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

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

Company Reports Economic EPS of $2.18; EPS of $1.18

BOSTON--(BUSINESS WIRE)-- Affiliated Managers Group, Inc. (NYS: AMG) today reported its financial and operating results for the second quarter and six months ended June 30, 2013.


For the second quarter of 2013, Economic earnings per share ("Economic EPS") were $2.18, compared to $1.66 for the same period of 2012, while diluted earnings per share for the second quarter of 2013 were $1.18, compared to $0.12 (or $0.82 excluding non-cash adjustments) for the same period of 2012. For the second quarter of 2013, Economic net income was $121.1 million, compared to $87.6 million for the same period of 2012, and Net income was $64.7 million, compared to $6.6 million (or $43.1 million excluding non-cash adjustments) for the same period of 2012. For the second quarter of 2013, EBITDA was $173.0 million, compared to $113.7 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.)

For the six months ended June 30, 2013, Economic net income was $245.4 million, while EBITDA was $348.0 million, and Net income was $127.1 million. For the six months ended June 30, 2012, Economic net income was $171.1 million, while EBITDA was $227.8 million, and Net income was $44.0 million (or $82.9 million excluding non-cash adjustments).

Net client cash flows for the second quarter of 2013 were $13.2 billion. The aggregate assets under management of AMG's affiliated investment management firms were approximately $470 billion at June 30, 2013.

"With record net client cash flows of $13 billion in the second quarter, and over $25 billion for the year to date, AMG has had an exceptional first half of 2013, despite a volatile global market environment," stated Sean M. Healey, Chairman and Chief Executive Officer of AMG. "Our Economic earnings per share increased 31% over the second quarter of 2012, reflecting excellent execution across our business, including continued outstanding organic growth and strong investment performance by our Affiliates."

"AMG's thirteenth consecutive quarter of strong net client cash flows was generated by the successful execution of our global distribution strategy and our Affiliates' outstanding long-term investment performance," Mr. Healey continued. "Global institutional clients are increasingly seeking differentiated, value-added strategies for the alpha portions of their portfolios, and our Affiliates offer industry-leading products in the most attractive areas in active equities and alternatives - including Yacktman, Harding Loevner, Tweedy, Browne, Artemis, and Genesis across U.S., global, and emerging markets equities, as well as BlueMountain, ValueAct, First Quadrant, and AQR in an array of alternative strategies. Given our strategic focus on performance-oriented product areas, AMG continues to be well-positioned to benefit from these client demand trends, and we see substantial additional opportunities as clients increase their allocations to risk products. With the ongoing success of our global distribution strategy, including new mandates in every coverage region during the second quarter, we are adding incremental resources to our platform around the world, and looking ahead, we will continue to focus on enhancing the breadth and specialization of our coverage across key markets and channels globally."

"Finally, notwithstanding recent market volatility, we are seeing increasing engagement from outstanding traditional and alternative boutique firms around the world," Mr. Healey concluded. "Given our 20-year track record of successful partnerships, as well as the long-term relationships formed with the best managers globally through our consistent calling effort, we remain confident in our prospects for meaningful incremental earnings growth through accretive investments in new Affiliates going forward."

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 June 30, 2013, the aggregate assets under management of AMG's Affiliates were approximately $470 billion in more than 400 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 417126.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
6/30/126/30/13
 
Revenue$429.6$541.0
 
Net income (controlling interest)$6.6$64.7
 
Economic net income (A)$87.6$121.1
 
EBITDA (B)$113.7$173.0
 
 
Average shares outstanding - diluted52.754.6
 
Earnings per share - diluted$0.12$1.18
 
Average shares outstanding - adjusted diluted (C)52.755.5
 
Economic earnings per share (C)$1.66$2.18
 
 
 

December 31,
2012

June 30, 2013
 
Cash and cash equivalents$430.4$413.8
 
Senior bank debt$325.0$100.0
 
Senior notes$340.0$340.0
 
Senior convertible securities (D)$450.1$404.8
 
Junior convertible trust preferred securities$515.5$517.1
 
Stockholders' equity$2,084.2$2,154.8
 
Affiliated Managers Group, Inc.
Financial Highlights
(in millions, except per share data)
    
Six MonthsSix Months
EndedEnded
6/30/126/30/13
 
Revenue$847.2$1,043.3
 
Net income (controlling interest)$44.0$127.1
 
Economic net income (A)$171.1$245.4
 
EBITDA (B)$227.8$348.0
 
 
 
Average shares outstanding - diluted52.854.4
 
Earnings per share - diluted$0.83$2.33
 
Average shares outstanding - adjusted diluted (C)52.855.1
 
Economic earnings per share (C)$3.24$4.45
 
Affiliated Managers Group, Inc.
Reconciliations of Earnings Per Share Calculation
(in millions, except per share data)
    
Three MonthsThree Months
EndedEnded
6/30/126/30/13
 
Net income (controlling interest)$6.6$64.7
 
Average shares outstanding - diluted52.754.6
 
Earnings per share - diluted$0.12$1.18
 
 
 
Six MonthsSix Months
EndedEnded
6/30/126/30/13
 
Net income (controlling interest)$44.0$127.1
 
Average shares outstanding - diluted52.854.4
 
Earnings per share - diluted$0.83$2.33
 
Affiliated Managers Group, Inc.
Reconciliations of Average Shares Outstanding
(in millions)
    
Three MonthsThree Months
EndedEnded
6/30/126/30/13
 
Average shares outstanding - diluted52.754.6
Dilutive impact of 2008 Senior Convertible Notes shares-0.8
Dilutive impact of Trust Preferred shares-0.1
Average shares outstanding - adjusted diluted (C)52.755.5
 
 
 
Six MonthsSix Months
EndedEnded
6/30/126/30/13
 
Average shares outstanding - diluted52.854.4
Dilutive impact of 2008 Senior Convertible Notes shares-0.7
Average shares outstanding - adjusted diluted (C)52.855.1
 
Affiliated Managers Group, Inc.
Operating Results
(in millions)
        
Assets Under Management
 
Statement of Changes - Quarter to Date
InstitutionalMutual Fund

High Net
Worth

Total
 
Assets under management, March 31, 2013$268,479$134,735$59,319$462,533
Client cash inflows11,43616,5572,59230,585
Client cash outflows (6,839) (8,293) (2,295) (17,427)
Net client cash flows 4,597  8,264  297  13,158 
Investment performance(4,985)(210)(391)(5,586)
Other (E) (593) (25) (7) (625)
Assets under management, June 30, 2013$267,498 $142,764 $59,218 $469,480 
 
 
 
Statement of Changes - Year to Date
InstitutionalMutual Fund

High Net
Worth

Total
 
Assets under management, December 31, 2012$254,337$121,874$55,556$431,767
Client cash inflows22,32428,6255,76656,715
Client cash outflows (11,805) (15,581) (4,217) (31,603)
Net client cash flows 10,519  13,044  1,549  25,112 
Investment performance3,8617,8712,12313,855
Other (E) (1,219) (25) (10) (1,254)
Assets under management, June 30, 2013$267,498 $142,764 $59,218 $469,480 
 
Affiliated Managers Group, Inc.
Operating Result
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