10-QPeriod: Q1 FY2017

AFFILIATED MANAGERS GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 5, 2017For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported solid financial results for the first quarter of 2017, with Net income attributable to controlling interest increasing 18% year-over-year to $122.5 million. Diluted earnings per share also saw a significant increase of 17% to $2.13. Revenue remained relatively flat at $544.3 million, a slight decrease of 0.2% from the prior year, primarily impacted by a small decline in performance fees. However, the company saw substantial growth in its equity method revenue, which surged by 82% to $819.7 million, driven by recent investments in new affiliates and growth at existing ones. Assets under management (AUM) experienced robust growth, increasing 17% to $753.5 billion, with a significant 36% jump in equity method affiliate AUM contributing to this expansion. The company's financial health appears strong, with operating cash flow significantly improving to $122.1 million from $25.6 million in the prior year. While financing activities showed a net outflow of $277.4 million, this was largely due to debt repayments and common stock repurchases. AMG also announced a quarterly cash dividend of $0.20 per common share, indicating a commitment to returning value to shareholders.

Financial Highlights

42 data points
Beta

Revenue

$544.30M

Net Income

$122.50M

22.5% Net Margin

EPS (Diluted)

$2.13

Total Assets

$8.59B

Cash & Equivalents

$293.60M

Free Cash Flow

$118.00M

Financial Statements
Beta
Revenue$544.30M
SG&A Expenses$88.70M
Operating Expenses$391.70M
Operating Income$262.50M
Interest Expense$22.50M
Net Income$122.50M
EPS (Basic)$2.16
EPS (Diluted)$2.13
Shares Outstanding (Basic)56.70M
Shares Outstanding (Diluted)59.20M

Key Highlights

  • 1Net income attributable to controlling interest increased 18% to $122.5 million.
  • 2Diluted earnings per share rose 17% to $2.13.
  • 3Total assets under management (AUM) grew 17% to $753.5 billion.
  • 4Equity method revenue saw a substantial 82% increase, reaching $819.7 million.
  • 5Operating cash flow significantly improved, rising to $122.1 million from $25.6 million in the prior year.
  • 6The company announced a quarterly cash dividend of $0.20 per common share.
  • 7Stock repurchases continued, with 0.5 million shares bought back in Q1 2017 at an average price of $161.87.

Frequently Asked Questions

While overall revenue saw a slight decrease, the primary driver of growth in the company's financial performance was the significant surge in equity method revenue, which increased by 82% to $819.7 million. This growth was largely fueled by recent investments in new affiliates and increased activity within existing equity method affiliates.

AMG experienced robust growth in AUM, which increased by 17% to $753.5 billion. This expansion was significantly driven by a 36% increase in AUM at equity method affiliates, highlighting the success of recent investments and the growing contribution of these entities.

AMG is returning capital to shareholders through both dividends and share repurchases. The company announced a quarterly cash dividend of $0.20 per common share. Additionally, AMG actively engages in share repurchases; in the first quarter of 2017, they repurchased approximately 0.5 million shares of common stock.

Total operating expenses remained relatively flat, showing only a 0.3% increase. A notable decrease was seen in Selling, general and administrative expenses, down 8%, primarily due to lower sub-advisory and distribution expenses. Intangible amortization and impairments also decreased by 18%.