AMG's strong recurring cash flow is an important source of its long-term earnings growth. The Company's structure allows its share of cash flow from Affiliates to be used to finance new investments, repurchase stock or repay debt, as appropriate. AMG seeks to invest in Affiliates on terms that are accretive to Cash EPS. Because the addition of new Affiliates typically has almost no impact on AMG's fixed expenses, the corresponding revenue increase can immediately have a positive impact on cash flow.

AMG's efficient balance sheet management is an important element of its financial strength. The Company maintains capacity to fund new investments while enhancing its return on equity with the use of moderate financial leverage. The diversity of cash flow from AMG's Affiliates limits the Company's exposure to any single investment style or market sector, providing stability to its earnings.

Diversification *

* Represents the approximate annual percentages of EBITDA Contribution to AMG by Product Category and Distribution Channel. EBITDA Contribution represents the portion of Affiliate revenue that is allocated to AMG.