This Annual Report on Form 10-K and other documents filed by us contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect management's current views with respect to, among other things, our operations and financial performance. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or the negative versions of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these forward-looking statements. We believe that these factors include, but are not limited to, the risks described in Item 1A. Risk Factors of this Annual Report on Form 10-K. These factors are not exhaustive and should be read in conjunction with the other cautionary statements that are included in this Annual Report on Form 10-K. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Executive Overview General We are a global investment manager specializing in real assets and alternative income, including real estate, preferred securities, infrastructure, resource equities, commodities, as well as multi-strategy solutions. Founded in 1986, we are headquartered inNew York City , with offices inLondon ,Dublin ,Hong Kong andTokyo . Our primary investment strategies includeU.S. real estate, preferred securities and low duration preferred securities, global/international real estate, global listed infrastructure, real assets multi-strategy, midstream energy and MLPs, as well as global natural resource equities. Our strategies seek to achieve a variety of investment objectives for different risk profiles and are actively managed by specialist teams of investment professionals who employ fundamental-driven research and portfolio management processes. We offer our strategies through a variety of investment vehicles, includingU.S. and non-U.S. registered funds and other commingled vehicles, separate accounts and subadvised portfolios.
Our distribution network encompasses two major channels, wealth and institutional. Our wealth channel includes registered investment advisers, wirehouses, independent and regional broker dealers and bank trusts. Our institutional channel includes sovereign wealth funds, corporate plans, insurance companies and public funds, including defined benefit and defined contribution plans, as well as other financial institutions that access our investment management services directly or through consultants and other intermediaries.
Our revenue from the wealth channel is primarily derived from investment advisory, administration, distribution and service fees from open-end and closed-end funds and other commingled vehicles. Our revenue from the institutional channel is derived from fees received from our clients for managing advised and subadvised accounts. Our fees are based on contractually specified rates applied to the value of the assets we manage and, in certain cases, may include a performance-based fee. Our revenue fluctuates with changes in the total value of our assets under management, which may occur as a result of market appreciation and depreciation, contributions or withdrawals from investor accounts and distributions. This revenue is recognized over the period that the assets are managed.
A majority of our revenue, 93.4%, 93.1% and 92.4% for the years ended
Inflation and the associated increase in interest rates have combined to adversely affect the total value of our assets under management, which reduced, and may continue to reduce, the fees we earn. In addition, inflationary pressures have negatively impacted our expenses, particularly segments of compensation and certain operating and vendor costs.
The Russian invasion ofUkraine has impacted global financial markets, introducing new threats to global economic growth and adding to inflationary pressures. We have taken measures to ensure ongoing compliance with all applicable sanctions and guidance issued by authorities globally against certain regions, entities, or individuals. Our overall exposure to Russian and Ukrainian securities is limited and we do not expect a material impact to our financial results. 20 --------------------------------------------------------------------------------
Assets Under Management By Investment Vehicle (in millions) Years Ended December 31, 2022 2021 2020 Open-end Funds Assets under management, beginning of period$ 50,911 $ 35,160 $ 30,725 Inflows 17,939 19,542 17,556 Outflows (19,713) (10,765) (12,135) Net inflows (outflows) (1,774) 8,777 5,421 Market appreciation (depreciation) (10,282) 8,936 405 Distributions (1,952) (1,936) (1,391) Transfers - (26) - Total increase (decrease) (14,008) 15,751 4,435
Assets under management, end of period
$ 35,160 Percentage of total assets under management 45.9 % 47.7 % 44.0 % Average assets under management$ 43,202 $ 42,991
Institutional Accounts Assets under management, beginning of period$ 42,727 $ 33,255 $ 31,813 Inflows 5,915 6,152 7,192 Outflows (6,357) (5,563) (4,418) Net inflows (outflows) (442) 589 2,774 Market appreciation (depreciation) (8,927) 10,041 53 Distributions (985) (1,184) (1,385) Transfers - 26 - Total increase (decrease) (10,354) 9,472 1,442
Assets under management, end of period
$ 33,255 Percentage of total assets under management 40.3 % 40.1 % 41.6 % Average assets under management$ 36,383 $ 38,906
Closed-end Funds Assets under management, beginning of period$ 12,991 $ 11,493 $ 9,644 Inflows 575 206 2,652 Outflows - (119) (89) Net inflows (outflows) 575 87 2,563 Market appreciation (depreciation) (1,722) 2,033 (197) Distributions (695) (622) (517) Total increase (decrease) (1,842) 1,498 1,849
Assets under management, end of period
$ 11,493 Percentage of total assets under management 13.9 % 12.2 % 14.4 % Average assets under management$ 12,039 $ 12,317
Total
Assets under management, beginning of period
$ 72,182 Inflows 24,429 25,900 27,400 Outflows (26,070) (16,447) (16,642) Net inflows (outflows) (1,641) 9,453 10,758 Market appreciation (depreciation) (20,931) 21,010 261 Distributions (3,632) (3,742) (3,293) Total increase (decrease) (26,204) 26,721 7,726
Assets under management, end of period
$ 79,908 Average assets under management$ 91,624 $ 94,214 $ 69,175 21
-------------------------------------------------------------------------------- Assets Under Management - Institutional Accounts By Account Type (in millions) Years Ended December 31, 2022 2021 2020 Advisory Assets under management, beginning of period$ 24,599 $ 17,628 $ 15,669 Inflows 3,672 4,891 4,324 Outflows (4,734) (2,945) (2,771) Net inflows (outflows) (1,062) 1,946 1,553 Market appreciation (depreciation) (4,906) 4,999 406 Transfers - 26 - Total increase (decrease) (5,968) 6,971 1,959 Assets under management, end of period$ 18,631 $ 24,599 $ 17,628 Percentage of institutional assets under management 57.6 % 57.6 % 53.0 % Average assets under management$ 21,233 $
22,092
Japan Subadvisory Assets under management, beginning of period$ 11,329 $ 9,720 $ 10,323 Inflows 988 305 1,601 Outflows (436) (1,075) (626) Net inflows (outflows) 552 (770) 975 Market appreciation (depreciation) (2,520) 3,563 (193) Distributions (985) (1,184) (1,385) Total increase (decrease) (2,953) 1,609 (603) Assets under management, end of period$ 8,376 $ 11,329 $ 9,720 Percentage of institutional assets under management 25.9 % 26.5 % 29.2 % Average assets under management$ 9,302 $
10,335
Subadvisory Excluding Japan Assets under management, beginning of period$ 6,799 $ 5,907 $ 5,821 Inflows 1,255 956 1,267 Outflows (1,187) (1,543) (1,021) Net inflows (outflows) 68 (587) 246 Market appreciation (depreciation) (1,501) 1,479 (160) Total increase (decrease) (1,433) 892 86 Assets under management, end of period$ 5,366 $ 6,799 $ 5,907 Percentage of institutional assets under management 16.6 % 15.9 % 17.8 % Average assets under management$ 5,848 $
6,479
Total Institutional Accounts Assets under management, beginning of period$ 42,727 $ 33,255 $ 31,813 Inflows 5,915 6,152 7,192 Outflows (6,357) (5,563) (4,418) Net inflows (outflows) (442) 589 2,774 Market appreciation (depreciation) (8,927) 10,041 53 Distributions (985) (1,184) (1,385) Transfers - 26 - Total increase (decrease) (10,354) 9,472 1,442 Assets under management, end of period$ 32,373 $ 42,727 $ 33,255 Average assets under management$ 36,383 $ 38,906 $ 29,883 22
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Assets Under Management By Investment Strategy (in millions) Years Ended December 31, 2022 2021 2020U.S. Real Estate Assets under management, beginning of period$ 49,915 $ 32,827 $ 31,024 Inflows 10,572 11,538 11,114 Outflows (10,869) (6,499) (6,478) Net inflows (outflows) (297) 5,039 4,636 Market appreciation (depreciation) (12,097) 14,417 (574) Distributions (2,406) (2,294) (2,282) Transfers (7) (74) 23 Total increase (decrease) (14,807) 17,088 1,803
Assets under management, end of period
$ 32,827 Percentage of total assets under management 43.7 % 46.8 % 41.1 % Average assets under management$ 41,627 $ 41,315
Preferred Securities Assets under management, beginning of period$ 26,987 $ 23,185 $ 17,581 Inflows 7,059 8,802 10,979 Outflows (10,212) (5,053) (5,828) Net inflows (outflows) (3,153) 3,749 5,151 Market appreciation (depreciation) (3,240) 964 1,172 Distributions (834) (985) (696) Transfers 7 74 (23) Total increase (decrease) (7,220) 3,802 5,604
Assets under management, end of period
$ 23,185 Percentage of total assets under management 24.6 % 25.3 % 29.0 % Average assets under management$ 22,638 $ 25,262
Global/International Real Estate Assets under management, beginning of period$ 19,380 $ 15,214 $ 13,509 Inflows 3,848 3,263 4,122 Outflows (3,289) (2,833) (2,436) Net inflows (outflows) 559 430 1,686 Market appreciation (depreciation) (5,039) 3,933 102 Distributions (118) (197) (83) Total increase (decrease) (4,598) 4,166 1,705
Assets under management, end of period
$ 15,214 Percentage of total assets under management 18.4 % 18.2 % 19.0 % Average assets under management$ 16,692 $ 17,688 $ 13,193 23
-------------------------------------------------------------------------------- Assets Under Management By Investment Strategy - continued (in millions) Years Ended December 31, 2022 2021 2020 Global Listed Infrastructure Assets under management, beginning of period$ 8,763 $ 6,729 $ 8,076 Inflows 1,566 1,751 997 Outflows (1,112) (765) (1,722) Net inflows (outflows) 454 986 (725) Market appreciation (depreciation) (405) 1,256 (423) Distributions (216) (208) (199) Total increase (decrease) (167) 2,034 (1,347)
Assets under management, end of period
$ 6,729 Percentage of total assets under management 10.7 % 8.2 % 8.4 % Average assets under management$ 8,700 $ 7,970
Other
Assets under management, beginning of period
$ 1,992 Inflows 1,384 546 188 Outflows (588) (1,297) (178) Net inflows (outflows) 796 (751) 10 Market appreciation (depreciation) (150) 440 (16) Distributions (58) (58) (33) Total increase (decrease) 588 (369) (39)
Assets under management, end of period
$ 1,953 Percentage of total assets under management 2.7 % 1.5 % 2.4 % Average assets under management$ 1,967 $ 1,979
Total
Assets under management, beginning of period
$ 72,182 Inflows 24,429 25,900 27,400 Outflows (26,070) (16,447) (16,642) Net inflows (outflows) (1,641) 9,453 10,758 Market appreciation (depreciation) (20,931) 21,010 261 Distributions (3,632) (3,742) (3,293) Total increase (decrease) (26,204) 26,721 7,726
Assets under management, end of period
$ 79,908 Average assets under management$ 91,624 $ 94,214 $ 69,175 24
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Investment Performance as of
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(1) Past performance is no guarantee of future results.Outperformance is determined by comparing the annualized investment performance of each investment strategy to the performance of specified reference benchmarks. Investment performance in excess of the performance of the benchmark is considered outperformance. The investment performance calculation of each investment strategy is based on all active accounts and investment models pursuing similar investment objectives. For accounts, actual investment performance is measured gross of fees and net of withholding taxes. For investment models, for which actual investment performance does not exist, the investment performance of a composite of accounts pursuing comparable investment objectives is used as a proxy for actual investment performance. The performance of the specified reference benchmark for each account and investment model is measured net of withholding taxes, where applicable. This is not investment advice and may not be construed as sales or marketing material for any financial product or service sponsored or provided byCohen & Steers . (2) © 2023 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Morningstar calculates its ratings based on a risk-adjusted return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive five stars, the next 22.5% receive four stars, the next 35% receive three stars, the next 22.5% receive two stars and the bottom 10% receive one star. Past performance is no guarantee of future results. Based on independent rating by Morningstar, Inc. of investment performance of eachCohen & Steers -sponsored open-endU.S. -registered mutual fund for all share classes for the overall period atDecember 30, 2022 . Overall Morningstar rating is a weighted average based on the 3-year, 5-year and 10-year Morningstar rating. Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages. This is not investment advice and may not be construed as sales or marketing material for any financial product or service sponsored or provided byCohen & Steers .
Changes in Assets Under Management - 2022 Compared with 2021
Assets under management atDecember 31, 2022 decreased 24.6% to$80.4 billion from$106.6 billion atDecember 31, 2021 . The decrease was due to net outflows of$1.6 billion , market depreciation of$20.9 billion and distributions of$3.6 billion . Net outflows included$3.2 billion from preferred securities, partially offset by net inflows of$748 million into real assets multi-strategy (included in "Other" in the table on pages 23 and 24),$559 million into global/international real estate and$454 million into global listed infrastructure. Market depreciation included$12.1 billion fromU.S. real estate,$5.0 billion from global/international real estate and$3.2 billion from preferred securities. Distributions included$2.4 billion fromU.S. real estate and$834 million from preferred securities. Our overall organic decay rate was (1.5%) for the year endedDecember 31, 2022 . The organic growth/decay rate represents the ratio of net flows for the year to the beginning assets under management. 25 --------------------------------------------------------------------------------
Average assets under management for the year ended
Open-end funds
Assets under management in open-end funds atDecember 31, 2022 , which represented 45.9% of total assets under management, decreased 27.5% to$36.9 billion from$50.9 billion atDecember 31, 2021 . The decrease was due to net outflows of$1.8 billion , market depreciation of$10.3 billion and distributions of$2.0 billion . Net outflows included$3.1 billion from preferred securities, partially offset by net inflows of$733 million into real assets multi-strategy (included in "Other" in the table on pages 23 and 24),$248 million into global/international real estate and$184 million into global listed infrastructure. Market depreciation included$7.1 billion fromU.S. real estate and$2.2 billion from preferred securities. Distributions included$1.2 billion fromU.S. real estate and$611 million from preferred securities. Of these distributions,$1.6 billion was reinvested and included in net flows. Our organic decay rate for open-end funds was (3.5%) for the year endedDecember 31, 2022 .
Average assets under management for open-end funds for the year ended
Institutional accounts Assets under management in institutional accounts atDecember 31, 2022 , which represented 40.3% of total assets under management, decreased 24.2% to$32.4 billion from$42.7 billion atDecember 31, 2021 . The decrease was due to net outflows of$442 million , market depreciation of$8.9 billion and distributions of$1.0 billion . Net outflows included$799 million fromU.S. real estate, partially offset by net inflows of$310 million into global/international real estate. Market depreciation included$4.2 billion from global/international real estate and$4.0 billion fromU.S. real estate. Distributions included$934 million fromU.S. real estate. Our organic decay rate for institutional accounts was (1.0%) for the year endedDecember 31, 2022 . Average assets under management for institutional accounts for the year endedDecember 31, 2022 decreased 6.5% to$36.4 billion from$38.9 billion for the year endedDecember 31, 2021 . Assets under management in advisory accounts atDecember 31, 2022 , which represented 57.6% of institutional assets under management, decreased 24.3% to$18.6 billion from$24.6 billion atDecember 31, 2021 . The decrease was due to net outflows of$1.1 billion and market depreciation of$4.9 billion . Net outflows included$1.5 billion fromU.S. real estate, partially offset by net inflows of$316 million into global listed infrastructure and$313 million into global/international real estate. Market depreciation included$2.4 billion from global/international real estate and$1.9 billion fromU.S. real estate. Our organic decay rate for advisory accounts was (4.3%) for the year endedDecember 31, 2022 .
Average assets under management for advisory accounts for the year ended
Assets under management inJapan subadvisory accounts atDecember 31, 2022 , which represented 25.9% of institutional assets under management, decreased 26.1% to$8.4 billion from$11.3 billion atDecember 31, 2021 . The decrease was due to market depreciation of$2.5 billion and distributions of$1.0 billion , partially offset by net inflows of$552 million . Net inflows included$488 million intoU.S. real estate. Market depreciation included$1.8 billion fromU.S. real estate and$659 million from global/international real estate. Distributions included$934 million fromU.S. real estate. Our organic growth rate forJapan subadvisory accounts was 4.9% for the year endedDecember 31, 2022 .
Average assets under management for
Assets under management in subadvisory accounts excludingJapan atDecember 31, 2022 , which represented 16.6% of institutional assets under management, decreased 21.1% to$5.4 billion from$6.8 billion atDecember 31, 2021 . The decrease was due to market depreciation of$1.5 billion , partially offset by net inflows of$68 million . Market depreciation included$1.1 billion from global/international real estate. Our organic growth rate for subadvisory accounts excludingJapan was 1.0% for the year endedDecember 31, 2022 . Average assets under management for subadvisory accounts excludingJapan for the year endedDecember 31, 2022 decreased 9.7% to$5.8 billion from$6.5 billion for the year endedDecember 31, 2021 . 26 --------------------------------------------------------------------------------
Closed-end funds
Assets under management in closed-end funds atDecember 31, 2022 , which represented 13.9% of total assets under management, decreased 14.2% to$11.1 billion from$13.0 billion atDecember 31, 2021 . The decrease was due to market depreciation of$1.7 billion and distributions of$695 million , partially offset by net inflows of$575 million . Inflows of$482 million , which included leverage, were attributable to the Company's initial public offering of the Cohen & Steers Real Estate Opportunities and Income Fund (RLTY). Our organic growth rate for closed-end funds was 4.4% for the year endedDecember 31, 2022 .
Average assets under management for closed-end funds for the year ended
Changes in Assets Under Management - 2021 Compared with 2020
Assets under management atDecember 31, 2021 increased 33.4% to$106.6 billion from$79.9 billion atDecember 31, 2020 . The increase was due to net inflows of$9.5 billion and market appreciation of$21.0 billion , partially offset by distributions of$3.7 billion . Net inflows included$5.0 billion intoU.S. real estate and$3.7 billion into preferred securities. Market appreciation included$14.4 billion fromU.S. real estate and$3.9 billion from global/international real estate. Distributions included$2.3 billion fromU.S. real estate and$985 million from preferred securities. Our overall organic growth rate was 11.8% for the year endedDecember 31, 2021 .
Average assets under management for the year ended
Open-end funds
Assets under management in open-end funds atDecember 31, 2021 , which represented 47.7% of total assets under management, increased 44.8% to$50.9 billion from$35.2 billion atDecember 31, 2020 . The increase was due to net inflows of$8.8 billion and market appreciation of$8.9 billion , partially offset by distributions of$1.9 billion . Net inflows included$4.2 billion intoU.S. real estate and$3.3 billion into preferred securities. Market appreciation included$7.8 million fromU.S. real estate. Distributions included$1.0 billion fromU.S. real estate and$762 million from preferred securities. Of these distributions,$1.5 billion was reinvested and included in net flows. Our organic growth rate for open-end funds was 25.0% for the year endedDecember 31, 2021 . Average assets under management for open-end funds for the year endedDecember 31, 2021 increased 42.6% to$43.0 billion from$30.2 billion for the year endedDecember 31, 2020 . Institutional accounts Assets under management in institutional accounts atDecember 31, 2021 , which represented 40.1% of total assets under management, increased 28.5% to$42.7 billion from$33.3 billion atDecember 31, 2020 . The increase was due to net inflows of$589 million and market appreciation of$10.0 billion , partially offset by distributions of$1.2 billion . Net inflows included$802 million intoU.S. real estate and$603 million into global listed infrastructure, partially offset by net outflows of$1.0 billion from real assets multi-strategy (included in "Other" in the table on pages 23 and 24). Market appreciation included$5.6 billion fromU.S. real estate and$3.5 billion from global/international real estate. Distributions included$1.1 billion fromU.S. real estate. Our organic growth rate for institutional accounts was 1.8% for the year endedDecember 31, 2021 . Average assets under management for institutional accounts for the year endedDecember 31, 2021 increased 30.2% to$38.9 billion from$29.9 billion for the year endedDecember 31, 2020 . Assets under management in advisory accounts atDecember 31, 2021 , which represented 57.6% of institutional assets under management, increased 39.5% to$24.6 billion from$17.6 billion atDecember 31, 2020 . The increase was due to net inflows of$1.9 billion and market appreciation of$5.0 billion . Net inflows included$1.5 billion intoU.S. real estate,$746 million into global listed infrastructure and$599 million into preferred securities, partially offset by net outflows of$1.0 billion from real assets multi-strategy (included in "Other" in the table on pages 23 and 24). Market appreciation included$2.3 billion fromU.S. real estate and$1.9 billion from global/international real estate. Our organic growth rate for advisory accounts was 11.0% for the year endedDecember 31, 2021 . 27 --------------------------------------------------------------------------------
Average assets under management for advisory accounts for the year ended
Assets under management inJapan subadvisory accounts atDecember 31, 2021 , which represented 26.5% of institutional assets under management, increased 16.6% to$11.3 billion from$9.7 billion atDecember 31, 2020 . The increase was due to market appreciation of$3.6 billion , partially offset by net outflows of$770 million and distributions of$1.2 billion . Net outflows included$554 million fromU.S. real estate. Market appreciation included$2.9 billion fromU.S. real estate and$636 million from global/international real estate. Distributions included$1.1 billion fromU.S. real estate. Our organic decay rate forJapan subadvisory accounts was (7.9%) for the year endedDecember 31, 2021 .
Average assets under management for
Assets under management in subadvisory accounts excludingJapan atDecember 31, 2021 , which represented 15.9% of institutional assets under management, increased 15.1% to$6.8 billion from$5.9 billion atDecember 31, 2020 . The increase was due to market appreciation of$1.5 billion , partially offset by net outflows of$587 million . Net outflows included$374 million from global/international real estate and$137 million from global listed infrastructure. Market appreciation included$938 million from global/international real estate and$342 million fromU.S. real estate. Our organic decay rate for subadvisory accounts excludingJapan was (9.9%) for the year endedDecember 31, 2021 . Average assets under management for subadvisory accounts excludingJapan for the year endedDecember 31, 2021 increased 24.1% to$6.5 billion from$5.2 billion for the year endedDecember 31, 2020 .
Closed-end funds
Assets under management in closed-end funds atDecember 31, 2021 , which represented 12.2% of total assets under management, increased 13.0% to$13.0 billion from$11.5 billion atDecember 31, 2020 . The increase was primarily due to market appreciation of$2.0 billion , partially offset by distributions of$622 million . Our organic growth rate for closed-end funds was 0.8% for the year endedDecember 31, 2021 . Average assets under management for closed-end funds for the year endedDecember 31, 2021 increased 34.8% to$12.3 billion from$9.1 billion for the year endedDecember 31, 2020 . 28 -------------------------------------------------------------------------------- Summary of Operating Results (in thousands, except percentages and per share data) Years Ended December 31, 2022 2021 2020 U.S. GAAP Revenue$ 566,906 $ 583,832 $ 427,536 Expenses (1)$ 350,968 $ 323,460 $ 332,479 Operating income$ 215,938 $ 260,372 $ 95,057 Non-operating income (loss) (2)$ (19,041) $ 21,572 $ (1,670) Net income attributable to common stockholders$ 171,042 $ 211,396 $ 76,584 Diluted earnings per share$ 3.47 $ 4.31 $ 1.57 Operating margin 38.1 % 44.6 % 22.2 % As Adjusted (3) Net income attributable to common stockholders$ 182,251 $ 197,947 $ 125,291 Diluted earnings per share$ 3.70 $ 4.03 $ 2.57 Operating margin 43.0 % 46.0 % 39.6 %
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(1)Included expenses of$60.6 million associated with the initial public offering of theCohen & Steers Tax-Advantaged Preferred Securities and Income Fund (PTA) for the year endedDecember 31, 2020 . (2)Included amounts attributable to third-party interests in consolidated investment vehicles. Refer to non-operating income (loss) tables on pages 30 and 32 for additional detail. (3)Refer to pages 33-35 for reconciliations ofU.S. GAAP to as adjusted results. 2022 Compared with 2021 Revenue (in thousands) Years Ended December 31, 2022 2021 $ Change % Change Investment advisory and administration fees Open-end funds$ 288,577 $ 288,359 $ 218 0.1 % Institutional accounts 134,012 146,345$ (12,333) (8.4) % Closed-end funds 106,722 108,840$ (2,118) (1.9) % Total 529,311 543,544$ (14,233) (2.6) % Distribution and service fees 35,093 37,630$ (2,537) (6.7) % Other 2,502 2,658$ (156) (5.9) % Total revenue$ 566,906 $ 583,832 $ (16,926) (2.9) % Investment advisory and administration fees decreased from the year endedDecember 31, 2021 , primarily due to lower average assets under management in both institutional accounts and closed-end funds, as well as lower performance fees from certain institutional accounts. •Total investment advisory and administration revenue from open-end funds compared with average assets under management implied an annual effective fee rate of 66.8 bps and 67.1 bps for the years endedDecember 31, 2022 and 2021, respectively. •Total investment advisory revenue from institutional accounts compared with average assets under management implied an annual effective fee rate of 36.8 bps and 37.6 bps for the years endedDecember 31, 2022 and 2021, respectively. The decrease in the implied annual effective fee rate was primarily due to lower performance fees for the year endedDecember 31, 2022 . Excluding the performance fees of$636,000 and$5.6 million , the implied annual effective fee rate would have been 36.7 bps and 36.2 bps for the years endedDecember 31, 2022 and 2021, respectively. •Total investment advisory and administration revenue from closed-end funds compared with average assets under management implied an annual effective fee rate of 88.6 bps and 88.4 bps for the years endedDecember 31, 2022 and 2021, respectively. 29
-------------------------------------------------------------------------------- Distribution and service fees for the year endedDecember 31, 2022 decreased primarily due to lower average assets under management in load share classes. Expenses (in thousands) Years Ended December 31, 2022 2021 $ Change % Change Employee compensation and benefits$ 208,831 $ 195,443 $ 13,388 6.9 % Distribution and service fees 82,928 75,891$ 7,037 9.3 % General and administrative 54,826 48,034$ 6,792 14.1 % Depreciation and amortization 4,383 4,092$ 291 7.1 % Total expenses$ 350,968 $ 323,460 $ 27,508 8.5 % Employee compensation and benefits increased from the year endedDecember 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 lower incentive compensation of$2.3 million . Distribution and service fee expenses increased from the year endedDecember 31, 2021 , primarily due to costs of$14.2 million associated with the initial public offering of RLTY in 2022, partially offset by a shift in the composition of assets under management into lower cost share classes. General and administrative expenses increased from the year endedDecember 31, 2021 , primarily due to higher information technology-related expenses of$2.4 million , an increase in travel and entertainment of$1.9 million and one month of incremental lease expense related to the Company's future headquarters at1166 Avenue of the Americas of$1.1 million . Operating margin for the year endedDecember 31, 2022 decreased to 38.1% from 44.6% for the year endedDecember 31, 2021 . The year endedDecember 31, 2022 included costs associated with the initial public offering of RLTY. Operating margin represents the ratio of operating income to revenue. Non-operating Income (Loss) (in thousands) Year Ended December 31, 2022 Consolidated Investment Corporate Vehicles Seed Investments Corporate Other Total Interest and dividend income-net$ 3,718 $
1,355 $ 1,745
(26,480) (2,345) 3,719 (1) (25,106) Foreign currency gain (loss)-net (3,765) (14) 3,026 (753) Total non-operating income (loss) (26,527) (1,004) 8,490 (19,041) Net (income) loss attributable to noncontrolling interests 21,556 - - 21,556 Non-operating income (loss) attributable to the Company$ (4,971) $ (1,004) $ 8,490$ 2,515 _________________________ (1) Comprised primarily of gain (loss) on derivative contracts, which are utilized to economically hedge a portion of the market risk of the Company's seed investments included in both Consolidated Investment Vehicles and Corporate Seed Investments. (in thousands) Year Ended December 31, 2021 Consolidated Investment Corporate Corporate Vehicles Seed Investments Other Total Interest and dividend income-net$ 2,166 $ 652$ 59 $ 2,877 Gain (loss) from investments-net 20,072 6,130 (7,418) (1) 18,784 Foreign currency gain (loss)-net 331 (1) (419) (89) Total non-operating income (loss) 22,569 6,781 (7,778) 21,572 Net (income) loss attributable to noncontrolling interests (14,758) - - (14,758) Non-operating income (loss) attributable to the Company$ 7,811 $ 6,781$ (7,778) $ 6,814 _________________________ (1) Comprised primarily of gain (loss) on derivative contracts, which are utilized to economically hedge a portion of the market risk of the Company's seed investments included in both Consolidated Investment Vehicles and Corporate Seed Investments. 30 --------------------------------------------------------------------------------
Income Taxes
A reconciliation of the Company's statutory federal income tax rate and the effective income tax rate is summarized in the following table:
Years Ended
2022 2021 U.S. statutory tax rate 21.0 % 21.0 % State and local income taxes, net of federal benefit 3.3 3.8 Non-deductible executive compensation 3.0 2.3 Unrecognized tax benefit adjustments (3.3) (3.2) Excess tax benefits related to the vesting and delivery of restricted stock units (2.7) (2.2) Other 0.4 (0.8) Effective income tax rate 21.7 % 20.9 % 2021 Compared with 2020 Revenue (in thousands) Years Ended December 31, 2021 2020 $ Change % Change Investment advisory and administration fees Open-end funds$ 288,359 $ 201,135 $ 87,224 43.4 % Institutional accounts 146,345 115,876$ 30,469 26.3 % Closed-end funds 108,840 78,026$ 30,814 39.5 % Total 543,544 395,037$ 148,507 37.6 % Distribution and service fees 37,630 30,134$ 7,496 24.9 % Other 2,658 2,365$ 293 12.4 % Total revenue$ 583,832 $ 427,536 $ 156,296 36.6 %
Investment advisory and administration fees increased from the year ended
•Total investment advisory and administration revenue from open-end funds compared with average assets under management implied an annual effective fee rate of 67.1 bps and 66.7 bps for the years endedDecember 31, 2021 and 2020, respectively. •Total investment advisory revenue from institutional accounts compared with average assets under management implied an annual effective fee rate of 37.6 bps and 38.8 bps for the years endedDecember 31, 2021 and 2020, respectively. The decrease in the implied annual effective fee rate was primarily due to lower performance fees for the year endedDecember 31, 2021 . Excluding the performance fees of$5.6 million and$7.7 million , the implied annual effective fee rate would have been 36.2 bps for the years endedDecember 31, 2021 and 2020, respectively. •Total investment advisory and administration revenue from closed-end funds compared with average assets under management implied an annual effective fee rate of 88.4 bps and 85.4 bps for the years endedDecember 31, 2021 and 2020, respectively. The increase in the implied annual effective fee rate was primarily due to the initial public offering of PTA in the fourth quarter of 2020.
Distribution and service fees for the year ended
31 --------------------------------------------------------------------------------
Expenses (in thousands) Years Ended December 31, 2021 2020 $ Change % Change Employee compensation and benefits$ 195,443 $ 156,457 $ 38,986 24.9 % Distribution and service fees 75,891 115,084$ (39,193) (34.1) % General and administrative 48,034 56,286$ (8,252) (14.7) % Depreciation and amortization 4,092 4,652$ (560) (12.0) % Total expenses$ 323,460 $ 332,479 $ (9,019) (2.7) % Employee compensation and benefits increased from the year endedDecember 31, 2020 , primarily due to an increase in incentive compensation of$24.8 million and higher accelerated vesting of certain restricted stock units of$6.4 million . Distribution and service fee expenses for the year endedDecember 31, 2020 included expenses of$57.8 million associated with the initial public offering of PTA. Excluding these expenses, distribution and service fees for the year endedDecember 31, 2021 increased$18.6 million primarily due to higher average assets under management inU.S. open-end funds. General and administrative expenses for the year endedDecember 31, 2020 included expenses of$11.9 million associated with the Cohen & Steers Quality Income Realty Fund, Inc. (RQI) rights offering. Excluding these expenses, general and administrative expenses for the year endedDecember 31, 2021 increased$3.6 million primarily due to higher recruitment fees of$1.7 million and higher information technology-related expenses of$1.2 million .
Operating Margin
Operating margin for the year endedDecember 31, 2021 increased to 44.6% from 22.2% for the year endedDecember 31, 2020 . The year endedDecember 31, 2020 included costs associated with the initial public offering of PTA and the RQI rights offering noted above. Non-operating Income (Loss) (in thousands) Year Ended December 31, 2021 Consolidated Investment Corporate Corporate Vehicles Seed Investments Other Total Interest and dividend income-net$ 2,166 $ 652$ 59 $ 2,877 Gain (loss) from investments-net 20,072 6,130 (7,418) (1) 18,784 Foreign currency gain (loss)-net 331 (1) (419) (89) Total non-operating income (loss) 22,569 6,781 (7,778) 21,572 Net (income) loss attributable to noncontrolling interests (14,758) - - (14,758) Non-operating income (loss) attributable to the Company$ 7,811 $ 6,781$ (7,778) $ 6,814 _________________________ (1) Comprised primarily of gain (loss) on derivative contracts, which are utilized to economically hedge a portion of the market risk of the Company's seed investments including both consolidated investment vehicles and corporate seed investments. (in thousands) Year Ended December 31, 2020 Consolidated Corporate Corporate Investment Vehicles Seed Investments Other Total Interest and dividend income-net $ 1,763 $ 595$ 1,004 $ 3,362 Gain (loss) from investments-net (2,492) 204 (1,828) (1) (4,116) Foreign currency gain (loss)-net (399) - (517) (916) Total non-operating income (loss) (1,128) 799 (1,341) (1,670) Net (income) loss attributable to noncontrolling interests 1,419 - - 1,419 Non-operating income (loss) attributable to the Company $ 291 $ 799$ (1,341) $ (251) _________________________ (1) Comprised primarily of gain (loss) on derivative contracts, which are utilized to economically hedge a portion of the market risk of the Company's seed investments including both consolidated investment vehicles and corporate seed investments. 32 --------------------------------------------------------------------------------
Income Taxes Years Ended December 31, 2021 2020 U.S. statutory tax rate 21.0 % 21.0 % State and local income taxes, net of federal benefit 3.8 4.1 Non-deductible executive compensation 2.3 2.6 Unrecognized tax benefit adjustments (3.2) 0.4 Excess tax benefits related to the vesting and delivery of restricted stock units (2.2) (9.0) Other (0.8) 0.1 Effective income tax rate 20.9 % 19.2 %
Reconciliations of
Management believes that use of the following as adjusted (non-GAAP) financial results provides greater transparency into the Company's operating performance. In addition, these as adjusted financial results are used to prepare the Company's internal management reports which are used in evaluating its business.
While we believe that these as adjusted financial results are useful in
evaluating operating performance, this information should be considered as
supplemental in nature and not as a substitute for the related financial
information prepared in accordance with
Reconciliation of
Years Ended December 31, (in thousands, except per share data) 2022 2021 2020
Net income attributable to common stockholders,
$ 211,396 $ 76,584 Seed investments (1) 4,317 (5,870) 1,443 Accelerated vesting of restricted stock units 10,260 7,197 774 Lease expense - 280 Park Avenue (2) 776 - - Initial public offering costs (3) 15,239 - 60,559 Rights offering costs (4) - - 11,859 Other non-recurring expenses (5) - - 500 Foreign currency exchange (gains) losses-net (6) (4,741) (475) 871 Tax adjustments (7) (14,642) (14,301) (27,299)
Net income attributable to common stockholders, as adjusted
$ 182,251
Diluted weighted average shares outstanding 49,297 49,090 48,676 Diluted earnings per share, U.S. GAAP$ 3.47 $ 4.31 $ 1.57 Seed investments 0.09 (0.12) 0.03 Accelerated vesting of restricted stock units 0.21 0.15 0.02 Lease expense - 280 Park Avenue 0.02 - - Initial public offering costs 0.31 - 1.24 Rights offering costs - - 0.24 Other non-recurring expenses - - 0.01 Foreign currency exchange (gains) losses-net (0.10) (0.01) 0.02 Tax adjustments (0.30) (0.30) (0.56) Diluted earnings per share, as adjusted$ 3.70
_________________________
(1)Represents amounts related to the deconsolidation of seed investments in consolidated investment vehicles as well as non-operating (income) loss from seed investments that were not consolidated. (2)Represents one month of lease expense related to the Company's current headquarters at280 Park Avenue , which it expects to vacate in the fourth quarter of 2023. In connection with the transition to its future headquarters, the Company will recognize additional GAAP lease expense as a result of the overlapping terms for both its current and future headquarters until its current headquarters lease expires inJanuary 2024 . 33 -------------------------------------------------------------------------------- (3)Represents costs associated with the initial public offerings of RLTY and PTA for years endedDecember 31, 2022 and 2020, respectively. Costs are summarized in the following table: Years Ended December 31, (in thousands) 2022 2021 2020 Employee compensation and benefits$ 357 $ - $
1,317
Distribution and service fees 14,224 -
57,818
General and administrative 658 -
1,424
Initial public offering costs$ 15,239 $ - $
60,559
(4)Represents costs associated with the RQI rights offering, which were recorded in general and administrative expense. (5)Represents non-recurring expenses, which were recorded in distribution and service fees. (6)Represents net foreign currency exchange (gains) losses associated withU.S. dollar-denominated assets held by certain foreign subsidiaries.
(7)Tax adjustments are summarized in the following table:
Years Ended December 31, (in thousands) 2022 2021 2020
Exclusion of tax effects associated with items noted above
$ (3,522) $ (2,262) $ (17,119) Exclusion of discrete tax items (11,120) (12,039) (10,180) Total tax adjustments$ (14,642)
Reconciliation of
Years Ended December 31, (in thousands, except percentages) 2022 2021 2020 Revenue, U.S. GAAP$ 566,906 $ 583,832 $ 427,536 Seed investments (1) 790 411 281 Revenue, as adjusted$ 567,696 $ 584,243 $ 427,817 Expenses, U.S. GAAP$ 350,968 $ 323,460 $ 332,479 Seed investments (1) (838) (819) (424)
Accelerated vesting of restricted stock units (10,260) (7,197)
(774)
Lease expense - 280 Park Avenue (2) (776) - - Initial public offering costs (3) (15,239) -
(60,559)
Rights offering costs (4) - -
(11,859)
Other non-recurring expenses (5) - - (500) Expenses, as adjusted$ 323,855 $ 315,444 $ 258,363 Operating income, U.S. GAAP$ 215,938 $ 260,372 $ 95,057 Seed investments (1) 1,628 1,230 705 Accelerated vesting of restricted stock units 10,260 7,197
774
Lease expense - 280 Park Avenue (2) 776 - - Initial public offering costs (3) 15,239 -
60,559
Rights offering costs (4) - -
11,859
Other non-recurring expenses (5) - -
500
Operating income, as adjusted$ 243,841 $ 268,799
Operating margin, U.S. GAAP 38.1 % 44.6 % 22.2 % Operating margin, as adjusted 43.0 % 46.0
% 39.6 %
_________________________
(1)Represents amounts related to the deconsolidation of seed investments in consolidated investment vehicles. (2)Represents one month of lease expense related to the Company's current headquarters at280 Park Avenue , which it expects to vacate in the fourth quarter of 2023. In connection with the transition to its future headquarters, the Company will recognize additional non-recurring GAAP lease expense as a result of the overlapping terms for both its current and future headquarters until its current headquarters lease expires inJanuary 2024 . 34 -------------------------------------------------------------------------------- (3)Represents costs associated with the initial public offerings of RLTY and PTA for years endedDecember 31, 2022 and 2020, respectively. Costs are summarized in the following table: Years Ended December 31, (in thousands) 2022 2021 2020 Employee compensation and benefits$ 357 $ - $
1,317
Distribution and service fees 14,224 -
57,818
General and administrative 658 -
1,424
Initial public offering costs$ 15,239 $ - $
60,559
(4)Represents costs associated with the RQI rights offering, which were recorded in general and administrative expense. (5)Represents non-recurring expenses, which were recorded in distribution and service fees.
Reconciliation of
Years Ended December 31, (in thousands) 2022 2021
2020
Non-operating income (loss), U.S. GAAP$ (19,041) $ 21,572 $ (1,670) Seed investments (1) 24,245 (21,858)
2,157
Foreign currency exchange (gains) losses-net (2) (4,741) (475)
871
Non-operating income (loss), as adjusted$ 463 $ (761)
_________________________
(1)Represents amounts related to the deconsolidation of seed investments in consolidated investment vehicles as well as non-operating (income) loss from seed investments that were not consolidated. (2)Represents net foreign currency exchange (gains) losses associated withU.S. dollar-denominated assets held by certain foreign subsidiaries. 35 --------------------------------------------------------------------------------
Changes in Financial Condition, Liquidity and Capital Resources
We seek to maintain a balance sheet that supports our business strategies and provides the appropriate amount of liquidity at all times.
Net Liquid Assets
Our current financial condition is highly liquid and is primarily comprised of cash and cash equivalents, liquid seed investments and other current assets. Liquid assets are reduced by current liabilities, which are generally defined as obligations due within one year (together, net liquid assets).
The table below summarizes net liquid assets:
December 31, December 31, (in thousands) 2022 2021 Cash and cash equivalents$ 247,418 $ 184,373 Liquid seed investments-net 67,987 62,679 Other current assets 70,716 84,533 Current liabilities (114,522) (118,888) Net liquid assets$ 271,599 $ 212,697 Cash and cash equivalents Cash and cash equivalents are on deposit with several highly rated financial institutions and include short-term, highly liquid investments, which are readily convertible into cash and have original maturities of three months or less.
Liquid seed investments-net
Liquid seed investments 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 and are presented net of noncontrolling interests.
Other current assets
Other current assets primarily represent investment advisory and administration fees receivable. AtDecember 31, 2022 , institutional accounts comprised 46.3% of total accounts receivable, while open-end and closed-end funds, together, comprised 48.0% of total accounts receivable. We perform a review of our receivables on an ongoing basis in order to assess collectability and, based on our analysis atDecember 31, 2022 , there was no allowance for uncollectible accounts required.
Current liabilities
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.
Future capital needs
Our business has become more capital intensive, primarily through co-investment opportunities. Potential uses of capital range from 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, onJanuary 20, 2023 , we entered into a Credit Agreement providing for a$100 million senior unsecured revolving credit facility maturing onJanuary 20, 2026 . Borrowings under the Credit Agreement will be used for working capital and other general corporate purposes. To date, we have not drawn on the credit agreement. DuringAugust 2022 , we entered into a lease agreement for our new corporate headquarters inNew York City . In connection with the build-out of our new space, we expect to incur costs of approximately$40.0 million to$50.0 million , net of lease incentives. The lease for our current corporate headquarters, also inNew York City , is scheduled to expire inJanuary 2024 . 36 -------------------------------------------------------------------------------- We have committed to invest up to$50.0 million inCohen & Steers Real Estate Opportunities Fund, L.P. (REOF) of which$32.6 million remains unfunded. In addition, we have committed to invest up to$125.0 million inCohen & Steers Income Opportunities REIT, Inc. (CNSREIT) of which$124.8 million remains unfunded. The timing for funding the remaining portion of our commitments is determined by the investment vehicles.
Cash flows
Our cash flows generally result from the operating activities of our business, with investment advisory and administration fees being the most significant contributor.
The table below summarizes our cash flows:
Years Ended December 31, (in thousands) 2022 2021 2020 Cash Flow Data: Net cash provided by (used in) operating activities$ 61,680 $ 242,901 $ 89,186 Net cash provided by (used in) investing activities (2,857) 47,648 (1,770) Net cash provided by (used in) financing activities 8,975 (145,426) (148,895) Net increase (decrease) in cash and cash equivalents 67,798 145,123 (61,479)
Effect of foreign exchange rate changes on cash and cash equivalents
(4,440) (999) 1,359 Cash and cash equivalents, beginning of the period 185,356 41,232 101,352 Cash and cash equivalents, end of the period$ 248,714
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 the sales and maturities ofU.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 . In 2021, cash and cash equivalents, excluding the effect of foreign exchange rate changes, increased by$145.1 million when compared with 2020. The year endedDecember 31, 2020 included costs associated with the initial public offering of PTA and the RQI rights offering. 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$242.9 million . Net cash provided by investing activities was$47.6 million , which included$41.7 million of proceeds from the sales and maturities ofU.S. Treasury securities held for corporate purposes and net proceeds of securities held directly for the purpose of establishing performance track records of$8.1 million . Net cash used in financing activities was$145.4 million , including dividends paid to stockholders of$147.6 million , which included a special dividend of$60.3 million paid onNovember 30, 2021 , repurchases of common stock to satisfy employee withholding tax obligations on the vesting and delivery of restricted stock units of$22.6 million , partially offset by net contributions from noncontrolling interests of$23.7 million . In 2020, cash and cash equivalents, excluding the effect of foreign exchange rate changes, decreased by$61.5 million when compared with 2019. The decrease in cash was primarily due to the payment of expenses of$60.6 million associated with the initial public offering of PTA and$12.0 million associated with the RQI rights offering for the year endedDecember 31, 2020 . 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$89.2 million . Net cash used in investing activities was$1.8 million , primarily attributable to net purchases of securities held directly for the purpose of establishing performance track records of$7.3 million and purchases of property and equipment of$2.5 million , partially offset by$8.4 million of proceeds from the sales and maturities ofU.S. Treasury securities held for corporate purposes. Net cash used in financing activities was$148.9 million , including dividends paid to stockholders of$122.5 million , which included a special dividend of$47.8 million paid onDecember 1, 2020 and repurchases of common stock to satisfy employee withholding tax obligations on the vesting and delivery of restricted stock units of$25.9 million . 37 --------------------------------------------------------------------------------
Contractual Obligations, Commitments and Contingencies
The following table summarizes our contractual obligations atDecember 31, 2022 : (in thousands) 2023 2024 2025 2026 2027 Thereafter Total Operating leases (1)$ 11,824 $ 10,880 $ 13,038 $ 13,038 $ 13,038 $ 161,161 $ 222,979 Purchase obligations (2) 6,173 4,540 3,305 2,382 316 - 16,716 Other liability (3) 1,246 1,662 2,077 - - - 4,985 Total$ 19,243 $ 17,082 $ 18,420 $ 15,420 $ 13,354 $ 161,161 $ 244,680 _________________________
(1)Includes new lease agreement for our future corporate headquarters in
(2)Represents contracts which are either noncancellable or cancellable with a penalty. Our obligations primarily reflected information technology equipment, software licenses and standard service contracts for market data. (3)Consists of the transition tax liability based on the cumulative undistributed earnings and profits of our foreign subsidiaries in connection with the enactment of the Tax Cuts and Jobs Act in 2017. See Note 14, Income Taxes, in the notes to the consolidated financial statements included in Part IV, Item 15 of this filing. Investment Commitments We have committed to invest up to$50.0 million in REOF. As ofDecember 31, 2022 , we had funded$17.4 million of this commitment. In addition, we have committed to invest up to$125.0 million in CNSREIT. As ofDecember 31, 2022 , we had funded$0.2 million of this commitment. The timing for funding the remaining portion of our commitments is determined by the investment vehicles.
Dividends
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, contractual, legal and regulatory restrictions on the payment of dividends, if any, by us and our subsidiaries and such other factors deemed relevant. OnFebruary 23, 2023 , we declared a quarterly dividend on our common stock in the amount of$0.57 per share. This dividend will be payable onMarch 16, 2023 to stockholders of record at the close of business onMarch 6, 2023 .
Contingencies
Due to the uncertainty with respect to the timing of future cash flows associated with unrecognized tax benefits atDecember 31, 2022 , the Company is unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities. Therefore,$5.0 million of gross unrecognized tax benefits have been excluded from the contractual obligations table above. See Note 14, Income Taxes, in the notes to the consolidated financial statements included in Part IV, Item 15 of this filing.
Net Capital Requirements
Several of our subsidiaries are subject to minimum net capital requirements by the local laws and regulations to which they are subject. As ofDecember 31, 2022 , 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.
Critical Accounting Estimates
The preparation of our consolidated financial statements in accordance with accounting principles generally accepted inthe United States of America requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes the estimates used in preparing the consolidated financial statements are reasonable and prudent. Actual results could differ from those estimates. 38 -------------------------------------------------------------------------------- Our significant accounting policies are disclosed in Note 2, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements included in Part IV, Item 15 of this filing and should be read in conjunction with the summarized information below. Management considers the following accounting estimates critical to an informed review of our consolidated financial statements as they require management to make certain judgments about matters that may be uncertain at the time the estimates were determined. Valuation of Investments 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. 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.
Income Taxes
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 during reporting periods that may pertain to prior period provisions 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. 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. The calculation of our tax liabilities involves uncertainties in the application of complex tax laws and regulations in several jurisdictions across our global operations. In accordance with Accounting Standards Codification Topic 740, Income Taxes (ASC 740), a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. 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.
Recently Issued Accounting Pronouncements
See discussion of Recently Issued Accounting Pronouncements in Note 2 of the consolidated financial statements.
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