What changed in this filing

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Item 1. Financial Statements

2023-08-07 compared with 2023-05-08 · 256 added, 136 removed, 594 unchanged (40% of the section changed)

3 unchanged sentences

(in millions, except per share data)

For the Three Months Ended March 31,

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

2022 2023 2022 2023

Consolidated revenue $ 604.1 $ 512.5 $ 1,211.4 $ 1,029.9

8 unchanged sentences

Equity method income (net) 30.5 55.8 79.1 114.5

Investment and other income 13.6 38.0

Investment and other income (expense) ( 22.0 ) 26.5 ( 8.4 ) 64.3

Income before income taxes 212.0 220.2 486.4 453.6

11 unchanged sentences

(in millions)

For the Three Months Ended March 31,

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

2022 2023 2022 2023

Net income $ 174.0 $ 187.4 $ 392.6 $ 375.9

11 unchanged sentences

(in millions)

2022 March 31,

2022 June 30,

Cash and cash equivalents $ 429.2 $ 785.5

32 unchanged sentences

(in millions)

Three Months Ended March 31, 2022 Total Stockholders’ Equity

Three Months Ended June 30, 2022 Total Stockholders’ Equity

Stock Additional

4 unchanged sentences

Interests Total

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

Net income — — — 109.4 — 64.6 174.0

Other comprehensive loss, net of tax — — ( 52.5 ) — — ( 21.5 ) ( 74.0 )

Share-based compensation — 15.1 — — — — 15.1

Common stock issued under share-based incentive plans — ( 0.2 ) — — 1.2 — 1.0

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

Dividends ($ 0.01 per share)

— — — ( 0.3 ) — — ( 0.3 )

Affiliate equity activity:

Affiliate equity compensation — 2.0 — — — 12.1 14.1

Issuances — 0.1 — — — 1.4 1.5

Purchases — ( 2.5 ) — — — 2.5 —

Changes in redemption value of Redeemable non-controlling interests — 79.9 — — — — 79.9

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

Capital contributions and other — — — — — 10.4 10.4

Distributions to non-controlling interests — — — — — ( 89.3 ) ( 89.3 )

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

Three Months Ended June 30, 2023 Total Stockholders’ Equity

Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Retained

Earnings Treasury

Interests Total

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

Net income — — — 125.3 — 62.1 187.4

Other comprehensive income, net of tax — — 17.1 — — 7.3 24.4

Share-based compensation — 14.7 — — — — 14.7

Common stock issued under share-based incentive plans — ( 0.2 ) — — 0.1 — ( 0.1 )

Share repurchases — 59.1 — — ( 104.0 ) — ( 44.9 )

Dividends ($ 0.01 per share)

— — — ( 0.4 ) — — ( 0.4 )

Affiliate equity activity:

Affiliate equity compensation — 7.6 — — — 10.6 18.2

Issuances — ( 4.5 ) — — — 5.9 1.4

Purchases — 6.8 — — — ( 1.8 ) 5.0

Changes in redemption value of Redeemable non-controlling interests — 4.5 — — — — 4.5

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

Capital contributions and other — — — — — 15.8 15.8

Distributions to non-controlling interests — — — — — ( 76.9 ) ( 76.9 )

June 30, 2023 $ 0.6 $ 651.9 $ ( 161.2 ) $ 5,977.2 $ ( 3,070.5 ) $ 970.4 $ 4,368.4

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

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in millions)

Six Months Ended June 30, 2022 Total Stockholders' Equity

Stock Additional

Capital Accumulated

Comprehensive 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

12 unchanged sentences

Changes in redemption value of Redeemable non-controlling interests — 86.9 — — — — 86.9

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

Capital contributions and other — — — — — 34.3 34.3

Distributions to non-controlling interests — — — — — ( 211.8 ) ( 211.8 )

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

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

Six Months Ended June 30, 2023 Total Stockholders' Equity

Stock Additional

1 unchanged sentence

Comprehensive

Loss Retained

Income (Loss) Retained

Earnings Treasury

5 unchanged sentences

Common stock issued under share-based incentive plans — ( 39.3 ) — — 14.1 — ( 25.2 )

Share repurchases — 59.1 — — ( 104.0 ) — ( 44.9 )

Dividends ($ 0.02 per share)

5 unchanged sentences

Changes in redemption value of Redeemable non-controlling interests — ( 97.2 ) — — — — ( 97.2 )

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

Capital contributions and other — — — — — 12.5 12.5

Distributions to non-controlling interests — — — — — ( 156.4 ) ( 156.4 )

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

June 30, 2023 $ 0.6 $ 651.9 $ ( 161.2 ) $ 5,977.2 $ ( 3,070.5 ) $ 970.4 $ 4,368.4

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

2 unchanged sentences

(in millions)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flow from (used in) operating activities:

5 unchanged sentences

Equity method income (net) ( 79.1 ) ( 114.5 )

Distributions of earnings received from equity method investments 173.1 305.5

Share-based compensation and Affiliate equity expense 30.9 25.3

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

Distributions received from equity method investments 276.4 350.9

Share-based compensation and Affiliate equity compensation expense 56.7 57.4

Net realized and unrealized losses (gains) on investment securities 8.4 ( 48.2 )

Other non-cash items ( 8.0 ) ( 0.1 )

2 unchanged sentences

Sales of securities by consolidated Affiliate sponsored investment products 21.7 24.6

Increase in receivables ( 52.2 ) ( 92.2 )

(Increase) decrease in other assets ( 1.8 ) 2.9

Decrease (increase) in receivables 0.5 ( 163.8 )

Decrease in other assets 9.4 10.0

Decrease in payables, accrued liabilities, and other liabilities ( 206.8 ) ( 201.5 )

2 unchanged sentences

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

Return of capital from equity method investments 0.8 —

Purchase of fixed assets ( 6.1 ) ( 4.0 )

1 unchanged sentence

Maturities and sales of investment securities 16.4 510.1

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

Cash flow (used in) from investing activities ( 172.0 ) 291.1

Cash flow from (used in) financing activities:

4 unchanged sentences

Distributions to non-controlling interests ( 211.8 ) ( 156.4 )

Affiliate equity issuances (net) 6.3 7.3

Affiliate equity (purchases) / issuances (net) ( 19.1 ) ( 8.4 )

Subscriptions (redemptions) to consolidated Affiliate sponsored investment products, net 6.9 ( 5.3 )

26 unchanged sentences

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.

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.

The Company is evaluating the impact of this standard and it currently does not expect the adoption to have a material impact on its Consolidated Financial Statements.

Investments in Marketable Securities

1 unchanged sentence

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

2022 March 31,

2022 June 30,

Cost $ 394.4 $ 80.1

2 unchanged sentences

Fair value $ 447.9 $ 95.8

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.

As of December 31, 2022 and June 30, 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 $ 49.9 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

In July 2023, the Company sold its remaining 2.6 million ordinary shares of EQT.

As of December 31, 2022 and June 30, 2023, investments in equity securities include consolidated Affiliate sponsored investment products with fair values of $ 23.5 million and $ 20.6 million, respectively.

For the three and six months ended June 30, 2022, the Company recognized net unrealized losses on equity securities still held as of June 30, 2022 of $ 18.7 million and $ 24.9 million, respectively.

For the three and six months ended June 30, 2023,

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

the Company recognized net unrealized gains on equity securities still held as of June 30, 2023 of $ 2.6 million and $ 3.9 million, respectively.

Debt Securities

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

1 unchanged sentence

Available-for-Sale Trading

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

2022 June 30,

2023 December 31,

2022 June 30,

Cost $ 252.3 $ 330.8 $ 19.7 $ 20.3

1 unchanged sentence

Fair value $ 251.0 $ 329.1 $ 18.0 $ 19.3

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.

For the three months ended June 30, 2022 and 2023, and for the six months ended June 30, 2022 there were no maturities or sales of available-for-sale securities.

For the six months ended June 30, 2023, the Company received $ 101.7 million of proceeds from the maturity of available-for-sale securities.

For the three and six months ended June 30, 2022, the Company recognized net unrealized losses on debt securities classified as trading still held as of June 30, 2022 of $ 1.9 million and $ 2.7 million, respectively.

For the three and six months ended June 30, 2023, the Company recognized net unrealized gains (losses) on debt securities classified as trading still held as of June 30, 2023 of $ 0.0 million and $( 0.0) million , respectively.

Other Investments

7 unchanged sentences

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

December 31, 2022 March 31, 2023

Category of Investment Fair Value Unfunded

December 31, 2022 June 30, 2023

Fair Value Unfunded

Commitments Fair Value Unfunded

10 unchanged sentences

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

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

(3) Fair value attributable to the controlling interest was $ 275.1 million and $ 295.7 million as of December 31, 2022 and June 30, 2023, respectively.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

2022 March 31,

2022 June 30,

Cost $ 8.5 $ 8.5

1 unchanged sentence

Carrying amount $ 50.4 $ 50.4

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

For the three and six months ended June 30, 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 March 31,

For the Three Months Ended June 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

2 unchanged sentences

Sales and distributions ( 7.8 ) — ( 7.8 ) ( 17.4 ) — ( 17.4 )

Net realized and unrealized (losses) gains ( 13.7 ) — ( 13.7 ) $ 12.2 $ — $ 12.2

Balance, end of period $ 334.3 $ 50.4 $ 384.7 $ 406.6 $ 50.4 $ 457.0

For the Six Months Ended June 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 $ 324.8 $ 50.4 $ 375.2 $ 371.2 $ 50.4 $ 421.6

Purchases and commitments 27.1 — 27.1 46.0 — 46.0

Sales and distributions ( 19.3 ) — ( 19.3 ) ( 28.9 ) — ( 28.9 )

Net realized and unrealized gains 1.7 — 1.7 $ 18.3 $ — $ 18.3

2 unchanged sentences

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Fair Value Measurements

10 unchanged sentences

Derivative financial instruments 0.9 — 0.9 —

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Fair Value Measurements

16 unchanged sentences

The following table presents the changes in level 3 liabilities:

For the Three Months Ended March 31,

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

For the Three Months Ended June 30,

Contingent Payment Obligations Affiliate

Equity Purchase Obligations Contingent Payment Obligations Affiliate

Equity Purchase Obligations

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

Purchases and issuances (1)

Settlements and reductions — ( 26.9 ) — ( 16.8 )

Net realized and unrealized (gains) losses (2)

( 17.2 ) ( 3.6 ) 0.5 ( 2.5 )

Balance, end of period $ 14.2 $ 25.0 $ 23.4 $ 68.4

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

$ ( 17.2 ) $ ( 3.5 ) $ 0.5 $ ( 1.8 )

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Six Months Ended June 30,

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

Purchases and issuances (1)

— 48.5 — 71.0

Settlements and reductions — ( 32.2 ) — ( 24.3 )

8 unchanged sentences

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Quantitative Information About Level 3 Fair Value Measurements

December 31, 2022 March 31, 2023

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

December 31, 2022 June 30, 2023

Techniques Unobservable

Input Fair Value Range Weighted Average (1)

Fair Value Range Weighted Average (1)

2 unchanged sentences

Discount rates 6 %

6 % 5 % - 7 %

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

14 unchanged sentences

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

December 31, 2022 March 31, 2023

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

December 31, 2022 June 30, 2023

Carrying Value Fair Value Carrying Value Fair Value Fair Value Hierarchy

12 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.

13 unchanged sentences

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

5 unchanged sentences

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

December 31, 2022 March 31, 2023

December 31, 2022 June 30, 2023

Unconsolidated

5 unchanged sentences

Affiliates accounted for under the equity method $ 1,273.5 $ 2,051.6 $ 916.9 $ 1,846.8

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)

As of December 31, 2022 and June 30, 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 $ 1,943.8 million, respectively, including Affiliates accounted for under the equity method considered VREs of $ 87.9 million and $ 97.0 million, respectively.

Affiliate Sponsored Investment Products

10 unchanged sentences

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, 2022 March 31, 2023

December 31, 2022 June 30, 2023

Unconsolidated

5 unchanged sentences

Affiliate sponsored investment products $ 4,878.6 $ 15.3 $ 5,600.1 $ 22.5

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following table summarizes the Company’s Debt:

2022 March 31,

2022 June 30,

Senior bank debt $ 349.9 $ 349.9

10 unchanged sentences

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.

As of June 30, 2023, 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 %.

As of December 31, 2022 and June 30, 2023, the Company had no outstanding borrowings under the revolver.

As of June 30, 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:

The principal terms of the senior notes outstanding as of June 30, 2023 were as follows:

Senior Notes 2025

11 unchanged sentences

Junior Subordinated Notes

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of June 30, 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.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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.

As of June 30, 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.

As of December 31, 2022 and June 30, 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,

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

2022 2023 2022 2023

Contractual interest expense $ 4.5 $ 4.4 $ 9.5 $ 8.8

7 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 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.

During the six months ended June 30, 2022, the Company

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

repurchased a portion of its junior convertible securities for a purchase price of $ 60.9 million and as a result of these repurchases, the Company reduced its Deferred income tax liability (net) by $ 11.7 million.

The Company did not repurchase any of its junior convertible securities during the six months ended June 30, 2023.

Commitments and Contingencies

3 unchanged sentences

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

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:

As of June 30, 2023, these unfunded commitments were $ 154.3 million and may be called in future periods.

As of June 30, 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

4 unchanged sentences

__________________________

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

(1) Fair value as of June 30, 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)

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 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 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.

As of June 30, 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, all of which may become payable from 2024 through 2029.

As of June 30, 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.

7 unchanged sentences

Other ( 5.1 )

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

Balance, as of June 30, 2023 $ 2,659.6

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Acquired Client Relationships (Net)

Definite-lived Indefinite-lived Total

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

Value Accumulated

Amortization Net Book

Value Net Book

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

3 unchanged sentences

( 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

Balance, as of June 30, 2023 $ 1,346.4 $ ( 1,085.7 ) $ 260.7 $ 1,602.4 $ 1,863.1

__________________________

1 unchanged sentence

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 $ 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 .

The Company recorded amortization expense within Intangible amortization and impairments in the Consolidated Statements of Income for these relationships of $ 12.5 million and $ 25.0 million for the three and six months ended June 30, 2022, respectively, and $ 12.5 million and $ 25.0 million for the three and six months ended June 30, 2023, respectively.

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

As of June 30, 2023, no impairments of indefinite-lived acquired client relationships were indicated.

In July 2023, the Company entered into an agreement with a third party and one of the Company’s consolidated Affiliates, under which the third party will acquire 100 % of the outstanding equity interests in the Affiliate.

Pursuant to the terms of the agreement, the Company will receive gross cash proceeds of approximately $ 294 million.

The Affiliate will continue to be included in the Company’s results until closing of the transaction, which is expected to occur in the second half of 2023, and is subject to customary closing conditions.

As of August 7, 2023, the gain on the transaction cannot be estimated because it is dependent on the amount of goodwill allocated to the Affiliate, which cannot be determined until closing.

Equity Method Investments in Affiliates

1 unchanged sentence

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

2022 March 31,

2022 June 30,

Goodwill $ 1,262.4 $ 1,280.7

4 unchanged sentences

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

Equity Method Investments in Affiliates

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Equity Method Investments in Affiliates (Net)

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

3 unchanged sentences

Foreign currency translation 29.2

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

Balance, as of June 30, 2023 $ 1,943.8

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

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

The Company recorded amortization expense for these relationships of $ 34.6 million and $ 57.9 million for the three and six months ended June 30, 2022, respectively, and $ 20.9 million and $ 41.8 million for the three and six months ended June 30, 2023, respectively.

Based on relationships existing as of June 30, 2023, the Company estimates the amortization expense attributable to its Affiliates will be approximately $ 42 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 20 Affiliates accounted for under the equity method as of December 31, 2022 and June 30, 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 June 2023, the Company entered into an agreement to acquire a minority equity interest in Forbion Group Holding B.V.

(“Forbion”), a pan-European venture capital and growth equity firm focused on investing in high-quality life sciences companies.

Following the close of the transaction, Forbion partners will continue to hold a significant majority of the equity of the business and direct its day-to-day operations.

The transaction is expected to close during the second half of 2023, and is subject to customary closing conditions.

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 $ 21.0 million and $ 19.7 million as of December 31, 2022 and March 31, 2023, respectively.

The prior owner’s interests are presented within Other liabilities and were $ 21.0 million and $ 19.2 million as of December 31, 2022 and June 30, 2023, respectively.

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

4 unchanged sentences

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, 13, and 14.

Share-Based Compensation

The following table presents share-based compensation expense:

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

2022 2023 2022 2023

Share-based compensation $ 15.1 $ 14.7 $ 29.8 $ 29.4

The following table presents share-based compensation expense:

For the Three Months Ended March 31,

Share-based compensation expense $ 14.7 $ 14.7

Tax benefit 1.9 1.9 3.7 3.7

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

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).

As of June 30, 2023, the Company had unrecognized share-based compensation expense of $ 82.7 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— 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.

Unvested units–June 30, 2023 1.0 131.67

For the six months ended June 30, 2022 and 2023, the Company granted restricted stock units with fair values of $ 46.3 million and $ 48.3 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.

3 unchanged sentences

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

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

Stock Options Weighted Average

Exercise Price Weighted Average

Contractual Life

Unexercised options outstanding–December 31, 2022 3.2 $ 76.81

4 unchanged sentences

Performance condition changes — —

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.

Unexercised options outstanding–June 30, 2023 3.2 76.74 3.2

Exercisable at June 30, 2023 0.0 121.51 3.2

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

The Company did not grant any stock options during the six months ended June 30, 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

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.

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

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

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

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the six months ended June 30, 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 Three Months Ended March 31, 2022

For the Six Months Ended June 30,

Dividend yield 0.0 %

16 unchanged sentences

Transfers to Other liabilities ( 57.7 )

Transfers from Non-controlling interests 0.1

Changes in redemption value 97.2

Balance, as of March 31, 2023 (1)

Balance, as of June 30, 2023 (1)

___________________________

(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.

(1) As of December 31, 2022 and June 30, 2023, Redeemable non-controlling interests include consolidated Affiliate sponsored investment products primarily attributable to third-party investors of $ 20.1 million and $ 16.0 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 $ 122.5 million and $ 79.5 million for the three months ended March 31, 2022 and 2023, respectively.

Distributions paid to non-controlling interest Affiliate equity holders were $ 211.8 million and $ 156.4 million for the six months ended June 30, 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 three months ended March 31, 2022 and 2023,

For the six months ended June 30, 2022 and 2023, the amount of cash paid for purchases was $ 32.2 million and $ 21.8 million, respectively.

For the six months ended June 30, 2022 and 2023, the total amount of cash received for issuances was $ 13.1 million and $ 13.4 million, respectively.

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 March 31,

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

2022 2023 2022 2023

Controlling interest $ ( 1.4 ) $ 6.8 $ 0.3 $ 6.1

4 unchanged sentences

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

March 31, 2023 37.1 5 years 281.8 7 years

June 30, 2023 29.5 5 years 271.0 6 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 $ 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.

The total receivable was $ 11.6 million and $ 6.9 million as of December 31, 2022 and June 30, 2023, respectively, and was included in Other assets.

The total payable was $ 24.5 million and $ 68.4 million as of December 31, 2022 and June 30, 2023, respectively, and was included in Other liabilities.

Effects of Changes in the Company’s Ownership in Affiliates

3 unchanged sentences

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

For the Three Months Ended March 31,

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

2022 2023 2022 2023

Net income (controlling interest) $ 109.4 $ 125.3 $ 255.4 $ 259.8

6 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended March 31,

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

2022 2023 2022 2023

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 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.

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

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

The Company’s effective tax rate (controlling interest) for the three months ended June 30, 2023 was lower than the marginal tax rate of 24.5%, primarily due to tax benefits resulting from a decrease in the Company’s 2022 estimated foreign tax expense.

The Company’s effective tax rate (controlling interest) for the six months ended June 30, 2023 was lower than the marginal tax rate due to tax benefits resulting from a decrease in the Company’s 2022 estimated foreign tax expense and tax windfalls attributable to share-based compensation.

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

1 unchanged sentence

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.

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

The Company records the excise tax as part of the cost basis of its common stock repurchased .

Earnings Per Share

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Three Months Ended March 31,

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

2022 2023 2022 2023

Net income (controlling interest) $ 109.4 $ 125.3 $ 255.4 $ 259.8

10 unchanged sentences

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

For the Three Months Ended March 31,

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

2022 2023 2022 2023

Stock options and restricted stock units 0.3 0.2 0.3 0.3

Shares issuable to settle Redeemable non-controlling interests 4.6 2.5 1.8 3.8

For the three and six months ended June 30, 2023, under its authorized share repurchase programs, the Company repurchased 0.7 million shares of its common stock at an average price per share of $ 125.13 .

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.

The Company received an initial share delivery of 1.1 million shares in December 2022, which represented 80 % of the upfront payment based on the closing price of its common stock on the agreement date.

In June 2023, the Company received a final share delivery of 0.4 million shares.

Under this agreement the Company repurchased a total of 1.5 million shares at an average price of $ 147.29 per share.

Comprehensive Income

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

For the Three Months Ended March 31,

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

For the Three Months Ended June 30,

Pre-Tax Tax (Expense)

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

Foreign currency translation gain (loss) $ ( 71.8 ) $ ( 1.6 ) $ ( 73.4 ) $ 25.7 $ ( 1.2 ) $ 24.5

2 unchanged sentences

Other comprehensive income (loss) $ ( 72.4 ) $ ( 1.6 ) $ ( 74.0 ) $ 25.4 $ ( 1.0 ) $ 24.4

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

For the Six Months Ended June 30,

Pre-Tax Tax (Expense)

Benefit Net of Tax Pre-Tax Tax (Expense)

Benefit Net of Tax

Foreign currency translation gain (loss) $ ( 83.1 ) $ ( 2.1 ) $ ( 85.2 ) $ 55.2 $ ( 3.9 ) $ 51.3

Change in net realized and unrealized gain (loss) on derivative financial instruments ( 0.6 ) 0.0 ( 0.6 ) 0.7 0.0 0.7

Change in net unrealized gain (loss) on available-for-sale debt securities — — — ( 0.3 ) 0.1 ( 0.2 )

Other comprehensive income (loss) $ ( 83.7 ) $ ( 2.1 ) $ ( 85.8 ) $ 55.6 $ ( 3.8 ) $ 51.8

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

Adjustment Realized and

Unrealized Gains (Losses)

on Derivative Financial Instruments Unrealized Gains

(Losses) on Investment

on Derivative Financial Instruments Unrealized

Gains (Losses)

on Investment Available-for-Sale Debt

Securities Total

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

Other comprehensive income before reclassifications 26.8 0.3 0.4 27.5

Other comprehensive income (loss) before reclassifications 51.3 0.8 ( 0.2 ) 51.9

Amounts reclassified — ( 0.1 ) — ( 0.1 )

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

Net other comprehensive income (loss) 51.3 0.7 ( 0.2 ) 51.8

Balance, as of June 30, 2023 $ ( 245.1 ) $ 0.3 $ ( 1.2 ) $ ( 246.0 )

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