##### 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, 2005
 - 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
 1111 E. Warrenville Road, Naperville, Illinois, 60563
 
 þ 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 4. Submission of Matters to a Vote of Security HoldersItem 6. ExhibitsSIGNATURESAmendment to Management Services AgreementCertificationCertificationCertificationCertification    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CALAMOS ASSET MANAGEMENT, INC.
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except per share data)
 June 30,
    
    December 31,2005
    
    2004(unaudited)ASSETS:Current assetsCash and cash equivalents
    
    $
    143,198
    
    
    $
    149,768Receivables:Affiliates and affiliated funds
    
    
    21,057
    
    
    
    21,222Customers
    
    
    7,356
    
    
    
    6,012Investment securities, trading and available for sale
    
    
    178,442
    
    
    
    147,521Prepaid expenses
    
    
    2,144
    
    
    
    1,917Deferred tax asset, net
    
    
    7,431
    
    
    
    6,892Other
    
    
    3,452
    
    
    
    4,046Total current assets
    
    
    363,080
    
    
    
    337,378Non-current assetsDeferred tax asset, net
    
    
    107,065
    
    
    
    111,186Deferred sales commissions
    
    
    62,253
    
    
    
    61,417Property and equipment, net of accumulated depreciation ($4,981
at 6/30/05 and $3,588 at 12/31/04)
    
    
    35,075
    
    
    
    4,902Other non-current assets
    
    
    1,751
    
    
    
    1,569Total non-current assets
    
    
    206,144
    
    
    
    179,074Total assets
    
    
    569,224
    
    
    
    516,452LIABILITIES AND STOCKHOLDERS EQUITY:Current liabilitiesAccounts payable:Brokers
    
    
    14,942
    
    
    
    12,514Affiliates
    
    
    59
    
    
    
    813Accrued compensation and benefits
    
    
    10,083
    
    
    
    9,985Accrued expenses and other current liabilities
    
    
    6,974
    
    
    
    17,767Total current liabilities
    
    
    32,058
    
    
    
    41,079Long-term liabilitiesLong-term debt
    
    
    150,000
    
    
    
    150,000Other long-term liabilities
    
    
    6,347
    
    
    
    263Total long-term liabilities
    
    
    156,347
    
    
    
    150,263Total liabilities
    
    
    188,405
    
    
    
    191,342Minority interest in partnership investments
    
    
    36,350
    
    
    
    31,322Minority interest in Calamos Holdings LLC
    
    
    173,934
    
    
    
    135,294Stockholders equity:Class A Common Stock, $0.01 par value. Authorized 600,000,000
shares; issued and outstanding 23,000,000 shares
    
    
    230
    
    
    
    230Class B Common Stock, $0.01 par value. Authorized 1,000 shares;
issued and outstanding 100 shares
    
    
    0
    
    
    
    0Additional paid-in capital
    
    
    154,638
    
    
    
    154,156Retained earnings
    
    
    14,108
    
    
    
    2,364Accumulated other comprehensive income
    
    
    1,559
    
    
    
    1,744Total stockholders equity
    
    
    170,535
    
    
    
    158,494Total liabilities, minority interest and stockholders equity
    
    $
    569,224
    
    
    $
    516,452
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##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
 CONSOLIDATED STATEMENTS OF INCOME
Three and Six Months Ended June 30, 2005 and 2004
(in thousands, except per share data)
 Three Months Ended June 30,
    
    Six Months Ended June 30,2005
    
    2004
    
    2005
    
    2004(Predecessor)
    
    
    
    
    
    (Predecessor)(Unaudited)
    
    (Unaudited)
    
    (Unaudited)Revenues:Investment management fees
    
    $
    67,430
    
    
    $
    51,451
    
    
    $
    133,270
    
    
    $
    92,703Distribution and underwriting fees
    
    
    30,764
    
    
    
    23,754
    
    
    
    61,389
    
    
    
    45,802Other
    
    
    878
    
    
    
    650
    
    
    
    1,734
    
    
    
    1,010Total revenues
    
    
    99,072
    
    
    
    75,855
    
    
    
    196,393
    
    
    
    139,515Expenses:Employee compensation and benefits
    
    
    14,860
    
    
    
    17,367
    
    
    
    29,781
    
    
    
    28,145Distribution and underwriting expense
    
    
    18,693
    
    
    
    11,413
    
    
    
    36,364
    
    
    
    21,703Amortization of deferred sales commissions
    
    
    8,028
    
    
    
    7,446
    
    
    
    15,904
    
    
    
    14,079Marketing and sales promotion
    
    
    3,068
    
    
    
    2,892
    
    
    
    6,536
    
    
    
    11,997General and administrative
    
    
    5,676
    
    
    
    3,436
    
    
    
    10,072
    
    
    
    6,187Total expenses
    
    
    50,325
    
    
    
    42,554
    
    
    
    98,657
    
    
    
    82,111Operating income
    
    
    48,747
    
    
    
    33,301
    
    
    
    97,736
    
    
    
    57,404Other income (expenses):Interest expense
    
    
    (2,036
    )
    
    
    (1,601
    )
    
    
    (4,069
    )
    
    
    (1,893
    )Investment and other income
    
    
    7,118
    
    
    
    2,237
    
    
    
    4,165
    
    
    
    2,516Total other income (expense), net
    
    
    5,082
    
    

    
    636
    
    
    
    96
    
    
    
    623Income before minority interest and income taxes
    
    
    53,829
    
    
    
    33,937
    
    
    
    97,832
    
    
    
    58,027Minority interest in partnership investments
    
    
    3,178
    
    
    
    
    
    
    
    1,028
    
    
    
    Income before minority interest in CalamosHoldings LLC and income taxes
    
    
    50,651
    
    
    
    33,937
    
    
    
    96,804
    
    
    
    58,027Minority interest in Calamos Holdings LLC
    
    
    38,980
    
    
    
    
    
    
    
    74,515
    
    
    
    Income before income taxes
    
    
    11,671
    
    
    
    33,937
    
    
    
    22,289
    
    
    
    58,027Income taxes
    
    
    4,669
    
    
    
    519
    
    
    
    8,916
    
    
    
    877Net income
    
    $
    7,002
    
    
    $
    33,418
    
    
    $
    13,373
    
    
    $
    57,150Earnings per shareBasic
    
    $
    0.30
    
    
    $
    0.35
    
    
    $
    0.58
    
    
    $
    0.59Diluted
    
    $
    0.30
    
    
    $
    0.35
    
    
    $
    0.58
    
    
    $
    0.59Weighted average shares outstandingBasic
    
    
    23,000,100
    
    
    
    96,800,000
    
    
    
    23,000,100
    
    
    
    96,800,000Diluted
    
    
    100,557,047
    
    
    
    96,800,000
    
    
    
    100,577,064
    
    
    
    96,800,000
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CALAMOS ASSET MANAGEMENT, INC.
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
Six Months Ended June 30, 2005
(in thousands)
(unaudited)
 Additional
    
    
    
    
    
    AccumulatedCommon
    
    Paid-in
    
    Retained
    
    ComprehensiveStock
    
    Capital
    
    Earnings
    
    Income
    
    TotalBalance at December 31, 2004
    
    $
    230
    
    
    $
    154,156
    
    
    $
    2,364
    
    
    $
    1,744
    
    
    $
    158,494Net income
    
    
    
    
    
    
    
    
    
    
    13,373
    
    
    
    
    
    
    
    13,373Changes in unrealized gains on available-for-sale securities, net of minority interest and
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (185
    )
    
    
    (185
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,188Compensation expense recognized under stock
incentive plans, net of minority interest
    
    
    
    
    
    
    482
    
    
    
    
    
    
    
    
    
    
    
    482Dividend equivalent accrued under stock
Incentive plans, net of minority interest
    
    
    
    
    
    
    
    
    
    
    (19
    )
    
    
    
    
    
    
    (19
    )Dividends declared
    
    
    
    
    
    
    
    
    
    
    (1,610
    )
    
    
    
    
    
    
    (1,610
    )Balance at June 30, 2005
    
    $
    230
    
    
    $
    154,638
    
    
    $
    14,108
    
    
    $
    1,559
    
    
    $
    170,535
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CALAMOS ASSET MANAGEMENT, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2005 and 2004
(in thousands)
 2005
    
    2004(Unaudited)
    
    (Predecessor)Cash and cash equivalents at beginning of year
    
    $
    149,768
    
    
    $
    5,073Cash flows from operating activities:Net income
    
    
    13,373
    
    
    
    57,150Adjustments to reconcile net income to net cash provided by operating activities:Minority interest in partnership investments
    
    
    1,028
    
    
    
    Minority interest in Calamos Holdings LLC
    
    
    74,515
    
    
    
    Amortization of deferred sales commissions
    
    
    15,904
    
    
    
    14,079Other depreciation and amortization
    
    
    1,536
    
    
    
    685Unrealized appreciation on trading securities
    
    
    (1,645
    )
    
    
    (217
    )Unrealized depreciation on investment in partnership
    
    
    94
    
    
    
    67Management fee received in partnership units
    
    
    (77
    )
    
    
    (80
    )Stock-based compensation
    
    
    2,093
    
    
    
    Deferred taxes
    
    
    3,704
    
    
    
    Gain on disposal of property
    
    
    
    
    
    
    (1,989
    )(Increase) decrease in assets:Accounts receivable:Customers
    
    
    (1,344
    )
    
    
    (858
    )Affiliates and affiliated mutual funds
    
    
    165
    
    
    
    (8,531
    )Deferred sales commissions
    
    
    (16,740
    )
    
    
    (23,434
    )Other assets
    
    
    25
    
    
    
    (1,508
    )Increase in liabilities:Accounts payable
    
    
    1,674
    
    
    
    4,048Accrued compensation and benefits and deferred compensation
    
    
    98
    
    
    
    5,958Other liabilities and accrued expenses
    
    
    2,208
    
    
    
    6,620Net cash provided by operating activities
    
    
    96,611
    
    
    
    51,990Cash flows used in investing activities:Net additions to property and equipment
    
    
    (31,566
    )
    
    
    (8,371
    )Net purchases of securities and partnership investments
    
    
    (26,610
    )
    
    
    (47,182
    )Net cash used in investing activities
    
    
    (58,176
    )
    
    
    (55,553
    )Cash flows provided by (used in) financing activities:Net payments on bank debt
    
    
    
    
    
    
    (30,200
    )Net payments on mortgage payable
    
    
    
    
    
    
    (152
    )Net borrowings on debt offering
    
    
    
    
    
    
    148,003Cash dividends paid to minority shareholders
    
    
    (41,785
    )
    
    
    (22,467
    )Cash dividends paid to common shareholders
    
    
    (3,220
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (45,005
    )
    
    
    95,184Net increase (decrease) in cash
    
    
    (6,570
    )
    
    
    91,621Cash and cash equivalents at end of period
    
    $
    143,198
    
    
    $
    96,694
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CALAMOS ASSET MANAGEMENT, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 (1) Organization and Description of Business
  (2) Basis of Presentation
    (3) Cash and Cash Equivalents
  -7-




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CALAMOS ASSET MANAGEMENT, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (4) Property and Equipment
  (5) Earnings Per Share
  Three Months Ended
    
    Six Months Ended(in thousands, except per share data)
    
    June 30,
    
    June 30, 20052005
    
    2004
    
    2005
    
    2004Earnings per share  basicEarnings available to common shareholders
    
    $
    7,002
    
    
    $
    33,418
    
    
    $
    13,373
    
    
    $
    57,150Weighted average shares outstanding
    
    
    23,000
    
    
    
    96,800
    
    
    
    23,000
    
    
    
    96,800Earnings per share  basic
    
    $
    0.30
    
    
    $
    0.35
    
    
    $
    0.58
    
    
    $
    0.59Earnings per share  dilutedIncome before minority interest in Calamos
Holdings LLC and income taxes
    
    $
    50,651
    
    
    $
    33,937
    
    
    $
    96,804
    
    
    $
    58,027Less: Impact of income taxes
    
    
    20,260
    
    
    
    519
    
    
    
    38,722
    
    
    
    877Earnings available to common shareholders
    
    $
    30,391
    
    
    $
    33,418
    
    
    $
    58,082
    
    
    $
    57,150Weighted average shares outstanding
    
    
    23,000
    
    
    
    96,800
    
    
    
    23,000
    
    
    
    96,800Conversion of membership units for
common stock
    
    
    77,000
    
    
    
    
    
    
    
    77,000
    
    
    
    Dilutive impact of RSUs
    
    
    547
    
    
    
    
    
    
    
    546
    
    
    
    Dilutive impact of stock options
    
    
    10
    
    
    
    
    
    
    
    31
    
    
    
    Weighted average shares and potential
dilutive shares outstanding
    
    
    100,557
    
    
    
    96,800
    
    
    
    100,577
    
    
    
    96,800Earnings per share  diluted
    
    $
    0.30
    
    
    $
    0.35
    
    
    $
    0.58
    
    
    $
    0.59
  -8-




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CALAMOS ASSET MANAGEMENT, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Accounting for Stock-Based Compensation
 (6) Recently Issued Accounting Pronouncements
  Determining
Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or
Similar Entity When the Limited Partners Have Certain Rights Consolidation of Variable Interest Entities
 -9-




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    June 30,(In millions)
    
    2005
    
    2004Mutual FundsOpen-end funds
    
    $
    22,432
    
    
    $
    16,528Closed-end funds
    
    
    5,901
    
    
    
    5,762Total mutual funds
    
    
    28,333
    
    
    
    22,290Separate AccountsInstitutional accounts
    
    
    3,678
    
    
    
    2,998Managed accounts
    
    
    6,844
    
    
    
    6,577Private client accounts
    
    
    578
    
    
    
    381Alternative investments
    
    
    79
    
    
    
    16Total separate accounts
    
    
    11,179
    
    
    
    9,972Total assets under management
    
    $
    39,512
    
    
    $
    32,262
    -10-




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Operating Results
 Second Quarter and Six Months Ended June 30, 2005 Compared to Second Quarter and Six Months Ended
June 30, 2004
 Assets Under Management
  ($ in millions)
    
    Three Months Ended June 30,
    
    Six Months Ended June 30,Change
    
    
    
    
    
    
    
    
    
    Change2005
    
    2004
    
    Amount
    
    Percent
    
    2005
    
    2004
    
    Amount
    
    PercentMutual FundsBeginning assets under management
    
    $
    27,366
    
    
    $
    19,320
    
    
    $
    8,046
    
    
    
    42
    %
    
    $
    26,951
    
    
    $
    14,650
    
    
    $
    12,301
    
    
    
    84
    %Net purchases
    
    
    582
    
    
    
    2,842
    
    
    
    (2,260
    )
    
    
    80
    
    
    
    2,133
    
    
    
    6,851
    
    
    
    (4,718
    )
    
    
    69Market appreciation (depreciation)
    
    
    385
    
    
    
    128
    
    
    
    257
    
    
    
    201
    
    
    
    (751
    )
    
    
    789
    
    
    
    (1,540
    )
    
    
    195Ending assets under management
    
    
    28,333
    
    
    
    22,290
    
    
    
    6,043
    
    
    
    27
    
    
    
    28,333
    
    
    
    22,290
    
    
    
    6,043
    
    
    
    27Average assets under management
    
    
    27,443
    
    
    
    20,535
    
    
    
    6,908
    
    
    
    34
    
    
    
    27,265
    
    
    
    18,364
    
    
    
    8,901
    
    
    
    48Separate AccountsBeginning assets under management
    
    
    10,880
    
    
    
    9,653
    
    
    
    1,227
    
    
    
    13
    
    
    
    11,024
    
    
    
    9,189
    
    
    
    1,835
    
    
    
    20Net purchases
    
    
    27
    
    
    
    200
    
    
    
    (173
    )
    
    
    87
    
    
    
    430
    
    
    
    310
    
    
    
    120
    
    
    
    39Market appreciation (depreciation)
    
    
    272
    
    
    
    119
    
    
    
    153
    
    
    
    129
    
    
    
    (275
    )
    
    
    473
    
    
    
    (748
    )
    
    
    158Ending assets under management
    
    
    11,179
    
    
    
    9,972
    
    
    
    1,207
    
    
    
    12
    
    
    
    11,179
    
    
    
    9,972
    
    
    
    1,207
    
    
    
    12Average assets under management
    
    
    10,854
    
    
    
    9,667
    
    
    
    1,187
    
    
    
    12
    
    
    
    10,871
    
    
    
    9,539
    
    
    
    1,332
    
    
    
    14Total Assets Under ManagementBeginning assets under management
    
    
    38,246
    
    
    
    28,973
    
    
    
    9,273
    
    
    
    32
    
    
    
    37,975
    
    
    
    23,839
    
    
    
    14,136
    
    
    
    59Net purchases
    
    
    609
    
    
    
    3,042
    
    
    
    (2,433
    )
    
    
    80
    
    
    
    2,563
    
    
    
    7,161
    
    
    
    (4,598
    )
    
    
    64Market appreciation (depreciation)
    
    
    657
    
    
    
    247
    
    
    
    410
    
    
    
    166
    
    
    
    (1,026
    )
    
    
    1,262
    
    
    
    (2,288
    )
    
    
    181Ending assets under management
    
    
    39,512
    
    
    
    32,262
    
    
    
    7,250
    
    
    
    22
    
    
    
    39,512
    
    
    
    32,262
    
    
    
    7,250
    
    
    
    22Average assets under management
    
    $
    38,297
    
    
    $
    30,202
    
    
    $
    8,095
    
    
    
    27
    %
    
    $
    38,136
    
    
    $
    27,903
    
    
    $
    10,233
    
    
    
    37
    %
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##### Table of Contents



Revenues
  ($ in thousands)
    
    Three Months Ended June 30,
    
    Six Months Ended June 30,Change
    
    
    
    
    
    
    
    
    
    Change2005
    
    2004
    
    Amount
    
    Percent
    
    2005
    
    2004
    
    Amount
    
    PercentInvestment management fees
    
    $
    67,430
    
    
    $
    51,451
    
    
    $
    15,979
    
    
    
    31
    %
    
    $
    133,270
    
    
    $
    92,703
    
    
    $
    40,567
    
    
    
    44
    %Distribution and
underwriting fees
    
    
    30,764
    
    
    
    23,754
    
    
    
    7,010
    
    
    
    30
    
    
    
    61,389
    
    
    
    45,802
    
    
    
    15,587
    
    
    
    34Other
    
    
    878
    
    
    
    650
    
    
    
    228
    
    
    
    35
    
    
    
    1,734
    
    
    
    1,010
    
    
    
    724
    
    
    
    72Total revenues
    
    $
    99,072
    
    
    $
    75,855
    
    
    $
    23,217
    
    
    
    31
    %
    
    $
    196,393
    
    
    $
    139,515
    
    
    $
    56,878
    
    
    
    41
    %
   Operating Expenses
  ($ in thousands)
    
    Three Months Ended June 30,
    
    Six Months Ended June 30,Change
    
    
    
    
    
    
    
    
    
    Change2005
    
    2004
    
    Amount
    
    Percent
    
    2005
    
    2004
    
    Amount
    
    PercentEmployee compensation and benefits
    
    $
    14,860
    
    
    $
    17,367
    
    
    $
    (2,507
    )
    
    
    14
    %
    
    $
    29,781
    
    
    $
    28,145
    
    
    $
    1,636
    
    
    
    6
    %Distribution expense
    
    
    18,693
    
    
    
    11,413
    
    
    
    7,280
    
    
    
    64
    
    
    
    36,364
    
    
    
    21,703
    
    
    
    14,661
    
    
    
    68Amortization
of deferred sales commissions
    
    
    8,028
    
    
    
    7,446
    
    
    
    582
    
    
    
    8
    
    
    
    15,904
    
    
    
    14,079
    
    
    
    1,825
    
    
    
    13Marketing and sales promotion
    
    
    3,068
    
    
    
    2,892
    
    
    
    176
    
    
    
    6
    
    
    
    6,536
    
    
    
    11,997
    
    
    
    (5,461
    )
    
    
    46General and administrative
    
    
    5,676
    
    
    
    3,436
    
    
    
    2,240
    
    
    
    65
    
    
    
    10,072
    
    
    
    6,187
    
    
    
    3,885
    
    
    
    63Total operating expenses
    
    $
    50,325
    
    
    $
    42,554
    
    
    $
    7,771
    
    
    
    18
    %
    
    $
    98,657
    
    
    $
    82,111
    
    
    $
    16,546
    
    
    
    20
    %
  -12-




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##### Table of Contents



Income Taxes
  Net Income
  -13-




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##### Table of Contents



(in thousands, except share data)
    
    Three Months Ended June 30,Pro Forma
    
    2004 as2005
    
    2004
    
    Adjustments
    
    AdjustedRevenues:Investment management fees
    
    $
    67,430
    
    
    $
    51,451
    
    
    $
    
    
    
    $
    51,451Distribution and underwriting fees
    
    
    30,764
    
    
    
    23,754
    
    
    
    
    
    
    
    23,754Other
    
    
    878
    
    
    
    650
    
    
    
    (78
    )(1)
    
    
    572Total revenues
    
    
    99,072
    
    
    
    75,855
    
    
    
    (78
    )
    
    
    75,777Expenses:Employee compensation and benefits
    
    
    14,860
    
    
    
    17,367
    
    
    
    (57
    ) (1)
    
    
    17,310Distribution and underwriting expense
    
    
    18,693
    
    
    
    11,413
    
    
    
    
    
    
    
    11,413Amortization of deferred sales
commissions
    
    
    8,028
    
    
    
    7,446
    
    
    
    
    
    
    
    7,446Marketing and sales promotion
    
    
    3,068
    
    
    
    2,892
    
    
    
    
    
    
    
    2,892General and administrative
    
    
    5,676
    
    
    
    3,436
    
    
    
    55
    (1)
    
    
    3,491Total expenses
    
    
    50,325
    
    
    
    42,554
    
    
    
    (2
    )
    
    
    42,552Operating income
    
    
    48,747
    
    
    
    33,301
    
    
    
    (76
    )
    
    
    33,225Total other income (expense), net
    
    
    1,904
    (2)
    
    
    636
    
    
    
    (1,880
    )(1)
    
    
    (1,244
    )Income before minority interest in Calamos Holdings LLC and income taxes
    
    
    50,651
    
    
    
    33,937
    
    
    
    (1,956
    )
    
    
    31,981Minority interest
    
    
    38,980
    
    
    
    
    
    
    
    24,625
    (3)
    
    
    24,625Income before income taxes
    
    
    11,671
    
    
    
    33,937
    
    
    
    (26,581
    )
    
    
    7,356Income taxes
    
    
    4,669
    
    
    
    519
    
    
    
    2,415
    (4)
    
    
    2,934Net income
    
    $
    7,002
    
    
    $
    33,418
    
    
    $
    (28,996
    )
    
    $
    4,422Earnings per share, basic
    
    $
    0.30
    
    
    $
    0.35
    
    
    
    
    
    
    $
    0.19Weighted average shares outstanding, basic
    
    
    23,000,100
    
    
    
    96,800,000
    (5)
    
    
    
    
    
    
    23,000,100
    (6)Calculation of earnings per share,
diluted, assuming exchange of membership
units:Income before minority interest in Calamos Holdings LLC and income taxes
    
    
    50,651
    
    
    
    
    
    
    
    
    
    
    
    31,981Impact of income taxes
    
    
    20,260
    
    
    
    
    
    
    
    
    
    
    
    12,757
    (7)Earnings available to common
shareholders
    
    
    30,391
    
    
    
    
    
    
    
    
    
    
    
    19,224Earnings per share, diluted
    
    $
    0.30
    
    
    $
    0.35
    
    
    
    
    
    
    $
    0.19Weighted average shares outstanding, diluted (8)
    
    
    100,557,047
    
    
    
    96,800,000
    
    
    
    
    
    
    
    100,000,100
 -14-




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##### Table of Contents



(in thousands, except share data)
    
    Six Months Ended June 30,Pro Forma
    
    2004 as2005
    
    2004
    
    Adjustments
    
    AdjustedRevenues:Investment management fees
    
    $
    133,270
    
    
    $
    92,703
    
    
    $
    
    
    
    $
    92,703Distribution and underwriting fees
    
    
    61,389
    
    
    
    45,802
    
    
    
    
    
    
    
    45,802Other
    
    
    1,734
    
    
    
    1,010
    
    
    
    (157
    )(1)
    
    
    853Total revenues
    
    
    196,393
    
    
    
    139,515
    
    
    
    (157
    )
    
    
    139,358Expenses:Employee compensation and benefits
    
    
    29,781
    
    
    
    28,145
    
    
    
    (123
    )(1)
    
    
    28,022Distribution and underwriting expense
    
    
    36,364
    
    
    
    21,703
    
    
    
    
    
    
    
    21,703Amortization of deferred sales
commissions
    
    
    15,904
    
    
    
    14,079
    
    
    
    
    
    
    
    14,079Marketing and sales promotion
    
    
    6,536
    
    
    
    11,997
    
    
    
    
    
    
    
    11,997General and administrative
    
    
    10,072
    
    
    
    6,187
    
    
    
    115
    (1)
    
    
    6,302Total expenses
    
    
    98,657
    
    
    
    82,111
    
    
    
    (8
    )
    
    
    82,103Operating income
    
    
    97,736
    
    
    
    57,404
    
    
    
    (149
    )
    
    
    57,255Total other income (expense), net
    
    
    (932)
    (2)
    
    
    623
    
    
    
    (1,808
    )(1)
    
    
    (1,185
    )Income before minority interest in Calamos Holdings LLC and income taxes
    
    
    96,804
    
    
    
    58,027
    
    
    
    (1,957
    )
    
    
    56,070Minority interest
    
    
    74,515
    
    
    
    
    
    
    
    43,174
    (3)
    
    
    43,174Income before income taxes
    
    
    22,289
    
    
    
    58,027
    
    
    
    (45,131
    )
    
    
    12,896Income taxes
    
    
    8,916
    
    
    
    877
    
    
    
    4,267
    (4)
    
    
    5,144Net income
    
    $
    13,373
    
    
    $
    57,150
    
    
    $
    (49,398
    )
    
    $
    7,752Earnings per share, basic
    
    $
    0.58
    
    
    $
    0.59
    
    
    
    
    
    
    $
    0.34Weighted average shares outstanding, basic
    
    
    23,000,100
    
    
    
    96,800,000
    (5)
    
    
    
    
    
    
    23,000,100
    (6)Calculation of earnings per share,
diluted, assuming exchange of membership
units:Income before minority interest in Calamos Holdings LLC and income taxes
    
    
    96,804
    
    
    
    
    
    
    
    
    
    
    
    56,070Impact of income taxes
    
    
    38,722
    
    
    
    
    
    
    
    
    
    
    
    22,366
    (7)Earnings available to common
shareholders
    
    
    58,082
    
    
    
    
    
    
    
    
    
    
    
    33,704Earnings per share, diluted
    
    $
    0.58
    
    
    $
    0.59
    
    
    
    
    
    
    $
    0.34Weighted average shares outstanding,
diluted (8)
    
    
    100,577,064
    
    
    
    96,800,000
    
    
    
    
    
    
    
    100,000,100
 -15-




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##### Table of Contents



(1)
    
    Represents the adjustment related to the Real Estate Distribution based on actual
amounts recorded during the periods presented.(2)
    
    Includes $7.1 million of investment gains, partially offset by $3.2 million of
minority interest related to the consolidation of the Calamos Equity Opportunities Fund L.P.
and $2.0 million of interest expense for the three months ended June 30, 2005 and includes
$4.1 million of interest expense and $1.0 million of minority interest related to the
consolidation of the Calamos Equity Opportunities Fund L.P., partially offset by $4.2 million
of investment gains for the six month period ended June 30, 2005.(3)
    
    Represents an adjustment to increase Calamos Asset Management, Inc.s minority
interest allocation to 77.0%. Minority interest was determined by multiplying the income
before minority interest and taxes by Calamos Family Partners, Inc.s and John P. Calamos,
Sr.s 77.0% aggregate ownership.(4)
    
    Reflects the impact of federal and state income taxes on the income allocated from
Calamos Holdings LLC to Calamos Asset Management, Inc. Historically, Calamos Family
Partners, Inc. operated as an S corporation and was not subject to U.S. federal and certain
state income taxes but was subject to Illinois replacement taxes. The amount of pro forma
adjustment was determined by eliminating the Illinois replacement tax and applying the
combined 2004 effective federal corporate income tax rates and applicable state tax rates to
income before income taxes.(5)
    
    Represents the contribution by Calamos Family Partners of all its assets and
liabilities in exchange for 96,800,000 membership units of Calamos Holdings LLC.(6)
    
    Reflects 23,000,000 shares of Class A common stock, which represents 23.0% of
the outstanding shares after the offering. In addition to shares of Class A common stock,
there are 100 shares of Class B common stock outstanding.(7)
    
    In calculating diluted earnings per share for the periods ended June 30, 2005
and 2004, the effective tax rates of 40.00% and 39.89%, respectively, were applied to income
before minority interest and income taxes.(8)
    
    Diluted shares outstanding for each period presented represent the weighted
average Class A common stock after giving effect to the Offering as of the beginning of 2004.
The diluted shares outstanding are calculated: (a) including the effect of outstanding
restricted stock units and option awards and (b) assuming Calamos Family Partners, Inc. and
John P. Calamos, Sr. exchanged all of their membership units in Calamos Holdings LLC for, and
converted all outstanding shares of our Class B common stock into, shares of our Class A
common stock, in each case on a one-for-one basis.  ($ in thousands)
    
    Three Months Ended June 30,
    
    Six Months Ended June 30,Change
    
    
    
    
    
    
    
    
    
    Change2005
    
    2004
    
    Amount
    
    Percent
    
    2005
    
    2004
    
    Amount
    
    Percent(Pro Forma)
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Pro Forma)Total revenues
    
    $
    99,072
    
    
    $
    75,777
    
    
    $
    23,295
    
    
    
    31
    %
    
    $
    196,393
    
    
    $
    139,358
    
    
    $
    57,035
    
    
    
    41
    %Total operating expenses
    
    
    50,325
    
    
    
    42,552
    
    
    
    7,773
    
    
    
    18
    
    
    
    98,657
    
    
    
    82,103
    
    
    
    16,554
    
    
    
    20Operating income
    
    
    48,747
    
    
    
    33,225
    
    
    
    15,522
    
    
    
    47
    
    
    
    97,736
    
    
    
    57,255
    
    
    
    40,481
    
    
    
    71Other income (expense), net
    
    
    1,904
    
    
    
    (1,244
    )
    
    
    3,148
    
    
    
    *
    
    
    
    (932
    )
    
    
    (1,185
    )
    
    
    253
    
    
    
    21Minority interest
    
    
    38,980
    
    
    
    24,625
    
    
    
    14,355
    
    
    
    58
    
    
    
    74,515
    
    
    
    43,174
    
    
    
    31,341
    
    
    
    73Income taxes
    
    
    4,669
    
    
    
    2,934
    
    
    
    1,735
    
    
    
    59
    
    
    
    8,916
    
    
    
    5,144
    
    
    
    3,772
    
    
    
    73Net income
    
    $
    7,002
    
    
    $
    4,422
    
    
    $
    2,580
    
    
    
    58
    %
    
    $
    13,373
    
    
    $
    7,752
    
    
    $
    5,621
    
    
    
    73
    %
 *
    
    Not meaningful. -16-




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##### Table of Contents



Liquidity and Capital Resources
   (in thousands)
    
    June 30,
    
    December 31,2005
    
    2004Statements of financial condition data:Cash and cash equivalents
    
    $
    143,198
    
    
    $
    149,768Receivables
    
    
    28,413
    
    
    
    27,234Investments
    
    
    178,442
    
    
    
    147,521Deferred tax asset
    
    
    114,496
    
    
    
    118,078Deferred sales commissions
    
    
    62,253
    
    
    
    61,417Long-term debt
    
    
    150,000
    
    
    
    150,000
  Six Months EndedJune 30,(in thousands)
    
    2005
    
    2004Cash flow data:Net cash provided by operating activities
    
    $
    96,611
    
    
    $
    51,990Net cash used by investing activities
    
    
    (58,176
    )
    
    
    (55,553
    )Net cash provided by (used in) financing activities
    
    
    (45,005
    )
    
    
    95,184
     -17-




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##### Table of Contents



Critical Accounting Policies
  Newly Issued Accounting Pronouncements
  Determining
Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or
Similar Entity When the Limited Partners Have Certain Rights Consolidation of Variable Interest Entities
 Forward-Looking Information
    -18-




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
   -19-




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 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
    
    Withheld
    
    WithheldJohn P. Calamos, Sr.
    
    
    n/a
    
    
    
    768,001,000
    
    
    
    n/a
    
    
    
    0Nick P. Calamos
    
    
    n/a
    
    
    
    768,001,000
    
    
    
    n/a
    
    
    
    0G. Bradford Bulkley
    
    
    20,358,811
    
    
    
    768,001,000
    
    
    
    655,423
    
    
    
    0Richard W. Gilbert
    
    
    20,297,184
    
    
    
    768,001,000
    
    
    
    727,050
    
    
    
    0Arthur L. Knight
    
    
    20,359,939
    
    
    
    768,001,000
    
    
    
    664,295
    
    
    
    0
  
 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 April 26, 2005).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
    
    Amendment Number 1 to Management Services Agreement between the Registrant and
Calamos Family Partners, Inc.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.
 -20-




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##### Table of Contents



SIGNATURES
  CALAMOS ASSET MANAGEMENT, INC.(Registrant)Date: August 11, 2005
    
    By:
    
    /s/ Patrick H. DudasikPatrick H. DudasikExecutive Vice President, Chief FinancialOfficer and Treasurer
 -21-