##### 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:
 June 30, 2008
 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 þ o o
  o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONItem 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 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 4. Submission of Matters to a Vote of Security HoldersItem 6. ExhibitsSIGNATURESEX-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)
 June 30,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETS:Current assetsCash and cash equivalents
    
    $
    205,664
    
    
    $
    108,441Receivables:Affiliates and affiliated funds
    
    
    24,222
    
    
    
    27,641Customers
    
    
    9,918
    
    
    
    11,699Investment securities
    
    
    404,035
    
    
    
    535,476Partnership investments and offshore funds
    
    
    349,556
    
    
    
    353,004Prepaid expenses
    
    
    4,225
    
    
    
    3,139Deferred tax assets, net
    
    
    9,066
    
    
    
    6,926Other assets
    
    
    2,782
    
    
    
    2,206Total current assets
    
    
    1,009,468
    
    
    
    1,048,532Non-current assetsDeferred tax assets, net
    
    
    77,605
    
    
    
    83,358Deferred sales commissions
    
    
    27,160
    
    
    
    34,076Property and equipment, net of accumulated depreciation ($26,944
at 6/30/08 and $21,841 at 12/31/07)
    
    
    46,821
    
    
    
    48,420Other non-current assets
    
    
    3,226
    
    
    
    3,286Total non-current assets
    
    
    154,812
    
    
    
    169,140Total assets
    
    
    1,164,280
    
    
    
    1,217,672LIABILITIES AND STOCKHOLDERS EQUITY:Current liabilitiesAccounts payable:Brokers
    
    
    17,854
    
    
    
    19,950Affiliates and affiliated funds
    
    
    302
    
    
    
    372Accrued compensation and benefits
    
    
    9,115
    
    
    
    26,462Interest payable
    
    
    12,452
    
    
    
    12,636Accrued expenses and other current liabilities
    
    
    5,933
    
    
    
    9,257Total current liabilities
    
    
    45,656
    
    
    
    68,677Long-term liabilitiesLong-term debt
    
    
    525,000
    
    
    
    525,000Other long-term liabilities
    
    
    10,023
    
    
    
    8,876Total long-term liabilities
    
    
    535,023
    
    
    
    533,876Total liabilities
    
    
    580,679
    
    
    
    602,553Minority interest in partnership investments and offshore funds
    
    
    108,324
    
    
    
    49,177Minority interest in Calamos Holdings LLC
    
    
    283,284
    
    
    
    352,205Stockholders equity:Class A Common Stock, $0.01 par value; authorized 600,000,000 shares;
23,453,073 shares issued and 19,453,073 shares outstanding at June
30, 2008; 23,324,082 shares issued and 20,871,982 shares outstanding
at December 31, 2007
    
    
    235
    
    
    
    233Class B Common Stock, $0.01 par value; authorized 1,000 shares; issued
and outstanding 100 shares
    
    
    0
    
    
    
    0Additional paid-in capital
    
    
    222,562
    
    
    
    198,924Retained earnings
    
    
    68,083
    
    
    
    70,102Accumulated other comprehensive income (loss)
    
    
    (3,672
    )
    
    
    5,081Treasury stock at cost; 4,000,000 shares at June 30, 2008 and
2,452,100 shares at December 31, 2007
    
    
    (95,215
    )
    
    
    (60,603
    )Total stockholders equity
    
    
    191,993
    
    
    
    213,737Total liabilities, minority interest and stockholders equity
    
    $
    1,164,280
    
    
    $
    1,217,672
  -2-




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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Six Months Ended June 30, 2008 and 2007
(in thousands, except share data)
(unaudited)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:Investment management fees
    
    $
    78,449
    
    
    $
    78,313
    
    
    $
    155,723
    
    
    $
    156,788Distribution and underwriting fees
    
    
    32,818
    
    
    
    35,560
    
    
    
    65,288
    
    
    
    71,741Other
    
    
    971
    
    
    
    894
    
    
    
    1,920
    
    
    
    1,938Total revenues
    
    
    112,238
    
    
    
    114,767
    
    
    
    222,931
    
    
    
    230,467Expenses:Employee compensation and benefits
    
    
    19,994
    
    
    
    22,512
    
    
    
    43,454
    
    
    
    43,278Distribution and underwriting expense
    
    
    24,875
    
    
    
    25,196
    
    
    
    49,033
    
    
    
    50,223Amortization of deferred sales commissions
    
    
    5,966
    
    
    
    7,278
    
    
    
    12,086
    
    
    
    15,156Marketing and sales promotion
    
    
    3,035
    
    
    
    29,731
    
    
    
    6,071
    
    
    
    33,213General and administrative
    
    
    9,257
    
    
    
    9,118
    
    
    
    18,747
    
    
    
    17,510Total operating expenses
    
    
    63,127
    
    
    
    93,835
    
    
    
    129,391
    
    
    
    159,380Operating income
    
    
    49,111
    
    
    
    20,932
    
    
    
    93,540
    
    
    
    71,087Other income (expense):Net interest income (expense)
    
    
    (7,668
    )
    
    
    1,495
    
    
    
    (14,922
    )
    
    
    3,489Investment and other income (loss)
    
    
    23,955
    
    
    
    7,378
    
    
    
    (22,819
    )
    
    
    7,770Minority interest in partnership
investments and offshore funds
    
    
    810
    
    
    
    (3,020
    )
    
    
    13,269
    
    
    
    (2,269
    )Total other income (expense), net
    
    
    17,097
    
    
    
    5,853
    
    
    
    (24,472
    )
    
    
    8,990Income before minority interest in
Calamos Holdings LLC and income taxes
    
    
    66,208
    
    
    
    26,785
    
    
    
    69,068
    
    
    
    80,077Minority interest in Calamos Holdings LLC
    
    
    52,477
    
    
    
    20,367
    
    
    
    54,585
    
    
    
    61,075Income before income taxes
    
    
    13,731
    
    
    
    6,418
    
    
    
    14,483
    
    
    
    19,002Income taxes
    
    
    11,835
    
    
    
    2,613
    
    
    
    12,138
    
    
    
    7,663Net income
    
    $
    1,896
    
    
    $
    3,805
    
    
    $
    2,345
    
    
    $
    11,339Earnings per shareBasic
    
    $
    0.10
    
    
    $
    0.17
    
    
    $
    0.12
    
    
    $
    0.49Diluted
    
    $
    0.09
    
    
    $
    0.16
    
    
    $
    0.11
    
    
    $
    0.48Weighted average shares outstandingBasic
    
    
    19,742,736
    
    
    
    22,846,901
    
    
    
    20,039,887
    
    
    
    23,084,223Diluted
    
    
    97,051,708
    
    
    
    100,289,411
    
    
    
    97,331,973
    
    
    
    100,525,789Cash dividends per share
    
    $
    0.11
    
    
    $
    0.11
    
    
    $
    0.22
    
    
    $
    0.22
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CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
Six Months Ended June 30, 2008
(in thousands)
(unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    TreasuryStock
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Stock
    
    
    TotalBalance at December 31, 2007
    
    $
    233
    
    
    $
    198,924
    
    
    $
    70,102
    
    
    $
    5,081
    
    
    $
    (60,603
    )
    
    $
    213,737Net income
    
    
    
    
    
    
    
    
    
    
    2,345
    
    
    
    
    
    
    
    
    
    
    
    2,345Changes in unrealized gains
(losses) on available-for-sale
securities, net of minority interest
and income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,942
    )
    
    
    
    
    
    
    (5,942
    )Less: reclassification adjustment
for realized gains on available-for-sale securities included in net
income, net of minority interest
and income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,569
    )
    
    
    
    
    
    
    (2,569
    )Total comprehensive
income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,166
    )Issuance of common stock (128,991
Class A common shares)
    
    
    2
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repurchase of common stock
(1,547,900 Class A common shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34,612
    )
    
    
    (34,612
    )Sale of Calamos Holdings LLC
membership units (1,547,900 units)
    
    
    
    
    
    
    27,469
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,469Cumulative impact of changes in
ownership of Calamos Holdings LLC
    
    
    
    
    
    
    (4,561
    )
    
    
    15
    
    
    
    (242
    )
    
    
    
    
    
    
    (4,788
    )Compensation expense recognized
under stock incentive plans, net of
minority interest
    
    
    
    
    
    
    732
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    732Dividends declared
    
    
    
    
    
    
    
    
    
    
    (4,379
    )
    
    
    
    
    
    
    
    
    
    
    (4,379
    )Balance at June 30, 2008
    
    $
    235
    
    
    $
    222,562
    
    
    $
    68,083
    
    
    $
    (3,672
    )
    
    $
    (95,215
    )
    
    $
    191,993
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CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2008 and 2007
(in thousands)
(unaudited)
 2008
    
    
    2007Cash and cash equivalents at beginning of year
    
    $
    108,441
    
    
    $
    328,841Cash flows from operating activities:Net income
    
    
    2,345
    
    
    
    11,339Adjustments to reconcile net income to net cash provided by
operating activities:Minority interest in Calamos Holdings LLC
    
    
    54,585
    
    
    
    61,075Minority interest in partnership investments and offshore funds
    
    
    (13,269
    )
    
    
    2,269Amortization of deferred sales commissions
    
    
    12,086
    
    
    
    15,156Other depreciation and amortization
    
    
    5,300
    
    
    
    4,024Unrealized depreciation (appreciation) on CFS securities,
partnership investments and offshore funds
    
    
    49,123
    
    
    
    (5,305
    )Net realized gain on sale of investment securities
    
    
    (20,663
    )
    
    
    Deferred taxes
    
    
    8,414
    
    
    
    2,872Stock-based compensation
    
    
    3,561
    
    
    
    3,478Employee taxes paid on vesting under stock incentive plans
    
    
    (1,715
    )
    
    
    (1,853
    )(Increase) decrease in assets:Accounts receivable:Affiliates and affiliated mutual funds
    
    
    3,419
    
    
    
    1,738Customers
    
    
    1,781
    
    
    
    1,086Deferred sales commissions
    
    
    (5,170
    )
    
    
    (5,472
    )Other assets
    
    
    (2,088
    )
    
    
    (4,946
    )Increase (decrease) in liabilities:Accounts payable
    
    
    (2,166
    )
    
    
    91Accrued compensation and benefits
    
    
    (17,347
    )
    
    
    (10,068
    )Other liabilities and accrued expenses
    
    
    (1,880
    )
    
    
    31,702Net cash provided by operating activities
    
    
    76,316
    
    
    
    107,186Cash flows provided by (used in) investing activities:Net additions to property and equipment
    
    
    (3,504
    )
    
    
    (4,997
    )Net sales (purchases) of investment securities
    
    
    85,886
    
    
    
    (152,980
    )Net changes in partnership investments and offshore funds
    
    
    28,123
    
    
    
    (51,616
    )Net cash provided by (used in) investing activities
    
    
    110,505
    
    
    
    (209,593
    )Cash flows used in financing activities:Deferred tax benefit on vesting under stock incentive plans
    
    
    192
    
    
    
    209Repurchase of common stock
    
    
    (34,612
    )
    
    
    (18,840
    )Cash dividends paid to minority shareholders
    
    
    (50,799
    )
    
    
    (55,121
    )Cash dividends paid to common shareholders
    
    
    (4,379
    )
    
    
    (5,078
    )Net cash used in financing activities
    
    
    (89,598
    )
    
    
    (78,830
    )Net increase (decrease) in cash
    
    
    97,223
    
    
    
    (181,237
    )Cash and cash equivalents at end of period
    
    $
    205,664
    
    
    $
    147,604
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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 (1) Organization and Description of Business
  (2) Basis of Presentation
       -6-




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (3) Investment Securities
  June 30, 2008(in thousands)
    
    Available-for-Sale
    
    
    CFS Securities
    
    
    Total SecuritiesMutual FundsEquity
    
    $
    217,286
    
    
    $
    27,348
    
    
    $
    244,634Balanced
    
    
    38,624
    
    
    
    657
    
    
    
    39,281Fixed income
    
    
    115,534
    
    
    
    
    
    
    
    115,534High yield
    
    
    3,579
    
    
    
    
    
    
    
    3,579Other
    
    
    233
    
    
    
    214
    
    
    
    447Total mutual funds
    
    
    375,256
    
    
    
    28,219
    
    
    
    403,475Other investment securities
    
    
    419
    
    
    
    141
    
    
    
    560$
    375,675
    
    
    $
    28,360
    
    
    $
    404,035
 December 31, 2007(in thousands)
    
    Available-for-Sale
    
    
    CFS Securities
    
    
    Total SecuritiesMutual FundsEquity
    
    $
    322,344
    
    
    $
    3,095
    
    
    $
    325,439Balanced
    
    
    90,049
    
    
    
    722
    
    
    
    90,771Fixed income
    
    
    114,439
    
    
    
    
    
    
    
    114,439High yield
    
    
    3,663
    
    
    
    
    
    
    
    3,663Other
    
    
    245
    
    
    
    227
    
    
    
    472Total mutual funds
    
    
    530,740
    
    
    
    4,044
    
    
    
    534,784Other investment securities
    
    
    430
    
    
    
    262
    
    
    
    692$
    531,170
    
    
    $
    4,306
    
    
    $
    535,476
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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,(in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Available-for-sale securities:Proceeds from sale
    
    $
    113,329
    
    
    $
    
    
    
    $
    113,329
    
    
    $
    Realized gains
    
    
    20,663
    
    
    
    
    
    
    
    20,234
    
    
    
    Unrealized gains (losses)
    
    
    (4,957
    )
    
    
    12,694
    
    
    
    (44,603
    )
    
    
    16,057Gains reclassified out of accumulated
other comprehensive income into earnings
    
    
    20,663
    
    
    
    
    
    
    
    20,234
    
    
    
    CFS securities:Unrealized gains (losses)
    
    
    (380
    )
    
    
    310
    
    
    
    (953
    )
    
    
    358
  June 30,
    
    
    December 31,(in thousands)
    
    2008
    
    
    2007Total cumulative unrealized gains on available-for-sale securities
with net gains:Mutual FundsEquity
    
    $
    5,027
    
    
    $
    39,461Balanced
    
    
    8
    
    
    
    5,860Fixed income
    
    
    560
    
    
    
    1,022Other
    
    
    
    
    
    
    5Total mutual funds
    
    
    5,595
    
    
    
    46,348Other investment securities
    
    
    242
    
    
    
    297Total gains
    
    
    5,837
    
    
    
    46,645Total cumulative unrealized losses on available-for-sale securities
with net losses:Mutual FundsEquity
    
    
    (24,340
    )
    
    
    (7,073
    )Balanced
    
    
    (6,302
    )
    
    
    (17
    )Fixed income
    
    
    (1,135
    )
    
    
    (334
    )High yield
    
    
    (413
    )
    
    
    (272
    )Other
    
    
    (9
    )
    
    
    Total mutual funds
    
    
    (32,199
    )
    
    
    (7,696
    )Other investment securities
    
    
    
    
    
    
    (475
    )Total losses
    
    
    (32,199
    )
    
    
    (8,171
    )Total cumulative net unrealized gains (losses) on available-for-sale securities
    
    $
    (26,362
    )
    
    $
    38,474
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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (4) Partnership Investments and Offshore Funds
  June 30,
    
    
    December 31,(in thousands)
    
    2008
    
    
    2007Calamos Equity Opportunities Fund LP:Securities owned
    
    $
    
    
    
    $
    111,142Securities sold but not yet purchased
    
    
    
    
    
    
    (24,838
    )Accrued expenses and other current liabilities
    
    
    
    
    
    
    (1,478
    )Other current assets
    
    
    
    
    
    
    20Calamos Equity Opportunities Fund LP securities, net
    
    
    
    
    
    
    84,846Calamos Market Neutral Opportunities Fund LP:Securities owned
    
    
    60,399
    
    
    
    81,361Securities sold but not yet purchased
    
    
    (13,710
    )
    
    
    (22,372
    )Accrued expenses and other current liabilities
    
    
    (490
    )
    
    
    (5,178
    )Other current assets
    
    
    6,219
    
    
    
    1,028Calamos Market Neutral Opportunities Fund LP securities, net
    
    
    52,418
    
    
    
    54,839Calamos Global Funds PLC:Securities owned
    
    
    283,955
    
    
    
    200,196Other current assets
    
    
    8,807
    
    
    
    5,107Accrued expenses and other liabilities
    
    
    (4,245
    )
    
    
    (2,045
    )Calamos Global Funds PLC
    
    
    288,517
    
    
    
    203,258Investment in other partnerships
    
    
    8,621
    
    
    
    10,061Partnership investments and offshore funds
    
    $
    349,556
    
    
    $
    353,004
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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (5) Fair Value Measurements
 Fair Value Measurements,
   Fair Value Measurements at Reporting Date UsingQuoted Prices
    
    
    Significantin Active
    
    
    Other
    
    
    SignificantMarkets for
    
    
    Observable
    
    
    Unobservable(in thousands)
    
    June 30,
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Investment securities (note 3)
    
    $
    404,035
    
    
    $
    404,035
    
    
    $
    
    
    
    $
    Securities owned by Partnership
Investments and Offshore Funds
(note 4)
    
    
    344,354
    
    
    
    287,070
    
    
    
    57,284
    
    
    
    Securities sold but not yet purchased
(note 4)
    
    
    (13,710
    )
    
    
    (13,710
    )
    
    
    
    
    
    
    Total
    
    $
    734,679
    
    
    $
    677,395
    
    
    $
    57,284
    
    
    $
    
 (6) Minority Interest in Calamos Holdings LLC
  (in thousands)Minority interest at December 31, 2007
    
    $
    352,205Income allocated to minority interests
    
    
    54,585Changes in unrealized gains (losses) on available-for-sale securities
    
    
    (35,177
    )Reclassification adjustment for realized gains on sale of available-for-sale securities
    
    
    (16,155
    )Sale of Calamos Holdings LLC membership units
    
    
    (27,469
    )Cumulative impact of changes in ownership of Calamos Holdings LLC units
    
    
    3,265Compensation expense recognized under stock incentive plans
    
    
    2,829Tax distributions
    
    
    (33,859
    )Equity distributions
    
    
    (16,940
    )Minority interest at June 30, 2008
    
    $
    283,284
 -10-




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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (7) Earnings Per Share
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands, except per share data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Earnings per share  basicEarnings available to common shareholders
    
    $
    1,896
    
    
    $
    3,805
    
    
    $
    2,345
    
    
    $
    11,339Weighted average shares outstanding
    
    
    19,743
    
    
    
    22,847
    
    
    
    20,040
    
    
    
    23,084Earnings per share  basic
    
    $
    0.10
    
    
    $
    0.17
    
    
    $
    0.12
    
    
    $
    0.49Earnings per share  dilutedIncome before minority interest in Calamos
Holdings LLC and income taxes
    
    $
    66,208
    
    
    $
    26,785
    
    
    $
    69,068
    
    
    $
    80,077Less: Impact of revaluation of net deferred
tax assets
    
    
    33,287
    
    
    
    
    
    
    
    32,888
    
    
    
    Less: Impact of income taxes
    
    
    24,319
    
    
    
    10,906
    
    
    
    25,592
    
    
    
    32,295Earnings available to common shareholders
    
    $
    8,602
    
    
    $
    15,879
    
    
    $
    10,588
    
    
    $
    47,782Weighted average shares outstanding
    
    
    19,743
    
    
    
    22,847
    
    
    
    20,040
    
    
    
    23,084Conversion of membership units for common
stock
    
    
    77,000
    
    
    
    77,000
    
    
    
    77,000
    
    
    
    77,000Dilutive impact of restricted stock units
    
    
    309
    
    
    
    387
    
    
    
    292
    
    
    
    376Dilutive impact of stock options
    
    
    
    
    
    
    55
    
    
    
    
    
    
    
    66Weighted average diluted shares outstanding
    
    
    97,052
    
    
    
    100,289
    
    
    
    97,332
    
    
    
    100,526Earnings per share  diluted
    
    $
    0.09
    
    
    $
    0.16
    
    
    $
    0.11
    
    
    $
    0.48
  Share-Based Payment
 -11-




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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (8) Stock Based Compensation
     (9) Total Other Income (Expense), Net
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Interest income
    
    $
    494
    
    
    $
    3,532
    
    
    $
    1,341
    
    
    $
    7,562Interest expense
    
    
    (8,162
    )
    
    
    (2,037
    )
    
    
    (16,263
    )
    
    
    (4,073
    )Net interest income (expense)
    
    
    (7,668
    )
    
    
    1,495
    
    
    
    (14,922
    )
    
    
    3,489Capital gains and dividend income
    
    
    22,418
    
    
    
    170
    
    
    
    24,478
    
    
    
    680Unrealized appreciation (depreciation)
    
    
    1,299
    
    
    
    6,936
    
    
    
    (47,786
    )
    
    
    6,496Miscellaneous other income
    
    
    238
    
    
    
    272
    
    
    
    489
    
    
    
    594Investment and other income (loss)
    
    
    23,955
    
    
    
    7,378
    
    
    
    (22,819
    )
    
    
    7,770Minority interest in partnership investments
    
    
    810
    
    
    
    (3,020
    )
    
    
    13,269
    
    
    
    (2,269
    )Total other income (expense), net
    
    $
    17,097
    
    
    $
    5,853
    
    
    $
    (24,472
    )
    
    $
    8,990
  -12-




---



##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (10) Income Taxes
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Current:Federal
    
    $
    2,918
    
    
    $
    678
    
    
    $
    3,072
    
    
    $
    3,533State
    
    
    240
    
    
    
    162
    
    
    
    277
    
    
    
    841Total current income taxes
    
    
    3,158
    
    
    
    840
    
    
    
    3,349
    
    
    
    4,374Deferred:Federal
    
    
    1,760
    
    
    
    1,432
    
    
    
    1,851
    
    
    
    2,657State
    
    
    6,917
    
    
    
    341
    
    
    
    6,938
    
    
    
    632Total deferred income taxes
    
    
    8,677
    
    
    
    1,773
    
    
    
    8,789
    
    
    
    3,289Total income taxes
    
    $
    11,835
    
    
    $
    2,613
    
    
    $
    12,138
    
    
    $
    7,663
  (in thousands)
    
    2008
    
    
    2007Deferred tax assets:Intangible assets
    
    $
    84,649
    
    
    $
    97,290Unrealized net holding losses on investments of available-for-sale securities
    
    
    2,102
    
    
    
    Other
    
    
    2,231
    
    
    
    984Total deferred tax assets
    
    
    88,982
    
    
    
    98,274Deferred tax liabilities:Unrealized net holding gains on investments of available-for-sale securities
    
    
    
    
    
    
    3,191Deferred sales commission
    
    
    1,490
    
    
    
    2,808Other
    
    
    821
    
    
    
    1,991Total deferred tax liabilities
    
    
    2,311
    
    
    
    7,990Net deferred tax assets
    
    $
    86,671
    
    
    $
    90,284
  -13-




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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Statutory U.S. federal income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes, net of federal tax benefits
    
    
    2.0
    %
    
    
    5.0
    %
    
    
    2.0
    %
    
    
    5.0
    %Other non-deductible items
    
    
    (0.1
    )%
    
    
    0.7
    %
    
    
    0.1
    %
    
    
    0.3
    %Effective income tax rate
    
    
    36.9
    %
    
    
    40.7
    %
    
    
    37.1
    %
    
    
    40.3
    %
 (11) Common Stock Repurchase
   (12) Recently Issued Accounting Pronouncements
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133
 -14-




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   June 30,(in millions)
    
    2008
    
    
    2007Mutual FundsOpen-end funds
    
    $
    24,005
    
    
    $
    25,996Closed-end funds
    
    
    6,688
    
    
    
    7,290Total mutual funds
    
    
    30,693
    
    
    
    33,286Separate AccountsInstitutional accounts
    
    
    5,232
    
    
    
    4,710Managed accounts
    
    
    5,232
    
    
    
    5,677Alternative investments
    
    
    53
    
    
    
    138Total separate accounts
    
    
    10,517
    
    
    
    10,525Total assets under management
    
    $
    41,210
    
    
    $
    43,811
   -15-




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##### Table of Contents



Operating Results
 Second Quarter and Six Months Ended June 30, 2008 Compared to Second Quarter and Six Months Ended
June 30, 2007
 Assets Under Management
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,Change
    
    
    
    
    
    
    
    
    
    
    Change($ in millions)
    
    2008
    
    
    2007
    
    
    Amount
    
    
    Percent
    
    
    2008
    
    
    2007
    
    
    Amount
    
    
    PercentMutual FundsBeginning assets under management
    
    $
    30,658
    
    
    $
    32,086
    
    
    $
    (1,428
    )
    
    
    (4
    )%
    
    $
    34,835
    
    
    $
    33,704
    
    
    $
    1,131
    
    
    
    3
    %Net purchases (redemptions)
    
    
    (282
    )
    
    
    (766
    )
    
    
    484
    
    
    
    63
    
    
    
    (732
    )
    
    
    (2,718
    )
    
    
    1,986
    
    
    
    73Market appreciation (depreciation)
    
    
    317
    
    
    
    1,966
    
    
    
    (1,649
    )
    
    
    (84
    )
    
    
    (3,410
    )
    
    
    2,300
    
    
    
    (5,710
    )
    
    
    *Ending assets under management
    
    
    30,693
    
    
    
    33,286
    
    
    
    (2,593
    )
    
    
    (8
    )
    
    
    30,693
    
    
    
    33,286
    
    
    
    (2,593
    )
    
    
    (8
    )Average assets under management
    
    
    32,114
    
    
    
    32,979
    
    
    
    (865
    )
    
    
    (3
    )
    
    
    31,758
    
    
    
    32,995
    
    
    
    (1,237
    )
    
    
    (4
    )Separate AccountsBeginning assets under management
    
    
    10,248
    
    
    
    10,464
    
    
    
    (216
    )
    
    
    (2
    )
    
    
    11,373
    
    
    
    11,021
    
    
    
    352
    
    
    
    3Net purchases (redemptions)
    
    
    83
    
    
    
    (540
    )
    
    
    623
    
    
    
    *
    
    
    
    189
    
    
    
    (1,219
    )
    
    
    1,408
    
    
    
    *Market appreciation (depreciation)
    
    
    186
    
    
    
    601
    
    
    
    (415
    )
    
    
    (69
    )
    
    
    (1,045
    )
    
    
    723
    
    
    
    (1,768
    )
    
    
    *Ending assets under management
    
    
    10,517
    
    
    
    10,525
    
    
    
    (8
    )
    
    
    0
    
    
    
    10,517
    
    
    
    10,525
    
    
    
    (8
    )
    
    
    0Average assets under management
    
    
    10,834
    
    
    
    10,565
    
    
    
    269
    
    
    
    3
    
    
    
    10,728
    
    
    
    10,696
    
    
    
    32
    
    
    
    0Total Assets Under ManagementBeginning assets under management
    
    
    40,906
    
    
    
    42,550
    
    
    
    (1,644
    )
    
    
    (4
    )
    
    
    46,208
    
    
    
    44,725
    
    
    
    1,483
    
    
    
    3Net purchases (redemptions)
    
    
    (199
    )
    
    
    (1,306
    )
    
    
    1,107
    
    
    
    85
    
    
    
    (543
    )
    
    
    (3,937
    )
    
    
    3,394
    
    
    
    86Market appreciation (depreciation)
    
    
    503
    
    
    
    2,567
    
    
    
    (2,064
    )
    
    
    (80
    )
    
    
    (4,455
    )
    
    
    3,023
    
    
    
    (7,478
    )
    
    
    *Ending assets under management
    
    
    41,210
    
    
    
    43,811
    
    
    
    (2,601
    )
    
    
    (6
    )
    
    
    41,210
    
    
    
    43,811
    
    
    
    (2,601
    )
    
    
    (6
    )Average assets under management
    
    $
    42,948
    
    
    $
    43,544
    
    
    $
    (596
    )
    
    
    (1
    )%
    
    $
    42,486
    
    
    $
    43,692
    
    
    $
    (1,206
    )
    
    
    (3
    )%
 
 *
    
    Not meaningful.   -16-




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##### Table of Contents



Impact of One-Time Items
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,($ in thousands)
    
    2008
    
    2007
    
    2008
    
    2007Operating expenses
    
    $
    63,127
    
    
    $
    93,835
    
    
    $
    129,391
    
    
    $
    159,380Termination of closed-end fund compensation agreements
    
    
    
    
    
    
    19,500
    
    
    
    
    
    
    
    19,500Closed-end fund structuring fees
    
    
    
    
    
    
    6,904
    
    
    
    
    
    
    
    6,904Operating expenses, as adjusted
    
    $
    63,127
    
    
    $
    67,431
    
    
    $
    129,391
    
    
    $
    132,976Operating income
    
    $
    49,111
    
    
    $
    20,932
    
    
    $
    93,540
    
    
    $
    71,087Termination of closed-end fund compensation agreements
    
    
    
    
    
    
    19,500
    
    
    
    
    
    
    
    19,500Closed-end fund structuring fees
    
    
    
    
    
    
    6,904
    
    
    
    
    
    
    
    6,904Operating income, as adjusted
    
    $
    49,111
    
    
    $
    47,336
    
    
    $
    93,540
    
    
    $
    97,491Operating income per diluted share, net of income taxes
    
    $
    0.32
    
    
    $
    0.12
    
    
    $
    0.61
    
    
    $
    0.42Termination of closed-end fund compensation agreements
    
    
    
    
    
    
    0.12
    
    
    
    
    
    
    
    0.11Closed-end fund structuring fees
    
    
    
    
    
    
    0.04
    
    
    
    
    
    
    
    0.04Operating income per diluted share, net of income
taxes, as adjusted
    
    $
    0.32
    
    
    $
    0.28
    
    
    $
    0.61
    
    
    $
    0.57Operating margin
    
    
    43.8
    %
    
    
    18.2
    %
    
    
    42.0
    %
    
    
    30.8
    %Termination of closed-end fund compensation agreements
    
    
    
    
    
    
    17.0
    
    
    
    
    
    
    
    8.5Closed-end fund structuring fees
    
    
    
    
    
    
    6.0
    
    
    
    
    
    
    
    3.0Operating margin, as adjusted
    
    
    43.8
    %
    
    
    41.2
    %
    
    
    42.0
    %
    
    
    42.3
    %Net income
    
    $
    1,896
    
    
    $
    3,805
    
    
    $
    2,345
    
    
    $
    11,339Termination of closed-end fund compensation agreements
    
    
    
    
    
    
    2,634
    
    
    
    
    
    
    
    2,634Closed-end fund structuring fees
    
    
    
    
    
    
    933
    
    
    
    
    
    
    
    933Net deferred tax assets revaluation
    
    
    6,771
    
    
    
    
    
    
    
    6,771
    
    
    
    Net income, as adjusted
    
    $
    8,667
    
    
    $
    7,372
    
    
    $
    9,116
    
    
    $
    14,906Diluted earnings per share
    
    $
    0.09
    
    
    $
    0.16
    
    
    $
    0.11
    
    
    $
    0.48Termination of closed-end fund compensation agreements
    
    
    
    
    
    
    0.12
    
    
    
    
    
    
    
    0.11Closed-end fund structuring fees
    
    
    
    
    
    
    0.04
    
    
    
    
    
    
    
    0.04Net deferred tax assets revaluation
    
    
    0.34
    
    
    
    
    
    
    
    0.34
    
    
    
    Diluted earnings per share, as adjusted
    
    $
    0.43
    
    
    $
    0.32
    
    
    $
    0.45
    
    
    $
    0.63
 -17-




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##### Table of Contents



Financial Overview
    Revenues
  ($ in thousands)
    
    Three Months Ended June 30,
    
    
    Six Months Ended June 30,Change
    
    
    
    
    
    
    
    
    
    
    Change2008
    
    
    2007
    
    
    Amount
    
    
    Percent
    
    
    2008
    
    
    2007
    
    
    Amount
    
    
    PercentInvestment management fees
    
    $
    78,449
    
    
    $
    78,313
    
    
    $
    136
    
    
    
    0
    %
    
    $
    155,723
    
    
    $
    156,788
    
    
    $
    (1,065
    )
    
    
    (1
    )%Distribution and
underwriting fees
    
    
    32,818
    
    
    
    35,560
    
    
    
    (2,742
    )
    
    
    (8
    )
    
    
    65,288
    
    
    
    71,741
    
    
    
    (6,453
    )
    
    
    (9
    )Other
    
    
    971
    
    
    
    894
    
    
    
    77
    
    
    
    9
    
    
    
    1,920
    
    
    
    1,938
    
    
    
    (18
    )
    
    
    (1
    )Total revenues
    
    $
    112,238
    
    
    $
    114,767
    
    
    $
    (2,529
    )
    
    
    (2
    )%
    
    $
    222,931
    
    
    $
    230,467
    
    
    $
    (7,536
    )
    
    
    (3
    )%
   -18-




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##### Table of Contents



Operating Expenses
   ($ in thousands)
    
    Three Months Ended June 30,
    
    
    Six Months Ended June 30,Change
    
    
    
    
    
    
    
    
    
    
    Change2008
    
    
    2007
    
    
    Amount
    
    
    Percent
    
    
    2008
    
    
    2007
    
    
    Amount
    
    
    PercentEmployee compensation and benefits
    
    $
    19,994
    
    
    $
    22,512
    
    
    $
    (2,518
    )
    
    
    (11
    )%
    
    $
    43,454
    
    
    $
    43,278
    
    
    $
    176
    
    
    
    0
    %Distribution and underwriting
expense
    
    
    24,875
    
    
    
    25,196
    
    
    
    (321
    )
    
    
    (1
    )
    
    
    49,033
    
    
    
    50,223
    
    
    
    (1,190
    )
    
    
    (2
    )Amortization of deferred sales
commissions
    
    
    5,966
    
    
    
    7,278
    
    
    
    (1,312
    )
    
    
    (18
    )
    
    
    12,086
    
    
    
    15,156
    
    
    
    (3,070
    )
    
    
    (20
    )Marketing and sales promotion
    
    
    3,035
    
    
    
    29,731
    
    
    
    (26,696
    )
    
    
    (90
    )
    
    
    6,071
    
    
    
    33,213
    
    
    
    (27,142
    )
    
    
    (82
    )General and administrative
    
    
    9,257
    
    
    
    9,118
    
    
    
    139
    
    
    
    2
    
    
    
    18,747
    
    
    
    17,510
    
    
    
    1,237
    
    
    
    7Total operating expenses
    
    $
    63,127
    
    
    $
    93,835
    
    
    $
    (30,708
    )
    
    
    (33
    )%
    
    $
    129,391
    
    
    $
    159,380
    
    
    $
    (29,989
    )
    
    
    (19
    )%
      -19-




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##### Table of Contents



Non-Operating Activities
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,($ in thousands)
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeInterest income
    
    $
    494
    
    
    $
    3,532
    
    
    $
    (3,038
    )
    
    $
    1,341
    
    
    $
    7,562
    
    
    $
    (6,221
    )Interest expense
    
    
    (8,162
    )
    
    
    (2,037
    )
    
    
    (6,125
    )
    
    
    (16,263
    )
    
    
    (4,073
    )
    
    
    (12,190
    )Net interest income (expense)
    
    
    (7,668
    )
    
    
    1,495
    
    
    
    (9,163
    )
    
    
    (14,922
    )
    
    
    3,489
    
    
    
    (18,411
    )Capital gains and dividend income
    
    
    22,418
    
    
    
    170
    
    
    
    22,248
    
    
    
    24,478
    
    
    
    680
    
    
    
    23,798Unrealized appreciation (depreciation)
    
    
    1,299
    
    
    
    6,936
    
    
    
    (5,637
    )
    
    
    (47,786
    )
    
    
    6,496
    
    
    
    (54,282
    )Miscellaneous other income
    
    
    238
    
    
    
    272
    
    
    
    (34
    )
    
    
    489
    
    
    
    594
    
    
    
    (105
    )Investment and other income (loss)
    
    
    23,955
    
    
    
    7,378
    
    
    
    16,577
    
    
    
    (22,819
    )
    
    
    7,770
    
    
    
    (30,589
    )Minority interest in partnership investments
and offshore funds
    
    
    810
    
    
    
    (3,020
    )
    
    
    3,830
    
    
    
    13,269
    
    
    
    (2,269
    )
    
    
    15,538Total other income (expense), net
    
    $
    17,097
    
    
    $
    5,853
    
    
    $
    11,244
    
    
    $
    (24,472
    )
    
    $
    8,990
    
    
    $
    (33,462
    )
      Income Taxes
  -20-




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##### Table of Contents



Net Income
   Liquidity and Capital Resources
   June 30,
    
    December 31,(in thousands)
    
    2008
    
    2007Statements of financial condition data:Cash and cash equivalents
    
    $
    205,664
    
    
    $
    108,441Receivables
    
    
    34,140
    
    
    
    39,340Investment securities
    
    
    404,035
    
    
    
    535,476Partnership investments and offshore funds
    
    
    349,556
    
    
    
    353,004Deferred sales commissions
    
    
    27,160
    
    
    
    34,076Property and
equipment, net of accumulated depreciation
    
    
    46,821
    
    
    
    48,420Long-term debt
    
    
    525,000
    
    
    
    525,000
  June 30,(in thousands)
    
    2008
    
    2007Cash flow data:Net cash provided by operating activities
    
    $
    76,316
    
    
    $
    107,186Net cash provided by (used in) investing
activities
    
    
    110,505
    
    
    
    (209,593
    )Net cash used in financing activities
    
    
    (89,598
    )
    
    
    (78,830
    )
     -21-




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##### Table of Contents



Recently Issued Accounting Pronouncements
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133
 Critical Accounting Policies
  Forward-Looking Information
    -22-




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##### Table of Contents



Risk Factors
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
   -23-




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  (c)
    
    
    (d)Total Number of
    
    
    Maximum NumberShares Purchased as
    
    
    of Shares that May(a)
    
    
    (b)
    
    
    Part of Publicly
    
    
    be PurchasedTotal Number of
    
    
    Average Price Paid
    
    
    Announced Plans or
    
    
    Under the Plans orShares Purchased
    
    
    Per Share
    
    
    Programs
    
    
    ProgramsApril 1  April 30, 2008
    
    
    48,000
    
    
    $
    16.91
    
    
    
    48,000
    
    
    
    611,200May 1  May 31, 2008
    
    
    611,200
    
    
    
    19.39
    
    
    
    611,200
    
    
    
    June 1  June 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    659,200
    
    
    $
    19.21
    
    
    
    659,200
    
    
    
    
 
 Item 4. Submission of Matters to a Vote of Security Holders
  Class A Shares
    
    Class B Shares
    
    Class A Shares
    
    Class B SharesElection of:
    
    For
    
    For
    
    Against
    
    AgainstJohn P. Calamos, Sr.
    
    
    n/a
    
    
    
    768,001,000
    
    
    
    n/a
    
    
    
    0Nick P. Calamos
    
    
    n/a
    
    
    
    768,001,000
    
    
    
    n/a
    
    
    
    0G. Bradford Bulkley
    
    
    16,875,218
    
    
    
    768,001,000
    
    
    
    1,290,388
    
    
    
    0Mitchell S. Feiger
    
    
    16,828,352
    
    
    
    768,001,000
    
    
    
    1,337,254
    
    
    
    0Richard W. Gilbert
    
    
    16,874,993
    
    
    
    768,001,000
    
    
    
    1,290,613
    
    
    
    0Arthur L. Knight
    
    
    16,583,839
    
    
    
    768,001,000
    
    
    
    1,581,767
    
    
    
    0
  -24-




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##### Table of Contents



Item 6. Exhibits
 3(i)
    
    Amended and Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 to the Registrants Current Report
on Form 8-K filed with the Securities and Exchange Commission on November 2,
2004).3(ii)
    
    Amended and Restated By-Laws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on March 8, 2007).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).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.
 -25-




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##### Table of Contents



SIGNATURES
  CALAMOS ASSET MANAGEMENT, INC.
(Registrant)Date:  August 6, 2008
    By:
    /s/ Cristina WasiakCristina WasiakInterim Chief Financial Officer -26-