What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-08 compared with 2024-08-08 · 82 added, 84 removed, 310 unchanged (35% of the section changed)

53 unchanged sentences

In many of these firms, we have a number of products that are on preferred "recommended" lists and on fee-based advisory programs.

Our private client business is marketed directly to individual clients by financial advisory teams at our affiliated investment managers.

Our wealth management business is marketed directly to individual clients by financial advisory teams at our affiliated investment managers.

Financial Highlights

▪ Net income per diluted share was $2.43 in the second quarter of 2024, a decrease of $1.67, or 40.7%, compared to net income per diluted share of $4.10 in the second quarter of 2023.

▪ Total sales were $6.1 billion in the second quarter of 2024, a decrease of $1.4 billion, or 19.0%, from $7.6 billion in the second quarter of 2023.

Net flows were $(2.6) billion in the second quarter of 2024 compared to neutral net flows in the second quarter of 2023.

▪ Assets under management were $173.6 billion at June 30, 2024, an increase of $5.3 billion, or 3.1%, from June 30, 2023.

▪ Total revenues were $227.0 million in the third quarter of 2024, an increase of $7.8 million, or 3.5%, compared to total revenues of $219.3 million in the third quarter of 2023.

▪ Operating income was $55.3 million in the third quarter of 2024, an increase of $10.4 million, or 23.1%, compared to $44.9 million in the third quarter of 2023.

▪ Net income per diluted share was $5.71 in the third quarter of 2024, an increase of $1.52, or 36.3%, compared to net income per diluted share of $4.19 in the third quarter of 2023.

Assets Under Management

At June 30, 2024, total assets under management were $173.6 billion, representing an increase of $5.3 billion, or 3.1%, from June 30, 2023, and an increase of $1.3 billion, or 0.8%, from December 31, 2023.

The increase in total assets under management from June 30, 2023 included $16.9 billion from positive market performance partially offset by $9.2 billion of net outflows.

Total sales were $6.6 billion in the third quarter of 2024, an increase of $0.8 billion, or 13.5%, from $5.8 billion in the third quarter of 2023.

Net flows were $(1.7) billion in the third quarter of 2024 compared to net flows of $(1.5) billion in the third quarter of 2023.

At September 30, 2024, total assets under management were $183.7 billion, representing an increase of $21.2 billion, or 13.0%, from September 30, 2023, and an increase of $11.5 billion, or 6.7%, from December 31, 2023.

The increase in total assets under management from September 30, 2023 included $33.0 billion from positive market performance partially offset by $9.4 billion of net outflows.

The increase in total assets under management from December 31, 2023 included $18.7 billion from positive market performance partially offset by $5.6 billion of net outflows.

1 unchanged sentence

The following table summarizes our assets under management by product:

As of June 30, Change

As of September 30, Change

(in millions) 2024 2023 $ %

16 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2024 2023 2024 2023

23 unchanged sentences

Ending balance $ 50,610 $ 38,665 $ 50,610 $ 38,665

Three Months Ended

June 30, Six Months Ended

(in millions) 2024 2023 2024 2023

Institutional Accounts (4)

20 unchanged sentences

The following table summarizes assets under management by asset class:

As of June 30, Change % of Total

As of September 30, Change % of Total

(in millions) 2024 2023 $ % 2024 2023

8 unchanged sentences

The following tables summarize the average management fees earned in basis points and average assets under management:

Three Months Ended June 30,

Three Months Ended September 30,

Average Fee Earned

8 unchanged sentences

All Products 41.9 42.0 $ 175,990 $ 167,872

Six Months Ended June 30,

Nine Months Ended September 30,

Average Fee Earned

22 unchanged sentences

Average fees earned will vary based on several factors, including the asset mix and expense reimbursements to the funds.

The average fee rate earned on all products was flat for the three and six months ended June 30, 2024 compared to the same periods in the prior year.

The average fee rate earned on all products was flat for the three and nine months ended September 30, 2024 compared to the same periods in the prior year.

Results of Operations

1 unchanged sentence

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

(in thousands) 2024 2023 $ % 2024 2023 $ %

6 unchanged sentences

Interest income (expense), net 9,671 8,235 1,436 17.4 % 26,019 23,689 2,330 9.8 %

Income (loss) before income taxes 37,770 41,090 (3,320) (8.1) % 84,468 84,436 32 N/M

Income (loss) before income taxes 64,901 50,335 14,566 28.9 % 149,369 134,771 14,598 10.8 %

Income tax expense (benefit) 15,797 12,181 3,616 29.7 % 36,376 31,794 4,582 14.4 %

Net income (loss) 49,104 38,154 10,950 28.7 % 112,993 102,977 10,016 9.7 %

Noncontrolling interests (8,408) 77 (8,485) N/M (16,417) 4,058 (20,475) N/M

Noncontrolling interests (8,124) (7,248) (876) 12.1 % (24,541) (3,190) (21,351) 669.3 %

Net Income (Loss) Attributable to Virtus Investment Partners, Inc.

1 unchanged sentence

Earnings (loss) per share-diluted $ 5.71 $ 4.19 $ 1.52 36.3 % $ 12.23 $ 13.50 $ (1.27) (9.4) %

N/M = Not Meaningful

In the second quarter of 2024, total revenues increased 5.1% to $224.4 million from $213.5 million in the second quarter of 2023, primarily as a result of increased average assets under management during the current year period compared to the prior year period.

Operating income increased $5.2 million to $44.2 million in the second quarter of 2024 compared to $39.0 million in the second quarter of 2023, due primarily to the aforementioned increased revenue, partially offset by increased operating expenses.

In the third quarter of 2024, total revenues increased 3.5% to $227.0 million from $219.3 million in the third quarter of 2023, primarily as a result of increased average assets under management during the current year period compared to the prior year period.

Operating income increased $10.4 million to $55.3 million in the third quarter of 2024 compared to $44.9 million in the third quarter of 2023, due primarily to the aforementioned increased revenue, as well as decreased operating expenses.

Revenues by source were as follows:

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

(in thousands) 2024 2023 $ % 2024 2023 $ %

11 unchanged sentences

Investment management fees are earned based on a percentage of assets under management and are paid pursuant to the terms of the respective investment management agreements, which generally require monthly or quarterly payments.

Investment management fees increased by $11.7 million, or 6.5%, and $35.6 million, or 10.3% for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year primarily due to the increase in average

assets under management.

Investment management fees increased by $9.0 million, or 4.9%, and $44.5 million, or 8.4%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year primarily due to the increase in average assets under management.

Distribution and Service Fees

Distribution and service fees are sales- and asset-based fees earned from open-end funds for marketing and distribution services.

Distribution and service fees decreased by $0.7 million, or 5.1%, and $0.8 million, or 3.0%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.

Distribution and service fees decreased by $0.8 million, or 5.3%, and $1.6 million, or 3.8%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.

Administration and Shareholder Service Fees

1 unchanged sentence

retail funds, ETFs and certain closed-end funds.

Fund administration and shareholder service fees remained consistent during the three months ended June 30, 2024 compared to the same period in the prior year and increased by $0.4 million, or 1.1%, for the six months ended June 30, 2024, compared to the same period in the prior year.

The increase for the six-month period was primarily due to the increase in average assets under management of our U.S.

retail funds and ETFs.

Fund administration and shareholder service fees decreased by $0.5 million, or 2.7% for the three months ended September 30, 2024 and remained consistent during the nine months ended September 30, 2024, compared to the same periods in the prior year.

The decrease during the three-month period is due to the decrease in average assets under management of our U.S.

retail funds.

Other Income and Fees

Other income and fees primarily represent fees related to other fee-earning assets and contingent sales charges earned from investor redemptions of certain shares sold without a front-end sales charge.

Other income and fees decreased by $0.2 million, or 14.4%, for the three months ended June 30, 2024, and remained consistent during the six months ended June 30, 2024 compared to the same periods in the prior year.

The decrease during the three-month period is primarily due to lower fees earned on other fee-earning assets and lower fees received for trading and investment services.

Other income and fees primarily represent fees related to other fee-earning assets and marketing fees earned on certain ETFs.

Other income and fees remained consistent during the three and nine months ended September 30, 2024 compared to the same periods in the prior year.

Operating Expenses

1 unchanged sentence

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

(in thousands) 2024 2023 $ % 2024 2023 $ %

4 unchanged sentences

Other operating expenses of CIP 465 553 (88) (15.9) % 4,064 1,613 2,451 152.0 %

Change in fair value of contingent consideration (3,300) (6,800) 3,500 (51.5) % (3,300) (6,800) 3,500 (51.5) %

Restructuring expense 690 — 690 N/M 1,487 — 1,487 N/M

Change in fair value of contingent consideration (4,000) — (4,000) N/M (7,300) (6,800) (500) 7.4 %

Restructuring expense — 691 (691) (100.0) % 1,487 691 796 115.2 %

Depreciation expense 2,330 1,504 826 54.9 % 6,628 4,134 2,494 60.3 %

4 unchanged sentences

Employment expenses consist of fixed and variable compensation and related employee benefit costs.

Employment expenses of $105.7 million increased by $1.0 million, or 0.9%, for the three months ended June 30, 2024 primarily due to an increase in profit- and sales-based compensation.

Employment expenses increased by $17.5 million, or 8.6%, for the six months ended June 30, 2024, compared to the same period in the prior year primarily due to an increase in profit- and sales-based compensation and the addition of AlphaSimplex.

Employment expenses of $105.6 million increased by $4.0 million, or 3.9%, for the three months ended September 30, 2024 primarily due to an increase in sales- and profit-based compensation.

Employment expenses increased by $21.5 million, or 7.0%, for the nine months ended September 30, 2024, compared to the same period in the prior year primarily due to an increase in profit- and sales-based compensation and the addition of AlphaSimplex.

Distribution and Other Asset-Based Expenses

1 unchanged sentence

These payments are primarily based on assets under management.

Distribution and other asset-based expenses also include the amortization of deferred sales commissions related

to up-front commissions on shares sold without a front-end sales charge to shareholders.

The deferred sales commissions are amortized on a straight-line basis over the period commissions are recovered from distribution fee revenues and contingent sales charges received upon redemption of shares.

During the three and six months ended June 30, 2024, distribution and other asset-based expenses decreased by $1.8 million, or 6.9%, and $1.1 million, or 2.3%, respectively, compared to the same periods in the prior year primarily due to decreases in assets under management in share classes that have asset-based distribution and other expenses.

Distribution and other asset-based expenses remained consistent for the three months ended September 30, 2024 and decreased by $1.1 million, or 1.5%, for the nine months ended September 30, 2024 compared to the same periods in the prior year.

The decrease during the nine-month period was primarily due to decreases in assets under management in share classes that have asset-based distribution and other asset-based expenses.

Other Operating Expenses

Other operating expenses primarily consist of investment research and technology costs, professional fees, travel and distribution-related costs, rent and occupancy expenses, and other business costs.

Other operating expenses remained consistent during the three and six months ended June 30, 2024 compared to the same periods in the prior year.

Other operating expenses primarily consist of investment research and data costs, software application and development expenses, professional fees, travel and distribution-related costs, rent and occupancy expenses, and other business costs.

Other operating expenses remained consistent during the three and nine months ended September 30, 2024 compared to the same periods in the prior year.

Other Operating Expenses of CIP

Other operating expenses of CIP increased by $2.5 million, or 708.1%, and $2.5 million, or 239.5%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year primarily due to the refinancing of two CLOs in the current year periods.

Other operating expenses of CIP remained consistent for the three months ended September 30, 2024 and increased by $2.5 million, or 152.0%, for the nine months ended September 30, 2024, compared to the same periods in the prior year.

The increase during the nine-month period was primarily due to the refinancing of two CLOs in the current year to date period.

Change in Fair Value of Contingent Consideration

1 unchanged sentence

The change in fair value is recorded in the current period as a gain or loss.

The $3.5 million change in fair value of contingent consideration for the three and six months ended June 30, 2024 compared to the same periods in the prior year was primarily attributable to changes in underlying performance estimates.

The $4.0 million and $0.5 million changes in fair value of contingent consideration for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year were primarily attributable to changes in underlying performance estimates.

Depreciation Expense

Depreciation expense consists primarily of the straight-line depreciation of furniture, equipment and leasehold improvements.

Depreciation expense increased $0.8 million, or 52.9%, and $1.7 million, or 63.4%, for the three and six months ended June 30, 2024, compared to the same periods in the prior year.

The increase during both periods was primarily due to the acceleration of deprecation on leasehold improvements in the current year periods, software and equipment purchases in the current and prior year periods and depreciation expense for new office space.

Depreciation expense increased $0.8 million, or 54.9%, and $2.5 million, or 60.3%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year.

The increase during both periods was primarily due to the acceleration of depreciation on leasehold improvements associated with a terminated lease in the current year periods, software and equipment purchases and depreciation expense associated with new office space.

Amortization Expense

Amortization expense consists of the amortization of definite-lived intangible assets over their estimated useful lives.

Amortization expense decreased $0.6 million, or 3.9%, for the three months ended June 30, 2024, compared to the same period in the prior year, primarily due to intangible assets becoming fully amortized during the current year period.

Amortization expense increased by $0.3 million, or 1.1%, for the six months ended June 30, 2024, compared to the same period in the prior year, primarily due to the addition of AlphaSimplex intangible assets in the second quarter of the prior year partially offset by intangible assets becoming fully amortized during the current year period.

Amortization expense decreased $2.5 million, or 16.2%, for the three months ended September 30, 2024, compared to the same period in the prior year, primarily due to intangible assets becoming fully amortized during the current year period.

Amortization expense decreased by $2.2 million, or 4.7%, for the nine months ended September 30, 2024, compared to the same period in the prior year, primarily due to intangible assets becoming fully amortized during the current year period partially offset by the addition of AlphaSimplex intangible assets in the second quarter of the prior year.

Other Income (Expense)

1 unchanged sentence

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

(in thousands) 2024 2023 $ % 2024 2023 $ %

5 unchanged sentences

Realized and unrealized gain (loss) on investments, net

Realized and unrealized gain (loss) on investments, net changed during the three and six months ended June 30, 2024 by $(3.3) million and $(2.5) million, respectively, compared to the same periods in the prior year.

Realized and unrealized gain (loss) on investments, net changed during the three and nine months ended September 30, 2024 by $6.5 million and $3.9 million, respectively, compared to the same periods in the prior year.

The realized and unrealized gains and losses reflect changes in overall market conditions for the respective periods.

Realized and unrealized gain (loss) of CIP, net

Realized and unrealized gain (loss) of CIP, net changed by $(8.5) million and $(9.6) million for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year.

The change for the three months ended June 30, 2024 consisted primarily of changes in unrealized losses of $32.1 million related to the value of the notes payable, partially offset by net unrealized and realized gains of $23.6 million due to changes in market values of leveraged loans.

The change for the six months ended June 30, 2024 consisted primarily of changes in unrealized losses of $15.3 million related to the value of the notes payable, partially offset by net unrealized and realized gains of $5.7 million due to changes in market values of leveraged loans.

Realized and unrealized gain (loss) of CIP, net changed by $(4.1) million and $(13.7) million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year.

The change for the three months ended September 30, 2024 consisted primarily of changes in net unrealized and realized losses of $51.8 million, due to changes in market values of leveraged loans, partially offset by unrealized gains of $47.7 million related to the value of the notes payable.

The change for the nine months ended September 30, 2024 consisted primarily of changes in net unrealized and realized losses of $46.1 million, due to changes in market values of leveraged loans partially offset by unrealized gains of $32.4 million related to the value of the notes payable.

Other income (expense), net

Other income (expense), net changed by $1.4 million and $2.3 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year primarily due to changes in the gains and losses on our equity method investments.

Other income (expense), net changed by $0.4 million and $2.8 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year primarily due to changes in the gains and losses on our equity method investments.

Interest Income (Expense)

1 unchanged sentence

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

(in thousands) 2024 2023 $ % 2024 2023 $ %

6 unchanged sentences

Interest Expense

Interest expense decreased $0.6 million, or 9.7%, for the three months ended June 30, 2024 and remained consistent during the six months ended June 30, 2024.

The decrease during the three-month period was primarily due to lower average debt outstanding during the current year period.

Interest expense decreased $0.4 million, or 6.7%, and $0.3 million, or 2.0%, for the three and nine months ended September 30, 2024, respectively, primarily due to lower average debt outstanding during the current year periods.

Interest and Dividend Income

Interest and dividend income remained consistent during the three and six months ended June 30, 2024 compared to the same periods in the prior year.

Interest and dividend income remained consistent during the three and nine months ended September 30, 2024 compared to the same periods in the prior year.

Interest and Dividend Income of Investments of CIP

Interest and dividend income of investments of CIP increased $4.5 million, or 9.4%, and $8.8 million, or 9.3% for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year.

Interest and dividend income of investments of CIP increased $0.8 million, or 1.7%, and $9.6 million, or 6.7% for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year.

The increases were primarily due to the addition of a CLO in the third quarter of 2023 and higher average interest rates during the current year periods.

1 unchanged sentence

Interest expense of CIP represents interest expense on the notes payable of CIP.

Interest expense of CIP increased by $3.2 million, or 8.3%, and $8.0 million, or 10.9% for the three and six months ended June 30, 2024, compared to the same periods in the prior year primarily due to the addition of a CLO in the third quarter of 2023 and higher average interest rates in the current year periods.

Interest expense of CIP remained consistent for the three months ended September 30, 2024 compared to the same period in the prior year and increased by $7.9 million, or 7.0% for the nine months ended September 30, 2024 compared to the same period in the prior year.

The increase for the current year to date period is primarily attributable to the addition of a CLO in the third quarter of 2023.

Income Tax Expense (Benefit)

The provision for income taxes reflected U.S.

federal, state and local taxes at an estimated effective tax rate of 24.4% and 23.2% for the six months ended June 30, 2024 and 2023, respectively.

The higher estimated effective tax rate for the six months ended June 30, 2024 was primarily due to a change in excess tax benefits associated with stock-based compensation and the change in valuation allowances in the current year related to the tax effects of unrealized gains on certain of our investments.

federal, state and local taxes at an estimated effective tax rate of 24.4% and 23.6% for the nine months ended September 30, 2024 and 2023, respectively.

The higher estimated effective tax rate for the nine months ended September 30, 2024 was primarily due to a change in excess tax benefits associated with stock-based compensation.

Liquidity and Capital Resources

1 unchanged sentence

The following table summarizes certain financial data relating to our liquidity and capital resources:

September 30,

2024 December 31, 2023 Change

7 unchanged sentences

Total equity 892,722 868,289 24,433 2.8 %

Six Months Ended

June 30, Change

(in thousands) 2024 2023 $ %

Nine Months Ended

September 30, Change

(in thousands, Provided by (Used in);

2024 2023 $ %

Cash Flow Data

Provided by (Used in):

Operating activities $ 104,562 $ 229,840 $ (125,278) (54.5) %

1 unchanged sentence

Financing activities (129,506) (285,769) 156,263 (54.7) %

At June 30, 2024, we had $183.0 million of cash and cash equivalents and $122.3 million of investments, which included $86.2 million of investment securities, compared to $239.6 million of cash and cash equivalents and $132.7 million of investments, which included $97.3 million of investment securities, at December 31, 2023.

At September 30, 2024, we had $195.5 million of cash and cash equivalents and $164.7 million of investments, which included $127.9 million of investment securities, compared to $239.6 million of cash and cash equivalents and $132.7 million of investments, which included $97.3 million of investment securities, at December 31, 2023.

Uses of Capital

Our operating expenses consist of employee compensation and related benefit costs and other operating expenses, which primarily consist of investment research, technology costs, professional fees, distribution and occupancy costs, as well as interest on our indebtedness and income taxes.

Our operating expenses consist of employee compensation and related benefit costs and other operating expenses, which primarily consist of investment research and data costs, software application and development expenses, professional fees, distribution and occupancy costs, as well as interest on our indebtedness and income taxes.

Annual incentive compensation, our largest annual operating cash expenditure, is paid in the first quarter of the year.

10 unchanged sentences

Capital and Reserve Requirements

Certain of our subsidiaries are registered with the SEC, Central Bank of Ireland (CBI) or other regulators that subject them to certain rules regarding minimum net capital.

Failure to meet these requirements could result in adverse consequences

to us, including additional reporting requirements, or interruption of our business.

At June 30, 2024, these subsidiaries were in compliance with all minimum net capital requirements.

Certain of our subsidiaries are registered with the SEC, Central Bank of Ireland or other regulators that subject them to certain rules regarding minimum net capital.

Failure to meet these requirements could result in adverse consequences to us, including additional reporting requirements, or interruption of our business.

At September 30, 2024, these subsidiaries were in compliance with all minimum net capital requirements.

Balance Sheet

3 unchanged sentences

Operating Cash Flow

Net cash provided by operating activities of $35.4 million for the six months ended June 30, 2024 decreased by $66.7 million from net cash provided by operating activities of $102.1 million for the same period in the prior year primarily due to a decrease of $48.0 million in net sales of investments by CIP in the current year period and an increase in payments of incentive compensation in the current year.

Net cash provided by operating activities of $104.6 million for the nine months ended September 30, 2024 decreased by $125.3 million from net cash provided by operating activities of $229.8 million for the same period in the prior year primarily due to a decrease of $139.4 million in net sales of investments by CIP in the current year period.

Investing Cash Flow

Cash flows from investing activities consist primarily of capital expenditures and other investing activities related to our business operations.

Net cash used in investing activities of $3.8 million for the six months ended June 30, 2024 decreased by $119.4 million from net cash used in investing activities of $123.2 million for the same period in the prior year primarily due to the AlphaSimplex acquisition in the prior year.

Net cash used in investing activities of $4.8 million for the nine months ended September 30, 2024 decreased by $122.5 million from net cash used in investing activities of $127.3 million for the same period in the prior year primarily due to the AlphaSimplex acquisition in the prior year.

Financing Cash Flow

Cash flows from financing activities consist primarily of transactions related to our common shares, issuance and repayment of debt by us and CIP, payments of contingent consideration and purchases and sales of noncontrolling interests.

Net cash used in financing activities of $21.8 million for the six months ended June 30, 2024 decreased by $188.9 million from net cash used of $210.7 million for the same period in the prior year primarily due to a $222.6 million increase in net borrowings of CIP attributable to the refinancing of two CLOs in the current period partially offset by the prior year period $50.0 million borrowing on the credit facility as part of the AlphaSimplex acquisition.

Net cash used in financing activities of $129.5 million for the nine months ended September 30, 2024 decreased by $156.3 million from net cash used of $285.8 million for the same period in the prior year primarily due to a $187.7 million increase in net borrowings of CIP attributable to the refinancing of two CLOs in the current period partially offset by the prior year period $50.0 million borrowing on the credit facility as part of the AlphaSimplex acquisition.

Credit Agreement

The Company's credit agreement, as amended (the "Credit Agreement"), comprises (i) a $275.0 million term loan with a seven-year term (the "Term Loan") expiring in September 2028, and (ii) a $175.0 million revolving credit facility with a five-year term expiring in September 2026.

The Company repaid $6.4 million outstanding under the Term Loan during the six months ended June 30, 2024 and had $252.4 million outstanding under the Term Loan at June 30, 2024.

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 $4.8 million as of June 30, 2024.

The Company repaid $17.1 million outstanding under the Term Loan during the nine months ended September 30, 2024 and had $241.8 million outstanding under the Term Loan at September 30, 2024.

Critical Accounting Policies and Estimates

3 unchanged sentences

A complete description of our significant accounting policies is included in our 2023 Annual Report on Form 10-K.

There were no material changes in our critical accounting policies and estimates in the three months ended June 30, 2024.

There were no material changes in our critical accounting policies and estimates in the three months ended September 30, 2024.

Recently Issued Accounting Pronouncements

For a discussion of accounting standards, see Note 2 in our condensed consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

The Company is primarily exposed to market risk associated with unfavorable movements in interest rates and securities prices.

During the three and nine months ended September 30, 2024, there were no material changes to the information contained in Part II, Item 7A of the Company's 2023 Annual Report on Form 10-K.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis