What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-05 compared with 2022-05-09 · 215 added, 89 removed, 545 unchanged (36% of the section changed)

30 unchanged sentences

Accumulated other comprehensive loss ( 11.7 ) ( 10.8 )

Non-controlling interests in consolidated Funds — —

Total equity ( 71.0 ) ( 17.6 )

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Management fees $ 93.5 $ 111.6 $ 195.7 $ 215.4

20 unchanged sentences

Income from discontinued operations, net of tax — 53.4 — 75.3

Gain on disposal of discontinued operations, net of tax — 509.2 — 509.2

Net income 28.6 587.3 52.4 627.7

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net income $ 28.6 $ 587.3 $ 52.4 $ 627.7

1 unchanged sentence

Amortization related to derivative securities, net of tax

0.6 0.6 2.2 1.2

Foreign currency translation adjustment ( 2.4 ) 0.1 ( 3.1 ) 1.2

Total other comprehensive income 0.9 1.7

Total other comprehensive income (loss) ( 1.8 ) 0.7 ( 0.9 ) 2.4

Comprehensive income attributable to non-controlling interests in consolidated Funds — 54.6 — 68.0

3 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2022 and 2021

For the three months ended June 30, 2022 and 2021

($ in millions except share data, unaudited)

5 unchanged sentences

interests Non-controlling

equity Total equity and

non-controlling

December 31, 2020 79.4 $ 0.1 $ 492.4 $ ( 176.5 ) $ ( 13.6 ) $ 302.4 $ 1.7 $ 80.3 $ 384.4 $ 384.4

March 31, 2021 79.4 $ 0.1 $ 492.8 $ ( 150.3 ) $ ( 11.9 ) $ 330.7 $ 5.6 $ 93.7 $ 430.0

Issuance of common stock — — 0.1 — — 0.1 — — 0.1

Capital contributions — — — — — — — 29.7 29.7

6 unchanged sentences

— — — — — — ( 5.6 ) — ( 5.6 )

Net de-consolidation of Funds — — — — — — — ( 178.0 ) ( 178.0 )

Dividends ($ 0.01 per share)

1 unchanged sentence

Net income — — — 532.7 — 532.7 — 54.6 587.3

June 30, 2021 79.4 $ 0.1 $ 493.4 $ 381.6 $ ( 11.2 ) $ 863.9 $ — $ — $ 863.9

March 31, 2022 41.4 $ — $ — $ ( 88.0 ) $ ( 9.9 ) $ ( 97.9 ) $ — $ — $ ( 97.9 )

Equity-based compensation — — 0.5 — — 0.5 — — 0.5

Foreign currency translation adjustment

— — — — ( 2.4 ) ( 2.4 ) — — ( 2.4 )

Amortization related to derivatives securities, net of tax

— — — — 0.6 0.6 — — 0.6

Dividends ($ 0.01 per share)

— — ( 0.4 ) — ( 0.4 ) — — ( 0.4 )

Net income — — — 28.6 — 28.6 — — 28.6

June 30, 2022 41.4 $ — $ 0.5 $ ( 59.8 ) $ ( 11.7 ) $ ( 71.0 ) $ — $ — $ ( 71.0 )

See Notes to Condensed Consolidated Financial Statements

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the six months ended June 30, 2022 and 2021

($ in millions except share data, unaudited)

(millions) Common stock,

value Additional paid-in capital Retained earnings (deficit) Accumulated

comprehensive

income (loss) Total

stockholders’

interests Non-controlling

December 31, 2020 79.4 $ 0.1 $ 492.4 $ ( 176.5 ) $ ( 13.6 ) $ 302.4 $ 1.7 $ 80.3 $ 384.4

Issuance of common stock — — 0.1 — — 0.1 — — 0.1

Capital contributions — — — — — — 3.8 29.7 33.5

Equity-based compensation — — 0.9 — — 0.9 — — 0.9

Foreign currency translation adjustment

— — — — 1.2 1.2 — — 1.2

Amortization related to derivatives securities, net of tax

— — — — 1.2 1.2 — — 1.2

Other changes in non-controlling interests

— — — — — — ( 5.5 ) — ( 5.5 )

Net de-consolidation of Funds — — — — — — — ( 178.0 ) ( 178.0 )

Dividends ($ 0.02 per share)

— — — ( 1.6 ) — ( 1.6 ) — — ( 1.6 )

Net income — — — 559.7 — 559.7 — 68.0 627.7

June 30, 2021 79.4 $ 0.1 $ 493.4 $ 381.6 $ ( 11.2 ) $ 863.9 $ — $ — $ 863.9

December 31, 2021 45.4 $ — $ — $ ( 6.8 ) $ ( 10.8 ) $ ( 17.6 ) $ — $ — $ ( 17.6 )

Issuance of common stock 0.2 — — — — — — — —

Repurchase of common stock ( 4.2 ) — — ( 103.2 ) — ( 103.2 ) — — ( 103.2 )

8 unchanged sentences

Net income — — — 52.4 — 52.4 — — 52.4

March 31, 2022 41.4 $ — $ — $ ( 88.0 ) $ ( 9.9 ) $ ( 97.9 ) $ — $ — $ ( 97.9 ) $ ( 97.9 )

June 30, 2022 41.4 $ — $ 0.5 $ ( 59.8 ) $ ( 11.7 ) $ ( 71.0 ) $ — $ — $ ( 71.0 )

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in millions, unaudited)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

2 unchanged sentences

Adjustments to reconcile net income to net cash flows from operating activities from continuing operations:

Gain on sale of discontinued operations, net of tax — ( 509.2 )

Loss on extinguishment of debt 3.2 —

10 unchanged sentences

(Increase) decrease in investment advisory fees receivable 68.2 ( 31.8 )

Decrease in other receivables, prepayments, deposits and other assets 0.4 11.2

(Increase) decrease in other receivables, prepayments, deposits and other assets ( 1.7 ) 9.7

Decrease in accrued incentive compensation, operating lease liabilities and other liabilities ( 77.3 ) ( 21.6 )

5 unchanged sentences

Additions of fixed assets, excluding discontinued operations ( 8.2 ) ( 7.4 )

Cash proceeds from sale of subsidiaries — 713.7

Purchase of investment securities ( 5.1 ) ( 2.5 )

12 unchanged sentences

Withholding tax payments related to stock option exercise ( 2.3 ) —

See Notes to Condensed Consolidated Financial Statements

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Cash Flows

(in millions, unaudited)

Six Months Ended

Net cash flows from financing activities of continuing operations ( 183.4 ) 50.5

3 unchanged sentences

Net increase (decrease) in cash and cash equivalents ( 159.9 ) 791.4

See Notes to Condensed Consolidated Financial Statements

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Cash Flows

(in millions, unaudited)

Three Months Ended

Cash and cash equivalents at beginning of period $ 252.1 $ 372.9

30 unchanged sentences

The remaining shares held by HNA were bought back by the Company in the first quarter of 2019.

For the three months ended March 31, 2022, the Company repurchased 4,147,450 shares of common stock at an average price of $ 24.09 per share, or approximately $ 100 million in total, including commissions.

For the three months ended March 31, 2021, the Company did no t repurchase any shares of common stock.

For the three months ended June 30, 2022, the Company did not repurchase any shares of common stock.

For the six months ended June 30, 2022, the Company repurchased 4,147,450 shares of common stock at an average price of $ 24.09 per share, or approximately $ 100 million in total, including commissions.

For the three and six months ended June 30, 2021, the Company did no t repurchase any shares of common stock.

BrightSphere Investment Group Inc.

17 unchanged sentences

The preparation of these Condensed Consolidated Financial Statements 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 period.

The three months ended March 31, 2022 were characterized by continued uncertainty due to the COVID-19 pandemic which could impact estimates and assumptions made by management.

Actual results could differ from such estimates, and the differences may be material to the Condensed Consolidated Financial Statements.

7 unchanged sentences

On March 30, 2021, the Company entered into a definitive agreement with Ares Holdings L.P.

(“Ares”), pursuant to which Ares agreed to purchase all of the Company’s interests in Landmark and the Company’s co-investments in Landmark funds.

(“Ares”), pursuant to which Ares agreed to purchase all of the Company’s interests in Landmark Partners LLC (“Landmark”) and the Company’s co-investments in Landmark funds.

On June 2, 2021, the Company completed the sale of all its interests in Landmark to Ares for cash consideration of $ 690.0 million, adjusted for customary closing adjustments.

The Company recognized a gain on disposal of discontinued operations of $ 509.2 million, net of tax of $ 176.6 million for the three and six months ended June 30, 2021.

The divestiture of Landmark met the discontinued operations criteria as it represented a strategic shift that had a major effect on the Company’s operations and financial results.

4 unchanged sentences

The divestiture of TSW met the discontinued operations criteria as it represented a strategic shift that has a major effect on the Company’s operations and financial results.

The major classes of revenue and expenses constituting net income from discontinued operations attributable to controlling interests for Landmark and TSW in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 are as follows (in millions):

Three Months Ended March 31,

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

3) Discontinued Operations (cont.)

The major classes of revenue and expenses constituting net income from discontinued operations attributable to controlling interests for Landmark and TSW in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 are as follows (in millions):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Revenues $ — $ 51.3 $ — $ 109.5

6 unchanged sentences

Total operating expenses — 48.4 — 98.6

Operating income (loss) — 8.0

Operating income — 2.9 — 10.9

Investment gains of consolidated Funds — 51.5 — 68.1

2 unchanged sentences

Income from discontinued operations, net of tax — 53.4 — 75.3

Gain on disposal, net of tax of $ 0.0 , $ 176.6 , $ 0.0 , and $ 176.6

— 509.2 — 509.2

Total discontinued operations — 562.6 — 584.5

Income from discontinued operations attributable to non-controlling interests — 54.6 — 68.0

2 unchanged sentences

In connection with the sale of Landmark on June 2, 2021, the Company transferred its co-investment interests in Landmark funds to Ares for $ 31.5 million.

The redemption resulted in the de-consolidation of consolidated Funds

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

3) Discontinued Operations (cont.)

that were considered to be variable interest entities (“VIEs”) as of June 2, 2021 upon consummation of the sale.

The redemption resulted in the de-consolidation of consolidated Funds that were considered to be variable interest entities (“VIEs”) as of June 2, 2021 upon consummation of the sale.

The criteria for discontinued operations accounting treatment were met.

The consolidated Funds’ investments gains/(losses) from discontinued operations, net of tax, attributable to controlling interests was $ 3.1 million in the Company’s Condensed Consolidated Statement of Operations for the three months ended March 31, 2021.

The consolidated Funds’ investments gains/(losses) from discontinued operations, net of tax, attributable to controlling interests was $( 3.1 ) million and $ 0.0 million in the Company’s Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2021, respectively.

4) Investments

Investments are comprised of the following as of the dates indicated (in millions):

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

4) Investments (cont.)

2022 December 31,

2 unchanged sentences

Total investments per Condensed Consolidated Balance Sheets $ 49.1 $ 54.5

Investment income is comprised of the following for the three months ended March 31 (in millions):

Three Months Ended March 31,

Investment income (loss) is comprised of the following for the three and six months ended June 30 (in millions):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Realized and unrealized gains (losses) on other investments held at fair value $ ( 0.7 ) $ 3.5 $ ( 0.8 ) $ 4.9

5 unchanged sentences

5) Fair Value Measurements

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at March 31, 2022 (in millions):

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at June 30, 2022 (in millions):

Quoted prices

2 unchanged sentences

(Level III) Uncategorized Total value,

March 31, 2022

June 30, 2022

Investments in separate accounts (2)

31 unchanged sentences

procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.

(2) Investments in separate accounts of $ 4.5 million at March 31, 2022 consist of approximately 100 % of equity securities and other investments.

(2) Investments in separate accounts of $ 4.0 million at June 30, 2022 consist of approximately 100 % of equity securities and other investments.

Investments in separate accounts of $ 4.6 million at December 31, 2021 consist of approximately 100 % of equity securities and other investments.

The Company values these using the published price of the underlying securities (classified as Level I) or quoted price supported by observable inputs as of the measurement date (classified as Level II).

(3) Investments related to long-term incentive compensation plans of $ 44.4 million and $ 45.0 million at March 31, 2022 and December 31, 2021, respectively, were investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates.

(3) Investments related to long-term incentive compensation plans of $ 40.9 million and $ 45.0 million at June 30, 2022 and December 31, 2021, respectively, were investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates.

Accordingly, the Company has classified these investments as Level I.

(4) The uncategorized amounts of $ 4.5 million and $ 4.9 million at March 31, 2022 and December 31, 2021, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy.

(4) The uncategorized amounts of $ 4.2 million and $ 4.9 million at June 30, 2022 and December 31, 2021, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy.

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Condensed Consolidated Balance Sheets.

2 unchanged sentences

UCITS and other investment vehicles are not subject to redemption restrictions.

The real estate investment Funds of $ 4.4 million and $ 4.8 million at March 31, 2022 and December 31, 2021, respectively, are subject to longer than quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds.

The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one year from March 31, 2022.

The real estate investment Funds of $ 4.2 million and $ 4.8 million at June 30, 2022 and December 31, 2021, respectively, are subject to longer than quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds.

The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one year from June 30, 2022.

The valuation process for the underlying real estate investments held by the real estate investment Funds begins with each property or loan being valued by the investment teams.

2 unchanged sentences

In connection with this process, changes in fair value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions.

There were no significant transfers of financial assets or liabilities between Levels II or III during the three months ended March 31, 2022 and 2021, respectively.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Fair Value Measurements (cont.)

The following table reconciles the opening balances of Level III financial assets to closing balances at the end of the period (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Investments in unconsolidated Funds 2022 2021 2022 2021

Level III financial assets

At beginning of the period $ — $ 2.5 $ — $ 2.5

Additions (redemptions) — ( 0.1 ) — ( 0.1 )

Disposals — ( 2.7 ) — ( 2.7 )

Total net fair value gains/losses recognized in net income

Total Level III financial assets

$ — $ — $ — $ —

There were no significant transfers of financial assets or liabilities between Levels II or III during the three and six months ended June 30, 2022 and 2021, respectively.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

6) Variable Interest Entities

5 unchanged sentences

The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial.

The Company did not consolidate any funds that are VIEs as of March 31, 2022 and December 31, 2021.

The Company did not consolidate any funds that are VIEs as of June 30, 2022 and December 31, 2021.

The Company’s involvement with Funds that are VIEs and not consolidated by the Company is generally limited to that of an investment manager and its investment in the unconsolidated VIE, if any.

13 unchanged sentences

The Company’s borrowings and long-term debt was comprised of the following as of the dates indicated (in millions):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(in millions) Carrying Value Fair Value Fair Value Level Carrying Value Fair Value Fair Value Level

13 unchanged sentences

(3) On January 18, 2022, the Company completed the full redemption of the $ 125 million aggregate principal amount outstanding of its 5.125 % Senior Notes due August 1, 2031.

As a result of this transaction, the Company recorded a $ 3.2 million loss on extinguishment of debt within the Condensed Consolidated Statements of Operations for the three months ended March 31, 2022.

As a result of this transaction, the Company recorded a $ 3.2 million loss on extinguishment of debt within the Condensed Consolidated Statements of Operations for the six months ended June 30, 2022.

Revolving Credit Facility

9 unchanged sentences

The operating leases have remaining lease terms of less than 1 year to 12 years, some of which include options to extend the leases for up to 5 years.

The following table summarizes information about the Company’s operating leases for the three months ended March 31 (in millions):

Three Months Ended March 31,

The following table summarizes information about the Company’s operating leases for the three and six months ended June 30 (in millions):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Operating lease cost $ 2.5 $ 2.9 $ 5.0 $ 5.9

Variable lease cost 0.1 — 0.1 0.1

Sublease income ( 0.2 ) $ ( 0.1 ) ( 0.3 ) ( 0.1 )

2 unchanged sentences

Operating cash flows from operating leases $ 2.2 $ 3.5 $ 4.4 $ 6.1

Right of use assets obtained in exchange for new operating lease liabilities 1.8 1.5 1.8 1.6

In determining the incremental borrowing rate, the Company considered the interest rate yield for the specific interest rate environment and the Company’s credit spread at the inception of the lease.

For the three months ended March 31, 2022 and 2021, the weighted average remaining lease term was 11.2 years and 11.1 years, respectively, and the weighted average discount rate was 3.35 % and 3.34 %, respectively.

Maturities of operating lease liabilities were as follows (in millions):

For the six months ended June 30, 2022 and 2021, the weighted average remaining lease term was 10.9 and 11.7 , respectively, and the weighted average discount rate was 3.39 % and 3.35 %, respectively.

BrightSphere Investment Group Inc.

1 unchanged sentence

8) Leases (cont.)

Maturities of operating lease liabilities were as follows (in millions):

Operating Leases

Year Ending December 31,

2022 (excluding the three months ended March 31, 2022)

2022 (excluding the six months ended June 30, 2022)

Thereafter 56.5

1 unchanged sentence

Less imputed interest ( 15.9 )

9) Commitments and Contingencies

Operational commitments

The Company had an unfunded commitment to invest up to approximately $ 0.2 million in co-investments at a former Affiliate as of March 31, 2022.

These commitments will be funded as required through the end of the investment period through 2022.

Included in cash and cash equivalents is $ 1.5 million pertaining to the wind-down of BrightSphere Investment UK, Ltd.

A number of our subsidiaries operate under regulatory authorities that require that they maintain minimum financial or capital requirements.

Management is not aware of any violations of such financial requirements occurring during the period.

Included in cash and cash equivalents is $ 1.5 million pertaining to the wind-down of BrightSphere Investment U.K., Ltd.

The Company entered into a guaranty for an office space security deposit in the amount of $ 2.5 million in January 2020.

1 unchanged sentence

This guaranty expires in 2022.

There are no liabilities recorded on the Condensed Consolidated Balance Sheet as of March 31, 2022 related to this guaranty.

The Company and its Affiliates are subject to claims, legal proceedings, and other contingencies in the ordinary course of their business activities.

Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved in a manner unfavorable to the Company or its Affiliates.

The Company and its Affiliates establish accruals for matters for which the outcome is probable and can be reasonably estimated.

There are no liabilities recorded on the Condensed Consolidated Balance Sheet as of June 30, 2022 related to this guaranty.

The Company is subject to claims, legal proceedings, and other contingencies in the ordinary course of its business activities.

Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved in a manner unfavorable to the Company.

The Company establishes accruals for matters for which the outcome is probable and can be reasonably estimated.

If an insurance claim or other indemnification for a litigation accrual is available to the Company, the associated gain will not be recognized until all contingencies related to the gain have been resolved.

As of March 31, 2022, there were no material accruals for claims, legal proceedings, or other contingencies.

As of June 30, 2022, there were no material accruals for claims, legal proceedings, or other contingencies.

BrightSphere Investment Group Inc.

9 unchanged sentences

However, given the fact that uncertainty exists around the requirement, the Company has chosen to evaluate its potential exposure related to non-collection and remittance of these taxes.

At March 31, 2022, management of the Company has estimated the potential maximum exposure and concluded that it is not material.

No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at March 31, 2022.

At June 30, 2022, management of the Company has estimated the potential maximum exposure and concluded that it is not material.

No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at June 30, 2022.

Considerations of credit risk

3 unchanged sentences

For the Company and certain Affiliates, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits.

At March 31, 2022, approximately $ 20.5 million of the Company’s cash and cash equivalents were invested in money market funds.

At June 30, 2022, approximately $ 20.6 million of the Company’s cash and cash equivalents were invested in money market funds.

Additionally, the Company holds insurance policies which cover historical and future tax benefits relating to certain of its deferred tax assets.

6 unchanged sentences

The calculation of basic and diluted earnings per share of common stock is as follows (dollars in millions, except per share data):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Income from continuing operations attributable to controlling interests $ 28.6 $ 24.7 $ 52.4 $ 43.2

15 unchanged sentences

Notes to Condensed Consolidated Financial Statements

11) Revenue (cont.)

Management fees

7 unchanged sentences

In instances where a customer reimburses the Company for a cost paid on the customer’s behalf, the Company is acting as a principal and the reimbursement is accrued on a gross basis at cost as the corresponding reimbursable expenses are incurred.

There was no revenue from expense reimbursements for the three months ended March 31, 2022.

Revenue from expense reimbursements amounted to $ 1.0 million for the three months ended March 31, 2021.

There was no revenue from expense reimbursements for the three and six months ended June 30, 2022.

Revenue from expense reimbursements amounted to $ 1.2 million for the three months ended June 30, 2021.

Revenue from expense reimbursements amounted to $ 2.2 million for the six months ended June 30, 2021.

Revenue is recorded in other revenue in the Company’s Condensed Consolidated Statements of Operations.

1 unchanged sentence

Disaggregation of management fee revenue

The geographic disaggregation of management fee revenue for the three months ended March 31 (in millions) are presented below:

Three Months Ended March 31,

The geographic disaggregation of management fee revenue for the three and six months ended June 30 (in millions) are presented below:

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Quant & Solutions

$ 71.2 $ 80.0 $ 148.2 $ 154.4

22.3 26.0 47.5 50.5

Management fee revenue $ 93.5 $ 111.6 $ 195.7 $ 215.4

(1) The Company’s previously disposed affiliates, Campbell Global and ICM, are included within the Other category for the three months ended March 31, 2021.

(1) The Company’s previously divested Affiliates, Campbell Global and ICM, are included within the Other category for the three and six months ended June 30, 2021.

BrightSphere Investment Group Inc.

1 unchanged sentence

12) Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2022 and 2021 are as follows (in millions):

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended June 30, 2022 and 2021 are as follows (in millions):

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of December 31, 2021

Balance, as of March 31, 2022

$ 4.1 $ ( 14.0 ) $ ( 9.9 )

3 unchanged sentences

Other comprehensive income (loss) ( 2.4 ) 0.6 ( 1.8 )

Balance, as of June 30, 2022

$ 1.7 $ ( 13.4 ) $ ( 11.7 )

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of March 31, 2021

$ 5.5 $ ( 17.4 ) $ ( 11.9 )

Foreign currency translation adjustment 0.1 — 0.1

Amortization related to derivatives securities, before tax

Tax impact — ( 0.2 ) ( 0.2 )

Other comprehensive income 0.1 0.6 0.7

Balance, as of June 30, 2021

$ 5.6 $ ( 16.8 ) $ ( 11.2 )

The components of accumulated other comprehensive income (loss), net of tax, for the six months ended June 30, 2022 and 2021 are as follows (in millions):

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

3 unchanged sentences

Tax impact — ( 0.8 ) ( 0.8 )

Other comprehensive income (loss) ( 3.1 ) 2.2 ( 0.9 )

Balance, as of June 30, 2022

$ 1.7 $ ( 13.4 ) $ ( 11.7 )

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

12) Accumulated Other Comprehensive Income (Loss) (cont.)

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of December 31, 2020 $ 4.4 $ ( 18.0 ) $ ( 13.6 )

Foreign currency translation adjustment 1.2 — 1.2

Amortization related to derivatives securities, before tax

Tax impact — ( 0.4 ) ( 0.4 )

Other comprehensive income 1.2 1.2 2.4

Balance, as of March 31, 2021

Balance, as of June 30, 2021

$ 5.6 $ ( 16.8 ) $ ( 11.2 )

1 unchanged sentence

As a result of this transaction, the Company recorded $ 1.3 million of amortization expense included in Amortization related to derivatives securities, before tax.

For the three months ended March 31, 2022 and 2021, the Company reclassified $ 2.2 million and $ 0.8 million, respectively, from accumulated other comprehensive income (loss) to interest expense on the Condensed Consolidated Statements of Operations.

13) Derivatives and Hedging

3 unchanged sentences

The Treasury rate lock contract eliminated the impact of fluctuations in the underlying benchmark interest rate for future forecasted debt issuances.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

13) Derivatives and Hedging (cont.)

assessed the effectiveness of the hedging contract at inception and on a quarterly basis thereafter.

The Company assessed the effectiveness of the hedging contract at inception and on a quarterly basis thereafter.

The forecasted debt issuances occurred in July 2016 and the Treasury rate lock, which had an accumulated fair value of $( 34.4 ) million, was settled.

Refer to Note 7, Borrowings and Debt, for additional information on the debt issuances.

As of March 31, 2022, the balance recorded in accumulated other comprehensive income (loss) was $( 14.0 ) million, net of tax.

As of June 30, 2022, the balance recorded in accumulated other comprehensive income (loss) was $( 13.4 ) million, net of tax.

This balance will be reclassified to earnings through interest expense over the life of the issued debt.

Amounts of $ 2.2 million and $ 0.8 million have been reclassified for the three months ended March 31, 2022 and 2021, respectively.

The Company reclassified $ 0.8 million for each of the three months ended June 30, 2022 and 2021.

Amounts of $ 3.0 million and $ 1.6 million have been reclassified for the six months ended June 30, 2022 and 2021, respectively.

During the next twelve months the Company expects to reclassify approximately $ 3.3 million to interest expense.

On January 18, 2022, the Company completed the full redemption of the $ 125 million aggregate principal amount outstanding of its 5.125 % Senior Notes due August 1, 2031.

As a result of this transaction, amortization expense of $ 1.3 million (of the $ 2.2 million interest expense reclassified to earnings for the three months ended March 31, 2022) was reclassified to earnings as interest expense .

As a result of this transaction, amortization expense of $ 1.3 million (of the $ 3.0 million interest expense reclassified to earnings for the six months ended June 30, 2022) was reclassified to earnings as interest expense .

BrightSphere Investment Group Inc.

4 unchanged sentences

This segment is comprised of the Company’s interest in Acadian.

The corporate head office is included within the Other category, along with our previously disposed Affiliates, Campbell Global, ICM for the three months ended March 31, 2021.

The corporate head office is included within the Other category, along with our previously disposed Affiliates, Campbell Global and ICM, for the three and six months ended June 30, 2021.

The corporate head office expenses are not allocated to the Company’s business segment but the Chief Operating Decision Maker (“CODM”) does consider the cost structure of the corporate head office when evaluating the financial performance of the segment.

20 unchanged sentences

GAAP net income (loss):

The following table presents the financial data for the Company’s segment for the three months ended June 30, 2022 (in millions):

BrightSphere Investment Group Inc.

1 unchanged sentence

14) Segments (cont.)

The following table presents the financial data for the Company’s segment for the three months ended March 31, 2022 (in millions):

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Quant & Solutions Other Reconciling Adjustments Total U.S.

7 unchanged sentences

Net interest expense — ( 4.6 ) ( 0.1 ) (b) ( 4.7 )

Net investment income (loss) — — ( 0.7 ) (c) ( 0.7 )

Income tax expense — ( 6.3 ) ( 6.4 ) (d) ( 12.7 )

Economic net income $ 33.6 $ ( 16.3 ) $ 11.3 $ 28.6

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

14) Segments (cont.)

The following table presents the financial data for the Company’s segments for the three months ended June 30, 2021 (in millions):

Three Months Ended June 30, 2021

Quant & Solutions Other Reconciling Adjustments Total U.S.

ENI revenue $ 111.1 $ 22.3 $ ( 0.1 ) (e) $ 133.3

ENI operating expenses 38.3 9.5 13.5 (a) 61.3

Earnings before variable compensation 72.8 12.8 ( 13.6 ) 72.0

Variable compensation 22.0 10.4 0.3 (f) 32.7

ENI operating earnings (after variable comp) 50.8 2.4 ( 13.9 ) 39.3

Affiliate key employee distributions 3.1 0.1 — 3.2

Earnings after Affiliate key employee distributions 47.7 2.3 ( 13.9 ) 36.1

Net interest expense — ( 5.4 ) ( 0.8 ) (b) ( 6.2 )

Net investment income — — 4.7 (c) 4.7

Net income attributable to non-controlling interests in consolidated Funds — — ( 54.6 ) (c) ( 54.6 )

Income tax (expense) benefit — ( 11.7 ) 1.8 (d) ( 9.9 )

Income from discontinued operations, net of tax — — 53.4 (c) 53.4

Gain on disposal of discontinued operations, net of tax — — 509.2 (g) 509.2

Economic net income $ 47.7 $ ( 14.8 ) $ 499.8 $ 532.7

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

14) Segments (cont.)

The following table presents the financial data for the Company’s segment for the six months ended June 30, 2022 (in millions):

Six Months Ended June 30, 2022

Quant & Solutions Other Reconciling Adjustments Total U.S.

ENI revenue $ 207.7 $ — $ — $ 207.7

ENI operating expenses 80.8 8.9 ( 24.9 ) (a) 64.8

Earnings before variable compensation 126.9 ( 8.9 ) 24.9 142.9

Variable compensation 48.0 2.6 — 50.6

ENI operating earnings (after variable comp) 78.9 ( 11.5 ) 24.9 92.3

Affiliate key employee distributions 2.4 — — 2.4

Earnings after Affiliate key employee distributions 76.5 ( 11.5 ) 24.9 89.9

Net interest expense — ( 9.2 ) ( 2.0 ) (b) ( 11.2 )

Net investment loss — — ( 0.8 ) (c) ( 0.8 )

Loss on extinguishment of debt — — ( 3.2 ) (c) ( 3.2 )

4 unchanged sentences

14) Segments (cont.)

The following table presents the financial data for the Company’s segments for the three months ended March 31, 2021 (in millions):

Three Months Ended March 31, 2021

The following table presents the financial data for the Company’s segments for the six months ended June 30, 2021 (in millions):

Six Months Ended June 30, 2021

Quant & Solutions Other Reconciling Adjustments Total U.S.

10 unchanged sentences

Net income attributable to non-controlling interests in consolidated Funds — — ( 68.0 ) (c) ( 68.0 )

Income tax expense — ( 8.3 ) ( 0.8 ) (d) ( 9.1 )

Income tax (expense) benefit — ( 20.0 ) 1.0 (d) ( 19.0 )

Income from discontinued operations, net of tax — — 75.3 (c) 75.3

Gain on disposal of discontinued operations, net of tax — — 509.2 (g) 509.2

Economic net income $ 88.0 $ ( 32.6 ) $ 504.3 $ 559.7

12 unchanged sentences

Reconciling Adjustments:

(a) Adjusted to include non-cash expenses for key employee equity and profit interest revaluations, capital transaction costs, and amortization of acquired intangible assets, restructuring costs, consolidated Funds’ operating expenses and the Fund expenses reimbursed by customers, each of which are included in U.S.

Adjusted to include non-cash expenses for key employee equity and profit interest revaluations, capital transaction costs, and amortization of acquired intangible assets, restructuring costs, consolidated Funds’ operating expenses and the Fund expenses reimbursed by customers, each of which are included in U.S.

GAAP operating expenses.

(b) Adjusted to include the cost of seed financing, which is included in U.S.

Adjusted to include the cost of seed financing, which is included in U.S.

GAAP interest expense.

(c) Adjusted to include net investment income (loss), the loss on extinguishment of debt, net income (loss) attributable to non-controlling interests in consolidated Funds, and the loss on sale of subsidiary, and the results of discontinued operations, net of tax, all of which are included in U.S.

Adjusted to include net investment income (loss), the loss on extinguishment of debt, net income (loss) attributable to non-controlling interests in consolidated Funds, and the loss on sale of subsidiary, and the results of discontinued operations, net of tax, all of which are included in U.S.

GAAP net income attributable to controlling interests.

(d) Adjusted to include the impact of deferred tax attributable to the amortization of goodwill and acquired intangibles.

Also adjusted to include the tax impact of certain ENI adjustments;

exclude the tax expense

BrightSphere Investment Group Inc.

1 unchanged sentence

14) Segments (cont.)

or benefits relating to uncertain tax positions, and exclude the tax impact of other unusual items that are not related to current operating results for ENI purposes.

(e) Adjusted to exclude earnings from equity-accounted Affiliate, which are included in U.S.

Adjusted to include the impact of deferred tax attributable to the amortization of goodwill and acquired intangibles.

Also adjusted to include the tax impact of certain ENI adjustments;

exclude the tax expense or benefits relating to uncertain tax positions, and exclude the tax impact of other unusual items that are not related to current operating results for ENI purposes.

Adjusted to exclude earnings from equity-accounted Affiliate, which are included in U.S.

GAAP investment income, and to include consolidated Funds revenues and the separate revenues recorded for certain Fund expenses reimbursed by customers, which are included in U.S.

GAAP revenue.

(f) Adjusted to include restructuring costs which are included in U.S.

Adjusted to include restructuring costs which are included in U.S.

GAAP compensation expense.

Adjusted to include the gain on disposal of discontinued operations, net of tax, which is included in U.S.

GAAP net income attributable to controlling interests.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements