AMG, a leading partner to independent investment management firms
globally, today reported its financial and operating results for
the fourth quarter and year ended December 31, 2023.
Jay C. Horgen, President and Chief
Executive Officer of AMG, said:“AMG reported 2023 Economic
Earnings per share of $19.48, reflecting the disciplined execution
of our strategy, including allocating capital to the areas of
highest growth and return. AMG's focus on investing in secular
growth areas continued to diversify our business, further
distinguishing our unique profile, which includes independent firms
operating in private markets, liquid alternatives, and
differentiated active equities.
“AMG recently celebrated 30 years of successfully partnering
with independent investment management firms globally. As we enter
our next decade, AMG continues to provide the advantages of
partnership to magnify our Affiliates' long-term success and
actively support their independence. In 2023, we invested our
capital and resources in and alongside our Affiliates, including to
develop new products and expand their client reach into new
geographies. In addition, as AMG's unique partnership model
continued to attract outstanding firms seeking a strategic partner,
we welcomed two new private markets Affiliates, Forbion and Ara
Partners, which are focused on life sciences and industrial
decarbonization, respectively. With the addition of these new
Affiliates, AMG's dedicated private markets Affiliates manage
approximately $115 billion in aggregate client assets and, in 2023,
they raised approximately $16 billion on a pro forma basis,(ii)
highlighting the ongoing secular demand for our Affiliates'
specialized strategies.
“AMG enters 2024 with significant momentum across our business,
increasing opportunities to invest for growth, and an excellent
capital position. Given our and our Affiliates' distinct
competitive advantages, we are well-positioned to create meaningful
incremental shareholder value over time.”
FINANCIAL
HIGHLIGHTS |
|
|
Three Months Ended |
|
|
|
Years Ended |
|
(in millions, except as noted
and per share data) |
|
|
12/31/2022 |
|
12/31/2023 |
|
|
|
12/31/2022 |
|
12/31/2023 |
|
Operating Performance
Measures |
|
|
|
|
|
|
|
|
|
|
|
|
AUM (at period end, in billions) |
|
|
$ |
650.8 |
|
|
$ |
672.7 |
|
|
|
|
$ |
650.8 |
|
|
$ |
672.7 |
|
|
Average AUM (in billions) |
|
|
|
642.2 |
|
|
|
648.1 |
|
|
|
|
|
709.4 |
|
|
|
660.3 |
|
|
Net client cash flows (in billions) |
|
|
|
(10.5 |
) |
|
|
(6.1 |
) |
|
|
|
|
(33.0 |
) |
|
|
(29.2 |
) |
|
Aggregate fees |
|
|
|
1,884.3 |
|
|
|
1,560.9 |
|
|
|
|
|
5,560.5 |
|
|
|
5,066.6 |
|
|
Financial Performance
Measures |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (controlling interest) |
|
|
$ |
777.8 |
|
|
$ |
196.2 |
|
|
|
|
$ |
1,145.9 |
|
|
$ |
672.9 |
|
|
Earnings per share (diluted)(1) |
|
|
|
17.40 |
|
|
|
5.15 |
|
|
|
|
|
25.35 |
|
|
|
17.42 |
|
|
Supplemental
Performance Measures(2) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (controlling interest) |
|
|
$ |
377.7 |
|
|
$ |
296.2 |
|
|
|
|
$ |
1,053.8 |
|
|
$ |
935.7 |
|
|
Economic net income (controlling interest) |
|
|
|
290.1 |
|
|
|
242.9 |
|
|
|
|
|
797.2 |
|
|
|
717.8 |
|
|
Economic earnings per share |
|
|
|
7.40 |
|
|
|
6.86 |
|
|
|
|
|
20.02 |
|
|
|
19.48 |
|
|
For additional information on our Supplemental Performance
Measures, including reconciliations to GAAP, see the Financial
Tables and Notes.
(i) In the third quarter of 2023, AMG completed both the sale of
EQT shares received in connection with the BPEA Transaction and the
sale of its outstanding equity interests in Veritable; the gains
related to / from these transactions are included in GAAP financial
metrics and are excluded from applicable non-GAAP financial
metrics, including Economic net income (controlling interest).(ii)
Pro forma represents the combined fundraising as if our new
Affiliate investments during 2023 had been consummated as of
January 1, 2023.
Capital Management During the fourth quarter of
2023, the Company repurchased approximately $133 million in common
stock, bringing full-year share repurchases, inclusive of the $225
million accelerated share repurchase program entered into at
year-end 2022 and completed in the second quarter of 2023, to
approximately $574 million. The Company also announced a
fourth-quarter cash dividend of $0.01 per share of common stock,
payable February 29, 2024 to stockholders of record as of the close
of business on February 15, 2024.
About AMGAMG (NYSE: AMG) is a
strategic partner to leading independent investment management
firms globally. AMG’s strategy is to generate long‐term value by
investing in a diverse array of high-quality independent
partner-owned firms, through a proven partnership approach, and
allocating resources across AMG's unique opportunity set to the
areas of highest growth and return. Through its distinctive
approach, AMG magnifies its Affiliates' existing advantages and
actively supports their independence and ownership culture. As of
December 31, 2023, AMG’s aggregate assets under management
were approximately $673 billion across a diverse range of private
markets, liquid alternative, and differentiated long-only
investment 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 13743794.
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/.
Financial Tables Follow
ASSETS UNDER
MANAGEMENT - STATEMENTS OF CHANGES (in
billions) |
BY STRATEGY - QUARTER
TO DATE |
Alternatives |
Global Equities |
U.S. Equities |
Multi-Asset &Fixed
Income |
Total |
AUM, September 30, 2023 |
$ |
231.2 |
|
$ |
173.4 |
|
$ |
133.4 |
|
$ |
97.8 |
|
$ |
635.8 |
|
Client cash inflows and commitments |
|
9.9 |
|
|
6.5 |
|
|
4.4 |
|
|
5.0 |
|
|
25.8 |
|
Client cash outflows |
|
(7.6 |
) |
|
(10.6 |
) |
|
(8.5 |
) |
|
(5.2 |
) |
|
(31.9 |
) |
Net client cash
flows |
|
2.3 |
|
|
(4.1 |
) |
|
(4.1 |
) |
|
(0.2 |
) |
|
(6.1 |
) |
New investments |
|
5.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
5.1 |
|
Market changes |
|
3.1 |
|
|
15.2 |
|
|
13.7 |
|
|
6.5 |
|
|
38.5 |
|
Foreign exchange |
|
1.9 |
|
|
2.4 |
|
|
0.5 |
|
|
0.5 |
|
|
5.3 |
|
Realizations and distributions (net) |
|
(2.4 |
) |
|
(0.2 |
) |
|
(0.7 |
) |
|
(0.1 |
) |
|
(3.4 |
) |
Other |
|
(2.4 |
) |
|
(0.1 |
) |
|
0.0 |
|
|
(0.0 |
) |
|
(2.5 |
) |
AUM, December 31,
2023 |
$ |
238.8 |
|
$ |
186.6 |
|
$ |
142.8 |
|
$ |
104.5 |
|
$ |
672.7 |
|
BY STRATEGY - YEAR TO
DATE |
Alternatives |
Global Equities |
U.S. Equities |
Multi-Asset &Fixed
Income |
Total |
AUM, December 31, 2022 |
$ |
220.9 |
|
$ |
186.1 |
|
$ |
133.3 |
|
$ |
110.5 |
|
$ |
650.8 |
|
Client cash inflows and commitments |
|
32.4 |
|
|
19.7 |
|
|
18.0 |
|
|
19.6 |
|
|
89.7 |
|
Client cash outflows |
|
(23.1 |
) |
|
(46.0 |
) |
|
(30.9 |
) |
|
(18.9 |
) |
|
(118.9 |
) |
Net client cash
flows |
|
9.3 |
|
|
(26.3 |
) |
|
(12.9 |
) |
|
0.7 |
|
|
(29.2 |
) |
New investments |
|
8.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
8.1 |
|
Veritable* |
|
(0.2 |
) |
|
— |
|
|
— |
|
|
(17.6 |
) |
|
(17.8 |
) |
Market changes |
|
8.7 |
|
|
25.0 |
|
|
22.5 |
|
|
10.8 |
|
|
67.0 |
|
Foreign exchange |
|
2.1 |
|
|
2.4 |
|
|
0.5 |
|
|
0.3 |
|
|
5.3 |
|
Realizations and distributions (net) |
|
(7.3 |
) |
|
(0.3 |
) |
|
(0.7 |
) |
|
(0.3 |
) |
|
(8.6 |
) |
Other |
|
(2.8 |
) |
|
(0.3 |
) |
|
0.1 |
|
|
0.1 |
|
|
(2.9 |
) |
AUM, December 31,
2023 |
$ |
238.8 |
|
$ |
186.6 |
|
$ |
142.8 |
|
$ |
104.5 |
|
$ |
672.7 |
|
BY CLIENT TYPE -
QUARTER TO DATE |
Institutional |
Retail |
High NetWorth |
Total |
AUM, September 30, 2023 |
$ |
333.9 |
|
$ |
186.8 |
|
$ |
115.1 |
|
$ |
635.8 |
|
Client cash inflows and commitments |
|
13.4 |
|
|
7.4 |
|
|
5.0 |
|
|
25.8 |
|
Client cash outflows |
|
(14.0 |
) |
|
(12.3 |
) |
|
(5.6 |
) |
|
(31.9 |
) |
Net client cash
flows |
|
(0.6 |
) |
|
(4.9 |
) |
|
(0.6 |
) |
|
(6.1 |
) |
New investments |
|
5.1 |
|
|
— |
|
|
— |
|
|
5.1 |
|
Market changes |
|
14.9 |
|
|
15.5 |
|
|
8.1 |
|
|
38.5 |
|
Foreign exchange |
|
3.0 |
|
|
1.9 |
|
|
0.4 |
|
|
5.3 |
|
Realizations and distributions (net) |
|
(1.8 |
) |
|
(1.6 |
) |
|
(0.0 |
) |
|
(3.4 |
) |
Other |
|
0.4 |
|
|
(1.7 |
) |
|
(1.2 |
) |
|
(2.5 |
) |
AUM, December 31,
2023 |
$ |
354.9 |
|
$ |
196.0 |
|
$ |
121.8 |
|
$ |
672.7 |
|
BY CLIENT TYPE - YEAR
TO DATE |
Institutional |
Retail |
High NetWorth |
Total |
AUM, December 31, 2022 |
$ |
333.5 |
|
$ |
188.9 |
|
$ |
128.4 |
|
$ |
650.8 |
|
Client cash inflows and commitments |
|
38.5 |
|
|
31.5 |
|
|
19.7 |
|
|
89.7 |
|
Client cash outflows |
|
(50.2 |
) |
|
(47.7 |
) |
|
(21.0 |
) |
|
(118.9 |
) |
Net client cash
flows |
|
(11.7 |
) |
|
(16.2 |
) |
|
(1.3 |
) |
|
(29.2 |
) |
New investments |
|
7.9 |
|
|
— |
|
|
0.2 |
|
|
8.1 |
|
Veritable* |
|
(0.2 |
) |
|
— |
|
|
(17.6 |
) |
|
(17.8 |
) |
Market changes |
|
28.0 |
|
|
25.5 |
|
|
13.5 |
|
|
67.0 |
|
Foreign exchange |
|
3.0 |
|
|
1.9 |
|
|
0.4 |
|
|
5.3 |
|
Realizations and distributions (net) |
|
(6.0 |
) |
|
(2.4 |
) |
|
(0.2 |
) |
|
(8.6 |
) |
Other |
|
0.4 |
|
|
(1.7 |
) |
|
(1.6 |
) |
|
(2.9 |
) |
AUM, December 31,
2023 |
$ |
354.9 |
|
$ |
196.0 |
|
$ |
121.8 |
|
$ |
672.7 |
|
__________________________* Assets under management attributable
to Veritable as of the closing date.
CONSOLIDATED STATEMENTS OF INCOME
|
|
Three Months Ended |
|
(in millions, except per share
data) |
|
12/31/2022 |
|
12/31/2023 |
|
Consolidated revenue |
|
$ |
539.6 |
|
|
$ |
502.7 |
|
|
|
|
|
|
|
|
Consolidated
expenses: |
|
|
|
|
|
Compensation and related expenses |
|
|
274.5 |
|
|
|
244.5 |
|
|
Selling, general and administrative |
|
|
109.8 |
|
|
|
84.8 |
|
|
Intangible amortization and impairments |
|
|
12.2 |
|
|
|
10.8 |
|
|
Interest expense |
|
|
29.7 |
|
|
|
31.4 |
|
|
Depreciation and other amortization |
|
|
4.0 |
|
|
|
3.0 |
|
|
Other expenses (net) |
|
|
22.2 |
|
|
|
9.6 |
|
|
Total consolidated
expenses |
|
|
452.4 |
|
|
|
384.1 |
|
|
|
|
|
|
|
|
Equity method income
(net)(3) |
|
|
214.2 |
|
|
|
125.7 |
|
|
Affiliate Transaction
gains(4) |
|
|
641.9 |
|
|
|
— |
|
|
Investment and other
income(4) |
|
|
115.6 |
|
|
|
29.8 |
|
|
Income before income
taxes |
|
|
1,058.9 |
|
|
|
274.1 |
|
|
|
|
|
|
|
|
Income tax expense |
|
|
227.8 |
|
|
|
29.8 |
|
|
Net
income |
|
|
831.1 |
|
|
|
244.3 |
|
|
|
|
|
|
|
|
Net income (non-controlling
interests) |
|
|
(53.3 |
) |
|
|
(48.1 |
) |
|
Net income
(controlling interest) |
|
$ |
777.8 |
|
|
$ |
196.2 |
|
|
|
|
|
|
|
|
Average shares outstanding
(basic) |
|
|
37.5 |
|
|
|
33.7 |
|
|
Average shares outstanding
(diluted) |
|
|
46.0 |
|
|
|
41.3 |
|
|
|
|
|
|
|
|
Earnings per share
(basic) |
|
$ |
20.75 |
|
|
$ |
5.83 |
|
|
Earnings per share
(diluted)(1) |
|
$ |
17.40 |
|
|
$ |
5.15 |
|
|
RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE
MEASURES(2)
|
|
Three Months Ended |
|
(in millions, except per share
data) |
|
12/31/2022 |
|
12/31/2023 |
|
Net income (controlling interest) |
|
$ |
777.8 |
|
|
$ |
196.2 |
|
|
Intangible amortization and impairments |
|
|
78.1 |
|
|
|
39.9 |
|
|
Intangible-related deferred taxes |
|
|
4.2 |
|
|
|
12.8 |
|
|
Affiliate Transactions(4) |
|
|
(576.0 |
) |
|
|
— |
|
|
Other economic items |
|
|
6.0 |
|
|
|
(6.0 |
) |
|
Economic net income
(controlling interest) |
|
$ |
290.1 |
|
|
$ |
242.9 |
|
|
|
|
|
|
|
|
Average shares outstanding
(adjusted diluted) |
|
|
39.2 |
|
|
|
35.4 |
|
|
Economic earnings per
share |
|
$ |
7.40 |
|
|
$ |
6.86 |
|
|
|
|
|
|
|
|
Net income
(controlling interest) |
|
$ |
777.8 |
|
|
$ |
196.2 |
|
|
Interest expense |
|
|
29.7 |
|
|
|
31.4 |
|
|
Income taxes |
|
|
226.2 |
|
|
|
34.5 |
|
|
Intangible amortization and impairments |
|
|
78.1 |
|
|
|
39.9 |
|
|
Affiliate Transactions(4) |
|
|
(743.6 |
) |
|
|
— |
|
|
Other items |
|
|
9.5 |
|
|
|
(5.8 |
) |
|
Adjusted EBITDA
(controlling interest) |
|
$ |
377.7 |
|
|
$ |
296.2 |
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
Years Ended |
|
(in millions, except per share
data) |
|
12/31/2022 |
|
12/31/2023 |
|
Consolidated revenue |
|
$ |
2,329.6 |
|
|
$ |
2,057.8 |
|
|
|
|
|
|
|
|
Consolidated
expenses: |
|
|
|
|
|
Compensation and related expenses |
|
|
1,071.5 |
|
|
|
907.5 |
|
|
Selling, general and administrative |
|
|
385.5 |
|
|
|
358.2 |
|
|
Intangible amortization and impairments |
|
|
51.6 |
|
|
|
48.3 |
|
|
Interest expense |
|
|
114.4 |
|
|
|
123.8 |
|
|
Depreciation and other amortization |
|
|
15.8 |
|
|
|
13.0 |
|
|
Other expenses (net) |
|
|
34.7 |
|
|
|
45.8 |
|
|
Total consolidated
expenses |
|
|
1,673.5 |
|
|
|
1,496.6 |
|
|
|
|
|
|
|
|
Equity method income
(net)(3) |
|
|
338.1 |
|
|
|
280.0 |
|
|
Affiliate Transaction
gains(4) |
|
|
641.9 |
|
|
|
133.1 |
|
|
Investment and other
income(4) |
|
|
110.3 |
|
|
|
117.1 |
|
|
Income before income
taxes |
|
|
1,746.4 |
|
|
|
1,091.4 |
|
|
|
|
|
|
|
|
Income tax expense |
|
|
358.3 |
|
|
|
185.3 |
|
|
Net
income |
|
|
1,388.1 |
|
|
|
906.1 |
|
|
|
|
|
|
|
|
Net income (non-controlling
interests) |
|
|
(242.2 |
) |
|
|
(233.2 |
) |
|
Net income
(controlling interest) |
|
$ |
1,145.9 |
|
|
$ |
672.9 |
|
|
|
|
|
|
|
|
Average shares outstanding
(basic) |
|
|
38.5 |
|
|
|
35.1 |
|
|
Average shares outstanding
(diluted) |
|
|
49.0 |
|
|
|
42.2 |
|
|
|
|
|
|
|
|
Earnings per share
(basic) |
|
$ |
29.77 |
|
|
$ |
19.18 |
|
|
Earnings per share
(diluted)(1) |
|
$ |
25.35 |
|
|
$ |
17.42 |
|
|
RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE
MEASURES(2)
|
|
Years Ended |
|
(in millions, except per share
data) |
|
12/31/2022 |
|
12/31/2023 |
|
Net income (controlling interest) |
|
$ |
1,145.9 |
|
|
$ |
672.9 |
|
|
Intangible amortization and impairments |
|
|
195.0 |
|
|
|
128.5 |
|
|
Intangible-related deferred taxes |
|
|
45.5 |
|
|
|
57.3 |
|
|
Affiliate Transactions(4) |
|
|
(576.0 |
) |
|
|
(122.1 |
) |
|
Other economic items |
|
|
(13.2 |
) |
|
|
(18.8 |
) |
|
Economic net income
(controlling interest) |
|
$ |
797.2 |
|
|
$ |
717.8 |
|
|
|
|
|
|
|
|
Average shares outstanding
(adjusted diluted) |
|
|
39.8 |
|
|
|
36.8 |
|
|
Economic earnings per
share |
|
$ |
20.02 |
|
|
$ |
19.48 |
|
|
|
|
|
|
|
|
Net income
(controlling interest) |
|
$ |
1,145.9 |
|
|
$ |
672.9 |
|
|
Interest expense |
|
|
114.4 |
|
|
|
123.8 |
|
|
Income taxes |
|
|
347.4 |
|
|
|
185.2 |
|
|
Intangible amortization and impairments |
|
|
195.0 |
|
|
|
128.5 |
|
|
Affiliate Transactions(4) |
|
|
(743.6 |
) |
|
|
(162.7 |
) |
|
Other items |
|
|
(5.3 |
) |
|
|
(12.0 |
) |
|
Adjusted EBITDA
(controlling interest) |
|
$ |
1,053.8 |
|
|
$ |
935.7 |
|
|
CONSOLIDATED BALANCE SHEETS
|
|
Years Ended |
|
(in millions) |
|
12/31/2022 |
|
12/31/2023 |
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
429.2 |
|
|
$ |
813.6 |
|
|
Receivables |
|
|
316.0 |
|
|
|
368.4 |
|
|
Investments in marketable securities |
|
|
716.9 |
|
|
|
461.0 |
|
|
Goodwill |
|
|
2,648.7 |
|
|
|
2,523.6 |
|
|
Acquired client relationships (net) |
|
|
1,876.0 |
|
|
|
1,812.4 |
|
|
Equity method investments in Affiliates (net) |
|
|
2,139.5 |
|
|
|
2,288.5 |
|
|
Fixed assets (net) |
|
|
68.5 |
|
|
|
67.3 |
|
|
Other investments |
|
|
421.6 |
|
|
|
480.9 |
|
|
Other assets |
|
|
264.6 |
|
|
|
243.9 |
|
|
Total
assets |
|
$ |
8,881.0 |
|
|
$ |
9,059.6 |
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
Payables and accrued liabilities |
|
$ |
778.3 |
|
|
$ |
628.5 |
|
|
Debt |
|
|
2,535.3 |
|
|
|
2,537.5 |
|
|
Deferred income tax liability (net) |
|
|
464.7 |
|
|
|
463.8 |
|
|
Other liabilities |
|
|
461.7 |
|
|
|
466.3 |
|
|
Total
liabilities |
|
|
4,240.0 |
|
|
|
4,096.1 |
|
|
|
|
|
|
|
|
Redeemable non-controlling
interests |
|
|
465.4 |
|
|
|
393.4 |
|
|
Equity: |
|
|
|
|
|
Common stock |
|
|
0.6 |
|
|
|
0.6 |
|
|
Additional paid-in capital |
|
|
695.5 |
|
|
|
741.4 |
|
|
Accumulated other comprehensive loss |
|
|
(203.4 |
) |
|
|
(167.6 |
) |
|
Retained earnings |
|
|
5,718.2 |
|
|
|
6,389.6 |
|
|
|
|
|
6,210.9 |
|
|
|
6,964.0 |
|
|
Less: treasury stock, at
cost |
|
|
(2,980.6 |
) |
|
|
(3,376.1 |
) |
|
Total stockholders’
equity |
|
|
3,230.3 |
|
|
|
3,587.9 |
|
|
Non-controlling interests |
|
|
945.3 |
|
|
|
982.2 |
|
|
Total
equity |
|
|
4,175.6 |
|
|
|
4,570.1 |
|
|
Total liabilities and
equity |
|
$ |
8,881.0 |
|
|
$ |
9,059.6 |
|
|
See Notes for additional information.
Notes |
|
|
(1) |
Earnings per share (diluted) adjusts for the dilutive effect of the
potential issuance of incremental shares of our common stock. |
|
|
|
We assume the settlement of all
of our Redeemable non-controlling interests using the maximum
number of shares permitted under our arrangements. 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. |
|
|
|
We are required to apply the
if-converted method to our outstanding junior convertible
securities when calculating 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 |
|
Years Ended |
|
|
(in millions) |
|
12/31/2022 |
|
12/31/2023 |
|
12/31/2022 |
|
12/31/2023 |
|
|
Numerator |
|
|
|
|
|
|
|
|
|
|
Net income (controlling interest) |
|
$ |
777.8 |
|
$ |
196.2 |
|
$ |
1,145.9 |
|
$ |
672.9 |
|
|
Income from hypothetical
settlement of Redeemable non-controlling interests, net of
taxes |
|
|
19.1 |
|
|
12.9 |
|
|
82.9 |
|
|
49.0 |
|
|
Interest expense on junior
convertible securities, net of taxes |
|
|
3.4 |
|
|
3.4 |
|
|
14.0 |
|
|
13.4 |
|
|
Net income (controlling
interest), as adjusted |
|
$ |
800.3 |
|
$ |
212.5 |
|
$ |
1,242.8 |
|
$ |
735.3 |
|
|
Denominator |
|
|
|
|
|
|
|
|
|
|
Average shares outstanding
(basic) |
|
|
37.5 |
|
|
33.7 |
|
|
38.5 |
|
|
35.1 |
|
|
Effect of dilutive
instruments: |
|
|
|
|
|
|
|
|
|
|
Stock options and restricted stock units |
|
|
1.7 |
|
|
1.7 |
|
|
1.3 |
|
|
1.7 |
|
|
Hypothetical issuance of shares to settle Redeemable
non-controlling interests |
|
|
5.0 |
|
|
4.2 |
|
|
7.4 |
|
|
3.7 |
|
|
Junior convertible securities |
|
|
1.8 |
|
|
1.7 |
|
|
1.8 |
|
|
1.7 |
|
|
Average shares outstanding
(diluted) |
|
|
46.0 |
|
|
41.3 |
|
|
49.0 |
|
|
42.2 |
|
(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. In the first quarter of
2023, we updated the definitions of Adjusted EBITDA (controlling
interest) and Economic net income (controlling interest) to reflect
AMG's strategic evolution, including our increased allocation of
capital toward private markets and liquid alternatives. To align
with the economic impact of these capital allocation decisions, the
updated definitions of Adjusted EBITDA (controlling interest) and
Economic net income (controlling interest): (i) include only the
realized economic gains and losses on seed capital, general partner
commitments, and other strategic investments and (ii) exclude any
unrealized gains and losses on strategic investments (consistent
with the existing treatment of seed capital and general partner
commitments). We have retroactively applied this definition change
to prior periods. |
|
|
|
Adjusted EBITDA (controlling
interest) represents our performance before our share of interest
expense, income and certain non-income based taxes, depreciation,
amortization, impairments, gains and losses related to the BPEA and
Veritable Transactions, and non-cash items such as certain
Affiliate equity activity, gains and losses on our contingent
payment obligations, and unrealized gains and losses on seed
capital, general partner commitments, and other strategic
investments. Adjusted EBITDA (controlling interest) is also
adjusted to include realized economic gains and losses related to
these seed capital, general partner commitments, and other
strategic investments. 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 adjust Net income
(controlling interest) for 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, gains and losses related to the BPEA and
Veritable Transactions, net of tax, and other economic items which
include gains and losses related to contingent payment obligations,
tax windfalls and shortfalls from share-based compensation, certain
Affiliate equity activity, unrealized gains and losses on seed
capital, general partner commitments, and other strategic
investments, and realized economic gains and losses related to
these seed capital, general partner commitments, and other
strategic 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, we exclude the potential shares issued upon settlement
of Redeemable non-controlling interests from Average shares
outstanding (adjusted diluted) because we intend to settle those
obligations without issuing shares, consistent with all prior
Affiliate equity purchase transactions. 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 our 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 |
|
Years Ended |
|
|
(in millions) |
|
12/31/2022 |
|
12/31/2023 |
|
12/31/2022 |
|
12/31/2023 |
|
|
Average shares outstanding (diluted) |
|
46.0 |
|
|
41.3 |
|
|
49.0 |
|
|
42.2 |
|
|
|
Hypothetical issuance of shares to settle Redeemable
non-controlling interests |
|
(5.0 |
) |
|
(4.2 |
) |
|
(7.4 |
) |
|
(3.7 |
) |
|
|
Junior convertible securities |
|
(1.8 |
) |
|
(1.7 |
) |
|
(1.8 |
) |
|
(1.7 |
) |
|
|
Average shares outstanding
(adjusted diluted) |
|
39.2 |
|
|
35.4 |
|
|
39.8 |
|
|
36.8 |
|
|
|
|
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 most
recent 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 (net): |
|
|
|
Three Months Ended |
|
Years Ended |
|
|
(in millions) |
|
12/31/2022 |
|
12/31/2023 |
|
12/31/2022 |
|
12/31/2023 |
|
|
Equity method earnings |
|
$ |
284.1 |
|
|
$ |
158.3 |
|
|
$ |
497.2 |
|
|
$ |
375.6 |
|
|
|
Equity method intangible
amortization and impairments |
|
|
(69.9 |
) |
|
|
(32.6 |
) |
|
|
(159.1 |
) |
|
|
(95.6 |
) |
|
|
Equity method income (net) |
|
$ |
214.2 |
|
|
$ |
125.7 |
|
|
$ |
338.1 |
|
|
$ |
280.0 |
|
|
(4) |
The following table presents the impact of the sales of our equity
interests in Baring Private Equity Asia ("BPEA") to EQT AB (“EQT”),
a public company listed on Nasdaq Stockholm (EQT ST) in the fourth
quarter of 2022, pursuant to which we received ordinary shares of
EQT, (the“BPEA Transaction”), and Veritable, LP (“Veritable”) to a
third party in the third quarter of 2023 (the “Veritable
Transaction”): |
|
|
|
Three Months Ended |
|
Years Ended |
|
|
(in millions) |
|
12/31/2022 |
|
12/31/2023 |
|
12/31/2022 |
|
12/31/2023 |
|
|
Affiliate Transaction gains |
|
$ |
641.9 |
|
|
$ |
— |
|
$ |
641.9 |
|
|
$ |
133.1 |
|
|
|
Investment and other income -
Realized and unrealized gains on EQT shares |
|
|
101.7 |
|
|
|
— |
|
|
101.7 |
|
|
|
29.6 |
|
|
|
Affiliate Transaction gains, pre-tax |
|
|
743.6 |
|
|
|
— |
|
|
743.6 |
|
|
|
162.7 |
|
|
|
Income taxes |
|
|
(167.6 |
) |
|
|
— |
|
|
(167.6 |
) |
|
|
(40.6 |
) |
|
|
Affiliate Transaction gains, after-tax |
|
$ |
576.0 |
|
|
$ |
— |
|
$ |
576.0 |
|
|
$ |
122.1 |
|
|
|
Forward-Looking Statements and Other
Matters
Certain matters discussed in this press release issued by
Affiliated Managers Group, Inc. (“AMG” or the “Company”) 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 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,
uncertainties relating to closing of pending investments or
transactions and potential changes in the anticipated benefits
thereof, 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.
|
|
|
|
Investor Relations:Media Relations: |
|
Patricia FigueroaAnn Imes+1 (617) 747-3300ir@amg.compr@amg.com |
|
|
|
Grafico Azioni Affiliated Managers (NYSE:AMG)
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