Affiliated Managers (US:AMG)2025-02-14 22:04Financial Performance - Net income for 2024 was $740.6 million, representing an 18% decrease from $906.1 million in 2023, primarily due to a prior year gain from the sale of an equity interest[147]. - The company experienced net client cash flows of negative $13.9 million in 2024, with significant outflows in equity strategies[139]. - Economic net income (controlling interest) decreased by 2% in 2024 to $701.6 million, impacted by increased taxes and interest expenses[149]. - The company reported a 4% increase in Adjusted EBITDA (controlling interest) to $973.1 million in 2024[148]. - Consolidated revenue decreased by $16.9 million or 1% in 2024, primarily due to a $20.3 million or 1% decrease from asset-based fees[152]. - Net income (controlling interest) decreased by $161.3 million or 24% in 2024, primarily due to a pre-tax gain associated with the Veritable Transaction recognized in 2023[173]. - Investment and other income decreased by $39.7 million or 34% in 2024, primarily due to a $35.3 million decrease in net realized and unrealized gains on investments[169]. - Earnings per share (diluted) for 2024 was $15.13, down from $17.42 in 2023[253]. - The Company’s consolidated revenue for 2024 was $2,040.9 million, a decrease of 0.9% from 2023[253]. - Total consolidated expenses for 2024 were $1,507.8 million, reflecting a slight increase from $1,496.6 million in 2023[253]. Assets and Liabilities - As of December 31, 2024, the company's total assets under management reached approximately $707.9 billion, reflecting a 5% increase from $672.7 billion in 2023[132]. - Average assets under management for 2024 were $700.5 billion, a 6% increase from $660.3 billion in 2023[136]. - Total assets decreased from $9,059.6 million in 2023 to $8,830.9 million in 2024, a decline of 2.5%[259]. - Total liabilities increased from $4,096.1 million in 2023 to $4,182.2 million in 2024, an increase of 2.1%[259]. - The company’s equity decreased from $4,570.1 million in 2023 to $4,298.2 million in 2024, a decline of 5.9%[262]. Cash Flow - Operating cash flow for 2024 was $932.1 million, primarily driven by net income of $740.6 million and distributions from equity method investments of $403.9 million[189]. - Investing cash flow for 2024 was $379.1 million, mainly due to $898.1 million from maturities and sales of investment securities[190]. - Financing cash flow for 2024 was a net outflow of $1,175.9 million, primarily due to $709.8 million in common stock repurchases and $400.0 million in senior notes repayment[191]. - Cash flow from operating activities decreased from $1,054.7 million in 2022 to $874.3 million in 2023, with a slight recovery expected to $932.1 million in 2024[267]. - Cash flow from investing activities improved significantly from a negative $109.9 million in 2022 to a positive $264.5 million in 2023, and further to $379.1 million in 2024[267]. - Cash flow used in financing activities was $1,402.9 million in 2022, reduced to $758.3 million in 2023, with an expected increase to $1,175.9 million in 2024[267]. Investments and Affiliates - The company completed a minority investment in NorthBridge Partners, LLC, a private markets manager, on February 6, 2025[133]. - The company anticipates further evolution of its business mix through investments in new and existing Affiliates to capitalize on industry growth trends[139]. - The equity method investments in affiliates (net) balance was $2,246.6 million as of December 31, 2024[248]. - Management recognized a $39.9 million expense to reduce the carrying value of an equity method investment in an affiliate to fair value due to anticipated declines in assets under management[248]. - The company’s investments in affiliates, net of cash acquired, were $291.1 million in 2022, projected to be $294.7 million in 2023, and significantly reduced to $5.9 million in 2024[267]. Debt and Financing - As of December 31, 2024, the carrying value of total debt was $3.4 billion, with a weighted average maturity of 21 years[196]. - The bank leverage ratio as of December 31, 2024, was 0.9x, significantly below the maximum allowed ratio of 3.25x[199]. - The company fully repaid $400.0 million of 2024 senior notes in the first quarter of 2024[200]. - The company issued $400.0 million of 2034 senior unsecured notes in Q3 2024, with a maturity date of August 20, 2034[200]. - The company intends to use the net proceeds from the 2034 senior notes for general corporate purposes, including share repurchases and debt repayment[202]. - As of December 31, 2024, the company had $341.7 million of principal outstanding in junior convertible trust preferred securities maturing in 2037[204]. Tax and Compliance - Income tax expense decreased by $2.7 million or 1% in 2024, with an effective rate of 25.5% compared to 20.9% in 2023[171]. - Unrecognized tax benefits are recorded based on the likelihood of sustaining uncertain tax positions, with related interest and penalties included in income tax expense[319]. - The Company assesses the recoverability of deferred tax assets, considering future taxable income and recent operations, adjusting the valuation allowance as necessary[318]. Shareholder Returns - Share repurchases amounted to $706.0 million, indicating a significant investment in returning capital to shareholders[263]. - The company entered into an equity distribution program with an aggregate sales price of up to $500.0 million, with no sales occurring as of December 31, 2024[206]. Goodwill and Impairment - The company completed its annual qualitative goodwill impairment assessment as of September 30, 2024, with no impairment indicated[219]. - For the year ended December 31, 2024, the company recorded a $39.9 million expense to reduce the carrying value of an Affiliate to fair value[226]. Currency and Interest Rate Sensitivity - As of December 31, 2024, a 1% change in interest rates would have resulted in a $226.1 million net change in the fair value of fixed rate securities[229]. - A 1% change in the pound sterling, Canadian dollar, and Euro to U.S. dollar exchange rates would have resulted in changes to stockholders' equity of $8.4 million, $1.9 million, and $1.5 million, respectively[231]. - For the year ended December 31, 2024, a 1% change in the pound sterling, Canadian dollar, and Euro to U.S. dollar exchange rates would have resulted in annual changes to income before income taxes of $1.2 million, $0.3 million, and $0.0 million, respectively[231].