Document
0.150.070.150.070.160.090.140.040.150.030.170.090.130.040.140.05false--12-31Q2201900010044340.300.600.320.640.010.0115300000015300000058500000585000005000000075000000500000007500000015000000050000065000007800000 0001004434 2019-01-01 2019-06-30 0001004434 us-gaap:CommonStockMember 2019-01-01 2019-06-30 0001004434 amg:FivePointEightSeventyFiveJuniorSubordinatedNotesDue2059Member 2019-01-01 2019-06-30 0001004434 2019-07-30 0001004434 2019-04-01 2019-06-30 0001004434 2018-04-01 2018-06-30 0001004434 2018-01-01 2018-06-30 0001004434 2018-12-31 0001004434 2019-06-30 0001004434 us-gaap:TreasuryStockMember 2019-03-31 0001004434 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001004434 us-gaap:CommonStockMember 2019-06-30 0001004434 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001004434 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001004434 us-gaap:TreasuryStockMember 2019-06-30 0001004434 us-gaap:RetainedEarningsMember 2019-03-31 0001004434 us-gaap:NoncontrollingInterestMember 2019-06-30 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001004434 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0001004434 us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0001004434 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001004434 us-gaap:NoncontrollingInterestMember 2019-03-31 0001004434 us-gaap:CommonStockMember 2019-03-31 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001004434 us-gaap:RetainedEarningsMember 2019-06-30 0001004434 2019-03-31 0001004434 us-gaap:TreasuryStockMember 2019-01-01 2019-06-30 0001004434 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-06-30 0001004434 us-gaap:CommonStockMember 2018-12-31 0001004434 us-gaap:RetainedEarningsMember 2019-01-01 2019-06-30 0001004434 us-gaap:RetainedEarningsMember 2018-12-31 0001004434 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-06-30 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0001004434 us-gaap:TreasuryStockMember 2018-12-31 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001004434 us-gaap:NoncontrollingInterestMember 2018-12-31 0001004434 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001004434 us-gaap:NoncontrollingInterestMember 2018-04-01 2018-06-30 0001004434 us-gaap:TreasuryStockMember 2018-03-31 0001004434 us-gaap:CommonStockMember 2018-06-30 0001004434 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0001004434 us-gaap:NoncontrollingInterestMember 2018-06-30 0001004434 us-gaap:TreasuryStockMember 2018-04-01 2018-06-30 0001004434 us-gaap:RetainedEarningsMember 2018-03-31 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0001004434 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001004434 us-gaap:RetainedEarningsMember 2018-06-30 0001004434 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0001004434 2018-03-31 0001004434 us-gaap:CommonStockMember 2018-03-31 0001004434 us-gaap:NoncontrollingInterestMember 2018-03-31 0001004434 us-gaap:TreasuryStockMember 2018-06-30 0001004434 2018-06-30 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001004434 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001004434 us-gaap:RetainedEarningsMember 2018-01-01 2018-06-30 0001004434 us-gaap:NoncontrollingInterestMember 2018-01-01 2018-06-30 0001004434 us-gaap:NoncontrollingInterestMember 2017-12-31 0001004434 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-06-30 0001004434 us-gaap:RetainedEarningsMember 2017-12-31 0001004434 2017-12-31 0001004434 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001004434 us-gaap:TreasuryStockMember 2018-01-01 2018-06-30 0001004434 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-06-30 0001004434 us-gaap:TreasuryStockMember 2017-12-31 0001004434 us-gaap:CommonStockMember 2017-12-31 0001004434 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001004434 amg:SponsoredInvestmentFundsMember 2019-01-01 2019-03-31 0001004434 amg:VariableInterestEntitiesPreviouslyAccountedforUndertheEquityMethodMember 2018-12-31 0001004434 amg:VariableInterestEntitiesPreviouslyAccountedforUndertheEquityMethodMember 2019-06-30 0001004434 amg:SponsoredInvestmentFundsMember 2018-12-31 0001004434 amg:SponsoredInvestmentFundsMember 2019-06-30 0001004434 us-gaap:JuniorSubordinatedDebtMember 2018-12-31 0001004434 us-gaap:ConvertibleDebtSecuritiesMember 2018-12-31 0001004434 us-gaap:JuniorSubordinatedDebtMember 2019-06-30 0001004434 us-gaap:UnsecuredDebtMember 2019-06-30 0001004434 us-gaap:UnsecuredDebtMember 2018-12-31 0001004434 us-gaap:SeniorNotesMember 2019-06-30 0001004434 us-gaap:ConvertibleDebtSecuritiesMember 2019-06-30 0001004434 us-gaap:SeniorNotesMember 2018-12-31 0001004434 amg:SeniorUnsecuredCreditFacilityRevolverMember us-gaap:UnsecuredDebtMember 2019-03-31 0001004434 amg:FivePointEightSeventyFiveJuniorSubordinatedNotesDue2059Member us-gaap:JuniorSubordinatedDebtMember 2019-03-31 2019-03-31 0001004434 amg:FivePointEightSeventyFiveJuniorSubordinatedNotesDue2059Member us-gaap:DebtInstrumentRedemptionPeriodOneMember us-gaap:JuniorSubordinatedDebtMember 2019-03-31 2019-03-31 0001004434 amg:SeniorUnsecuredTermLoanMember us-gaap:UnsecuredDebtMember 2019-03-31 0001004434 amg:FivePointEightSeventyFiveJuniorSubordinatedNotesDue2059Member us-gaap:JuniorSubordinatedDebtMember 2019-04-30 0001004434 amg:SeniorUnsecuredCreditFacilityRevolverMember us-gaap:UnsecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-04-01 2019-06-30 0001004434 amg:SeniorUnsecuredTermLoanMember us-gaap:UnsecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-04-01 2019-06-30 0001004434 amg:FivePointEightSeventyFiveJuniorSubordinatedNotesDue2059Member us-gaap:JuniorSubordinatedDebtMember 2019-03-31 0001004434 amg:FivePointEightSeventyFiveJuniorSubordinatedNotesDue2059Member us-gaap:JuniorSubordinatedDebtMember 2019-04-01 2019-04-30 0001004434 amg:FivePointEightSeventyFiveJuniorSubordinatedNotesDue2059Member us-gaap:DebtInstrumentRedemptionPeriodTwoMember us-gaap:JuniorSubordinatedDebtMember 2019-03-31 2019-03-31 0001004434 amg:ForwardEquityAgreementMember 2019-01-01 2019-06-30 0001004434 amg:ForwardEquityAgreementMember 2019-03-31 0001004434 us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-04-01 2019-06-30 0001004434 us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-01-01 2019-06-30 0001004434 us-gaap:ForeignExchangeForwardMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-04-01 2019-06-30 0001004434 us-gaap:CallOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-04-01 2019-06-30 0001004434 us-gaap:ForeignExchangeForwardMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-04-01 2019-06-30 0001004434 us-gaap:ForeignExchangeForwardMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-01-01 2019-06-30 0001004434 us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-04-01 2019-06-30 0001004434 us-gaap:CallOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-04-01 2019-06-30 0001004434 us-gaap:PutOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-04-01 2019-06-30 0001004434 us-gaap:PutOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-01-01 2019-06-30 0001004434 us-gaap:CallOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-01-01 2019-06-30 0001004434 us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-06-30 0001004434 us-gaap:PutOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-06-30 0001004434 us-gaap:CallOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-06-30 0001004434 us-gaap:PutOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-04-01 2019-06-30 0001004434 us-gaap:ForeignExchangeForwardMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-06-30 0001004434 us-gaap:NetInvestmentHedgingMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 us-gaap:NetInvestmentHedgingMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0001004434 us-gaap:ForeignExchangeForwardMember us-gaap:NetInvestmentHedgingMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0001004434 us-gaap:CallOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0001004434 us-gaap:PutOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0001004434 us-gaap:CallOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 us-gaap:PutOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 us-gaap:ForeignExchangeForwardMember us-gaap:NetInvestmentHedgingMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 srt:MaximumMember us-gaap:PutOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 us-gaap:ForeignExchangeForwardMember 2018-12-31 0001004434 srt:MinimumMember us-gaap:CallOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 srt:MaximumMember us-gaap:CallOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 amg:ForeignExchangeForwardExpiring2021Member us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 us-gaap:ForeignExchangeForwardMember 2019-06-30 0001004434 amg:ForeignExchangeForwardExpiring2024Member us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 srt:MinimumMember us-gaap:PutOptionMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001004434 us-gaap:ForeignExchangeOptionMember 2018-12-31 0001004434 us-gaap:NonUsMember us-gaap:EquityMethodInvesteeMember 2019-06-30 0001004434 us-gaap:ConsolidatedEntitiesMember 2019-06-30 0001004434 us-gaap:OtherThanSecuritiesInvestmentMember us-gaap:ParentMember 2018-12-31 0001004434 us-gaap:OtherThanSecuritiesInvestmentMember us-gaap:ParentMember 2019-06-30 0001004434 amg:OtherFundsMember 2018-12-31 0001004434 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember us-gaap:PrivateEquityFundsMember 2018-12-31 0001004434 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember us-gaap:OtherThanSecuritiesInvestmentMember 2018-12-31 0001004434 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember us-gaap:OtherThanSecuritiesInvestmentMember 2019-06-30 0001004434 amg:OtherFundsMember 2019-06-30 0001004434 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember us-gaap:PrivateEquityFundsMember 2019-06-30 0001004434 us-gaap:OtherThanSecuritiesInvestmentMember 2019-06-30 0001004434 us-gaap:OtherThanSecuritiesInvestmentMember 2018-12-31 0001004434 us-gaap:PrivateEquityFundsMember 2019-06-30 0001004434 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember amg:OtherFundsMember 2019-06-30 0001004434 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember amg:OtherFundsMember 2018-12-31 0001004434 us-gaap:PrivateEquityFundsMember 2018-12-31 0001004434 us-gaap:FairValueInputsLevel3Member amg:ObligationsToRelatedPartiesMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 us-gaap:FairValueInputsLevel3Member amg:ObligationsToRelatedPartiesMember amg:DiscountedCashFlowValuationTechniqueMember 2019-06-30 0001004434 us-gaap:FairValueInputsLevel3Member amg:ContingentPaymentArrangementsMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 us-gaap:FairValueInputsLevel3Member amg:ContingentPaymentArrangementsMember amg:DiscountedCashFlowValuationTechniqueMember 2019-06-30 0001004434 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-06-30 0001004434 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0001004434 us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0001004434 us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-06-30 0001004434 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001004434 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001004434 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001004434 us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001004434 amg:ObligationsToRelatedPartiesMember 2018-06-30 0001004434 amg:ObligationsToRelatedPartiesMember 2018-01-01 2018-06-30 0001004434 amg:ContingentPaymentArrangementsMember 2018-12-31 0001004434 amg:ContingentPaymentArrangementsMember 2018-01-01 2018-06-30 0001004434 amg:ObligationsToRelatedPartiesMember 2019-01-01 2019-06-30 0001004434 amg:ContingentPaymentArrangementsMember 2018-06-30 0001004434 amg:ContingentPaymentArrangementsMember 2019-01-01 2019-06-30 0001004434 amg:ContingentPaymentArrangementsMember 2019-06-30 0001004434 amg:ObligationsToRelatedPartiesMember 2019-06-30 0001004434 amg:ContingentPaymentArrangementsMember 2017-12-31 0001004434 amg:ObligationsToRelatedPartiesMember 2018-12-31 0001004434 amg:ObligationsToRelatedPartiesMember 2017-12-31 0001004434 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001004434 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001004434 us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001004434 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001004434 amg:ContingentPaymentArrangementsMember 2019-04-01 2019-06-30 0001004434 amg:ContingentPaymentArrangementsMember 2018-04-01 2018-06-30 0001004434 amg:ObligationsToRelatedPartiesMember 2019-04-01 2019-06-30 0001004434 amg:ContingentPaymentArrangementsMember 2019-03-31 0001004434 amg:ContingentPaymentArrangementsMember 2018-03-31 0001004434 amg:ObligationsToRelatedPartiesMember 2019-03-31 0001004434 amg:ObligationsToRelatedPartiesMember 2018-04-01 2018-06-30 0001004434 amg:ObligationsToRelatedPartiesMember 2018-03-31 0001004434 srt:MaximumMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputLongTermRevenueGrowthRateMember amg:DiscountedCashFlowValuationTechniqueMember 2019-06-30 0001004434 srt:MinimumMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputDiscountRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 amg:ContingentPaymentArrangementsMember us-gaap:MeasurementInputLongTermRevenueGrowthRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 srt:MinimumMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputLongTermRevenueGrowthRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 srt:WeightedAverageMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputLongTermRevenueGrowthRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 srt:MaximumMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputLongTermRevenueGrowthRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 srt:WeightedAverageMember amg:ContingentPaymentArrangementsMember us-gaap:MeasurementInputLongTermRevenueGrowthRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 srt:MaximumMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputDiscountRateMember amg:DiscountedCashFlowValuationTechniqueMember 2019-06-30 0001004434 srt:WeightedAverageMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputDiscountRateMember amg:DiscountedCashFlowValuationTechniqueMember 2019-06-30 0001004434 amg:ContingentPaymentArrangementsMember us-gaap:MeasurementInputDiscountRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 srt:MinimumMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputDiscountRateMember amg:DiscountedCashFlowValuationTechniqueMember 2019-06-30 0001004434 srt:WeightedAverageMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputDiscountRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 srt:MinimumMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputLongTermRevenueGrowthRateMember amg:DiscountedCashFlowValuationTechniqueMember 2019-06-30 0001004434 srt:WeightedAverageMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputLongTermRevenueGrowthRateMember amg:DiscountedCashFlowValuationTechniqueMember 2019-06-30 0001004434 srt:WeightedAverageMember amg:ContingentPaymentArrangementsMember us-gaap:MeasurementInputDiscountRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 srt:MaximumMember amg:ObligationsToRelatedPartiesMember us-gaap:MeasurementInputDiscountRateMember amg:DiscountedCashFlowValuationTechniqueMember 2018-12-31 0001004434 us-gaap:CustomerRelationshipsMember 2019-01-01 2019-06-30 0001004434 us-gaap:CustomerRelationshipsMember 2019-06-30 0001004434 us-gaap:CustomerRelationshipsMember 2018-12-31 0001004434 us-gaap:CustomerRelationshipsMember amg:IntangibleAmortizationandImpairmentsMember 2019-01-01 2019-06-30 0001004434 us-gaap:CustomerRelationshipsMember amg:IntangibleAmortizationandImpairmentsMember 2018-01-01 2018-06-30 0001004434 us-gaap:CustomerRelationshipsMember amg:IntangibleAmortizationandImpairmentsMember 2019-04-01 2019-06-30 0001004434 us-gaap:CustomerRelationshipsMember amg:IntangibleAmortizationandImpairmentsMember 2018-04-01 2018-06-30 0001004434 2019-01-01 2019-03-31 0001004434 us-gaap:CustomerRelationshipsMember us-gaap:EquityMethodInvesteeMember 2019-06-30 0001004434 us-gaap:CustomerRelationshipsMember us-gaap:EquityMethodInvesteeMember 2018-01-01 2018-06-30 0001004434 us-gaap:CustomerRelationshipsMember us-gaap:EquityMethodInvesteeMember 2018-04-01 2018-06-30 0001004434 us-gaap:NonUsMember us-gaap:EquityMethodInvesteeMember 2019-03-31 0001004434 us-gaap:CustomerRelationshipsMember us-gaap:EquityMethodInvesteeMember 2019-01-01 2019-06-30 0001004434 us-gaap:CustomerRelationshipsMember us-gaap:EquityMethodInvesteeMember 2019-04-01 2019-06-30 0001004434 us-gaap:NonUsMember us-gaap:EquityMethodInvesteeMember 2019-04-01 2019-06-30 0001004434 us-gaap:EquityMethodInvesteeMember 2019-01-01 2019-06-30 0001004434 us-gaap:EquityMethodInvesteeMember 2019-06-30 0001004434 us-gaap:EquityMethodInvesteeMember 2018-12-31 0001004434 amg:PrivateEquityInvestmentPartnershipsofAffiliateMember amg:PriorOwnerMember 2018-12-31 0001004434 amg:PrivateEquityInvestmentPartnershipsofAffiliateMember amg:PriorOwnerMember 2019-06-30 0001004434 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0001004434 us-gaap:RestrictedStockUnitsRSUMember 2018-12-31 0001004434 us-gaap:RestrictedStockUnitsRSUMember 2019-06-30 0001004434 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001004434 us-gaap:EmployeeStockOptionMember 2018-01-01 2018-06-30 0001004434 srt:MinimumMember us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001004434 srt:MaximumMember us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001004434 srt:MaximumMember us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0001004434 us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-06-30 0001004434 srt:MinimumMember us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0001004434 srt:MinimumMember 2019-01-01 2019-06-30 0001004434 srt:MaximumMember 2019-01-01 2019-06-30 0001004434 srt:AffiliatedEntityMember 2018-01-01 2018-06-30 0001004434 srt:AffiliatedEntityMember 2018-04-01 2018-06-30 0001004434 srt:AffiliatedEntityMember 2019-04-01 2019-06-30 0001004434 srt:AffiliatedEntityMember 2019-01-01 2019-06-30 0001004434 us-gaap:OtherAssetsMember 2019-06-30 0001004434 us-gaap:OtherLiabilitiesMember 2018-12-31 0001004434 us-gaap:OtherLiabilitiesMember 2019-06-30 0001004434 us-gaap:OtherAssetsMember 2018-12-31 0001004434 us-gaap:NoncontrollingInterestMember 2018-01-01 2018-12-31 0001004434 srt:AffiliatedEntityMember 2018-01-01 2018-12-31 0001004434 srt:ParentCompanyMember 2019-04-01 2019-06-30 0001004434 srt:ParentCompanyMember 2018-01-01 2018-06-30 0001004434 srt:ParentCompanyMember 2018-04-01 2018-06-30 0001004434 srt:ParentCompanyMember 2019-01-01 2019-06-30 0001004434 us-gaap:ConvertibleDebtSecuritiesMember 2018-04-01 2018-06-30 0001004434 amg:EmployeeStockOptionsandRestrictedStockMember 2019-04-01 2019-06-30 0001004434 amg:EmployeeStockOptionsandRestrictedStockMember 2019-01-01 2019-06-30 0001004434 us-gaap:ConvertibleDebtSecuritiesMember 2019-04-01 2019-06-30 0001004434 us-gaap:ConvertibleDebtSecuritiesMember 2018-01-01 2018-06-30 0001004434 us-gaap:ConvertibleDebtSecuritiesMember 2019-01-01 2019-06-30 0001004434 amg:EmployeeStockOptionsandRestrictedStockMember 2018-04-01 2018-06-30 0001004434 amg:EmployeeStockOptionsandRestrictedStockMember 2018-01-01 2018-06-30 0001004434 amg:AccountingStandardsUpdate201802Member 2019-01-01 2019-01-01 0001004434 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2018-04-01 2018-06-30 0001004434 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2019-04-01 2019-06-30 0001004434 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2018-04-01 2018-06-30 0001004434 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-04-01 2019-06-30 0001004434 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2018-01-01 2018-06-30 0001004434 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2019-01-01 2019-06-30 0001004434 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-06-30 0001004434 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2018-01-01 2018-06-30 0001004434 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-06-30 0001004434 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2019-06-30 0001004434 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-06-30 0001004434 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-06-30 0001004434 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0001004434 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-06-30 0001004434 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0001004434 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 iso4217:USD xbrli:shares iso4217:USD amg:unit iso4217:USD iso4217:GBP xbrli:pure xbrli:shares amg:derivative
QuickLinks -- Click here to rapidly navigate through this document

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 10-Q
(Mark One)
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to          
Commission File Number 001-13459
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13037081&doc=11
AFFILIATED MANAGERS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
04-3218510
(State or other jurisdiction
of incorporation or organization)
 
(IRS Employer Identification Number)
777 South Flagler Drive, West Palm Beach, Florida 33401
(Address of principal executive offices)
(800345-1100
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock ($0.01 par value)
 
AMG
 
New York Stock Exchange
5.875% Junior Subordinated Notes due 2059
 
MGR
 
New York Stock Exchange


QuickLinks -- Click here to rapidly navigate through this document

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
Accelerated filer 
 
Non-accelerated filer 

 
Smaller reporting company
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
There were 50,639,554 shares of the registrant’s common stock outstanding on July 30, 2019.
 




PART I—FINANCIAL INFORMATION
Item 1.
Financial Statements
AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data)
(unaudited)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2018
 
2019
 
2018
 
2019
Consolidated revenue
$
600.1

 
$
591.9

 
$
1,212.6

 
$
1,135.1

 
 
 
 
 
 
 
 
Consolidated expenses:
 
 
 
 
 
 
 
Compensation and related expenses
241.0

 
258.0

 
507.7

 
486.2

Selling, general and administrative
105.2

 
96.2

 
211.6

 
191.8

Intangible amortization and impairments
23.2

 
21.2

 
46.4

 
50.9

Interest expense
21.4

 
19.7

 
43.0

 
37.9

Depreciation and other amortization
5.7

 
5.3

 
11.2

 
10.6

Other expenses (net)
11.1

 
12.2

 
23.2

 
23.0

Total consolidated expenses
407.6

 
412.6

 
843.1

 
800.4

 
 
 
 
 
 
 
 
Equity method income (loss) (net)
35.3

 
29.4

 
131.6

 
(328.8
)
 
 
 
 
 
 
 
 
Investment and other income
11.5

 
7.2

 
25.7

 
15.2

Income before income taxes
239.3

 
215.9

 
526.8

 
21.1

 
 
 
 
 
 
 
 
Income tax expense (benefit)
34.1

 
35.7

 
97.5

 
(26.1
)
Net income
205.2

 
180.2

 
429.3

 
47.2

 
 
 
 
 
 
 
 
Net income (non-controlling interests)
(88.2
)
 
(72.5
)
 
(159.3
)
 
(140.3
)
Net income (loss) (controlling interest)
$
117.0

 
$
107.7

 
$
270.0

 
$
(93.1
)
 
 
 
 
 
 
 
 
Average shares outstanding (basic)
54.0

 
51.0

 
54.3

 
51.5

Average shares outstanding (diluted)
54.2

 
51.0

 
56.8

 
51.5

 
 
 
 
 
 
 
 
Earnings (loss) per share (basic)
$
2.17

 
$
2.11

 
$
4.97

 
$
(1.81
)
Earnings (loss) per share (diluted)
$
2.16

 
$
2.11

 
$
4.92

 
$
(1.81
)
The accompanying notes are an integral part of the Consolidated Financial Statements.

2



AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2018
 
2019
 
2018
 
2019
Net income
$
205.2

 
$
180.2

 
$
429.3

 
$
47.2

Other comprehensive income, net of tax:
 
 
 
 
 
 
 
Foreign currency translation gain (loss)
(20.2
)
 
5.2

 
8.9

 
12.7

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

 
(0.7
)
 
0.3

 
0.5

Other comprehensive income (loss), net of tax
(20.2
)
 
4.5

 
9.2

 
13.2

Comprehensive income
185.0

 
184.7

 
438.5

 
60.4

Comprehensive income (non-controlling interests)
(73.8
)
 
(65.2
)
 
(153.4
)
 
(139.6
)
Comprehensive income (loss) (controlling interest)
$
111.2

 
$
119.5

 
$
285.1

 
$
(79.2
)
The accompanying notes are an integral part of the Consolidated Financial Statements.

3



AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
 
December 31,
2018
 
June 30,
2019
Assets
 
 
 
Cash and cash equivalents
$
565.5

 
$
360.0

Receivables
400.6

 
528.7

Investments in marketable securities
119.3

 
33.9

Goodwill
2,633.4

 
2,639.5

Acquired client relationships (net)
1,309.9

 
1,257.1

Equity method investments in Affiliates (net)
2,791.0

 
2,330.2

Fixed assets (net)
104.3

 
99.8

Other investments
201.1

 
209.7

Other assets
94.0

 
268.9

Total assets
$
8,219.1

 
$
7,727.8

Liabilities and Equity
 
 
 
Payables and accrued liabilities
$
746.6

 
$
607.1

Debt
1,829.6

 
1,791.4

Deferred income tax liability (net)
511.6

 
421.7

Other liabilities
162.7

 
354.6

Total liabilities
3,250.5

 
3,174.8

Commitments and contingencies (Note 8)


 


Redeemable non-controlling interests
833.7

 
727.2

Equity:
 
 
 
Common stock ($0.01 par value, 153.0 shares authorized; 58.5 shares outstanding in 2018 and 2019)
0.6

 
0.6

Additional paid-in capital
835.6

 
835.8

Accumulated other comprehensive loss
(109.0
)
 
(95.1
)
Retained earnings
3,876.8

 
3,743.7

 
4,604.0

 
4,485.0

Less: Treasury stock, at cost (6.5 shares in 2018 and 7.8 shares in 2019)
(1,146.6
)
 
(1,259.7
)
Total stockholders' equity
3,457.4

 
3,225.3

Non-controlling interests
677.5

 
600.5

Total equity
4,134.9

 
3,825.8

Total liabilities and equity
$
8,219.1

 
$
7,727.8

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

4



AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in millions)
(unaudited)
Three Months Ended June 30, 2018
Total Stockholders’ Equity
 
 
 
 
 
Common
Stock
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Retained
Earnings
 
Treasury
Stock at
Cost
 
Non-
controlling
Interests
 
Total
Equity
March 31, 2018
$
0.6

 
$
664.2

 
$
(0.9
)
 
$
3,834.9

 
$
(821.8
)
 
$
745.6

 
$
4,422.6

Net income

 

 

 
117.0

 

 
88.2

 
205.2

Other comprehensive income

 

 
(5.8
)
 

 

 
(14.4
)
 
(20.2
)
Share-based compensation

 
11.1

 

 

 

 

 
11.1

Common stock issued under share-based incentive plans

 
(1.3
)
 

 

 
2.0

 

 
0.7

Share repurchases

 

 

 

 
(150.0
)
 

 
(150.0
)
Dividends ($0.30 per share)

 

 

 
(16.4
)
 

 

 
(16.4
)
Affiliate equity activity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliate equity compensation

 
2.2

 

 

 

 
6.1

 
8.3

Issuances

 
(3.4
)
 

 

 

 
3.4

 

Repurchases

 
(0.3
)
 

 

 

 

 
(0.3
)
Changes in redemption value of Redeemable non-controlling interests

 
7.2

 

 

 

 

 
7.2

Transfers to Redeemable non-controlling interests

 

 

 

 

 
(18.5
)
 
(18.5
)
Capital contributions by Affiliate equity holders

 

 

 

 

 
0.6

 
0.6

Distributions to non-controlling interests

 

 

 

 

 
(92.9
)
 
(92.9
)
June 30, 2018
$
0.6

 
$
679.7

 
$
(6.7
)
 
$
3,935.5

 
$
(969.8
)
 
$
718.1

 
$
4,357.4

Three Months Ended June 30, 2019
Total Stockholders’ Equity
 
 
 
 
 
Common
Stock
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Retained
Earnings
 
Treasury
Stock at
Cost
 
Non-
controlling
Interests
 
Total
Equity
March 31, 2019
$
0.6

 
$
804.4

 
$
(106.9
)
 
$
3,652.6

 
$
(1,210.3
)
 
$
619.9

 
$
3,760.3

Net income

 

 

 
107.7

 

 
72.5

 
180.2

Other comprehensive income

 

 
11.8

 

 

 
(7.3
)
 
4.5

Share-based compensation

 
10.2

 

 

 

 

 
10.2

Common stock issued under share-based incentive plans

 
(0.8
)
 

 

 
0.7

 

 
(0.1
)
Share repurchases

 

 

 

 
(50.1
)
 

 
(50.1
)
Dividends ($0.32 per share)

 

 

 
(16.6
)
 

 

 
(16.6
)
Issuance costs and other

 
0.2

 

 

 

 

 
0.2

Affiliate equity activity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliate equity compensation

 
2.8

 

 

 

 
9.6

 
12.4

Issuances

 
(0.6
)
 

 

 

 
1.0

 
0.4

Repurchases

 
3.1

 

 

 

 

 
3.1

Changes in redemption value of Redeemable non-controlling interests

 
16.5

 

 

 

 

 
16.5

Transfers to Redeemable non-controlling interests

 

 

 

 

 
(7.1
)
 
(7.1
)
Distributions to non-controlling interests

 

 

 

 

 
(88.1
)
 
(88.1
)
June 30, 2019
$
0.6

 
$
835.8

 
$
(95.1
)
 
$
3,743.7

 
$
(1,259.7
)
 
$
600.5

 
$
3,825.8

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


5



AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(in millions)
(unaudited)
 Six Months Ended June 30, 2018
Total Stockholders’ Equity
 
 
 
 
 
Common
Stock
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Retained
Earnings
 
Treasury
Stock at
Cost
 
Non-
controlling
Interests
 
Total
Equity
December 31, 2017
$
0.6

 
$
808.6

 
$
(21.8
)
 
$
3,698.5

 
$
(663.7
)
 
$
756.3

 
$
4,578.5

Net income

 

 

 
270.0

 

 
159.3

 
429.3

Other comprehensive income

 

 
15.1

 

 

 
(5.9
)
 
9.2

Share-based compensation

 
21.8

 

 

 

 

 
21.8

Common stock issued under share-based incentive plans

 
(3.5
)
 

 

 
(5.3
)
 

 
(8.8
)
Share repurchases

 

 

 

 
(300.8
)
 

 
(300.8
)
Dividends ($0.60 per share)

 

 

 
(33.0
)
 

 

 
(33.0
)
Affiliate equity activity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliate equity compensation

 
4.8

 

 

 

 
22.9

 
27.7

Issuances

 
(4.8
)
 

 

 

 
11.8

 
7.0

Repurchases

 
14.1

 

 

 

 

 
14.1

Changes in redemption value of Redeemable non-controlling interests

 
(161.3
)
 

 

 

 

 
(161.3
)
Transfers to Redeemable non-controlling interests

 

 

 

 

 
(23.4
)
 
(23.4
)
Capital contributions by Affiliate equity holders

 

 

 

 

 
2.4

 
2.4

Distributions to non-controlling interests

 

 

 

 

 
(205.3
)
 
(205.3
)
June 30, 2018
$
0.6

 
$
679.7

 
$
(6.7
)
 
$
3,935.5

 
$
(969.8
)
 
$
718.1

 
$
4,357.4

 Six Months Ended June 30, 2019
Total Stockholders’ Equity
 
 
 
 
 
Common
Stock
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Retained
Earnings
 
Treasury
Stock at
Cost
 
Non-
controlling
Interests
 
Total
Equity
December 31, 2018
$
0.6

 
$
835.6

 
$
(109.0
)
 
$
3,876.8

 
$
(1,146.6
)
 
$
677.5

 
$
4,134.9

Impact of adoption of new accounting standards (see Note 19)

 

 

 
(6.6
)
 

 

 
(6.6
)
Net income (loss)

 

 

 
(93.1
)
 

 
140.3

 
47.2

Other comprehensive income

 

 
13.9

 

 

 
(0.7
)
 
13.2

Share-based compensation

 
19.0

 

 

 

 

 
19.0

Common stock issued under share-based incentive plans

 
(33.8
)
 

 

 
27.6

 

 
(6.2
)
Share repurchases

 

 

 

 
(140.7
)
 

 
(140.7
)
Dividends ($0.64 per share)

 

 

 
(33.4
)
 

 

 
(33.4
)
Issuance costs and other

 
0.2

 

 

 

 

 
0.2

Affiliate equity activity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliate equity compensation

 
5.0

 

 

 

 
18.0

 
23.0

Issuances

 
(1.5
)
 

 

 

 
12.1

 
10.6

Repurchases

 
7.7

 

 

 

 

 
7.7

Changes in redemption value of Redeemable non-controlling interests

 
3.6

 

 

 

 

 
3.6

Transfers to Redeemable non-controlling interests

 

 

 

 

 
(54.4
)
 
(54.4
)
Capital contributions by Affiliate equity holders

 

 

 

 

 
0.4

 
0.4

Distributions to non-controlling interests

 
 
 

 

 

 
(192.7
)
 
(192.7
)
June 30, 2019
$
0.6

 
$
835.8

 
$
(95.1
)
 
$
3,743.7

 
$
(1,259.7
)
 
$
600.5

 
$
3,825.8

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

6



AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
 
For the Six Months Ended June 30,
 
2018
 
2019
Cash flow from (used in) operating activities:
 
 
 
Net income
$
429.3

 
$
47.2

Adjustments to reconcile Net income (loss) to cash flow from (used in) operating activities:
 
 
 
Intangible amortization and impairments
46.4

 
50.9

Depreciation and other amortization
11.2

 
10.6

Deferred income tax expense (benefit)
18.7

 
(80.5
)
Equity method (income) loss (net)
(131.6
)
 
328.8

Distributions of earnings received from equity method investments
327.8

 
155.9

Share-based compensation and Affiliate equity expense
49.5

 
42.0

Other non-cash items
(5.7
)
 
(8.8
)
Changes in assets and liabilities:
 
 
 
Purchases of securities by consolidated Affiliate sponsored investment products
(23.2
)
 

Sales of securities by consolidated Affiliate sponsored investment products
24.1

 
3.2

Increase in receivables
(60.6
)
 
(126.5
)
Increase in other assets
(6.0
)
 
(0.8
)
Decrease in payables, accrued liabilities and other liabilities
(102.6
)
 
(112.8
)
Cash flow from operating activities
577.3

 
309.2

Cash flow from (used in) investing activities:
 
 
 
Investments in Affiliates
(7.3
)
 
(59.8
)
Divestments of Affiliates

 
28.8

Purchase of fixed assets
(10.3
)
 
(6.3
)
Purchase of investment securities
(18.4
)
 
(30.7
)
Sale of investment securities
10.5

 
25.0

Cash flow used in investing activities
(25.5
)
 
(43.0
)
Cash flow from (used in) financing activities:
 
 
 
Borrowings of debt
565.0

 
420.7

Repayments of debt
(540.0
)
 
(460.0
)
Repurchases of common stock (net)
(319.8
)
 
(141.8
)
Dividends paid on common stock
(32.6
)
 
(33.4
)
Distributions to non-controlling interests
(205.3
)
 
(192.7
)
Affiliate equity issuances and repurchases (net)
(50.9
)
 
(41.9
)
Other financing items
(12.2
)
 
(21.3
)
Cash flow used in financing activities
(595.8
)
 
(470.4
)
Effect of foreign currency exchange rate changes on cash and cash equivalents
(2.7
)
 
1.3

Net decrease in cash and cash equivalents
(46.7
)
 
(202.9
)
Cash and cash equivalents at beginning of period
439.5

 
565.5

Effect of deconsolidation of Affiliate sponsored investment products

 
(2.6
)
Cash and cash equivalents at end of period
$
392.8

 
$
360.0

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

7

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)



1.
Basis of Presentation and Use of Estimates
The Consolidated Financial Statements of Affiliated Managers Group, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for full year financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair statement of the Company’s interim financial position and results of operations have been included and all intercompany balances and transactions have been eliminated. Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for any other period or for the full year. The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 includes additional information about its operations, financial position and accounting policies, and should be read in conjunction with this Quarterly Report on Form 10-Q.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
All amounts in these notes, except per share data in the text and tables herein, are stated in millions unless otherwise indicated.
2.
Accounting Standards and Policies
Recently Adopted Accounting Standards
Effective January 1, 2019, the Company adopted the following new Accounting Standard Updates (“ASUs”):

ASU 2016-02, Leases (and related ASUs);
ASU 2018-02, Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income; and
ASU 2014-09, Revenue from Contracts with Customers (and related ASUs, effective for the Company’s equity method Affiliates)

The adoption of ASU 2016-02 was the only ASU that had a significant impact on the Company’s Consolidated Financial Statements.

In the first quarter of 2019, the Company adopted ASU 2016-02 using a modified retrospective method and, as a result, recorded a lease liability of $190.8 million and after certain reclassifications, primarily related to accrued lease payments and unamortized lease incentives, a right-of-use asset of $163.6 million as of January 1, 2019. Additionally, the Company elected the transition practical expedients provided by ASU 2016-02, which allowed the Company to carryforward its historical lease classification. Having adopted ASU 2016-02, the Company updated its leases accounting policy as described below. For a complete list of significant accounting policies, see the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Leases

Leases are classified as either operating leases or finance leases. The Company and its Affiliates currently lease office space and equipment primarily under operating lease arrangements.  As these leases expire, it is expected that, in the normal course of business, they will be renewed or replaced.  Whether a lease is classified as an operating lease or a finance lease, the Company and its Affiliates must record a right-of-use asset and a lease liability for all leases at the commencement date of the lease, other than for leases with an initial term of 12 months or less. As permitted under ASU 2016-02, the Company and its Affiliates elect not to record short-term leases with an initial lease term less than 12 months on the Company’s Consolidated Balance Sheets. Right-of-use assets and lease liabilities are reported in Other assets and Other liabilities, respectively, on the Consolidated Balance Sheets. A lease liability is initially and subsequently reported at the present value of the outstanding lease payments determined by discounting those lease payments over the remaining lease term using the incremental borrowing rate of the legal entity entering into the lease as of the commencement date.  A right-of-use asset is initially reported at the present value of the corresponding lease liability plus any prepaid lease payments and initial direct costs of entering into the

8

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


lease, and reduced by any lease incentives. Subsequently, a right-of-use asset is reported at the present value of the lease liability adjusted for any prepaid or accrued lease payments, remaining balances of any lease incentives received, unamortized initial direct costs of entering into the lease and any impairments of the right-of-use asset.  The Company and its Affiliates test for possible impairments of right-of-use assets annually or more frequently whenever events or changes in circumstances indicate that the carrying value of a right-of-use asset may exceed its fair value.  If the carrying value of the right-of-use asset exceeds its fair value, then the carrying value of the right-of-use asset is reduced to its fair value and the expense is recorded in Other expenses (net) on the Consolidated Statements of Income. Subsequent to an impairment, the carrying value of the right-of-use asset is amortized on a straight-line basis over the remaining lease term.

Lease liabilities and right-of-use assets based on variable lease payments that depend on an index or rate are initially measured using the index or rate at the commencement date with any subsequent changes in variable lease payments reported in Other expenses (net) as incurred. Most lease agreements for office space that are classified as operating leases contain renewal options, rent escalation clauses or other lease incentives provided by the lessor.  Lease expense is accrued to recognize lease escalation provisions and renewal options that are reasonably certain to be exercised, as well as lease incentives provided by the lessor, on a straight-line basis over the lease term and is reported in Other expenses (net). If a right-of-use asset is impaired, the lease expense is subsequently reported in Other expenses (net) as the straight-line amortization of the right-of-use asset and the accretion of the lease liability, thereby transitioning to a front-loaded expense recognition profile for the associated lease.

The Company and its Affiliates combine lease and non-lease components for their office space leases and separate non-lease components for their equipment leases in calculating their lease liabilities. Sublease income is reported in Investment and other income on the Consolidated Statements of Income.
3.
Investments in Marketable Securities
The following is a summary of the cost, gross unrealized gains, unrealized losses and fair value of Investments in marketable securities:
 
December 31,
2018
 
June 30,
2019
Cost
$
126.8

 
$
31.7

Unrealized gains
1.1

 
2.3

Unrealized losses
(8.6
)
 
(0.1
)
Fair value
$
119.3

 
$
33.9


For the three and six months ended June 30, 2018, the Company received proceeds of $12.1 million and $25.9 million, respectively, from the sale of investments in marketable securities, and recorded net gains of $1.3 million and $4.1 million, respectively. For the three and six months ended June 30, 2019, the Company received proceeds of $3.4 million and $18.5 million, respectively, from the sale of investments in marketable securities, and recorded net gains of $0.2 million and $0.7 million, respectively.
In the first quarter of 2019, the Company deconsolidated an Affiliate sponsored investment product with a fair value of $84.3 million.
4.
Investments in Affiliates and Affiliate Sponsored Investment Products
In evaluating whether an investment must be consolidated, the Company evaluates the risk, rewards and significant terms of each of its Affiliates and other investments to determine if an investment is considered a voting rights entity (“VRE”) or a variable interest entity (“VIE”). An entity is a VRE when the total equity investment at risk is sufficient to enable the entity to finance its activities independently, and when the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to direct the activities of the entity that most significantly impact its economic performance. An entity is a VIE when it lacks one or more of the characteristics of a VRE, which, for the Company, are Affiliate investments structured as partnerships (or similar entities) where the Company is a limited partner and lacks substantive kick-out or substantive participation rights over the general partner. Assessing whether an entity is a VRE or VIE involves judgment. 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.

The Company consolidates VREs when it has control over significant operating, financial and investing decisions of the entity. When the Company lacks such control, but is deemed to have significant influence, the Company accounts for the entity

9

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


under the equity method. Other investments in which the Company does not have rights to exercise significant influence are recorded at fair value, with changes in fair value reflected within Investment and other income on the Consolidated Statements of Income.

The Company consolidates VIEs when it is the primary beneficiary of the entity, which is defined as having the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. Substantially all of the Company’s consolidated Affiliates considered VIEs are controlled because the Company holds a majority of the voting interests or it is the managing member or general partner. Furthermore, an Affiliate’s assets can be used for purposes other than the settlement of the respective Affiliate’s obligations. The Company applies the equity method of accounting to VIEs where the Company is not the primary beneficiary, but has the ability to exercise significant influence over operating and financial matters of the VIE.

Investments in Affiliates

Substantially all of the Company’s Affiliates are considered VIEs and are either consolidated or accounted for under the equity method. A limited number of the Company’s Affiliates are considered VREs and most of these are accounted for under the equity method.

When an Affiliate is consolidated, the portion of the earnings attributable to Affiliate management’s equity ownership is included in Net income (non-controlling interests) in the Consolidated Statements of Income. Undistributed earnings attributable to Affiliate managements’ equity ownership, along with their share of any tangible or intangible net assets, are presented within Non-controlling interests on the Consolidated Balance Sheets. Affiliate equity interests where the holder has certain rights to demand settlement are presented, at their current redemption values, as Redeemable non-controlling interests on the Consolidated Balance Sheets. The Company periodically issues, sells and repurchases the equity of its consolidated Affiliates. 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 within Additional paid-in capital in the Consolidated Balance Sheets, net of any related income tax effects in the period the transaction occurs.

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 (loss) (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. Any deferred taxes recorded upon acquisition of an equity method Affiliate are presented on a gross basis within Equity method investments in Affiliates (net) and Deferred income tax liability (net) in the Consolidated Balance Sheets. The Company’s share of income taxes incurred directly by Affiliates accounted for under the equity method is recorded within Income tax expense (benefit) in the Consolidated Statements of Income.

The Company periodically evaluates its equity method Affiliates for impairment. In such impairment evaluations, the Company assesses whether or not the fair value of the investment has declined below its carrying value for a period considered to be other-than-temporary. If the Company determines that a decline in fair value below the carrying value of the investment is other-than-temporary, then the carrying value of the investment is reduced to its fair value and the expense is recorded in Equity method income (loss) (net).

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

 
December 31, 2018
 
June 30, 2019
 
Unconsolidated
VIE Net Assets
 
Carrying Value and
Maximum Exposure
to Loss
 
Unconsolidated
VIE Net Assets
 
Carrying Value and
Maximum Exposure
to Loss
Affiliates accounted for under the equity method
$
1,102.9

 
$
2,277.8

 
$
1,007.6

 
$
1,839.1



As of December 31, 2018 and June 30, 2019, the carrying value and maximum exposure to loss for all of the Company’s equity method Affiliates was $2,791.0 million and $2,330.2 million, respectively, including equity method Affiliates considered VREs of $513.2 million and $491.1 million, respectively.

Affiliate Sponsored Investment Products

10

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)



The Company’s Affiliates sponsor various investment products where they also act as the investment adviser. These investment products are typically owned primarily by third-party investors; however, certain products are funded with general partner and seed capital investments from the Company and its Affiliates.

Third-party investors in Affiliate sponsored investment products are generally entitled to substantially all of the economics of these products, except for the asset and performance based fees earned by the Company’s Affiliates or any gains or losses attributable to the Company’s or its Affiliates’ investments in these products. As a result, the Company does not generally consolidate these products unless the Company’s or its consolidated Affiliate’s interest in the product is considered substantial. When the Company’s or its consolidated Affiliates’ interests are considered substantial and the products are consolidated, the Company retains the specialized investment company accounting principles of the underlying products, and all of the underlying investments are carried at fair value in Investments in marketable securities in the Consolidated Balance Sheets, with corresponding changes in the investments’ fair values reflected in Investment and other income. Purchases and sales of securities are presented within purchases and sales by consolidated Affiliate sponsored investment products in the Consolidated Statements of Cash Flows and the third-party investors’ interests are recorded in Redeemable non-controlling interests. When the Company or its consolidated Affiliates no longer control these products, due to a reduction in ownership or other reasons, the products are deconsolidated with only the Company’s or its consolidated Affiliate’s investment in the product reported from the date of deconsolidation.

The Company’s carrying value, and maximum exposure to loss from unconsolidated Affiliate sponsored investment products, is its or its consolidated Affiliate’s interest in the unconsolidated net assets of the respective products. The net assets of unconsolidated VIEs attributable to Affiliate sponsored investment products, and the Company’s carrying value and maximum exposure to loss, were as follows:
 
December 31, 2018
 
June 30, 2019

Unconsolidated
VIE Net Assets
 
Carrying Value and
Maximum Exposure
to Loss
 
Unconsolidated
VIE Net Assets
 
Carrying Value and
Maximum Exposure
to Loss
Affiliate sponsored investment products
$
2,216.5

 
$
1.1

 
$
2,262.6

 
$
1.5


5.
Debt
The Company’s Debt consisted of the following:
 
December 31,
2018
 
June 30,
2019
Senior bank debt
$
779.7

 
$
449.7

Senior notes
742.5

 
743.1

Junior convertible securities
307.4

 
309.0

Junior subordinated notes

 
289.6

Debt
$
1,829.6

 
$
1,791.4


Long-term debt is carried at amortized cost. Unamortized discounts and debt issuance costs related to long-term debt are presented in the Consolidated Balance Sheets as an adjustment to the carrying value of the associated long-term debt.

Senior Bank Debt

In the first quarter of 2019, the Company amended and restated its existing credit facilities to provide for a $1.25 billion senior unsecured multicurrency revolving credit facility (the “revolver”) and a $450.0 million senior unsecured term loan facility (the “term loan” and, together with the revolver, the “credit facilities”). The revolver matures on January 18, 2024, and the term loan matures on January 18, 2023. Subject to certain conditions, the Company may increase the commitments under the revolver by up to an additional $500.0 million and may borrow up to an additional $75.0 million under the term loan. The Company pays interest on any outstanding obligations under the credit facilities at specified rates, based either on an applicable LIBOR or prime rate, plus a marginal rate determined based on its credit rating. For the three months ended June 30, 2019, the interest rate for substantially all of the Company’s borrowings under the credit facilities was LIBOR plus 1.10% for the revolver and LIBOR plus 0.875% for the term loan.


11

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Junior Subordinated Notes
In the first quarter of 2019, the Company issued $280.0 million of junior subordinated notes with a maturity date of March 30, 2059. In April 2019, the Company issued an additional $20.0 million of junior subordinated notes pursuant to the underwriters’ exercise of an overallotment option, which increased the total amount issued to $300.0 million. The junior subordinated notes bear interest at a fixed rate of 5.875% per annum, payable quarterly in cash, subject to the Company’s right to defer interest payments in accordance with the terms of the junior subordinated notes. The junior subordinated notes were issued at 100% of the principal amount and rank junior and subordinate in right of payment and upon liquidation to all of the Company’s current and future senior indebtedness. On or after March 30, 2024, at the Company’s option, the junior subordinated notes may be redeemed, in whole or in part, at 100% of the principal amount, plus any accrued and unpaid interest. Prior to March 30, 2024, at the Company’s option, the junior subordinated notes may be redeemed, in whole but not in part, at 100% of the principal amount, plus any accrued and unpaid interest, if certain changes in tax laws, regulations or interpretations occur; or at 102% of the principal amount, plus any accrued and unpaid interest, if a rating agency makes certain changes relating to the equity credit criteria for securities with features similar to the junior subordinated notes.
6.
Equity Distribution Program
In the first quarter of 2019, the Company entered into equity distribution and forward equity agreements with several major securities firms under which it may, from time to time, issue and sell shares of its common stock (immediately or on a forward basis) having an aggregate sales price of up to $500.0 million (the “equity distribution program”). This equity distribution program superseded and replaced the Company’s prior equity distribution program. As of June 30, 2019, no sales had occurred under the new or prior equity distribution program.
7. Derivative Financial Instruments
The Company and its Affiliates may use derivative financial instruments to offset exposure to changes in interest rates, foreign currency exchange rates and markets.

In 2018, the Company entered into two separate pound sterling-denominated forward foreign currency contracts (the “forward contracts”) with a large financial institution (the “counterparty”). Concurrent to entering into each of the forward contracts, the Company also entered into two separate collar contracts (the “collar contracts”) with the same counterparty for the same notional amounts and expiration dates as the forward contracts. Under one of the forward contracts, the Company will deliver £325.3 million for $450.0 million in 2021 and, under the other forward contract, the Company will deliver £285.8 million for $400.0 million in 2024. Under the collar contract expiring in 2021, the Company sold a put option with a lower strike price of 1.318 U.S. dollars per one pound sterling and purchased a call option with an upper strike price of 1.448 U.S. dollars per one pound sterling. Under the collar contract expiring in 2024, the Company sold a put option with a lower strike price of 1.288 U.S. dollars per one pound sterling and purchased a call option with an upper strike price of 1.535 U.S. dollars per one pound sterling.

The combination of the forward contracts and the collar contracts was designated as net investment hedges against fluctuations in foreign currency exchange rates on certain of the Company’s investments in Affiliates with the pound sterling as their functional currency.

<