The Company leases office space and equipment under non-cancellable operating leases expiring at different dates until 2026. Future lease payments total $77,876 and include the following payments for each of the next five years as at December 31, 2015, and thereafter:
$ 2016 11,934 2017 10,416 2018 7,943 2019 7,198 2020 6,601 Thereafter 33,784 Contingent liabilities
In the normal course of business, the Company is party to business and employee-related claims. The potential outcomes related to existing matters faced by the Company are not determinable at this time. The Company intends to defend these actions, and management believes that the resolution of these matters will not have a material adverse effect on the Company’s financial condition.
21.
Capital management
The Company’s capital comprises share capital, (deficit) retained earnings and long-term debt, less cash. The Company manages its capital to ensure there are adequate capital resources while maximizing the return to shareholders through the optimization of the debt and equity balance and to maintain compliance with regulatory requirements and certain restrictive covenants required by the lender of the debt.
In order to maintain its capital structure, the Company may issue new shares or proceed to the issuance or repayment of debt and acquire or sell assets to improve its financial performance and flexibility.
22.
Related party transactions
The Company has carried out the following transactions with shareholders and their related companies, during the years ended December 31.
2015 2014
$ $
Base management, performance and other revenues 52,326 49,290
Selling, general & administrative expenses
Reference fees 1,592 1,583
Other 2,320 1,775
Interest on long-term debt 7,782 7,864
Changes in fair value of derivative financial instruments 445 301
Acquisition costs 120 -
Shares issued as settlement of the purchase price obligations 8,500 8,500
These transactions were made in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Fees are at prevailing market prices and are settled on normal trade terms. The amounts due under the Company’s revolving facility presented as long-term debt are amounts due to a syndicate of lenders which includes two related parties of the Company. During the second quarter of 2015, the Company paid $1,034 to the syndicate of lenders for different transaction-related fees in relation to the amendment of the revolving facility. The amounts are recorded as deferred financing costs. The derivative financial instruments liability is due to a related company.
The Company has carried out the following transaction with joint ventures: other revenue of $400 for the year ended December 31, 2015 ($1,202 for the year ended December 31, 2014).
23. Segment reporting
The chief operating decision-maker of the Company has determined that the Company’s reportable segment is investment management services in Canada and the United States of America.
Geographical information
Revenues Non-current assets For the year ended
December 31, 2015 As at December 31, 2015
$ $
Canada 180,178 492,841
United States of America 78,239 250,614
23. Segment reporting (continued)
Revenues are attributed to countries on the basis of the customer’s location. Non-current assets exclude deferred income taxes.
24.
Subsequent event
Pending acquisition
On February 29, 2016, the Company announced that it had reached a definitive agreement to acquire all of the outstanding shares of Apex Capital Management (“Apex”), a prominent growth equity manager based in Dayton, Ohio. The acquisition is in line with the Company’s North American growth strategy, and provides a meaningful complementary presence in the institutional and sub-advisory retail markets, small/mid cap, small cap and other growth strategies.
Under the terms of the agreement, the purchase price for Apex includes US$88,000 payable in cash to the sellers and US$57,000 worth of Fiera Capital Class A Shares that will be held in escrow and issued over 7 years starting on the first anniversary of the closing date. The Class A Shares will not have voting rights until their release from escrow. The purchase price is subject to post-closing price adjustments.
The Company will finance the cash portion of the acquisition with a new US$125,000 term loan which will mature three years from the date of closing. The Company plans to use the additional amounts available under the new loan to refinance existing borrowings under the revolving facility.
The transaction is expected to close in April 2016, and is subject to customary conditions, including regulatory approvals and approval of the TSX.
Disposal of joint venture
On January 15, 2016 the Company completed the sale of the Company’s 35% equity ownership in Axium for cash proceeds of $20,000. As a result, the Company wrote off the assets held-for-sale of $5,496, reclassified $509 of accumulated other comprehensive income to net earnings and recorded a gain on disposal of $15,013.
Shares purchased for cancellation
During the month of January 2016, the Company purchased and cancelled 154,500 Class A Shares at a cost of $1,306. The excess paid of $353 over the recorded capital stock value of the shares repurchased for cancellation was charged to retained earnings.
Dividends declared
On March 16, 2016, the Board declared a quarterly dividend of $0.15 per share to shareholders of record as at March 29, 2016 and payable on April 26, 2016.