What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-04 compared with 2022-08-05 · 279 added, 254 removed, 870 unchanged (38% of the section changed)

14 unchanged sentences

This section also provides a Summary Results of Operations and information regarding our Assets Under Management by strategy, client type and location, and net flows by segment, client type and client location.

GAAP Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021 includes an explanation of changes in our U.S.

GAAP revenue, expense and other items for the three and six months ended June 30, 2022 and 2021, as well as key U.S.

GAAP Results of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 includes an explanation of changes in our U.S.

GAAP revenue, expense and other items for the three and nine months ended September 30, 2022 and 2021, as well as key U.S.

GAAP operating metrics.

2 unchanged sentences

This section also provides a reconciliation between U.S.

GAAP net income attributable to controlling interests and ENI for the three and six months ended June 30, 2022 and 2021 as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses.

GAAP net income attributable to controlling interests and ENI for the three and nine months ended September 30, 2022 and 2021 as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses.

This section also provides key non-GAAP operating metrics.

16 unchanged sentences

Through Acadian, we offer a diverse range of actively-managed investment strategies and products to institutional investors around the globe.

The corporate head office is included within the Other category, along with our previously disposed Affiliates, Campbell Global, LLC (“Campbell Global”) and Investment Counselors of Maryland, LLC (“ICM”), for the three and six months ended June 30, 2021.

We completed the sale of our equity interests in ICM in July 2021.

We completed the sale of our equity interest in Campbell Global in August 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 our segment.

2 unchanged sentences

Recent Developments

COVID-19 Impact

The COVID-19 pandemic has had a significant impact on the global economy and the financial and securities markets.

Ongoing global health concerns and uncertainty regarding the impact of COVID-19 could lead to further market volatility.

As the pandemic continues to evolve, we continue to monitor the economic uncertainty and market volatility related to COVID-19, which has impacted the investment management industry in which we operate.

The extent of the impact on our business operations and financial results will depend on a number of factors and future developments, including the spread of variants of COVID-19, which are uncertain and cannot be predicted.

See Item 1A to our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities Exchange Commission on February 28, 2022.

Russia Invasion of Ukraine

5 unchanged sentences

We earn management fees based on assets under management.

Approximately 80% of our management fees for the three months ended June 30, 2022 were calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM or other measuring methods.

Approximately 80% of our management fees for the three months ended September 30, 2022 were calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM or other measuring methods.

Changes in the levels of our AUM are driven by our investment performance and net client cash flows.

38 unchanged sentences

Summary Results of Operations

The following table summarizes our unaudited results of operations for the three and six months ended June 30, 2022 and 2021:

($ in millions, unless otherwise noted) Three Months Ended June 30, Six Months Ended June 30,

The following table summarizes our unaudited results of operations for the three and nine months ended September 30, 2022 and 2021:

($ in millions, unless otherwise noted) Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 vs.

35 unchanged sentences

GAAP financial information and a further discussion of economic net income refer to “—Non-GAAP Supplemental Performance Measure—Economic Net Income and Segment Analysis.”

(3) Excludes restructuring costs associated with the transfer of an insurance policy from our former parent of $0.3 million for the three months ended June 30, 2022.

Excludes restructuring costs at Acadian of $0.1 million and costs associated with the transfer of an insurance policy from our former parent of $0.6 million for the six months ended June 30, 2022.

Excludes income from discontinued operations attributable to controlling interests, as well as restructuring costs at the Center and Affiliates of $2.0 million and costs associated with the transfer of an insurance policy from our former parent of $0.3 million for the three months ended June 30, 2021.

Excludes income from discontinued operations attributable to controlling interests, as well as restructuring costs at the Center of $3.5 million, costs associated with the transfer of an insurance policy from our former parent of $0.6 million and the loss on sale of Affiliates of $1.3 million for the six months ended June 30, 2021.

(3) Excludes restructuring costs of $0.1 million and costs associated with the transfer of an insurance policy from our former parent of $0.3 million for the three months ended September 30, 2022.

Excludes restructuring costs of $0.2 million and costs associated with the transfer of an insurance policy from our former parent of $0.9 million for the nine months ended September 30, 2022.

Excludes income from discontinued operations attributable to controlling interests, as well as restructuring costs at the Center and Affiliates of $0.5 million and costs associated with the transfer of an insurance policy from our former parent of $0.3 million and the gain on sale of subsidiaries of $34.6 million for the three months ended September 30, 2021.

Excludes income from discontinued operations attributable to controlling interests, as well as restructuring costs at the Center and Affiliates of $4.0 million, costs associated with the transfer of an insurance policy from our former parent of $0.9 million and the gain on sale of subsidiaries of $33.3 million for the nine months ended September 30, 2021.

(4) ENI revenue is the ENI measure which corresponds to U.S.

14 unchanged sentences

The following table presents our assets under management as of each of the dates indicated:

($ in billions) June 30, 2022 December 31, 2021

($ in billions) September 30, 2022 December 31, 2021

Acadian Asset Management $ 83.3 $ 117.2

3 unchanged sentences

The following table presents our assets under management by strategy as of each of the dates indicated:

($ in billions) June 30, 2022 December 31, 2021

($ in billions) September 30, 2022 December 31, 2021

Developed Markets 64.7 89.3

2 unchanged sentences

The following table shows assets under management by client type as of each of the dates indicated:

($ in billions) June 30, 2022 December 31, 2021

($ in billions) September 30, 2022 December 31, 2021

AUM % of total AUM % of total

8 unchanged sentences

The following table shows assets under management by client location as of each of the dates indicated:

($ in billions) June 30, 2022 December 31, 2021

($ in billions) September 30, 2022 December 31, 2021

AUM % of total AUM % of total

18 unchanged sentences

The following table summarizes our asset flows and market appreciation (depreciation) by segment for each of the periods indicated:

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in billions, unless otherwise noted) 2022 2021 2022 2021

11 unchanged sentences

Beginning balance $ — $ — $ — $ 3.2

Sale of Affiliate — — — —

Gross inflows — — — —

Gross outflows — — — —

Reinvested income and distributions — — — —

Net flows — — — —

4 unchanged sentences

Beginning balance $ — $ 9.1 $ — $ 5.8

Sale of Affiliates — (8.9) — (8.9)

Gross inflows — — — 0.7

7 unchanged sentences

Beginning balance $ 90.5 $ 126.9 $ 117.2 $ 116.0

Sale of Affiliate — (8.9) — (8.9)

Gross inflows 2.0 2.8 8.0 8.4

4 unchanged sentences

Other — — — (0.1)

Ending balance continuing operations $ 90.5 $ 126.9 $ 90.5 $ 126.9

Discontinued operations (2)

$ — $ 24.6 — 24.6

Ending balance including discontinued operations $ 90.5 $ 151.5 $ 90.5 $ 151.5

Ending balance $ 83.3 $ 113.7 $ 83.3 $ 113.7

Average AUM $ 90.3 $ 121.9 $ 100.9 $ 121.3

6 unchanged sentences

(1) Average AUM equals average AUM of consolidated Affiliates.

(2) Our reportable segments reflect the sales of Landmark Partners (“Landmark”) and Thompson, Siegel & Walmsley LLC (“TSW”) and the reclassification of their AUM, asset flows and market appreciation (depreciation) to discontinued operations.

The Other category consists of our previously disposed affiliates, Campbell Global and ICM, for the three and six months ended June 30, 2021.

(2) ICM has been reclassified to the Other category as of the beginning of the first quarter of 2021.

The Other category consists of our previously disposed affiliates, Campbell Global and ICM, for the three and nine months ended September 30, 2021.

We also analyze our asset flows by client type and client location.

7 unchanged sentences

The following table summarizes our asset flows by client type for each of the periods indicated:

($ in billions) Three Months Ended June 30, Six Months Ended June 30,

($ in billions) Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Beginning balance $ 11.8 $ 13.6 $ 14.1 $ 11.5

Sale of Affiliate — (0.4) — (0.4)

Gross inflows 0.2 0.2 1.0 2.1

6 unchanged sentences

Beginning balance $ 74.3 $ 105.5 $ 97.8 $ 97.8

Sale of Affiliate — (6.0) — (6.0)

Gross inflows 1.7 1.9 6.1 4.9

3 unchanged sentences

Market appreciation (depreciation) (6.4) (3.3) (24.6) 9.6

— (0.1) — (0.1)

Ending balance $ 68.6 $ 95.1 $ 68.6 $ 95.1

Beginning balance $ 4.4 $ 7.8 $ 5.3 $ 6.7

Sale of Affiliate — (2.5) — (2.5)

Gross inflows 0.1 0.7 0.9 1.4

5 unchanged sentences

Beginning balance $ 90.5 $ 126.9 $ 117.2 $ 116.0

Sale of Affiliate — (8.9) — (8.9)

Gross inflows 2.0 2.8 8.0 8.4

3 unchanged sentences

Market appreciation (depreciation) (7.8) (3.6) (29.5) 11.8

— (0.1) — (0.1)

Ending balance continuing operations 90.5 126.9 90.5 126.9

Discontinued operations (2)

— 24.6 — 24.6

Ending balance including discontinued operations $ 90.5 $ 151.5 $ 90.5 $ 151.5

Ending balance 83.3 113.7 83.3 113.7

(1) Other movements related to billable assets adjustment.

(2) Reflects the disposition of Landmark and TSW.

As a result of the transactions, Landmark and TSW are reported within discontinued operations.

Our categorization by client location includes:

2 unchanged sentences

The following table summarizes asset flows by client location for each of the periods indicated:

($ in billions) Three Months Ended June 30, Six Months Ended June 30,

($ in billions) Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Beginning balance $ 60.9 $ 85.9 $ 77.1 $ 77.4

Sale of Affiliate — (7.9) — (7.9)

Gross inflows 1.2 1.4 4.5 4.7

5 unchanged sentences

Beginning balance $ 29.6 $ 41.0 $ 40.1 $ 38.6

Sale of Affiliate — (1.0) — (1.0)

Gross inflows 0.8 1.4 3.5 3.7

3 unchanged sentences

Market appreciation (depreciation) (2.3) (1.2) (9.3) 3.2

— (0.1) — (0.1)

Ending balance $ 27.3 $ 39.6 $ 27.3 $ 39.6

Beginning balance $ 90.5 $ 126.9 $ 117.2 $ 116.0

Sale of Affiliate — (8.9) — (8.9)

Gross inflows 2.0 2.8 8.0 8.4

3 unchanged sentences

Market appreciation (depreciation) (7.8) (3.6) (29.5) 11.8

— (0.1) — (0.1)

Ending balance continuing operations 90.5 126.9 90.5 126.9

Discontinued operations (2)

— 24.6 — 24.6

Adjusted ending balance including discontinued operations $ 90.5 $ 151.5 $ 90.5 $ 151.5

Ending balance $ 83.3 $ 113.7 $ 83.3 $ 113.7

(1) Other movements related to billable assets adjustment.

(2) Reflects the disposition of Landmark and TSW.

As a result of the transactions, Landmark and TSW are reported within discontinued operations.

At June 30, 2022, our total assets under management were $90.5 billion, a decrease of $(19.7) billion, or (17.9)%, compared to $110.2 billion at March 31, 2022 and a decrease of $(36.4) billion, or (28.7)%, compared to $126.9 billion at June 30, 2021.

The decrease in assets under management compared to June 30, 2021 is a result of market depreciation and net outflows in the last twelve months, along with the dispositions of previous Affiliates, ICM and Campbell Global, that occurred in the three months ended September 30, 2021.

The change in assets under management during the three months ended June 30, 2022 reflects net market depreciation of $(16.9) billion, and net outflows of $(2.8) billion.

The change in assets under management during the six months ended June 30, 2022 reflects net market deprecation of $(21.7) billion, and net flows of $(5.0) billion.

At September 30, 2022, our total assets under management were $83.3 billion, a decrease of $(7.2) billion, or (8.0)%, compared to $90.5 billion at June 30, 2022 and a decrease of $(30.4) billion, or (26.7)%, compared to $113.7 billion at September 30, 2021.

The decrease in assets under management compared to September 30, 2021 is a result of market depreciation and net outflows in the last twelve months.

The change in assets under management during the three months ended September 30, 2022 reflects net market depreciation of $(7.8) billion, slightly offset by net inflows of $0.6 billion.

The change in assets under management during the nine months ended September 30, 2022 reflects net market deprecation of $(29.5) billion, and net outflows of $(4.4) billion.

Market appreciation or depreciation reported in current and prior periods includes changes in equity prices, as well as the impact from exchange rate fluctuations on our foreign-denominated AUM.

Given a substantial portion of our AUM is denominated in foreign currencies, foreign exchange rate movements in the second quarter of 2022 had a more pronounced negative impact on AUM, as a result of the strengthening of the U.S.

Given a substantial portion of our AUM is denominated in foreign currencies, foreign exchange rate movements in 2022 had a more pronounced negative impact on AUM, as a result of the strengthening of the U.S.

dollar relative to other currencies in the current quarter.

For the three months ended June 30, 2022, our net flows were $(2.8) billion compared to $(2.2) billion for the three months ended March 31, 2022 and $(0.9) billion for the three months ended June 30, 2021.

The change in net flows during the three months ended June 30, 2022 compared to the three months ended June 30, 2021 was primarily due to tactical re-allocations by a few large clients.

Reinvested income and distributions of $1.0 billion, $0.9 billion, and $0.7 billion are reflected in the net flows for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively.

For the three months ended June 30, 2022, the annualized revenue impact of the net flows was $(7.4) million.

This is compared to the annualized revenue impact of net flows of $(1.1) million for the three months ended March 31, 2022 and $(0.9) million for the three months ended June 30, 2021.

For the three months ended September 30, 2022, our net flows were $0.6 billion compared to $(2.8) billion for the three months ended June 30, 2022 and $(0.7) billion for the three months ended September 30, 2021.

The change in net flows during the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily due to a reduction in large terminations and withdrawals in the three months ended September 30, 2022.

Reinvested income and distributions of $0.9 billion, $1.0 billion, and $0.7 billion are reflected in the net flows for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, respectively.

For the three months ended September 30, 2022, the annualized revenue impact of the net flows was $0.3 million.

This is compared to the annualized revenue impact of net flows of $(7.4) million for the three months ended June 30, 2022 and $(1.6) million for the three months ended September 30, 2021.

Gross inflows of $2.0 billion during the three-month period yielded approximately 44 bps compared to $2.8 billion yielding approximately 47 bps in the year-ago period, and gross outflows in the same period of $(2.3) billion yielded approximately 52 bps compared to $(4.2) billion yielding approximately 41 bps in the year-ago period.

For the six months ended June 30, 2022, our net flows were $(5.0) billion compared to $(4.4) billion for the six months ended June 30, 2021.

The change in net flows during the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was primarily driven by higher outflows related to asset rebalancing.

Reinvested income and distributions of $1.9 billion and $1.3 billion are reflected in the net flows for the six months ended June 30, 2022 and June 30, 2021, respectively.

For the six months ended June 30, 2022, the annualized revenue impact of the net flows was $(8.5) million compared to $(8.8) million for the six months ended June 30, 2021.

Gross inflows of $6.0 billion in the six months ended June 30, 2022 yielded approximately 51 bps compared to $5.6 billion yielding approximately 49 bps in the year-ago period.

Gross outflows of $(12.9) billion yielded approximately 36 bps in the six months ended June 30, 2022 compared to $(11.3) billion yielding approximately 36 bps in the year-ago period.

GAAP Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021

GAAP results of operations were as follows for the three and six months ended June 30, 2022 and 2021:

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

For the nine months ended September 30, 2022, our net flows were $(4.4) billion compared to $(5.1) billion for the nine months ended September 30, 2021.

The change in net flows during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily driven by lower outflows in the nine months ended September 30, 2022.

Reinvested income and distributions of $2.8 billion and $2.0 billion are reflected in the net flows for the nine months ended September 30, 2022 and September 30, 2021, respectively.

For the nine months ended September 30, 2022, the annualized revenue impact of the net flows was $(8.2) million compared to $(10.4) million for the nine months ended September 30, 2021.

Gross inflows of $8.0 billion in the nine months ended September 30, 2022 yielded approximately 49 bps compared to $8.4 billion yielding approximately 48 bps in the year-ago period.

Gross outflows of $(15.2) billion yielded approximately 38 bps in the nine months ended September 30, 2022 compared to $(15.5) billion yielding approximately 38 bps in the year-ago period.

GAAP Results of Operations for the Three and Nine Months Ended September 30, 2022 and 2021

GAAP results of operations were as follows for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions, unless otherwise noted) 2022 2021 Increase

7 unchanged sentences

General and administrative expense 17.5 16.5 1.0 50.9 53.6 (2.7)

Amortization of acquired intangibles

0.1 0.1 — 0.1 0.1 —

Depreciation and amortization 4.2 5.4 (1.2) 14.8 16.7 (1.9)

5 unchanged sentences

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

Loss on sale of subsidiary — — — — (1.3) 1.3

Gain on sale of subsidiaries — 34.6 (34.6) — 33.3 (33.3)

Income from continuing operations before taxes

20 unchanged sentences

($ in millions) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

GAAP Statement of Operations 2022 2021 2022 2021

13 unchanged sentences

Our management fees are a function of the fee rates our Affiliates charge to their clients, which are typically expressed in basis points, and the levels of our assets under management.

Excluding assets managed by our equity-accounted Affiliate, average basis points earned on average assets under management were 37.2 bps and 37.1 bps for the three and six months ended June 30, 2022, respectively, and 37.2 and 37.0 bps bps for the three and six months ended June 30, 2021, respectively.

The overall weighted average fee rate increase for the three and six months ended June 30, 2022 is the result of changes in the mix of assets under management caused by market movements and client flows.

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Management fees decreased $(18.1) million, or (16.2)%, from $111.6 million for the three months ended June 30, 2021 to $93.5 million for the three months ended June 30, 2022.

Excluding assets managed by our equity-accounted Affiliate, average basis points earned on average assets under management were 37.6 bps and 37.1 bps for the three and nine months ended September 30, 2022, respectively, and 36.8 and 37.0 bps bps for the three and nine months ended September 30, 2021, respectively.

The overall weighted average fee rate increase for the three and nine months ended September 30, 2022 is the result of changes in the mix of assets under management caused by market movements and client flows.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Management fees decreased $(25.7) million, or (23.1)%, from $111.4 million for the three months ended September 30, 2021 to $85.7 million for the three months ended September 30, 2022.

The decrease was primarily due to a decrease in average assets under management, as well as the disposition of Campbell Global.

Average assets under management excluding our equity-accounted Affiliate decreased (16)%, from $120.6 billion for the three months ended June 30, 2021 to $100.8 billion for the three months ended June 30, 2022, mainly due to the negative market and net outflows over the past twelve months, as well as the disposition of Campbell Global in the second half of 2021.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Management fees decreased $(19.7) million, or (9.1)%, from $215.4 million for the six months ended June 30, 2021 to $195.7 million for the six months ended June 30, 2022.

Average assets under management excluding our equity-accounted Affiliate decreased (25)%, from $119.9 billion for the three months ended September 30, 2021 to $90.3 billion for the three months ended September 30, 2022, mainly due to the negative market and net outflows over the past twelve months, as well as the disposition of Campbell Global in August 2021.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Management fees decreased $(45.4) million, or (13.9)%, from $326.8 million for the nine months ended September 30, 2021 to $281.4 million for the nine months ended September 30, 2022.

The decrease was primarily attributable to the equity market decline and net outflows over the past twelve months, as well as the disposition of Campbell Global.

Average assets under management excluding equity-accounted Affiliate decreased (10)%, from $117.5 billion for the six months ended June 30, 2021 to $105.5 billion for the six months ended June 30, 2022, mainly due to the equity market decline and net outflows over the past twelve months, as well as the disposition of Campbell Global in the second half of 2021.

Average assets under management excluding equity-accounted Affiliate decreased (15)%, from $118.1 billion for the nine months ended September 30, 2021 to $100.9 billion for the nine months ended September 30, 2022, mainly due to the equity market decline and net outflows over the past twelve months, as well as the disposition of Campbell Global in August 2021.

Performance Fees

1 unchanged sentence

Performance fees are typically shared with our Affiliate key employees through various contractual compensation and profit-sharing arrangements.

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Performance fees decreased $(18.4) million, from $20.4 million for the three months ended June 30, 2021 to $2.0 million for the three months ended June 30, 2022, primarily due to the disposition of Campbell Global, which contributed $15.3 million to Q2 2021 performance fees.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Performance fees decreased $(2.3) million, from $3.4 million for the three months ended September 30, 2021 to $1.1 million for the three months ended September 30, 2022, primarily due to the decline in performance fee eligible assets.

Performance fees can be variable and are contractually triggered based on investment performance results over agreed upon time periods.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Performance fees decreased $(13.0) million, from $25.0 million for the six months ended June 30, 2021 to $12.0 million for the six months ended June 30, 2022, primarily due to the disposition of Campbell Global, which contributed $15.3 million to the first half of 2021 performance fees.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Performance fees decreased $(15.3) million, from $28.4 million for the nine months ended September 30, 2021 to $13.1 million for the nine months ended September 30, 2022, primarily due to the disposition of Campbell Global, which contributed $15.3 million to the first half of 2021 performance fees.

Performance fees are variable and are contractually triggered based on investment performance results over agreed upon time periods.

Other Revenue

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Other revenue decreased $(1.3) million, from $1.3 million for the three months ended June 30, 2021 to $0.0 million for the three months ended June 30, 2022.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Other revenue was $3.1 million for the three months ended September 30, 2021.

There was no other revenue for the three months ended September 30, 2022.

The decrease was attributable to the disposition of Campbell Global in August 2021.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Other revenue decreased $(2.6) million, from $2.6 million for the six months ended June 30, 2021 to $0.0 million for the six months ended June 30, 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Other revenue was $5.7 million for the nine months ended September 30, 2021.

There was no other revenue for the nine months ended September 30, 2022.

The decrease was attributable to the disposition of Campbell Global in August 2021.

3 unchanged sentences

general and administrative expenses;

amortization of acquired intangibles;

depreciation and amortization charges.

2 unchanged sentences

The following table presents the components of U.S.

GAAP compensation expense for the three and six months ended June 30, 2022 and 2021:

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

GAAP compensation expense for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

12 unchanged sentences

(1) Fixed compensation and benefits includes base salaries, payroll taxes and the cost of benefit programs provided.

For the three and six months ended June 30, 2022, $20.5 million and $42.4 million, respectively, of fixed compensation and benefits (of the $20.5 million and $42.4 million above) are included within economic net income.

For the three and nine months ended September 30, 2022, $21.5 million and $63.9 million, respectively, of fixed compensation and benefits (of the $21.5 million and $63.9 million above) are included within economic net income.

Fixed compensation and benefits includes base salaries, payroll taxes and the cost of benefit programs provided.

For the three and six months ended June 30, 2021, $24.2 million and $48.5 million, respectively, of fixed compensation and benefits (of the $25.4 million and $50.6 million above) are included within economic net income, which excludes Fund expenses initially paid by our Affiliates on the Fund’s behalf and subsequently reimbursed.

For the three and nine months ended September 30, 2021, $23.6 million and $72.1 million, respectively, of fixed compensation and benefits (of the $24.5 million and $75.1 million above) are included within economic net income, which excludes Fund expenses initially paid by our Affiliates on the Fund’s behalf and subsequently reimbursed.

(2) Sales-based compensation is paid to our Affiliates’ sales and distribution teams and represents compensation earned by our sales professionals, paid over a multi-year period, related to revenue earned on new sales.

2 unchanged sentences

Variable compensation is awarded based on a contractual percentage of Affiliate ENI profits before variable compensation and may be paid in the form of cash or non-cash Affiliate equity or profit interests.

In Affiliates with an agreed split of performance fees between Affiliate employees and BSUS, the Affiliates’ share of performance fees is allocated entirely to variable compensation.

In Affiliates with an agreed split of performance fees between Affiliate employees and BSUS, the Affiliates’ share of performance fees, which ranges from 60%-75% of the total, is allocated entirely to variable compensation.

Center variable compensation includes cash and our equity.

Non-cash variable compensation awards typically vest over several years and are recognized as compensation expense over that service period.

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

3 unchanged sentences

$ 19.8 $ 27.1 $ 70.4 $ 83.8

(a) For the three and six months ended June 30, 2022, $22.7 million and $50.6 million, respectively, of variable compensation expense (of the $22.7 million and $50.6 million above) are included within economic net income.

For the three and six months ended June 30, 2021, $32.4 million and $55.9 million, respectively, of variable compensation expense (of the $32.7 million and $56.7 million above) are included within economic net income, which excludes $0.3 million and $0.8 million of variable compensation associated with restructuring at an Affiliate.

(a) For the three and nine months ended September 30, 2022, $19.8 million and $70.4 million, respectively, of variable compensation expense (of the $19.8 million and $70.4 million above) are included within economic net income.

For the three and nine months ended September 30, 2021, $27.0 million and $82.9 million, respectively, of variable compensation expense (of the $27.1 million and $83.8 million above) are included within economic net income, which excludes $0.1 million and $0.9 million of variable compensation associated with restructuring at an Affiliate.

(4) Affiliate key employee distributions represent the share of Affiliate profits after variable compensation that is attributable to Affiliate key employee equity and profit interests holders, according to their ownership interests.

6 unchanged sentences

Fluctuations in compensation and benefits expense for the periods presented are discussed below.

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Compensation and benefits expense decreased $(46.4) million, or (63.2)%, from $73.4 million for the three months ended June 30, 2021 to $27.0 million for the three months ended June 30, 2022.

Fixed compensation and benefits decreased $(4.9) million, or (19.3)%, from $25.4 million for the three months ended June 30, 2021 to $20.5 million for the three months ended June 30, 2022, primarily reflecting disposition of Affiliates.

Variable compensation decreased $(10.0) million, or (30.6)%, from $32.7 million for the three months ended June 30, 2021 to $22.7 million for the three months ended June 30, 2022.

The decrease was primarily attributable to the disposition of Campbell Global.

Sales-based compensation increased $0.2 million, or 10.5%, from $1.9 million for the three months ended June 30, 2021 to $2.1 million for the three months ended June 30, 2022, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods.

Affiliate key employee distributions decreased $(2.7) million, or (84.4)%, from $3.2 million for the three months ended June 30, 2021 to $0.5 million for the three months ended June 30, 2022 as a result of lower underlying operating earnings at the consolidated Affiliates.

Revaluations of Affiliate equity decreased by $(29.0) million reflecting revaluations of key employee ownership interests at our consolidated Affiliates as the value of Affiliate equity increased $10.2 million for the three months ended June 30, 2021 and decreased $(18.8) million for the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Compensation and benefits expense decreased $(52.2) million, or (41.4)%, from $126.0 million for the six months ended June 30, 2021 to $73.8 million for the six months ended June 30, 2022.

Fixed compensation and benefits decreased $(8.2) million, or (16.2)%, from $50.6 million for the six months ended June 30, 2021 to $42.4 million for the six months ended June 30, 2022, primarily reflecting Affiliate dispositions.

Variable compensation decreased $(6.1) million, or (10.8)%, from $56.7 million for the six months ended June 30, 2021 to $50.6 million for the six months ended June 30, 2022.

The decrease was primarily attributable to the disposition of Campbell Global.

Sales-based compensation increased $0.5 million, or 14.3%, from $3.5 million for the six months ended June 30, 2021 to $4.0 million for the six months ended June 30, 2022, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods.

Affiliate key employee distributions decreased $(2.1) million, or (46.7)%, from $4.5 million for the six months ended June 30, 2021 to $2.4 million for the six months ended June 30, 2022, primarily as a result of lower underlying operating earnings at the consolidated Affiliates.

Revaluations of Affiliate equity decreased by $(36.3) million reflecting the change in value of key employee ownership interests at our consolidated Affiliates, as the value of Affiliate equity increased $10.7 million for the six months ended June 30, 2021 and decreased $(25.6) million for the six months ended June 30, 2022.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Compensation and benefits expense decreased $(32.3) million, or (48.1)%, from $67.2 million for the three months ended September 30, 2021 to $34.9 million for the three months ended September 30, 2022.

Fixed compensation and benefits decreased $(3.0) million, or (12.2)%, from $24.5 million for the three months ended September 30, 2021 to $21.5 million for the three months ended September 30, 2022, primarily reflecting disposition of Affiliates.

Variable compensation decreased $(7.3) million, or (26.9)%, from $27.1 million for the three months ended September 30, 2021 to $19.8 million for the three months ended September 30, 2022.

The decrease was primarily attributable to lower pre-bonus profits in the current year, as well as the disposition of Campbell Global.

This decrease was partially offset by the inclusion of deferred compensation expense earned on prior year performance fee revenues, of which the Affiliate’s share is determined by a contractual split and recognized as compensation expense over a vesting period.

Sales-based compensation decreased $(0.2) million, or (10.5)%, from $1.9 million for the three months ended September 30, 2021 to $1.7 million for the three months ended September 30, 2022, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods.

Affiliate key employee distributions decreased $(3.9) million, or (78.0)%, from $5.0 million for the three months ended September 30, 2021 to $1.1 million for the three months ended September 30, 2022 as a result of lower underlying operating earnings at the consolidated Affiliates.

Revaluations of Affiliate equity decreased by $(17.9) million reflecting revaluations of key employee ownership interests at our consolidated Affiliates as the value of Affiliate equity increased $8.7 million for the three months ended September 30, 2021 and decreased $(9.2) million for the three months ended September 30, 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Compensation and benefits expense decreased $(84.5) million, or (43.7)%, from $193.2 million for the nine months ended September 30, 2021 to $108.7 million for the nine months ended September 30, 2022.

Fixed compensation and benefits decreased $(11.2) million, or (14.9)%, from $75.1 million for the nine months ended September 30, 2021 to $63.9 million for the nine months ended September 30, 2022, primarily reflecting Affiliate dispositions.

Variable compensation decreased $(13.4) million, or (16.0)%, from $83.8 million for the nine months ended September 30, 2021 to $70.4 million for the nine months ended September 30, 2022.

The decrease was primarily attributable to lower pre-bonus profits in the current year, as well as the disposition of Campbell Global.

Sales-based compensation increased $0.3 million, or 5.6%, from $5.4 million for the nine months ended September 30, 2021 to $5.7 million for the nine months ended September 30, 2022, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods.

Affiliate key employee distributions decreased $(6.0) million, or (63.2)%, from $9.5 million for the nine months ended September 30, 2021 to $3.5 million for the nine months ended September 30, 2022, primarily as a result of lower underlying operating earnings at the consolidated Affiliates.

Revaluations of Affiliate equity decreased by $(54.2) million reflecting the change in value of key employee ownership interests at our consolidated Affiliates, as the value of Affiliate equity increased $19.4 million for the nine months ended September 30, 2021 and decreased $(34.8) million for the nine months ended September 30, 2022.

General and Administrative Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

General and administrative expense decreased $(1.5) million, or (8.3)%, from $18.0 million for the three months ended June 30, 2021 to $16.5 million for the three months ended June 30, 2022.

The decrease was primarily due to the disposition of Affiliates.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

General and administrative expense decreased $(3.7) million, or (10.0)%, from $37.1 million for the six months ended June 30, 2021 to $33.4 million for the six months ended June 30, 2022.

The decrease was primarily due to the disposition of Affiliates.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

General and administrative expense increased $1.0 million, or 6.1%, from $16.5 million for the three months ended September 30, 2021 to $17.5 million for the three months ended September 30, 2022.

The increase was primarily due to increased travel and entertainment, consulting, and system costs.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

General and administrative expense decreased $(2.7) million, or (5.0)%, from $53.6 million for the nine months ended September 30, 2021 to $50.9 million for the nine months ended September 30, 2022.

The decrease was primarily due to the disposition of Affiliates, offset partially by an increase in travel and entertainment, consulting, and system costs in the current period.

Amortization of Acquired Intangibles Expense

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Amortization of

acquired intangibles expense was unchanged at $0.1 million for the three months ended September 30, 2021 and $0.1 million for the three months ended September 30, 2022.

This account reflects the amortization of intangible assets acquired by Acadian.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Amortization of

acquired intangibles expense was unchanged, at $0.1 million for the nine months ended September 30, 2021 and $0.1 million nine months ended September 30, 2022.

This account reflects the amortization of intangible assets acquired by Acadian.

Depreciation and Amortization Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Depreciation and amortization expense decreased $(0.5) million, or (8.6)%, from $5.8 million for the three months ended June 30, 2021 to $5.3 million for the three months ended June 30, 2022.

The decrease was primarily due to the disposition of Affiliates.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Depreciation and amortization expense decreased $(0.7) million, or (6.2)%, from $11.3 million for the six months ended June 30, 2021 to $10.6 million for the six months ended June 30, 2022.

The decrease was primarily due to the disposition of Affiliates.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Depreciation and amortization expense decreased $(1.2) million, or (22.2)%, from $5.4 million for the three months ended September 30, 2021 to $4.2 million for the three months ended September 30, 2022.

The decrease was primarily attributable to the effect of certain assets becoming fully depreciated and the disposition of Affiliates.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Depreciation and amortization expense decreased $(1.9) million, or (11.4)%, from $16.7 million for the nine months ended September 30, 2021 to $14.8 million for the nine months ended September 30, 2022.

The decrease was primarily attributable to the effect of certain assets becoming fully depreciated and the disposition of Affiliates.

GAAP Other Non-Operating Items of Income and Expense

3 unchanged sentences

loss on extinguishment of debt;

loss on sale of subsidiary.

gain on sale of subsidiaries.

Investment Income

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Investment income decreased $(5.4) million, from $4.7 million for the three months ended June 30, 2021 to $(0.7) million for the three months ended June 30, 2022.

The decrease was driven primarily by lower returns on seed capital investments due to the market decline in the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Investment income decreased $(8.1) million, from $7.3 million for the six months ended June 30, 2021 to $(0.8) million for the six months ended June 30, 2022.

The decrease was driven primarily by lower returns on seed capital investments due to the market decline in the six months ended June 30, 2022.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Investment income decreased $(0.7) million, from $0.3 million for the three months ended September 30, 2021 to $(0.4) million for the three months ended September 30, 2022.

The decrease was driven primarily by lower returns on seed capital investments due to the market decline in the three months ended September 30, 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Investment income decreased $(8.8) million, from $7.6 million for the nine months ended September 30, 2021 to $(1.2) million for the nine months ended September 30, 2022.

The decrease was driven primarily by lower returns on seed capital investments due to the market decline in the nine months ended September 30, 2022.

Interest Income

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Interest income remained flat at $0.1 million for the three months ended June 30, 2021 compared to $0.1 million for the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Interest income remained flat at $0.1 million for the six months ended June 30, 2021 compared to $0.1 million for the three months ended June 30, 2022.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Interest income was $0.2 million for the three months ended September 30, 2022.

There was no interest income for the three months ended September 30, 2021.

The increase was due to an increase in short-term investment returns.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Interest income increased $0.2 million, from $0.1 million for the nine months ended September 30, 2021 compared to $0.3 million for the nine months ended September 30, 2022.

The increase was due to an increase in short-term investment returns.

Interest Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Interest expense decreased $(1.5) million, or (23.8)%, from $6.3 million for the three months ended June 30, 2021 to $4.8 million for the three months ended June 30, 2022, primarily reflecting a lower balance of third party borrowings following the redemption of our our 5.125% Senior Notes due August 1, 2031 in January 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Interest expense decreased $(1.2) million, or (9.6)%, from $12.5 million for the six months ended June 30, 2021 to $11.3 million for the six months ended June 30, 2022, primarily reflecting the lower balance of third party borrowings in 2022, slightly offset by $1.3 million of additional interest expense related to the amortization of the cash flow hedge associated with the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Interest expense decreased $(1.6) million, or (25.8)%, from $6.2 million for the three months ended September 30, 2021 to $4.6 million for the three months ended September 30, 2022, primarily reflecting a lower balance of third party borrowings following the redemption of our 5.125% Senior Notes due August 1, 2031 in January 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Interest expense decreased $(2.8) million, or (15.0)%, from $18.7 million for the nine months ended September 30, 2021 to $15.9 million for the nine months ended September 30, 2022, primarily reflecting the lower balance of third party borrowings in 2022, slightly offset by $1.3 million of additional interest expense related to the amortization of the cash flow hedge associated with the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

Loss on Extinguishment of Debt

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

There was no loss on extinguishment of debt in the three months ended June 30, 2021 or the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

There was no loss on extinguishment of debt in the six months ended June 30, 2021.

Loss on extinguishment of debt was $(3.2) million for the six months ended June 30, 2022 as a result of the full redemption of the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

Loss on Sale of Subsidiary

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

There was no loss on sale of subsidiary in the three months ended June 30, 2021 or the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Loss on sale of subsidiary was $(1.3) million for the six months ended June 30, 2021, representing the loss on disposition of a business unit during the six months ended June 30, 2021.

There was no loss on sale of subsidiary in the three months ended June 30, 2022.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

There was no loss on extinguishment of debt in the three months ended September 30, 2021 or the three months ended September 30, 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

There was no loss on extinguishment of debt in the nine months ended September 30, 2021.

Loss on extinguishment of debt was $(3.2) million for the nine months ended September 30, 2022 as a result of the full redemption of the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

Gain on Sale of Subsidiaries

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Gain on sale of subsidiaries was $34.6 million for the three months ended September 30, 2021.

Included in the balance for the three months ended September 30, 2021 is our gain on the sale of our equity interests in ICM and Campbell Global.

There was no gain on sale of subsidiaries in the three months ended September 30, 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Gain on sale of subsidiaries was $33.3 million for the nine months ended September 30, 2021.

Included in the balance for the nine months ended September 30, 2021 is our gain on the sale of our equity interests in ICM and Campbell Global, slightly offset by the loss on disposition of a business unit during the nine months ended September 30, 2021.

There was no gain on sale of subsidiaries in the nine months ended September 30, 2022.

GAAP Income Tax Expense (Benefit)

1 unchanged sentence

Our effective tax rate could be impacted in the future by these items as well as further changes in tax laws and regulations in jurisdictions in which we operate.

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Income tax expense increased $2.8 million, from $9.9 million for the three months ended June 30, 2021 to $12.7 million for the three months ended June 30, 2022.

The increase in income tax expense primarily relates to an increase in income from continuing operations in the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021 :

Income tax expense increased $3.3 million, from $19.0 million for the six months ended June 30, 2021 to $22.3 million for the six months ended June 30, 2022.

The increase in income tax expense primarily relates to an increase in income from continuing operations during the six months ended June 30, 2022.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Income tax expense decreased $(7.0) million, from $14.5 million for the three months ended September 30, 2021 to $7.5 million for the three months ended September 30, 2022.

The decrease in income tax expense primarily relates to a decrease in income from continuing operations in the three months ended September 30, 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021 :

Income tax expense decreased $(3.7) million, from $33.5 million for the nine months ended September 30, 2021 to $29.8 million for the nine months ended September 30, 2022.

The decrease in income tax expense primarily relates to a decrease in income from continuing operations during the nine months ended September 30, 2022.

GAAP Consolidated Funds

As discussed further in Note 3 of our accompanying Consolidated Financial Statements, we sold our equity interests in Landmark on June 2, 2021, which resulted in the de-consolidation of all Landmark Funds as of June 2, 2021, the consummation of the sale.

There were no consolidated Funds for the three and six months ended June 30, 2022.

As previously noted, consolidated Landmark Funds are included in discontinued operations for the three and six months ended June 30, 2021.

There were no consolidated Funds for the three and nine months ended September 30, 2022.

As previously noted, consolidated Landmark Funds are included in discontinued operations for the nine months ended September 30, 2021.

Discontinued Operations

As discussed further in Note 3 of our accompanying Consolidated Financial Statements, we completed the sale of all our equity interests in TSW on July 19, 2021, and we completed the sale of all our equity interests in Landmark on June 2, 2021.

As a result, Landmark and TSW are reported within discontinued operations for the three and six months ended June 30, 2021.

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Income from discontinued operations was $53.4 million for the three months ended June 30, 2021, representing the income from TSW and Landmark including consolidated Landmark Funds.

There was no income from discontinued operations for the three months ended June 30, 2022.

The gain on sale of discontinued operations was $509.2 million for the three months ended June 30, 2021, representing the gain on sale of Landmark.

There was no gain on disposal of discontinued operations for the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Income from discontinued operations was $75.3 million for the six months ended June 30, 2021, representing the net income from TSW and Landmark, including consolidated Landmark Funds.

There was no income from discontinued operations for the six months ended June 30, 2022.

The gain on sale of discontinued operations was $509.2 million for the six months ended June 30, 2021, representing the gain on sale of Landmark.

There was no gain on disposal of discontinued operations for the six months ended June 30, 2022.

As a result, Landmark and TSW are reported within discontinued operations for the three and nine months ended September 30, 2021.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Income from discontinued operations was $1.2 million for the three months ended September 30, 2021, representing the income from TSW and Landmark including consolidated Landmark Funds.

There was no income from discontinued operations for the three months ended September 30, 2022.

The gain on disposal of discontinued operations was $185.4 million for the three months ended September 30, 2021, representing the gain on sale of our equity interests in TSW.

There was no gain on disposal of discontinued operations for the three months ended September 30, 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Income from discontinued operations was $76.5 million for the nine months ended September 30, 2021, representing the net income from TSW and Landmark, including consolidated Landmark Funds.

There was no income from discontinued operations for the nine months ended September 30, 2022.

The gain on disposal of discontinued operations was $694.6 million for the nine months ended September 30, 2021, representing the gain on sales of Landmark and TSW.

There was no gain on disposal of discontinued operations for the nine months ended September 30, 2022.

GAAP Operating Metrics

The following table shows our key U.S.

GAAP operating metrics for the three and six months ended June 30, 2022 and 2021.

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

GAAP operating metrics for the three and nine months ended September 30, 2022 and 2021.

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

14 unchanged sentences

(1) The following table identifies the components of operating income before variable compensation and Affiliate key employee distributions, as well as operating income before Affiliate key employee distributions:

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

46 unchanged sentences

Reconciliation of U.S.

GAAP Net Income to Economic Net Income for the Three and Six Months Ended June 30, 2022 and 2021

The following table reconciles net income attributable to controlling interests to economic net income for the three and six months ended June 30, 2022 and 2021:

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

GAAP Net Income to Economic Net Income for the Three and Nine Months Ended September 30, 2022 and 2021

The following table reconciles net income attributable to controlling interests to economic net income for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

16 unchanged sentences

$ 12.5 $ 23.6 $ 53.2 $ 79.0

(1) The net return on seed/co-investment (gains) losses and financings for the three and six months ended June 30, 2022 and 2021 is shown in the following table:

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

(1) The net return on seed/co-investment (gains) losses and financings for the three and nine months ended September 30, 2022 and 2021 is shown in the following table:

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

5 unchanged sentences

Net seed/co-investment (gains) losses and financing $ 0.4 $ 0.2 $ 1.4 $ (3.5)

* The blended rate is based first on the interest rate paid on our non-recourse seed capital facility up to the average amount drawn, and thereafter on the weighted average rate of the long-term debt.

(2) The three months ended June 30, 2022 includes restructuring costs associated with the transfer of an insurance policy from our former parent of $0.3 million.

The three months ended June 30, 2021 includes income from discontinued operations attributable to controlling interests of $511.1 million, restructuring costs at the Center and Affiliate of $2.0 million, and costs associated with the transfer of an insurance policy from our former parent of of $0.3 million.

The six months ended June 30, 2022 includes restructuring costs at the Affiliate of $0.1 million, and costs associated with the transfer of an insurance policy from our former parent of $0.6 million.

The six months ended June 30, 2021 includes income from discontinued operations attributable to controlling interests of $516.5 million, restructuring costs at the Center of $3.5 million, costs associated with the transfer of an insurance policy from our former parent of $0.6 million, and the loss on sale of subsidiary of $1.3 million.

* The blended rate is based on the weighted average rate of the long-term debt.

(2) The three months ended September 30, 2022 includes restructuring costs of $0.1 million and costs associated with the transfer of an insurance policy from our former parent of $0.3 million.

The three months ended September 30, 2021 includes income from discontinued operations attributable to controlling interests of $(186.6) million, restructuring costs at the Center and Affiliate of $0.5 million, and costs associated with the transfer of an insurance policy from our former parent of of $0.3 million, and the gain on sale of subsidiaries of $34.6 million.

The nine months ended September 30, 2022 includes restructuring costs of $0.2 million, and costs associated with the transfer of an insurance policy from our former parent of $0.9 million.

The nine months ended September 30, 2021 includes income from discontinued operations attributable to controlling interests of $703.1 million, restructuring costs at the Center and Affiliates of $4.0 million, costs associated with the transfer of an insurance policy from our former parent of $0.9 million, and the gain on sale of subsidiaries of $33.3 million.

(3) Reflects the sum of lines (i), (ii), (iii), (iv) and the restructuring component of line (vi) multiplied by the 27.3% U.S.

7 unchanged sentences

The following table reconciles U.S.

GAAP revenue to ENI revenue for the three and six months ended June 30, 2022 and 2021:

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

GAAP revenue to ENI revenue for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

5 unchanged sentences

The following table identifies the components of ENI revenue:

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

10 unchanged sentences

(3) ENI other income is comprised primarily of other revenue under U.S.

GAAP, plus our earnings from our previously disposed equity-accounted Affiliate of $1.3 million and $2.4 million for the three and six months ended June 30, 2021, respectively.

GAAP, plus our earnings from our previously disposed equity-accounted Affiliate of $0.2 million and $2.6 million for the three and nine months ended September 30, 2021, respectively.

As further described in “—Non-GAAP Supplemental Performance Measure—Economic Net Income and Segment Analysis,” ENI other income also excludes certain Fund expenses initially paid by our Affiliates on the Funds’ behalf and subsequently reimbursed.

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

11 unchanged sentences

The following table reconciles U.S.

GAAP operating expense to ENI operating expense for the three and six months ended June 30, 2022 and 2021.

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

GAAP operating expense to ENI operating expense for the three and nine months ended September 30, 2022 and 2021.

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

3 unchanged sentences

9.2 (8.7) 34.8 (19.4)

Goodwill impairment and amortization of acquired intangible assets (0.1) (0.1) (0.1) (0.1)

Capital transaction costs — 0.1 — (0.3)

7 unchanged sentences

ENI operating expense $ 44.5 $ 47.0 $ 134.2 $ 143.6

(1) The three months ended June 30, 2022 includes $0.3 million costs associated with the transfer of an insurance policy from our former parent.

The three months ended June 30, 2021 includes $2.0 million of restructuring costs at the Center and Affiliate and $0.3 million costs associated with the transfer of an insurance policy from our former parent.

The six months ended June 30, 2022 includes $0.1 million of restructuring costs at the Affiliate, and $0.6 million of costs associated with the transfer of an insurance policy from our former parent.

The six months ended June 30, 2021 includes $3.5 million of restructuring costs at the Center and Affiliates and $0.6 million costs associated with the transfer of an insurance policy from our former parent.

(1) The three months ended September 30, 2022 includes $0.1 million of restructuring costs and $0.3 million costs associated with the transfer of an insurance policy from our former parent.

The three months ended September 30, 2021 includes $0.5 million of restructuring costs at the Center and Affiliate and $0.3 million costs associated with the transfer of an insurance policy from our former parent.

The nine months ended September 30, 2022 includes $0.2 million of restructuring costs and $0.9 million of costs associated with the transfer of an insurance policy from our former parent.

The nine months ended September 30, 2021 includes $4.0 million of restructuring costs at the Center and Affiliates and $0.9 million costs associated with the transfer of an insurance policy from our former parent.

The following table identifies the components of ENI operating expense:

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

7 unchanged sentences

The following table reconciles U.S.

GAAP compensation and benefits expense for the three and six months ended June 30, 2022 and 2021 to ENI fixed compensation and benefits expense:

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

GAAP compensation and benefits expense for the three and nine months ended September 30, 2022 and 2021 to ENI fixed compensation and benefits expense:

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

14 unchanged sentences

GAAP general and administrative expense to ENI general and administrative expense:

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

6 unchanged sentences

Key Non-GAAP Operating Metrics

The following table shows our key non-GAAP operating metrics for the three and six months ended June 30, 2022 and 2021.

The following table shows our key non-GAAP operating metrics for the three and nine months ended September 30, 2022 and 2021.

We present these metrics because they are the measures our management uses to evaluate the profitability of our business and are useful to investors because they represent the key drivers and measures of economic performance within our business model.

1 unchanged sentence

GAAP measure:

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

26 unchanged sentences

GAAP operating income to ENI operating earnings:

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

3 unchanged sentences

Affiliate key employee-owned equity and profit interest revaluations (9.2) 8.7 (34.8) 19.4

Goodwill impairment and amortization of acquired intangible assets and pre-acquisition employee equity 0.1 0.1 0.1 0.1

Capital transaction costs — (0.1) — 0.3

8 unchanged sentences

ENI earnings after Affiliate key employee distributions $ 21.4 $ 38.4 $ 86.4 $ 124.6

(a) The three months ended June 30, 2022 includes $0.3 million costs associated with the transfer of an insurance policy from our former parent.

The three months ended June 30, 2021 includes $2.0 million of restructuring costs at the Center and Affiliates and $0.3 million of costs associated with the transfer of an insurance policy from our former parent.

The six months ended June 30, 2022 includes $0.1 million of restructuring costs at the Affiliate and $0.6 million of costs associated with the transfer of an insurance policy from our former parent.

The six months ended June 30, 2021 includes $3.5 million of restructuring costs at the Center and $0.6 million of costs associated with the transfer of an insurance policy from our former parent.

(a) The three months ended September 30, 2022 includes $0.1 million of restructuring costs and $0.3 million costs associated with the transfer of an insurance policy from our former parent.

The three months ended September 30, 2021 includes $0.5 million of restructuring costs at the Center and Affiliates and $0.3 million of costs associated with the transfer of an insurance policy from our former parent.

The nine months ended September 30, 2022 includes $0.2 million of restructuring costs and $0.9 million of costs associated with the transfer of an insurance policy from our former parent.

The nine months ended September 30, 2021 includes $4.0 million of restructuring costs at the Center and Affiliates and $0.9 million of costs associated with the transfer of an insurance policy from our former parent.

(2) The ENI operating margin, which is calculated before Affiliate key employee distributions, is used by management and is useful to investors to evaluate the overall operating margin of the business without regard to our various ownership levels at each of the Affiliates.

1 unchanged sentence

GAAP operating margin.

GAAP operating margin, excluding the effect of consolidated Funds, is 48.9% for the three months ended June 30, 2022 and 27.1% for the three months ended June 30, 2021, 43.3% for the six months ended June 30, 2022, and 28.2% for the six months ended June 30, 2021.

GAAP operating margin, excluding the effect of consolidated Funds, is 34.7% for the three months ended September 30, 2022 and 24.3% for the three months ended September 30, 2021, 40.7% for the nine months ended September 30, 2022, and 27.0% for the nine months ended September 30, 2021.

The ENI operating margin is important because it gives investors an understanding of the profitability of the total business relative to revenue, irrespective of the ownership position which we have in each of our Affiliates.

4 unchanged sentences

We have provided this ratio since many operating expenses, including fixed compensation and benefits and general and administrative expense, are generally linked to the overall size of the business.

We track this ratio as a key measure of scale economies because in our profit-sharing economic model, scale benefits both the Affiliate employees

and our stockholders.

We track this ratio as a key measure of scale economies because in our profit-sharing economic model, scale benefits both the Affiliate employees and our stockholders.

The ENI operating expense ratio is most comparable to the U.S.

17 unchanged sentences

The following table reconciles the United States statutory tax to tax on economic net income:

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

10 unchanged sentences

(1) Includes interest income and third-party ENI interest expense, as shown in the following table:

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

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

20 unchanged sentences

This segment is comprised of our interest in Acadian.

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 is included within the Other category, along with our previously disposed Affiliates, Campbell Global and ICM, for the three and nine months ended September 30, 2021.

We completed the sale of our equity interests in ICM in July 2021.

We completed the sale of our equity interest in Campbell Global in August 2021.

The corporate head office expenses are not allocated to the Company’s business segment but the CODM does consider the cost structure of the corporate head office when evaluating the financial performance of our segment.

10 unchanged sentences

ENI operating expenses include compensation and benefits, general and administrative expense, and depreciation and amortization under U.S.

GAAP, adjusted to exclude non-cash expenses representing changes in the value of Affiliate equity and profit interests held by Affiliate key employees, impairment of goodwill, and the separate expenses recorded under U.S.

GAAP, adjusted to exclude non-cash expenses representing changes in the value of

Affiliate equity and profit interests held by Affiliate key employees, impairment of goodwill, and the separate expenses recorded under U.S.

GAAP for certain Fund expenses reimbursed to our Affiliates.

5 unchanged sentences

Segment ENI Revenue

The following table identifies the components of segment ENI revenue for the three months ended June 30, 2022 and 2021:

Three Months Ended June 30,

The following table identifies the components of segment ENI revenue for the three months ended September 30, 2022 and 2021:

Three Months Ended September 30,

($ in millions) 2022 2021

5 unchanged sentences

ENI revenue $ 86.8 $ — $ 86.8 $ 110.6 $ 6.8 $ 117.4

The following table identifies the components of segment ENI revenue for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

The following table identifies the components of segment ENI revenue for the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

($ in millions) 2022 2021

6 unchanged sentences

Quant & Solutions Segment ENI Revenue

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Quant & Solutions ENI revenue decreased $(15.6) million, or (14.0)%, from $111.1 million for the three months ended June 30, 2021 to $95.5 million for the three months ended June 30, 2022.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Quant & Solutions ENI revenue decreased $(23.8) million, or (21.5)%, from $110.6 million for the three months ended September 30, 2021 to $86.8 million for the three months ended September 30, 2022.

The decrease was mainly attributable to (20.6)% lower management fees driven by lower average AUM resulting from equity market decline and net outflows over the past twelve months.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Quant & Solutions ENI revenue decreased $(6.9) million, or (3.2)%, from $214.6 million for the six months ended June 30, 2021 to $207.7 million for the six months ended June 30, 2022.

The decrease was attributable to (4.5)% lower management fees, driven by lower average AUM, partly offset by an increase in performance fees in the current period as a result of higher out-performance in certain non-U.S.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Quant & Solutions ENI revenue decreased $(30.7) million, or (9.4)%, from $325.2 million for the nine months ended September 30, 2021 to $294.5 million for the nine months ended September 30, 2022.

The decrease was attributable to (10.1)% lower management fees, driven by lower average AUM.

Other ENI Revenue

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Other ENI revenue was $22.3 million for the three months ended June 30, 2021 representing the revenue from our previously disposed Affiliates, Campbell Global and ICM.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Other ENI revenue was $6.8 million for the three months ended September 30, 2021 representing the revenue from our previously disposed Affiliates, Campbell Global and ICM.

The sales of Campbell Global and ICM were completed in 2021.

There was no Other ENI revenue for the for the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Other ENI revenue was $28.6 million for the six months ended June 30, 2021 representing the revenue from our previously disposed Affiliates, Campbell Global and ICM.

There was no Other ENI revenue for the for the three months ended September 30, 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Other ENI revenue was $35.4 million for the nine months ended September 30, 2021 representing the revenue from our previously disposed Affiliates, Campbell Global and ICM.

The sales of Campbell Global and ICM were completed in 2021.

There was no Other ENI revenue for the six months ended June 30, 2022.

There was no Other ENI revenue for the nine months ended September 30, 2022.

Segment ENI Expense

The following table identifies the components of segment ENI expense for the three months ended June 30, 2022 and 2021:

Three Months Ended June 30,

The following table identifies the components of segment ENI expense for the three months ended September 30, 2022 and 2021:

Three Months Ended September 30,

($ in millions) 2022 2021

12 unchanged sentences

Total Expenses $ 60.4 $ 5.0 $ 65.4 $ 66.7 $ 12.3 $ 79.0

The following table identifies the components of segment ENI expense for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

The following table identifies the components of segment ENI expense for the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

($ in millions) 2022 2021

12 unchanged sentences

Quant & Solutions Segment ENI Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Quant & Solutions ENI operating expense increased $1.4 million, or 3.7%, from $38.3 million for the three months ended June 30, 2021 to $39.7 million for the three months ended June 30, 2022.

The increase was driven by 15.2% higher ENI general and administrative expense resulting from higher travel and entertainment, portfolio administrative and system costs.

This increase was partly offset by (2.6)% lower ENI fixed compensation and benefits expense resulting from lower payroll tax.

Quant & Solutions ENI variable compensation expense, which is based on contractual arrangements, decreased (1.4)%, as a result of lower profit before variable compensation.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Quant & Solutions ENI operating expense increased $1.0 million, or 2.5%, from $39.4 million for the three months ended September 30, 2021 to $40.4 million for the three months ended September 30, 2022.

The increase was driven by 10.1% higher ENI general and administrative expense resulting from higher travel and entertainment, consultant, and system costs.

Quant & Solutions ENI fixed compensation and benefits expense increased 3.1% due to higher salaries and new hires.

Quant & Solutions ENI variable compensation expense is based on contractual percentage of earnings before variable compensation, and also includes a formulaic split of performance fee revenue that gets deferred and recognized as variable compensation expense over a three-year vesting period.

Quant & Solutions ENI variable compensation expense decreased (19.6)% as a result of lower earnings before variable compensation in the current period, partially offset by the inclusion of deferred compensation expense earned on prior year performance fee revenues.

Affiliate key employee distributions attributable to Quant & Solutions decreased (71.1)%, impacted by lower ENI earnings after variable compensation and the leveraged nature of the distribution share.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Quant & Solutions ENI operating expense increased $3.4 million, or 4.4%, from $77.4 million for the six months ended June 30, 2021 to $80.8 million for the six months ended June 30, 2022.

The increase was driven by 1.9% higher ENI fixed compensation and benefits expense resulting from higher headcount and 10.0% higher ENI general and administrative expense primarily due to higher travel and entertainment, portfolio administrative and systems costs.

Quant & Solutions ENI variable compensation expense, which is based on contractual arrangements, increased 7.6%, as a result of higher earnings before variable compensation and the contractual share of variable compensation earned on performance fees.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Quant & Solutions ENI operating expense increased $4.4 million, or 3.8%, from $116.8 million for the nine months ended September 30, 2021 to $121.2 million for the nine months ended September 30, 2022.

The increase was driven by 2.3% higher ENI fixed compensation and benefits expense resulting from higher salaries and new hires and 10.0% higher ENI general and administrative expense primarily due to higher travel and entertainment, consultant, and systems costs.

Quant & Solutions ENI variable compensation expense decreased (1.8)% as a result of lower earnings before variable compensation in the current period, partially offset by the inclusion of deferred compensation expense earned on prior year performance fee revenues.

Affiliate key employee distributions attributable to Quant & Solutions decreased (58.3)%, impacted by lower ENI earnings after variable compensation, and the leveraged nature of the distribution share.

Other ENI Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021:

Other ENI operating expense decreased $(5.1) million, or (53.7)%, from $9.5 million for the three months ended June 30, 2021 to $4.4 million for the three months ended June 30, 2022.

Three months ended September 30, 2022 compared to three months ended September 30, 2021:

Other ENI operating expense decreased $(3.5) million, or (46.1)%, from $7.6 million for the three months ended September 30, 2021 to $4.1 million for the three months ended September 30, 2022.

The decrease was driven by (62.8)% lower fixed compensation and benefit expense, and (22.6)% lower general and administrative expense resulting from disposition of Affiliates in 2021.

Other ENI variable compensation expense decreased (74.3)% due to the disposition of Campbell Global.

Six months ended June 30, 2022 compared to six months ended June 30, 2021:

Other ENI operating expense decreased $(10.3) million, or (53.6)%, from $19.2 million for the six months ended June 30, 2021 to $8.9 million for the six months ended June 30, 2022.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021:

Other ENI operating expense decreased $(13.8) million, or (51.5)%, from $26.8 million for the nine months ended September 30, 2021 to $13.0 million for the nine months ended September 30, 2022.

The decrease was driven by (62.9)% lower fixed compensation and benefit expense and (34.3)% lower general and administrative expense resulting from disposition of Affiliates in 2021.

3 unchanged sentences

All amounts presented exclude consolidated Funds:

Six Months Ended June 30,

Nine Months Ended September 30,

($ in millions) 2022 2021

4 unchanged sentences

(1) Cash flow data shown only includes cash flows from continuing operations.

Comparison for the six months ended June 30, 2022 and 2021

Net cash from operating activities from continuing operations decreased $(17.1) million, from net cash provided of $47.0 million for the six months ended June 30, 2021 to net cash provided of $29.9 million for the six months ended June 30, 2022, driven by the disposition of Affiliates in 2021, as well as changes in net income offset by changes in operating assets and liabilities period over period.

In the six months ended June 30, 2022, net cash from investing activities of continuing operations decreased $(718.6) million, from $712.2 million provided in the six months ended June 30, 2021 to $6.4 million used in the six months ended June 30, 2022, driven by proceeds from the sale of Landmark in the six months ended June 30, 2021.

Net cash from financing activities from continuing operations decreased $233.9 million, from $50.5 million provided in the six months ended June 30, 2021 to $183.4 million used in the six months ended June 30, 2022, primarily due to the repayment of third party borrowings and the revolving credit facility, as well as higher share repurchases in the six months ended June 30, 2022.

Comparison for the nine months ended September 30, 2022 and 2021

Net cash from operating activities from continuing operations increased $41.0 million, from net cash provided of $22.3 million for the nine months ended September 30, 2021 to net cash provided of $63.3 million for the nine months ended September 30, 2022, driven by changes in net income offset by changes in operating assets and liabilities period over period, including the collection of 2021 revenue in the first quarter of 2022 and taxes paid in the nine months ended September 30, 2021.

In the nine months ended September 30, 2022, net cash from investing activities of continuing operations decreased $(1,018.3) million, from $1,009.0 million provided in the nine months ended September 30, 2021 to $9.3 million used in the nine months ended September 30, 2022, driven by proceeds from the sale of Landmark, TSW, Campbell Global and ICM in the nine months ended September 30, 2021.

Net cash from financing activities from continuing operations decreased $224.7 million, from $20.0 million provided in the nine months ended September 30, 2021 to $204.7 million used in the nine months ended September 30, 2022, primarily due to the repayment of third party borrowings and the revolving credit facility, as well as higher share repurchases in the nine months ended September 30, 2022.

Supplemental Liquidity Measure — Adjusted EBITDA

4 unchanged sentences

The following table reconciles our U.S.

GAAP net income attributable to controlling interests to EBITDA to Adjusted EBITDA to economic net income for the three and six months ended June 30, 2022 and 2021.

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

GAAP net income attributable to controlling interests to EBITDA to Adjusted EBITDA to economic net income for the three and nine months ended September 30, 2022 and 2021.

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2022 2021 2022 2021

20 unchanged sentences

$ 12.5 $ 23.6 $ 53.2 $ 79.0

(1) The three months ended June 30, 2022 includes $0.3 million of costs associated with the transfer of an insurance policy from our former parent.

The six months ended June 30, 2022 includes $0.1 million of restructuring costs at the Affiliate, $0.6 million of costs associated with the transfer of an insurance policy from our former parent.

The three months ended June 30, 2021 includes $2.0 million of restructuring costs and costs associated with the transfer of an insurance policy from our former parent of $0.3 million.

The six months ended June 30, 2021 includes $3.5 million of restructuring costs and costs associated with the transfer of an insurance policy from our former parent of $0.6 million, and the loss on sale of subsidiary of $1.3 million.

(1) The three months ended September 30, 2022 includes $0.1 million of restructuring costs and $0.3 million of costs associated with the transfer of an insurance policy from our former parent.

The nine months ended September 30, 2022 includes $0.2 million of restructuring costs and $0.9 million of costs associated with the transfer of an insurance policy from our former parent.

The three months ended September 30, 2021 includes $0.5 million of restructuring costs at the Center and Affiliates and costs associated with the transfer of an insurance policy from our former parent of $0.3 million, and the gain on sale of subsidiaries of $34.6 million.

The nine months ended September 30, 2021 includes $4.0 million of restructuring costs at the Center and Affiliates and costs associated with the transfer of an insurance policy from our former parent of $0.9 million, and the gain on sale of subsidiaries of $33.3 million.

(2) Includes non-cash equity-based award amortization expense.

9 unchanged sentences

The following table summarizes our financing arrangements as of the dates indicated:

($ in millions) June 30,

($ in millions) September 30,

2022 December 31,

1 unchanged sentence

Revolving credit facility:

Revolving credit facility $ 50.0 $ — Variable rate March 7, 2025

$125 million revolving credit facility

$ 29.0 $ — Variable rate March 7, 2025

Total revolving credit facility $ 29.0 $ —

5 unchanged sentences

(1) 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 $3.2 million of loss on extinguishment of debt within the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022.

Revolving Credit Facility

4 unchanged sentences

Under the Acadian Credit Agreement, the ratio of Acadian’s third-party borrowings to Acadian’s trailing twelve months Adjusted EBITDA, as defined by the Acadian Credit Agreement (the “Leverage Ratio”), cannot exceed 2.5x and the ratio of Acadian’s trailing twelve months Adjusted EBITDA to Acadian’s interest expense (the “Interest Coverage Ratio”) must be not less than 4.0x.

At June 30, 2022, Acadian’s Leverage Ratio was 0.2x and Acadian’s Interest Coverage Ratio was 220.5x.

At September 30, 2022, Acadian’s Leverage Ratio was 0.1x and Acadian’s Interest Coverage Ratio was 156x.

Other Compensation Liabilities

1 unchanged sentence

The following table summarizes our other long-term liabilities:

September 30,

2022 December 31,

12 unchanged sentences

There is a voluntary deferral plan investment balance included in investments on the Consolidated Balance Sheets that corresponds to this deferral liability.

Additionally, we have recorded accrued incentive compensation of $64.6 million and $117.4 million on the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021, respectively.

Included within the accrued incentive compensation balance is the vested portion of Acadian’s deferred compensation pool.

Acadian’s deferred compensation pool is based on a contractual percentage of Acadian performance fee revenues and post-bonus profits, and is subject to a three-year vesting period.

Compensation expense is recognized over the requisite service period.

Critical Accounting Policies and Estimates

4 unchanged sentences

Forward Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements, including anticipated revenues, margins, cash flows or earnings, anticipated future performance of our business and our Affiliate, our expected future net cash flows, our anticipated expense levels, capital management, expected impact of the COVID-19 pandemic on our business, financial condition, results of operations and cash flows, and/or expectations regarding market conditions.

This Quarterly Report on Form 10-Q includes forward-looking statements, which may include, from time to time, anticipated revenues, margins, cash flows or earnings, anticipated future performance of our business and our Affiliate, our expected future net cash flows, our anticipated expense levels, capital management, financial condition, results of operations and cash flows, and/or expectations regarding market conditions.

The words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “can be,” “may be,” “aim to,” “may affect,” “may depend,” “intends,” “expects,” “believes,” “estimate,” “project,” and other similar expressions are intended to identify such forward-looking statements.

4 unchanged sentences

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 2. Management’s Discussion and Analysis