What changed in this filing

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Item 1. Financial Statements

2023-05-08 compared with 2022-11-04 · 153 added, 342 removed, 428 unchanged (54% of the section changed)

3 unchanged sentences

(in millions, except for share and per share data, unaudited)

September 30,

2023 December 31,

8 unchanged sentences

Deferred tax assets 65.9 64.7

Assets of consolidated Funds:

Cash and cash equivalents, restricted 12.6 12.8

Investments 2.8 1.9

Other assets 3.5 2.4

Total assets $ 546.0 $ 518.7

8 unchanged sentences

Third party borrowings 273.6 273.5

Liabilities of consolidated Funds:

Accounts payable and accrued expenses 0.5 0.3

Derivative liabilities at fair value 2.6 2.2

Total liabilities 554.3 540.3

Commitments and contingencies

Redeemable non-controlling interests in consolidated Funds 0.4 —

Common stock (par value $ 0.001 ;

10 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Management fees $ 90.6 $ 102.2

Performance fees 0.5 10.0

Other revenue — 3.1 — 5.7

Consolidated Funds’ revenue 0.7 —

Total revenue 91.8 112.2

3 unchanged sentences

Depreciation and amortization 3.8 5.3

Amortization of acquired intangibles 0.1 0.1 0.1 0.1

Consolidated Funds’ expense 0.7 —

Total operating expenses 72.0 69.0

5 unchanged sentences

Loss on extinguishment of debt — ( 3.2 )

Gain on sale of subsidiaries — 34.6 — 33.3

Net consolidated Funds’ investment gains 0.8 —

Total non-operating income (loss) ( 2.7 ) ( 9.8 )

Income from continuing operations before taxes 25.3 57.4 100.0 119.6

Income before income taxes 17.1 33.4

Income tax expense 5.1 9.6

Income from continuing operations 17.8 42.9 70.2 86.1

Income from discontinued operations, net of tax — 1.2 — 76.5

Gain on disposal of discontinued operations, net of tax — 185.4 — 694.6

Net income 12.0 23.8

3 unchanged sentences

Earnings per share (diluted) attributable to controlling interests 0.28 0.53

Continuing operations earnings per share (basic) attributable to controlling interests 0.43 0.54 1.66 1.08

Continuing operations earnings per share (diluted) attributable to controlling interests 0.42 0.52 1.62 1.04

Weighted average common stock outstanding 41.4 44.0

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income $ 12.0 $ 23.8

1 unchanged sentence

Amortization related to derivative securities, net of tax

0.6 0.6 2.8 1.8

Foreign currency translation adjustment 0.7 ( 0.7 )

Total other comprehensive income (loss) ( 1.9 ) ( 0.3 ) ( 2.8 ) 2.1

Total other comprehensive income 1.3 0.9

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

3 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended September 30, 2022 and 2021

($ in millions except share data, unaudited)

(millions) Common stock,

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

comprehensive

income (loss) Total

stockholders’

interests Non-controlling

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

Issuance of common stock 0.4 — 0.1 — — 0.1 — — 0.1

Equity-based compensation — — 0.4 — — 0.4 — — 0.4

Foreign currency translation adjustment

— — — — ( 0.9 ) ( 0.9 ) — — ( 0.9 )

Amortization related to derivatives securities, net of tax

— — — — 0.6 0.6 — — 0.6

Withholding tax related to stock option exercise — — ( 8.9 ) — — ( 8.9 ) — — ( 8.9 )

Dividends ($ 0.01 per share)

— — — ( 0.7 ) — ( 0.7 ) — — ( 0.7 )

Net income — — — 229.5 — 229.5 — — 229.5

September 30, 2021 79.8 $ 0.1 $ 485.0 $ 610.4 $ ( 11.5 ) $ 1,084.0 $ — $ — $ 1,084.0

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

Equity-based compensation — — 0.4 — — 0.4 — — 0.4

Foreign currency translation adjustment

— — — — ( 2.5 ) ( 2.5 ) — — ( 2.5 )

Amortization related to derivatives securities, net of tax

— — — — 0.6 0.6 — — 0.6

Dividends ($ 0.01 per share)

— — ( 0.4 ) — ( 0.4 ) — — ( 0.4 )

Net income — — — 17.8 — 17.8 — — 17.8

September 30, 2022 41.4 $ — $ 0.9 $ ( 42.4 ) $ ( 13.6 ) $ ( 55.1 ) $ — $ — $ ( 55.1 )

See Notes to Condensed Consolidated Financial Statements

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the nine months ended September 30, 2022 and 2021

For the three months ended March 31, 2023 and 2022

($ in millions except share data, unaudited)

4 unchanged sentences

stockholders’

interests Non-controlling

equity Redeemable non-controlling interests in consolidated

Funds Total equity and

non-controlling

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

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

Capital contributions — — — — — — 3.8 29.7 33.5

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

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

4 unchanged sentences

Withholding tax related to stock option exercise ( 0.9 ) ( 1.4 ) — ( 2.3 ) ( 2.3 )

Other changes in non-controlling interests

— — — — — — ( 5.5 ) — ( 5.5 )

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

Dividends ($ 0.01 per share)

1 unchanged sentence

Net income — — — 23.8 — 23.8 — 23.8

September 30, 2021 79.8 $ 0.1 $ 485.0 $ 610.4 $ ( 11.5 ) $ 1,084.0 $ — $ — $ 1,084.0

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

December 31, 2022 41.4 $ — $ 1.5 $ ( 12.5 ) $ ( 10.6 ) $ ( 21.6 ) $ — $ ( 21.6 )

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

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

Net capital contributions — — — — — — 0.4 0.4

Equity-based compensation — — 0.2 — — 0.2 — 0.2

3 unchanged sentences

— — — — 0.6 0.6 — 0.6

Withholding tax related to stock option exercise — — ( 0.9 ) ( 1.4 ) — ( 2.3 ) — — ( 2.3 )

Withholding tax related to stock option exercise and restricted stock vesting — — ( 0.3 ) — — ( 0.3 ) — ( 0.3 )

Dividends ($ 0.01 per share)

1 unchanged sentence

Net income — — — 12.0 — 12.0 — 12.0

September 30, 2022 41.4 $ — $ 0.9 $ ( 42.4 ) $ ( 13.6 ) $ ( 55.1 ) $ — $ — $ ( 55.1 )

March 31, 2023 41.5 $ — $ 1.4 $ ( 0.8 ) $ ( 9.3 ) $ ( 8.7 ) $ 0.4 $ ( 8.3 )

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in millions, unaudited)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Net income 12.0 23.8

Income from discontinued operations, net of tax — ( 76.5 )

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

Amortization of acquired intangibles 0.1 0.1

Gain on disposal of discontinued operations, net of tax — ( 694.6 )

Net (income) loss attributable to redeemable non-controlling interests in consolidated Funds — —

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

Loss on extinguishment of debt — 3.2

Gain on sale of subsidiaries — ( 33.3 )

Depreciation and other amortization 3.8 5.3

1 unchanged sentence

Amortization and revaluation of non-cash compensation awards 1.2 ( 4.2 )

Net earnings from Affiliate accounted for using the equity method — ( 2.6 )

Distributions received from equity method Affiliate — 4.4

Distributions from discontinued operations — 52.7

Deferred income taxes ( 1.0 ) 0.8

(Gains) losses on other investments ( 1.1 ) 1.2

Changes in operating assets and liabilities (excluding discontinued operations):

(Increase) decrease in investment advisory fees receivable 75.9 ( 33.7 )

Increase in other receivables, prepayments, deposits and other assets ( 4.9 ) ( 0.1 )

Changes in operating assets and liabilities:

Decrease in investment advisory fees receivable 22.6 52.7

Decrease in other receivables, prepayments, deposits and other assets 0.8 0.4

Decrease in accrued incentive compensation, operating lease liabilities and other liabilities ( 68.8 ) ( 92.2 )

Decrease in accounts payable, accrued expenses and accrued income taxes ( 4.8 ) ( 8.1 )

Net cash flows from operating activities of continuing operations 63.3 22.3

Net cash flows from operating activities of discontinued operations — ( 7.2 )

Total net cash flows from operating activities 63.3 15.1

Net cash flows from operating activities ( 34.3 ) ( 14.4 )

Adjustments to reconcile net income (loss) attributable to redeemable non-controlling interests of consolidated Funds to net cash flows from operating activities:

Purchase of investments ( 0.1 ) —

Sale of investments 0.4 —

(Increase) decrease in receivables and other assets ( 1.0 ) —

Increase in accounts payable and other liabilities 0.1 —

Net cash flows from operating activities of consolidated Funds ( 0.6 ) —

Net cash flows from operating activities ( 34.9 ) ( 14.4 )

Cash flows from investing activities:

Additions of fixed assets, excluding discontinued operations ( 12.7 ) ( 11.1 )

Cash proceeds from sale of discontinued operations — 950.2

Cash proceeds from sale of subsidiaries — 46.2

Additions of fixed assets ( 4.5 ) ( 4.0 )

Purchase of investment securities ( 2.6 ) ( 4.8 )

Sale of investment securities 1.5 4.8

Net cash flows from investing activities of continuing operations ( 9.3 ) 1,009.0

Net cash flows from investing activities of discontinued operations — 3.1

Total net cash flows from investing activities ( 9.3 ) 1,012.1

Net cash flows from investing activities ( 5.6 ) ( 4.0 )

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in millions, unaudited)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from financing activities:

2 unchanged sentences

Payment for debt issuance costs — ( 0.9 )

Proceeds from stock issuance — 0.2

Payment to OM plc for co-investment redemptions ( 0.4 ) ( 1.1 )

2 unchanged sentences

Repurchases of common stock — ( 103.2 )

Withholding tax payments related to stock option exercise ( 2.3 ) ( 8.9 )

Net cash flows from financing activities of continuing operations ( 204.7 ) 20.0

Net cash flows from financing activities of discontinued operations — ( 27.2 )

Total net cash flows from financing activities ( 204.7 ) ( 7.2 )

Withholding tax payments related to stock option exercise and restricted stock vesting ( 0.3 ) ( 2.3 )

Cash flows from financing activities of consolidated Funds

Redeemable non-controlling interest capital raised 0.4 —

Net cash flows from financing activities 85.9 ( 144.9 )

Effect of foreign exchange rate changes on cash and cash equivalents 0.1 —

1 unchanged sentence

Cash and cash equivalents at beginning of period $ 121.2 $ 252.1

Cash and cash equivalents at beginning of period classified within assets held for sale $ — $ 31.2

Cash and cash equivalents at end of period from continuing operations $ 101.4 $ 1,424.1

Cash and cash equivalents at end of period $ 166.7 $ 88.8

Supplemental disclosure of cash flow information:

9 unchanged sentences

The Company historically held interests in a diverse group of investment management firms (the “Affiliates”) individually headquartered in the United States.

The Company completed the disposition of certain Affiliates and currently operates the business through one Affiliate, Acadian Asset Management LLC (“Acadian”), within its Quant & Solutions reportable segment:

The Company completed the disposition of certain Affiliates and, beginning in 2021, has operated the business through one Affiliate, Acadian Asset Management LLC (“Acadian”).

Acadian comprises the Company’s Quant & Solutions reportable segment:

• Quant & Solutions —comprised of versatile, often highly-tailored strategies that leverage data and technology in a computational, factor-based investment process across a range of asset classes in developed and emerging markets, including global, non-U.S.

1 unchanged sentence

Acadian is organized as a limited liability company.

Fees for services are largely asset-based and, as a result, the Company’s revenue fluctuates based on the performance of financial markets and investors’ asset flows in and out of the Company’s products.

The Company utilizes a profit-sharing model in structuring its compensation and ownership with Acadian.

Fees for services are largely asset-based and, as a result, revenues fluctuate based on the performance of financial markets and investors’ asset flows in and out of Acadian’s products.

The Company utilizes a profit-sharing model in structuring its compensation and ownership arrangements with Acadian.

Variable compensation is based on the firm’s profitability.

1 unchanged sentence

The profit-sharing model results in the alignment of BSIG and Acadian key employee economic interests, which is critical to the Company’s talent management strategy and long-term growth of the business.

The corporate head office is included within the Other category, along with the Company’s previously disposed affiliates, Campbell Global, LLC (“Campbell Global”) and Investment Counselors of Maryland (“ICM”), for the prior year period.

The corporate head office is included within the Other category.

Prior to 2014, the Company was a wholly-owned subsidiary of Old Mutual plc (“OM plc”), an international long-term savings, protection, and investment group, listed on the London Stock Exchange.

On October 15, 2014, the Company completed the initial public offering (the “Offering”) by OM plc pursuant to the Securities Act of 1933, as amended.

Additionally, between the Offering and February 25, 2019, the Company, OM plc and/or HNA Capital U.S.

(“HNA”) completed a series of transactions in the Company’s shares, including a two-step transaction announced on March 25, 2017 for a sale by OM plc of a 24.95 % shareholding in the Company to HNA and a two-step transaction announced on November 19, 2018 for a sale of the substantial majority of the shares held by HNA of the Company to Paulson & Co.

On February 25, 2019, this transaction was completed and Paulson held approximately 21.7 % of the shares of the Company.

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

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

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

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

As of March 31, 2023, Paulson & Co.

(“Paulson”) held approximately 21.6 % of the common stock of the Company.

For the three months ended March 31, 2023, the Company did not repurchase any shares of common stock.

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

All shares of common stock repurchased by the Company were retired.

BrightSphere Investment Group Inc.

3 unchanged sentences

Basis of presentation

These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets, statements of operations, comprehensive income, changes in stockholders’ equity and cash flows of the Company.

These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets, statements of operations, statements of comprehensive income, statements of changes in stockholders’ equity and statements of cash flows of the Company.

Within these Condensed Consolidated Financial Statements, Paulson and its related entities, as defined above, are referred to as “related parties.”

2 unchanged sentences

All dollar amounts, except per-share data in the text and tables herein, are stated in millions unless otherwise indicated.

Transactions between the Company and its related parties are included in the Condensed Consolidated Financial Statements, however, material intercompany balances and transactions among the Company, its consolidated Affiliates and consolidated Funds are eliminated in consolidation.

The Notes to the Condensed Consolidated Financial Statements are presented on a continuing operations basis unless otherwise noted.

See Note 3, Discontinued Operations for additional information.

Transactions between the Company and its related parties are included in the Condensed Consolidated Financial Statements;

however, material intercompany balances and transactions among the Company, its consolidated Affiliate and consolidated Funds are eliminated in consolidation.

Certain disclosures included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (annual report on Form 10-K) are not required to be included on an interim basis in the Company’s quarterly reports on Form 10-Q.

10 unchanged sentences

Notes to Condensed Consolidated Financial Statements

3) Discontinued Operations

Landmark Partners

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

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

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

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

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

The Company redeemed co-investments of $ 31.5 million in Landmark’s funds as of June 2, 2021 upon consummation of the sale.

Thompson, Siegel & Walmsley, LLC

On May 9, 2021, the Company entered into an agreement with Pendal Group Limited (“Pendal”), to sell all of the Company’s interests in Thompson, Siegel & Walmsley, LLC (“TSW”) and the Company’s seed investment in TSW strategies.

On July 22, 2021, the Company completed the sale of all its interests in TSW to Pendal for cash consideration of $ 240.0 million.

The Company recognized a gain on disposal of discontinued operations of $ 185.4 million net of tax of $ 74.0 million for the three and nine months ended September 30, 2021.

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

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

3) Discontinued Operations (cont.)

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

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

2022 2021 2022 2021

Revenues $ — $ 5.6 $ — $ 115.1

Operating expenses:

Compensation and benefits — 3.6 — 91.2

General and administrative expenses — 0.4 — 8.1

Amortization of intangibles — — — 2.7

Depreciation and amortization — — — 0.5

Consolidated Funds’ expense — — — 0.1

Total operating expenses — 4.0 — 102.6

Operating income — 1.6 — 12.5

Investment gains of consolidated Funds — — — 68.1

Income from discontinued operations before taxes — 1.6 — 80.6

Income tax expense — 0.4 — 4.1

Income from discontinued operations, net of tax — 1.2 — 76.5

Gain on disposal, net of tax of $ 0.0 , $ 74.0 , $ 0.0 , and $ 250.6

— 185.4 — 694.6

Total discontinued operations — 186.6 — 771.1

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

Net income from discontinued operations attributable to controlling interests $ — $ 186.6 $ — $ 703.1

Consolidated Funds

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

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

The criteria for discontinued operations accounting treatment were met.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

3) Investments

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

September 30,

2023 December 31,

Other investments $ 7.8 $ 9.5

Investments of consolidated Funds held at fair value

Seed & Other investments $ 8.7 $ 8.4

Investments related to long-term incentive compensation plans 41.2 40.0

Total investments per Condensed Consolidated Balance Sheets $ 52.7 $ 50.3

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

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

2022 2021 2022 2021

Realized and unrealized gains (losses) on other investments held at fair value $ ( 0.4 ) $ 0.1 $ ( 1.2 ) $ 5.0

Earnings from equity-accounted investment in Affiliate — 0.2 — 2.6

Total investment income (loss) per Condensed Consolidated Statements of Operations

$ ( 0.4 ) $ 0.3 $ ( 1.2 ) $ 7.6

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

4) Fair Value Measurements

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

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at March 31, 2023 (in millions):

Quoted prices

2 unchanged sentences

(Level III) Uncategorized Total value,

September 30, 2022

March 31, 2023

Assets of BSIG and consolidated Funds (1)

Derivatives $ 0.3 $ 2.5 $ — $ — $ 2.8

Consolidated Funds total 0.3 2.5 — — 2.8

Investments in separate accounts (2)

4 unchanged sentences

— — — 4.3 4.3

BSIG total 45.6 — — 4.3 49.9

Total fair value assets $ 45.9 $ 2.5 $ — $ 4.3 $ 52.7

Liabilities of consolidated Funds (1)

Derivatives $ ( 0.3 ) $ ( 2.3 ) $ — $ — $ ( 2.6 )

Consolidated Funds total ( 0.3 ) ( 2.3 ) — — ( 2.6 )

Total fair value liabilities $ ( 0.3 ) $ ( 2.3 ) $ — $ — $ ( 2.6 )

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

4) Fair Value Measurements (cont.)

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

3 unchanged sentences

(Level III) Uncategorized Total value December 31, 2022

Assets of BSIG and consolidated Funds (1)

Derivatives 0.3 1.6 — — 1.9

Consolidated Funds total 0.3 1.6 — — 1.9

Investments in separate accounts (2)

4 unchanged sentences

— — — 4.2 4.2

BSIG total 44.2 — — 4.2 48.4

Total fair value assets $ 44.5 $ 1.6 $ — $ 4.2 $ 50.3

(1) Assets measured at fair value are comprised of financial investments managed by the Company's Affiliates.

Equity securities, including common and preferred stock and short-term investment funds which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation.

Liabilities of consolidated Funds (1)

Derivatives ( 0.2 ) ( 2.0 ) — — ( 2.2 )

Consolidated Funds total ( 0.2 ) ( 2.0 ) — — ( 2.2 )

Total fair value liabilities $ ( 0.2 ) $ ( 2.0 ) $ — $ — $ ( 2.2 )

(1) Assets and liabilities measured at fair value are comprised of financial investments managed by the Company's Affiliate.

Derivatives which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation.

To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I.

2 unchanged sentences

The Company has not made adjustments to the prices provided.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Fair Value Measurements (cont.)

If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model, such securities are classified as Level III.

2 unchanged sentences

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

(2) Investments in separate accounts of $ 3.8 million at September 30, 2022 consist of 100 % equity securities and other investments.

(2) Investments in separate accounts of $ 4.4 million at March 31, 2023 consist of 100 % equity securities and other investments.

Investments in separate accounts of $ 4.2 million at December 31, 2022 consist of approximately 100 % of equity securities and other investments.

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

(3) Investments related to long-term incentive compensation plans of $ 38.1 million and $ 45.0 million at September 30, 2022 and December 31, 2021, respectively, were investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates.

The Company values these using the

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

4) Fair Value Measurements (cont.)

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

(3) Investments related to long-term incentive compensation plans of $ 41.2 million and $ 40.0 million at March 31, 2023 and December 31, 2022, respectively, were investments in publicly registered daily redeemable funds (some managed by Acadian), which the Company has classified as trading securities and valued using the published price as of the measurement dates.

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

(4) The uncategorized amounts of $ 4.0 million and $ 4.9 million at September 30, 2022 and December 31, 2021, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy.

(4) The uncategorized amounts of $ 4.3 million and $ 4.2 million at March 31, 2023 and December 31, 2022, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy.

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

2 unchanged sentences

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

The real estate investment Funds of $ 3.9 million and $ 4.8 million at September 30, 2022 and December 31, 2021, respectively, are subject to longer than quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds.

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

The real estate investment Funds of $ 4.2 million and $ 4.1 million at March 31, 2023 and December 31, 2022, respectively, are subject to longer than quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds.

The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one to two years from March 31, 2023.

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

2 unchanged sentences

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

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Fair Value Measurements (cont.)

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

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

Investments in unconsolidated Funds 2022 2021 2022 2021

Level III financial assets

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

Additions (redemptions) — — — ( 0.1 )

Disposals — — — ( 2.7 )

Total net fair value gains/losses recognized in net income

Total Level III financial assets

$ — $ — $ — $ —

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

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

There were no significant transfers of financial assets or liabilities between Levels II or III during the three months ended March 31, 2023 and 2022, respectively.

5) Variable Interest Entities

The Company, through its Affiliate, sponsors the formation of various entities considered to be VIEs.

The Company, through its Affiliate, sponsors the formation of various entities considered to be variable interest entities (“VIEs”).

These VIEs are primarily Funds managed by the Company’s Affiliate, and other partnership interests typically owned entirely by third-party investors.

Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Affiliate key employees and/or individuals that own non-controlling interests in the Affiliate.

The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to more than an insignificant amount of the risks and rewards of the entity.

Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Affiliate key employees and/or individuals that have ownership interests in the Affiliate.

The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to absorb more than an insignificant amount of the risks and rewards of the entity.

Typically the Fund’s investors are entitled to substantially all of the economics of these VIEs with the exception of the management fees and performance fees, if any, earned by the Company or any investment the Company has made into the Funds.

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

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

The Company generally is not the primary

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Variable Interest Entities (cont.)

beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial.

The following table presents the assets and liabilities of Funds that are VIEs and consolidated by the Company (in millions):

2023 December 31,

Investments at fair value $ 2.8 $ 1.9

Other assets of consolidated Funds 16.1 $ 15.2

Total Assets $ 18.9 $ 17.1

Liabilities of consolidated Funds 3.1 2.5

Total Liabilities $ 3.1 $ 2.5

“Investments at fair value” consist of investments in derivative securities.

To the extent the Company also has consolidated Funds that are not VIEs, the assets and liabilities of those Funds are not included in the table above.

The assets of consolidated VIEs presented in the table above belong to the investors in those Funds, are available for use only by the Fund to which they belong, and are not available for use by the Company to the extent they are held by non-controlling interests.

Any debt or liabilities held by consolidated Funds have no recourse to the Company’s general credit.

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

The Company’s investment in any unconsolidated VIE generally represents an insignificant interest of the Fund’s net assets and assets under management, such that the majority of the VIEs results are attributable to third parties.

The Company’s exposure to risk in these entities is generally limited to any capital contribution it has made or is required to make and any earned but uncollected management fees.

1 unchanged sentence

The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions):

September 30,

2023 December 31,

8 unchanged sentences

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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

8 unchanged sentences

$ 125 million 5.125 % Senior Notes Due August 1, 2031 (2)(3)

— — 121.8 126.4 2

Total third party borrowings $ 273.6 $ 257.2 $ 273.5 $ 249.7

2 unchanged sentences

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

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

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

Revolving Credit Facility

4 unchanged sentences

6) Borrowings and Debt (cont.)

Borrowings under the Acadian Credit Agreement bear interest, at Acadian’s option, at the per annum rate equal to either (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5 % and (iii) the secured overnight financing rate for a one month period plus a credit spread adjustment of 0.10 % (“Adjusted Term SOFR”) plus 1 %, plus, in each case, an additional amount ranging from 0.5 % to 1.0 %, with such additional amount based on Acadian’s Leverage Ratio (as defined below) or (b) Adjusted Term SOFR for plus an additional amount ranging from 1.5 % to 2.0 %, with such additional amount based on Acadian’s Leverage Ratio.

Borrowings under the Acadian Credit Agreement bear interest, at Acadian’s option, at the per annum rate equal to either (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5 % and (iii) the secured overnight financing rate for a one month period plus a credit spread adjustment of 0.10 % (“Adjusted Term SOFR”) plus 1 %, plus, in each case, an additional amount ranging from 0.5 % to 1.0 %, with such additional amount based on Acadian’s Leverage Ratio (as defined below) or (b) Adjusted Term SOFR plus an additional amount ranging from 1.5 % to 2.0 %, with such additional amount based on Acadian’s Leverage Ratio.

In addition, Acadian is charged a commitment fee based on the average daily unused portion of the revolving credit facility under the Acadian Credit Agreement at a per annum rate ranging from 0.25 % to 0.375 %, with such amount based on Acadian’s Leverage Ratio.

2 unchanged sentences

The operating leases have remaining lease terms of less than 1 year to 11 years, some of which include options to extend the leases for up to 5 years.

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

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

2022 2021 2022 2021

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

Three Months Ended March 31,

Operating lease cost $ 2.1 $ 2.5

6 unchanged sentences

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

For the nine months ended September 30, 2022 and 2021, the weighted average remaining lease term was 10.7 years and 11.6 years, respectively, and the weighted average discount rate was 3.39 % and 3.34 %, respectively.

For the three months ended March 31, 2023 and 2022, the weighted average remaining lease term was 10.2 and 11.2 , respectively, and the weighted average discount rate was 3.54 % and 3.35 %, respectively.

BrightSphere Investment Group Inc.

4 unchanged sentences

Year Ending December 31,

2022 (excluding the nine months ended September 30, 2022)

2023 (excluding the three months ended March 31, 2023)

Thereafter 49.6

9 unchanged sentences

This guaranty expires in 2033.

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

There are no liabilities recorded on the Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 related to this guaranty.

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

1 unchanged sentence

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

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

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

As of March 31, 2023, there were no material accruals for claims and the Company does not believe any outstanding matters will have a material adverse effect on the Company.

BrightSphere Investment Group Inc.

9 unchanged sentences

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

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

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

At March 31, 2023, management of the Company has estimated the potential maximum exposure and concluded that it is not material.

No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at March 31, 2023.

Considerations of credit risk

3 unchanged sentences

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

At September 30, 2022, approximately $ 45.7 million of the Company’s cash and cash equivalents were invested in money market funds.

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

6 unchanged sentences

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

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

2022 2021 2022 2021

Income from continuing operations attributable to controlling interests $ 17.8 $ 42.9 $ 70.2 $ 86.1

Income from discontinued operations attributable to controlling interests (Note 3) — 186.6 — 703.1

Net income attributable to controlling interests $ 17.8 $ 229.5 $ 70.2 $ 789.2

Total income available to participating unvested securities (1)

— — — ( 0.1 )

Three Months Ended March 31,

Net income attributable to common stock $ 12.0 $ 23.8

5 unchanged sentences

Earnings per share of common stock attributable to controlling interests:

Continuing operations $ 0.43 $ 0.54 $ 1.66 $ 1.08

Discontinued operations — 2.34 — 8.85

Basic earnings per share of common stock attributable to controlling interests $ 0.43 $ 2.88 $ 1.66 $ 9.93

Continuing operations $ 0.42 $ 0.52 $ 1.62 $ 1.04

Discontinued operations — 2.24 — 8.49

Diluted earnings per share of common stock attributable to controlling interests $ 0.42 $ 2.76 $ 1.62 $ 9.53

(1) Income available to participating unvested securities includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings.

Basic $ 0.29 $ 0.54

Diluted $ 0.28 $ 0.53

BrightSphere Investment Group Inc.

1 unchanged sentence

Management fees

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

The Company’s management fees are a function of the fee rates the Affiliate charges to it’s clients, which are typically expressed in basis points, and the levels of the Company’s assets under management.

The most significant driver of increases or decreases in this average fee rate is changes in the mix of the Company’s assets under management caused by net inflows or outflows in certain asset classes or disproportionate market movements.

2 unchanged sentences

Performance fees are recorded in revenues when the contractual performance criteria have been met and when it is probable that a significant reversal of revenue recognized will not occur in future reporting periods.

Other revenue

Included in other revenue are certain payroll and benefits costs and expenses paid on behalf of Funds by the Company’s Affiliates.

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

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

Revenue from expense reimbursements amounted to $ 0.7 million for the three months ended September 30, 2021.

Revenue from expense reimbursements amounted to $ 2.9 million for the nine months ended September 30, 2021.

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

Other revenue may also consist of other miscellaneous revenue, consisting primarily of administration and consulting services.

Disaggregation of management fee revenue

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

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

2022 2021 2022 2021

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

Three Months Ended March 31,

Quant & Solutions

$ 67.9 $ 77.0

20.8 27.7 68.3 78.2

Management fee revenue $ 90.6 $ 102.2

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

BrightSphere Investment Group Inc.

1 unchanged sentence

11) Accumulated Other Comprehensive Income (Loss)

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

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of June 30, 2022

$ 1.7 $ ( 13.4 ) $ ( 11.7 )

Foreign currency translation adjustment ( 2.5 ) — ( 2.5 )

Amortization related to derivatives securities, before tax — 0.8 0.8

Tax impact — ( 0.2 ) ( 0.2 )

Other comprehensive income (loss) ( 2.5 ) 0.6 ( 1.9 )

Balance, as of September 30, 2022

$ ( 0.8 ) $ ( 12.8 ) $ ( 13.6 )

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of June 30, 2021

$ 5.6 $ ( 16.8 ) $ ( 11.2 )

Foreign currency translation adjustment ( 0.9 ) — ( 0.9 )

Amortization related to derivatives securities, before tax

Tax impact — ( 0.2 ) ( 0.2 )

Other comprehensive income (loss) ( 0.9 ) 0.6 ( 0.3 )

Balance, as of September 30, 2021

$ 4.7 $ ( 16.2 ) $ ( 11.5 )

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

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2023 and 2022 are as follows (in millions):

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

3 unchanged sentences

Tax impact — ( 0.2 ) ( 0.2 )

Other comprehensive income (loss) ( 5.6 ) 2.8 ( 2.8 )

Balance, as of September 30, 2022

Other comprehensive income 0.7 0.6 1.3

Balance, as of March 31, 2023

$ 2.4 $ ( 11.7 ) $ ( 9.3 )

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

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

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

3 unchanged sentences

Tax impact — ( 0.6 ) ( 0.6 )

Other comprehensive income 0.3 1.8 2.1

Balance, as of September 30, 2021

Other comprehensive income (loss) ( 0.7 ) 1.6 0.9

Balance, as of March 31, 2022

$ 4.1 $ ( 14.0 ) $ ( 9.9 )

(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 $ 1.3 million of amortization expense included in Amortization related to derivatives securities, before tax.

As a result of this transaction, the Company recorded $ 1.3 million of amortization expense included in Amortization related to derivatives securities, before tax for the three months ended March 31, 2022.

12) Derivatives and Hedging

5 unchanged sentences

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

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

As of September 30, 2022, the balance recorded in accumulated other comprehensive income (loss) was $( 12.8 ) million, net of tax.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

12) Derivatives and Hedging (cont.)

As of March 31, 2023, the balance recorded in accumulated other comprehensive income (loss) was $( 11.7 ) million, net of tax.

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

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

Amounts of $ 3.8 million and $ 2.4 million have been reclassified for the nine months ended September 30, 2022 and 2021, respectively.

Amounts of $ 0.8 million and $ 2.2 million have been reclassified for the three months ended March 31, 2023 and 2022, respectively.

During the next twelve months the Company expects to reclassify approximately $ 3.5 million to interest expense.

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

As a result of this transaction, amortization expense of $ 1.3 million (of the $ 3.8 million interest expense reclassified to earnings for the nine months ended September 30, 2022) was reclassified to earnings as interest expense.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

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

The Company has the following reportable segment:

2 unchanged sentences

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

The corporate head office is included within the Other category, along with our previously disposed Affiliates, Campbell Global 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 interests in Campbell Global in August 2021.

The corporate head office is included within the Other category.

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

10 unchanged sentences

GAAP, adjusted to include management fees paid to Affiliates by consolidated Funds and the Company’s share of earnings from equity-accounted Affiliate.

ENI revenue is also adjusted to exclude the separate revenues recorded under U.S.

GAAP for certain Fund expenses reimbursed to our Affiliates.

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, goodwill impairment and amortization of acquired intangible assets, capital transaction costs, restructuring costs, and the separate expenses recorded under U.S.

GAAP for certain Fund expenses reimbursed to Affiliates.

Additionally, variable compensation and Affiliate key employee distributions are segregated from ENI operating expenses.

4 unchanged sentences

Segment Presentation

The following tables set forth summarized operating results for the Company’s segments and related adjustments necessary to reconcile the segment economic net income to arrive at the Company’s consolidated U.S.

The following tables set forth summarized operating results for the Company’s segment and related adjustments necessary to reconcile the segment economic net income to arrive at the Company’s consolidated U.S.

GAAP net income (loss).

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

Three Months Ended September 30, 2022

The following table presents the financial data for the Company’s segment for the three months ended March 31, 2023 (in millions):

Three Months Ended March 31, 2023

Quant & Solutions Other Reconciling Adjustments Total U.S.

7 unchanged sentences

Net interest expense — ( 3.4 ) ( 0.4 ) (b) ( 3.8 )

Net investment loss — — ( 0.4 ) (c) ( 0.4 )

Income tax expense — ( 4.6 ) ( 2.9 ) (d) ( 7.5 )

Economic net income $ 26.4 $ ( 13.9 ) $ 5.3 $ 17.8

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

14) Segments (cont.)

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

Three Months Ended September 30, 2021

Quant & Solutions Other Reconciling Adjustments Total U.S.

ENI revenue $ 110.6 $ 6.8 $ 0.5 (e) $ 117.9

ENI operating expenses 39.4 7.6 10.1 (a) 57.1

Earnings before variable compensation 71.2 ( 0.8 ) ( 9.6 ) 60.8

Variable compensation 23.5 3.5 0.1 (f) 27.1

ENI operating earnings (after variable comp) 47.7 ( 4.3 ) ( 9.7 ) 33.7

Affiliate key employee distributions 3.8 1.2 — 5.0

Earnings after Affiliate key employee distributions 43.9 ( 5.5 ) ( 9.7 ) 28.7

Net interest expense — ( 5.8 ) ( 0.4 ) (b) ( 6.2 )

Net investment income — — 1.1 (c) 1.1

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

Income tax expense — ( 4.4 ) ( 0.7 ) (d) ( 5.1 )

Income from discontinued operations, net of tax — — 1.2 (c) 1.2

Gain on disposal of discontinued operations, net of tax — — 185.4 (g) 185.4

Economic net income $ 23.8 $ ( 12.0 ) $ 0.2 $ 12.0

2 unchanged sentences

13) Segments (cont.)

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

Nine Months Ended September 30, 2022

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

Three Months Ended March 31, 2022

Quant & Solutions Other Reconciling Adjustments Total U.S.

7 unchanged sentences

Net interest expense — ( 4.6 ) ( 1.9 ) (b) ( 6.5 )

Net investment loss — — ( 1.2 ) (c) ( 1.2 )

Net investment income (loss) — — ( 0.1 ) (c) ( 0.1 )

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

1 unchanged sentence

Economic net income $ 42.9 $ ( 19.5 ) $ 0.4 $ 23.8

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

14) Segments (cont.)

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

Nine Months Ended September 30, 2021

Quant & Solutions Other Reconciling Adjustments Total U.S.

ENI revenue $ 325.2 $ 35.4 $ 0.3 (e) $ 360.9

ENI operating expenses 116.8 26.8 26.7 (a) 170.3

Earnings before variable compensation 208.4 8.6 ( 26.4 ) 190.6

Variable compensation 68.1 14.8 0.9 (f) 83.8

ENI operating earnings (after variable comp) 140.3 ( 6.2 ) ( 27.3 ) 106.8

Affiliate key employee distributions 8.4 1.1 — 9.5

Earnings after Affiliate key employee distributions 131.9 ( 7.3 ) ( 27.3 ) 97.3

Net interest expense — ( 16.6 ) ( 2.0 ) (b) ( 18.6 )

Net investment income — — 7.6 (c) 7.6

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

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

Income tax expense — ( 29.0 ) ( 4.5 ) (d) ( 33.5 )

Income from discontinued operations, net of tax — — 76.5 (c) 76.5

Gain on disposal of discontinued operations, net of tax — — 694.6 (g) 694.6

Economic net income $ 131.9 $ ( 52.9 ) $ 710.2 $ 789.2

(1) The most directly comparable U.S.

11 unchanged sentences

Reconciling Adjustments:

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

Adjusted to include non-cash expenses for key employee equity and profit interest revaluations, capital transaction costs, amortization of acquired intangible assets and restructuring costs, each of which are included in U.S.

GAAP operating expenses.

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

Adjusted to include the cost of seed financing and amortization of debt issuance costs, which is included in U.S.

GAAP interest expense.

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

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

GAAP net income attributable to controlling interests.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

14) Segments (cont.)

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

1 unchanged sentence

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

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

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

GAAP revenue.

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

GAAP compensation expense.

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

GAAP net income attributable to controlling interests.

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

What changed 10-Q

Item 1. Financial Statements