What changed in this filing

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Item 1. Financial Statements

2020-08-06 compared with 2020-05-06 · 117 added, 80 removed, 505 unchanged (28% of the section changed)

25 unchanged sentences

Equity attributable to stockholders:

Series D mandatory convertible preferred stock, $0.01 par value, 0 and 1,150,000 shares authorized, issued and outstanding at March 31, 2020 and December 31, 2019, respectively

Series D mandatory convertible preferred stock, $0.01 par value, 0 and 1,150,000 shares authorized, issued and outstanding at June 30, 2020 and December 31, 2019, respectively

Common stock, $0.01 par value, 1,000,000,000 shares authorized;

11,733,976 shares issued and 7,695,413 shares outstanding at March 31, 2020 and 10,736,887 shares issued and 6,809,280 shares outstanding at December 31, 2019, respectively

11,777,732 shares issued and 7,664,272 shares outstanding at June 30, 2020 and 10,736,887 shares issued and 6,809,280 shares outstanding at December 31, 2019, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated other comprehensive income (loss)

Treasury stock, at cost, 4,038,563 and 3,927,607 shares at March 31, 2020 and December 31, 2019, respectively

Treasury stock, at cost, 4,113,460 and 3,927,607 shares at June 30, 2020 and December 31, 2019, respectively

Total equity attributable to stockholders

5 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands, except per share data)

40 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands)

1 unchanged sentence

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment, net of tax of $9 and $(3) for the three months ended March 31, 2020 and 2019, respectively

Foreign currency translation adjustment, net of tax of $0 and $4 for the three months ended June 30, 2020 and 2019, respectively, and $9 and $1 for the six months ended June 30, 2020 and 2019, respectively

Other comprehensive income (loss)

5 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

(in thousands)

9 unchanged sentences

Realized and unrealized (gains) losses on investments, net

Distributions from equity method investments

Sales (purchases) of investments, net

58 unchanged sentences

(in thousands, except per share data)

Balances at December 31, 2018

Balances at March 31, 2019

Net income (loss)

1 unchanged sentence

Net subscriptions (redemptions) and other

Reclassification from other comprehensive (income) loss

Cash dividends declared ($1.8125 per preferred share)

4 unchanged sentences

Stock-based compensation

Balances at June 30, 2019

Balances at March 31, 2020

Net income (loss)

Foreign currency translation adjustments

Net subscriptions (redemptions) and other

Cash dividends declared ($0.67 per common share)

Repurchases of common shares

Issuance of common shares related to employee stock transactions

Taxes paid on stock-based compensation

Stock-based compensation

Balances at June 30, 2020

Permanent Equity

Temporary Equity

Preferred Stock

Retained Earnings (Accumulated

Comprehensive

Income (Loss)

Treasury Stock

Attributed To

(in thousands, except per share data)

Balances at December 31, 2018

Net income (loss)

Reclassification from other comprehensive (income) loss

Foreign currency translation adjustments

Net subscriptions (redemptions) and other

Cash dividends declared ($3.625 per preferred share)

Cash dividends declared ($1.10 per common share)

Repurchases of common shares

Issuance of common shares related to employee stock transactions

Taxes paid on stock-based compensation

Stock-based compensation

Balances at June 30, 2019

Balances at December 31, 2019

Net income (loss)

Foreign currency translation adjustments

Net subscriptions (redemptions) and other

Conversion of preferred stock

Cash dividends declared ($1.34 per common share)

Repurchases of common shares

Issuance of common shares related to employee stock transactions

1 unchanged sentence

Stock-based compensation

Balances at March 31, 2020

Balances at June 30, 2020

The accompanying notes are an integral part of these condensed consolidated financial statements.

15 unchanged sentences

In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s financial condition and results of operations.

Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 .

Operating results for the six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 .

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 ("2019 Annual Report on Form 10-K") filed with the Securities and Exchange Commission (the "SEC").

1 unchanged sentence

New Accounting Standards Implemented

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) .

In August 2018, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) .

This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, including an internal-use software license.

10 unchanged sentences

Early adoption is permitted, with the amendments to be applied on a prospective basis.

The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

The Company is currently evaluating the impact of adopting this standard on its condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

10 unchanged sentences

The following table summarizes revenue by source:

Three Months Ended March 31,

Three Months Ended

Six Months Ended

(in thousands)

14 unchanged sentences

(in thousands)

March 31, 2020

June 30, 2020

December 31, 2019

6 unchanged sentences

Activity in intangible assets, net was as follows:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

7 unchanged sentences

Investments consist primarily of investments in the Company's sponsored products.

The Company's investments, excluding the assets of consolidated investment products ("CIP") discussed in Note 15, at March 31, 2020 and December 31, 2019 were as follows:

The Company's investments, excluding the assets of consolidated investment products ("CIP") discussed in Note 15, at June 30, 2020 and December 31, 2019 were as follows:

(in thousands)

March 31, 2020

June 30, 2020

December 31, 2019

5 unchanged sentences

The Company's equity method investments are valued on a three-month lag based upon the availability of financial information.

Therefore, the equity in earnings may not reflect the effects of the market disruption that occurred in the first quarter of 2020.

Investment Securities - fair value

1 unchanged sentence

The composition of the Company’s investment securities - fair value was as follows:

March 31, 2020

June 30, 2020

December 31, 2019

5 unchanged sentences

Total investment securities - fair value

For the three months ended March 31, 2020 , the Company recognized realized losses of $ 0.3 million on the sale of its investment securities - fair value.

For the three months ended March 31, 2019 , the Company recognized realized losses of $ 0.8 million on investment securities - fair value.

For the three and six months ended June 30, 2020 , the Company recognized realized gains of less than $ 0.1 million

and realized losses of $ 0.3 million , respectively, on the sale of its investment securities - fair value.

For the three and six months ended June 30, 2019 , the Company recognized a realized gain of $ 0.2 million and a realized loss of $ 0.6 million , respectively, on the sale of its investment securities - fair value.

Fair Value Measurements

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 15, as of March 31, 2020 and December 31, 2019 by fair value hierarchy level were as follows:

March 31, 2020

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 15, as of June 30, 2020 and December 31, 2019 by fair value hierarchy level were as follows:

June 30, 2020

(in thousands)

22 unchanged sentences

Equity securities represent securities traded on active markets and are valued at the official closing price (typically the last sale or bid) on the exchange on which the securities are primarily traded and are categorized as Level 1.

Debt securities represent investments in senior secured bank loans and are based on evaluated quotations received from independent pricing services and are categorized as Level 2.

Nonqualified retirement plan assets represent mutual funds within a nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1.

Cash, accounts receivable, accounts payable and accrued liabilities equal or approximate fair value based on the short-term nature of these instruments.

The Company had no Level 3 investments for the three-month period ended March 31, 2020.

The following table is a reconciliation of assets for Level 3 investments for which significant unobservable inputs were used to determine fair value for the three months ended March 31, 2019:

Three Months Ended March 31,

The Company had no Level 3 investments for the three and six-month periods ended June 30, 2020.

The following table is a reconciliation of assets for Level 3 investments for which significant unobservable inputs were used to determine fair value for the three and six-months ended June 30, 2019:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

11 unchanged sentences

Dividends Declared

On February 26, 2020, the Company declared a quarterly cash dividend of $ 0.67 per common share to be paid on May 15, 2020 to shareholders of record at the close of business on April 30, 2020.

On May 13, 2020, the Company declared a quarterly cash dividend of $ 0.67 per common share to be paid on August 14, 2020 to stockholders of record at the close of business on July 31, 2020.

Common Stock Repurchases

During the three months ended March 31, 2020 , the Company repurchased 110,956 common shares at a weighted average price of $ 90.10 per share, for a total cost, including fees and expenses, of $ 10.0 million under its share repurchase program.

As of March 31, 2020 , 141,482 shares remained available for repurchase.

During the three and six months ended June 30, 2020 , the Company repurchased 74,897 and 185,853 common shares, respectively, at a weighted average price of $ 100.11 and $ 94.13 per share, respectively, for a total cost, including fees and expenses, of $ 7.5 million and $ 17.5 million , respectively, under its share repurchase program.

In May 2020, the Company's Board of Directors authorized an additional 750,000 shares to be repurchased under the share repurchase program.

As of June 30, 2020 , 816,585 shares remained available for repurchase.

Under the terms of the program, the Company may repurchase shares of its common stock from time to time at its discretion through open market repurchases, privately negotiated transactions and/or other mechanisms, depending on price and prevailing market and business conditions.

1 unchanged sentence

Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2020 and 2019 were as follows:

The changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2020 and 2019 were as follows:

(in thousands)

4 unchanged sentences

Net current-period other comprehensive income (loss)

Balance at March 31, 2020

Balance at June 30, 2020

(in thousands)

5 unchanged sentences

Net current-period other comprehensive income (loss)

Balance at March 31, 2019

Balance at June 30, 2019

Stock-Based Compensation

Pursuant to the Company's Omnibus Incentive and Equity Plan (the "Plan"), officers, employees and directors may be granted equity-based awards, including restricted stock units ("RSUs"), performance stock units ("PSUs"), stock options and unrestricted shares of common stock.

At March 31, 2020 , 364,416 shares of common stock remained available for issuance of the 2,820,000 shares that are authorized for issuance under the Plan.

At June 30, 2020 , 337,091 shares of common stock remained available for issuance of the 2,820,000 shares that are authorized for issuance under the Plan.

Stock based compensation expense is summarized as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

4 unchanged sentences

Shares that are issued upon vesting are newly issued shares from the Plan and are not issued from treasury stock.

RSU activity for the three months ended March 31, 2020 is summarized as follows:

RSU activity for the six months ended June 30, 2020 is summarized as follows:

Weighted Average

Outstanding at December 31, 2019

Outstanding at March 31, 2020

For the three months ended March 31, 2020 and 2019 , a total of 41,426 and 47,658 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations.

The Company paid $ 3.6 million and $ 4.8 million for the three months ended March 31, 2020 and 2019 , respectively, in minimum employee tax withholding obligations related to RSUs withheld for net share settlements.

Outstanding at June 30, 2020

For the six months ended June 30, 2020 and 2019 , a total of 62,899 and 57,411 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations.

The Company paid $ 5.5 million and $ 5.8 million for the six months ended June 30, 2020 and 2019 , respectively, in minimum employee tax withholding obligations related to RSUs withheld for net share settlements.

These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have been otherwise issued as a result of the vesting.

During the three months ended March 31, 2020 , the Company granted 68,371 PSUs, included in the table above, that contain performance-based metrics in addition to a service condition.

During the six months ended June 30, 2020 , the Company granted 68,371 PSUs, included in the table above, that contain performance-based metrics in addition to a service condition.

Compensation expense for PSUs is generally recognized over a three -year service period based upon the value determined using a combination of (i) the intrinsic value method, for awards that contain a performance metric that represents a "performance condition" in accordance with ASC 718 and (ii) the Monte Carlo simulation valuation model for awards that contain a "market condition" performance metric under ASC 718.

Compensation expense for PSU awards that contain a market condition is fixed at the date of grant and will not be adjusted in future periods based upon the achievement of the market condition.

Compensation expense for PSU awards that contain a market condition is fixed at the date of grant and will not be adjusted in

future periods based upon the achievement of the market condition.

Compensation expense for PSU awards with a performance condition is recorded each period based upon a probability assessment of the expected outcome of the performance metric with a final adjustment upon measurement at the end of the performance period.

As of March 31, 2020 , unamortized stock-based compensation expense for unvested RSUs and PSUs was $ 33.1 million , with a weighted-average remaining amortization period of 1.7 years .

Stock Options

Stock options generally cliff vest after three years and have a contractual life of 10 years.

Stock option activity for the three months ended March 31, 2020 is summarized as follows:

Exercise Price

Outstanding at December 31, 2019

Outstanding, vested and exercisable at March 31, 2020

As of June 30, 2020 , unamortized stock-based compensation expense for unvested RSUs and PSUs was $ 30.0 million , with a weighted-average remaining amortization period of 1.6 years .

Earnings (Loss) Per Share

4 unchanged sentences

The computation of basic and diluted EPS is as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended

(in thousands, except per share amounts)

10 unchanged sentences

The following table details the securities that have been excluded from the above computation of weighted-average number of shares for diluted EPS, because the effect would be anti-dilutive:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Restricted stock units and options

Preferred stock

Total anti-dilutive securities

2 unchanged sentences

The provision for income taxes reflected U.S.

federal, state and local taxes at an estimated effective tax rate of 91.1 % and 15.8 % for the three months ended March 31, 2020 and 2019 , respectively.

The increase in the estimated effective tax rate for the three months ended March 31, 2020 was primarily due to unrealized losses on various Company investments for which a valuation allowance is recorded.

federal, state and local taxes at an estimated effective tax rate of 50.9 % and 20.5 % for the six months ended June 30, 2020 and 2019 , respectively.

The comparatively higher estimated effective tax rate for the six months ended June 30, 2020 was primarily due to unrealized losses on certain Company investments for which a valuation allowance was recorded.

C redit Agreement

The Company's credit agreement, as amended (the "Credit Agreement"), is comprised of (i) $ 365.0 million of seven-year term debt (the "Term Loan") expiring in June 2024 and (ii) a $ 100.0 million five-year revolving credit facility (the "Credit Facility") expiring in June 2022.

During the three months ended March 31, 2020 , the Company reduced its Term Loan by $ 27.5 million , including the retirement of $ 10.0 million of principal for $ 8.9 million from certain debt holders in accordance with the prepayment provisions in the Credit Agreement.

At March 31, 2020 , $ 258.2 million was outstanding under the Term Loan, and the Company had no outstanding borrowings under its Credit Facility.

In accordance with ASC 835, Interest, the amounts outstanding under the Company's Term Loan are presented on the Condensed Consolidated Balance Sheet net of related debt issuance costs, which were $ 6.7 million as of March 31, 2020 .

During the six months ended June 30, 2020 , the Company reduced its Term Loan by $ 45.0 million , including the retirement of $ 10.0 million of principal for $ 8.9 million from certain debt holders in accordance with the prepayment provisions in the Credit Agreement.

At June 30, 2020 , $ 240.7 million was outstanding under the Term Loan, and the Company had no outstanding borrowings under its Credit Facility.

Commitments and Contingencies

9 unchanged sentences

Based on information currently available, available insurance coverage, indemnities and established reserves, the Company believes that the outcomes of its legal and regulatory proceedings are not likely, either individually or in the aggregate, to have a material adverse effect on the Company’s results of operations, cash flows or its consolidated financial condition.

However, in the event of unexpected subsequent developments and given the

inherent unpredictability of these legal and regulatory matters, the Company can provide no assurance that its assessment of any claim, dispute, regulatory examination or investigation or other legal matter will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.

However, in the event of unexpected subsequent developments and given the inherent unpredictability of these legal and regulatory matters, the Company can provide no assurance that its assessment of any claim, dispute, regulatory examination or investigation or other legal matter will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.

Redeemable Noncontrolling Interests

5 unchanged sentences

Minority interests in an affiliate are recorded at estimated redemption value within redeemable noncontrolling interests on the Company's Condensed Consolidated Balance Sheets, and changes in estimated redemption value of these interests are recorded in the Company’s Condensed Consolidated Statements of Operations within noncontrolling interests.

Redeemable noncontrolling interests for the three months ended March 31, 2020 included the following amounts:

Redeemable noncontrolling interests for the six months ended June 30, 2020 included the following amounts:

(in thousands)

5 unchanged sentences

Net subscriptions (redemptions) and other

Balances at March 31, 2020

Balances at June 30, 2020

(1) Relates to noncontrolling interests redeemable at other than fair value.

11 unchanged sentences

The consolidation and deconsolidation of these investment products have no impact on net income (loss) attributable to stockholders.

The Company’s risk with respect to these investment products is limited to its beneficial interests in

these products.

The Company’s risk with respect to these investment products is limited to its beneficial interests in these products.

The Company has no right to the benefits from, and does not bear the risks associated with, these investment products beyond the Company’s investments in, and fees generated from, these products.

The following table presents the balances of CIP that, after intercompany eliminations, were reflected in the Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019 :

March 31, 2020

The following table presents the balances of CIP that, after intercompany eliminations, were reflected in the Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019 :

June 30, 2020

December 31, 2019

7 unchanged sentences

The majority of the Company's CIP that are VIEs are CLOs.

At March 31, 2020 , the Company consolidated six CLOs.

At June 30, 2020 , the Company consolidated six CLOs.

The financial information of certain CLOs is included in the Company's condensed consolidated financial statements on a one-month lag based upon the availability of the fund financial information.

1 unchanged sentence

Investments of CLOs

The CLOs' held investments of $ 2.1 billion at March 31, 2020 consisting of bank loan investments, which comprise the majority of the CLOs' portfolio asset collateral and are senior secured corporate loans across a variety of industries.

The CLOs held investments of $ 2.2 billion at June 30, 2020 consisting of bank loan investments, which comprise the majority of the CLOs' portfolio asset collateral and are senior secured corporate loans across a variety of industries.

These bank loan investments mature at various dates between 2020 and 2028 and pay interest at LIBOR plus a spread of up to 8.50 % .

The CLOs may elect to reinvest any prepayments received on bank loan investments between April 2020 and January 2025, depending on the CLO.

The CLOs may elect to reinvest any prepayments received on bank loan investments up until the periods between October 2019 and March 2025, depending on the CLO.

Generally, subsequent prepayments received after the reinvestment period must be used to pay down the note obligations.

At March 31, 2020 , the fair value of the senior bank loans exceeded the unpaid principal balance by $ 121.9 million .

At March 31, 2020 , there were no material collateral assets in default.

At June 30, 2020 , the fair value of the senior bank loans was less than the unpaid principal balance by $ 219.3 million .

At June 30, 2020 , there were no material collateral assets in default.

Notes Payable of CLOs

4 unchanged sentences

The secured notes of the consolidated CLOs have contractual recourse only to the related assets of the CLO and are classified as financial liabilities.

Although these beneficial interests are eliminated upon consolidation, the application of the measurement alternative prescribed by ASU 2014-13, Consolidation (Topic 810) ("ASU 2014-13") results in the net assets of the consolidated CLOs shown above to be equivalent to the beneficial interests retained by the Company at March 31, 2020 , as shown in the table below:

(in thousands)

2 unchanged sentences

Total beneficial interests

As noted above, the financial information of certain CLOs are included in the Company's condensed consolidated financial statements on a one-month lag based upon the availability of financial information.

The Company's beneficial interest consisting of subordinated notes in the CLOs decreased by approximately $ 20.0 million during the month of March 2020 primarily driven by decreases in the fair values of bank loan assets as result of the COVID-19 pandemic and its economic effects , which is not reflected in the CLOs current period results.

The following table represents income and expenses of the consolidated CLOs included in the Company’s Condensed Consolidated Statements of Operations for the period indicated:

(in thousands)

Three Months Ended March 31, 2020

Six Months Ended June 30, 2020

Realized and unrealized gain (loss), net

7 unchanged sentences

(in thousands)

Three Months Ended March 31, 2020

Six Months Ended June 30, 2020

Distributions received and unrealized gains (losses) on the subordinated notes held by the Company

2 unchanged sentences

Fair Value Measurements of CIP

The assets and liabilities of CIP measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 by fair value hierarchy level were as follows:

As of March 31, 2020

The assets and liabilities of CIP measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 by fair value hierarchy level were as follows:

As of June 30, 2020

(in thousands)

19 unchanged sentences

Level 2 investments represent most debt securities, including bank loans and certain equity securities (including non-U.S.

securities), for which closing prices are not readily available or are deemed to not reflect readily available market prices, and are valued using an independent pricing service.

securities), for which closing prices are not readily available or are deemed to not reflect readily available market prices,

and are valued using an independent pricing service.

Debt investments are valued based on quotations received from independent pricing services or from dealers who make markets in such securities.

11 unchanged sentences

The cash pledged or on deposit is recorded in the Condensed Consolidated Balance Sheets of the Company as Cash pledged or on deposit of CIP.

The fair value of such derivatives at March 31, 2020 was immaterial.

The fair value of such derivatives at June 30, 2020 was immaterial.

Notes payable represent notes issued by CIP CLOs and are measured using the measurement alternative in ASU 2014-13.

3 unchanged sentences

Short sales are recorded in the Condensed Consolidated Balance Sheets within other liabilities of CIP and are classified as Level 1 based on the underlying equity security.

The securities purchase payable at March 31, 2020 and December 31, 2019 approximated fair value due to the short-term nature of the instruments.

The securities purchase payable at June 30, 2020 and December 31, 2019 approximated fair value due to the short-term nature of the instruments.

The following table is a reconciliation of assets of CIP for Level 3 investments for which significant unobservable inputs were used to determine fair value:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

10 unchanged sentences

The Company serves as the collateral manager for other collateralized loan and collateralized bond obligations (collectively, "CDOs") that are not consolidated.

The assets and liabilities of these CDOs reside in bankruptcy remote, special purpose entities in which the Company has no ownership of, nor holds any notes issued by, the CDOs, and provides neither recourse nor guarantees.

The assets and liabilities of these CDOs reside in bankruptcy remote, special

purpose entities in which the Company has no ownership of, nor holds any notes issued by, the CDOs, and provides neither recourse nor guarantees.

The Company has determined that the investment management fees it receives for serving as collateral manager for these CDOs did not represent a variable interest since (i) the fees the Company earns are compensation for services provided and are commensurate with the level of effort required to provide the investment management services, (ii) the Company does not hold other interests in the CDOs that individually, or in the aggregate, would absorb more than an insignificant amount of the CDOs' expected losses or receive more than an insignificant amount of the CDOs' expected residual return, and (iii) the investment management arrangement only includes terms, conditions and amounts that are customarily present in arrangements for similar services negotiated at arm's length.

1 unchanged sentence

The Company is not the primary beneficiary as its interest in these entities does not provide the Company with the power to direct the activities that most significantly impact the entities' economic performance.

At March 31, 2020 , the carrying value and maximum risk of loss related to the Company's interest in these VIEs was $ 15.2 million .

At June 30, 2020 , the carrying value and maximum risk of loss related to the Company's interest in these VIEs was $ 14.6 million .

Subsequent Events

On July 4, 2020, two wholly-owned subsidiaries of the Company entered into an agreement with Allianz Global Investors U.S.

LLC and Allianz Global Investors Distributors LLC (collectively, "AllianzGI") allowing the Company to be the investment adviser, distributor and/or administrator of certain AllianzGI's open-end, closed-end and retail separate account assets.

The agreement is subject to the approval of the AllianceGI U.S.

Funds Board and fund shareholders and is expected to close near year-end 2020.

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