What changed in this filing

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Item 1. Financial Statements

2023-05-08 compared with 2022-11-07 · 196 added, 324 removed, 534 unchanged (49% of the section changed)

3 unchanged sentences

(in millions, except per share data)

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

2021 2022 2021 2022

For the Three Months Ended March 31,

Consolidated revenue $ 607.3 $ 517.4

8 unchanged sentences

Equity method income (net) 48.6 58.6

Investment and other income (expense) 37.5 3.1 91.1 ( 5.3 )

Investment and other income 13.6 38.0

Income before income taxes 274.4 233.5

11 unchanged sentences

(in millions)

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

2021 2022 2021 2022

For the Three Months Ended March 31,

Net income $ 218.7 $ 188.5

1 unchanged sentence

Foreign currency translation gain (loss) ( 11.8 ) 26.8

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

Change in net realized and unrealized gain (loss) on derivative financial instruments 0.0 0.2

Change in net unrealized gain (loss) on available-for-sale debt securities — 0.4

Other comprehensive income (loss), net of tax ( 11.8 ) 27.4

6 unchanged sentences

(in millions)

2021 September 30,

2022 March 31,

Cash and cash equivalents $ 429.2 $ 832.8

32 unchanged sentences

(in millions)

Three Months Ended September 30, 2021 Total Stockholders’ Equity

Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Treasury

Interests Total

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

Net income — — — 128.4 — 80.0 208.4

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

Share-based compensation — 21.2 — — — — 21.2

Common stock issued under share-based incentive plans — ( 7.8 ) — — 1.4 — ( 6.4 )

Repurchases of junior convertible securities — ( 1.3 ) — — — — ( 1.3 )

Share repurchases — — — — ( 100.0 ) — ( 100.0 )

Dividends ($ 0.01 per share)

— — — ( 0.3 ) — — ( 0.3 )

Affiliate equity activity:

Affiliate equity compensation — 2.5 — — — 8.9 11.4

Issuances — — — — — 0.5 0.5

Purchases — 1.2 — — — ( 2.4 ) ( 1.2 )

Changes in redemption value of Redeemable non-controlling interests — 0.9 — — — — 0.9

Transfers to Redeemable non-controlling interests — — — — — ( 0.1 ) ( 0.1 )

Capital contributions and other — — — — — ( 2.5 ) ( 2.5 )

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

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

Three Months Ended September 30, 2022 Total Stockholders’ Equity

Three Months Ended March 31, 2022 Total Stockholders’ Equity

Stock Additional

4 unchanged sentences

Interests Total

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

Net income — — — 112.6 — 51.7 164.3

Other comprehensive loss, net of tax — — ( 68.2 ) — — ( 20.2 ) ( 88.4 )

Share-based compensation — 15.2 — — — — 15.2

Common stock issued under share-based incentive plans — ( 8.5 ) — — 3.4 — ( 5.1 )

Share repurchases — — — — ( 80.0 ) — ( 80.0 )

Dividends ($ 0.01 per share)

— — — ( 0.4 ) — — ( 0.4 )

Affiliate equity activity:

Affiliate equity compensation — 1.6 — — — 8.5 10.1

Issuances — ( 5.3 ) — — — 8.9 3.6

Purchases — ( 1.2 ) — — — ( 1.5 ) ( 2.7 )

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

Capital contributions and other — — — — — 5.2 5.2

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

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

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

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in millions)

Nine Months Ended September 30, 2021 Total Stockholders' Equity

Stock Additional

Capital Accumulated

Comprehensive Income (Loss) Retained

Earnings Treasury

Interests Total

December 31, 2021 $ 0.6 $ 651.6 $ ( 87.9 ) $ 4,569.5 $ ( 2,347.4 ) $ 924.2 $ 3,710.6

Impact of adoption of new accounting standards (ASU 2020-06) — ( 80.6 ) — 4.5 — — ( 76.1 )

Net income — — — 146.0 — 72.7 218.7

Other comprehensive income (loss), net of tax — — 14.6 — — ( 3.9 ) 10.7

Other comprehensive loss, net of tax — — ( 5.3 ) — — ( 6.5 ) ( 11.8 )

Share-based compensation — 14.7 — — — — 14.7

Common stock issued under share-based incentive plans — ( 29.9 ) — — 16.6 — ( 13.3 )

Repurchases of junior convertible securities — ( 6.1 ) — — — — ( 6.1 )

Share repurchases — — — — ( 184.6 ) — ( 184.6 )

6 unchanged sentences

Changes in redemption value of Redeemable non-controlling interests — 7.0 — — — — 7.0

Transfers to Redeemable non-controlling interests — — — — — ( 3.9 ) ( 3.9 )

Capital contributions and other — — — — — 23.8 23.8

Distributions to non-controlling interests — — — — — ( 122.5 ) ( 122.5 )

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

Nine Months Ended September 30, 2022 Total Stockholders' Equity

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

Three Months Ended March 31, 2023 Total Stockholders’ Equity

Stock Additional

5 unchanged sentences

December 31, 2022 $ 0.6 $ 695.5 $ ( 203.4 ) $ 5,718.2 $ ( 2,980.6 ) $ 945.3 $ 4,175.6

Impact of adoption of new accounting standards (see Note 2) — ( 80.6 ) — 4.5 — — ( 76.1 )

Net income — — — 134.5 — 54.0 188.5

Other comprehensive loss, net of tax — — ( 126.0 ) — — ( 48.2 ) ( 174.2 )

Other comprehensive income, net of tax — — 25.1 — — 2.3 27.4

Share-based compensation — 14.7 — — — — 14.7

Common stock issued under share-based incentive plans — ( 39.1 ) — — 14.0 — ( 25.1 )

Share repurchases — — — — ( 344.7 ) — ( 344.7 )

Dividends ($ 0.01 per share)

5 unchanged sentences

Changes in redemption value of Redeemable non-controlling interests — ( 101.7 ) — — — — ( 101.7 )

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

Capital contributions and other — — — — — ( 3.3 ) ( 3.3 )

Distributions to non-controlling interests — — — — — ( 79.5 ) ( 79.5 )

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

March 31, 2023 $ 0.6 $ 563.9 $ ( 178.3 ) $ 5,852.3 $ ( 2,966.6 ) $ 947.5 $ 4,219.4

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

2 unchanged sentences

(in millions)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cash flow from (used in) operating activities:

7 unchanged sentences

Share-based compensation and Affiliate equity expense 30.9 25.3

Net realized and unrealized gains on investment securities ( 12.9 ) ( 32.9 )

Other non-cash items ( 0.4 ) 8.0

2 unchanged sentences

Sales of securities by consolidated Affiliate sponsored investment products 10.3 12.4

(Increase) decrease in receivables ( 81.0 ) 9.5

Decrease in other assets 22.5 19.3

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

Increase in receivables ( 52.2 ) ( 92.2 )

(Increase) decrease in other assets ( 1.8 ) 2.9

Decrease in payables, accrued liabilities, and other liabilities ( 196.5 ) ( 141.8 )

Cash flow from operating activities 145.0 234.8

1 unchanged sentence

Investments in Affiliates, net of cash acquired ( 147.8 ) —

Return of capital from equity method investments 3.4 0.8

Purchase of fixed assets ( 3.7 ) ( 1.9 )

Purchase of investment securities ( 15.4 ) ( 109.8 )

Sale of investment securities 26.0 36.7

Cash flow used in investing activities ( 177.8 ) ( 266.6 )

Maturities and sales of investment securities 9.5 399.7

Cash flow from (used in) investing activities ( 157.4 ) 288.0

Cash flow from (used in) financing activities:

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

Borrowings of senior bank debt — 25.0

Repayments of senior bank debt and junior convertible securities ( 16.5 ) ( 25.0 )

2 unchanged sentences

Distributions to non-controlling interests ( 122.5 ) ( 79.5 )

Affiliate equity (purchases) / issuances (net) ( 47.8 ) ( 21.8 )

Subscriptions to consolidated Affiliate sponsored investment products, net of redemptions 33.2 6.5

Affiliate equity issuances (net) 6.3 7.3

Subscriptions (redemptions) to consolidated Affiliate sponsored investment products, net 4.4 ( 2.7 )

Other financing items ( 58.9 ) ( 41.6 )

1 unchanged sentence

Effect of foreign currency exchange rate changes on cash and cash equivalents ( 6.2 ) 2.6

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

Net (decrease) increase in cash and cash equivalents ( 407.5 ) 408.5

Cash and cash equivalents at beginning of period 908.5 429.2

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

Effect of deconsolidation of Affiliates — ( 4.9 )

Cash and cash equivalents at end of period $ 501.0 $ 832.8

4 unchanged sentences

The Consolidated Financial Statements of Affiliated Managers Group, Inc.

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

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

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

8 unchanged sentences

Accounting Standards and Policies

Recently Adopted Accounting Standards

Effective January 1, 2022, the Company adopted Accounting Standard Update (“ASU”) 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity using a modified retrospective method.

ASU 2020-06 removes the separate liability and equity accounting for the Company’s junior convertible securities.

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.

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.

As a result of the adoption of ASU 2020-06, the Company also updated its Earnings Per Share accounting policy as described below.

Earnings Per Share

The calculation of Earnings per share (basic) is based on the weighted average number of shares of the Company’s common stock outstanding during the period.

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.

The Company had share-based compensation awards outstanding during the periods presented with vesting provisions subject to certain performance conditions.

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.

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.

These arrangements are presented at their current redemption value as Redeemable non-controlling interests.

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.

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.

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.

Purchases are assumed to occur at the beginning of the reporting period.

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).

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.

For this calculation, the interest expense (net of tax) attributable to these dilutive

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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.

Recent Accounting Developments

In June 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-03, Fair Value Measurement (Topic 820):

In June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820):

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.

4 unchanged sentences

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

2021 September 30,

2022 March 31,

Cost $ 394.4 $ 165.9

2 unchanged sentences

Fair value $ 447.9 $ 186.5

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

As of December 31, 2022 and March 31, 2023, investments in equity securities include ordinary shares of EQT AB (“EQT”), a public company listed on Nasdaq Stockholm (EQT.ST), with fair values of $ 405.1 million and $ 141.5 million, respectively.

The Company received the EQT shares through the sale of its equity interest in Baring Private Equity Asia (“BPEA”), in connection with the strategic combination of BPEA and EQT, which was completed in the fourth quarter of 2022.

As of December 31, 2022 and March 31, 2023, investments in equity securities include consolidated Affiliate sponsored investment products with fair values of $ 23.5 million and $ 21.4 million, respectively.

For the three months ended March 31, 2023, the Company recognized $ 1.4 million of net unrealized gains on equity securities still held as of March 31, 2023.

Debt Securities

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

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

2021 September 30,

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Treasury securities classified as available-for-sale, of which $ 100.4 million mature in 2023 and $ 151.7 million mature in 2024, and consolidated Affiliate sponsored investment products classified as trading:

Available-for-sale Trading

December 31, 2022 March 31, 2023 December 31, 2022 March 31, 2023

Cost $ 252.3 $ 252.9 $ 19.7 $ 20.6

1 unchanged sentence

Fair value $ 251.0 $ 252.1 $ 18.0 $ 19.1

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

During the three months ended March 31, 2023, the Company received $ 101.7 million of proceeds from the maturity of available-for-sale securities.

For the three months ended March 31, 2023, the Company recognized $ 0.1 million of net unrealized losses on our debt securities classified as trading still held as of March 31, 2023.

Other Investments

Other investments consist of investments in funds advised by the Company’s Affiliates that are carried at net asset value (“NAV”) as a practical expedient and other investments without readily determinable fair values.

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

Investments Measured at NAV as a Practical Expedient

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

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.

The Company accounts for its interests in these funds using the equity method of accounting and is required to retain the specialized accounting of the investment companies.

The Company accounts for its interests in these funds using the equity method of accounting and is required to retain the specialized fair value accounting of the investment companies.

Because the funds’ investments do not have readily determinable fair values, the Company uses the NAV of these investments as a practical expedient for their fair values.

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

December 31, 2021 September 30, 2022

December 31, 2022 March 31, 2023

Category of Investment Fair Value Unfunded

11 unchanged sentences

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

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

(3) Fair value attributable to the controlling interest was $ 275.1 million and $ 279.4 million as of December 31, 2022 and March 31, 2023, respectively.

Investments Without Readily Determinable Fair Values

2 unchanged sentences

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

2021 September 30,

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

2022 March 31,

Cost $ 8.5 $ 8.5

1 unchanged sentence

Carrying amount $ 50.4 $ 50.4

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

For the three months ended March 31, 2023, the Company recorded no gains or losses on the underlying investment.

The following table presents the changes in Other investments:

For the Three Months Ended September 30,

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

Balance, beginning of period $ 298.3 $ 13.8 $ 312.1 $ 334.3 $ 50.4 $ 384.7

Net realized and unrealized gains (losses) (1)

18.0 19.7 37.7 ( 10.4 ) — ( 10.4 )

Purchases and commitments 17.7 — 17.7 11.2 — 11.2

Sales and distributions ( 10.4 ) — ( 10.4 ) ( 31.8 ) — ( 31.8 )

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

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

Balance, beginning of period $ 324.8 $ 50.4 $ 375.2 $ 371.2 $ 50.4 $ 421.6

Net realized and unrealized gains (losses) (1)

68.2 19.7 87.9 ( 8.8 ) — ( 8.8 )

Purchases and commitments 15.1 — 15.1 9.8 — 9.8

Sales and distributions ( 11.5 ) — ( 11.5 ) ( 11.5 ) — ( 11.5 )

Net realized and unrealized gains 15.3 — 15.3 6.1 — 6.1

Balance, end of period $ 343.7 $ 50.4 $ 394.1 $ 375.6 $ 50.4 $ 426.0

___________________________

(1) Recognized in Investment and other income.

Fair Value Measurements

3 unchanged sentences

Financial Assets

Investments in marketable securities $ 78.5 $ 64.5 $ 14.0 $ —

Investments in equity securities (1)

$ 447.9 $ 305.6 $ 142.3 $ —

Investments in debt securities (1)

269.0 — 269.0 —

Derivative financial instruments (2)

3 unchanged sentences

Derivative financial instruments 0.9 — 0.9 —

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Fair Value Measurements

September 30,

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

Financial Assets

Investments in marketable securities $ 183.7 $ 73.4 $ 110.3 $ —

Investments in equity securities (1)

$ 186.5 $ 45.0 $ 141.5 $ —

Investments in debt securities (1)

271.2 — 271.2 —

Derivative financial instruments (2)

4 unchanged sentences

__________________________

(1) Amounts are presented within Investments in marketable securities on the Consolidated Balance Sheets.

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

2 unchanged sentences

The following table presents the changes in level 3 liabilities:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended September 30,

Contingent Payment Obligations Affiliate

Equity Purchase Obligations Contingent Payment Obligations Affiliate

Equity Purchase Obligations

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

Net realized and unrealized gains (1)

— — ( 0.3 ) ( 1.4 )

Purchases and issuances (2)

Settlements and reductions — ( 3.5 ) — ( 4.8 )

Balance, end of period $ — $ 47.7 $ 13.9 $ 25.4

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

For the Nine Months Ended September 30,

Contingent Payment Obligations Affiliate

Equity Purchase Obligations Contingent Payment Obligations Affiliate

Equity Purchase Obligations

For the Three Months Ended March 31,

Contingent Payment Obligations Affiliate Equity Purchase Obligations Contingent Payment Obligations Affiliate Equity Purchase Obligations

Balance, beginning of period $ 40.3 $ 12.6 $ 21.0 $ 24.5

Net realized and unrealized losses (gains) (1)

— 2.2 ( 26.4 ) ( 5.3 )

Purchases and issuances (1)

1 unchanged sentence

Settlements and reductions — ( 5.3 ) — ( 7.5 )

Net realized and unrealized (gains) losses (2)

( 8.9 ) ( 0.3 ) 1.9 ( 0.3 )

Balance, end of period $ 31.4 $ 47.6 $ 22.9 $ 60.9

Net change in unrealized gains relating to instruments still held at the reporting date $ — $ — $ ( 26.4 ) $ ( 5.3 )

Net change in unrealized (gains) losses relating to instruments still held at the reporting date (1)

$ ( 8.9 ) $ ( 0.3 ) $ 1.9 $ ( 0.3 )

(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 in the Consolidated Statements of Income.

__________________________

(1) Affiliate equity purchase obligation activity includes transfers from Redeemable non-controlling interests.

(2) Gains and losses resulting from changes to expected payments are included in Other expenses (net) on the Consolidated Statements of Income and the accretion of these obligations is included in Interest expense on the Consolidated Statements of Income.

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Quantitative Information About Level 3 Fair Value Measurements

December 31, 2021 September 30, 2022

Techniques Unobservable

Input Fair Value Range Weighted Average (1)

December 31, 2022 March 31, 2023

Valuation Techniques Unobservable Input Fair Value Range Weighted Average (1)

Fair Value Range Weighted Average (1)

11 unchanged sentences

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

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

contingent payment obligations.

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

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

Affiliate equity purchase obligations include agreements to purchase Affiliate equity.

As of September 30, 2022, there were no changes to growth or discount rates that had a significant impact to Affiliate equity purchase obligations recorded in prior periods.

Affiliate equity purchase obligations include agreements to purchase Affiliate equity and represent the fair value of the expected future settlement amounts.

Changes to assumed growth rates and discount rates change the fair value of the Affiliate equity purchase obligations.

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

Other Financial Assets and Liabilities Not Carried at Fair Value

The following table summarizes other financial liabilities not carried at fair value:

December 31, 2021 September 30, 2022

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

December 31, 2022 March 31, 2023

Carrying Value Fair Value Carrying Value Fair Value Fair Value Hierarchy

5 unchanged sentences

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

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

The carrying value of the credit facilities (as defined in Note 7) approximates fair value because the credit facilities have variable interest based on selected short-term rates.

Investments in Affiliates and Affiliate Sponsored Investment Products

4 unchanged sentences

Upon the occurrence of certain events, management reviews and reconsiders its previous conclusion regarding the status of an entity as a VRE or a VIE.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company consolidates VREs when it has control over significant operating, financial, and investing decisions of the entity.

8 unchanged sentences

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

10 unchanged sentences

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

December 31, 2021 September 30, 2022

December 31, 2022 March 31, 2023

Unconsolidated

5 unchanged sentences

Affiliates accounted for under the equity method $ 1,273.5 $ 2,051.6 $ 839.3 $ 1,826.1

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

As of December 31, 2022 and March 31, 2023, the carrying value and maximum exposure to loss for all of the Company’s Affiliates accounted for under the equity method was $ 2,139.5 million and $ 1,920.2 million, respectively, including Affiliates accounted for under the equity method considered VREs of $ 87.9 million and $ 94.1 million, respectively.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Affiliate Sponsored Investment Products

5 unchanged sentences

However, for certain products, the Company’s consolidated Affiliates, as the investment manager, have the power to direct the activities of the investment product and have an exposure to the economics of the VIE that is more than insignificant, though generally only for a short period while the product is established and has yet to attract significant other investors.

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

When the products are consolidated, the Company retains the specialized investment company accounting principles of the underlying products, and all of the underlying investments are carried at fair value in Investments in marketable securities, with corresponding changes in the investments’ fair values included in Investment and other income.

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

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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

December 31, 2021 September 30, 2022

December 31, 2022 March 31, 2023

Unconsolidated

6 unchanged sentences

The following table summarizes the Company’s Debt:

2021 September 30,

2022 March 31,

Senior bank debt $ 349.9 $ 349.9

5 unchanged sentences

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

Effective January 1, 2022, the Company adjusted the carrying value of its junior convertible securities (see Note 2).

Senior Bank Debt

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

Both the revolver and the term loan mature on October 23, 2026.

The revolver matures on October 25, 2027 and 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.

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

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

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

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

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

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

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.

As of March 31, 2023, the interest rate for the Company’s

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

outstanding borrowings under the term loan was term-SOFR plus a SOFR adjustment of 0.10 % plus the marginal rate of 0.85 %.

As of December 31, 2022 and March 31, 2023, the Company had no outstanding borrowings under the revolver.

As of March 31, 2023, the Company had senior notes outstanding.

The carrying values of the senior notes are accreted to their principal amount at maturity over the remaining life of the underlying instrument.

The principal terms of the senior notes outstanding as of March 31, 2023 were as follows:

Senior Notes 2025

7 unchanged sentences

Call price As defined As defined As defined

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

2 unchanged sentences

Junior Subordinated Notes

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

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

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

As of March 31, 2023, the Company had junior subordinated notes outstanding, the respective principal terms of which are presented below:

Junior Subordinated Notes 2060

14 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.

Junior Convertible Securities

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

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

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

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

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

2021 2022 2021 2022

Junior Convertible Securities

As of March 31, 2023, the Company had $ 341.7 million of principal outstanding in its 5.15 % junior convertible trust preferred securities (the “junior convertible securities”), maturing in 2037.

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

As of December 31, 2022 and March 31, 2023, the unamortized issuance costs related to the junior convertible securities were $ 3.1 million and $ 3.0 million, respectively.

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

For the Three Months Ended March 31,

Contractual interest expense $ 5.0 $ 4.4

Amortization of debt issuance costs 0.1 0.1

Amortization of debt discount 0.8 — 2.4 —

Total $ 5.1 $ 4.5

5 unchanged sentences

The Company may redeem the junior convertible securities if the closing price of its common stock for 20 trading days in a period of 30 consecutive trading days exceeds 130 % of the then prevailing conversion price, and may also repurchase junior convertible securities in the open market or in privately negotiated transactions from time to time at management’s discretion.

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

Equity Distribution Program

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

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

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

During the three months ended March 31, 2022, the Company repurchased a portion of its junior convertible securities for a purchase price of $ 16.5 million and as a result of these repurchases, the Company reduced its Deferred income tax liability (net) by $ 2.7 million.

The Company did not repurchase any of its junior convertible securities during the three months ended March 31, 2023.

Commitments and Contingencies

3 unchanged sentences

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

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

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

As of March 31, 2023, these unfunded commitments were $ 154.9 million and may be called in future periods.

As of March 31, 2023, the Company was obligated to make deferred payments and was contingently liable to make payments in connection with certain of its consolidated Affiliates as follows:

Earliest Payable

1 unchanged sentence

Deferred payment obligations $ 65.0 $ — $ 65.0 $ 21.7 $ 43.3 $ —

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

Contingent payment obligations (1)

1 unchanged sentence

__________________________

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

(1) Fair value as of March 31, 2023.

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.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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

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

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

As of March 31, 2023, the Company was obligated to make payments of $ 8.8 million in 2023.

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

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

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

As of March 31, 2023, 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, of which $ 62.5 million may become payable in 2023 and the remainder may become payable through 2029.

As of March 31, 2023, the Company expected to make payments of approximately $ 13 million.

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

6 unchanged sentences

Foreign currency translation 5.3

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

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

Other ( 5.1 )

Balance, as of March 31, 2023 $ 2,648.9

Acquired Client Relationships (Net)

Definite-lived Indefinite-lived Total

Value Accumulated

Amortization Net Book

Value Net Book

Gross Book Value Accumulated Amortization Net Book Value Net Book Value Net Book Value

Balance, as of December 31, 2022 $ 1,355.1 $ ( 1,069.7 ) $ 285.4 $ 1,590.6 $ 1,876.0

1 unchanged sentence

Foreign currency translation 0.2 — 0.2 6.5 6.7

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

Transfers (1)

( 10.3 ) 10.3 — ( 4.1 ) ( 4.1 )

Balance, as of March 31, 2023 $ 1,345.0 $ ( 1,071.9 ) $ 273.1 $ 1,593.0 $ 1,866.1

__________________________

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

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

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

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

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

The Company recorded amortization expense within Intangible amortization and impairments in the Consolidated Statements of Income for these relationships of $ 12.6 million and $ 12.5 million for the three months ended March 31, 2022 and 2023, respectively.

Based on relationships existing as of March 31, 2023, the Company estimates that its consolidated amortization expense will be approximately $ 38 million for the remainder of 2023, approximately $ 35 million in 2024, and approximately $ 30 million in each of 2025, 2026, 2027, and approximately $ 25 million in 2028.

As of March 31, 2023, no impairments of indefinite-lived acquired client relationships were indicated .

Equity Method Investments in Affiliates

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

The Company expects the majority of the consideration paid for Systematica will be deductible for U.S.

tax purposes over a 15-year life.

The Company’s purchase price allocation for the investment was measured using a discounted cash flow analysis 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.

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

2021 September 30,

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

2022 March 31,

Goodwill $ 1,262.4 $ 1,278.4

4 unchanged sentences

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

Equity Method Investments in Affiliates (Net)

Equity Method Investments in Affiliates

Balance, as of December 31, 2022 $ 2,139.5

Investments in Affiliates 182.8

Earnings 79.5

1 unchanged sentence

Distributions of earnings ( 306.9 )

Return of capital ( 0.8 )

Foreign currency translation 25.0

Other ( 8.5 )

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

Balance, as of March 31, 2023 $ 1,920.2

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

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

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

The Company recorded amortization expense for these relationships of $ 23.3 million and $ 20.9 million for the three months ended March 31, 2022 and 2023, respectively.

Based on relationships existing as of March 31, 2023, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 65 million for the remainder of 2023, approximately $ 50 million in each of 2024 and 2025, approximately $ 45 million in each of 2026 and 2027, and approximately $ 35 million in 2028.

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

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

The Company had 20 and 21 Affiliates accounted for under the equity method as of December 31, 2022 and March 31, 2023.

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

1 unchanged sentence

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

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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

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

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

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

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

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

Related Party Transactions

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

The prior owner’s interests are presented within Other liabilities and were $ 28.5 million and $ 19.0 million as of December 31, 2021 and September 30, 2022, respectively.

The prior owner’s interests are presented within Other liabilities and were $ 21.0 million and $ 19.7 million as of December 31, 2022 and March 31, 2023, respectively.

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

2 unchanged sentences

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

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, 13, and 14.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Share-Based Compensation

The following table presents share-based compensation expense:

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

2021 2022 2021 2022

Share-based compensation $ 21.2 $ 15.2 $ 44.5 $ 45.0

For the Three Months Ended March 31,

Share-based compensation expense $ 14.7 $ 14.7

Tax benefit 1.7 1.7

As of December 31, 2022, the Company had unrecognized share-based compensation expense of $ 64.7 million.

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

As of March 31, 2023, the Company had unrecognized share-based compensation expense of $ 95.0 million, which will be recognized over a weighted average period of approximately three years (assuming no forfeitures).

Restricted Stock

6 unchanged sentences

Performance condition changes 0.0 73.81

Unvested units—September 30, 2022 1.1 105.87

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

Unvested units— March 31, 2023 1.0 131.44

For the three months ended March 31, 2022 and 2023, the Company granted restricted stock units with fair values of $ 45.3 million and $ 45.5 million, respectively.

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

Restricted stock units containing

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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

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

1 unchanged sentence

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

Stock Options Weighted Average

Exercise Price Weighted Average

Contractual Life

Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years)

Unexercised options outstanding— December 31, 2022 3.2 $ 76.81

4 unchanged sentences

Performance condition changes — —

Unexercised options outstanding—September 30, 2022 3.2 76.91 3.9

Exercisable at September 30, 2022 0.1 121.58 2.2

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

respectively.

Unexercised options outstanding— March 31, 2023 3.2 76.77 3.5

Exercisable at March 31, 2023 0.0 116.62 3.1

For the three months ended March 31, 2022, the Company granted stock options with fair values of $ 1.8 million.

The Company did not grant any stock options during the three months ended March 31, 2023.

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

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

All stock options have been granted with exercise

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

prices equal to the closing price of the Company’s common stock on the grant date.

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

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

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

For the three months ended March 31, 2022, the weighted average fair value of options granted was $ 47.84 .

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

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

For the Nine Months Ended September 30,

For the Three Months Ended March 31, 2022

Dividend yield 0.0 %

12 unchanged sentences

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Redeemable Non-controlling Interests

2 unchanged sentences

Transfers to Other liabilities ( 32.3 )

Transfers from Non-controlling interests 1.8

Changes in redemption value 101.7

Balance, as of September 30, 2022 (1)

Balance, as of March 31, 2023 (1)

__________________________

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

(1) As of December 31, 2022 and March 31, 2023, Redeemable non-controlling interests include consolidated Affiliate sponsored investment products primarily attributable to third-party investors of $ 20.1 million and $ 18.5 million, respectively.

Affiliate Equity

1 unchanged sentence

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

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

Distributions paid to non-controlling interest Affiliate equity holders were $ 122.5 million and $ 79.5 million for the three months ended March 31, 2022 and 2023, respectively.

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

1 unchanged sentence

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

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

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

For the three months ended March 31, 2022 and 2023,

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

the amount of cash paid for purchases was $ 5.3 million and $ 5.0 million, respectively.

For the three months ended March 31, 2022 and 2023, the total amount of cash received for issuances was $ 11.6 million and $ 12.3 million, respectively.

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

2 unchanged sentences

The following table presents Affiliate equity compensation expense:

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

2021 2022 2021 2022

For the Three Months Ended March 31,

Controlling interest $ 1.7 $ ( 0.7 )

4 unchanged sentences

December 31, 2022 $ 31.4 5 years $ 284.6 7 years

September 30, 2022 34.2 5 years 297.1 7 years

March 31, 2023 37.1 5 years 281.8 7 years

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

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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

The total receivable was $ 11.6 million and $ 11.0 million as of December 31, 2022 and March 31, 2023, respectively, and was included in Other assets.

The total payable was $ 24.5 million and $ 60.9 million as of December 31, 2022 and March 31, 2023, respectively, and was included in Other liabilities.

Effects of Changes in the Company’s Ownership in Affiliates

2 unchanged sentences

No gain or loss related to these transactions is recognized in the Consolidated Statements of Income or the Consolidated Statements of Comprehensive Income.

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

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

2021 2022 2021 2022

For the Three Months Ended March 31,

Net income (controlling interest) $ 146.0 $ 134.5

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

Increase (decrease) in controlling interest paid-in capital from Affiliate equity issuances 3.4 ( 3.6 )

Decrease in controlling interest paid-in capital from Affiliate equity purchases ( 25.9 ) ( 27.5 )

2 unchanged sentences

The following table presents the consolidated provision for income taxes:

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

2021 2022 2021 2022

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended March 31,

Controlling interest:

13 unchanged sentences

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

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

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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

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

The Company’s effective tax rate (controlling interest) for the three months ended March 31, 2022 was higher than the marginal tax rate of 24.5%, primarily due to increases in non-deductible compensation expense and unrecognized tax benefits, partially offset by tax benefits from foreign operations.

The Company’s effective tax rate (controlling interest) for the three months ended March 31, 2023 was lower than the marginal tax rate of 24.5%, primarily due to tax windfalls related to share-based compensation, partially offset by the impact of the increase in the UK corporate tax rate in 2023.

In August 2022, the Inflation Reduction Act was enacted into law.

The relevant provisions of the Inflation Reduction Act for the Company are the 15% corporate alternative minimum income tax and the 1% excise tax on repurchases of the Company’s common stock.

These provisions are effective as of January 1, 2023.

The Company does not currently expect the Inflation Reduction Act to have a material impact on its Consolidated Financial Statements.

The Company expects to record the excise tax as part of the cost basis of its common stock repurchased.

Earnings Per Share

2 unchanged sentences

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

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

2021 2022 2021 2022

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended March 31,

Net income (controlling interest) $ 146.0 $ 134.5

10 unchanged sentences

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

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

2021 2022 2021 2022

For the Three Months Ended March 31,

Stock options and restricted stock units 0.5 0.4

Shares issuable to settle Redeemable non-controlling interests 3.1 4.2

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

Comprehensive Income

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended September 30,

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

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

Change in net realized and unrealized gain (loss) on derivative financial instruments ( 1.9 ) ( 0.0 ) ( 1.9 ) ( 1.6 ) 0.0 ( 1.6 )

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

For the Nine Months Ended September 30,

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

For the Three Months Ended March 31,

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

Foreign currency translation gain (loss) $ ( 11.3 ) $ ( 0.5 ) $ ( 11.8 ) $ 29.5 $ ( 2.7 ) $ 26.8

Change in net realized and unrealized gain (loss) on derivative financial instruments 0.0 0.0 0.0 0.2 0.0 0.2

Change in net unrealized gain (loss) on available-for-sale debt securities — — — 0.5 ( 0.1 ) 0.4

Other comprehensive income (loss) $ ( 11.3 ) $ ( 0.5 ) $ ( 11.8 ) $ 30.2 $ ( 2.8 ) $ 27.4

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Adjustment Realized and

Unrealized Gains (Losses)

on Derivative Financial Instruments Total

on Derivative Financial Instruments Unrealized Gains

(Losses) on Investment

Securities Total

Balance, as of December 31, 2022 $ ( 296.4 ) $ ( 0.4 ) $ ( 1.0 ) $ ( 297.8 )

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

Other comprehensive income before reclassifications 26.8 0.3 0.4 27.5

Amounts reclassified — ( 0.1 ) — ( 0.1 )

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

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

Net other comprehensive income 26.8 0.2 0.4 27.4

Balance, as of March 31, 2023 $ ( 269.6 ) $ ( 0.2 ) $ ( 0.6 ) $ ( 270.4 )

Table of Content s

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

What changed 10-Q

Item 1. Financial Statements