What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-05 compared with 2021-08-05 · 200 added, 183 removed, 596 unchanged (39% of the section changed)

3 unchanged sentences

(in millions, except per share data)

For the Three Months Ended June 30, For the Six Months Ended June 30,

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

2020 2021 2020 2021

9 unchanged sentences

Equity method income (loss) (net) 17.0 35.9 ( 78.8 ) 125.1

Investment and other income (expense) ( 12.1 ) 21.1 ( 9.7 ) 53.5

Investment and other income 12.7 37.5 2.9 91.1

Income before income taxes 165.3 253.3 274.2 773.1

11 unchanged sentences

(in millions)

For the Three Months Ended June 30, For the Six Months Ended June 30,

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

2020 2021 2020 2021

6 unchanged sentences

Comprehensive income (non-controlling interests) ( 65.9 ) ( 77.3 ) ( 137.5 ) ( 215.5 )

Comprehensive income (loss) (controlling interest) $ 6.8 $ 118.0 $ ( 46.5 ) $ 292.4

Comprehensive income (controlling interest) $ 86.8 $ 109.5 $ 40.2 $ 401.9

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

2 unchanged sentences

(in millions)

2020 June 30,

2020 September 30,

Cash and cash equivalents $ 1,039.7 $ 1,128.0

32 unchanged sentences

(in millions)

Three Months Ended June 30, 2020 Total Stockholders’ Equity

Three Months Ended September 30, 2020 Total Stockholders’ Equity

Stock Additional

1 unchanged sentence

Comprehensive

Loss Retained

Income (Loss) Retained

Earnings Treasury

Interests Total

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

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 loss, net of tax — — ( 23.9 ) — — ( 0.6 ) ( 24.5 )

Other comprehensive income, net of tax — — 15.5 — — 9.4 24.9

Share-based compensation — 15.7 — — — — 15.7

10 unchanged sentences

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

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

Three Months Ended June 30, 2021 Total Stockholders’ Equity

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

Three Months Ended September 30, 2021 Total Stockholders’ Equity

Stock Additional

1 unchanged sentence

Comprehensive

Income (Loss) Retained

Loss Retained

Earnings Treasury

Interests Total

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

June 30, 2021 $ 0.6 $ 539.3 $ ( 64.8 ) $ 4,263.4 $ ( 2,128.9 ) $ 548.3 $ 3,157.9

Net income — — — 128.4 — 80.0 208.4

Other comprehensive income (loss), net of tax — — 9.0 — — ( 1.1 ) 7.9

Other comprehensive loss, net of tax — — ( 18.9 ) — — ( 2.7 ) ( 21.6 )

Share-based compensation — 21.2 — — — — 21.2

12 unchanged sentences

Distributions to non-controlling interests — — — — — ( 67.4 ) ( 67.4 )

June 30, 2021 $ 0.6 $ 539.3 $ ( 64.8 ) $ 4,263.4 $ ( 2,128.9 ) $ 548.3 $ 3,157.9

September 30, 2021 $ 0.6 $ 556.0 $ ( 83.7 ) $ 4,391.5 $ ( 2,227.5 ) $ 562.6 $ 3,199.5

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

2 unchanged sentences

(in millions)

Six Months Ended June 30, 2020 Total Stockholders' Equity

Nine Months Ended September 30, 2020 Total Stockholders' Equity

Stock Additional

19 unchanged sentences

Distributions to non-controlling interests — — — — — ( 249.1 ) ( 249.1 )

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

Six Months Ended June 30, 2021 Total Stockholders' Equity

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

Nine Months Ended September 30, 2021 Total Stockholders' Equity

Stock Additional

21 unchanged sentences

Distributions to non-controlling interests — — — — — ( 260.9 ) ( 260.9 )

June 30, 2021 $ 0.6 $ 539.3 $ ( 64.8 ) $ 4,263.4 $ ( 2,128.9 ) $ 548.3 $ 3,157.9

September 30, 2021 $ 0.6 $ 556.0 $ ( 83.7 ) $ 4,391.5 $ ( 2,227.5 ) $ 562.6 $ 3,199.5

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

2 unchanged sentences

(in millions)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash flow from (used in) operating activities:

3 unchanged sentences

Depreciation and other amortization 14.7 12.5

Deferred income tax (benefit) expense ( 19.5 ) 68.2

Deferred income tax expense 10.6 87.6

Equity method loss (income) (net) 78.8 ( 125.1 )

5 unchanged sentences

Sales of securities by consolidated Affiliate sponsored investment products 77.6 49.9

Increase in receivables ( 92.5 ) ( 293.3 )

Decrease (increase) in other assets 14.0 ( 15.0 )

Decrease (increase) in receivables 9.0 ( 81.0 )

(Increase) decrease in other assets ( 8.5 ) 22.5

(Decrease) increase in payables, accrued liabilities, and other liabilities ( 136.7 ) 80.1

2 unchanged sentences

Investments in Affiliates ( 2.4 ) ( 144.9 )

Return of capital from equity method investments — 3.4

Purchase of fixed assets ( 6.8 ) ( 4.9 )

1 unchanged sentence

Sale of investment securities 36.9 26.0

Cash flow from (used in) investing activities 3.1 ( 170.7 )

Cash flow used in investing activities ( 8.0 ) ( 177.8 )

Cash flow from (used in) financing activities:

8 unchanged sentences

Effect of foreign currency exchange rate changes on cash and cash equivalents ( 5.3 ) ( 1.8 )

Net increase (decrease) in cash and cash equivalents 142.0 ( 257.9 )

Net increase in cash and cash equivalents 392.0 92.2

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

Effect of deconsolidation of Affiliate sponsored investment products — ( 3.9 )

Effect of deconsolidation of Affiliates and Affiliate sponsored investment products ( 2.2 ) ( 3.9 )

Cash and cash equivalents at end of period $ 929.4 $ 1,128.0

19 unchanged sentences

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, 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.

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 also modifies 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’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.

The Company plans to adopt the standard using a modified retrospective method.

Assuming no further repurchases of its convertible debt instruments, the Company currently estimates the adoption of this standard will result in increases in Debt and beginning Retained Earnings of $ 102.4 million and $ 4.6 million, respectively, and decreases in Additional paid-in-capital and Deferred income tax liability (net) of $ 81.4 million and $ 25.6 million, respectively.

While the potential dilution to the calculation of Earnings per share (diluted) could be material and depends upon a number of factors, such as current share price, number of convertible shares, and conversion price, if the standard was adopted in the current period, Earnings per share (diluted) would not be significantly impacted.

Investments in Marketable Securities

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

2020 June 30,

2020 September 30,

Cost $ 69.4 $ 68.5

2 unchanged sentences

Fair value $ 74.9 $ 75.8

As of December 31, 2020 and June 30, 2021, Investments in marketable securities include consolidated Affiliate sponsored investment products with fair values of $ 52.3 million and $ 19.7 million, respectively.

Other Investments

As of December 31, 2020 and September 30, 2021, Investments in marketable securities include consolidated Affiliate sponsored investment products with fair values of $ 52.3 million and $ 19.0 million, respectively.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Other Investments

Other investments consist of investments in funds advised by the Company’s Affiliates that are carried at net asset value (“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 (expense) on the Consolidated Statements of Income.

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

2 unchanged sentences

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Category of Investment Fair Value Unfunded

10 unchanged sentences

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

(3) Fair value attributable to the controlling interest was $ 164.4 million and $ 202.3 million as of December 31, 2020 and June 30, 2021, respectively.

As of December 31, 2020 and June 30, 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.

(3) Fair value attributable to the controlling interest was $ 164.4 million and $ 217.7 million as of December 31, 2020 and September 30, 2021, respectively.

Investments Without Readily Determinable Fair Values

The following table summarizes the cost, cumulative upward adjustments, and carrying amount of investments without readily determinable fair values:

2020 September 30,

Cost $ 8.5 $ 8.5

Cumulative upward adjustments 5.3 25.0

Carrying amount $ 13.8 $ 33.5

During the three and nine months ended September 30, 2021, the Company recorded an upward adjustment of $ 19.7 million based on an observable price change in the underlying investment.

Fair Value Measurements

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Fair Value Measurements

6 unchanged sentences

Derivative financial instruments 4.2 — 4.2 —

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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)

10 unchanged sentences

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

For the Three Months Ended June 30, For the Six Months Ended June 30,

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

2020 2021 2020 2021

11 unchanged sentences

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Quantitative Information About Level 3 Fair Value Measurements

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Techniques Unobservable

9 unchanged sentences

(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 June 30, 2021, there were no changes to growth or discount rates that had a significant impact to Affiliate equity purchase obligations recorded in prior periods.

As of September 30, 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 Company has other financial assets and liabilities that are not required to be carried at fair value, but are required to be disclosed at fair value.

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.

2 unchanged sentences

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Carrying Value Fair Value Carrying Value Fair Value Fair Value Hierarchy

10 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 on the Consolidated Balance Sheets, with changes in fair value included in Investment and other income (expense).

Other investments with readily determinable fair values 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.

Substantially all of the Company’s consolidated Affiliates considered VIEs are controlled because the Company holds a majority of the voting interests or it is the managing member or general partner.

Substantially all of the Company’s

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

consolidated Affiliates considered VIEs are controlled because the Company holds a majority of the voting interests or it is the managing member or general partner.

Furthermore, an Affiliate’s assets can be used for purposes other than the settlement of the respective Affiliate’s obligations.

4 unchanged sentences

When an Affiliate is consolidated, the portion of the earnings attributable to Affiliate management’s equity ownership is included in Net income (non-controlling interests) in the Consolidated Statements of Income.

Undistributed earnings attributable to Affiliate managements’ equity ownership, along with their share of any tangible or intangible net assets, are

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

presented within Non-controlling interests on the Consolidated Balance Sheets.

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.

8 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, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Unconsolidated

5 unchanged sentences

Affiliates accounted for under the equity method $ 1,384.2 $ 1,962.1 $ 1,194.6 $ 1,976.7

As of December 31, 2020 and June 30, 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 $ 2,119.1 million, respectively, including Affiliates accounted for under the equity method considered VREs of $ 112.7 million and $ 109.5 million, respectively.

As of December 31, 2020 and September 30, 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 $ 2,085.2 million, respectively, including Affiliates accounted for under the equity method considered VREs of $ 112.7 million and $ 108.5 million, respectively.

Affiliate Sponsored Investment Products

The Company’s Affiliates sponsor various investment products where they also act as the investment adviser.

The Company’s Affiliates sponsor various investment products where the Affiliate also acts as the investment adviser.

These investment products are typically owned primarily by third-party investors;

1 unchanged sentence

Third-party investors in Affiliate sponsored investment products are generally entitled to substantially all of the economics of these products, except for the asset- and performance-based fees earned by the Company’s Affiliates or any gains or losses attributable to the Company’s or its Affiliates’ investments in these products.

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 included in Investment and other income (expense).

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, 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:

As a result, the Company generally does not 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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

December 31, 2020 June 30, 2021

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 included 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, respectively, and the third-party investors’ interests are recorded in Redeemable non-controlling interests.

The Company’s carrying value, and maximum exposure to loss from unconsolidated Affiliate sponsored investment products, is its or its consolidated Affiliates’ interests 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:

December 31, 2020 September 30, 2021

Unconsolidated

6 unchanged sentences

The following table summarizes the Company’s Debt:

2020 June 30,

2020 September 30,

Senior bank debt $ 349.8 $ 349.8

5 unchanged sentences

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

The table above does not include $ 200.0 million of junior subordinated notes issued by the Company on July 13, 2021, as more fully described below.

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”).

In January 2021, the Company amended the term loan to adjust the marginal rate by 0.075 % to 0.95 % and to extend the maturity by three years .

In June 2021, the Company further amended the term loan to reduce the marginal rate by 0.10 % to 0.85 %.

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

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

The Company amended and restated the revolver in October 2021, extending the maturity from January 18, 2024 to October 23, 2026, and amended the term loan in January 2021 and June 2021, and further amended and restated the term loan in October 2021, extending the maturity from January 18, 2023 to October 23, 2026.

Through these amendments, the Company also reduced applicable rates for the revolver and the term loan, and provided for customary LIBOR succession provisions.

The commercial terms of the revolver and the term loan otherwise remain the same.

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 June 30, 2021, the interest rate for the Company’s borrowings under the term loan was LIBOR plus 0.85 %.

As of December 31, 2020 and June 30, 2021, the Company had no outstanding borrowings under the revolver.

Senior Notes and Junior Subordinated Notes

As of June 30, 2021, the Company had senior notes and junior subordinated notes outstanding.

The carrying value of the senior notes and junior subordinated notes is accreted to the principal amount at maturity over the remaining life of the underlying instrument.

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

As of September 30, 2021, the interest rate for the Company’s borrowings under the term loan was LIBOR plus 0.85 %.

As of December 31, 2020 and September 30, 2021, the Company had no outstanding borrowings under the revolver.

As of September 30, 2021, the Company had senior notes outstanding.

The carrying value of the senior notes is accreted to the principal amount at maturity over the remaining life of the underlying instrument.

The principal terms of the senior notes outstanding as of September 30, 2021 were as follows:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The principal terms of the senior notes and junior subordinated notes outstanding as of June 30, 2021 were as follows:

Senior Notes 2025

Senior Notes 2030

Senior Notes 2059

Junior Subordinated Notes 2060

Junior Subordinated Notes

Issue date February 2014 February 2015 June 2020 March 2019 September 2020

Maturity date February 2024 August 2025 June 2030 March 2059 September 2060

Issue date February 2014 February 2015 June 2020

Maturity date February 2024 August 2025 June 2030

Par value (in millions) $ 400.0 $ 350.0 $ 350.0

Stated coupon 4.25 % 3.50 % 3.30 %

Coupon frequency Semi-annually Semi-annually Semi-annually Quarterly (3)

Quarterly (3)

Potential call date Any time (1)

March 2024 (2)

September 2025 (2)

Call price As defined (1)

As defined (1)

As defined (2)

__________________________

(1) The 2024, 2025, and 2030 senior notes may be redeemed, in whole or in part, at any time, in the case of the 2024 and 2025 senior notes, and at any time prior to March 15, 2030, in the case of the 2030 senior notes.

Coupon frequency Semi-annually Semi-annually Semi-annually

Potential call date Any time Any time Any time

Call price As defined As defined As defined

The senior notes may be redeemed, in whole or in part, at any time, in the case of the 2024 and 2025 senior notes, and at any time prior to March 15, 2030, in the case of the 2030 senior notes.

In each case, the senior notes may be redeemed at a make-whole redemption price, plus accrued and unpaid interest.

The make-whole redemption price, in each case, is equal to the greater of 100 % of the principal amount of the notes to be redeemed and the remaining principal and interest payments on the notes being redeemed (excluding accrued but unpaid interest to, but not including, the redemption date) discounted to their present value as of the redemption date at the applicable treasury rate plus 0.25 %, in the case of the 2024 and the 2025 senior notes, and to their present value as of the redemption date on a semi-annual basis at the applicable treasury rate plus 0.40 %, in the case of the 2030 senior notes.

(2) The 2059 and 2060 junior subordinated notes may be redeemed at any time, in whole or in part, on or after March 30, 2024, in the case of the 2059 junior subordinated notes, and on or after September 30, 2025, in the case of the 2060 junior subordinated notes.

Junior Subordinated Notes

As of September 30, 2021, the Company had junior subordinated notes outstanding.

The carrying value of the junior subordinated notes is accreted to the principal amount at maturity over the remaining life of the underlying instrument.

The principal terms of the junior subordinated notes outstanding as of September 30, 2021 were as follows:

Junior Subordinated Notes 2060

Junior Subordinated Notes 2061

Junior Subordinated Notes

Issue date March 2019 September 2020 July 2021

Maturity date March 2059 September 2060 September 2061

Par value (in millions) $ 300.0 $ 275.0 $ 200.0

Stated coupon 5.875 % 4.75 % 4.20 %

Coupon frequency Quarterly Quarterly Quarterly

Potential call date March 2024 September 2025 September 2026

Call price As defined As defined As defined

Listing NYSE NYSE NYSE

The junior subordinated notes may be redeemed at any time, in whole or in part, on or after March 30, 2024, in the case of the 2059 junior subordinated notes, on or after September 30, 2025, in the case of the 2060 junior subordinated notes, and on or after September 30, 2026, in the case of the 2061 junior subordinated notes.

In each case, the junior subordinated notes may be redeemed at 100 % of the principal amount of the notes being redeemed, plus any accrued and unpaid interest thereon.

2 unchanged sentences

The Company may, at its option, and subject to certain conditions and restrictions, defer interest payments subject to the terms of the junior subordinated notes.

On July 13, 2021, the Company issued $ 200.0 million of additional junior subordinated notes with a maturity date of September 30, 2061, (the “2061 junior subordinated notes”).

The 2061 junior subordinated notes bear interest at a fixed-rate of 4.20 % per annum.

The junior subordinated notes are listed on the New York Stock Exchange.

Interest is payable quarterly, commencing on September 30, 2021, and the Company has the right to defer interest payments in accordance with the terms of the notes.

The 2061 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, 2026, at the Company’s option, the 2061 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, 2026, at the Company’s option, the 2061 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 2061 junior subordinated notes.

Junior Convertible Securities

As of June 30, 2021, the Company had 5.15 % junior convertible trust preferred securities outstanding (the “junior convertible securities”) with a carrying value of $ 304.5 million.

The carrying value is accreted to the principal amount at maturity ($ 409.8 million) over a remaining life of approximately 16 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

As of September 30, 2021, the Company had 5.15 % junior convertible trust preferred securities outstanding (the “junior convertible securities”) with a carrying value of $ 301.4 million.

The carrying value is accreted to the principal amount at

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

securities in the open market or in privately negotiated transactions from time to time at management’s discretion.

During the six months ended June 30, 2021, the Company paid $ 22.8 million to repurchase a portion of its junior convertible securities, resulting in reductions of $ 15.4 million and $ 4.8 million to Debt and Additional paid-in capital, respectively.

maturity ($ 404.7 million) over a remaining life of approximately 16 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.

During the nine months ended September 30, 2021, the Company paid $ 28.7 million to repurchase a portion of its junior convertible securities, resulting in reductions of $ 26.1 million and $ 6.1 million in Debt and Additional paid-in capital, respectively.

As a result of these repurchases, the Company also reduced its Deferred income tax liability (net) by $ 6.2 million.

7 unchanged sentences

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 June 30, 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.

As of September 30, 2021, the Company held no cash collateral from the swap counterparty, and the swap counterparty held $ 1.1 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.

6 unchanged sentences

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

December 31, 2020 June 30, 2021

December 31, 2020 September 30, 2021

Assets Liabilities Assets Liabilities

3 unchanged sentences

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 $ 1.6 million and $ 1.2 million, respectively, as of June 30, 2021.

they were $ 3.5 million and $ 4.2 million, respectively, as of December 31, 2020, and $ 1.0 million and $ 2.5 million, respectively, as of September 30, 2021.

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

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended June 30,

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)

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

For the Three Months Ended September 30,

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

Forward foreign currency contracts $ 0.4 $ 0.1 $ — $ ( 2.0 ) $ 0.4 $ —

1 unchanged sentence

Total $ 0.3 $ 0.1 $ — $ ( 1.9 ) $ 0.4 $ —

For the Six Months Ended June 30,

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 (1)

For the Nine Months Ended September 30,

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

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

Forward foreign currency contracts $ 64.9 $ 0.4 $ 2.8 $ ( 1.6 ) $ 1.4 $ —

10 unchanged sentences

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

As of June 30, 2021, these unfunded commitments were $ 128.5 million and may be called in future periods.

As of June 30, 2021, the Company was contingently liable to make payments of $ 188.0 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 $ 147.5 million may become payable from 2023 through 2029.

As of June 30, 2021, the Company expected to make payments of approximately $ 13 million.

As of September 30, 2021, these unfunded commitments were $ 114.1 million and may be called in future periods.

As of September 30, 2021, the Company was contingently liable to make payments of $ 188.0 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 $ 147.5 million may become payable from 2023 through 2029.

As of September 30, 2021, the Company expected to make payments of approximately $ 15 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.

7 unchanged sentences

minority owner rescinded this notice.

As of June 30, 2021, the minority owner maintained a 14 % ownership interest in the Affiliate.

As of September 30, 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.

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

In July 2021, the Company entered into a definitive agreement to acquire a majority equity interest in Parnassus Investments (“Parnassus”), an ESG-dedicated fund manager.

Following the close of the transaction, Parnassus partners will continue to hold a substantial portion of the equity of the business and direct its day-to-day operations.

The transaction, which is expected to close during the second half of 2021, is subject to customary closing conditions and regulatory approvals.

On July 2, 2021, the Company entered into a definitive agreement to acquire a majority equity interest in Parnassus Investments, an ESG-dedicated fund manager.

On October 1, 2021, the Company completed its investment for upfront cash consideration of $ 300.4 million, deferred consideration of $ 150.2 million which is payable in the fourth quarter of 2022, and a contingent payment obligation related to the achievement of specified financial targets of up to $ 75.1 million which may become payable from 2024 through 2026.

This transaction was financed with available cash.

On September 27, 2021, the Company entered into a definitive agreement to acquire a majority equity interest in Abacus Capital Group LLC (“Abacus”), a real estate investment manager focused on the U.S.

multifamily sector.

Following the close of the transaction, Abacus partners will continue to hold a substantial portion of the equity of the business and direct its day-to-day operations.

The transaction, which is expected to close during the fourth quarter of 2021, is subject to customary closing conditions and regulatory approvals.

Goodwill and Acquired Client Relationships

2 unchanged sentences

Foreign currency translation ( 2.9 )

Balance, as of June 30, 2021 $ 2,669.7

Balance, as of September 30, 2021 $ 2,658.5

As of September 30, 2021, the Company completed its annual impairment assessment on goodwill and no impairment was indicated.

Acquired Client Relationships (Net)

7 unchanged sentences

Foreign currency translation ( 0.2 ) 0.1 ( 0.1 ) ( 5.2 ) ( 5.3 )

Balance, as of June 30, 2021 $ 1,170.5 $ ( 1,046.7 ) $ 123.8 $ 913.0 $ 1,036.8

Balance, as of September 30, 2021 $ 1,166.4 $ ( 1,052.0 ) $ 114.4 $ 903.8 $ 1,018.2

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 Consolidated Statements of Income for these relationships of $ 20.6 million and $ 41.2 million for the three and six months ended June 30, 2020, respectively, and $ 8.9 million and $ 16.4 million for the three and six months ended June 30, 2021, respectively.

Based on relationships existing as of June 30, 2021, the Company estimates that its consolidated amortization expense will be approximately $ 15 million for the remainder of 2021, approximately $ 30 million in each of 2022 and 2023, approximately $ 15 million in 2024, and approximately $ 10 million in each of 2025 and 2026.

The Company recorded amortization expense within Intangible amortization and impairments in the Consolidated Statements of Income for these relationships of $ 7.0 million and $ 48.2 million for the three and nine months ended September 30, 2020, respectively, and $ 8.9 million and $ 25.3 million for the three and nine months ended September 30, 2021, respectively.

Based on relationships existing as of September 30, 2021, the Company estimates that its consolidated amortization expense will be approximately $ 9 million for the remainder of 2021, approximately $ 30 million in each of 2022 and 2023, approximately $ 15 million in 2024, and approximately $ 10 million in each of 2025 and 2026.

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.

1 unchanged sentence

In the third quarter of 2020, the Company sold its interest in the Affiliate.

As of June 30, 2021, no impairments of indefinite-lived acquired client relationships were indicated.

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.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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, a discount rate of 15 % for asset-based fees, and a market participant tax rate of 25 %.

In addition, in the third quarter of 2020, 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, 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.

4 unchanged sentences

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

6 unchanged sentences

Distributions of earnings ( 288.1 )

Return of capital ( 3.4 )

Foreign currency translation 25.8

Balance, as of June 30, 2021 $ 2,119.1

Balance, as of September 30, 2021 $ 2,085.2

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 $ 36.9 million and $ 76.2 million for the three and six months ended June 30, 2020, respectively, and $ 29.3 million and $ 64.5 million for the three and six months ended June 30, 2021, respectively.

Based on relationships existing as of June 30, 2021, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 60 million for the remainder of 2021, approximately $ 80 million in each of 2022 and 2023, and approximately $ 50 million in each of 2024, 2025, and 2026.

The Company recognized amortization expense for these relationships of $ 34.3 million and $ 110.5 million for the three and nine months ended September 30, 2020, respectively, and $ 29.3 million and $ 93.8 million for the three and nine months ended September 30, 2021, respectively.

Based on relationships existing as of September 30, 2021, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 30 million for the remainder of 2021, approximately $ 80 million in each of 2022 and 2023, and approximately $ 50 million in each of 2024, 2025, and 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.

2 unchanged sentences

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 June 30, 2021, the estimated fair values of the Company’s Affiliates accounted for under the equity method exceeded their carrying values.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of September 30, 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 June 30, 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.

As of September 30, 2021, the Company was obligated to make deferred and contingent payments of $ 103.9 million related to certain of its Affiliates accounted for under the equity method, of which $ 63.9 million is payable in 2021, although this amount may be funded in future periods, and $ 40.0 million is payable in 2022.

Related Party Transactions

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 within Other liabilities and were $ 35.4 million and $ 32.8 million as of December 31, 2020 and June 30, 2021, respectively.

The prior owner’s interests are presented within Other liabilities and were $ 35.4 million and $ 31.7 million as of December 31, 2020 and September 30, 2021, respectively.

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

2 unchanged sentences

Affiliate management owners and the Company’s officers may serve as trustees or directors of certain investment vehicles from which the Company or an Affiliate earns fees.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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.

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

Share-Based Compensation

The following table presents share-based compensation expense:

For the Three Months Ended June 30, For the Six Months Ended June 30,

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

2020 2021 2020 2021

2 unchanged sentences

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

As of June 30, 2021, the Company had unrecognized share-based compensation expense of $ 85.4 million, which will be recognized over a weighted average period of approximately three years (assuming no forfeitures).

As of September 30, 2021, the Company had unrecognized share-based compensation expense of $ 82.5 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 0.1 80.19

Unvested units - June 30, 2021 1.1 93.52

For the six months ended June 30, 2020 and 2021, the Company granted restricted stock units with fair values of $ 30.5 million and $ 26.9 million, respectively.

Unvested units - September 30, 2021 1.1 94.22

For the nine months ended September 30, 2020 and 2021, the Company granted restricted stock units with fair values of $ 31.6 million and $ 27.8 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.

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

certain performance conditions.

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

9 unchanged sentences

Performance condition changes 0.6 74.42

Unexercised options outstanding - June 30, 2021 2.7 79.66 5.0

Exercisable at June 30, 2021 0.2 136.09 1.6

For the six months ended June 30, 2020 and 2021, the Company granted stock options with fair values of $ 3.9 million and $ 1.8 million, respectively.

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

the grant date.

Unexercised options outstanding - September 30, 2021 3.3 78.21 4.8

Exercisable at September 30, 2021 0.2 131.74 1.6

For the nine months ended September 30, 2020 and 2021, the Company granted stock options with fair values of $ 4.4 million and $ 2.0 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.

1 unchanged sentence

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 $ 17.49 and $ 54.25 , per option, for the six months ended June 30, 2020 and 2021, respectively.

The weighted average fair value of options granted was $ 18.23 and $ 54.19 , per option, for the nine months ended September 30, 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 Six Months Ended June 30,

For the Nine Months Ended September 30,

Dividend yield 1.6 % 0.0 %

11 unchanged sentences

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

4 unchanged sentences

Changes in redemption value 176.9

Balance, as of June 30, 2021 (1)

Balance, as of September 30, 2021 (1)

___________________________

(1) As of December 31, 2020 and June 30, 2021, Redeemable non-controlling interests include consolidated Affiliate sponsored investment products primarily attributable to third-party investors of $ 35.4 million and $ 21.0 million, respectively.

(1) As of December 31, 2020 and September 30, 2021, Redeemable non-controlling interests include consolidated Affiliate sponsored investment products primarily attributable to third-party investors of $ 35.4 million and $ 18.3 million, respectively.

Affiliate Equity

1 unchanged sentence

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

Distributions paid to non-controlling interest Affiliate equity holders were $ 171.7 million and $ 193.5 million, for the six months ended June 30, 2020 and 2021, respectively.

Distributions paid to non-controlling interest Affiliate equity holders were $ 249.1 million and $ 260.9 million, for the nine months ended September 30, 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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

For the six months ended June 30, 2020 and 2021, the amount of cash paid for purchases was $ 160.6 million and $ 62.4 million, respectively.

For the six months ended June 30, 2020 and 2021, the total amount of cash received for issuances was $ 17.1 million and $ 17.6 million, respectively.

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

For the nine months ended September 30, 2020 and 2021, the amount of cash paid for purchases was $ 249.6 million and $ 65.9 million, respectively.

For the nine months ended September 30, 2020 and 2021, the total amount of cash received for issuances was $ 17.1 million and $ 18.1 million, respectively.

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

2 unchanged sentences

The following table presents Affiliate equity compensation expense:

For the Three Months Ended June 30, For the Six Months Ended June 30,

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

2020 2021 2020 2021

5 unchanged sentences

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

June 30, 2021 49.1 5 years 109.2 5 years

September 30, 2021 47.6 5 years 108.1 4 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 $ 8.6 million as of December 31, 2020 and June 30, 2021, respectively, and was included in Other assets.

The total payable was $ 22.0 million and $ 47.9 million as of December 31, 2020 and June 30, 2021, respectively, and was included in Other liabilities.

The total receivable was $ 9.6 million and $ 15.5 million as of December 31, 2020 and September 30, 2021, respectively, and was included in Other assets.

The total payable was $ 22.0 million and $ 47.7 million as of December 31, 2020 and September 30, 2021, respectively, and was included in Other liabilities.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Effects of Changes in the Company’s Ownership in Affiliates

3 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 June 30, For the Six Months Ended June 30,

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

2020 2021 2020 2021

Net income (controlling interest) $ 71.3 $ 128.4 $ 86.3 $ 387.3

Decrease in controlling interest paid-in capital from Affiliate equity issuances — ( 17.0 ) ( 1.3 ) ( 17.5 )

Increase (decrease) in controlling interest paid-in capital from Affiliate equity issuances 2.9 — 1.6 ( 17.5 )

Decrease in controlling interest paid-in capital from Affiliate equity purchases ( 65.4 ) ( 1.2 ) ( 226.0 ) ( 57.2 )

Net income (loss) (controlling interest) including the net impact of Affiliate equity transactions $ 8.8 $ 127.2 $ ( 138.1 ) $ 312.6

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 June 30, For the Six Months Ended June 30,

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

2020 2021 2020 2021

14 unchanged sentences

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

The Company’s effective tax rate (controlling interest) increased to 36.3 % and 29.9 % for the three and six months ended June 30, 2021, respectively, primarily due to a $ 19.2 million deferred tax expense resulting from the revaluation of certain deferred tax liabilities due to an increase in the UK tax rate enacted during the second quarter of 2021, as well as a $ 5.5 million benefit related to uncertain tax positions and a $ 4.1 million benefit for a capital loss carried back to a fiscal year prior to the effective date of the Tax Cuts and Jobs Act in 2020 that did not reoccur.

The Company’s effective tax rate (controlling interest) for the three months ended September 30, 2020 was higher than the marginal tax rate, 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.

The Company’s effective tax rate (controlling interest) for the nine months ended September 30, 2020 was higher than the marginal tax rate, 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, as well as a $ 3.6 million tax expense related to share-

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

based compensation, offset by a $ 5.5 million benefit related to uncertain tax positions in the period.

The Company’s effective tax rate (controlling interest) for the nine months ended September 30, 2021 was higher than the marginal tax rate, primarily due to a $ 19.2 million deferred tax expense resulting from the revaluation of certain deferred tax liabilities due to an increase in the UK tax rate enacted during the second quarter of 2021 .

Earnings Per Share

1 unchanged sentence

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

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 per share available to common stockholders:

For the Three Months Ended June 30, For the Six Months Ended June 30,

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

2020 2021 2020 2021

9 unchanged sentences

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

For the Three Months Ended June 30, For the Six Months Ended June 30,

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

2020 2021 2020 2021

3 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 six months ended June 30, 2021, under its authorized share repurchase programs, the Company repurchased 0.5 million and 2.1 million shares of its common stock, respectively, at an average price per share of $ 158.83 and $ 135.92 , respectively.

For the three and nine months ended September 30, 2021, under its authorized share repurchase programs, the Company repurchased 0.6 million and 2.8 million shares of its common stock, respectively, at an average price per share of $ 161.02 and $ 141.58 , respectively.

Comprehensive Income

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

For the Three Months Ended June 30,

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended September 30,

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

Foreign currency translation gain (loss) $ 25.2 $ ( 0.5 ) $ 24.7 $ ( 19.0 ) $ ( 0.7 ) $ ( 19.7 )

1 unchanged sentence

Other comprehensive income (loss) $ 25.4 $ ( 0.5 ) $ 24.9 $ ( 20.9 ) $ ( 0.7 ) $ ( 21.6 )

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

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

9 unchanged sentences

Amounts reclassified — ( 1.4 ) ( 1.4 )

Net other comprehensive income 31.3 0.9 32.2

Balance, as of June 30, 2021 $ ( 130.6 ) $ 0.6 $ ( 130.0 )

Net other comprehensive income (loss) 11.7 ( 1.0 ) 10.7

Balance, as of September 30, 2021 $ ( 150.2 ) $ ( 1.3 ) $ ( 151.5 )

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