AFFILIATED MANAGERS GROUP, INC.AMG
AFFILIATED MANAGERS GROUP, INC. Income Taxes Disclosure
Income Taxes
The Company’s consolidated income tax provision includes taxes attributable to the controlling interest and, to a lesser
extent, taxes attributable to the non-controlling interests.
The following table presents the consolidated provision for income taxes:
For the Years Ended December 31, | ||||||
2023 | 2024 | 2025 | ||||
Controlling interest(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $178.3 | $174.8 | $272.2 | |||
Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7.0 | 7.8 | 10.1 | |||
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $185.3 | $182.6 | $282.3 | |||
Income before income taxes (controlling interest) . . . . . . . . . . . . . . . . . . . . . . | $851.2 | $686.4 | $988.8 | |||
Effective tax rate (controlling interest)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 20.9% | 25.5% | 27.5% | |||
___________________________
(1)For the years ended December 31, 2023, 2024, and 2025, income tax expense (controlling interest) included intangible-
related deferred tax expense of $29.8 million, $66.7 million, and $53.1 million, respectively.
(2)Taxes attributable to the controlling interest divided by income before income taxes (controlling interest).
The consolidated provision for income taxes consisted of the following:
For the Years Ended December 31, | ||||||
2023 | 2024 | 2025 | ||||
Current | ||||||
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $105.2 | $59.6 | $95.2 | |||
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10.8 | 16.6 | 19.9 | |||
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 37.9 | 45.8 | 83.4 | |||
Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 153.9 | 122.0 | 198.5 | |||
Deferred | ||||||
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 27.3 | 52.5 | 78.5 | |||
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7.0 | 11.9 | 18.9 | |||
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (2.9) | (3.8) | (13.6) | |||
Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 31.4 | 60.6 | 83.8 | |||
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $185.3 | $182.6 | $282.3 | |||
For financial reporting purposes, Income before income taxes consisted of the following:
For the Years Ended December 31, | ||||||
2023 | 2024 | 2025 | ||||
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $782.3 | $678.5 | $1,005.7 | |||
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 309.1 | 244.7 | 180.6 | |||
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $1,091.4 | $923.2 | $1,186.3 | |||
The following table presents consolidated income taxes paid, net by jurisdiction:
For the Years Ended December 31, | ||||||
2023 | 2024 | 2025 | ||||
U.S. federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $240.3 | $82.9 | $52.6 | |||
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 42.3 | 39.0 | 43.0 | |||
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 31.9 | 20.6 | 15.1 | |||
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $314.5 | $142.5 | $110.7 | |||
The following table reconciles the U.S. federal statutory tax rate to the Company’s effective tax rate:
For the Years Ended December 31, | ||||||||||||
2023 | 2024 | 2025 | ||||||||||
$ | % | $ | % | $ | % | |||||||
Statutory U.S. federal tax . . . . . . . . . . . . . . . . | $229.2 | 21.0% | $193.9 | 21.0% | $249.1 | 21.0% | ||||||
State income taxes, net of federal benefit(1) . . | 14.1 | 1.3% | 19.2 | 2.1% | 26.0 | 2.1% | ||||||
Foreign tax effects: | ||||||||||||
United Kingdom | ||||||||||||
Affiliate equity expense . . . . . . . . . . . . . . . | 0.8 | 0.1% | 1.4 | 0.2% | 19.2 | 1.7% | ||||||
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3.5 | 0.3% | 7.0 | 0.8% | 1.8 | 0.1% | ||||||
Other foreign jurisdictions . . . . . . . . . . . . . . | (25.3) | (2.4)% | (9.1) | (1.0)% | (7.4) | (0.6)% | ||||||
Effect of cross-border tax laws . . . . . . . . . . . . | (4.4) | (0.4)% | 6.5 | 0.7% | 9.1 | 0.8% | ||||||
Nontaxable or nondeductible items . . . . . . . . | 5.1 | 0.5% | 4.2 | 0.5% | 5.2 | 0.4% | ||||||
Change in valuation allowance . . . . . . . . . . . . | 0.6 | 0.1% | 0.3 | 0.0% | 0.2 | 0.0% | ||||||
Unrecognized tax benefits . . . . . . . . . . . . . . . | 5.1 | 0.5% | 1.2 | 0.1% | 10.5 | 0.9% | ||||||
Other adjustments: | ||||||||||||
Effect of income from non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (43.4) | (4.0)% | (42.0) | (4.5)% | (31.4) | (2.6)% | ||||||
Effective tax . . . . . . . . . . . . . . . . . . . . . . . . . . | $185.3 | 17.0% | $182.6 | 19.9% | $282.3 | 23.8% | ||||||
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(1)The state and local jurisdictions that make up the majority of the effect of the state and local income tax include
Massachusetts, California, and New York.
The Company’s effective tax rate (controlling interest) in 2023 is lower than the marginal tax rate of 24.5 %, primarily due
to discrete benefits from foreign operations. The effective tax rate (controlling interest) in 2024 is higher than the marginal tax
rate of 24.5%, primarily due to an expense to reduce the carrying value of a foreign Affiliate to fair value for which no tax
benefit was recorded, partially offset by tax windfalls attributable to share-based compensation. The effective tax rate
(controlling interest) in 2025 is higher than the marginal tax rate of 24.5%, primarily due to unrecognized tax benefits and non-
deductible compensation expense, partially offset by tax windfalls attributable to share-based compensation.
The Company’s effective tax rate reflects the relative contributions of earnings in the jurisdictions in which the Company
and its Affiliates operate and is impacted by changes in the jurisdictional mix of income before taxes.
Deferred tax liability (net) reflects the expected future tax consequences of temporary differences between the financial
reporting bases and tax bases of the Company’s assets and liabilities. The significant components of the Company’s Deferred
tax liability (net) are as follows:
December 31, | ||||
2024 | 2025 | |||
Deferred Tax Assets | ||||
State net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $13.8 | $13.7 | ||
Foreign loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 17.7 | 19.6 | ||
Foreign tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 16.3 | 16.5 | ||
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 33.5 | 22.5 | ||
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 81.3 | 72.3 | ||
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (44.8) | (47.0) | ||
Deferred tax assets, net of valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 36.5 | 25.3 | ||
Deferred Tax Liabilities | ||||
Intangible asset amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (353.0) | (392.6) | ||
Non-deductible intangible amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (101.4) | (82.9) | ||
Junior convertible securities interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (92.6) | (58.3) | ||
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (8.0) | (22.8) | ||
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (555.0) | (556.6) | ||
Deferred tax liability (net)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $(518.5) | $(531.3) | ||
___________________________
(1)As of December 31, 2024 and 2025, foreign loss carryforwards of $17.7 million (net of a $15.7 million valuation
allowance) and $19.6 million (net of a $17.8 million valuation allowance), respectively, are included in Other assets as they
represent a net deferred tax asset in a foreign jurisdiction.
As of December 31, 2025, the Company had available state net operating loss carryforwards of $213.3 million, a majority
of which will expire over four years to seven years, foreign loss carryforwards of $73.9 million, of which $51.5 million will
expire over ten years to 14 years and $22.4 million will carry forward indefinitely, and foreign tax credit carryforwards of $16.5
million, a majority of which will expire over five years to seven years.
The Company believed it was more-likely-than-not that the benefit from certain state and foreign loss carryforwards and
foreign tax credit carryforwards would not be fully realized, and, as of December 31, 2025, had valuation allowances of $12.7
million, $17.8 million, and $16.5 million on the state and foreign loss carryforwards and the foreign tax credit carryforwards,
respectively. For the years ended December 31, 2024 and 2025, the Company decreased its valuation allowance $2.8 million
and increased its valuation allowance $2.2 million, respectively.
The Company’s estimates and assumptions regarding the realization of its state and foreign loss carryforwards do not
contemplate certain changes in ownership of the Company’s stock which could limit the utilization of these carryforwards.
The Company provides for U.S. income taxes on all foreign earnings. The Company does not provide for U.S. income
taxes on the portion of the excess of the financial reporting bases over tax bases in the Company’s investments in foreign
subsidiaries considered permanent in duration. Such amount would generally become taxable upon the repatriation of assets
from, or a sale or liquidation of, the foreign subsidiaries. A determination of the potential amount of unrecognized U.S. income
tax related to these amounts is not practicable because of the numerous assumptions associated with this hypothetical
calculation.
The following table presents the changes in unrecognized tax benefits:
For the Years Ended December 31, | ||||||
2023 | 2024 | 2025 | ||||
Balance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $49.6 | $37.8 | $37.3 | |||
Additions based on current year tax positions . . . . . . . . . . . . . . . . . . . . . . . . . | 6.4 | 0.5 | 5.7 | |||
Additions based on prior years’ tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . | 1.0 | 3.5 | 9.8 | |||
Reduction for prior years’ tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (13.5) | (0.8) | — | |||
Lapse of the statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (4.8) | (2.5) | (7.3) | |||
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (1.3) | — | — | |||
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 0.4 | (1.2) | 0.5 | |||
Balance, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $37.8 | $37.3 | $46.0 | |||
Included in the balance of unrecognized tax benefits as of December 31, 2023, 2024, and 2025 were $37.8 million, $37.3
million, and $46.0 million, respectively, of tax benefits that, if recognized, would favorably affect the Company’s effective
tax rate (controlling interest). As of December 31, 2025, certain of these benefits, if realized, would be offset by the
utilization of indirect tax benefits, for which the Company had accrued deferred tax assets of $7.0 million.
The Company records accrued interest and penalties related to unrecognized tax benefits in Income tax expense. For the
years ended December 31, 2023, 2024, and 2025, interest and penalties related to unrecognized tax benefits were $0.8
million, $(0.5) million, and $(0.1) million, respectively. As of December 31, 2024 and 2025, the Company had accrued
interest and penalties related to unrecognized tax benefits of $13.9 million and $13.8 million, respectively.
The Company is subject to U.S. federal, state and local, and foreign income tax in multiple jurisdictions and is
periodically subject to tax examinations in these jurisdictions. The completion of examinations may result in the payment of
additional taxes and/or the recognition of tax benefits. The Company is generally no longer subject to income tax
examinations by U.S. federal, state and local, or foreign taxing authorities for periods prior to 2019.
The Company continues to monitor and evaluate legislative developments related to the Organization for Economic Co-
operation and Development’s Pillar Two directive (“Pillar Two”), which establishes a framework for a global minimum
corporate tax rate of 15%. Several countries in which the Company or its Affiliates operate are adopting legislation to
implement Pillar Two. The Company currently does not expect Pillar Two to have a material impact on its Consolidated
Financial Statements.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 25, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.