<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL PERIOD ENDED DECEMBER 31, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 333-34-477
-----------
GLOBAL DECISIONS GROUP LLC
(Exact name of registrant as specified in its charter)
DELAWARE 13-3963605
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o MCCARTHY, CRISANTI & MAFFEI, INC.
590 MADISON AVENUE
NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
212-896-7510
<PAGE> 2
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No X
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes X No
--- ---
At June 16, 1998 there were 4,838,710 Limited Liability Company units
outstanding.
This special financial report contains only financial statements for
the fiscal year ended December 31, 1997 pursuant to Rule 15d-2.
<PAGE> 3
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
CONSOLIDATED FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT ACCOUNTANTS
YEAR ENDED DECEMBER 31, 1997
<PAGE> 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
MCM Group, Inc. and Subsidiaries:
We have audited the accompanying consolidated balance sheet of MCM GROUP, INC.
and SUBSIDIARIES (the Predecessor Company of Global Decisions Group LLC - see
Note 1 to the consolidated financial statements) as of December 31, 1997, and
the related consolidated statements of income, changes in members' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of MCM
Group, Inc. and Subsidiaries as of December 31, 1997, and the consolidated
results of its operations and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.
New York, New York
February 20, 1998
<PAGE> 5
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
CONSOLIDATED BALANCE SHEET
As of December 31, 1997
(in 000's except for units and per unit amounts)
<TABLE>
<CAPTION>
ASSETS 1997
-------
<S> <C>
Current assets:
Cash and cash equivalents $15,979
Accounts receivable, net of allowance for doubtful accounts of $307 in 1997 4,387
Prepaid expenses and other assets 397
-------
Total current assets 20,763
Furniture, equipment and leasehold improvements, net 1,842
Excess of cost over fair value of net assets acquired, net 15,688
Other assets 2,264
-------
Total assets $40,557
=======
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 757
Accrued vendor commissions 1,683
Income taxes payable 2,012
Bank loans payable 577
Payroll and benefit-related liabilities 2,405
-------
Total current liabilities 7,434
Deferred income taxes payable 456
Other liabilities, including minority interest 1,068
-------
Total liabilities 8,958
Commitments and contingencies
Redeemable voting LLC units:
Voting LLC Units, 168,655 units issued and outstanding at redemption value of $10.47
per unit, less notes receivable from members of $885 880
Members' equity:
Voting LLC units, 3,170,054 issued and outstanding 22,182
Undistributed earnings 8,537
-------
Total members' equity 30,719
-------
Total liabilities and members' equity $40,557
=======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 6
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 1997
(In 000's except per unit and unit amounts)
<TABLE>
<CAPTION>
1997
----------
<S> <C>
Revenues:
Research services $ 40,227
Expenses:
Vendor commissions 11,714
Compensation and benefits 12,114
Sales, distribution and administrative 8,895
Amortization of excess of cost over fair value of
net assets acquired 779
----------
Total expenses 33,502
Operating income 6,725
Interest income 687
Other income, net 55
----------
Income before income taxes 7,467
Income taxes 3,544
----------
Net income $ 3,923
==========
Per LLC Unit:
Net income per LLC unit:
Basic and diluted $ 1.18
Weighted-average units outstanding 3,327,818
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 7
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS' EQUITY
Year ended December 31, 1997
(In 000's)
<TABLE>
<CAPTION>
VOTING LLC UNDISTRIBUTED
UNITS EARNINGS TOTAL
---------- ------------- -------
<S> <C> <C> <C>
Balance at December 31, 1996 $22,182 $ 4,614 $26,796
Net income 3,923 3,923
------- ------- -------
Balance at December 31, 1997 $22,182 $ 8,537 $30,719
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 8
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended December 31, 1997
(in 000's)
<TABLE>
<CAPTION>
1997
--------
<S> <C>
Cash flows from operating activities:
Net income $ 3,923
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,154
Changes in assets and liabilities:
Decrease in receivables, net 264
Increase in accounts payable and accrued expenses 59
Increase in accrued vendor commissions 166
Increase in income taxes payable 1,698
Increase in payroll and benefit-related liabilities 827
Decrease in deferred income taxes (385)
Increase in other, net (1,433)
--------
Total adjustments 2,350
Net cash provided by operating activities 6,273
--------
Cash flows used by investing activities:
Capital expenditures (171)
--------
Cash flows from financing activities:
Net bank loan repayments (80)
Issuance of redeemable LLC units, less notes receivable 80
--------
Net cash provided by financing activities --
Net increase in cash 6,102
Cash and cash equivalents at beginning of year 9,877
--------
Cash and cash equivalents at end of year $ 15,979
========
Supplementary disclosure of cash flow information:
Cash paid for:
Income taxes $ 2,231
Interest 9
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE> 9
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 1997
1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS:
MCM Group, Inc. ("MGI" or the "Predecessor Company"), a Delaware
corporation, was incorporated on August 21, 1996 as a wholly owned
subsidiary of VK/AC Holding, Inc. ("Holding"). On that date, Holding was
a majority owned subsidiary of The Clayton & Dubilier Private Equity Fund
IV Limited Partnership ("C&D Fund IV"), which is managed by Clayton
Dubilier & Rice, Inc. Prior to August 31, 1996, McCarthy, Crisanti &
Maffei, Inc. ("MCM") was a wholly owned subsidiary of Holding. On August
31, 1996, Holding's ownership interest in MCM was transferred to MGI. On
August 31, 1996, 100% of the outstanding Class A common stock of MGI was
distributed to the stockholders of record of Holding as a dividend on
their shares of Holding's common stock. Upon the distribution, MGI became
a majority owned subsidiary of C&D Fund IV.
Global Decisions Group LLC, the successor company ("GDG"), a Delaware
limited liability company, was formed by MGI and MCM on June 30, 1997,
for the purpose of effecting the Merger, as discussed in Note 2, whereby
a wholly owned subsidiary of GDG was merged into MGI on February 12,
1998, with MGI as the surviving corporation. Pursuant to this Merger each
outstanding share of MGI common stock was converted into the right to
receive limited liability company units of GDG. Therefore, the Merger has
been accounted for in a manner similar to the pooling of interests method
due to the common ownership of MGI and GDG.
The financial statements include the accounts of GDG, MGI and MCM and its
subsidiaries (collectively, "the Company") and reflect the exchange of
MGI common stock for GDG units in the Merger. All material intercompany
accounts and transactions have been eliminated in consolidation.
MCM and its subsidiaries are providers of specialized on-line financial
information and analysis relating to domestic and international debt and
currency markets. MCM distributes its products primarily through on-line
telecommunications information networks to institutional clients in 54
countries. In addition to its headquarters in New York, MCM has offices
in Boston, London, Paris, Tokyo, Hong Kong and Singapore.
2. MERGER AND EXCHANGE TRANSACTION:
On August 1, 1997, MGI entered into the Plan of Merger and Exchange
Agreement (the "Merger Agreement") by and among MGI, GDG, the
stockholders of Cambridge Energy Research Associates, Inc. ("CERA"), and
The Goldman Sachs Group, L.P. ("Goldman"). On February 12, 1998, in
accordance with the Merger Agreement, GDG Merger Corporation, a wholly
owned subsidiary of GDG which was formed specifically for the purpose of
the Merger,
6
<PAGE> 10
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Year ended December 31, 1997
was merged into MGI (the "Merger"). MGI was the surviving corporation and
became a wholly owned subsidiary of GDG. Each share of MGI Class A and
Class C common stock (redeemable - see Note 8 - and non-redeemable)
ceased to be outstanding and was converted into the right to receive
9.55555 limited liability company units of GDG ("Units"), as provided in
the Merger Agreement.
The CERA stockholders exchanged each outstanding share of common stock
and non-voting common stock of CERA for 5.17956 Units, 1,243,125 Units in
total, the contingent right to receive from 0.49875 to 2.94851 additional
Units, and a contingent option to purchase 0.37028 additional Units.
Goldman exchanged a portion of its limited partnership interest in
Cambridge Energy Research Associates Limited Partnership ("CERA LP"),
which was immediately transferred to CERA, for 150,000 Units, the
contingent right to receive from 14,444 to 85,389 additional Units, and a
contingent option to purchase 9,874 additional Units. The contingent
rights and the contingent options are subject to the attainment of
certain revenue growth rates by CERA.
On February 11, 1998, MCM entered into a five year revolving credit
agreement with Chase Manhattan Bank and Bank of America National Trust
and Savings Association which provides for a $30,000,000 facility. In
accordance with the Merger Agreement, on February 12, 1998, MCM loaned
$25,000,000 to CERA. CERA used these funds to distribute $21,510,000 to
its stockholders and to purchase a portion of the limited partnership
interest in CERA LP from Goldman for $2,390,000.
As a result of these transactions, CERA became a wholly owned subsidiary
of GDG, and CERA LP was dissolved and its assets and liabilities
transferred to CERA.
The acquisition of CERA on February 12, 1998, for approximately
$46,000,000 ($16,000,000 in Units and $30,000,000 in cash) has been
accounted for as a purchase in accordance with Accounting Principles
Board Opinion No. 16. Intangibles (principally goodwill) of approximately
$40,000,000 arising on the acquisition are to be amortized over their
estimated useful lives of five to twenty-five years. As of December 31,
1997, the Company capitalized approximately $1,800,000 of costs incurred
in the acquisition which have been included in other assets. Upon the
closing of the transaction, amortization of such costs commenced as part
of intangibles.
7
<PAGE> 11
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Year ended December 31, 1997
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
RESEARCH SERVICES
Revenue from Research Services results from the Company producing and
distributing electronic information services worldwide and is recognized
when the services are provided. The life of the customers' contract
period is generally one year. Amounts billed or collected relating to
future periods are classified as unearned revenue and recognized as the
services are provided.
VENDOR COMMISSIONS
Vendor commissions are royalties paid to distributors of the Company's
on-line services.
DEPRECIATION
The Company provides for depreciation of equipment using the straight
line method over three years. Leasehold improvements and furniture are
amortized over the lesser of the remaining lives of the leases or their
estimated useful lives using the straight-line method. All fixed assets
are stated at cost and related repair and maintenance charges are
expensed as incurred. When assets are sold, retired or otherwise disposed
of, the applicable costs and accumulated depreciation are removed from
the accounts and the resulting gain or loss is included in the
consolidated statement of income. Accumulated depreciation at December
31, 1997, was $1,434,000.
AMORTIZATION
The estimated life of Excess of Cost Over Fair Value of Net Assets
Acquired was determined by an independent study. The Company assesses
impairment of this asset based on several factors, including probable
fair market value, cash flows, and the aggregate value of the business as
a whole. Excess of Cost Over Fair Value of Net Assets Acquired is being
amortized over twenty-five years on a straight line basis. Accumulated
amortization of Excess of Cost Over Fair Value of Net Assets Acquired at
December 31, 1997, was $3,794,000.
TRANSLATION OF FOREIGN CURRENCIES
The monetary assets and liabilities of foreign operations that are
denominated in foreign currencies are converted into U.S. dollars at year
end or historical exchange rates. Income and expense items are converted
into U.S. dollars at average rates of exchange prevailing during the
year. Foreign exchange gains and losses are not material to the
consolidated financial statements.
8
<PAGE> 12
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Year ended December 31, 1997
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income" and SFAS No. 131,
"Disclosure about Segments of an Enterprise and Related Information."
SFAS 130 establishes standards for reporting and display of comprehensive
income and its components in full set general-purpose financial
statements. SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997. Reclassification of financial statements for earlier
periods provided for comparative purposes is required. The adoption of
SFAS No. 130 will have no impact on the Company's consolidated results of
operations, financial position or cash flows.
SFAS No. 131 establishes standards for the way that public business
enterprises report information about operating segments in annual
financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports issued
to shareholders. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. SFAS
No. 131 is effective for financial statements for fiscal years beginning
after December 15, 1997. The adoption of SFAS No. 131 will have no impact
on the Company's consolidated results of operations, financial position
or cash flows.
Effective in December 1997 the Company adopted the provisions of SFAS No.
128, "Earnings per Share," and SFAS No. 129, "Disclosure of Information
about Capital Structure."
4. INCOME TAXES:
The Company accounts for income taxes in accordance with the provisions
of SFAS No. 109, "Accounting for Income Taxes." Under this standard,
deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled.
9
<PAGE> 13
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Year ended December 31, 1997
Income tax expense for the year ended December 31, 1997 consisted of (in
000's):
<TABLE>
<S> <C>
Current:
U.S. Federal $1,957
State, local, and foreign 1,499
------
3,456
------
Deferred:
U.S. Federal 75
State and local 13
------
88
------
Total $3,544
======
</TABLE>
The deferred income tax liability shown on the consolidated balance sheet
at December 31, 1997, is due primarily to temporary differences between
tax and book amortization of excess of cost over fair value of net assets
acquired.
The provision for income taxes is different from that which would be
computed by applying the statutory federal income tax rate to income
before taxes. The principal reasons for the differences for the year
ended December 31, 1997, are set forth in the table below.
Federal statutory rate 34.0%
State taxes, net of federal income
tax benefit 10.0
Foreign and other, net 3.4
----
Effective rate 47.4%
=====
5. PROFIT SHARING:
The Company administers a profit sharing plan qualified under the
Internal Revenue Code for all employees, as well as a non-qualified plan
for highly compensated employees who wish to defer additional income. The
Company's contribution to the plans was $350,000 for the year ended
December 31, 1997.
10
<PAGE> 14
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Year ended December 31, 1997
6. COMMITMENTS AND CONTINGENCIES:
Rent expense for office space was $1,420,000, net of sublease income of
approximately $216,000 from an affiliate of Holding, for the year ended
December 31, 1997. Future minimum lease commitments under non-cancelable
long-term leases are:
<TABLE>
<CAPTION>
YEAR (000's)
---- ---------
<S> <C>
1998 $ 1,004
1999 1,014
2000 1,129
2001 1,129
2002 1,129
2003 through 2018 9,312
---------
$ 14,717
=========
</TABLE>
In the ordinary course of business, certain claims arise against the
Company. Management believes such claims are without merit and will
vigorously defend its position. In the opinion of management, based on
the information currently available, the ultimate resolution of these
claims will not have a material adverse affect on the Company's financial
position or the results of its operations.
7. FOREIGN OPERATIONS:
The Company provides research services to various customers in foreign
countries. For the year ended December 31, 1997, such revenues amounted
to $19,744,000.
8. REDEEMABLE UNITS:
The Company sold 19,111 Units in 1997 to members of management, other key
employees and directors of the Company (the "Management Investors"). The
Company agreed to repurchase 168,655 of the total Units outstanding at
fair market value under certain defined conditions, such as death,
disability, retirement at normal retirement age, or termination of
employment without cause. Fair market value is periodically estimated by
the Company's board of directors considering, among other factors, the
value as determined by an independent appraisal. The redeemable Units
held by the Management Investors have been presented on the balance sheet
as redeemable Units and excluded from members' equity.
11
<PAGE> 15
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Year ended December 31, 1997
The redeemable Units have been reported at redemption value at issuance,
which exceeds the estimated fair market value of the Units at December
31, 1997, less notes receivable of $885,000 from the Management
Investors.
9. STOCK OPTION PLANS:
OPTIONS ISSUED UNDER THE STOCK OPTION PLAN
Options to purchase 408,194 Units have been granted to the Management
Investors pursuant to the MCM Group, Inc. Stock Option Plan (the "Stock
Option Plan"). Under the terms of the Merger Agreement, the options
outstanding under the Stock Option Plan for the Predecessor Company's
Class C Common Stock were automatically converted into options to receive
Units at the closing date. One half of the options issued under the Stock
Option Plan were Service Options which will vest over a period of time up
to five years, 20% on each anniversary of the option grant date subject
to continued employment with the Company or a subsidiary and accelerated
vesting in the event of death or a change in control of the Company. The
other options issued under the Stock Option Plan were Performance Options
which will vest three years from the date of grant subject to continued
employment with the Company and the achievement of certain financial
performance objectives by the Company and vesting in the event of death
or change in control of the Company. All of the Performance Options
become exercisable nine years from the grant date regardless of the
achievement of the financial performance objectives. The Service Options
and the Performance Options expire on the tenth anniversary of the grant
date.
The following summarizes activity in the Stock Option Plan for the year
ended December 31, 1997:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
UNITS PRICE
------- --------
<S> <C> <C>
Balance, December 31, 1996 361,946 $ 12.75
Service Options Granted 23,124 $ 12.75
Performance Options Granted 23,124 12.75
------- --------
Balance, December 31, 1997 408,194 $ 12.75
======= ========
</TABLE>
The range of exercise prices was from $10.47 to $15.03 per share.
As of December 31, 1997, 36,196 options were exercisable, 63,468 Units
were available for future grants, and the average contractual life
remaining was 8.76 years.
12
<PAGE> 16
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Year ended December 31, 1997
OPTIONS ISSUED UNDER THE SPECIAL STOCK OPTION PLAN
The Company's Special Stock Option Plan (the "Plan") provided for the
grant of stock options for the Predecessor Company's Class A Common Stock
on August 31, 1996, to certain current and former employees of Holding.
The options were awarded in connection with the transfer of the ownership
of MCM from Holding to the Company. Under the terms of the Merger
Agreement, the options outstanding under the Plan at the closing date
were automatically converted into options to receive Units.
As of December 31, 1997 and 1996, options to purchase 459,718 Units at a
weighted average exercise price of $10.47 were outstanding, and were
fully vested and exercisable upon issuance.
As of December 31, 1997, no Units were available for future grants and
the average contractual life remaining was 3.67 years.
The Company has adopted SFAS No. 123, "Accounting for Stock-Based
Compensation." As permitted by the provisions of SFAS No. 123 the Company
applies Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" and related interpretations in accounting for its
stock option plans. No compensation cost has been recognized for the
Company's stock option plans. If compensation cost for the Company's
stock option plans had been determined based on the fair value method as
defined by SFAS No. 123, the Company's pro forma net income for 1997
would have approximated $3,763,000 and the basic earnings per Unit would
have approximated $1.13.
The weighted average fair value of options granted in 1997 was $2.05 per
Unit. The fair value is based on the minimum value method with the
following assumptions for 1997: risk-free interest rate of 6.26%, no
dividend yield, and a weighted average expected life of the options of 3
years.
10. BANK LOANS:
A subsidiary maintains credit facilities in Japanese Yen which provide
financing availability approximating $700,000, with variable interest
rates. The average interest rate during the year ended December 31, 1997,
was 1.80%. The Company is not required to pay any commitment fees.
13
<PAGE> 17
MCM GROUP, INC. AND SUBSIDIARIES
(PREDECESSOR COMPANY OF GLOBAL DECISIONS GROUP LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Year ended December 31, 1997
11. PER UNIT AMOUNTS:
In February 1997, SFAS No. 128, "Earnings Per Share" was issued. The
statement, which is effective for financial statements issued for periods
ending after December 15, 1997, modifies the standards for computing and
presenting earnings per share (EPS). SFAS No. 128 requires the dual
presentation of a basic EPS and a diluted EPS on the face of the income
statement.
Options outstanding at December 31, 1997, as shown in Note 9 to the
financial statements, were excluded from the diluted earnings per Unit
calculation because the options' exercise prices were greater than the
average fair value during 1997.
14
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York as of the 16th day of June, 1998.
GLOBAL DECISIONS GROUP LLC
By: /s/ Gordon McMahon
----------------------------
Gordon McMahon
Vice President and Secretary
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
- --------------------------- ----------------------------- -------------
/s/ Alberto Cribiore Director and President June 16, 1998
- --------------------------- (Principal Executive Officer)
Alberto Cribiore
/s/ Chauncey Morgan Chief Financial Officer June 16, 1998
- --------------------------- (Principal Financial Officer)
Chauncey Morgan
/s/ Richard J. Schnall Treasurer June 16, 1998
- --------------------------- (Principal Financial Officer)
Richard J. Schnall
/s/ Gordon McMahon Director and President, June 16, 1998
- --------------------------- and Secretary
Gordon McMahon
/s/ David Nixon Director and Vice President June 16, 1998
- ---------------------------
David Nixon
<PAGE> 19
SIGNATURES TITLE DATE
- --------------------------- ----------------------------- -------------
/s/ Donald J. Gogel Director and Vice President June 16, 1998
- ---------------------------
Donald J. Gogel
/s/ Peter Derow Director June 16, 1998
- ---------------------------
Peter Derow
/s/ Martin D. Payson Director June 16, 1998
--------------------------
Martin D. Payson
/s/ Wallace Mathai-Davis Director June 16, 1998
- ---------------------------
Wallace Mathai-Davis
/s/ Dennis McDonnell Director June 16, 1998
- ---------------------------
Dennis J. McDonnell
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 15,979
<SECURITIES> 0
<RECEIVABLES> 4,694
<ALLOWANCES> (307)
<INVENTORY> 0
<CURRENT-ASSETS> 20,763
<PP&E> 3,276
<DEPRECIATION> (1,434)
<TOTAL-ASSETS> 40,557
<CURRENT-LIABILITIES> 7,434
<BONDS> 0
880<F1>
0
<COMMON> 22,182<F2>
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<CGS> 23,828
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<LOSS-PROVISION> 300
<INTEREST-EXPENSE> (687)
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<INCOME-TAX> 3,544
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<EPS-PRIMARY> 1.18
<EPS-DILUTED> 1.18
<FN>
<F1>REDEEMABLE VOTING LLC UNITS
<F2>VOTING LLC UNITS
</FN>
</TABLE>
