UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 28, 2015
Affiliated Managers Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
001-13459 |
|
04-3218510 |
(Commission File Number) |
|
(IRS Employer Identification No.) |
777 South Flagler Drive |
|
|
West Palm Beach, Florida |
|
33401 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
(800) 345-1100
(Registrants Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 Results of Operations and Financial Condition.
On July 28, 2015, Affiliated Managers Group, Inc. (the Company) issued a press release setting forth its financial and operating results for the quarter ended June 30, 2015. A copy of this press release is furnished as Exhibit 99.1 hereto, except for such portions which are filed, as noted below under Item 9.01.
ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The financial statement tables set forth on pages 4 through 14 in Exhibit 99.1 hereto are filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall be deemed incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended. The remaining information in Exhibit 99.1 is being furnished to the Securities and Exchange Commission as provided pursuant to General Instruction B.2 of Form 8-K.
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Earnings Press Release issued by the Company on July 28, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
AFFILIATED MANAGERS GROUP, INC. | ||
|
| ||
|
| ||
Date: July 28, 2015 |
By: |
/s/ David M. Billings | |
|
|
Name: |
David M. Billings |
|
|
Title: |
Executive Vice President, |
|
|
|
General Counsel and Secretary |
Exhibit 99.1
|
Investor Relations: |
Alexandra Lynn |
|
|
Selene Oh |
|
|
ir@amg.com |
|
|
|
|
Media Relations: |
Laura OBrien |
|
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(617) 747-3300 |
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pr@amg.com |
AMG Reports Financial and Operating Results
for the Second Quarter and First Half of 2015
Company Reports Economic EPS of $3.08; EPS of $2.31
BOSTON, July 28, 2015 Affiliated Managers Group, Inc. (NYSE: AMG) today reported its financial and operating results for the second quarter and six months ended June 30, 2015.
For the second quarter of 2015, Economic earnings per share (Economic EPS) were $3.08, compared to $2.65 for the same period of 2014, and diluted earnings per share for the second quarter of 2015 were $2.31, compared to $1.75 for the same period of 2014. For the second quarter of 2015, Economic net income was $171.4 million, compared to $149.8 million for the same period of 2014. For the second quarter of 2015, Net income was $128.7 million, compared to $99.1 million for the same period of 2014. For the second quarter of 2015, EBITDA was $239.2 million, compared to $211.9 million for the same period of 2014. (Economic EPS, Economic net income, and EBITDA are defined in the attached tables, along with reconciliations to the most directly comparable GAAP measure.)
For the six months ended June 30, 2015, Economic net income was $333.5 million, EBITDA was $460.1 million, and Net income was $256.7 million. For the six months ended June 30, 2014, Economic net income was $287.7 million, EBITDA was $403.8 million, and Net income was $176.2 million.
Net client cash flows for the second quarter of 2015 were $4.1 billion. AMGs aggregate assets under management were approximately $650 billion at June 30, 2015, pro forma for a pending investment.
AMG generated strong results for the second quarter, reporting Economic earnings per share of $3.08, a 16% increase over the second quarter of 2014, stated Sean M. Healey, Chairman and Chief Executive Officer of AMG. Against the backdrop of elevated market volatility, our results reflect ongoing successful execution across all aspects of our business, including strong organic growth, excellent long-term performance of our Affiliates, and additional investments in outstanding new Affiliates.
We have generated strong organic growth from positive client cash flows for 21 consecutive quarters including over $4 billion in net inflows during the second quarter which is particularly notable given the muted investor risk appetite observed by the broader industry, Mr. Healey continued. Global institutional clients increasingly recognize the competitive advantages of boutique firms in generating alpha for the return-seeking portions of their portfolios. With their industry-leading products in the most attractive areas in active equities and alternatives, our Affiliates continue to benefit from these demand trends, and we see ongoing opportunities to win new business across a broad range of geographies and channels.
Finally, the transaction environment remains highly favorable for us, and we are making meaningful progress with a number of outstanding prospects across a diverse array of leading traditional and alternative firms globally, Mr. Healey concluded. In addition, we were pleased to announce our fifth Wealth Partners Affiliate, myCIO, a leading wealth management boutique with approximately $7 billion in client assets, and we continue to see substantial opportunities to partner with outstanding wealth management firms. Looking ahead, given our unparalleled competitive position, including a proven track record of successful partnerships spanning over two decades, we are uniquely well positioned to execute on a broad and diverse opportunity set of prospective Affiliates.
About AMG
AMG is a global asset management company with equity investments in leading boutique investment management firms. AMGs innovative partnership approach allows each Affiliates management team to own significant equity in their firm while maintaining operational autonomy. AMGs strategy is to generate growth through the internal growth of existing Affiliates, as well as through investments in new Affiliates. In addition, AMG provides centralized assistance to its Affiliates in strategic matters, marketing, distribution, product development and operations. As of June 30, 2015, AMGs aggregate assets under management were approximately $650 billion, pro forma for a pending investment, in more than 500 investment products across a broad range of investment styles, asset classes and distribution channels. For more information, please visit the Companys website at www.amg.com.
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, continues, may, will, should, seeks, approximately, predicts, projects, intends, plans, estimates, 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, 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 Annual Report on Form 10-K for the year ended December 31, 2014, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SECs website at www.sec.gov. 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.
Financial Tables Follow
A teleconference will be held with AMGs management at 11:00 a.m. Eastern time today. Parties interested in listening to the teleconference should dial 1-877-407-9210 (domestic calls) or 1-201-689-8049 (international calls) starting at 10:45 a.m. Eastern time. Those wishing to listen to the teleconference should dial the appropriate number at least ten minutes before the call begins.
The teleconference 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 (domestic calls) or 1-201-612-7415 (international calls) and provide conference ID 13613761. The live call and replay of the session, and additional financial information referenced during the teleconference, can also be accessed via AMGs website at http://www.amg.com/InvestorRelations/.
AMG
Financial Highlights
(in millions, except per share data)
|
|
Three Months |
|
Three Months |
| ||
|
|
Ended |
|
Ended |
| ||
|
|
6/30/14 |
|
6/30/15 |
| ||
|
|
|
|
|
| ||
Revenue |
|
$ |
636.3 |
|
$ |
646.6 |
|
|
|
|
|
|
| ||
Net income (controlling interest) |
|
$ |
99.1 |
|
$ |
128.7 |
|
|
|
|
|
|
| ||
Economic net income (controlling interest) (A) |
|
$ |
149.8 |
|
$ |
171.4 |
|
|
|
|
|
|
| ||
EBITDA (controlling interest) (B) |
|
$ |
211.9 |
|
$ |
239.2 |
|
|
|
|
|
|
| ||
Average shares outstanding (diluted) |
|
56.6 |
|
57.5 |
| ||
|
|
|
|
|
| ||
Earnings per share (diluted) |
|
$ |
1.75 |
|
$ |
2.31 |
|
|
|
|
|
|
| ||
Average shares outstanding (adjusted diluted) (C) |
|
56.6 |
|
55.6 |
| ||
|
|
|
|
|
| ||
Economic earnings per share (C) |
|
$ |
2.65 |
|
$ |
3.08 |
|
|
|
December 31, |
|
June 30, |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
550.6 |
|
$ |
488.5 |
|
|
|
|
|
|
| ||
Senior bank debt |
|
$ |
855.0 |
|
$ |
475.0 |
|
|
|
|
|
|
| ||
Senior notes |
|
$ |
736.8 |
|
$ |
1,084.3 |
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|
|
|
|
|
| ||
Convertible securities |
|
$ |
303.1 |
|
$ |
304.1 |
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|
|
|
|
|
| ||
Stockholders equity |
|
$ |
2,627.0 |
|
$ |
2,651.1 |
|
AMG
Financial Highlights
(in millions, except per share data)
|
|
Six Months |
|
Six Months |
| ||
|
|
Ended |
|
Ended |
| ||
|
|
6/30/14 |
|
6/30/15 |
| ||
|
|
|
|
|
| ||
Revenue |
|
$ |
1,229.4 |
|
$ |
1,281.6 |
|
|
|
|
|
|
| ||
Net income (controlling interest) |
|
$ |
176.2 |
|
$ |
256.7 |
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|
|
|
|
|
| ||
Economic net income (controlling interest) (A) |
|
$ |
287.7 |
|
$ |
333.5 |
|
|
|
|
|
|
| ||
EBITDA (controlling interest) (B) |
|
$ |
403.8 |
|
$ |
460.1 |
|
|
|
|
|
|
| ||
Average shares outstanding (diluted) |
|
55.9 |
|
57.7 |
| ||
|
|
|
|
|
| ||
Earnings per share (diluted) |
|
$ |
3.15 |
|
$ |
4.58 |
|
|
|
|
|
|
| ||
Average shares outstanding (adjusted diluted) (C) |
|
56.1 |
|
55.7 |
| ||
|
|
|
|
|
| ||
Economic earnings per share (C) |
|
$ |
5.13 |
|
$ |
5.99 |
|
AMG
Reconciliations of Earnings Per Share Calculation
(in millions, except per share data)
|
|
Three Months |
|
Three Months |
| ||
|
|
Ended |
|
Ended |
| ||
|
|
6/30/14 |
|
6/30/15 |
| ||
|
|
|
|
|
| ||
Net income (controlling interest) |
|
$ |
99.1 |
|
$ |
128.7 |
|
Convertible securities interest expense, net |
|
|
|
3.8 |
| ||
Net income (controlling interest), as adjusted |
|
$ |
99.1 |
|
$ |
132.5 |
|
|
|
|
|
|
| ||
Average shares outstanding (diluted) |
|
56.6 |
|
57.5 |
| ||
|
|
|
|
|
| ||
Earnings per share (diluted) |
|
$ |
1.75 |
|
$ |
2.31 |
|
|
|
Six Months |
|
Six Months |
| ||
|
|
Ended |
|
Ended |
| ||
|
|
6/30/14 |
|
6/30/15 |
| ||
|
|
|
|
|
| ||
Net income (controlling interest) |
|
$ |
176.2 |
|
$ |
256.7 |
|
Convertible securities interest expense, net |
|
|
|
7.6 |
| ||
Net income (controlling interest), as adjusted |
|
$ |
176.2 |
|
$ |
264.3 |
|
|
|
|
|
|
| ||
Average shares outstanding (diluted) |
|
55.9 |
|
57.7 |
| ||
|
|
|
|
|
| ||
Earnings per share (diluted) |
|
$ |
3.15 |
|
$ |
4.58 |
|
AMG
Reconciliations of Average Shares Outstanding
(in millions)
|
|
Three Months |
|
Three Months |
|
|
|
Ended |
|
Ended |
|
|
|
6/30/14 |
|
6/30/15 |
|
|
|
|
|
|
|
Average shares outstanding (diluted) |
|
56.6 |
|
57.5 |
|
Assumed issuance of junior convertible securities shares |
|
|
|
(2.2 |
) |
Dilutive impact of junior convertible securities shares |
|
|
|
0.3 |
|
Average shares outstanding (adjusted diluted) (C) |
|
56.6 |
|
55.6 |
|
|
|
Six Months |
|
Six Months |
|
|
|
Ended |
|
Ended |
|
|
|
6/30/14 |
|
6/30/15 |
|
|
|
|
|
|
|
Average shares outstanding (diluted) |
|
55.9 |
|
57.7 |
|
Assumed issuance of junior convertible securities shares |
|
|
|
(2.2 |
) |
Dilutive impact of junior convertible securities shares |
|
0.2 |
|
0.2 |
|
Average shares outstanding (adjusted diluted) (C) |
|
56.1 |
|
55.7 |
|
AMG
Operating Results
Assets Under Management
(in millions)
Statement of Changes - Quarter to Date
|
|
Institutional |
|
Mutual |
|
High Net |
|
Total |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Assets under management, March 31, 2015 |
|
$ |
360,013 |
|
$ |
193,722 |
|
$ |
78,428 |
|
$ |
632,163 |
|
Client cash inflows |
|
16,187 |
|
12,427 |
|
3,223 |
|
31,837 |
| ||||
Client cash outflows |
|
(10,093 |
) |
(14,536 |
) |
(3,154 |
) |
(27,783 |
) | ||||
Net client cash flows |
|
6,094 |
|
(2,109 |
) |
69 |
|
4,054 |
| ||||
New investments (D) |
|
719 |
|
|
|
5,198 |
|
5,917 |
| ||||
Market changes |
|
(733 |
) |
273 |
|
595 |
|
135 |
| ||||
Other |
|
493 |
|
(19 |
) |
(5 |
) |
469 |
| ||||
Assets under management, June 30, 2015 |
|
$ |
366,586 |
|
$ |
191,867 |
|
$ |
84,285 |
|
$ |
642,738 |
|
Statement of Changes - Year to Date
|
|
Institutional |
|
Mutual |
|
High Net |
|
Total |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Assets under management, December 31, 2014 |
|
$ |
355,600 |
|
$ |
188,428 |
|
$ |
76,158 |
|
$ |
620,186 |
|
Client cash inflows |
|
29,209 |
|
26,164 |
|
6,679 |
|
62,052 |
| ||||
Client cash outflows |
|
(20,186 |
) |
(26,911 |
) |
(5,569 |
) |
(52,666 |
) | ||||
Net client cash flows |
|
9,023 |
|
(747 |
) |
1,110 |
|
9,386 |
| ||||
New investments (D) |
|
719 |
|
|
|
5,198 |
|
5,917 |
| ||||
Market changes |
|
795 |
|
4,205 |
|
1,824 |
|
6,824 |
| ||||
Other |
|
449 |
|
(19 |
) |
(5 |
) |
425 |
| ||||
Assets under management, June 30, 2015 |
|
$ |
366,586 |
|
$ |
191,867 |
|
$ |
84,285 |
|
$ |
642,738 |
|
AMG
Operating Results
Financial Results
(in millions)
|
|
Three |
|
|
|
Three |
|
|
| ||
|
|
Months |
|
|
|
Months |
|
|
| ||
|
|
Ended |
|
Percent |
|
Ended |
|
Percent |
| ||
|
|
6/30/14 |
|
of Total |
|
6/30/15 |
|
of Total |
| ||
Revenue |
|
|
|
|
|
|
|
|
| ||
Institutional |
|
$ |
265.2 |
|
42% |
|
$ |
255.4 |
|
39% |
|
Mutual Fund |
|
310.0 |
|
49% |
|
323.0 |
|
50% |
| ||
High Net Worth |
|
61.1 |
|
9% |
|
68.2 |
|
11% |
| ||
|
|
$ |
636.3 |
|
100% |
|
$ |
646.6 |
|
100% |
|
|
|
|
|
|
|
|
|
|
| ||
EBITDA (controlling interest) (B) |
|
|
|
|
|
|
|
|
| ||
Institutional |
|
$ |
112.9 |
|
53% |
|
$ |
122.0 |
|
51% |
|
Mutual Fund |
|
78.4 |
|
37% |
|
92.4 |
|
39% |
| ||
High Net Worth |
|
20.6 |
|
10% |
|
24.8 |
|
10% |
| ||
|
|
$ |
211.9 |
|
100% |
|
$ |
239.2 |
|
100% |
|
|
|
Six |
|
|
|
Six |
|
|
| ||
|
|
Months |
|
|
|
Months |
|
|
| ||
|
|
Ended |
|
Percent |
|
Ended |
|
Percent |
| ||
|
|
6/30/14 |
|
of Total |
|
6/30/15 |
|
of Total |
| ||
Revenue |
|
|
|
|
|
|
|
|
| ||
Institutional |
|
$ |
510.1 |
|
41% |
|
$ |
508.3 |
|
40% |
|
Mutual Fund |
|
601.9 |
|
49% |
|
641.3 |
|
50% |
| ||
High Net Worth |
|
117.4 |
|
10% |
|
132.0 |
|
10% |
| ||
|
|
$ |
1,229.4 |
|
100% |
|
$ |
1,281.6 |
|
100% |
|
|
|
|
|
|
|
|
|
|
| ||
EBITDA (controlling interest) (B) |
|
|
|
|
|
|
|
|
| ||
Institutional |
|
$ |
211.5 |
|
52% |
|
$ |
230.8 |
|
50% |
|
Mutual Fund |
|
153.0 |
|
38% |
|
182.5 |
|
40% |
| ||
High Net Worth |
|
39.3 |
|
10% |
|
46.8 |
|
10% |
| ||
|
|
$ |
403.8 |
|
100% |
|
$ |
460.1 |
|
100% |
|
AMG
Reconciliations of Performance Measures
(in millions)
|
|
Three Months |
|
Three Months |
| ||
|
|
Ended |
|
Ended |
| ||
|
|
6/30/14 |
|
6/30/15 |
| ||
|
|
|
|
|
| ||
Net income (controlling interest) |
|
$ |
99.1 |
|
$ |
128.7 |
|
Intangible amortization and impairments |
|
30.8 |
|
30.0 |
| ||
Intangible-related deferred taxes |
|
18.4 |
|
20.7 |
| ||
Other economic items (E) |
|
1.5 |
|
(8.0 |
) | ||
Economic net income (controlling interest) (A) |
|
$ |
149.8 |
|
$ |
171.4 |
|
|
|
|
|
|
| ||
Net income (controlling interest) |
|
$ |
99.1 |
|
$ |
128.7 |
|
Interest expense |
|
20.0 |
|
22.5 |
| ||
Imputed interest and contingent payment arrangements (E)
|
|
2.4 |
|
(13.2 |
) | ||
Income taxes |
|
57.7 |
|
69.2 |
| ||
Depreciation and other amortization |
|
1.9 |
|
2.0 |
| ||
Intangible amortization and impairments |
|
30.8 |
|
30.0 |
| ||
EBITDA (controlling interest) (B) |
|
$ |
211.9 |
|
$ |
239.2 |
|
|
|
|
|
|
| ||
|
|
Six Months |
|
Six Months |
| ||
|
|
Ended |
|
Ended |
| ||
|
|
6/30/14 |
|
6/30/15 |
| ||
|
|
|
|
|
| ||
Net income (controlling interest) |
|
$ |
176.2 |
|
$ |
256.7 |
|
Intangible amortization and impairments |
|
58.1 |
|
59.8 |
| ||
Intangible-related deferred taxes |
|
35.3 |
|
41.1 |
| ||
Other economic items (E) |
|
18.1 |
|
(24.1 |
) | ||
Economic net income (controlling interest) (A) |
|
$ |
287.7 |
|
$ |
333.5 |
|
|
|
|
|
|
| ||
Net income (controlling interest) |
|
$ |
176.2 |
|
$ |
256.7 |
|
Interest expense |
|
37.7 |
|
44.7 |
| ||
Imputed interest and contingent payment arrangements (E) |
|
24.8 |
|
(40.4 |
) | ||
Income taxes |
|
103.3 |
|
135.4 |
| ||
Depreciation and other amortization |
|
3.7 |
|
3.9 |
| ||
Intangible amortization and impairments |
|
58.1 |
|
59.8 |
| ||
EBITDA (controlling interest) (B) |
|
$ |
403.8 |
|
$ |
460.1 |
|
AMG
Consolidated Statements of Income
(in millions, except per share data)
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
|
|
2014 |
|
2015 |
|
2014 |
|
2015 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
|
$ |
636.3 |
|
$ |
646.6 |
|
$ |
1,229.4 |
|
$ |
1,281.6 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
Compensation and related expenses |
|
272.6 |
|
292.2 |
|
508.3 |
|
544.9 |
| ||||
Selling, general and administrative |
|
122.8 |
|
114.3 |
|
245.1 |
|
223.0 |
| ||||
Intangible amortization and impairments |
|
28.1 |
|
28.1 |
|
55.5 |
|
55.9 |
| ||||
Depreciation and other amortization |
|
4.1 |
|
4.6 |
|
7.9 |
|
9.0 |
| ||||
Other operating expenses |
|
10.3 |
|
12.2 |
|
20.2 |
|
22.1 |
| ||||
|
|
437.9 |
|
451.4 |
|
837.0 |
|
854.9 |
| ||||
Operating income |
|
198.4 |
|
195.2 |
|
392.4 |
|
426.7 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from equity method investments |
|
54.7 |
|
60.1 |
|
100.9 |
|
113.2 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Other non-operating (income) and expenses: |
|
|
|
|
|
|
|
|
| ||||
Investment and other income |
|
(8.4 |
) |
(16.0 |
) |
(16.6 |
) |
(16.7 |
) | ||||
Interest expense |
|
20.0 |
|
22.5 |
|
37.7 |
|
44.7 |
| ||||
Imputed interest expense and contingent payment arrangements (E) |
|
2.4 |
|
(13.2 |
) |
24.8 |
|
(40.4 |
) | ||||
|
|
14.0 |
|
(6.7 |
) |
45.9 |
|
(12.4 |
) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before income taxes |
|
239.1 |
|
262.0 |
|
447.4 |
|
552.3 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income taxes (F) |
|
61.1 |
|
72.1 |
|
110.0 |
|
141.7 |
| ||||
Net income |
|
178.0 |
|
189.9 |
|
337.4 |
|
410.6 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income (non-controlling interests) |
|
(78.9 |
) |
(61.2 |
) |
(161.2 |
) |
(153.9 |
) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income (controlling interest) |
|
$ |
99.1 |
|
$ |
128.7 |
|
$ |
176.2 |
|
$ |
256.7 |
|
|
|
|
|
|
|
|
|
|
| ||||
Average shares outstanding (basic) |
|
55.4 |
|
54.6 |
|
54.6 |
|
54.7 |
| ||||
Average shares outstanding (diluted) |
|
56.6 |
|
57.5 |
|
55.9 |
|
57.7 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Earnings per share (basic) |
|
$ |
1.79 |
|
$ |
2.36 |
|
$ |
3.23 |
|
$ |
4.70 |
|
Earnings per share (diluted) |
|
$ |
1.75 |
|
$ |
2.31 |
|
$ |
3.15 |
|
$ |
4.58 |
|
AMG
Consolidated Balance Sheets
(in millions)
|
|
December 31, |
|
June 30, |
| ||
|
|
2014 |
|
2015 |
| ||
Assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
550.6 |
|
$ |
488.5 |
|
Receivables |
|
425.9 |
|
482.0 |
| ||
Investments in marketable securities |
|
172.6 |
|
261.5 |
| ||
Other investments |
|
167.2 |
|
165.7 |
| ||
Fixed assets, net |
|
95.4 |
|
97.8 |
| ||
Goodwill |
|
2,652.8 |
|
2,670.0 |
| ||
Acquired client relationships, net |
|
1,778.4 |
|
1,749.8 |
| ||
Equity investments in Affiliates |
|
1,783.5 |
|
1,692.1 |
| ||
Other assets |
|
71.7 |
|
71.4 |
| ||
Total assets |
|
$ |
7,698.1 |
|
$ |
7,678.8 |
|
|
|
|
|
|
| ||
Liabilities and Equity |
|
|
|
|
| ||
Payables and accrued liabilities |
|
$ |
808.3 |
|
$ |
632.0 |
|
Senior bank debt |
|
855.0 |
|
475.0 |
| ||
Senior notes |
|
736.8 |
|
1,084.3 |
| ||
Convertible securities |
|
303.1 |
|
304.1 |
| ||
Deferred income taxes |
|
491.7 |
|
572.9 |
| ||
Other liabilities |
|
214.5 |
|
229.4 |
| ||
Total liabilities |
|
3,409.4 |
|
3,297.7 |
| ||
|
|
|
|
|
| ||
Redeemable non-controlling interests |
|
645.5 |
|
744.3 |
| ||
Equity: |
|
|
|
|
| ||
Common stock |
|
0.6 |
|
0.6 |
| ||
Additional paid-in capital |
|
672.2 |
|
501.3 |
| ||
Accumulated other comprehensive income |
|
31.8 |
|
76.1 |
| ||
Retained earnings |
|
2,163.3 |
|
2,420.0 |
| ||
|
|
2,867.9 |
|
2,998.0 |
| ||
Less: treasury stock, at cost |
|
(240.9 |
) |
(346.9 |
) | ||
Total stockholders equity |
|
2,627.0 |
|
2,651.1 |
| ||
Non-controlling interests |
|
1,016.2 |
|
985.7 |
| ||
Total equity |
|
3,643.2 |
|
3,636.8 |
| ||
Total liabilities and equity |
|
$ |
7,698.1 |
|
$ |
7,678.8 |
|
AMG
Notes
(in millions)
(A) Under our Economic net income (controlling interest) definition, we add to Net income (controlling interest) our share of intangible amortization (including equity method intangible amortization) and impairments, 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 arrangements) and certain Affiliate equity expenses. We consider Economic net income (controlling interest) an important measure of our financial performance, as we believe it best represents operating performance before our share of non-cash expenses relating to the acquisition of interests in our affiliated investment management firms, and it is therefore employed as our principal performance benchmark. This non-GAAP performance measure is provided in addition to, but not as a substitute for, Net income (controlling interest) or any other GAAP measure of financial performance or liquidity.
We add back intangible amortization and impairments attributable to acquired client relationships because these expenses do not correspond to the changes in the value of these assets, which do not diminish predictably over time. The portion of deferred taxes generally attributable to intangible assets (including goodwill) is added back because we believe it is unlikely these accruals will be used to settle material tax obligations. We add back non-cash imputed interest and reductions or increases in contingent payment arrangements because it better reflects our contractual interest obligations. We add back non-cash expenses relating to certain transfers of equity between Affiliate partners when these transfers have no dilutive effect to shareholders.
(B) EBITDA (controlling interest) represents our performance before our share of interest expense, income taxes, depreciation and amortization. We believe that many investors use this information when comparing the financial performance of companies in the investment management industry. EBITDA (controlling interest), as calculated by us, may not be consistent with computations of EBITDA by other companies. This non-GAAP performance measure is provided in addition to, but not as a substitute for, Net income (controlling interest) or any other GAAP measure of financial performance or liquidity.
(C) 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 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 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. This method does not take into account any increase or decrease in our cost of capital in an assumed conversion. Economic earnings per share is provided in addition to, but not as a substitute for, Earnings per share (diluted) or any other GAAP measure of financial performance.
(D) We completed our investment in Baker Street Advisors, LLC in the second quarter of 2015.
(E) In the first and second quarters of 2015, we adjusted our estimate of our contingent payment obligations and, accordingly, reported gains attributable to the controlling interest of $29.8 ($18.5 net of tax) and $15.0 ($9.3 net of tax), respectively.
(F) Our consolidated income tax provision includes taxes attributable to the controlling interest, and to a lesser extent, taxes attributable to non-controlling interests, as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
|
|
2014 |
|
2015 |
|
2014 |
|
2015 |
| ||||
Current income taxes |
|
$ |
42.3 |
|
$ |
43.4 |
|
$ |
72.6 |
|
$ |
75.4 |
|
Intangible-related deferred taxes |
|
18.4 |
|
20.7 |
|
35.3 |
|
41.1 |
| ||||
Other deferred taxes |
|
(3.0 |
) |
5.1 |
|
(4.6 |
) |
18.9 |
| ||||
Taxes attributable to controlling interest |
|
57.7 |
|
69.2 |
|
103.3 |
|
135.4 |
| ||||
Taxes attributable to non-controlling interests |
|
3.4 |
|
2.9 |
|
6.7 |
|
6.3 |
| ||||
Total income taxes |
|
$ |
61.1 |
|
$ |
72.1 |
|
$ |
110.0 |
|
$ |
141.7 |
|
|
|
|
|
|
|
|
|
|
| ||||
Income before taxes (controlling interest) |
|
$ |
156.8 |
|
$ |
197.9 |
|
$ |
279.5 |
|
$ |
392.1 |
|
|
|
|
|
|
|
|
|
|
| ||||
Effective tax rate * |
|
36.8 |
% |
35.0 |
% |
37.0 |
% |
34.5 |
% |
* Taxes attributable to the controlling interest divided by controlling interest share of the consolidated income before taxes.