Assets under management ended the third quarter of 2024 at $1,630.9 billion, an increase of $61.8 billion from June 30, 2024. The increase in assets under management during the third quarter of 2024 was driven by market appreciation and income, net of distributions not reinvested, of $74.0 billion, offset by net cash outflows of $12.2 billion.

As of September 30, 2024, total assets in these solutions were $582 billion, of which $567 billion are included in our reported assets under management in the tables above.

We have ample liquidity and resources that allow us to take advantage of attractive growth opportunities. We are investing in key capabilities, including investment professionals, distribution professionals, technologies, and new product offerings in order to provide our clients with strong investment management expertise and service.

The decrease in our U.S. GAAP operating margin for the third quarter of 2024 compared to the 2023 period was driven by operating expense growth outpacing net revenue growth primarily due to changes in the supplemental savings plan liability and lower capital allocation-based income.

The firm employed 8,104 associates at September 30, 2024, an increase of 2.5% from the end of 2023 and an increase of 3.3% from September 30, 2023.

Challenging market conditions have reduced revenue expectations below the defined revenue targets resulting in a reduction of the contingent consideration liability to zero as of September 30, 2024.

There have been no material changes in the information provided in Item 1A of our Form 10-K Annual Report for 2023.

Our future revenues and results of operations will fluctuate primarily due to changes in the total value and composition of assets under our management. Such changes result from many factors, including, among other things: client-related cash inflows and outflows in our products, performance fees, capital allocation-based income, fluctuations in global financial markets that result in appreciation or depreciation of the assets under our management.

Our business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax, and compliance requirements may have a substantial effect on our operations and results, including, but not limited to, effects on costs that we incur and effects on investor interest in sponsored investment products and investing in general or in particular classes of mutual funds or other investments.

Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success.

The average annualized effective fee rate earned for the three- and nine-month periods ended September 30, 2024 declined from the comparable 2023 periods due to client flows and transfers creating a mix shift in assets under management toward lower fee products and asset classes.

The investment management industry has been evolving and industry participants are facing several challenging trends including passive investments taking market share from traditional active strategies; continued downward fee pressure; demand for new investment vehicles to meet client needs; and an ever-changing regulatory landscape.

Operating expenses on a U.S. GAAP basis were $1,172.0 million in the third quarter of 2024, a 7.6% increase over the comparable 2023 period. In comparison to the third quarter of 2023, about 70% of the increase in U.S. GAAP operating expenses was due to a market-related increase of $43.4 million in the supplemental savings liability in the third quarter of 2024, compared to a decrease of $14.2 million in the supplemental savings liability in the 2023 period.

Technology, occupancy, and facility costs were $164.0 million in the third quarter of 2024, an increase of $4.3 million, or 2.7%, compared to the $159.7 million recognized in the 2023 quarter. The increases in both periods were primarily related to higher costs from the firm's ongoing investment in its technology capabilities, primarily hosted solution licenses.

General, administrative, and other expenses were $104.2 million in the third quarter of 2024, an increase of $18.5 million, or 21.6%, compared to the $85.7 million recognized in the 2023 quarter. These increases were partially offset by lower research fee expense as the firm changed its approach to paying for research, consistent with regulations and general industry practice.

Technology, occupancy, and facility costs were $164.0 million in the third quarter of 2024, an increase of $4.3 million, or 2.7%, compared to the $159.7 million recognized in the 2023 quarter. The increases in both periods were primarily related to higher costs from the firm's ongoing investment in its technology capabilities, primarily hosted solution licenses.

We anticipate property, equipment, software and other capital expenditures, including internal labor capitalization, for the full-year 2024 to be about $460 million of which approximately 60% is planned for technology initiatives with the remaining primarily related to the build out of our new Baltimore headquarters.

We are investing in key capabilities, including investment professionals, distribution professionals, technologies, and new product offerings in order to provide our clients with strong investment management expertise and service.

We expended $263.7 million in the first nine months of 2024 to repurchase 2.3 million shares of our outstanding common stock, at an average price of $112.30 per share. While opportunistic in our approach to stock buybacks, we will generally repurchase our common stock over time to offset the dilution created by our equity-based compensation plans.

We increased our quarterly recurring dividend per common share in February 2024 by 1.6% to $1.24 per common share from $1.22 per common share.

We anticipate property, equipment, software and other capital expenditures, including internal labor capitalization, for the full-year 2024 to be about $460 million of which approximately 60% is planned for technology initiatives with the remaining primarily related to the build out of our new Baltimore headquarters.

The provided 10-Q filing does not contain explicit information regarding specific ESG initiatives or targets.

Global bond returns were broadly positive in the third quarter of 2024. In the U.S., Treasury bill yields and shorter-term bond yields declined as the Fed reduced the fed funds target rate to the 4.75% to 5.00% range and signaled the potential for more rate cuts.

Developed non-U.S. equity markets generally outperformed large-cap U.S. stocks in U.S. dollar terms, as a weaker dollar versus major non-U.S. currencies lifted overseas returns in dollar terms.

Emerging equity markets outperformed stocks in developed non-U.S. markets in dollar terms. Emerging Asian markets were mostly positive; a few rose more than 20%. Chinese shares surged more than 23%, while the A shares market climbed more than 21%, thanks to brisk gains in September stemming from new Chinese economic stimulus measures.