{"url_path":"/sec/mgre/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-17","source_url":"https://www.sec.gov/Archives/edgar/data/1004434/0001628280-26-008665-index.html","accession_number":"0001628280-26-008665","cik":"0001004434","ticker":"AMG","issuer_name":"AFFILIATED MANAGERS GROUP, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1004434/0001628280-26-008665-index.html","primary_entity_key":"0001004434","primary_entity_name":"AFFILIATED MANAGERS GROUP, INC."},"word_count":37262,"has_tables":true,"body_markdown":"Item 8.Financial Statements and Supplementary Data\n\nManagement’s Report on Internal Control Over Financial Reporting\n\nManagement of Affiliated Managers Group, Inc. (the “Company”) is responsible for establishing and maintaining adequate\n\ninternal control over financial reporting.  The Company’s internal control over financial reporting processes are designed by, or\n\nunder the supervision of, the Company’s chief executive and chief financial officers and applied by the Company’s Board of\n\nDirectors, management, and other senior employees to provide reasonable assurance regarding the reliability of financial\n\nreporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with\n\naccounting principles generally accepted in the U.S.\n\nThe Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of\n\nrecords that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable\n\nassurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with\n\naccounting principles generally accepted in the U.S., and that receipts and expenditures are being made only in accordance with\n\nauthorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or\n\ntimely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on its\n\nfinancial statements.\n\nAs of December 31, 2025, management conducted an assessment of the effectiveness of the Company’s internal control\n\nover financial reporting based on the framework established in Internal Control — Integrated Framework (2013) issued by the\n\nCommittee of Sponsoring Organizations of the Treadway Commission (COSO).  Based on this assessment, management has\n\ndetermined that the Company’s internal control over financial reporting as of December 31, 2025 was effective.\n\nThe Company’s internal control over financial reporting as of December 31, 2025 has been audited by\n\nPricewaterhouseCoopers LLP (PCAOB ID 238), an independent registered public accounting firm, as stated in their report\n\nappearing in “Report of Independent Registered Public Accounting Firm,” which expresses an unqualified opinion on the\n\neffectiveness of the Company’s internal control over financial reporting as of December 31, 2025.\n\n42\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Board of Directors and Stockholders of Affiliated Managers Group, Inc.\n\nOpinions on the Financial Statements and Internal Control over Financial Reporting\n\nWe have audited the accompanying consolidated balance sheets of Affiliated Managers Group, Inc. and its affiliates (the\n\n“Company”) as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income,\n\nof changes in equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related\n\nnotes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the\n\n“consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of\n\nDecember 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee\n\nof Sponsoring Organizations of the Treadway Commission (COSO).\n\nIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial\n\nposition of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the\n\nthree years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United\n\nStates of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over\n\nfinancial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013)\n\nissued by the COSO.\n\nBasis for Opinions\n\nThe Company's management is responsible for these consolidated financial statements, for maintaining effective internal\n\ncontrol over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included\n\nin Management’s Report on Internal Control Over Financial Reporting appearing under Item 8.  Our responsibility is to express\n\nopinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting\n\nbased on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United\n\nStates) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities\n\nlaws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform\n\nthe audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,\n\nwhether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material\n\nrespects.\n\nOur audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement\n\nof the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. \n\nSuch procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated\n\nfinancial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by\n\nmanagement, as well as evaluating the overall presentation of the consolidated financial statements.  Our audit of internal\n\ncontrol over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the\n\nrisk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based\n\non the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the\n\ncircumstances.  We believe that our audits provide a reasonable basis for our opinions.\n\nDefinition and Limitations of Internal Control over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the\n\nreliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally\n\naccepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures\n\nthat (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and\n\ndispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit\n\npreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and\n\nexpenditures of the company are being made only in accordance with authorizations of management and directors of the\n\ncompany; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or\n\ndisposition of the company’s assets that could have a material effect on the financial statements.\n\n43\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,\n\nprojections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate\n\nbecause of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\nCritical Audit Matters\n\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial\n\nstatements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or\n\ndisclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or\n\ncomplex judgments.  The communication of critical audit matters does not alter in any way our opinion on the consolidated\n\nfinancial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate\n\nopinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nImpairment Assessment for Indefinite-lived Acquired Client Relationships\n\nAs described in Notes 1 and 7 to the consolidated financial statements, the carrying value of indefinite-lived acquired client\n\nrelationships was $1,484 million as of December 31, 2025.  Management assesses for the possible impairment of indefinite-\n\nlived acquired client relationships annually or more frequently whenever events or changes in circumstances indicate that the\n\ncarrying amount of the asset may not be recoverable.  As disclosed by management, if they determine that it is likely that the\n\nfair value has declined below the related carrying value, management performs discounted cash flow analyses to determine the\n\nfair value of the asset group and record an expense to reduce the carrying value to its fair value.  During the year ended\n\nDecember 31, 2025, management completed impairment assessments of the indefinite-lived acquired client relationships for\n\ncertain mutual fund assets and determined that the fair value of the assets had declined below their carrying values and recorded\n\nan impairment expense of $128 million, to reduce the carrying value of the assets to fair value.  The decline in the fair value\n\nwas a result of current and projected declines in assets under management that decreased the forecasted revenue associated with\n\nthe assets.  The most relevant assumptions used in these analyses were revenue growth rates over the next five years, long-term\n\nrevenue growth rates, and discount rates.\n\nThe principal considerations for our determination that performing procedures relating to the impairment assessment for\n\nindefinite-lived acquired client relationships is a critical audit matter are (i) the significant judgment by management when\n\ndeveloping the fair value estimate of the indefinite-lived acquired client relationships, (ii) a high degree of auditor judgment,\n\nsubjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the discount\n\nrates, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.\n\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall\n\nopinion on the consolidated financial statements.  These procedures included testing the effectiveness of controls relating to\n\nmanagement’s impairment assessment for the indefinite-lived acquired client relationships, including controls over the\n\nsignificant assumptions related to the discount rates.  These procedures also included, among others, (i) testing management’s\n\nprocess for developing the fair value estimate of the indefinite-lived acquired client relationships, (ii) testing the completeness\n\nand accuracy of certain underlying data used in the discounted cash flow analyses, and (iii) the involvement of professionals\n\nwith specialized skill and knowledge to assist in evaluating (a) the appropriateness of the discounted cash flow analyses and (b)\n\nthe reasonableness of the significant assumptions used by management related to the discount rates.\n\n/s/ PricewaterhouseCoopers LLP\n\nBoston, Massachusetts\n\nFebruary 17, 2026\n\nWe have served as the Company’s auditor since 1993.\n\n44\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nCONSOLIDATED STATEMENTS OF INCOME\n\n(in millions, except per share data)\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nConsolidated revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$2,057.8\n\n$2,040.9\n\n$2,074.4\n\nConsolidated expenses:\n\n \n\n \n\n \n\nCompensation and related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n907.5\n\n915.3\n\n1,019.8\n\nSelling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n358.2\n\n376.5\n\n408.6\n\nIntangible amortization and impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n48.3\n\n29.0\n\n160.3\n\nInterest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n123.8\n\n133.3\n\n136.5\n\nDepreciation and other amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n13.0\n\n13.4\n\n10.4\n\nOther expenses (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n45.8\n\n40.3\n\n69.8\n\nTotal consolidated expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1,496.6\n\n1,507.8\n\n1,805.4\n\nEquity method income (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n280.0\n\n312.7\n\n462.9\n\nAffiliate transaction gains (Notes 7 and 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n133.1\n\n—\n\n371.3\n\nInvestment and other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n117.1\n\n77.4\n\n83.1\n\nIncome before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1,091.4\n\n923.2\n\n1,186.3\n\nIncome tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n185.3\n\n182.6\n\n282.3\n\nNet income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n906.1\n\n740.6\n\n904.0\n\nNet income (non-controlling interests) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(233.2)\n\n(229.0)\n\n(187.4)\n\nNet income (controlling interest) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$672.9\n\n$511.6\n\n$716.6\n\nAverage shares outstanding (basic) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n35.1\n\n31.1\n\n28.5\n\nAverage shares outstanding (diluted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n42.2\n\n36.1\n\n33.0\n\nEarnings per share (basic) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$19.18\n\n$16.45\n\n$25.18\n\nEarnings per share (diluted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$17.42\n\n$15.13\n\n$22.74\n\nThe accompanying notes are an integral part of the Consolidated Financial Statements.\n\n45\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(in millions)\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nNet income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$906.1\n\n$740.6\n\n$904.0\n\nOther comprehensive income, net of tax:\n\n \n\n \n\n \n\nForeign currency translation gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n41.1\n\n1.5\n\n70.2\n\nChange in net realized and unrealized gain (loss) on derivative financial instruments . .\n\n0.3\n\n0.5\n\n(0.9)\n\nChange in net unrealized gain (loss) on available-for-sale debt securities . . . . . . . . . . .\n\n0.5\n\n0.1\n\n0.4\n\nOther comprehensive income, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n41.9\n\n2.1\n\n69.7\n\nComprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n948.0\n\n742.7\n\n973.7\n\nComprehensive income (non-controlling interests) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(239.3)\n\n(227.1)\n\n(200.3)\n\nComprehensive income (controlling interest) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$708.7\n\n$515.6\n\n$773.4\n\nThe accompanying notes are an integral part of the Consolidated Financial Statements.\n\n46\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nCONSOLIDATED BALANCE SHEETS\n\n(in millions, except par value)\n\n \n\nDecember 31,\n\n \n\n2024\n\n2025\n\nAssets\n\n \n\n \n\nCash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$950.0\n\n$586.0\n\nReceivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n409.7\n\n496.2\n\nInvestments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n595.6\n\n711.6\n\nGoodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n2,504.9\n\n2,531.2\n\nAcquired client relationships (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1,777.8\n\n1,639.3\n\nEquity method investments in Affiliates (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n2,246.6\n\n2,870.4\n\nFixed assets (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n57.6\n\n54.4\n\nOther assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n288.7\n\n318.3\n\nTotal assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$8,830.9\n\n$9,207.4\n\nLiabilities and Equity\n\n \n\n \n\nPayables and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$639.1\n\n$806.9\n\nDebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n2,620.2\n\n2,691.3\n\nDeferred tax liability (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n520.5\n\n533.1\n\nOther liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n402.4\n\n754.0\n\nTotal liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n4,182.2\n\n4,785.3\n\nCommitments and contingencies (Note 6)\n\nRedeemable non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n350.5\n\n246.8\n\nEquity:\n\n \n\n \n\nCommon stock ($0.01 par value, 153.0 shares authorized; 58.5 shares issued as of     \n\nDecember 31, 2024 and 2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.6\n\n0.6\n\nAdditional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n733.1\n\n616.1\n\nAccumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(163.6)\n\n(106.8)\n\nRetained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n6,899.8\n\n7,615.4\n\n7,469.9\n\n8,125.3\n\nLess: Treasury stock, at cost (28.9 shares in 2024 and 31.5 shares in 2025) . . . . . . . . . . . . . . . . .\n\n(4,124.6)\n\n(4,886.9)\n\nTotal stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n3,345.3\n\n3,238.4\n\nNon-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n952.9\n\n936.9\n\nTotal equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n4,298.2\n\n4,175.3\n\nTotal liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$8,830.9\n\n$9,207.4\n\nThe accompanying notes are an integral part of the Consolidated Financial Statements.\n\n47\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY\n\n(in millions, except dividends per share)\n\n \n\nTotal Stockholders’ Equity\n\n \n\n \n\n \n\nCommon\n\nStock\n\nAdditional\n\nPaid-In\n\nCapital\n\nAccumulated\n\nOther\n\nComprehensive\n\nLoss\n\nRetained\n\nEarnings\n\nTreasury\n\nStock at\n\nCost\n\nNon-\n\ncontrolling\n\nInterests\n\nTotal\n\nEquity\n\nDecember 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$0.6\n\n$695.5\n\n$(203.4)\n\n$5,718.2\n\n$(2,980.6)\n\n$945.3\n\n$4,175.6\n\nNet income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n672.9\n\n—\n\n233.2\n\n906.1\n\nOther comprehensive income, net of tax . . . . . . . . . . . . . .\n\n—\n\n—\n\n35.8\n\n—\n\n—\n\n6.1\n\n41.9\n\nShare-based compensation . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n59.4\n\n—\n\n—\n\n—\n\n—\n\n59.4\n\nCommon stock issued under share-based incentive plans .\n\n—\n\n(47.2)\n\n—\n\n—\n\n15.9\n\n—\n\n(31.3)\n\nShare repurchases, inclusive of excise tax . . . . . . . . . . . . .\n\n—\n\n59.1\n\n—\n\n—\n\n(411.4)\n\n—\n\n(352.3)\n\nDividends ($0.04 per share) . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n(1.5)\n\n—\n\n—\n\n(1.5)\n\nAffiliate equity-related activities:\n\nAffiliate equity expense . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n13.4\n\n—\n\n—\n\n—\n\n39.1\n\n52.5\n\nIssuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(13.7)\n\n—\n\n—\n\n—\n\n30.1\n\n16.4\n\nPurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n13.6\n\n—\n\n—\n\n—\n\n(5.5)\n\n8.1\n\nChanges in redemption value of Redeemable non-\n\ncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(55.5)\n\n—\n\n—\n\n—\n\n—\n\n(55.5)\n\nTransfers from Redeemable non-controlling interests . .\n\n—\n\n—\n\n—\n\n—\n\n—\n\n8.9\n\n8.9\n\nCapital contributions and other . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n—\n\n—\n\n13.5\n\n13.5\n\nDistributions to non-controlling interests . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n—\n\n—\n\n(271.3)\n\n(271.3)\n\nEffect of deconsolidation of Affiliates . . . . . . . . . . . . . . . .\n\n—\n\n16.8\n\n—\n\n—\n\n—\n\n(17.2)\n\n(0.4)\n\nDecember 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$0.6\n\n$741.4\n\n$(167.6)\n\n$6,389.6\n\n$(3,376.1)\n\n$982.2\n\n$4,570.1\n\nNet income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n511.6\n\n—\n\n229.0\n\n740.6\n\nOther comprehensive income (loss), net of tax . . . . . . . . .\n\n—\n\n—\n\n4.0\n\n—\n\n—\n\n(1.9)\n\n2.1\n\nShare-based compensation . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n52.0\n\n—\n\n—\n\n—\n\n—\n\n52.0\n\nCommon stock issued under share-based incentive plans .\n\n—\n\n(44.2)\n\n—\n\n—\n\n(42.5)\n\n—\n\n(86.7)\n\nShare repurchases, inclusive of excise tax . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n—\n\n(706.0)\n\n—\n\n(706.0)\n\nDividends ($0.04 per share) . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n(1.4)\n\n—\n\n—\n\n(1.4)\n\nAffiliate equity-related activities:\n\nAffiliate equity expense . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n15.6\n\n—\n\n—\n\n—\n\n39.4\n\n55.0\n\nIssuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(4.3)\n\n—\n\n—\n\n—\n\n10.6\n\n6.3\n\nPurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(3.5)\n\n—\n\n—\n\n—\n\n(20.5)\n\n(24.0)\n\nChanges in redemption value of Redeemable non-\n\ncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(23.9)\n\n—\n\n—\n\n—\n\n—\n\n(23.9)\n\nTransfers to Redeemable non-controlling interests . . . . .\n\n—\n\n—\n\n—\n\n—\n\n—\n\n(1.7)\n\n(1.7)\n\nCapital contributions and other . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n—\n\n—\n\n(26.2)\n\n(26.2)\n\nDistributions to non-controlling interests . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n—\n\n—\n\n(258.0)\n\n(258.0)\n\nDecember 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$0.6\n\n$733.1\n\n$(163.6)\n\n$6,899.8\n\n$(4,124.6)\n\n$952.9\n\n$4,298.2\n\nNet income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n716.6\n\n—\n\n187.4\n\n904.0\n\nOther comprehensive income, net of tax . . . . . . . . . . . . . .\n\n—\n\n—\n\n56.8\n\n—\n\n—\n\n12.9\n\n69.7\n\nShare-based compensation . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n59.2\n\n—\n\n—\n\n—\n\n—\n\n59.2\n\nCommon stock issued under share-based incentive plans .\n\n—\n\n(48.5)\n\n—\n\n—\n\n(56.7)\n\n—\n\n(105.2)\n\nConversion premium on junior convertible securities, net\n\nof tax (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(116.6)\n\n—\n\n—\n\n—\n\n—\n\n(116.6)\n\nShare repurchases, inclusive of excise tax . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n—\n\n(705.6)\n\n—\n\n(705.6)\n\nDividends ($0.04 per share) . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n(1.0)\n\n—\n\n—\n\n(1.0)\n\nAffiliate equity-related activities:\n\nAffiliate equity expense . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n30.7\n\n—\n\n—\n\n—\n\n32.2\n\n62.9\n\nIssuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(20.5)\n\n—\n\n—\n\n—\n\n32.4\n\n11.9\n\nPurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n60.8\n\n—\n\n—\n\n—\n\n(77.4)\n\n(16.6)\n\nChanges in redemption value of Redeemable non-\n\ncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(82.1)\n\n—\n\n—\n\n—\n\n—\n\n(82.1)\n\nTransfers from Redeemable non-controlling interests . .\n\n—\n\n—\n\n—\n\n—\n\n—\n\n53.0\n\n53.0\n\nCapital contributions and other . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n—\n\n—\n\n(4.2)\n\n(4.2)\n\nDistributions to non-controlling interests . . . . . . . . . . . .\n\n—\n\n—\n\n—\n\n—\n\n—\n\n(252.3)\n\n(252.3)\n\nDecember 31, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$0.6\n\n$616.1\n\n$(106.8)\n\n$7,615.4\n\n$(4,886.9)\n\n$936.9\n\n$4,175.3\n\nThe accompanying notes are an integral part of the Consolidated Financial Statements.\n\n48\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(in millions)\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nCash flow from (used in) operating activities:\n\n \n\n \n\n \n\nNet income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$906.1\n\n$740.6\n\n$904.0\n\nAdjustments to reconcile Net income to cash flow from (used in) operating activities:\n\n \n\n \n\n \n\nIntangible amortization and impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n48.3\n\n29.0\n\n160.3\n\nDepreciation and other amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n13.0\n\n13.4\n\n10.4\n\nDeferred income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n31.4\n\n60.6\n\n83.8\n\nEquity method income (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(280.0)\n\n(312.7)\n\n(462.9)\n\nDistributions received from equity method investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n490.8\n\n403.9\n\n467.8\n\nAffiliate transaction gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(133.1)\n\n—\n\n(371.3)\n\nShare-based compensation and Affiliate equity expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n112.1\n\n111.6\n\n202.8\n\nNet realized and unrealized gains on investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(84.2)\n\n(39.3)\n\n(55.7)\n\nOther non-cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(10.8)\n\n(3.9)\n\n8.1\n\nChanges in assets and liabilities:\n\n \n\n \n\n \n\nPurchases of securities by consolidated Affiliate sponsored investment products . . . . . . . . . . . . . . . . . . . . . . . .\n\n(45.0)\n\n(76.5)\n\n(100.6)\n\nSales of securities by consolidated Affiliate sponsored investment products . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n54.3\n\n62.2\n\n72.7\n\nIncrease in receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(48.4)\n\n(44.2)\n\n(49.8)\n\nDecrease (increase) in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n9.2\n\n6.6\n\n(28.1)\n\n(Decrease) increase in payables, accrued liabilities, and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(189.4)\n\n(19.2)\n\n131.7\n\nCash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n874.3\n\n932.1\n\n973.2\n\nCash flow from (used in) investing activities:\n\n \n\n \n\n \n\nInvestments in Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(294.7)\n\n(5.9)\n\n(776.0)\n\nProceeds from Affiliate transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n294.0\n\n—\n\n403.8\n\nReturn of capital from equity method investments in Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.2\n\n0.7\n\n9.8\n\nPurchases of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(12.4)\n\n(3.4)\n\n(6.1)\n\nPurchases of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(731.1)\n\n(510.4)\n\n(103.8)\n\nMaturities and sales of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1,008.5\n\n898.1\n\n266.2\n\nCash flow from (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n264.5\n\n379.1\n\n(206.1)\n\nCash flow from (used in) financing activities:\n\n \n\n \n\n \n\nBorrowings of senior bank debt, senior notes, and junior subordinated notes . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n25.0\n\n847.6\n\n899.3\n\nRepayments of senior bank debt, junior convertible securities, and senior notes . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(25.0)\n\n(750.0)\n\n(826.1)\n\nRepurchases of common stock, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(341.9)\n\n(709.8)\n\n(706.3)\n\nDividends paid on common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(1.5)\n\n(1.4)\n\n(1.0)\n\nDistributions to non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(271.3)\n\n(258.0)\n\n(252.3)\n\nAffiliate equity purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(67.4)\n\n(106.5)\n\n(176.7)\n\nAffiliate equity issuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n13.4\n\n6.3\n\n6.4\n\n(Redemptions) subscriptions to consolidated Affiliate sponsored investment products, net . . . . . . . . . . . . . . . .\n\n(12.6)\n\n(6.4)\n\n21.2\n\nSettlement of deferred payments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(21.7)\n\n(98.7)\n\n—\n\nTaxes paid on shares withheld on share-based awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(31.4)\n\n(87.1)\n\n(108.0)\n\nOther financing items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(23.9)\n\n(11.9)\n\n(5.2)\n\nCash flow used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(758.3)\n\n(1,175.9)\n\n(1,148.7)\n\nEffect of foreign currency exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n6.9\n\n(4.2)\n\n11.6\n\nNet increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n387.4\n\n131.1\n\n(370.0)\n\nCash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n429.2\n\n813.6\n\n950.0\n\nEffect of consolidation (deconsolidation) of Affiliates and Affiliate sponsored investment products . . . . . . . . . .\n\n(3.0)\n\n5.3\n\n6.0\n\nCash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$813.6\n\n$950.0\n\n$586.0\n\nSupplemental disclosure of cash flow information:\n\n \n\n \n\n \n\nIncome taxes paid, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$314.5\n\n$142.5\n\n$110.7\n\nInterest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n110.4\n\n138.2\n\n137.9\n\nOperating lease liabilities paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n37.7\n\n39.4\n\n35.4\n\nSupplemental disclosure of non-cash investing and financing activities:\n\n \n\n \n\n \n\nShares received from Affiliate transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$—\n\n$—\n\n$154.0\n\nConversion premium obligations on junior convertible securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n164.7\n\nStock issued upon vesting of restricted stock units and exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . .\n\n55.0\n\n114.4\n\n137.5\n\nPayables recorded for Affiliate equity purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n43.0\n\n35.0\n\n131.4\n\nStock received for tax withholdings on share-based payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n31.4\n\n87.1\n\n108.0\n\nStock received for the exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.6\n\n113.9\n\n103.1\n\nPayables recorded for investments in Affiliates and contingent payment obligations . . . . . . . . . . . . . . . . . . . . .\n\n57.6\n\n7.0\n\n83.7\n\nRight-of-use assets obtained in exchange for new operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n17.5\n\n8.8\n\n13.0\n\nThe accompanying notes are an integral part of the Consolidated Financial Statements.\n\n49\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n1.Business and Summary of Significant Accounting Policies\n\n(a)Organization and Nature of Operations\n\nAffiliated Managers Group, Inc. (“AMG” or the “Company”) is a strategic partner to leading independent investment\n\nmanagement firms globally.  AMG’s strategy is to generate long-term value by investing in high-quality independent partner-\n\nowned firms, which the Company refers to as “Affiliates.”  The Company’s Affiliates provide a comprehensive and diverse\n\nrange of differentiated investment strategies designed to assist institutional and wealth clients worldwide in achieving their\n\ninvestment objectives. \n\nEach of the Company’s Affiliates operates through distinct legal entities, which affords the Company the flexibility to\n\ndesign a separate operating agreement for each Affiliate.  Each operating agreement reflects the specific terms of the\n\nCompany’s economic participation in the Affiliate, which, in each case, uses a “structured partnership interest.” \n\nThe form of the Company’s structured partnership interests in Affiliates differs from Affiliate to Affiliate and ranges from\n\nstructures where the Company contractually shares in the Affiliate’s revenue without regard to expenses, comprising Affiliates\n\nthat contribute a majority of the Company’s Consolidated revenue, to others where the Company contractually shares in the\n\nAffiliate’s revenue less agreed-upon expenses.  Further, the structure at a particular Affiliate, or the expenses that the Company\n\nagrees to share in, may change during the course of the Company’s investment.  Where the Company shares in the Affiliate’s\n\nrevenue without regard to expenses, the Affiliate allocates a specified percentage of its revenue to the Company and Affiliate\n\nmanagement, while using the remainder for operating expenses and additional distributions to Affiliate management.  The\n\nCompany and Affiliate management, therefore, participate in any increase or decrease in revenue and only Affiliate\n\nmanagement participates in any increase or decrease in expenses.  Under these structured partnership interests, the Company’s\n\ncontractual share of revenue generally has priority over distributions to Affiliate management.  Where the Company shares in\n\nthe Affiliate’s revenue less agreed-upon expenses, the Company benefits from any increase in revenue or any decrease in the\n\nagreed-upon expenses, but also has exposure to any decrease in revenue or any increase in such agreed-upon expenses.  The\n\ndegree of the Company’s exposure to agreed-upon expenses from these structured partnership interests varies by Affiliate.\n\n(b)Basis of Presentation and Use of Estimates\n\nThe Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles\n\ngenerally accepted in the U.S. (“GAAP”).  All intercompany balances and transactions have been eliminated.  Certain\n\nreclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation. All\n\ndollar amounts, except per share, per unit, and per option data in the text and tables herein, are stated in millions unless\n\notherwise indicated.\n\nThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions\n\nthat affect the reported amounts and disclosures in the financial statements.  Actual results could differ from those estimates.\n\n(c)Principles of Consolidation\n\nIn evaluating whether an investment must be consolidated, the Company evaluates the risk, rewards, and significant terms\n\nof each of its Affiliates and other investments to determine if an investment is considered a voting rights entity (“VRE”) or a\n\nvariable interest entity (“VIE”).  An entity is a VRE when the total equity investment at risk is sufficient to enable the entity to\n\nfinance its activities independently, and when the equity holders have the obligation to absorb losses, the right to receive\n\nresidual returns, and the right to direct the activities of the entity that most significantly impact its economic performance.  An\n\nentity is a VIE when it lacks one or more of the characteristics of a VRE, which, for the Company, are Affiliate investments\n\nstructured as partnerships (or similar entities) where the Company is a limited partner and lacks substantive kick-out or\n\nsubstantive participation rights over the general partner.  Assessing whether an entity is a VRE or VIE involves judgment. \n\nUpon the occurrence of certain events, management reviews and reconsiders its previous conclusion regarding the status of an\n\nentity as a VRE or a VIE.\n\nThe Company consolidates VREs when it has control over significant operating, financial, and investing decisions of the\n\nentity.  When the Company lacks such control, but is deemed to have significant influence, the Company accounts for the VRE\n\nunder the equity method.  Investments with readily determinable fair values in which the Company does not have rights to\n\nexercise significant influence are recorded at fair value on the Consolidated Balance Sheets, with changes in fair value included\n\nin Investment and other income on the Consolidated Statements of Income.\n\n50\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nThe Company consolidates VIEs when it is the primary beneficiary of the entity, which is defined as having the power to\n\ndirect the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of, or the\n\nright to receive benefits from, the entity that could potentially be significant to the VIE.  Substantially all of the Company’s\n\nconsolidated Affiliates considered VIEs are controlled because the Company holds a majority of the voting interests or it is the\n\nmanaging member or general partner.  Furthermore, an Affiliate’s assets can be used for purposes other than the settlement of\n\nthe respective Affiliate’s obligations.  The Company applies the equity method of accounting to VIEs where the Company is\n\nnot the primary beneficiary, but has the ability to exercise significant influence over operating and financial matters of the VIE. \n\nSee Note 4.\n\nInvestments in Affiliates\n\nSubstantially all of the Company’s Affiliates are considered VIEs and are either consolidated or accounted for under the\n\nequity method.  A limited number of the Company’s Affiliates are considered VREs and most of these are accounted for under\n\nthe equity method.\n\nWhen an Affiliate is consolidated, the portion of the earnings attributable to Affiliate management’s and any co-investor’s\n\nequity ownership is included in Net income (non-controlling interests) in the Consolidated Statements of Income. \n\nUndistributed earnings attributable to Affiliate management’s and any co-investor’s equity ownership, along with their share of\n\nany tangible or intangible net assets, are included in Non-controlling interests on the Consolidated Balance Sheets.  Affiliate\n\nequity interests where the holder has certain rights to demand settlement are presented, at their current redemption values, as\n\nRedeemable non-controlling interests or Other liabilities on the Consolidated Balance Sheets.  The Company periodically\n\nissues, sells, and purchases the equity of its consolidated Affiliates.  Because these transactions take place between entities\n\nunder common control, any gains or losses attributable to these transactions are required to be included in Additional paid-in\n\ncapital on the Consolidated Balance Sheets, net of any related income tax effects in the period the transaction occurs.\n\nWhen an Affiliate is accounted for under the equity method, the Company’s share of an Affiliate’s earnings or losses, net\n\nof amortization and impairments, is included in Equity method income (net) in the Consolidated Statements of Income and the\n\ncarrying value of the Affiliate is recorded in Equity method investments in Affiliates (net) in the Consolidated Balance Sheets.\n\nThe Company periodically performs assessments to determine if the fair value of an investment may have declined below\n\nits related carrying value for its Affiliates accounted for under the equity method for a period that the Company considers to be\n\nother-than-temporary.  The Company performs these assessments if certain triggering events occur or annually during the\n\nfourth quarter.  The Company first considers whether certain qualitative factors indicate an increased likelihood of a decline in\n\nthe fair value of an Affiliate during the reporting period.  If such a decline is identified, and it is likely that an investment’s fair\n\nvalue may have declined below its carrying value, the Company performs a quantitative assessment to determine if an\n\nimpairment exists.  Impairments are recorded as an expense in Equity method income (net) to reduce the carrying value of the\n\nAffiliate to its fair value.\n\nAffiliate Sponsored Investment Products\n\nThe Company’s Affiliates sponsor various investment products where the Affiliate also acts as the investment adviser. \n\nThese investment products are typically owned primarily by third-party investors; however, certain products are funded with\n\ngeneral partner and seed capital investments from the Company and its Affiliates.\n\nThird-party investors in Affiliate sponsored investment products are generally entitled to substantially all of the economics\n\nof these products, except for the asset- and performance-based fees earned by the Company’s Affiliates or any gains or losses\n\nattributable to the Company’s or its Affiliates’ investments in these products.  As a result, the Company generally does not\n\nconsolidate these products.  However, for certain products, the Company’s consolidated Affiliates, as the investment manager,\n\nhave the power to direct the activities of the investment product and have an exposure to the economics of the product that is\n\nmore than insignificant, though generally only for a short period while the product is established and has yet to attract\n\nsignificant third-party investors.  When the products are consolidated, the Company retains the specialized investment company\n\naccounting principles of the underlying products, and all of the underlying investments are carried at fair value in Investments\n\non the Consolidated Balance Sheets, with corresponding changes in the investments’ fair values included in Investment and\n\nother income.  Purchases and sales of securities are included in purchases and sales of securities by consolidated Affiliate\n\nsponsored investment products in the Consolidated Statements of Cash Flows, respectively, and the third-party investors’\n\ninterests are recorded in Redeemable non-controlling interests.  When the Company or its consolidated Affiliates no longer\n\ncontrol these products, due to a reduction in ownership or other reasons, the products are deconsolidated with only the\n\nCompany’s or its consolidated Affiliate’s investment in the product reported from the date of deconsolidation.\n\n51\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(d)Cash and Cash Equivalents\n\nThe Company considers certain highly liquid investments, including money market mutual funds, with original maturities\n\nof three months or less to be cash equivalents.  Cash equivalents are stated at cost, which approximates market value due to the\n\nshort-term maturity of these investments.  Money market mutual funds with a floating net asset value (“NAV”) would not meet\n\nthe definition of a cash equivalent if the fund has enacted liquidity fees or redemption gates.\n\n(e)Receivables\n\nThe Company’s Affiliates earn asset- and performance-based fees, which are billed based on the terms of the related\n\ncontracts.  Billed but uncollected asset- and performance-based fees are recorded in Receivables on the Consolidated Balance\n\nSheets and are generally short-term in nature.\n\nCertain of the Company’s Affiliates in the UK act as intermediaries between clients and their sponsored investment\n\nproducts.  Normal settlement periods on transactions initiated by these clients with the sponsored investment products result in\n\nunsettled fund share receivables and payables that are presented on a gross basis within Receivables and Payables and accrued\n\nliabilities on the Consolidated Balance Sheets.  The gross presentation of these receivables and offsetting payables reflects the\n\nlegal relationship between the underlying investors, the Company’s Affiliates, and the sponsored investment products.\n\n(f)Investments\n\nMarketable securities\n\nEquity securities\n\nEquity securities are measured at fair value which reflects the cost of the investment as well as unrealized gains and losses\n\nwhich are recorded in Investment and other income.  Realized gains and losses on equity securities are recorded in Investment\n\nand other income on the trade date on a specific identification basis, except for consolidated Affiliate sponsored investment\n\nproducts which use an average cost basis.\n\nDebt securities\n\nDebt securities are classified as either trading, available-for-sale, or held-to-maturity based on the Company’s intent and\n\nability to hold the security.  Securities classified as trading are measured at fair value which reflects the cost of the investment\n\nas well as unrealized gains and losses which are recorded in Investment and other income.  Securities classified as available-for-\n\nsale are measured at fair value which reflects amortized cost of the investment as well as unrealized gains and losses which are\n\nrecorded in Accumulated other comprehensive loss as a separate component of stockholders’ equity on the Consolidated\n\nBalance Sheets.  Securities classified as held-to-maturity are measured at amortized cost.  Realized gains and losses on debt\n\nsecurities are recorded in Investment and other income.\n\nOther investments\n\nInvestments Measured at NAV as a Practical Expedient\n\nThe Company’s Affiliates sponsor investment products in which the Company and its Affiliates may make general partner\n\nand seed capital investments.  These products generally operate in partnership form and apply the specialized fair value\n\naccounting for investment companies.  Because the products’ investments do not have readily determinable fair values, the\n\nCompany uses the NAV of these investments as a practical expedient for their fair values. \n\nInvestments Without Readily Determinable Fair Values\n\nWhen an investment does not have a readily determinable fair value and does not qualify for the practical expedient to\n\nestimate fair value, such as an investment in a private corporation where the Company does not exercise significant influence,\n\nthe Company generally elects to measure such investments at cost minus impairments, if any, plus or minus changes resulting\n\nfrom observable price changes in orderly transactions for identical or similar investments.\n\nRealized and unrealized gains and losses related to other investments are recorded in Investment and other income. \n\n(g)Fair Value Measurements\n\nThe Company determines the fair value of certain investment securities and other financial and non-financial assets and\n\nliabilities.  Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an\n\n52\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\norderly transaction between market participants in the principal or most advantageous market at the measurement date, utilizing\n\na hierarchy of three different valuation techniques:\n\nLevel 1 - Unadjusted quoted market prices for identical instruments in active markets;\n\nLevel 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in\n\nmarkets that are not active; and model-derived valuations whose inputs, or significant value drivers, are observable; and\n\nLevel 3 - Prices that reflect the Company’s own assumptions concerning unobservable inputs to the valuation model.  In\n\nthese valuation models, the Company is required to make judgments about growth rates of assets under management, client\n\nattrition, asset- and performance-based fee rates, and expenses.  These valuation models also require judgments about tax\n\nbenefits, credit risk, interest rates, tax rates, discount rates, volatility, and discounts for lack of marketability.  These inputs\n\nrequire significant management judgment and reflect the Company’s assumptions that the Company believes market\n\nparticipants would use in pricing the asset or liability.\n\n(h)Acquired Client Relationships and Goodwill\n\nEach Affiliate in which the Company makes an investment has identifiable assets arising from contractual or other legal\n\nrights with their clients (“acquired client relationships”).  In determining the value of acquired client relationships, the Company\n\nanalyzes the net present value of these Affiliates’ existing client relationships based on a number of factors, including: the\n\nAffiliate’s historical and potential future operating performance; the Affiliate’s historical and potential future rates of attrition\n\nof existing clients; the stability and longevity of existing client relationships; the Affiliate’s recent, as well as long-term,\n\ninvestment performance; the characteristics of the firm’s products and investment styles; the stability and depth of the\n\nAffiliate’s management team; and the Affiliate’s history and perceived franchise or brand value.\n\nThe Company has determined that certain of its acquired client relationships meet the criteria to be considered indefinite-\n\nlived assets because the Company expects the contracts to be renewed annually and, therefore, the cash flows generated by\n\nthese contracts to continue indefinitely.  Accordingly, the Company does not amortize these intangible assets, but instead\n\nassesses these assets annually or more frequently whenever events or circumstances occur indicating that the recorded\n\nindefinite-lived acquired client relationship may be impaired.  Each reporting period, the Company assesses whether events or\n\ncircumstances have occurred that indicate that the indefinite life criteria are no longer met.\n\nThe Company has determined that certain of its acquired client relationships meet the criteria to be considered definite-\n\nlived assets, including investment advisory contracts between its Affiliates and their underlying investors, and are amortized\n\nover their expected period of economic benefit.  The expected period of economic benefit of definite-lived acquired client\n\nrelationships is a judgment based on the historical and projected attrition rates of each Affiliate’s existing clients, and other\n\nfactors that may influence the expected future economic benefit the Company will derive from these relationships.  The\n\nexpected lives of definite-lived acquired client relationships are analyzed annually or more frequently whenever events or\n\ncircumstances have occurred that indicate the expected period of economic benefit may no longer be appropriate.\n\nThe Company assesses for the possible impairment of indefinite- and definite-lived acquired client relationships annually\n\nor more frequently whenever events or changes in circumstances indicate that the carrying amount of the asset may not be\n\nrecoverable.  If such indicators exist, the Company considers various qualitative and quantitative factors (including market\n\nmultiples) to determine if the fair value of each asset is greater than its carrying value.  If the carrying value is greater than the\n\nfair value, an expense would be recorded in Intangible amortization and impairments in the Consolidated Statements of Income\n\nto reduce the carrying value of the asset to fair value.\n\nGoodwill represents the future economic benefits arising from assets acquired in a business combination that are not\n\nseparately recognized.  Goodwill is not amortized, but is instead reviewed for impairment.  The Company performs an\n\nimpairment assessment annually or more frequently whenever events or circumstances occur indicating that the carrying value\n\nof its single reporting unit is in excess of its fair value.  In this assessment, the Company typically measures the fair value of its\n\nreporting unit using various qualitative and quantitative factors (including the Company’s market capitalization and market\n\nmultiples for asset management businesses).  If a potential impairment is more-likely-than-not, then the Company will perform\n\na single step assessment with any excess of carrying value over fair value recorded as an expense in Intangible amortization and\n\nimpairments.\n\n(i)Fixed Assets\n\nFixed assets are recorded at cost and depreciated using the straight-line method over their estimated useful lives.  The\n\nestimated useful lives of office equipment and furniture and fixtures range from two years to ten years and three years to ten\n\n53\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nyears, respectively.  Computer software developed or obtained for internal use is amortized over the estimated useful life of the\n\nsoftware, which is generally two years to five years.  Leasehold improvements are amortized over the shorter of their estimated\n\nuseful lives or the term of the lease.  Buildings are amortized over their expected useful lives, generally not to exceed 39 years. \n\nThe costs of improvements that extend the life of a fixed asset are capitalized, while the cost of repairs and maintenance are\n\nexpensed as incurred.  Land and artwork are not depreciated; artwork is included in Other assets on the Consolidated Balance\n\nSheets.\n\n(j)Leases\n\nLeases are classified as either operating leases or finance leases.  The Company and its Affiliates currently lease office\n\nspace and equipment primarily under operating lease arrangements.  As these leases expire, it is expected that, in the normal\n\ncourse of business, they will be renewed or replaced.  Whether a lease is classified as an operating lease or a finance lease, the\n\nCompany and its Affiliates must record a right-of-use asset and a lease liability at the commencement date of the lease, other\n\nthan for leases with an initial term of 12 months or less.  The Company and its Affiliates elect not to record short-term leases\n\nwith an initial lease term less than 12 months on the Consolidated Balance Sheets.  Right-of-use assets and lease liabilities are\n\nincluded in Other assets and Other liabilities, respectively.  A lease liability is initially and subsequently reported at the present\n\nvalue of the outstanding lease payments determined by discounting those lease payments over the remaining lease term using\n\nthe incremental borrowing rate of the legal entity entering into the lease as of the commencement date.  A right-of-use asset is\n\ninitially reported at the present value of the corresponding lease liability plus any prepaid lease payments and initial direct costs\n\nof entering into the lease, and reduced by any lease incentives.  Subsequently, a right-of-use asset is reported at the present\n\nvalue of the lease liability adjusted for any prepaid or accrued lease payments, remaining balances of any lease incentives\n\nreceived, unamortized initial direct costs of entering into the lease, and any impairments of the right-of-use asset.  The\n\nCompany and its Affiliates test for possible impairments of right-of-use assets annually or more frequently whenever events or\n\nchanges in circumstances indicate that the carrying value of a right-of-use asset may exceed its fair value.  If the carrying value\n\nof the right-of-use asset exceeds its fair value, then the carrying value of the right-of-use asset is reduced to its fair value and the\n\nexpense is recorded in Other expenses (net) in the Consolidated Statements of Income.  Subsequent to an impairment, the\n\ncarrying value of the right-of-use asset is amortized on a straight-line basis over the remaining lease term.\n\nLease liabilities and right-of-use assets based on variable lease payments that depend on an index or rate are initially\n\nmeasured using the index or rate at the commencement date with any subsequent changes in variable lease payments recorded\n\nin Other expenses (net) as incurred.  Most lease agreements for office space that are classified as operating leases contain\n\nrenewal options, rent escalation clauses, or other lease incentives provided by the lessor.  Lease expense is accrued to recognize\n\nlease escalation provisions and renewal options that are reasonably certain to be exercised, as well as lease incentives provided\n\nby the lessor, on a straight-line basis over the lease term and is recorded in Other expenses (net).  If a right-of-use asset is\n\nimpaired, the lease expense is subsequently recorded in Other expenses (net) as the straight-line amortization of the right-of-use\n\nasset and the accretion of the lease liability, thereby transitioning to a front-loaded expense recognition profile for the associated\n\nlease.\n\nThe Company and its Affiliates combine lease and non-lease components for their office space leases and separate non-\n\nlease components for their equipment leases in calculating their lease liabilities.  Sublease income is recorded in Investment and\n\nother income.\n\n(k)Debt\n\nThe Company’s debt instruments are carried at amortized cost.  Unamortized discounts and debt issuance costs associated\n\nwith its debt instruments, with the exception of the Company’s senior unsecured multicurrency revolving credit facility (the\n\n“revolver”), are presented on the Consolidated Balance Sheets as an adjustment to the carrying value of the associated debt. \n\nThe carrying value of the debt is accreted to the principal amount at maturity over the remaining life of the underlying debt. \n\nThe accretion of the debt and the amortization of debt issuance costs, are recorded in Interest expense in the Consolidated\n\nStatements of Income, using the effective interest method.\n\nUnamortized issuance costs associated with the revolver are recorded in Other assets and amortized over the remaining\n\nterm of the revolver to Interest expense.\n\nGains and losses on repurchases or settlement of debt are recorded in Interest expense.\n\n54\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(l)Derivative Financial Instruments\n\nThe Company and its Affiliates may use derivative financial instruments to offset exposure to changes in interest rates,\n\nforeign currency exchange rates, and markets.  The Company records derivatives on the Consolidated Balance Sheets at fair\n\nvalue.  The Company assesses hedge effectiveness at derivative inception and on a quarterly basis.  Changes in fair value of a\n\nhedging instrument that are excluded from the assessment of hedge effectiveness, also known as excluded components, are\n\nrecorded in earnings on a straight-line basis over the respective period of the contracts.\n\nFor derivative financial instruments designated as cash flow hedges, the Company uses a qualitative method of assessing\n\nhedge effectiveness by comparing the notional amounts, timing of payments, currencies (for forward foreign currency\n\ncontracts), and interest rates (for interest rate swaps).  The effective portion of the unrealized gain or loss is recorded in\n\nAccumulated other comprehensive loss as a separate component of stockholders’ equity and reclassified to earnings with the\n\nhedged item.  If the qualitative assessment indicates ineffectiveness, then the Company performs a quantitative assessment\n\nwhich is generally measured by comparing the present value of the cumulative change in the expected future cash flows of the\n\nhedged contract with the present value of the cumulative change in the expected future cash flows of the hedged item.  Upon\n\ntermination of these instruments or the repayment of the Company’s outstanding Secured Overnight Financing Rate (“SOFR”)-\n\nbased borrowings, any gain or loss recorded in Accumulated other comprehensive loss will be reclassified into earnings. \n\nChanges in the fair values of cash flow hedges are recorded in Change in net realized and unrealized gain (loss) on derivative\n\nfinancial instruments in the Consolidated Statements of Comprehensive Income. \n\nFor net investment hedges, hedge effectiveness is measured using the spot rate method.  The effective portion of the\n\nunrealized gain or loss is recorded in Accumulated other comprehensive loss as a separate component of stockholders’ equity\n\nand reclassified to earnings with the hedged item.  Changes in the fair values of the effective net investment hedges are\n\nrecorded in Foreign currency translation gain in the Consolidated Statements of Comprehensive Income.  Upon the sale or\n\nliquidation of the underlying investment, any gain or loss remaining in Accumulated other comprehensive loss will be\n\nreclassified to earnings. \n\nIf the Company’s or its Affiliates’ derivative financial instruments do not qualify as effective hedges, changes in the fair\n\nvalue of the derivatives are recorded as a gain or loss in Investment and other income.\n\n(m)Revenue Recognition\n\nConsolidated revenue primarily represents asset- and performance-based fees earned by the Company and its consolidated\n\nAffiliates for managing the assets of clients.  Substantially all of the Company’s and its Affiliates’ contracts contain a single\n\nperformance obligation, which is the provision of investment management services.  Investment management, broker-dealer,\n\nand administrative services are performed and consumed simultaneously and, therefore, the Company recognizes these asset-\n\nbased fees ratably over time.  Substantially all the Company’s asset-based fees for services are based on the value of client\n\nassets over time, which are typically determined using observable market data, or on committed capital.  Services may be\n\ninvoiced in advance or in arrears and are payable upon receipt.  Any asset-based fees collected in advance are deferred and\n\nrecognized as the services are performed and consumed.  Consolidated revenue recognized by the Company is adjusted for any\n\nexpense reimbursement arrangements.  The Company’s Affiliates may periodically either waive or reduce fees in order to\n\nattract or retain client assets or for other reasons.  Fee waivers or reductions are presented as a reduction to Consolidated\n\nrevenue in the Consolidated Statements of Income.\n\nPerformance-based fees, including carried interest, are recognized upon the satisfaction of performance obligations, the\n\nresolution of any constraints, which include exceeding performance benchmarks or hurdle rates that may extend over one or\n\nmore reporting periods, and when it is improbable that there will be a significant reversal in the amount of revenue recognized. \n\nAs a result, any performance-based fees or carried interest recognized in the current reporting period may relate to performance\n\nobligations satisfied in a previous reporting period.  \n\nThe Company and its Affiliates have contractual arrangements with third-parties to provide distribution-related services. \n\nFees received and expenses incurred under these arrangements are primarily based on the value of client assets over time. \n\nDistribution-related fees are recorded in Consolidated revenue gross of any related expenses when the Company and its\n\nconsolidated Affiliates are the principal in their role as primary obligor under their distribution-related services arrangements. \n\nDistribution-related expenses are recorded in Selling, general and administrative in the Consolidated Statements of Income.\n\nThe Company and its Affiliates may enter into contracts for which the costs to obtain or fulfill the contract are based upon\n\na percentage of the value of a client’s future assets under management.  The Company records these variable costs when\n\nincurred because they are subject to market volatility and are not estimable upon the inception of a contract with a client.  Any\n\n55\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nexpenses paid in advance are capitalized and amortized on a systematic basis, consistent with the transfer of services, which is\n\nthe equivalent of recognizing the costs as incurred.\n\n(n)Contingent Payment Obligations\n\nThe Company periodically enters into contingent payment obligations in connection with its investments in Affiliates.  In\n\nthese obligations, the Company agrees to pay additional consideration to the sellers to the extent that certain specified financial\n\ntargets are achieved.  For consolidated Affiliates, the Company estimates the fair value of these potential future obligations at\n\nthe time the investment in an Affiliate is consummated and records a liability in Other liabilities.  The Company then accretes\n\nthe obligation to its expected payment amount over the period until the arrangement is measured.  If the Company’s expected\n\npayment amount subsequently changes, the obligation is reduced or increased in the current period resulting in a gain or loss,\n\nrespectively.  Gains and losses resulting from changes to expected payments are included in Other expenses (net) and the\n\naccretion of these obligations to their expected payment amounts are included in Interest expense.  For Affiliates accounted for\n\nunder the equity method, the Company records a liability in Other liabilities when a payment becomes probable, with a\n\ncorresponding increase to the carrying value of the Affiliate in Equity method investments in Affiliates (net).\n\n(o)Income Taxes\n\nThe Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred\n\ntax assets and liabilities for the expected future tax consequences of differences between the financial reporting bases of assets\n\nand liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to\n\nreverse.  The effect on deferred tax assets and liabilities of a change in tax rates is recorded in Income tax expense in the\n\nConsolidated Statements of Income in the period when the change is enacted.\n\nThe Company regularly assesses the recoverability of its deferred tax assets to determine whether these assets are more-\n\nlikely-than-not to be realized.  In making such a determination, the Company considers all available positive and negative\n\nevidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning\n\nstrategies, and results of recent operations.  If the Company determines it would not be able to realize its deferred tax assets, it\n\nrecords a valuation allowance to reflect the deferred tax assets at their current value.  The recording of adjustments to the\n\nvaluation allowance will generally increase or decrease Income tax expense.\n\nThe Company records unrecognized tax benefits based on whether it is more-likely-than-not that the uncertain tax positions\n\nwill be sustained on the basis of the technical merits of the position.  If it is determined that an uncertain tax position is more-\n\nlikely-than-not to be sustained, the Company records the largest amount of tax benefit that is more than 50% likely to be\n\nrealized upon ultimate settlement with the related tax authority in Income tax expense.  Interest and penalties related to\n\nunrecognized tax benefits are also recorded in Income tax expense.\n\nThe Company has elected to treat taxes due on U.S. inclusions in taxable income related to Global Intangible Low Taxed\n\nIncome (“GILTI”) as a current period expense.\n\n(p)Foreign Currency Translation\n\nAssets and liabilities denominated in a functional currency other than the U.S. dollar are translated into U.S. dollars using\n\nexchange rates in effect as of the Consolidated Balance Sheet date.  Revenue and expenses denominated in a functional\n\ncurrency other than the U.S. dollar are translated into U.S. dollars using average exchange rates for the relevant period. \n\nBecause of the long-term nature of the Company’s investments in its Affiliates, net translation exchange gains and losses\n\nresulting from foreign currency translation are recorded in Accumulated other comprehensive loss.  Foreign currency\n\ntransaction gains and losses are included in Investment and other income.\n\n(q)Concentration of Credit Risk\n\nFinancial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of\n\ncash investments and derivative financial instruments.  The Company and its Affiliates maintain cash and cash equivalents,\n\ninvestments, and, at times, certain derivative financial instruments with various high credit-quality financial institutions.  These\n\nfinancial institutions are typically located in countries in which the Company and its Affiliates operate.  For the Company and\n\ncertain of its Affiliates, cash deposits at a financial institution may, from time to time, exceed insurance limits (similar to\n\nFederal Deposit Insurance Corporation insurance limits).\n\n56\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(r)Earnings Per Share\n\nThe calculation of Earnings per share (basic) is based on the weighted average number of shares of the Company’s\n\ncommon stock outstanding during the period.  Earnings per share (diluted) is similar to Earnings per share (basic), but adjusts\n\nfor the dilutive effect of the potential issuance of incremental shares of the Company’s common stock.\n\nThe Company had share-based compensation awards outstanding during the periods presented with vesting provisions\n\nsubject to certain performance conditions.  These awards are excluded from the calculation of Earnings per share (diluted) if the\n\nperformance condition has not been met as of the end of the reporting period.\n\nThe Company has agreements with Affiliate equity holders that provide the Company a conditional right to call and holders\n\na conditional right to put their interests to the Company at certain intervals.  These arrangements are presented at their current\n\nredemption value as Redeemable non-controlling interests.  The Company may settle these interests in cash or, subject to the\n\nterms of the applicable agreement, shares of its common stock, or other forms of consideration, at its option.  The Company\n\nmust assume the settlement of all of its Redeemable non-controlling interests using the maximum number of shares permitted\n\nunder its arrangements.  Purchases are assumed to occur at the beginning of the reporting period.  The Company acquires the\n\nrights to the underlying Affiliate equity when purchased, and therefore, the earnings that would be acquired (net of tax) are\n\nassumed to increase Net income (controlling interest) in the computation of Earnings per share (diluted).  The issuance of\n\nshares and the related income acquired are excluded from the calculation if an assumed purchase of Redeemable non-\n\ncontrolling interests would be anti-dilutive to diluted earnings per share.\n\nThe Company had junior convertible securities outstanding during the periods presented and is required to apply the if-\n\nconverted method to these securities in its calculation of Earnings per share (diluted) for the period in which they were\n\noutstanding.  Under the if-converted method, shares that are issuable upon conversion are deemed outstanding, regardless of\n\nwhether the securities are contractually convertible into the Company’s common stock at that time.  For this calculation, the\n\ninterest expense (net of tax) attributable to these dilutive securities is added back to Net income (controlling interest) in the\n\nConsolidated Statements of Income, reflecting the assumption that the securities have been converted.  Issuable shares for these\n\nsecurities and related interest expense are excluded from the calculation if an assumed conversion would be anti-dilutive to\n\ndiluted earnings per share.\n\n(s)Share-Based Compensation Plans\n\nThe Company recognizes expenses for all share-based compensation arrangements based on the number of awards\n\nexpected to vest.  The expense for awards without performance conditions is recognized on a straight-line basis over the\n\nrequisite service period, including grants that are subject to graded vesting.  The Company recognizes expenses for all other\n\narrangements on a straight-line basis for each separately vesting portion of the award. \n\nTax windfalls or shortfalls are recorded in Income tax expense and have been classified as operating activities in the\n\nConsolidated Statements of Cash Flows.  Taxes paid by the Company when it withholds shares to satisfy tax withholding\n\nobligations are classified as a financing activity in the Consolidated Statements of Cash Flows.\n\n(t)Recently Adopted Accounting Standards and Developments\n\nRecently Adopted Accounting Standards\n\nEffective for the financial year ended December 31, 2024 and for interim periods beginning January 1, 2025, the Company\n\nadopted Accounting Standard Update (“ASU”) 2023-07, Segment Reporting: Improvements to Reportable Segment\n\nDisclosures.  Effective January 1, 2025, the Company adopted ASU 2024-01, Compensation — Stock Compensation: Scope\n\nApplication of Profits Interest and Similar Awards.  Effective for the financial year ended December 31, 2025, the Company\n\nadopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, using a retrospective method,\n\nwhich requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes\n\npaid.  The adoption of these standards did not have a material impact on the Company’s Consolidated Financial Statements.\n\nRecent Accounting Developments\n\nIn November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement —\n\nReporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income\n\nStatement Expenses, which requires improved disclosure of the nature and disaggregation of income statement expenses.  The\n\nstandard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15,\n\n57\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n2027.  The Company is currently evaluating the potential impact that this standard may have on its Consolidated Financial\n\nStatements.\n\nIn May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810):\n\nDetermining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which revises guidance on how an entity\n\nshould identify the accounting acquirer in a business combination in which the legal acquiree is a VIE.  The standard is\n\neffective for annual periods beginning after December 15, 2026 and interim periods within those annual reporting periods.  The\n\nCompany is currently evaluating the potential impact that this standard may have on its Consolidated Financial Statements.\n\nIn September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software\n\n(Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which increases the operability of the\n\nrecognition guidance considering different methods of software development.  The standard is effective for annual periods\n\nbeginning after December 15, 2027 and interim periods within those annual reporting periods.  The Company is currently\n\nevaluating the potential impact that this standard may have on its Consolidated Financial Statements.\n\nIn November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting\n\nImprovements, which amends certain aspects of the hedge accounting guidance to more closely align hedge accounting with the\n\neconomics of an entity’s risk management activities.  The standard is effective for annual reporting periods beginning after\n\nDecember 15, 2026 and interim periods within those annual reporting periods.  The Company is currently evaluating the\n\npotential impact that this standard may have on its Consolidated Financial Statements.                                                                                                                                                                                                                                                                             \n\n2.Investments\n\nThe following table summarizes the Company’s Investments:\n\nDecember 31,\n\n2024\n\n2025\n\nMarketable securities\n\nEquity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$32.3\n\n$34.8\n\nDebt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n24.3\n\n50.0\n\nTotal marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n56.6\n\n84.8\n\nOther investments\n\nInvestments measured at NAV as a practical expedient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n488.6\n\n576.4\n\nInvestments without readily determinable fair values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n50.4\n\n50.4\n\nTotal other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n539.0\n\n626.8\n\nInvestments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$595.6\n\n$711.6\n\nMarketable Securities\n\nEquity Securities\n\nThe following table summarizes the cost, gross unrealized gains, gross unrealized losses, and fair value of investments in\n\nequity securities:\n\nDecember 31,\n\n \n\n2024\n\n2025\n\nCost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$30.0\n\n$37.5\n\nUnrealized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n3.7\n\n6.1\n\nUnrealized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(1.4)\n\n(8.8)\n\nFair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$32.3\n\n$34.8\n\nAs of December 31, 2024 and 2025, investments in equity securities include consolidated Affiliate sponsored investment\n\nproducts with fair values of $10.9 million and $9.2 million, respectively.\n\nFor the years ended December 31, 2023, 2024, and 2025, the Company recognized net unrealized gains on equity securities\n\nstill held as of December 31, 2023, 2024, and 2025 of $2.9 million, $1.2 million, and $5.5 million, respectively.\n\n58\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nDebt Securities\n\nThe following table summarizes the cost, gross unrealized gains, gross unrealized losses, and fair value of investments in\n\nconsolidated Affiliate sponsored investment products classified as trading:\n\n \n\nDecember 31,\n\n2024\n\n2025\n\nCost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$24.6\n\n$49.4\n\nUnrealized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n1.1\n\nUnrealized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(0.3)\n\n(0.5)\n\nFair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$24.3\n\n$50.0\n\nFor the years ended December 31, 2023, 2024, and 2025, the Company recognized net unrealized gains on debt securities\n\nclassified as trading still held as of December 31, 2023, 2024, and 2025 of $0.8 million, $0.5 million, and $2.8 million,\n\nrespectively.\n\nFor the years ended December 31, 2023 and 2024, the Company received $511.1 million and $825.2 million of proceeds\n\nfrom the maturities of available-for-sale securities, respectively.  For the year ended December 31, 2025, there were no\n\nmaturities of available-for-sale securities.\n\nOther Investments\n\nInvestments Measured at NAV as a Practical Expedient\n\nThe following table summarizes the fair values of investments that are measured at NAV as a practical expedient and any\n\nrelated unfunded commitments:\n\n \n\nDecember 31, 2024\n\nDecember 31, 2025\n\nFair Value\n\nUnfunded\n\nCommitments\n\nFair Value\n\nUnfunded\n\nCommitments\n\nInvestments with limited liquidity(1) . . . . . . . . . . . . . . . . . . . .\n\n$486.9\n\n$205.5\n\n$535.7\n\n$258.3\n\nInvestments with periodic liquidity(2) . . . . . . . . . . . . . . . . . . .\n\n1.7\n\n—\n\n40.7\n\n24.7\n\n  Total(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$488.6\n\n$205.5\n\n$576.4\n\n$283.0\n\n___________________________\n\n(1)The Company expects to receive distributions related to its interests in investments with limited liquidity as the underlying\n\nassets are liquidated over the life of the investments, which is generally up to 15 years.  The Company accounts for the\n\nmajority of its interests in investments with limited liquidity one quarter in arrears (adjusted for current period calls and\n\ndistributions).\n\n(2)Investments with periodic liquidity are generally redeemable on a daily, monthly, or quarterly basis.\n\n(3)Investments measured at NAV as a practical expedient primarily invest in a broad range of private markets.  Fair value\n\nattributable to the controlling interest was $370.1 million and $456.6 million as of December 31, 2024 and 2025,\n\nrespectively.\n\nInvestments Without Readily Determinable Fair Values\n\nThe following table summarizes the cost, cumulative unrealized gains, and carrying amount of the Company’s investment\n\nin a private corporation where it does not exercise significant influence, and does not have a readily determinable fair value:\n\n \n\nDecember 31,\n\n2024\n\n2025\n\nCost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$8.5\n\n$8.5\n\nCumulative unrealized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n41.9\n\n41.9\n\nCarrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$50.4\n\n$50.4\n\n59\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nFor the years ended December 31, 2023, 2024, and 2025, the Company did not recognize any net unrealized gains or losses\n\non the underlying investment still held as of December 31, 2023, 2024, and 2025, respectively.\n\nThe following table presents the changes in other investments:\n\nFor the Years Ended December 31,\n\n2024\n\n2025\n\nMeasured at\n\nNAV as a\n\nPractical\n\nExpedient\n\nWithout\n\nReadily\n\nDeterminable\n\nFair Values\n\nTotal\n\nMeasured at\n\nNAV as a\n\nPractical\n\nExpedient\n\nWithout\n\nReadily\n\nDeterminable\n\nFair Values\n\nTotal\n\nBalance, beginning of period . . . . . . .\n\n$430.5\n\n$50.4\n\n$480.9\n\n$488.6\n\n$50.4\n\n$539.0\n\nPurchases and commitments funded(1)\n\n92.0\n\n—\n\n92.0\n\n147.6\n\n—\n\n147.6\n\nSales and distributions . . . . . . . . . . . .\n\n(62.2)\n\n—\n\n(62.2)\n\n(105.5)\n\n—\n\n(105.5)\n\nNet realized and unrealized gains . . .\n\n28.3\n\n—\n\n28.3\n\n45.7\n\n—\n\n45.7\n\nBalance, end of period . . . . . . . . . . . .\n\n$488.6\n\n$50.4\n\n$539.0\n\n$576.4\n\n$50.4\n\n$626.8\n\n___________________________\n\n(1)For the year ended December 31, 2025, purchases and commitments funded includes the transfer of $53.4 million of\n\ninterests from Equity method investments in Affiliates (net) associated with the Comvest Transaction.  See Note 8.\n\n3.Fair Value Measurements\n\nThe following tables summarize financial assets and liabilities that are measured at fair value on a recurring basis:\n\n \n\n \n\nFair Value Measurements\n\n \n\nDecember 31,\n\n2024\n\n \n\nLevel 1\n\nLevel 2\n\nLevel 3\n\nFinancial Assets(1)\n\n \n\n \n\n \n\n \n\nInvestments in equity securities . . . . . . . . . . . . . . . . . . . . . .\n\n$32.3\n\n$32.3\n\n$—\n\n$—\n\nInvestments in debt securities . . . . . . . . . . . . . . . . . . . . . . .\n\n24.3\n\n—\n\n24.3\n\n—\n\nFinancial Liabilities(2)\n\n \n\n \n\n \n\n \n\nContingent payment obligations . . . . . . . . . . . . . . . . . . . . .\n\n$5.7\n\n$—\n\n$—\n\n$5.7\n\nAffiliate equity purchase obligations . . . . . . . . . . . . . . . . . .\n\n54.8\n\n—\n\n—\n\n54.8\n\n \n\n \n\nFair Value Measurements\n\n \n\nDecember 31,\n\n2025\n\n \n\nLevel 1\n\nLevel 2\n\nLevel 3\n\nFinancial Assets(1)\n\n \n\n \n\n \n\n \n\nInvestments in equity securities . . . . . . . . . . . . . . . . . . . . . .\n\n$34.8\n\n$34.8\n\n$—\n\n$—\n\nInvestments in debt securities . . . . . . . . . . . . . . . . . . . . . . .\n\n50.0\n\n—\n\n50.0\n\n—\n\nFinancial Liabilities(2)\n\n \n\n \n\n \n\n \n\nContingent payment obligations . . . . . . . . . . . . . . . . . . . . .\n\n$0.0\n\n$—\n\n$—\n\n$0.0\n\nAffiliate equity purchase obligations . . . . . . . . . . . . . . . . . .\n\n161.2\n\n—\n\n—\n\n161.2\n\n___________________________\n\n(1)Amounts are recorded in Investments.\n\n(2)Amounts are recorded in Other liabilities.\n\n60\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nLevel 3 Financial Liabilities\n\nThe following table presents the changes in Level 3 liabilities:\n\nFor the Years Ended December 31,\n\n2024\n\n2025\n\nContingent\n\nPayment\n\nObligations\n\nAffiliate\n\nEquity Purchase\n\nObligations\n\nContingent\n\nPayment\n\nObligations\n\nAffiliate\n\nEquity Purchase\n\nObligations\n\nBalance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$14.7\n\n$53.9\n\n$5.7\n\n$54.8\n\nPurchases and issuances(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n110.0\n\n—\n\n240.5\n\nSettlements and reductions . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(108.7)\n\n(4.9)\n\n(176.5)\n\nNet realized and unrealized (gains) losses(2) . . . . . . . . . . . . . .\n\n(9.0)\n\n(0.4)\n\n(0.8)\n\n42.4\n\nBalance, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$5.7\n\n$54.8\n\n$0.0\n\n$161.2\n\nNet change in unrealized (gains) losses relating to\n\ninstruments still held at the reporting date(1) . . . . . . . . . . . . . .\n\n$(9.0)\n\n$0.1\n\n$(0.1)\n\n$43.3\n\n___________________________\n\n(1)Affiliate equity purchase obligation activity includes transfers from Redeemable non-controlling interests.\n\n(2)Gains and losses resulting from changes to expected payments related to contingent payment obligations and the accretion\n\nof these obligations are included in Other expenses (net) and included in Interest expense, respectively.  Changes to the\n\nredemption value of Affiliate equity purchase obligations are included in Compensation and related expenses in the\n\nConsolidated Statements of Income.\n\nThe following table presents certain quantitative information about the significant unobservable inputs used in valuing the\n\nCompany’s recurring Level 3 fair value measurements:\n\n \n\nQuantitative Information about Level 3 Fair Value Measurements\n\nDecember 31, 2024\n\nDecember 31, 2025\n\n \n\nValuation\n\nTechniques\n\nUnobservable\n\nInput\n\nFair Value\n\nRange\n\nWeighted\n\nAverage(1)\n\nFair Value\n\nRange\n\nWeighted\n\nAverage(1)\n\nContingent payment\n\nobligations . . . . . . . . .\n\nMonte Carlo\n\nsimulation\n\nVolatility\n\n$5.7\n\n18%\n\n18%\n\n$0.0\n\n13%\n\n13%\n\nDiscount rates\n\n4%\n\n4%\n\n5%\n\n5%\n\nAffiliate equity\n\npurchase obligations . .\n\nDiscounted\n\ncash flow\n\nGrowth rates(2)\n\n$45.2\n\n(4)% - 9%\n\n(1)%\n\n$113.0\n\n(10)% - 11%\n\n3%\n\nDiscount rates\n\n \n\n12% - 19%\n\n14%\n\n11% - 18%\n\n14%\n\nMonte Carlo\n\nsimulation\n\nVolatility\n\n$9.6\n\n10% - 15%\n\n11%\n\n$48.2\n\n15%\n\n15%\n\nDiscount rates\n\n6%\n\n6%\n\n5%\n\n5%\n\n___________________________\n\n(1)Calculated by comparing the relative fair value of an obligation to its respective total.\n\n(2)Represents growth rates of asset- and performance-based fees.\n\nContingent payment obligations represent the fair value of the expected future settlement amounts related to the\n\nCompany’s investments in its consolidated Affiliates.  Changes to assumed volatility and discount rates change the fair value of\n\ncontingent payment obligations.  Increases to the volatility rates used would result in higher fair values, while increases to the\n\ndiscount rates used would result in lower fair values.\n\nAffiliate equity purchase obligations include agreements to purchase Affiliate equity and represent the fair value of the\n\nexpected future settlement amounts.  When using a discounted cash flow valuation technique, increases to the assumed growth\n\nrates used would result in higher fair values, while increases to the discount rates used would result in lower fair values.  When\n\nusing a Monte Carlo valuation technique, changes to assumed volatility and discount rates change the fair value of Affiliate\n\nequity purchase obligations.  Increases to the volatility rates used would result in higher fair values, while increases to the\n\n61\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\ndiscount rates used would result in lower fair values.  As of December 31, 2025, there were no changes to valuation inputs that\n\nhad a significant impact to Affiliate equity purchase obligations recorded in prior periods. \n\nOther Financial Assets and Liabilities Not Carried at Fair Value \n\nThe following table summarizes the Company’s other financial liabilities not carried at fair value:\n\n \n\nDecember 31, 2024\n\nDecember 31, 2025\n\nCarrying Value\n\nFair Value\n\nCarrying Value\n\nFair Value\n\nFair Value\n\nHierarchy\n\nSenior notes . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$1,097.4\n\n$1,062.9\n\n$1,172.0\n\n$1,171.0\n\nLevel 2\n\nJunior subordinated notes . . . . . . . . . . . . . . .\n\n1,216.0\n\n1,035.6\n\n1,216.1\n\n995.2\n\nLevel 2\n\nThe carrying amount of Cash and cash equivalents, Receivables, Payables and accrued liabilities, and certain Other\n\nliabilities approximates fair value because of the short-term nature of these instruments.  The carrying value of the revolver\n\napproximates fair value because the revolver has variable interest based on selected short-term rates.\n\n4.Investments in Affiliates and Affiliate Sponsored Investment Products\n\nInvestments in Affiliates\n\nThe Company’s Affiliates are consolidated or accounted for under the equity method, depending upon the underlying\n\nstructure of and relationship with each Affiliate.  Substantially all of the Company’s consolidated Affiliates are VIEs.  The\n\nCompany’s Affiliates accounted for under the equity method considered VIEs generally require minimal levels of working\n\ncapital on each Affiliate’s balance sheet.  Certain of the Company’s Affiliates accounted for under the equity method hold\n\ngeneral partner and seed investments, which may be significant.  As of December 31, 2024 and 2025, the Company’s carrying\n\nvalue and maximum exposure to loss attributable to its Affiliates accounted for under the equity method considered VIEs was\n\n$2,135.2 million and $2,763.6 million, respectively.\n\nAs of December 31, 2024 and 2025, the carrying value and maximum exposure to loss for all of the Company’s Affiliates\n\naccounted for under the equity method was $2,246.6 million and $2,870.4 million, respectively, including Affiliates accounted\n\nfor under the equity method considered VREs of $111.4 million and $106.8 million, respectively.\n\nAffiliate Sponsored Investment Products\n\nThe Company’s carrying value and maximum exposure to loss from unconsolidated Affiliate sponsored investment\n\nproducts, is its or its consolidated Affiliates’ interests in the unconsolidated net assets of the respective products.  These\n\nproducts vary in size from early-stage products with few initial investors to mature products with a large population of\n\ninvestors.  As of December 31, 2024 and 2025, the Company’s carrying value and maximum exposure to loss attributable to\n\nAffiliate sponsored investment products, which are unconsolidated VIEs, was $28.0 million and $88.9 million, respectively.\n\n5.Debt\n\nThe following table summarizes the Company’s Debt:\n\nDecember 31,\n\n2024\n\n2025\n\nSenior bank debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$—\n\n$—\n\nSenior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1,092.1\n\n1,163.8\n\nJunior subordinated notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1,189.0\n\n1,189.3\n\nJunior convertible securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n339.1\n\n338.2\n\nDebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$2,620.2\n\n$2,691.3\n\nSenior Bank Debt\n\nAs of December 31, 2025, the Company had a $1.25 billion revolver which matures on November 15, 2029.  Subject to\n\ncertain conditions, the Company may increase the commitments under the revolver by up to an additional $500.0 million.  The\n\nCompany pays interest on any outstanding obligations under the revolver at a specified rate, currently based either on an\n\napplicable term-SOFR plus a SOFR adjustment of 0.10%, or prime rate, plus a marginal rate determined based on its credit\n\n62\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nrating.  Prior to the repayment of the Company’s senior unsecured term loan facility in the third quarter of 2024, the interest rate\n\nfor its outstanding borrowings was term-SOFR plus a SOFR adjustment of 0.10%, plus the marginal rate of 0.85%.\n\nThe revolver contains financial covenants with respect to leverage and interest coverage, as well as customary affirmative\n\nand negative covenants, including limitations on priority indebtedness, asset dispositions, and fundamental corporate changes,\n\nand certain customary events of default.\n\nAs of December 31, 2024 and 2025, the Company had no outstanding borrowings under the revolver.  The Company pays\n\ncommitment fees on the unused portion of its revolver.  For the years ended December 31, 2024 and 2025, these fees amounted\n\nto $1.3 million and $1.2 million, respectively.\n\nAs of the date of this Annual Report on Form 10-K, the Company had outstanding borrowings of $475.0 million under the\n\nrevolver.\n\nSenior Notes\n\nIn the third quarter of 2025, the Company’s $350.0 million 3.50% senior notes matured and were fully repaid.\n\nAs of December 31, 2025, the Company had senior notes outstanding, the respective principal terms and effective interest\n\nrates of which are presented and described below:\n\n2030\n\nSenior Notes\n\n2034\n\nSenior Notes\n\n2036\n\nSenior Notes\n\nIssue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\nJune 2020\n\nAugust 2024\n\nDecember 2025\n\nMaturity date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\nJune 2030\n\nAugust 2034\n\nFebruary 2036\n\nPar value (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$350.0\n\n$400.0\n\n$425.0\n\nStated coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n3.30%\n\n5.50%\n\n5.50%\n\nCoupon frequency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\nSemi-annually\n\nSemi-annually\n\nSemi-annually\n\nEffective interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n3.39%\n\n5.64%\n\n5.60%\n\nOn December 11, 2025, the Company issued $425.0 million aggregate principal amount of senior unsecured notes with a\n\nmaturity date of February 15, 2036 (the “2036 senior notes”).  Interest is payable beginning August 15, 2026.\n\nIn addition to customary event of default provisions, the indenture governing the senior notes, including the applicable\n\nsupplemental indentures with respect to the 2030, 2034, and 2036 senior notes, limits the Company’s ability to consolidate,\n\nmerge, or sell all or substantially all of its assets, and requires the Company to make an offer to repurchase the applicable senior\n\nnotes at 101% of the principal amount, plus any accrued and unpaid interest thereon to, but not including, the date of\n\nrepurchase, upon certain change of control triggering events.  The senior notes may be redeemed, in whole or in part, at a make-\n\nwhole redemption price (plus accrued and unpaid interest), at any time prior to March 15, 2030, in the case of the 2030 senior\n\nnotes, at any time prior to May 20, 2034, in the case of the 2034 senior notes, and at any time prior to November 15, 2035, in\n\nthe case of the 2036 senior notes.  The make-whole redemption price, in each case, is equal to the greater of 100% of the\n\nprincipal amount of the notes to be redeemed and the remaining principal and interest payments on the notes being redeemed\n\n(excluding accrued but unpaid interest to, but not including, the redemption date) discounted to their present value as of the\n\nredemption date on a semi-annual basis at the applicable Treasury rate plus 0.40%, in the case of the 2030 senior notes, and\n\nplus 0.25%, in the case of the 2034 and 2036 senior notes.  In addition, the 2030, 2034, and 2036 senior notes may be\n\nredeemed, in whole or in part, at any time, on or after March 15, 2030, May 20, 2034, and November 15, 2035, respectively, at\n\na redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest thereon\n\nto, but not including, the redemption date.\n\n63\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nJunior Subordinated Notes\n\nAs of December 31, 2025, the Company had junior subordinated notes outstanding, the respective principal terms and\n\neffective interest rates of which are presented and described below: \n\n2059\n\nJunior Subordinated\n\nNotes\n\n2060\n\nJunior Subordinated\n\nNotes\n\n2061\n\nJunior Subordinated\n\nNotes\n\n2064\n\nJunior Subordinated\n\nNotes\n\nIssue date . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\nMarch 2019\n\nSeptember 2020\n\nJuly 2021\n\nMarch 2024\n\nMaturity date . . . . . . . . . . . . . . . . . . . . . . . . .\n\nMarch 2059\n\nSeptember 2060\n\nSeptember 2061\n\nMarch 2064\n\nPar value (in millions) . . . . . . . . . . . . . . . . . .\n\n$300.0\n\n$275.0\n\n$200.0\n\n$450.0\n\nStated coupon . . . . . . . . . . . . . . . . . . . . . . . . .\n\n5.875%\n\n4.75%\n\n4.20%\n\n6.75%\n\nCoupon frequency . . . . . . . . . . . . . . . . . . . . .\n\nQuarterly\n\nQuarterly\n\nQuarterly\n\nQuarterly\n\nNYSE Symbol . . . . . . . . . . . . . . . . . . . . . . . .\n\nMGR\n\nMGRB\n\nMGRD\n\nMGRE\n\nEffective interest rate . . . . . . . . . . . . . . . . . . .\n\n5.91%\n\n4.78%\n\n4.23%\n\n6.76%\n\nAs of December 31, 2025, each of the 2059 and 2060 junior subordinated notes could be redeemed at any time, in whole or\n\nin part.  The other junior subordinated notes may be redeemed at any time, in whole or in part, on or after September 30, 2026,\n\nin the case of the 2061 junior subordinated notes, and on or after March 30, 2029, in the case of the 2064 junior subordinated\n\nnotes.  In each case, the junior subordinated notes may be redeemed at 100% of the principal amount of the notes being\n\nredeemed, plus any accrued and unpaid interest thereon.  Prior to the applicable redemption date, at the Company’s option, the\n\napplicable junior subordinated notes may also be redeemed, in whole but not in part, at 100% of the principal amount, plus any\n\naccrued and unpaid interest, if certain changes in tax laws, regulations, or interpretations occur; or at 102% of the principal\n\namount, plus any accrued and unpaid interest, if a rating agency makes certain changes relating to the equity credit criteria for\n\nsecurities with features similar to the applicable notes.\n\nThe Company may, at its option, and subject to certain conditions and restrictions, defer interest payments subject to the\n\nterms of the junior subordinated notes.\n\nJunior Convertible Securities  \n\nAs of December 31, 2025, the Company had $340.6 million of principal outstanding on its junior convertible trust\n\npreferred securities (the “junior convertible securities”).  Prior to their redemption by the Company, as described below, the\n\njunior convertible securities bore interest at a rate of 5.15% per annum, which interest payments were payable quarterly in cash. \n\nThe junior convertible securities were considered contingent payment debt instruments under federal income tax regulations,\n\nwhich required the Company to deduct interest in an amount greater than its reported interest expense (“excess interest expense\n\ndeductions”).\n\nAs of December 31, 2024 and 2025, the unamortized issuance costs related to the junior convertible securities were $2.7\n\nmillion and $2.4 million, respectively.\n\nThe following table presents interest expense recorded in connection with the junior convertible securities:\n\nFor the Years Ended December 31,\n\n2023\n\n2024\n\n2025\n\nContractual interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$17.6\n\n$17.6\n\n$16.9\n\nAmortization of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.2\n\n0.2\n\n0.2\n\nTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$17.8\n\n$17.8\n\n$17.1\n\nEffective interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n5.21%\n\n5.21%\n\n5.00%\n\nIn November 2025, pursuant to the terms of the junior convertible securities, the Company adjusted the conversion rate of\n\nthe securities to 0.2582 shares of common stock per $50.00 junior convertible security, equivalent to an adjusted conversion\n\nprice of $193.65 per share.  The adjustment was the result of the Company’s cumulative declared dividends on its common\n\nstock since the prior adjustment.\n\n64\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nOn December 8, 2025, the Company delivered notice that it had elected to redeem all of the outstanding junior convertible\n\nsecurities on December 29, 2025 (the “Redemption Date”), and announced its intention to settle any and all conversion\n\nobligations in cash.  Substantially all holders of the junior convertible securities delivered requests to convert their securities\n\nprior to the Redemption Date.  On December 15, 2025 (the “Election Date”), the Company made an irrevocable election to\n\nsettle its conversion obligations in cash by reference to the daily volume weighted average price of the Company’s common\n\nstock during each applicable ten trading day conversion reference period.  These conversions resulted in a settlement value in\n\nexcess of the associated carrying value (the “conversion premium”).  As of December 31, 2025, the conversion premium of\n\n$155.5 million was recorded within Other liabilities, with a corresponding reduction to Additional paid-in capital.  In addition,\n\nthe conversion resulted in a reduction to Deferred tax liability (net) on the Consolidated Balance Sheets of $38.9 million, with a\n\ncorresponding increase to Additional paid-in capital.  The Company’s election to settle each applicable conversion premium in\n\ncash using a ten-day reference period was accounted for as a forward sale contract, which resulted in a $9.2 million expense\n\nrecorded in Other expenses (net), in the fourth quarter of 2025.\n\nOn the Redemption Date, the Company redeemed $1.1 million of junior convertible securities which were not converted,\n\nreflecting the principal amount of the redeemed securities, plus accrued and unpaid interest, up to, but not including, the\n\nRedemption Date.\n\nIn January 2026, the Company settled each of its applicable conversion obligations in cash for an aggregate amount of\n\n$514.6 million which resulted in an incremental expense related to the forward sale contract of $9.3 million.  As a result of the\n\nsettlement of these securities, the Company expects to incur a current cash tax liability of approximately $56.0 million in 2026,\n\nreflective of the recapture of excess interest expense deductions.  As of the date of this Annual Report on Form 10-K, none of\n\nthe Company's junior convertible securities are outstanding.\n\n6.Commitments and Contingencies\n\nFrom time to time, the Company and its Affiliates may be subject to claims, legal proceedings, and other contingencies in\n\nthe ordinary course of their business activities.  Any such matters are subject to various uncertainties, and it is possible that\n\nsome of these matters may be resolved in a manner unfavorable to the Company or its Affiliates.  The Company and its\n\nAffiliates establish accruals, as necessary, for matters for which the outcome is probable and the amount of the liability can be\n\nreasonably estimated.  For matters for which the outcome is probable but not reasonably estimable or where the outcome is\n\nreasonably possible but not probable, the Company provides disclosure related to such matters, as necessary.\n\nThe Company has committed to co-invest in certain Affiliate sponsored investment products.  As of December 31, 2025,\n\nthese unfunded commitments were $285.0 million and may be called in future periods.\n\nAs of December 31, 2025, the Company was contingently liable to make payments in connection with a consolidated\n\nAffiliate, which are included in Other liabilities.  The Company is contingently liable to make maximum contingent payments\n\nof up to $100.0 million ($24.9 million attributable to a co-investor).  The fair value of contingent payment obligation was\n\n$0.0 million.  The final measurement date of the contingent payment obligation is in July 2026.\n\nAs of December 31, 2025, the Company was obligated to make deferred payments of $85.8 million related to certain of its\n\ninvestments in Affiliates accounted for under the equity method, of which $56.4 million is payable in 2026 and $29.4 million is\n\npayable in 2027.  Deferred payment obligations are included in Other liabilities.\n\nAs of December 31, 2025, the Company was contingently liable to make payments of $451.7 million related to the\n\nachievement of specified financial targets by certain of its Affiliates accounted for under the equity method, of which $4.0\n\nmillion may become payable in 2026, $366.4 million may become payable in 2027, $35.9 million may become payable in 2028,\n\nand $22.7 million may become payable in each of 2029 and 2030.\n\nAffiliate equity interests provide holders at consolidated Affiliates with a conditional right to put their interests to the\n\nCompany over time.  See Note 14.\n\nThe Company and certain of its consolidated Affiliates operate under regulatory authorities that require the maintenance of\n\nminimum financial or capital requirements.  The Company’s management is not aware of any significant violations of such\n\nrequirements.\n\n65\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n7.Goodwill and Acquired Client Relationships\n\nThe following table presents the changes in the Company’s Goodwill:\n\nGoodwill\n\n2024\n\n2025\n\nBalance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$2,523.6\n\n$2,504.9\n\nForeign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(18.7)\n\n26.3\n\nBalance, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$2,504.9\n\n$2,531.2\n\nAs of September 30, 2025, the Company completed its annual impairment assessment on goodwill and no impairment was\n\nindicated.\n\nThe following table presents the changes in the Company’s components of Acquired client relationships (net):\n\n \n\nAcquired Client Relationships (Net)\n\n \n\nDefinite-lived\n\nIndefinite-lived\n\nTotal\n\n \n\nGross Carrying\n\nValue\n\nAccumulated\n\nAmortization\n\nNet Carrying\n\nValue\n\nCarrying\n\nValue\n\nCarrying\n\nValue\n\nBalance, as of December 31, 2023 . . . . . . . .\n\n$1,260.5\n\n$(1,051.2)\n\n$209.3\n\n$1,603.1\n\n$1,812.4\n\nIntangible amortization and impairments . .\n\n—\n\n(29.0)\n\n(29.0)\n\n—\n\n(29.0)\n\nForeign currency translation . . . . . . . . . . . .\n\n(5.0)\n\n5.0\n\n—\n\n(5.6)\n\n(5.6)\n\nBalance, as of December 31, 2024 . . . . . . . .\n\n$1,255.5\n\n$(1,075.2)\n\n$180.3\n\n$1,597.5\n\n$1,777.8\n\nIntangible amortization and impairments . .\n\n—\n\n(25.3)\n\n(25.3)\n\n(135.0)\n\n(160.3)\n\nForeign currency translation . . . . . . . . . . . .\n\n11.9\n\n(11.9)\n\n—\n\n21.8\n\n21.8\n\nBalance, as of December 31, 2025 . . . . . . . .\n\n$1,267.4\n\n$(1,112.4)\n\n$155.0\n\n$1,484.3\n\n$1,639.3\n\nDefinite-lived acquired client relationships at the Company’s consolidated Affiliates are amortized over their expected\n\nperiod of economic benefit.  The Company recorded amortization expense in Intangible amortization and impairments for these\n\nrelationships of $48.3 million, $29.0 million, and $25.3 million for the years ended December 31, 2023, 2024, and 2025,\n\nrespectively.  Based on relationships existing as of December 31, 2025, the Company estimates that its consolidated\n\namortization expense will be approximately $25 million in each of 2026, 2027, and 2028, approximately $15 million in 2029,\n\nand approximately $10 million in 2030.  As of December 31, 2025, no impairments of definite-lived acquired client\n\nrelationships were indicated.\n\nIn the first quarter of 2025, the Company completed an impairment assessment of the indefinite-lived acquired client\n\nrelationships for certain mutual fund assets and determined that the fair value of the assets had declined below their carrying\n\nvalues.  Accordingly, the Company recorded an expense in Intangible amortization and impairments of $59.2 million\n\nattributable to the controlling interest ($70.0 million in aggregate) to reduce the carrying value of the assets to fair value.  The\n\ndecline in the fair value was a result of current and projected declines in assets under management that decreased the forecasted\n\nrevenue associated with the assets.  The most relevant assumptions used in these analyses were revenue growth rates over the\n\nnext five years ranging from (21)% to 0%, long-term revenue growth rates of 0%, and discount rates of 11.0%.\n\nIn the first quarter of 2025, the Company also recorded an expense in Intangible amortization and impairments of\n\n$4.0 million attributable to the controlling interest ($7.0 million in aggregate) to reduce the carrying value of an indefinite-lived\n\nacquired client relationship to zero due to the closure of one of its Affiliate’s mutual fund products.\n\nIn the fourth quarter of 2025, the Company completed its annual impairment assessment of its indefinite-lived acquired\n\nclient relationships and determined that the fair value of certain mutual fund assets had declined below their carrying values. \n\nAccordingly, the Company recorded an expense in Intangible amortization and impairments of $37.0 million attributable to the\n\ncontrolling interest ($58.0 million in aggregate) to reduce the carrying value of the assets to fair value.  The decline in the fair\n\nvalue was a result of current and projected declines in assets under management that decreased the forecasted revenue\n\nassociated with the assets.  The most relevant assumptions used in these analyses were revenue growth rates over the next five\n\nyears ranging from (34)% to 0%, long-term revenue growth rates of 0%, and discount rates of 10.5%.\n\n66\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nFor the year ended December 31, 2025, no other impairments were indicated for the Company’s indefinite-lived acquired\n\nclient relationships.\n\nIn the third quarter of 2023, the Company completed the sale of its equity interest in Veritable, LP (“Veritable”), one of the\n\nCompany’s consolidated Affiliates, (the “Veritable Transaction”).  Pursuant to the terms of the agreement, under which a third\n\nparty acquired 100% of the outstanding equity interests in Veritable, the Company received $287.4 million in cash, net of\n\ntransaction costs.  Veritable is included in the Company’s results through the closing date, and the Company’s gain from the\n\ntransaction was $133.1 million, which is recorded in Affiliate transaction gains in the Consolidated Statements of Income.\n\n8.Equity Method Investments in Affiliates\n\nCertain of the Company’s investments in Affiliates are accounted for under the equity method.  The Company had 22\n\nequity method Affiliates as of December 31, 2024 and 2025.  The majority of these Affiliates are partnerships with structured\n\ninterests that define how the Company will participate in Affiliate earnings, typically based upon a fixed percentage of the\n\nAffiliate’s revenue less agreed-upon expenses.  The partnership agreements do not define a fixed percentage for the Company’s\n\nownership of the equity of the Affiliate.  These percentages would be subject to a separate future negotiation if an Affiliate were\n\nto be sold or liquidated.  The financial results of certain Affiliates accounted for under the equity method are recognized in the\n\nConsolidated Financial Statements one quarter in arrears.\n\nThe following tables present summarized financial information of the Company’s Affiliates accounted for under the equity\n\nmethod:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nRevenue(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$3,115.6\n\n$3,212.0\n\n$5,326.0\n\nNet income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1,313.0\n\n1,506.4\n\n1,971.2\n\n___________________________\n\n(1)Revenue and net income include asset- and performance-based fees, the impact of consolidated sponsored investment\n\nproducts, and new Affiliate investments for the full-year, regardless of the date of the Company’s investment.\n\n \n\nDecember 31,\n\n \n\n2024\n\n2025\n\nAssets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$3,348.2\n\n$4,539.9\n\nLiabilities and Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1,262.9\n\n2,114.1\n\nThe following table presents the changes in Equity method investments in Affiliates (net):\n\nEquity Method Investments in\n\nAffiliates (Net)\n\n2024\n\n2025\n\nBalance, beginning of period(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$2,288.5\n\n$2,246.6\n\nInvestments in Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n14.3\n\n857.6\n\nAffiliate transactions(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(187.5)\n\nEarnings, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n442.7\n\n561.0\n\nIntangible amortization and impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(130.0)\n\n(98.1)\n\nDistributions of earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(402.7)\n\n(465.9)\n\nReturn of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(0.7)\n\n(9.8)\n\nForeign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n34.5\n\n19.9\n\nOther(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n(53.4)\n\nBalance, end of period(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$2,246.6\n\n$2,870.4\n\n___________________________\n\n(1)Includes undistributed earnings of $168.0 million, $206.1 million, and $280.4 million as of December 31, 2023, 2024, and\n\n2025, respectively.\n\n67\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(2)Represents the Company’s equity method investments in Peppertree, Comvest’s private credit business, and Montrusco\n\nBolton as of their respective closing dates.\n\n(3)For the year ended December 31, 2025, Other includes the transfer of $53.4 million of interests to Investments associated\n\nwith the Comvest Transaction.\n\nIn the first quarter of 2025, the Company completed its minority investment in NorthBridge Partners, LLC\n\n(“NorthBridge”), a private markets manager specializing in industrial logistics real estate assets, and in the second quarter of\n\n2025, the Company completed its minority investment in Verition Fund Management LLC (“Verition”), a global multi-strategy\n\ninvestment firm.  In the fourth quarter of 2025, the Company completed its minority investments in Montefiore Investment\n\n(“Montefiore”), a European private equity firm focused on the services sector, and Qualitas Energy, a renewables-focused\n\nglobal infrastructure manager specializing in energy transition.  A portion of the consideration paid for NorthBridge and the\n\nmajority of the consideration paid for Verition will be deductible for U.S. tax purposes over a 15-year life.  The Company’s\n\npurchase price allocations for each investment were measured using discounted cash flow analyses that included assumptions of\n\nexpected market performance, net client cash flows, and discount rates.\n\nIn the third quarter of 2025, the Company completed the sale of its minority equity interest in Peppertree Capital\n\nManagement, Inc. (“Peppertree”), as part of the announced acquisition of Peppertree by TPG Inc. (“TPG”), a public\n\ncompany listed on the Nasdaq Global Select Market.  Pursuant to the terms of the agreement with TPG, under which the\n\nCompany and each of the other owners agreed to sell their respective equity interests in Peppertree, the Company received\n\ntotal consideration of $253.2 million, net of transaction costs, which included $99.8 million in cash and 2.9 million TPG\n\nClass A common shares, all of which the Company has since sold.  Peppertree is included in the Company’s results\n\nthrough the closing date and the Company’s gain from the transaction was $127.6 million, which is recorded in Affiliate\n\ntransaction gains.\n\nIn November 2025, Comvest Partners (“Comvest”) completed the previously announced agreement to sell its private\n\ncredit business to Manulife Financial Corporation.  Pursuant to the terms of the agreement, the Company received total\n\ncash consideration of $282.0 million for its portion of Comvest’s private credit business.  Comvest’s private credit business\n\nis included in the Company’s results through the closing date and the portion retained will continue to be included going\n\nforward.  The Company’s gain from the transaction was $227.6 million, which is recorded in Affiliate transaction gains.\n\nIn December 2025, the Company completed the sale of its minority equity interest in Montrusco Bolton Investments\n\nInc. (“Montrusco Bolton”) to Walter Global Asset Management Inc.  Pursuant to the terms of the agreement, the Company\n\nreceived total cash consideration of $22.0 million.  Montrusco Bolton is included in the Company’s results through the\n\nclosing date and the Company’s gain from the transaction was $16.2 million, which is recorded in Affiliate transaction\n\ngains.\n\nDefinite-lived acquired client relationships at the Company’s Affiliates accounted for under the equity method are\n\namortized over their expected period of economic benefit.  The Company recorded amortization expense for these relationships\n\nof $86.0 million, $90.1 million, and $98.1 million for the years ended December 31, 2023, 2024, and 2025, respectively.  Based\n\non relationships existing as of December 31, 2025, the Company estimates the amortization expense attributable to its Affiliates\n\naccounted for under the equity method will be approximately $100 million in each of 2026 and 2027, approximately $85\n\nmillion in 2028, and approximately $70 million in each of 2029 and 2030.\n\nIn the second quarter of 2024, the Company recorded a $39.9 million expense to reduce the carrying value of an Affiliate to\n\nfair value.  The decline in the fair value was a result of an anticipated decline in assets under management, which decreased the\n\nforecasted income associated with the investment.  The fair value of the investment was determined using a discounted cash\n\nflow analysis, a Level 3 fair value measurement that included a projected compounded growth in assets under management over\n\nthe next ten years of (2.5)%, long-term growth rate of 3%, discount rates of 12% and 20% for asset- and performance-based\n\nfees, respectively, and a market participant tax rate of 21%.  Based on the discounted cash flow analysis, the Company\n\nconcluded that the fair value of its investment had declined below its carrying value and that the decline was other-than-\n\ntemporary.\n\nFor the year ended December 31, 2025, the Company completed its annual assessment of its investments in Affiliates\n\naccounted for under the equity method and no impairments were indicated.\n\nIn January 2026, the Company completed the previously announced agreement with Brown Brothers Harriman\n\n(“BBH”), a privately held global financial services firm, to acquire a minority equity interest in BBH Credit Partners, a\n\nnewly formed subsidiary of BBH focused on structured and alternative credit investment strategies.  Following the close of\n\n68\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nthe transaction, BBH partners continue to direct day-to-day operations and the Company’s ownership is limited to a\n\nminority interest in the BBH Credit Partners subsidiary.\n\nOn February 12, 2026, the Company announced the completion of its additional minority investment in Garda Capital\n\nPartners LP (“Garda”), a liquid alternatives manager specializing in fixed income relative value strategies and an Affiliate\n\nsince 2019, and its minority investment in HighBrook Investors (“HighBrook”), a private markets manager specializing in\n\nreal estate assets.  Following the close of the transactions, the Company’s investment in Garda continues to be accounted\n\nfor under the equity method and Affiliate management continues to hold a majority of the equity of the respective\n\nbusinesses and directs the day-to-day operations.\n\n9.Lease Commitments\n\nThe Company and its Affiliates currently lease office space and equipment under various operating leasing arrangements. \n\nThe following table presents total lease costs, net:\n\nFor the Years Ended December 31,\n\n2023\n\n2024\n\n2025\n\nOperating lease costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$36.4\n\n$34.6\n\n$33.6\n\nShort-term lease costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1.1\n\n1.2\n\n0.5\n\nVariable lease costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.0\n\n0.0\n\n0.0\n\nSublease income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(6.5)\n\n(6.6)\n\n(5.9)\n\nTotal lease costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$31.0\n\n$29.2\n\n$28.2\n\nAs of December 31, 2024 and 2025, the Company’s and its Affiliates’ weighted average operating lease term was seven\n\nyears and six years, respectively, and the weighted average operating lease discount rate was 3%.\n\nAs of December 31, 2025, the maturities of lease liabilities were as follows:\n\nOperating\n\nLeases\n\n2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$30.4\n\n2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n26.3\n\n2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n24.9\n\n2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n23.3\n\n2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n21.4\n\nThereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n36.2\n\nTotal undiscounted lease liabilities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$162.5\n\n___________________________\n\n(1)Total undiscounted lease liabilities were $23.5 million greater than the operating leases recorded in Other liabilities\n\nprimarily due to present value discounting.  Both amounts exclude leases with initial terms of 12 months or less and leases\n\nthat have not yet commenced.\n\n69\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n10.Fixed Assets\n\nFixed assets (net) consisted of the following:\n\n \n\nDecember 31,\n\n \n\n2024\n\n2025\n\nBuildings and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$110.0\n\n$112.4\n\nSoftware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n45.2\n\n43.5\n\nEquipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n20.2\n\n18.7\n\nFurniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n17.5\n\n17.6\n\nLand, improvements and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n20.7\n\n20.9\n\nFixed assets, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n213.6\n\n213.1\n\nAccumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(156.0)\n\n(158.7)\n\nFixed assets (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$57.6\n\n$54.4\n\n11.Payables and Accrued Liabilities\n\nPayables and accrued liabilities consisted of the following:\n\n \n\nDecember 31,\n\n \n\n2024\n\n2025\n\nAccrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$322.3\n\n$329.7\n\nOther(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n316.8\n\n477.2\n\nPayables and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$639.1\n\n$806.9\n\n___________________________\n\n(1)Other primarily includes unsettled fund shares payable, accrued income taxes, and other accrued liabilities.\n\n12.Related Party Transactions\n\nThe Company has related party transactions in association with its deferred and contingent payment obligations, and\n\nAffiliate equity transactions, as more fully described in Notes 6, 13, and 14.\n\nFrom time to time, certain funds of the Company’s consolidated Affiliates may make tax distributions to partners subject to\n\nclawback.  As of  December 31, 2024 and 2025, the total receivable was $59.2 million and $68.6 million, respectively, and was\n\nincluded in Other assets, and the total payable was $87.8 million and $99.3 million, respectively, and was included in Other\n\nliabilities.  These amounts were primarily attributable to the non-controlling interests.\n\nA prior owner of one of the Company’s consolidated Affiliates retains interests in certain of the Affiliate’s private equity\n\npartnerships and, as a result, is a related party of the Company.  The prior owner’s interests are included in Other liabilities and\n\nwere $14.5 million and $11.7 million as of December 31, 2024 and 2025, respectively.\n\nThe Company may invest from time to time in funds or products advised by its Affiliates.  The Company’s executive\n\nofficers and directors may invest from time to time in funds advised or products offered by its Affiliates, or receive other\n\ninvestment services provided by its Affiliates, on substantially the same terms as other participating investors.  The Company\n\nand its Affiliates earn asset- and performance-based feed and incur distribution and other expenses for services provided to\n\nAffiliate sponsored investment products.  In addition, the Company and its Affiliates earn fees or incur expenses related to the\n\nCompany’s efforts to develop and distribute Affiliate products.  Affiliate management owners and the Company’s officers may\n\nserve as trustees or directors of certain investment vehicles from which the Company or an Affiliate earns fees.\n\nFrom time to time, the Company may enter into ordinary course engagements for capital markets, banking, brokerage, and\n\nother services with beneficial owners of 5% or more of the Company’s voting securities.\n\n13.Redeemable Non-Controlling Interests\n\nAffiliate equity interests provide holders with an equity interest in one of the Company’s consolidated Affiliates, consistent\n\nwith the structured partnership interests in place at the respective Affiliate.  Affiliate equity holders generally have a conditional\n\n70\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nright to put their interests to the Company at certain intervals (between five years and 15 years from the date the equity interest\n\nis received by the Affiliate equity holder or on an annual basis following an Affiliate equity holder’s departure).  Prior to\n\nbecoming redeemable, the Company’s Affiliate equity is included in Non-controlling interests.  Upon becoming redeemable,\n\nthese interests are reclassified to Redeemable non-controlling interests at their current redemption values.  Changes in the\n\ncurrent redemption value are recorded to Additional paid-in capital.  When the Company has an unconditional obligation to\n\npurchase Affiliate equity interests, the interests are reclassified from Redeemable non-controlling interests to Other liabilities at\n\ncurrent fair value.  Changes in fair value are recorded to Other expenses (net).\n\nThe following table presents the changes in Redeemable non-controlling interests:\n\n \n\nRedeemable Non-controlling\n\nInterests\n\n \n\n2024\n\n2025\n\nBalance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$393.4\n\n$350.5\n\nIncrease attributable to consolidated Affiliate sponsored investment products . . . . . . . . . . . . .\n\n1.1\n\n19.3\n\nTransfers to Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(69.6)\n\n(152.1)\n\nTransfers from (to) Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1.7\n\n(53.0)\n\nChanges in redemption value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n23.9\n\n82.1\n\nBalance, end of period(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$350.5\n\n$246.8\n\n__________________________\n\n(1) As of December 31, 2024 and 2025, Redeemable non-controlling interests includes consolidated Affiliate sponsored\n\ninvestment products primarily attributable to third-party investors of $12.9 million and $32.2 million, respectively.\n\n14.Affiliate Equity\n\nAffiliate equity interests are allocated income in a manner that is consistent with the structured partnership interests in\n\nplace at the respective Affiliate.  The Company’s consolidated Affiliates generally pay quarterly distributions to Affiliate equity\n\nholders.  Distributions paid to non-controlling interest Affiliate equity holders were $271.3 million, $258.0 million, and $252.3\n\nmillion for the years ended December 31, 2023, 2024, and 2025, respectively.\n\nAffiliate equity interests provide the Company a conditional right to call (following an Affiliate equity holder’s departure)\n\nand Affiliate equity holders have a conditional right to put their interests at certain intervals (including on an annual basis\n\nfollowing an Affiliate equity holder’s departure).  The Company has the right to settle a portion of these purchases in shares of\n\nits common stock.  For Affiliates accounted for under the equity method, the Company does not typically have such put and call\n\narrangements.  The purchase price of these conditional purchases are generally calculated based upon a multiple of cash flow\n\ndistributions, which is intended to represent fair value.  Affiliate equity holders are also permitted to sell their equity interests to\n\nother individuals or entities in certain cases, subject to the Company's approval or other restrictions.  The Company, at its\n\noption, may pay for Affiliate equity purchases in cash, shares of its common stock, or other forms of consideration, and can\n\nconsent to the transfer of these interests to Affiliate partners and other parties.\n\nThe Company periodically purchases Affiliate equity from and issues Affiliate equity to the Company’s consolidated\n\nAffiliate partners and other parties.  The amount of cash paid for purchases was $67.4 million, $106.5 million, and $176.7\n\nmillion for the years ended December 31, 2023, 2024, and 2025, respectively.  The total amount of cash received for issuances\n\nwas $13.4 million, $6.3 million, and $6.4 million for the years ended December 31, 2023, 2024, and 2025, respectively. \n\nSales and purchases of Affiliate equity generally occur at fair value; however, the Company also grants Affiliate equity to\n\nits consolidated Affiliate partners and other parties as a form of compensation.  If the equity is issued for consideration below\n\nthe fair value of the equity, or purchased for consideration above the fair value of the equity, the difference is recorded as an\n\nexpense in Compensation and related expenses over the requisite service period.\n\n71\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nThe following table presents Affiliate equity expense:\n\nFor the Years Ended December 31,\n\n2023\n\n2024\n\n2025\n\nControlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$13.6\n\n$20.2\n\n$111.4\n\nNon-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n39.1\n\n39.4\n\n32.2\n\nTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$52.7\n\n$59.6\n\n$143.6\n\nIn the second quarter of 2025, the terms of certain equity awards at an Affiliate were modified.  The modification included\n\na mandatory repurchase provision upon termination of employment that changed the awards classification from equity to\n\nliability and as a result, the Company recorded incremental Affiliate equity expense of $30.5 million attributable to the\n\ncontrolling interest.\n\nThe following table presents unrecognized Affiliate equity expense:\n\nControlling\n\nInterest\n\nRemaining Life\n\nNon-controlling\n\nInterests\n\nRemaining Life\n\n2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$30.6\n\n5 years\n\n$235.7\n\n6 years\n\n2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n36.7\n\n3 years\n\n206.0\n\n6 years\n\n2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n71.7\n\n2 years\n\n159.5\n\n5 years\n\nThe Company records amounts receivable from, and payable to, Affiliate equity holders in connection with the transfer of\n\nAffiliate equity interests that have not settled at the end of the period.  The total receivable was $7.9 million and $4.7 million as\n\nof December 31, 2024 and 2025, respectively, and was included in Other assets.  The total payable was $54.8 million and\n\n$161.2 million as of December 31, 2024 and 2025, respectively, and was included in Other liabilities.\n\nEffects of Changes in the Company’s Ownership in Affiliates\n\nThe Company periodically acquires interests from, and transfers interests to, Affiliate equity holders.  Because these\n\ntransactions do not result in a change of control, any gain or loss related to these transactions is recorded to Additional paid-in\n\ncapital, which increases or decreases the controlling interest’s equity.  No gain or loss related to these transactions is recorded in\n\nthe Consolidated Statements of Income or the Consolidated Statements of Comprehensive Income.\n\nWhile the Company presents the current redemption value of Affiliate equity within Redeemable non-controlling interests,\n\nwith changes in the current redemption value increasing or decreasing the controlling interest’s equity over time, the following\n\ntable presents the cumulative effect that ownership changes had on the controlling interest’s equity related only to Affiliate\n\nequity transactions that occurred during the applicable periods:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nNet income (controlling interest) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$672.9\n\n$511.6\n\n$716.6\n\nDecrease in controlling interest paid-in capital from Affiliate equity\n\nissuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(13.5)\n\n(3.1)\n\n(18.4)\n\nDecrease in controlling interest paid-in capital from Affiliate equity\n\npurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(50.4)\n\n(32.6)\n\n(47.9)\n\nNet income (controlling interest) including the net impact of Affiliate equity\n\ntransactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$609.0\n\n$475.9\n\n$650.3\n\n15.Stockholders’ Equity\n\nPreferred Stock\n\nThe Company is authorized to issue up to 5.0 million shares of preferred stock.  Any such preferred stock issued by the\n\nCompany may rank prior to common stock as to dividend rights, liquidation preference or both, may have full or limited voting\n\nrights, and may be convertible into shares of common stock.  As of December 31, 2025, the Company had no shares of \n\npreferred stock outstanding.\n\n72\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nCommon Stock\n\nThe Company is authorized to issue up to 150.0 million shares of voting common stock and 3.0 million shares of class B\n\nnon-voting common stock.\n\nThe Company’s Board of Directors authorized a share repurchase program in July 2024 to repurchase up to 5.4 million\n\nshares of its common stock and this authorization has no expiry.  Purchases may be made from time to time, at management’s\n\ndiscretion, in the open market or in privately negotiated transactions, including through the use of trading plans, as well as\n\npursuant to accelerated share repurchase programs or other share repurchase strategies that may include derivative financial\n\ninstruments.  For the year ended December 31, 2025, the Company repurchased 3.3 million shares of its common stock at an\n\naverage price per share of $212.92.  As of December 31, 2025, there were a total of 2.0 million shares available for repurchase\n\nunder the Company’s July 2024 share repurchase program.  The Company’s Board of Directors authorized an additional share\n\nrepurchase program in January 2026 to repurchase up to 4.2 million shares of the Company’s common stock.\n\nThe following table summarizes the Company's share repurchase activity:\n\nShares\n\nRepurchased\n\nAverage Price\n\nPer Share\n\n2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n3.0\n\n$132.99\n\n2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n4.3\n\n162.65\n\n2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n3.3\n\n212.92\n\nEquity Distribution Program\n\nIn the first quarter of 2025, the Company entered into an equity distribution agreement and forward sale agreements with\n\nseveral major securities firms under which it may, from time to time, issue and sell shares of its common stock (immediately or\n\non a forward basis) having an aggregate sales price of up to $500.0 million (the “equity distribution program”).  This equity\n\ndistribution program superseded and replaced the Company’s prior equity distribution program.  As of December 31, 2025, no\n\nsales had occurred under the equity distribution program.\n\nFinancial Instruments\n\nThe equity distribution program meets the definition of equity and is not required to be accounted for separately as a\n\nderivative financial instrument.\n\nPrior to the Election Date, the Company’s junior convertible securities, which contained an embedded right for holders to\n\nreceive shares of the Company’s common stock under certain conditions, met the definition of equity and were not required to\n\nbe accounted for separately as derivative financial instruments.  Subsequently, the Company’s election to settle each applicable\n\nconversion premium in cash using a ten-day reference period was accounted for as a forward sale contract.  See Note 5.\n\n16.Share-Based Compensation\n\nShare-Based Incentive Plans\n\nThe Company has established various plans under which it is authorized to grant restricted stock, restricted stock units,\n\nstock options, and stock appreciation rights.  The Company may also grant cash awards that can be notionally invested in one or\n\nmore specified measurement funds, including the Company’s common stock.  Awards granted under the Company’s share-\n\nbased incentive plans typically participate in any dividends declared, but such amounts are deferred until delivery of the shares\n\nand are forfeitable if the requisite service is not satisfied.  Dividends may accrue in cash or may be reinvested in the Company’s\n\ncommon stock.\n\n73\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nShare-Based Compensation\n\nThe following table presents share-based compensation expense:\n\nShare-Based\n\nCompensation\n\nExpense\n\nTax Benefit\n\n2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$59.4\n\n$7.4\n\n2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n52.0\n\n6.3\n\n2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n59.2\n\n5.2\n\nThe excess tax benefit recognized from share-based incentive plans was $4.4 million, $10.3 million, and $20.3 million for\n\nthe years ended December 31, 2023, 2024, and 2025, respectively. \n\nAs of December 31, 2024, the Company had unrecognized share-based compensation expense of $38.1 million.  As of\n\nDecember 31, 2025, the Company had unrecognized share-based compensation of $70.2 million, which will be recognized over\n\na weighted average period of approximately three years (assuming no forfeitures).\n\nRestricted Stock\n\nThe following table summarizes transactions in the Company’s restricted stock units:\n\nRestricted\n\nStock Units\n\nWeighted\n\nAverage\n\nGrant Date\n\nValue\n\nPer Unit\n\nUnvested units, as of December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.8\n\n$147.46\n\nUnits granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.3\n\n167.96\n\nUnits vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(0.4)\n\n137.69\n\nUnits forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(0.0)\n\n154.29\n\nPerformance condition changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.3\n\n164.94\n\nUnvested units, as of December 31, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1.0\n\n$161.80\n\nThe Company granted restricted stock units with fair values of $49.3 million, $31.3 million, and $54.8 million for the years\n\nended December 31, 2023, 2024, and 2025, respectively.  These restricted stock units were valued based on the closing price of\n\nthe Company’s common stock on the grant date and the number of shares expected to vest.  Restricted stock units containing\n\nvesting conditions generally require service over a period of three years to four years and may also require the satisfaction of\n\ncertain performance conditions.  For awards with performance conditions, the number of restricted stock units expected to vest\n\nmay change over time depending upon the performance level expected to be achieved. \n\nThe total fair value of restricted stock units vested was $86.2 million, $50.5 million, and $59.0 million for the years ended\n\nDecember 31, 2023, 2024, and 2025, respectively.  As of December 31, 2025, the Company had 1.6 million shares available for\n\ngrant under its plans.\n\n74\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nStock Options\n\nThe following table summarizes transactions in the Company’s stock options:\n\nStock \n\nOptions\n\nWeighted\n\nAverage\n\nExercise Price\n\nPer Option\n\nWeighted\n\nAverage\n\nRemaining\n\nContractual\n\nLife (Years)\n\nUnexercised options outstanding, as of December 31, 2024 . . . . . . . . . . . . . .\n\n1.7\n\n$78.45\n\n \n\nOptions granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n \n\nOptions exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(1.4)\n\n75.69\n\n \n\nOptions forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n—\n\n \n\nOptions expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(0.0)\n\n203.22\n\nPerformance condition changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.0\n\n129.17\n\nUnexercised options outstanding, as of December 31, 2025 . . . . . . . . . . . . . .\n\n0.3\n\n$92.73\n\n1.4\n\nExercisable at December 31, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.2\n\n$76.60\n\n0.7\n\nThe Company did not grant any stock options for the years ended December 31, 2023, 2024, and 2025.  Stock options\n\ngenerally vest over a period of four years to five years and expire seven years after the grant date.  All stock options have been\n\ngranted with exercise prices equal to the closing price of the Company’s common stock on the grant date.  Substantially all of\n\nthe Company’s outstanding stock options contain both service and performance conditions.  For awards with performance\n\nconditions, the number of stock options expected to vest may change over time depending upon the performance level expected\n\nto be achieved. \n\nThe Company generally uses treasury stock to settle stock option exercises.  The total intrinsic value of stock options\n\nexercised for the years ended December 31, 2023, 2024, and 2025 was $0.2 million, $150.7 million, and $187.6 million,\n\nrespectively.  The cash received for stock options exercised was zero, $0.3 million, and $2.8 million for the years ended\n\nDecember 31, 2023, 2024, and 2025, respectively.  As of December 31, 2025, the intrinsic value of exercisable stock options\n\noutstanding was $37.0 million, and 1.1 million options were available for grant under the Company’s option plans.\n\n17.Benefit Plans\n\nThe Company has a defined contribution plan that is a qualified employee profit-sharing plan, covering substantially all of\n\nits employees.  Under this plan, the Company is able to make discretionary contributions for the benefit of its employees that\n\nare qualified plan participants, up to Internal Revenue Service (“IRS”) limits.  The Company’s consolidated Affiliates generally\n\nhave their own qualified defined contribution retirement plans covering their respective employees or, for several Affiliates, had\n\ntheir employees covered under the Company’s plan until February or March 2023, as applicable.  In each case, the relevant\n\nAffiliate was able to make discretionary contributions for the benefit of its employees, as applicable, that were qualified plan\n\nparticipants, up to IRS limits.  Consolidated expenses related to these plans were $24.8 million, $24.9 million, and $24.5\n\nmillion for the years ended December 31, 2023, 2024, and 2025, respectively.  The controlling interest’s portion of expenses\n\nrelated to these plans were $3.6 million, $4.6 million, and $4.0 million for the years ended December 31, 2023, 2024, and 2025,\n\nrespectively.\n\n18.Income Taxes\n\nThe Company’s consolidated income tax provision includes taxes attributable to the controlling interest and, to a lesser\n\nextent, taxes attributable to the non-controlling interests. \n\n75\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nThe following table presents the consolidated provision for income taxes:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nControlling interest(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$178.3\n\n$174.8\n\n$272.2\n\nNon-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n7.0\n\n7.8\n\n10.1\n\nIncome tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$185.3\n\n$182.6\n\n$282.3\n\nIncome before income taxes (controlling interest) . . . . . . . . . . . . . . . . . . . . . .\n\n$851.2\n\n$686.4\n\n$988.8\n\nEffective tax rate (controlling interest)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n20.9%\n\n25.5%\n\n27.5%\n\n___________________________\n\n(1)For the years ended December 31, 2023, 2024, and 2025, income tax expense (controlling interest) included intangible-\n\nrelated deferred tax expense of $29.8 million, $66.7 million, and $53.1 million, respectively.\n\n(2)Taxes attributable to the controlling interest divided by income before income taxes (controlling interest).\n\nThe consolidated provision for income taxes consisted of the following:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nCurrent\n\n \n\n \n\n \n\nFederal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$105.2\n\n$59.6\n\n$95.2\n\nState . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n10.8\n\n16.6\n\n19.9\n\nForeign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n37.9\n\n45.8\n\n83.4\n\nTotal current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n153.9\n\n122.0\n\n198.5\n\nDeferred\n\n \n\n \n\n \n\nFederal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n27.3\n\n52.5\n\n78.5\n\nState . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n7.0\n\n11.9\n\n18.9\n\nForeign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(2.9)\n\n(3.8)\n\n(13.6)\n\nTotal deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n31.4\n\n60.6\n\n83.8\n\nIncome tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$185.3\n\n$182.6\n\n$282.3\n\nFor financial reporting purposes, Income before income taxes consisted of the following:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nDomestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$782.3\n\n$678.5\n\n$1,005.7\n\nInternational . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n309.1\n\n244.7\n\n180.6\n\nTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$1,091.4\n\n$923.2\n\n$1,186.3\n\nThe following table presents consolidated income taxes paid, net by jurisdiction:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nU.S. federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$240.3\n\n$82.9\n\n$52.6\n\nUnited Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n42.3\n\n39.0\n\n43.0\n\nOther . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n31.9\n\n20.6\n\n15.1\n\nTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$314.5\n\n$142.5\n\n$110.7\n\n76\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nThe following table reconciles the U.S. federal statutory tax rate to the Company’s effective tax rate:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\n$\n\n%\n\n$\n\n%\n\n$\n\n%\n\nStatutory U.S. federal tax . . . . . . . . . . . . . . . .\n\n$229.2\n\n21.0%\n\n$193.9\n\n21.0%\n\n$249.1\n\n21.0%\n\nState income taxes, net of federal benefit(1) . .\n\n14.1\n\n1.3%\n\n19.2\n\n2.1%\n\n26.0\n\n2.1%\n\nForeign tax effects:\n\nUnited Kingdom\n\nAffiliate equity expense . . . . . . . . . . . . . . .\n\n0.8\n\n0.1%\n\n1.4\n\n0.2%\n\n19.2\n\n1.7%\n\nOther . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n3.5\n\n0.3%\n\n7.0\n\n0.8%\n\n1.8\n\n0.1%\n\nOther foreign jurisdictions . . . . . . . . . . . . . .\n\n(25.3)\n\n(2.4)%\n\n(9.1)\n\n(1.0)%\n\n(7.4)\n\n(0.6)%\n\nEffect of cross-border tax laws . . . . . . . . . . . .\n\n(4.4)\n\n(0.4)%\n\n6.5\n\n0.7%\n\n9.1\n\n0.8%\n\nNontaxable or nondeductible items . . . . . . . .\n\n5.1\n\n0.5%\n\n4.2\n\n0.5%\n\n5.2\n\n0.4%\n\nChange in valuation allowance . . . . . . . . . . . .\n\n0.6\n\n0.1%\n\n0.3\n\n0.0%\n\n0.2\n\n0.0%\n\nUnrecognized tax benefits . . . . . . . . . . . . . . .\n\n5.1\n\n0.5%\n\n1.2\n\n0.1%\n\n10.5\n\n0.9%\n\nOther adjustments:\n\nEffect of income from non-controlling\n\ninterests . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(43.4)\n\n(4.0)%\n\n(42.0)\n\n(4.5)%\n\n(31.4)\n\n(2.6)%\n\nEffective tax . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$185.3\n\n17.0%\n\n$182.6\n\n19.9%\n\n$282.3\n\n23.8%\n\n___________________________\n\n(1)The state and local jurisdictions that make up the majority of the effect of the state and local income tax include\n\nMassachusetts, California, and New York.\n\nThe Company’s effective tax rate (controlling interest) in 2023 is lower than the marginal tax rate of 24.5 %, primarily due\n\nto discrete benefits from foreign operations.  The effective tax rate (controlling interest) in 2024 is higher than the marginal tax\n\nrate of 24.5%, primarily due to an expense to reduce the carrying value of a foreign Affiliate to fair value for which no tax\n\nbenefit was recorded, partially offset by tax windfalls attributable to share-based compensation.  The effective tax rate\n\n(controlling interest) in 2025 is higher than the marginal tax rate of 24.5%, primarily due to unrecognized tax benefits and non-\n\ndeductible compensation expense, partially offset by tax windfalls attributable to share-based compensation.\n\nThe Company’s effective tax rate reflects the relative contributions of earnings in the jurisdictions in which the Company\n\nand its Affiliates operate and is impacted by changes in the jurisdictional mix of income before taxes.\n\n77\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nDeferred tax liability (net) reflects the expected future tax consequences of temporary differences between the financial\n\nreporting bases and tax bases of the Company’s assets and liabilities.  The significant components of the Company’s Deferred\n\ntax liability (net) are as follows:\n\n \n\nDecember 31,\n\n \n\n2024\n\n2025\n\nDeferred Tax Assets\n\n \n\n \n\nState net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$13.8\n\n$13.7\n\nForeign loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n17.7\n\n19.6\n\nForeign tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n16.3\n\n16.5\n\nOther . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n33.5\n\n22.5\n\nTotal deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n81.3\n\n72.3\n\nValuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(44.8)\n\n(47.0)\n\nDeferred tax assets, net of valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n36.5\n\n25.3\n\nDeferred Tax Liabilities\n\n \n\n \n\nIntangible asset amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(353.0)\n\n(392.6)\n\nNon-deductible intangible amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(101.4)\n\n(82.9)\n\nJunior convertible securities interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(92.6)\n\n(58.3)\n\nOther . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(8.0)\n\n(22.8)\n\nTotal deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(555.0)\n\n(556.6)\n\nDeferred tax liability (net)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$(518.5)\n\n$(531.3)\n\n___________________________\n\n(1)As of December 31, 2024 and 2025, foreign loss carryforwards of $17.7 million (net of a $15.7 million valuation\n\nallowance) and $19.6 million (net of a $17.8 million valuation allowance), respectively, are included in Other assets as they\n\nrepresent a net deferred tax asset in a foreign jurisdiction.\n\nAs of December 31, 2025, the Company had available state net operating loss carryforwards of $213.3 million, a majority\n\nof which will expire over four years to seven years, foreign loss carryforwards of $73.9 million, of which $51.5 million will\n\nexpire over ten years to 14 years and $22.4 million will carry forward indefinitely, and foreign tax credit carryforwards of $16.5\n\nmillion, a majority of which will expire over five years to seven years.\n\nThe Company believed it was more-likely-than-not that the benefit from certain state and foreign loss carryforwards and\n\nforeign tax credit carryforwards would not be fully realized, and, as of December 31, 2025, had valuation allowances of $12.7\n\nmillion, $17.8 million, and $16.5 million on the state and foreign loss carryforwards and the foreign tax credit carryforwards,\n\nrespectively.  For the years ended December 31, 2024 and 2025, the Company decreased its valuation allowance $2.8 million\n\nand increased its valuation allowance $2.2 million, respectively. \n\nThe Company’s estimates and assumptions regarding the realization of its state and foreign loss carryforwards do not\n\ncontemplate certain changes in ownership of the Company’s stock which could limit the utilization of these carryforwards.   \n\nThe Company provides for U.S. income taxes on all foreign earnings.  The Company does not provide for U.S. income\n\ntaxes on the portion of the excess of the financial reporting bases over tax bases in the Company’s investments in foreign\n\nsubsidiaries considered permanent in duration.  Such amount would generally become taxable upon the repatriation of assets\n\nfrom, or a sale or liquidation of, the foreign subsidiaries.  A determination of the potential amount of unrecognized U.S. income\n\ntax related to these amounts is not practicable because of the numerous assumptions associated with this hypothetical\n\ncalculation.\n\n78\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nThe following table presents the changes in unrecognized tax benefits:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nBalance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$49.6\n\n$37.8\n\n$37.3\n\nAdditions based on current year tax positions . . . . . . . . . . . . . . . . . . . . . . . . .\n\n6.4\n\n0.5\n\n5.7\n\nAdditions based on prior years’ tax positions . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1.0\n\n3.5\n\n9.8\n\nReduction for prior years’ tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(13.5)\n\n(0.8)\n\n—\n\nLapse of the statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(4.8)\n\n(2.5)\n\n(7.3)\n\nSettlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(1.3)\n\n—\n\n—\n\nForeign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.4\n\n(1.2)\n\n0.5\n\nBalance, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$37.8\n\n$37.3\n\n$46.0\n\nIncluded in the balance of unrecognized tax benefits as of December 31, 2023, 2024, and 2025 were $37.8 million, $37.3\n\nmillion, and $46.0 million, respectively, of tax benefits that, if recognized, would favorably affect the Company’s effective\n\ntax rate (controlling interest).  As of December 31, 2025, certain of these benefits, if realized, would be offset by the\n\nutilization of indirect tax benefits, for which the Company had accrued deferred tax assets of $7.0 million.\n\nThe Company records accrued interest and penalties related to unrecognized tax benefits in Income tax expense.  For the\n\nyears ended December 31, 2023, 2024, and 2025, interest and penalties related to unrecognized tax benefits were $0.8\n\nmillion, $(0.5) million, and $(0.1) million, respectively.  As of December 31, 2024 and 2025, the Company had accrued\n\ninterest and penalties related to unrecognized tax benefits of $13.9 million and $13.8 million, respectively.\n\nThe Company is subject to U.S. federal, state and local, and foreign income tax in multiple jurisdictions and is\n\nperiodically subject to tax examinations in these jurisdictions.  The completion of examinations may result in the payment of\n\nadditional taxes and/or the recognition of tax benefits.  The Company is generally no longer subject to income tax\n\nexaminations by U.S. federal, state and local, or foreign taxing authorities for periods prior to 2019.\n\nThe Company continues to monitor and evaluate legislative developments related to the Organization for Economic Co-\n\noperation and Development’s Pillar Two directive (“Pillar Two”), which establishes a framework for a global minimum\n\ncorporate tax rate of 15%.  Several countries in which the Company or its Affiliates operate are adopting legislation to\n\nimplement Pillar Two.  The Company currently does not expect Pillar Two to have a material impact on its Consolidated\n\nFinancial Statements.\n\n19.Earnings Per Share\n\nThe calculation of Earnings per share (basic) is based on the weighted average number of shares of the Company’s\n\ncommon stock outstanding during the period.  Earnings per share (diluted) is similar to Earnings per share (basic), but adjusts\n\nfor the dilutive effect of the potential issuance of incremental shares of the Company’s common stock.\n\n79\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nThe following table presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted\n\nearnings per share available to common stockholders:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nNumerator\n\n \n\n \n\n \n\nNet income (controlling interest) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$672.9\n\n$511.6\n\n$716.6\n\nIncome from hypothetical settlement of Redeemable non-controlling\n\ninterests, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n49.0\n\n20.5\n\n20.5\n\nInterest expense on junior convertible securities, net of taxes . . . . . . . . . . . . .\n\n13.4\n\n13.4\n\n12.9\n\nNet income (controlling interest), as adjusted . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$735.3\n\n$545.5\n\n$750.0\n\nDenominator\n\n \n\n \n\n \n\nAverage shares outstanding (basic) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n35.1\n\n31.1\n\n28.5\n\nEffect of dilutive instruments:\n\nStock options and restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1.7\n\n1.7\n\n0.9\n\nHypothetical issuance of shares to settle Redeemable non-controlling\n\ninterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n3.7\n\n1.6\n\n1.9\n\nAssumed issuance of junior convertible securities shares . . . . . . . . . . . . . . .\n\n1.7\n\n1.7\n\n1.7\n\nAverage shares outstanding (diluted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n42.2\n\n36.1\n\n33.0\n\nAverage shares outstanding (diluted) in the table above excludes stock options and restricted stock units that have not met\n\ncertain performance conditions and instruments that have an anti-dilutive effect on Earnings per share (diluted).  The following\n\ntable presents a summary of items excluded from the denominator in the table above:\n\n \n\nFor the Years Ended December 31,\n\n \n\n2023\n\n2024\n\n2025\n\nStock options and restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.2\n\n0.2\n\n0.1\n\nShares issuable to settle Redeemable non-controlling interests . . . . . . . . . . . .\n\n0.7\n\n2.0\n\n0.3\n\n20.Comprehensive Income\n\nThe following tables present the tax effects allocated to each component of Other comprehensive income:\n\n \n\nFor the Year Ended December 31, 2023\n\n \n\nPre-Tax\n\nTax (Expense)\n\nBenefit\n\nNet of Tax\n\nForeign currency translation gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$44.8\n\n$(3.7)\n\n$41.1\n\nChange in net realized and unrealized gain (loss) on derivative financial\n\ninstruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.3\n\n0.0\n\n0.3\n\nChange in net unrealized gain (loss) on available-for-sale debt securities . . . .\n\n0.5\n\n0.0\n\n0.5\n\nOther comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$45.6\n\n$(3.7)\n\n$41.9\n\n \n\nFor the Year Ended December 31, 2024\n\n \n\nPre-Tax\n\nTax Expense\n\nNet of Tax\n\nForeign currency translation gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$11.0\n\n$(9.5)\n\n$1.5\n\nChange in net realized and unrealized gain (loss) on derivative financial\n\ninstruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.5\n\n—\n\n0.5\n\nChange in net unrealized gain (loss) on available-for-sale debt securities . . . .\n\n0.5\n\n(0.4)\n\n0.1\n\nOther comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$12.0\n\n$(9.9)\n\n$2.1\n\n80\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n \n\nFor the Year Ended December 31, 2025\n\n \n\nPre-Tax\n\nTax Benefit\n\nNet of Tax\n\nForeign currency translation gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$69.2\n\n$1.0\n\n$70.2\n\nChange in net realized and unrealized gain (loss) on derivative financial\n\ninstruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(0.9)\n\n—\n\n(0.9)\n\nChange in net unrealized gain (loss) on available-for-sale debt securities . . . .\n\n0.4\n\n—\n\n0.4\n\nOther comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$68.7\n\n$1.0\n\n$69.7\n\nThe components of accumulated other comprehensive loss, net of taxes, were as follows:\n\nForeign\n\nCurrency\n\nTranslation\n\nAdjustment\n\nRealized and\n\nUnrealized\n\nGain (Loss) on\n\nDerivative\n\nFinancial\n\nInstruments\n\nUnrealized\n\nGain (Loss)\n\non\n\nAvailable-\n\nfor-Sale\n\nDebt\n\nSecurities\n\nTotal\n\nBalance, as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$(255.3)\n\n$(0.1)\n\n$(0.5)\n\n$(255.9)\n\nOther comprehensive income (loss) before reclassifications . . . . . . . . . .\n\n1.5\n\n(0.2)\n\n0.1\n\n1.4\n\nAmounts reclassified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n—\n\n0.7\n\n—\n\n0.7\n\nNet other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n1.5\n\n0.5\n\n0.1\n\n2.1\n\nBalance, as of December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$(253.8)\n\n$0.4\n\n$(0.4)\n\n$(253.8)\n\nOther comprehensive income (loss) before reclassifications . . . . . . . . . .\n\n71.0\n\n(1.2)\n\n0.4\n\n70.2\n\nAmounts reclassified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n(0.8)\n\n0.3\n\n—\n\n(0.5)\n\nNet other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n70.2\n\n(0.9)\n\n0.4\n\n69.7\n\nBalance, as of December 31, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$(183.6)\n\n$(0.5)\n\n$—\n\n$(184.1)\n\n21.Segment and Geographic Information\n\nThe Company operates in one segment.  Accordingly, the Company’s Consolidated revenue, Net income, and Total assets\n\nreflect the revenue, profit, and assets of the Company’s single segment, respectively.\n\nThe Company’s Chief Executive Officer is the chief operating decision maker (“CODM”).  The CODM uses Net income in\n\nassessing the performance and in determining the allocation of resources of the Company’s reportable segment.  The CODM is\n\nregularly provided expense information consistent with the expense categories presented in the Company’s Consolidated\n\nStatements of Income.\n\n81\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nAFFILIATED MANAGERS GROUP, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\nThe following tables present Consolidated revenue and Fixed assets (net) of the Company by geographic location.  For\n\nAffiliates, this information is primarily based on the location of the Affiliates’ headquarters.\n\nFor the Years Ended December 31,\n\n2023\n\n2024\n\n2025\n\nConsolidated revenue\n\nUnited States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$1,519.3\n\n$1,485.2\n\n$1,486.9\n\nUnited Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n498.3\n\n500.5\n\n527.0\n\nOther . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n40.2\n\n55.2\n\n60.5\n\nTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$2,057.8\n\n$2,040.9\n\n$2,074.4\n\nDecember 31,\n\n2024\n\n2025\n\nFixed assets (net)\n\nUnited States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$48.9\n\n$43.9\n\nUnited Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n8.5\n\n10.2\n\nOther . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n0.2\n\n0.3\n\nTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$57.6\n\n$54.4\n\n82\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)\n\nSchedule II\n\nValuation and Qualifying Accounts\n\n(in millions)\n\nBalance\n\nBeginning of\n\nPeriod\n\nAdditions\n\nCharged to Costs\n\nand Expenses\n\nAdditions\n\nCharged to\n\nOther Accounts\n\nDeductions\n\nBalance\n\nEnd of Period\n\nIncome Tax Valuation Allowance\n\n \n\n \n\n \n\n \n\n \n\nYears Ending December 31,\n\n \n\n \n\n \n\n \n\n \n\n2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$48.1\n\n$0.6\n\n$0.4\n\n$(1.5)\n\n$47.6\n\n2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n47.6\n\n0.3\n\n0.0\n\n(3.1)\n\n44.8\n\n2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n44.8\n\n1.5\n\n0.8\n\n(0.1)\n\n47.0\n\nOther Allowances(1)\n\n \n\n \n\n \n\n \n\n \n\nYears Ending December 31,\n\n \n\n \n\n \n\n \n\n \n\n2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n$3.5\n\n$1.5\n\n$—\n\n$(1.2)\n\n$3.8\n\n2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n3.8\n\n—\n\n—\n\n(1.5)\n\n2.3\n\n2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\n\n2.3\n\n5.1\n\n—\n\n(1.0)\n\n6.4\n\n___________________________\n\n(1)Other allowances represents reserves on notes received in connection with transfers of the Company’s interests in certain\n\nAffiliates, as well as other receivable amounts, which the Company considered uncollectible.  Deductions represent the\n\nreversal of such reserves upon collection of the amounts due.\n\n83\n\n[Table of Contents](#ibfa0590d77ac4199aa63edb4b8813f49_7)"}