##### 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:
 September 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
    
    32-0122554
(I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)2020 Calamos Court, Naperville, Illinois
    
    60563(Address of Principal Executive Offices)
    
    (Zip Code)
 (630) 245-7200
 
 þ o
 o þ
 o þ




---



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 6. ExhibitsLeaseCertificationCertificationSection 906 CertificationSection 906 Certification    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)
 September 30,
    
    December 31,2005
    
    2004(unaudited)ASSETS:Current assetsCash and cash equivalents
    
    $
    174,195
    
    
    $
    149,768Receivables:Affiliates and affiliated funds
    
    
    22,718
    
    
    
    21,222Customers
    
    
    8,402
    
    
    
    6,012Investment securities, trading and available for sale
    
    
    198,148
    
    
    
    147,521Prepaid expenses
    
    
    1,614
    
    
    
    1,917Deferred tax asset, net
    
    
    4,777
    
    
    
    6,892Other
    
    
    3,176
    
    
    
    4,046Total current assets
    
    
    413,030
    
    
    
    337,378Non-current assetsDeferred tax asset, net
    
    
    105,364
    
    
    
    111,186Deferred sales commissions
    
    
    60,228
    
    
    
    61,417Property and equipment, net of accumulated depreciation ($4,967
at 9/30/05 and $3,588 at 12/31/04)
    
    
    39,730
    
    
    
    4,902Other non-current assets
    
    
    1,767
    
    
    
    1,569Total non-current assets
    
    
    207,089
    
    
    
    179,074Total assets
    
    
    620,119
    
    
    
    516,452LIABILITIES AND STOCKHOLDERS EQUITY:Current liabilitiesAccounts payable:Brokers
    
    
    16,832
    
    
    
    12,514Affiliates
    
    
    102
    
    
    
    813Accrued compensation and benefits
    
    
    14,394
    
    
    
    9,985Accrued expenses and other current liabilities
    
    
    8,759
    
    
    
    17,767Total current liabilities
    
    
    40,087
    
    
    
    41,079Long-term liabilitiesLong-term debt
    
    
    150,000
    
    
    
    150,000Other long-term liabilities
    
    
    6,665
    
    
    
    263Total long-term liabilities
    
    
    156,665
    
    
    
    150,263Total liabilities
    
    
    196,752
    
    
    
    191,342Minority interest in partnership investments
    
    
    43,766
    
    
    
    31,322Minority interest in Calamos Holdings LLC
    
    
    201,561
    
    
    
    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
    
    
    154,894
    
    
    
    154,156Retained earnings
    
    
    20,117
    
    
    
    2,364Accumulated other comprehensive income
    
    
    2,799
    
    
    
    1,744Total stockholders equity
    
    
    178,040
    
    
    
    158,494Total liabilities, minority interest and stockholders equity
    
    $
    620,119
    
    
    $
    516,452
  -2-




---



##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
 CONSOLIDATED STATEMENTS OF INCOME
Three and Nine Months Ended September 30, 2005 and 2004
(in thousands, except per share data)
(unaudited)
 Three Months Ended September 30,
    
    Nine Months Ended September 30,2005
    
    2004
    
    2005
    
    2004(Predecessor)
    
    
    
    
    
    (Predecessor)Revenues:Investment management fees
    
    $
    73,669
    
    
    $
    55,837
    
    
    $
    206,939
    
    
    $
    148,540Distribution and underwriting fees
    
    
    33,335
    
    
    
    24,769
    
    
    
    94,724
    
    
    
    70,571Other
    
    
    682
    
    
    
    625
    
    
    
    2,416
    
    
    
    1,635Total revenues
    
    
    107,686
    
    
    
    81,231
    
    
    
    304,079
    
    
    
    220,746Expenses:Employee compensation and benefits
    
    
    15,365
    
    
    
    17,103
    
    
    
    45,146
    
    
    
    45,248Distribution and underwriting expense
    
    
    20,642
    
    
    
    12,967
    
    
    
    57,006
    
    
    
    34,670Amortization of deferred sales commissions
    
    
    7,894
    
    
    
    7,598
    
    
    
    23,798
    
    
    
    21,677Marketing and sales promotion
    
    
    3,760
    
    
    
    3,733
    
    
    
    10,296
    
    
    
    15,730General and administrative
    
    
    6,693
    
    
    
    4,376
    
    
    
    16,765
    
    
    
    10,563Total expenses
    
    
    54,354
    
    
    
    45,777
    
    
    
    153,011
    
    
    
    127,888Operating income
    
    
    53,332
    
    
    
    35,454
    
    
    
    151,068
    
    
    
    92,858Other income (expenses):Interest expense
    
    
    (2,036
    )
    
    
    (2,052
    )
    
    
    (6,105
    )
    
    
    (3,945
    )Investment and other income
    
    
    6,007
    
    
    
    392
    
    
    
    10,172
    
    
    
    2,908Total other income (expense), net
    
    
    3,971
    
    
    
    (1,660
    )
    
    
    4,067
    
    
    
    (1,037
    )Income before minority interests and
income taxes
    
    
    57,303
    
    
    
    33,794
    
    
    
    155,135
    
    
    
    91,821Minority interest in partnership investments
    
    
    2,416
    
    
    
    
    
    
    
    3,444
    
    
    
    Income before minority interest in Calamos
Holdings LLC and income taxes
    
    
    54,887
    
    
    
    33,794
    
    
    
    151,691
    
    
    
    91,821Minority interest in Calamos Holdings LLC
    
    
    42,224
    
    
    
    
    
    
    
    116,739
    
    
    
    Income before income taxes
    
    
    12,663
    
    
    
    33,794
    
    
    
    34,952
    
    
    
    91,821Income taxes
    
    
    5,024
    
    
    
    688
    
    
    
    13,940
    
    
    
    1,565Net income
    
    $
    7,639
    
    
    $
    33,106
    
    
    $
    21,012
    
    
    $
    90,256Earnings per shareBasic
    
    $
    0.33
    
    
    $
    0.34
    
    
    $
    0.91
    
    
    $
    0.93Diluted
    
    $
    0.33
    
    
    $
    0.34
    
    
    $
    0.91
    
    
    $
    0.93Weighted average shares outstandingBasic
    
    
    23,000,100
    
    
    
    96,800,000
    
    
    
    23,000,100
    
    
    
    96,800,000Diluted
    
    
    100,667,805
    
    
    
    96,800,000
    
    
    
    100,606,766
    
    
    
    96,800,000
  -3-




---



##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
Nine Months Ended September 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
    
    
    
    
    
    
    
    
    
    
    21,012
    
    
    
    
    
    
    
    21,012Changes in unrealized gains on
available-for-sale
securities, net of minority interest and
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,055
    
    
    
    1,055Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,067Compensation expense recognized under stock
incentive plans, net of minority interest
    
    
    
    
    
    
    738
    
    
    
    
    
    
    
    
    
    
    
    738Dividend equivalent accrued under stock
Incentive plans, net of minority interest
    
    
    
    
    
    
    
    
    
    
    (39
    )
    
    
    
    
    
    
    (39
    )Dividends declared
    
    
    
    
    
    
    
    
    
    
    (3,220
    )
    
    
    
    
    
    
    (3,220
    )Balance at September 30, 2005
    
    $
    230
    
    
    $
    154,894
    
    
    $
    20,117
    
    
    $
    2,799
    
    
    $
    178,040
  -4-




---



##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2005 and 2004
(in thousands)
(unaudited)
 2005
    
    2004(Predecessor)Cash and cash equivalents at beginning of year
    
    $
    149,768
    
    
    $
    5,073Cash flows from operating activities:Net income
    
    
    21,012
    
    
    
    90,256Adjustments to reconcile net income to net cash provided by
operating activities:Minority interest in partnership investments
    
    
    3,444
    
    
    
    Minority interest in Calamos Holdings LLC
    
    
    116,739
    
    
    
    Amortization of deferred sales commissions
    
    
    23,798
    
    
    
    21,677Other depreciation and amortization
    
    
    3,204
    
    
    
    1,078Unrealized appreciation on trading securities
    
    
    (6,158
    )
    
    
    (79
    )Unrealized (appreciation) depreciation on investment in partnership
    
    
    70
    
    
    
    (59
    )Management fee received in partnership units
    
    
    (115
    )
    
    
    (121
    )Stock-based compensation
    
    
    3,210
    
    
    
    Deferred taxes
    
    
    7,242
    
    
    
    Loss (gain) on disposal of property
    
    
    515
    
    
    
    (1,989
    )Non-cash donation of equipment
    
    
    139
    
    
    
    (Increase) decrease in assets:Accounts receivable:Customers
    
    
    (2,390
    )
    
    
    (1,241
    )Affiliates and affiliated mutual funds
    
    
    (1,496
    )
    
    
    (5,290
    )Deferred sales commissions
    
    
    (22,609
    )
    
    
    (31,807
    )Other assets
    
    
    806
    
    
    
    (2,027
    )Increase in liabilities:Accounts payable
    
    
    3,607
    
    
    
    4,051Accrued compensation and benefits and deferred compensation
    
    
    4,409
    
    
    
    7,925Other liabilities and accrued expenses
    
    
    4,224
    
    
    
    11,345Net cash provided by operating activities
    
    
    159,651
    
    
    
    93,719Cash flows used in investing activities:Net additions to property and equipment
    
    
    (38,472
    )
    
    
    (8,831
    )Net purchases of securities and partnership investments
    
    
    (27,859
    )
    
    
    (47,245
    )Net cash used in investing activities
    
    
    (66,331
    )
    
    
    (56,076
    )Cash flows provided by (used in) financing activities:Net payments on bank debt
    
    
    
    
    
    
    (30,199
    )Net payments on mortgage payable
    
    
    
    
    
    
    (152
    )Net borrowings on debt offering
    
    
    
    
    
    
    148,003Cash dividends paid to minority shareholders
    
    
    (64,063
    )
    
    
    (43,345
    )Cash dividends paid to common shareholders
    
    
    (4,830
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (68,893
    )
    
    
    74,307Net increase in cash
    
    
    24,427
    
    
    
    111,950Cash and cash equivalents at end of period
    
    $
    174,195
    
    
    $
    117,023
  -5-




---



##### Table of Contents



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
  -6-




---



##### Table of Contents



CALAMOS ASSET MANAGEMENT, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (4) Property and Equipment
  (5) Earnings Per Share
  Three Months Ended
    
    Nine Months Ended(in thousands, except per share data)
    
    September 30,
    
    September 30,2005
    
    2004
    
    2005
    
    2004Earnings per share  basicEarnings available to common shareholders
    
    $
    7,639
    
    
    $
    33,106
    
    
    $
    21,012
    
    
    $
    90,256Weighted average shares outstanding
    
    
    23,000
    
    
    
    96,800
    
    
    
    23,000
    
    
    
    96,800Earnings per share  basic
    
    $
    0.33
    
    
    $
    0.34
    
    
    $
    0.91
    
    
    $
    0.93Earnings per share  dilutedIncome before minority interest in
Calamos Holdings LLC and income taxes
    
    $
    54,887
    
    
    $
    33,794
    
    
    $
    151,691
    
    
    $
    91,821Less: Impact of income taxes
    
    
    21,774
    
    
    
    688
    
    
    
    60,494
    
    
    
    1,565Earnings available to common shareholders
    
    $
    33,113
    
    
    $
    33,106
    
    
    $
    91,197
    
    
    $
    90,256Weighted 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
    
    
    605
    
    
    
    
    
    
    
    565
    
    
    
    Dilutive impact of stock options
    
    
    63
    
    
    
    
    
    
    
    42
    
    
    
    Weighted average shares and potential
dilutive shares outstanding
    
    
    100,668
    
    
    
    96,800
    
    
    
    100,607
    
    
    
    96,800Earnings per share  diluted
    
    $
    0.33
    
    
    $
    0.34
    
    
    $
    0.91
    
    
    $
    0.93
  -7-




---



##### Table of Contents



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
 Accounting Changes and Error Corrections.
 -8-




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    September 30,($ in millions)
    
    2005
    
    2004Mutual FundsOpen-end funds
    
    $
    24,480
    
    
    $
    17,307Closed-end funds
    
    
    5,996
    
    
    
    5,798Total mutual funds
    
    
    30,476
    
    
    
    23,105Separate AccountsInstitutional accounts
    
    
    3,912
    
    
    
    3,108Managed accounts
    
    
    7,012
    
    
    
    6,576Private client accounts
    
    
    681
    
    
    
    443Alternative investments
    
    
    88
    
    
    
    17Total separate accounts
    
    
    11,693
    
    
    
    10,144Total assets under management
    
    $
    42,169
    
    
    $
    33,249
    -9-




---



##### Table of Contents



Operating Results
 Third Quarter and Nine Months Ended September 30, 2005 Compared to Third Quarter and Nine Months
Ended September 30, 2004
 Assets Under Management
  ($ in millions)
    
    Three Months Ended September 30,
    
    Nine Months Ended September 30,Change
    
    
    
    
    
    
    
    
    
    Change2005
    
    2004
    
    Amount
    
    Percent
    
    2005
    
    2004
    
    Amount
    
    PercentMutual FundsBeginning assets under management
    
    $
    28,333
    
    
    $
    22,290
    
    
    $
    6,043
    
    
    
    27
    %
    
    $
    26,951
    
    
    $
    14,650
    
    
    $
    12,301
    
    
    
    84
    %Net purchases
    
    
    471
    
    
    
    1,219
    
    
    
    (748
    )
    
    
    61
    
    
    
    2,604
    
    
    
    8,070
    
    
    
    (5,466
    )
    
    
    68Market appreciation (depreciation)
    
    
    1,672
    
    
    
    (404
    )
    
    
    2,076
    
    
    
    514
    
    
    
    921
    
    
    
    385
    
    
    
    536
    
    
    
    139Ending assets under management
    
    
    30,476
    
    
    
    23,105
    
    
    
    7,371
    
    
    
    32
    
    
    
    30,476
    
    
    
    23,105
    
    
    
    7,371
    
    
    
    32Average assets under management
    
    
    29,572
    
    
    
    22,230
    
    
    
    7,342
    
    
    
    33
    
    
    
    28,035
    
    
    
    19,539
    
    
    
    8,496
    
    
    
    43Separate AccountsBeginning assets under management
    
    
    11,179
    
    
    
    9,972
    
    
    
    1,207
    
    
    
    12
    
    
    
    11,024
    
    
    
    9,189
    
    
    
    1,835
    
    
    
    20Net purchases (redemptions)
    
    
    (74
    )
    
    
    317
    
    
    
    (391
    )
    
    
    123
    
    
    
    356
    
    
    
    627
    
    
    
    (271
    )
    
    
    43Market appreciation (depreciation)
    
    
    588
    
    
    
    (145
    )
    
    
    733
    
    
    
    506
    
    
    
    313
    
    
    
    328
    
    
    
    (15
    )
    
    
    5Ending assets under management
    
    
    11,693
    
    
    
    10,144
    
    
    
    1,549
    
    
    
    15
    
    
    
    11,693
    
    
    
    10,144
    
    
    
    1,549
    
    
    
    15Average assets under management
    
    
    11,514
    
    
    
    9,868
    
    
    
    1,646
    
    
    
    17
    
    
    
    11,098
    
    
    
    9,627
    
    
    
    1,471
    
    
    
    15Total Assets Under ManagementBeginning assets under management
    
    
    39,512
    
    
    
    32,262
    
    
    
    7,250
    
    
    
    22
    
    
    
    37,975
    
    
    
    23,839
    
    
    
    14,136
    
    
    
    59Net purchases
    
    
    397
    
    
    
    1,536
    
    
    
    (1,139
    )
    
    
    74
    
    
    
    2,960
    
    
    
    8,697
    
    
    
    (5,737
    )
    
    
    66Market appreciation (depreciation)
    
    
    2,260
    
    
    
    (549
    )
    
    
    2,809
    
    
    
    512
    
    
    
    1,234
    
    
    
    713
    
    
    
    521
    
    
    
    73Ending assets under management
    
    
    42,169
    
    
    
    33,249
    
    
    
    8,920
    
    
    
    27
    
    
    
    42,169
    
    
    
    33,249
    
    
    
    8,920
    
    
    
    27Average assets under management
    
    $
    41,086
    
    
    $
    32,098
    
    
    $
    8,988
    
    
    
    28
    %
    
    $
    39,133
    
    
    $
    29,166
    
    
    $
    9,967
    
    
    
    34
    %
  -10-




---



##### Table of Contents



Revenues
  ($ in thousands)
    
    Three Months Ended September 30,
    
    Nine Months Ended September 30,Change
    
    
    
    
    
    
    
    
    
    Change2005
    
    2004
    
    Amount
    
    Percent
    
    2005
    
    2004
    
    Amount
    
    PercentInvestment management fees
    
    $
    73,669
    
    
    $
    55,837
    
    
    $
    17,832
    
    
    
    32
    %
    
    $
    206,939
    
    
    $
    148,540
    
    
    $
    58,399
    
    
    
    39
    %Distribution and
underwriting fees
    
    
    33,335
    
    
    
    24,769
    
    
    
    8,566
    
    
    
    35
    
    
    
    94,724
    
    
    
    70,571
    
    
    
    24,153
    
    
    
    34Other
    
    
    682
    
    
    
    625
    
    
    
    57
    
    
    
    9
    
    
    
    2,416
    
    
    
    1,635
    
    
    
    781
    
    
    
    48Total revenues
    
    $
    107,686
    
    
    $
    81,231
    
    
    $
    26,455
    
    
    
    33
    %
    
    $
    304,079
    
    
    $
    220,746
    
    
    $
    83,333
    
    
    
    38
    %
   Operating Expenses
  ($ in thousands)
    
    Three Months Ended September 30,
    
    Nine Months Ended September 30,Change
    
    
    
    
    
    
    
    
    
    Change2005
    
    2004
    
    Amount
    
    Percent
    
    2005
    
    2004
    
    Amount
    
    PercentEmployee compensation and benefits
    
    $
    15,365
    
    
    $
    17,103
    
    
    $
    (1,738
    )
    
    
    10
    %
    
    $
    45,146
    
    
    $
    45,248
    
    
    $
    (102
    )
    
    
    
    %Distribution expense
    
    
    20,642
    
    
    
    12,967
    
    
    
    7,675
    
    
    
    59
    
    
    
    57,006
    
    
    
    34,670
    
    
    
    22,336
    
    
    
    64Amortization of deferred sales
commissions
    
    
    7,894
    
    
    
    7,598
    
    
    
    296
    
    
    
    4
    
    
    
    23,798
    
    
    
    21,677
    
    
    
    2,121
    
    
    
    10Marketing and sales promotion
    
    
    3,760
    
    
    
    3,733
    
    
    
    27
    
    
    
    1
    
    
    
    10,296
    
    
    
    15,730
    
    
    
    (5,434
    )
    
    
    35General and administrative
    
    
    6,693
    
    
    
    4,376
    
    
    
    2,317
    
    
    
    53
    
    
    
    16,765
    
    
    
    10,563
    
    
    
    6,202
    
    
    
    59Total operating expenses
    
    $
    54,354
    
    
    $
    45,777
    
    
    $
    8,577
    
    
    
    19
    %
    
    $
    153,011
    
    
    $
    127,888
    
    
    $
    25,123
    
    
    
    20
    %
  -11-




---



##### Table of Contents



Income Taxes
  Net Income
  -12-




---



##### Table of Contents



(in thousands, except share data)
    
    Three Months Ended September 30,Pro Forma
    
    2004 as2005
    
    2004
    
    Adjustments
    
    AdjustedRevenues:Investment management fees
    
    $
    73,669
    
    
    $
    55,837
    
    
    $
    
    
    
    $
    55,837Distribution and underwriting fees
    
    
    33,335
    
    
    
    24,769
    
    
    
    
    
    
    
    24,769Other
    
    
    682
    
    
    
    625
    
    
    
    
    
    
    
    625Total revenues
    
    
    107,686
    
    
    
    81,231
    
    
    
    
    
    
    
    81,231Expenses:Employee compensation and benefits
    
    
    15,365
    
    
    
    17,103
    
    
    
    
    
    
    
    17,103Distribution and underwriting expense
    
    
    20,642
    
    
    
    12,967
    
    
    
    
    
    
    
    12,967Amortization of deferred sales commissions
    
    
    7,894
    
    
    
    7,598
    
    
    
    
    
    
    
    7,598Marketing and sales promotion
    
    
    3,760
    
    
    
    3,733
    
    
    
    
    
    
    
    3,733General and administrative
    
    
    6,693
    
    
    
    4,376
    
    
    
    
    
    
    
    4,376Total expenses
    
    
    54,354
    
    
    
    45,777
    
    
    
    
    
    
    
    45,777Operating income
    
    
    53,332
    
    
    
    35,454
    
    
    
    
    
    
    
    35,454Total other income (expense), net
    
    
    1,555
    (1)
    
    
    (1,660
    )
    
    
    
    
    
    
    (1,660
    )Income before minority interest in Calamos
Holdings LLC and income taxes
    
    
    54,887
    
    
    
    33,794
    
    
    
    
    
    
    
    33,794Minority interest
    
    
    42,224
    
    
    
    
    
    
    
    26,022
    (2)
    
    
    26,022Income before income taxes
    
    
    12,663
    
    
    
    33,794
    
    
    
    (26,022
    )
    
    
    7,772Income taxes
    
    
    5,024
    
    
    
    688
    
    
    
    2,412
    (3)
    
    
    3,100Net income
    
    $
    7,639
    
    
    $
    33,106
    
    
    $
    (28,434
    )
    
    $
    4,672Earnings per share, basic
    
    $
    0.33
    
    
    $
    0.34
    
    
    
    
    
    
    $
    0.20Weighted average shares outstanding, basic
    
    
    23,000,100
    
    
    
    96,800,000
    (4)
    
    
    
    
    
    
    23,000,100
    (5)Calculation of earnings per share,
diluted, assuming exchange of membership
units:Income before minority interest in
Calamos Holdings LLC and income taxes
    
    
    54,887
    
    
    
    
    
    
    
    
    
    
    
    33,794Impact of income taxes (6)
    
    
    21,774
    
    
    
    
    
    
    
    
    
    
    
    13,480Earnings available to common
shareholders
    
    
    33,113
    
    
    
    
    
    
    
    
    
    
    
    20,314Earnings per share, diluted
    
    $
    0.33
    
    
    $
    0.34
    
    
    
    
    
    
    $
    0.20Weighted average shares outstanding,
diluted (7)
    
    
    100,667,805
    
    
    
    96,800,000
    
    
    
    
    
    
    
    100,000,100
 -13-




---



##### Table of Contents



(in thousands, except share data)
    
    Nine Months Ended September 30,Pro Forma
    
    2004 as2005
    
    2004
    
    Adjustments
    
    AdjustedRevenues:Investment management fees
    
    $
    206,939
    
    
    $
    148,540
    
    
    $
    
    
    
    $
    148,540Distribution and underwriting fees
    
    
    94,724
    
    
    
    70,571
    
    
    
    
    
    
    
    70,571Other
    
    
    2,416
    
    
    
    1,635
    
    
    
    (157
    )(8)
    
    
    1,478Total revenues
    
    
    304,079
    
    
    
    220,746
    
    
    
    (157
    )
    
    
    220,589Expenses:Employee compensation and benefits
    
    
    45,146
    
    
    
    45,248
    
    
    
    (123
    )(8)
    
    
    45,125Distribution and underwriting expense
    
    
    57,006
    
    
    
    34,670
    
    
    
    
    
    
    
    34,670Amortization of deferred sales commissions
    
    
    23,798
    
    
    
    21,677
    
    
    
    
    
    
    
    21,677Marketing and sales promotion
    
    
    10,296
    
    
    
    15,730
    
    
    
    
    
    
    
    15,730General and administrative
    
    
    16,765
    
    
    
    10,563
    
    
    
    115
    (8)
    
    
    10,678Total expenses
    
    
    153,011
    
    
    
    127,888
    
    
    
    (8
    )
    
    
    127,880Operating income
    
    
    151,068
    
    
    
    92,858
    
    
    
    (149
    )
    
    
    92,709Total other income (expense), net
    
    
    623
    (1)
    
    
    (1,037
    )
    
    
    (1,808
    )(8)
    
    
    (2,845
    )Income before minority interest in Calamos
Holdings LLC and income taxes
    
    
    151,691
    
    
    
    91,821
    
    
    
    (1,957
    )
    
    
    89,864Minority interest
    
    
    116,739
    
    
    
    
    
    
    
    69,196
    (2)
    
    
    69,196Income before income taxes
    
    
    34,952
    
    
    
    91,821
    
    
    
    (71,153
    )
    
    
    20,668Income taxes
    
    
    13,940
    
    
    
    1,565
    
    
    
    6,679
    (3)
    
    
    8,244Net income
    
    $
    21,012
    
    
    $
    90,256
    
    
    $
    (77,832
    )
    
    $
    12,424Earnings per share, basic
    
    $
    0.91
    
    
    $
    0.93
    
    
    
    
    
    
    $
    0.54Weighted average shares outstanding, basic
    
    
    23,000,100
    
    
    
    96,800,000
    (4)
    
    
    
    
    
    
    23,000,100
    (5)Calculation of earnings per share,
diluted, assuming exchange of membership
units:Income before minority interest in
Calamos Holdings LLC and income taxes
    
    
    151,691
    
    
    
    
    
    
    
    
    
    
    
    89,864Impact of income taxes (6)
    
    
    60,494
    
    
    
    
    
    
    
    
    
    
    
    35,847Earnings available to common
shareholders
    
    
    91,197
    
    
    
    
    
    
    
    
    
    
    
    54,017Earnings per share, diluted
    
    $
    0.91
    
    
    $
    0.93
    
    
    
    
    
    
    $
    0.54Weighted average shares outstanding,
diluted (7)
    
    
    100,606,766
    
    
    
    96,800,000
    
    
    
    
    
    
    
    100,000,100
 -14-




---



##### Table of Contents



(1)
    
    Includes $6.0 million of investment gains, partially offset by $2.4 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 September 30, 2005 and
includes $10.2 million of investment gains, partially offset by $6.1 million of interest
expense and $3.4 million of minority interest related to the consolidation of the Calamos
Equity Opportunities Fund L.P. for the nine month period ended September 30, 2005.
 (2)
    
    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.
 (3)
    
    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.
 (4)
    
    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.
 (5)
    
    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.
 (6)
    
    In calculating diluted earnings per share, the 2005 effective rates for the
three and nine months ended September 30, 2005 of 39.67% and 39.88%, respectively, and the
2004 effective tax rate of 39.89% were applied to income before minority interest and income
taxes.
 (7)
    
    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
dilutive restricted stock units and dilutive 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.
 (8)
    
    Represents the adjustment related to the Real Estate Distribution based on actual
amounts recorded during the periods presented.
  ($ in thousands)
    
    Three Months Ended September 30,
    
    Nine Months Ended September 30,Change
    
    
    
    
    
    
    
    
    
    Change2005
    
    2004
    
    Amount
    
    Percent
    
    2005
    
    2004
    
    Amount
    
    Percent(Pro Forma)
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Pro Forma)Total revenues
    
    $
    107,686
    
    
    $
    81,231
    
    
    $
    26,455
    
    
    
    33
    %
    
    $
    304,079
    
    
    $
    220,589
    
    
    $
    83,490
    
    
    
    38
    %Total operating expenses
    
    
    54,354
    
    
    
    45,777
    
    
    
    8,577
    
    
    
    19
    
    
    
    153,011
    
    
    
    127,880
    
    
    
    25,131
    
    
    
    20Operating income
    
    
    53,332
    
    
    
    35,454
    
    
    
    17,878
    
    
    
    50
    
    
    
    151,068
    
    
    
    92,709
    
    
    
    58,359
    
    
    
    63Other income (expense), net
    
    
    1,555
    
    
    
    (1,660
    )
    
    
    3,215
    
    
    
    *
    
    
    
    623
    
    
    
    (2,845
    )
    
    
    3,468
    
    
    
    *Minority interest
    
    
    42,224
    
    
    
    26,022
    
    
    
    16,202
    
    
    
    62
    
    
    
    116,739
    
    
    
    69,196
    
    
    
    47,543
    
    
    
    69Income taxes
    
    
    5,024
    
    
    
    3,100
    
    
    
    1,924
    
    
    
    62
    
    
    
    13,940
    
    
    
    8,244
    
    
    
    5,696
    
    
    
    69Net income
    
    $
    7,639
    
    
    $
    4,672
    
    
    $
    2,967
    
    
    
    64
    %
    
    $
    21,012
    
    
    $
    12,424
    
    
    $
    8,588
    
    
    
    69
    %
  -15-




---



##### Table of Contents



Liquidity and Capital Resources
   September 30,
    
    December 31,(in thousands)
    
    2005
    
    2004Statements of financial condition data:Cash and cash equivalents
    
    $
    174,195
    
    
    $
    149,768Receivables
    
    
    31,120
    
    
    
    27,234Investments
    
    
    198,148
    
    
    
    147,521Deferred tax asset
    
    
    110,141
    
    
    
    118,078Deferred sales commissions
    
    
    60,228
    
    
    
    61,417Property and equipment, net
    
    
    39,730
    
    
    
    4,902Long-term debt
    
    
    150,000
    
    
    
    150,000
  Nine Months EndedSeptember 30,(in thousands)
    
    2005
    
    2004Cash flow data:Net cash provided by operating activities
    
    $
    159,651
    
    
    $
    93,719Net cash used by investing activities
    
    
    (66,331
    )
    
    
    (56,076
    )Net cash provided by (used in) financing activities
    
    
    (68,893
    )
    
    
    74,307
     -16-




---



##### 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
 Accounting Changes and Error Corrections.
 Forward-Looking Information
    -17-




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
   -18-




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 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
    
    Lease Between 2020 Calamos Court
LLC and Calamos Holdings LLC (formerly with Calamos Holdings, 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.
 -19-




---



##### Table of Contents



SIGNATURES
  CALAMOS ASSET MANAGEMENT, INC.(Registrant)Date:  November 10, 2005
    By:
    /s/ Patrick H. DudasikPatrick H. DudasikExecutive Vice President, Chief Financial Officer
and Treasurer -20-