BrightSphere Investment Group Inc

Previous wording

Unless we state otherwise or the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company”, “BrightSphere” or “BSIG” refer to BrightSphere Investment Group Inc., and references to “we,” “our” and “us” refer to BSIG and its consolidated subsidiaries, excluding discontinued operations. References to the holding company or “Center” excluding the Affiliates refer to BrightSphere Inc., or “BSUS,” a Delaware corporation and wholly owned subsidiary of BSIG. Unless we state otherwise or the context otherwise requires, references in this Quarterly Report on Form 10-Q to “Affiliates” or an “Affiliate” refer to the asset management firms in which we have or previously had an ownership interest. References in this Quarterly Report on Form 10-Q to “OM plc” refer to Old Mutual plc, our former parent. None of the information in this Quarterly Report on Form 10-Q constitutes either an offer or a solicitation to buy or sell Acadian’s products or services, nor is any such information a recommendation for Acadian’s products or services.

Current wording

Unless we state otherwise or the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company”, “BrightSphere” or “BSIG” refer to BrightSphere Investment Group Inc., and references to “we,” “our” and “us” refer to BSIG and its consolidated subsidiaries, excluding discontinued operations. References to the holding company or “Center” excluding our Affiliate refers to BrightSphere Inc., or “BSUS,” a Delaware corporation and wholly owned subsidiary of BSIG. Unless we state otherwise or the context otherwise requires, references in this Quarterly Report on Form 10-Q to “Affiliates” or an “Affiliate” refer to the asset management firms in which we have or previously had an ownership interest. References in this Quarterly Report on Form 10-Q to “Acadian” refer to Acadian Asset Management LLC, our sole Affiliate. References in this Quarterly Report on Form 10-Q to “OM plc” refer to Old Mutual plc, our former parent. None of the information in this Quarterly Report on Form 10-Q constitutes either an offer or a solicitation to buy or sell Acadian’s products or services, nor is any such information a recommendation for Acadian’s products or services.

Previous wording

•U.S. GAAP Results of Operations for the Three Months Ended March 31, 2024 and 2023 includes an explanation of changes in our U.S. GAAP revenue, expense and other items for the three months ended March 31, 2024 and 2023, as well as key U.S. GAAP operating metrics.

Current wording

•U.S. GAAP Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023 includes an explanation of changes in our U.S. GAAP revenue, expense and other items for the three and six months ended June 30, 2024 and 2023, as well as key U.S. GAAP operating metrics.

Previous wording

•Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis includes an explanation of the key differences between U.S. GAAP net income and ENI, the key measure management uses to evaluate our performance. This section also provides a reconciliation between U.S. GAAP net income attributable to controlling interests and ENI for the three months ended March 31, 2024 and 2023, as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses. This section also provides key non-GAAP operating metrics. In addition, this section provides segment analysis for our business segment.

Current wording

•Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis includes an explanation of the key differences between U.S. GAAP net income and ENI, the key measure management uses to evaluate our performance. This section also provides a reconciliation between U.S. GAAP net income attributable to controlling interests and ENI for the three and six months ended June 30, 2024 and 2023, as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses. This section also provides key non-GAAP operating metrics. In addition, this section provides segment analysis for our business segment.

Previous wording

Our profitability is affected by a variety of factors including the level and composition of our average assets under management, or AUM, fee rates charged on AUM and our expense structure. We earn management fees based on assets under management. Approximately 80% of our management fees for the three months ended March 31, 2024 were calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM. Changes in the levels of our AUM are driven by market investment performance and net client cash flows. We may also earn performance fees when certain accounts differ in relation to relevant benchmarks or exceed or fail to exceed required returns. Approximately $15 billion, or 14%, of our AUM are in accounts with incentive fee features in which we participate in the performance fee. The majority of these performance fees are calculated based on value added over the relevant benchmarks on a rolling one-year basis.

Current wording

Our profitability is affected by a variety of factors including the level and composition of our average assets under management, or AUM, fee rates charged on AUM and our expense structure. We earn management fees based on assets under management. Approximately 80% of our management fees for the three months ended June 30, 2024 were calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM. Changes in the levels of our AUM are driven by market investment performance and net client cash flows. We may also earn performance fees when certain accounts differ in relation to relevant benchmarks or exceed or fail to exceed required returns. Approximately $16 billion, or 14%, of our AUM are in accounts with incentive fee features in which we participate in the performance fee. The majority of these performance fees are calculated based on value added over the relevant benchmarks on a rolling one-year basis.

Previous wording

The following table summarizes our unaudited results of operations for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes our unaudited results of operations for the three and six months ended June 30, 2024 and 2023:

Previous wording

(3)Excludes severance-related items at Acadian of $(0.2) million and costs associated with the transfer of an insurance policy from our former parent of $0.2 million for the three months ended March 31, 2024. Excludes costs associated with the transfer of an insurance policy from our former parent of $0.4 million for the three months ended March 31, 2023.

Current wording

(3)Excludes severance-related items at Acadian of $(0.3) million, costs associated with the transfer of an insurance policy from our former parent of $0.4 million, and costs associated with the wind-down of the Multi-Asset Class Strategies, or “MACS” business in the standalone format of $1.3 million for the three months ended June 30, 2024. Excludes costs associated with the transfer of an insurance policy from our former parent of $0.2 million for the three months ended June 30, 2023. Excludes severance-related items at Acadian of $(0.5) million, costs associated with the transfer of an insurance policy from our former Parent of $0.6 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million for the six months ended June 30, 2024. Excludes costs associated with the transfer of an insurance policy from our former parent of $0.6 million for the six months ended June 30, 2023.

Previous wording

At March 31, 2024, our total assets under management were $110.4 billion, an increase of $6.7 billion, or 6.5%, compared to $103.7 billion at December 31, 2023 and an increase of $12.9 billion, or 13.2%, compared to $97.5 billion at March 31, 2023. The increase in assets under management compared to March 31, 2023 was driven by the equity market appreciation in the last twelve months. The change in assets under management during the three months ended March 31, 2024 reflects net market appreciation of $6.3 billion and net inflows of $0.4 billion. Market appreciation or depreciation reported in current and prior periods includes changes in equity prices, as well as the impact from exchange rate fluctuations on our foreign-denominated AUM. Given a substantial portion of our AUM is denominated in foreign currencies, foreign exchange rate movements during the period can impact AUM when the strength of the U.S. dollar changes relative to other currencies.

Current wording

At June 30, 2024, our total assets under management were $112.6 billion, an increase of $2.2 billion, or 2.0%, compared to $110.4 billion at March 31, 2024 and an increase of $12.7 billion, or 12.7%, compared to $99.9 billion at June 30, 2023. The increase in assets under management compared to June 30, 2023 was driven by the equity market appreciation in the last twelve months. The change in assets under management during the three months ended June 30, 2024 reflects net market appreciation of $2.2 billion, and flat net flows. The change in assets under management during the six months ended June 30, 2024 reflects net market appreciation of $8.5 billion and net inflows of $0.4 billion. Market appreciation or depreciation reported in current and prior periods includes changes in equity prices, as well as the impact from exchange rate fluctuations on our foreign-denominated AUM. Given a substantial portion of our AUM is denominated in foreign currencies, foreign exchange rate movements during the period can impact AUM when the strength of the U.S. dollar changes relative to other currencies.

Previous wording

For the three months ended March 31, 2024, our net flows were $0.4 billion compared to $0.1 billion for the three months ended March 31, 2023. The change in net flows during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily driven by increased sales in the three months ended March 31, 2024. Reinvested income and distributions of $0.8 billion and $0.9 billion are reflected in the net flows for the three months ended March 31, 2024 and March 31, 2023, respectively. For the three months ended March 31, 2024, the annualized revenue impact of the net flows was $(0.2) million compared to $1.0 million for the three months ended March 31, 2023. Gross inflows of $4.3 billion in the three months ended March 31, 2024 yielded approximately 40 bps compared to $2.2 billion yielding approximately 41 bps in the year-ago period. Gross outflows of $(4.7) billion yielded approximately 44 bps in the three months ended March 31, 2024 compared to $(3.0) billion yielding approximately 39 bps in the year-ago period.

Current wording

For the six months ended June 30, 2024, our net flows were $0.4 billion compared to $0.2 billion for the six months ended June 30, 2023. The change in net flows during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily driven by increased sales in the six months ended June 30, 2024. Reinvested income and distributions of $1.6 billion and $1.8 billion are reflected in the net flows for the six months ended June 30, 2024 and June 30, 2023, respectively. For the six months ended June 30, 2024, the annualized revenue impact of the net flows was $1.2 million compared to $1.9 million for the six months ended June 30, 2023. Gross inflows of $12.6 billion in the six months ended June 30, 2024 yielded approximately 35 bps compared to $4.2 billion yielding approximately 44 bps in the year-ago period. Gross outflows of $(13.8) billion yielded approximately 36 bps in the six months ended June 30, 2024 compared to $(5.8) billion yielding approximately 41 bps in the year-ago period.

Previous wording

Our U.S. GAAP results of operations were as follows for the three months ended March 31, 2024 and 2023:

Current wording

Our U.S. GAAP results of operations were as follows for the three and six months ended June 30, 2024 and 2023:

Previous wording

Average basis points earned on average assets under management were 38.2 bps for the three months ended March 31, 2024 and 38.1 bps for the three months ended March 31, 2023. The overall weighted average fee rate increase for the three months ended March 31, 2024 is the result of changes in the mix of assets under management caused by market movements and client flows.

Current wording

Average basis points earned on average assets under management were 38.5 bps and 38.3 bps for the three and six months ended June 30, 2024, respectively, and 38.1 bps for the three and six months ended June 30, 2023. The overall weighted average fee rate increase for the three and six months ended June 30, 2024 is the result of changes in the mix of assets under management caused by market movements and client flows.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: Management fees increased $11.6 million, or 12.8%, from $90.6 million for the three months ended March 31, 2023 to $102.2 million for the three months ended March 31, 2024. The increase was due to higher levels of average assets under management. Average assets under management increased 11.6%, from $96.4 billion for the three months ended March 31, 2023 to $107.6 billion for the three months ended March 31, 2024, mainly due to the positive equity market in the past twelve months.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Management fees increased $12.7 million, or 13.7%, from $92.8 million for the three months ended June 30, 2023 to $105.5 million for the three months ended June 30, 2024. The increase was driven by higher levels of average assets under management. Average assets under management increased 12.7%, from $97.9 billion for the three months ended June 30, 2023 to $110.3 billion for the three months ended June 30, 2024, mainly due to the positive equity market impact in the past twelve months.

Previous wording

Approximately $15 billion, or 14% of our AUM, were in accounts with performance fee features in which we participate. Performance fees are typically shared with our Affiliate key employees through various contractual compensation and profit-sharing arrangements.

Current wording

Approximately $16 billion, or 14% of our AUM, were in accounts with performance fee features in which we participate. Performance fees are typically shared with our Affiliate key employees through various contractual compensation and profit-sharing arrangements.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: Performance fees increased $2.6 million, from $0.5 million for the three months ended March 31, 2023 to $3.1 million for the three months ended March 31, 2024, primarily due to strong performance relative to market in certain strategies. Performance fees are variable and are contractually triggered based on investment performance results over agreed upon time periods.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Performance fees increased $0.6 million, from $2.2 million for the three months ended June 30, 2023 to $2.8 million for the three months ended June 30, 2024, primarily due to strong performance relative to benchmarks in certain strategies. Performance fees can be variable and are contractually triggered based on investment performance results over agreed upon time periods.

Previous wording

Our most significant category of expense is compensation and benefits awarded to our and our Affiliate’s employees. The following table presents the components of U.S. GAAP compensation expense for the three months ended March 31, 2024 and 2023:

Current wording

Our most significant category of expense is compensation and benefits awarded to our and our Affiliate’s employees. The following table presents the components of U.S. GAAP compensation expense for the three and six months ended June 30, 2024 and 2023:

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: Compensation and benefits expense increased $9.0 million, or 18.3%, from $49.1 million for the three months ended March 31, 2023 to $58.1 million for the three months ended March 31, 2024. Fixed compensation and benefits increased $0.1 million, or 0.4%, from $23.4 million for the three months ended March 31, 2023 to $23.5 million for the three months ended March 31, 2024, primarily reflecting cost of living increases and the cost of new hires supporting our growth initiatives, partially offset by cost savings realized from restructuring at our Affiliate in late 2023. Variable compensation increased $3.2 million, or 13.8%, from $23.2 million for the three months ended March 31, 2023 to $26.4 million for the three months ended March 31, 2024. The increase was primarily attributable to higher pre-bonus profits in the three months ended March 31, 2024. Sales-based compensation decreased $(0.3) million or (15.8)% from $1.9 million for the three months ended March 31, 2023 to $1.6 million for the three months ended March 31, 2024, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods. Affiliate key employee distributions increased $1.0 million, or 83.3%, from $1.2 million for the three months ended March 31, 2023 to $2.2 million for the nine months ended March 31, 2024, driven by higher operating earnings in the three months ended March 31, 2024. Revaluations of Affiliate equity changed $5.0 million, reflecting fluctuations in the value of key employee ownership interests at our consolidated Affiliate, as the value of Affiliate equity decreased $(0.6) million for the three months ended March 31, 2023 and increased $4.4 million for the three months ended March 31, 2024.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Compensation and benefits expense increased $13.7 million, or 28.2%, from $48.5 million for the three months ended June 30, 2023 to $62.2 million for the three months ended June 30, 2024. Fixed compensation and benefits increased $0.6 million, or 2.5%, from $23.7 million for the three months ended June 30, 2023 to $24.3 million for the three months ended June 30, 2024, primarily reflecting cost of living increases and the cost of new hires supporting our growth initiatives, partially offset by cost savings realized from restructuring at our Affiliate in late 2023. Variable compensation increased $5.2 million, or 22.9%, from $22.7 million for the three months ended June 30, 2023 to $27.9 million for the three months ended June 30, 2024. The increase was primarily attributable to higher pre-bonus profits in the three months ended June 30, 2024 at our Affiliate, partially offset by changes in deferred compensation expense earned on current and prior year performance fee revenues, of which the Affiliate’s share is determined by a contractual split and recognized as compensation expense over a vesting period. The deferred nature of the bonus earned on performance fee revenues can result in compensation expense variability that is uncorrelated to current period earnings. Sales-based compensation increased $0.4 million, or 25.0%, from $1.6 million for the three months ended June 30, 2023 to $2.0 million for the three months ended June 30, 2024, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods. Affiliate key employee distributions increased $0.9 million, or 75.0%, from $1.2 million for the three months ended June 30, 2023 to $2.1 million for the three months ended June 30, 2024. Affiliate key employee distributions for certain tiers of equity are calculated after an earnings threshold is met, whereby no distributions are made to these equity holders when earnings are below the threshold. The change in Affiliate key employee distributions during the current period is driven by higher operating earnings in the current period and the leveraged nature of this distribution share. Revaluations of Affiliate equity changed by $6.6 million, reflecting fluctuations in the value of key employee ownership interests at our consolidated Affiliate, as the value of Affiliate equity decreased $(0.7) million for the three months ended June 30, 2023 and increased $5.9 million for the three months ended June 30, 2024. For certain tiers of Affiliate equity, revaluations are calculated based on earnings above a threshold. The change in the revaluation in the current period is driven by higher earnings period over period, including earnings over the threshold for certain Affiliate equity.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: General and administrative expense increased $1.6 million, or 8.7%, from $18.4 million for the three months ended March 31, 2023 to $20.0 million for the three months ended March 31, 2024. The increase was primarily due to higher systems, outside services and portfolio administrative costs, as well as our continued investment in growth initiatives and capabilities.

Current wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: General and administrative expense increased $0.9 million, or 2.2%, from $40.2 million for the six months ended June 30, 2023 to $41.1 million for the six months ended June 30, 2024. The increase was primarily due to higher systems, outside services and portfolio administrative costs, and our continued investment in growth initiatives and capabilities, partially offset by lower consultant costs and the impact of foreign currency changes.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: Depreciation and amortization expense increased $0.8 million, or 21.1%, from $3.8 million for the three months ended March 31, 2023 to $4.6 million for the three months ended March 31, 2024. The increase was primarily attributable to additional software and technology investments in the business.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Depreciation and amortization expense increased $0.6 million, or 13.6%, from $4.4 million for the three months ended June 30, 2023 to $5.0 million for the three months ended June 30, 2024. The increase was due to additional software and technology investments in the business.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: Investment income increased $0.6 million, from $0.3 million for the three months ended March 31, 2023 to $0.9 million for the three months ended March 31, 2024, reflecting an increase in returns generated by seed capital investments due to market appreciation.

Current wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Investment income increased $0.5 million, or 100.0%, from $0.5 million for the six months ended June 30, 2023 to $1.0 million for the six months ended June 30, 2024, reflecting an increase in returns generated by seed capital investments due to market appreciation.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: Interest income increased $0.2 million, or 18.2%, from $1.1 million for the three months ended March 31, 2023 compared to $1.3 million for the three months ended March 31, 2024. The increase was due to an increases in short-term investment returns in the three months ended March 31, 2024.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Interest income decreased $(0.6) million, or (40.0)% from $1.5 million for the three months ended June 30, 2023 compared to $0.9 million for the three months ended June 30, 2024. The decrease was due to lower average cash balances and decreases in short-term investment returns in the three months ended June 30, 2024.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: Interest expense increased $0.1 million, or 2.0%, from $4.9 million for the three months ended March 31, 2023 to $5.0 million for the three months ended March 31, 2024, reflecting an increase in interest rates on the revolving credit facility in the three months ended March 31, 2024.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Interest expense decreased $(0.1) million, or (1.9)%, from $5.4 million for the three months ended June 30, 2023 to $5.3 million for the three months ended June 30, 2024, reflecting a lower balance drawn on the revolving credit facility in the three months ended June 30, 2024.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: Income tax expense increased $1.0 million, from $5.1 million for the three months ended March 31, 2023 to $6.1 million for the three months ended March 31, 2024. The increase in income tax expense primarily relates to the increase in income before income taxes during the three months ended March 31, 2024.

Current wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Income tax expense increased $1.1 million, from $10.6 million for the six months ended June 30, 2023 to $11.7 million for the six months ended June 30, 2024. The increase in income tax expense primarily relates to the increase in income before income taxes attributable to controlling interests in the six months ended June 30, 2024.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023: Consolidated Funds’ revenue decreased $(0.3) million, from $0.7 million for the three months ended March 31, 2023 to $0.4 million for the three months ended March 31, 2024. Consolidated Funds’ expense decreased $(0.6) million, from $0.7 million for the three months ended March 31, 2023 to $0.1 million for the three months ended March 31, 2024. Net consolidated Funds’ investment gain increased $0.9 million from $0.8 million for the three months ended March 31, 2023 to $1.7 million for the three months ended March 31, 2024.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Consolidated Funds’ revenue decreased $(0.6) million, from $1.3 million for the three months ended June 30, 2023 to $0.7 million for the three months ended June 30, 2024. Consolidated Funds’ expense decreased $(1.1) million, from $1.2 million for the three months ended June 30, 2023 to $0.1 million for the three months ended June 30, 2024. Net consolidated Funds’ investment gain increased $0.5 million from $0.3 million for the three months ended June 30, 2023 to $0.8 million for the three months ended June 30, 2024. These movements relate to the underlying activity of our consolidated Funds.

Previous wording

The following table shows our key U.S. GAAP operating metrics for the three months ended March 31, 2024 and 2023.

Current wording

The following table shows our key U.S. GAAP operating metrics for the three and six months ended June 30, 2024 and 2023.

Previous wording

(1)Excluding the effect of Funds’ consolidation in the applicable periods, the U.S. GAAP operating margin is 21.5% for the three months ended March 31, 2024, and 21.7% for the three months ended March 31, 2023.

Current wording

(1)Excluding the effect of Funds’ consolidation in the applicable periods, the U.S. GAAP operating margin is 18.5% for the three months ended June 30, 2024, 21.4% for the three months ended June 30, 2023, 19.9% for the six months ended June 30, 2024, and 21.5% for the six months ended June 30, 2023.

Previous wording

(2)Excludes consolidated Funds’ expense of $0.1 million for the three months ended March 31, 2024, and $0.7 million for the three months ended March 31, 2023.

Current wording

(2)Excludes consolidated Funds’ expense of $0.1 million for the three months ended June 30, 2024, $1.2 million for the three months ended June 30, 2023, $0.2 million for the six months ended June 30, 2024, and $1.9 million for the six months ended June 30, 2023.

Previous wording

(3)Excludes the effect of Funds consolidation for the three months ended March 31, 2024 and 2023.

Current wording

(3)Excludes the effect of Funds consolidation for the three and six months ended June 30, 2024 and 2023.

Previous wording

(4)Excludes consolidated Funds’ revenue of $0.4 million for the three months ended March 31, 2024, and $0.7 million for the three months ended March 31, 2023.

Current wording

(4)Excludes consolidated Funds’ revenue of $0.7 million for the three months ended June 30, 2024, $1.3 million for the three months ended June 30, 2023, $1.1 million for the six months ended June 30, 2024, and $2.0 million for the six months ended June 30, 2023.

Previous wording

•We include within management fee revenue any fees paid to Affiliate by consolidated Funds.

Current wording

•We include within management fee revenue any fees paid to our Affiliate by consolidated Funds.

Previous wording

Reconciliation of U.S. GAAP Net Income to Economic Net Income for the Three Months Ended March 31, 2024 and 2023

Current wording

Reconciliation of U.S. GAAP Net Income to Economic Net Income for the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

The following table reconciles net income attributable to controlling interests to economic net income for the three months ended March 31, 2024 and 2023:

Current wording

The following table reconciles net income attributable to controlling interests to economic net income for the three and six months ended June 30, 2024 and 2023:

Previous wording

(1)The net return on seed/co-investment (gains) losses and financings for the three months ended March 31, 2024 and 2023 is shown in the following table:

Current wording

(1)The net return on seed/co-investment (gains) losses and financings for the three and six months ended June 30, 2024 and 2023 is shown in the following table:

Previous wording

(2)The three months ended March 31, 2024 includes severance-related items at Acadian of $(0.2) million and costs associated with the transfer of an insurance policy from our former parent of $0.2 million. The three months ended March 31, 2023 includes costs associated with the transfer of an insurance policy from our former parent of $0.4 million.

Current wording

(2)The three months ended June 30, 2024 includes severance-related items at Acadian of $(0.3) million, costs associated with the transfer of an insurance policy from our former parent of $0.4 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million. The three months ended June 30, 2023 includes costs associated with the transfer of an insurance policy from our former parent of $0.2 million. The six months ended June 30, 2024 includes severance-related items at Acadian of $(0.5) million, costs associated with the transfer of an insurance policy from our former parent of $0.6 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million. The six months ended June 30, 2023 includes costs associated with the transfer of an insurance policy from our former parent of $0.6 million.

Previous wording

The following table reconciles U.S. GAAP revenue to ENI revenue for the three months ended March 31, 2024 and 2023:

Current wording

The following table reconciles U.S. GAAP revenue to ENI revenue for the three and six months ended June 30, 2024 and 2023:

Previous wording

The following table reconciles U.S. GAAP operating expense to ENI operating expense for the three months ended March 31, 2024 and 2023.

Current wording

The following table reconciles U.S. GAAP operating expense to ENI operating expense for the three and six months ended June 30, 2024 and 2023.

Previous wording

(2)The three months ended March 31, 2024 excludes $(0.2) million severance-related items at Acadian that is included within Restructuring costs.

Current wording

(2)The three and six months ended June 30, 2024 excludes $(0.3) million and $(0.5) million, respectively, of severance-related items at Acadian that is included within restructuring costs. Each of the three and six months ended June 30, 2024 excludes $0.9 million of costs associated with the wind-down of the MACS business in the standalone format that is included within restructuring costs.

Previous wording

(1)Fixed compensation and benefits include base salaries, payroll taxes and the cost of benefit programs provided. The following table reconciles U.S. GAAP compensation and benefits expense for the three months ended March 31, 2024 and 2023 to ENI fixed compensation and benefits expense:

Current wording

(1)Fixed compensation and benefits include base salaries, payroll taxes and the cost of benefit programs provided. The following table reconciles U.S. GAAP compensation and benefits expense for the three and six months ended June 30, 2024 and 2023 to ENI fixed compensation and benefits expense:

Previous wording

The following table reconciles U.S. GAAP general and administrative expense to ENI general and administrative expense:

Current wording

(2)The following table reconciles U.S. GAAP general and administrative expense to ENI general and administrative expense:

Previous wording

The following table shows our key non-GAAP operating metrics for the three months ended March 31, 2024 and 2023. We present these metrics because they are the measures our management uses to evaluate the profitability of our business and are useful to investors because they represent the key drivers and measures of economic performance within our business model. Please see the footnotes below for an explanation of each ratio, its usefulness in measuring the economics and operating performance of our business, and a reference to the most closely related U.S. GAAP measure:

Current wording

The following table shows our key non-GAAP operating metrics for the three and six months ended June 30, 2024 and 2023. We present these metrics because they are the measures our management uses to evaluate the profitability of our business and are useful to investors because they represent the key drivers and measures of economic performance within our business model. Please see the footnotes below for an explanation of each ratio, its usefulness in measuring the economics and operating performance of our business, and a reference to the most closely related U.S. GAAP measure:

Previous wording

(2)The ENI operating margin, which is calculated before Affiliate key employee distributions, is used by management and is useful to investors to evaluate the overall operating margin of the business. The ENI operating margin is most comparable to our U.S. GAAP operating margin. Our U.S. GAAP operating margin, excluding the effect of consolidated Funds, is 21.5% for the three months ended March 31, 2024, and 21.7% for the three months ended March 31, 2023.

Current wording

(2)The ENI operating margin, which is calculated before Affiliate key employee distributions, is used by management and is useful to investors to evaluate the overall operating margin of the business. The ENI operating margin is most comparable to our U.S. GAAP operating margin. Our U.S. GAAP operating margin, excluding the effect of consolidated Funds, is 18.5% for the three months ended June 30, 2024, 21.4% for the three months ended June 30, 2023, 19.9% for the six months ended June 30, 2024, and 21.5% for the six months ended June 30, 2023.

Previous wording

(b)ENI earnings after Affiliate key employee distributions is calculated as ENI operating income (ENI revenue, less ENI operating expense, less ENI variable compensation), less Affiliate key employee distributions. Refer to “—Key Non-GAAP Operating Metrics” for a reconciliation from U.S. GAAP operating income (loss) to ENI earnings after Affiliate key employee distributions.

Current wording

(b)ENI earnings after Affiliate key employee distributions is calculated as ENI operating income (ENI revenue, less ENI operating expense, less ENI variable compensation), less Affiliate key employee distributions. Refer to “—Key Non-GAAP Operating Metrics” for a reconciliation from U.S. GAAP operating income to ENI earnings after Affiliate key employee distributions.