COHEN & STEERS INC

Previous wording

Assets under management in open-end funds at December 31, 2023, which represented 44.5% of total assets under management, increased 0.3% to $37.0 billion from $36.9 billion at December 31, 2022. The increase was due to market appreciation of $3.2 billion, partially offset by net outflows of $1.7 billion and distributions of $1.3 billion. Net outflows included $1.4 billion from preferred securities. Market appreciation included $2.4 billion from U.S. real estate and $547 million from preferred securities. Distributions included $608 million from U.S. real estate and $538 million from preferred securities. Of these distributions, $977 million was reinvested and included in net flows. Our organic decay rate for open-end funds was (4.5%) for the year ended December 31, 2023.

Current wording

•Distributions of $1.3 billion including $598 million from U.S. real estate and $520 million from preferred securities, of which $962 million was reinvested and included in net flows

Previous wording

(2)Refer to pages 35-37 for reconciliations of U.S. GAAP to as adjusted results.

Current wording

(1)Refer to pages 30-31 for reconciliations of U.S. GAAP to as adjusted results.

Previous wording

Total investment advisory revenue from institutional accounts compared with average assets under management implied an annual effective fee rate of 37.6 bps and 36.8 bps for the years ended December 31, 2023 and 2022, respectively. The increase in the implied annual effective fee rate was primarily due to higher performance fees of $2.5 million for the year ended December 31, 2023 versus $636,000 for the year ended December 31, 2022. Excluding the performance fees, the implied annual effective fee rate would have been 36.8 bps and 36.7 bps for the years ended December 31, 2023 and 2022, respectively.

Current wording

Total investment advisory revenue from institutional accounts compared with average assets under management implied an annual effective fee rate of 38.5 bps and 37.6 bps for the years ended December 31, 2024 and 2023, respectively. Excluding performance fees of $1.4 million and $2.5 million, the implied annual effective fee rate would have been 38.1 bps and 36.8 bps for the years ended December 31, 2024 and 2023, respectively. The increase in the implied annual effective fee rate is primarily due to the shift in the mix of assets under management.

Previous wording

Total investment advisory and administration revenue from closed-end funds compared with average assets under management implied an annual effective fee rate of 88.8 bps and 88.6 bps for the years ended December 31, 2023 and 2022, respectively.

Current wording

Total investment advisory and administration revenue from closed-end funds compared with average assets under management implied an annual effective fee rate of 88.7 bps and 88.8 bps for the years ended December 31, 2024 and 2023, respectively.

Previous wording

Employee compensation and benefits increased from the year ended December 31, 2021, primarily due to higher amortization of restricted stock units of $9.1 million and an increase in salaries of $6.0 million, partially offset by

Current wording

Employee compensation and benefits increased from the year ended December 31, 2023 primarily due to higher amortization of restricted stock units of $7.7 million, including $5.8 million of accelerated vesting of certain restricted

Previous wording

Distribution and service fee expenses decreased by $28.8 million from the year ended December 31, 2022, which included $14.2 million of costs associated with the offering of RLTY. The remainder of the decrease was primarily due to lower average assets under management in U.S. open-end funds.

Current wording

Distribution and service fee expenses increased by $3.0 million from the year ended December 31, 2023 primarily due to higher average assets under management in U.S. open-end funds.

Previous wording

Operating margin for the year ended December 31, 2022 decreased to 38.1% from 44.6% for the year ended December 31, 2021. The year ended December 31, 2022 included costs associated with the initial public offering of RLTY.

Current wording

Operating margin for the year ended December 31, 2024 decreased to 33.4% from 33.6% for the year ended December 31, 2023.

Previous wording

A reconciliation of the Company’s statutory federal income tax rate and the effective income tax rate is summarized in the following table:

Current wording

A reconciliation of the Company’s statutory federal income tax rate to the effective income tax rate is summarized in the following table:

Previous wording

Effective January 1, 2023, the Company revised its methodology for as adjusted results to include interest and dividends from seed investments. Prior period amounts have not been recast to conform with the current period results as the impact was not significant.

Current wording

Effective January 1, 2023, the Company revised its methodology for as adjusted results to include interest and dividends from corporate seed investments. Amounts for the year ended December 31, 2022 have not been recast to conform with the current methodology as the impact was not significant.

Previous wording

(2)Represents adjustment to remove the impact of lease and other expenses related to the Company's prior headquarters, for which the lease expired in January 2024. From a GAAP perspective, the Company recognized lease expense on both its prior and current headquarters as a result of overlapping lease terms.

Current wording

(3)Represents the impact of lease and other expenses related to the Company's prior headquarters, for which the lease expired in January 2024. From a GAAP perspective, the Company recognized lease expense on both its prior and current headquarters as a result of overlapping lease terms.

Previous wording

million, which included leverage, were attributable to the Company's offering of the Cohen & Steers Real Estate

Current wording

(4)Represents costs associated with the offering of the Cohen & Steers Real Estate Opportunities and Income Fund (RLTY).

Previous wording

(4)Represents net foreign currency exchange (gains) losses associated with U.S. dollar-denominated assets held by certain foreign subsidiaries.

Current wording

(5)Represents net foreign currency exchange (gains) losses associated with U.S. dollar-denominated assets held by certain foreign subsidiaries.

Previous wording

(5)Tax adjustments are summarized in the following table:

Current wording

(6)Tax adjustments are summarized in the following table:

Previous wording

(2)Represents adjustment to remove the impact of lease and other expenses related to the Company's prior headquarters, for which the lease expired in January 2024. From a GAAP perspective, the Company recognized lease expense on both its prior and current headquarters as a result of overlapping lease terms.

Current wording

(2)Represents the impact of lease and other expenses related to the Company's prior headquarters, for which the lease expired in January 2024. From a GAAP perspective, the Company recognized lease expense on both its prior and current headquarters as a result of overlapping lease terms.

Previous wording

(3)Represents costs associated with the offering of RLTY. Costs are summarized in the following table:

Current wording

(3)Represents costs associated with the offering of RLTY.

Previous wording

Liquid seed investments, recorded at fair value, are generally traded in active markets on major exchanges and can typically be liquidated within a normal settlement cycle. Liquid seed investments include corporate securities held directly for the purpose of establishing performance track records and the Company's economic interest in consolidated investment vehicles which are presented net of noncontrolling interests.

Current wording

Liquid seed investments, recorded at fair value, are generally traded in active markets on major exchanges and can typically be liquidated within a normal settlement cycle. Liquid seed investments are primarily securities held directly for the purpose of establishing performance records and the Company's economic interest in certain consolidated funds which are presented net of noncontrolling interests.

Previous wording

Other current assets primarily represent investment advisory and administration fees receivable. At December 31, 2023, receivables from institutional accounts comprised 47.7% of other current assets, while receivables from open-end and closed-end funds, together, comprised 45.5% of other current assets. We perform a review of our receivables on an ongoing basis in order to assess collectability and, based on our analysis at December 31, 2023, there was no allowance for uncollectible accounts required.

Current wording

Other current assets primarily represent investment advisory and administration fees receivable. We perform a review of our receivables on an ongoing basis to assess collectability and, based on our analysis at December 31, 2024, no allowance for uncollectible accounts was required.

Previous wording

Current liabilities included accrued compensation and benefits, distribution and service fees payable, operating lease obligations due within 12-months, certain income taxes payable and other liabilities and accrued expenses.

Current wording

Current liabilities included accrued compensation and benefits, distribution and service fees payable, operating lease obligations due within 12-months, certain income taxes payable and certain other liabilities and accrued expenses.

Previous wording

Our business has become more capital intensive. Potential uses of capital range from, among other things, funding the upfront costs associated with closed-end fund launches and rights offerings, seeding new strategies and vehicles, co-investing in private real estate vehicles and making various one-time investments to grow our firm infrastructure as our business scales. In order to provide us with the financial flexibility to pursue these opportunities, on January 20, 2023, we entered into a Credit Agreement providing for a $100.0 million senior unsecured revolving credit facility maturing on January 20, 2026.

Current wording

Our business may become capital intensive over time to support growth initiatives. Potential uses of capital range from, among other things, seeding new strategies and investment vehicles, co-investing in private real estate vehicles, funding the upfront costs associated with product offerings, and making various investments to grow our firm infrastructure as our business scales. In order to provide us with the financial flexibility to pursue these opportunities, we have a $100.0 million senior unsecured revolving credit facility maturing on January 20, 2026.

Previous wording

We have committed to invest up to $50.0 million in REOF. As of December 31, 2023, we had funded $21.7 million of this commitment. In addition, we have committed to invest up to $125.0 million in CNSREIT. As of December 31, 2023, we had funded $0.2 million of this commitment. In January 2024, the Company funded an additional $23.6 million of its commitment to CNSREIT. The timing for funding the remaining portion of our commitments is uncertain.

Current wording

We have committed to invest up to a total of $175.0 million in certain of our investment vehicles, of which $80.0 million remained unfunded as of December 31, 2024. The timing for funding the remaining portion of our commitments is uncertain.

Previous wording

In 2022, cash and cash equivalents, excluding the effect of foreign exchange rate changes, increased by $67.8 million when compared with 2021. Cash flows from operating activities primarily consisted of net income adjusted for certain non-cash items and changes in assets and liabilities. Net cash provided by operating activities was $61.7 million. Net cash used in investing activities was $2.9 million, which included purchases of property and equipment of $4.2 million, partially offset by net proceeds from sales and maturities of U.S. Treasury securities held for corporate purposes and securities held directly for the purpose of establishing performance track records of $1.0 million. Net cash provided by financing activities was $9.0 million, including net contributions from noncontrolling interests of $142.1 million, partially offset by dividends paid to stockholders of $107.4 million and repurchases of common stock to satisfy employee withholding tax obligations on the vesting and delivery of restricted stock units of $26.8 million.

Current wording

In 2024, cash and cash equivalents, excluding the effect of foreign exchange rate changes, decreased by $4.9 million when compared with 2023. Cash flows from operating activities primarily consisted of net income adjusted for certain non-cash items and changes in assets and liabilities. Net cash provided by operating activities was $96.7 million. Net cash used in investing activities was $119.7 million, which included the funding of $67.0 million of our $125.0 million commitment to CNSREIT and net purchases of U.S. Treasury securities held for corporate purposes of $48.1 million. Net cash provided by financing activities was $18.2 million, including net contributions from noncontrolling interests of $88.9 million and proceeds of $68.5 million from the issuance of common stock in a registered public offering, partially offset by dividends paid to stockholders of $119.2 million and repurchases of common stock to satisfy employee withholding tax obligations on the vesting and delivery of restricted stock units of $21.1 million.

Previous wording

Subject to the approval of our board of directors, we anticipate paying dividends. When determining whether to pay a dividend, we take into account general economic and business conditions, our strategic plans, our results of operations and financial condition, cash flows and liquidity, contractual, legal and regulatory restrictions on the payment of dividends, if any, by us and our subsidiaries and such other factors deemed relevant.

Current wording

Subject to the approval of our board of directors, we anticipate paying dividends. When determining whether to pay a dividend, we consider general economic and business conditions, our strategic plans, our results of operations and financial condition, cash flow and liquidity, contractual, legal and regulatory restrictions on the payment of dividends, if any, by us and our subsidiaries and such other factors deemed relevant.

Previous wording

On February 22, 2024, we declared a quarterly dividend on our common stock in the amountof $0.59 per share. This dividend will be payable on March 14, 2024 to stockholders of record at the close of business on March 4, 2024.

Current wording

On February 20, 2025, we declared a quarterly dividend on our common stock in the amountof$0.62 per share. This dividend will be payable on March 13, 2025 to stockholders of record at the close of business on March 3, 2025.

Previous wording

Due to the uncertainty with respect to the timing of future cash flows associated with unrecognized tax benefits at December 31, 2023, the Company is unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities. Therefore, $2.5 million of gross unrecognized tax benefits have been excluded from the contractual obligations table above. See Note 15, Income Taxes, in the notes to the consolidated financial statements included in Part IV, Item 15 of this filing.

Current wording

Due to the uncertainty with respect to the timing of future cash flows associated with unrecognized tax benefits at December 31, 2024, the Company is unable to reasonably estimate when cash settlement with the respective taxing authorities will occur. Therefore, $1.3 million of gross unrecognized tax benefits have been excluded from the contractual obligations table above. See Note 15, Income Taxes, in the notes to the consolidated financial statements included in Part IV, Item 15 of this filing.

Previous wording

Several of our subsidiaries are subject to minimum net capital requirements by the local laws and regulations to which they are subject. As of December 31, 2023, each of our subsidiaries subject to a minimum net capital requirement satisfied the applicable requirement. See Note 12, Regulatory Requirements, in the notes to the consolidated financial statements included in Part IV, Item 15.

Current wording

Several of our subsidiaries are subject to minimum net capital requirements by the local laws and regulations to which they are subject. As of December 31, 2024, each of our subsidiaries subject to a minimum net capital requirement satisfied the applicable requirement. See Note 12, Regulatory Requirements, in the notes to the consolidated financial statements included in Part IV, Item 15 of this filing.

Previous wording

There is no established market for private real estate investments, and there may not be any comparable public market valuations. As a result, the valuation of a private real estate investment may be based on imperfect information and is subject to inherent uncertainties, and the resulting values may differ from values that would have been determined had a ready market existed for such investments, from values placed on such investments by other investors and from prices at which such investments may ultimately be sold.

Current wording

There is no established market for private real estate investments, and there may not be any comparable public market valuations. As a result, the valuation of a private real estate investment may be based on subjective information and is subject to inherent uncertainties, and the resulting values may differ from values that would have been determined had a ready market existed for such investments, from values placed on such investments by other investors and from prices at which such investments may ultimately be sold.

Previous wording

We have retained an independent valuation services firm to assist in the determination of the fair value of certain of our private real estate investments. Each real property investment is valued no less than quarterly in accordance with the applicable governing documents. Limited partnerships that hold real property investments are valued using the valuation methodology we deem most appropriate and consistent with industry best practices and market conditions. We expect the primary methodology used to value real property investments will be the income approach, whereby value is derived by determining the present value of an asset’s expected stream of future cash flows (for example, discounted cash flow analysis). Consistent with industry practices, the income approach incorporates actual contractual lease income, professional judgments regarding comparable rental and operating expense data, the capitalization or discount rate and projections of future rent and expenses based on appropriate market evidence, and other subjective factors. Other methodologies that may also be used to value a real property investment include, among other approaches, sales comparisons and cost approaches. We will monitor the real property investments for material events that we believe may be expected to have a material impact on the most recent estimated fair values of such real property investments.

Current wording

We have retained an independent valuation services firm to assist in the determination of the fair value of certain of our private real estate investments. Each real property investment is valued no less than quarterly in accordance with the applicable governing documents. Limited partnerships that hold real property investments are valued using the valuation methodology we deem most appropriate and consistent with industry best practices and market conditions. We expect the primary methodology used to value real property investments will be the income approach, whereby value is derived by determining the present value of an asset’s expected stream of future cash flows (for example, discounted cash flow analysis). Consistent with industry practices, the income approach incorporates actual contractual lease income, professional judgments regarding comparable rental and operating expense data, the capitalization or discount rate and projections of future rent and expenses based on appropriate market evidence, and other subjective factors. Other methodologies that may also be used to value a real property investment include, among other approaches, sales comparisons and cost approaches. We monitor the real property investments for events that we believe could have a material impact on the most recent estimated fair values of such real property investments.

Previous wording

We operate globally through our subsidiaries and therefore must allocate our income, expenses, and earnings taking into account various laws and regulations. Our tax provision represents an estimate of the total liability that we have incurred as a result of our global operations. The determination of our annual provision is subject to judgments and estimates and the actual results included in our annual tax returns may vary from the amounts reported in our consolidated financial statements. Accordingly, we recognize additions to, or reductions from, income tax expense as our estimated liabilities are revised and actual tax returns and audits, if any, are settled. Such adjustments are recognized in the quarterly period in which they are determined.

Current wording

We operate globally through our subsidiaries and therefore must allocate our income, expenses, and earnings considering various laws and regulations. Our tax provision represents an estimate of the total liability that we have incurred as a result of our global operations. The determination of our annual provision is subject to judgments and estimates and the actual results included in our annual tax returns may vary from the amounts reported in our consolidated financial statements. Accordingly, we recognize additions to, or reductions from, income tax expense as our estimated liabilities are revised, actual tax returns are filed and audits, if any, are settled. Such adjustments are recognized in the quarterly period in which they are determined.

Previous wording

In addition, we record current and deferred tax consequences of all transactions that have been recognized in the consolidated financial statements in accordance with the provisions of the enacted tax laws. Deferred tax assets are recognized for temporary differences that will result in deductible amounts in future years at tax rates that are expected to apply in those years. Deferred tax liabilities are recognized for temporary differences that will result in taxable income in future years at tax rates that are expected to apply in those years. We record a valuation allowance, when necessary, to reduce deferred tax assets to an amount that more likely than not will be realized.

Current wording

In addition, we record current and deferred tax consequences of all transactions that have been recognized in the consolidated financial statements in accordance with the provisions of the enacted tax laws. Deferred tax assets are recognized for temporary differences that will result in deductible amounts in future years at tax rates that are expected to apply in those years. We record a valuation allowance, when necessary, to reduce deferred tax assets to an amount that more likely than not will be realized. Deferred tax liabilities are recognized for temporary differences that will result in taxable income in future years at tax rates that are expected to apply in those years.

Previous wording

We record unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may differ from our current estimate of the unrecognized tax benefit liabilities. These differences are reflected as increases or decreases in income tax expense in the period in which new information becomes available.

Current wording

We record unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of these uncertainties, the ultimate resolution may differ from our current estimate of the unrecognized tax benefit liabilities. These differences are reflected as increases or decreases in income tax expense in the period in which new information becomes available.