employer
Identification No.)2020 Calamos Court, Naperville, Illinois
(Address of Principal Executive Offices)
    
    60563
(Zip Code)
 (630) 245-7200
 
 þ o
 o o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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TABLE OF CONTENTS  Item 1. Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 6. ExhibitsEX-10.2EX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share data)
 March 31,
    
    
    December 31,2011
    
    
    2010(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    78,540
    
    
    $
    82,870Receivables:Affiliates and affiliated funds
    
    
    21,316
    
    
    
    19,320Customers
    
    
    11,195
    
    
    
    10,351Investment securities
    
    
    349,151
    
    
    
    314,215Derivative assets
    
    
    1,952
    
    
    
    4,026Partnership investments, net
    
    
    22,678
    
    
    
    41,678Prepaid expenses
    
    
    4,504
    
    
    
    3,087Deferred tax assets, net
    
    
    9,410
    
    
    
    8,757Other current assets
    
    
    2,023
    
    
    
    1,481Total current assets
    
    
    500,769
    
    
    
    485,785Non-current assets:Deferred tax assets, net
    
    
    63,598
    
    
    
    66,960Deferred sales commissions
    
    
    8,017
    
    
    
    8,515Property and equipment, net of accumulated depreciation ($48,661 at
March 31, 2011 and $47,512 at December 31, 2010)
    
    
    25,921
    
    
    
    26,745Other non-current assets
    
    
    1,174
    
    
    
    1,241Total non-current assets
    
    
    98,710
    
    
    
    103,461Total assets
    
    $
    599,479
    
    
    $
    589,246LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIESCurrent liabilities:Distribution fees payable
    
    $
    17,011
    
    
    $
    16,560Accrued compensation and benefits
    
    
    8,769
    
    
    
    21,411Current portion of long-term debt
    
    
    32,885
    
    
    
    32,885Loans payable
    
    
    6,875
    
    
    
    Interest payable
    
    
    1,972
    
    
    
    3,026Derivative liabilities
    
    
    571
    
    
    
    5,918Accrued expenses and other current liabilities
    
    
    5,348
    
    
    
    3,906Total current liabilities
    
    
    73,431
    
    
    
    83,706Long-term liabilities:Long-term debt
    
    
    92,115
    
    
    
    92,115Deferred rent
    
    
    9,465
    
    
    
    9,456Other long-term liabilities
    
    
    428
    
    
    
    577Total long-term liabilities
    
    
    102,008
    
    
    
    102,148Total liabilities
    
    
    175,439
    
    
    
    185,854STOCKHOLDERS EQUITYClass A
Common Stock, $0.01 par value; authorized 600,000,000 shares; 24,124,701
shares issued and 20,124,701 shares outstanding at March 31, 2011; 23,942,317
shares issued and 19,942,317 shares outstanding at December 31, 2010
    
    
    241
    
    
    
    239Class B Common Stock, $0.01 par value; authorized 1,000 shares; 100 shares issued
and outstanding at March 31, 2011 and December 31, 2010
    
    
    0
    
    
    
    0Additional paid-in capital
    
    
    212,914
    
    
    
    212,256Retained earnings
    
    
    62,590
    
    
    
    59,895Accumulated other comprehensive income
    
    
    7,796
    
    
    
    5,841Treasury stock at cost; 4,000,000 shares at March 31, 2011 and December 31, 2010
    
    
    (95,215
    )
    
    
    (95,215
    )Calamos Asset Management, Inc. stockholders equity
    
    
    188,326
    
    
    
    183,016Non-controlling interest in Calamos Holdings LLC (Calamos Interests)
    
    
    235,714
    
    
    
    218,679Non-controlling interest in partnership investments
    
    
    
    
    
    
    1,697Total non-controlling interest
    
    
    235,714
    
    
    
    220,376Total stockholders equity
    
    
    424,040
    
    
    
    403,392Total liabilities and stockholders equity
    
    $
    599,479
    
    
    $
    589,246
  2




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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2011 and 2010
(in thousands, except share data)
(unaudited)
 2011
    
    
    2010REVENUESInvestment management fees
    
    $
    67,608
    
    
    $
    58,570Distribution and underwriting fees
    
    
    22,112
    
    
    
    21,835Other
    
    
    828
    
    
    
    725Total revenues
    
    
    90,548
    
    
    
    81,130EXPENSESEmployee compensation and benefits
    
    
    20,632
    
    
    
    20,132Distribution expenses
    
    
    18,233
    
    
    
    16,790Amortization of deferred sales commissions
    
    
    1,748
    
    
    
    2,566Marketing and sales promotion
    
    
    3,439
    
    
    
    2,732General and administrative
    
    
    9,181
    
    
    
    8,392Total operating expenses
    
    
    53,233
    
    
    
    50,612Operating income
    
    
    37,315
    
    
    
    30,518NON-OPERATING INCOMENet interest expense
    
    
    (1,895
    )
    
    
    (1,844
    )Investment and other income (loss)
    
    
    (1,627
    )
    
    
    8,753Total non-operating income (loss)
    
    
    (3,522
    )
    
    
    6,909Income before income tax provision
    
    
    33,793
    
    
    
    37,427Income tax provision
    
    
    2,907
    
    
    
    3,222Net income
    
    
    30,886
    
    
    
    34,205Net income attributable to non-controlling interest in Calamos Holdings LLC
(Calamos Interests)
    
    
    (26,249
    )
    
    
    (29,387
    )Net income attributable to non-controlling interest in partnership investments
    
    
    (5
    )
    
    
    (7
    )Net income attributable to Calamos Asset Management, Inc.
    
    $
    4,632
    
    
    $
    4,811Earnings per share:Basic
    
    $
    0.23
    
    
    $
    0.24Diluted
    
    $
    0.23
    
    
    $
    0.24Weighted average shares outstanding:Basic
    
    
    20,035,394
    
    
    
    19,820,744Diluted
    
    
    20,478,456
    
    
    
    20,122,940Cash dividends per share
    
    $
    0.095
    
    
    $
    0.075
  3




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CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
Three Months Ended March 31, 2011
(in thousands)
(unaudited)
 Non-controllinginterest inCALAMOS ASSET MANAGEMENT, INC. STOCKHOLDERS
    
    
    Calamos
    
    
    Non-Accumulated
    
    
    
    
    
    
    Holdings
    
    
    controllingAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    LLC
    
    
    interest inCommon
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    (Calamos
    
    
    partnershipStock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Stock
    
    
    Interests)
    
    
    investments
    
    
    TotalBalance at Dec. 31, 2010
    
    $
    239
    
    
    $
    212,256
    
    
    $
    59,895
    
    
    $
    5,841
    
    
    $
    (95,215
    )
    
    $
    218,679
    
    
    $
    1,697
    
    
    $
    403,392Net income
    
    
    
    
    
    
    
    
    
    
    4,632
    
    
    
    
    
    
    
    
    
    
    
    26,249
    
    
    
    5
    
    
    
    30,886Changes in unrealized
gains on available-for-
sale securities, net of
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,112
    
    
    
    
    
    
    
    12,148
    
    
    
    
    
    
    
    14,260Reclassification adjustment for
realized gains on available-for-sale
securities included in income, net of
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (228
    )
    
    
    
    
    
    
    (1,301
    )
    
    
    
    
    
    
    (1,529
    )Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,617Issuance of common stock (182,384 Class
A common shares)
    
    
    2
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cumulative impact of changes in
ownership of Calamos Holdings LLC
    
    
    
    
    
    
    250
    
    
    
    (3
    )
    
    
    71
    
    
    
    
    
    
    
    (1,344
    )
    
    
    
    
    
    
    (1,026
    )Compensation expense recognized under
stock incentive plans
    
    
    
    
    
    
    410
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,470
    
    
    
    
    
    
    
    1,880Dividend equivalent accrued under stock
incentive plans
    
    
    
    
    
    
    
    
    
    
    (22
    )
    
    
    
    
    
    
    
    
    
    
    (77
    )
    
    
    
    
    
    
    (99
    )Liquidation of Calamos Market Neutral
Opportunities Fund LP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,702
    )
    
    
    (1,702
    )Distribution to non-controlling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,110
    )
    
    
    
    
    
    
    (20,110
    )Dividends declared
    
    
    
    
    
    
    
    
    
    
    (1,912
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,912
    )Balance at March 31, 2011
    
    $
    241
    
    
    $
    212,914
    
    
    $
    62,590
    
    
    $
    7,796
    
    
    $
    (95,215
    )
    
    $
    235,714
    
    
    $
    
    
    
    $
    424,040
  4




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CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2011 and 2010
(in thousands)
(unaudited)
 2011
    
    
    2010Cash and cash equivalents at beginning of period
    
    $
    82,870
    
    
    $
    145,431Cash flows from operating activities:Net income
    
    
    30,886
    
    
    
    34,205Adjustments to reconcile net income to net cash provided by
operating activities:Amortization of deferred sales commissions
    
    
    1,748
    
    
    
    2,566Other depreciation and amortization
    
    
    1,480
    
    
    
    2,457Deferred rent
    
    
    9
    
    
    
    33Change in unrealized appreciation on CFS securities,
derivative assets, derivative liabilities and partnership
investments, net
    
    
    (3,274
    )
    
    
    (601
    )Net realized (gain) loss on sale of investment
securities, derivative assets and derivative liabilities
    
    
    5,769
    
    
    
    (7,104
    )Deferred taxes
    
    
    1,565
    
    
    
    1,995Stock based compensation
    
    
    1,880
    
    
    
    2,381Employee taxes paid on vesting under stock incentive plans
    
    
    (1,031
    )
    
    
    (1,017
    )Increase in assets:Receivables:Affiliates and affiliated funds, net
    
    
    (1,996
    )
    
    
    (1,245
    )Customers
    
    
    (844
    )
    
    
    (583
    )Deferred sales commissions
    
    
    (1,250
    )
    
    
    (1,802
    )Other assets
    
    
    (1,922
    )
    
    
    (687
    )Increase (decrease) in liabilities:Distribution fees payable
    
    
    451
    
    
    
    858Accrued compensation and benefits
    
    
    (12,642
    )
    
    
    (9,140
    )Accrued expenses and other liabilities
    
    
    137
    
    
    
    (1,433
    )Net cash provided by operating activities
    
    
    20,966
    
    
    
    20,883Cash flows used in investing activities:Net additions to property and equipment
    
    
    (626
    )
    
    
    (261
    )Purchase of investment securities
    
    
    (30,823
    )
    
    
    (119,657
    )Proceeds from sale of investment securities
    
    
    12,106
    
    
    
    93,855Net purchases of derivatives
    
    
    (9,381
    )
    
    
    (4,097
    )Net changes in partnership investments
    
    
    18,571
    
    
    
    (95
    )Net cash used in investing activities
    
    
    (10,153
    )
    
    
    (30,255
    )Cash flows used in financing activities:Net proceeds from margin loans
    
    
    6,875
    
    
    
    Deferred tax benefit on vesting under stock incentive plans
    
    
    4
    
    
    
    57Distributions paid to non-controlling interests
    
    
    (20,110
    )
    
    
    (19,633
    )Cash dividends paid to common stockholders
    
    
    (1,912
    )
    
    
    (1,481
    )Net cash used in financing activities
    
    
    (15,143
    )
    
    
    (21,057
    )Net decrease in cash
    
    
    (4,330
    )
    
    
    (30,429
    )Cash and cash equivalents at end of period
    
    $
    78,540
    
    
    $
    115,002Supplemental disclosure of cash flow information:Cash paid for:Income taxes, net
    
    $
    1,266
    
    
    $
    1,050Interest
    
    $
    2,977
    
    
    $
    2,977
  5




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 (1) Organization and Description of Business
  
 
 (1)
    
    Represents combined economic interest of Calamos Family Partners, Inc. and John P.
Calamos, Sr. who is also a member of Calamos Holdings LLC. 6




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
  (2) Basis of Presentation
       7




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 (3) Investment Securities
  March 31, 2011Unrealized
    
    
    Unrealized(in thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueAvailable-for-sale securities:Mutual FundsEquity
    
    $
    154,996
    
    
    $
    42,843
    
    
    $
    (1
    )
    
    $
    197,838Fixed income
    
    
    84,460
    
    
    
    475
    
    
    
    (110
    )
    
    
    84,825Low-volatility equity
    
    
    45,185
    
    
    
    15,261
    
    
    
    
    
    
    
    60,446Other
    
    
    1,602
    
    
    
    75
    
    
    
    (202
    )
    
    
    1,475Total available-for-sale securities
    
    $
    286,243
    
    
    $
    58,654
    
    
    $
    (313
    )
    
    $
    344,584CFS securities:Mutual FundsEquity
    
    $
    3,004
    
    
    $
    1,426
    
    
    $
    
    
    
    $
    4,430Common Stock
    
    
    56
    
    
    
    81
    
    
    
    
    
    
    
    137Total CFS securities
    
    $
    3,060
    
    
    $
    1,507
    
    
    $
    
    
    
    $
    4,567Total investment securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    349,151
 8




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 December 31, 2010Unrealized
    
    
    Unrealized(in thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueAvailable-for-sale securities:Mutual FundsEquity
    
    $
    129,280
    
    
    $
    32,483
    
    
    $
    (3
    )
    
    $
    161,760Fixed income
    
    
    89,712
    
    
    
    18
    
    
    
    (425
    )
    
    
    89,305Low-volatility equity
    
    
    45,219
    
    
    
    12,580
    
    
    
    (1
    )
    
    
    57,798Other
    
    
    1,579
    
    
    
    51
    
    
    
    (242
    )
    
    
    1,388Total available-for-sale securities
    
    $
    265,790
    
    
    $
    45,132
    
    
    $
    (671
    )
    
    $
    310,251CFS securities:Mutual FundsEquity
    
    $
    3,004
    
    
    $
    834
    
    
    $
    
    
    
    $
    3,838Common Stock
    
    
    56
    
    
    
    70
    
    
    
    
    
    
    
    126Total CFS securities
    
    $
    3,060
    
    
    $
    904
    
    
    $
    
    
    
    $
    3,964Total investment securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    314,215
     Three Months Ended March 31,(in thousands)
    
    2011
    
    
    2010Available-for-sale securities:Proceeds from sale
    
    $
    12,106
    
    
    $
    93,855Gross realized gains on sales
    
    
    1,737
    
    
    
    10,229Unrealized gains
    
    
    15,544
    
    
    
    5,308Net gains reclassified out of
accumulated other comprehensive
income to earnings
    
    
    1,665
    
    
    
    8,638CFS securities:Unrealized gains
    
    
    603
    
    
    
    581
 9




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 (4) Derivative Assets and Liabilities
   (5) Partnership Investments
  March 31,
    
    
    December 31,(in thousands)
    
    2011
    
    
    2010Calamos Market Neutral Opportunities Fund LP:Deposits with broker
    
    $
    
    
    
    $
    11,128Securities owned
    
    
    
    
    
    
    16,365Securities sold but not yet purchased
    
    
    
    
    
    
    (7,175
    )Accrued expenses and other current liabilities
    
    
    
    
    
    
    (62
    )Other current assets
    
    
    
    
    
    
    69Calamos Market Neutral Opportunities Fund LP, net
    
    
    
    
    
    
    20,325Investment in other partnerships
    
    
    22,678
    
    
    
    21,353Partnership investments, net
    
    $
    22,678
    
    
    $
    41,678
   10




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 (6) Fair Value Measurements
    Fair Value Measurements UsingQuoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    OtherIdentical Assets
    
    
    Observable(in thousands)
    
    March 31,
    
    
    and Liabilities
    
    
    InputsDescription
    
    2011
    
    
    (Level 1)
    
    
    (Level 2)Cash and cash equivalentsMoney market funds
    
    $
    33,982
    
    
    $
    33,982
    
    
    $
    Investment securities (Note 3)Mutual FundsEquity
    
    
    202,268
    
    
    
    202,268
    
    
    
    Fixed income
    
    
    84,825
    
    
    
    84,825
    
    
    
    Low-volatility equity
    
    
    60,446
    
    
    
    60,446
    
    
    
    Other
    
    
    1,475
    
    
    
    1,475
    
    
    
    Total mutual funds
    
    
    349,014
    
    
    
    349,014
    
    
    
    Common stock
    
    
    137
    
    
    
    137
    
    
    
    349,151
    
    
    
    349,151
    
    
    
    Derivative assets (Note 4)Exchange-traded put option contracts
    
    
    1,952
    
    
    
    1,952
    
    
    
    Derivative liabilities (Note 4)Exchange-traded call option contracts
    
    
    (571
    )
    
    
    (571
    )
    
    
    Total
    
    $
    384,514
    
    
    $
    384,514
    
    
    $
    
 11




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 Fair Value Measurements UsingQuoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    OtherIdentical Assets
    
    
    Observable(in thousands)
    
    December 31,
    
    
    and Liabilities
    
    
    InputsDescription
    
    2010
    
    
    (Level 1)
    
    
    (Level 2)Cash and cash equivalentsMoney market funds
    
    $
    35,392
    
    
    $
    35,392
    
    
    $
    Investment securities (Note 3)Mutual FundsEquity
    
    
    165,598
    
    
    
    165,598
    
    
    
    Fixed income
    
    
    89,305
    
    
    
    89,305
    
    
    
    Low-volatility equity
    
    
    57,798
    
    
    
    57,798
    
    
    
    Other
    
    
    1,388
    
    
    
    1,388
    
    
    
    Total mutual funds
    
    
    314,089
    
    
    
    314,089
    
    
    
    Common stock
    
    
    126
    
    
    
    126
    
    
    
    314,215
    
    
    
    314,215
    
    
    
    Derivative assets (Note 4)Exchange-traded put option contracts
    
    
    4,026
    
    
    
    4,026
    
    
    
    Derivative liabilities (Note 4)Exchange-traded call option contracts
    
    
    (5,918
    )
    
    
    (5,918
    )
    
    
    Securities and derivatives owned by the
Partnership (Note 5)Convertible bonds
    
    
    16,140
    
    
    
    
    
    
    
    16,140Purchased options
    
    
    145
    
    
    
    145
    
    
    
    Common stocks
    
    
    80
    
    
    
    80
    
    
    
    16,365
    
    
    
    225
    
    
    
    16,140Securities sold but not yet purchased
of the Partnership (Note 5)Common stocks
    
    
    (7,165
    )
    
    
    (7,165
    )
    
    
    Exchange-traded call option contracts
    
    
    (10
    )
    
    
    (10
    )
    
    
    (7,175
    )
    
    
    (7,175
    )
    
    
    Total
    
    $
    356,905
    
    
    $
    340,765
    
    
    $
    16,140
 (7) Fair Value of Financial Instruments
  12




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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
  (8) Loans Payable
  (9) Stock Based Compensation
     (10) Non-operating Income (Loss)
  Three Months EndedMarch 31,(in thousands)
    
    2011
    
    
    2010Interest income
    
    $
    69
    
    
    $
    106Interest expense
    
    
    (1,964
    )
    
    
    (1,950
    )Net interest expense
    
    
    (1,895
    )
    
    
    (1,844
    )Investment income (loss)
    
    
    (1,664
    )
    
    
    8,602Miscellaneous other income
    
    
    37
    
    
    
    151Investment and other income (loss)
    
    
    (1,627
    )
    
    
    8,753Non-operating income (loss)
    
    
    (3,522
    )
    
    
    6,909
 13




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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 (11) Income Taxes
  Three Months EndedMarch 31,(in thousands)
    
    2011
    
    
    2010Income tax provision
    
    $
    2,907
    
    
    $
    3,222Income tax provision attributable to
non-controlling interest in Calamos Holdings
LLC
    
    
    (153
    )
    
    
    (321
    )Income tax provision attributable
to CAM
    
    
    2,754
    
    
    
    2,901Net income attributable to CAM
    
    
    4,632
    
    
    
    4,811Income before taxes attributable to CAM
    
    $
    7,386
    
    
    $
    7,712CAMs effective income tax rate
    
    
    37.3
    %
    
    
    37.6
    %
 (12) Earnings Per Share
  Three Months EndedMarch 31,(in thousands, except per share data)
    
    2011
    
    
    2010Earnings per share  basicEarnings available to common shareholders
    
    $
    4,632
    
    
    $
    4,811Weighted average shares outstanding
    
    
    20,035
    
    
    
    19,821Earnings per share  basic
    
    $
    0.23
    
    
    $
    0.24Earnings per share  dilutedEarnings available to common shareholders
    
    $
    4,632
    
    
    $
    4,811Weighted average shares outstanding
    
    
    20,035
    
    
    
    19,821Dilutive impact of restricted stock units
    
    
    443
    
    
    
    302Weighted average diluted shares outstanding
    
    
    20,478
    
    
    
    20,123Earnings per share  diluted
    
    $
    0.23
    
    
    $
    0.24
    14




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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
    Three Months EndedMarch 31,2011
    
    
    2010Exchange of Calamos Interests ownership
interest in Holdings for shares of Class A
common stock
    
    
    51,451,838
    
    
    
    52,506,228Restricted stock units
    
    
    
    
    
    
    44,083Stock options
    
    
    2,368,245
    
    
    
    2,452,653Total
    
    
    53,820,083
    
    
    
    55,002,964
  15




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
   March 31,(in millions)
    
    2011
    
    
    2010Investment CompaniesOpen-end mutual funds
    
    $
    23,575
    
    
    $
    19,959Closed-end funds
    
    
    5,506
    
    
    
    5,081Total investment companies
    
    
    29,081
    
    
    
    25,040Separate AccountsInstitutional accounts
    
    
    6,179
    
    
    
    5,047Managed accounts
    
    
    2,701
    
    
    
    2,876Total separate accounts
    
    
    8,880
    
    
    
    7,923Total Assets Under Management
    
    $
    37,961
    
    
    $
    32,963
   16




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##### Table of Contents



Operating Results
 Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010
 Assets Under Management
  Three Months Ended March 31,
    
    
    Change( in millions)
    
    2011
    
    
    2010
    
    
    Amount
    
    
    PercentTotal Investment CompaniesBeginning assets under management
    
    $
    27,352
    
    
    $
    24,480
    
    
    $
    2,872
    
    
    
    12
    %Net purchases (redemptions)
    
    
    346
    
    
    
    (32
    )
    
    
    378
    
    
    
    *Market appreciation
    
    
    1,383
    
    
    
    592
    
    
    
    791
    
    
    
    134Ending assets under management
    
    
    29,081
    
    
    
    25,040
    
    
    
    4,041
    
    
    
    16Average assets under management
    
    
    28,367
    
    
    
    24,347
    
    
    
    4,020
    
    
    
    17InstitutionalBeginning assets under management
    
    
    5,559
    
    
    
    4,619
    
    
    
    940
    
    
    
    20
    %Net inflows
    
    
    254
    
    
    
    259
    
    
    
    (5
    )
    
    
    2Market appreciation
    
    
    366
    
    
    
    169
    
    
    
    197
    
    
    
    117Ending assets under management
    
    
    6,179
    
    
    
    5,047
    
    
    
    1,132
    
    
    
    22Average assets under management
    
    
    5,815
    
    
    
    4,722
    
    
    
    1,093
    
    
    
    23Managed AccountsBeginning assets under management
    
    
    2,503
    
    
    
    3,615
    
    
    
    (1,112
    )
    
    
    31
    %Net inflows (outflows)
    
    
    18
    
    
    
    (774
    )
    
    
    792
    
    
    
    *Market appreciation
    
    
    180
    
    
    
    35
    
    
    
    145
    
    
    
    414Ending assets under management
    
    
    2,701
    
    
    
    2,876
    
    
    
    (175
    )
    
    
    6Average assets under management
    
    
    2,598
    
    
    
    3,279
    
    
    
    (681
    )
    
    
    21Total Assets Under ManagementBeginning assets under management
    
    
    35,414
    
    
    
    32,714
    
    
    
    2,700
    
    
    
    8
    %Net inflows (outflows)
    
    
    618
    
    
    
    (547
    )
    
    
    1,165
    
    
    
    *Market appreciation
    
    
    1,929
    
    
    
    796
    
    
    
    1,133
    
    
    
    142Ending assets under management
    
    
    37,961
    
    
    
    32,963
    
    
    
    4,998
    
    
    
    15Average assets under management
    
    $
    36,780
    
    
    $
    32,348
    
    
    $
    4,432
    
    
    
    14
 
 *
    
    Not meaningful.   17




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##### Table of Contents



Financial Overview
 Three Months Ended March 31,
    
    Change(in thousands, except margin)
    
    2011
    
    2010
    
    Amount
    
    PercentOperating income
    
    $
    37,315
    
    
    $
    30,518
    
    
    $
    6,797
    
    
    
    22
    %Operating margin
    
    
    41.2
    %
    
    
    37.6
    %
    
    
    3.6
    %
    
    
    10
    %Net income attributable to Calamos
Asset Management, Inc.
    
    $
    4,632
    
    
    $
    4,811
    
    
    $
    (179
    )
    
    
    (4
    )%
   Three Months Ended March 31,(in thousands)
    
    2011
    
    
    2010Distribution and underwriting fees
    
    $
    22,112
    
    
    $
    21,835Distribution expenses
    
    
    (18,233
    )
    
    
    (16,790
    )Amortization of deferred sales commissions
    
    
    (1,748
    )
    
    
    (2,566
    )Net distribution fees
    
    $
    2,131
    
    
    $
    2,479Net distribution fee margin
    
    
    10
    %
    
    
    11
    %
  18




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##### Table of Contents



Revenues
  Three Months Ended March 31,
    
    
    Change(in thousands)
    
    2011
    
    
    2010
    
    
    Amount
    
    
    PercentInvestment management fees
    
    $
    67,608
    
    
    $
    58,570
    
    
    $
    9,038
    
    
    
    15
    %Distribution and underwriting fees
    
    
    22,112
    
    
    
    21,835
    
    
    
    277
    
    
    
    1Other
    
    
    828
    
    
    
    725
    
    
    
    103
    
    
    
    14Total revenues
    
    $
    90,548
    
    
    $
    81,130
    
    
    $
    9,418
    
    
    
    12
    %
   Operating Expenses
  Three Months Ended March 31,
    
    
    Change(in thousands)
    
    2011
    
    
    2010
    
    
    Amount
    
    
    PercentEmployee compensation and benefits
    
    $
    20,632
    
    
    $
    20,132
    
    
    $
    500
    
    
    
    2
    %Distribution expenses
    
    
    18,233
    
    
    
    16,790
    
    
    
    1,443
    
    
    
    9Amortization of deferred sales
commissions
    
    
    1,748
    
    
    
    2,566
    
    
    
    (818
    )
    
    
    (32
    )Marketing and sales promotion
    
    
    3,439
    
    
    
    2,732
    
    
    
    707
    
    
    
    26General and administrative
    
    
    9,181
    
    
    
    8,392
    
    
    
    789
    
    
    
    9Total operating expenses
    
    $
    53,233
    
    
    $
    50,612
    
    
    $
    2,621
    
    
    
    5
    %
  19




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##### Table of Contents



Non-operating Activities, Net of Non-controlling Interest in Partnership Investments
  Three Months Ended March 31,(in thousands)
    
    2011
    
    
    2010
    
    
    ChangeInterest income
    
    $
    69
    
    
    $
    106
    
    
    $
    (37
    )Interest expense
    
    
    (1,964
    )
    
    
    (1,950
    )
    
    
    (14
    )Net interest expense
    
    
    (1,895
    )
    
    
    (1,844
    )
    
    
    (51
    )Investment income (loss)
    
    
    (1,664
    )
    
    
    8,602
    
    
    
    (10,266
    )Miscellaneous other income
    
    
    37
    
    
    
    151
    
    
    
    (114
    )Investment and other income (loss)
    
    
    (1,627
    )
    
    
    8,753
    
    
    
    (10,380
    )Non-operating income
    
    
    (3,522
    )
    
    
    6,909
    
    
    
    (10,431
    )Net income attributable to non-controlling
interest in partnership investments
    
    
    (5
    )
    
    
    (7
    )
    
    
    2Non-operating income (loss), net of non-
controlling interest in partnerships
    
    $
    (3,527
    )
    
    $
    6,902
    
    
    $
    (10,429
    )
   20




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##### Table of Contents



Three Months Ended March 31, 2011Change inAccumulatedOtherNon-Operating
    
    
    Comprehensive(in thousands)
    
    Income
    
    
    Income
    
    
    TotalMutual funds and common stock
    
    $
    3,160
    
    
    $
    13,879
    
    
    $
    17,039Partnership investments
    
    
    1,284
    
    
    
    
    
    
    
    1,284Equity option contracts
    
    
    (6,108
    )
    
    
    
    
    
    
    (6,108
    )Investment income
    
    
    (1,664
    )
    
    
    13,879
    
    
    
    12,215Non-controlling interest in
partnership investments
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )Investment portfolio results
    
    $
    (1,669
    )
    
    
    
    
    
    $
    12,210Less: Non-controlling interest in
Calamos Holdings LLC
    
    
    
    
    
    
    (10,776
    )Deferred income taxes
    
    
    
    
    
    
    (1,148
    )Change in accumulated other
comprehensive income
    
    
    
    
    
    $
    1,955
  Income Taxes
  Net Income
    Liquidity and Capital Resources
  21




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##### Table of Contents



Increase(in thousands)
    
    March 31, 2011
    
    
    December 31, 2010
    
    
    (Decrease)Cash and cash equivalents
    
    $
    78,540
    
    
    $
    82,870
    
    
    $
    (4,330
    )Investment securities
    
    
    349,151
    
    
    
    314,215
    
    
    
    34,936Derivatives, net
    
    
    1,381
    
    
    
    (1,892
    )
    
    
    3,273Partnership investments, net of non-controlling
interests
    
    
    22,678
    
    
    
    39,981
    
    
    
    (17,303
    )Total corporate investment portfolio
    
    $
    451,750
    
    
    $
    435,174
    
    
    $
    16,576
  Results as ofCovenant
    
    March 31, 2011EBITDA/interest expense  not less than 3.0
    
    
    19.05Debt/EBITDA  not more than 3.0
    
    
    0.89Investment coverage ratio  not less than 1.175
    
    
    3.03Net worth  not less than $160 million
    
    $302 million
  March 31,
    
    
    December 31,(in thousands)
    
    2011
    
    
    2010Statements of financial condition data:Cash and cash equivalents
    
    $
    78,540
    
    
    $
    82,870Receivables
    
    
    32,511
    
    
    
    29,671Investment securities and derivatives, net
    
    
    350,532
    
    
    
    312,323Partnership investments, net
    
    
    22,678
    
    
    
    39,981Deferred tax assets, net
    
    
    73,008
    
    
    
    75,717Deferred sales commissions
    
    
    8,017
    
    
    
    8,515Long-term debt, including current portion
    
    
    125,000
    
    
    
    125,000Loan payable
    
    
    6,875
    
    
    
    
  March 31,(in thousands)
    
    2011
    
    
    2010Cash flow data:Net cash provided by operating activities
    
    $
    20,966
    
    
    $
    20,883Net cash used in investing
activities
    
    
    (10,153
    )
    
    
    (30,255
    )Net cash used in financing activities
    
    
    (15,143
    )
    
    
    (21,057
    )
  22




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##### Table of Contents



Recently Issued Accounting Pronouncements
  Critical Accounting Policies
  Other Information
    23




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##### Table of Contents



No Recognition of CAMs
    
    
    Full Recognition of CAMsOther Assets
    
    
    Other AssetsOwnership in
    
    
    
    
    
    
    Ownership inCalamos
    
    
    Other
    
    
    Calamos
    
    
    Other( in thousands, except share data)
    
    Holdings LLC
    
    
    Assets
    
    
    Holdings LLC
    
    
    AssetsDivide:Discounted value of CAMs Other Assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    95,056Class A shares outstanding at March 31, 2011
    
    
    
    
    
    
    20,124,701
    
    
    
    
    
    
    
    20,124,701Discounted value per share of CAMs
Other Assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4.72Multiply:Share price attributed to assets
    
    $
    16.59
    
    
    
    
    
    
    $
    11.87
    
    
    $
    4.72Class A shares outstanding at March 31, 2011
    
    
    20,124,701
    
    
    
    20,124,701
    
    
    
    20,124,701
    
    
    
    20,124,701Market capitalization of outstanding shares
    
    $
    333,869
    
    
    
    
    
    
    $
    238,880
    
    
    $
    95,056Divide by:CAMs percentage ownership
    
    
    21.9
    %
    
    
    100
    %
    
    
    21.9
    %
    
    
    100
    %Market capitalization associated with CAMs assets
    
    $
    1,524,516
    
    
    
    
    
    
    $
    1,090,776
    
    
    $
    95,056Fully consolidated market capitalization
    
    
    $1,524,516



    
    
    
    $1,185,832
 24




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##### Table of Contents



No Recognition of CAMs
    
    
    Full Recognition of CAMs(in thousands, except share data)
    
    Other Assets
    
    
    Other AssetsMarket capitalization associated with
CAMs investment in Calamos Holdings
(see table above)
    
    $
    1,524,516
    
    
    $
    1,090,776Multiply by:Calamos Interests ownership in Calamos
Holdings LLC(1)
    
    
    78.1
    %
    
    
    78.1
    %Calamos Interests value
exchanged for Class A common
stock
    
    $
    1,193,344
    
    
    
    853,586Divide by:Share price of CAM Class A common stock
    
    $
    16.59
    
    
    $
    16.59Shares issued to the Calamos
Interests upon Exchange
    
    
    71,931,522
    
    
    
    51,451,838
 
 (1)
    
    The ownership percentage presented in the table has been approximated for presentation
purposes yet the values presented are derived from the precise ownership percentage. Forward-Looking Information
     25




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##### Table of Contents



Risk Factors
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
   26




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
    27




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##### Table of Contents



Item 5. Other Information
  28




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##### Table of Contents



Item 6. Exhibits
 3(i)
    
    Second Amended and Restated Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrants Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 13, 2009).3(ii)
    
    Second Amended and Restated By-Laws of the Registrant (incorporated by reference to Exhibit
3.2 to the Registrants Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 13, 2009).4.1
    
    Stockholders Agreement among John P. Calamos, Sr., Nick P. Calamos and John P. Calamos,
Jr., certain trusts controlled by them, Calamos Family Partners, Inc. and the Registrant
(incorporated by reference to Exhibit 4.1 to the Registrants Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission on December 3, 2004).4.2
    
    Registration Rights Agreement between Calamos Family Partners, Inc., John P. Calamos, Sr.
and the Registrant (incorporated by reference to Exhibit 4.2 to the Registrants Quarterly
Report on Form 10-Q filed with the Securities and Exchange Commission on December 3, 2004).10.1
    
    Calamos Asset Management, Inc. Incentive Compensation Plan, as amended effective May 22,
2009 (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form
8-K filed with the Securities and Exchange Commission on May 27, 2009).10.2
    
    Transition Agreement dated March 1, 2011 between Calamos Advisors LLC and Cristina Wasiak.31.1
    
    Certification pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act.31.2
    
    Certification pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act.32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 29




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##### Table of Contents



SIGNATURES
  CALAMOS ASSET MANAGEMENT, INC.
(Registrant)Date:  May 10, 2011
    By:

/s/
Nimish S. BhattSVP, Interim Chief Financial
Officer
and Director of Operations 30