AMG, a strategic partner to leading independent investment
management firms globally, today reported its financial and
operating results for the third quarter and nine months ended
September 30, 2024.
Jay C. Horgen, President and Chief
Executive Officer of AMG, said:“AMG delivered strong
results in the third quarter, including year-over-year growth of
18% in Economic Earnings per share, reflecting the ongoing momentum
in our business and the positive impact of our disciplined capital
allocation strategy.
“Our growth strategy continues to drive the
evolution of our business mix toward secular growth areas, with
alternative strategies meaningfully, and increasingly, contributing
to AMG’s earnings. AMG’s dedicated private markets Affiliates
raised approximately $7 billion in the quarter, reflecting the
strength of the ongoing demand for our Affiliates’ specialized
strategies. During the quarter, we continued to invest AMG’s
capital and resources in and alongside our Affiliates to enhance
their growth – including by collaborating to develop additional
innovative alternative solutions, across both private markets and
liquid alternatives, for the U.S. wealth marketplace. AMG's proven
ability to magnify the competitive advantages of partner-owned
firms, while also preserving their independence, continues to
differentiate AMG’s partnership model and is highly valued by
prospective Affiliates. As we form partnerships with additional new
Affiliates in areas of secular demand and continue to invest in
existing Affiliates, including by leveraging our capital formation
capabilities, we expect to accelerate the evolution of AMG’s
business profile toward alternatives and enhance our long-term
growth prospects.
“Our excellent capital position was further
strengthened through the issuance of $400 million in senior notes
in the quarter, extending the average duration of our debt to more
than 20 years. Given our unique partnership model, proven strategic
capabilities, and ample financial flexibility, we see increasing
opportunities to invest for growth in both new and existing
Affiliates, and create meaningful additional shareholder value over
time.”
|
FINANCIAL HIGHLIGHTS |
Three Months Ended |
|
Nine Months Ended |
|
(in millions, except as noted and per share data) |
9/30/2023 |
|
9/30/2024 |
|
9/30/2023 |
|
9/30/2024 |
|
Operating Performance Measures |
|
|
|
|
|
|
|
|
AUM (at period end, in billions) |
$ |
635.8 |
|
|
$ |
728.4 |
|
|
$ |
635.8 |
|
|
$ |
728.4 |
|
|
Average AUM (in billions) |
|
663.8 |
|
|
|
711.7 |
|
|
|
664.4 |
|
|
|
694.9 |
|
|
Net client cash flows (in billions) |
|
(9.4 |
) |
|
|
(2.8 |
) |
|
|
(23.1 |
) |
|
|
(5.6 |
) |
|
Aggregate fees |
|
997.5 |
|
|
|
1,157.1 |
|
|
|
3,505.7 |
|
|
|
3,726.8 |
|
|
Financial Performance Measures |
|
|
|
|
|
|
|
|
Net income (controlling interest) |
$ |
217.0 |
|
|
$ |
123.6 |
|
|
$ |
476.8 |
|
|
$ |
349.5 |
|
|
Earnings per share (diluted)(1) |
|
5.48 |
|
|
|
3.78 |
|
|
|
12.28 |
|
|
|
10.25 |
|
|
Supplemental Performance
Measures(2) |
|
|
|
|
|
|
|
|
Adjusted EBITDA (controlling interest) |
$ |
208.4 |
|
|
$ |
214.1 |
|
|
$ |
639.6 |
|
|
$ |
691.4 |
|
|
Economic net income (controlling interest) |
|
149.5 |
|
|
|
153.2 |
|
|
|
474.9 |
|
|
|
495.8 |
|
|
Economic earnings per share |
|
4.08 |
|
|
|
4.82 |
|
|
|
12.72 |
|
|
|
14.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For additional information on our Supplemental
Performance Measures, including reconciliations to GAAP, see the
Financial Tables and Notes.
Capital Management During the
third quarter of 2024, the Company repurchased approximately $103
million in common stock, bringing total year-to-date repurchases to
approximately $580 million. The Company also announced a
third-quarter cash dividend of $0.01 per share of common stock,
payable November 29, 2024 to stockholders of record as of the close
of business on November 14, 2024.
About AMGAMG (NYSE: AMG) is a
strategic partner to leading independent investment management
firms globally. AMG’s strategy is to generate long‐term value by
investing in a diverse array of high-quality independent
partner-owned firms, through a proven partnership approach, and
allocating resources across AMG's unique opportunity set to the
areas of highest growth and return. Through its distinctive
approach, AMG magnifies its Affiliates' existing advantages and
actively supports their independence and ownership culture. As of
September 30, 2024, AMG’s aggregate assets under management
were approximately $728 billion across a diverse range of private
markets, liquid alternative, and differentiated long-only
investment strategies. For more information, please visit the
Company’s website at www.amg.com.
Conference Call, Replay, and Presentation
InformationA conference call will be held with AMG’s
management at 8:30 a.m. Eastern time today. Parties interested in
listening to the conference call should dial 1-877-407-8291 (U.S.
calls) or 1-201-689-8345 (non-U.S. calls) shortly before the call
begins.
The conference call will also be available for
replay beginning approximately one hour after the conclusion of the
call. To hear a replay of the call, please dial 1-877-660-6853
(U.S. calls) or 1-201-612-7415 (non-U.S. calls) and provide
conference ID 13749048. The live call and replay of the session and
a presentation highlighting the Company's performance can also be
accessed via AMG’s website at https://ir.amg.com/.
Financial Tables Follow
|
ASSETS UNDER MANAGEMENT - STATEMENTS OF CHANGES (in
billions) |
|
|
|
|
|
|
|
|
BY STRATEGY - QUARTER TO DATE |
Alternatives |
Global Equities |
U.S. Equities |
Multi-Asset & Fixed
Income |
Total |
|
AUM, June 30, 2024 |
$ |
256.6 |
|
$ |
186.4 |
|
$ |
146.6 |
|
$ |
111.4 |
|
$ |
701.0 |
|
|
Client cash inflows and commitments |
|
14.3 |
|
|
3.9 |
|
|
4.7 |
|
|
4.4 |
|
|
27.3 |
|
|
Client cash outflows |
|
(6.9 |
) |
|
(10.2 |
) |
|
(8.4 |
) |
|
(4.6 |
) |
|
(30.1 |
) |
|
Net client cash flows |
|
7.4 |
|
|
(6.3 |
) |
|
(3.7 |
) |
|
(0.2 |
) |
|
(2.8 |
) |
|
New investments* |
|
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
|
0.7 |
|
|
Market changes |
|
1.1 |
|
|
11.2 |
|
|
8.3 |
|
|
3.6 |
|
|
24.2 |
|
|
Foreign exchange |
|
2.8 |
|
|
3.0 |
|
|
0.4 |
|
|
0.5 |
|
|
6.7 |
|
|
Realizations and distributions (net) |
|
(1.3 |
) |
|
(0.0 |
) |
|
(0.0 |
) |
|
(0.1 |
) |
|
(1.4 |
) |
|
Other |
|
(0.1 |
) |
|
0.0 |
|
|
0.0 |
|
|
0.1 |
|
|
— |
|
|
AUM, September 30, 2024 |
$ |
266.5 |
|
$ |
194.3 |
|
$ |
151.6 |
|
$ |
116.0 |
|
$ |
728.4 |
|
|
|
|
|
|
|
|
|
BY STRATEGY - YEAR TO DATE |
Alternatives |
Global Equities |
U.S. Equities |
Multi-Asset & Fixed
Income |
Total |
|
AUM, December 31, 2023 |
$ |
238.8 |
|
$ |
186.6 |
|
$ |
142.8 |
|
$ |
104.5 |
|
$ |
672.7 |
|
|
Client cash inflows and commitments |
|
36.7 |
|
|
13.6 |
|
|
14.3 |
|
|
16.8 |
|
|
81.4 |
|
|
Client cash outflows |
|
(18.4 |
) |
|
(28.4 |
) |
|
(25.9 |
) |
|
(14.3 |
) |
|
(87.0 |
) |
|
Net client cash flows |
|
18.3 |
|
|
(14.8 |
) |
|
(11.6 |
) |
|
2.5 |
|
|
(5.6 |
) |
|
New investments |
|
0.7 |
|
|
— |
|
|
— |
|
|
0.7 |
|
|
1.4 |
|
|
Market changes |
|
7.7 |
|
|
23.8 |
|
|
20.1 |
|
|
8.3 |
|
|
59.9 |
|
|
Foreign exchange |
|
2.4 |
|
|
1.8 |
|
|
(0.1 |
) |
|
0.2 |
|
|
4.3 |
|
|
Realizations and distributions (net) |
|
(3.9 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(0.2 |
) |
|
(4.3 |
) |
|
Other |
|
2.5 |
|
|
(3.0 |
) |
|
0.5 |
|
|
0.0 |
|
|
0.0 |
|
|
AUM, September 30, 2024 |
$ |
266.5 |
|
$ |
194.3 |
|
$ |
151.6 |
|
$ |
116.0 |
|
$ |
728.4 |
|
|
|
|
|
|
|
|
BY CLIENT TYPE - QUARTER TO DATE |
Institutional |
Retail |
High Net Worth |
Total |
|
AUM, June 30, 2024 |
$ |
369.7 |
|
$ |
201.4 |
|
$ |
129.9 |
|
$ |
701.0 |
|
|
Client cash inflows and commitments |
|
11.7 |
|
|
8.5 |
|
|
7.1 |
|
|
27.3 |
|
|
Client cash outflows |
|
(11.7 |
) |
|
(13.2 |
) |
|
(5.2 |
) |
|
(30.1 |
) |
|
Net client cash flows |
|
(0.0 |
) |
|
(4.7 |
) |
|
1.9 |
|
|
(2.8 |
) |
|
New investments* |
|
— |
|
|
— |
|
|
0.7 |
|
|
0.7 |
|
|
Market changes |
|
9.2 |
|
|
9.4 |
|
|
5.6 |
|
|
24.2 |
|
|
Foreign exchange |
|
3.6 |
|
|
2.9 |
|
|
0.2 |
|
|
6.7 |
|
|
Realizations and distributions (net) |
|
(1.3 |
) |
|
(0.1 |
) |
|
(0.0 |
) |
|
(1.4 |
) |
|
Other |
|
(6.1 |
) |
|
(0.4 |
) |
|
6.5 |
|
|
— |
|
|
AUM, September 30, 2024 |
$ |
375.1 |
|
$ |
208.5 |
|
$ |
144.8 |
|
$ |
728.4 |
|
|
|
|
|
|
|
|
BY CLIENT TYPE - YEAR TO DATE |
Institutional |
Retail |
High Net Worth |
Total |
|
AUM, December 31, 2023 |
$ |
354.9 |
|
$ |
196.0 |
|
$ |
121.8 |
|
$ |
672.7 |
|
|
Client cash inflows and commitments |
|
36.8 |
|
|
26.3 |
|
|
18.3 |
|
|
81.4 |
|
|
Client cash outflows |
|
(31.7 |
) |
|
(39.1 |
) |
|
(16.2 |
) |
|
(87.0 |
) |
|
Net client cash flows |
|
5.1 |
|
|
(12.8 |
) |
|
2.1 |
|
|
(5.6 |
) |
|
New investments |
|
0.5 |
|
|
— |
|
|
0.9 |
|
|
1.4 |
|
|
Market changes |
|
26.0 |
|
|
23.1 |
|
|
10.8 |
|
|
59.9 |
|
|
Foreign exchange |
|
2.0 |
|
|
2.4 |
|
|
(0.1 |
) |
|
4.3 |
|
|
Realizations and distributions (net) |
|
(3.9 |
) |
|
(0.3 |
) |
|
(0.1 |
) |
|
(4.3 |
) |
|
Other |
|
(9.5 |
) |
|
0.1 |
|
|
9.4 |
|
|
0.0 |
|
|
AUM, September 30, 2024 |
$ |
375.1 |
|
$ |
208.5 |
|
$ |
144.8 |
|
$ |
728.4 |
|
|
|
__________________________* Includes assets under
management related to a new investment made by an existing
Affiliate.
| |
|
CONSOLIDATED STATEMENTS OF INCOME |
| |
|
|
|
| |
|
Three Months Ended |
|
|
(in millions, except per share data) |
|
9/30/2023 |
|
9/30/2024 |
|
|
Consolidated revenue |
|
$ |
525.2 |
|
|
$ |
516.4 |
|
|
| |
|
|
|
|
|
|
Consolidated expenses: |
|
|
|
|
|
|
Compensation and related expenses |
|
|
211.8 |
|
|
|
220.8 |
|
|
|
Selling, general and administrative |
|
|
91.1 |
|
|
|
97.0 |
|
|
|
Intangible amortization and impairments |
|
|
12.5 |
|
|
|
7.3 |
|
|
|
Interest expense |
|
|
31.1 |
|
|
|
34.7 |
|
|
|
Depreciation and other amortization |
|
|
3.0 |
|
|
|
3.3 |
|
|
|
Other expenses (net) |
|
|
7.9 |
|
|
|
11.6 |
|
|
|
Total consolidated expenses |
|
|
357.4 |
|
|
|
374.7 |
|
|
| |
|
|
|
|
|
|
Equity method income
(net)(3) |
|
|
39.8 |
|
|
|
52.6 |
|
|
|
Affiliate Transaction gain(4) |
|
|
133.1 |
|
|
|
— |
|
|
|
Investment and other income |
|
|
23.0 |
|
|
|
22.8 |
|
|
|
Income before income taxes |
|
|
363.7 |
|
|
|
217.1 |
|
|
| |
|
|
|
|
|
|
Income tax expense |
|
|
77.7 |
|
|
|
31.3 |
|
|
|
Net income |
|
|
286.0 |
|
|
|
185.8 |
|
|
| |
|
|
|
|
|
|
Net income (non-controlling interests) |
|
|
(69.0 |
) |
|
|
(62.2 |
) |
|
|
Net income (controlling interest) |
|
$ |
217.0 |
|
|
$ |
123.6 |
|
|
| |
|
|
|
|
|
|
Average shares outstanding (basic) |
|
|
34.9 |
|
|
|
30.1 |
|
|
|
Average shares outstanding (diluted) |
|
|
43.4 |
|
|
|
35.0 |
|
|
| |
|
|
|
|
|
|
Earnings per share (basic) |
|
$ |
6.22 |
|
|
$ |
4.11 |
|
|
|
Earnings per share
(diluted)(1) |
|
$ |
5.48 |
|
|
$ |
3.78 |
|
|
| |
|
RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE
MEASURES(2) |
| |
|
Three Months Ended |
|
|
(in millions, except per share data) |
|
9/30/2023 |
|
9/30/2024 |
|
|
Net income (controlling interest) |
|
$ |
217.0 |
|
|
$ |
123.6 |
|
|
|
Intangible amortization and impairments |
|
|
29.8 |
|
|
|
27.5 |
|
|
|
Intangible-related deferred taxes |
|
|
14.7 |
|
|
|
15.6 |
|
|
|
Affiliate Transactions(4) |
|
|
(104.7 |
) |
|
|
— |
|
|
|
Other economic items |
|
|
(7.3 |
) |
|
|
(13.5 |
) |
|
|
Economic net income (controlling interest) |
|
$ |
149.5 |
|
|
$ |
153.2 |
|
|
| |
|
|
|
|
|
|
Average shares outstanding (adjusted diluted) |
|
|
36.6 |
|
|
|
31.8 |
|
|
|
Economic earnings per share |
|
$ |
4.08 |
|
|
$ |
4.82 |
|
|
| |
|
|
|
|
|
|
Net income (controlling interest) |
|
$ |
217.0 |
|
|
$ |
123.6 |
|
|
|
Interest expense |
|
|
31.1 |
|
|
|
34.7 |
|
|
|
Income taxes |
|
|
76.6 |
|
|
|
33.3 |
|
|
|
Intangible amortization and impairments |
|
|
29.8 |
|
|
|
27.5 |
|
|
|
Affiliate Transactions(4) |
|
|
(139.6 |
) |
|
|
— |
|
|
|
Other items |
|
|
(6.5 |
) |
|
|
(5.0 |
) |
|
|
Adjusted EBITDA (controlling interest) |
|
$ |
208.4 |
|
|
$ |
214.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes for additional information.
| |
|
CONSOLIDATED STATEMENTS OF INCOME |
| |
|
|
|
| |
|
Nine Months Ended |
|
|
(in millions, except per share data) |
|
9/30/2023 |
|
9/30/2024 |
|
|
Consolidated revenue |
|
$ |
1,555.2 |
|
|
$ |
1,516.6 |
|
|
| |
|
|
|
|
|
|
Consolidated expenses: |
|
|
|
|
|
|
Compensation and related expenses |
|
|
663.0 |
|
|
|
676.5 |
|
|
|
Selling, general and administrative |
|
|
273.4 |
|
|
|
278.1 |
|
|
|
Intangible amortization and impairments |
|
|
37.5 |
|
|
|
21.8 |
|
|
|
Interest expense |
|
|
92.4 |
|
|
|
98.1 |
|
|
|
Depreciation and other amortization |
|
|
10.0 |
|
|
|
9.4 |
|
|
|
Other expenses (net) |
|
|
36.2 |
|
|
|
31.5 |
|
|
|
Total consolidated expenses |
|
|
1,112.5 |
|
|
|
1,115.4 |
|
|
| |
|
|
|
|
|
|
Equity method income
(net)(3) |
|
|
154.3 |
|
|
|
188.3 |
|
|
|
Affiliate Transaction gain(4) |
|
|
133.1 |
|
|
|
— |
|
|
|
Investment and other income |
|
|
87.2 |
|
|
|
60.0 |
|
|
|
Income before income taxes |
|
|
817.3 |
|
|
|
649.5 |
|
|
| |
|
|
|
|
|
|
Income tax expense |
|
|
155.4 |
|
|
|
130.0 |
|
|
|
Net income |
|
|
661.9 |
|
|
|
519.5 |
|
|
| |
|
|
|
|
|
|
Net income (non-controlling interests) |
|
|
(185.1 |
) |
|
|
(170.0 |
) |
|
|
Net income (controlling interest) |
|
$ |
476.8 |
|
|
$ |
349.5 |
|
|
| |
|
|
|
|
|
|
Average shares outstanding (basic) |
|
|
35.6 |
|
|
|
31.4 |
|
|
|
Average shares outstanding (diluted) |
|
|
42.9 |
|
|
|
35.2 |
|
|
| |
|
|
|
|
|
|
Earnings per share (basic) |
|
$ |
13.41 |
|
|
$ |
11.11 |
|
|
|
Earnings per share
(diluted)(1) |
|
$ |
12.28 |
|
|
$ |
10.25 |
|
|
| |
|
RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE
MEASURES(2) |
| |
|
|
|
| |
|
Nine Months Ended |
|
|
(in millions, except per share data) |
|
9/30/2023 |
|
9/30/2024 |
|
|
Net income (controlling interest) |
|
$ |
476.8 |
|
|
$ |
349.5 |
|
|
|
Intangible amortization and impairments |
|
|
88.6 |
|
|
|
118.7 |
|
|
|
Intangible-related deferred taxes |
|
|
44.6 |
|
|
|
46.6 |
|
|
|
Affiliate Transactions(4) |
|
|
(122.1 |
) |
|
|
— |
|
|
|
Other economic items |
|
|
(13.0 |
) |
|
|
(19.0 |
) |
|
|
Economic net income (controlling interest) |
|
$ |
474.9 |
|
|
$ |
495.8 |
|
|
| |
|
|
|
|
|
|
Average shares outstanding (adjusted diluted) |
|
|
37.3 |
|
|
|
33.3 |
|
|
|
Economic earnings per share |
|
$ |
12.72 |
|
|
$ |
14.90 |
|
|
| |
|
|
|
|
|
|
Net income (controlling interest) |
|
$ |
476.8 |
|
|
$ |
349.5 |
|
|
|
Interest expense |
|
|
92.4 |
|
|
|
98.1 |
|
|
|
Income taxes |
|
|
150.7 |
|
|
|
133.0 |
|
|
|
Intangible amortization and impairments |
|
|
88.6 |
|
|
|
118.7 |
|
|
|
Affiliate Transactions(4) |
|
|
(162.7 |
) |
|
|
— |
|
|
|
Other items |
|
|
(6.2 |
) |
|
|
(7.9 |
) |
|
|
Adjusted EBITDA (controlling interest) |
|
$ |
639.6 |
|
|
$ |
691.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes for additional information.
| |
|
CONSOLIDATED BALANCE SHEETS |
| |
|
|
|
| |
|
Period Ended |
|
|
(in millions) |
|
12/31/2023 |
|
9/30/2024 |
|
|
Assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
813.6 |
|
|
$ |
1,010.7 |
|
|
|
Receivables |
|
|
368.4 |
|
|
|
457.1 |
|
|
|
Investments in marketable securities |
|
|
461.0 |
|
|
|
66.1 |
|
|
|
Goodwill |
|
|
2,523.6 |
|
|
|
2,532.0 |
|
|
|
Acquired client relationships (net) |
|
|
1,812.4 |
|
|
|
1,807.1 |
|
|
|
Equity method investments in Affiliates (net) |
|
|
2,288.5 |
|
|
|
2,148.4 |
|
|
|
Fixed assets (net) |
|
|
67.3 |
|
|
|
61.0 |
|
|
|
Other investments |
|
|
480.9 |
|
|
|
532.8 |
|
|
|
Other assets |
|
|
243.9 |
|
|
|
287.8 |
|
|
|
Total assets |
|
$ |
9,059.6 |
|
|
$ |
8,903.0 |
|
|
| |
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
Payables and accrued liabilities |
|
$ |
628.5 |
|
|
$ |
625.7 |
|
|
|
Debt |
|
|
2,537.5 |
|
|
|
2,619.7 |
|
|
|
Deferred income tax liability (net) |
|
|
463.8 |
|
|
|
522.0 |
|
|
|
Other liabilities |
|
|
466.3 |
|
|
|
464.5 |
|
|
|
Total liabilities |
|
|
4,096.1 |
|
|
|
4,231.9 |
|
|
| |
|
|
|
|
|
|
Redeemable non-controlling interests |
|
|
393.4 |
|
|
|
397.1 |
|
|
|
Equity: |
|
|
|
|
|
|
Common stock |
|
|
0.6 |
|
|
|
0.6 |
|
|
|
Additional paid-in capital |
|
|
741.4 |
|
|
|
711.3 |
|
|
|
Accumulated other comprehensive loss |
|
|
(167.6 |
) |
|
|
(139.2 |
) |
|
|
Retained earnings |
|
|
6,389.6 |
|
|
|
6,738.1 |
|
|
| |
|
|
6,964.0 |
|
|
|
7,310.8 |
|
|
|
Less: treasury stock, at cost |
|
|
(3,376.1 |
) |
|
|
(3,994.5 |
) |
|
|
Total stockholders’ equity |
|
|
3,587.9 |
|
|
|
3,316.3 |
|
|
|
Non-controlling interests |
|
|
982.2 |
|
|
|
957.7 |
|
|
|
Total equity |
|
|
4,570.1 |
|
|
|
4,274.0 |
|
|
|
Total liabilities and equity |
|
$ |
9,059.6 |
|
|
$ |
8,903.0 |
|
|
|
|
Notes
|
(1) |
Earnings per share (diluted) adjusts for the dilutive effect of the
potential issuance of incremental shares of our common stock. |
|
|
|
|
|
We assume the settlement of all of our Redeemable non-controlling
interests using the maximum number of shares permitted under our
arrangements. The issuance of shares and the related income
acquired are excluded from the calculation if an assumed purchase
of Redeemable non-controlling interests would be anti-dilutive to
diluted earnings per share. |
|
|
|
|
|
We are required to apply the if-converted method to our outstanding
junior convertible securities when calculating Earnings per share
(diluted). Under the if-converted method, shares that are issuable
upon conversion are deemed outstanding, regardless of whether the
securities are contractually convertible into our common stock at
that time. For this calculation, the interest expense (net of tax)
attributable to these dilutive securities is added back to Net
income (controlling interest), reflecting the assumption that the
securities have been converted. Issuable shares for these
securities and related interest expense are excluded from the
calculation if an assumed conversion would be anti-dilutive to
diluted earnings per share. |
|
|
|
|
|
The following table provides a reconciliation of the numerator and
denominator used in the calculation of basic and diluted earnings
per share: |
| |
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
(in millions) |
|
9/30/2023 |
|
9/30/2024 |
|
9/30/2023 |
|
9/30/2024 |
|
|
|
Numerator |
|
|
|
|
|
|
|
|
|
|
|
Net income (controlling interest) |
|
$ |
217.0 |
|
$ |
123.6 |
|
$ |
476.8 |
|
$ |
349.5 |
|
|
|
Income from hypothetical settlement of Redeemable non-controlling
interests, net of taxes |
|
|
17.1 |
|
|
5.2 |
|
|
39.4 |
|
|
1.0 |
|
|
|
Interest expense on junior convertible securities, net of
taxes |
|
|
3.4 |
|
|
3.4 |
|
|
10.1 |
|
|
10.1 |
|
|
|
Net income (controlling interest), as adjusted |
|
$ |
237.5 |
|
$ |
132.2 |
|
$ |
526.3 |
|
$ |
360.6 |
|
|
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding (basic) |
|
|
34.9 |
|
|
30.1 |
|
|
35.6 |
|
|
31.4 |
|
|
|
Effect of dilutive instruments: |
|
|
|
|
|
|
|
|
|
|
|
Stock options and restricted stock units |
|
|
1.7 |
|
|
1.7 |
|
|
1.7 |
|
|
1.9 |
|
|
|
Hypothetical issuance of shares to settle Redeemable
non-controlling interests |
|
|
5.1 |
|
|
1.5 |
|
|
3.9 |
|
|
0.2 |
|
|
|
Junior convertible securities |
|
|
1.7 |
|
|
1.7 |
|
|
1.7 |
|
|
1.7 |
|
|
|
Average shares outstanding (diluted) |
|
|
43.4 |
|
|
35.0 |
|
|
42.9 |
|
|
35.2 |
|
|
|
|
|
(2) |
As supplemental information, we provide non-GAAP performance
measures of Adjusted EBITDA (controlling interest), Economic net
income (controlling interest), and Economic earnings per share. We
believe that many investors use our Adjusted EBITDA (controlling
interest) when comparing our financial performance to other
companies in the investment management industry. Management
utilizes these non-GAAP performance measures to assess our
performance before our share of certain non-cash GAAP expenses
primarily related to the acquisition of interests in Affiliates and
to improve comparability between periods. Economic net income
(controlling interest) and Economic earnings per share are used by
management and our Board of Directors as our principal performance
benchmarks, including as one of the measures for determining
executive compensation. These non-GAAP performance measures are
provided in addition to, but not as a substitute for, Net income
(controlling interest), Earnings per share, or other GAAP
performance measures. For additional information on our non-GAAP
measures, see our most recent Annual and Quarterly Reports on Form
10-K and 10-Q, respectively, which are accessible on the SEC's
website at www.sec.gov. |
|
|
|
|
|
Adjusted EBITDA (controlling interest) represents our performance
before our share of interest expense, income and certain non-income
based taxes, depreciation, amortization, impairments, gains and
losses related to Affiliate Transactions, and non-cash items such
as certain Affiliate equity activity, gains and losses on our
contingent payment obligations, and unrealized gains and losses on
seed capital, general partner commitments, and other strategic
investments. Adjusted EBITDA (controlling interest) is also
adjusted to include realized economic gains and losses related to
these seed capital, general partner commitments, and other
strategic investments. |
|
|
|
|
|
Under our Economic net income (controlling interest) definition, we
adjust Net income (controlling interest) for our share of pre-tax
intangible amortization and impairments related to intangible
assets (including the portion attributable to equity method
investments in Affiliates) because these expenses do not correspond
to the changes in the value of these assets, which do not diminish
predictably over time. We also adjust for deferred taxes
attributable to intangible assets because we believe it is unlikely
these accruals will be used to settle material tax obligations.
Further, we adjust for gains and losses related to Affiliate
Transactions, net of tax, and other economic items. Other economic
items include certain Affiliate equity activity, gains and losses
related to contingent payment obligations, tax windfalls and
shortfalls from share-based compensation, unrealized gains and
losses on seed capital, general partner commitments, and other
strategic investments, and realized economic gains and losses
related to these seed capital, general partner commitments, and
other strategic investments. |
|
|
|
|
|
Economic earnings per share represents Economic net income
(controlling interest) divided by the Average shares outstanding
(adjusted diluted). In this calculation, we exclude the potential
shares issued upon settlement of Redeemable non-controlling
interests from Average shares outstanding (adjusted diluted)
because we intend to settle those obligations without issuing
shares, consistent with all prior Affiliate equity purchase
transactions. The potential share issuance in connection with our
junior convertible securities is measured using a “treasury stock”
method. Under this method, only the net number of shares of common
stock equal to the value of the junior convertible securities in
excess of par, if any, are deemed to be outstanding. We believe the
inclusion of net shares under a treasury stock method best reflects
the benefit of the increase in available capital resources (which
could be used to repurchase shares of our common stock) that occurs
when these securities are converted and we are relieved of our debt
obligation. |
|
|
|
|
|
The following table provides a reconciliation of Average shares
outstanding (adjusted diluted): |
| |
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
(in millions) |
|
9/30/2023 |
|
9/30/2024 |
|
9/30/2023 |
|
9/30/2024 |
|
|
|
Average shares outstanding (diluted) |
|
43.4 |
|
|
35.0 |
|
|
42.9 |
|
|
35.2 |
|
|
|
|
Hypothetical issuance of shares to settle Redeemable
non-controlling interests |
|
(5.1 |
) |
|
(1.5 |
) |
|
(3.9 |
) |
|
(0.2 |
) |
|
|
|
Junior convertible securities |
|
(1.7 |
) |
|
(1.7 |
) |
|
(1.7 |
) |
|
(1.7 |
) |
|
|
|
Average shares outstanding (adjusted diluted) |
|
36.6 |
|
|
31.8 |
|
|
37.3 |
|
|
33.3 |
|
|
|
(3) |
The following table presents equity method earnings and equity
method intangible amortization and impairments, which in aggregate
form Equity method income (net): |
| |
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
(in millions) |
|
9/30/2023 |
|
9/30/2024 |
|
9/30/2023 |
|
9/30/2024 |
|
|
|
Equity method earnings |
|
$ |
61.0 |
|
|
$ |
75.3 |
|
|
$ |
217.3 |
|
|
$ |
292.6 |
|
|
|
|
Equity method intangible amortization and impairments |
|
|
(21.2 |
) |
|
|
(22.7 |
) |
|
|
(63.0 |
) |
|
|
(104.3 |
) |
|
|
|
Equity method income (net) |
|
$ |
39.8 |
|
|
$ |
52.6 |
|
|
$ |
154.3 |
|
|
$ |
188.3 |
|
|
|
(4) |
The following table presents the impact of the completion of our
previously announced sales of our equity interests in Veritable, LP
to a third party in the third quarter of 2023, and Baring Private
Equity Asia to EQT AB (“EQT”), a public company listed on Nasdaq
Stockholm (EQT ST), in the fourth quarter of 2022, pursuant to
which we received ordinary shares of EQT: |
| |
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
(in millions) |
|
9/30/2023 |
|
9/30/2024 |
|
9/30/2023 |
|
9/30/2024 |
|
|
|
Affiliate Transaction gain |
|
$ |
133.1 |
|
|
$ |
— |
|
$ |
133.1 |
|
|
$ |
— |
|
|
|
Investment and other income - Realized gains on EQT shares |
|
|
6.5 |
|
|
|
— |
|
|
29.6 |
|
|
|
— |
|
|
|
Affiliate Transactions, pre-tax |
|
|
139.6 |
|
|
|
— |
|
|
162.7 |
|
|
|
— |
|
|
|
Income taxes |
|
|
(34.9 |
) |
|
|
— |
|
|
(40.6 |
) |
|
|
— |
|
|
|
Affiliate Transactions, after-tax |
|
$ |
104.7 |
|
|
$ |
— |
|
$ |
122.1 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward-Looking Statements and Other
Matters
Certain matters discussed in this press release
issued by Affiliated Managers Group, Inc. (“AMG” or the “Company”)
may constitute forward-looking statements within the meaning of the
federal securities laws. These statements include, but are not
limited to, statements related to our expectations regarding the
performance of our business, our financial results, our liquidity
and capital resources, and other non-historical statements. You can
identify these forward-looking statements by the use of words such
as “outlook,” “guidance,” “believes,” “expects,” “potential,”
“preliminary,” “continues,” “may,” “will,” “should,” “seeks,”
“approximately,” “predicts,” “projects,” “positioned,” “prospects,”
“intends,” “plans,” “estimates,” “pending investments,”
“anticipates,” or the negative version of these words or other
comparable words. Actual results and the timing of certain events
could differ materially from those projected in or contemplated by
the forward-looking statements due to a number of factors,
including changes in the securities or financial markets or in
general economic conditions, the availability of equity and debt
financing, competition for acquisitions of interests in investment
management firms, uncertainties relating to closing of pending
investments or transactions and potential changes in the
anticipated benefits thereof, the investment performance and growth
rates of our Affiliates and their ability to effectively market
their investment strategies, the mix of Affiliate contributions to
our earnings, and other risks, uncertainties, and assumptions,
including those described under the section entitled “Risk Factors”
in our most recent Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q. Such factors may be updated from time to time in our
periodic filings with the SEC. These factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included in this release and
in our filings with the SEC. We undertake no obligation to publicly
update or review any forward-looking statements, whether as a
result of new information, future developments, or otherwise,
except as required by applicable law.
This release does not constitute an offer of any
products, investment vehicles, or services of any AMG
Affiliate.
From time to time, AMG may use its website as a
distribution channel of material Company information. AMG routinely
posts financial and other important information regarding the
Company in the Investor Relations section of its website at
www.amg.com and encourages investors to consult that section
regularly.
| Investor &
Media Relations: |
Patricia
Figueroa |
| |
+1 (617) 747-3300 |
| |
ir@amg.com |
| |
pr@amg.com |
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