SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-10994
--------------
For the quarterly period ended September 30, 2000
PHOENIX INVESTMENT PARTNERS, LTD.
DELAWARE 95-4191764
(State of Incorporation) (I.R.S. Employer Identification No.)
56 Prospect St., Hartford, Connecticut 06115-0480 (860) 403-5000
(Address of principal executive offices) (Registrant's telephone number)
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 X No ___
On October 31, 2000, the registrant had 45,894,419 shares of $.01 par value
common stock outstanding.
<PAGE>
PHOENIX INVESTMENT PARTNERS, LTD. AND SUBSIDIARIES
Quarter Ended September 30, 2000
Index
PART I - FINANCIAL INFORMATION:
Page
Item 1. Consolidated Financial Statements:
Consolidated Condensed Statements of Financial Condition. 3
September 30, 2000 and December 31, 1999
Consolidated Statements of Income........................ 4
Three Months Ended September 30, 2000 and
Three Months Ended September 30, 1999
Consolidated Statements of Income........................ 5
Nine Months Ended September 30, 2000 and
Nine Months Ended September 30, 1999
Consolidated Condensed Statements of Cash Flows ......... 6
Nine Months Ended September 30, 2000 and
Nine Months Ended September 30, 1999
Notes to Consolidated Financial Statements............... 7
Item 2. Management's Discussion and Analysis of:
Results of Operations and Financial Condition............ 14
Liquidity and Capital Resources.......................... 20
Market Risk.............................................. 21
Cautionary Statement under Section 21E of the Securities
Exchange Act of 1934.................................. 21
PART II - OTHER INFORMATION:
Item 1. Legal Proceedings........................................ 22
Item 4. Submission of Matters to a Vote of Security Holders...... 22
Item 6. Exhibits and Reports on Form 8-K......................... 22
Signatures........................................................ 23
2
<PAGE>
PART I. Financial Information
Item 1. Consolidated Financial Statements
Phoenix Investment Partners, Ltd. and Subsidiaries
Consolidated Condensed Statements of Financial Condition
(in thousands)
(Unaudited)
September 30, December 31,
2000 1999
Assets
Current Assets
Cash and cash equivalents $ 43,559 $ 42,203
Marketable securities, at market 10,152 7,941
Accounts receivable 49,429 45,658
Prepaid expenses and other current assets 3,352 3,487
--------- --------
Total current assets 106,492 99,289
Deferred commissions 688 1,219
Furniture, equipment and leasehold improvements, net 12,967 12,475
Goodwill and intangible assets, net 574,789 556,534
Long-term investments and other assets 16,637 12,169
--------- --------
Total assets $ 711,573 $681,686
========= ========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and other accrued liabilities $ 47,161 $ 45,987
Payables to related parties 3,024 4,749
Broker-dealer payable 10,494 13,197
Current portion of long-term debt 225 964
--------- --------
Total current liabilities 60,904 64,897
Deferred taxes, net 39,811 45,656
Long-term debt, net of current portion 225 754
Convertible subordinated debentures 70,021 76,364
Credit facilities 245,000 235,000
Lease obligations and other long-term liabilities 4,783 3,759
--------- --------
Total liabilities 420,744 426,430
--------- --------
Minority Interest 2,407 4,255
--------- --------
Stockholders' Equity
Common stock, $.01 par value, 100,000,000 shares
authorized, 47,852,783 and 45,760,201 shares issued,
and 45,824,865 and 43,760,201 shares outstanding 479 458
Additional paid-in capital 216,822 200,410
Retained earnings 84,689 60,737
Unrealized gains on securities available-for-sale 2,842 5,143
Unearned compensation on restricted stock (2,021) (1,029)
Treasury stock, at cost, 2,027,918 and 2,000,000 shares (14,389) (14,718)
--------- --------
Total stockholders' equity 288,422 251,001
--------- --------
Total liabilities and stockholders' equity $ 711,573 $681,686
========= ========
The accompanying notes are an integral part of these statements.
3
<PAGE>
Phoenix Investment Partners, Ltd. and Subsidiaries
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
Three Months Ended
September 30,
2000 1999
Revenues
Investment management fees $ 71,079 $ 64,168
Mutual funds - ancillary fees 7,649 7,814
Other income and fees 1,947 1,384
--------- --------
Total revenues 80,675 73,366
--------- --------
Operating Expenses
Employment expenses 35,641 29,395
Other operating expenses 19,073 17,377
Depreciation and amortization of
leasehold improvements 959 1,031
Amortization of goodwill and intangible assets 7,763 7,992
Amortization of deferred commissions 134 339
--------- --------
Total operating expenses 63,570 56,134
--------- --------
Operating Income 17,105 17,232
--------- --------
Equity in Earnings of Unconsolidated Affiliates 245 359
--------- --------
Nonrecurring Items (2,700) (5,900)
--------- --------
Gain on Sale 3,672
--------- --------
Other Income (Expense) - Net 622 (120)
--------- --------
Interest (Expense) Income - Net
Interest expense (4,865) (5,090)
Interest income 653 955
--------- --------
Total interest expense - net (4,212) (4,135)
--------- --------
Income to Minority Interest (1,315) (948)
--------- --------
Income Before Income Taxes 13,417 6,488
Provision for income taxes 4,894 2,712
--------- --------
Net Income $ 8,523 $ 3,776
========= ========
Weighted average shares outstanding
Basic 44,884 43,929
Diluted 55,793 54,031
Earnings per share
Basic $ .19 $ .09
Diluted $ .16 $ .08
The accompanying notes are an integral part of these statements.
4
<PAGE>
Phoenix Investment Partners, Ltd. and Subsidiaries
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
Nine Months Ended
September 30,
2000 1999
Revenues
Investment management fees $ 214,212 $182,258
Mutual funds - ancillary fees 26,260 23,300
Other income and fees 5,204 3,772
--------- --------
Total revenues 245,676 209,330
--------- --------
Operating Expenses
Employment expenses 99,296 85,167
Other operating expenses 56,444 48,601
Depreciation and amortization of
leasehold improvements 2,970 2,875
Amortization of goodwill and intangible assets 23,636 22,297
Amortization of deferred commissions 531 1,348
--------- --------
Total operating expenses 182,877 160,288
--------- --------
Operating Income 62,799 49,042
--------- --------
Equity in Earnings of Unconsolidated Affiliates 362 825
--------- --------
Nonrecurring Items 1,800 (5,900)
--------- --------
Gain on Sale 12,544
--------- --------
Other Income - Net 1,452 578
--------- --------
Interest (Expense) Income - Net
Interest expense (14,631) (13,995)
Interest income 1,702 2,415
--------- --------
Total interest expense - net (12,929) (11,580)
--------- --------
Income to Minority Interest (4,091) (2,534)
--------- --------
Income Before Income Taxes 61,937 30,431
Provision for income taxes 27,433 13,237
--------- --------
Net Income $ 34,504 $ 17,194
========= ========
Weighted average shares outstanding
Basic 44,476 43,810
Diluted 54,335 53,873
Earnings per share
Basic $ .78 .39
Diluted $ .67 .36
The accompanying notes are an integral part of these statements.
5
<PAGE>
Phoenix Investment Partners, Ltd. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(in thousands)
(Unaudited)
Nine Months Ended
` September 30,
2000 1999
Cash Flows from Operating Activities:
Net income $ 34,504 $ 17,194
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of
leasehold improvements 2,970 2,875
Amortization of goodwill and intangible assets 23,636 22,297
Amortization of deferred commissions 531 1,348
Income to minority interest 4,091 2,534
Compensation recognized under employee
benefit plans 1,998 1,265
Gain on sale (12,544)
Nonrecurring items 2,700 5,900
Equity in earnings of unconsolidated
affiliates, net of dividends (318) (633)
Changes in other operating assets (3,228) (1,647)
Changes in other operating liabilities (6,603) (3,257)
-------- --------
Net cash provided by operating activities 47,737 47,876
-------- --------
Cash Flows from Investing Activities:
Purchase of subsidiaries, net of cash acquired (59,191) (138,551)
Proceeds from sale of National-Oilwell, Inc.
common stock 12,544
Proceeds from sale of Cleveland operations 4,985
Capital expenditures, net (3,737) (4,375)
(Purchase) sale of marketable securities, net (333) 10,804
Purchase of long-term investments (736) (569)
Proceeds from long-term investments 489
-------- --------
Net cash used in investing activities (46,468) (132,202)
-------- --------
Cash Flows from Financing Activities:
Proceeds from borrowings, net 8,733 109,358
Dividends paid (10,552) (7,869)
Distributions to minority interest (3,627) (1,978)
Stock repurchases (284) (2,723)
Proceeds from issuance of stock 5,817 2,362
Other financing activities (174)
--------- --------
Net cash provided by financing activities 87 98,976
-------- --------
Net increase in cash and cash equivalents 1,356 14,650
Cash and cash equivalents, beginning of period 42,203 29,298
-------- --------
Cash and Cash Equivalents, End of Period $ 43,559 $ 43,948
======== ========
Supplemental Cash Flow Information:
Interest paid $ 13,669 $13,549
Income taxes paid $ 41,778 $27,347
The accompanying notes are an integral part of these statements.
6
<PAGE>
Phoenix Investment Partners, Ltd. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
1. Basis of Presentation
The unaudited consolidated financial statements of Phoenix Investment
Partners, Ltd. and Subsidiaries (PXP or the Company) included herein have
been prepared in accordance with the instructions to the Quarterly Report on
Form 10-Q pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It is
suggested that these consolidated financial statements be read in conjunction
with the financial statements and notes included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999. Reclassifications
have been made, when necessary, to conform the prior period presentation to
the current period presentation.
2. Pending Merger
On September 10, 2000, PXP entered into an agreement and plan of merger with
its majority stockholder PM Holdings, Inc. and its parent Phoenix Home Life
Mutual Insurance Company (PHL). Pursuant to the agreement, PM Holdings, Inc.
will acquire the remaining outstanding shares of PXP not already owned by PM
Holdings, Inc. for $15.75 per share, subject to approval by PXP shareholders.
As of September 30, 2000 PHL held a 58% interest in PXP.
3. Acquisition Related Activity
In September 2000, PXP, in accordance with the original terms of Roger
Engemann & Associates, Inc.'s (REA) Purchase and Sale Agreement, paid REA an
additional purchase price of $50 million, based upon growth in REA's
management fee revenues. This additional purchase price was financed through
borrowings from an existing credit facility and is included as a component of
goodwill and intangible assets in the Consolidated Condensed Statements of
Financial Condition.
On March 1, 1999, PXP acquired the retail mutual fund and closed-end fund
businesses of the New York City-based Zweig Fund Group (Zweig) for
consideration of approximately $135 million. The agreement provides for an
additional payout dependent upon revenue growth of the purchased businesses
through December 31, 2001.
The purchase price for Zweig represents the consideration paid and the direct
costs incurred by PXP related to the purchase. The excess of purchase price
over the fair value of acquired net tangible assets of Zweig totaled $136.4
million. Of this excess purchase price, $77.2 million has been allocated to
intangible assets, primarily associated with investment management contracts,
which are being amortized over their estimated useful lives using the
straight-line method. The average estimated useful life of the intangible
assets is approximately 12 years. The remaining excess purchase price of
$59.1 million has been classified as goodwill and is being amortized over 40
years using the straight-line method. Related amortization of $7.1 million
and $5.7 million has been expensed for the year to date periods ended
September 30, 2000 and 1999, respectively.
7
<PAGE>
The following table summarizes the calculation and allocation of Zweig's
purchase price (in thousands):
Purchase price:
Consideration paid $135,000
Transaction costs 2,391
--------
Total purchase price $137,391
========
Purchase price allocation:
Fair value of acquired net assets $ 1,033
Identified intangibles 77,210
Goodwill 59,148
--------
Total purchase price allocation $137,391
========
4. Pro Forma Results
The Company's financial results for 2000 include the operations of Zweig,
while the first nine months of 1999 exclude the operations of Zweig for the
period from January 1, 1999 through February 28, 1999. Management believes
that, for comparative purposes, the most meaningful financial presentation
for 1999 is on a pro forma basis.
The following financial information for the nine months ended September 30,
2000 reflects actual results. The pro forma financial information for the
nine months ended September 30, 1999 is derived from the historical financial
statements of PXP and Zweig, and gives effect to the acquisition of Zweig by
PXP assuming the acquisition was effected on January 1, 1999. The pro forma
financial information does not necessarily reflect the actual results that
would have been obtained had the acquisition taken effect on the
aforementioned assumed date.
Nine Months Ended
September 30,
2000 1999
Actual Pro Forma
(in thousands,
except per share data)
Revenues $245,676 $216,014
-------- --------
Employment expenses 99,296 87,631
Other operating expenses 59,945 54,135
Amortization of goodwill and
intangible assets 23,636 23,901
------- -------
Operating income 62,799 50,347
Other income (expense) - net 16,158 (4,497)
Interest expense - net (12,929) (12,864)
Income to minority interest (4,091) (2,534)
------- -------
Income before income taxes 61,937 30,452
Provision for income taxes 27,433 13,246
------- -------
Net income $34,504 $17,206
======= =======
Earnings per share
Basic $ .78 $ .39
Diluted $ .67 $ .36
8
<PAGE>
5. Segment Information
PXP has determined that its reportable segments are those based on the method
used for internal reporting, which disaggregates the business by customer
category. The Company's reportable segments are its retail and institutional
investment management lines of business. The retail line primarily serves the
individual investor by acting as advisor to and, in certain instances,
distributor for open-end mutual funds and managed accounts. The institutional
line provides management services primarily to corporate entities, closed-end
funds, structured finance products, and multi-employer retirement funds, as
well as endowment, insurance and other special purpose funds.
The following tables summarize pertinent financial information relative to
the Company's operations for the nine month periods ended September 30, 2000
and 1999:
September 30, 2000 Insti- All
Retail tutional Other Total
-------- ------- ------- ---------
(in thousands)
Revenues $157,286 $86,982 $ 1,408 $245,676
-------- ------- ------- --------
Employment and
other operating expenses 96,815 59,713 2,713 159,241
Amortization of goodwill
and intangible assets 12,760 10,876 23,636
-------- ------- ------- --------
Operating income (loss) 47,711 16,393 (1,305) 62,799
Other income - net 4,512 1,045 10,601 16,158
Interest expense (8,607) (5,258) (766) (14,631)
Interest income 176 276 1,250 1,702
Minority interest (4,091) (4,091)
-------- ------- ------- -------
Income before income taxes $ 43,792 $ 8,365 $ 9,780 $ 61,937
======== ======= ======= ========
(in millions)
Assets under management $ 29,116 $32,742 $ -- $ 61,858
======== ======= ======= ========
September 30, 1999 Insti- All
Retail tutional Other Total
-------- ------- ------- ---------
(in thousands)
Revenues $132,035 $75,720 $ 1,575 $209,330
-------- ------- ------- --------
Employment and
other operating expenses 85,644 50,422 1,925 137,991
Amortization of goodwill
and intangible assets 12,325 9,972 22,297
-------- ------- ------- --------
Operating income (loss) 34,066 15,326 (350) 49,042
Other (expense) income - net (5,973) 456 1,020 (4,497)
Interest expense (6,967) (3,534) (3,494) (13,995)
Interest income 559 186 1,670 2,415
Minority interest (2,534) (2,534)
-------- ------- ------- -------
Income (loss) before income taxes $ 21,685 $ 9,900 $(1,154) $ 30,431
======== ======= ======= ========
(in millions)
Assets under management $ 24,418 $33,627 $ -- $ 58,045
======== ======= ======= ========
The "All Other" column represents corporate office revenue and expenses which
are not directly attributable to a line of business.
There are no intersegment revenues. Balance sheet asset information by line
of business is not reported as the information is not produced internally and
is not utilized in managing the business.
9
<PAGE>
6. Long-term Debt
At September 30, 2000 and December 31, 1999, PXP had outstanding borrowings
of $200 million under a $200 million Credit Agreement. In addition, at
September 30, 2000 and December 31 1999, PXP had outstanding borrowings of
$45 million and $35 million, respectively, under a separate $175 million
Credit Agreement. Interest rates on both credit agreements are variable. The
credit agreements require no principal repayments prior to maturity. The
Company's majority stockholder, PHL, has guaranteed the obligations, for
which it is paid a .10% guarantee fee on the outstanding balances.
7. Dividends and Other Capital Transactions
On November 6, 2000, the Company's Board of Directors declared a quarterly
dividend of $.08 per common share payable December 7, 2000, to stockholders
of record on November 24, 2000. Interest on the 6% Convertible Subordinated
Debentures for the period from September 10, 2000 through December 9, 2000
will be payable on December 11, 2000 to registered holders as of November 20,
2000.
8. Comprehensive Income
The components of comprehensive income, and related tax effects, are as
follows:
Tax
(Expense) Net
Before Tax Benefit of Tax
---------- -------- -------
Three Months Ended September 30, 2000 (in thousands)
Net income $13,417 $ (4,894) $ 8,523
------- -------- -------
Other comprehensive income:
Net unrealized appreciation on securities
available-for-sale arising during period 130 (53) 77
Less: reclassification adjustment for gains
realized in net income (3,672) 1,505 (2,167)
------ -------- -------
Total other comprehensive income (3,542) 1,452 (2,090)
------ -------- -------
Comprehensive income $9,875 $ (3,442) $ 6,433
====== ======== =======
Nine Months Ended September 30, 2000
Net income $61,937 $(27,433) $34,504
------- -------- -------
Other comprehensive income:
Net unrealized appreciation on securities
available-for-sale arising during period 8,644 (3,544) 5,100
Less: reclassification adjustment for
gains realized in net income (12,544) 5,143 (7,401)
------- -------- -------
Total other comprehensive income (3,900) 1,599 (2,301)
------ -------- -------
Comprehensive income $58,037 $(25,834) $32,203
======= ======== =======
10
<PAGE>
Tax
(Expense) Net
Before Tax Benefit of Tax
---------- -------- -------
Three Months Ended September 30, 1999 (in thousands)
Net income $6,488 $ (2,712) $ 3,776
------ -------- -------
Other comprehensive income:
Net unrealized appreciation on securities
available-for-sale arising during period 1,463 (600) 863
------ -------- -------
Comprehensive income $7,951 $ (3,312) $ 4,639
====== ======== =======
Nine Months Ended September 30, 1999
Net income $30,431 $(13,237) $17,194
------- -------- -------
Other comprehensive income:
Net unrealized appreciation on securities
available-for-sale arising during period 3,136 (1,286) 1,850
------ -------- -------
Comprehensive income $33,567 $(14,523) $19,044
======= ======== =======
9. Nonrecurring Items
Legal Settlement
In September 2000, PXP agreed to settle pending litigation between PXP and
the former members of Associated Surplus Dealers, as outlined in the
Company's 1999 Annual Report on Form 10-K, for $2.7 million, including a
provision for attorneys fees. The terms of the final settlement are being
negotiated.
Insurance Recovery
In the second quarter of 2000, PXP received a $4.5 million insurance recovery
related to a $5.9 million loss recorded in the third quarter of 1999, which
resulted from the Company's decision to reimburse two mutual fund investment
portfolios which had inadvertently sustained losses.
Sale of Cleveland Operations
On June 30, 2000, PXP sold its Cleveland-based operations of Duff & Phelps
Investment Management Co. (DPIM), which managed and serviced $3.3 billion of
advisory assets, to a local management group. PXP received cash and a note
receivable totaling $8.3 million. Additional consideration may be received
based upon future revenue run rates. The transaction, as recorded, did not
have a material impact on the Company's pre-tax results of operations.
However, due to the inclusion of $8.5 million of non-deductible goodwill in
the basis of the Cleveland operations, the Company recorded a $3.4 million
tax expense.
11
<PAGE>
10. Gain on Sale
On March 3, 2000, PXP sold 188,260 shares of National-Oilwell, Inc. (NOI)
common stock, included in marketable securities at December 31, 1999, for
$251/2 per share, realizing a gain of $4.8 million in the first quarter. In
addition, on March 2, 2000, DPI Oil Service, LP (DPI), an affiliated limited
partnership in which PXP holds an interest, sold a portion of its shares of
NOI. The Company's proportionate share of the proceeds from the sale was $1.1
million, resulting in a total first quarter gain to PXP of $5.9 million
relating to the sale of NOI shares.
On March 13, 2000, DPI distributed its remaining shares of NOI common stock.
As a result of this distribution, PXP received 354,134 shares of NOI.
On June 16, 2000 PXP sold 100,000 shares of NOI common stock for $30.05 per
share, realizing a gain of $3.0 million. On August 7, 2000, PXP sold an
additional 100,000 shares of NOI common stock at an average price of $36.72
per share, realizing a gain of $3.7 million. As of September 30, 2000 the
Company held 154,134 shares of NOI, which are included in marketable
securities.
11. Earnings Per Share
Earnings per share (EPS) is calculated in accordance with SFAS No. 128,
"Earnings per Share." Basic EPS is computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding for the period. The computation of diluted EPS is similar to
basic EPS, except that the denominator is increased to include the number of
additional common shares that would have been outstanding if potentially
dilutive common shares had been issued, and the numerator is increased for
any related net income effect. Potentially dilutive shares are based on
outstanding stock options and convertible securities.
The following tables reconcile the Company's basic earnings per share to
diluted earnings per share:
Per-Share
Income Shares Amount
(in thousands)
For the Three Months Ended September 30, 2000
Basic EPS
Income available to common
stockholders $ 8,523 44,884 $ .19
======
Effect of Dilutive Securities
Stock options 2,198
6% convertible debentures 657 8,711
------- ------
Diluted EPS
Income available to common
stockholders and assumed
conversions $ 9,180 55,793 $ .16
======= ====== ======
12
<PAGE>
Per-Share
Income Shares Amount
(in thousands)
For the Nine Months Ended September 30, 2000
Basic EPS
Income available to common
stockholders $ 34,504 44,476 $ .78
======
Effect of Dilutive Securities
Stock options 1,148
6% convertible debentures 2,005 8,711
------- ------
Diluted EPS
Income available to common
stockholders and assumed
conversions $ 36,509 54,335 $ .67
======== ====== ======
For the Three Months Ended September 30, 1999
Basic EPS
Income available to common
stockholders $ 3,776 43,929 $ .09
======
Effect of Dilutive Securities
Stock options 603
6% convertible debentures 681 9,499
------- ------
Diluted EPS
Income available to common
stockholders and assumed
conversions $ 4,457 54,031 $ .08
======= ====== ======
For the Nine Months Ended September 30, 1999
Basic EPS
Income available to common
stockholders $ 17,194 43,810 $ .39
======
Effect of Dilutive Securities
Stock options 564
6% convertible debentures 2,022 9,499
------- ------
Diluted EPS
Income available to common
stockholders and assumed
conversions $ 19,216 53,873 $ .36
======== ====== ======
13
<PAGE>
Phoenix Investment Partners, Ltd. and Subsidiaries
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
BUSINESS DESCRIPTION
Phoenix Investment Partners, Ltd. and subsidiaries (PXP or the Company) provide
a variety of financial services to a broad base of institutional, corporate and
individual clients.
PXP currently operates two lines of business: retail and institutional
investment management. The retail line of business provides investment
management services to individuals on a discretionary basis (including
administrative services) with products consisting of open-end mutual funds and
managed accounts. Managed accounts include broker-dealer sponsored and
distributed wrap programs and individually managed account investment services
(private client), both of which are offered to high net-worth individuals. The
institutional line of business provides discretionary and non-discretionary
investment management services primarily to corporate entities, closed-end
funds, structured finance products, and multi-employer retirement funds, as well
as endowment, insurance, and other special purpose funds.
The following table summarizes operating revenues, income before income taxes,
and assets under management by line of business as of, and for the nine months
ended, September 30, 2000 and 1999:
Income Before Assets Under
Revenues Income Taxes Management
----------------- ----------------- ----------------
2000 1999 2000 1999 2000 1999
---- ---- ---- ---- ---- ----
(in thousands) (in thousands) (in millions)
Retail $157,286 $132,035 $ 43,792 $ 21,685 $ 29,116 $ 24,418
Institutional 86,982 75,720 8,365 9,900 32,742 33,627
All other * 1,408 1,575 9,780 (1,154)
-------- ------- -------- ------- -------- --------
Total $245,676 $209,330 $ 61,937 $ 30,431 $ 61,858 $ 58,045
======== ======== ======== ======== ======== ========
* - "All other" represents corporate office revenue and expenses, which are not
attributed directly to either line of business.
14
<PAGE>
RESULTS OF OPERATIONS
Assets Under Management
At September 30, 2000, PXP had $61.9 billion of assets under management, a
decrease of $2.7 billion from December 31, 1999, and an increase of $3.8 billion
from September 30, 1999. The decrease from December 31, 1999 is principally the
result of a reduction of $3.3 billion from the sale of Duff & Phelp's Investment
Management Co.'s (DPIM) Cleveland operations in June 2000 and net asset outflows
of $.8 billion, offset by $1.2 billion of positive performance. The increase
from September 30, 1999 is principally the result of $7.8 billion of positive
investment performance, offset, in part, by $3.3 billion from the sale of DPIM's
Cleveland operations, as well as net asset outflows of $.4 billion. Since the
revenues of the Company are substantially earned based upon assets under
management, this information is important to an understanding of the business.
September 30, June 30, December 31,September 30,
2000 2000 1999 1999
------- -------- -------- --------
(in millions)
Retail:
Open-end Mutual Funds $17,605 $ 17,561 $ 18,073 $ 15,911
Managed Accounts * 11,511 11,470 10,370 8,507
------- -------- -------- --------
29,116 29,031 28,443 24,418
------- -------- -------- --------
Institutional:
Institutional Accounts ** 16,218 15,933 20,514 18,327
Structured Finance Products *** 1,886 1,673 1,276 1,196
Closed-end Funds 4,837 4,545 4,596 4,566
PHL General Account and
Other PHL Related 9,801 9,650 9,772 9,538
------- -------- -------- --------
32,742 31,801 36,158 33,627
------- -------- -------- --------
$61,858 $ 60,832 $ 64,601 $ 58,045
======= ======== ======== ========
* Managed Accounts represent broker-dealer sponsored and distributed wrap fee
programs and individually managed account investment services, both of
which are offered to high net-worth individuals.
** Institutional Accounts include 100% of the assets managed by Seneca Capital
Management.
*** Structured Finance Products consist of debt and equity securities backed by
an actively managed portfolio of equity or fixed income securities.
Three Months Ended September 30, 2000 Compared with Three Months Ended
September 30, 1999 - Historical
Revenues for the three months ended September 30, 2000 of $80.7 million
increased $7.3 million (10%) from $73.4 million for the same period in 1999.
Revenues for the retail and institutional lines of business increased $6.0
million and $1.5 million, respectively.
15
<PAGE>
Investment management fees of $71.1 million for the three months ended September
30, 2000 increased $6.9 million (11%) as compared to $64.2 million for the same
period in 1999. Management fees earned by the retail line of business increased
$6.2 million due to an increase of $4.5 billion in average assets under
management. Management fees earned by the institutional line of business
increased $.7 million primarily due to increases in average assets under
management of $.5 billion and $3.4 billion for structured finance products and
at Seneca, respectively, offset, in part, by a $5.7 billion decrease in other
institutional assets under management, of which approximately $3.3 billion is
the result of the sale of DPIM's Cleveland operations in June 2000. The increase
in average assets managed, excluding Cleveland, since September 30, 1999 in each
line of business is primarily due to investment performance. In addition, the
retail line of business experienced net asset inflows for managed accounts of
$2.0 billion since September 30, 1999, offset by net asset outflows of $1.3
billion from other retail products, primarily mutual funds. Excluding the sale
of DPIM's Cleveland operations, the institutional line of business experienced
$1.2 billion of net asset outflows, comprised principally of net asset outflows
of $3.6 billion from DPIM, partially offset by net asset inflows of $1.4 billion
from Seneca and $.6 billion from structured finance products.
Mutual funds - ancillary fees, a component of the retail line of business, of
$7.6 million for the three months ended September 30, 2000, decreased $.2
million (2%) as compared to $7.8 million for the same period in 1999.
Administrative fees decreased $1.7 million partially as a result of a vote by
the Board of Trustees of the Phoenix-Engemann Funds, which eliminated the
administrative fee effective July 1, 2000, and whereby those funds going forward
are reimbursing PXP for charges that were previously covered by the
administrative fee (e.g.: shareholder service agent fees, fund accounting fees,
printing, etc.). Net distributor fees increased $.7 million as a result of an
increase in average assets managed, principally in the Phoenix-Engemann Funds.
Fund accounting fees earned on open-end mutual funds and Phoenix Home Life
Mutual Insurance Company (PHL) sponsored variable products increased $.7 million
primarily as a result of an increase in average assets under management as well
as reimbursement by the Phoenix-Engemann Funds.
Other income and fees of $1.9 million for the three months ended September 30,
2000 increased $.6 million (41%) as compared to $1.4 million for the same period
in 1999. A $1.1 million increase in commission income was offset, in part, by a
$.1 million decrease in the net fees earned administering the Zweig closed-end
funds and a $.2 million decrease due to the expiration of a name use fee.
Operating expenses for the three months ended September 30, 2000 of $63.6
million increased $7.4 million (13%) from $56.1 million for the same period in
1999, of which $3.5 million and $4.0 million related to the retail and
institutional lines of business, respectively.
Employment expenses of $35.6 million for the three months ended September 30,
2000 increased $6.2 million (21%) as compared to $29.4 million for the same
period in 1999. Incentive compensation increased by $3.7 million, of which $2.5
million is from certain subsidiaries that, in accordance with their respective
operating agreements, receive increased compensation directly related to
increases in their revenues or earnings. The addition of sales and marketing
positions in both the retail and institutional lines of business in the third
quarter of 2000 increased compensation expense by $2.6 million. Profit sharing
expense increased by $1.1 million. Additionally, the third quarter of 1999
included $1.1 million of one-time severance costs, which were the result of a
re-organization of the institutional line of business. An increase in base
compensation expense, primarily the result of annual salary adjustments, was
offset, in part, by certain other employment expense reductions.
Other operating expenses of $19.1 million for the three months ended September
30, 2000 increased $1.7 million (10%) as compared to $17.4 million for the same
period in 1999. An increase in outside services of $1.2 million was primarily
the result of the increased use of consultants for various Company initiatives.
Professional fees increased $.4 million as a result of various legal matters.
Depreciation and amortization of leasehold improvements was $1.0 million for
both of the three month periods ended September 30, 2000 and 1999.
16
<PAGE>
Amortization of goodwill and intangible assets of $7.8 million for the three
months ended September 30, 2000 decreased $.2 million (3%) as compared to $8.0
million for the same period in 1999 as a result of the sale of DPIM's Cleveland
operations in June 2000 offset, in part, by other increases in intangible
amortization.
Amortization of deferred commissions, a component of the retail line of
business, of $.1 million for the three months ended September 30, 2000 decreased
$.2 million (60%) as compared to $.3 million for the same period in 1999 as a
result of a decrease in Roger Engemann & Associates (REA) deferred commissions
asset established prior to February 1, 1998, which continues to be amortized.
Operating income of $17.1 million for the three months ended September 30, 2000
decreased $.1 million (1%) as compared to $17.2 million for the same period in
1999 as a result of the changes discussed above.
Equity in earnings of unconsolidated affiliates of $.2 million for the three
months ended September 30, 2000 decreased $.1 million (32%) as compared to $.4
million for the same period in 1999 due to a net decrease in equity earnings
from certain PXP limited partnership investments.
In September 2000 a nonrecurring item of $2.7 million resulted from an agreement
to settle pending litigation with the former members of Associated Surplus
Dealers. The 1999 item resulted from the Company's decision to reimburse two
mutual fund investment portfolios which had inadvertently sustained losses, of
which $4.5 million was recovered in the second quarter of 2000.
Gain on sale of $3.7 million is the result of the sale of an additional 100,000
shares of National-Oilwell, Inc. (NOI) common stock, which were distributed to
PXP in March 2000 from a joint venture investment.
Other income - net of $.6 million for the three months ended September 30, 2000
increased $.7 million as compared to other expense of $.1 million for the same
period in 1999, of which $.4 million is due to an increase in unrealized gains
on marketable securities.
Interest expense - net of $4.2 million for the three months ended September 30,
2000 increased $.1 million (2%) as compared to $4.1 million for the same period
in 1999. A $70 million decrease in the average outstanding balance on the credit
facilities offset, in part, by a 1.0% increase in the average interest rate
charged on borrowings, decreased interest expense by $.2 million. The repayment
of an interest-bearing promissory note in the fourth quarter of 1999, decreased
interest income by $.2 million in the third quarter of 2000 as compared to the
same quarter in 1999.
Income to minority interest of $1.3 million and $.9 million for the three months
ended September 30, 2000 and 1999, respectively, represents the minority
shareholders' interest in the equity earnings of Seneca, which is fully
consolidated in the Company's financial statements.
Net income for the three months ended September 30, 2000 of $8.5 million
reflects an increase of $4.7 million (126%) from $3.8 million for the third
quarter of 1999, resulting from the changes discussed above. The effective tax
rate of 36.5% for the three months ended September 30, 2000 decreased 5.3% from
41.8% for the same period in 1999 due to the effect of certain provision to tax
return items.
Nine Months Ended September 30, 2000 Compared with Nine Months Ended
September 30, 1999 - Historical
Revenues for the nine months ended September 30, 2000 of $245.7 million, which
includes $20.1 million for Zweig, increased $36.3 million (17%) from $209.3
million for the same period in 1999, which includes $20.1 million for Zweig.
Revenues for the retail and institutional lines of business increased $25.3
million and $11.3 million, respectively.
17
<PAGE>
Investment management fees of $214.2 million for the nine months ended September
30, 2000, which includes $17.2 million for Zweig, increased $32.0 million (18%)
as compared to $182.3 million for the same period in 1999, which includes $17.5
million for Zweig. Excluding Zweig, management fees earned by the retail and
institutional lines of business increased $23.9 million and $8.4 million,
respectively, due to increases of $5.2 billion and $1.0 billion, respectively,
in average assets under management. The overall increase in average assets
managed since September 30, 1999 in each line of business is primarily due to
investment performance. In addition, the retail line of business experienced net
asset inflows for managed accounts of $2.0 billion since September 30, 1999
offset by net asset outflows of $1.3 billion from other retail products,
primarily mutual funds. Excluding the sale of DPIM's Cleveland operations, the
institutional line of business experienced $1.2 billion of net asset outflows,
comprised principally of net asset outflows of $3.6 billion from DPIM, partially
offset by net asset inflows of $1.4 billion from Seneca and $.6 billion from
structured finance products.
Mutual funds - ancillary fees, a component of the retail line of business, of
$26.3 million for the nine months ended September 30, 2000, which includes $1.7
million for Zweig, increased $3.0 million (13%) as compared to $23.3 million for
the same period in 1999, which includes $.9 million for Zweig. Administrative
fees decreased $1.2 million primarily as a result of a vote by the Board of
Trustees of the Phoenix-Engemann Funds, which eliminated the administrative fee
effective July 1, 2000, and whereby these funds now reimburse PXP for charges
that were previously covered by the administrative fee (e.g.: shareholder
service agent fees, fund accounting fees, printing, etc.) offset by an increase
in average assets of the Phoenix-Engemann Funds during the first six months of
2000. Net distributor fees increased $1.6 million as a result of an increase in
average assets managed, principally in the Phoenix-Engemann Funds. Fund
accounting fees earned on open-end mutual funds and PHL sponsored variable
products increased $.9 million primarily as a result of an increase in average
assets under management as well as reimbursement by the Phoenix-Engemann Funds.
Shareholder service agent fees increased $.5 million as a result of a change in
the fee structure, which took effect in April 1999, and reimbursement by the
Phoenix-Engemann Funds beginning July 1, 2000.
Other income and fees of $5.2 million for the nine months ended September 30,
2000, which includes $1.3 million for Zweig, increased $1.4 million (38%) as
compared to $3.8 million for the same period in 1999, which includes $1.7
million for Zweig, primarily due to an increase in commission income.
Operating expenses for the nine months ended September 30, 2000 of $182.9
million, which includes $15.9 million for Zweig, increased $22.6 million (14%)
from $160.3 million for the same period in 1999, which includes $18.3 million
for Zweig. Operating expenses for the retail and institutional lines of business
increased $11.6 million and $10.2 million, respectively.
Employment expenses of $99.3 million for the nine months ended September 30,
2000, which includes $2.4 million for Zweig, increased $14.1 million (17%) as
compared to $85.2 million for the same period in 1999, which includes $6.6
million for Zweig. Incentive compensation increased by $12.4 million, of which
$9.1 million is from certain subsidiaries that, in accordance with their
operating agreements, receive increased compensation directly related to
increases in their revenues or earnings. Other sales and performance based
incentive compensation increased $3.3 million. The addition of sales and
marketing positions in both the retail and institutional lines of business in
the third quarter of 2000 increased compensation expense by $2.6 million. Profit
sharing expense increased by $1.7 million. Amortization of unearned
compensation, related to the issuance of restricted stock grants, increased
employment expense by $1.0 million. Savings resulting from the closing of the
equity department in Hartford in April 1999 decreased employment expenses by
$1.4 million for the nine months ended September 30, 2000. An increase in base
compensation expense, primarily as a result of annual salary adjustments, was
offset, in part, by certain other employment expense reductions.
18
<PAGE>
Other operating expenses of $56.4 million for the nine months ended September
30, 2000, which includes $5.8 million for Zweig, increased $7.8 million (16%) as
compared to $48.6 million for the same period in 1999, which includes $5.6
million for Zweig. Rent expense increased $1.0 million due to a one-time charge
related to a DPIM sublease transaction during the second quarter of 2000.
Commissions and finders fees increased $1.0 million due to increased sales.
Professional fees increased $1.0 million as a result of various legal matters.
Expenses related to open-end mutual funds, for which PXP is reimbursed by the
funds, increased $.7 million. An increase in outside services of $1.4 million, a
result of the increased use of consultants for various Company initiatives, was
offset, in part, by a $.4 million decrease in computer services, primarily
resulting from the completion of the Company's Year 2000 project and a decreased
reliance on PHL's mainframe systems. An increase of $.7 million resulted from an
increase in broker/dealer meeting expenses. Various other less significant year
over year variances increased other operating expenses by $2.2 million.
Depreciation and amortization of leasehold improvements of $3.0 million for the
nine months ended September 30, 2000, which includes $.5 million for Zweig,
remained relatively constant from $2.9 million for the same period in 1999,
which includes $.4 million for Zweig.
Amortization of goodwill and intangible assets of $23.6 million for the nine
months ended September 30, 2000 increased $1.3 million (6%) as compared to $22.3
million for the same period in 1999 as a result of the Zweig purchase, which was
completed on March 1, 1999 offset, in part, by the sale of DPIM's Cleveland
operations in June 2000.
Amortization of deferred commissions, a component of the retail line of
business, of $.5 million for the nine months ended September 30, 2000 decreased
$.8 million (61%) as compared to $1.3 million for the same period in 1999 as a
result of a decrease in REA's deferred commissions asset established prior to
February 1, 1998, which continues to be amortized.
Operating income of $62.8 million for the nine months ended September 30, 2000
increased $13.8 million (28%) as compared to $49.0 million for the same period
in 1999 as a result of the changes discussed above.
Equity in earnings of unconsolidated affiliates of $.4 million for the nine
months ended September 30, 2000 decreased $.5 million (56%) as compared to $.8
million for the same period in 1999 primarily due to a net decrease in equity
earnings from certain PXP limited partnership investments.
In September 2000 a nonrecurring item of $2.7 million resulted from an agreement
to settle pending litigation with the former members of Associated Surplus
Dealers. In the second quarter of 2000, PXP received a $4.5 million insurance
recovery related to the Company's decision to reimburse $5.9 million to two
mutual fund investment portfolios, which had inadvertently sustained losses in
the third quarter of 1999.
Gain on sale of $12.5 million is the result of the sale of NOI common stock
either directly or through an entity in which PXP has a partnership interest.
Other income - net of $1.5 million for the nine months ended September 30, 2000
increased $.9 million (151%) as compared to $.6 million for the same period in
1999, of which $.4 million is the result of an increase in unrealized gains on
investments in marketable securities.
Interest expense - net of $12.9 million for the nine months ended September 30,
2000 increased $1.3 million (12%) as compared to $11.6 million for the same
period in 1999 of which $.7 million is due to additional interest charges
resulting from the financing of the Zweig acquisition and a 1.0% increase in the
average interest rate charged on borrowings offset, in part, by a $25 million
reduction in the average outstanding balance since September 30, 1999. The
repayment of an interest-bearing promissory note in the fourth quarter of 1999,
decreased interest income by $.7 million in 2000.
Income to minority interest of $4.1 million and $2.5 million for the nine months
ended September 30, 2000 and 1999, respectively, represents the minority
shareholders' interest in the equity earnings of Seneca, which is fully
consolidated in the Company's financial statements.
19
<PAGE>
Net income for the nine months ended September 30, 2000 of $34.5 million
reflects an increase of $17.3 million from $17.2 million for the same period in
1999, resulting primarily from the changes discussed above. The effective tax
rate of 44.3% for the nine months ended September 30, 2000 increased .8% from
43.5% for the same period in 1999. This increase is primarily the result of the
sale of the DPIM's Cleveland operations in June 2000, for which there was a $3.4
million tax expense resulting from related goodwill included in the basis of the
disposed operations offset, in part, by the effect of certain provision to tax
return items. A tax liability, related to a portfolio-loss reimbursement
recorded in the third quarter of 1999, was released as a result of a related
insurance recovery in June 2000, which also decreased the effective tax rate for
the nine months ended September 30, 2000.
Nine Months Ended September 30, 2000 Compared with Nine Months Ended
September 30, 1999 - Pro Forma (see Note 4)
Except for the items noted below, the variances for the nine months ended
September 30, 2000 compared to the same pro forma period in 1999 are
substantially the same as historical.
Investment management fees of $214.2 million for the nine months ended September
30, 2000 increased $26.4 million (14%) from $187.8 million for the same pro
forma period in 1999. In addition to the historical variances noted above, Zweig
investment management fees decreased $5.9 million due to a $.7 billion decrease
in average assets under management resulting primarily from net asset outflows.
Net income of $34.5 million for the nine months ended September 30, 2000
increased $17.3 million as compared to $17.2 million for the same pro forma
period in 1999, resulting from the changes discussed above. The effective tax
rate increased to 44.3% for the nine months ended September 30, 2000 from 43.6%
for the same pro forma period in 1999, resulting entirely from the historical
variances noted above.
LIQUIDITY AND CAPITAL RESOURCES
The Company's business is not considered to be capital intensive. Working
capital requirements for the Company have historically been provided by
operating cash flow. It is expected that such cash flows will continue to serve
as the principal source of working capital for the Company for the near future.
The Company's current capital structure, as of October 31, 2000, includes 45.9
million shares of common stock outstanding and $69.9 million of 6% Convertible
Subordinated Debentures with a principal value of $25.00 per debenture. The
current dividend rate on common stock is $.08 per share per quarter. If the
dividend rate remains constant for 2000, the total annual dividend on common
stock would be $14.7 million based upon shares outstanding at October 31, 2000.
The total annual interest expense on the debentures based upon debentures
outstanding at October 31, 2000, at an interest rate of 6%, would be $4.2
million.
The Company has two five-year credit facilities, totaling $375 million, with no
required principal repayments prior to maturity ($200 million matures in August
2002 and $175 million matures in March 2004). The outstanding obligations under
the credit facilities at September 30, 2000 were $245 million with an average
interest rate of approximately 7.0%. The credit agreements contain financial and
operating covenants including, among other provisions, requirements that the
Company maintain certain financial ratios and satisfy certain financial tests,
restrictions on the ability to incur indebtedness, and limitations on the amount
of the Company's capital expenditures. At September 30, 2000, the Company was in
compliance with all covenants contained in the credit agreements. The Company
believes that funds from operations and amounts available under the credit
facility will provide adequate liquidity for the foreseeable future.
20
<PAGE>
The Company has commitments with unrelated third parties whereby the third
parties fund commissions paid by the Company upon the sale of Class B share
mutual funds. The commitments, which were to have expired on September 30, 2000,
were extended. Management expects to enter into similar financing effective
after December 1, 2000. However, if the Company is not successful in securing
refinancing, it will be necessary to fund these commissions using operating
cashflows.
The Company secured two letters of credit, totaling $4.2 million with the Bank
of Montreal in June 2000, which will expire on November 30, 2000. PHL has
guaranteed these lines of credit for which PXP will pay a guarantee fee.
Management considers the liquidity of the Company to be adequate to meet present
and anticipated needs.
MARKET RISK
The Company is exposed to the impact of interest rate changes and changes in the
market value of its investments and assets managed. The Company does not have
any derivative investments and has no exposure to foreign currency fluctuations.
The Company's exposure to changes in interest rates is limited to borrowings
under two five-year credit agreements, which have variable interest rates. The
average interest rate on the credit agreements in the first nine months of 2000
and for all of 1999 was approximately 6.9% and 6.0%, respectively. In addition,
the Company has Convertible Subordinated Debentures bearing interest at 6%. At
September 30, 2000, the Company estimated that the fair value of the Convertible
Subordinated Debentures approximated market value.
The Company invests excess cash in marketable securities, which consist of
mutual fund investments, of which the Company is the advisor, publicly traded
securities, and U.S. Government obligations. The fair value of these investments
approximated market value at September 30, 2000.
The Company's revenues are largely driven by the market value of its assets
under management and therefore the Company is exposed to fluctuations in market
prices. Management fees earned on managed accounts and certain institutional
accounts (approximately 35% of total assets under management), for any given
quarter, are based on the market value of the portfolio on the last day of the
preceding quarter. Any significant increase or decline in the market value of
assets managed on the last day of a quarter would result in a corresponding
increase or decrease in revenues for the following three months.
CAUTIONARY STATEMENT UNDER SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934
This quarterly report contains forward-looking statements that involve risks and
uncertainties, including, but not limited to, the following: The Company's
performance is highly dependent on the amount of assets under management, which
may decrease for a variety of reasons including changes in interest rates and
adverse economic conditions; the Company's performance is very sensitive to
changes in interest rates, which may increase from current levels; the Company's
performance is affected by the demand for and the market acceptance of the
Company's products and services; the Company's business is extremely competitive
with several competitors being substantially larger than the Company; and the
Company's performance may be impacted by changes in the performance of financial
markets and general economic conditions. Accordingly, actual results may differ
materially from those set forth in the forward-looking statements. Attention is
also directed to other risk factors set forth in documents filed by the Company
with the Securities and Exchange Commission.
21
<PAGE>
PART II. Other Information
Item 1. Legal Proceedings
With regard to the litigation between PXP and the former members of
Associated Surplus Dealers, as outlined in the Company's 1999 Annual
Report on Form 10-K, a settlement of $2.7 million, including a
provision for attorneys fees, was agreed upon in September 2000.
The arbitration between PXP and its former president, as described in
the Company's 1999 Annual Report on Form 10-K, has been tentatively
scheduled for a hearing in January 2001.
On July 25, 2000, five separate class action lawsuits were filed in the
Delaware Chancery Court against PXP, Phoenix Home Life Mutual Insurance
Company (Phoenix Home Life) and each of the Directors of PXP, seeking
to enjoin the consummation of the proposed acquisition by Phoenix Home
Life of the outstanding common stock of PXP not already owned by
Phoenix Home Life.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 6. Exhibits and Reports on Form 8-K
A Current Report on Form 8-K was filed on August 8, 2000 describing an
offer by Phoenix Home Life Mutual Insurance Company (Phoenix Home Life)
to purchase the remaining outstanding shares of the Registrant not
already owned by Phoenix Home Life for $12.50 per share.
A Current Report on Form 8-K was filed on September 13, 2000 describing
a definitive Agreement and Plan of Merger entered into on September 10,
2000 with Phoenix Home Life and Phoenix Home Life's wholly-owned
subsidiary PM Holdings, Inc., whereby PM Holdings, Inc. will acquire
the remaining outstanding shares of the Registrant not already owned by
PM Holdings, Inc.for $15.75 per share, subject to shareholder approval.
22
<PAGE>
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.
Phoenix Investment Partners, Ltd.
November 13, 2000 /s/ Philip R. McLoughlin
------------------------------
Philip R. McLoughlin, Chairman and
Chief Executive Officer
November 13, 2000 /s/ William R. Moyer
------------------------------
William R. Moyer, Chief Financial Officer
23
