AMG Reports Financial and Operating Results for the First Quarter of 2013

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AMG Reports Financial and Operating Results for the First Quarter of 2013

Company Reports Economic EPS of $2.27; EPS of $1.15

BOSTON--(BUSINESS WIRE)-- Affiliated Managers Group, Inc. (NYS: AMG) today reported its financial and operating results for the quarter ended March 31, 2013.


For the first quarter of 2013, Economic earnings per share ("Economic EPS") were $2.27, compared to $1.58 for the same period of 2012, while diluted earnings per share for the first quarter of 2013 were $1.15, compared to $0.71 for the same period of 2012. For the first quarter of 2013, Economic net income was $124.2 million, compared to $83.5 million for the same period of 2012. For the first quarter of 2013, Net income was $62.4 million, compared to $37.4 million for the same period of 2012. For the first quarter of 2013, EBITDA was $175.0 million, compared to $114.1 million for the same period of 2012. (Economic EPS, Economic net income, and EBITDA are defined in the attached tables, along with comparisons to the appropriate GAAP measure.)

Net client cash flows for the first quarter of 2013 were $12.0 billion. The aggregate assets under management of AMG's affiliated investment management firms were approximately $463 billion at March 31, 2013.

"With strong year-over-year growth in our earnings and record net client cash flows of $12 billion in the first quarter, AMG has had an excellent start to 2013," stated Sean M. Healey, Chairman and Chief Executive Officer of AMG. "Our Economic earnings per share increased 44% over the first quarter of 2012 - adjusting for the impact of the early realization of performance fees, the increase was 30% - reflecting continued strong organic growth and excellent execution across all areas of our business."

"This quarter marks AMG's twelfth consecutive quarter of strong net client cash flows generated by the successful execution of our global distribution strategy and our Affiliates' excellent investment performance," Mr. Healey continued. "Our Affiliates' industry-leading products, particularly in global and emerging markets equities and alternatives, continue to see strong demand around the world, especially given the long-term track records of outperformance at Affiliates such as Tweedy, Browne, Harding Loevner, Genesis, BlueMountain, and AQR. As we continue to enhance the breadth and depth of our global distribution platform, including into additional coverage regions, we see substantial opportunities for our Affiliates to generate new business and win further market share globally."

"Finally, we continue to make progress with a diverse pipeline of prospective Affiliates around the world," Mr. Healey concluded. "With our unique competitive position and a favorable transaction environment, we are actively pursuing an array of opportunities across outstanding traditional and alternative firms, and we are confident in our prospects for continued meaningful growth through accretive new investments."

About Affiliated Managers Group

AMG is a global asset management company with equity investments in leading boutique investment management firms. AMG's innovative partnership approach allows each Affiliate's management team to own significant equity in their firm while maintaining operational autonomy. AMG's 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 March 31, 2013, the aggregate assets under management of AMG's Affiliates were approximately $463 billion in more than 350 investment products across a broad range of investment styles, asset classes and distribution channels. For more information, please visit the Company's 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.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 of our Affiliates and their ability to effectively market their investment strategies, and other risks detailed from time to time in AMG's filings with the Securities and Exchange Commission.Reference is hereby made to the "Risk Factors" set forth in the Company's Form 10-K for the year ended December 31, 2012.

AMG routinely posts information that may be significant for investors in the Investor Relations section of its website, and encourages investors to consult that section regularly.For additional information, please visitwww.amg.com.

Financial Tables Follow

A teleconference will be held with AMG's 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 412594.The live call and replay of the session, and additional financial information referenced during the teleconference, can also be accessed via the Web athttp://www.amg.com/InvestorRelations/.

 

Affiliated Managers Group, Inc.

Financial Highlights
(in millions, except per share data)
  
Three MonthsThree Months
EndedEnded
 3/31/12 3/31/13
 
Revenue$417.7$502.2
 
Net income (controlling interest)$37.4$62.4
 
Economic net income (A)$83.5$124.2
 
EBITDA (B)$114.1$175.0
 
 
Average shares outstanding - diluted52.954.2
 
Earnings per share - diluted$0.71$1.15
 
Average shares outstanding - adjusted diluted (C)52.954.7
 
Economic earnings per share (C)$1.58$2.27
 
 
 

December 31,
2012

March 31,
2013

 
Cash and cash equivalents$430.4$335.0
 
Senior bank debt$325.0$150.0
 
Senior notes$340.0$340.0
 
Senior convertible securities$450.1$454.0
 
Junior convertible trust preferred securities$515.5$516.3
 
Stockholders' equity$2,084.2$2,130.9
 
 
Affiliated Managers Group, Inc.
Reconciliations of Earnings Per Share Calculation
(in millions, except per share data)
  
Three MonthsThree Months
EndedEnded
 3/31/12 3/31/13
 
Net income (controlling interest)$37.4$62.4
 
Average shares outstanding - diluted52.954.2
 
Earnings per share - diluted$0.71$1.15
 
 
Reconciliations of Average Shares Outstanding
 
Three MonthsThree Months
EndedEnded
 3/31/12 3/31/13
 
Average shares outstanding - diluted52.954.2

Dilutive impact of 2008 Senior convertible securities shares

 - 0.5
Average shares outstanding - adjusted diluted (C) 52.9 54.7
 
Affiliated Managers Group, Inc.
Operating Results
    
Assets Under Management
(in millions)
 
Statement of Changes
Institutional

Mutual
Fund

High Net
Worth

Total

Assets under management, December 31,
 2012

$254,337$121,874$55,556$431,767
Client cash inflows

10,889

12,068

3,174

26,131

Client cash outflows 

(4,967

) 

(7,288

) 

(1,922

) 

(14,177

)
Net client cash flows 5,922  4,780  1,252  11,954 
Investment performance8,8468,0812,51419,441
Other (D) (626) -  (3) (629)
Assets under management, March 31, 2013$268,479 $134,735 $59,319 $462,533 
 
 
 
 
Financial Results
(in millions)
ThreeThree
MonthsMonths
EndedPercentEndedPercent
 3/31/12 of Total 3/31/13 of Total
Revenue
Institutional$206.850%$223.845%
Mutual Fund175.742%227.645%
High Net Worth 35.2  8% 50.8  10%
$417.7  100%$502.2  100%
 
EBITDA (B)
Institutional$66.859%$104.160%
Mutual Fund37.132%55.031%
High Net Worth 10.2  9% 15.9  9%
$114.1  100%$175.0  100%
 
 
Affiliated Managers Group, Inc.
Reconciliations of Performance and Liquidity Measures
(in millions)
  
Three MonthsThree Months
EndedEnded
 3/31/12  3/31/13 
 
Net income (controlling interest)$37.4$62.4
Intangible amortization and impairments35.038.4
Intangible-related deferred taxes9.912.0
Imputed interest and contingent payment arrangements0.69.1
Affiliate equity expense 0.6  2.3 
Economic net income (A)$83.5 $124.2 
 
Cash flow from operations$52.5$

202.2

Interest expense, net of non-cash items

 

16.821.7
Current tax provision8.021.2
Income from equity method investments, net of distributions(14.1)

(32.9

)
Changes in assets and liabilities and other adjustments 50.9  

(37.2

)
EBITDA (B)$114.1 $175.0 
Holding company expenses 21.9  22.8 

EBITDA contribution

$136.0 $197.8 
 
 
Affiliated Managers Group, Inc.
Consolidated Statements of Income
(in millions, except per share data)
  
Three Months Ended
March 31,
 2012  2013 
 
Revenue$417.7$502.2
 
Operating expenses:
Compensation and related expenses181.1214.5
Selling, general and administrative85.092.3
Intangible amortization and impairments30.432.9
Depreciation and other amortization3.43.5
Other operating expenses 9.0  8.5 
 308.9  351.7 
Operating income 108.8  150.5 
 
Income from equity method investments 

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