AMG Reports Financial and Operating Results for the Fourth Quarter and Full Year 2012

Tue Jan 29, 2013 8:11am EST

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Company Reports Economic EPS of $2.55; EPS of $1.40 for Fourth Quarter, Economic
EPS of $7.71; EPS of $3.28 for Full Year 2012
BOSTON--(Business Wire)--
Affiliated Managers Group, Inc. (NYSE: AMG) today reported its financial and
operating results for the fourth quarter and full year 2012. 

For the fourth quarter of 2012, Economic earnings per share ("Economic EPS")
were $2.55, compared to $1.76 for the same period of 2011, while diluted
earnings per share for the fourth quarter of 2012 were $1.40, compared to $0.77
for the same period of 2011. For the fourth quarter of 2012, Economic net income
was $136.5 million, compared to $92.5 million for the same period of 2011. For
the fourth quarter of 2012, Net income was $75.0 million, compared to $40.3
million for the same period of 2011. For the fourth quarter of 2012, EBITDA was
$182.1 million, compared to $116.3 million for the same period of 2011.
(Economic EPS, Economic net income, and EBITDA are defined in the attached
tables, along with comparisons to the appropriate GAAP measure.) 

For the year ended December 31, 2012, Economic net income was $408.8 million,
while EBITDA was $543.4 million, and Net income was $174.0 million. For the year
ended December 31, 2011, Economic net income was $351.0 million, while EBITDA
was $471.3 million, and Net income was $164.9 million. 

Net client cash flows for the fourth quarter of 2012 were $5.1 billion, and
flows for the year ended December 31, 2012 were $30.1 billion. The aggregate
assets under management of AMG`s affiliated investment management firms were
approximately $432 billion at December 31, 2012. 

"AMG`s results for the fourth quarter and full year 2012 reflected strong
performance across all areas of our business and the excellent execution of our
growth strategy, including continued outstanding growth from net client cash
flows, the ongoing expansion of our global distribution platform, and the
significant deployment of capital through our new investments strategy," stated
Sean M. Healey, Chairman and Chief Executive Officer of AMG. "Our Economic
earnings per share were a record $7.71 for the year, an increase of 16% over
2011, and going forward, we see excellent opportunities to generate further
growth in earnings and shareholder value through both the organic growth of our
Affiliates as well as the addition of outstanding new Affiliates." 

"Our Affiliates produced strong investment performance in the areas which are
most attractive to global clients for the alpha-generating portions of their
portfolios, including global and emerging markets equities and alternatives,
which collectively generate over 70% of our EBITDA," Mr. Healey added. "With
industry-leading long-term track records in these product areas at Affiliates
such as Tweedy, Browne, Harding Loevner, and Genesis in equities, and ValueAct,
AQR, and BlueMountain in alternatives, we are well-positioned for continued
strong organic growth. In addition, our alternative products delivered excellent
absolute returns and meaningful performance fees during the year." 

Mr. Healey continued, "Our global distribution strategy, which complements
Affiliate-level marketing efforts with the centralized platform of AMG`s global
franchise, has now generated exceptional organic growth from net client cash
flows for eleven consecutive quarters - including over $30 billion of net client
cash flows in 2012, a period in which investor risk appetite remained broadly
muted. The strategic investment we have made over the past five years in
extending the breadth and depth of our Affiliates` marketing reach around the
globe has generated substantial incremental new business in every coverage
region, and with new offices in Dubai and Zurich and additional resources in
Germany and Switzerland within the past year, we expect continued momentum going
forward. Given the increasing client demand for differentiated, alpha-generating
strategies from specialist firms, and the significant opportunities we see to
win new business and market share around the world, we will continue to add
capabilities in key markets and channels globally in 2013." 

"Finally, we were very pleased with the successful execution of our new
investments strategy in 2012, with the addition of Veritable, Yacktman, and our
significant additional investment in BlueMountain," Mr. Healey concluded. "Our
forward new investment pipeline is strong and diverse, and includes traditional,
alternative, and wealth management firms globally. We are making excellent
progress in this area as we actively evaluate an array of prospective
Affiliates, and we will continue to benefit from our reputation as the partner
of choice to the best boutique firms around the world. Given AMG`s unique
competitive position and our outstanding track record of Affiliate investments,
we are confident in our ability to add materially to our earnings growth through
accretive Affiliate investments 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 December 31, 2012, the aggregate assets under
management of AMG`s Affiliates were approximately $432 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, 2011.

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 visit www.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 407209.The live call and replay of the session, and
additional financial information referenced during the teleconference, can also
be accessed via the Web at http://www.amg.com/InvestorRelations/.

                                                                                                  
                                                                                                  
 Affiliated Managers Group, Inc.                                                                  
 Financial Highlights                                                                             
 (in millions, except per share data)                                                             
                                                                                                  
                                                            Three Months        Three Months      
                                                            Ended               Ended             
                                                            12/31/11            12/31/12          
                                                                                                  
 Revenue                                                    $        402.4      $        491.0    
                                                                                                  
 Net income (controlling interest)                          $        40.3       $        75.0     
                                                                                                  
 Economic net income (A)                                    $        92.5       $        136.5    
                                                                                                  
 EBITDA (B)                                                 $        116.3      $        182.1    
                                                                                                  
                                                                                                  
 Average shares outstanding - diluted                                52.6                55.5     
                                                                                                  
 Earnings per share - diluted                               $        0.77       $        1.40     
                                                                                                  
 Average shares outstanding - adjusted diluted (C)                   52.6                53.6     
                                                                                                  
 Economic earnings per share (C)                            $        1.76       $        2.55     
                                                                                                  
                                                                                                  
                                                                                                  
                                                            December 31,        December 31,      
                                                            2011                2012              
                                                                                                  
 Cash and cash equivalents                                  $        449.5      $        430.4    
                                                                                                  
 Senior bank debt                                           $        250.0      $        325.0    
                                                                                                  
 Senior notes (D)                                           $        -          $        340.0    
                                                                                                  
 Senior convertible securities (E)                          $        435.6      $        450.1    
                                                                                                  
 Junior convertible trust preferred securities (E)          $        512.6      $        515.5    
                                                                                                  
 Stockholders` equity                                       $        1,866.0    $        2,067.8  
                                                                                                  
                                                                                                  


 Affiliated Managers Group, Inc.                                                              
 Financial Highlights                                                                         
 (in millions, except per share data)                                                         
                                                                                              
                                                            Year              Year            
                                                            Ended             Ended           
                                                            12/31/11          12/31/12        
                                                                                              
 Revenue                                                    $      1,704.8    $      1,805.5  
                                                                                              
 Net income (controlling interest)                          $      164.9      $      174.0    
                                                                                              
 Economic net income (A)                                    $      351.0      $      408.8    
                                                                                              
 EBITDA (B)                                                 $      471.3      $      543.4    
                                                                                              
                                                                                              
                                                                                              
 Average shares outstanding - diluted                              53.0              53.0     
                                                                                              
 Earnings per share - diluted                               $      3.11       $      3.28     
                                                                                              
 Average shares outstanding - adjusted diluted (C)                 53.0              53.0     
                                                                                              
 Economic earnings per share (C)                            $      6.62       $      7.71     
                                                                                              
                                                                                              


 Affiliated Managers Group, Inc.                                                                 
 Reconciliations of Earnings Per Share Calculation                                               
 (in millions, except per share data)                                                            
                                                                                                 
                                                           Three Months        Three Months      
                                                           Ended               Ended             
                                                           12/31/11            12/31/12          
                                                                                                 
 Net income (controlling interest)                         $        40.3       $        75.0     
 Convertible securities interest expense, net (F)                   -                   2.7      
 Net income (controlling interest), as adjusted            $        40.3       $        77.7     
                                                                                                 
 Average shares outstanding - diluted                               52.6                55.5     
                                                                                                 
 Earnings per share - diluted                              $        0.77       $        1.40     
                                                                                                 
                                                                                                 
                                                           Year                Year              
                                                           Ended               Ended             
                                                           12/31/11            12/31/12          
                                                                                                 
 Net income (controlling interest)                         $        164.9      $        174.0    
 Convertible securities interest expense, net (F)                   -                   -        
 Net income (controlling interest), as adjusted            $        164.9      $        174.0    
                                                                                                 
 Average shares outstanding - diluted                               53.0                53.0     
                                                                                                 
 Earnings per share - diluted                              $        3.11       $        3.28     
                                                                                                 
                                                                                                 


 Affiliated Managers Group, Inc.                                                                      
 Reconciliations of Average Shares Outstanding                                                        
 (in millions)                                                                                        
                                                                                                      
                                                                   Three Months    Three Months       
                                                                   Ended           Ended              
                                                                   12/31/11        12/31/12           
                                                                                                      
 Average shares outstanding - diluted                              52.6            55.5               
 Assumed issuance of 2008 Senior Convertible Notes shares          -               -                  
 Assumed issuance of Trust Preferred shares                        -               (2.0      )        
 Dilutive impact of 2008 Senior Convertible Notes shares           -               0.1                
 Dilutive impact of Trust Preferred shares                         -               -                  
 Average shares outstanding - adjusted diluted (C)                 52.6            53.6               
                                                                                                      
                                                                                                      
                                                                                                      
                                                                   Year            Year               
                                                                   Ended           Ended              
                                                                   12/31/11        12/31/12           
                                                                                                      
 Average shares outstanding - diluted                              53.0            53.0               
 Assumed issuance of 2008 Senior Convertible Notes shares          -               -                  
 Assumed issuance of Trust Preferred shares                        -               -                  
 Dilutive impact of 2008 Senior Convertible Notes shares           -               -                  
 Dilutive impact of Trust Preferred shares                         -               -                  
 Average shares outstanding - adjusted diluted (C)                 53.0            53.0               
                                                                                                      
                                                                                                      


 Affiliated Managers Group, Inc.                                                                                                         
 Operating Results                                                                                                                       
 (in millions)                                                                                                                           
                                                                                                                                         
 Assets Under Management                                                                                                                 
                                                                                                                                         
 Statement of Changes - Quarter to Date                                                                                                  
                                                      Mutual               Institutional            High Net            Total            
                                                      Fund                                          Worth                                
                                                                                                                                         
 Assets under management, September 30, 2012          $    117,852         $      243,756           $    54,506         $   416,114      
 Client cash inflows                                       9,542                  10,238                 2,752              22,532       
 Client cash outflows                                      (7,686   )             (7,055   )             (2,721  )          (17,462  )   
 Net client cash flows                                     1,856                  3,183                  31                 5,070        
 Investment performance                                    2,166                  7,398                  1,019              10,583       
 Assets under management, December 31, 2012           $    121,874         $      254,337           $    55,556         $   431,767      
                                                                                                                                         
                                                                                                                                         
                                                                                                                                         
 Statement of Changes - Year to Date                                                                                                     
                                                      Mutual               Institutional            High Net            Total            
                                                      Fund                                          Worth                                
                                                                                                                                         
 Assets under management, December 31, 2011           $    85,222          $      205,658           $    36,582         $   327,462      
 New investments (G)                                       14,773                 13                     13,219             28,005       
 Client cash inflows                                       35,027                 43,541                 10,928             89,496       
 Client cash outflows                                      (25,282  )             (24,918  )             (9,154  )          (59,354  )   
 Net client cash flows                                     9,745                  18,623                 1,774              30,142       
 Investment performance                                    12,308                 30,796                 4,359              47,463       
 Other (H)                                                 (174     )             (753     )             (378    )          (1,305   )   
 Assets under management, December 31, 2012           $    121,874         $      254,337           $    55,556         $   431,767      
                                                                                                                                         
                                                                                                                                         


 Affiliated Managers Group, Inc.                                                              
 Operating Results                                                                            
 (in millions)                                                                                
                                                                                              
 Financial Results                                                                            
                                                                                              
                                                                                              
                            Three                             Three                           
                            Months                            Months                          
                            Ended             Percent         Ended             Percent       
                            12/31/11          of Total        12/31/12          of Total      
 Revenue                                                                                      
 Mutual Fund                $      168.0      42     %        $      217.1      44     %      
 Institutional                     200.8      50     %               224.3      46     %      
 High Net Worth                    33.6       8      %               49.6       10     %      
                            $      402.4      100    %        $      491.0      100    %      
                                                                                              
 EBITDA (B)                                                                                   
 Mutual Fund                $      30.2       26     %        $      49.7       27     %      
 Institutional                     75.2       65     %               116.3      64     %      
 High Net Worth                    10.9       9      %               16.1       9      %      
                            $      116.3      100    %        $      182.1      100    %      
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                            Year                              Year                            
                            Ended             Percent         Ended             Percent       
                            12/31/11          of Total        12/31/12          of Total      
 Revenue                                                                                      
 Mutual Fund                $      723.7      43     %        $      774.4      43     %      
 Institutional                     841.4      49     %               861.3      48     %      
 High Net Worth                    139.7      8      %               169.8      9      %      
                            $      1,704.8    100    %        $      1,805.5    100    %      
                                                                                              
 EBITDA (B)                                                                                   
 Mutual Fund                $      151.2      32     %        $      169.5      31     %      
 Institutional                     288.3      61     %               323.5      60     %      
 High Net Worth                    31.8       7      %               50.4       9      %      
                            $      471.3      100    %        $      543.4      100    %      
                                                                                              
                                                                                              


 Affiliated Managers Group, Inc.                                                                                    
 Reconciliations of Performance and Liquidity Measures                                                              
 (in millions)                                                                                                      
                                                                                                                    
                                                                                                                    
                                                                      Three Months            Three Months          
                                                                      Ended                   Ended                 
                                                                      12/31/11                12/31/12              
                                                                                                                    
 Net income (controlling interest)                                    $      40.3             $      75.0           
 Intangible amortization and impairments                                     36.1                    36.9           
 Intangible-related deferred taxes                                           7.0                     17.5           
 Imputed interest and contingent payment arrangements                        1.6                     5.9            
 Affiliate equity expense                                                    7.5                     1.2            
 Economic net income (A)                                              $      92.5             $      136.5          
                                                                                                                    
 Cash flow from operations                                            $      158.6            $      186.2          
 Interest expense, net of non-cash items                                     16.4                    21.7           
 Current tax provision                                                       13.1                    29.9           
 Income from equity method investments, net of distributions                 22.9                    67.5           
 Changes in assets and liabilities and other adjustments                     (94.7   )               (123.2  )      
 EBITDA (B)                                                           $      116.3            $      182.1          
 Holding company expenses                                                    21.0                    28.8           
 EBITDA Contribution                                                  $      137.3            $      210.9          
                                                                                                                    
                                                                      Year                    Year                  
                                                                      Ended                   Ended                 
                                                                      12/31/11                12/31/12              
                                                                                                                    
 Net income (controlling interest)                                    $      164.9            $      174.0          
 Intangible amortization and impairments                                     117.0                   220.9          
 Intangible-related deferred taxes                                           43.2                    17.6           
 Imputed interest and contingent payment arrangements                        14.7                    (6.8    )      
 Affiliate equity expense                                                    11.2                    3.1            
 Economic net income (A)                                              $      351.0            $      408.8          
                                                                                                                    
 Cash flow from operations                                            $      708.5            $      633.2          
 Interest expense, net of non-cash items                                     65.7                    74.8           
 Current tax provision                                                       45.0                    61.0           
 Income from equity method investments, net of distributions                 (22.7   )               61.9           
 Changes in assets and liabilities and other adjustments                     (325.2  )               (287.5  )      
 EBITDA (B)                                                           $      471.3            $      543.4          
 Holding company expenses                                                    82.1                    94.7           
 EBITDA Contribution                                                  $      553.4            $      638.1          
                                                                                                                    
                                                                                                                    


 Affiliated Managers Group, Inc.                                                                                               
 Consolidated Statements of Income                                                                                             
 (in millions, except per share data)                                                                                          
                                                                                                                               
                                                Three Months Ended                       Year Ended                            
                                                December 31,                             December 31,                          
                                                2011                  2012               2011                 2012             
                                                                                                                               
 Revenue                                        $    402.4            $    491.0         $   1,704.8          $   1,805.5      
                                                                                                                               
 Operating expenses:                                                                                                           
 Compensation and related expenses                   173.9                 218.7             718.8                784.7        
 Selling, general and administrative                 89.2                  99.2              350.8                366.9        
 Intangible amortization and impairments (I)         31.3                  31.0              97.7                 200.0        
 Depreciation and other amortization                 3.4                   3.5               15.0                 14.1         
 Other operating expenses                            9.4                   11.7              36.4                 39.4         
                                                     307.2                 364.1             1,218.7              1,405.1      
 Operating income                                    95.2                  126.9             486.1                400.4        
                                                                                                                               
 Non-operating (income) and expenses:                                                                                          
 Investment and other (income) loss                  (1.8   )              (1.8   )          5.0                  (22.0    )   
 Income from equity method investments               (32.6  )              (82.3  )          (72.7    )           (129.7   )   
 Interest expense                                    18.2                  24.2              73.8                 83.0         
 Imputed interest expense and contingent                                                                                       
 payment arrangements (J)                            2.4                   9.7               27.3                 (26.1    )   
                                                     (13.8  )              (50.2  )          33.4                 (94.8    )   
                                                                                                                               
 Income before income taxes                          109.0                 177.1             452.7                495.2        
                                                                                                                               
 Income taxes (K)                                    19.9                  37.8              93.1                 83.8         
 Net income                                          89.1                  139.3             359.6                411.4        
                                                                                                                               
 Net income (non-controlling interests)              (48.8  )              (64.3  )          (194.7   )           (237.4   )   
 Net income (controlling interest)              $    40.3             $    75.0          $   164.9            $   174.0        
                                                                                                                               
 Average shares outstanding - basic                  51.5                  52.1              51.8                 51.7         
 Average shares outstanding - diluted                52.6                  55.5              53.0                 53.0         
                                                                                                                               
 Earnings per share - basic                     $    0.78             $    1.44          $   3.18             $   3.36         
 Earnings per share - diluted                   $    0.77             $    1.40          $   3.11             $   3.28         
                                                                                                                               
                                                                                                                               


 Affiliated Managers Group, Inc.                                                                            
 Consolidated Balance Sheets                                                                                
 (in millions)                                                                                              
                                                            December 31,             December 31,           
                                                            2011                     2012                   
 Assets                                                                                                     
 Current assets:                                                                                            
 Cash and cash equivalents                                  $      449.5             $      430.4           
 Investment advisory fees receivable                               214.9                    255.5           
 Investments in marketable securities                              100.4                    128.9           
 Unsettled fund share receivables                                  34.5                     40.1            
 Prepaid expenses and other current assets                         77.1                     57.4            
 Total current assets                                              876.4                    912.3           
                                                                                                            
 Fixed assets, net                                                 69.1                     81.5            
 Equity investments in Affiliates                                  615.8                    1,031.3         
 Acquired client relationships, net                                1,321.1                  1,585.5         
 Goodwill                                                          2,117.3                  2,355.2         
 Other assets                                                      219.2                    221.3           
 Total assets                                               $      5,218.9           $      6,187.1         
                                                                                                            
 Liabilities and Equity                                                                                     
 Current liabilities:                                                                                       
 Accounts payable and accrued liabilities                   $      343.6             $      324.7           
 Unsettled fund share payables                                     40.8                     39.8            
 Payables to related party                                         33.2                     11.3            
 Total current liabilities                                         417.6                    375.8           
                                                                                                            
 Senior bank debt                                                  250.0                    325.0           
 Senior notes (D)                                                  -                        340.0           
 Senior convertible securities (E)                                 435.6                    450.1           
 Junior convertible trust preferred securities (E)                 512.6                    515.5           
 Deferred income taxes                                             506.0                    513.7           
 Other long-term liabilities                                       145.7                    164.7           
 Total liabilities                                                 2,267.5                  2,684.8         
                                                                                                            
 Redeemable non-controlling interests                              451.8                    477.5           
                                                                                                            
 Equity:                                                                                                    
 Common stock                                                      0.5                      0.5             
 Additional paid-in capital                                        927.5                    852.1           
 Accumulated other comprehensive income                            50.0                     79.1            
 Retained earnings                                                 1,176.7                  1,350.7         
                                                                   2,154.7                  2,282.4         
 Less treasury stock, at cost                                      (288.7   )               (214.6   )      
 Total stockholders` equity                                        1,866.0                  2,067.8         
                                                                                                            
 Non-controlling interests                                         633.6                    957.0           
 Total equity                                                      2,499.6                  3,024.8         
 Total liabilities and equity                               $      5,218.9           $      6,187.1         
                                                                                                            
                                                                                                            


 Affiliated Managers Group, Inc.                                                                                                                         
 Consolidated Statements of Cash Flow                                                                                                                    
 (in millions)                                                                                                                                           
                                                                               Three Months                          Year                                
                                                                               Ended                                 Ended                               
                                                                               December 31,                          December 31,                        
                                                                               2011                2012              2011                2012            
 Cash flow from operating activities:                                                                                                                    
 Net income                                                                    $   89.1            $   139.3         $   359.6           $   411.4       
 Adjustments to reconcile Net income to net cash flow from operating                                                                                     
 activities:                                                                                                                                             
 Intangible amortization and impairments                                           31.3                31.0              97.7                200.0       
 Amortization of issuance costs                                                    1.8                 2.5               8.1                 8.2         
 Depreciation and other amortization                                               3.4                 3.5               15.0                14.1        
 Deferred income tax provision                                                     3.5                 5.3               35.2                11.1        
 Imputed interest expense and contingent payment arrangements                      2.4                 9.7               27.3                (26.1   )   
 Income from equity method investments, net of amortization                        (32.6   )           (82.3   )         (72.7   )           (129.7  )   
 Distributions received from equity method investments                             17.9                25.2              128.3               104.7       
 Tax benefit from exercise of stock options                                        0.2                 2.1               1.1                 3.5         
 Share-based compensation                                                          11.1                23.5              30.3                47.6        
 Affiliate equity expense                                                          13.1                12.3              22.1                21.7        
 Other adjustments                                                                 1.9                 11.3              21.3                12.6        
 Changes in assets and liabilities:                                                                                                                      
 (Increase) decrease in investment advisory fees receivable                        4.3                 (13.5   )         22.5                (34.8   )   
 (Increase) decrease in prepaids and other current assets                          6.3                 8.7               (2.8    )           (4.2    )   
 (Increase) decrease in other assets                                               0.2                 (0.3    )         (1.5    )           (2.8    )   
 (Increase) decrease in unsettled fund shares receivable                           22.6                10.7              5.9                 (4.5    )   
 Increase (decrease) in unsettled fund shares payable                              (5.0    )           (13.0   )         2.0                 (2.3    )   
 Increase (decrease) in accounts payable, accrued liabilities and                                                                                        
 other long-term liabilities                                                       (12.9   )           10.2              9.1                 2.7         
 Cash flow from operating activities                                               158.6               186.2             708.5               633.2       
 Cash flow used in investing activities:                                                                                                                 
 Investments in Affiliates                                                         -                   (42.1   )         (13.3   )           (797.4  )   
 Purchase of fixed assets                                                          (7.7    )           (10.1   )         (16.1   )           (20.0   )   
 Purchase of investment securities                                                 (0.8    )           (5.3    )         (49.2   )           (19.1   )   
 Sale of investment securities                                                     -                   3.1               10.9                34.2        
 Cash flow used in investing activities                                            (8.5    )           (54.4   )         (67.7   )           (802.3  )   
 Cash flow from (used in) financing activities:                                                                                                          
 Borrowings of senior bank debt                                                    250.0               75.0              360.0               630.0       
 Repayments of senior bank debt                                                    (210.0  )           (195.0  )         (570.0  )           (555.0  )   
 Issuance of senior notes                                                          -                   140.0             -                   340.0       
 Issuance of common stock                                                          6.8                 27.7              28.0                73.4        
 Repurchase of common stock                                                        (13.0   )           -                 (61.0   )           (60.9   )   
 Issuance costs                                                                    (5.1    )           (4.4    )         (13.6   )           (10.4   )   
 Excess tax benefit from exercise of stock options                                 2.2                 10.4              7.1                 22.0        
 Settlement of treasury lock                                                       (4.7    )           -                 (0.8    )           -           
 Note payments                                                                     8.3                 (1.5    )         (72.5   )           (3.6    )   
 Distributions to non-controlling interests                                        (52.1   )           (43.7   )         (167.6  )           (181.4  )   
 Affiliate equity issuances and repurchases                                        (6.6    )           (82.8   )         (13.4   )           (107.9  )   
 Cash flow from (used in) financing activities                                     (24.2   )           (74.3   )         (503.8  )           146.2       
                                                                                                                                                         
 Effect of foreign exchange rate changes on cash and cash equivalents              0.3                 0.3               (0.8    )           3.8         
 Net increase (decrease) in cash and cash equivalents                              126.2               57.8              136.2               (19.1   )   
 Cash and cash equivalents at beginning of period                                  323.3               372.6             313.3               449.5       
 Cash and cash equivalents at end of period                                    $   449.5           $   430.4         $   449.5           $   430.4       
                                                                                                                                                         
                                                                                                                                                         


 Affiliated Managers Group, Inc.                                                                                                                                                  
 Notes                                                                                                                                                                            
 (in millions, except per share data)                                                                                                                                             
                                                                                                                                                                                  
 (A)    Under our Economic net income definition, we add to Net income (controlling interest) amortization (including equity method amortization) and impairments, deferred taxes 
        related to intangible assets, non-cash imputed interest expense (principally related to the accounting for convertible securities and contingent payment arrangements) and 
        certain Affiliate equity expenses. We consider Economic net income an important measure of our financial performance, as we believe it best represents operating          
        performance before 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; Economic net income is not a liquidity      
        measure, and should not be used in place of liquidity measures calculated under GAAP.                                                                                     
                                                                                                                                                                                  
        We add back 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 expenses relating to certain transfers of equity between   
        Affiliate management partners when these transfers have no dilutive effect to shareholders.                                                                               
                                                                                                                                                                                  
 (B)    EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization. This supplemental non-GAAP liquidity measure is provided in addition  
        to, but not as a substitute for, cash flow from operations. As a measure of liquidity, we believe EBITDA is useful as an indicator of our ability to service debt, make   
        new investments and meet working capital requirements. EBITDA, as calculated by us, may not be consistent with computations of EBITDA by other companies. In reporting    
        EBITDA by segment, Affiliate expenses are allocated to a particular segment on a pro rata basis with respect to the revenue generated by that Affiliate in such segment.  
                                                                                                                                                                                  
 (C)    Economic earnings per share represents Economic net income divided by the adjusted diluted average shares outstanding. 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 contingently convertible securities and the junior convertible trust preferred 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 not a liquidity measure, and should not be used in place of liquidity measures   
        calculated under GAAP.                                                                                                                                                    
                                                                                                                                                                                  
 (D)    In the third and fourth quarters of 2012, we sold $200.0 aggregate principal amount of 6.375% Senior Notes due 2042 and $140.0 aggregate principal amount of 5.25% Senior 
        Notes due 2022, respectively.                                                                                                                                             
                                                                                                                                                                                  
 (E)    We have bifurcated our convertible debt securities into their debt and equity components on our balance sheet. The principal amount at maturity of the senior convertible 
        notes due 2038 was $460.0 at December 31, 2011 and December 31, 2012. The principal amount at maturity of the junior convertible trust preferred securities was $730.8 at 
        December 31, 2011 and December 31, 2012, comprised of $300.0 due 2036 and $430.8 due 2037.                                                                                
                                                                                                                                                                                  
 (F)    Convertible securities interest expense, net includes the interest expense, net of tax, associated with our dilutive convertible securities.                              
                                                                                                                                                                                  
 (G)    In the second quarter of 2012, we completed investments in Yacktman Asset Management Co. and Veritable, LP.                                                               
                                                                                                                                                                                  
 (H)    Other includes assets under management attributable to Affiliate product transitions, new investment client transitions and transfers of our interests in certain         
        Affiliated investment management firms, the financial effects of which are not material to our ongoing results.                                                           
                                                                                                                                                                                  
 (I)    In the first and second quarters of 2012, we reduced the carrying value of certain of our indefinite-lived intangible assets and, accordingly, recorded pre-tax expenses  
        of $8.7 and $93.5, respectively.                                                                                                                                          
                                                                                                                                                                                  
 (J)    In the first and second quarters of 2012, we adjusted our estimate of our contingent payment obligations and, accordingly, recorded pre-tax gains attributable to the     
        controlling interest of $5.0 and $34.6, respectively. In the fourth quarter of 2012, we adjusted our estimate of our contingent payment obligations and, accordingly,     
        recorded a pre-tax expense attributable to the controlling interest of $3.8.                                                                                              
                                                                                                                                                                                  
 (K)    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                                                                                      Year Ended                                                                                 
                                                                                  December 31,                                                                                            December 31,                                                                               
                                                                                  2011                                                2012                                                2011                                                2012                                   
       Current income taxes                                                       $            13.1                                   $            29.9                                   $            45.0                                   $            61.0                      
       Intangible-related deferred taxes (1)                                                   7.0                                                 22.6                                                43.2                                                22.7                      
       Other deferred taxes                                                                    (2.3         )                                      (17.0        )                                      (4.0         )                                      (12.1        )            
       Taxes attributable to controlling interest                                              17.8                                                35.5                                                84.2                                                71.6                      
       Taxes attributable to non-controlling interests                                         2.1                                                 2.3                                                 8.9                                                 12.2                      
       Total income taxes                                                         $            19.9                                   $            37.8                                   $            93.1                                   $            83.8                      
                                                                                                                                                                                                                                                                                     
       Income before taxes (controlling interest)                                 $            58.1                                   $            110.5                                  $            249.1                                  $            245.6                     
                                                                                                                                                                                                                                                                                     
       Effective tax rate (2)                                                                  30.6         %                                      32.1         %                                      33.8         %                                      29.2         %            
                                                                                                                                                                                                                                                                                     
       (1) Intangible-related deferred taxes for the three months and year ended December 31, 2012 include $5.1 related to a one-time item not added back for the calculation of Economic net income.                                                                                
       (2) Taxes attributable to controlling interests divided by controlling interest share of the consolidated income before taxes.                                                                                                                                                


Affiliated Managers Group, Inc.
Investor Relations:
Alexandra Lynn
(617) 747-3300
ir@amg.com
or
Media Relations:
Laura O`Brien
(617) 747-3300
pr@amg.com

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