What changed in this filing

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Item 1. Financial Statements

2023-08-08 compared with 2023-05-08 · 188 added, 89 removed, 492 unchanged (36% of the section changed)

30 unchanged sentences

Derivative liabilities at fair value 2.4 2.2

Securities sold, not yet purchased, at fair value 1.3 —

Total liabilities 552.3 540.3

4 unchanged sentences

Additional paid-in capital 1.5 1.5

Retained deficit ( 0.8 ) ( 12.5 )

Retained earnings (deficit) 10.1 ( 12.5 )

Accumulated other comprehensive loss ( 7.9 ) ( 10.6 )

Total equity ( 8.3 ) ( 21.6 )

Total equity (deficit) and redeemable non-controlling interests in consolidated Funds 6.0 ( 21.6 )

Total liabilities and equity $ 558.3 $ 518.7

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Management fees $ 92.8 $ 93.5 $ 183.4 $ 195.7

15 unchanged sentences

Net consolidated Funds’ investment gains 0.3 — 1.1 —

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

Total non-operating loss ( 3.4 ) ( 5.4 ) ( 6.1 ) ( 15.2 )

Income before income taxes 17.0 41.3 34.1 74.7

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net income $ 11.5 $ 28.6 $ 23.5 $ 52.4

1 unchanged sentence

Amortization related to derivative securities, net of tax

0.6 0.6 1.2 2.2

Foreign currency translation adjustment 0.8 ( 2.4 ) 1.5 ( 3.1 )

Total other comprehensive income 1.3 0.9

Total other comprehensive income (loss) 1.4 ( 1.8 ) 2.7 ( 0.9 )

Comprehensive income attributable to non-controlling interests in consolidated Funds 0.1 — 0.1 —

3 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2023 and 2022

For the three months ended June 30, 2023 and 2022

($ in millions except share data, unaudited)

4 unchanged sentences

stockholders’

equity Redeemable non-controlling interests in consolidated

Funds Total equity and

equity (deficit) Redeemable non-controlling

Funds Total equity (deficit) and

non-controlling

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

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

Foreign currency translation adjustment

— — — — ( 2.4 ) ( 2.4 ) — ( 2.4 )

Amortization related to derivatives securities, net of tax

— — — — 0.6 0.6 — 0.6

Dividends ($ 0.01 per share)

— — — ( 0.4 ) — ( 0.4 ) — ( 0.4 )

Net income — — — 28.6 — 28.6 — 28.6

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

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

Capital contributions — — — — — — 1.8 1.8

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

Foreign currency translation adjustment

— — — — 0.8 0.8 — 0.8

Amortization related to derivatives securities, net of tax

— — — — 0.6 0.6 — 0.6

Withholding tax related to stock option exercise — — ( 0.4 ) — — ( 0.4 ) — ( 0.4 )

Dividends ($ 0.01 per share)

— — ( 0.5 ) — ( 0.5 ) — ( 0.5 )

Net income — — — 11.4 — 11.4 0.1 11.5

June 30, 2023 41.5 $ — $ 1.5 $ 10.1 $ ( 7.9 ) $ 3.7 2.3 $ 6.0

See Notes to Condensed Consolidated Financial Statements

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the six months ended June 30, 2023 and 2022

($ in millions except share data, unaudited)

(millions) Common stock,

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

comprehensive

income (loss) Total

stockholders’

equity (deficit) Redeemable non-controlling interests in consolidated

Funds Total equity (deficit) and

non-controlling

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

10 unchanged sentences

Net income — — — 52.4 — 52.4 — 52.4

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

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

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

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

Net capital contributions — — — — — — 0.4 0.4

Capital contributions — — — — — — 2.2 2.2

Equity-based compensation — — 0.7 — — 0.7 — 0.7

7 unchanged sentences

Net income — — — 23.4 — 23.4 0.1 23.5

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

June 30, 2023 41.5 $ — $ 1.5 $ 10.1 $ ( 7.9 ) $ 3.7 $ 2.3 $ 6.0

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in millions, unaudited)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

10 unchanged sentences

Decrease in investment advisory fees receivable 32.7 68.2

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

(Increase) decrease in other receivables, prepayments, deposits and other assets 2.1 ( 1.7 )

Decrease in accrued incentive compensation, operating lease liabilities and other liabilities ( 46.3 ) ( 77.3 )

Decrease in accounts payable, accrued expenses and accrued income taxes ( 11.5 ) ( 19.2 )

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:

Net cash flows from operating activities, excluding consolidated Funds 7.3 29.9

Net income attributable to redeemable non-controlling interests in consolidated Funds 0.1 —

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

Purchase of investments ( 2.2 ) —

13 unchanged sentences

(in millions, unaudited)

Three Months Ended

Six Months Ended

Cash flows from financing activities:

13 unchanged sentences

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

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

Cash and cash equivalents at end of period (including cash at consolidated Funds classified as restricted) $ 152.9 $ 92.2

Supplemental disclosure of cash flow information:

Interest paid $ 7.1 $ 8.0

Interest paid (excluding consolidated Funds) $ 8.2 $ 8.7

Income taxes paid 20.9 27.7

10 unchanged sentences

• 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.

and small-cap equities, as well as managed volatility, ESG, multi-asset, equity alternatives, and long/short strategies.

and small-cap equities, as well as managed volatility, multi-asset, equity alternatives, and long/short strategies.

Acadian is organized as a limited liability company.

7 unchanged sentences

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.

As of March 31, 2023, Paulson & Co.

As of June 30, 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.

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

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

27 unchanged sentences

Investments of consolidated Funds held at fair value

Seed & Other investments $ 8.7 $ 8.4

Other investments 4.4 8.4

Investments related to long-term incentive compensation plans 43.0 40.0

1 unchanged sentence

4) Fair Value Measurements

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

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at June 30, 2023 (in millions):

Quoted prices

1 unchanged sentence

(Level II) Significant

(Level III) Uncategorized Total value,

March 31, 2023

(Level III) Uncategorized Total value, June 30, 2023

Assets of BSIG and consolidated Funds (1)

Common stock $ 6.5 $ — $ — $ — $ 6.5

Derivatives 0.4 2.4 — — 2.8

10 unchanged sentences

Derivatives $ ( 0.2 ) $ ( 2.2 ) $ — $ — $ ( 2.4 )

Common Stock ( 1.3 ) — — — ( 1.3 )

Consolidated Funds total ( 1.5 ) ( 2.2 ) — — ( 3.7 )

24 unchanged sentences

(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.

Equity securities and 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

4) 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 $ 4.4 million at March 31, 2023 consist of 100 % equity securities and other investments.

(2) Investments in separate accounts of $ 0.1 million at June 30, 2023 consisted of 100 % cash equivalents.

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

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.

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 $ 43.0 million and $ 40.0 million at June 30, 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 $ 4.3 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.

(4) The uncategorized amounts of $ 4.3 million and $ 4.2 million at June 30, 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.

These unconsolidated Funds consist primarily of real estate investment Funds, UCITS and other investment vehicles.

These unconsolidated Funds consist primarily of real estate investment Funds and other investment vehicles.

The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates.

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

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.

Other investment vehicles are not subject to redemption restrictions.

The real estate investment Funds of $ 4.2 million and $ 4.1 million at June 30, 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 June 30, 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.

The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, acquisitions, and research teams.

The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, finance, and research teams.

For certain properties and loans, the valuation process may also include a valuation by independent appraisers.

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

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

There were no significant transfers of financial assets or liabilities between Levels II or III during the three and six months ended June 30, 2023 and 2022, respectively.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Variable Interest Entities

4 unchanged sentences

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

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

13 unchanged sentences

The Company has not issued any investment performance guarantees to these VIEs or their investors.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Variable Interest Entities (cont.)

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

5 unchanged sentences

(1) Includes equity investments the Company has made or is required to make.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

6) Borrowings and Debt

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

12 unchanged sentences

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

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

Revolving Credit Facility

On March 7, 2022, the Company, Royal Bank of Canada, BMO Harris Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Bank of America N.A., the Bank of New York Mellon and Citibank, N.A., as an issuing bank and administrative agent (collectively, the “Lenders”), entered into a new revolving credit facility agreement (the “Acadian Credit Agreement”), which replaced the Company’s revolving credit facility dated as of August 20, 2019 (as amended by an amendment dated September 3, 2020 and an assignment and assumption and amendment agreement dated February 23, 2021, the “Original Credit Agreement”).

The maturity date of this Original Credit Agreement was August 22, 2022, and the maturity date of the Acadian Credit Agreement is March 7, 2025.

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

BrightSphere Investment Group Inc.

1 unchanged sentence

6) Borrowings and Debt (cont.)

Revolving Credit Facility

On March 7, 2022, Acadian, Royal Bank of Canada, BMO Harris Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Bank of America N.A., the Bank of New York Mellon and Citibank, N.A., as an issuing bank and administrative agent (collectively, the “Lenders”), entered into a new revolving credit facility agreement (the “Acadian Credit Agreement”), which replaced the Company’s revolving credit facility dated as of August 20, 2019 (as amended by an amendment dated September 3, 2020 and an assignment and assumption and amendment agreement dated February 23, 2021, the “Original Credit Agreement”).

The maturity date of this Original Credit Agreement was August 22, 2022, and the maturity date of the Acadian Credit Agreement is March 7, 2025.

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.

3 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 months ended March 31 (in millions):

Three Months Ended March 31,

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

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

2023 2022 2023 2022

Operating lease cost $ 2.1 $ 2.5 $ 4.2 $ 5.0

5 unchanged sentences

Right of use assets obtained in exchange for new operating lease liabilities 0.1 1.8 2.9 1.8

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

For the three months ended March 31, 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.

1 unchanged sentence

7) Leases (cont.)

For the six months ended June 30, 2023 and 2022, the weighted average remaining lease term was 10.0 and 10.9 years, respectively, and the weighted average discount rate was 3.55 % and 3.39 %, respectively.

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

1 unchanged sentence

Year Ending December 31,

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

2023 (excluding the six months ended June 30, 2023)

Thereafter 49.6

5 unchanged sentences

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

Included in cash and cash equivalents is $ 3.6 million pertaining to the wind-down of BrightSphere Investment U.K., Ltd.

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

1 unchanged sentence

This guaranty expires in 2033.

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

There are no liabilities recorded on the Condensed Consolidated Balance Sheets as of June 30, 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.

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.

As of June 30, 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 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.

At June 30, 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 June 30, 2023.

Considerations of credit risk

5 unchanged sentences

The insurers of the policies are considered a significant counterparty to the Company.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

9) Earnings Per Share

2 unchanged sentences

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

Three Months Ended March 31,

Net income attributable to common stock $ 12.0 $ 23.8

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

9) Earnings Per Share (cont.)

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

2023 2022 2023 2022

Net income attributable to controlling interests $ 11.4 $ 28.6 $ 23.4 $ 52.4

Weighted-average shares of common stock outstanding—basic 41,484,303 41,425,555 41,464,362 42,690,683

6 unchanged sentences

Diluted $ 0.27 $ 0.67 $ 0.55 $ 1.19

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

Management fees

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 Company’s management fees are a function of the fee rates the Affiliate charges to its 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.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

10) Revenue (cont.)

Disaggregation of management fee revenue

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

Three Months Ended March 31,

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

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

2023 2022 2023 2022

Quant & Solutions

$ 69.3 $ 71.2 $ 137.3 $ 148.2

23.5 22.3 46.1 47.5

Management fee revenue $ 92.8 $ 93.5 $ 183.4 $ 195.7

11) Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended June 30, 2023 and 2022 are as follows (in millions):

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of March 31, 2023

$ 2.4 $ ( 11.7 ) $ ( 9.3 )

Foreign currency translation adjustment 0.8 — 0.8

Amortization related to derivatives securities, before tax — 0.8 0.8

Tax impact — ( 0.2 ) ( 0.2 )

Other comprehensive income 0.8 0.6 1.4

Balance, as of June 30, 2023

$ 3.2 $ ( 11.1 ) $ ( 7.9 )

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of March 31, 2022

$ 4.1 $ ( 14.0 ) $ ( 9.9 )

Foreign currency translation adjustment ( 2.4 ) — ( 2.4 )

Amortization related to derivatives securities, before tax — 0.8 0.8

Tax impact — ( 0.2 ) ( 0.2 )

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

Balance, as of June 30, 2022

$ 1.7 $ ( 13.4 ) $ ( 11.7 )

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

11) Accumulated Other Comprehensive Income (Loss)

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):

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

The components of accumulated other comprehensive income (loss), net of tax, for the six months ended June 30, 2023 and 2022 are as follows (in millions):

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

4 unchanged sentences

Other comprehensive income 1.5 1.2 2.7

Balance, as of March 31, 2023

Balance, as of June 30, 2023

$ 3.2 $ ( 11.1 ) $ ( 7.9 )

5 unchanged sentences

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

Balance, as of March 31, 2022

Balance, as of June 30, 2022

$ 1.7 $ ( 13.4 ) $ ( 11.7 )

(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 for the three months ended March 31, 2022.

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 six months ended June 30, 2022.

12) Derivatives and Hedging

8 unchanged sentences

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.

As of June 30, 2023, the balance recorded in accumulated other comprehensive income (loss) was $( 11.1 ) million, net of tax.

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

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

The Company reclassified $ 0.8 million for each of the three months ended June 30, 2023 and 2022.

Amounts of $ 1.7 million and $ 3.0 million have been reclassified for the six months ended June 30, 2023 and 2022, respectively.

During the next twelve months the Company expects to reclassify approximately $ 3.6 million to interest expense.

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

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

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

The Company has the following reportable segment:

and small-cap equities, as well as managed volatility, ESG, multi-asset, equity alternatives, and long/short strategies.

and small-cap equities, as well as managed volatility, multi-asset, equity alternatives, and long/short strategies.

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

11 unchanged sentences

ENI revenue includes management fees, performance fees and other revenue under U.S.

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

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

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

1 unchanged sentence

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

ENI segment results are also adjusted to exclude the portion of consolidated Fund revenues, expenses and investment return recorded under U.S.

BrightSphere Investment Group Inc.

1 unchanged sentence

13) Segments (cont.)

ENI segment results are also adjusted to exclude the portion of consolidated Fund revenues, expenses and investment return recorded under U.S.

Segment Presentation

1 unchanged sentence

GAAP net income (loss).

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

The following table presents the financial data for the Company’s segment for the three months ended June 30, 2023 (in millions):

Three Months Ended June 30, 2023

Quant & Solutions Other Reconciling Adjustments Total U.S.

8 unchanged sentences

Net investment income — — 0.5 (c) 0.5

Net income attributable to non-controlling interests in consolidated Funds — — ( 0.1 ) (c) ( 0.1 )

Income tax expense — ( 4.4 ) ( 1.1 ) (d) ( 5.5 )

3 unchanged sentences

13) Segments (cont.)

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

Three Months Ended March 31, 2022

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

Three Months Ended June 30, 2022

Quant & Solutions Other Reconciling Adjustments Total U.S.

7 unchanged sentences

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

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

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

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

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

The following table presents the financial data for the Company’s segment for the six months ended June 30, 2023 (in millions):

Six Months Ended June 30, 2023

Quant & Solutions Other Reconciling Adjustments Total U.S.

ENI revenue $ 186.1 $ — $ 2.0 $ 188.1

ENI operating expenses 90.9 7.4 1.3 (a) 99.6

Earnings before variable compensation 95.2 ( 7.4 ) 0.7 88.5

Variable compensation 44.5 1.4 — 45.9

ENI operating earnings (after variable comp) 50.7 ( 8.8 ) 0.7 42.6

Affiliate key employee distributions 2.4 — — 2.4

Earnings after Affiliate key employee distributions 48.3 ( 8.8 ) 0.7 40.2

Net interest expense — ( 6.9 ) ( 0.8 ) (b) ( 7.7 )

Net investment income — — 1.6 (c) 1.6

Net income attributable to non-controlling interests in consolidated Funds — — ( 0.1 ) (c) ( 0.1 )

Income tax expense — ( 8.8 ) ( 1.8 ) (d) ( 10.6 )

Economic net income $ 48.3 $ ( 24.5 ) $ ( 0.4 ) $ 23.4

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

13) Segments (cont.)

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

Six Months Ended June 30, 2022

Quant & Solutions Other Reconciling Adjustments Total U.S.

ENI revenue $ 207.7 $ — $ — $ 207.7

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

Earnings before variable compensation 126.9 ( 8.9 ) 24.9 142.9

Variable compensation 48.0 2.6 — 50.6

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

Affiliate key employee distributions 2.4 — — 2.4

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

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

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

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

14 unchanged sentences

Reconciling Adjustments:

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.

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

GAAP operating expenses.

1 unchanged sentence

GAAP interest expense.

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.

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

GAAP net income attributable to controlling interests.

3 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 1. Financial Statements