What changed in this filing

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Item 1. Financial Statements

2021-05-07 compared with 2020-10-30 · 258 added, 382 removed, 392 unchanged (62% of the section changed)

3 unchanged sentences

(in millions, except per share data)

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2019 2020 2019 2020

For the Three Months Ended March 31,

Consolidated revenue $ 507.3 $ 559.1

22 unchanged sentences

(in millions)

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2019 2020 2019 2020

For the Three Months Ended March 31,

Net income $ 40.0 $ 214.1

3 unchanged sentences

Other comprehensive income (loss), net of tax ( 53.9 ) 24.3

Comprehensive income 125.0 152.7 185.4 177.7

Comprehensive income (loss) ( 13.9 ) 238.4

Comprehensive income (non-controlling interests) ( 39.4 ) ( 64.0 )

4 unchanged sentences

(in millions)

2019 September 30,

2020 March 31,

Cash and cash equivalents $ 1,039.7 $ 766.2

32 unchanged sentences

(in millions)

Three Months Ended September 30, 2019 Total Stockholders’ Equity

Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Treasury

Interests Total

June 30, 2019 $ 0.6 $ 835.8 $ ( 95.1 ) $ 3,743.7 $ ( 1,259.7 ) $ 600.5 $ 3,825.8

Net income — — — 86.3 — 75.8 162.1

Other comprehensive loss — — ( 29.9 ) — — ( 7.2 ) ( 37.1 )

Share-based compensation — 11.7 — — — — 11.7

Common stock issued under share-based incentive plans — ( 0.1 ) — — 0.4 — 0.3

Share repurchases — ( 7.5 ) — — ( 102.5 ) — ( 110.0 )

Dividends ($ 0.32 per share)

— — — ( 16.4 ) — — ( 16.4 )

Affiliate equity activity:

Affiliate equity compensation — 2.3 — — — 6.9 9.2

Issuances — ( 2.0 ) — — — 2.3 0.3

Repurchases — 3.9 — — — — 3.9

Changes in redemption value of Redeemable non-controlling interests — ( 101.5 ) — — — — ( 101.5 )

Transfers to Redeemable non-controlling interests — — — — — ( 31.2 ) ( 31.2 )

Distributions to non-controlling interests — — — — — ( 83.9 ) ( 83.9 )

September 30, 2019 $ 0.6 $ 742.6 $ ( 125.0 ) $ 3,813.6 $ ( 1,361.8 ) $ 563.2 $ 3,633.2

Three Months Ended September 30, 2020 Total Stockholders’ Equity

Three Months Ended March 31, 2020 Total Stockholders’ Equity

Stock Additional

4 unchanged sentences

Interests Total

June 30, 2020 $ 0.6 $ 768.2 $ ( 170.4 ) $ 3,819.3 $ ( 1,563.0 ) $ 487.2 $ 3,341.9

Net income — — — 71.3 — 56.5 127.8

Other comprehensive income — — 15.5 — — 9.4 24.9

Share-based compensation — 15.7 — — — — 15.7

Common stock issued under share-based incentive plans — ( 1.1 ) — — 1.0 — ( 0.1 )

Share repurchases — 4.6 — — ( 89.0 ) — ( 84.4 )

Dividends ($ 0.01 per share)

— — — ( 0.5 ) — — ( 0.5 )

Affiliate equity activity:

Affiliate equity compensation — 3.5 — — — 6.0 9.5

Issuances — 2.9 — — — 0.2 3.1

Repurchases — 21.0 — — — ( 2.2 ) 18.8

Changes in redemption value of Redeemable non-controlling interests — ( 50.7 ) — — — — ( 50.7 )

Transfers to Redeemable non-controlling interests — — — — — ( 0.2 ) ( 0.2 )

Distributions to non-controlling interests — — — — — ( 77.4 ) ( 77.4 )

September 30, 2020 $ 0.6 $ 764.1 $ ( 154.9 ) $ 3,890.1 $ ( 1,651.0 ) $ 479.5 $ 3,328.4

The accompanying notes are an integral part of the Consolidated Financial Statements.

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in millions)

Nine Months Ended September 30, 2019 Total Stockholders' Equity

Stock Additional

Capital Accumulated

Comprehensive Loss Retained

Earnings Treasury

Interests Total

December 31, 2019 $ 0.6 $ 707.2 $ ( 108.8 ) $ 3,819.8 $ ( 1,481.3 ) $ 561.6 $ 3,499.1

Impact of adoption of new accounting standard (ASU 2018-02) — — — ( 6.6 ) — — ( 6.6 )

Net income (loss) — — — ( 15.6 ) — 55.6 40.0

Other comprehensive loss — — ( 16.0 ) — — ( 7.9 ) ( 23.9 )

Other comprehensive loss, net of tax — — ( 37.7 ) — — ( 16.2 ) ( 53.9 )

Share-based compensation — 8.2 — — — — 8.2

3 unchanged sentences

— — — ( 15.1 ) — — ( 15.1 )

Issuance costs and other — 0.2 — — — — 0.2

Affiliate equity activity:

1 unchanged sentence

Issuances — ( 1.8 ) — — — 13.9 12.1

Repurchases — 11.6 — — — — 11.6

Purchases — 34.7 — — — — 34.7

Changes in redemption value of Redeemable non-controlling interests — 143.0 — — — — 143.0

2 unchanged sentences

Distributions to non-controlling interests — — — — — ( 99.6 ) ( 99.6 )

September 30, 2019 $ 0.6 $ 742.6 $ ( 125.0 ) $ 3,813.6 $ ( 1,361.8 ) $ 563.2 $ 3,633.2

Nine Months Ended September 30, 2020 Total Stockholders' Equity

March 31, 2020 $ 0.6 $ 860.7 $ ( 146.5 ) $ 3,789.1 $ ( 1,523.9 ) $ 528.9 $ 3,508.9

Three Months Ended March 31, 2021 Total Stockholders’ Equity

Stock Additional

1 unchanged sentence

Comprehensive

Loss Retained

Income (Loss) Retained

Earnings Treasury

2 unchanged sentences

Net income — — — 149.9 — 64.2 214.1

Other comprehensive loss — — ( 46.1 ) — — ( 7.4 ) ( 53.5 )

Other comprehensive income (loss), net of tax — — 24.5 — — ( 0.2 ) 24.3

Share-based compensation — 9.7 — — — — 9.7

Common stock issued under share-based incentive plans — ( 44.3 ) — — 34.1 — ( 10.2 )

Repurchase of junior convertible securities — ( 2.9 ) — — — ( 2.9 )

Share repurchases — 17.3 — — ( 227.3 ) — ( 210.0 )

4 unchanged sentences

Issuances — 0.6 — — — 1.1 1.7

Repurchases — 57.4 — — — ( 13.5 ) 43.9

Purchases — 11.6 — — — 15.7 27.3

Changes in redemption value of Redeemable non-controlling interests — ( 105.6 ) — — — — ( 105.6 )

Transfers to Redeemable non-controlling interests — — — — — ( 0.5 ) ( 0.5 )

Capital contributions and other — — — — — 4.9 4.9

Distributions to non-controlling interests — — — — — ( 102.6 ) ( 102.6 )

September 30, 2020 $ 0.6 $ 764.1 $ ( 154.9 ) $ 3,890.1 $ ( 1,651.0 ) $ 479.5 $ 3,328.4

March 31, 2021 $ 0.6 $ 619.7 $ ( 73.8 ) $ 4,154.9 $ ( 2,050.2 ) $ 536.1 $ 3,187.3

The accompanying notes are an integral part of the Consolidated Financial Statements.

2 unchanged sentences

(in millions)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cash flow from (used in) operating activities:

4 unchanged sentences

Deferred income tax (benefit) expense ( 19.2 ) 17.8

Equity method loss (net) 318.5 78.8

Equity method loss (income) (net) 113.2 ( 51.7 )

Distributions of earnings received from equity method investments 124.4 157.9

4 unchanged sentences

Sales of securities by consolidated Affiliate sponsored investment products 25.2 23.7

(Increase) decrease in receivables ( 91.5 ) 9.0

Increase in other assets ( 4.0 ) ( 8.5 )

Increase in receivables ( 32.7 ) ( 86.6 )

Decrease in other assets 10.8 11.2

Decrease in payables, accrued liabilities, and other liabilities ( 209.6 ) ( 72.6 )

2 unchanged sentences

Investments in Affiliates ( 0.7 ) ( 11.8 )

Divestments of Affiliates 28.8 —

Purchase of fixed assets ( 2.6 ) ( 0.7 )

1 unchanged sentence

Sale of investment securities 31.1 9.4

Cash flow used in investing activities ( 139.9 ) ( 8.0 )

Cash flow from (used in) investing activities 15.9 ( 24.1 )

Cash flow from (used in) financing activities:

Borrowings of senior bank debt and senior notes 470.7 874.8

Repayments of senior bank debt ( 510.0 ) ( 350.0 )

Borrowings of senior bank debt, senior notes, and junior subordinated notes 250.0 —

Repayments of senior bank debt and junior convertible securities — ( 15.0 )

Repurchases of common stock (net) ( 80.2 ) ( 312.8 )

1 unchanged sentence

Distributions to non-controlling interests ( 99.6 ) ( 102.6 )

Affiliate equity repurchases and issuances (net) ( 74.8 ) ( 232.5 )

Affiliate equity (purchases) / issuances (net) ( 84.4 ) ( 15.0 )

Other financing items ( 8.2 ) 5.0

1 unchanged sentence

Effect of foreign currency exchange rate changes on cash and cash equivalents ( 11.2 ) 2.6

Net (decrease) increase in cash and cash equivalents ( 160.4 ) 392.0

Net increase (decrease) in cash and cash equivalents 52.6 ( 273.5 )

Cash and cash equivalents at beginning of period 539.6 1,039.7

Effect of deconsolidation of Affiliates and Affiliate sponsored investment products ( 2.6 ) ( 2.2 )

Cash and cash equivalents at end of period $ 592.2 $ 766.2

4 unchanged sentences

The Consolidated Financial Statements of Affiliated Managers Group, Inc.

(the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

(the “Company”) have been prepared in accordance with accounting principles generally accepted in the U.S.

(“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP for full year financial statements.

8 unchanged sentences

Recently Adopted Accounting Standards

Effective January 1, 2020, the Company adopted Accounting Standard Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments.

Effective January 1, 2021, the Company adopted Accounting Standard Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes.

The adoption of this standard did not have a significant impact on the Company’s Consolidated Financial Statements.

Recent Accounting Developments

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity.

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity, which simplifies the accounting for convertible instruments and will also modify how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted earnings per share calculation.

The standard is effective for interim and annual periods beginning after December 15, 2021 for the Company and its consolidated Affiliates, and is effective for interim and annual periods beginning after December 15, 2023 for the Company’s Affiliates accounted for under the equity method.

The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In June 2020, the FASB extended the effective date of ASU 2016-02, Leases for the Company’s Affiliates accounted for under the equity method.

After the extension, ASU 2016-02 is effective for annual periods beginning after December 15, 2021 and interims periods beginning after December 15, 2022.

The Company does not expect the adoption of this standard by its equity method investments to have a significant impact to its Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes.

The standard is effective for interim and annual periods beginning after December 15, 2020 for the Company and its consolidated Affiliates, and is effective for annual periods beginning after December 15, 2021 and interim periods beginning after December 15, 2022 for the Company’s Affiliates accounted for under the equity method.

The Company does not expect the adoption of this standard to have a significant impact to its Consolidated Financial Statements.

The Company’s adoption of ASU 2020-06 will result in the Company accounting for its convertible debt instrument as a single liability measured at amortized cost and will modify how certain equity instruments that may be settled in cash or shares, at the Company’s option, impact the calculation of Earnings per share (diluted).

The Company continues to evaluate the impact of this standard on its Consolidated Financial Statements.

Investments in Marketable Securities

The following is a summary of the cost, gross unrealized gains, gross unrealized losses and fair value of Investments in marketable securities:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

2019 September 30,

The following table summarizes the cost, gross unrealized gains, gross unrealized losses, and fair value of Investments in marketable securities:

2020 March 31,

Cost $ 69.4 $ 102.9

2 unchanged sentences

Fair value $ 74.9 $ 108.8

The Company recorded proceeds of $ 2.9 million and $ 21.4 million for the three and nine months ended September 30, 2019, respectively, and $ 16.7 million and $ 80.8 million for the three and nine months ended September 30, 2020, respectively, from the sale of investments in marketable securities.

No significant gains or losses were recorded for the three and nine months ended September 30, 2019 and 2020.

As of December 31, 2019 and September 30, 2020, Investments in marketable securities includes consolidated Affiliate sponsored investment products with fair values of $ 38.1 million and $ 43.4 million, respectively.

As of December 31, 2020 and March 31, 2021, Investments in marketable securities include consolidated Affiliate sponsored investment products with fair values of $ 52.3 million and $ 77.8 million, respectively.

Other Investments

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Other investments consist of investments in funds advised by the Company’s Affiliates that are carried at NAV as a practical expedient and investments without readily determinable fair values.

The income or loss related to these investments is recorded in Investment and other income on the Consolidated Statements of Income.

Investments Measured at NAV as a Practical Expedient

The Company’s Affiliates sponsor investment products in which the Company and its consolidated Affiliates may make general partner and seed capital investments.

The Company uses the NAV of these investments as a practical expedient for their fair values.

The following table summarizes the fair values of these investments and any related unfunded commitments:

December 31, 2020 March 31, 2021

Category of Investment Fair Value Unfunded

Commitments Fair Value Unfunded

Private equity funds (1)

$ 235.4 $ 122.2 $ 263.1 $ 127.7

Investments in other strategies (2)

$ 243.4 $ 122.2 $ 278.9 $ 127.7

___________________________

(1) The Company accounts for the majority of its interests in private equity funds under the equity method of accounting and uses NAV as a practical expedient, one quarter in arrears (adjusted for current period calls and distributions), to determine the fair value.

These funds primarily invest in a broad range of third-party funds and direct investments.

Distributions will be received as the underlying assets are liquidated over the life of the funds, which is generally up to 15 years.

(2) These are multi-disciplinary funds that invest across various asset classes and strategies, including equity, credit, and real estate.

Investments are generally redeemable on a daily, monthly, or quarterly basis.

(3) Fair value attributable to the controlling interest was $ 164.4 million and $ 191.1 million as of December 31, 2020 and March 31, 2021, respectively.

As of December 31, 2020 and March 31, 2021, the Company held investments without readily determinable fair values of $ 13.8 million, including an upward adjustment of $ 5.3 million based on an observable price change recognized during the fourth quarter of 2020.

Fair Value Measurements

The following tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:

Fair Value Measurements

Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Financial Assets

Investments in marketable securities $ 74.9 $ 25.7 $ 49.2 $ —

Derivative financial instruments (1)

Financial Liabilities (2)

Affiliate equity purchase obligations $ 22.0 $ — $ — $ 22.0

Derivative financial instruments 4.2 — 4.2 —

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Fair Value Measurements

Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Financial Assets

Investments in marketable securities $ 108.8 $ 34.3 $ 74.5 $ —

Derivative financial instruments (1)

Financial Liabilities (2)

Affiliate equity purchase obligations $ 66.1 $ — $ — $ 66.1

Derivative financial instruments 2.0 — 2.0 —

__________________________

(1) Amounts are presented within Other assets on the Consolidated Balance Sheets.

(2) Amounts are presented within Other liabilities on the Consolidated Balance Sheets.

Level 3 Financial Liabilities

The following table presents the changes in level 3 liabilities for Affiliate equity purchase obligations:

For the Three Months Ended March 31,

Balance, beginning of period $ 19.8 $ 22.0

Net realized and unrealized (gains) losses (1)

Purchases and issuances (2)

Settlements and reductions ( 97.2 ) ( 27.5 )

Balance, end of period $ 115.1 $ 66.1

Net change in unrealized (gains) losses relating to instruments still held at the reporting date $ — $ —

___________________________

(1) Accretion expense for these arrangements and obligations is recorded in Interest expense in the Consolidated Statements of Income.

(2) Includes transfers from Redeemable non-controlling interests.

The following table presents certain quantitative information about the significant unobservable inputs used in valuing the Company’s level 3 fair value measurements:

Quantitative Information About Level 3 Fair Value Measurements

December 31, 2020 March 31, 2021

Techniques Unobservable

Input Fair Value Range Weighted Average (1)

Fair Value Range Weighted Average (1)

Affiliate equity purchase obligations Discounted cash flow Growth rates (2)

$ 22.0 ( 5 )% - 8 %

3 % $ 66.1 ( 1 )% - 8 %

Discount rates 14 % - 16 %

15 % 14 % - 16 %

___________________________

(1) Calculated by comparing the relative fair value of an obligation to its respective total.

(2) Represents growth rates of asset and performance based fees.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Affiliate equity purchase obligations include agreements to purchase Affiliate equity.

As of March 31, 2021, there were no changes to growth or discount rates that had a significant impact to Affiliate equity purchase obligations recorded in prior periods.

Other Financial Assets and Liabilities Not Carried at Fair Value

The Company has other financial assets and liabilities, which are not required to be carried at fair value, but the Company is required to disclose their fair values.

The carrying amount of Cash and cash equivalents, Receivables, and Payables and accrued liabilities approximates fair value because of the short-term nature of these instruments.

The carrying value of notes receivable, which is reported in Other assets, approximates fair value because interest rates and other terms are at market rates.

The carrying value of the credit facilities approximates fair value because the credit facilities have variable interest based on selected short-term rates.

The following table summarizes the Company’s other financial liabilities not carried at fair value:

December 31, 2020 March 31, 2021

Carrying Value Fair Value Carrying Value Fair Value Fair Value Hierarchy

Senior notes $ 1,097.3 $ 1,206.6 $ 1,097.5 $ 1,180.2 Level 2

Junior convertible securities 318.4 427.6 308.8 459.9 Level 2

Junior subordinated notes 565.7 623.1 565.8 593.0 Level 2

Investments in Affiliates and Affiliate Sponsored Investment Products

6 unchanged sentences

When the Company lacks such control, but is deemed to have significant influence, the Company accounts for the VRE under the equity method.

Other investments in which the Company does not have rights to exercise significant influence are recorded at fair value, with changes in fair value recorded in Investment and other income on the Consolidated Statements of Income.

Other investments in which the Company does not have rights to exercise significant influence are recorded at fair value on the Consolidated Balance Sheets, with changes in fair value included in Investment and other income.

The Company consolidates VIEs when it is the primary beneficiary of the entity, which is defined as having the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE.

7 unchanged sentences

Undistributed earnings attributable to Affiliate managements’ equity ownership, along with their share of any tangible or intangible net assets, are presented within Non-controlling interests on the Consolidated Balance Sheets.

Affiliate equity interests where the holder has certain rights to demand settlement are presented, at their current redemption values, as Redeemable non-controlling interests on the Consolidated Balance Sheets.

The Company periodically issues, sells and repurchases the equity of its consolidated Affiliates.

Because these transactions take place between entities that are under common control, any gains or losses

Affiliate equity interests where the holder has

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

attributable to these transactions are required to be included within Additional paid-in capital in the Consolidated Balance Sheets, net of any related income tax effects in the period the transaction occurs.

certain rights to demand settlement are presented, at their current redemption values, as Redeemable non-controlling interests on the Consolidated Balance Sheets.

The Company periodically issues, sells and purchases the equity of its consolidated Affiliates.

Because these transactions take place between entities that are under common control, any gains or losses attributable to these transactions are required to be included in Additional paid-in capital in the Consolidated Balance Sheets, net of any related income tax effects in the period the transaction occurs.

When an Affiliate is accounted for under the equity method, the Company’s share of an Affiliate’s earnings or losses, net of amortization and impairments, is included in Equity method income (loss) (net) in the Consolidated Statements of Income and the carrying value of the Affiliate is reported in Equity method investments in Affiliates (net) in the Consolidated Balance Sheets.

Deferred taxes recorded on intangible assets upon acquisition of an Affiliate accounted for under the equity method are presented on a gross basis within Equity method investments in Affiliates (net) and Deferred income tax liability (net) in the Consolidated Balance Sheets.

The Company’s share of income taxes incurred directly by Affiliates accounted for under the equity method is recorded within Income tax expense in the Consolidated Statements of Income.

The Company’s share of income taxes incurred directly by Affiliates accounted for under the equity method is recorded in Income tax expense in the Consolidated Statements of Income.

The Company periodically performs assessments to determine if the fair value of an investment may have declined below its related carrying value for its Affiliates accounted for under the equity method for a period that the Company considers to be other-than temporary.

2 unchanged sentences

The unconsolidated assets, net of liabilities and non-controlling interests of Affiliates accounted for under the equity method considered VIEs, and the Company’s carrying value and maximum exposure to loss, were as follows:

December 31, 2019 September 30, 2020

December 31, 2020 March 31, 2021

Unconsolidated

5 unchanged sentences

Affiliates accounted for under the equity method $ 1,384.2 $ 1,962.1 $ 1,290.3 $ 1,890.9

As of December 31, 2019 and September 30, 2020, the carrying value and maximum exposure to loss for all of the Company’s Affiliates accounted for under the equity method was $ 2,195.6 million and $ 1,974.7 million, respectively, including Affiliates accounted for under the equity method considered VREs of $ 352.6 million and $ 162.4 million, respectively.

As of December 31, 2020 and March 31, 2021, the carrying value and maximum exposure to loss for all of the Company’s Affiliates accounted for under the equity method was $ 2,074.8 million and $ 1,999.5 million, respectively, including Affiliates accounted for under the equity method considered VREs of $ 112.7 million and $ 108.6 million, respectively.

Affiliate Sponsored Investment Products

4 unchanged sentences

As a result, the Company does not generally consolidate these products unless the Company’s or its consolidated Affiliate’s interest in the product is considered substantial.

When the Company’s or its consolidated Affiliates’ interests are considered substantial and the products are consolidated, the Company retains the specialized investment company accounting principles of the underlying products, and all of the underlying investments are carried at fair value in Investments in marketable securities in the Consolidated Balance Sheets, with corresponding changes in the investments’ fair values reflected in Investment and other income.

Purchases and sales of securities are presented within purchases and sales by consolidated Affiliate sponsored investment products in the Consolidated Statements of Cash Flows and the third-party investors’ interests are recorded in Redeemable non-controlling interests.

When the Company or its consolidated Affiliates no longer control these products, due to a reduction in ownership or other reasons, the products are deconsolidated with only the Company’s or its consolidated Affiliate’s investment in the product reported from the date of deconsolidation.

The Company’s carrying value, and maximum exposure to loss from unconsolidated Affiliate sponsored investment products, is its and its consolidated Affiliate’s interest in the unconsolidated net assets of the respective products.

The Company’s carrying value, and maximum exposure to loss from unconsolidated Affiliate sponsored investment products is its, or its consolidated Affiliates’ interest in the unconsolidated net assets of the respective products.

The net assets of unconsolidated VIEs attributable to Affiliate sponsored investment products, and the Company’s carrying value and maximum exposure to loss, were as follows:

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

December 31, 2019 September 30, 2020

December 31, 2020 March 31, 2021

Unconsolidated

6 unchanged sentences

The following table summarizes the Company’s Debt:

2019 September 30,

2020 March 31,

Senior bank debt $ 349.8 $ 349.8

4 unchanged sentences

The Company’s senior notes, junior convertible securities, and junior subordinated notes are carried at amortized cost.

Unamortized discounts and debt issuance costs are presented in the Consolidated Balance Sheets as an adjustment to the carrying value of the associated debt.

Unamortized discounts and debt issuance costs are presented within the Consolidated Balance Sheets as an adjustment to the carrying value of the associated debt.

Senior Bank Debt

The Company has a $ 1.25 billion senior unsecured multicurrency revolving credit facility (the “revolver”) and a $ 350.0 million senior unsecured term loan facility (the “term loan” and, together with the revolver, the “credit facilities”).

The revolver matures on January 18, 2024, and the term loan matures on January 18, 2023.

On January 8, 2021, the Company amended and refinanced the term loan to adjust the marginal rate by 0.075 % to 0.950 % and to extend the maturity by three years .

The commercial terms of the term loan otherwise remained the same.

The revolver matures on January 18, 2024, and the term loan, as amended, matures on January 18, 2026.

Subject to certain conditions, the Company may increase the commitments under the revolver by up to an additional $ 500.0 million and may borrow up to an additional $ 75.0 million under the term loan.

The Company pays interest on any outstanding obligations under the credit facilities at specified rates, based either on an applicable LIBOR or prime rate, plus a marginal rate determined based on its credit rating.

For the three months ended September 30, 2020, the interest rate for the Company’s borrowings under the term loan was LIBOR plus 0.875 %.

As of December 31, 2019 and September 30, 2020, the Company had no outstanding borrowings under the revolver.

In the second quarter of 2020, the Company issued $ 350.0 million of senior unsecured notes with a maturity date of June 15, 2030 (the “2030 senior notes”).

The 2030 senior notes bear interest at a fixed rate of 3.3 % per annum.

Interest is payable semi-annually, and the Company has the right to redeem the 2030 senior notes at any time, in whole or in part, at a make-whole redemption price plus accrued and unpaid interest.

In addition to customary event of default provisions, the indenture governing the 2030 senior notes limits the Company's ability to consolidate, merge or sell all or substantially all of its assets and requires the Company to make an offer to repurchase the 2030 senior notes upon certain change of control triggering events.

Junior Subordinated Notes

In September 2020, the Company issued $ 275.0 million of junior subordinated notes with a maturity date of September 30, 2060 (the “2060 junior subordinated notes”).

The 2060 junior subordinated notes bear interest at a fixed rate of 4.750 % per annum.

Interest is payable quarterly, commencing on December 30, 2020, and the Company has the right to defer interest payments in accordance with the terms of the notes.

The 2060 junior subordinated notes were issued at 100 % of the principal amount and rank junior and subordinate in right of payment and upon liquidation to all of the Company’s current and future senior indebtedness.

On or after September 30, 2025, at the Company’s option, the 2060 junior subordinated notes may be redeemed in whole or in part, at 100 % of the principal amount, plus any accrued and unpaid interest.

Prior to September 30, 2025, at the Company’s option, the 2060 junior subordinated notes may be redeemed in whole but not in part, at 100 % of the principal amount, plus any accrued and unpaid interest, if certain changes in tax laws, regulations or interpretations occur;

or at 102 % of the principal amount, plus any accrued and unpaid interest, if a rating agency makes certain changes relating to the equity credit criteria for securities with features similar to the 2060 junior subordinated notes.

For the three months ended March 31, 2021, the interest rate for the Company’s borrowings under the term loan was LIBOR plus 0.950 %.

As of December 31, 2020 and March 31, 2021, the Company had no outstanding borrowings under the revolver.

Junior Convertible Securities

As of March 31, 2021, the Company had 5.15 % junior convertible trust preferred securities outstanding (the “junior convertible securities”) with a carrying value of $ 308.8 million.

The carrying value is accreted to the principal amount at maturity ($ 416.7 million) over a remaining life of approximately 17 years.

Holders of the junior convertible securities have no rights to put these securities to the Company.

Upon conversion, holders will receive cash or shares of the Company’s common stock, or a combination thereof, at the Company’s election.

The Company may redeem the junior convertible securities, subject to its stock trading at or above certain specified levels over specified times periods, and may also repurchase junior convertible securities in the open market or in privately negotiated transactions from time to time at management’s discretion.

In the first quarter of 2021, the Company paid $ 15.0 million to repurchase a portion of its junior convertible securities, resulting in reductions of $ 10.3 million and $ 2.9 million to Debt and Additional paid-in capital, respectively.

As a result of these repurchases, the Company also reduced its Deferred income tax liability (net) by $ 3.3 million.

Derivative Financial Instruments

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company and its Affiliates may use derivative financial instruments to offset exposure to changes in interest rates, foreign currency exchange rates, and markets.

In 2018, the Company entered into two separate pound sterling-denominated forward foreign currency contracts (the “forward contracts”) with a large financial institution (the “counterparty”).

Concurrent to entering into each of the forward contracts, the Company also entered into two separate collar contracts (the “collar contracts”) with the same counterparty for the same notional amounts and expiration dates as each of the forward contracts.

The combinations of the forward contracts and the collar contracts were designated as net investment hedges against fluctuations in foreign currency exchange rates on certain of the Company’s investments in Affiliates with the pound sterling as their functional currency.

In the first quarter of 2020, the Company terminated the forward contracts and the corresponding collar contracts, and upon settlement received net proceeds of $ 24.9 million.

In the first quarter of 2020, the Company terminated its pound sterling-denominated forward foreign currency contracts and its corresponding collar contracts, which were designated as net investment hedges, and upon settlement, the Company received net proceeds of $ 24.9 million.

The net proceeds from the termination of the contracts are presented within sale of investment securities in the Consolidated Statements of Cash Flows.

The Company’s forward contracts and collar contracts with the counterparty were governed by an International Swaps and Derivative Association Master Agreement, which provided for legally enforceable rights to set-off.

The terms of the contracts also required the Company and the counterparty to post cash collateral in certain circumstances throughout the duration of the contracts.

As of December 31, 2019, the Company held $ 8.7 million of cash collateral from the counterparty, and the counterparty held no cash collateral from the Company.

In the first quarter of 2020, the Company entered into an interest rate swap contract (the “interest rate swap”) with a large financial institution (the “swap counterparty”), which will expire in March 2023.

The interest rate swap, which is designated as a cash flow hedge, is used to exchange the Company’s LIBOR-based interest payments for fixed rate payments.

The Company receives payments based on one month LIBOR and makes payments based on an annual fixed rate of 0.5135 % on a notional amount of $ 250.0 million.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company has an interest rate swap contract (the “interest rate swap”) with a large financial institution (the “swap counterparty”), which will expire in March 2023.

The interest rate swap, which is designated as a cash flow hedge, is used to exchange a portion of the Company’s LIBOR-based interest payments for fixed rate interest payments.

Under the contract, the Company receives payments based on one month LIBOR and makes payments based on an annual fixed rate of 0.5135 % on a notional amount of $ 250.0 million.

The terms of the contract also require the Company and the swap counterparty to post cash collateral in certain circumstances throughout the duration of the contract.

As of September 30, 2020, the Company held no cash collateral from the swap counterparty, and the swap counterparty held $ 2.2 million of cash collateral from the Company.

As of March 31, 2021, the Company held no cash collateral from the swap counterparty, and the swap counterparty held $ 1.6 million of cash collateral from the Company.

Certain of the Company’s Affiliates use forward foreign currency contracts to hedge the risk of foreign exchange rate movements, which are designated as cash flow hedges.

The Company assesses hedge effectiveness on a quarterly basis.

For derivative financial instruments designated as cash flow hedges, the Company uses a qualitative method of assessing hedge effectiveness by comparing the notional amounts, timing of payments, currencies (for the forward foreign currency contracts), and interest rates (for the interest rate swap).

Upon termination of these instruments or the repayment of the Company’s outstanding LIBOR-based borrowings, any gain or loss recorded in Accumulated other comprehensive loss in the Consolidated Balance Sheets will be reclassified into earnings.

Changes in the fair values of cash flow hedges are reported in Change in net realized and unrealized gain (loss) on derivative financial instruments in the Consolidated Statements of Comprehensive Income.

Upon termination of the interest rate swap or the repayment of the Company’s outstanding LIBOR-based borrowings, any gain or loss recorded in Accumulated other comprehensive (loss) in the Consolidated Balance Sheets will be reclassified into earnings.

Changes in the fair values of the effective net investment hedges are reported in Foreign currency translation gain (loss) in the Consolidated Statements of Comprehensive Income.

Upon the sale or liquidation of the underlying investment, any gain or loss remaining in Accumulated other comprehensive loss related to the forward and collar contracts will be reclassified to earnings.

The Company assesses hedge effectiveness on a quarterly basis.

Certain of the Company’s Affiliates use forward foreign currency contracts to hedge the risk of foreign exchange rate movements, which were not significant.

Upon the sale or liquidation of the underlying investment, any gain or loss remaining in Accumulated other comprehensive loss will be reclassified to earnings.

The following table summarizes the Company’s and its Affiliates’ derivative financial instruments measured at fair value on a recurring basis:

December 31, 2019 September 30, 2020

December 31, 2020 March 31, 2021

Assets Liabilities Assets Liabilities

Forward contracts $ 23.8 $ ( 1.0 ) $ 2.6 $ ( 1.9 )

Put options — ( 31.0 ) — —

Call options 15.1 — — —

Interest rate swap — — — ( 2.1 )

Total $ 38.9 $ ( 32.0 ) $ 2.6 $ ( 4.0 )

The forward and collar contracts entered into in 2018 included a set-off right and were therefore, presented on a net basis in Other assets;

they were $ 5.7 million as of December 31, 2019.

The Company and certain of its consolidated Affiliates have also entered into contracts that do not include set-off rights and are therefore, presented on a gross basis in Other assets and Other liabilities;

they were $ 2.2 million and $ 1.0 million, respectively, as of December 31, 2019 and $ 2.6 million and $ 4.0 million, respectively, as of September 30, 2020.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following tables summarize the effects of derivative financial instruments on the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Income:

For the Three Months Ended September 30,

Gain (Loss) Recognized in Other Comprehensive Income (Loss) Loss Reclassified from Accumulated Other Comprehensive Loss into Earnings Gain Recognized in Earnings from Excluded Components (1)

Gain (Loss) Recognized in Other Comprehensive Income (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings Gain (Loss) Recognized in Earnings from Excluded Components (1)

Forward contracts $ 22.8 $ ( 0.0 ) $ 3.5 $ 0.4 $ 0.1 $ —

Put options ( 8.4 ) — — — — —

Call options ( 7.5 ) — — — — —

Forward foreign currency contracts $ 3.5 $ ( 2.3 ) $ 1.9 $ ( 0.6 )

Interest rate swap — ( 1.9 ) — ( 1.4 )

Total $ 3.5 $ ( 4.2 ) $ 1.9 $ ( 2.0 )

For the Nine Months Ended September 30,

Gain (Loss) Recognized in Other Comprehensive Income Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings Gain Recognized in Earnings from Excluded Components (1)

Forward contracts $ 32.6 $ 0.1 $ 10.4 $ 64.9 $ 0.4 $ 2.8

The Company and certain of its consolidated Affiliates have entered into contracts that do not include set-off rights and are therefore presented on a gross basis in Other assets and Other liabilities;

they were $ 3.5 million and $ 4.2 million, respectively, as of December 31, 2020, and $ 1.9 million and $ 2.0 million, respectively, as of March 31, 2021.

The following table summarizes the effects of derivative financial instruments on the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Income:

For the Three Months Ended March 31,

Gain (Loss) Recognized in Other Comprehensive Income (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings Gain Recognized in Earnings from Excluded Components (1)

Gain Recognized in Other Comprehensive Income Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings Gain (Loss) Recognized in Earnings from Excluded Components

Forward foreign currency contracts $ 65.0 $ 0.1 $ 2.8 $ 0.1 $ 0.5 $ —

Put options ( 47.7 ) — — — — —

3 unchanged sentences

___________________________

(1) The excluded components of the forward contracts were recognized in earnings on a straight-line basis over the respective period of the contracts as a reduction to Interest expense on the Consolidated Statements of Income.

(1) The excluded components of the forward foreign currency contracts were recognized in earnings on a straight-line basis over the respective period of the contracts as a reduction to Interest expense.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Commitments and Contingencies

3 unchanged sentences

The Company has committed to co-invest in certain Affiliate sponsored investment products.

As of September 30, 2020, these unfunded commitments were $ 129.4 million and may be called in future periods.

As of September 30, 2020, the Company was obligated to make payments related to an investment in an Affiliate accounted for under the equity method.

The maximum the Company is obligated to pay is $ 35.0 million in 2020 or 2021, and $ 37.5 million in 2022.

In addition, as of September 30, 2020, the Company was contingently liable to make payments related to the achievement of specified financial targets by certain of its Affiliates accounted for under the equity method, of which $ 150.0 million may become payable in 2021, $ 77.5 million in 2022 and $ 62.5 million from 2023 through 2025.

As of September 30, 2020, the Company expected to make payments of approximately $ 53 million.

The Company expects to make no payments in 2020.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

the event certain financial targets are not met at one of the Company’s Affiliates, the Company may receive payments of up to $ 12.5 million and also has the option to reduce its ownership interest and receive an incremental payment of $ 25.0 million.

Affiliate equity interests provide holders with a conditional right to put their interests to the Company over time.

In connection with one of the Company’s investments in an Affiliate, a minority owner has the right to elect to sell a portion of its ownership interest in the Affiliate to the Company annually.

If the minority owner sells its interest to the Company, then the Company will continue to account for the Affiliate under the equity method.

In the fourth quarter of 2019, the Company was notified by the minority owner that it had elected to sell a 5 % interest in the Affiliate to the Company.

In the first quarter of 2020, with the consent of the Company, the minority owner rescinded this notice.

As of September 30, 2020, the minority owner maintains a 14 % ownership interest in the Affiliate.

As of March 31, 2021, these unfunded commitments were $ 127.7 million and may be called in future periods.

In addition, as of March 31, 2021, the Company was contingently liable to make payments of $ 118.0 million related to the achievement of specified financial targets by certain of its Affiliates accounted for under the equity method, of which $ 40.5 million may become payable in 2022 and $ 77.5 million may become payable from 2023 through 2025.

As of March 31, 2021, the Company expected to make payments of approximately $ 13 million.

In the event certain financial targets are not met at one of the Company’s Affiliates, the Company may receive payments of up to $ 12.5 million and also has the option to reduce its ownership interest and receive an incremental payment of $ 25.0 million.

Affiliate equity interests provide holders at consolidated Affiliates with a conditional right to put their interests to the Company over time.

In connection with one of the Company’s investments in an Affiliate accounted for under the equity method, a minority owner has the right to elect to sell a portion of its ownership interest in the Affiliate to the Company annually.

If the minority owner sells its interest to the Company, the Company will continue to account for the Affiliate under the equity method.

In the fourth quarter of 2020, the Company was notified by the minority owner that it may elect to sell a 5 % interest in the Affiliate to the Company.

In the three months ended March 31, 2021, with the consent of the Company, the minority owner rescinded this notice.

As of March 31, 2021, the minority owner maintained a 14 % ownership interest in the Affiliate.

The Company and certain of its consolidated Affiliates operate under regulatory authorities that require the maintenance of minimum financial or capital requirements.

Management is not aware of any significant violations of such requirements.

Fair Value Measurements

The following tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:

Fair Value Measurements

Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Financial Assets

Investments in marketable securities $ 59.4 $ 24.4 $ 35.0 $ —

Derivative financial instruments (1)

Financial Liabilities (2)

Affiliate equity repurchase obligations $ 19.8 $ — $ — $ 19.8

Derivative financial instruments 1.0 — 1.0 —

Fair Value Measurements

September 30,

Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Financial Assets

Investments in marketable securities $ 68.2 $ 27.5 $ 40.7 $ —

Derivative financial instruments (1)

Financial Liabilities (2)

Affiliate equity repurchase obligations $ 69.9 $ — $ — $ 69.9

Derivative financial instruments 4.0 — 4.0 —

__________________________

(1) Amounts are presented within Other assets.

(2) Amounts are presented within Other liabilities.

Level 3 Financial Assets and Liabilities

The following tables present the changes in level 3 assets and liabilities for Affiliate equity repurchase obligations:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2019 2020 2019 2020

Balance, beginning of period $ 57.4 $ 73.3 $ 36.2 $ 19.8

Net realized and unrealized (gains) losses (1)

0.7 ( 0.2 ) 0.6 ( 4.1 )

Purchases and issuances (2)

12.1 85.8 85.1 292.8

Settlements and reductions ( 33.4 ) ( 89.0 ) ( 85.1 ) ( 238.6 )

Balance, end of period $ 36.8 $ 69.9 $ 36.8 $ 69.9

Net change in unrealized (gains) losses relating to instruments still held at the reporting date $ — $ — $ — $ —

___________________________

(1) Accretion expense for these arrangements and obligations is recorded in Interest expense.

(2) Includes transfers from Redeemable non-controlling interests.

The following table presents certain quantitative information about the significant unobservable inputs used in valuing the Company’s level 3 fair value measurements:

Quantitative Information About Level 3 Fair Value Measurements

December 31, 2019 September 30, 2020

Techniques Unobservable

Input Fair Value Range Weighted Average (1)

Fair Value Range Weighted Average (1)

Affiliate equity repurchase obligations Discounted cash flow Growth rates (2)

$ 19.8 ( 9 )% - 7 %

5 % $ 69.9 ( 1 )% - 8 %

Discount rates 14 % - 17 %

15 % 14 % - 16 %

___________________________

(1) Calculated by comparing the relative fair value of an obligation to its respective total.

(2) Represents growth rates of asset and performance based fees.

Affiliate equity repurchase obligations include agreements to repurchase Affiliate equity.

As of September 30, 2020, there were no changes to growth or discount rates that had a significant impact to Affiliate equity repurchase obligations recorded in prior periods.

Investments Measured at NAV as a Practical Expedient

The Company’s Affiliates sponsor investment products in which the Company and its Affiliates may make general partner and seed capital investments.

The Company uses the net asset value (“NAV”) of these investments as a practical expedient for their fair values and reports these investments within Other investments on the Consolidated Balance Sheets.

The following table summarizes the fair value of these investments and any related unfunded commitments:

December 31, 2019 September 30, 2020

Category of Investment Fair Value Unfunded

Commitments Fair Value Unfunded

Private equity funds (1)

$ 203.3 $ 127.2 $ 208.7 $ 129.4

Investments in other strategies (2)

$ 211.8 $ 127.2 $ 215.0 $ 129.4

___________________________

(1) The Company accounts for its interests in private equity funds under the equity method of accounting and, therefore, uses NAV as a practical expedient, one quarter in arrears (adjusted for current period calls and distributions) to determine the fair value.

These funds primarily invest in a broad range of third-party funds and direct investments.

Distributions will be received as the underlying assets are liquidated over the life of the funds, which is generally up to 15 years.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(2) These are multi-disciplinary funds that invest across various asset classes and strategies, including equity, credit and real estate.

Investments are generally redeemable on a daily, monthly or quarterly basis.

(3) Fair value attributable to the controlling interest was $ 137.6 million and $ 145.9 million as of December 31, 2019 and September 30, 2020, respectively.

Other Financial Assets and Liabilities Not Carried at Fair Value

The Company has other financial assets and liabilities, which are not required to be carried at fair value, but the Company is required to disclose their fair values.

The carrying amount of Cash and cash equivalents, Receivables, and Payables and accrued liabilities approximates fair value because of the short-term nature of these instruments.

The carrying value of notes receivable, which is reported in Other assets, approximates fair value because interest rates and other terms are at market rates.

The carrying value of the credit facilities approximates fair value because the credit facilities have variable interest based on selected short-term rates.

The following table summarizes the Company’s other financial liabilities not carried at fair value:

December 31, 2019 September 30, 2020

Carrying Value Fair Value Carrying Value Fair Value Fair Value Hierarchy

Senior notes $ 746.8 $ 797.4 $ 1,097.2 $ 1,197.2 Level 2

Junior convertible securities 315.4 415.7 317.7 390.4 Level 2

Junior subordinated notes 290.7 327.7 565.7 607.9 Level 2

As of December 31, 2019, and September 30, 2020, the Company held investments without readily determinable fair values of zero and $ 8.5 million, respectively.

The Company’s management is not aware of any significant violations of such requirements.

Goodwill and Acquired Client Relationships

2 unchanged sentences

Foreign currency translation 4.8

Other ( 1.9 )

Balance, as of September 30, 2020 $ 2,638.8

As of September 30, 2020, the Company completed its annual impairment assessment on goodwill and no impairment was indicated.

Balance, as of March 31, 2021 $ 2,666.2

Acquired Client Relationships (Net)

7 unchanged sentences

Foreign currency translation 1.4 ( 1.2 ) 0.2 2.8 3.0

Transfers (1)

( 85.7 ) 85.7 — — —

Balance, as of September 30, 2020 $ 1,159.9 $ ( 1,014.3 ) $ 145.6 $ 889.6 $ 1,035.2

(1) Transfers include acquired client relationships at Affiliates that were deconsolidated during the period.

Balance, as of March 31, 2021 $ 1,168.0 $ ( 1,035.5 ) $ 132.5 $ 911.8 $ 1,044.3

Definite-lived acquired client relationships at the Company’s consolidated Affiliates are amortized over their expected period of economic benefit.

The Company recorded amortization expense within Intangible amortization and impairments in

The Company recorded amortization expense within Intangible amortization and impairments in the Consolidated Statements of Income for these relationships of $ 20.6 million and $ 7.5 million for the three months ended March 31, 2020 and 2021, respectively.

Based on relationships existing as of March 31, 2021, the Company estimates that its consolidated amortization expense will be approximately $ 23 million for the remainder of 2021, approximately $ 30 million in each of 2022 and 2023, approximately $ 20 million in each of 2024 and 2025, and approximately $ 10 million in 2026.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

the Consolidated Statements of Income for these relationships of $ 21.1 million and $ 72.0 million for the three and nine months ended September 30, 2019, respectively, and $ 7.0 million, and $ 48.2 million for the three and nine months ended September 30, 2020, respectively.

Based on relationships existing as of September 30, 2020, the Company estimates that its consolidated amortization expense will be approximately $ 10 million for the remainder of 2020, approximately $ 30 million in each of 2021, 2022 and 2023, approximately $ 20 million in 2024 and approximately $ 10 million in 2025.

In the second quarter of 2020, the Company agreed with a consolidated Affiliate to strategically reposition their business and to sell its equity interest in the Affiliate.

The Company recorded an expense in Intangible amortization and impairments of $ 32.8 million attributable to the controlling interest ($ 60.3 million in aggregate) to reduce the carrying value of the Affiliate’s acquired client relationships to zero as of June 30, 2020.

In July 2020, the Company sold its interest in the Affiliate and the Company recorded no significant gain or loss on the transaction.

In the third quarter of 2020, the Company completed an impairment assessment of the indefinite-lived acquired client relationships at one of its Affiliates, and determined that the fair value of the asset had declined below its carrying value.

Accordingly, the Company recorded an expense in Intangible amortization and impairments of $ 12.5 million attributable to the controlling interest ($ 14.0 million in aggregate) to reduce the carrying value of the asset to fair value.

The decline in the fair value was a result of a projected decline in assets under management that decreased the forecasted revenue associated with the asset.

The fair value of the asset was determined using a discounted cash flow analysis, a level 3 fair value measurement that included a projected growth rate of ( 14 )% for assets under management, discount rate of 15 % for asset based fees, and a market participant tax rate of 25 %.

In addition, the Company recorded an expense in Intangible amortization and impairments of $ 7.4 million attributable to the controlling interest ($ 10.9 million in aggregate) to reduce the carrying value of an indefinite-lived acquired client relationship to zero due to the closure of one of its Affiliate’s retail investment products.

As of September 30, 2020, no other impairments of indefinite-lived acquired client relationships were indicated.

If financial markets worsen as a result of the novel coronavirus global pandemic (“COVID-19”) or other factors, the fair values of these assets could drop below their carrying values resulting in future impairments.

As of March 31, 2021, no impairments of indefinite-lived acquired client relationships were indicated.

If financial markets become depressed for a prolonged period as a result of the novel coronavirus global pandemic (“COVID-19”) or other factors, the fair values of these assets could drop below their carrying values resulting in future impairments.

Equity Method Investments in Affiliates

In the first quarter of 2020, the Company completed its minority investment in Comvest Partners, and in the third quarter of 2020, the Company established a minority equity interest in Inclusive Capital Partners.

The Company’s purchase price allocation for each transaction was measured using financial models that included assumptions of expected market performance, net client cash flows and discount rates.

The financial results of certain Affiliates accounted for under the equity method, including those of Comvest Partners, are recognized in the Consolidated Financial Statements one quarter in arrears.

In the first quarter of 2021, the Company completed its minority investment in Boston Common Asset Management LLC (“Boston Common”).

The majority of the consideration paid for Boston Common is deductible for U.S.

tax purposes over a 15 year life.

The Company’s purchase price allocation for the transaction was measured using financial models that included assumptions of expected market performance, net client cash flows, and discount rates.

The financial results of certain Affiliates accounted for under the equity method are recognized in the Consolidated Financial Statements one quarter in arrears.

The following table presents the change in Equity method investments in Affiliates (net):

7 unchanged sentences

Other ( 3.8 )

Balance, as of September 30, 2020 $ 1,974.7

Balance, as of March 31, 2021 $ 1,999.5

Definite-lived acquired client relationships at the Company’s Affiliates accounted for under the equity method are amortized over their expected period of economic benefit.

The Company recognized amortization expense for these relationships of $ 42.1 million and $ 104.1 million for the three and nine months ended September 30, 2019, respectively, and $ 34.3 million and $ 110.5 million for the three and nine months ended September 30, 2020, respectively.

Based on relationships

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

existing as of September 30, 2020, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 40 million for the remainder of 2020, approximately $ 120 million in 2021, and approximately $ 50 million in each of 2022, 2023, 2024 and 2025.

In the first quarter of 2019, the Company recorded a $ 415.0 million expense to reduce the carrying value of an Affiliate to fair value.

In March 2019, the Company concluded that the growth expectations of the Affiliate had declined and determined that the estimated fair value of the Affiliate had also declined meaningfully.

Therefore, the Company performed a valuation to determine whether the fair value of the Affiliate had declined below its carrying value.

The fair value of the investment was determined using a discounted cash flow analysis, a level 3 fair value measurement, that included a projected compounded asset based fee growth over the first five years of ( 13 )%, discount rates of 11 % and 20 % for asset and performance based fees, respectively, and a market participant tax rate of 25 %.

Based on the discounted cash flow analysis, the Company concluded that the fair value of its investment had declined below its carrying value and that the decline was other-than-temporary.

In October 2019, the Company sold its interest in the Affiliate.

In the third quarter of 2019, the Company recorded a $ 10.0 million expense to reduce the carrying value of an Affiliate to fair value.

The fair value of the investment was determined using a discounted cash flow analysis, a level 3 fair value measurement, that included a projected growth rate of ( 20 )%, discount rates of 11 % and 20 % for asset and performance based fees, respectively, and a market participant tax rate of 25 %.

Based on the discounted cash flow analysis, the Company concluded that the fair value of its investment had declined below its carrying value and that the decline was other-than-temporary.

The Company recognized amortization expense for these relationships of $ 39.3 million and $ 35.2 million for the three months ended March 31, 2020 and 2021, respectively.

Based on relationships existing as of March 31, 2021, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 85 million for the remainder of 2021, approximately $ 50 million in each of 2022, 2023, 2024, and 2025, and approximately $ 40 million in 2026.

In the first quarter of 2020, the Company recorded a $ 140.0 million expense to reduce the carrying value of an Affiliate to fair value.

The decline in the fair value was a result of a decline in assets under management and a reduction in projected growth, which decreased the forecasted revenue associated with the investment.

The fair value of the investment was determined using a discounted cash flow analysis, a level 3 fair value measurement, that included projected compounded growth in assets under management over the first five years of ( 2 )%, discount rates of 11 % and 20 % for asset and performance based fees, respectively, and a market participant tax rate of 25 %.

The fair value of the investment was determined using a probability-weighted discounted cash flow analysis, a level 3 fair value measurement, that included projected compounded growth in assets under management over the first five years of ( 2 )%, discount rates of 11 % and 20 % for asset and performance based fees, respectively, and a market participant tax rate of 25 %.

Based on the discounted cash flow analysis, the Company concluded that the fair value of its investment had declined below its carrying value and that the decline was other-than-temporary.

As of September 30, 2020, the estimated fair values of the Company’s Affiliates accounted for under the equity method exceeded their carrying values.

If financial markets worsen as a result of COVID-19 or other factors, or the financial performance of an Affiliate worsens as a result of net client cash outflows or performance, regardless of the performance of financial markets, the fair values of these assets could drop below their carrying values for periods considered other than temporary, resulting in future impairments.

The Company has determined that certain of its Affiliates accounted for under the equity method are significant under Rule 10-01(b)(1) of Regulation S-X.

For the three and nine months ended September 30, 2019, these Affiliates recognized revenue of $ 122.7 million and $ 429.8 million, respectively, and net income of $ 75.2 million and $ 290.9 million, respectively.

For the three and nine months ended September 30, 2020, these Affiliates recognized revenue of $ 116.2 million and $ 524.5 million, respectively, and net income of $ 74.2 million and $ 379.5 million, respectively.

As of March 31, 2021, the estimated fair values of the Company’s Affiliates accounted for under the equity method exceeded their carrying values.

If financial markets become depressed for a prolonged period as a result of COVID-19 or other factors, or the financial performance of an Affiliate worsens as a result of net client cash outflows or performance, regardless of the performance of financial markets, the fair values of these assets could drop below their carrying values for periods considered other-than-temporary, resulting in future impairments.

As of March 31, 2021, the Company was obligated to make payments of $ 104.4 million related to certain of its Affiliates accounted for under the equity method, of which $ 26.9 million is payable in 2021 and $ 77.5 million is payable in 2022.

On April 30, 2021, the Company completed a minority investment in OCP Asia Limited, a leading alternative manager in private markets, providing customized secured lending solutions across the Asia-Pacific region.

Related Party Transactions

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

A prior owner of one of the Company’s consolidated Affiliates retains interests in certain of the Affiliate’s private equity partnerships and, as a result, is a related party of the Company.

The prior owner’s interests are presented in Other liabilities and were $ 38.5 million and $ 33.8 million as of December 31, 2019 and September 30, 2020, respectively.

The prior owner’s interests are presented within Other liabilities and were $ 35.4 million and $ 33.3 million as of December 31, 2020 and March 31, 2021, respectively.

The Company may invest from time to time in funds or products advised by its Affiliates.

3 unchanged sentences

The Company has related party transactions in association with its contingent payment arrangements and Affiliate equity transactions, as more fully described in Notes 9, 11, 14, and 15.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Share-Based Compensation

The following table presents share-based compensation expense:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2019 2020 2019 2020

For the Three Months Ended March 31,

Share-based compensation $ 8.2 $ 9.7

1 unchanged sentence

As of December 31, 2020, the Company had unrecognized share-based compensation expense of $ 86.2 million.

As of September 30, 2020, the Company had unrecognized share-based compensation expense of $ 88.8 million, which will be recognized over a weighted average period of approximately three years (assuming no forfeitures).

As of March 31, 2021, the Company had unrecognized share-based compensation expense of $ 97.9 million, which will be recognized over a weighted average period of approximately three years (assuming no forfeitures).

Restricted Stock

6 unchanged sentences

Performance condition changes 0.0 110.02

Unvested units - September 30, 2020 1.1 99.21

For the nine months ended September 30, 2019 and 2020, the Company granted restricted stock units with fair values of $ 60.6 million and $ 31.6 million, respectively.

These restricted stock units were valued based on the closing price of the Company’s common stock on the grant date and the number of shares expected to be delivered.

Unvested units - March 31, 2021 1.1 93.36

For the three months ended March 31, 2020 and 2021, the Company granted restricted stock units with fair values of $ 30.5 million and $ 26.7 million, respectively.

These restricted stock units were valued based on the closing price of the Company’s common stock on the grant date and the number of shares expected to vest.

Restricted stock units containing vesting conditions generally require service over a period of three years to four years and may also require the satisfaction of certain performance conditions.

2 unchanged sentences

The following table summarizes transactions in the Company’s stock options:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Stock Options Weighted Average

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Performance condition changes — —

Unexercised options outstanding - September 30, 2020 2.5 84.03 5.2

Exercisable at September 30, 2020 0.4 128.91 1.9

For the nine months ended September 30, 2019 and 2020, the Company granted stock options with fair values of $ 33.3 million and $ 4.4 million, respectively.

Unexercised options outstanding - March 31, 2021 2.8 81.62 4.9

Exercisable at March 31, 2021 0.4 127.49 1.4

For the three months ended March 31, 2020 and 2021, the Company granted stock options with fair values of $ 3.9 million and $ 0.8 million, respectively.

Stock options generally vest over a period of three years to five years and expire seven years after the grant date.

All stock options have been granted with exercise prices equal to the closing price of the Company’s common stock on the grant date.

Substantially all of the Company’s outstanding stock options contain both service and

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

performance conditions.

Substantially all of the Company’s outstanding stock options contain both service and performance conditions.

For awards with performance conditions, the number of stock options expected to vest may change over time depending upon the performance level achieved.

The weighted average fair value of options granted was $ 18.36 and $ 18.23 , per option, for the nine months ended September 30, 2019 and 2020, respectively.

The weighted average fair value of options granted was $ 17.49 and $ 50.04 , per option, for the three months ended March 31, 2020 and 2021, respectively.

The Company uses the Black-Scholes option pricing model to determine the fair value of options.

The weighted average grant date assumptions used to estimate the fair value of stock options granted were as follows:

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Dividend yield 1.7 % 0.0 %

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Affiliate equity interests provide holders with an equity interest in one of the Company’s Affiliates, consistent with the structured partnership interests in place at the respective Affiliate.

Affiliate equity holders generally have a conditional right to put their interests to the Company at certain intervals (between five years and 15 years from the date the equity interest is received or on an annual basis following an Affiliate equity holder’s departure).

Prior to becoming redeemable, the value of the Company’s Affiliate equity is presented within Non-controlling interests.

Upon becoming redeemable, the value of these interests is reclassified and the current redemption value of these interests is presented as Redeemable non-controlling interests.

Affiliate equity holders generally have a conditional right to put their interests to the Company at certain intervals (between five years and 15 years from the date the equity interest is received by the Affiliate equity holder or on an annual basis following an Affiliate equity holder’s departure).

Prior to becoming redeemable, the Company’s Affiliate equity is presented within Non-controlling interests.

Upon becoming redeemable, these interests are reclassified to Redeemable non-controlling interests at their current redemption values.

Changes in the current redemption value are recorded to Additional paid-in capital.

When the Company receives a put notice, and, therefore, has an unconditional obligation to repurchase Affiliate equity interests, they are reclassified to Other liabilities.

When the Company receives a put notice, and, therefore, has an unconditional obligation to purchase Affiliate equity interests, the interests are reclassified from Redeemable non-controlling interests to Other liabilities.

The following table presents the changes in Redeemable non-controlling interests:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Redeemable Non-controlling Interests

Balance, as of December 31, 2020 (1)

Changes attributable to consolidated Affiliate sponsored investment products 3.9

Increase attributable to consolidated Affiliate sponsored investment products 23.7

Transfers to Other liabilities ( 70.7 )

1 unchanged sentence

Changes in redemption value 105.6

Balance, as of September 30, 2020 (1)

Balance, as of March 31, 2021 (1)

___________________________

(1) As of December 31, 2019 and September 30, 2020, Redeemable non-controlling interests includes consolidated Affiliate sponsored investment products primarily attributable to third-party investors of $ 21.6 million and $ 25.5 million, respectively.

(1) As of December 31, 2020 and March 31, 2021, Redeemable non-controlling interests include consolidated Affiliate sponsored investment products primarily attributable to third-party investors of $ 35.4 million and $ 59.1 million, respectively.

Affiliate Equity

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The Company’s Affiliates generally pay quarterly distributions to Affiliate equity holders.

For the nine months ended September 30, 2019 and 2020, distributions paid to Affiliate equity holders (non-controlling interests) were $ 276.6 million and $ 249.1 million, respectively.

The Company periodically repurchases Affiliate equity from and issues Affiliate equity to the Company’s consolidated Affiliate partners and its officers under agreements that provide the Company with a conditional right to call and Affiliate equity holders the conditional right to put their Affiliate equity interests to the Company at certain intervals.

For the nine months ended September 30, 2019 and 2020, the amount of cash paid for repurchases was $ 85.2 million and $ 249.6 million,

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

respectively.

For the nine months ended September 30, 2019 and 2020, the total amount of cash received for issuances was $ 10.4 million and $ 17.1 million, respectively.

Sales and repurchases of Affiliate equity generally occur at fair value;

Distributions paid to non-controlling interest Affiliate equity holders were $ 99.6 million and $ 102.6 million for the three months ended March 31, 2020 and 2021, respectively.

The Company periodically purchases Affiliate equity from and issues Affiliate equity to the Company’s consolidated Affiliate partners and its officers under agreements that provide the Company a conditional right to call and Affiliate equity holders the conditional right to put their Affiliate equity interests to the Company at certain intervals.

For Affiliates accounted for under the equity method, the Company does not typically have such put and call arrangements.

For the three months ended March 31, 2020 and 2021, the amount of cash paid for purchases was $ 96.5 million and $ 27.4 million, respectively.

For the three months ended March 31, 2020 and 2021, the total amount of cash received for issuances was $ 12.1 million and $ 12.4 million, respectively.

Sales and purchases of Affiliate equity generally occur at fair value;

however, the Company also grants Affiliate equity to its consolidated Affiliate partners and its officers as a form of compensation.

If the equity is issued for consideration below the fair value of the equity, or repurchased for consideration above the fair value of the equity, the difference is recorded as compensation expense in Compensation and related expenses in the Consolidated Statements of Income over the requisite service period.

If the equity is issued for consideration below the fair value of the equity, or purchased for consideration above the fair value of the equity, the difference is recorded as compensation expense in Compensation and related expenses in the Consolidated Statements of Income over the requisite service period.

The following table presents Affiliate equity compensation expense:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2019 2020 2019 2020

For the Three Months Ended March 31,

Controlling interest $ 2.8 $ 4.4

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December 31, 2020 $ 35.9 4 years $ 109.7 5 years

September 30, 2020 37.6 4 years 115.2 5 years

The Company records amounts receivable from, and payable to, Affiliate equity holders in connection with the transfer of Affiliate equity interests that have not settled at the end of the period and other related transactions.

The total receivable was $ 14.8 million and $ 14.6 million as of December 31, 2019 and September 30, 2020, respectively, and was included in Other assets.

The total payable was $ 19.8 million and $ 69.9 million as of December 31, 2019 and September 30, 2020, respectively, and was included in Other liabilities.

March 31, 2021 36.6 4 years 109.5 5 years

The Company records amounts receivable from, and payable to, Affiliate equity holders in connection with the transfer of Affiliate equity interests that have not settled at the end of the period.

The total receivable was $ 9.6 million and $ 11.2 million as of December 31, 2020 and March 31, 2021, respectively, and was included in Other assets.

The total payable was $ 22.0 million and $ 66.1 million as of December 31, 2020 and March 31, 2021, respectively, and was included in Other liabilities.

Effects of Changes in the Company’s Ownership in Affiliates

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company periodically acquires interests from, and transfers interests to, Affiliate equity holders.

2 unchanged sentences

While the Company presents the current redemption value of Affiliate equity within Redeemable non-controlling interests, with changes in the current redemption value increasing or decreasing the controlling interest’s equity over time, the following table presents the cumulative effect that ownership changes had on the controlling interest’s equity related only to Affiliate equity transactions that settled during the applicable periods:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2019 2020 2019 2020

For the Three Months Ended March 31,

Net income (loss) (controlling interest) $ ( 15.6 ) $ 149.9

(Decrease) increase in controlling interest paid-in capital from Affiliate equity issuances ( 1.9 ) 2.9 ( 2.8 ) 1.6

Decrease in controlling interest paid-in capital from Affiliate equity repurchases ( 7.6 ) ( 65.4 ) ( 38.2 ) ( 226.0 )

Decrease in controlling interest paid-in capital from Affiliate equity issuances ( 1.3 ) ( 0.5 )

Decrease in controlling interest paid-in capital from Affiliate equity purchases ( 155.1 ) ( 47.8 )

Net income (loss) (controlling interest) including the net impact of Affiliate equity transactions $ ( 172.0 ) $ 101.6

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company’s consolidated income tax provision includes taxes attributable to the controlling interest and, to a lesser extent, taxes attributable to the non-controlling interests.

The following table presents the consolidated provision for income taxes:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2019 2020 2019 2020

For the Three Months Ended March 31,

Controlling interest:

9 unchanged sentences

Income (loss) before income taxes (controlling interest) $ ( 15.4 ) $ 198.3

Effective tax rate (controlling interests) (1)

Effective tax rate (controlling interest) (1)

( 1.0 ) % 24.4 %

1 unchanged sentence

(1) Taxes attributable to the controlling interest divided by income (loss) before income taxes (controlling interest).

The Company’s effective tax rate (controlling interest) increased to 31.3 % for the three months ended September 30, 2020, primarily due to an $ 8.1 million deferred tax expense resulting from the revaluation of certain of the Company’s deferred tax liabilities due to an increase in the UK tax rate during the period.

The Company’s effective tax rate (controlling interest) decreased to 28.1 % for the nine months ended September 30, 2020, primarily due to a $ 129.9 million increase in Income before income taxes (controlling interest) and state and foreign income tax accruals in the nine months ended September 30, 2019 that did not recur in 2020 .

For the three months ended March 31, 2021, the Company’s effective tax rate (controlling interest) was 24.4 % as compared to ( 1.0 )% for the three months ended March 31, 2020.

The lower tax rate in 2020 was primarily due to a loss before income taxes attributable to the controlling interest which offset the majority of the Company’s Income tax expense for the three months ended March 31, 2020.

Earnings Per Share

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Earnings (loss) per share (diluted) is similar to Earnings (loss) per share (basic), but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company’s common stock.

The following is a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings (loss) per share available to common stockholders:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following is a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings (loss) per share available to common stockholders:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2019 2020 2019 2020

For the Three Months Ended March 31,

Net income (loss) (controlling interest) $ ( 15.6 ) $ 149.9

4 unchanged sentences

Stock options and restricted stock units — 0.6

Junior convertible securities — 2.2

Average shares outstanding (diluted) 47.8 45.4

1 unchanged sentence

The following is a summary of items excluded from the denominator in the table above:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2019 2020 2019 2020

For the Three Months Ended March 31,

Stock options and restricted stock units 3.3 0.4

2 unchanged sentences

Because it is the Company’s intention to settle these potential purchases in cash, the calculation of Average shares outstanding (diluted) excludes any potential dilutive effect from possible share settlements of Affiliate equity purchases.

For the three and nine months ended September 30, 2020, the Company repurchased 1.3 million and 2.8 million shares, respectively, of its common stock, at an average price per share of $ 67.82 and $ 72.22 , respectively.

For the three months ended March 31, 2021, the Company repurchased 1.6 million shares of its common stock, at an average price per share of $ 128.84 .

Comprehensive Income

The following tables present the tax effects allocated to each component of Other comprehensive income (loss):

For the Three Months Ended September 30,

Pre-Tax Tax Benefit Net of Tax Pre-Tax Tax Expense Net of Tax

Foreign currency translation gain (loss) $ ( 41.2 ) $ 3.6 $ ( 37.6 ) $ 25.2 $ ( 0.5 ) $ 24.7

Change in net realized and unrealized gain on derivative financial instruments 0.5 — 0.5 0.2 — 0.2

Other comprehensive income (loss) $ ( 40.7 ) $ 3.6 $ ( 37.1 ) $ 25.4 $ ( 0.5 ) $ 24.9

For the Nine Months Ended September 30,

Pre-Tax Tax Benefit Net of Tax Pre-Tax Tax (Expense)

Benefit Net of Tax

The following table presents the tax effects allocated to each component of Other comprehensive income (loss):

For the Three Months Ended March 31,

Pre-Tax Tax (Expense)

Benefit Net of Tax Pre-Tax Tax Expense Net of Tax

Foreign currency translation gain (loss) $ ( 41.0 ) $ ( 11.9 ) $ ( 52.9 ) $ 29.6 $ ( 5.8 ) $ 23.8

1 unchanged sentence

Other comprehensive income (loss) $ ( 42.2 ) $ ( 11.7 ) $ ( 53.9 ) $ 30.2 $ ( 5.9 ) $ 24.3

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The components of accumulated other comprehensive loss, net of taxes, were as follows:

3 unchanged sentences

Balance, as of December 31, 2020 $ ( 161.9 ) $ ( 0.3 ) $ ( 162.2 )

Other comprehensive loss before reclassifications ( 51.4 ) ( 2.5 ) ( 53.9 )

Other comprehensive income before reclassifications 23.8 1.1 24.9

Amounts reclassified — ( 0.6 ) ( 0.6 )

Net other comprehensive loss ( 51.4 ) ( 2.1 ) ( 53.5 )

Balance, as of September 30, 2020 $ ( 228.5 ) $ ( 0.9 ) $ ( 229.4 )

Net other comprehensive income 23.8 0.5 24.3

Balance, as of March 31, 2021 $ ( 138.1 ) $ 0.2 $ ( 137.9 )

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements