What changed in this filing

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Item 1. Financial Statements

2022-08-08 compared with 2022-05-09 · 221 added, 185 removed, 661 unchanged (38% of the section changed)

4 unchanged sentences

(In thousands, except shares data)

March 31, 2022

June 30, 2022

December 31, 2021

29 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Investment management fees

10 unchanged sentences

Income from operations

Other income (expense)

Interest income and other income (expense)

Other (expense) income

Interest income and other (expense) income

Interest expense and other financing costs

Loss on debt extinguishment

Total other income (expense), net

Total other expense, net

Income before income taxes

8 unchanged sentences

(In thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Other comprehensive income (loss), net of tax

Net unrealized income on cash flow hedges

Net unrealized loss on foreign currency translation

Net unrealized income (loss) on cash flow hedges

Net unrealized income (loss) on foreign currency translation

Total other comprehensive income (loss), net of tax

6 unchanged sentences

Comprehensive

Treasury Stock

Balance, December 31, 2021

8 unchanged sentences

Balance, March 31, 2022

Issuance of common stock

Repurchase of shares

Shares withheld related to net settlement of equity awards

Vesting of restricted share grants

Exercise of options

Other comprehensive income

Share-based compensation

Dividends paid

Balance, June 30, 2022

Treasury Stock

8 unchanged sentences

Exercise of options

Other comprehensive income

Other comprehensive loss

Share-based compensation

1 unchanged sentence

Balance, March 31, 2021

Issuance of common stock

Share conversion - Class B to A

Repurchase of shares

Shares withheld related to net settlement of equity awards

Vesting of restricted share grants

Exercise of options

Other comprehensive loss

Share-based compensation

Dividends paid

Balance, June 30, 2021

See the accompanying notes to the unaudited condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

5 unchanged sentences

Change in fair value of contingent consideration obligations

Unrealized depreciation (appreciation) on investments

Unrealized (appreciation) depreciation on investments

Noncash lease expense

18 unchanged sentences

Payments of taxes related to net share settlement of equity awards

Repayment of long-term senior debt

Repayments of long-term senior debt

Payment of dividends

1 unchanged sentence

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

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

15 unchanged sentences

On and effective July 1, 2019, the Company completed the acquisition (the “USAA AMCO Acquisition” or “USAA AMCO”) of USAA Asset Management Company (“USAA Adviser”) and Victory Capital Transfer Agency, Inc.

(“VCTA”), formally known as the USAA Transfer Agency Company d/b/a USAA Shareholder Account Services.

(“VCTA”), formerly known as the USAA Transfer Agency Company d/b/a USAA Shareholder Account Services.

The USAA AMCO Acquisition includes USAA’s mutual fund and exchange traded fund (“ETF”) businesses and its 529 Education Savings Plan (collectively, the “USAA Mutual Fund Business”).

31 unchanged sentences

In the opinion of management, the consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial condition, results of operations, and cash flows for the interim periods presented.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Certain prior period amounts have been reclassified to conform to the current year presentation.

Operating results for the three- and six-month periods ending June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Principles of Consolidation

11 unchanged sentences

The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption.

Financial markets experienced significant declines during the first quarter of 2020, although certain markets, including domestic equity securities, experienced recoveries that more than offset the first quarter decline.

While COVID-19 did not have a material adverse effect on our business, operations and financial results, the extent to which the pandemic impacts our business, operations and financial results going forward will depend on numerous evolving factors that we may not be able to accurately predict, including:

16 unchanged sentences

New Accounting Pronouncements

Accounting Standards Adopted in 2022

Accounting Standards Adopted or Applied in 2022

Effective January 1, 2022 , the Company adopted ASU 2016-02, “Leases (Topic 842)” (the “New Lease Standard”) which supersedes previous lease guidance, Accounting Standards Codification (“ASC”) Topic 840 (“ASC Topic 840”).

2 unchanged sentences

The Company adopted the New Lease Standard using the modified retrospective method of applying the new standard at the adoption date.

We elected the package of practical expedients permitted under the transition guidance which allowed us to carry forward historical lease classification s for existing and expired leases and not reassess existing lease initial direct costs.

We elected the package of practical expedients permitted under the transition guidance which allowed us to carry forward historical lease classifications for existing and expired leases and not reassess existing lease initial direct costs.

In addition, we elected for all classes of underlying assets not to separate lease and non-lease components of a contract.

11 unchanged sentences

The lease liability recorded for our operating leases on January 1, 2022 was based on the present value of the remaining minimum lease payments discounted using our secured incremental borrowing rate on that date for the average remaining term for our lease portfolio.

Accounting Standards Adopted in 2021

Internal-Use Software:

Effective January 1, 2021 , the Company adopted, on a prospective basis, Accounting Standards Update (“ASU”) 2018-15 (“ASU 2018-15”), "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those of developing or obtaining internal-use software.

The adoption had no impact on the Company’s consolidated financial statements.

Subsequent Measurement of Goodwill:

Effective January 1, 2021 , the Company adopted, on a prospective basis, ASU 2017-04 (“ASU 2017-04”), “Intangibles – Goodwill and Other (Topic 350)” (“ASU 2017-04”) which simplifies the test for goodwill impairment.

ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill (step two) to measure a goodwill impairment charge.

Goodwill impairment will be based upon the results of step one of the impairment test, which is defined as the excess of the carrying amount of a reporting unit over its fair value, not to exceed the carrying amount of goodwill allocated to that reporting unit.

The adoption had no impact on the Company’s consolidated financial statements.

Recently Issued Accounting Standards

Reference Rate Reform:

2 unchanged sentences

The amendments in this guidance are effective for all entities through December 31, 2022.

The Company is currently evaluating the effect of this new standard on its consolidated financial statements.

Currently, the Company elects to use the three-month LIBOR rate plus the margin on LIBOR required by the 2019 Credit Agreement to pay interest on its debt.

In April 2022, the FASB issued a proposal to defer the sunset date of ASU 2020-04 to December 31, 2024 from December 31, 2022.

The Company currently elects to use the three-month LIBOR rate plus the margin on LIBOR required by the 2019 Credit Agreement to pay interest on its debt.

The 2019 Credit Agreement provides for a mechanism for determining an alternative interest rate following the phase-out of LIBOR, which for the three-month rate is expected to occur following the publication of LIBOR rates on June 30, 2023.

Under the Company’s cash flow hedge, the Company pays interest at a fixed rate of interest on a quarterly basis and receives interest at the three-month LIBOR rate in effect for that quarter.

The Company has elected to use the guidance in ASU 2020-04 for its cash flow hedge to assert that it remains probable that the hedged forecasted transaction will occur.

Recently Issued Accounting Standards

Expected Credit Losses:

2 unchanged sentences

ASU 2016-13 creates a new model for determining current expected credit losses (“CECL”) on trade and other receivables, net investments in leases, contract assets and long-term receivables.

The CECL impairment model requires companies to consider the risk of loss even if it is

remote and to include forecasts of future economic conditions as well as information about past events and current conditions.

The CECL impairment model requires companies to consider the risk of loss even if it is remote and to include forecasts of future economic conditions as well as information about past events and current conditions.

The effective date for calendar-year public business entities was January 1, 2020.

As an emerging growth company (“EGC”), the Company will adopt ASU 2016-13 on January 1, 2023 and is currently reviewing the effect of this new standard on its consolidated financial statements.

Fair Value Measurements :

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” to clarify guidance for determining the fair value of certain equity securities and eliminate diversity in practice.

ASU 2022-03 states that contractual sale restrictions should not be considered when measuring the fair value of an equity security and requires new disclosures for entities with equity securities subject to contractual sale restrictions.

The effective date for calendar-year public business entities is January 1, 2024.

As an EGC, the Company will adopt ASU 2022-03 on January 1, 2025.

Early adoption is permitted.

As the Company does not have equity

securities subject to contractual sale restrictions, ASU 2022-03 is not expected to impact its consolidated financial statements.

Revenue RECOGNITION

In accordance with the revenue recognition standard requirements, the following table disaggregates our revenue by type and product:

Three Months Ended March 31,

In accordance with revenue recognition standard requirements, the following table disaggregates our revenue by type and product:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

19 unchanged sentences

(in thousands)

March 31, 2022

June 30, 2022

December 31, 2021

13 unchanged sentences

Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer.

Variable consideration is included in the

transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Investment management, fund administration and fund distribution fees are generally considered variable consideration as they are typically calculated as a percentage of AUM.

Fund transfer agent fees are also considered variable consideration as they are calculated as a percentage of AUM or based on the number of accounts in the fund.

Fund transfer agent fees are also considered variable consideration as they are calculated

as a percentage of AUM or based on the number of accounts in the fund.

In such cases, the amount of fees earned is subject to factors outside of the Company’s control including customer or underlying investor contributions and redemptions and financial market volatility.

27 unchanged sentences

Fund administration fees are determined based on the contractual rate applied to average daily net assets of the Victory Funds, USAA Funds and VictoryShares for which administration services are provided.

Revenue is recorded on a monthly basis when the value of

consideration is measured using actual average daily net assets and constraints are removed.

The Company’s fund administration f ee revenue is recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations.

Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets and constraints are removed.

The Company’s fund administration fee revenue is recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations.

The Company has contractual arrangements with a third party to provide certain sub-administration services.

33 unchanged sentences

The same prescribed valuation process is used to price securities in separate accounts and the Company’s other non-alternative investment vehicles for which a quotation or price evaluation is not readily available from a pricing service .

The fair value of Level III assets held by alternative investment vehicles is determined under the respective valuation policy for each fund.

The fair value of Level 3 assets held by alternative investment vehicles is determined under the respective valuation policy for each fund.

The valuation policies address the fact that substantially all the investments of a fund may not have readily available market information and therefore the fair value for these assets is typically determined using unobservable inputs and models that may include subjective assumptions.

AUM reported by the Company for alternative investment vehicles may not necessarily equal the funds’ net asset values or the total fair value of the funds’ portfolio investments as AUM represents the basis for calculating management fees.

For the periods presented, less than one percent of the Company’s total AUM were Level III assets priced without a quoted market price, broker price quote or pricing service quotation.

AUM reported by the Company for alternative investment vehicles may not necessarily equal the

funds’ net asset values or the total fair value of the funds’ portfolio investments as AUM represents the basis for calculating management fees.

For the periods presented, less than one percent of the Company’s total AUM were Level 3 assets priced without a quoted market price, broker price quote or pricing service quotation.

USAA AMCO Acquisition

Under the terms of the USAA AMCO Acquisition purchase agreement, a maximum of $ 150.0 million ($ 37.5 million per year) in contingent payments is payable to sellers based on the annual revenue of USAA Adviser attributable to all “non-managed money”-related AUM in each of the first four years following the closing.

To receive any contingent payment in respect of “non-managed money”-related assets for a given year, annual revenue from “non-managed money”-related assets must be at least 80 % of the revenue run-rate (as calculated under the Stock Purchase Agreement) of the USAA Adviser’s “non-managed money”-related assets under management as of the closing date, and to achieve the maximum contingent payment for a given year, such annual revenue must total at least 100 % of that closing date revenue run-rate.

Annual contingent payments in respect of “non-managed money”-related assets are subject to certain “catch-up” provisions set forth in the USAA Stock Purchase Agreement.

At March 31, 2022, a maximum of $ 75.0 million in contingent consideration ($ 37.5 million per year for the remaining 2 years of the earn out period) was payable to sellers.

At June 30, 2022, a maximum of $ 75.0 million in contingent consideration ($ 37.5 million per year for the remaining 2 years of the earn out period) was potentially payable to sellers.

The estimated fair value of contingent consideration payable to sellers is determined using the real options method.

3 unchanged sentences

As the contingent consideration represents a subordinate, unsecured claim of the Company, the Company assesses a discount rate which incorporates adjustments for credit risk and the subordination of the contingent consideration.

Significant inputs to the valuation of contingent consideration payable to sellers as of March 31, 2022 and December 31, 2021 are as follows and are approximate values:

March 31, 2022

Significant inputs to the valuation of contingent consideration payable to sellers as of June 30, 2022 and December 31, 2021 are as follows and are approximate values:

June 30, 2022

December 31, 2021

Non-managed money revenue average annual growth rate

Non-managed money revenue 4 year average annual growth rate

Market price of risk

3 unchanged sentences

Undiscounted estimated remaining earn out payments in millions

The estimated fair value of contingent consideration payable to sellers at March 31, 2022 was estimated at $ 66.0 million and is recorded in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets.

The estimated fair value of contingent consideration payable to sellers at June 30, 2022 was estimated at $ 57.0 million and is recorded in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets.

The decrease in the liability of $ 11.8 million from $ 68.8 million at December 31, 2021 was recorded in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations.

THB Acquisition

On March 1, 2021, the Company completed the acquisition of certain assets of THB, including without limitation, (i) certain investment advisory and business contracts, (ii) certain books and records, (iii) the investment performance track record, and (iv) all business intellectual property and proprietary software, and hired the THB investment team.

At March 1, 2021, the THB AUM that was acquired totaled $ 547 million.

THB manages responsible investment portfolios in the micro-cap, small-cap and mid-cap asset classes, including U.S., global and international strategies.

Because substantially all of the fair value of the acquired assets was concentrated in a single identifiable asset, the transaction was accounted for as an asset acquisition.

Estimated acquisition costs of $ 0.6 million were allocated to a definite-lived customer relationship intangible asset.

NEC Acquisition

5 unchanged sentences

It also provides for advance payments and catch-up payments to be made based on actual NEC net management fee revenue, as defined in the purchase agreement, as measured at the end of each 12 month anniversary of the Start Date over a six year period.

The maximum amount of contingent payments is due, less any contingent payments previously paid, upon the occurrence of certain specified events within a five year period following the Start Date.

maximum amount of contingent payments is due, less any contingent payments previously paid, upon the occurrence of certain specified events within a five year period following the Start Date.

The Company determined that substantially all of the contingent payments payable per the NEC purchase agreement represent compensation for post-closing services.

Accordingly, these contingent payments were excluded from the purchase price for the NEC Acquisition and a liability for these contingent payments was not recorded on the acquisition date.

Accordingly, these contingent payments were excluded from the purchase price for the NEC Acquisition.

The Company records compensation expense over the estimated service period on a straight-line basis in an amount equal to the total contingent payments currently forecasted to be paid.

In the first quarter of 2022, the Company recorded $ 1.8 million in NEC contingent payment compensation expense, which is included in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations.

At March 31, 2022, the liability for NEC contingent payments totaled $ 2.9 million, which is included in accrued compensation and benefits in the unaudited Condensed Consolidated Balance Sheets.

The NEC Acquisition purchase price of $ 63.1 million was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date.

The Company used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below.

The carried interests in the existing NEC Funds were not acquired in the transaction.

The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $ 41.0 million was recorded to goodwill in the unaudited Condensed Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes.

The goodwill arising from the acquisition primarily results from future earnings and cash flows from new funds expected to be launched on the NEC alternative investment platform.

The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired:

(in thousands)

Investment management fees receivable

Other receivables and prepaid expenses

Property and equipment

Other intangible assets (1)

Accounts payable and accrued expenses

Purchase price, net of cash acquired

Includes $ 14.0 million for definite-lived customer relationships with a 6 year estimated useful life and $ 9.7 million for definite-lived investment advisory contracts with a 2 year estimated useful life, which are recorded in other intangible assets, net on the unaudited Condensed Consolidated Balance Sheets.

As of March 31, 2022, the purchase price allocation for the NEC Acquisition is preliminary as all of the customary post-closing purchase adjustments have not been finalized.

In the three and six months of 2022, the Company recorded $ 1.8 million and $ 3.7 million in NEC contingent payment compensation expense, which is included in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations.

At June 30, 2022, the liability for NEC contingent payments totaled $ 4.7 million, which is included in accrued compensation and benefits in the unaudited Condensed Consolidated Balance Sheets.

As of June 30, 2022, the purchase price allocation for the NEC Acquisition is preliminary as all of the customary post-closing purchase adjustments have not been finalized.

The final purchase price allocation may reflect changes to the provisional valuations for accounts payable and accrued expenses.

2 unchanged sentences

On December 31, 2021, the Company completed the acquisition of 100 % of the equity interests of WestEnd.

Founded in 2004, and headquartered in Charlotte, North Carolina, WestEnd is an ETF strategist advisor that provides financial advisors with a turnkey, core

model allocation strategy for either a holistic solution or complementary source of alpha.

Founded in 2004, and headquartered in Charlotte, North Carolina, WestEnd is an ETF strategist advisor that provides financial advisors with a turnkey, core model allocation strategy for either a holistic solution or complementary source of alpha.

The firm offers four primary ETF strategies and one large cap core strategy in Separately Managed Account (SMA) structures.

The aggregate purchase price (the “WestEnd Purchase Price”) for the WestEnd Acquisition is estimated at $ 716.1 million, net of cash acquired, which includes (i) $ 475.8 million in cash paid at closing (the “WestEnd Closing”) net of cash acquired, plus the acquisition date value of contingent payments due to sellers of $ 239.7 million plus $ 0.6 million payable in cash for net working capital adjustments.

The contingent earn-out payments are based on net revenue of the WestEnd business during each of the first four years following the WestEnd Closing, subject to certain “catch-up” provisions over a five and one half year period following the WestEnd Closing.

2 unchanged sentences

Please refer to Note 9, Debt, for more information on the 2021 Incremental Term Loans.

A total of $ 2.9 million of the cash paid at closing was placed in escrow, of which $ 0.5 million was available for purchase price adjustments and $ 2.4 million is available to compensate the Company for eligible claims under the purchase agreement’s indemnification provisions.

In April 2022, the Company paid $ 0.6 million in cash to sellers for net working capital adjustments and the $ 0.5 million in escrow funds reserved for purchase price adjustments was released to sellers.

A total of $ 2.9 million of the cash paid at closing was placed in escrow.

In April 2022, the $ 0.5 million of escrow funds reserved for purchase price adjustments was released to sellers.

The remaining $ 2.4 million of escrow funds remains available to compensate the Company for eligible claims under the purchase agreement’s indemnification provisions.

The purchase price of $ 716.1 million was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the WestEnd Acquisition.

3 unchanged sentences

The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired:

(in thousands)

Investment management fees receivable

7 unchanged sentences

Includes $ 172.5 million for definite-lived customer relationship assets with a 10 year estimated useful life and $ 3.0 million for a definite-lived trade name asset with a 7 year estimated useful life, which are recorded in other intangible assets, net on the unaudited Condensed Consolidated Balance Sheets.

As of March 31, 2022, the purchase price allocation for the WestEnd Acquisition is preliminary as all customary post-closing purchase adjustments have not been finalized.

The final purchase price allocation may reflect changes to the provisional valuations for accounts payable and accrued expenses.

As of June 30, 2022, the purchase price allocation for the WestEnd Acquisition is preliminary as the final calculations may reflect changes to the provisional valuations for accounts payable and accrued expenses.

Adjustments will be made, as necessary, during the measurement period of up to one year after the closing date.

5 unchanged sentences

A maximum of $ 320.0 million ($ 80.0 million per year) is payable to sellers in contingent payments.

The fair value of contingent consideration payable to sellers was estimated at $ 239.0 million at March 31, 2022, a decrease of $ 0.7 million from December 31, 2021.

Significant inputs to the valuation of contingent consideration payable to sellers as of March 31, 2022 and December 31, 2021 are as follows and are approximate values:

The fair value of contingent consideration payable to sellers was estimated at $ 221.4 million at June 30, 2022, a decrease of $ 18.3 million from December 31, 2021.

Significant inputs to the valuation of contingent consideration payable to sellers as of June 30, 2022 and December 31, 2021 are as follows and are approximate values:

December 31, 2021

March 31, 2022

June 30, 2022

Acquisition Date

Net revenue average annual growth rate

Net revenue 5 year average annual growth rate

Market price of risk adjustment for revenue (continuous)

3 unchanged sentences

Undiscounted estimated remaining earn out payments $ millions

As the WestEnd Acquisition was effective at market close on December 31, 2021, the Company’s operating results for 2021 do not include WestEnd.

Actual and Pro Forma Results for WestEnd

WestEnd revenue for the three months ended March 31, 2022, was as follows:

WestEnd revenue for the three and six months ended June 30, 2022, was as follows:

Three Months Ended

Six Months Ended

(in millions)

March 31, 2022

Net income attributable to WestEnd for the three months ended March 31, 2022 is impractical to determine as the Company does not prepare discrete financial information at that level.

June 30, 2022

Net income attributable to WestEnd for the three and six months ended June 30, 2022 is impractical to determine as the Company does not prepare discrete financial information at that level.

The following Unaudited Pro Forma Condensed Combined Statement of Operations is provided for illustrative purposes only and assumes that the acquisition occurred on January 1, 2020.

3 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands, except per share amount)

March 31, 2021

June 30, 2021

Earnings per share of common stock

4 unchanged sentences

Acquisition-related costs

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

2 unchanged sentences

In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies.

The following table presents the rollforward of restructuring and integration liabilities, which are recorded in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets, for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

16 unchanged sentences

These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

The table below shows liabilities measured at fair value on a recurring basis.

As of March 31, 2022

The table below shows assets and liabilities measured at fair value on a recurring basis.

As of June 30, 2022

(in thousands)

Financial Assets

Money market funds

Investments in proprietary funds

5 unchanged sentences

Total Financial Liabilities

Contingent consideration arrangement liabilities of $ 305.0 million plus $ 0.6 million of consideration payable to sellers for WestEnd acquisition net working capital adjustments equal $ 305.6 million in consideration payable for acquisition of business on the unaudited Condensed Consolidated Balance Sheets as of March 31, 2022.

As of December 31, 2021

14 unchanged sentences

The Swap effectively fixes the interest rate at 3.22% on $450 million of the outstanding Term Loan balance through the Term Loan’s maturity in July 2026.

The fair value of the Swap is included in other assets in the unaudited Condensed Consolidated Balance Sheets at March 31, 2022 and December 31, 2021.

The fair value of the Swap is included in other assets in the unaudited Condensed Consolidated Balance Sheets at June 30, 2022 and December 31, 2021.

Pricing is determined based on a third party, model-derived valuation in which all significant inputs are observable in active markets (Level 2).

Refer to Note 14, Derivatives, for further detail on the Swap.

Contingent consideration arrangements include the USAA AMCO earn-out payment liability and the WestEnd earn-out payment liability.

Contingent consideration arrangements include the USAA AMCO Acquisition and WestEnd Acquisition earn-out payment liabilities.

Contingent consideration arrangements are included in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets.

5 unchanged sentences

Changes in the fair value of contingent consideration arrangement liabilities, realized or unrealized, are recorded in earnings and are included in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations.

The following table presents the change in contingent consideration arrangement liabilities for the three months ended March 31, 2022.

The following table presents the change in contingent consideration arrangement liabilities for the six months ended June 30, 2022.

(in thousands)

3 unchanged sentences

WestEnd change in fair value measurement

Balance, March 31, 2022

There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy from December 31, 2021 to March 31, 2022.

Balance, June 30, 2022

There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy from December 31, 2021 to June 30, 2022.

The Company recognizes transfers at the end of the reporting period.

The net carrying value of accounts receivable and accounts payable approximates fair value due to the short‑term nature of these assets and liabilities.

The fair value of our long-term debt at March 31, 2022 is considered to be its carrying value as the interest rate

on the bank debt is variable and approximates current market rates.

The fair value of our long-term debt at June 30, 2022 is considered to be its carrying value as the interest rate on the bank debt is variable and approximates current market rates.

As a result, Level 2 inputs are utilized to determine the fair value of our long‑term debt .

7 unchanged sentences

The table below presents balances and transactions involving related parties included in the unaudited Condensed Consolidated Balance Sheets and unaudited Condensed Consolidated Statements of Operations.

Included in cash and cash equivalents is cash held in the USAA Treasury Money Market Fund.

Included in receivables (investment management fees) are amounts due from the Victory Funds, USAA Funds, VictoryShares, Victory Collective Funds and other pooled investment vehicles for investment management services.

6 unchanged sentences

(in thousands)

March 31, 2022

June 30, 2022

December 31, 2021

Related party assets

Cash and cash equivalents

Receivables (investment management fees)

5 unchanged sentences

Accounts payable and accrued expenses (fund reimbursements)

Three Months Ended

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

4 unchanged sentences

General and administrative

Related party other (expense) income

Interest income and other (expense) income

At March 31, 2022 and December 31, 2021, the Company had investments in proprietary funds and deferred compensation plan investments.

Related party other income (expense)

Interest income and other income (expense)

As of June 30, 2022 and December 31, 2021, the Company had investments in proprietary funds and deferred compensation plan investments.

Investments in proprietary funds consist entirely of seed capital investments in certain Victory Funds and USAA Funds.

5 unchanged sentences

(in thousands)

As of March 31, 2022

As of June 30, 2022

As of December 31, 2021

Proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the three months ended March 31, 2022 and 2021 are as follows:

Proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the periods ended June 30, 2022 and 2021 are as follows:

(in thousands)

For the three months ended March 31, 2022

For the three months ended March 31, 2021

For the three months ended June 30, 2022

For the three months ended June 30, 2021

(in thousands)

For the six months ended June 30, 2022

For the six months ended June 30, 2021

Deferred Compensation Plan Investments

2 unchanged sentences

(in thousands)

As of March 31, 2022

As of June 30, 2022

As of December 31, 2021

Proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the three months ended March 31, 2022 and 2021 are as follows:

Proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the periods ended June 30, 2022 and 2021 are as follows :

(in thousands)

For the three months ended March 31, 2022

For the three months ended March 31, 2021

The effective tax rate for the three months ended March 31, 2022 and 2021 differs from the United States federal statutory rate primarily as a result of state and local income taxes, excess tax benefits on share-based compensation and certain non-deductible expenses.

For the three months ended March 31, 2022 and 2021, the provision for income taxes was $ 19.3 million and $ 17.7 million, respectively, and the effective tax rate for each period was 21.3 %.

No valuation allowance was recorded for deferred tax assets for the three months ended March 31, 2022 and 2021 .

For the three months ended June 30, 2022

For the three months ended June 30, 2021

(in thousands)

For the six months ended June 30, 2022

For the six months ended June 30, 2021

The effective tax rate for the three months ended June 30, 2022 and 2021 differs from the United States federal statutory rate primarily as a result of state and local income taxes, excess tax benefits on share-based compensation and certain non-deductible expenses.

For the three months ended June 30, 2022 and 2021, the provision for income taxes was $ 25.8 million and $ 20.6 million, or 24.6 % and 22.9 %, of pre-tax income respectively.

For the six months ended June 30, 2022 and 2021, the provision for income taxes was $ 45.1 million and $ 38.3 million, or 23.0 % and 22.2 %, of pre-tax income respectively.

The effective tax rate for the three and six months ended June 30, 2022 was higher than the effective tax rate for the same periods in 2021 mainly due to lower excess tax benefits on share-based compensation and an increase in certain non-deductible expenses.

No valuation allowance was recorded for deferred tax assets in the three and six months ended June 30, 2022 and 2021.

2020 Debt Repricing

3 unchanged sentences

After the Second Amendment, the applicable margin on LIBOR under the Repriced Term Loans is 2.25 %.

2021 Incremental Term Loans

2021 Debt Repricing

On December 31, 2021, the Company entered into the Third Amendment (the “Third Amendment”) to the 2019 Credit Agreement with the guarantors party thereto, Barclays Bank PLC, as administrative agent, and the lenders party thereto from time to time.

3 unchanged sentences

The Company incurred a total of $ 9.1 million of other third party costs related to the 2021 Incremental Term Loans, which were recorded as term loan debt issuance costs .

The following table presents the components of long-term debt in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

The following table presents the components of long-term debt in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021:

(in thousands)

March 31, 2022

June 30, 2022

December 31, 2021

Effective Interest Rate as of March 31, 2022

Due July 2026, 2.47 % interest rate, resets April 6, 2022

Due December 2028, 3.26 % interest rate, reset March 31, 2022

Effective Interest Rate as of June 30, 2022

Due July 2026, 3.22 % interest rate, resets July 6, 2022

Due December 2028, 4.50 % interest rate, reset June 30, 2022

Term loan principal outstanding

5 unchanged sentences

In addition, the 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0 % of the commitments thereunder (excluding certain letters of credit), of no greater than 3.80 to 1.00.

As of March 31, 2022, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with the financial performance covenant.

Repayments of outstanding term loans under the 2019 Credit Agreement totaled $ 70.0 million and $ 50.0 million for the three months ended March 31, 2022 and 2021, respectively.

Refer to Note 17, Subsequent Events, for information related to term loan activity subsequent to March 31, 2022.

The Company recognized a $ 1.6 million loss on debt extinguishment in the three months ended March 31, 2022, due to repayments of term loan principal, which consisted of the write-off of $ 1.2 million and $ 0.4 million of unamortized debt issuance costs and debt discount, respectively.

During the three months ended March 31, 2021, the Company recognized a net loss on debt extinguishment of $ 2.8 million due to repayments of term loan principal and execution of the Second Amendment, which consisted of the write-off of $ 1.8 million and $ 1.0 million of unamortized debt issuance costs and debt discount, respectively.

The following table presents the components of interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021.

For the Three Months

Ended March 31,

As of June 30, 2022, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with the financial performance covenant.

Repayments of outstanding term loans under the 2019 Credit Agreement totaled $ 45.0 million and $ 115.0 million for the three and six months ended June 30, 2022, respectively.

Refer to Note 17, Subsequent Events, for information related to term loan activity subsequent to June 30, 2022.

The Company recognized a loss on debt extinguishment of $ 1.0 million and $ 2.5 million in the three and six months ended June 30, 2022, respectively, due to repayments of term loan principal.

A total of $ 57.0 million and $ 107.0 million of the outstanding term loans under the 2019 Credit Agreement was repaid during the three and six months ended June 30, 2021, respectively.

The Company recognized a net loss on debt extinguishment of $ 1.1 million and $ 3.9 million in the three and six months ended June 30, 2021 due to term loan repayments and entering into the Second Amendment.

Interest Expense

The following table presents the components of interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations for the periods ended June 30, 2022 and 2021:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

(in thousands)

14 unchanged sentences

Balance, March 31, 2022

Issuance of shares

Repurchase of shares

Vesting of restricted share grants

Exercise of options

Shares withheld related to net settlement of equity awards

Balance, June 30, 2022

Shares of Common Stock Issued

8 unchanged sentences

Balance, March 31, 2021

Issuance of shares

Share conversion - Class B to A

Repurchase of shares

Vesting of restricted share grants

Exercise of options

Shares withheld related to net settlement of equity awards

Balance, June 30, 2021

Share Repurchase Program

In December 2021, the Company’s Board of Directors authorized a sixth share repurchase program whereby the Company may repurchase up to an additional $ 15.0 million of the Company’s Common Stock in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC.

The amount and timing of purchases under the share repurchase program authorized in December 2021 will depend on a number of factors, including the price and availability of the Company’s shares, trading volume, capital availability, Company performance and general economic and market conditions.

The program can be suspended or discontinued at any time.

The December 2021 share repurchase program took effect in January 2022, immediately upon the completion of the May 2021 share repurchase program, and expires when $ 15 million of shares are repurchased or December 31, 2022 .

During the three months ended March 31, 2022, the Company repurchased 292,570 shares of Common Stock at a total cost of $ 9.4 million for an average price of $ 32.26 per share.

As of March 31, 2022, a total of $ 6.6 million was available for future repurchases under the current share repurchase program, and a cumulative total of 4,361,057 shares of Common Stock had been repurchased under programs authorized by the Company’s Board of Directors at a total cost of $ 83.4 million for an average price of $ 19.13 per share.

On May 5, 2022, the Company’s Board of Directors approved a new share repurchase program (the “2022 Share Repurchase Program”) authorizing the repurchase of up to $ 100.0 million of the Company’s Common Stock.

Under the 2022 Share Repurchase Program, which took effect in May 2022, the Company may purchase its shares from time to time until December 31, 2023 in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC.

The amount and timing of purchases under the 2022 Share Repurchase Program will depend on a number of factors including the price and availability of the Company’s shares, trading volume, capital availability, Company performance and general economic and market conditions.

The 2022 Share Repurchase Program can be suspended or discontinued at any time.

During the three months ended June 30, 2022, the Company repurchased 640,125 shares of Common Stock at a total cost of $ 16.9 million for an average price of $ 26.41 per share.

During the six months ended June 30, 2022, 932,695 shares were repurchased at a total cost of $ 26.3 million for an average price of $ 28.25 .

As of June 30, 2022, a total of $ 89.7 million was available for future repurchases under the 2022 Share Repurchase Program, and a cumulative total of 5,001,182 shares of Common Stock had been repurchased under programs authorized by the Company’s Board of Directors at a total cost of $ 100.3 million for an average price of $ 20.06 per share.

Dividend Payments

Dividends paid or payable for the three months ended March 31, 2022 totaled $ 17.6 million and included $ 17.2 million for quarterly dividends and $ 0.4 million in cash bonuses and distributions related to dividends previously declared upon vesting of restricted stock and stock option awards.

At March 31, 2022 and December 31, 2021, the amount of cash bonuses and distributions related to dividends previously declared on unvested and outstanding restricted share awards and stock options totaled $ 0.8 million and $ 1.0 million, respectively, which was not recorded as a liability as of the balance sheet date.

Dividends paid or payable for the six months ended June 30, 2022 totaled $ 34.9 million and included quarterly dividends of $ 34.3 million and $ 0.6 million in cash bonuses and distributions related to dividends previously declared upon vesting of restricted stock and stock option awards.

At June 30, 2022 and December 31, 2021, the amount of cash bonuses and distributions related to dividends previously declared on unvested and outstanding restricted share awards and stock options totaled $ 1.0 million, which was not recorded as a liability as of the balance sheet date.

A liability will be recorded for these cash bonuses and dividends when the restricted shares and options vest.

Share‑Based Compensation

During the three months ended March 31, 2022, the Company issued restricted stock awards for 514,223 shares of Common Stock, of which awards for 7,995 shares were fully vested on the grant date, awards for 345,069 shares vest over two years , awards for 3,108 shares vest over thirty-three months and 158,051 shares vest over three years .

Stock option award and restricted stock award activity during the three months ended March 31, 2022 and 2021 was as follows:

Current Period Activity

During the three months ended June 30, 2022, the Company issued restricted stock awards for 34,314 shares of common stock, of which awards for 10,123 shares were fully vested on the grant date and awards for 24,191 shares vest over two years .

For the six months ended June 30, 2022, the Company issued restricted stock awards for 548,537 shares of common stock, of which awards for 18,118 shares were fully vested on the grant date, awards for 369,260 shares vest over two years , awards for 3,108 shares vest over thirty-three months , and awards for 158,051 shares vest over three years .

Stock option award and restricted stock award activity during the six months ended June 30, 2022 and 2021 was as follows:

Shares Subject to Stock Option Awards

Three Months Ended March 31,

Six Months Ended June 30,

Outstanding at beginning of period

Outstanding at end of period

Outstanding at end of the period

Restricted Stock Awards

Three Months Ended March 31,

Six Months Ended June 30,

Avg wtd grant-

4 unchanged sentences

Unvested at end of period

Share-Based Compensation Expense

The Company recorded $ 3.9 million and $ 5.5 million of share-based compensation expense during the three months ended March 31, 2022 and 2021, respectively, in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations.

The Company recorded $ 5.0 million and $ 4.3 million of share-based compensation expense in the three months ended June 30, 2022 and 2021, respectively, and $ 8.9 million and $ 9.9 million of share-based compensation in the six months ended June 30, 2022 and 2021, respectively, in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations.

Earnings Per Share

The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three months ended March 31, 2022 and 2021:

The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

(in thousands except per share amounts)

3 unchanged sentences

Earnings per share

Outstanding instruments excluded from the computation of weighted average shares for diluted earnings per share because the effect would be anti-dilutive were de minimus in amount for the three months ended March 31, 2022.

There were no outstanding instruments excluded from the computation of weighted average shares for diluted earnings per share because the effect would be anti-dilutive for the three months ended March 31, 2021.

Outstanding instruments excluded from the computation of weighted average shares for diluted earnings per share because the effect would be anti-dilutive was 0.5 million for the three months ended June 30, 2022.

Holders of non-vested share-based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards .

Accumulated Other Comprehensive Income (Loss )

The following table presents changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2022 and 2021.

The following table presents changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2022 and 2021.

(in thousands)

3 unchanged sentences

Net current period other comprehensive income (loss)

Balance, March 31, 2022

Balance, June 30, 2022

Balance, December 31, 2020

2 unchanged sentences

Net current period other comprehensive income (loss)

Balance, March 31, 2021

Balance, June 30, 2021

Reclassifications out of accumulated other comprehensive income (loss) related to cash flow hedges are recorded in interest expense and other financing costs.

3 unchanged sentences

Under the terms of the Swap, the Company pays interest at a fixed rate of interest on a quarterly basis and receives interest at the three-month LIBOR rate in effect for that quarter.

The notional value, fixed rate of interest and expiration date of the Swap as of March 31, 2022 were

The notional value, fixed rate of interest and expiration date of the Swap as of June 30, 2022 were

$ 450 million – 0.965 % – July 1, 2026 .

4 unchanged sentences

The Swap is assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis.

For the three months ended March 31, 2022 and since inception, the Swap was deemed to be highly effective.

For the three and six months ended June 30, 2022 and since inception, the Swap was deemed to be highly effective.

The Swap is designated as a cash flow hedge.

Accordingly, the Swap is measured at fair value with mark-to-market gains or losses deferred and included in accumulated other comprehensive income (loss) (“AOCI(L)”), net of tax, to the extent the hedge is determined to be effective.

Gains or losses from the Swap are reclassified to interest expense in the same period during which the hedged transaction affects earnings.

Accordingly, the Swap is measured at fair value with mark-to-market gains or losses deferred and included in accumulated other comprehensive income (loss), net of tax, to the extent the hedge is determined to be effective.

Gains or losses from the Swap are reclassified to interest expense in the same period during which the hedged transaction affects earnings.

The amount payable to the Swap counterparty at March 31, 2022 of $ 0.8 million is recorded in other liabilities on the unaudited Condensed Consolidated Balance Sheets.

All derivative instruments are recorded on the unaudited Condensed Consolidated Balance Sheets at fair value as an asset (if the derivative is in a gain position) or a liability (if the derivative is in a loss position).

On March 31, 2022 and December 31, 2021, the Swap had a fair value of $ 29.2 million and $ 7.8 million and was recorded in other assets.

The following table summarizes the classification of the Swap in the unaudited Condensed Consolidated Balance Sheets and the notional amount at March 31, 2022 and December 31, 2021 (in thousands):

At June 30, 2022, a de minimis amount was recorded as receivable from the Swap counterparty and included in other assets in the unaudited Condensed Consolidated Balance Sheets.

The following table summarizes the classification of the Swap in the unaudited Condensed Consolidated Balance Sheets and the notional amount at June 30, 2022 and December 31, 2021 (in thousands):

Balance Sheets

March 31, 2022

June 30, 2022

December 31, 2021

1 unchanged sentence

Notional amount

The following tables summarize the effects of the Swap in the unaudited Condensed Consolidated Statements of Operations and unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2022 and 2021 (in thousands):

The following table summarizes the effects of the Swap in the unaudited Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended

Six Months Ended

Statement of Operations

2 unchanged sentences

Three Months Ended

Six Months Ended

Statements of Comprehensive Income

Other comprehensive income

Income recognized in AOCI(L), net of tax

Other comprehensive income (loss)

Income (loss) recognized in AOCI(L), net of tax

EQUITY METHOD INVESTMENT

6 unchanged sentences

Given the level of ownership interest in Alderwood, which is an English limited liability partnership, and the fact that Alderwood will maintain specific ownership accounts for investors, the Company accounts for its investment in Alderwood using the equity method of accounting.

For each of the periods ended March 31, 2022 and 2021, losses from equity method investments recorded in interest income and other income (expense) in the unaudited Condensed Consolidated Statements of Operations were $ 0.1 million.

Equity method investments are recorded in other assets in the unaudited Condensed Consolidated Balance Sheets.

At March 31, 2022 and December 31, 2021, the Company held an equity investment in Alderwood of $ 2.5 million and $ 1.1 million, respectively.

At June 30, 2022 and December 31, 2021, the Company’s equity method investment in Alderwood totaled $ 2.3 million and $ 1.1 million, respectively.

Gains and losses from equity method investments are recorded in interest income and other income (expense) in the unaudited Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2022 and 2021, losses from equity method investments were de minimis in amount.

The Company determines if a contract is a lease at inception.

1 unchanged sentence

All of our leases are classified as operating leases.

Supplemental balance sheet information related to the Company’s operating leases as of March 31, 2022 was as follows (in thousands):

March 31, 2022

Supplemental balance sheet information related to the Company’s operating leases as of June 30, 2022 was as follows (in thousands):

June 30, 2022

Operating lease ROU assets (1)

4 unchanged sentences

Current portion and noncurrent portion of operating lease liabilities are recorded in other liabilities on the unaudited Condensed Consolidated Balance Sheets.

March 31, 2022

June 30, 2022

Weighted-average remaining lease term

Weighted-average discount rate

The components of lease expense and other lease information as of and during the three-month period ended March 31, 2022 are as follows (in thousands):

March 31, 2022

The components of lease expense and other lease information as of and during the three and six month periods ended June 30, 2022 are as follows (in thousands):

Three Months Ended

Six Months Ended

June 30, 2022

Operating lease cost

10 unchanged sentences

Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term, and associated potential option payments are excluded from lease payments.

Expenses associated with operating leases were $ 1.9 million and $ 1.8 million for the three months ended March 31, 2022 and 2021, respectively, and are recorded in general and administrative expenses on the unaudited Condensed Consolidated Statement of Operations.

Expenses associated with operating leases were $ 1.7 million and $ 3.6 million for the three and six months ended June 30, 2022, respectively, and are recorded in general and administrative expenses on the unaudited Condensed Consolidated Statement of Operations.

Expenses associated with operating leases were $ 1.8 million and $ 3.7 million for the three and six months ended June 30, 2021.

Variable lease costs, such as utilities and common area maintenance charges, are excluded from lease liabilities and expensed as incurred.

The variable lease costs are determined based on terms in the lease contracts and primarily relate to usage of the ROU asset and services received from the lessor.

The following table summarizes the maturity of our operating lease liabilities as of March 31, 2022 (in thousands):

The following table summarizes the maturity of our operating lease liabilities as of June 30, 2022 (in thousands):

Total undiscounted lease payments

2 unchanged sentences

SUBSEQUENT EVENTS

Subsequent to March 31, 2022, the Company reduced outstanding debt on the 2021 Incremental Term Loans by $ 20.0 million .

Subsequent to March 31, 2022, the Company’s Board of Directors approved a new common stock repurchase program authorizing the repurchase of up to $ 100 million of its common stock.

Under the new program, which will commence immediately upon completion of the current program, the Company may purchase its shares from time to time until December 31, 2023 in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC.

The amount and timing of the purchases will depend on a number of factors including the price and availability of the Company's shares, trading volume, capital availability, Company performance and general economic and market conditions.

The share repurchase program may be suspended or discontinued at any time.

On May 5, 2022 , the Company’s Board of Directors also approved a regular quarterly cash dividend of $ 0.25 per share.

The dividend is payable on June 27, 2022 , to shareholders of record on June 10, 2022 .

Subsequent to June 30, 2022, we reduced outstanding principal by $ 25.6 million, consisting of a $ 19.0 million reduction on the 2021 Incremental Term Loans and a $ 6.6 million reduction on the Repriced Term Loans, through repayments and open market term loan debt repurchases and retirements.

In July 2022, Alderwood decided to wind down its business and operations, including the business and operations of its private fund.

On July 31, 2022, the Company’s wholly owned subsidiary retired as a member of Alderwood thereby terminating the Company’s commitment to contribute an additional $ 3 million in capital to Alderwood and $ 50 million in capital to Alderwood’s private fund.

Alderwood returned the $ 1.5 million in capital the Company contributed pursuant to the Alderwood Amendment on July 27, 2022.

On August 4, 2022 , the Company’s Board of Directors approved a regular quarterly cash dividend of $ 0.25 per share.

The dividend is payable on September 26, 2022 , to shareholders of record on September 12, 2022 .

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