<PAGE>
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): February 2, 2000
AFFILIATED MANAGERS GROUP, INC.
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(Exact name of Registrant as specified in charter)
Delaware 0001-13459 043218510
- ---------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
Two International Place, 23rd Floor, Boston, MA 02110
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(Address of principal executive offices) (Zip code)
(617) 747-3300
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(Registrant's telephone number, including area code)
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Item 5. Other Events
Registrant is filing this Form 8-K in order to file a current earnings press
release. By this filing, Registrant is not establishing the practice of filing
all earnings press releases in the future and may discontinue such filings at
any time.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 -- Press Release issued on January 26, 2000 by Affiliated Managers
Group, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AFFILIATED MANAGERS GROUP, INC.
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(Registrant)
Date: February 2, 2000 /s/ Darrell W. Crate
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DARRELL W. CRATE
Senior Vice President
Chief Financial Officer and Treasurer
(and also as Principal Financial and
Accounting Officer)
<PAGE>
Exhibits
A. Press Release issued on January 26, 2000 by Affiliated Managers Group,
Inc.
<PAGE>
Exhibit 99.1
Affiliated Managers Group Reports Fourth Quarter and Full Year 1999 Results
January 26, 2000
Page 1 of 6
Contact: Darrell W. Crate
Affiliated Managers Group, Inc.
(617) 747-3300
AMG REPORTS FINANCIAL AND OPERATING RESULTS
FOR FOURTH QUARTER AND FULL YEAR 1999
COMPANY REPORTS 4Q99 EPS INCREASE OF 300% OVER 4Q98
FULL YEAR CASH EPS OF $4.33 AND EPS OF $3.18
BOSTON, MA, JANUARY 26, 2000 -- Affiliated Managers Group, Inc. (NYSE:AMG), an
asset management holding company, today reported its financial and operating
results for the fourth quarter and full year 1999.
Diluted earnings per share for the fourth quarter of 1999 were $1.92, a 300%
increase over diluted earnings per share of $0.48 for the fourth quarter of
1998. Cash net income ("EBITDA as adjusted," as defined in Note B to the
attached Summary Financial Data) for the fourth quarter of 1999 grew 192% to
$2.22 per share, as compared to $0.76 per share for the fourth quarter of 1998.
Aggregate net income for the fourth quarter of 1999 was $44.7 million, an
increase of 381% compared to $9.3 million for the fourth quarter of 1998.
"EBITDA" (as defined in Note A to the attached Summary Financial Data) for the
fourth quarter of 1999 was $92.0 million, a 283% increase versus $24.0 million
for the fourth quarter of 1998, and revenues for the fourth quarter of 1999 were
$286.6 million, a 257% increase versus $80.3 million for the fourth quarter of
1998. The revenues, EBITDA and net income for the fourth quarter of 1999 include
substantial performance fees earned by several Affiliates, principally Essex
Investment Management Company, LLC. These performance fees are inherently
dependent upon investment results and therefore may not recur to the same
magnitude in future years.
For the year ended December 31, 1999, net income was $72.2 million and cash net
income was $98.3 million, or $3.18 and $4.33 per share on a diluted basis,
respectively, on revenues of $518.7 million. EBITDA for the same period was
$166.8 million. For the year ended December 31, 1998, net income was $25.6
million and cash net income was $45.7 million, or $1.33 and $2.38 per share on a
diluted basis, respectively, on revenues of $238.5 million. EBITDA was $76.3
million for the year ended December 31, 1998.
(MORE)
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Affiliated Managers Group Reports Fourth Quarter and Full Year 1999 Results
January 26, 2000
Page 2 of 6
Assets under management among AMG's Affiliates at December 31, 1999 were $87.0
billion (pro forma for Frontier Capital Management Company, LLC ("Frontier"),
which closed on January 18, 2000), compared to $69.9 billion at September 30,
1999. Aggregate net client cash flows from directly managed assets were positive
$494 million for the year, although those for the fourth quarter were negative
$981 million. Overlay assets (which generally carry lower fees than directly
managed assets) increased by $447 million for the quarter and declined by $1.1
billion for the year.
"We are pleased with our financial and operating results for the fourth quarter
and full year 1999," stated William J. Nutt, Chairman and Chief Executive
Officer of AMG. "This year's performance is another example of how the breadth
and diversity of our Affiliates continue to help drive earnings growth." Mr.
Nutt continued, "In particular, we benefited from our exposure to the growth
equity sector of the market in 1999, although we are also pleased with the
performance of our value-oriented and other Affiliates for the year."
"In addition to the outstanding performance of our existing Affiliates, we
continued to successfully execute our strategy of generating growth through
investments in new Affiliates," added Sean M. Healey, AMG's President and Chief
Operating Officer. "We completed investments in AMG's 14th and 15th Affiliates,
The Managers Funds LLC in April 1999 and Frontier in January 2000. Since the
closing of our investment in The Managers Funds LLC, assets under management in
its pre-existing business have grown 50%. Together with AMG during the fourth
quarter, the firm launched the first series of Managers AMG Funds, a no-load
mutual fund family managed and distributed by The Managers Funds LLC and
sub-advised by AMG's other Affiliates. Similarly, Frontier's growth in assets
under management has been impressive. Since the date of the announcement of our
investment in October 1999, the firm's assets have grown from $4.0 billion to
$5.0 billion." Mr. Healey continued, "We also assisted one of our Affiliates,
First Quadrant, L.P., in acquiring an excellent London-based firm, Objective
Asset Management Ltd., during the fourth quarter."
AMG addresses the succession and transition issues facing the principals of
growing mid-sized investment management firms. The Company's strategy is to
generate growth through investments in new Affiliates, as well as through the
internal growth of its existing Affiliates. AMG's innovative transaction
structure allows individual members of each Affiliate's management to retain or
receive significant direct ownership in their firm while maintaining operating
autonomy. In addition, AMG provides centralized assistance to its Affiliates in
strategic matters, marketing, distribution, product development, and operations.
<PAGE>
Affiliated Managers Group Reports Fourth Quarter and Full Year 1999 Results
January 26, 2000
Page 3 of 6
(MORE)
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CERTAIN MATTERS DISCUSSED IN THIS PRESS RELEASE MAY CONSTITUTE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. ACTUAL RESULTS AND
THE TIMING OF CERTAIN EVENTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN OR
CONTEMPLATED BY THE FORWARD-LOOKING STATEMENTS DUE TO A NUMBER OF FACTORS,
INCLUDING CHANGES IN THE SECURITIES OR FINANCIAL MARKETS OR IN GENERAL ECONOMIC
CONDITIONS, THE AVAILABILITY OF EQUITY AND DEBT FINANCING, COMPETITION FOR
ACQUISITIONS OF INTEREST IN INVESTMENT MANAGEMENT FIRMS, THE INVESTMENT
PERFORMANCE OF OUR AFFILIATES AND THEIR ABILITY TO EFFECTIVELY MARKET THEIR
INVESTMENT STRATEGIES, AND OTHER RISKS DETAILED FROM TIME TO TIME IN AMG'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. REFERENCE IS HEREBY MADE TO
THE "CAUTIONARY STATEMENTS" SET FORTH IN THE COMPANY'S FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1998.
FINANCIAL TABLES FOLLOW
# # #
FOR MORE INFORMATION ON AFFILIATED MANAGERS GROUP,
PLEASE VISIT AMG'S WEB SITE AT WWW.AMG.COM
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Affiliated Managers Group Reports Fourth Quarter and Full Year 1999 Results
January 26, 2000
Page 4 of 6
Affiliated Managers Group, Inc.
Summary Financial Data
(dollars in thousands, except as indicated and share and per share data)
<TABLE>
<CAPTION>
Three Months Three Months
Ended 12/31/98 Ended 12/31/99
------------------ -------------------
<S> <C> <C>
STATEMENT OF INCOME DATA:
Revenues $ 80,293 $ 286,627
Other operating expenses 42,390 155,429
Depreciation and amortization 5,398 6,878
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Operating income 32,505 124,320
Investment and other income (910) (11,698)
Interest expense 3,036 2,809
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Income before minority interest and income taxes 30,379 133,209
Minority interest (14,862) (50,937)
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Income before income taxes 15,517 82,272
Income tax expense 6,207 37,599
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$ 9,310 $ 44,673
================== ====================
Average shares outstanding - basic 17,492,720 23,079,572
Average shares outstanding - diluted 19,360,481 23,226,904
Net income per share - basic $ 0.53 $ 1.94
Net income per share - diluted $ 0.48 $ 1.92
OTHER FINANCIAL DATA:
EBITDA(A) $ 23,951 $ 91,959
Cash net income ("EBITDA as adjusted")(B) $ 14,708 $ 51,551
Cash net income ("EBITDA as adjusted") per share $ 0.76 2.22
(under same method used to calculate
diluted earnings per share)
</TABLE>
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
------------------ -------------------
<S> <C> <C>
BALANCE SHEET DATA:
Senior debt $ 212,500 $ 174,500
Subordinated debt 800 800
Stockholders' equity $ 313,655 $ 477,986
</TABLE>
(more)
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Affiliated Managers Group Reports Fourth Quarter and Full Year 1999 Results
January 26, 2000
Page 5 of 6
Affiliated Managers Group, Inc.
Summary Financial Data
(dollars in thousands, except as indicated and share and per share data)
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/98 12/31/99
<S> <C> <C>
----------- -----------
STATEMENT OF INCOME DATA:
Revenues $ 238,494 $ 518,726
Other operating expenses 125,590 279,937
Depreciation and amortization 20,124 26,130
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Operating income 92,780 212,659
Investment and other income (2,251) (14,237)
Interest expense 13,603 11,764
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Income before minority interest and income taxes 81,428 215,132
Minority interest (38,843) (86,225)
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Income before income taxes 42,585 128,907
Income tax expense 17,034 56,719
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Net income $ 25,551 $ 72,188
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Average shares outstanding - basic 17,582,900 22,180,112
Average shares outstanding - diluted 19,222,831 22,693,016
Net income per share - basic $ 1.45 $ 3.25
Net income per share - diluted $ 1.33 $ 3.18
OTHER FINANCIAL DATA;
EDITDA (A) $ 76,312 $ 166,801
Cash net income ("EDITDA as adjusted") (B) $ 45,675 $ 98,318
Cash net income ("EDITDA as adjusted") per share $ 2.38 $ 4.33
(under same method used to calculate
diluted earnings per share)
</TABLE>
(more)
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Affiliated Managers Group Reports Fourth Quarter and Full Year 1999 Results
January 26, 2000
Page 6 of 6
AFFILIATED MANAGERS GROUP, INC.
SUMMARY FINANCIAL DATA
(dollars in thousands)
SUPPLEMENTAL REPORTED INFORMATION:
<TABLE>
<CAPTION>
Three Months Year Ended
Ended 12/31/99 12/31/99
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<S> <C> <C>
Assets under management (at period end, in millions) (C): $ 82,041 $ 82,041
Revenue: $286,627 $518,726
Owners' Allocation (D): $148,590 $266,788
EBITDA Contribution (E): $101,117 $184,454
RECONCILIATION OF EBITDA CONTRIBUTION TO EBITDA:
Total EBITDA Contribution (as above) $101,117 $184,454
Less, holding company expenses (9,158) (17,653)
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EBITDA $ 91,959 $166,801
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</TABLE>
Notes:
(A) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization.
(B) Cash net income ("EBITDA as adjusted") represents earnings after interest
expense and income taxes but before depreciation and amortization.
(C) Excludes assets managed by Frontier Capital Management Company, LLC, in
which the Company invested on January 18, 2000.
(D) Owners' Allocation represents the portion of an Affiliate's revenues
which is allocated to the owners of that Affiliate, including AMG,
generally in proportion to their ownership interest, pursuant to the
revenue sharing agreement with such Affiliate.
(E) EBITDA Contribution represents the portion of an Affiliate's revenues
that is allocated to AMG after amounts retained by the Affiliate for
compensation and day-to-day operating and overhead expenses, but before
the interest, income taxes, depreciation and amortization expenses of the
Affiliate.
