Affiliated Managers Group, Inc. (NYSE: AMG) today reported its
financial and operating results for the fourth quarter and full
year 2021.
Jay C. Horgen, President and Chief
Executive Officer of AMG, said:“AMG generated excellent
results in 2021, including year-over-year growth of 33% in Adjusted
EBITDA and 37% in Economic Earnings per Share, given strong
Affiliate investment performance, and the positive impact of new
investments and share repurchases. Client cash flows were positive
for the quarter and full year, excluding certain quantitative
strategies. Liquid and illiquid alternative strategies generated
$12 billion in net inflows during the quarter, reflecting AMG's
strategic business evolution toward secular growth areas. As we
continue to increase AMG's participation in growth areas —
including private markets, specialty fixed income, wealth
management, Asia, and ESG — we are well-positioned for future
growth.
“In 2021, we successfully executed on our growth strategy, in
partnering with new Affiliates, accelerating growth at our existing
Affiliates, and enhancing our strategic capabilities. We were
pleased to welcome four high-quality Affiliates over the last 12
months, including private real estate manager Abacus, ESG-dedicated
managers Parnassus Investments and Boston Common Asset Management,
and private credit manager OCP Asia. In addition, we recently
increased our investment in Systematica, one of the industry's
largest woman-owned and -led alternative firms. Our recent new
investment activity reflects increasing demand for AMG's proven
range of partnership solutions, which today includes growth
capital, distribution, and succession planning — and looking ahead,
AMG's unique approach will continue to attract independent managers
seeking a strategic partner that can enhance their long-term growth
and competitive positioning.
“Given our strong execution in 2021 and resulting significant
business momentum, the quality and diversity of our Affiliates, and
our disciplined approach to capital deployment, we entered 2022
with increased earnings power, a strong and flexible balance sheet,
and an outstanding opportunity to drive further earnings growth and
generate significant long-term value for our shareholders."
FINANCIAL
HIGHLIGHTS |
|
|
Three Months Ended |
|
|
|
Year Ended |
|
(in millions, except as noted
and per share data) |
|
|
12/31/2020 |
|
12/31/2021 |
|
|
|
12/31/2020 |
|
12/31/2021 |
|
Operating Performance
Measures |
|
|
|
|
|
|
|
|
|
|
|
|
AUM (at period end, in billions) |
|
|
$ |
716.2 |
|
|
$ |
813.8 |
|
|
|
|
$ |
716.2 |
|
|
$ |
813.8 |
|
|
Average AUM (in billions) |
|
|
|
700.9 |
|
|
|
809.7 |
|
|
|
|
|
664.4 |
|
|
|
761.7 |
|
|
Net client cash flows (in billions) |
|
|
|
(15.8 |
) |
|
|
(6.2 |
) |
|
|
|
|
(61.8 |
) |
|
|
(18.5 |
) |
|
Aggregate fees |
|
|
|
1,450.7 |
|
|
|
1,935.3 |
|
|
|
|
|
4,626.4 |
|
|
|
5,611.4 |
|
|
Financial Performance
Measures |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (controlling interest) |
|
|
$ |
115.9 |
|
|
$ |
178.5 |
|
|
|
|
$ |
202.2 |
|
|
$ |
565.7 |
|
|
Earnings per share (diluted) (1) |
|
|
|
2.54 |
|
|
|
4.17 |
|
|
|
|
|
4.33 |
|
|
|
13.05 |
|
|
Supplemental
Performance Measures (2) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (controlling interest) |
|
|
$ |
255.2 |
|
|
$ |
356.8 |
|
|
|
|
$ |
798.8 |
|
|
$ |
1,058.6 |
|
|
Economic net income (controlling interest) |
|
|
|
191.4 |
|
|
|
255.3 |
|
|
|
|
|
624.4 |
|
|
|
779.8 |
|
|
Economic earnings per share |
|
|
|
4.22 |
|
|
|
6.10 |
|
|
|
|
|
13.36 |
|
|
|
18.28 |
|
|
For additional information on our Supplemental Performance
Measures, including reconciliations to GAAP, see the Financial
Tables and Notes.
*Incremental investment in Systematica closed on January 14,
2022, and is not included in presentation of fourth quarter or
full-year financial results.
Capital Management During the fourth quarter of
2021, the Company repurchased approximately $120 million in common
stock bringing total share repurchases to $510 million for the full
year 2021, and announced a fourth-quarter cash dividend of $0.01
per share of common stock, payable March 3, 2022 to stockholders of
record as of the close of business on February 17, 2022. In
addition, AMG’s Board of Directors increased the Company’s share
repurchase authorization to a total of 5.1 million shares.
About AMGAMG is a leading partner to
independent active investment management firms globally. AMG’s
strategy is to generate long‐term value by investing in a diverse
array of high-quality partner-owned investment firms through a
proven partnership approach, and allocating resources across the
Company's unique opportunity set to the areas of highest growth and
return. AMG’s innovative partnership approach enables each
Affiliate’s management team to own significant equity in their firm
while maintaining operational and investment autonomy. In addition,
AMG offers its Affiliates growth capital, global distribution, and
other strategic value-added capabilities, which enhance the
long-term growth of these independent businesses and enable them to
align equity incentives across generations of principals to build
enduring franchises. As of December 31, 2021, AMG’s aggregate
assets under management were approximately $814 billion across a
broad range of return-oriented strategies. For more information,
please visit the Company’s website at www.amg.com.
Conference Call, Replay and Presentation
InformationA conference call will be held with AMG’s
management at 8:30 a.m. Eastern time today. Parties interested in
listening to the conference call should dial 1-877-407-8291 (U.S.
calls) or 1-201-689-8345 (non-U.S. calls) shortly before the call
begins.
The conference call will also be available for replay beginning
approximately one hour after the conclusion of the call. To hear a
replay of the call, please dial 1-877-660-6853 (U.S. calls) or
1-201-612-7415 (non-U.S. calls) and provide conference ID 13726515.
The live call and replay of the session and a presentation
highlighting the Company's performance can also be accessed via
AMG’s website at https://ir.amg.com/.
Investor Relations:Anjali Aggarwal
Media Relations:
Ann Imes
+1 (617) 747-3300ir@amg.compr@amg.com
Financial Tables Follow
|
ASSETS
UNDER MANAGEMENT - STATEMENT OF CHANGES (in billions) |
|
BY STRATEGY - QUARTER TO DATE |
|
Alternatives |
|
|
Global Equities |
|
|
U.S. Equities |
|
|
Multi-Asset & Fixed
Income |
|
|
Total |
|
AUM, September 30,
2021 |
$ |
230.0 |
|
$ |
279.7 |
|
$ |
112.1 |
|
$ |
126.0 |
|
$ |
747.8 |
|
Client cash inflows and commitments |
|
17.0 |
|
|
8.6 |
|
|
7.8 |
|
|
7.1 |
|
|
40.5 |
|
Client cash outflows |
|
(10.0 |
) |
|
(20.3 |
) |
|
(10.3 |
) |
|
(6.1 |
) |
|
(46.7 |
) |
Net client cash
flows |
|
7.0 |
|
|
(11.7 |
) |
|
(2.5 |
) |
|
1.0 |
|
|
(6.2 |
) |
New investments |
|
1.4 |
|
|
— |
|
|
50.6 |
|
|
0.4 |
|
|
52.4 |
|
Market changes |
|
1.5 |
|
|
9.6 |
|
|
10.7 |
|
|
2.8 |
|
|
24.6 |
|
Foreign exchange |
|
0.1 |
|
|
0.2 |
|
|
0.1 |
|
|
(0.1 |
) |
|
0.3 |
|
Realizations and distributions (net) |
|
(1.8 |
) |
|
(0.3 |
) |
|
(0.3 |
) |
|
— |
|
|
(2.4 |
) |
Other |
|
— |
|
|
— |
|
|
— |
|
|
(2.7 |
) |
|
(2.7 |
) |
AUM, December 31,
2021 |
$ |
238.2 |
|
$ |
277.5 |
|
$ |
170.7 |
|
$ |
127.4 |
|
$ |
813.8 |
|
BY STRATEGY - YEAR TO DATE |
|
Alternatives |
|
|
Global Equities |
|
|
U.S. Equities |
|
|
Multi-Asset & Fixed
Income |
|
|
Total |
|
AUM, December 31,
2020 |
$ |
216.5 |
|
$ |
278.5 |
|
$ |
103.5 |
|
$ |
117.7 |
|
$ |
716.2 |
|
Client cash inflows and commitments |
|
46.5 |
|
|
38.3 |
|
|
25.7 |
|
|
25.7 |
|
|
136.2 |
|
Client cash outflows |
|
(25.2 |
) |
|
(72.3 |
) |
|
(33.0 |
) |
|
(24.2 |
) |
|
(154.7 |
) |
Net client cash
flows |
|
21.3 |
|
|
(34.0 |
) |
|
(7.3 |
) |
|
1.5 |
|
|
(18.5 |
) |
New investments |
|
4.0 |
|
|
2.9 |
|
|
51.7 |
|
|
0.4 |
|
|
59.0 |
|
Market changes |
|
11.3 |
|
|
31.3 |
|
|
23.0 |
|
|
10.7 |
|
|
76.3 |
|
Foreign exchange |
|
(0.5 |
) |
|
(0.7 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(1.4 |
) |
Realizations and distributions (net) |
|
(12.4 |
) |
|
(0.4 |
) |
|
(0.2 |
) |
|
(0.2 |
) |
|
(13.2 |
) |
Other |
|
(2.0 |
) |
|
(0.1 |
) |
|
0.1 |
|
|
(2.6 |
) |
|
(4.6 |
) |
AUM, December 31,
2021 |
$ |
238.2 |
|
$ |
277.5 |
|
$ |
170.7 |
|
$ |
127.4 |
|
$ |
813.8 |
|
BY CLIENT TYPE - QUARTER TO DATE |
|
Institutional |
|
|
Retail |
|
|
High Net Worth |
|
|
Total |
|
AUM, September 30,
2021 |
$ |
406.5 |
|
$ |
200.8 |
|
$ |
140.5 |
|
$ |
747.8 |
|
Client cash inflows and commitments |
|
19.8 |
|
|
12.6 |
|
|
8.1 |
|
|
40.5 |
|
Client cash outflows |
|
(21.3 |
) |
|
(19.5 |
) |
|
(5.9 |
) |
|
(46.7 |
) |
Net client cash
flows |
|
(1.5 |
) |
|
(6.9 |
) |
|
2.2 |
|
|
(6.2 |
) |
New investments |
|
3.7 |
|
|
48.7 |
|
|
— |
|
|
52.4 |
|
Market changes |
|
7.6 |
|
|
11.9 |
|
|
5.1 |
|
|
24.6 |
|
Foreign exchange |
|
0.2 |
|
|
— |
|
|
0.1 |
|
|
0.3 |
|
Realizations and distributions (net) |
|
(1.6 |
) |
|
(0.6 |
) |
|
(0.2 |
) |
|
(2.4 |
) |
Other |
|
(1.1 |
) |
|
(1.4 |
) |
|
(0.2 |
) |
|
(2.7 |
) |
AUM, December 31,
2021 |
$ |
413.8 |
|
$ |
252.5 |
|
$ |
147.5 |
|
$ |
813.8 |
|
BY CLIENT TYPE - YEAR TO DATE |
|
Institutional |
|
|
Retail |
|
|
High Net Worth |
|
|
Total |
|
AUM, December 31,
2020 |
$ |
401.0 |
|
$ |
189.3 |
|
$ |
125.9 |
|
$ |
716.2 |
|
Client cash inflows and commitments |
|
58.4 |
|
|
50.9 |
|
|
26.9 |
|
|
136.2 |
|
Client cash outflows |
|
(70.7 |
) |
|
(63.3 |
) |
|
(20.7 |
) |
|
(154.7 |
) |
Net client cash
flows |
|
(12.3 |
) |
|
(12.4 |
) |
|
6.2 |
|
|
(18.5 |
) |
New investments |
|
8.3 |
|
|
49.6 |
|
|
1.1 |
|
|
59.0 |
|
Market changes |
|
32.7 |
|
|
28.7 |
|
|
14.9 |
|
|
76.3 |
|
Foreign exchange |
|
(0.5 |
) |
|
(0.9 |
) |
|
— |
|
|
(1.4 |
) |
Realizations and distributions (net) |
|
(11.8 |
) |
|
(0.9 |
) |
|
(0.5 |
) |
|
(13.2 |
) |
Other |
|
(3.6 |
) |
|
(0.9 |
) |
|
(0.1 |
) |
|
(4.6 |
) |
AUM, December 31,
2021 |
$ |
413.8 |
|
$ |
252.5 |
|
$ |
147.5 |
|
$ |
813.8 |
|
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
Three Months Ended |
(in millions, except per share
data) |
|
12/31/2020 |
|
12/31/2021 |
|
|
|
|
|
Consolidated revenue |
|
$ |
554.4 |
|
|
$ |
691.8 |
|
|
|
|
|
|
Consolidated
expenses: |
|
|
|
|
Compensation and related expenses |
|
|
246.8 |
|
|
|
295.0 |
|
Selling, general and administrative |
|
|
83.5 |
|
|
|
96.8 |
|
Intangible amortization and impairments |
|
|
7.1 |
|
|
|
10.4 |
|
Interest expense |
|
|
26.8 |
|
|
|
28.6 |
|
Depreciation and other amortization |
|
|
4.4 |
|
|
|
4.1 |
|
Other expenses (net) |
|
|
18.1 |
|
|
|
32.8 |
|
Total consolidated
expenses |
|
|
386.7 |
|
|
|
467.7 |
|
|
|
|
|
|
Equity method income
(net)(3) |
|
|
35.4 |
|
|
|
117.4 |
|
|
|
|
|
|
Investment and other
income |
|
|
31.1 |
|
|
|
26.5 |
|
Income before income
taxes |
|
|
234.2 |
|
|
|
368.0 |
|
|
|
|
|
|
Income tax expense |
|
|
38.4 |
|
|
|
84.6 |
|
Net
income |
|
|
195.8 |
|
|
|
283.4 |
|
|
|
|
|
|
Net income (non-controlling
interests) |
|
|
(79.9 |
) |
|
|
(104.9 |
) |
Net income
(controlling interest) |
|
$ |
115.9 |
|
|
$ |
178.5 |
|
|
|
|
|
|
Average shares outstanding
(basic) |
|
|
44.9 |
|
|
|
40.6 |
|
Average shares outstanding
(diluted) |
|
|
47.5 |
|
|
|
43.9 |
|
|
|
|
|
|
Earnings per share
(basic) |
|
$ |
2.58 |
|
|
$ |
4.40 |
|
Earnings per share
(diluted)(1) |
|
$ |
2.54 |
|
|
$ |
4.17 |
|
|
RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE
MEASURES(2) |
|
|
Three Months Ended |
(in millions, except per share
data) |
|
12/31/2020 |
|
12/31/2021 |
|
|
|
|
|
Net income (controlling interest) |
|
$ |
115.9 |
|
|
$ |
178.5 |
|
Intangible amortization and impairments |
|
|
86.5 |
|
|
|
88.2 |
|
Intangible-related deferred taxes |
|
|
(2.8 |
) |
|
|
0.6 |
|
Other economic items |
|
|
(8.2 |
) |
|
|
(12.0 |
) |
Economic net income
(controlling interest) |
|
$ |
191.4 |
|
|
$ |
255.3 |
|
|
|
|
|
|
Average shares outstanding
(adjusted diluted) |
|
|
45.3 |
|
|
|
41.8 |
|
Economic earnings per
share |
|
$ |
4.22 |
|
|
$ |
6.10 |
|
|
|
|
|
|
Net income
(controlling interest) |
|
$ |
115.9 |
|
|
$ |
178.5 |
|
Interest expense |
|
|
26.8 |
|
|
|
28.6 |
|
Income taxes |
|
|
35.8 |
|
|
|
76.4 |
|
Intangible amortization and impairments |
|
|
86.5 |
|
|
|
88.2 |
|
Other items |
|
|
(9.8 |
) |
|
|
(14.9 |
) |
Adjusted EBITDA
(controlling interest) |
|
$ |
255.2 |
|
|
$ |
356.8 |
|
See Notes for additional information.
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
Year Ended |
(in millions, except per share
data) |
|
12/31/2020 |
|
12/31/2021 |
|
|
|
|
|
Consolidated revenue |
|
$ |
2,027.5 |
|
|
$ |
2,412.4 |
|
|
|
|
|
|
Consolidated
expenses: |
|
|
|
|
Compensation and related expenses |
|
|
883.7 |
|
|
|
1,047.1 |
|
Selling, general and administrative |
|
|
321.4 |
|
|
|
347.1 |
|
Intangible amortization and impairments |
|
|
140.5 |
|
|
|
35.7 |
|
Interest expense |
|
|
92.3 |
|
|
|
111.4 |
|
Depreciation and other amortization |
|
|
19.1 |
|
|
|
16.6 |
|
Other expenses (net) |
|
|
52.8 |
|
|
|
73.5 |
|
Total consolidated
expenses |
|
|
1,509.8 |
|
|
|
1,631.4 |
|
|
|
|
|
|
Equity method income
(loss) (net)(3) |
|
|
(43.4 |
) |
|
|
242.5 |
|
|
|
|
|
|
Investment and other
income |
|
|
34.1 |
|
|
|
117.6 |
|
Income before income
taxes |
|
|
508.4 |
|
|
|
1,141.1 |
|
|
|
|
|
|
Income tax expense |
|
|
81.4 |
|
|
|
251.0 |
|
Net
income |
|
|
427.0 |
|
|
|
890.1 |
|
|
|
|
|
|
Net income (non-controlling
interests) |
|
|
(224.8 |
) |
|
|
(324.4 |
) |
Net income
(controlling interest) |
|
$ |
202.2 |
|
|
$ |
565.7 |
|
|
|
|
|
|
Average shares outstanding
(basic) |
|
|
46.5 |
|
|
|
41.5 |
|
Average shares outstanding
(diluted) |
|
|
46.7 |
|
|
|
44.8 |
|
|
|
|
|
|
Earnings per share
(basic) |
|
$ |
4.34 |
|
|
$ |
13.65 |
|
Earnings per share
(diluted)(1) |
|
$ |
4.33 |
|
|
$ |
13.05 |
|
|
RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE
MEASURES(2) |
|
|
Year Ended |
(in millions, except per share
data) |
|
12/31/2020 |
|
12/31/2021 |
|
|
|
|
|
Net income (controlling interest) |
|
$ |
202.2 |
|
|
$ |
565.7 |
|
Intangible amortization and impairments |
|
|
427.7 |
|
|
|
199.9 |
|
Intangible-related deferred taxes |
|
|
(9.9 |
) |
|
|
52.5 |
|
Other economic items |
|
|
4.4 |
|
|
|
(38.3 |
) |
Economic net income
(controlling interest) |
|
$ |
624.4 |
|
|
$ |
779.8 |
|
|
|
|
|
|
Average shares outstanding
(adjusted diluted) |
|
|
46.7 |
|
|
|
42.7 |
|
Economic earnings per
share |
|
$ |
13.36 |
|
|
$ |
18.28 |
|
|
|
|
|
|
Net income
(controlling interest) |
|
$ |
202.2 |
|
|
$ |
565.7 |
|
Interest expense |
|
|
92.3 |
|
|
|
111.4 |
|
Income taxes |
|
|
69.5 |
|
|
|
229.6 |
|
Intangible amortization and impairments |
|
|
427.7 |
|
|
|
199.9 |
|
Other items |
|
|
7.1 |
|
|
|
(48.0 |
) |
Adjusted EBITDA
(controlling interest) |
|
$ |
798.8 |
|
|
$ |
1,058.6 |
|
See Notes for additional information
|
CONSOLIDATED BALANCE SHEET |
|
|
Year Ended |
(in millions) |
|
12/31/2020 |
|
12/31/2021 |
|
|
|
|
|
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
1,039.7 |
|
|
$ |
908.5 |
|
Receivables |
|
|
421.6 |
|
|
|
419.2 |
|
Investments in marketable securities |
|
|
74.9 |
|
|
|
78.5 |
|
Goodwill |
|
|
2,661.4 |
|
|
|
2,689.2 |
|
Acquired client relationships (net) |
|
|
1,048.8 |
|
|
|
1,966.4 |
|
Equity method investments in Affiliates (net) |
|
|
2,074.8 |
|
|
|
2,134.4 |
|
Fixed assets (net) |
|
|
79.6 |
|
|
|
73.9 |
|
Other investments |
|
|
257.2 |
|
|
|
375.2 |
|
Other assets |
|
|
230.9 |
|
|
|
231.1 |
|
Total
assets |
|
$ |
7,888.9 |
|
|
$ |
8,876.4 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
Payables and accrued liabilities |
|
$ |
712.4 |
|
|
$ |
789.1 |
|
Debt |
|
|
2,312.1 |
|
|
|
2,490.4 |
|
Deferred income tax liability (net) |
|
|
423.4 |
|
|
|
503.2 |
|
Other liabilities |
|
|
452.2 |
|
|
|
709.2 |
|
Total
liabilities |
|
|
3,900.1 |
|
|
|
4,491.9 |
|
|
|
|
|
|
Redeemable non-controlling
interests |
|
|
671.5 |
|
|
|
673.9 |
|
Equity: |
|
|
|
|
Common stock |
|
|
0.6 |
|
|
|
0.6 |
|
Additional paid-in capital |
|
|
728.9 |
|
|
|
651.6 |
|
Accumulated other comprehensive loss |
|
|
(98.3 |
) |
|
|
(87.9 |
) |
Retained earnings |
|
|
4,005.5 |
|
|
|
4,569.5 |
|
|
|
|
4,636.7 |
|
|
|
5,133.8 |
|
Less: treasury stock, at
cost |
|
|
(1,857.0 |
) |
|
|
(2,347.4 |
) |
Total stockholders’
equity |
|
|
2,779.7 |
|
|
|
2,786.4 |
|
Non-controlling interests |
|
|
537.6 |
|
|
|
924.2 |
|
Total
equity |
|
|
3,317.3 |
|
|
|
3,710.6 |
|
Total liabilities and
equity |
|
$ |
7,888.9 |
|
|
$ |
8,876.4 |
|
Notes |
|
|
|
(1) |
|
Earnings per share (diluted) adjusts for the dilutive effect of the
potential issuance of incremental shares of our common stock. We
had junior convertible securities outstanding during the periods
presented and are required to apply the if-converted method to
these securities in our 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 our common stock at
that time. For this calculation, the interest expense (net of tax)
attributable to these dilutive securities is added back to Net
income (controlling interest), reflecting the assumption that the
securities have been converted. 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. |
|
|
|
|
|
The following table provides a
reconciliation of the numerator and denominator used in the
calculation of basic and diluted earnings per share: |
|
|
|
Three Months Ended |
|
Year Ended |
|
(in millions) |
|
12/31/2020 |
|
12/31/2021 |
|
12/31/2020 |
|
12/31/2021 |
|
Numerator |
|
|
|
|
|
|
|
|
|
Net income (controlling interest) |
|
$ |
115.9 |
|
|
$ |
178.5 |
|
|
$ |
202.2 |
|
|
$ |
565.7 |
|
|
Interest expense on junior
convertible securities, net of taxes |
|
|
4.8 |
|
|
|
4.5 |
|
|
|
— |
|
|
|
18.5 |
|
|
Net income (controlling
interest), as adjusted |
|
$ |
120.7 |
|
|
$ |
183.0 |
|
|
$ |
202.2 |
|
|
$ |
584.2 |
|
|
Denominator |
|
|
|
|
|
|
|
|
|
Average shares outstanding
(basic) |
|
|
44.9 |
|
|
|
40.6 |
|
|
|
46.5 |
|
|
|
41.5 |
|
|
Effect of dilutive
instruments: |
|
|
|
|
|
|
|
|
|
Stock options and restricted stock units |
|
|
0.4 |
|
|
|
1.2 |
|
|
|
0.2 |
|
|
|
1.2 |
|
|
Junior convertible securities |
|
|
2.2 |
|
|
|
2.1 |
|
|
|
— |
|
|
|
2.1 |
|
|
Average shares outstanding
(diluted) |
|
|
47.5 |
|
|
|
43.9 |
|
|
|
46.7 |
|
|
|
44.8 |
|
(2) |
|
As
supplemental information, we provide non-GAAP performance measures
of Adjusted EBITDA (controlling interest), Economic net income
(controlling interest), and Economic earnings per share. Management
utilizes these non-GAAP performance measures to assess our
performance before our share of certain non-cash expenses and to
improve comparability between periods. |
|
|
|
|
|
Adjusted EBITDA (controlling
interest) represents our performance before our share of interest
expense, income taxes, depreciation, amortization, impairments,
certain Affiliate equity expenses, certain gains and losses,
including on general partner and seed capital investments, and
adjustments to our contingent payment obligations. We believe that
many investors use this non-GAAP measure when assessing the
financial performance of companies in the investment management
industry. |
|
|
|
|
|
Under our Economic net income
(controlling interest) definition, we add to Net income
(controlling interest) our share of pre-tax intangible amortization
and impairments (including the portion attributable to equity
method investments in Affiliates), deferred taxes related to
intangible assets, and other economic items which include non-cash
imputed interest (principally related to the accounting for
convertible securities and contingent payment obligations), certain
Affiliate equity expenses, and certain gains and losses, including
on general partner and seed capital investments. Economic net
income (controlling interest) is used by management and our Board
of Directors as our principal performance benchmark, including as
one of the measures for aligning executive compensation with
stockholder value. |
|
|
|
|
|
Economic earnings per share
represents Economic net income (controlling interest) divided by
the Average shares outstanding (adjusted diluted). In this
calculation, the potential share issuance in connection with our
junior convertible securities is measured using a “treasury stock”
method. Under this method, only the net number of shares of common
stock equal to the value of the junior convertible securities in
excess of par, if any, are deemed to be outstanding. We believe the
inclusion of net shares under a treasury stock method best reflects
the benefit of the increase in available capital resources (which
could be used to repurchase shares of common stock) that occurs
when these securities are converted and we are relieved of our debt
obligation. |
|
|
|
|
The following
table provides a reconciliation of Average shares outstanding
(adjusted diluted): |
|
|
|
Three Months Ended |
|
Year Ended |
|
(in millions) |
|
12/31/2020 |
|
12/31/2021 |
|
|
12/31/2020 |
|
|
12/31/2021 |
|
Average shares outstanding (diluted) |
|
|
47.5 |
|
|
|
43.9 |
|
|
|
46.7 |
|
|
|
44.8 |
|
|
Junior convertible securities |
|
|
(2.2 |
) |
|
|
(2.1 |
) |
|
|
— |
|
|
|
(2.1 |
) |
|
Average shares outstanding
(adjusted diluted) |
|
|
45.3 |
|
|
|
41.8 |
|
|
|
46.7 |
|
|
|
42.7 |
|
|
|
These non-GAAP performance measures are provided in addition to,
but not as a substitute for, Net income (controlling interest),
Earnings per share or other GAAP performance measures. For
additional information on our non-GAAP measures, see our Annual and
Quarterly Reports on Form 10-K and 10-Q, respectively, which are
accessible on the SEC’s website at www.sec.gov. |
|
|
|
(3) |
|
The following table presents
equity method earnings and equity method intangible amortization
and impairments, which in aggregate form Equity method income
(loss) (net): |
|
|
|
Three Months Ended |
|
Year Ended |
|
(in millions) |
|
12/31/2020 |
|
12/31/2021 |
|
12/31/2020 |
|
12/31/2021 |
|
Equity method earnings |
|
$ |
116.9 |
|
|
$ |
198.6 |
|
|
$ |
288.6 |
|
|
$ |
417.5 |
|
|
Equity method intangible
amortization and impairments |
|
|
(81.5 |
) |
|
|
(81.2 |
) |
|
|
(332.0 |
) |
|
|
(175.0 |
) |
|
Equity method income (loss) (net) |
|
$ |
35.4 |
|
|
$ |
117.4 |
|
|
$ |
(43.4 |
) |
|
$ |
242.5 |
|
Forward Looking Statements and Other
Matters
Certain matters discussed in this press release may constitute
forward-looking statements within the meaning of the federal
securities laws. These statements include, but are not limited to,
statements related to our expectations regarding the performance of
our business, our financial results, our liquidity and capital
resources, and other non-historical statements. You can identify
these forward-looking statements by the use of words such as
“outlook,” “guidance,” “believes,” “expects,” “potential,”
"preliminary," “continues,” “may,” “will,” “should,” “seeks,”
“approximately,” “predicts,” “projects,” “positioned,” “prospects,”
“intends,” “plans,” “estimates,” “pending investments,”
“anticipates,” or the negative version of these words or other
comparable words. Actual results and the timing of certain events
could differ materially from those projected in or contemplated by
the forward-looking statements due to a number of factors,
including changes in the securities or financial markets or in
general economic conditions, pandemics (including COVID-19) and
related changes in the global economy, capital markets and the
asset management industry, the availability of equity and debt
financing, competition for acquisitions of interests in investment
management firms, the ability to close pending investments, the
investment performance and growth rates of our Affiliates and their
ability to effectively market their investment strategies, the mix
of Affiliate contributions to our earnings, and other risks,
uncertainties, and assumptions, including those described under the
section entitled “Risk Factors” in our most recent Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. Such factors may be
updated from time to time in our periodic filings with the SEC.
These factors should not be construed as exhaustive and should be
read in conjunction with the other cautionary statements that are
included in this release and in our filings with the SEC. We
undertake no obligation to publicly update or review any
forward-looking statements, whether as a result of new information,
future developments, or otherwise, except as required by applicable
law.
From time to time, AMG may use its website as a distribution
channel of material Company information. AMG routinely posts
financial and other important information regarding the Company in
the Investor Relations section of its website at
www.amg.com and encourages investors to consult that section
regularly.
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