UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A
(Amendment No.1)

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 24, 2010

WESTWOOD HOLDINGS GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)

 
 	 	 	 	 	
Delaware	 	001-31234	 	75-2969997	
(State or Other Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification Number)	
200 Crescent Court, Suite 1200
Dallas, Texas 75201
(Address of principal executive offices, including zip code)
(214) 756-6900
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

EXPLANATORY NOTE
On November 24, 2010, Westwood Holdings Group, Inc. (also referred to as the “Company,” the “Registrant,” “we,” “us” or “our”) filed a Current Report on Form 8-K (the “Initial Form 8-K”) disclosing the closing of the acquisition of all of the outstanding membership interests of McCarthy Group Advisors, L.L.C., a Nebraska limited liability company and registered investment advisor based in Omaha, Nebraska. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, we hereby amend the report previously filed on November 24, 2010 to provide Item 9.01 – Financial Statements and Exhibits to add the historical financial statements of McCarthy Group Advisors, L.L.C. and the pro forma financial information required by Item 9.01. Except as described herein, all information in the Initial Form 8-K remains unchanged.
 
Item 9.01.	Financial Statements and Exhibits.	
 
(a)	Financial statements of businesses acquired:	
Attached as Exhibit 99.1 are the following financial statements as required by Item 9.01(a)(1) of Form 8-K:
The audited financial statements of McCarthy Group Advisors, L.L.C. for the years ended December 31, 2009 and 2008 and the unaudited interim financial statements for the nine-month periods ended September 30, 2010 and 2009 as follows:
Independent Accountants’ Report
Financial Statements:
Balance Sheets
Statements of Income
Statements of Members’ Equity
Statements of Cash Flows
Notes to Financial Statements
 
(b)	Pro Forma financial information.:	
Attached as Exhibit 99.2 is the following pro forma financial information as required by Item 9.01(b)(1) of Form 8-K:
Pro forma Unaudited Condensed Combined Balance Sheet as of September 30, 2010
Pro forma Unaudited Condensed Combined Statement of Income for the Nine Month period ended September 30, 2010
Pro forma Unaudited Condensed Combined Statement of Income for the Year Ended December 31, 2009
Notes to the Pro forma Unaudited Condensed Combined Financial Statements
 
(c)	Exhibits:	

Exhibit No.	  	Description	
 	 	
23.1	  	Consent of Independent Auditors	
 	 	
99.1	  	Audited and Unaudited Financial Statements for McCarthy Group Advisors, L.L.C.	
 	 	
99.2	  	Unaudited Pro Forma Condensed Combined Financial Information	

SIGNATURES
In accordance with 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 hereunto duly authorized.

 	 	WESTWOOD HOLDINGS GROUP, INC.	
 	 	
Date: February 3, 2011	 	/S/ WILLIAM R. HARDCASTLE, JR.	
 	 	William R. Hardcastle, Jr.,	
 	 	Chief Financial Officer	

Exhibit Index

Exhibit No.	  	Description	
 	 	
23.1	  	Consent of Independent Auditors	
 	 	
99.1	  	Audited and Unaudited Financial Statements for McCarthy Group Advisors, L.L.C.	
 	 	
99.2	  	Unaudited Pro Forma Condensed Combined Financial Information	

Exhibit 23.1
Board of Directors
Westwood Holdings Group, Inc.
We consent to the inclusion in the current report on Form 8-K/A (File No. 001-31234) of our report dated April 6, 2010, on our audits of the financial statements and financial statement schedules of McCarthy Group Advisors, L.L.C. as of December 31, 2009 and 2008.
/s/ BKD LLP
Omaha, Nebraska
February 3, 2011

Exhibit 99.1
Independent Accountants’ Report
Board of Directors
McCarthy Group Advisors, L.L.C.
Omaha, Nebraska
We have audited the accompanying balance sheets of McCarthy Group Advisors, L.L.C. (the “Company”) as of December 31, 2009 and 2008, and the related statements of income, members’ equity, and cash flows for the years 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 audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of McCarthy Group Advisors, L.L.C. as of December 31, 2009 and 2008, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ BKD LLP
    Omaha, Nebraska
    April 6, 2010

McCARTHY GROUP ADVISORS, L.L.C.
Balance Sheets

 	  	September 30,	 	  	December 31,	 	
 	  	2010	 	  	2009	 	  	2008	 	
 	  	(Unaudited)	 	  	 	 	  	 	 	
Assets	  	 	 	 	  	 	 	 	  	 	 	 	
Current assets	  	 	 	 	  	 	 	 	  	 	 	 	
Cash and cash equivalents	  	$	781,358	  	  	$	255,228	  	  	$	409,894	  	
Accounts receivable	  	 	211,394	  	  	 	214,167	  	  	 	185,504	  	
Prepaid expenses	  	 	49,392	  	  	 	185,035	  	  	 	175,328	  	

Total current assets	  	 	1,042,144	  	  	 	654,430	  	  	 	770,726	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Property and equipment, at Cost	  	 	 	 	  	 	 	 	  	 	 	 	
Office equipment	  	 	52,286	  	  	 	51,859	  	  	 	28,033	  	
Computer equipment and software	  	 	70,145	  	  	 	57,217	  	  	 	125,215	  	
Office furniture	  	 	64,319	  	  	 	64,319	  	  	 	49,303	  	
Leasehold improvements	  	 	27,187	  	  	 	27,187	  	  	 	41,736	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
 	  	 	213,937	  	  	 	200,582	  	  	 	244,287	  	
Less accumulated depreciation and amortization	  	 	126,738	  	  	 	91,490	  	  	 	169,340	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
 	  	 	87,199	  	  	 	109,092	  	  	 	74,947	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total assets	  	$	1,129,343	  	  	$	763,522	  	  	$	845,673	  	

Liabilities and Members’ Equity	  	 	 	 	  	 	 	 	  	 	 	 	
Current liabilities	  	 	 	 	  	 	 	 	  	 	 	 	
Accounts payable	  	$	45,488	  	  	$	49,293	  	  	$	44,990	  	
Accrued expenses	  	 	643,602	  	  	 	279,426	  	  	 	395,009	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total current liabilities	  	 	689,090	  	  	 	328,719	  	  	 	439,999	  	
 	 	 	 	
Members’ equity	  	 	440,253	  	  	 	434,803	  	  	 	405,674	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total liabilities and members’ equity	  	$	1,129,343	  	  	$	763,522	  	  	$	845,673	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
See Notes to Financial Statements

McCARTHY GROUP ADVISORS, L.L.C.
Statements of Income

 	  	Nine Months Ended September 30,	 	  	Years Ended December 31,	 	
 	  	2010	 	  	2009	 	  	2009	 	  	2008	 	
 	  	(Unaudited)	 	  	(Unaudited)	 	  	 	 	  	 	 	
Revenues	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Asset management fees	  	$	1,155,989	  	  	$	1,045,402	  	  	$	1,421,356	  	  	$	1,928,634	  	
MGAM advisory fees	  	 	1,504,799	  	  	 	1,229,565	  	  	 	1,708,807	  	  	 	1,886,321	  	
McCarthy Fund Advisory fees	  	 	252,653	  	  	 	189,647	  	  	 	280,536	  	  	 	206,486	  	
Expense reimbursement income	  	 	232,367	  	  	 	192,097	  	  	 	268,498	  	  	 	290,397	  	
Interest income	  	 	—  	  	  	 	877	  	  	 	880	  	  	 	15,489	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
 	  	 	3,145,808	  	  	 	2,657,588	  	  	 	3,680,077	  	  	 	4,327,327	  	

Expenses	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Salaries and employee benefits	  	 	1,841,553	  	  	 	1,537,225	  	  	 	2,119,428	  	  	 	2,476,844	  	
General and administrative	  	 	663,556	  	  	 	664,097	  	  	 	861,985	  	  	 	927,627	  	
Depreciation and amortization	  	 	35,249	  	  	 	18,562	  	  	 	25,132	  	  	 	33,759	  	
Loss on disposal of property and equipment	  	 	—  	  	  	 	9,378	  	  	 	21,254	  	  	 	—  	  	
Other	  	 	—  	  	  	 	4,515	  	  	 	4,515	  	  	 	—  	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
 	  	 	2,540,358	  	  	 	2,233,777	  	  	 	3,032,314	  	  	 	3,438,230	  	

Net Income	  	$	605,450	  	  	$	423,811	  	  	$	647,763	  	  	$	889,097	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
See Notes to Financial Statements

McCARTHY GROUP ADVISORS, L.L.C.
Statements of Members’ Equity
Nine Month Period Ended September 30, 2010 and
Years Ended December 31, 2009 and 2008

 	  	Class A Units	 	 	Class B Units	 	 	 	 	
 	  	MGA Holdings	 	 	Andrea	 	 	Andrea	 	 	Rod	 	 	 	 	
 	  	L.LC.	 	 	McMahon	 	 	McMahon	 	 	Cerny	 	 	Total	 	
 	 	 	 	 	 	
Balance, January 1, 2008	  	$	655,536	  	 	$	10,041	  	 	$	8,657	  	 	$	8,657	  	 	$	682,891	  	
Member capital distributions	  	 	(1,146,702	) 	 	 	(2,298	) 	 	 	(8,657	) 	 	 	(8,657	) 	 	 	(1,166,314	) 	
Net income	  	 	869,923	  	 	 	1,740	  	 	 	8,717	  	 	 	8,717	  	 	 	889,097	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, December 31, 2008	  	 	378,757	  	 	 	9,483	  	 	 	8,717	  	 	 	8,717	  	 	 	405,674	  	
Member capital distributions	  	 	(600,000	) 	 	 	(1,200	) 	 	 	(8,717	) 	 	 	(8,717	) 	 	 	(618,634	) 	
Net income	  	 	633,793	  	 	 	1,268	  	 	 	6,351	  	 	 	6,351	  	 	 	647,763	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, December 31, 2009	  	 	412,550	  	 	 	9,551	  	 	 	6,351	  	 	 	6,351	  	 	 	434,803	  	
Member capital distributions (unaudited)	  	 	(598,800	) 	 	 	(1,200	) 	 	 	—  	  	 	 	—  	  	 	 	(600,000	) 	
Net income (unaudited)	  	 	592,393	  	 	 	1,185	  	 	 	5,936	  	 	 	5,936	  	 	 	605,450	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, September 30, 2010 (unaudited)	  	$	406,143	  	 	$	9,536	  	 	$	12,287	  	 	$	12,287	  	 	$	440,253	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See Notes to Financial Statements

McCARTHY GROUP ADVISORS, L.L.C.
Statements of Cash Flows

 	  	Nine Months
Ended	 	 	Years Ended December 31,	 	
 	  	2010	 	 	2009	 	 	2008	 	
 	  	(Unaudited)	 	 	 	 	 	 	 	
Operating Activities	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	605,450	  	 	$	647,763	  	 	$	889,097	  	
Items not requiring cash	  	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	  	 	35,249	  	 	 	25,132	  	 	 	33,759	  	
Loss on disposal of property and equipment	  	 	—  	  	 	 	21,254	  	 	 	—  	  	
Changes in	  	 	 	 	 	 	 	 	 	 	 	 	
Accounts receivable	  	 	2,773	  	 	 	(28,663	) 	 	 	42,187	  	
Prepaid expenses	  	 	135,643	  	 	 	(9,707	) 	 	 	(27,991	) 	
Accounts payable and accrued expenses	  	 	360,371	  	 	 	(111,280	) 	 	 	212,356	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	 	1,139,486	  	 	 	544,499	  	 	 	1,149,408	  	

Investing activities - Purchase of Property and Equipment	  	 	(13,356	) 	 	 	(80,531	) 	 	 	(3,001	) 	

Financing Activities - Member Capital Distributions	  	 	(600,000	) 	 	 	(618,634	) 	 	 	(1,166,314	) 	

Increase (decrease) in Cash	  	 	526,130	  	 	 	(154,666	) 	 	 	(19,907	) 	
 	 	 	 	
Cash, Beginning of Period	  	 	255,228	  	 	 	409,894	  	 	 	429,801	  	

Cash, End of Period	  	$	781,358	  	 	$	255,228	  	 	$	409,894	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
See Notes to Financial Statements

McCarthy Group Advisors, L.L.C
Notes to Financial Statements
Note 1: Acquisition (unaudited)
On November 18, 2010, all of the outstanding membership interests of the Company were acquired by Westwood Holdings Group, Inc., an asset management firm headquartered in Dallas, Texas. The aggregate consideration consisted of $5.048 million in cash and the issuance of 181,461 shares of the acquirer’s common stock.
Note 2: Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
McCarthy Group Advisors, L.L.C. (the Company), a Nebraska limited liability company, is engaged in the business of offering investment advice, investment management services, and financial planning for customers primarily in Nebraska and Iowa. The Company is registered as an investment advisor with the Securities and Exchange Commission.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash
Effective October 3, 2008, the FDIC’s insurance limits increased to $250,000. The increase in federally insured limits is currently set to expire December 31, 2013.
Certain of the financial institutions holding the Company’s cash accounts are participating in the FDIC’s Transaction Account Guarantee Program. Under the program, through June 30, 2010, all noninterest-bearing transaction accounts at these institutions are fully guaranteed by the FDIC for the entire amount in the account.
At December 31, 2009, none of the Company’s cash accounts exceeded federally insured limits.
Accounts Receivable
Accounts receivable are stated at the amount billed to customers. The Company does not provide for an allowance for doubtful accounts as most billings are debited directly from the managed accounts. Accounts receivable billed are ordinarily due 30 days after the issuance of the invoice.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is charged to expense on a straight-line basis over the estimated useful life of each asset. Accelerated methods are used for income tax purposes.

Note 2: Nature of Operations and Summary of Significant Accounting Policies – Continued
Income Taxes
The members of the Company have elected to be taxed under the provisions of Subchapter “K” of the Internal Revenue Code and a similar section of the Nebraska income tax law. Therefore, taxable income or loss is reported to the individual members for inclusion in their respective tax returns and no provision for federal and state income taxes is included in these statements.
The Company files income tax returns in federal and state jurisdictions. With a few exceptions, the Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2002.
Note 3: Members’ Equity
The Company has authorized both Class A and B Units. Class B Units at any time will not exceed 10% of the total units and may be voting or non-voting and subject to transfer restrictions. As of December 31, 2009 and 2008, the Class B units outstanding are for profit interests only with no voting rights.
The liability of each member shall be limited to its capital contribution set forth in McCarthy Group Advisor, L.L.C.’s operating agreement, and provided under the Limited Liability Act of Nebraska. No Member shall have any other liability to contribute money to, or in respect of the liabilities or obligations of McCarthy Group Advisors, L.L.C., except as and to the extent provided in the Limited Liability Act of Nebraska. No Member shall be obligated to make loans to McCarthy Group Advisors, L.L.C.
Note 4: Operating Lease
The Company leases office space under an operating lease which expires in July 2014. Rent expense for the years ended December 31, 2009 and 2008, including allocations of operating expenses, was $220,037 and $249,745, respectively. Future minimum lease payments for the next five years at December 31, 2009, were:

2010	  	$	102,161	  	
2011	  	 	105,230	  	
2012	  	 	108,379	  	
2013	  	 	111,621	  	
2014	  	 	66,245	  	
Note 5: Employee Benefit Plan
The Company has established a 401(k) Profit Sharing Plan for substantially all full-time employees, which provides for elective deferrals from each employee’s salary. The Company contributes 3% of each participating employee’s monthly salary to the Plan. The Company’s contributions to the plan were approximately $38,300 and $39,400 in 2009 and 2008, respectively.

Note 6: Related Party Transactions
Revenues attributable to services provided to related parties (MGA Investment LLCs, MGA Long-Short, L.P., McCarthy Multi-Cap Stock Fund, KPM Equity Partners Limited Partnership) were recorded as follows at September 30, 2010, December 31, 2009 and December 31, 2008:

 	  	September 30,	 	  	December 31,	 	
 	  	2010	 	  	2009	 	  	2008	 	
 	  	(Unaudited)	 	  	 	 	  	 	 	
Revenues, net of broker fee	  	$	1,036,406	  	  	$	1,247,859	  	  	$	1,353,861	  	
Accounts receivable, net of broker fee	  	 	91,854	  	  	 	96,166	  	  	 	68,423	  	
Note 7: Subsequent Events
Subsequent events have been evaluated through April 6, 2010, which is the date the financial statements were available to be issued.

Exhibit 99.2
WESTWOOD HOLDINGS GROUP, INC.
Proforma Condensed Combined Balance Sheets
As of September 30, 2010
(Unaudited)
(In thousands, except par value and share amounts)

 	  	Westwood	 	 	McCarthy	 	  	Proforma
Adjustments	 	 	 	  	Proforma
Combined	 	
Assets	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Current assets:	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Cash and cash equivalents	  	$	3,839	  	 	$	781	  	  	$	(5,048	) 	 	A	  	$	(428	) 	
Accounts receivable	  	 	6,587	  	 	 	212	  	  	 	—  	  	 	 	  	 	6,799	  	
Investments, at fair value	  	 	46,001	  	 	 	—  	  	  	 	—  	  	 	 	  	 	46,001	  	
Deferred income taxes	  	 	2,169	  	 	 	—  	  	  	 	—  	  	 	 	  	 	2,169	  	
Prepaid income taxes	  	 	1,013	  	 	 	—  	  	  	 	—  	  	 	 	  	 	1,013	  	
Other current assets	  	 	538	  	 	 	49	  	  	 	—  	  	 	 	  	 	587	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total current assets	  	 	60,147	  	 	 	1,042	  	  	 	(5,048	) 	 	 	  	 	56,141	  	
Goodwill	  	 	3,915	  	 	 	—  	  	  	 	7,318	  	 	B	  	 	11,233	  	
Intangible assets, net	  	 	971	  	 	 	—  	  	  	 	4,224	  	 	C	  	 	5,195	  	
Property and equipment, net	  	 	335	  	 	 	87	  	  	 	—  	  	 	 	  	 	422	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total assets	  	$	65,368	  	 	$	1,129	  	  	$	6,494	  	 	 	  	$	72,991	  	

Liabilities and Stockholders’ Equity	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Current liabilities:	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Accounts payable and accrued liabilities	  	$	1,348	  	 	$	45	  	  	$	—  	  	 	 	  	$	1,393	  	
Dividends payable	  	 	2,463	  	 	 	—  	  	  	 	—  	  	 	 	  	 	2,463	  	
Compensation and benefits payable	  	 	6,751	  	 	 	637	  	  	 	—  	  	 	 	  	 	7,388	  	
Deferred acquisition liability	  	 	924	  	 	 	—  	  	  	 	—  	  	 	 	  	 	924	  	
Other current liabilities	  	 	11	  	 	 	—  	  	  	 	—  	  	 	 	  	 	11	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total current liabilities	  	 	11,497	  	 	 	682	  	  	 	—  	  	 	 	  	 	12,179	  	
Deferred acquisition liability	  	 	818	  	 	 	—  	  	  	 	—  	  	 	 	  	 	818	  	
Deferred income taxes	  	 	58	  	 	 	—  	  	  	 	—  	  	 	 	  	 	58	  	
Deferred rent	  	 	133	  	 	 	7	  	  	 	—  	  	 	 	  	 	140	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total long-term liabilities	  	 	1,009	  	 	 	7	  	  	 	—  	  	 	 	  	 	1,016	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total liabilities	  	 	12,506	  	 	 	689	  	  	 	—  	  	 	 	  	 	13,195	  	
Stockholders’ Equity:	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Common stock, $0.01 par value, authorized 25,000,000 shares	  	 	77	  	 	 	—  	  	  	 	2	  	 	D	  	 	79	  	
Additional paid-in capital	  	 	56,095	  	 	 	—  	  	  	 	6,932	  	 	E	  	 	63,027	  	
Treasury stock, at cost - 229,195 shares	  	 	(8,749	) 	 	 	—  	  	  	 	—  	  	 	 	  	 	(8,749	) 	
Accumulated other comprehensive income	  	 	877	  	 	 	—  	  	  	 	—  	  	 	 	  	 	877	  	
Members’ equity	  	 	—  	  	 	 	440	  	  	 	(440	) 	 	F	  	 	—  	  	
Retained earnings	  	 	4,562	  	 	 	—  	  	  	 	—  	  	 	 	  	 	4,562	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total stockholders’ equity	  	 	52,862	  	 	 	440	  	  	 	6,494	  	 	 	  	 	59,796	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total liabilities and members’ equity	  	$	65,368	  	 	$	1,129	  	  	$	6,494	  	 	 	  	$	72,991	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	  	 	 	 	
See accompanying notes

WESTWOOD HOLDINGS GROUP, INC.
Proforma Condensed Combined Statements of Income
Nine Months Ended September 30, 2010
(Unaudited)
(In thousands, except per share data)

 	  	Westwood	 	  	McCarthy	 	  	Proforma
Adjustments	 	 	 	  	Proforma
Combined	 	
 	 	 	 	 	 	
REVENUES:	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Advisory fees Asset-based	  	$	30,457	  	  	$	3,145	  	  	$	—  	  	 	 	  	$	33,602	  	
Trust fees	  	 	8,950	  	  	 	—  	  	  	 	—  	  	 	 	  	 	8,950	  	
Other revenues, net	  	 	476	  	  	 	—  	  	  	 	—  	  	 	 	  	 	476	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total revenues	  	 	39,883	  	  	 	3,145	  	  	 	—  	  	 	 	  	 	43,028	  	

EXPENSES:	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Employee compensation and benefits	  	 	21,447	  	  	 	1,842	  	  	 	—  	  	 	 	  	 	23,289	  	
Sales and marketing	  	 	569	  	  	 	—  	  	  	 	—  	  	 	 	  	 	569	  	
WHG mutual funds	  	 	344	  	  	 	—  	  	  	 	—  	  	 	 	  	 	344	  	
Information technology	  	 	977	  	  	 	—  	  	  	 	—  	  	 	 	  	 	977	  	
Professional services	  	 	1,916	  	  	 	—  	  	  	 	—  	  	 	 	  	 	1,916	  	
General and administrative	  	 	2,026	  	  	 	698	  	  	 	282	  	 	G	  	 	3,006	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total expenses	  	 	27,279	  	  	 	2,540	  	  	 	282	  	 	 	  	 	30,101	  	

Income before income taxes	  	 	12,604	  	  	 	605	  	  	 	(282	) 	 	 	  	 	12,927	  	
Provision for income taxes	  	 	4,579	  	  	 	—  	  	  	 	117	  	 	H	  	 	4,696	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Net income	  	$	8,025	  	  	$	605	  	  	$	(399	) 	 	 	  	$	8,231	  	

Earnings per share:	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Basic	  	$	1.13	  	  	 	 	 	  	 	 	 	 	 	  	$	1.13	  	
Diluted	  	$	1.11	  	  	 	 	 	  	 	 	 	 	 	  	$	1.11	  	
 	 	 	 	 	 	
Weighted average shares outstanding:	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Basic	  	 	6,567,429	  	  	 	 	 	  	 	181,461	  	 	I	  	 	6,748,890	  	
Diluted	  	 	6,710,716	  	  	 	 	 	  	 	181,461	  	 	I	  	 	6,892,177	  	
See accompanying notes

WESTWOOD HOLDINGS GROUP, INC.
Proforma Condensed Combined Statements of Income
Year Ended December 31, 2009
(Unaudited)
(In thousands, except per share data)

 	  	Westwood	 	  	McCarthy	 	  	Proforma
Adjustments	 	 	 	  	Proforma
Combined	 	
 	 	 	 	 	 	
REVENUES:	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Advisory fees Asset-based	  	$	31,794	  	  	$	3,678	  	  	$	—  	  	 	 	  	$	35,472	  	
Trust fees	  	 	10,304	  	  	 	—  	  	  	 	—  	  	 	 	  	 	10,304	  	
Other revenues, net	  	 	455	  	  	 	—  	  	  	 	—  	  	 	 	  	 	455	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total revenues	  	 	42,553	  	  	 	3,678	  	  	 	—  	  	 	 	  	 	46,231	  	

EXPENSES:	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Employee compensation and benefits	  	 	23,730	  	  	 	2,119	  	  	 	—  	  	 	 	  	 	25,849	  	
Sales and marketing	  	 	576	  	  	 	—  	  	  	 	—  	  	 	 	  	 	576	  	
WHG mutual funds	  	 	600	  	  	 	—  	  	  	 	—  	  	 	 	  	 	600	  	
Information technology	  	 	1,221	  	  	 	—  	  	  	 	—  	  	 	 	  	 	1,221	  	
Professional services	  	 	1,531	  	  	 	—  	  	  	 	—  	  	 	 	  	 	1,531	  	
General and administrative	  	 	2,577	  	  	 	911	  	  	 	397	  	 	G	  	 	3,885	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Total expenses	  	 	30,235	  	  	 	3,030	  	  	 	397	  	 	 	  	 	33,662	  	

Income before income taxes	  	 	12,318	  	  	 	648	  	  	 	(397	) 	 	 	  	 	12,569	  	
Provision for income taxes	  	 	4,423	  	  	 	—  	  	  	 	90	  	 	H	  	 	4,513	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Net income	  	$	7,895	  	  	$	648	  	  	$	(487	) 	 	 	  	$	8,056	  	

Earnings per share:	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Basic	  	$	1.10	  	  	 	 	 	  	 	 	 	 	 	  	$	1.09	  	
Diluted	  	$	1.09	  	  	 	 	 	  	 	 	 	 	 	  	$	1.09	  	
 	 	 	 	 	 	
Weighted average shares outstanding:	  	 	 	 	  	 	 	 	  	 	 	 	 	 	  	 	 	 	
Basic	  	 	6,339,791	  	  	 	 	 	  	 	181,461	  	 	I	  	 	6,521,252	  	
Diluted	  	 	6,366,988	  	  	 	 	 	  	 	181,461	  	 	I	  	 	6,548,449	  	
See accompanying notes

Notes to Unaudited Pro Forma Condensed Combined
Financial Statements
Basis of Presentation
On November 18, 2010, Westwood Group Holdings, L.L.C. (“Westwood”) completed the acquisition of all of the outstanding membership interests of McCarthy Group Advisors, L.L.C (“McCarthy”), a Nebraska limited liability company. The registered investment advisory firm based out of Omaha, Nebraska manages private wealth and institutional client assets and was purchased from MGA Holdings, L.L.C., also a Nebraska limited liability company. The aggregate consideration for the purchase consisted of $5.0 million in cash and the issuance of 181,461 shares of Westwood’s common stock.
The acquisition of McCarthy will be accounted for using the purchase method of accounting pursuant to ASC 805, Business Combinations. Accordingly, the purchase price will be allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.
The accompanying pro forma financial information and related notes should be read in conjunction with Westwood’s Annual Report on Form 10-K for the year ended December 31, 2009 and its Quarterly Report on Form 10-Q for the nine months ended September 30, 2010.
The pro forma unaudited condensed statements of income may not represent what the actual results would have been had the transaction occurred at the beginning of the applicable periods.
The pro forma unaudited condensed balance sheets at September 30, 2010 were presented as if the transaction occurred on September 30, 2010.
The pro forma unaudited condensed statements of income for the nine months ended September 30, 2010 were presented as if the transaction occurred on January 1, 2010.
The pro forma unaudited condensed statements of income for the year ended December 31, 2009 were presented as if the transaction occurred on January 1, 2009.
The columns labeled Westwood represent the unaudited balance sheet of Westwood Holdings Group, Inc. as of September 30, 2010 and its respective statements of income for the nine months ended September 30, 2010 and the year ended December 31, 2009. The columns labeled McCarthy represent the unaudited balance sheet of McCarthy Group Advisors, L.L.C. as of September 30, 2010 and its respective unaudited statements of income for the nine months ended September 30, 2010 and the year ended December 31, 2009.

The pro forma unaudited combined balance sheet and statements of income of Westwood are prepared to give effect to the following:
 
 	A.	Cash expended as part of the purchase consideration.	
 
 	B.	Goodwill on acquisition, arrived at as follows (in thousands):	

Purchase consideration:	  	 	 	 	
Cash	  	$	5,048	  	
Common stock	  	 	6,934	  	
 	  	 	 	 	
 	  	 	11,982	  	

Tangible net assets acquired	  	 	440	  	
Identifiable intangible assets	  	 	4,224	  	
 	  	 	 	 	
 	  	 	4,664	  	

Goodwill acquired	  	$	7,318	  	

 	C.	The following identifiable intangible assets (in thousands):	

 	  	 	 	  	Estimated	 	
 	  	 	 	  	useful lives	 	
Customer Accounts	  	$	3,965	  	  	 	15 years	  	
Non-compete agreements	  	 	24	  	  	 	2 years	  	
Trade-name	  	 	235	  	  	 	2 years	  	
 	  	 	 	 	  	 	 	 	
 	  	$	4,224	  	  	 	 	 	

 	D.	Par value of 181,461 shares of Westwood Holdings Group, Inc.’s common stock issued as part of the purchase consideration.	
 
 	E.	Estimated value over par of the 181,461 shares of Westwood Holdings Group, Inc.’s common stock issued as part of the purchase consideration.	
 
 	F.	Elimination of McCarthy’s equity, which was fully acquired by Westwood.	
 
 	G.	Depreciation adjustments, based on the estimated fair value of property and equipment acquired, and amortization adjustments based on the estimated fair value of definite-lived intangible assets acquired.	
 
 	H.	Income tax adjustment, using the effective tax rate for the respective fiscal periods.	
 
 	I.	Shares of Westwood Holdings Group, Inc.’s common stock issued as part of the consideration for the business combination.