Invesco Reports Results for the Three Months Ended June 30, 2014 Continued strong, long-term investment performance

Adjusted operating margin improved to 41.8%

Adjusted diluted EPS of $0.65

ATLANTA, July 31, 2014 /PRNewswire/ -- Invesco Ltd. (NYSE: IVZ) today reported financial results for the three months ended June 30, 2014.

"By delivering strong investment performance to clients during the second quarter, Invesco achieved positive flows across our global business (ex-UK)," said Martin L. Flanagan, president and CEO. "As a result of these positive flows and our continued focus on effectively managing our business, Invesco's adjusted operating margin improved to 41.8% from 39.3% in the same quarter a year ago."


Q2-14


Q1-14


Q2-14 vs.
Q1-14


Q2-13


Q2-14 vs.
Q2-13


Adjusted Financial Measures(1)
















Net revenues

$901.0

m


$887.8

m


1.5

%


$790.3

m


14.0

%


Operating income

$377.0

m


$363.0

m


3.9

%


$310.6

m


21.4

%


Operating margin

41.8

%


40.9

%





39.3

%





Net income attributable to common shareholders

$282.4

m


$261.6

m


8.0

%


$223.7

m


26.2

%


Diluted EPS

$0.65



$0.60



8.3

%


$0.50



30.0

%


















U.S. GAAP Financial Measures
















Operating revenues

$1,289.9

m


$1,269.5

m


1.6

%


$1,135.5

m


13.6

%


Operating income

$354.8

m


$244.3

m


45.2

%


$273.9

m


29.5

%


Operating margin

27.5

%


19.2

%





24.1

%





Net income attributable to common shareholders

$274.5

m


$187.8

m


46.2

%


$202.6

m


35.5

%


Diluted EPS

$0.63



$0.43



46.5

%


$0.45



40.0

%


















Assets Under Management
















Ending AUM

$802.4

bn


$787.3

bn


1.9

%


$705.6

bn


13.7

%


Average AUM

$790.1

bn


$779.6

bn


1.3

%


$719.8

bn


9.8

%


(1)

The adjusted financial measures are all non-GAAP financial measures. See the information on pages 10 through 12 for a reconciliation to their most directly comparable U.S. GAAP measures and the notes beginning on page 19 for other important disclosures.

Assets Under Management

Total assets under management (AUM) at June 30, 2014, were $802.4 billion (March 31, 2014: $787.3 billion), an increase of $15.1 billion during the second quarter. Total net outflows were $8.8 billion for the second quarter, as detailed below:

Summary of net flows (in billions)


Q2-14


Q1-14


Q2-13

Active


($8.0)



$3.2



$0.1


Passive


1.1



3.3



1.3


Long-term net flows


(6.9)



6.5



1.4


Invesco PowerShares QQQ


(3.0)



(1.3)



0.7


Money market


1.1



(6.1)



(0.7)


Total net flows


($8.8)



($0.9)



$1.4












As previously disclosed, U.K. AUM experienced a single client withdrawal of $13.1 billion during the second quarter, which included $6.2 billion of U.K. equity income AUM. Excluding this single client withdrawal, U.K. equity income AUM net flows would have improved relative to the prior quarter, and total long-term net inflows for the company would have been $6.2 billion in the second quarter.

Net market gains led to a $19.9 billion increase in AUM during the second quarter, compared to a $9.4 billion increase in the first quarter 2014. Foreign exchange rate movements led to a $4.0 billion increase in AUM during the second quarter, compared to a $0.1 billion increase in the first quarter 2014. Average AUM during the second quarter were $790.1 billion, compared to $779.6 billion for the first quarter 2014, an increase of 1.3%. Further analysis is included in the supplementary schedules to this release.

Earnings Summary

The company is presenting both U.S. GAAP earnings information and non-GAAP earnings information in this release. The company believes that the additional disclosure of non-GAAP earnings information provides further transparency into the business on an ongoing operations basis and allows more appropriate comparisons with our industry peers. Management uses these non-GAAP performance measures to evaluate the business, and they are consistent with internal management reporting. These measures are described more fully in the the company's Forms 10-K.

Non-GAAP Earnings

This section discusses the company's second quarter 2014 non-GAAP financial information, as compared to the first quarter 2014. The phrase "as adjusted" is used in the following earnings discussion to identify non-GAAP information, together with the non-GAAP financial measures of net revenues, adjusted operating margin, adjusted net income attributable to common shareholders and adjusted diluted EPS. The most directly comparable U.S. GAAP items are reconciled to these non-GAAP items on pages 10 through 12 of this release.

Net revenues increased by $13.2 million (1.5%) to $901.0 million in the second quarter, from $887.8 million in the first quarter 2014. The change was principally due to increases in management fees, offset by lower performance fees in the second quarter compared to the first quarter. Foreign exchange rate changes increased second quarter net revenues by $6.6 million compared to the first quarter 2014.

Investment management fees, as adjusted, increased $65.5 million (6.6%) to $1,054.5 million in the second quarter, from $989.0 million in the first quarter 2014. In April 2014, our U.K. Invesco Perpetual business introduced a single Fund Management Fee (FMF) for their retail funds to replace the separate annual management fee and registration fee. The single FMF removes the complexity of having separate elements to the fee structure and is a proactive response to the regulatory promotion of providing a clear disclosure of product fees charged to investors. This resulted in an increase in investment management fees of $29.6 million and a corresponding decrease in service and distribution fees. After allowing for this change, the remaining increase reflects the higher average AUM, increasing revenue yields as the average AUM weighting moved towards higher fee-earning asset classes, and the additional day in the second quarter compared to the first quarter 2014. Foreign exchange rate changes increased second quarter management fees by $8.6 million when compared to first quarter 2014.

Service and distribution fees, as adjusted, decreased $23.9 million (10.0%) to $214.7 million in the second quarter, from $238.6 million in the first quarter 2014. The decrease is due to the introduction of a single FMF for U.K. funds as noted above. After allowing for this, service and distribution fees have increased in line with average AUM and the additional day in the second quarter compared to the first quarter. Foreign exchange rate changes increased second quarter service and distribution fees by $0.2 million when compared to first quarter 2014.

Performance fees, as adjusted, were $7.3 million in the second quarter, compared to $33.6 million in the first quarter 2014. The first quarter performance fees included $27.6 million generated by the U.K. investment teams. Foreign exchange rate changes had no net impact on second quarter performance fees when compared to the first quarter 2014.

Other revenues, as adjusted, increased by $3.2 million (9.0%) to $38.9 million in the second quarter, compared to $35.7 million in the first quarter 2014, due to increased transaction fees from real estate fund activities. Foreign exchange rate changes increased other revenues by $0.7 million in the second quarter when compared to the first quarter 2014.

Third-party distribution, service and advisory expenses, as adjusted, increased by $5.3 million (1.3%) to $414.4 million in the second quarter from $409.1 million in the first quarter 2014, the increase is consistent with the revenues derived from the related retail AUM. Foreign exchange rate changes increased third-party distribution, service and advisory expenses by $2.9 million in the second quarter when compared to the first quarter 2014.

Total operating expenses, as adjusted, decreased by $0.8 million (0.2%) to $524.0 million in the second quarter from $524.8 million in the first quarter 2014. Foreign exchange rate changes increased second quarter operating expenses, as adjusted, by $3.1 million when compared to the first quarter 2014.

Employee compensation expenses, as adjusted, decreased by $8.5 million (2.4%) to $344.6 million in the second quarter, from $353.1 million in the first quarter 2014. The first quarter included seasonally higher payroll tax costs that decreased in the second quarter. This expense reduction was partially offset by an increase in incentive compensation together with a full quarter of higher base salaries effective from March 1. Foreign exchange rate changes increased second quarter employee compensation expenses by $2.1 million when compared to the first quarter 2014.

Marketing expenses, as adjusted, increased by $6.7 million (27.7%) to $30.9 million in the second quarter, from $24.2 million in the first quarter 2014 due to increased advertising and other client related marketing expenditure in EMEA. Foreign exchange rate changes increased second quarter marketing expenses by $0.2 million when compared to the first quarter 2014.

Property, office and technology expenses, as adjusted, decreased $1.6 million (2.1%) to $76.1 million in the second quarter, from $77.7 million in the first quarter 2014. The decrease reflects lower rent and related costs due to the vacating of leased properties associated with our business optimization initiative in the first quarter. Foreign exchange rate changes increased second quarter property, office and technology expenses by $0.4 million when compared to the first quarter 2014.

General and administrative expenses, as adjusted, increased $2.6 million (3.7%) to $72.4 million in the second quarter, from $69.8 million in the first quarter 2014, due to increased legal, training and professional service costs. Foreign exchange rate changes increased second quarter general and administrative expenses by $0.4 million when compared to the first quarter 2014.

Non-operating other income and expenses, as adjusted, included equity in earnings from investments of $4.1 million in the second quarter, compared to $3.2 million in the first quarter 2014. Other gains and losses, net in the second quarter were a gain of $14.8 million compared to a first quarter 2014 gain of $2.5 million. The gain in the second quarter includes $4.7 million realized from the sale and liquidation of CLO products and $5.7 million realized on the sale of other seed investments. Separately, other income of consolidated sponsored investment products (CSIP) was a gain of $7.7 million in the second quarter, of which $3.6 million is attributable to noncontrolling interests. The first quarter 2014 included a CSIP gain of $8.2 million with $2.9 million attributable to noncontrolling interests.

The adjusted effective tax rate decreased to 26.5% for the second quarter, from 27.0% for the first quarter 2014. The first quarter included a 0.8% rate increase reflecting the impact of New York State tax legislation enacted during the quarter.

U.S. GAAP Earnings

This section comments on several significant items that have impacted the company's second and first quarter results as presented in accordance with U.S. GAAP.

Operating revenues increased 1.6% to $1,289.9 million in the second quarter, from $1,269.5 million in the first quarter 2014. Operating expenses decreased by 8.8% to $935.1 million in the second quarter, from $1,025.2 million in the first quarter 2014.

Operating expenses for first quarter 2014 included a charge of £18.6 million ($31.1 million) in respect of the penalty under a settlement of an enforcement proceeding reached with the U.K. Financial Conduct Authority (FCA) pertaining to the company's compliance with certain FCA rules and regulations for the period from May 2008 to November 2012. This charge, together with settlement-related legal costs of $0.5 million, was recorded in general and administrative expenses and reduced diluted EPS by $0.07 for the first quarter.

Also in the first quarter 2014, the company recorded business optimization initiative charges of $43.0 million in operating expenses that include $35.8 million associated with vacating leased properties and $7.2 million of staff severance. Separately, general and administrative expenses for the first quarter included a $5.3 million fund reimbursement settlement cost associated with historical management fees. After allowing for taxation, these items reduced first quarter diluted earnings per share by $0.09.

The effective tax rate on continuing operations decreased to 25.3% for the second quarter, from 29.9% for the first quarter 2014. See note 10 on page 22 for further details.

Balance Sheet and Cash Flow Statement Presentation

The company is presenting in this release both a U.S. GAAP balance sheet and balance sheet information excluding CIP, along with a U.S. GAAP statement of cash flows and cash flow statement information excluding CIP. The information presented excluding CIP is a non-GAAP presentation. Balance sheet and cash flow statement information before and after the consolidation of investment products are reconciled on pages 15 and 18, respectively.

The company believes that, by excluding the consolidation of investment products, the non-GAAP balance sheet and cash flow statement information provides a more representative presentation of our financial risks and the company's cash and debt positions, allowing more appropriate comparisons with our industry peers. Management uses these non-GAAP presentations to evaluate the business, and the presentations are consistent with internal management reporting. As demonstrated by the selected balance sheet data that follows, inclusion of the long-term debt of CIP within liquidity measures, such as debt-to-equity ratios, causes the company to appear to be significantly more indebted than is actually the case.

Balance Sheets and Capital Management

Selected balance sheet information is reflected in the table below:



Excluding CIP (Non-GAAP)(1)


Including CIP (U.S. GAAP)



June 30, 2014


December 31,
2013


June 30, 2014


December 31,
2013

in millions













Cash and cash equivalents


$1,196.0



$1,331.2



$1,196.0



$1,331.2


Investments of CIP






4,971.4



4,734.7


Total assets(1)


$14,580.4



$13,952.6



$19,899.5



$19,270.5















Long-term debt


1,588.9



1,588.6



1,588.9



1,588.6


Debt of CIP






4,301.5



4,181.7


Long-term debt / Long-term debt plus CIP debt


1,588.9



1,588.6



5,890.4



5,770.3















Total liabilities(1)


$5,919.1



$5,649.7



$10,421.6



$10,293.2















Total permanent equity(1)


$8,506.3



$8,302.9



$9,322.9



$8,977.3















Debt/Equity % (1) (2)


18.7

%


19.1

%


63.2

%


64.3

%

(1)

The balance sheet line items excluding CIP are non-GAAP financial measures. See the reconciliation information on page 15 for balance sheet information before and after the consolidation of investment products.



(2)

The debt/equity ratio excluding CIP is a non-GAAP financial measure. The debt/equity ratio is calculated as long-term debt divided by total permanent equity for the balance sheet information excluding CIP and long-term debt plus debt of CIP divided by total permanent equity for the balance sheet including CIP.

As of June 30, 2014, the company's cash and cash equivalents were $1,196.0 million, with long-term debt of $1,588.9 million. The credit facility balance was zero at June 30, 2014, March 31, 2014 and December 31, 2013.

During the second quarter the company received cash proceeds of $60.8 million representing final settlement from the 2013 sale of the Atlantic Trust Private Wealth Management business ("Atlantic Trust").

Dividends paid in the second quarter were $109.1 million, bringing year-to-date dividends paid to $207.1 million. Today the company is announcing a second-quarter cash dividend of 25.0 cents per share to holders of common shares. The dividend is payable on September 5, 2014, to shareholders of record at the close of business on August 21, 2014, with an ex-dividend date of August 19, 2014.

During the second quarter the company repurchased $50.0 million of its common shares on the open market, representing 1.3 million shares at a weighted average share price of $36.74. This brings year-to-date repurchases to $169.6 million representing 4.9 million shares.

Headcount

As of June 30, 2014, the company had 6,070 employees, compared to 6,005 employees as of March 31, 2014.

Invesco Ltd. is a leading independent global investment management firm, dedicated to helping investors worldwide achieve their financial objectives. By delivering the combined power of our distinctive investment management capabilities, Invesco provides a wide range of investment strategies and vehicles to our clients around the world. Operating in more than 20 countries, the firm is listed on the New York Stock Exchange under the symbol IVZ. Additional information is available at www.invesco.com.

Members of the investment community and general public are invited to listen to the conference call today, July 31, 2014, at 9:00 a.m. ET by dialing one of the following numbers: 1-866-617-1526 for U.S. and Canadian callers or 1-210-795-0624 for international callers. An audio replay of the conference call will be available until Friday, August 15, 2014 at 5:00 p.m. ET by calling 1-888-562-4433 for U.S. and Canadian callers or 1-402-280-9926 for international callers. A presentation highlighting the company's performance will be available during a live Webcast and on Invesco's Website at www.invesco.com.

This release, and comments made in the associated conference call today, may include "forward-looking statements." Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, assets under management, acquisitions and divestitures, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "projects," "forecasts," and future or conditional verbs such as "will," "may," "could," "should," and "would" as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.

Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission. You may obtain these reports from the SEC's website at www.sec.gov. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.

Logo - http://photos.prnewswire.com/prnh/20110131/MM39469LOGO-a

 


Invesco Ltd.
Non-GAAP Condensed Consolidated Income Statement Information
(Unaudited, in millions, other than per share amounts, headcount and AUM)



Q2-14


Q1-14


% Change


Q2-13


% Change

Adjusted revenues:















Investment management fees

$1,054.5



$989.0



6.6

%


$905.2



16.5

%

Service and distribution fees

214.7



238.6



(10.0)

%


215.7



(0.5)

%

Performance fees

7.3



33.6



(78.3)

%


9.0



(18.9)

%

Other

38.9



35.7



9.0

%


28.9



34.6

%

Third-party distribution, service and advisory

(414.4)



(409.1)



1.3

%


(368.5)



12.5

%

Net revenues

901.0



887.8



1.5

%


790.3



14.0

%

Adjusted operating expenses:















Employee compensation

344.6



353.1



(2.4)

%


322.7



6.8

%

Marketing

30.9



24.2



27.7

%


24.3



27.2

%

Property, office and technology

76.1



77.7



(2.1)

%


68.4



11.3

%

General and administrative

72.4



69.8



3.7

%


64.3



12.6

%

Total adjusted operating expenses

524.0



524.8



(0.2)

%


479.7



9.2

%

Adjusted operating income

377.0



363.0



3.9

%


310.6



21.4

%

Adjusted other income/(expense):















Equity in earnings of unconsolidated affiliates

4.1



3.2



28.1

%


3.6



13.9

%

Interest and dividend income

3.9



4.2



(7.1)

%


3.4



14.7

%

Interest expense

(18.2)



(18.7)



(2.7)

%


(10.0)



82.0

%

Other gains and losses, net

14.8



2.5



492.0

%


(0.7)



N/A

Other income/(loss) of CSIP, net

7.7



8.2



(6.1)

%




N/A

Adjusted income before income taxes

389.3



362.4



7.4

%


306.9



26.8

%

Adjusted income tax provision

(103.3)



(97.9)



5.5

%


(83.2)



24.2

%

Adjusted net income

286.0



264.5



8.1

%


223.7



27.8

%

Adjusted net (income)/loss attributable to noncontrolling interests in consolidated entities

(3.6)



(2.9)



24.1

%




N/A

Adjusted net income attributable to common shareholders

$282.4



$261.6



8.0

%


$223.7



26.2

%
















Adjusted diluted EPS

$0.65



$0.60



8.3

%


$0.50



30.0

%

Average diluted shares outstanding

436.4



437.4



(0.2)

%


450.1



(3.0)

%
















Ending headcount

6,070



6,005



1.1

%


5,818



4.3

%

Ending AUM (in billions)

$802.4



$787.3



1.9

%


$705.6



13.7

%

Average AUM (in billions)

$790.1



$779.6



1.3

%


$719.8



9.8

%





















 

 

Invesco Ltd.
U.S. GAAP Condensed Consolidated Income Statements
(Unaudited, in millions, other than per share amounts)



Q2-14


Q1-14


% Change


Q2-13


% Change

Operating revenues:















Investment management fees

$1,031.9



$965.4



6.9

%


$885.5



16.5

%

Service and distribution fees

214.7



238.6



(10.0)

%


215.7



(0.5)

%

Performance fees

5.0



31.1



(83.9)

%


6.0



(16.7)

%

Other

38.3



34.4



11.3

%


28.3



35.3

%

Total operating revenues

1,289.9



1,269.5



1.6

%


1,135.5



13.6

%

Operating expenses:















Employee compensation

342.9



362.1



(5.3)

%


324.1



5.8

%

Third-party distribution, service and advisory

410.6



405.4



1.3

%


366.0



12.2

%

Marketing

30.2



23.4



29.1

%


23.8



26.9

%

Property, office and technology

75.3



112.7



(33.2)

%


68.6



9.8

%

General and administrative

76.1



121.6



(37.4)

%


77.3



(1.6)

%

Transaction and integration





N/A


1.8



N/A

Total operating expenses

935.1



1,025.2



(8.8)

%


861.6



8.5

%

Operating income

354.8



244.3



45.2

%


273.9



29.5

%

Other income/(expense):















Equity in earnings of unconsolidated affiliates

5.5



10.0



(45.0)

%


6.9



(20.3)%


Interest and dividend income

3.1



2.9



6.9

%


2.1



47.6

%

Interest expense

(18.2)



(18.7)



(2.7)



(10.0)



82.0

%

Other gains and losses, net

16.2



6.6



145.5

%


0.4



N/A

Other income/(loss) of CSIP, net

7.7



8.2



(6.1)

%




N/A

Consolidated investment products (CIP):















 Interest income of CIP

48.0



48.3



(0.6)

%


50.7



(5.3)

%

 Interest expense of CIP

(30.3)



(30.3)



%


(30.6)



(1.0)

%

 Other gains/(losses) of CIP, net

36.8



26.5



38.9

%


(1.6)



N/A

Income from continuing operations before income taxes

423.6



297.8



42.2

%


291.8



45.2

%

Income tax provision

(107.0)



(89.0)



20.2

%


(83.5)



28.1

%

Income from continuing operations, net of income taxes

316.6



208.8



51.6

%


208.3



52.0

%

Income/(loss) from discontinued operations, net of taxes

0.2



(2.0)



N/A


(4.6)



N/A

Net income

316.8



206.8



53.2

%


203.7



55.5

%

Net (income)/loss attributable to noncontrolling interests in consolidated entities

(42.3)



(19.0)



122.6

%


(1.1)



N/A

Net income attributable to common shareholders

$274.5



$187.8



46.2

%


$202.6



35.5

%

Earnings per share:















---Basic EPS from continuing operations

$0.63



$0.43



46.5

%


$0.46



37.0

%

---Basic EPS from discontinued operations

$—



$—



N/A


($0.01)



N/A

---Total basic

$0.63



$0.43



46.5

%


$0.45



40.0

%
















---Diluted EPS from continuing operations

$0.63



$0.43



46.5

%


$0.46



37.0

%

---Diluted EPS from discontinued operations

$—



$—



N/A


($0.01)



N/A

---Total diluted

$0.63



$0.43



46.5

%


$0.45



40.0

%
















Average shares outstanding:















---basic

435.7



436.8



(0.3)

%


449.1



(3.0)

%

---diluted

436.4



437.4



(0.2)

%


450.1



(3.0)

%





















 

 


Invesco Ltd.
U.S. GAAP Condensed Consolidated Income Statements
(Unaudited, in millions, other than per share amounts)



Six months ended June 30,





2014


2013


% Change

Operating revenues:







Investment management fees

$1,997.3


$1,730.1


15.4

%

Service and distribution fees

453.3


422.0


7.4

%

Performance fees

36.1


42.1


(14.3)

%

Other

72.7


53.5


35.9

%

Total operating revenues

2,559.4


2,247.7


13.9

%

Operating expenses:







Employee compensation

705.0


665.6


5.9

%

Third-party distribution, service and advisory

816.0


712.1


14.6

%

Marketing

53.6


46.0


16.5

%

Property, office and technology

188.0


135.1


39.2

%

General and administrative

197.7


144.8


36.5

%

Transaction and integration


3.2


N/A

Total operating expenses

1,960.3


1,706.8


14.9

%

Operating income

599.1


540.9


10.8

%

Other income/(expense):







Equity in earnings of unconsolidated affiliates

15.5


15.0


3.3

%

Interest and dividend income

6.0


4.3


39.5

%

Interest expense

(36.9)


(19.7)


87.3

%

Other gains and losses, net

22.8


18.1


26.0

%

Other income/(loss) of CSIP, net

15.9



N/A

Consolidated investment products (CIP):







 Interest income of CIP

96.3


101.0


(4.7)

%

 Interest expense of CIP

(60.6)


(63.3)


(4.3)

%

 Other gains/(losses) of CIP, net

63.3


(22.7)


N/A

Income from continuing operations before income taxes

721.4


573.6


25.8

%

Income tax provision

(196.0)


(169.8)


15.4

%

Income from continuing operations, net of income taxes

525.4


403.8


30.1

%

Income/(loss) from discontinued operations, net of taxes

(1.8)


(0.5)


260.0

%

Net income

523.6


403.3


29.8

%

Net (income)/loss attributable to noncontrolling interests in consolidated entities

(61.3)


21.5


N/A

Net income attributable to common shareholders

$462.3


$424.8


8.8

%

Earnings per share:







---Basic EPS from continuing operations

$1.06


$0.95


11.6

%

---Basic EPS from discontinued operations

$—


$—


N/A

---Total basic

$1.06


$0.95


11.6

%








---Diluted EPS from continuing operations

$1.06


$0.95


11.6

%

---Diluted EPS from discontinued operations

$—


$—


N/A

---Total diluted

$1.06


$0.94


12.8

%








Average shares outstanding:







---basic

436.2


448.5


(2.7)

%

---diluted

436.9


449.6


(2.8)

%









 

 

Invesco Ltd.
Reconciliation of U.S. GAAP Condensed Consolidated Income Statement to Non-GAAP Condensed Consolidated Income Statement Information
(Unaudited, in millions, other than per share amounts)
Three months ended June 30, 2014



U.S.
GAAP
basis


Proportional
consolidation
of joint
ventures


Third party
distribution,
service and
advisory
expenses


Acquisition /
Disposition
related


Market
appreciation /
depreciation of
deferred
compensation
awards


CIP


Non-GAAP
basis

Operating revenues:





















Investment management fees

$1,031.9



$16.2



$—



$—



$—



$6.4



$1,054.5


Service and distribution fees

214.7













214.7


Performance fees

5.0











2.3



7.3


Other

38.3



0.7









(0.1)



38.9


Third-party distribution, service and advisory



(3.8)



(410.6)









(414.4)


Total operating revenues reconciled to net revenues

1,289.9



13.1



(410.6)







8.6



901.0


Operating expenses:





















Employee compensation

342.9



5.4







(3.7)





344.6


Third-party distribution, service and advisory

410.6





(410.6)










Marketing

30.2



0.7











30.9


Property, office and technology

75.3



0.8











76.1


General and administrative

76.1



1.4





(3.4)





(1.7)



72.4


Total operating expenses

935.1



8.3



(410.6)



(3.4)



(3.7)



(1.7)



524.0


Operating income reconciled to adjusted operating income

354.8



4.8





3.4



3.7



10.3



377.0


Other income/(expense):





















Equity in earnings of unconsolidated affiliates

5.5



(3.6)









2.2



4.1


Interest and dividend income

3.1



1.1







(0.9)



0.6



3.9


Interest expense

(18.2)













(18.2)


Other gains and losses, net

16.2









(6.1)



4.7



14.8


Other income/(loss) of CSIP, net

7.7













7.7


CIP:





















Interest income of CIP

48.0











(48.0)




Interest expense of CIP

(30.3)











30.3




Other gains/(losses) of CIP, net

36.8











(36.8)




Income from continuing operations before income taxes

423.6



2.3





3.4



(3.3)



(36.7)



389.3


Income tax provision

(107.0)



(2.3)





5.0



1.0





(103.3)


Income from continuing operations, net of income taxes

316.6







8.4



(2.3)



(36.7)



286.0


Income from discontinued operations, net of taxes

0.2







(0.2)








Net income

316.8







8.2



(2.3)



(36.7)



286.0


Net (income)/loss attributable to noncontrolling interests in consolidated entities

(42.3)











38.7



(3.6)


Net income attributable to common shareholders reconciled to adjusted net income attributable to common shareholders

$274.5



$—



$—



$8.2



($2.3)



$2.0



$282.4


Operating margin

27.5

%











Adjusted operating margin

41.8

%

Average diluted shares outstanding

436.4









Average diluted shares outstanding

436.4


Diluted EPS from continuing operations

$0.63












Adjusted diluted EPS

$0.65


Diluted EPS from discontinued operations

$—




















Diluted EPS

$0.63









































See pages 19 through 22 for notes to the reconciliation.










 

 

Invesco Ltd.
Reconciliation of U.S. GAAP Condensed Consolidated Income Statement to Non-GAAP Condensed Consolidated Income Statement Information
(Unaudited, in millions, other than per share amounts)
Three months ended March 31, 2014



U.S.
GAAP
basis


Proportional
consolidation
of joint
ventures


Third party
distribution,
service and
advisory
expenses


Acquisition /
Disposition
related


Market
appreciation /
depreciation of
deferred
compensation
awards


CIP


Other
reconciling
items


Non-GAAP
basis

Operating revenues:
























Investment management fees

$965.4



$17.7



$—



$—



$—



$5.9



$—



$989.0


Service and distribution fees

238.6















238.6


Performance fees

31.1











2.5





33.6


Other

34.4



1.3













35.7


Third-party distribution, service and advisory



(3.7)



(405.4)











(409.1)


Total operating revenues reconciled to net revenues

1,269.5



15.3



(405.4)







8.4





887.8


Operating expenses:
























Employee compensation

362.1



2.6







(4.4)





(7.2)



353.1


Third-party distribution, service and advisory

405.4





(405.4)












Marketing

23.4



0.8













24.2


Property, office and technology

112.7



0.8











(35.8)



77.7


General and administrative

121.6



1.5





(3.8)





(12.6)



(36.9)



69.8


Total operating expenses

1,025.2



5.7



(405.4)



(3.8)



(4.4)



(12.6)



(79.9)



524.8


Operating income reconciled to adjusted operating income

244.3



9.6





3.8



4.4



21.0



79.9



363.0


Other income/(expense):
























Equity in earnings of unconsolidated affiliates

10.0



(8.0)









1.2





3.2


Interest and dividend income

2.9



1.2







(0.8)



0.9





4.2


Interest expense

(18.7)















(18.7)


Other gains and losses, net

6.6









(3.9)





(0.2)



2.5


Other income/(loss) of CSIP, net

8.2















8.2


CIP:
























Interest income of CIP

48.3











(48.3)






Interest expense of CIP

(30.3)











30.3






Other gains/(losses) of CIP, net

26.5











(26.5)






Income from continuing operations before income taxes

297.8



2.8





3.8



(0.3)



(21.4)



79.7



362.4


Income tax provision

(89.0)



(2.8)





5.1







(11.2)



(97.9)


Income from continuing operations, net of income taxes

208.8







8.9



(0.3)



(21.4)



68.5



264.5


Loss from discontinued operations, net of taxes

(2.0)







2.0










Net income

206.8







10.9



(0.3)



(21.4)



68.5



264.5


Net (income)/loss attributable to noncontrolling interests in consolidated entities

(19.0)











16.1





(2.9)


Net income attributable to common shareholders reconciled to adjusted net income attributable to common shareholders

$187.8



$—



$—



$10.9



($0.3)



($5.3)



$68.5



$261.6


























Operating margin

19.2

%











Adjusted operating margin


40.9

%

























Average diluted shares outstanding

437.4












Average diluted shares outstanding


437.4


























Diluted EPS form continuing operations

$0.43














Adjusted diluted EPS


$0.60


Diluted EPS from discontinued operations

$—























Diluted EPS

$0.43















































See pages 19 through 22 for notes to the reconciliation.