What changed in this filing

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Item 1. Financial Statements

2022-11-07 compared with 2022-08-04 · 168 added, 148 removed, 690 unchanged (31% 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,

2021 2022 2021 2022

23 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,

2021 2022 2021 2022

2 unchanged sentences

Foreign currency translation gain (loss) ( 19.7 ) ( 86.8 ) 11.7 ( 172.0 )

Change in net realized and unrealized gain (loss) on derivative financial instruments 0.4 ( 0.6 ) 0.9 ( 0.6 )

Change in net realized and unrealized loss on derivative financial instruments ( 1.9 ) ( 1.6 ) ( 1.0 ) ( 2.2 )

Other comprehensive income (loss), net of tax ( 21.6 ) ( 88.4 ) 10.7 ( 174.2 )

6 unchanged sentences

(in millions)

2021 June 30,

2021 September 30,

Cash and cash equivalents $ 908.5 $ 622.9

32 unchanged sentences

(in millions)

Three Months Ended June 30, 2021 Total Stockholders’ Equity

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

Three Months Ended June 30, 2022 Total Stockholders’ Equity

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

Three Months Ended September 30, 2022 Total Stockholders’ Equity

Stock Additional

4 unchanged sentences

Interests Total

March 31, 2022 $ 0.6 $ 557.4 $ ( 93.2 ) $ 4,719.4 $ ( 2,515.4 ) $ 924.4 $ 3,593.2

June 30, 2022 $ 0.6 $ 651.8 $ ( 145.7 ) $ 4,828.5 $ ( 2,594.2 ) $ 902.8 $ 3,643.8

Net income — — — 112.6 — 51.7 164.3

10 unchanged sentences

Changes in redemption value of Redeemable non-controlling interests — 56.0 — — — — 56.0

Transfers to Redeemable non-controlling interests — — — — — ( 1.8 ) ( 1.8 )

Capital contributions and other — — — — — 5.2 5.2

Distributions to non-controlling interests — — — — — ( 66.2 ) ( 66.2 )

June 30, 2022 $ 0.6 $ 651.8 $ ( 145.7 ) $ 4,828.5 $ ( 2,594.2 ) $ 902.8 $ 3,643.8

September 30, 2022 $ 0.6 $ 709.6 $ ( 213.9 ) $ 4,940.7 $ ( 2,670.8 ) $ 889.2 $ 3,655.4

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

2 unchanged sentences

(in millions)

Six Months Ended June 30, 2021 Total Stockholders' Equity

Nine Months Ended September 30, 2021 Total Stockholders' Equity

Stock Additional

20 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

Six Months Ended June 30, 2022 Total Stockholders' Equity

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

Nine Months Ended September 30, 2022 Total Stockholders' Equity

Stock Additional

21 unchanged sentences

Distributions to non-controlling interests — — — — — ( 278.0 ) ( 278.0 )

June 30, 2022 $ 0.6 $ 651.8 $ ( 145.7 ) $ 4,828.5 $ ( 2,594.2 ) $ 902.8 $ 3,643.8

September 30, 2022 $ 0.6 $ 709.6 $ ( 213.9 ) $ 4,940.7 $ ( 2,670.8 ) $ 889.2 $ 3,655.4

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:

12 unchanged sentences

(Increase) decrease in receivables ( 81.0 ) 9.5

(Increase) decrease in other assets ( 15.0 ) 9.4

Decrease in other assets 22.5 19.3

Increase (decrease) in payables, accrued liabilities, and other liabilities 80.1 ( 176.2 )

8 unchanged sentences

Cash flow from (used in) financing activities:

Borrowings of senior bank debt, senior notes, and junior subordinated notes 200.0 —

Repayments of senior bank debt and junior convertible securities ( 26.1 ) ( 60.8 )

7 unchanged sentences

Effect of foreign currency exchange rate changes on cash and cash equivalents ( 1.8 ) ( 37.3 )

Net decrease in cash and cash equivalents ( 257.9 ) ( 301.7 )

Net increase (decrease) in cash and cash equivalents 92.2 ( 285.6 )

Cash and cash equivalents at beginning of period 1,039.7 908.5

49 unchanged sentences

Investments in Marketable Securities

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

2021 June 30,

Equity Securities

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

2021 September 30,

Cost $ 59.1 $ 73.8

2 unchanged sentences

Fair value $ 64.5 $ 73.4

As of December 31, 2021 and June 30, 2022, Investments in marketable securities include consolidated Affiliate sponsored investment products with fair values of $ 42.9 million and $ 34.3 million, respectively.

As of December 31, 2021 and September 30, 2022, investments in equity securities include consolidated Affiliate sponsored investment products with fair values of $ 28.9 million and $ 21.2 million, respectively.

Debt Securities

The following table summarizes the cost, gross unrealized losses, and fair value of investments in U.S.

Treasury Notes classified as available-for-sale, which mature in 2024, and other debt securities classified as trading:

2021 September 30,

Cost $ 14.1 $ 113.4

Unrealized losses ( 0.1 ) ( 3.1 )

Fair value $ 14.0 $ 110.3

As of December 31, 2021 and September 30, 2022, investments in debt securities classified as trading include consolidated Affiliate sponsored investment products with fair values of $ 14.0 million and $ 10.4 million, respectively.

Other Investments

7 unchanged sentences

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

December 31, 2021 June 30, 2022

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

December 31, 2021 September 30, 2022

Category of Investment Fair Value Unfunded

9 unchanged sentences

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 $ 224.4 million and $ 234.0 million as of December 31, 2021 and June 30, 2022, respectively.

(3) Fair value attributable to the controlling interest was $ 224.4 million and $ 209.1 million as of December 31, 2021 and September 30, 2022, respectively.

Investments Without Readily Determinable Fair Values

2 unchanged sentences

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

2021 June 30,

2021 September 30,

Cost $ 8.5 $ 8.5

1 unchanged sentence

Carrying amount $ 50.4 $ 50.4

During the three and six months ended June 30, 2022, the Company recorded no gains or losses on the underlying investment.

During the three and nine months ended September 30, 2022, the Company recorded no gains or losses on the underlying investment.

The following table presents the changes in Other investments:

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Measured at NAV as a Practical Expedient Without Readily Determinable Fair Values Total Measured at NAV as a Practical Expedient Without Readily Determinable Fair Values Total

5 unchanged sentences

Balance, end of period $ 323.6 $ 33.5 $ 357.1 $ 303.3 $ 50.4 $ 353.7

For the Six Months Ended June 30,

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Nine Months Ended September 30,

Measured at NAV as a Practical Expedient Without Readily Determinable Fair Values Total Measured at NAV as a Practical Expedient Without Readily Determinable Fair Values Total

Balance, beginning of period $ 243.4 $ 13.8 $ 257.2 $ 324.8 $ 50.4 $ 375.2

Net realized and unrealized gains (1)

Net realized and unrealized gains (losses) (1)

68.2 19.7 87.9 ( 8.8 ) — ( 8.8 )

6 unchanged sentences

The following tables summarize 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

8 unchanged sentences

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)

11 unchanged sentences

The following table presents the changes in level 3 liabilities:

For the Three Months Ended June 30,

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended September 30,

Contingent Payment Obligations Affiliate

2 unchanged sentences

Balance, beginning of period $ — $ 47.9 $ 14.2 $ 25.0

Net realized and unrealized losses (gains) (1)

Net realized and unrealized gains (1)

— — ( 0.3 ) ( 1.4 )

3 unchanged sentences

Net change in unrealized gains relating to instruments still held at the reporting date $ — $ — $ ( 0.3 ) $ ( 1.5 )

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Contingent Payment Obligations Affiliate

14 unchanged sentences

Quantitative Information About Level 3 Fair Value Measurements

December 31, 2021 June 30, 2022

December 31, 2021 September 30, 2022

Techniques Unobservable

4 unchanged sentences

Discount rates 1 % - 2 %

2 % 4 % - 5 %

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

7 unchanged sentences

Contingent payment obligations represent the fair value of the expected future settlement amounts related to the Company’s investments in its consolidated Affiliates.

Changes to assumed volatility and discount rates change the fair value of contingent payment obligations.

Changes to assumed volatility and discount rates change the fair value of

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

contingent payment obligations.

Increases to the volatility rates used would result in higher fair values, while increases to the discount rates used would result in lower fair values.

Affiliate equity purchase obligations include agreements to purchase Affiliate equity.

As of June 30, 2022, 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, 2022, 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 following table summarizes other financial liabilities not carried at fair value:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

December 31, 2021 June 30, 2022

December 31, 2021 September 30, 2022

Carrying Value Fair Value Carrying Value Fair Value Fair Value Hierarchy

22 unchanged sentences

A limited number of the Company’s Affiliates are considered VREs and most of these are accounted for under the equity method.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

3 unchanged sentences

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.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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 (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.

5 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, 2021 June 30, 2022

December 31, 2021 September 30, 2022

Unconsolidated

5 unchanged sentences

Affiliates accounted for under the equity method $ 1,864.7 $ 2,023.0 $ 1,558.4 $ 1,951.3

As of December 31, 2021 and June 30, 2022, the carrying value and maximum exposure to loss for all of the Company’s Affiliates accounted for under the equity method was $ 2,134.4 million and $ 2,104.1 million, respectively, including Affiliates accounted for under the equity method considered VREs of $ 111.4 million and $ 103.0 million, respectively.

As of December 31, 2021 and September 30, 2022, the carrying value and maximum exposure to loss for all of the Company’s Affiliates accounted for under the equity method was $ 2,134.4 million and $ 2,046.8 million, respectively, including Affiliates accounted for under the equity method considered VREs of $ 111.4 million and $ 95.5 million, respectively.

Affiliate Sponsored Investment Products

8 unchanged sentences

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.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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, 2021 June 30, 2022

December 31, 2021 September 30, 2022

Unconsolidated

5 unchanged sentences

Affiliate sponsored investment products $ 4,958.5 $ 15.7 $ 4,722.0 $ 21.8

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following table summarizes the Company’s Debt:

2021 June 30,

2021 September 30,

Senior bank debt $ 349.9 $ 349.9

11 unchanged sentences

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

As of June 30, 2022, the interest rate for the Company’s borrowings under the term loan was LIBOR plus 0.85 %.

As of December 31, 2021 and June 30, 2022, the Company had no outstanding borrowings under the revolver.

As of June 30, 2022, the Company had senior notes outstanding.

As of September 30, 2022, the interest rate for the Company’s borrowings under the term loan was LIBOR plus 0.85 %.

As of December 31, 2021 and September 30, 2022, the Company had no outstanding borrowings under the revolver.

As of September 30, 2022, 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 June 30, 2022 were as follows:

The principal terms of the senior notes outstanding as of September 30, 2022 were as follows:

Senior Notes 2025

7 unchanged sentences

Call price As defined As defined As defined

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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.

1 unchanged sentence

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.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Junior Subordinated Notes

As of June 30, 2022, the Company had junior subordinated notes outstanding.

As of September 30, 2022, 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 June 30, 2022 were as follows:

The principal terms of the junior subordinated notes outstanding as of September 30, 2022 were as follows:

Junior Subordinated Notes 2060

16 unchanged sentences

Effective January 1, 2022, the Company adopted ASU 2020-06.

As of June 30, 2022, the Company had $ 341.7 million of principal outstanding in its 5.15 % junior convertible trust preferred securities (the “junior convertible securities”), maturing in 2037.

As of September 30, 2022, the Company had $ 341.7 million of principal outstanding in its 5.15 % junior convertible trust preferred securities (the “junior convertible securities”), maturing in 2037.

The junior convertible securities bear interest at a rate of 5.15 % per annum, payable quarterly in cash.

As of December 31, 2021 and June 30, 2022, the unamortized issuance costs related to the junior convertible securities were $ 3.9 million and $ 3.2 million, respectively.

As of December 31, 2021 and September 30, 2022, the unamortized issuance costs related to the junior convertible securities were $ 3.9 million and $ 3.1 million, respectively.

The following table presents interest expense recognized in connection with the the junior convertible securities:

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

2021 2022 2021 2022

6 unchanged sentences

The holder may convert the securities to 0.2558 shares of common stock per $ 50.00 junior convertible security, equivalent to an adjusted conversion price of $ 195.47 per share.

The conversion rate is subject to adjustments as described in the Amended and Restated Declaration

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

of Trust of AMG Capital Trust II and the related indenture, both dated October 17, 2007 and filed as exhibits to the Company’s most recent Annual Report on Form 10-K.

The conversion rate is subject to adjustments as described in the Amended and Restated Declaration of Trust of AMG Capital Trust II and the related indenture, both dated October 17, 2007 and filed as exhibits to the Company’s most recent Annual Report on Form 10-K.

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 if the closing price of its common stock for 20 trading days in a period of 30 consecutive trading days exceeds 130 % of the then prevailing conversion price, 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 six months ended June 30, 2021 and 2022, the Company repurchased a portion of its junior convertible securities for a purchase price of $ 22.8 million and $ 60.9 million, respectively, and as a result of these repurchases, the Company reduced its Deferred income tax liability (net) by $ 4.9 million and $ 11.7 million, respectively.

During the nine months ended September 30, 2021 and 2022, the Company repurchased a portion of its junior convertible securities for a purchase price of $ 28.7 million and $ 60.9 million, respectively, and as a result of these repurchases, the Company reduced its Deferred income tax liability (net) by $ 6.2 million and $ 11.7 million, respectively.

Equity Distribution Program

On May 27, 2022, the Company entered into equity distribution and forward equity agreements with several major securities firms under which it may, from time to time, issue and sell shares of its common stock (immediately or on a forward basis) having an aggregate sales price of up to $ 500.0 million (the “equity distribution program”).

In the second quarter of 2022, the Company entered into equity distribution and forward equity agreements with several major securities firms under which it may, from time to time, issue and sell shares of its common stock (immediately or on a forward basis) having an aggregate sales price of up to $ 500.0 million (the “equity distribution program”).

This equity distribution program superseded and replaced the Company’s prior equity distribution program.

As of June 30, 2022, no sales had occurred under the equity distribution program.

As of September 30, 2022, no sales had occurred under the equity distribution program.

Commitments and Contingencies

3 unchanged sentences

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

As of June 30, 2022, these unfunded commitments were $ 146.1 million and may be called in future periods.

As of June 30, 2022, the Company was obligated to make deferred payments and was contingently liable to make payments in connection with certain of its consolidated Affiliates as follows:

As of September 30, 2022, these unfunded commitments were $ 154.7 million and may be called in future periods.

As of September 30, 2022, the Company was obligated to make deferred payments and was contingently liable to make payments in connection with certain of its consolidated Affiliates as follows:

Earliest Payable

1 unchanged sentence

Deferred payment obligations (1)

$ 215.2 $ 49.8 $ 265.0 $ 200.0 $ 21.7 $ 43.3 $ —

Contingent payment obligations (2)

1 unchanged sentence

__________________________

(1) Fair value as of June 30, 2022.

(1) As of November 7, 2022, the Company’s deferred payment obligations related to certain of its consolidated Affiliates were $ 65.0 million, all of which is attributable to the controlling interest and payable from 2023 through 2024.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(2) Fair value as of September 30, 2022.

The Company is contingently liable to make maximum contingent payments of up to $ 110.0 million ($ 24.9 million attributable to the co-investor), of which $ 100.0 million and $ 10.0 million may become payable in 2024 and 2025, respectively.

The Company had liabilities for deferred and contingent payment obligations related to certain of its investments in Affiliates accounted for under the equity method.

As of June 30, 2022, the Company was obligated to make payments of up to $ 80.8 million, all of which is payable in 2022.

As of September 30, 2022, the Company was obligated to make payments of up to $ 68.0 million, all of which is payable in 2022.

As of November 7, 2022, the Company’s deferred payment obligations related to certain of its Affiliates accounted for under the equity method were $ 187.7 million, all of which is payable in 2022.

Liabilities for deferred and contingent payments are included in Other liabilities.

As of June 30, 2022, the Company was contingently liable to make payments of $ 147.5 million related to the achievement of specified financial targets by certain of its Affiliates accounted for under the equity method, all of which may become payable from 2023 through 2029.

As of June 30, 2022, the Company expected to make payments of approximately $ 13 million.

As of September 30, 2022, the Company was contingently liable to make payments of $ 147.5 million related to the achievement of specified financial targets by certain of its Affiliates accounted for under the equity method, all of which may become payable from 2023 through 2029.

As of September 30, 2022, 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 accounted for under the equity method, 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.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

4 unchanged sentences

Foreign currency translation ( 61.3 )

Balance, as of June 30, 2022 $ 2,660.0

Balance, as of September 30, 2022 $ 2,627.9

As of September 30, 2022, the Company completed its annual impairment assessment on goodwill and no impairment was indicated.

Acquired Client Relationships (Net)

7 unchanged sentences

Foreign currency translation ( 12.3 ) 10.1 ( 2.2 ) ( 60.7 ) ( 62.9 )

Balance, as of June 30, 2022 $ 1,357.5 $ ( 1,047.5 ) $ 310.0 $ 1,595.2 $ 1,905.2

Balance, as of September 30, 2022 $ 1,351.9 $ ( 1,054.9 ) $ 297.0 $ 1,567.1 $ 1,864.1

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 $ 8.9 million and $ 16.4 million for the three and six months ended June 30, 2021, respectively, and $ 12.5 million and $ 25.0 million for the three and six months ended June 30, 2022, respectively.

Based on relationships existing as of June 30, 2022, the Company estimates that its consolidated amortization expense will be approximately $ 25 million for the remainder of 2022, approximately $ 50 million in 2023, and approximately $ 35 million in each of 2024, 2025, 2026, and 2027.

As of June 30, 2022, no impairments of indefinite-lived acquired client relationships were indicated.

The Company recorded amortization expense within Intangible amortization and impairments in the Consolidated Statements of Income for these relationships of $ 8.9 million and $ 25.3 million for the three and nine months ended September 30, 2021, respectively, and $ 12.2 million and $ 36.9 million for the three and nine months ended September 30, 2022, respectively.

Based on relationships existing as of September 30, 2022, the Company estimates that its consolidated amortization expense will be approximately $ 12 million for the remainder of 2022, approximately $ 50 million in 2023, and approximately $ 35 million in each of 2024, 2025, 2026, and 2027.

As of September 30, 2022, no impairments of indefinite-lived acquired client relationships were indicated.

Equity Method Investments in Affiliates

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

In the first quarter of 2022 the Company completed an additional investment in Systematica Investments (“Systematica”), an innovative technology-driven systematic manager.

4 unchanged sentences

Equity method investments in Affiliates (net) consisted of the following:

2021 June 30,

2021 September 30,

Goodwill $ 1,264.4 $ 1,330.9

4 unchanged sentences

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Equity Method Investments in Affiliates (Net)

7 unchanged sentences

Other ( 8.5 )

Balance, as of June 30, 2022 $ 2,104.1

Balance, as of September 30, 2022 $ 2,046.8

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 $ 29.3 million and $ 64.5 million for the three and six months ended June 30, 2021, respectively, and $ 34.6 million and $ 57.9 million for the three and six months ended June 30, 2022, respectively.

Based on relationships existing as of June 30, 2022, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 45 million for the remainder of 2022, approximately $ 80 million in 2023, approximately $ 50 million in each of 2024 and 2025, and approximately $ 40 million in each of 2026 and 2027.

As of June 30, 2022, the estimated fair values of the Company’s Affiliates accounted for under the equity method exceeded their carrying values.

The Company recognized amortization expense for these relationships of $ 29.3 million and $ 93.8 million for the three and nine months ended September 30, 2021, respectively, and $ 31.4 million and $ 89.3 million for the three and nine months ended September 30, 2022, respectively.

Based on relationships existing as of September 30, 2022, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 25 million for the remainder of 2022, approximately $ 80 million in 2023, approximately $ 50 million in each of 2024 and 2025, and approximately $ 40 million in each of 2026 and 2027.

The Company had liabilities for deferred and contingent payment obligations related to certain of its investments in Affiliates accounted for under the equity method.

The Company had 21 Affiliates accounted for under the equity method as of December 31, 2021 and June 30, 2022.

The Company had 21 Affiliates accounted for under the equity method as of December 31, 2021 and September 30, 2022.

The majority of these Affiliates are partnerships with structured interests that define how the Company will participate in Affiliate earnings, typically based upon a fixed percentage of revenue reduced by, in some cases, certain agreed-upon expenses.

1 unchanged sentence

These percentages would be subject to a separate future negotiation if an Affiliate were to be sold or liquidated.

On March 16, 2022, the Company and other parties entered into a Securities Purchase and Merger Agreement with EQT AB (“EQT”), a public company listed on Nasdaq Stockholm (EQT.ST), under which the Company and each of the other owners agreed to sell their respective equity interests in Baring Private Equity Asia (“BPEA”), an Affiliate accounted for by the Company under the equity method, to EQT, in connection with the announced strategic combination of BPEA and EQT.

Pursuant to the terms of the agreement, the Company will receive $ 240.0 million in cash and 28.68 million EQT ordinary shares ( 25 % of which are subject to a six -month lock-up), and will retain a portion of future carry in certain existing funds.

The Company acquired its interest in BPEA for $ 187.5 million in 2016 and, as of June 30, 2022, its carrying value was $ 135.3 million.

BPEA will continue to be included in the Company’s results until closing of the transaction, which is expected to occur in the fourth quarter of 2022, subject to customary closing conditions.

The Company’s gain on the transaction will be taxable at closing.

In the first quarter of 2022, the Company and other parties entered into a Securities Purchase and Merger Agreement with EQT AB (“EQT”), a public company listed on Nasdaq Stockholm (EQT.ST), under which the Company and each of the other owners agreed to sell their respective equity interests in Baring Private Equity Asia (“BPEA”), an Affiliate

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

accounted for by the Company under the equity method, to EQT, in connection with the announced strategic combination of BPEA and EQT.

Pursuant to the terms of the agreement, the Company was entitled to receive $ 240.0 million in cash and 28.68 million EQT ordinary shares ( 25 % of which are subject to a six -month lock-up), and to retain a portion of future carry in certain existing funds.

The Company acquired its interest in BPEA for $ 187.5 million in 2016 and, as of September 30, 2022, its carrying value was $ 132.7 million.

The Company’s gain on the transaction was taxable at closing, which occurred in October 2022.

BPEA will be included in the Company’s results through the closing date.

In October 2022, the Company made a minority investment in a private markets firm specializing in communications infrastructure with approximately $ 4 billion in assets under management.

The financial results will be recognized in the Consolidated Financial Statements one quarter in arrears.

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 $ 28.5 million and $ 22.5 million as of December 31, 2021 and June 30, 2022, respectively.

The prior owner’s interests are presented within Other liabilities and were $ 28.5 million and $ 19.0 million as of December 31, 2021 and September 30, 2022, 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 deferred and contingent payment obligations, and Affiliate equity transactions, as more fully described in Notes 9, 11, 14, and 15.

1 unchanged sentence

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,

2021 2022 2021 2022

2 unchanged sentences

As of December 31, 2021, the Company had unrecognized share-based compensation expense of $ 70.9 million.

As of June 30, 2022, the Company had unrecognized share-based compensation expense of $ 91.0 million, which will be recognized over a weighted average period of approximately three years (assuming no forfeitures).

As of September 30, 2022, the Company had unrecognized share-based compensation expense of $ 76.7 million, which will be recognized over a weighted average period of approximately two years (assuming no forfeitures).

Restricted Stock

6 unchanged sentences

Performance condition changes 0.0 139.30

Unvested units—June 30, 2022 1.2 102.99

For the six months ended June 30, 2021 and 2022, the Company granted restricted stock units with fair values of $ 26.9 million and $ 46.3 million, respectively.

Unvested units—September 30, 2022 1.1 105.87

For the nine months ended September 30, 2021 and 2022, the Company granted restricted stock units with fair values of $ 27.8 million and $ 47.1 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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

vesting conditions generally require service over a period of three years to four years and may also require the satisfaction of 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.

8 unchanged sentences

Options forfeited ( 0.0 ) 166.15

Options expired ( 0.0 ) 207.63

Performance condition changes 0.0 139.31

Unexercised options outstanding—June 30, 2022 3.2 77.78 4.2

Exercisable at June 30, 2022 0.1 137.54 1.5

For the six months ended June 30, 2021 and 2022, the Company granted stock options with fair values of $ 1.8 million.

Unexercised options outstanding—September 30, 2022 3.2 76.91 3.9

Exercisable at September 30, 2022 0.1 121.58 2.2

For the nine months ended September 30, 2021 and 2022, the Company granted stock options with fair values of $ 2.0 million and $ 1.8 million.

respectively.

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

options have been granted with exercise prices equal to the closing price of the Company’s common stock on 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 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 $ 54.25 and $ 47.84 , per option, for the six months ended June 30, 2021 and 2022, respectively.

The weighted average fair value of options granted was $ 54.19 and $ 47.84 , per option, for the nine months ended September 30, 2021 and 2022, 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 0.0 % 0.0 %

12 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 ( 142.9 )

Balance, as of June 30, 2022 (1)

Balance, as of September 30, 2022 (1)

___________________________

(1) As of December 31, 2021 and June 30, 2022, Redeemable non-controlling interests include consolidated Affiliate sponsored investment products primarily attributable to third-party investors of $ 25.0 million and $ 20.0 million, respectively.

(1) As of December 31, 2021 and September 30, 2022, Redeemable non-controlling interests include consolidated Affiliate sponsored investment products primarily attributable to third-party investors of $ 25.0 million and $ 18.7 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 $ 193.5 million and $ 211.8 million for the six months ended June 30, 2021 and 2022, respectively.

Distributions paid to non-controlling interest Affiliate equity holders were $ 260.9 million and $ 278.0 million for the nine months ended September 30, 2021 and 2022, respectively.

The Company periodically purchases Affiliate equity from and issues Affiliate equity to the Company’s consolidated Affiliate partners and other parties 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.

The Company has the

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

right to settle a portion of these purchases in shares of its common stock.

The Company has the right to settle a portion of these purchases in shares of its common stock.

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

For the six months ended June 30, 2021 and 2022, the amount of cash paid for purchases was $ 62.4 million and $ 32.2 million, respectively.

For the six months ended June 30, 2021 and 2022, the total amount of cash received for issuances was $ 17.6 million and $ 13.1 million, respectively.

For the nine months ended September 30, 2021 and 2022, the amount of cash paid for purchases was $ 65.9 million and $ 37.0 million, respectively.

For the nine months ended September 30, 2021 and 2022, the total amount of cash received for issuances was $ 18.1 million and $ 15.2 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,

2021 2022 2021 2022

5 unchanged sentences

December 31, 2021 $ 41.9 6 years $ 294.1 7 years

June 30, 2022 33.6 5 years 309.9 7 years

September 30, 2022 34.2 5 years 297.1 7 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 $ 9.0 million and $ 9.1 million as of December 31, 2021 and June 30, 2022, respectively, and was included in Other assets.

The total payable was $ 12.6 million and $ 25.0 million as of December 31, 2021 and June 30, 2022, respectively, and was included in Other liabilities.

The total receivable was $ 9.0 million and $ 9.7 million as

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

of December 31, 2021 and September 30, 2022, respectively, and was included in Other assets.

The total payable was $ 12.6 million and $ 25.4 million as of December 31, 2021 and September 30, 2022, respectively, and was included in Other liabilities.

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,

2021 2022 2021 2022

Net income (controlling interest) $ 128.4 $ 112.6 $ 387.3 $ 368.0

(Decrease) increase in controlling interest paid-in capital from Affiliate equity issuances ( 17.0 ) 1.5 ( 17.5 ) 4.9

Decrease in controlling interest paid-in capital from Affiliate equity issuances — ( 5.1 ) ( 17.5 ) ( 0.2 )

Decrease in controlling interest paid-in capital from Affiliate equity purchases ( 1.2 ) ( 2.3 ) ( 57.2 ) ( 32.2 )

Net income (controlling interest) including the net impact of Affiliate equity transactions $ 127.2 $ 105.2 $ 312.6 $ 335.6

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,

2021 2022 2021 2022

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) for the three and six months ended June 30, 2021 was higher than the marginal tax rate of 24.5%, primarily due to a $ 19.2 million deferred tax expense resulting from an increase in the UK tax rate enacted during the second quarter of 2021.

The Company’s effective tax rate (controlling interest) for the three months ended June 30, 2022 was not meaningfully different than the marginal tax rate of 24.5%.

The Company’s effective tax rate (controlling interest) for the six months ended June 30, 2022 was higher than the marginal tax rate, primarily due to a $ 4.0 million tax expense resulting from non-deductible compensation, partially offset by $ 2.2 million of tax benefits from the reduction of certain valuation allowances on foreign net operating losses .

The Company’s effective tax rate (controlling interest) for the three months ended September 30, 2021 was not meaningfully different than the marginal tax rate of 24.5%.

The Company’s effective tax rate (controlling interest) for the nine

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

months ended September 30, 2021 was higher than the marginal tax rate of 24.5%, primarily due to a $ 19.2 million deferred tax expense resulting from an increase in the UK tax rate enacted during the second quarter of 2021.

The Company’s effective tax rate (controlling interest) for the three months ended September 30, 2022 was lower than the marginal tax rate of 24.5%, primarily due to a $ 3.3 million tax benefit related to a change in the Company’s estimated foreign tax expense related to 2021.

The Company’s effective tax rate (controlling interest) for the nine months ended September 30, 2022 was not meaningfully different than the marginal tax rate of 24.5% .

Earnings Per Share

2 unchanged sentences

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:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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,

2021 2022 2021 2022

11 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,

2021 2022 2021 2022

1 unchanged sentence

Shares issuable to settle Redeemable non-controlling interests — 4.3 — 2.0

For the three and six months ended June 30, 2022, under its authorized share repurchase programs, the Company repurchased 0.6 million and 1.9 million shares of its common stock, respectively, at an average price per share of $ 128.75 and $ 139.29 , respectively.

For the three and nine months ended September 30, 2022, under its authorized share repurchase programs, the Company repurchased 0.6 million and 2.5 million shares of its common stock, respectively, at an average price per share of $ 125.13 and $ 135.73 , 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 Expense 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 Benefit Net of Tax

Foreign currency translation gain (loss) $ ( 19.0 ) $ ( 0.7 ) $ ( 19.7 ) $ ( 91.7 ) $ 4.9 $ ( 86.8 )

1 unchanged sentence

Other comprehensive income (loss) $ ( 20.9 ) $ ( 0.7 ) $ ( 21.6 ) $ ( 93.3 ) $ 4.9 $ ( 88.4 )

For the Six Months Ended June 30,

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

For the Nine Months Ended September 30,

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

Foreign currency translation gain (loss) $ 18.6 $ ( 6.9 ) $ 11.7 $ ( 174.8 ) $ 2.8 $ ( 172.0 )

1 unchanged sentence

Other comprehensive income (loss) $ 17.7 $ ( 7.0 ) $ 10.7 $ ( 177.0 ) $ 2.8 $ ( 174.2 )

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, 2021 $ ( 155.1 ) $ 0.1 $ ( 155.0 )

Other comprehensive (loss) income before reclassifications ( 85.2 ) 0.0 ( 85.2 )

Other comprehensive income (loss) before reclassifications ( 172.0 ) 0.0 ( 172.0 )

Amounts reclassified — ( 2.2 ) ( 2.2 )

Net other comprehensive loss ( 172.0 ) ( 2.2 ) ( 174.2 )

Balance, as of June 30, 2022 $ ( 240.3 ) $ ( 0.5 ) $ ( 240.8 )

Balance, as of September 30, 2022 $ ( 327.1 ) $ ( 2.1 ) $ ( 329.2 )

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