March 24, 2006
Mr. John P. Nolan
Accounting Branch Chief
United States Securities and Exchange Commission
Division of Corporation Finance-Disclosure Operations
100 F Street, NE
Washington, D.C. 20549
Re: Westwood Holdings Group, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2005
File No. 1-31234
Dear Mr. Nolan:
This letter is in response to your letter of review of our Form 10-K for
the fiscal year ended December 31, 2005. For your convenience, we have repeated
your comments, with each of your requests in bold and quotes, followed by our
response.
"Note 2. Summary of Significant Accounting Policies, page F-9
1. We note your disclosure on page F-9 that advisory and trust fees are
generally payable in advance on a calendar quarter basis and that advance
payments are deferred and recognized over the periods services are performed.
Please provide us with the following information:"
* "quantify the amount of advisory and trust fee deferred revenue as
of each period presented;"
o We do not have a significant amount of deferred revenue due to the fact that
revenue from clients billed quarterly in advance is earned and recognized fully
during a given quarter. The deferred revenue we have is due to clients that
are billed on an off-quarter period, a billing period that spans quarter
end dates. We had two such clients as of December 31, 2004 and one as
of December 31, 2005.
The following table displays our deferred revenue amounts in whole dollars:
As of December 31,
------------------
Deferred revenue 2005 2004
---------------------- ------- --------
Advisory fees - $11,007
Trust fees $7,380 6,333
------- --------
Total deferred revenue $7,380 $17,340
* "tell us the line item of your consolidated balance sheets in which
deferred revenue was presented;"
o Deferred revenue is included within "Other current liabilities" on our
consolidated balance sheets for the periods presented.
* "quantify the extent to which your advisory and trust fees are payable in
advance instead of as incurred;"
o The following table displays our advisory and trust fees payable in advance
for the last three years.
For the year ended December 31,
-------------------------------
Advanced billed revenue 2005 2004 2003
----------------------------------------- --------- -------- --------
Advisory fees billed in advance (in 000's) $5,832 $5,907 $5,817
As a percentage of total advisory fees 42% 45% 42%
Trust fees billed in advance (in 000's) $6,864 $5,591 $4,524
As a percentage of total trust fees 98% 96% 94%
* "tell us when you generally bill clients in advance for advisory and trust
fees (e.g. first day of the calendar quarter, last day of quarter preceding
the calendar quarter billed)."
o We bill our quarterly advanced paying clients during the first month of each
calendar quarter based on the assets under management as of the last day of the
preceding calendar quarter. A minority of our clients are billed monthly in
advance, we bill these clients monthly based on the assets under management as
of the last day of the preceding calendar month.
Westwood Holdings Group, Inc. ("the Company") acknowledges that:
* The Company is responsible for the adequacy and accuracy of the disclosures
in its filings;
* Staff comments or changes to disclosures in response to Staff comments in
the filings reviewed by the Staff do not foreclose the Commission from taking
any action with respect to the filing; and
* The Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws
of the United States.
We fully support the Division of Corporation Finance's mission to assist
filers with compliance with applicable disclosure requirements and to enhance
the overall disclosures in filings and would be happy to provide additional
information to the degree you deem it necessary.
Sincerely,
/S/ BRIAN O. CASEY
Brian O. Casey
Chief Executive Officer and President
cc: Lisa Haynes, Staff Accountant
Michael D. Fisher, Deloitte & Touche LLP
