Prompt:
Human: Last year's results were $1.28 per share on net income of $66.3 million.
Although these results were below our internal expectations for the quarter due to the impact of extreme weather and timing, we remain confident in our ability to achieve our original guidance range of $3 to $3.30 per share.
In a few minutes, Steve and Bob will provide additional insights in the key financial drivers for the remainder of the year.
At the highest level, I'd like to share a few thoughts on the extreme weather events that took place during the quarter and provide a progress update on our clean energy strategy.
As you know, in February of this year, a polar vortex brought extreme cold and icing conditions to much of our nation with areas, especially in the South and Southwest experiencing some of the coldest temperatures in decades.
These temperature extremes caused major disruption in the power and gas markets, resulting in significant operational challenges and power price volatility in a very short period of time.
Although ALLETE was affected by the extreme weather during the quarter, the effects varied greatly depending on locations and the nature of our operations.
For example, our regulated operations performed well and customers at Minnesota Power and Superior Water, Light and Power were largely unaffected, while extreme weather in the Southwest and lower wind availability in the Midwest negatively affected our ALLETE clean energy operations and related earnings.
ALLETE's strategic geographic diversity and our diverse business mix were certainly major factors in our ability to successfully navigate this extreme event, and we believe they will continue to differentiate ALLETE with our ability to remain resilient and manage adverse economic risk.
There are many differing views on the preferred speed and means of the global clean energy transformation needed to address climate change.
As we execute ALLETE's sustainability strategy, it's critically important to us that this transition truly be sustainable for ALLETE's businesses.
So we're committed to addressing climate change with all of our stakeholders in mind, our customers, our communities, our employees and our shareholders throughout this critical transition.
Whether we're talking about ALLETE's regulated or non-regulated businesses, our sustainability and action strategy provides optionality and allows time for advances in technology as well as time for our communities and our employees to transition to a secure and carbon-free energy economy.
Turning to Slide 3.
As we highlighted earlier this year, a significant step forward in our commitment to sustainability as Minnesota Power's recently announced vision to deliver 100% carbon-free energy to customers by 2050.
This bold vision and its timing reflects how seriously we take our responsibilities to the climate, our customers and our communities.
Minnesota Power is the first Minnesota utility to provide 50% renewable energy to our customers.
We reached this milestone last December, and we are continuing to move forward to reduce carbon.
It's important to note that the renewable energy provided by Minnesota Power consists of a diverse mix of wind, hydro, solar and biomass, and that diversity helps ensure resiliency and the reliable and affordable energy that our customers and our communities expect.
As detailed in our last conference call, Minnesota Power filed its integrated resource plan with the Minnesota Public Utilities Commission in February.
This IRP outlines our plans to further transform Minnesota Power's energy supply to 70% renewable by 2030 and to be coal free and 80% lower carbon by 2035.
Throughout this process, we will continue our close and transparent engagement with our many stakeholders.
Formed just 10 years ago, ALLETE clean energy is now the second largest company in the ALLETE family, with 100% renewable generation, serving many utilities as well as some of the largest commercial and industrial customers in the country.
ALLETE clean energy will drive additional clean energy sector growth, building on its strong track record of success by expanding beyond wind and additional clean energy spaces, such as solar and storage.
We've made significant progress on optimizing ALLETE clean energy's portfolio.
And just yesterday, we announced exciting renewable energy projects in Wisconsin with two new utility customers, which Bob will discuss in a moment.
ALLETE's family of businesses offer a differentiated value proposition.
And as we shared with you in February, we're committed to achieving our 5% to 7% average annual earnings per share growth objective.
We believe our businesses will continue to grow and thrive as society's commitment to further decarbonization only increases.
Because ALLETE is an early mover in this transition, we're well positioned to continue as a leader in our nation's clean energy future.
We aren't alone in our view.
In recent years, more than one external publication has recognized ALLETE as a top-tier renewable energy company, and we couldn't be more proud of that fact.
Today, ALLETE reported first-quarter 2021 earnings of $0.99 per share on net income of $51.8 million.
Earnings in 2020 were $1.28 per share on net income of $66.3 million.
The timing of income taxes and operating and maintenance expense in the first quarter of 2021 negatively impacted results compared to internal expectations by approximately $0.15 per share, which is expected to reverse during the remainder of the year.
In addition, net income in 2021 included an approximately $5 million or $0.10 per share negative impact related to ALLETE clean energy's Diamond Spring wind energy facility due to extreme winter weather in the Southwest United States in February 2021.
This winter weather event caused volatility in power prices in the regional power market, resulting in losses being incurred under one of the facility's power sales agreement.
A few details from our business segments.
ALLETE's regulated operations segment, which includes Minnesota Power, Superior Water, Light and Power and the company's investment in the American Transmission Company recorded net income of $45 million compared to $57.5 million in the first quarter of 2020.
Earnings reflected lower net income at Minnesota Power as compared to 2020, primarily due to lower margins resulting from the expiration of a power sales contract in 2020, lower kilowatt hour sales to industrial customers primarily due to the indefinite idling of the Verso paper mill in Duluth, Minnesota, higher operating and maintenance, property taxes and depreciation expense and the timing of income taxes.
These decreases were partially offset by increased earnings related to the Great Northern Transmission Line.
Net income at Superior Water, Light and Power and our equity earnings in the American Transmission Company were similar to those reported in 2020.
ALLETE clean energy recorded first-quarter 2021 net income of $7.4 million compared to $11.7 million in 2020.
Net income in 2021 included an approximately $5 million after-tax negative impact at ALLETE clean energy's Diamond Spring wind energy facility related to the extreme winter weather event and pricing volatility in the regional power market.
ALLETE clean energy's other wind facilities were negatively impacted by lower-than-expected wind resources.
Megawatt hour generation was approximately 15% below our expectations for the quarter, resulting in lower revenue and production tax credits.
Timing of income taxes of approximately $2 million negatively impacted earnings in the first quarter, which is expected to reverse during the year.
These decreases were partially offset by earnings from the South Peak wind energy facility, which commenced operations in April 2020.
Our corporate and other businesses, which includes BNI Energy and ALLETE properties recorded a net loss of $600,000 in 2021 compared to a net loss of $2.9 million in 2020.
The lower net loss in 2021 reflects the first full quarter of contributions from ALLETE's Nobles two wind energy facility and higher earnings from marketable equity securities as compared to the first quarter in 2020.
I'll now turn to our 2021 earnings guidance.
Despite the negative impact due to the extreme winter weather conditions and lower-than-expected wind resources impacting ALLETE clean energy during the quarter, we remain confident in achieving our 2021 earnings guidance of $3 to $3.30 per share.
As I noted, total timing impacts in the first quarter of approximately $0.15 per share are expected to reverse throughout the year.
And we now expect production for Minnesota Power's taconite customers to be approximately 37 million to 38 million tons.
Our original 2021 guidance included a projection of Minnesota Power's industrial sales, which reflected a partial recovery from 2020 with anticipated production from our taconite customers of approximately 35 million tons.
Nominations from our industrial customers for production through this summer are above our original estimate, supported by strong steel production and pricing of iron ore and steel, which has improved significantly since the depth of the pandemic in 2020.
We anticipate this strength to continue for the remainder of the year based on external market signals, both domestically and globally.
Primarily driven by this positive development, we now anticipate that our regulated operations will be at the higher end of our guidance range of $2.30 to $2.50 per share.
And ALLETE clean energy and our corporate and other businesses are expected to be at the lower end of our original guidance of $0.70 to $0.80 per share, primarily due to the extreme winter weather event previously discussed.
As already highlighted, financial results of ALLETE's businesses were impacted varying degrees by the extreme weather during the quarter, but we remain steadfast and confident in our ability to achieve our original earnings guidance range for 2021.
At the highest level, this confidence comes from our ability to mitigate some of the losses realized at ALLETE clean energy through expense management and an improving 2021 outlook for the economy and our large power production levels at Minnesota Power.
As I've expressed since the beginning of this year, achieving ALLETE's growth objective of 5% to 7% over the long term remains a focus, and we are continuing to advance and execute upon strategies to ensure that happens.
One of the most important initiatives is to ensure Minnesota Power is able to achieve reasonable rates of return.
Given the challenges of COVID and increasing investments and expenses incurred to support the clean energy transition, the company's return levels are at some of the lowest levels in decades at approximately 2% to 3% below the currently authorized level.
It is imperative that the financial returns of the business be improved, so that we are able to sustain our business and attract the equity and debt capital needed as we go forward.
Towards that end, in addition to our ongoing laser focus on business efficiency improvements, we have continued to advance our preparations for our Minnesota Power rate case, which will be filed in November of this year.
Beyond equitable regulatory outcomes, growth in our regulated businesses will be driven predominantly by sustainable clean energy infrastructure investments.
Minnesota Power's energy forward initiatives, as outlined in our recent IRP filing, would include an unprecedented transformation of our generation fleet as well as supporting transmission and distribution investments.
We believe the IRP strikes an important balance of advancing and achieving clean energy goals, while ensuring our system remains reliable and cost competitive to our customers.
We are also pursuing other regulated opportunities, particularly in the transmission area as the MISO region continues to be challenged with constraints on the grid as renewable generation continues to expand.
Our planned expansion of our 550-megawatt DC transmission line and our increasing investment in the American Transmission Company are prime examples of our transmission strategy already in motion.
Also in the transmission arena, Minnesota Power is an active member of Grid North Partners, formally known as CapX2020, a group of 10 northern cooperatives, municipal power agencies and investor-owned utilities who on March 9, 2021, announced a renewed name and focus to develop and expand transmission capacity to maintain reliable energy delivery across the northern region of the country and identify collaborative solutions to meet the region's evolving energy needs.
Minnesota Power is one of the three investor-owned utilities involved in this powerful partnership focused on grid reliability with a proven track record of identifying, developing and implementing transmission solutions.
Our second largest business, ALLETE clean energy, is entering a new and exciting stage of growth as it expands its service offerings beyond wind, include solar and storage solutions.
At the same time, the company continues to seek opportunities to optimize its existing PTC safe harbor wind turbines and enhanced returns of the existing portfolio.
As I stated last quarter, we are highly confident that with the expanded scale and suite of service offerings, we will be able to maintain very high levels of average annual earnings growth approaching 40% over the next 5 years.
A recent example of our strategy in action is evident by yesterday's announcement of the Red Barn build, own, transfer project with Wisconsin Public Service Corporation and Madison Gas and Electric.
This 92-megawatt project not only provides an opportunity to utilize our 80% safe harbor turbines, but also expands our customer base and presence in yet another geographic region of the country.
Subject to customary company and regulatory approvals, ALLETE clean energy plans to begin and complete construction of the facility in 2022.
An exciting added feature of this investment includes the acquisition of the up to 67-megawatt Whitetail development project.
This asset is well positioned in development with its advanced transmission and acute position, landowner relationships and provides additional optionality in the region for either a long-term PPA or build, own, transfer project.
In terms of an update on existing projects, recall that we had announced the Northern Wind project with Xcel Energy in February.
This project entails the repowering, expansion and planned sale of our energy Chanarambie and Viking wind power facility.
I'm pleased to report that the regulatory approval and permitting process continues to advance as expected for this 2022 project.
As we highlighted, cash received from the transaction is earmarked for deployment into new opportunities related to our solar and storage expansion strategy, reducing the potential for future equity needs.
On another note, our 303-megawatt Caddo project construction continues to advance on plan for a year-end 2021 completion.
In summary, the demand for new clean energy solutions continues to accelerate and exceed our original expectations.
Proposed changes in federal policy from the Biden administration, such as Direct Pay of PTCs, 10-year PTC extension, clean tech parity, etc.
, would only enhance our prospects.
Our expanding capabilities, strong reputation and widening geographic footprint established over the past 10 years uniquely positions us to leverage these trends, helping solve customer needs and providing our investors with a rewarding value proposition as we go.
All of ALLETE's growth initiatives are well supported by a strong balance sheet, conservative capital structure at approximately 41% total debt and a growing base of operating cash flow already over $300 million annually.
I'll now hand it back to Bethany.
We're pleased with our progress and our execution of ALLETE's strategy made all the more remarkable given the challenges of the past year.
And as the economy continues to strengthen, we're excited to share more in the coming quarters.
We're proud of all that we've accomplished and look forward to the future as we continue to answer the nation's call for cleaner and more sustainable energy.
On Slide 7, there are several links to important sustainability information about our company, but I would point you to the second link document, ALLETE's first comprehensive corporate sustainability report.
This CSR aligns with the reporting requirements of the sustainability accounting standards board, or SASB, and the task force on climate-related financial disclosures or TCFD.
I'd encourage you to review this document as it describes in detail ALLETE's strong commitment to sustainability in all of its forms, including diversity, equity and inclusion, our strong partnership with our communities as well as best practice governance.
We refer to our sustainability commitment as a commitment to people, planet and prosperity.
We're proud of ALLETE's track record and our work on this report, and we'll update the CSR regularly as we continue to execute our sustainability and action strategy.
We're a team and a company with a rich history of doing the right things the right way, and sustainability in all of its dimensions is not only a value shared by us at ALLETE, it's the very foundation of our strategy.
 Assistant:

Chosen response: compname says reaffirms 2021 earnings guidance range of $3.00 - $3.30 per share.


Prompt:
Human: Market demand, COVID-19 impacts, including operational logistics and supply chain disruptions, competition, weather, seasonality, currency-related issues, geopolitical issues and other risk factors listed from time-to-time in the company's SEC reports.
Dan will begin our call with a review of our financial results for the second quarter 2021.
And I will then provide more comments on the results.
So Dan, go ahead, please.
The key takeaways from our second quarter 2021 results are: second quarter sales and earnings are up significantly over the COVID impacted prior year second quarter.
Total company net sales of $348 million were up 29%.
Industrial division net sales of $231 million were up 27%.
Agricultural division net sales of $116 million were up 35%.
Net income of $26 million or $2.19 per diluted share was up 100%.
The adjusted net income of $23.4 million or $1.97 per diluted share was up 73% and EBITDA of $44.9 million was up 30% over the prior year's second quarter adjusted results.
Also, our trailing 12-month adjusted EBITDA was $155.3 million, up 7% from full year 2020.
Total debt outstanding was reduced by $38.7 million during the second quarter, and was down 28% from the prior year second quarter.
And our backlog increased 10% during the current second quarter to $503.6 million, which was up 132% over the prior year quarter.
Second quarter 2021 net sales of $348 million were 29% higher than the prior year second quarter.
During the quarter, our top line benefited from a continued rise in order rates and backlog as well as the effect of recent pricing actions, but inbound supply chain and labor capacity issues are still constraining our growth across all lines of business.
Industrial division's second quarter 2021 net sales of $231 million represented a 27% increase from the prior year second quarter.
We saw strong customer demand and backlog growth in all of this division's product lines.
Agricultural division second quarter 2021 sales were $116 million, up 35% from the prior year second quarter.
During the quarter, strong agricultural market conditions, low dealer inventories and pricing actions continue to drive organic sales growth in this division.
Gross margin for the second quarter of 2021 was $88.1 million or 25.4% of net sales compared to $67.8 million or 25.2% of net sales in the prior year second quarter.
Excluding $0.7 million of Morbark's inventory step-up expenses, the prior year second quarter gross margin was $68.5 million or 25.5% of net sales.
In the second quarter, the favorable leveraging effect from significant sales volume improvement over the COVID-impacted prior year quarter as well as aggressive pricing actions helped us maintain percentage gross margins despite a dramatic rise in material costs, production inefficiencies resulting from supply chain and labor capacity constraints and a less favorable mix of service part sales.
Operating income for the second quarter of 2021 was $33.6 million or 9.7% of net sales, which is up 48% over the prior year quarter and up 45% when prior year results are adjusted to exclude the Morbark inventory step-up expense.
Higher sales volume and the gross margin effects already mentioned, more than offset a more normal level of operating expenses as compared to the reduced spending levels of the pandemic-affected prior year period.
While we're pleased to see this improvement, we would normally expect a double-digit operating margin percentage in the second quarter.
Our recent pricing actions have been aggressive, but the effective impact of these actions has been lagging a continued steep rise in cost.
This is likely to continue until the rate of cost increases moderate.
Net income for the second quarter 2021 of $26 million or $2.19 per diluted share was double the prior year second quarter results.
Excluding a $2.6 million after-tax gain on a real estate sale from the current year quarter and the Morbark inventory step-up expense from the prior year quarter, second quarter adjusted net income of $23.4 million was up 73% over the adjusted prior year result.
This increase in adjusted net income was primarily due to the 48% improvement in operating income, but it was also helped by lower interest expense and a favorable effective income tax rate.
Second quarter 2021 EBITDA was $44.9 million, up 30% over the prior year second quarter adjusted EBITDA.
Trailing 12-month EBITDA of $155.3 million is up $10.1 million or 7% above adjusted 2020 EBITDA.
Second quarter 2021 EBITDA was 12.9% of net sales, which was flat to the prior year second quarter adjusted results.
During the second quarter 2021, we saw an $18 million net provision of cash from operating activities, despite steep volume and inflation-driven increases in both accounts receivable and inventories.
This, combined with the repatriation of cash from foreign subsidiaries, resulted in a $38.7 million reduction in outstanding debt during the second quarter.
Improved turnover of both receivables and inventory accounted for this better-than-expected performance.
We ended the second quarter of 2021 with an all-time high order backlog of $503.6 million, which is an increase of 132% over the prior year second quarter and 10% higher than the end of the current year first quarter.
During the quarter, we saw continued strong customer demand across the entire range of our industrial and agricultural products.
To recap our second quarter 2021 results.
Second quarter sales and earnings were up significantly over the COVID-impacted prior year second quarter.
Total company net sales up 29%.
Industrial division net sales, up 27%.
Agricultural division net sales, up 35%.
Net income, up 100% Adjusted net income, up 73%, and EBITDA, up 30% over the prior year second quarter adjusted results.
Trailing 12-month adjusted EBITDA was up 7% from full year 2020.
Total outstanding debt was reduced by $38.7 million during the second quarter, and our backlog increased 10% during the second quarter to $503.6 million.
It's an honor to succeed Ron Robinson, who's had an exemplary 22-year period as our CEO.
This is certainly an interesting time to step in as CEO with the many positive and challenging trends that are influencing business at the moment.
Over the past few months and certainly throughout the second quarter, coronavirus vaccination rates steadily improved across many countries, economies reopened and people became more confident about returning to more normal daily routines.
While recovery from the pandemic is not yet evident in all of our markets, North America and Europe have rebounded strongly, and we experienced a further resurgence of activity in our markets in the second quarter.
Customer ordering activity remained at a healthy level, and our backlog increased to another new record at the end of the quarter.
Unfortunately, many raw material suppliers and industrial component manufacturers have not been able to add capacity fast enough to meet the higher demand.
Certain critical components such as computer logic chips remain in severe shortage, and logistics networks are strained.
Manufacturers such as Alamo Group rely on a stable supply chain and efficient logistics network to allow us to meet our customers' needs in a timely manner.
A shortage of skilled workers has further limited the ability of manufacturers to add capacity, most notably in North America.
Finally, the combination of shortages and high demand has led to cost inflation in the raw materials and components that are needed to support our production requirements.
For example, steel prices continue to rise sharply and were up by double digits again in the period.
Like most manufacturers, Alamo Group is not immune to these issues, and our teams have had to work flexibly and creatively to deliver another solid performance for the quarter.
Continuing the trend of the last several quarters, our agricultural division produced strong second quarter results.
The ag market has consistently held up better during the pandemic, largely due to the combined effects of several positive trends.
First, after several years of soft conditions, dealer inventories were low when demand began to accelerate, and they remain low now as demand continues to outpace deliveries from OEMs to dealers.
Also, crop prices have been steadily rising since August of 2020, giving professional farmers the confidence to invest in maintenance or replacement of their equipment.
Similarly, livestock prices have been rising given the same increased confidence to ranchers.
Finally, the pandemic has led to more people to seeking rural lifestyles, increasing investments in land and the essential equipment to maintain it.
As a result of these combined trends in the market, in the second quarter, our agricultural division enjoyed steady growth in orders and sales, not only in North America and Europe, but also in markets such as Brazil and Australia.
The industrial division also reported solid improvements in both sales and earnings in the second quarter.
The impact of the pandemic on governmental budget has not been as severe as previously expected, and activity in this market continued to improve sequentially during the period.
Municipalities in the United States benefited from the very strong real estate market that has increased property taxes that are a major source of their revenue.
Also, stimulus actions taken by national governments in North America and Europe helped agencies at the state and local level offset lower revenue from income taxes and fees as employment fell as a result of pandemic.
During the second quarter, the industrial division sales to governmental agencies continued to accelerate but they've not quite fully recovered to the levels achieved before the onset of the pandemic.
Nongovernmental markets for the industrial divisions products also improved in sectors such as forestry, land clearing, petrochemicals, utilities and steel during the second quarter as most world economies took steps to reopen.
This was evident in improved sales of the division's large wood grinders, vacuum trucks and excavators.
Also, by the end of the quarter, utilization of our vacuum truck rental fleet was very close to pre-pandemic levels.
The industrial division was impacted by sharply higher steel costs, shortages of important hydraulic components, logistics delays and skilled worker shortages.
While this division also took significant price actions to protect margins, the longer delivery cycles associated with the division's products means that it will take somewhat longer for the higher prices to be fully evident in its results.
Considering the many operational challenges we faced in the second quarter, I'm pleased with the results we've achieved.
I'm also proud that our teams quickly reacted to these challenges to mitigate the impact on our results to the fullest extent possible.
I'm also pleased that we further reduced our debt this quarter and continued to strengthen the company's balance sheet.
This positions the company well to take advantage of acquisition opportunities that may arise, and what's proving to be an active M&A season.
With Alamo Group's record order backlog of nearly $504 million, the company's outlook continues to look promising although it doesn't now appear that the cost pressures, component shortages and tight labor market are likely to meaningfully improve during the remainder of 2021.
One issue that remains of concern is the spread of the de-strain of COVID that has emerged over the past few weeks.
Although evidence suggests that vaccinations reduce both the frequency and seriousness of COVID infections, another significant wave of coronavirus illness could adversely affect our performance.
On balance, though, I remain confident that our teams will continue to react appropriately as conditions in our operating environment involved, and that Alamo Group will continue to deliver solid results this year.
 Assistant:

Chosen response:
q2 adjusted earnings per share $1.97.
q2 earnings per share $2.19.


Prompt:
Human: Yesterday, on the close of the market, we issued our news release and investor supplement and posted related materials on our website at allstateinvestors.com.
Our management team is here to provide perspective on these results.
Let's start on Slide two.
Today, we're going to link operating results and strategy in order to show how we expect to continue to generate shareholder value.
So Allstate's strategy has two components: increase personal profit liability market share; and expand protection solutions, which are shown in the two ovals on the left.
The Transformative Growth plan to increase market share and personal profit liability has four components.
This strategy will drive market valuation by executing, innovating and focusing on long-term value creation.
So in the first half of the year, we executed well for customers, we executed well financially and for shareholders, as you can see on the right-hand panel.
Property-Liability market share increased by approximately one percentage point due to the acquisition of National General.
Allstate Protection Plans continue to grow rapidly by broadening the product offering to include appliance and furniture and expanding availability through Home Depot stores.
Strong execution generated excellent financial results, with revenues increasing 23.8% compared to the prior year, adjusted net income of $3 billion and a return on equity of 23.8% for the last 12 months.
Shareholders benefited from a 50% increase in the quarterly common dividend and a reduction in outstanding shares by 2.4% just this year under the current $3 billion share repurchase program.
Yesterday, the Board approved a new $5 billion common share repurchase program, which represents approximately 13% of current market capitalization, and we expect to complete that by the end of March of 2023.
Let's continue on Slide three.
In addition to operating execution, we're innovating to create long-term value.
The Transformative Growth plan to create a digital insurance company is making good progress.
Today, we're going to spend time talking about the distribution component of that plan.
Allstate is among the leaders in telematics capabilities with Drivewise in the industry's largest pay-per-mile product Milewise, which offers customers unique value.
Arity, our telematics service platform company, recently launched Arity IQ, which, when combined with LeadCloud and Transparent.
ly platforms, will integrate telematics information into pricing at the time of quote rather than at the times after the sale.
We enhanced our competitive position in independent agent channel by using National General to consolidate and improve our IA business model.
We executed agreements to sell Allstate Life Insurance Company and Allstate Life Insurance Company of New York to redeploy capital out of lower growth and return businesses and reduce exposure to interest rates.
Increasing market share, while maintaining attractive returns and expanding protection solutions through transformation, targeted acquisitions and divestitures will create shareholder value.
Slide four lays out the Allstate's strong second quarter performance.
Revenues of $12.6 billion in the quarter increased 21.6% compared to the prior year, largely reflects the National General acquisition and higher net investment income.
Property-Liability premiums earned and policies in force increased by 12.9% and 12.1%, respectively.
Net investment income of $974 million increased by over $0.75 billion compared to the prior year quarter, reflecting $649 million of income from the performance-based portfolio.
Net income of $1.6 billion was reported in the second quarter compared to $1.2 billion in the prior year.
Adjusted net income was $1.1 billion or $3.79 per diluted share, as you can see from the table on the bottom.
That's a 40% increase from the prior year quarter.
Allstate's excellent execution and strong operating results in the quarter contributed to that return on equity, which I just mentioned, of 23.8% over the last 12 months.
Let's move to Slide five to discuss our progress on building Transformative Growth business models.
So Transformative Growth, it's a multiyear initiative, and what we're working to do is build a low-cost digital insurer with broad distribution, and that's going to be accomplished through four areas: expanding customer access, improving customer value, increasing sophistication and investment in customer acquisition, and deploying new technology ecosystem.
In Transformative Growth, you wouldn't do it all in one day, of course, so it's got five phases, and substantial progress has been made in Phases two and three.
Phase two successes include improving the competitive price position of auto insurance, protecting margins by reducing costs.
New advertising was launched with increased investment.
We also are off to an excellent start with National General.
And of course, the phases overlap, so progress is also being made in Phase three.
So we're transforming the distribution platform, including supporting transition of Allstate agents to higher-growth and lower-cost models, which we'll discuss on the next slide.
Improving customer acquisition sophistication will lower cost relative to lifetime value.
We continue to focus on lowering underwriting claims expenses to deliver lower-cost protection to customers, and we've designed a new technology architecture.
We've coded much of the new applications.
The next step for us is to launch an integrated system with one product in one state.
Turning to Slide six.
Let's review how we're transforming the Allstate agent, Allstate direct sales and independent agent distribution platforms to grow market share.
The illustrative slides on the right side of the slide show -- provide a view into our growth expectations by channel over time.
Starting with Allstate exclusive agents, we're making progress transitioning to a higher-growth and lower-cost model.
This year, we changed agent compensation by increasing new business compensation opportunity and reducing of bonus paid on policy renewals.
We expect to continue this shift from renewal compensation to new sales because it aligns with what consumers want.
Consumers want assistance with purchasing insurance more than they want routine policy service.
To lower cost for agents, we're digitizing processes, redesigning products to increase self-service and expanding centralized service support.
We're also working to reduce agent operating expenses and real estate costs.
These changes will improve the customer value proposition with lower cost and easier service.
Now of course, you're not going to do this in one day either, so a multiyear transformation -- transition program is in place to support existing agents.
We've initiated it, and it has different levels of support based on agent performance.
Given this transition, we reduced new agent employment last year, which has had a negative impact on new business levels.
But as Mario will discuss next, this has been offset by higher productivity from existing agents.
At the same time, we have two new agent models in market, which have personal touch but a lower cost structure.
All of these changes are supported by more competitive auto insurance pricing and increased marketing spending, which is designed to continue to grow.
But as you can see on the right, the net impact of these changes for the Allstate agent channel is to be flat to a slight decline in sales in the short term but increased growth thereafter.
The Allstate direct sales effort leverages the capabilities that we built for the Esurance brand, and we've shifted our advertising focus away from Esurance to be totally focused on the Allstate brand and utilizing the direct channel for Allstate-branded sales as well.
And pricing is lower than the Allstate agent model since it doesn't come with the help of an agent.
And as this business grows, we're improving our operational and marketing effectiveness.
Direct sales now represent 29% of new auto business sales, and we expect that to continue to grow rapidly, as you can see on the right.
Independent agent distribution also represents an attractive growth opportunity.
The acquisition of National General enhanced our capabilities in this channel, and it added four million policies in force.
Additional growth is expected by broadening the product portfolio from high-risk drivers to middle-market auto and home insurance through the existing agent relationships.
We also expect to increase the number of agents actively engaged in selling National General products.
So when you combine this effective and efficient distribution with more competitive auto insurance pricing, enhanced marketing, advanced pricing and telematics and a digital experience, that's the Transformative Growth plan that will drive Property-Liability market share growth.
So Mario will now discuss the second quarter results in more detail.
Turning to Slide seven.
Let's dive deeper into the near-term results on our multifaceted approach to grow Property-Liability market share.
As you can see in the chart on the left side of the slide, Property-Liability policies in force grew by 12.1% compared to the prior year quarter primarily driven by National General and growth in Allstate brand new business.
National General, which includes Encompass, contributed growth of four million policies, and Allstate brand Property-Liability policies increased in the quarter driven by growth in homeowners and other personal lines.
Allstate brand auto policies in force declined slightly compared to the prior year quarter but increased sequentially for the second consecutive quarter, including growth of 111,000 policies compared to prior year, and as you can see by the table on the lower left.
The chart on the right shows a breakdown of personal auto new issued applications compared to prior year.
We continue to make progress in building higher-growth business models as we look to achieve leading positions in all three primary distribution channels.
The middle section of the chart on the right shows Allstate brand impacts by channel, which in total generated a 6.7% increase in new business growth compared to the prior year.
Modest increases from existing agents, excluding new appointments, and a 31% increase in the direct channel more than offset the volume that would normally have been generated by newly appointed agents, as we pilot new agent models with higher growth and lower costs.
The addition of National General also added 481,000 new auto applications in the quarter.
The recorded combined ratio of 95.7% increased 5.9 points compared to the prior year quarter.
This was primarily driven by increased losses relative to the historically low auto accident frequency experienced in the prior year quarter due to the pandemic.
Increased losses were partially offset by lower pandemic-related expenses primarily shelter-in-place paybacks in 2020 as well as lower catastrophe losses.
These are represented by the green bars in the combined ratio reconciliation chart on the lower left of the slide.
Shifting to the chart on the bottom right, we continue to make progress in reducing our cost structure.
This enables improvement in the competitive price position of auto insurance and investments in marketing and technology, while maintaining strong returns.
The total Property-Liability expense ratio of 24.7% in the second quarter decreased by 7.1 points compared to the prior year, again, driven by lower coronavirus-related expenses.
This was partially offset by the amortization of purchased intangibles associated with the acquisition of National General, restructuring charges and a 0.7-point increase from higher investment in advertising.
Excluding these items, as shown by the dark blue bars, the expense ratio decreased by 0.4 points in the second quarter compared to the prior year period, decreased 1.7 points below year-end 2019 and 2.5 points below year-end 2018, reflecting continued progress in improving cost efficiencies.
Claims expenses have also been reduced through innovations such as QuickFoto Claim, Virtual Assist and aerial imagery, which also improves the customer experience.
These claim improvements are not reflected in the expense ratio but are in the loss ratio and also helped maintain margins.
Moving to Slide nine, let's discuss how our auto insurance profitability, which remains very strong and is still favorable to prepandemic levels despite pandemic-driven volatility.
Allstate Protection auto underlying combined ratio finished at 91.8%.
As you can see from the chart, the level remains favorable to 2017 through 2019 historical second quarter and year-end levels despite increasing by 9.4 points compared to the prior year quarter.
The increase to the prior year quarter reflects a comparison to a period with historically low auto accident frequencies.
The improvement relative to historical levels is driven by auto accident frequency remaining below prepandemic levels, partly offset by auto severity increases and competitive pricing enhancements.
To illustrate the pandemic-driven volatility, Allstate brand auto property damage gross frequency increased 47.3% from the prior year quarter but is 21% lower than the same period in 2019.
Auto severity increases persisted relative to the prior year quarter and prepandemic periods across coverages, largely driven by the shift in mix to more severe, higher-speed auto accidents and rising inflationary impacts in both used car values and replacement part costs.
The incurred severity increases are running higher than general inflation, which are reflected in the recorded combined ratio.
To counteract rising severity, we are leveraging advanced claim capabilities, predictive modeling, advanced photo and video utilization and deep expertise in repair process management to enable a scaled response to inflation and supply constraints.
Targeted price increases will also be implemented, as necessary, to maintain attractive auto insurance returns.
Now let's shift to Slide 10, which highlights investment performance for the second quarter.
Net investment income totaled $974 million in the quarter, which was $754 million above the prior year quarter, driven by higher performance-based income as shown in the chart on the left.
Performance-based income totaled $649 million in the second quarter, as shown in gray, reflecting both idiosyncratic and broad-based valuation increases in private equity investments and, to a lesser extent, gains from the sales of real estate equity.
Market-based income, shown in blue, was $3 million above the prior year quarter.
The impact of reinvestment rates below the average interest-bearing portfolio yield was mitigated in the quarter by higher average assets under management and prepayment fee income.
Our total portfolio return in the second quarter totaled 2.6%, reflecting income as well as higher fixed income and equity valuations.
We take an active approach to optimizing our returns per unit risk over appropriate investment horizons.
Our investment activities are integrated into our overall enterprise risk-and-return process and play an important role in generating shareholder value.
We draw upon a deep and experienced team of roughly 350 professionals to leverage expertise in asset allocation, portfolio construction, fundamental research, deal leadership, quantitative methods, manager selection and risk management.
While the results for this quarter were exceptionally strong, particularly for the performance-based investments, we managed the portfolio with a longer-term view on returns.
At the right, we have provided our annualized portfolio returns over a three-, five-, and 10-year horizon.
As disclosed in our investor supplement, our performance-based portfolio has delivered an attractive 12% IRR over the last 10 years, which compares favorably to relevant public and private market comparisons.
Our performance-based strategy takes a longer-term view, where we seek to deliver attractive absolute and risk-adjusted returns and supplement market risk with idiosyncratic risk.
Moving to Slide 11.
Protection Services continues to grow revenue and profit.
Revenues, excluding the impact of realized gains and losses, increased 27.1% to $581 million in the second quarter.
The increase was driven by continued rapid growth in Allstate Protection Plans and expanding marketing services at Arity due to the integration of LeadCloud and Transparent.
ly, which were acquired as part of the National General acquisition.
Policies in force increased 15.5% to $147 million, also driven by Allstate Protection Plans and supported by the successful launch with the Home Depot in the first quarter.
Adjusted net income was $56 million in the second quarter, representing an increase of $18 million compared to the prior year quarter driven by profitable growth at Allstate Protection Plans and profits at Arity and Allstate Identity Protection.
Allstate Protection Plans generated adjusted net income of $42 million in the second quarter and $155 million over the past 12 months.
Now let's move to Slide 12, which highlights Allstate's attractive returns and strong capital position.
Allstate continued to generate attractive returns in the second quarter with adjusted net income return on equity of 23.8% for the last 12 months, which was 5.8 points higher than the prior year.
Excellent capital management and strong financial results have enabled Allstate to return cash to shareholders, while simultaneously investing in growth.
We continue to provide significant cash returns to shareholders in the second quarter through a combination of $562 million in share repurchases and $245 million in common stock dividends.
We announced the acquisition of SafeAuto in June, leveraging National General's success in integrating companies to accelerate growth.
The current $3 billion share repurchase program is expected to be completed in the third quarter.
And yesterday, the Board approved a new $5 billion share repurchase authorization to be completed by March 31, 2023.
This represents approximately 13% of our current market capitalization.
This new authorization continues Allstate's strong track record of providing cash returns to shareholders and reflects, in part, the deployable capital generated by the sale of our life and annuity businesses.
Moving to Slide 13.
It should be clear that Allstate is an attractive investment opportunity.
When you invest in Allstate, you get ownership of a company with advanced capabilities and a clear strategy, delivering superior financial results relative to peers and the broader market.
The table below shows Allstate across key financial metrics over the past five years compared to the S&P 500 and property-casualty insurance peers with a market cap of $4 billion or more.
As you can see by the four measures on the top, operating EPS, operating return on average equity, cash yield and total shareholder return, Allstate is consistently ranked in the top two or three among its peers.
In the case of operating earnings per share and cash yield to common shareholders, Allstate is in the top 10 and top 15%, respectively, compared to the S&P 500.
Moving down one row, Allstate's top line revenue growth relative to peers and the S&P 500 is in the middle of the pack.
We are committed to accelerating top line performance through Transformative Growth and innovating protection, while continuing to deliver excellent financial results.
Moving down to the price-to-earnings ratio.
Allstate is well below average, eight out of 10 P&C peers, and in the 10th percentile among the S&P 500.
This is an attractive valuation given our market-leading capabilities, excellent returns, future growth prospects and commitment to accelerate growth.
I've turned to Slide 14.
Let's finish where we started with a more macro and longer-term view of Allstate's execution, innovation and long-term value creation.
And this is the whole report card.
This is what you get by investing in Allstate.
Empowering customers with protection is a core part of our shared purpose.
We provide a broad set of protection solutions with over 180 million protection policies in force.
You see our name whether you're watching TV, you're in Walmart, you're in Target, you're in Costco, you're in Home Depot.
Allstate is ubiquitous out there protecting customers.
We constantly achieve industry-leading margins on auto and home insurance and have attractive risk-adjusted investment returns.
As a result, the adjusted net income return on equity has averaged 15.6% from 2016 to 2020, ranking number two in our peer group.
This has led to a 14.9% annualized total shareholder return over the last five years.
We have a history of innovation.
Transformative Growth is a multiyear personal, Property-Liability strategy to build a digital platform that offers low-cost, affordable, simple and connected protection solutions.
We're simultaneously innovating protection by expanding through telematics, product warranties and identity protection.
In telematics, we've taken a broad and aggressive approach with the insurance offerings and the creation of Arity, a leading telematics business.
Allstate is also innovating in corporate citizenship, focusing on climate change, privacy and equity.
For example, we used an underwriting syndicate for our $1.2 billion bond offering last year that was exclusively minority women and veteran-owned banking enterprises.
Long-term value is also being created through proactive capital management and strong governance.
Over the past five and 10 years, we've repurchased 25% and 50%, respectively, of outstanding shares.
Among the S&P 500, Allstate is in the top 15% of cash provided to shareholders.
At the same time, we've successfully invested over $6 billion in acquisitions, including Allstate Protection Plans, Allstate Identity Protection and National General.
And of course, strong governance is key to delivering those results.
Allstate has an experienced and diverse management team and Board with relevant expertise.
Execution, innovation and long-term value creation will continue to drive increased shareholder value.
 Assistant:

Chosen response:
q2 adjusted earnings per share $3.79.
q2 revenue rose 21.6 percent to $12.6 billion.


Prompt:
Human: A detailed discussion of the risks and uncertainties that may affect our future results is contained in AMETEK's filings with the SEC.
I'll now turn the meeting over to Dave.
AMETEK delivered excellent results in the first quarter was stronger than expected sales growth and outstanding operational execution leading to earnings above our expectations.
We returned to organic sales growth earlier than expected.
And as the economy continues its recovery, we are experiencing strong orders growth resulting in a record backlog.
Operationally, our businesses are performing at a high level, delivering impressive margin expansion and strong cash flows.
Additionally, we started the year with a notable level of acquisition activity, deploying a record $1.85 billion on five acquisitions thus far in 2021.
These acquisitions combined with our strong first quarter results and solid orders momentum led us to substantially increase our full year sales and earnings guidance.
AMETEK's success in navigating this difficult environment is a testament to the dedicated and highly talented employees across the company.
While we are encouraged with the acceleration of the vaccine rollout, we remain focused on the health and well-being of our employees and we'll remain vigilant in ensuring proper safety protocols are being followed.
Now let me turn to the first quarter results.
Overall sales in the quarter were up 1% versus the prior year to $1.22 billion.
Organic sales were up 1% with the divestiture of Reading Alloys being offset by a two point foreign currency tailwind.
Overall, orders in the quarter were a record $1.4 billion, up 16% compared to the same period last year, with organic orders up 9%.
This led to a book-to-bill of 1.15 and a record backlog of $2 billion.
We are encouraged by the strong orders as many of our businesses are seeing improved demand conditions across our markets, while some of our longer cycle businesses have yet to return to growth.
Operating income in the quarter was $293 million, a 6% increase over the first quarter of 2020.
Operating margins expanded an impressive 110 basis points to 24.1%.
EBITDA in the quarter was $356 million, up 4% over the prior year, with EBITDA margins of 29.2%.
This outstanding operating performance led to earnings of $1.07 per diluted share, up 5% versus the first quarter of 2020 and above our guidance range of $0.97 to $1.02.
Cash flow in the quarter was also very strong with operating cash flow of 5% to $284 million and free cash flow conversion of 122% of net income.
Let me provide some additional details at the operating group level.
Our Electronic Instruments Group and Electromechanical Group reported outstanding results in the first quarter, with both groups delivering positive organic sales growth and impressive margin expansion.
Sales for Electronic Instruments Group in the quarter were $791 million, up 2% over last year's first quarter driven by modest organic sales growth and a 1.5% foreign currency tailwind.
EIG's operating income in the first quarter was $207 million, up 7% versus the same quarter last year and operating margins expanded an impressive 110 basis points to 26.2%.
The Electromechanical Group also delivered strong operating performance in the quarter with positive organic sales growth driven by strong demand in our automation business.
EMG's first quarter sales were $425 million, down 1% versus the prior year.
Organic sales were up 2% in the quarter, while the divestiture of Reading Alloys was a five point headwind and foreign currency was a two point tailwind.
EMG's operating income was a record $105 million in the quarter, up 8% compared to the same quarter last year, and EMG's operating margins expanded an exceptional 190 basis points to a record 24.7%.
Now turning to acquisitions.
As we have discussed, acquisition activity slow considerably in 2020 due to the pandemic.
During this time, we acted swiftly to appropriately align our cost structure with the demand environment and to protect and further strengthen our balance sheet to support a meaningful return of M&A in 2021.
At the same time, we communicated that our business and acquisition teams remain very active and managing our pipeline of acquisition opportunities.
These actions positioned us to capitalize on an improving acquisition environment in a significant manner, deploying $1.85 billion to acquire five excellent businesses, thus far this year.
Now, let me take a moment to provide additional color on these deals.
I'll start with AMETEK's largest ever acquisition, Abaco Systems, headquartered in Huntsville, Alabama.
Abaco is a leading provider of mission-critical embedded computing systems used on key aerospace and defense platforms, along with specialized industrial applications.
Abaco's open architecture computing and electronic systems are ruggedized to meet military standards and withstand harsh conditions, including extreme temperatures, altitude and high vibration.
As a leading provider of differentiated technology solutions serving attractive, high-growth applications, Abaco nicely complements and expands our existing aerospace and defense platform.
Abaco has approximately $325 million in annual sales, and we deployed $1.35 billion on the acquisition.
Next, Magnetrol International, based in Aurora, Illinois, Magnetrol is a leading provider of level and flow control solutions for challenging process applications across a diverse set of end markets, including medical, pharmaceutical, oil and gas, food and beverage and general industrial markets.
Magnetrol's outstanding strategic fit, weather sensors, test and calibration business.
Combined, these businesses form an industry-leading sensor platform with a broad range of level and flow measurement solutions.
Magnetrol has annual sales of approximately $100 million, and we deployed $230 million on the acquisition.
Today, we announced the acquisition of NSI-MI Technologies, a leading provider of radio frequency and microwave test and measurement solutions based in Suwanee, Georgia.
NSI-MI is an exciting addition to our test and measurement platform, given their deep expertise and advanced RF and microwave technologies.
They're highly differentiated test and measurement solutions are uniquely positioned to support the continued development of advanced RF and microwave technologies for critical, high-growth applications including 5G wireless communications, autonomous vehicles and specialized defense systems.
NSI-MI has annual sales of approximately $90 million, and we deployed $230 million on the acquisition.
In addition to these acquisitions, AMETEK also acquired two smaller and yet highly strategic businesses, and [Phonetic] Crank Software and EGS Automation.
Crank Software, which is headquartered in Ottawa, Canada is the provider of embedded graphical user interface software and services.
Crank's award winning Storyboard software platform is ideally positioned to capitalize on the accelerating demand for smart digitally enabled devices.
And EGS Automation is an attractive bolt-on acquisition for our Dunkermotoren business, expanding our presence in the attractive automation market.
Located near Dunker's German headquarters, EGS designs and manufactures highly engineered and customized robotic solutions for niche medical, food and beverage and general industrial markets.
Combined, these acquisitions add approximately $535 million in annual sales aligned with attractive secular growth markets.
Additionally, they provide AMETEK with excellent returns in line with our stated hurdle rates.
Each of these integrations is going very well in the early stages of our ownership.
AMETEK's decentralized operating structure and proven operating capability provides us the flexibility to successfully integrate the businesses, while continuing to pursue additional acquisitions.
We are still working through a strong pipeline of attractive acquisition candidates.
And as Bill will discuss in a moment, we have ample balance sheet capacity with approximately $1.8 billion available to support our acquisition strategy.
In addition to continued capital deployment on acquisitions, we also remain committed to investing in our businesses.
For all of 2021, we expect to invest approximately $95 million in incremental growth investments.
These investments are largely centered around our research and development and sales and marketing functions, including targeted investments in support of our digital transformation strategy.
Our investments in RD&E continue to yield innovative advanced technology solutions, allowing us to expand our leadership position across our niche markets.
For all of 2021, we expect to spend approximately $270 million or 5.5% of sales on RD&E for our base businesses before adding in our recent acquisitions.
This level of spend is up 10% over last year's RD&E spend.
Now, shifting to our outlook for the remainder of the year.
With our strong results in the first quarter, including solid orders growth and a record backlog along with contributions from our recent acquisitions, we have increased our full-year sales and earnings guidance.
For 2021, we now expect overall sales to be up high teens on a percentage basis, while organic sales are expected to be up high single-digits on a percentage basis versus 2020.
Diluted earnings per share are now expected to be in the range of $4.48 to $4.56, which is an increase of 13% to 15% over last year's comparable basis.
This new range is a $0.28 midpoint increase from our previous adjusted earnings guidance of $4.18 to $4.30 per diluted share.
For the second quarter, overall sales are anticipated to be up in the low 30% range versus last year's quarter.
Second quarter earnings per diluted share are expected to be in the range of $1.08 to $1.10, up 29% to 31% over last year's second quarter.
Our revised guidance includes each of the five completed acquisitions.
To summarize, AMETEK delivered an excellent first quarter with solid orders and sales growth, strong margin expansion, a high quality of earnings and meaningful capital deployment.
These outstanding results speak to the strength and flexibility of the AMETEK growth model, along with the resilience of our world-class workforce.
With our differentiated technology solutions, serving a diverse set of niche end markets aligned with attractive secular growth opportunities, we remain firmly positioned to deliver long-term sustainable growth.
As Dave highlighted, AMETEK began the year with outstanding results highlighted by strong sales and orders growth and a high quality of earnings.
With that, I'll provide additional financial highlights for the quarter.
First quarter, general and administrative expenses were $18.6 million, up $3 million from the prior year, largely due to higher compensation expense.
As a percentage of total sales, G&A was 1.5% in the quarter.
For 2021, general and administrative expenses are now expected to be up approximately $12 million on a return of temporary costs, including compensation.
The effective tax rate in the first quarter was 19.5%, which was essentially in line with the adjusted 19.4% reported in the same period last year.
For 2021, we continue to expect our effective tax rate to be between 19% and 20%.
And as we've stated in the past, actual quarterly tax rates can differ dramatically either positively or negatively from this full year estimated rate.
Our businesses continue to do an outstanding job managing their working capital.
For the quarter, operating working capital was 14.2%, down 470 basis points from the 18.9% reported in the first quarter of 2020.
Just excellent work by our teams on the working capital front.
Capital expenditures in the first quarter were $18 million.
For the full year we now expect capital expenditures to be approximately $120 million.
Depreciation and amortization expense in the first quarter was $65 million.
For all of 2021, we now expect depreciation and amortization to be approximately $300 million, including after tax, acquisition-related intangible amortization of approximately $140 million or $0.60 per diluted share.
As Dave highlighted, our businesses continue to generate tremendous levels of cash given our asset light business model and strong working capital management.
In the first quarter, both operating cash flow and free cash flow were up 5% over last year's first quarter to $284 million and $267 million, respectively.
Free cash flow conversion was very strong at 122% of net income in the quarter.
Total debt at quarter end was $2.35 billion, down from $2.41 billion at the end of 2020, offsetting this debt with cash and cash equivalents of $1.1 billion.
At the end of the first quarter, our gross debt-to-EBITDA ratio was 1.7 times and our net debt-to-EBITDA ratio was 0.9 times.
As Dave noted, we've been very active on the acquisition front.
During the first quarter, we deployed approximately $270 million on the acquisitions Magnetrol, Crank Software and EGS Automation.
Subsequent to the end of the quarter, we deployed approximately $1.58 billion on the acquisition of Abaco Systems and NSI-MI, resulting in $1.85 billion in total capital deployed on strategic acquisitions thus far this year.
Also subsequent to the end of the first quarter, we announced we entered into a five-year delayed-draw bank term loan for up to $800 million with existing lenders under our revolving credit facility.
Proceeds from the term loan will be used to repay borrowings under our revolving credit facility following the recent acquisition activities and to provide capital to further support our acquisition growth strategy.
Following the acquisitions of Abaco and NSI, our gross debt-to-EBITDA ratio and our net debt-to-EBITDA ratio is expected to be 1.9 times and 1.7 times, respectively, at the end of the second quarter.
We continue to have an excellent financial capacity with approximately $1.8 billion of cash and existing credit facilities to support our growth initiatives.
To summarize, our businesses drove excellent performance in the first quarter with high quality results that outpaced our expectations.
We remain poised for significant growth in 2021, given our strong balance sheet, outstanding cash flows and the efforts of our talented workforce.
 Assistant:

Chosen response:
compname reports q1 adjusted earnings per share $1.07.
q1 adjusted earnings per share $1.07.
q1 sales rose 1 percent to $1.22 billion.
ametek - for 2021, now expect overall sales to be up high teens on a percentage basis compared to prior year, with organic sales up high single digits.
adjusted earnings per diluted share are expected to be in range of $4.48 to $4.56 for 2021.
overall sales in q2 are expected to be up in low 30% range versus q2 of 2020.
anticipate adjusted earnings per diluted share will be in range of $1.08 to $1.10 for q2 2021.


Prompt:
Human: Growth continues to be a theme for AMG as evidenced by our outstanding second-quarter results, which were driven by the consistent execution of our strategy and enhanced by our focus on new investments.
Economic earnings per share of $4.03 grew 47% year over year and represented the strongest second quarter in our history, primarily driven by EBITDA growth of 40% and ongoing share repurchase activity.
Year to date, our affiliates excellent absolute and relative investment performance has resulted in higher asset levels, enhanced organic growth, and meaningful performance fees.
We began the quarter by announcing our new investment in OCP Asia, increasing our exposure to the region and its fast-growing private credit markets, and we ended the quarter with the announcement of our newest partnership in Parnassus, the largest independent ESG-dedicated fund manager in the industry.
Together with our recent investment in Boston Common, a long-term leader in impact investing, we expect that these new affiliates will contribute over 90 million in EBITDA in 2022 and contribute meaningfully to our organic growth over time.
And we are only halfway through 2021.
With the addition of Parnassus, our run-rate EBITDA is now over 1 billion, increasing our opportunity to invest in new affiliates and areas of secular growth and in resources to enhance the growth of our existing affiliates, including strategic growth capital and distribution.
As evidenced by our seven new partnerships, which we've established over the last two years, our model is resonating with the highest quality independent investment firms in the industry.
Looking ahead, we see an even greater opportunity to execute on our new investment opportunity set, given the favorable transaction environment, AMG's strong competitive position, and the increasing demand for our partnership solutions.
As I highlighted in prior quarters, throughout the pandemic, a number of client demand trends have remained intact, including the ongoing demand for illiquid alternatives, while other trends have accelerated, such as the appetite for responsible and impact investing, all against the backdrop of an improving environment for active management.
Our strategy is focused on investing in areas of secular growth and our new investments in 2021 reflect this focus as we've increased our exposure to fast-growing segments such as Asia, private markets and ESG.
With the addition of Parnassus, Boston Common, and Inclusive Capital Partners, AMG's affiliates will now manage more than 80 billion in dedicated ESG strategies, and more than 600 billion in strategies that integrate ESG into their investment process, and they are positioned to capitalize on future growth as investors around the world continue to turn to active managers for responsible and impact investing.
A pioneer in sustainable investing, Parnassus has a 37-year track record of investing based on principles and performance, achieving attractive risk-adjusted returns by building portfolios that also have a positive societal impact.
We have known Ben Allen, Todd Alston, and their partners for nearly a decade.
And when it came time for Parnassus to choose a permanent partner and complete the first generational transition in the firm's long-term succession plan, they chose AMG.
We believe that AMG's partnership approach is the best solution in the market today for independent firms.
As it preserves the alignment between clients and partners across multiple generations while maintaining unique entrepreneurial cultures of partner-owned firms.
And this will be especially important to Parnassus given its leading market position and responsible and impact investing.
Succession planning has been and continues to be a core component of AMG's partnership approach as generational succession and demographically driven transition is inevitable for partner-owned firms.
Selecting an experienced supportive partner is critical to the long-term success of these independent firms.
AMG's expertise and collaborating with affiliates to develop and execute management transition plans and align incentives across generations of affiliate partners remains a significant differentiating factor as firms select AMG as their institutional partner.
Today, having worked with affiliates on these matters for nearly three decades, AMG is able to provide customized solutions for new partnerships based on our foundational principles of independence, alignment, and support.
Over the past two years, we have significantly enhanced our strategic focus and our resources dedicated to originating, structuring, and executing on new investments.
For the first time since 2016, the majority of our cash flow will be deployed in new affiliate, investments already announced with additional high-quality prospects in our transaction pipeline.
As I said before, growth was certainly a theme for the second quarter.
In addition to new investments, the strategic actions we have taken to invest in our affiliates and in distribution resources on behalf of our affiliates are also key contributors to that growth.
During the quarter, we completed the evolution of our U.S. wealth platform, AMG Funds, to an affiliate-only model, consistent with our institutional distribution strategy.
We have received shareholder approval for all funds transitioning from external sub-advisors, resulting in an incremental 4 billion in assets now being managed by our affiliates.
As part of these changes, we are offering a more differentiated product lineup at lower fees and providing clients access to excellent affiliate strategies, including in attractive areas such as ESG equities and fixed income, Asian equities, and international equities.
This is an important evolution of our strategy as all of AMG's operations and resources across our institutional wealth platforms globally are now fully aligned with our affiliates, which positions us to deliver meaningful additional organic growth over time.
And this is just one example of shareholder value creation through investments in our affiliates growth.
Several years ago, we ceded the AMG Pantheon's fund with $10 million, given the opportunity we saw to provide U.S. wealth investors access to private equity portfolios.
And last week, the fund reached a significant milestone, crossing the $0.5 billion mark in AUM.
The fund's performance is outstanding and its organic growth is accelerating as U.S. wealth investors are seeing the benefits of allocating to private equity in their portfolios.
This is a great example of how AMG's central capabilities can drive new growth areas for our affiliates.
In addition, we have been actively investing in affiliates through lift-outs, including global sustainable equities and fixed-income teams at Artemis and more recently at Pantheon, where we assisted in lifting out our real estate team for its global infrastructure and real assets platform.
Finally, the strength and momentum that we described in our business at the start of the year has only just begun to manifest in our results.
As we look forward to the second half of 2021 and the full-year 2022, we see tremendous opportunity to further build on this momentum through the continued execution of our strategy to drive top-line EBITDA growth, which, together with share repurchases, will further compound our earnings per share and create meaningful shareholder value over time.
Our second-quarter results demonstrate the differentiated growth drivers inherent in AMG's business model.
and our ability to create shareholder value now and into the future.
Our affiliates delivered strong investment performance.
We generated net inflows excluding Quant strategies.
We put significant capital to work both in new partnerships and investments in affiliates, and we repurchased stock in the quarter, evidencing our ability to compound growth through each of our cor earnings drivers.
For the quarter, adjusted EBITDA of 227 million grew 40% year over year, driven by strong affiliate investment performance in markets and the impact of our growth investments.
Economic earnings per share of $4.03 grew 47% year over year.
Further benefiting from share repurchase activity.
Net client cash inflows, excluding certain quantitative strategies, worth 3 billion in the quarter, driven by private markets, specialty fixed income, U.S. equities, ESG strategies, and the strategic evolution of our U.S. wealth platform, AMG Funds.
Outflows from certain quant strategies totaled 11 billion and had a de minimis impact on our earnings.
Our organic growth profile continues to improve as clients seek active management solutions in the face of a more volatile market environment, and we continue to add new affiliates in areas of secular growth, including ESG, Asia, and private markets.
Turning to performance by asset class and excluding certain quantitative strategies.
In alternatives, our illiquid strategies posted another strong quarter, with 3.7 billion in net inflows, led by strong fundraising at Pantheon, EIG, and Bearing.
Performance in this category remained strong, with more than 90% of assets outperforming benchmarks in the most recent and prior vintages.
Private markets businesses like OCP Asia, continue to be a focus area for us from a new investment perspective and represent a significant source of management fee earnings stability and performance fee potential over the long term.
Within liquid alternatives, net inflows were 1.4 billion, supported by continued client appetite for alternative sources of risk and return in the low-yield environment.
Including at affiliates such as Garda and Capula.
We continue to see significant performance fee generation in this category, reflecting our excellent performance across our concentrated long-only equity and specialty fixed income strategies.
Moving to global equities.
We reported net outflows of 6.3 billion, driven by idiosyncratic, lower fee institutional reallocation activity.
These mandates accounted for approximately two-thirds of the outflows in this category.
Long-term global equity performance continues to be strong, particularly in strategies that are meaningful contributors to our EBITDA.
Momentum in our U.S. equity strategies continues with inflows of 2.9 billion, driven by strong client demand, particularly for our value-focused strategies managed by leading firms such as River Road and Yactman and our small-cap strategies.
Our performance continues to be strong in this category and with our recent investments in Jackson Square, Boston Common, and Parnassus.
Going forward, we have a balanced mix of high-performing growth and value strategies.
Our multi-asset and fixed-income category generated inflows of nearly $1 billion, primarily driven by ongoing demand for muni-bond strategies and wealth-management solutions, particularly at GW&K and Baker Street this quarter.
For the second quarter, adjusted EBITDA of 227 million grew 40% year over year, driven by strong affiliate performance in markets and additional earnings power from our recent new affiliate investments.
Our adjusted EBITDA included 16 million of performance fees, and as I mentioned previously, reflects excellent affiliate investment performance, particularly in our liquid alternatives category.
Economic earnings per share of $4.03 grew 47% year over year, further benefiting from ongoing share repurchase activity.
Our recently announced partnership with Parnassus is expected to close early in the fourth quarter and will therefore have a partial-year impact on our financial results in 2021.
Net of onetime transaction costs, we expect Parnassus to contribute approximately $15 million to our fourth-quarter EBITDA results.
On a full-year 2022 basis, we expect Parnassus to contribute approximately 70 million of EBITDA and $1.30 of economic earnings per share.
Now moving to specific modeling items for the third quarter.
We expect adjusted EBITDA to be in the range of 215 to 220 million based on current AUM levels, which reflect a flat market blend through yesterday and seasonally lower performance fees of up to 5 million.
Our share of interest expense was $27 million for the second quarter, and we expect interest expense to be 28 million in the third quarter, reflecting our recent hybrid bond offering.
Controlling interest depreciation was 2 million in the second quarter, and we expect the third quarter to be at a similar level.
Our share of reported amortization and impairments was 36 million for the second quarter, and we expect it to be similar in the third quarter.
Our effective GAAP and cash tax rates were 36 and 18%, respectively, for the second quarter and we expect GAAP and cash tax rates to be 25 and 18%, respectively, for the third quarter.
Intangible-related deferred taxes were 31 million this quarter and we expect this to decline to a more normalized level of 12 million in the third quarter.
Both our GAAP tax rate and intangible-related deferred taxes were elevated this quarter as a result of recently enacted U.K. tax rate changes and did not impact economic net income or economic earnings per share.
Other economic items were negative 4 million.
In the third quarter, for modeling purposes, we expect other economic items, excluding any mark-to-market impact on GPNC to be 1 million.
Our adjusted weighted average share count for the second quarter was 42.5 million, and we expect our share count to be approximately 42.1 million for the third quarter.
Finally, turning to the balance sheet and capital allocation.
Our balance sheet remains a source of strength as we invest for growth and consistently return capital to shareholders.
Earlier this month, we further enhanced the balance sheet by issuing a 40-year $200 million hybrid bond at an asset management industry low coupon of 4.2%.
We continue to prioritize extending duration, enhancing flexibility, and maintaining significant capacity to allocate capital to fuel our growth strategy.
We also remain committed to returning excess cash to our shareholders.
In the second quarter, we repurchased $80 million of shares, bringing us to $290 million year to date, and we remain on track for $500 million of repurchases for the full year, subject to market conditions and the timing of new affiliate investments.
Over the last 24 months, we've returned nearly $1 billion of excess capital to shareholders, having repurchased nearly 20% of our shares outstanding, while simultaneously partnering with seven new affiliates, and investing in our existing affiliates and centralized capabilities.
As Jay highlighted in his remarks, our strong results this quarter demonstrate AMG's differentiated growth drivers and highlight the strength of our business model and the efficacy of our strategy.
The momentum in our business continues to accelerate, and we are putting our capital and resources to work to compound growth over time.
Our recent new investments in affiliates add significant and growing earnings power to our business and together with our strong capital position and demonstrated ability to return capital to shareholders, we are well-positioned to deliver shareholder value over time.
 Assistant:

Chosen response: compname reports earnings per share of $2.55, economic earnings per share of $4.03 in the second quarter of 2021.