What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 336 added, 309 removed, 492 unchanged (57% of the section changed)

40 unchanged sentences

capital, product strategy and development, capital formation, and incentive alignment and succession planning.

June 30, 2025 , our aggregate assets under management were approximately $771 billion across a diverse range of private

markets, liquid alternative, and differentiated long-only investment strategies.

In the first quarter of 2025, we completed a minority investment in NorthBridge Partners, LLC (“NorthBridge”), a

September 30, 2025 , our aggregate assets under management were approximately $804 billion across a diverse range of

private markets, liquid alternative, and differentiated long-only investment strategies.

In the first quarter of 2025, we completed our minority investment in NorthBridge Partners, LLC (“NorthBridge”), a

private markets manager specializing in industrial logistics real estate assets, and in the second quarter of 2025, we completed

9 unchanged sentences

results will be recognized in the Consolidated Financial Statements one quarter in arrears.

In July 2025, we completed the previously announced sale of our equity interest in Peppertree Capital Management, Inc.

In July 2025 , we completed the previously announced sale of our minority equity interest in Peppertree Capital

Management, Inc.

(“Peppertree”), as part of the announced acquisition of Peppertree by TPG Inc.

(“TPG”), a public company listed on the

Nasdaq Global Select Market.

Pursuant to the terms of the transaction agreement with TPG, under which we and each of the

other owners agreed to sell our respective equity interests in Peppertree, we received total consideration of approximately

$254 million which included approximately $100 million in cash and 2.9 million TPG Class A common shares, all of which

we have since sold.

We acquired our interest in Peppertree for $140.0 million in 2022.

Our gain on the transaction was

taxable at closing.

Peppertree will be included in our results through the closing date.

In July 2025, we entered into an agreement to acquire a minority equity interest in Montefiore Investment

(“Montefiore”), a European private equity firm focused on the service s sector.

Following the close of the transaction,

Montefiore partners will continue to hold a majority of the equity of the business and direct its day-to-day operations.

transaction is expected to close in the second half of 2025, subject to customary closing conditions.

On August 6, 2025, we entered into an agreement to sell a portion of our interest in Comvest Partners (“Comvest”), our

Affiliate accounted for under the equity method, as part of the announced acquisition of Comvest’s private credit business by

(“TPG”), a public company

listed on the Nasdaq Global Select Market (the “Peppertree Transaction”).

Pursuant to the terms of the transaction agreement

with TPG, under which we and each of the other owners agreed to sell our respective equity interests in Peppertree, we

received total consideration of $253.2 million , net of transaction costs, which included $99.8 million in cash and 2.9 million

TPG Class A common shares, all of which we have since sold.

Our gain on the transaction was $127.6 million and our after-

tax net proceeds were $218.1 million .

In October 2025, we announced an agreement with Brown Brothers Harriman (“BBH”), a privately held global financial

services firm, to acquire a minority equity interest in BBH Credit Partners, a newly formed subsidiary of BBH focused on

structured and alternative credit investment strategies.

Following the close of the transaction, BBH partners will continue to

direct day-to-day operations and our ownership will be limited to a minority interest in the BBH Credit Partners subsidiary.

The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions.

In October 2025, we completed the previously announced agreement to acquire a minority equity interest in Montefiore

Investment (“Montefiore”), a European private equity firm focused on the services sector.

Following the close of the

transaction, Montefiore partners continue to hold a majority of the equity of the business and direct its day-to-day operations.

On November 3, 2025, we completed the previously announced agreement to sell a portion of our minority equity

interest in Comvest Partners (“Comvest”), as part of the announced acquisition of Comvest’s private credit business by

Manulife Financial Corporation.

Pursuant to the terms of the agreement, we are expected to receive total cash consideration

of approximately $285 million , subject to certain closing adjustments.

Comvest will continue to be included in our results

until closing of the transaction and the portion retained will continue to be included going forward.

The transaction is

expected to close in the fourth quarter of 2025, subject to customary closing conditions.

Pursuant to the terms of the agreement, we received total cash consideration of

approximately $285 million .

We acquired our interest in Comvest for $125.0 million in 2020.

Our gain on the transaction

was taxable at closing.

Comvest will be included in our results through the closing date and the portion retained will continue

to be included going forward .

Operating Performance Measures

11 unchanged sentences

As of and for the Three

Months Ended June 30,

As of and for the Six

Months Ended June 30,

September 30,

As of and for the Nine

September 30,

(in billions, except as noted)

29 unchanged sentences

further evolve our business mix and better position AMG to benefit from industry growth trends.

The following tables present changes in our assets under management by strategy for the three and six months ended

June 30, 2025 :

The following tables present changes in our assets under management by strategy for the three and nine months ended

September 30, 2025 :

Differentiated Long-Only

1 unchanged sentence

Multi-Asset &

March 31, 2025

June 30, 2025

Client cash inflows and commitments

1 unchanged sentence

Net client cash flows

New investments

Affiliate transactions (2)

Market changes

1 unchanged sentence

Realizations and distributions (net)

June 30, 2025

September 30, 2025

Differentiated Long-Only

6 unchanged sentences

New investments

Affiliate transactions (2)

Market changes

1 unchanged sentence

Realizations and distributions (net)

June 30, 2025

September 30, 2025

_________________________

(1) Equities includes assets under management attributable to both global equities and U.S.

(2) Assets under management attributable to Peppertree as of the closing date.

(3) Foreign exchange reflects the impact of translating the assets under management of our Affiliates whose functional

13 unchanged sentences

(1) Past performance is not indicative of future results.

Performance and AUM information is as of June 30, 2025 and is based

on data available at the time of calculation.

Performance and AUM information is as of September 30, 2025 and is

based on data available at the time of calculation.

Product returns are sourced from Affiliates while benchmark returns are

46 unchanged sentences

period because they inherently depend on investment performance.

As of June 30, 2025 , approximately 28% of our total assets

under management could potentially earn performance-based fees.

These percentages were approximately 12% and 48% of our

assets under management for our consolidated Affiliates and Affiliates accounted for under the equity method, respectively.

As of September 30, 2025 , approximately 28% of our total

assets under management could potentially earn performance-based fees.

These percentages were approximately 12% and 47%

of our assets under management for our consolidated Affiliates and Affiliates accounted for under the equity method,

respectively.

We anticipate performance-based fees will be a recurring component of our aggregate fees;

however we do not anticipate these

fees to be a significant component of our Consolidated revenue as these fees are predominately earned by our Affiliates

accounted for under the equity method.

Aggregate fees were $1,173.5 million for the three months ended June 30, 2025 , an increase of $75.4 million or 7% as

compared to the three months ended June 30, 2024 .

The increase in our aggregate fees was due to a $108.4 million or 10%

increase from asset-based fees, partially offset by a $33.0 million or 3% decrease from performance-based fees, primarily in our

liquid alternative strategies.

however we do not

anticipate these fees to be a significant component of our Consolidated revenue as these fees are predominately earned by our

Affiliates accounted for under the equity method.

Aggregate fees were $1,346.0 million for the three months ended September 30, 2025 , an increase of $188.9 million or

16% as compared to the three months ended September 30, 2024 .

The increase in our aggregate fees was due to a $185.6

million or 16% increase from asset-based fees and a $3.3 million increase from performance-based fees, primarily in our liquid

alternative strategies.

The increase in asset-based fees was principally due to an increase in our average assets under

management, primarily in our private markets and liquid alternative strategies, and changes in the composition of our assets

under management.

Aggregate fees were $2,443.9 million for the six months ended June 30, 2025 , a decrease of $125.8 million or 5% as

compared to the six months ended June 30, 2024 .

The decrease in our aggregate fees was due to a $246.4 million or 10%

decrease from performance-based fees, primarily in our liquid alternative strategies, partially offset by a $120.6 million or 5%

increase from asset-based fees.

management, primarily in our liquid alternative and private markets strategies, and changes in the composition of our assets

under management, including the impact of our investments in new Affiliates.

Aggregate fees were $3,789.8 million for the nine months ended September 30, 2025 , an increase of $63.0 million or 2% as

compared to the nine months ended September 30, 2024 .

The increase in our aggregate fees was due to a $306.1 million or 8%

increase from asset-based fees, offset by a $243.1 million or 6% decrease from performance-based fees, primarily in our liquid

alternative strategies.

The increase in asset-based fees was principally due to an increase in our average assets under

management, primarily in our private markets and liquid alternative strategies.

management, primarily in our liquid alternative and private markets strategies, and changes in the composition of our assets

under management, including the impact of our investments in new Affiliates.

Financial and Supplemental Financial Performance Measures

1 unchanged sentence

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions)

5 unchanged sentences

measures and are discussed in “Supplemental Financial Performance Measures.”

Net income (controlling interest) increased $8.3 million or 11% for the three months ended June 30, 2025 .

This increase

was primarily due to a $47.5 million increase in Equity method income (net) and a $7.3 million decrease in Income tax expense

attributable to the controlling interest.

These increases to Net income (controlling interest) were partially offset by a $41.6

million increase in Affiliate equity compensation expense attributable to the controlling interest.

Net income (controlling interest) decreased $69.2 million or 31% for the six months ended June 30, 2025 .

This decrease

was primarily due to a $61.6 million increase in Intangible amortization and impairments attributable to the controlling interest

and a $38.9 million increase in Affiliate equity compensation expense attributable to the controlling interest.

These decreases

to Net income (controlling interest) were partially offset by a $35.9 million decrease in Income tax expense attributable to the

Net income (controlling interest) increased $88.8 million or 72% for the three months ended September 30, 2025 .

increase was primarily due to $127.6 million of Affiliate transaction gains and a $35.9 million increase in Equity method

income (net).

These increases were partially offset by a $39.1 million increase in Income tax expense attributable to the

controlling interest, primarily due to Affiliate transaction gains , and a $36.7 million increase in Affiliate equity compensation

expense attributable to the controlling interest.

Net income (controlling interest) increased $19.5 million or 6% for the nine months ended September 30, 2025 .

increase was primarily due to $127.6 million of Affiliate transaction gains and a $41.2 million increase in Equity method

income (net).

These increases were partially offset by a $75.6 million increase in Affiliate equity compensation expense

attributable to the controlling interest and a $60.9 million increase in Intangible amortization and impairments attributable to the

controlling interest .

Adjusted EBITDA (controlling interest) is an important supplemental financial performance measure for management.

Our Adjusted EBITDA (controlling interest) increased $2.2 million or 1% in the three months ended June 30, 2025 , primarily

due to a $75.4 million or 7% increase in aggregate fees.

Adjusted EBITDA increased less than aggregate fees on a percentage

basis primarily due to a $4.1 million decrease in Investment and other income attributable to the controlling interest.

Adjusted EBITDA (controlling interest) decreased $29.4 million or 6% for the six months ended June 30, 2025 , primarily

due to a $125.8 million or 5% decrease in aggregate fees, resulting from a decline in performance-based fees.

Our Adjusted EBITDA (controlling interest) increased $36.8 million or 17% f or the three months ended September 30, 2025 ,

primarily due to a $188.9 million or 16% increase in aggregate fees.

Adjusted EBITDA (controlling interest) increased $7.4 million or 1% for the nine months ended September 30, 2025 ,

primarily due to a $63.0 million or 2% increase in aggregate fees.

We believe Economic net income (controlling interest) is an important supplemental financial performance measure

1 unchanged sentence

improves comparability of performance between periods.

For the three months ended June 30, 2025 , our Economic net income

(controlling interest) increased $3.3 million or 2% , primarily due to a $2.2 million increase in Adjusted EBITDA (controlling

Economic net income (controlling interest) decreased $24.7 million or 7% for the six months ended June 30, 2025 ,

primarily due to a $29.4 million or 6% decrease in Adjusted EBITDA (controlling interest).

For the three months ended September 30, 2025 , our Economic net

income (controlling interest) increased $26.5 million or 17% , primarily due to a $36.8 million or 17% increase in Adjusted

EBITDA (controlling interest).

Economic net income (controlling interest) increased $1.8 million for the nine months ended September 30, 2025 ,

primarily due to a $7.4 million or 1% increase in Adjusted EBITDA (controlling interest).

Results of Operations

7 unchanged sentences

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions, except as noted)

2 unchanged sentences

Consolidated revenue

Our Consolidated revenue decreased $7.1 million or 1% for the three months ended June 30, 2025 , due to a $7.9 million or

1% decrease from asset-based fees, partially offset by a $0.8 million increase from performance-based fees, primarily in our

Our Consolidated revenue increased $11.6 million or 2% for the three months ended September 30, 2025 , due to a $16.7

million or 3% increase from asset-based fees, partially offset by a $5.1 million or 1% decrease from performance-based fees,

primarily in our private markets strategies.

The increase in asset-based fees was principally due to an increase in our

consolidated Affiliate average assets under management, primarily in our private markets strategies, partially offset by changes

in the composition of our assets under management.

Our Consolidated revenue increased $1.2 million for the nine months ended September 30, 2025 , due to a $3.3 million

increase from performance-based fees, primarily in our private markets strategies, partially offset by a $2.1 million decrease

from asset-based fees.

The decrease in asset-based fees was principally due to changes in the composition of our assets under

management, partially offset by an increase in our consolidated Affiliate average assets under management, primarily in our

private markets strategies.

The decrease in asset-based fees was principally due to changes in the composition of our assets

under management, partially offset by an increase in our consolidated Affiliate average assets under management, primarily in

our private markets strategies.

Our Consolidated revenue decreased $10.5 million or 1% for the six months ended June 30, 2025 , primarily due to an

$18.9 million or 2% decrease from asset-based fees, partially offset by an $8.4 million or 1% increase from performance-based

fees, primarily in our private markets strategies.

The decrease in asset-based fees was principally due to changes in the

composition of our assets under management, partially offset by an increase in our consolidated Affiliate average assets under

management, primarily in our private markets strategies.

Consolidated Expenses

1 unchanged sentence

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions)

8 unchanged sentences

(1) Percentage change is not meaningful.

Compensation and related expenses increased $48.4 million or 22% for the three months ended June 30, 2025 , primarily

due to a $41.0 million increase in Affiliate equity compensation expense primarily attributable to a modification of the terms of

certain equity awards at an Affiliate.

Compensation and related expenses increased $38.4 million or 8% for the six months ended June 30, 2025 , primarily due

to a $36.2 million increase in Affiliate equity compensation expense primarily attributable to a modification of the terms of

certain equity awards at an Affiliate, and a $12.4 million increase in compensation accruals.

These increases were partially

offset by a $10.2 million decrease in share-based compensation.

Selling, general and administrative expenses increased $6.3 million or 7% for the three months ended June 30, 2025 ,

primarily due to an $8.2 million increase in professional fees.

Selling, general and administrative expenses increased $9.3 million or 5% for the six months ended June 30, 2025 ,

Compensation and related expenses increased $32.7 million or 15% for the three months ended September 30, 2025 ,

primarily due to a $31.6 million increase in Affiliate equity compensation expense.

Compensation and related expenses increased $71.1 million or 11% for the nine months ended September 30, 2025 ,

primarily due to a $67.8 million increase in Affiliate equity compensation expense partially attributable to a modification of the

terms of certain equity awards at an Affiliate and a $10.9 million increase in compensation accruals correlated to the increase in

Consolidated revenue.

These increases were partially offset by a $7.8 million decrease in share-based compensation.

Selling, general and administrative expenses increased $3.5 million or 4% for the three months ended September 30, 2025 ,

primarily due to a $3.5 million increase in professional fees.

Intangible amortization and impairments decreased $1.0 million or 14% for the three months ended June 30, 2025 ,

Selling, general and administrative expenses increased $12.7 million or 5% for the nine months ended September 30, 2025 ,

primarily due to an $11.4 million increase in professional fees.

Intangible amortization and impairments decreased $1.0 million or 14% for the three months ended September 30, 2025 ,

primarily due to a $1.0 million decrease in amortization expense related to certain definite-lived assets being fully amortized.

Intangible amortization and impairments increased $75.1 million for the six months ended June 30, 2025 , primarily due to

a $70.0 million expense to reduce the carrying value of indefinite-lived acquired client relationships for certain asset groups to

fair value and a $7.0 million expense to reduce the carrying value of an indefinite-lived acquired client relationship to zero due

to the closure of a retail investment product.

These increases were partially offset by a $1.9 million decrease in amortization

expense due to certain definite-lived assets being fully amortized.

Interest expense increased $1.0 million or 3% for the three months ended June 30, 2025 , primarily due to a $5.6 million

increase from our 5.50% senior unsecured notes issued in August 2024 (the “2034 senior notes”).

This increase was partially

offset by a $4.7 million decrease due to the repayment of our senior unsecured term loan facility (the “term loan”), which was

fully repaid during the third quarter of 2024.

Interest expense increased $5.2 million or 8% for the six months ended June 30, 2025 , primarily due to an $11.3 million

increase from our 2034 senior notes and a $6.6 million increase from our 6.75% junior subordinated notes issued in March 2024

(“the 2064 junior subordinated notes”) .

These increases were partially offset by a $10.3 million decrease due to the repayment

of our term loan and a $2.2 million decrease due to the maturity of our 4.25% senior notes in February 2024.

There were no significant changes to Depreciation and other amortization for the three and six months ended June 30,

There were no significant changes to Other expenses (net) for the three months ended June 30, 2025 .

Other expenses (net) increased $1.7 million or 9% for the six months ended June 30, 2025 , primarily due to a $6.0 million

increase in expenses related to changes in the values of contingent payment obligations, partially offset by a $1.9 million

decrease in rent and related office costs.

Intangible amortization and impairments increased $74.2 million for the nine months ended September 30, 2025 , primarily

due to a $70.0 million expense to reduce the carrying value of indefinite-lived acquired client relationships for certain asset

groups to fair value and a $7.0 million expense to reduce the carrying value of an indefinite-lived acquired client relationship to

zero due to the closure of a retail investment product.

These increases were partially offset by a $2.8 million decrease in

amortization expense due to certain definite-lived assets being fully amortized.

Interest expense decreased $1.5 million or 4% for the three months ended September 30, 2025 , primarily due to a $2.7

million decrease due to our senior unsecured term loan facility (the “term loan”), which was fully repaid during the third quarter

of 2024, and a $2.1 million decrease due to the maturity of our 3.50% senior notes in August 2025 (the “2025 senior notes”).

These decreases were partially offset by a $3.1 million increase from our 5.50% senior unsecured notes issued in August 2024

(the “2034 senior notes”).

Interest expense increased $3.7 million or 4% for the nine months ended September 30, 2025 , primarily due to a $14.4

million increase from our 2034 senior notes and a $6.7 million increase from our 6.75% junior subordinated notes issued in

March 2024 (the “2064 junior subordinated notes”) .

These increases were partially offset by a $13.0 million decrease due to

the repayment of our term loan, a $2.2 million decrease due to the maturity of our 4.25% senior notes in February 2024, and a

$2.1 million decrease due to the maturity of our 2025 senior notes.

There were no significant changes to Depreciation and other amortization for the three and nine months ended

September 30, 2025 .

Other expenses (net) increased $1.5 million or 13% for the three months ended September 30, 2025 , primarily due to a $1.4

million increase in expenses related to changes in values of contingent payment obligations.

Other expenses (net) increased $3.2 million or 10% for the nine months ended September 30, 2025 , primarily due to a $7.4

million increase in expenses related to changes in the values of contingent payment obligations, partially offset by a $2.7

million decrease in rent and related office costs.

Equity Method Income (Net)

11 unchanged sentences

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions, except as noted)

11 unchanged sentences

(1) Percentage change is not meaningful.

Our equity method revenue, net increased $82.5 million or 14% for the three months ended June 30, 2025 , due to a $116.3

million or 19% increase from asset-based fees, partially offset by a $33.8 million or 5% decrease from performance-based fees,

primarily in our liquid alternative strategies.

The increase in asset-based fees was principally due to an increase in our equity

method Affiliate average assets under management, primarily in our liquid alternative strategies, and changes in the

composition of our assets under management, including the impact of our investments in new Affiliates.

For the three months ended June 30, 2025 , pre-tax equity method earnings increased $13.8 million or 17% , primarily due to

an $82.5 million or 14% increase in equity method revenue, net.

Pre-tax equity method earnings increased more than equity

method revenue, net on a percentage basis primarily due to an increase in earnings at certain Affiliates in which we share in

revenue less agreed-upon expenses.

Equity method intangible amortization increased $6.1 million or 29% for the three months ended June 30, 2025 , primarily

due to a $4.1 million increase in amortization expense due to investments in new Affiliates and a $3.8 million increase in

amortization expense due to an increase in actual and expected client attrition for certain definite-lived acquired client

relationships.

These increases were partially offset by a $1.9 million decrease in amortization expense related to certain

definite-lived assets being fully amortized.

Equity method intangible impairments decreased $39.9 million for the three and six months ended June 30, 2025 .

Note 9 of our Consolidated Financial Statements.

Our equity method revenue, net decreased $115.3 million or 7% for the six months ended June 30, 2025 , due to a $254.8

million or 16% decrease from performance-based fees, primarily in our liquid alternative strategies, partially offset by a $139.5

million or 9% increase from asset-based fees.

The increase in asset-based fees was principally due to an increase in our equity

method Affiliate average assets under management, primarily in our liquid alternative strategies, and changes in the

Our equity method revenue, net increased $177.3 million or 28% for the three months ended September 30, 2025 , due to a

$168.9 million or 27% increase from asset-based fees and an $8.4 million or 1% increase from performance-based fees,

primarily in our private markets and liquid alternative strategies.

The increase in asset-based fees was principally due to an

increase in our equity method Affiliate average assets under management, primarily in our liquid alternative strategies, and

changes in the composition of our assets under management, including the impact of our investments in new Affiliates.

For the three months ended September 30, 2025 , pre-tax equity method earnings increased $39.1 million or 49% , primarily

due to a $177.3 million or 28% increase in equity method revenue, net.

Pre-tax equity method earnings increased more than

equity method revenue, net on a percentage basis primarily due to an increase in earnings at certain Affiliates in which we share

in revenue less agreed-upon expenses.

Equity method intangible amortization increased $1.9 million or 8% for the three months ended September 30, 2025 ,

primarily due to a $5.8 million increase in amortization expense due to investments in new Affiliates.

This increase was

partially offset by a $4.1 million decrease in amortization expense related to certain definite-lived assets being fully amortized.

Our equity method revenue, net increased $61.8 million or 3% for the nine months ended September 30, 2025 , due to a

$308.2 million or 14% increase from asset-based fees, offset by a $246.4 million or 11% decrease from performance-based

fees, primarily in our liquid alternative strategies.

The increase in asset-based fees was principally due to an increase in our

equity method Affiliate average assets under management, primarily in our liquid alternative strategies, and changes in the

composition of our assets under management, including the impact of our investments in new Affiliates.

For the six months ended June 30, 2025 , pre-tax equity method earnings decreased $29.2 million or 13% , primarily due to

a $115.3 million or 7% decrease in equity method revenue, net.

Pre-tax equity method earnings decreased more than equity

method revenue, net on a percentage basis primarily due to a decrease in earnings at certain Affiliates in which we share in

revenue less agreed-upon expenses and hold a greater economic interest.

Equity method intangible amortization increased $3.9 million or 9% for the six months ended June 30, 2025 , primarily due

to a $4.2 million increase in amortization expense due to investments in new Affiliates and a $3.4 million increase in

amortization expense due to an increase in actual and expected client attrition for certain definite-lived acquired client

relationships.

These increases were partially offset by a $3.7 million decrease in amortization expense related to certain

definite-lived assets being fully amortized.

For the nine months ended September 30, 2025 , pre-tax equity method earnings increased $10.0 million or 3% , primarily

due to a $61.8 million or 3% increase in equity method revenue, net.

Equity method intangible amortization increased $5.8 million or 9% for the nine months ended September 30, 2025 ,

primarily due to a $10.1 million increase in amortization expense due to investments in new Affiliates.

This increase was

partially offset by a $3.5 million decrease in amortization expense related to certain definite-lived assets being fully amortized

and a $1.1 million decrease in amortization expense due to a decrease in actual and expected client attrition for certain definite-

lived acquired client relationships.

Equity method intangible impairments decreased $39.9 million for the nine months ended September 30, 2025 .

of our Consolidated Financial Statements.

Affiliate Transaction Gains

For the three and nine months ended September 30, 2025 , we recorded a $127.6 million gain on the Peppertree

Transactio n.

See Note 9 of our Consolidated Financial Statements.

Investment and Other Income

1 unchanged sentence

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions)

Investment and other income

Investment and other income increased $6.2 million or 32% for the three months ended June 30, 2025 , primarily due to a

$9.2 million increase in unrealized gains on other investments.

Investment and other income decreased $0.1 million for the six months ended June 30, 2025 , primarily due to a $5.7

million decrease in realized gains on investments in marketable securities and a $1.5 million decrease in interest income.

decreases were partially offset by a $7.5 million increase in unrealized gains on other investments.

Investment and other income increased $4.8 million or 21% for the three months ended September 30, 2025 , primarily due

to a $5.6 million increase in unrealized gains on other investments and a $5.0 million increase in realized gains on marketable

These increases were partially offset by a $7.2 million decrease in interest income.

Investment and other income increased $4.7 million or 8% for the nine months ended September 30, 2025 , primarily due to

a $13.2 million increase in unrealized gains on other investments and a $2.2 million increase in unrealized gains on marketable

These increases were partially offset by an $11.1 million decrease in interest income.

Income Tax Expense

1 unchanged sentence

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions)

Income tax expense

___________________________

(1) Percentage change is not meaningful.

Our consolidated income tax provision includes taxes attributable to the controlling interest and, to a lesser extent, taxes

attributable to the non-controlling interests.

Income tax expense decreased $7.6 million or 18% for the three months ended June 30, 2025 .

Income tax expense increased $40.3 million for the three months ended September 30, 2025 .

Our effective tax rate

(controlling interest) for the three months ended June 30, 2025 was 28.5% as compared to 35.0% for the three months ended

June 30, 2024 .

The decrease in the tax rate (controlling interest) was primarily due to an expense to reduce the carrying value

of an Affiliate to fair value for which no tax benefit was recorded in the three months ended June 30, 2024, which did not recur,

partially offset by an expense attributable to a modification of the terms of certain equity awards at an Affiliate for which no tax

benefit was recorded in the three months ended June 30, 2025 .

Income tax expense decreased $35.6 million or 36% for the six months ended June 30, 2025 .

Our effective rate

(controlling interest) for the six months ended June 30, 2025 was 27.1% as compared to 29.4% for the six months ended June

The decrease in the tax rate (controlling interest) was primarily due to an expense to reduce the carrying value of an

Affiliate to fair value for which no tax benefit was recorded in the six months ended June 30, 2024 , which did not recur,

partially offset by an expense attributable to a modification of the terms of certain equity awards at an Affiliate for which no tax

benefit was recorded in the six months ended June 30, 2025 .

(controlling interest) for the three months ended September 30, 2025 was 24.4% as compared to 19.3% for the three months

ended September 30, 2024 .

The increase in the effective tax rate (controlling interest) was primarily due to an expense

attributable to certain equity awards at an Affiliate for which no tax benefit was recorded, partially offset by tax windfalls

attributable to share-based compensation.

Income tax expense increased $4.7 million or 4% for the nine months ended September 30, 2025 .

O ur effective tax rate

(controlling interest) for the nine months ended September 30, 2025 was 25.6% as compared to 26.1% for the nine months

ended September 30, 2024 .

The decrease in the effective tax rate (controlling interest) was primarily due to an expense to

reduce the carrying value of an Affiliate to fair value for which no tax benefit was recorded in the nine months ended

September 30, 2024 , which did not recur, partially offset by an expense attributable to certain equity awards at an Affiliate for

which no tax benefit was recorded in the nine months ended September 30, 2025 .

The following table presents Net income, Net income (non-controlling interests), and Net income (controlling interest):

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions)

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Net income (controlling interest)

Net income (controlling interest) increased $8.3 million or 11% for the three months ended June 30, 2025 , primarily due to

an increase in Equity method income (net) and a decrease in Income tax expense attributable to the controlling interest.

increases to Net income (controlling interest) were partially offset by an increase in Affiliate equity compensation expense

attributable to the controlling interest.

Net income (controlling interest) decreased $69.2 million or 31% for the six months ended June 30, 2025 , primarily due to

an increase in Intangible amortization and impairments attributable to the controlling interest and an increase in Affiliate equity

compensation expense attributable to the controlling interest.

These decreases to Net income (controlling interest) were

partially offset by a decrease in Income tax expense attributable to the controlling interest.

Net income (controlling interest) increased $88.8 million or 72% for the three months ended September 30, 2025 , primarily

due to Affiliate transaction gains and an increase in Equity method income (net).

These increases to Net income (controlling

interest) were partially offset by an increase in Income tax expense attributable to the controlling interest and an increase in

Affiliate equity compensation expense attributable to the controlling interest.

Net income (controlling interest) increased $19.5 million or 6% for the nine months ended September 30, 2025 , primarily

due to Affiliate transaction gains and an increase in Equity method income (net).

These increases to Net income (controlling

interest) were partially offset by an increase in Affiliate equity compensation expense attributable to the controlling interest and

an increase in Intangible amortization and impairments attributable to the controlling interest.

Supplemental Financial Performance Measures

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For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions)

3 unchanged sentences

Intangible amortization and impairments (2)

Affiliate transactions (3)

Other items (4)

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The following table presents the

Intangible amortization and impairments shown above:

I ntangible amortization and impairments shown above:

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions)

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Equity method intangible amortization and impairments

(3) The three and nine months ended September 30, 2025 includes Peppertree Transaction gain of $127.6 million and realized

gains of $6.2 million on TPG Class A common shares, which are recorded in Affiliate transaction gains and Investment and

other income, respectively .

See Note 9 of our Consolidated Financial Statements.

(4) Other items include certain non-income based taxes, depreciation, and non-cash items such as certain Affiliate equity

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general partner commitments, and other strategic investments.

For the three and six months ended June 30, 2025 , other

items includes a one-time expense of $30.5 million which resulted from a modification of Affiliate equity which , consistent

with the definitions of our non-GAAP performance measures, has been added back to Adjusted EBITDA (controlling

For the nine months ended September 30, 2025 , other items

includes an expense of $30.5 million which resulted from a modification of Affiliate equity in the second quarter which ,

consistent with the definitions of our non-GAAP performance measures, has been added back to Adjusted EBITDA

(controlling interest).

See Note 14 of our Consolidated Financial Statements.

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For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(in millions, except per share data)

2 unchanged sentences

Intangible-related deferred taxes (2)

Affiliate transactions (3)

Other economic items (4)

3 unchanged sentences

Assumed issuance of junior convertible securities shares

Dilutive impact of junior convertible securities shares

Average shares outstanding (adjusted diluted)

3 unchanged sentences

(2) Includes equity method deferred taxes.

(3) The three and nine months ended September 30, 2025 includes Peppertree Transaction gain of $127.6 million and realized

gains on TPG Class A common shares of $6.2 million , net of $32.7 million of income tax expense.

See Note 9 of our

Consolidated Financial Statements.

(4) Other economic items include certain Affiliate equity activity, gains and losses related to contingent payment obligations,

2 unchanged sentences

partner commitments, and other strategic investments.

Other economic items were net of income tax expense of

$1.2 million and $3.0 million for the three months ended June 30, 2024 and 2025 , respectively, and $1.1 million and $4.5

million for the six months ended June 30, 2024 and 2025 , respectively.

For the three and six months ended June 30, 2025 ,

other economic items includes a one-time expense of $30.5 million which resulted from a modification of Affiliate equity

For the nine months ended September 30, 2025 , other economic

items includes an expense of $30.5 million which resulted from a modification of Affiliate equity in the second quarter

which, consistent with the definitions of our non-GAAP performance measures, has been added back to Economic net

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Global Ratings.

Cash and cash equivalents were $361.0 million as of June 30, 2025 and were attributable to b oth our controlling and the

non-controlling interests .

In the six months ended June 30, 2025 , we met our cash requirements primarily through cash

generated by operating activities.

Our principal uses of cash in the six months ended June 30, 2025 were for investments in

new Affiliates, the return of excess capital through share repurchases, and distributions to Affiliate equity holders.

Cash and cash equivalents were $476.1 million as of September 30, 2025 and were attributable to b oth our controlling and

the non-controlling interests .

In the nine months ended September 30, 2025 , we met our cash requirements primarily through

cash generated by operating activities .

Our principal uses of cash in the nine months ended September 30, 2025 were for

investments in new Affiliates, the return of excess capital through share repurchases, distributions to Affiliate equity holders,

and repayment of debt.

We expect investments in new Affiliates, investments in existing Affiliates, primarily through purchases of Affiliate equity

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The following table presents operating, investing, and financing cash flow activities:

For the Six Months

Ended June 30,

For the Nine Months

Ended September 30,

(in millions)

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cash items, and timing differences in the cash settlement of assets and liabilities.

For the six months ended June 30, 2025 , Cash flows from operating activities were $439.7 million , primarily from Net

income of $235.1 million and distributions of earnings received from equity method investments of $295.9 million .

items were partially offset by timing differences in the cash settlement of receivables, other assets, and payables, accrued

liabilities, and other liabilities of $135.4 million .

For the six months ended June 30, 2025 , operating cash flows were primarily

attributable to the controlling interest.

For the nine months ended September 30, 2025 , Cash flows from operating activities were $716.8 million , primarily from

Net income of $526.1 million adjusted for non-cash items of $105.5 million and distributions of earnings received from equity

method investments of $379.7 million .

These items were partially offset by timing differences in the cash settlement of

receivables, other assets, and payables, accrued liabilities, and other liabilities of $56.7 million .

For the nine months ended

September 30, 2025 , operating cash flows were primarily attributable to the controlling interest.

Investing Cash Flow

For the six months ended June 30, 2025 , Cash flows used in investing activities were $529.3 million , primarily due to

$510.1 million of investments in Affiliates and $56.4 million of purchases of investment securities.

These items were partially

offset by $40.2 million of maturities and sales of investment securities.

For the six months ended June 30, 2025 , investing cash

flows were primarily attributable to the controlling interest.

For the nine months ended September 30, 2025 , Cash flows used in investing activities were $258.6 million , primarily due

to $515.1 million of investments in Affiliates and $72.3 million of purchases of investment securities.

These items were

partially offset by $229.4 million of maturities and sales of investment securities and $99.8 million of cash proceeds from

Affiliate transactions .

For the nine months ended September 30, 2025 , investing cash flows were primarily attributable to the

controlling interest.

Financing Cash Flow

For the six months ended June 30, 2025 , Cash flows used in financing activities were $518.4 million , primarily due to

$277.5 million of repurchases of common stock, net, $149.7 million of distributions to non-controlling interests, and

$41.1 million of Affiliate equity purchases, net of issuances.

For the six months ended June 30, 2025 , financing cash flows

were primarily attributable to the controlling interest.

For the nine months ended September 30, 2025 , Cash flows used in financing activities were $948.6 million , primarily due

to $353.2 million of repurchases of common stock, net, repayment of senior notes of $350.0 million , $205.5 million of

distributions to non-controlling interests, and $105.8 million of taxes paid on shares withheld for share-based awards.

items were partially offset by borrowings of senior bank debt of $100.0 million.

For the nine months ended September 30,

2025 , financing cash flows were primarily attributable to the controlling interest.

Affiliate Equity

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interests to other individuals or entities in certain cases, subject to our approval or other restrictions.

As of June 30, 2025 , the current redemption value of Affiliate equity interests was $454.0 million , of which $336.1 million

was presented as Redeemable non-controlling interests (including $20.0 million of consolidated Affiliate sponsored investment

products primarily attributable to third-party investors), and $117.9 million was included in Other liabilities.

timing and amounts of these purchases are difficult to predict, we paid $42.9 million for Affiliate equity purchases and received

$1.8 million for Affiliate equity issuances during the six months ended June 30, 2025 , and we expect net purchases of

approximately $120 million of Affiliate equity during the remainder of 2025 .

In the event of a purchase, we become the owner

of the cash flow associated with the purchased equity.

See Notes 13 and 14 of our Consolidated Financial Statements.

As of September 30, 2025 , the current redemption value of Affiliate equity interests was $508.7 million , of which $273.5

million was presented as Redeemable non-controlling interests (including $30.3 million of consolidated Affiliate sponsored

investment products primarily attributable to third-party investors), and $235.2 million was included in Other liabilities.

Although the timing and amounts of these purchases are difficult to predict, we paid $51.8 million for Affiliate equity purchases

and received $1.8 million for Affiliate equity issuances during the nine months ended September 30, 2025 , and we expect net

purchases of approximately $110 million of Affiliate equity during the remainder of 2025 .

In the event of a purchase, we

become the owner of the cash flow associated with the purchased equity.

See Notes 13 and 14 of our Consolidated Financial

Share Repurchases

4 unchanged sentences

accelerated share repurchase programs or other share repurchase strategies that may include derivative financial instruments.

During the three and six months ended June 30, 2025 , we repurchased 0.6 million and 1.6 million shares of our common stock

at an average price per share of $168.72 and $170.16 , respectively.

As of June 30, 2025 , there were a total of 3.7 million shares

available for repurchase under our July 2024 share repurchase program.

During the three and nine months ended September 30, 2025 , we repurchased 0.3 million and 1.9 million shares of our common

stock at an average price per share of $230.04 and $180.49 , respectively.

As of September 30, 2025 , there were a total of 3.4

million shares available for repurchase under our July 2024 share repurchase program.

The following table presents the carrying value of our outstanding indebtedness:

(in millions)

September 30,

Senior bank debt

3 unchanged sentences

the carrying value of our debt in the table above is not reduced for debt issuance costs.

On August 1, 2025, our $350.0 million 3.50% senior notes due 2025 (“the 2025 senior notes”) matured and were fully

As of the date of this Quarterly Report on Form 10-Q, the weighted average maturity of our remaining outstanding non-

senior bank debt is 23 years , all of which is maturing in 2030 and beyond.

Our nearest term non-senior bank debt maturity

relates to our $350.0 million senior notes due June 2030 (“the 2030 senior notes”).

See Note 6 of our Consolidated Financial

As of September 30, 2025 , the weighted average maturity of our outstanding non-senior bank debt is 23 years , all of which

is maturing in 2030 and beyond.

Our nearest term non-senior bank debt maturity relates to our $350.0 million senior notes due

June 2030 (the “2030 senior notes”).

See Note 6 of our Consolidated Financial Statements.

Senior Bank Debt

As of June 30, 2025 , we had a $1.25 billion revolver which matures on November 15, 2029.

Subject to certain conditions,

we may increase the commitments under the revolver by up to an additional $500.0 million .

As of June 30, 2025 , we had no outstanding borrowings under the revolver, and could borrow all capacity and remain in

compliance with all of the terms of the revolver.

On July 30, 2025, we borrowed $100.0 million under the revolver.

As of June 30, 2025 , we had senior notes outstanding, the respective principal terms of which are presented and described

February 2015

As of September 30, 2025 , we had a $1.25 billion revolver which matures on November 15, 2029.

Subject to certain

conditions, we may increase the commitments under the revolver by up to an additional $500.0 million .

As of September 30, 2025 , we had outstanding borrowings under the revolver of $100.0 million , and we could borrow all

remaining capacity and maintain compliance with all of the terms of the revolver.

In the third quarter of 2025, our $350.0 million 3.50% senior notes matured and were fully repaid.

As of September 30, 2025 , we had senior notes outstanding, the respective principal terms of which are presented and

described below:

Maturity date

4 unchanged sentences

Semi-annually

The senior notes may be redeemed, in whole or in part, at a make-whole redemption price (plus accrued and unpaid

interest), at any time, in the case of the 2025 senior notes, at any time prior to March 15, 2030, in the case of the 2030 senior

notes, and at any time prior to May 20, 2034, in the case of the 2034 senior notes.

In addition, the 2030 and 2034 senior notes

may be redeemed at par, in whole or in part, at any time, on or after March 15, 2030 and May 20, 2034, respectively.

also repurchase senior notes in the open market or in privately negotiated transactions from time to time at management’s

interest), at any time prior to March 15, 2030, in the case of the 2030 senior notes, and at any time prior to May 20, 2034, in the

case of the 2034 senior notes.

In addition, the 2030 and 2034 senior notes may be redeemed at par (plus accrued and unpaid

interest), in whole or in part, at any time, on or after March 15, 2030 and May 20, 2034, respectively.

We may also repurchase

senior notes in the open market or in privately negotiated transactions from time to time at management’s discretion.

Junior Subordinated Notes

As of June 30, 2025 , we had junior subordinated notes outstanding, the respective principal terms of which are presented

and described below:

As of September 30, 2025 , we had junior subordinated notes outstanding, the respective principal terms of which are

presented and described below:

Junior Subordinated

9 unchanged sentences

Coupon frequency

As of June 30, 2025 , the 2059 junior subordinated notes could be redeemed at any time, in whole or in part.

junior subordinated notes may be redeemed at any time, in whole or in part, on or after September 30, 2025, in the case of the

2060 junior subordinated notes, on or after September 30, 2026, in the case of the 2061 junior subordinated notes, and on or

after March 30, 2029, in the case of the 2064 junior subordinated notes.

In each case, the junior subordinated notes may be

redeemed at 100% of the principal amount of the notes being redeemed, plus any accrued and unpaid interest thereon.

the applicable redemption date, at our option, the applicable junior subordinated notes may also be redeemed, in whole but not

in part, at 100% of the principal amount, plus any accrued and unpaid interest, if certain changes in tax laws, regulations, or

interpretations occur;

or at 102% of the principal amount, plus any accrued and unpaid interest, if a rating agency makes certain

changes relating to the equity credit criteria for securities with features similar to the applicable notes.

As of September 30, 2025 , each of the 2059 and the 2060 junior subordinated notes could be redeemed at any time, in

whole or in part.

The other junior subordinated notes may be redeemed at any time, in whole or in part, on or after September

30, 2026, in the case of the 2061 junior subordinated notes, and on or after March 30, 2029, in the case of the 2064 junior

subordinated notes.

In each case, the junior subordinated notes may be redeemed at 100% of the principal amount of the notes

being redeemed, plus any accrued and unpaid interest thereon.

Prior to the applicable redemption date, at our option, the

applicable junior subordinated notes may also be redeemed, in whole but not in part, at 100% of the principal amount, plus any

accrued and unpaid interest, if certain changes in tax laws, regulations, or interpretations occur;

or at 102% of the principal

amount, plus any accrued and unpaid interest, if a rating agency makes certain changes relating to the equity credit criteria for

securities with features similar to the applicable notes.

Junior Convertible Securities

As of June 30, 2025 , we had $341.7 million of principal outstanding in our 5.15% junior convertible trust preferred

As of September 30, 2025 , we had $341.7 million of principal outstanding in our 5.15% junior convertible trust preferred

securities (the “junior convertible securities”), maturing in 2037.

15 unchanged sentences

convertible securities in the open market or in privately negotiated transactions from time to time at management’s discretion.

W e did not repurchase any of our junior convertible securities during the six months ended June 30, 2024 and 2025 .

W e did not repurchase any of our junior convertible securities during the nine months ended September 30, 2024 and 2025 .

Equity Distribution Program

3 unchanged sentences

distribution program superseded and replaced our prior equity distribution program.

As of June 30, 2025 , no sales had occurred

under the equity distribution program.

As of September 30, 2025 , no sales had

occurred under the equity distribution program.

See Note 7 of our Consolidated Financial Statements.

1 unchanged sentence

See Notes 4 and 7 of our Consolidated Financial Statements.

As of June 30, 2025 , our lease obligations were $18.8 million for the remainder of 2025 , $55.1 million from 2026 through

As of September 30, 2025 , our lease obligations were $10.3 million for the remainder of 2025 , $56.7 million from 2026

through 2027, $48.2 million from 2028 through 2029, and $56.8 million thereafter.

The portion of these lease obligations

attributable to the controlling interest were $3.1 million for the remainder of 2025 , $9.1 million from 2026 through 2027, $6.8

million from 2028 through 2029, and $14.5 million thereafter.

The portion of these lease obligations attributable to

the controlling interest were $5.0 million for the remainder of 2025 , $7.3 million from 2026 through 2027, $4.5 million from

2028 through 2029, and $7.2 million thereafter.

Recent Accounting Developments

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additional future impairments.

For our indefinite-lived acquired client relationships, no other triggering events were identified during the three and six

months ended June 30, 2025 that would indicate an impairment.

For our indefinite-lived acquired client relationships, no other triggering events were identified during the three and nine

months ended September 30, 2025 that would indicate an impairment.

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our Quantitative and Qualitative Disclosures About Market Risk for the six months

ended June 30, 2025 .

There have been no material changes to our Quantitative and Qualitative Disclosures About Market Risk for the nine

months ended September 30, 2025 .

Please refer to Item 7A of our 2024 Annual Report on Form 10-K.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis