9 unchanged sentences
Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2022 was effective.
−Removed: As of December 31, 2021, management excluded Parnassus Investments ("Parnassus") and Abacus Capital Group LLC (“Abacus”) from its assessment of internal control over financial reporting because it completed majority investments that were accounted for as business combinations in 2021.
−Removed: Parnassus and Abacus' total assets and total revenues collectively represent approximately 0.8% and 3.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021.
−Removed: The Company’s internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report appearing in “Report of Independent Registered Public Accounting Firm,” which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021.
−Removed: Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )
+Added: The Company’s internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP (PCAOB ID 238 ), an independent registered public accounting firm, as stated in their report appearing in “Report of Independent Registered Public Accounting Firm,” which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022.
+Added: Tab l e of Contents
+Added: Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Affiliated Managers Group, Inc.
18 unchanged sentences
We believe that our audits provide a reasonable basis for our opinions.
−Removed: As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Parnassus Investments (“Parnassus”) and Abacus Capital Group, LLC (“Abacus”) from its assessment of internal control over financial reporting as of December 31, 2021 because the Company completed majority investments that were accounted for as business combinations during 2021.
−Removed: We have also excluded Parnassus and Abacus from our audit of internal control over financial reporting.
−Removed: Parnassus and Abacus’ total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent approximately 0.8% and 3.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
−Removed: dispositions of the assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
+Added: and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: Tab l e of Contents
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
1 unchanged sentence
Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Acquisition of Parnassus - Acquired Client Relationships
−Removed: As described in Note 9 to the consolidated financial statements, the Company completed a majority investment in Parnassus on October 1, 2021.
−Removed: As disclosed by management, the Company determined the fair value of certain assets (including acquired client relationships, an intangible asset), liabilities, and equity interests when allocating the purchase price of Parnassus by using a discounted cash flow analysis that included projected growth rates of assets under management and discount rate assumptions.
−Removed: The fair value of the acquired client relationships in 2021 were $957.0 million, the majority of which were from the acquisition of Parnassus.
−Removed: The principal considerations for our determination that performing procedures relating to the acquisition of Parnassus - acquired client relationships is a critical audit matter are (i) the significant judgment by management when determining the fair value, (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the projected growth rates of assets under management and the discount rate, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
−Removed: Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the acquired client relationships and the development of significant assumptions related to the projected growth rates of assets under management and the discount rate.
−Removed: These procedures also included, among others, (i) reading the purchase agreement and (ii) testing management’s process for determining the fair value of the acquired client relationships.
−Removed: Testing management’s process included evaluating the appropriateness of the discounted cash flow analysis, testing the completeness and accuracy of data used by management in the discounted cash flow analysis, and evaluating the reasonableness of significant assumptions related to the projected growth rates of assets under management and the discount rate.
−Removed: Evaluating the reasonableness of the projected growth rates of assets under management involved considering (i) the consistency with external market and industry data, (ii) the consistency with past performance of Parnassus, and (iii) whether the projected growth rates were consistent with evidence obtained in other areas of the audit.
−Removed: The reasonableness of the discount rate assumption was evaluated by considering the cost of capital of comparable businesses and other industry factors.
−Removed: Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow analysis and the discount rate assumption.
−Removed: Impairment Evaluation for Equity Method Investments in Affiliates
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Impairment Measurement for Equity Method Investment in Affiliate
As described in Notes 1 and 10 to the consolidated financial statements, the Company’s equity method investments in affiliates balance was $2,139.5 million as of December 31, 2022.
Management periodically evaluates its equity method investments in affiliates for impairment by performing assessments to determine if fair value may have declined below related carrying value for a period that they consider to be other-than-temporary.
−Removed: In the fourth quarter of 2021, management concluded that due to declines in assets under management and reductions in projected growth that there was a $52.0 million impairment to reduce the carrying value of an affiliate to fair value.
+Added: For the year ended December 31, 2022, management concluded that due to a decline in assets under management and a reduction in projected margin that there was a $50.0 million impairment to reduce the carrying value of an affiliate to fair value.
The fair value of the investment was determined using probability-weighted discounted cash flow analyses that require assumptions such as growth rates of assets under management and discount rates.
−Removed: The principal considerations for our determination that performing procedures relating to the impairment evaluation for equity method investments in affiliates is a critical audit matter are (i) the significant judgment by management to evaluate the significant assumptions used in the discounted cash flow analyses to determine the fair value of the investment, which was used to determine the amount that fair value had declined below its related carrying value for a period considered to be other-than-temporary, (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the growth rates of assets under management and discount rates used in the impairment evaluation, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
+Added: The principal considerations for our determination that performing procedures relating to the impairment measurement for the equity method investment in affiliate is a critical audit matter are (i) the significant judgment by management to evaluate the significant assumptions used in the discounted cash flow analyses to determine the fair value of the investment, which was used to determine the amount that fair value had declined below its related carrying value for a period considered to be other-than-temporary, (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the growth rates of assets under management and discount rates used in the impairment measurement, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to management’s impairment evaluation for equity method investments in affiliates, including controls over the discounted cash flow analyses and significant assumptions used to determine the fair value of equity method investments in affiliates.
−Removed: These procedures also included, among others, testing management’s process for determining the fair value of its equity method investments in affiliates, including evaluating the appropriateness of the discounted cash flow analyses, testing the completeness and accuracy of the underlying data used in the discounted cash flow analyses, and evaluating the reasonableness of the significant assumptions used by management in developing the fair value measurement related to the growth rates of assets under management and discount rates.
−Removed: Evaluating the reasonableness of the growth rates of assets under management involved considering (i) the consistency with external market and industry data, (ii) the consistency with past performance of the affiliate, and (iii) whether the growth rates were consistent with evidence obtained in other areas of the audit.
+Added: These procedures included testing the effectiveness of controls relating to management’s impairment measurement for the equity method investment in affiliate, including controls over the discounted cash flow analyses and significant assumptions used to determine the fair value of the equity method investment in affiliate.
+Added: These procedures also included, among others, testing management’s process for determining the fair value of its equity method investment in affiliate, including evaluating the appropriateness of the discounted cash flow analyses, testing the completeness and accuracy of the underlying data used in the discounted cash flow analyses, and evaluating the reasonableness of the significant assumptions used by management in developing the fair value measurement related to the growth rates of assets under management and discount rates.
+Added: The reasonableness of the growth rates of assets under management was evaluated by considering (i) the consistency with external market and industry data, (ii) the consistency with past performance of the affiliate, and (iii) whether the growth rates were consistent with evidence obtained in other areas of the audit.
The reasonableness of the discount rate assumption was evaluated by considering the cost of capital of comparable businesses and other industry factors.
4 unchanged sentences
We have served as the Company’s auditor since 1993.
+Added: Tab l e of Contents
AFFILIATED MANAGERS GROUP, INC.
13 unchanged sentences
Equity method income (loss) (net) ( 43.4 ) 242.5 338.1
+Added: BPEA Transaction gain (Note 10) — — 641.9
Investment and other income 34.1 117.6 110.3
9 unchanged sentences
The accompanying notes are an integral part of the Consolidated Financial Statements.
+Added: Tab l e of Contents
AFFILIATED MANAGERS GROUP, INC.
5 unchanged sentences
Other comprehensive income (loss), net of tax:
−Removed: Foreign currency translation gain 10.9 15.2 6.8
+Added: Foreign currency translation gain (loss) 15.2 6.8 ( 141.3 )
Change in net realized and unrealized gain (loss) on derivative financial instruments ( 1.5 ) 0.4 ( 0.5 )
−Removed: Other comprehensive income, net of tax 12.6 13.7 7.2
+Added: Change in net unrealized loss on available-for-sale debt securities — — ( 1.0 )
+Added: Other comprehensive income (loss), net of tax 13.7 7.2 ( 142.8 )
Comprehensive income 440.7 897.3 1,245.3
2 unchanged sentences
The accompanying notes are an integral part of the Consolidated Financial Statements.
+Added: Tab l e of Contents
AFFILIATED MANAGERS GROUP, INC.
32 unchanged sentences
The accompanying notes are an integral part of the Consolidated Financial Statements.
+Added: Tab l e of Contents
AFFILIATED MANAGERS GROUP, INC.
9 unchanged sentences
December 31, 2019 $ 0.6 $ 707.2 $ ( 108.8 ) $ 3,819.8 $ ( 1,481.3 ) $ 561.6 $ 3,499.1
−Removed: Impact of adoption of new accounting standard (ASU 2018-02) — — — ( 6.6 ) — — ( 6.6 )
Net income — — — 202.2 — 224.8 427.0
5 unchanged sentences
— — — ( 16.5 ) — — ( 16.5 )
−Removed: Issuance costs and other — 0.1 — — — — 0.1
Affiliate equity activity:
8 unchanged sentences
Net income — — — 565.7 — 324.4 890.1
−Removed: Other comprehensive income, net of tax — — 10.5 — — 3.2 13.7
+Added: Other comprehensive income (loss), net of tax — — 10.4 — — ( 3.2 ) 7.2
Share-based compensation — 63.4 — — — — 63.4
Common stock issued under share-based incentive plans — ( 53.5 ) — — 36.8 — ( 16.7 )
+Added: Repurchases of junior convertible securities — ( 7.1 ) — — — — ( 7.1 )
Share repurchases — 17.3 — — ( 527.2 ) — ( 509.9 )
1 unchanged sentence
— — — ( 1.7 ) — — ( 1.7 )
+Added: Investments in Affiliates — — — — — 247.0 247.0
Affiliate equity activity:
7 unchanged sentences
December 31, 2021 $ 0.6 $ 651.6 $ ( 87.9 ) $ 4,569.5 $ ( 2,347.4 ) $ 924.2 $ 3,710.6
+Added: Impact of adoption of new accounting standards (ASU 2020-06)
+Added: — ( 80.6 ) — 4.5 — — ( 76.1 )
+Added: Tab l e of Contents
Net income — — — 1,145.9 — 242.2 1,388.1
−Removed: Other comprehensive income (loss), net of tax — — 10.4 — — ( 3.2 ) 7.2
+Added: Other comprehensive loss, net of tax — — ( 115.5 ) — — ( 27.3 ) ( 142.8 )
Share-based compensation — 62.4 — — — — 62.4
Common stock issued under share-based incentive plans — ( 38.6 ) — — 21.5 — ( 17.1 )
−Removed: Repurchases of junior convertible securities — ( 7.1 ) — — — — ( 7.1 )
Share repurchases — ( 45.0 ) — — ( 654.7 ) — ( 699.7 )
1 unchanged sentence
— — — ( 1.7 ) — — ( 1.7 )
−Removed: Investments in Affiliates — — — — — 247.0 247.0
Affiliate equity activity:
8 unchanged sentences
The accompanying notes are an integral part of the Consolidated Financial Statements.
+Added: Tab l e of Contents
AFFILIATED MANAGERS GROUP, INC.
8 unchanged sentences
Depreciation and other amortization 19.1 16.6 15.8
−Removed: Deferred income tax (benefit) expense ( 55.8 ) 26.8 91.2
+Added: Deferred income tax expense 26.8 91.2 32.0
Equity method loss (income) (net) 43.4 ( 242.5 ) ( 338.1 )
+Added: BPEA Transaction gain — — ( 641.9 )
Distributions of earnings received from equity method investments 236.8 337.5 393.5
5 unchanged sentences
Sales of securities by consolidated Affiliate sponsored investment products 99.6 58.0 33.8
−Removed: (Increase) decrease in receivables ( 15.8 ) 1.1 31.7
−Removed: (Increase) decrease in other assets ( 51.4 ) 73.1 23.8
+Added: Decrease in receivables 1.1 31.7 87.0
+Added: Decrease in other assets 73.1 23.8 41.6
(Decrease) increase in payables, accrued liabilities, and other liabilities ( 64.2 ) 64.5 9.9
2 unchanged sentences
Investments in Affiliates, net of cash acquired ( 44.5 ) ( 562.6 ) ( 291.1 )
−Removed: Divestments of Affiliates and return of capital from equity method investments 117.7 — 4.4
+Added: Proceeds from the BPEA Transaction and return of capital from equity method investments — 4.4 224.4
Purchase of fixed assets ( 8.5 ) ( 8.4 ) ( 11.4 )
11 unchanged sentences
Subscriptions to consolidated Affiliate sponsored investment products, net of redemptions 12.9 40.9 13.0
+Added: Settlement of deferred payments, net ( 15.0 ) ( 21.7 ) ( 201.0 )
Other financing items ( 25.0 ) ( 20.4 ) ( 50.5 )
1 unchanged sentence
Effect of foreign currency exchange rate changes on cash and cash equivalents 2.1 ( 0.8 ) ( 22.6 )
−Removed: Net (decrease) increase in cash and cash equivalents ( 21.3 ) 502.3 ( 123.6 )
+Added: Net increase (decrease) in cash and cash equivalents 502.3 ( 123.6 ) ( 480.7 )
Cash and cash equivalents at beginning of period 539.6 1,039.7 908.5
−Removed: Effect of deconsolidation of Affiliates and Affiliate sponsored investment products ( 4.6 ) ( 2.2 ) ( 7.6 )
+Added: Effect of (deconsolidation) consolidation of Affiliates and Affiliate sponsored investment products ( 2.2 ) ( 7.6 ) 1.4
Cash and cash equivalents at end of period $ 1,039.7 $ 908.5 $ 429.2
10 unchanged sentences
Payables recorded for Affiliate equity purchases 22.0 11.0 27.2
+Added: EQT ordinary shares received from BPEA Transaction — — 515.2
+Added: Other investments from BPEA Transaction — — 51.7
The accompanying notes are an integral part of the Consolidated Financial Statements.
+Added: Tab l e of Contents
AFFILIATED MANAGERS GROUP, INC.
3 unchanged sentences
Affiliated Managers Group, Inc.
−Removed: (the “Company”) is a leading partner to independent active investment management firms globally.
−Removed: AMG’s strategy is to generate long-term value by investing in a diverse array of high-quality partner-owned investment firms, referred to as “Affiliates.” The Company’s Affiliates provide a comprehensive and diverse range of return-oriented strategies designed to assist institutional, retail, and high net worth clients worldwide in achieving their investment objectives.
−Removed: The Company operates in one segment, global asset management.
+Added: (“AMG” or the “Company”) is a leading partner to independent investment management firms globally.
+Added: AMG’s strategy is to generate long-term value by investing in a diverse array of high-quality partner-owned investment firms, referred to as “Affiliates.” The Company’s Affiliates provide a comprehensive and diverse range of differentiated investment strategies designed to assist institutional and wealth clients worldwide in achieving their investment objectives.
+Added: The Company operates in one segment, global investment management.
Each of the Company’s Affiliates operates through distinct legal entities, which affords the Company the flexibility to design a separate operating agreement for each Affiliate.
5 unchanged sentences
For other Affiliates, the Company uses structured partnership interests in which the Company contractually shares in the Affiliate’s revenue less agreed-upon expenses.
−Removed: This type of partnership interest allows the Company to benefit from any increase in revenue or any decrease in the agreed-upon expenses, but also exposes the Company to any decrease in revenue or any increase in such expenses.
−Removed: The degree of the Company’s exposure to expenses from these structured partnership interests varies by Affiliate and includes Affiliates in which the Company fully shares in the expenses of the business.
+Added: This type of partnership interest allows the Company to benefit from any increase in revenue or any decrease in the agreed-upon expenses, but also exposes the Company to any decrease in revenue or any increase in such agreed-upon expenses.
+Added: The degree of the Company’s exposure to agreed-upon expenses from these structured partnership interests varies by Affiliate, and includes several Affiliates in which the Company fully shares in the expenses of the business.
(b) Basis of Presentation and Use of Estimates
57 unchanged sentences
(f) Investments in Marketable Securities
−Removed: Realized and unrealized gains or losses on investments in marketable securities are reported within Investment and other income.
+Added: Equity securities
+Added: Realized and unrealized gains or losses on investments in equity securities are reported within Investment and other income.
Realized gains and losses are recorded on the trade date on a specific identified basis, except for consolidated Affiliate sponsored investment products which use an average cost basis.
+Added: Debt securities
+Added: Investments in debt securities are classified as either trading, available-for-sale, or held-to-maturity based on the Company’s intent and ability to hold the security to maturity.
+Added: Securities classified as trading are measured at fair value with unrealized gains and losses reported within Investment and other income.
+Added: Securities classified as available-for-sale are measured at fair value with unrealized gains and losses reported in Accumulated other comprehensive loss as a separate component of stockholders’ equity on the Consolidated Balance Sheets.
+Added: Securities classified as held-to-maturity are measured at amortized cost.
+Added: Realized gains and losses on debt securities are reported within Investment and other income.
(g) Fair Value Measurements
13 unchanged sentences
the Affiliate’s historical and potential future operating performance;
−Removed: the Affiliate’s historical and potential future rates of attrition of existing clients;
+Added: the Affiliate’s historical and potential future rates of attrition
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: of existing clients;
the stability and longevity of existing client relationships;
6 unchanged sentences
Each reporting period, the Company assesses whether events or circumstances have occurred that indicate that the indefinite life criteria are no longer met.
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company has determined that certain of its acquired client relationships meet the criteria to be considered definite-lived assets, including investment advisory contracts between its Affiliates and their underlying investors, and are amortized over their expected period of economic benefit.
11 unchanged sentences
Fixed assets are recorded at cost and depreciated using the straight-line method over their estimated useful lives.
−Removed: The estimated useful lives of office equipment and furniture and fixtures range from two years to ten years .
+Added: The estimated useful lives of office equipment and furniture and fixtures range from two years to seven years and three years to ten years , respectively.
Computer software developed or obtained for internal use is amortized over the estimated useful life of the software, generally two years to five years .
9 unchanged sentences
As permitted under Accounting Standard Update (“ASU”) 2016-02 Leases (and related ASUs), the Company and its Affiliates elect not to record short-term leases with an initial lease term less than 12 months on the Company’s Consolidated Balance Sheets.
−Removed: Right-of-use assets and lease liabilities are reported in Other assets and Other liabilities, respectively, on the Consolidated Balance Sheets.
+Added: Right-of-use assets and lease liabilities are reported in Other assets and Other liabilities, respectively.
A lease liability is initially and subsequently reported at the present value of the outstanding lease payments determined by discounting those lease payments over the remaining lease term using the incremental borrowing rate of the legal entity entering into the lease as of the commencement date.
−Removed: A right-of-use asset is initially reported at the present value of the corresponding lease liability plus any prepaid lease payments and initial direct costs of entering into the lease, and reduced by any lease incentives.
+Added: A right-of-use asset is initially reported at the present value of the corresponding lease liability plus any prepaid lease payments and initial direct costs
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: of entering into the lease, and reduced by any lease incentives.
Subsequently, a right-of-use asset is reported at the present value of the lease liability adjusted for any prepaid or accrued lease payments, remaining balances of any lease incentives received, unamortized initial direct costs of entering into the lease and any impairments of the right-of-use asset.
2 unchanged sentences
Subsequent to an impairment, the carrying value of the right-of-use asset is amortized on a straight-line basis over the remaining lease term.
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Lease liabilities and right-of-use assets based on variable lease payments that depend on an index or rate are initially measured using the index or rate at the commencement date with any subsequent changes in variable lease payments reported in Other expenses (net) as incurred.
4 unchanged sentences
Sublease income is reported in Investment and other income.
−Removed: (k) Issuance Costs
−Removed: Issuance costs related to the Company’s senior bank debt are amortized over the remaining term of the senior unsecured multicurrency revolving credit facility (the “revolver”) and the senior unsecured term loan facility (the “term loan” and, together with the revolver, the “credit facilities”), which approximates the effective interest method.
−Removed: Issuance costs associated with the revolver are included in Other assets.
−Removed: Issuance costs associated with the term loan, and those associated with the Company’s senior notes, junior subordinated notes, and junior convertible securities, which are amortized over the expected term of the security, are included as a reduction of Debt in the Consolidated Balance Sheets.
−Removed: The expense resulting from the amortization of these issuance costs is reported in Interest expense in the Consolidated Statements of Income.
+Added: The Company’s debt instruments are carried at amortized cost.
+Added: Unamortized discounts and debt issuance costs associated with its debt instruments, with the exception of the Company’s senior unsecured multicurrency revolving credit facility (the “revolver”), are presented within the Consolidated Balance Sheets as an adjustment to the carrying value of the associated debt.
+Added: The carrying value of the debt is accreted to the principal amount at maturity over the remaining life of the underlying debt.
+Added: The accretion of the debt and the amortization of debt issuance costs, are recognized in Interest expense in the Consolidated Statements of Income, using the effective interest method.
+Added: Unamortized issuance costs associated with the revolver are recorded in Other assets and amortized over the remaining term of the revolver to Interest expense in the Consolidated Statements of Income.
+Added: Gains and losses on repurchases or settlement of debt are recorded in Interest expense.
(l) Derivative Financial Instruments
6 unchanged sentences
If the qualitative assessment indicates ineffectiveness, then the Company performs a quantitative assessment which is generally measured by comparing the present value of the cumulative change in the expected future cash flows of the hedged contract with the present value of the cumulative change in the expected future cash flows of the hedged item.
−Removed: Upon termination of these instruments or the repayment of the Company’s outstanding LIBOR-based borrowings, any gain or loss recorded in Accumulated other comprehensive loss in the Consolidated Balance Sheets will be reclassified into earnings.
+Added: Upon termination of these instruments or the repayment of the Company’s outstanding Secured Overnight Financing Rate (“SOFR”)-based borrowings, any gain or loss recorded in Accumulated other comprehensive loss will be reclassified into earnings.
Changes in the fair values of cash flow hedges are reported in Change in net realized and unrealized gain (loss) on derivative financial instruments in the Consolidated Statements of Comprehensive Income.
1 unchanged sentence
The effective portion of the unrealized gain or loss is recorded in Other comprehensive income (loss) as a separate component of stockholders’ equity and reclassified to earnings with the hedged item.
−Removed: Changes in the fair values of the effective net investment hedges are reported in Foreign currency translation gain (loss) in the Consolidated Statements of Comprehensive Income.
+Added: Changes in the fair values of the effective net investment hedges are reported in
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Foreign currency translation gain (loss) in the Consolidated Statements of Comprehensive Income.
Upon the sale or liquidation of the underlying investment, any gain or loss remaining in Accumulated other comprehensive loss will be reclassified to earnings.
3 unchanged sentences
Substantially all of the Company’s and its Affiliates’ contracts contain a single performance obligation, which is the provision of investment management services.
−Removed: Investment management, broker-dealer, and administrative services are performed and consumed simultaneously and, therefore, the Company recognizes these asset-based
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: fees ratably over time.
+Added: Investment management, broker-dealer, and administrative services are performed and consumed simultaneously and, therefore, the Company recognizes these asset-based fees ratably over time.
Substantially all the Company’s asset-based fees for services are based on the value of client assets over time, which are typically determined using observable market data.
3 unchanged sentences
The Company’s Affiliates may periodically either waive or reduce fees in order to attract or retain client assets or for other reasons.
−Removed: Fee waivers or reductions are presented as a reduction to Consolidated revenue.
+Added: Fee waivers or reductions are presented as a reduction to Consolidated revenue in the Consolidated Statements of Income.
Performance-based fees, including carried interests, are recognized upon the satisfaction of performance obligations, the resolution of any constraints, which include exceeding performance benchmarks or hurdle rates that may extend over one or more reporting periods, and when it is improbable that there will be a significant reversal in the amount of revenue recognized.
18 unchanged sentences
The effect on deferred tax assets and liabilities of a change in tax rates is recorded in Income tax expense in the period when the change is enacted.
−Removed: The Company regularly assesses the recoverability of its deferred income tax assets to determine whether these assets are more-likely-than-not to be realized.
+Added: The Company regularly assesses the recoverability of its deferred income tax assets to determine whether these assets are
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: more-likely-than-not to be realized.
In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations.
4 unchanged sentences
Interest and penalties related to unrecognized tax benefits are also recorded in Income tax expense.
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company has elected to treat taxes due on U.S.
7 unchanged sentences
dollars using average exchange rates for the relevant period.
−Removed: Because of the long-term nature of the Company’s investments in its Affiliates, net translation exchange gains and losses resulting from foreign currency translation are recorded in Accumulated other comprehensive loss as a separate component of stockholders’ equity on the Consolidated Balance Sheets.
+Added: Because of the long-term nature of the Company’s investments in its Affiliates, net translation exchange gains and losses resulting from foreign currency translation are recorded in Accumulated other comprehensive loss.
Foreign currency transaction gains and losses are included in Investment and other income.
7 unchanged sentences
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.
+Added: The Company had share-based compensation awards outstanding during the periods presented with vesting provisions subject to certain performance conditions.
+Added: These awards are excluded from the calculation of Earnings per share (diluted) if the performance condition has not been met as of the end of the reporting period.
+Added: The Company has agreements with Affiliate equity holders that provide the Company a conditional right to call and holders a conditional right to put their interests to the Company at certain intervals.
+Added: These arrangements are presented at their current redemption value as Redeemable non-controlling interests.
+Added: The Company may settle these interests in cash or, subject to the terms of the applicable agreement, shares of its common stock, or other forms of consideration, at its option.
+Added: Prior to 2022, the Company excluded any potential dilutive effect from possible share settlements of Redeemable non-controlling interests as the Company currently intends to settle in cash.
+Added: Upon adoption of ASU 2020-06, the Company must assume the settlement of all of its Redeemable non-controlling interests using the maximum number of shares permitted under its arrangements.
+Added: Purchases are assumed to occur at the beginning of the reporting period.
+Added: The Company acquires the rights to the underlying Affiliate equity when purchased, and therefore, the earnings that would be acquired (net of tax) are assumed to increase Net income (controlling interest) in the computation of Earnings per share (diluted).
+Added: The issuance of shares and the related income acquired are excluded from the calculation if an assumed purchase of Redeemable non-controlling interests would be anti-dilutive to diluted earnings per share.
The Company had junior convertible securities outstanding during the periods presented and is required to apply the if-converted method to these securities in its calculation of Earnings per share (diluted).
Under the if-converted method, shares that are issuable upon conversion are deemed outstanding, regardless of whether the securities are contractually convertible into the Company’s common stock at that time.
−Removed: For this calculation, the interest expense (net of tax) attributable to these dilutive securities is added back to Net income (controlling interest), reflecting the assumption that the securities have been converted.
+Added: For this calculation, the interest expense (net of tax) attributable to these dilutive
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: securities is added back to Net income (controlling interest), reflecting the assumption that the securities have been converted.
Issuable shares for these securities and related interest expense are excluded from the calculation if an assumed conversion would be anti-dilutive to diluted earnings per share.
−Removed: The Company had share-based compensation awards outstanding during the periods presented with vesting provisions subject to certain performance conditions.
−Removed: These awards are excluded from the calculation of Earnings per share (diluted) if the performance condition has not been met as of the end of the reporting period.
(s) Share-Based Compensation Plans
5 unchanged sentences
(t) Recent Accounting Developments
−Removed: Effective January 1, 2021, the Company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes.
−Removed: The adoption of this standard did not have a significant impact on the Company’s Consolidated Financial Statements.
−Removed: In August 2020, the Financial Accounting Standards Board 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.
−Removed: 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.
−Removed: The Company’s adoption of ASU 2020-06 will
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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).
−Removed: The Company plans to adopt the standard using a modified retrospective method.
−Removed: The adoption of this standard will result in increases in Debt and beginning Retained Earnings of $ 101.5 million and $ 4.5 million, respectively, and decreases in Additional paid-in-capital and Deferred income tax liability (net) of $ 80.6 million and $ 25.4 million, respectively.
−Removed: 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.
−Removed: If the standard had been adopted on January 1, 2021, Earnings per share (diluted) would have been $ 13.04 for the year ended December 31, 2021.
+Added: Effective January 1, 2022, the Company adopted ASU 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity using a modified retrospective method.
+Added: ASU 2020-06 removes the separate liability and equity accounting for the Company’s junior convertible securities.
+Added: Consequently, the Company’s junior convertible securities are accounted for wholly as debt and are carried at their face value less unamortized debt issuance costs.
+Added: The adoption resulted in increases in Debt and beginning Retained Earnings of $ 101.5 million and $ 4.5 million, respectively, and decreases in Additional paid-in-capital and Deferred income tax liability (net) of $ 80.6 million and $ 25.4 million, respectively.
+Added: As a result of the adoption of ASU 2020-06, the Company also updated its Earnings Per Share accounting policy as described above.
+Added: In June 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-03, Fair Value Measurement (Topic 820):
+Added: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies the guidance in Topic 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security.
+Added: The standard is effective for interim and annual periods beginning after December 15, 2023 for the Company, and is effective for interim and annual periods beginning after December 15, 2024 for the Company’s Affiliates.
+Added: The Company is evaluating the impact of this standard, however it currently does not expect the adoption to have a material impact on its Consolidated Financial Statements.
Investments in Marketable Securities
−Removed: The following is a summary of the cost, gross unrealized gains, gross unrealized losses, and fair value of Investments in marketable securities:
+Added: Equity Securities
+Added: The following table summarizes the cost, gross unrealized gains, gross unrealized losses, and fair value of investments in equity securities:
Cost $ 59.1 $ 394.4
2 unchanged sentences
Fair value $ 64.5 $ 447.9
−Removed: As of December 31, 2020 and 2021, Investments in marketable securities include consolidated Affiliate sponsored investment products with fair values of $ 52.3 million and $ 42.9 million, respectively.
+Added: As of December 31, 2022, investments in equity securities include ordinary shares of EQT AB (“EQT”), a public company listed on Nasdaq Stockholm (EQT.ST) (see Note 10), with a fair value of $ 405.1 million.
+Added: Between January 1, 2023 and February 15, 2023, the Company has sold $ 196.0 million of EQT ordinary shares.
+Added: As of December 31, 2021 and 2022, investments in equity securities include consolidated Affiliate sponsored investment products with fair values of $ 28.9 million and $ 23.5 million, respectively.
+Added: For the year ended December 31, 2022, the Company recorded realized and unrealized gains on EQT ordinary shares of $ 43.8 million and $ 57.9 million, respectively.
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Debt Securities
+Added: The following table summarizes the cost, gross unrealized losses, and fair value of investments in U.S.
+Added: Treasury Notes classified as available-for-sale, of which $ 100.7 million mature in 2023 and $ 150.3 million mature in 2024, and other debt securities classified as trading:
+Added: Available-for-Sale Trading
+Added: December 31, 2021 December 31, 2022 December 31, 2021 December 31, 2022
+Added: Cost $ — $ 252.3 $ 14.1 $ 19.7
+Added: Unrealized losses — ( 1.3 ) ( 0.1 ) ( 1.7 )
+Added: Fair value $ — $ 251.0 $ 14.0 $ 18.0
+Added: As of December 31, 2021 and 2022, investments in debt securities classified as trading include consolidated Affiliate sponsored investment products with fair values of $ 14.0 million and $ 18.0 million, respectively.
Other Investments
−Removed: Other investments consist of investments in funds advised by the Company’s Affiliates that are carried at NAV as a practical expedient and other investments without readily determinable fair values.
+Added: Other investments consists primarily of investments in funds advised by the Company’s Affiliates that are carried at NAV as a practical expedient and other investments without readily determinable fair values.
Any gain or loss related to these investments is recorded in Investment and other income.
Investments Measured at NAV as a Practical Expedient
−Removed: The Company’s Affiliates sponsor funds in which the Company and its consolidated Affiliates may make general partner and seed capital investments.
+Added: The Company’s Affiliates sponsor funds in which the Company and its Affiliates may make general partner and seed capital investments.
These funds operate in partnership form and apply the specialized fair value accounting for investment companies.
10 unchanged sentences
$ 324.8 $ 156.3 $ 371.2 $ 158.3
+Added: __________________________
(1) The Company accounts for the majority of its interests in private equity funds one quarter in arrears (adjusted for current period calls and distributions).
4 unchanged sentences
(3) Fair value attributable to the controlling interest was $ 224.4 million and $ 275.1 million as of December 31, 2021 and 2022, respectively.
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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:
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Cost $ 8.5 $ 8.5
1 unchanged sentence
Carrying amount $ 50.4 $ 50.4
−Removed: During the year ended December 31, 2021, the Company recorded unrealized gains of $ 36.6 million based on observable price changes in the underlying investment.
+Added: During the year ended December 31, 2022, the Company recorded no gains or losses on the underlying investment.
The following table presents the changes in Other investments:
4 unchanged sentences
79.5 36.6 116.1 1.7 — 1.7
−Removed: Purchases and commitments 36.3 8.5 44.8 60.3 — 60.3
+Added: Additions and commitments 60.3 — 60.3 104.3 — 104.3
Sales and distributions ( 58.4 ) — ( 58.4 ) ( 59.6 ) — ( 59.6 )
3 unchanged sentences
Fair Value Measurements
−Removed: The following tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: The following tables summarize financial assets and liabilities that are measured at fair value on a recurring basis:
Fair Value Measurements
2 unchanged sentences
Financial Assets
−Removed: Investments in marketable securities $ 74.9 $ 25.7 $ 49.2 $ —
+Added: Investments in equity securities (1)
+Added: $ 64.5 $ 64.5 $ — $ —
+Added: Investments in debt securities (1)
+Added: 14.0 — 14.0 —
Derivative financial instruments (2)
Financial Liabilities (3)
+Added: Contingent payment obligations $ 40.3 $ — $ — $ 40.3
Affiliate equity purchase obligations 12.6 — — 12.6
4 unchanged sentences
Financial Assets
−Removed: Investments in marketable securities $ 78.5 $ 64.5 $ 14.0 $ —
+Added: Investments in equity securities (1)
+Added: $ 447.9 $ 305.6 $ 142.3 $ —
+Added: Investments in debt securities (1)
+Added: 269.0 — 269.0 —
Derivative financial instruments (2)
4 unchanged sentences
__________________________
+Added: (1) Amounts are presented within Investments in marketable securities.
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(2) Amounts are presented within Other assets.
7 unchanged sentences
Balance, beginning of period $ — $ 22.0 $ 40.3 $ 12.6
−Removed: Net realized and unrealized (gains) losses (1)
−Removed: — ( 4.3 ) 16.6 ( 1.4 )
Purchases and issuances (1)
1 unchanged sentence
Settlements and reductions — ( 120.7 ) — ( 52.1 )
+Added: Net realized and unrealized (gains) losses (2)
+Added: 16.6 ( 1.4 ) ( 19.3 ) ( 11.8 )
Balance, end of period $ 40.3 $ 12.6 $ 21.0 $ 24.5
−Removed: Net change in unrealized (gains) losses relating to instruments still held at the reporting date $ — $ — $ — $ —
+Added: Net change in unrealized gains relating to instruments still held at the reporting date $ — $ — $ ( 19.3 ) $ ( 5.9 )
__________________________
−Removed: (1) Gains and losses resulting from changes to expected payments are included in Other expenses (net) and the accretion of these obligations is included in Interest expense.
(1) Affiliate equity purchase obligation activity includes transfers from Redeemable non-controlling interests.
+Added: (2) Gains and losses resulting from changes to expected payments are included in Other expenses (net) and the accretion of these obligations is included in Interest expense.
The following table presents certain quantitative information about the significant unobservable inputs used in valuing the Company’s recurring level 3 fair value measurements:
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Quantitative Information About Level 3 Fair Value Measurements
3 unchanged sentences
Contingent payment obligations Monte Carlo simulation Volatility $ 40.3 13 % - 25 %
+Added: 13 % $ 21.0 18 % - 25 %
Discount rates 1 % - 2 %
7 unchanged sentences
(2) Represents growth rates of asset- and performance-based fees.
−Removed: Contingent payment obligations represent the present value of the expected future settlement amounts related to the Company’s investments in its consolidated Affiliates.
−Removed: Affiliate equity purchase obligations include agreements to repurchase Affiliate equity.
+Added: Contingent payment obligations represent the fair value of the expected future settlement amounts related to the Company’s investments in its consolidated Affiliates.
+Added: Changes to assumed volatility and discount rates change the fair value of contingent payment obligations.
+Added: 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.
+Added: Affiliate equity purchase obligations include agreements to purchase Affiliate equity.
As of December 31, 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
−Removed: 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.
−Removed: 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.
−Removed: The carrying value of notes receivable, which is reported in Other assets, approximates fair value because interest rates and other terms are at market rates.
−Removed: The carrying value of the credit facilities approximates fair value because the credit facilities have variable interest based on selected short-term rates.
The following table summarizes the Company’s other financial liabilities not carried at fair value:
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2021 December 31, 2022
3 unchanged sentences
Junior convertible securities 299.5 461.4 341.7 346.9 Level 2
+Added: 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.
+Added: The carrying amount of Cash and cash equivalents, Receivables, Payables and accrued liabilities, and certain Other liabilities approximates fair value because of the short-term nature of these instruments.
+Added: The carrying value of notes receivable, which is reported in Other assets, approximates fair value because interest rates and other terms are at market rates.
+Added: The carrying value of the credit facilities (as defined in Note 6) approximates fair value because the credit facilities have variable interest based on selected short-term rates.
Investments in Affiliates and Affiliate Sponsored Investment Products
11 unchanged sentences
Affiliates accounted for under the equity method $ 1,864.7 $ 2,023.0 $ 1,273.5 $ 2,051.6
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31, 2021 and 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 $ 2,139.5 million, respectively, including Affiliates accounted for under the equity method considered VREs of $ 111.4 million and $ 87.9 million, respectively.
11 unchanged sentences
The following table summarizes the Company’s Debt:
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Senior bank debt $ 349.9 $ 349.9
3 unchanged sentences
Debt $ 2,490.4 $ 2,535.3
−Removed: The Company’s senior notes, junior subordinated notes, and junior convertible securities are carried at amortized cost.
−Removed: Unamortized discounts and debt issuance costs are presented within the Consolidated Balance Sheets as an adjustment to the carrying value of the associated debt.
+Added: Effective January 1, 2022, the Company adjusted the carrying value of its junior convertible securities (see Note 1).
Senior Bank Debt
−Removed: The Company has a $ 1.25 billion senior unsecured multicurrency revolving credit facility and a $ 350.0 million senior unsecured term loan facility.
−Removed: 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.
−Removed: Through these amendments, the Company also reduced applicable rates for the revolver and the term loan, and provided for customary LIBOR succession provisions.
+Added: The Company has a $ 1.25 billion revolver and a $ 350.0 million senior unsecured term loan facility (the “term loan” and, together with the revolver, the “credit facilities”).
+Added: On November 18, 2022, the Company (i) amended the revolver, extending the maturity date of the revolver by one year to October 25, 2027, and (ii) further amended the revolver and amended the term loan, replacing LIBOR with a term SOFR-based rate as an applicable benchmark for each facility.
+Added: The term loan matures on October 23, 2026.
Subject to certain conditions, the Company may increase the commitments under the revolver by up to an additional $ 500.0 million and may borrow up to an additional $ 75.0 million under the term loan.
−Removed: 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.
−Removed: As of December 31, 2021, the interest rate for the Company’s outstanding borrowings under the credit facilities was LIBOR plus 0.85 %.
+Added: The Company pays interest on any outstanding obligations under the credit facilities at specified rates, currently based either on an applicable term-SOFR plus a SOFR adjustment of 0.10 %, or prime rate, plus a marginal rate determined based on its credit rating.
+Added: As of December 31, 2022, the interest rate for the Company’s outstanding borrowings under the term loan was term-SOFR plus a SOFR adjustment of 0.10 %, plus the marginal rate of 0.85 %.
The credit facilities contain financial covenants with respect to leverage and interest coverage, as well as customary affirmative and negative covenants, including limitations on priority indebtedness, asset dispositions, and fundamental corporate changes, and certain customary events of default.
2 unchanged sentences
The Company pays commitment fees on the unused portion of its revolver.
−Removed: For the years ended December 31, 2020 and 2021, these fees amounted to $ 1.5 million.
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: As of December 31, 2021, the Company had senior notes outstanding.
−Removed: The carrying value of the senior notes is accreted to the principal amount at maturity over the remaining life of the underlying instrument.
−Removed: The principal terms of the senior notes outstanding as of December 31, 2021 were as follows:
+Added: For the years ended December 31, 2021 and 2022, these fees amounted to $ 1.5 million and $ 1.3 million, respectively.
+Added: As of December 31, 2022, the Company had senior notes outstanding, the respective principal terms and effective interest rates of which are presented below:
Senior Notes 2025
7 unchanged sentences
Call price As defined As defined As defined
+Added: Effective interest rate 4.43 % 3.67 % 3.39 %
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.
−Removed: 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.
+Added: 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
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: 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.
Junior Subordinated Notes
−Removed: As of December 31, 2021, the Company had junior subordinated notes outstanding.
−Removed: The carrying value of the junior subordinated notes is accreted to the principal amount at maturity over the remaining life of the underlying instrument.
−Removed: The principal terms of the junior subordinated notes outstanding as of December 31, 2021 were as follows:
+Added: As of December 31, 2022, the Company had junior subordinated notes outstanding, the respective principal terms and effective interest rates of which are presented below:
Junior Subordinated Notes 2060
9 unchanged sentences
Listing NYSE NYSE NYSE
+Added: Effective interest rate 5.91 % 4.78 % 4.22 %
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.
3 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.
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: As of December 31, 2021, the effective interest rates of the 2024, the 2025, and the 2030 senior notes were 4.43 %, 3.67 %, and 3.39 %, respectively.
−Removed: As of December 31, 2021, the effective interest rates of the 2059, the 2060, and the 2061 junior subordinated notes were 5.90 %, 4.78 %, and 4.21 %, respectively.
Junior Convertible Securities
−Removed: The following table summarizes the Company’s junior convertible trust preferred securities outstanding (the “junior convertible securities”).
−Removed: The carrying value and principal amount at maturity of the junior convertible securities were as follows:
−Removed: December 31, 2020 December 31, 2021
−Removed: Value Principal Amount
−Removed: at Maturity Carrying
−Removed: Value Principal Amount
−Removed: Junior convertible securities (1)
−Removed: $ 318.4 $ 430.8 $ 299.5 $ 401.0
−Removed: __________________________
−Removed: (1) The carrying value is accreted to the principal amount at maturity over a remaining life of 16 years.
+Added: Effective January 1, 2022, the Company adopted ASU 2020-06.
+Added: As of December 31, 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.
+Added: As of December 31, 2021 and 2022, the unamortized issuance costs related to the junior convertible securities were $ 3.9 million and $ 3.1 million, respectively.
+Added: The following table presents interest expense recognized in connection with the junior convertible securities:
+Added: Contractual interest expense $ 22.2 $ 18.3
+Added: Amortization of debt issuance costs 0.4 0.2
+Added: Amortization of debt discount 3.1 —
+Added: Total $ 25.7 $ 18.5
+Added: Effective interest rate 5.99 % 5.21 %
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Holders of the junior convertible securities have no rights to put these securities to the Company.
+Added: 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.
+Added: 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 this 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.
−Removed: 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 subordinated notes in the open market or in privately negotiated transactions from time to time at management’s discretion.
+Added: 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.
The junior convertible securities are considered contingent payment debt instruments under federal income tax regulations, which require the Company to deduct interest in an amount greater than its reported interest expense.
The Company estimates that these deductions will generate annual deferred tax liabilities of approximately $ 8 million.
−Removed: During the year ended December 31, 2021, the Company paid $ 33.0 million to repurchase a portion of our junior convertible securities, resulting in reductions of $ 29.9 million and $ 7.1 million in Debt and Additional paid-in capital, respectively.
−Removed: As a result of these repurchases, the Company also reduced our Deferred income tax liability (net) by $ 7.0 million.
+Added: During the years ended December 31, 2021 and 2022, the Company repurchased a portion of its junior convertible securities for a purchase price of $ 33.0 million and $ 60.9 million, respectively, and as a result of these repurchases, the Company reduced its Deferred income tax liability (net) by $ 7.0 million and $ 11.4 million, respectively.
Derivative Financial Instruments
−Removed: In the first quarter of 2020, the Company terminated its pound sterling-denominated forward foreign currency contracts and its corresponding collar contracts, which were designated as net investment hedges, and upon settlement, the Company received net proceeds of $ 24.9 million.
+Added: In 2020, the Company terminated its pound sterling-denominated forward foreign currency contracts and its corresponding collar contracts, which were designated as net investment hedges, and upon settlement, the Company received net proceeds of $ 24.9 million.
The net proceeds from the termination of the contracts are presented within sale of investment securities in the Consolidated Statements of Cash Flows.
−Removed: During the fourth quarter of 2021, the Company terminated its interest rate swap contract (the “interest rate swap”) with a large financial institution (the “swap counterparty”), and upon settlement paid $ 0.4 million.
+Added: During 2021, the Company terminated its interest rate swap contract (the “interest rate swap”) with a large financial institution (the “swap counterparty”), and upon settlement paid $ 0.4 million.
The interest rate swap was designated as a cash flow hedge and was used to exchange a portion of the Company’s LIBOR-based interest payments for fixed rate interest payments.
−Removed: Under the contract, the Company received payments based on one-month LIBOR and made payments based on an annual fixed rate of 0.5135 % on a notional amount of $ 250.0 million.
−Removed: The terms of the contract also required the Company and the swap counterparty to post cash collateral in certain circumstances throughout the duration of the contract.
−Removed: As of December 31, 2021, the Company held no cash collateral from the swap counterparty, and the swap counterparty held no 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.
−Removed: The following table summarizes the Company’s and its Affiliates’ derivative financial instruments measured at fair value on a recurring basis:
−Removed: December 31, 2020 December 31, 2021
−Removed: Assets Liabilities Assets Liabilities
−Removed: Forward foreign currency contracts $ 3.5 $ ( 2.3 ) $ 0.9 $ ( 0.8 )
−Removed: Interest rate swap — ( 1.9 ) — —
−Removed: Total $ 3.5 $ ( 4.2 ) $ 0.9 $ ( 0.8 )
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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;
−Removed: they were $ 3.5 million and $ 4.2 million, respectively, as of December 31, 2020, and $ 0.9 million and $ 0.8 million, respectively, as of December 31, 2021.
+Added: These contracts do not include set-off rights and are therefore presented on a gross basis in Other assets and Other liabilities, which were $ 0.9 million and $ 0.8 million, respectively, as of December 31, 2021, and $ 0.5 million and $ 0.9 million, respectively, as of December 31, 2022.
The following table summarizes the effects of the derivative financial instruments on the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Income:
For the Years Ended December 31,
−Removed: Gain (Loss) Recorded in Other Comprehensive Income (loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings Gain Recorded in Earnings from Excluded Components (1)
−Removed: Gain (Loss) Recorded in Other Comprehensive Income (Loss) Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings Gain (loss) Recorded in Earnings from Excluded Components (1)
+Added: Gain (Loss) Recorded in Other Comprehensive Income (loss) Gain (loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings Loss Recorded in Other Comprehensive Income (Loss) Loss Reclassified from Accumulated Other Comprehensive Loss into Earnings
Forward foreign currency contracts $ ( 1.0 ) $ 1.0 $ ( 0.5 ) $ ( 1.0 )
−Removed: Put options ( 47.7 ) — — — — —
−Removed: Call options ( 1.3 ) — — — — —
Interest rate swap 1.9 ( 0.4 ) — —
Total $ 0.9 $ 0.6 $ ( 0.5 ) $ ( 1.0 )
−Removed: __________________________
−Removed: (1) The excluded components of the forward foreign currency contracts were recognized in earnings on a straight-line basis over the respective period of the contracts as a reduction to Interest expense.
Commitments and Contingencies
4 unchanged sentences
As of December 31, 2022, these unfunded commitments were $ 158.3 million and may be called in future periods.
−Removed: As of December 31, 2021, the Company was contingently liable to make payments of $ 185.0 million related to the achievement of specified financial targets by certain of its Affiliates accounted for under the equity method, of which, $ 37.5 million may become payable in 2022 and $ 147.5 million may become payable from 2023 through 2029.
−Removed: As of December 31, 2021, the Company expected to make payments of approximately $ 13 million.
−Removed: 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.
−Removed: Affiliate equity interests provide holders at consolidated Affiliates with a conditional right to put their interests to the Company over time.
−Removed: In connection with one of the Company’s investments in an Affiliate accounted for under the equity method, a minority owner had the right to elect to sell a portion of its ownership interest in the Affiliate to the Company annually.
−Removed: As of December 31, 2021, the minority owner maintained a 14 % ownership interest in the Affiliate.
−Removed: The minority owner sold its interest on January 14, 2022.
−Removed: As of December 31, 2021, the Company was contingently liable to make payments in connection with its investments in consolidated Affiliates.
−Removed: The Company and certain of its consolidated Affiliates operate under regulatory authorities that require the maintenance of minimum financial or capital requirements.
−Removed: The Company’s management is not aware of any significant violations of such requirements.
−Removed: Business Combinations
AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: On October 1, 2021, the Company, along with a co-investor, completed a majority investment in Parnassus Investments (“Parnassus”), a leading independent ESG-dedicated fund manager.
−Removed: The Company’s provisional purchase price allocation was measured using a discounted cash flow analysis that included a projected growth rate of 2.9 % for assets under management, discount rate of 17.5 % for asset-based fees, a market participant tax rate of 25 %, and discounts for lack of marketability of 20 % for non-controlling interests.
−Removed: The associated provisional amounts may be revised upon completion of the final valuation.
−Removed: At this time, the Company does not expect material changes.
−Removed: The consideration paid (less net tangible assets acquired) will be deductible for U.S.
−Removed: tax purposes over a 15-year life.
−Removed: In addition, on December 29, 2021, the Company completed a majority investment in Abacus Capital Group LLC (“Abacus”), a high-quality real estate investment firm focused on the U.S.
−Removed: multi-family sector.
−Removed: The Company’s provisional purchase price allocation was measured using a discounted cash flow analysis that included a projected growth rate of 8.2 % for assets under management, discount rates of 13.7 % and 30 % for asset- and performance-based fees, respectively, a market participant tax rate of 25 %, and discounts for lack of marketability of 30 % for non-controlling interests.
−Removed: The associated provisional amounts may be revised upon completion of the final valuation.
−Removed: At this time, the Company does not expect material changes.
−Removed: The consideration paid (less net tangible assets acquired) will be deductible for U.S.
−Removed: tax purposes over a 15-year life.
−Removed: The purchase price allocation for these investments is as follows:
−Removed: Consideration paid (1)
−Removed: Deferred payment obligations (2)
−Removed: Contingent payment obligations (3)
−Removed: Retained equity interests 247.0
−Removed: Enterprise value $ 994.4
−Removed: Acquired client relationships $ 957.0
−Removed: Trade name 5.0
−Removed: Lease contract ( 0.8 )
−Removed: Tangible assets, net 2.7
−Removed: Goodwill 30.5
−Removed: __________________________
−Removed: (1) The Company funded $ 363.0 million.
−Removed: (2) The Company’s portion of the deferred payment obligations is $ 211.6 million.
−Removed: (3) The Company’s portion of the contingent payment obligations is $ 18.1 million.
−Removed: The excess of the enterprise value over the separately identifiable net assets acquired was recorded as goodwill and allocated to our reporting unit.
−Removed: Acquisition-related costs incurred in connection with these investments were $ 9.2 million for the year ended December 31, 2021.
−Removed: These costs were primarily related to professional fees and recorded in Selling, general and administrative expenses.
−Removed: Unaudited pro forma financial results are set forth in the table below, assuming these investments occurred on January 1, 2020 and the Company’s structured partnership interests had been in effect for the entire period.
−Removed: These results include adjustments to intangible amortization, acquisition-related costs, accretion expense related to deferred and contingent payments, and interest expense related to assumed borrowings to complete the purchases.
−Removed: These results do not include the impact of gains or losses resulting from changes to expected payments related to the contingent payment obligations that did not occur, or the benefits that may be expected to result from these investments.
−Removed: These results are not necessarily indicative of the financial results had the investment been consummated at the beginning of the periods presented, nor are they necessarily indicative of the financial results expected in future periods.
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: For the Years Ended December 31,
−Removed: 2020 (Unaudited) 2021 (Unaudited)
−Removed: Revenue $ 2,236.5 $ 2,642.6
−Removed: Net income (controlling interest) 226.6 610.3
−Removed: The Company’s new investments in Parnassus and Abacus contributed $ 85.8 million and $ 16.2 million to the Company’s Revenue and Net income (controlling interest), respectively, during 2021.
−Removed: In connection with these investments, as of December 31, 2021, the Company was obligated to make deferred payments and was contingently liable to make payments as follows:
+Added: As of December 31, 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
6 unchanged sentences
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.
−Removed: Parnassus and Abacus are limited liability companies with structured interests that define how the Company will participate in Affiliate earnings, based upon a fixed percentage of revenue.
−Removed: The limited liability company agreements do not define a fixed percentage for the Company’s ownership of the equity of the Affiliates.
−Removed: These percentages would be subject to a separate future negotiation if the Affiliates were to be sold or liquidated.
+Added: The Company had liabilities for deferred and contingent payment obligations related to certain of its investments in Affiliates accounted for under the equity method.
+Added: As of December 31, 2022, the Company was obligated to make payments of up to $ 31.2 million, all of which is payable in 2023.
+Added: Liabilities for deferred and contingent payments are included in Other liabilities.
+Added: As of December 31, 2022, the Company was contingently liable to make payments of $ 153.5 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.
+Added: As of December 31, 2022, the Company expected to make payments of approximately $ 13 million.
+Added: 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.
+Added: Affiliate equity interests provide holders at consolidated Affiliates with a conditional right to put their interests to the Company over time.
+Added: The Company and certain of its consolidated Affiliates operate under regulatory authorities that require the maintenance of minimum financial or capital requirements.
+Added: The Company’s management is not aware of any significant violations of such requirements.
Goodwill and Acquired Client Relationships
15 unchanged sentences
Balance, as of December 31, 2020 $ 1,166.6 $ ( 1,026.8 ) $ 139.8 $ 909.0 $ 1,048.8
+Added: New investments 232.0 — 232.0 725.0 957.0
Intangible amortization and impairments — ( 35.7 ) ( 35.7 ) — ( 35.7 )
3 unchanged sentences
Balance, as of December 31, 2021 $ 1,364.2 $ ( 1,028.1 ) $ 336.1 $ 1,630.3 $ 1,966.4
−Removed: New investments 232.0 — 232.0 725.0 957.0
Intangible amortization and impairments — ( 49.1 ) ( 49.1 ) ( 2.5 ) ( 51.6 )
Foreign currency translation ( 9.1 ) 7.5 ( 1.6 ) ( 37.2 ) ( 38.8 )
−Removed: Transfers (1)
−Removed: ( 35.0 ) 35.0 — — —
Balance, as of December 31, 2022 $ 1,355.1 $ ( 1,069.7 ) $ 285.4 $ 1,590.6 $ 1,876.0
3 unchanged sentences
The Company recorded amortization expense in Intangible amortization and impairments for these relationships of $ 55.3 million, $ 35.7 million, and $ 49.1 million for the years ended December 31, 2020, 2021, and 2022, respectively.
−Removed: Based on relationships existing as of December 31, 2021, the Company estimates that its consolidated amortization expense will be approximately $ 50 million in each of 2022 and 2023, approximately $ 35 million in 2024, and approximately $ 30 million in each of 2025 and 2026.
+Added: Based on relationships existing as of December 31, 2022, the Company estimates that its consolidated amortization expense will be approximately $ 50 million in 2023, approximately $ 35 million in 2024, and approximately $ 30 million in each of 2025, 2026, and 2027.
As of December 31, 2022, no impairments of definite-lived acquired client relationships were indicated.
−Removed: 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.
−Removed: The Company recorded an expense in Intangible amortization and impairments of $ 32.8 million attributable to the controlling interest ($ 60.3 million in aggregate) to reduce the carrying value of the Affiliate’s acquired client relationships to zero as of June 30, 2020.
−Removed: In the third quarter of 2020, the Company sold its interest in the Affiliate and the Company recorded no significant gain or loss on the transaction.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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 %.
−Removed: 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 December 31, 2022, no impairments of indefinite-lived acquired client relationships were indicated.
−Removed: 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.
+Added: As of December 31, 2022, the Company had no provisional purchase price allocations.
Equity Method Investments in Affiliates
−Removed: In the first and second quarters of 2021, the Company completed minority investments in Boston Common Asset Management LLC (“Boston Common”), a pioneer in global sustainable and impact investing, and OCP Asia Limited (“OCP Asia”), a leading alternative manager in private markets, providing customized secured lending solutions across the Asia-Pacific region, respectively.
−Removed: The majority of the consideration paid for both Boston Common and OCP Asia is deductible for U.S.
+Added: In the first and fourth quarters of 2022, the Company completed an additional investment in Systematica Investments, an innovative technology-driven systematic manager, and completed a minority investment in Peppertree Capital Management, Inc.
+Added: (“Peppertree”), a private markets firm specializing in communications infrastructure, respectively.
+Added: The majority of the consideration paid for Peppertree will be deductible for U.S.
tax purposes over a 15-year life.
−Removed: The Company’s purchase price allocation for each investment was measured using
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: discounted cash flow analyses that included assumptions of expected market performance, net client cash flows, and discount rates.
+Added: The Company’s purchase price allocation for each investment was measured using discounted cash flow analyses that included assumptions of expected market performance, net client cash flows, and discount rates.
The financial results of certain Affiliates accounted for under the equity method are recognized in the Consolidated Financial Statements one quarter in arrears.
6 unchanged sentences
The following table presents the change in Equity method investments in Affiliates (net):
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Equity Method Investments in Affiliates (Net)
8 unchanged sentences
Balance, end of period $ 2,134.4 $ 2,139.5
+Added: __________________________
+Added: (1) Represents the Company’s equity method investment in Baring Private Equity Asia (“BPEA”) as of the BPEA Transaction closing date.
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 recorded amortization expense for these relationships of $ 147.0 million, $ 123.0 million, and $ 109.1 million for the years ended December 31, 2020, 2021, and 2022, respectively.
−Removed: Based on relationships existing as of December 31, 2021, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 80 million in 2022 and 2023, and approximately $ 50 million in each of 2024, 2025, and 2026.
−Removed: In the first and fourth quarters of 2020, the Company recorded expenses of $ 140.0 million and $ 45.0 million, respectively, to reduce the carrying value of an Affiliate to fair value.
−Removed: The decline in the fair values was a result of declines in assets under management and reductions in projected growth, which decreased the forecasted revenues associated with the investment.
−Removed: The fair values of the investment were determined using probability-weighted discounted cash flow analyses, level 3 fair value measurements that included projected compounded growth in assets under management over the first five years of ( 2 )% and ( 5 )% for the first and fourth quarters of 2020, respectively, discount rates of 11 % for asset-based fees, discount rates of 20 % for performance-based fees, and market participant tax rates of 25 %.
−Removed: Based on the discounted cash flow analyses, the Company concluded that the fair value of its investment had declined below its carrying value at each of the respective measurement dates and that the decline was other-than-temporary.
−Removed: In the fourth quarter of 2021, the Company recorded a $ 52.0 million expense to reduce the carrying value of an Affiliate to fair value.
+Added: Based on relationships existing as of December 31, 2022, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 85 million in 2023, approximately $ 55 million in 2024, approximately $ 50 million in 2025, and approximately $ 45 million in each of 2026 and 2027.
+Added: For the year ended 2021, the Company recorded a $ 52.0 million expense to reduce the carrying value of an Affiliate to fair value.
The decline in the fair value was a result of a decline in assets under management and a reduction in projected growth, which decreased the forecasted revenue associated with the investment.
−Removed: The fair value of the investment was determined using a probability-weighted discounted cash flow analysis, a level 3 fair value measurement that included a projected compounded growth in assets under management over the first five years of 0.3 %, discount rates of 11 % and 20 % for asset- and performance-based fees, respectively, and a market participant tax rate of 25 %.
−Removed: Based on the discounted cash flow
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
+Added: The fair value of the investment was determined using a probability-weighted discounted cash flow analysis, a level 3 fair value measurement that included a projected compounded growth in assets under management over the first five years of 0.3 %, long-term growth rate of 5 %, discount rates of 11 % and 20 % for asset- and performance-based fees, respectively, and a market participant tax rate of 25 %.
+Added: 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.
+Added: For the year ended 2022, the Company recorded a $ 50.0 million expense to reduce the carrying value of an Affiliate to fair value.
+Added: The decline in the fair value was a result of a decline in assets under management and a reduction in projected margin, which decreased the forecasted income associated with the investment.
+Added: The fair value of the investment was determined using a probability-weighted discounted cash flow analysis, a level 3 fair value measurement that included a projected compounded growth in assets under management over the first five years of 2 %, long-term growth rate of 5 %, discount rates of 11 % and 20 % for asset- and performance-based fees, respectively, and a market participant tax rate of 25 %.
+Added: 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.
For the year ended December 31, 2022, the Company completed its annual assessme nt of its investments in Affiliates accounted for under the equity method and no other impairments were indicated.
−Removed: 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.
The Company had liabilities for deferred and contingent payment obligations related to certain of its investments in Affiliates accounted for under the equity method.
−Removed: As of December 31, 2021, the Company was obligated to make deferred payments of up to $ 50.8 million, all of which is payable in 2022.
−Removed: As of December 31, 2021, the Company has recorded liabilities of $ 43.0 million related to the achievement of specified financial targets, which are expected to settle in 2022.
−Removed: Liabilities for deferred and contingent payments are included in Other liabilities.
The Company had 21 and 20 Affiliates accounted for under the equity method as of December 31, 2021 and 2022, respectively.
2 unchanged sentences
These percentages would be subject to a separate future negotiation if an Affiliate were to be sold or liquidated.
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table presents summarized financial information for Affiliates accounted for under the equity method:
7 unchanged sentences
__________________________
−Removed: (1) Revenue and net income include asset- and performance-based fees, the impact of consolidated sponsored investment products and investments in new Affiliates for the full-year, regardless of the date of the Company’s investment.
−Removed: On January 14, 2022, the Company completed an additional investment in Systematica Investments (“Systematica”), an innovative technology-driven systematic manager.
−Removed: Following the close of the transaction, the investment continues to be accounted for under the equity method of accounting and Systematica partners continue to hold a majority of the equity of the business and direct its day-to-day operations.
+Added: (1) Revenue and net income include asset- and performance-based fees, the impact of consolidated sponsored investment products and new Affiliate investments for the full-year, regardless of the date of the Company’s investment.
+Added: BPEA Transaction Gain
+Added: In the fourth quarter of 2022, the Company completed the previously announced sale of its equity interest in BPEA, an Affiliate accounted for by the Company under the equity method, to EQT (the “BPEA Transaction”) in connection with the strategic combination of BPEA and EQT.
+Added: Pursuant to the terms of the Securities Purchase and Merger Agreement with EQT, under which the Company and each of the other owners agreed to sell their respective equity interests in BPEA, the Company received $ 223.6 million in cash, net of transaction costs, and 28.68 million EQT ordinary shares ( 25 % of which are subject to a six-month lock-up, which expires in April 2023), and other investments.
+Added: BPEA is included in the Company’s results through the closing date and the Company’s gain on the transaction was $ 641.9 million.
+Added: The transaction was taxable at closing.
+Added: During the fourth quarter of 2022 and through February 15, 2023, the Company has sold 17.4 million EQT ordinary shares.
Lease Commitments
The Company and its Affiliates currently lease office space and equipment under various operating leasing arrangements.
−Removed: The following table presents total lease costs (net) for 2019, 2020, and 2021:
+Added: The following table presents total lease costs (net):
For the Years Ended December 31,
5 unchanged sentences
Total lease costs (net) $ 33.4 $ 26.7 $ 31.8
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: As of December 31, 2020 and 2021, the Company’s and its Affiliates’ weighted average operating lease term was seven years , and the weighted average operating lease discount rate was 4 % and 3 %, respectively.
+Added: As of December 31, 2021 and 2022, the Company’s and its Affiliates’ weighted average operating lease term was seven years and eight years , respectively, and the weighted average operating lease discount rate was 3 %.
As of December 31, 2022, the maturities of lease liabilities were as follows:
3 unchanged sentences
__________________________
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(1) Total undiscounted lease liabilities were $ 34.4 million greater than the operating leases recorded in Other liabilities primarily due to present value discounting.
12 unchanged sentences
Accrued compensation $ 545.5 $ 378.7
+Added: Accrued income taxes 49.6 224.4
Other 194.0 175.2
5 unchanged sentences
The Company’s executive officers and directors may invest from time to time in funds advised or products offered by its Affiliates, or receive other investment services provided by its Affiliates, on substantially the same terms as other investors.
−Removed: In addition, the Company and
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: its Affiliates earn asset- and performance-based fees and incur distribution and other expenses for services provided to Affiliate sponsored investment products.
+Added: In addition, the Company and its Affiliates earn asset- and performance-based fees and incur distribution and other expenses for services provided to Affiliate sponsored investment products.
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.
+Added: Also, from time to time, the Company may enter into ordinary course engagements for capital markets, banking, brokerage, and other services with beneficial owners of 5 % or more of the Company’s voting securities.
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 8, 10, 17, and 18.
1 unchanged sentence
The Company is authorized to issue up to 150.0 million shares of voting common stock and 3.0 million shares of class B non-voting common stock.
−Removed: The Company’s Board of Directors authorized share repurchase programs in January 2021 and October 2019 to repurchase up to 5.0 million and 6.0 million shares of its common stock, respectively, and these authorizations have no expiry.
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: The Company’s Board of Directors authorized share repurchase programs in October 2022, January 2022, and January 2021 to repurchase up to 3.0 million, 2.0 million, and 5.0 million shares of its common stock, respectively, and these authorizations have no expiry.
Purchases may be made from time to time, at management’s discretion, in the open market or in privately negotiated transactions, including through the use of trading plans, as well as pursuant to accelerated share repurchase programs or other share repurchase strategies that may include derivative financial instruments.
−Removed: As of December 31, 2021, the Company had repurchased all of the shares of the October 2019 authorized amount, and there were a total of 3.4 million shares available for repurchase under the Company’s January 2021 share repurchase program.
+Added: As of December 31, 2022, the Company had repurchased all of the shares of the January 2021 authorized amount, and there were a total of 3.9 million shares available for repurchase under the Company’s October 2022 and January 2022 share repurchase programs.
+Added: In December 2022, the Company entered into an accelerated share repurchase agreement to repurchase shares of its common stock in exchange for an upfront payment of $ 225.0 million.
+Added: The Company received an initial share delivery of 1.1 million shares in December 2022, which represents 80 % of the upfront payment based on the closing price of the Company’s common stock on the agreement date.
+Added: Such shares have been reflected in Treasury stock on the Consolidated Balance Sheets as of December 31, 2022.
+Added: The total number of shares to be repurchased will be based on volume-weighted average prices of the Company’s common stock during the term of the agreement less a discount and subject to adjustments pursuant to the terms and conditions of such agreement.
+Added: The final settlement of this transaction is expected to be completed in the second or third quarter of 2023.
The following is a summary of the Company’s share repurchase activity:
3 unchanged sentences
2022 4.5 144.45
−Removed: Between January 1, 2022 and February 16, 2022, the Company repurchased 0.8 million shares of its common stock in the open market for approximately $ 110 million.
Equity Distribution Program
−Removed: The Company has 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”).
+Added: 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”).
+Added: This equity distribution program superseded and replaced the Company’s prior equity distribution program.
As of December 31, 2022, no sales had occurred under the equity distribution program.
9 unchanged sentences
The Company may also grant cash awards that can be notionally invested in one or more specified measurement funds, including the Company’s common stock.
−Removed: Awards granted under the Company’s share-based incentive plans typically participate in any dividends declared, but such amounts are deferred until delivery of the shares
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: and are forfeitable if the requisite service is not satisfied.
+Added: Awards granted under the Company’s share-based incentive plans typically participate in any dividends declared, but such amounts are deferred until delivery of the shares and are forfeitable if the requisite service is not satisfied.
Dividends may accrue in cash or may be reinvested in the Company’s common stock.
1 unchanged sentence
The following table presents share-based compensation expense:
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Year Share-Based
3 unchanged sentences
2022 62.4 7.6
−Removed: The excess tax deficiency recognized from share-based incentive plans was $ 3.2 million, $ 3.9 million, and $ 0.2 million, for the years ended December 31, 2019, 2020, and 2021, respectively.
+Added: The excess tax (deficiency) benefit recognized from share-based incentive plans was $( 3.9 ) million, $( 0.2 ) million, and $ 1.8 million, for the years ended December 31, 2020, 2021, and 2022, respectively.
As of December 31, 2021, the Company had unrecognized share-based compensation expense of $ 70.9 million.
16 unchanged sentences
Stock Options
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table summarizes transactions in the Company’s stock options:
5 unchanged sentences
Options forfeited ( 0.0 ) 166.15
+Added: Options expired ( 0.0 ) 207.63
Performance condition changes 0.0 131.07
1 unchanged sentence
Exercisable at December 31, 2022 0.0 $ 121.12 3.0
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company granted stock options with fair values of $ 4.4 million, $ 2.0 million, and $ 1.8 million for the years ended December 31, 2020, 2021, and 2022, respectively.
5 unchanged sentences
The total intrinsic value of stock options exercised during the years ended December 31, 2020, 2021, and 2022 was $ 0.0 million , $ 13.4 million, and $ 1.2 million, respectively.
−Removed: The cash received for stock options exercised was $ 0.9 million, zero , and $ 3.6 million during the years ended December 31, 2019, 2020, and 2021, respectively.
+Added: The cash received for stock options exercised was zero , $ 3.6 million, and $ 2.6 million during the years ended December 31, 2020, 2021, and 2022, respectively.
As of December 31, 2022, the intrinsic value of exercisable stock options outstanding was $ 1.6 million, and 1.1 million options were available for grant under the Company’s option plans.
22 unchanged sentences
Changes in the current redemption value are recorded to Additional paid-in capital.
−Removed: When the Company has an unconditional obligation
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: to repurchase Affiliate equity interests, the interests are reclassified from Redeemable non-controlling interest to Other liabilities at current fair value.
+Added: When the Company has an unconditional obligation to purchase Affiliate equity interests, the interests are reclassified from Redeemable non-controlling interest to Other liabilities at current fair value.
Changes in fair value are recorded to Other expenses (net).
2 unchanged sentences
Balance, beginning of period $ 671.5 $ 673.9
−Removed: $ 916.7 $ 671.5
−Removed: Increase (decrease) attributable to consolidated Affiliate sponsored investment products 13.8 ( 10.4 )
+Added: Decrease attributable to consolidated Affiliate sponsored investment products ( 10.4 ) ( 4.9 )
Transfers to Other liabilities ( 112.7 ) ( 59.6 )
−Removed: Transfers (to) from Non-controlling interests ( 7.8 ) 3.9
+Added: Transfers from Non-controlling interests 3.9 1.8
Changes in redemption value 121.6 ( 145.8 )
1 unchanged sentence
$ 673.9 $ 465.4
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
__________________________
5 unchanged sentences
Affiliate equity interests provide the Company a conditional right to call (following an Affiliate equity holder’s departure) and Affiliate equity holders have a conditional right to put their interests at certain intervals (including on an annual basis following an Affiliate equity holder’s departure).
+Added: 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.
4 unchanged sentences
The amount of cash paid for purchases was $ 315.1 million, $ 150.5 million, and $ 61.5 million for the years ended December 31, 2020, 2021, and 2022, respectively.
−Removed: The total amount of cash received for issuances was $ 10.5 million, $ 20.2 million, and $ 117.7 million (including $ 99.6 million from a co-investor) for the years ended December 31, 2019, 2020, and 2021, respectively.
+Added: The total amount of cash received for issuances was $ 20.2 million, $ 117.7 million (including $ 99.6 million from a co-investor), and $ 15.2 million for the years ended December 31, 2020, 2021, and 2022, respectively.
Sales and purchases of Affiliate equity generally occur at fair value;
8 unchanged sentences
The following table presents unrecognized Affiliate equity compensation expense:
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Year Controlling Interest Remaining Life Non-controlling Interests Remaining Life
6 unchanged sentences
Effects of Changes in the Company’s Ownership in Affiliates
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company periodically acquires interests from, and transfers interests to, Affiliate equity holders.
1 unchanged sentence
No gain or loss related to these transactions is recognized in the Consolidated Statements of Income or the Consolidated Statements of Comprehensive Income.
−Removed: 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:
+Added: 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 occurred during the applicable periods:
For the Years Ended December 31,
13 unchanged sentences
The following table presents the consolidated provision for income taxes:
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended December 31,
15 unchanged sentences
(1) Taxes attributable to the controlling interest divided by income before income taxes (controlling interest).
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The consolidated provision for income taxes consisted of the following:
18 unchanged sentences
federal statutory tax rate to the Company’s effective tax rate:
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended December 31,
15 unchanged sentences
Effective tax rate 16.0 % 22.0 % 20.5 %
−Removed: The Company’s effective tax rate (controlling interest) in 2019 is lower than the marginal tax rate, primarily due to lower Income before income taxes, as a result of increased Intangible amortization and impairments expense, and tax benefits related to an Affiliate divestment.
−Removed: The effective tax rate (controlling interest) in 2020 is not significantly different from the marginal tax rate.
−Removed: The effective tax rate (controlling interest) in 2021 is higher than the marginal tax rate, primarily due to non-deductible compensation expense and an increase in deferred tax expense resulting from the revaluation of certain deferred tax liabilities due to an increase in the UK tax rate enacted during 2021.
−Removed: Deferred income tax liability (net) reflects the expected future tax consequences of temporary differences between the financial reporting bases and tax bases of the Company’s assets and liabilities.
−Removed: The significant components of the Company’s Deferred income tax liability (net) are as follows:
+Added: __________________________
+Added: (1) Reflective of the BPEA Transaction gain of $ 641.9 million and realized and unrealized gains on EQT ordinary shares of $ 43.8 million and $ 57.9 million, respectively.
+Added: The Company’s effective tax rate (controlling interest) in 2020 is not significantly different from the marginal tax rate.
+Added: The effective tax rate (controlling interest) in 2021 is higher than the marginal tax rate, primarily due to non-deductible compensation expense and an increase in deferred tax expense resulting from the revaluation of certain deferred tax liabilities
AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: due to an increase in the UK tax rate enacted during 2021.
+Added: The effective tax rate (controlling interest) in 2022 is lower than the marginal rate primarily due to the tax benefits of foreign operations and a state tax benefit related to the BPEA Transaction.
+Added: Deferred income tax liability (net) reflects the expected future tax consequences of temporary differences between the financial reporting bases and tax bases of the Company’s assets and liabilities.
+Added: The significant components of the Company’s Deferred income tax liability (net) are as follows:
Deferred Tax Assets
5 unchanged sentences
Foreign tax credits 8.7 15.4
+Added: Other 1.3 0.3
Total deferred tax assets 86.6 85.9
6 unchanged sentences
Right-of-use assets ( 5.9 ) ( 5.1 )
+Added: Accrued expenses — ( 3.0 )
Deferred income ( 27.3 ) ( 23.4 )
5 unchanged sentences
(1) As of December 31, 2021 and 2022, foreign loss carryforwards of $ 22.2 million (net of a $ 20.3 million valuation allowance) and $ 20.0 million (net of a $ 16.5 million valuation allowance), respectively, are presented within Other assets as they represent a net deferred tax asset in a foreign jurisdiction.
−Removed: As of December 31, 2021, the Company had available state net operating loss carryforwards of $ 242.4 million, a majority of which will expire over nine years to 12 years.
+Added: As of December 31, 2022, the Company had available state net operating loss carryforwards of $ 238.8 million, a majority of which will expire over seven years to 12 years.
As of December 31, 2022, the Company had foreign loss carryforwards of $ 75.7 million, of which $ 58.8 million will expire over ten years to 18 years and $ 16.9 million will carry forward indefinitely.
−Removed: As of December 31, 2021, the Company had foreign tax credit carryforwards of $ 8.7 million which will expire over seven years to ten years .
+Added: As of December 31, 2022, the Company had foreign tax credit carryforwards of $ 15.4 million which will expire over six years to ten years .
The Company believed it was more-likely-than-not that the benefit from certain state and foreign loss carryforwards and foreign tax credit carryforwards would not be fully realized, and, as of December 31, 2022, had valuation allowances of $ 16.1 million, $ 16.5 million, and $ 15.4 million on the state and foreign loss carryforwards and the foreign tax credit carryforwards, respectively.
3 unchanged sentences
income taxes on the excess of the financial reporting bases over tax bases in the Company’s investments in foreign subsidiaries considered permanent in duration.
−Removed: Such amount would generally become taxable upon the repatriation of assets from, or a sale or liquidation of, the foreign subsidiaries.
+Added: Such amount would generally become
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: taxable upon the repatriation of assets from, or a sale or liquidation of, the foreign subsidiaries.
While a determination of the potential amount of unrecognized deferred U.S.
1 unchanged sentence
A reconciliation of the changes in unrecognized tax benefits is as follows:
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended December 31,
22 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:
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended December 31,
1 unchanged sentence
Net income (controlling interest) $ 202.2 $ 565.7 $ 1,145.9
+Added: Income from hypothetical settlement of Redeemable non-controlling interests, net of tax — — 82.9
Interest expense on junior convertible securities, net of taxes — 18.5 14.0
3 unchanged sentences
Stock options and restricted stock units 0.2 1.2 1.3
+Added: Hypothetical issuance of shares to settle Redeemable non-controlling interests — — 7.4
Junior convertible securities — 2.1 1.8
Average shares outstanding (diluted) 46.7 44.8 49.0
−Removed: Average shares outstanding (diluted) in the table above excludes stock options and restricted stock units that have not met certain performance conditions and items that have an anti-dilutive effect on Earnings per share (diluted).
+Added: Average shares outstanding (diluted) in the table above excludes stock options and restricted stock units that have not met certain performance conditions and instruments that have an anti-dilutive effect on Earnings per share (diluted).
The following is a summary of items excluded from the denominator in the table above:
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended December 31,
2 unchanged sentences
Junior convertible securities 2.2 — —
−Removed: The Company may settle portions of its Affiliate equity purchases in shares of its common stock.
−Removed: 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.
+Added: Shares issuable to settle Redeemable non-controlling interests — — 0.1
Comprehensive Income
1 unchanged sentence
For the Year Ended December 31, 2020
−Removed: Pre-Tax Tax Benefit Net of Tax
−Removed: Foreign currency translation gain (loss) $ ( 11.4 ) $ 22.3 $ 10.9
−Removed: Change in net realized and unrealized gain on derivative financial instruments 1.7 — 1.7
−Removed: Other comprehensive income (loss) $ ( 9.7 ) $ 22.3 $ 12.6
−Removed: For the Year Ended December 31, 2020
−Removed: Pre-Tax Tax (Expense) Benefit Net of Tax
−Removed: Foreign currency translation gain (loss) $ 25.5 $ ( 10.3 ) $ 15.2
−Removed: Change in net realized and unrealized gain (loss) on derivative financial instruments ( 1.9 ) 0.4 ( 1.5 )
−Removed: Other comprehensive income (loss) $ 23.6 $ ( 9.9 ) $ 13.7
+Added: Pre-Tax Tax (Expense)
+Added: Benefit Net of Tax
+Added: Foreign currency translation gain $ 25.5 $ ( 10.3 ) $ 15.2
+Added: Change in net realized and unrealized loss on derivative financial instruments ( 1.9 ) 0.4 ( 1.5 )
+Added: Other comprehensive income $ 23.6 $ ( 9.9 ) $ 13.7
For the Year Ended December 31, 2021
Pre-Tax Tax Expense Net of Tax
−Removed: Foreign currency translation gain (loss) $ 10.3 $ ( 3.5 ) $ 6.8
+Added: Foreign currency translation gain $ 10.3 $ ( 3.5 ) $ 6.8
+Added: Change in net realized and unrealized gain on derivative financial instruments 0.9 ( 0.5 ) 0.4
+Added: Other comprehensive income $ 11.2 $ ( 4.0 ) $ 7.2
+Added: For the Year Ended December 31, 2022
+Added: Pre-Tax Tax Benefit Net of Tax
+Added: Foreign currency translation loss $ ( 144.1 ) $ 2.8 $ ( 141.3 )
Change in net realized and unrealized loss on derivative financial instruments ( 0.5 ) 0.0 ( 0.5 )
−Removed: Other comprehensive income (loss) $ 11.2 $ ( 4.0 ) $ 7.2
+Added: Change in net unrealized loss on available-for-sale debt securities ( 1.3 ) 0.3 ( 1.0 )
+Added: Other comprehensive loss $ ( 145.9 ) $ 3.1 $ ( 142.8 )
+Added: AFFILIATED MANAGERS GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The components of accumulated other comprehensive income (loss), net of taxes, were as follows:
−Removed: Foreign Currency Translation Adjustment Realized and Unrealized Gains (Losses) on Derivative Financial Instruments Total
+Added: Foreign Currency Translation Adjustment Realized and Unrealized Gains (Losses) on Derivative Financial Instruments Unrealized Losses on Available-for-Sale Debt Securities Total
Balance, as of December 31, 2020 $ ( 161.9 ) $ ( 0.3 ) $ — $ ( 162.2 )
1 unchanged sentence
Amounts reclassified — 0.6 — 0.6
−Removed: Net other comprehensive income (loss) 15.2 ( 1.5 ) 13.7
+Added: Net other comprehensive income 6.8 0.4 — 7.2
Balance, as of December 31, 2021 $ ( 155.1 ) $ 0.1 $ — $ ( 155.0 )
1 unchanged sentence
Amounts reclassified — ( 1.0 ) — ( 1.0 )
−Removed: Net other comprehensive income 6.8 0.4 7.2
+Added: Net other comprehensive loss ( 141.3 ) ( 0.5 ) ( 1.0 ) ( 142.8 )
Balance, as of December 31, 2022 $ ( 296.4 ) $ ( 0.4 ) $ ( 1.0 ) $ ( 297.8 )
14 unchanged sentences
Total $ 73.9 $ 68.5
−Removed: AFFILIATED MANAGERS GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Valuation and Qualifying Accounts
2 unchanged sentences
Charged to Costs
−Removed: and Expenses Additions
+Added: and Expenses Additions (Reductions)
Other Accounts Deductions Balance
11 unchanged sentences
__________________________
−Removed: (1) Other allowances represented reserves on notes received in connection with transfers of our interests in certain Affiliates, as well as other receivable amounts, which we considered uncollectible.
+Added: (1) Other allowances represented reserves on notes received in connection with transfers of the Company’s interests in certain Affiliates, as well as other receivable amounts, which the Company considered uncollectible.
Deductions represented the reversal of such reserves upon collection of the amounts due.
1 unchanged sentence
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.