Invesco Reports Results for the Year and Three Months Ended December 31, 2013 Annual adjusted operating income increased 27.7%

Annual adjusted diluted EPS up 29.1%

Total 2013 return of capital of $850 million

Total net inflows of $34.4 billion for 2013

ATLANTA, Jan. 30, 2014 /PRNewswire/ -- Invesco Ltd. (NYSE: IVZ) today reported financial results for the year and three months ended December 31, 2013.

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

"Invesco continued to provide strong, long-term investment performance to our clients, which contributed to one of our strongest years on record," said Martin L. Flanagan, president and CEO of Invesco. "During 2013, we made additional progress against our strategic priorities, continued to expand our global investment capabilities, launched several important new products and further invested in key aspects of our business that will benefit our clients and our business over the long term. We continue to believe we are in the early stages of achieving the full potential of the organization. Reflecting further confidence in the fundamentals of our business, we returned $850 million to shareholders during the year."

 


2013


2012


% Change


Adjusted Financial Measures(1,2)







Net revenues

$3,252.0m


$2,836.0m


14.7%


Operating income

$1,292.1m


$1,012.1m


27.7%


Operating margin

39.7%


35.7%




Net income attributable to common shareholders

$953.3m


$748.6m


27.3%


Diluted EPS

$2.13


$1.65


29.1%









U.S. GAAP Financial Measures







Operating revenues(2)

$4,644.6m


$4,050.4m


14.7%


Operating income(2)

$1,120.2m


$842.6m


32.9%


Operating margin(2)

24.1%


20.8%




Net income attributable to common shareholders

$940.3m


$677.1m


38.9%


Diluted EPS

$2.10


$1.49


40.9%









Assets Under Management(2)







Ending AUM

$778.7bn


$667.4bn


16.7%


Average AUM

$725.6bn


$645.3bn


12.4%




(1)

The adjusted financial measures are all non-GAAP financial measures. See the information on pages 12 through 16 for a reconciliation to their most directly comparable U.S. GAAP measures and the notes beginning on page 23 for other important disclosures.



(2)

The company has adopted a discontinued operations presentation for the Atlantic Trust Private Wealth Management business ("Atlantic Trust"). Amounts presented represent continuing operations and exclude Atlantic Trust. Prior period amounts have been reclassified to conform with this presentation. The sale of Atlantic Trust was completed on December 31, 2013.

 



Q4-13


Q3-13


Q4-13 vs.

Q3-13


Q4-12


Q4-13 vs.

Q4-12


Adjusted Financial Measures(1, 2)











Net revenues

$857.3m


$816.4m


5.0%


$730.6m


17.3%


Operating income

$347.2m


$328.1m


5.8%


$258.2m


34.5%


Operating margin

40.5%


40.2%




35.3%




Net income attributable to common shareholders

$258.1m


$246.0m


4.9%


$189.4m


36.3%


Diluted EPS

$0.58


$0.55


5.5%


$0.42


38.1%













U.S. GAAP Financial Measures











Operating revenues(2)

$1,225.1m


$1,171.8m


4.5%


$1,046.7m


17.0%


Operating income(2)

$293.3m


$286.0m


2.6%


$205.5m


42.7%


Operating margin(2)

23.9%


24.4%




19.6%




Net income attributable to common shareholders

$287.4m


$228.1m


26.0%


$158.7m


81.1%


Diluted EPS

$0.64


$0.51


25.5%


$0.35


82.9%













Assets Under Management(2)











Ending AUM

$778.7bn


$745.5bn


4.5%


$667.4bn


16.7%


Average AUM

$761.7bn


$729.4bn


4.4%


$660.2bn


15.4%




(1)

The adjusted financial measures are all non-GAAP financial measures. See the information on pages 12 through 16 for a reconciliation to their most directly comparable U.S. GAAP measures and the notes beginning on page 23 for other important disclosures.



(2)

The company has adopted a discontinued operations presentation for Atlantic Trust. Amounts presented represent continuing operations and exclude Atlantic Trust. Prior period amounts have been reclassified to conform with this presentation. The sale of Atlantic Trust was completed on December 31, 2013.

 

Assets Under Management

Total assets under management (AUM) at December 31, 2013, were $778.7 billion (September 30, 2013: $745.5 billion), an increase of $33.2 billion during the fourth quarter. Total net inflows were $5.2 billion for the fourth quarter, as detailed below:

 



Quarterly



Year-to-date


Summary of net flows (in billions)


Q4-13


Q3-13


Q4-12


2013


2012

Active


$0.3



$4.8



$1.1



$13.1



($0.5)


Passive


0.7



0.2



1.6



8.6



10.9


Long-term net flows


1.0



5.0



2.7



21.7



10.4


Invesco PowerShares QQQ


2.6



0.8



(2.5)



3.7



0.2


Money market


1.6



3.3



0.1



9.0



0.1


Total net flows


$5.2



$9.1



$0.3



$34.4



$10.7













 

Between October 15, 2013 and December 31, 2013, U.K. equity income AUM experienced net outflows of $4.8 billion.

Net market gains led to a $27.2 billion increase in AUM during the fourth quarter, compared to a $22.4 billion increase in the third quarter 2013. Foreign exchange rate movements led to an $0.8 billion increase in AUM during the fourth quarter, compared to an $8.4 billion increase in the third quarter 2013. Average AUM during the fourth quarter were $761.7 billion, compared to $729.4 billion for the third quarter 2013, an increase of 4.4%. All AUM amounts quoted above exclude the AUM of the discontinued operation. 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 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.

U.S. GAAP earnings information reflects the presentation of Atlantic Trust Private Wealth Management ("Atlantic Trust") as a discontinued operation. Non-GAAP earnings information excludes the discontinued operation from both current and prior periods. The sale of Atlantic Trust was completed on December 31, 2013.

Non-GAAP Earnings

This section discusses the company's fourth quarter 2013 non-GAAP financial results, as compared to the third quarter 2013. 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 12 through 16 of this release.

Net revenues increased by $40.9 million (5.0%) to $857.3 million in the fourth quarter, from $816.4 million in the third quarter 2013. The change was principally due to increases in investment management fees. Foreign exchange rate changes increased fourth quarter net revenues by $10.4 million when compared to the third quarter 2013.

Investment management fees, as adjusted, increased $44.8 million (4.8%) to $982.8 million in the fourth quarter, from $938.0 million in the third quarter 2013. The increase reflects the higher average AUM. Foreign exchange rate changes increased fourth quarter management fees by $12.9 million when compared to third quarter 2013.

Service and distribution fees, as adjusted, increased $9.4 million (4.3%) to $230.1 million in the fourth quarter, from $220.7 million in the third quarter 2013, also reflecting the higher average AUM. Foreign exchange rate changes increased fourth quarter service and distribution fees by $1.2 million when compared to third quarter 2013.

Performance fees, as adjusted, were $11.1 million in the fourth quarter, compared to $8.5 million in the third quarter 2013. Foreign exchange rate changes increased performance fees by $0.8 million in the fourth quarter when compared to the third quarter 2013.

Other revenues, as adjusted, increased by $0.2 million (0.6%) to $33.3 million in the fourth quarter, compared to $33.1 million in the third quarter 2013. Foreign exchange rate changes increased third quarter other revenues by $0.1 million, when compared to third quarter 2013.

Third-party distribution, service and advisory expenses, as adjusted, increased by $16.1 million (4.2%) to $400.0 million in the fourth quarter from $383.9 million in the third quarter 2013, increasing with higher related retail management fees and service and distribution fees. Foreign exchange rate changes increased the fourth quarter third-party distribution, services and advisory expenses by $4.6 million.

Total operating expenses, as adjusted, increased by $21.8 million (4.5%) to $510.1 million in the fourth quarter, from $488.3 million in the third quarter 2013. Foreign exchange rate changes increased fourth quarter operating expenses, as adjusted, by $5.9 million when compared to the third quarter 2013.

Employee compensation expenses, as adjusted, increased by $4.0 million (1.2%) to $332.3 million in the fourth quarter, from $328.3 million in the third quarter 2013. Foreign exchange rate changes increased fourth quarter employee compensation expenses by $3.5 million when compared to the third quarter 2013.

Marketing expenses, as adjusted, increased by $7.6 million (32.3%) to $31.1 million in the fourth quarter, from $23.5 million in the third quarter 2013. The fourth quarter included $2.0 million of advertising costs related to product launches together with an additional $5.0 million of advertising and other marketing costs in support of the existing business. Foreign exchange rate changes increased fourth quarter marketing expenses by $0.4 million when compared to the third quarter 2013.

Property, office and technology expenses, as adjusted, increased $2.2 million (3.0%) to $74.9 million in the fourth quarter, from $72.7 million in the third quarter 2013. Foreign exchange rate changes increased fourth quarter property, office and technology expenses by $1.0 million when compared to the third quarter 2013.

General and administrative expenses, as adjusted, increased $8.0 million (12.5%) to $71.8 million in the fourth quarter, from $63.8 million in the third quarter 2013. The fourth quarter includes a $4.5 million increase in professional service costs and travel related to product development and fund launches. Other seasonal general and administrative expenses increased in the fourth quarter by $2.5 million when compared to the third quarter 2013. Foreign exchange rate changes increased fourth quarter general and administrative expenses by $1.0 million when compared to the third quarter 2013.

Non-operating other income and expenses, as adjusted, included equity in earnings from investments of $5.0 million in the fourth quarter, compared to $7.5 million in the third quarter 2013. Other gains and losses, net in the fourth quarter were a gain of $1.7 million compared to a third quarter 2013 gain of $6.5 million. Separately, other income of consolidated sponsored investment products (CSIP) was a gain of $3.5 million in the fourth quarter compared to a third quarter 2013 loss of $0.6 million. Interest expense, as adjusted, increased $5.5 million (56.7%) to $15.2 million in the fourth quarter, from $9.7 million in the third quarter 2013, reflecting the interest expense on the new senior notes issued during the quarter.

The effective tax rate decreased to 25.4% for the fourth quarter, from 26.6% for the third quarter 2013.

U.S. GAAP Earnings

Operating revenues increased 4.5% to $1,225.1 million in the fourth quarter, from $1,171.8 million in the third quarter 2013. Operating expenses increased by 5.2% to $931.8 million in the fourth quarter, from $885.8 million in the third quarter 2013.

On December 31, the company completed the sale of Atlantic Trust to Canadian Imperial Bank of Commerce (CIBC). Net cash proceeds of $137.0 million were received, with an additional estimated $59 million due in the first half of 2014. The operating results and gain on sale of Atlantic Trust have been classified in the income statement as a discontinued operation for all periods presented. Net income of $66.4 million was recorded in the fourth quarter attributable to the discontinued operation, compared to a net loss of $1.4 million in the third quarter 2013. The fourth quarter net income included the gain on sale of $77.5 million, operating income of $26.3 million that includes performance fee revenue, and taxation expense of $37.4 million. The commentary below relates to U.S GAAP earnings from continuing operations.

On December 31, 2013, at the time of creating a new trust company subsidiary to continue operating the company's institutional trust activities immediately following the disposition of Atlantic Trust, the company made a $31.9 million payment ($19.8 million net of taxation) to a managed investment trust, which resulted in the subsequent termination of an outstanding support agreement. This expense was recorded in other gains/(losses) in the company's Consolidated Statement of Income during the three months ended December 31, 2013.

Property, office and technology expenses includes a charge of $11.7 million ($7.4 million net of taxation)in the fourth quarter related to the write-off of capitalized IT software development costs.

The effective tax rate on continuing operations declined to 21.9% for the fourth quarter, from 27.1% for the third quarter 2013. The fourth quarter included a 1.4% rate reduction related to the other gains/(losses) and property, office and technology expenses referenced above. The impact of the inclusion of non-controlling interests in consolidated investment products (CIP) reduced our effective tax rate by 3.2 percentage points for the fourth quarter, compared to a reduction of 1.7 percentage points on our effective tax rate for the third quarter.

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 19 and 22, 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)



December 31,

2013


December 31,

2012


December 31,

2013


December 31,

2012

$ in millions









Cash and cash equivalents


$1,331.2



$835.5



$1,331.2



$835.5


Investments of CIP






4,734.7



4,550.6


Total assets(1)


$13,952.6



$12,640.9



$19,270.5



$17,492.4











Long-term debt


1,588.6



1,186.0



1,588.6



1,186.0


Debt of CIP






4,181.7



3,899.4


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


$1,588.6



$1,186.0



$5,770.3



$5,085.4











Total liabilities(1)


$5,649.7



$4,448.6



$10,293.2



$8,443.4











Total equity(1)


$8,302.9



$8,192.3



$8,977.3



$9,049.0











Debt/Equity % (1) (2)


19.1

%


14.5

%


64.3

%


56.2

%



(1)

The balance sheet line items excluding CIP are non-GAAP financial measures. See the reconciliation information on page 19 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 equity for the balance sheet information excluding CIP and long-term debt plus debt of CIP divided by total equity for the balance sheet including CIP.

 

As of December 31, 2013, the company's cash and cash equivalents were $1,331.2 million, with long-term debt of $1,588.6 million. The credit facility balance was zero at December 31, 2013, compared to $788.0 million at September 30, 2013 and $586.5 million at December 31, 2012.

On November 12, 2013, the company completed the issuance of senior notes with aggregate principal amounts of $600.0 million at 4.000% due January 30, 2024 and $400.0 million at 5.375% due November 30, 2043. The proceeds were used, in part, to repay the outstanding balance on the credit facility at that date. Separately on December 17, 2013, the company amended the existing $1.25 billion credit facility to extend its maturity to December 17, 2018.

During the fourth quarter the company repurchased $350.0 million of its common shares on the open market, representing 10.1 million shares at a weighted average share price of $34.64. The company repurchased $470.5 million of its common shares during 2013, representing 13.9 million shares at a weighted average price of $33.74.

Dividends paid in the fourth quarter were $100.5 million bringing total 2013 full-year cash dividends to $379.7 million. Today the company is announcing a fourth-quarter cash dividend of 22.5 cents per share to holders of common shares. The dividend is payable on March 7, 2014, to shareholders of record at the close of business on February 20, 2014, with an ex-dividend date of February 18, 2014.

Headcount

As of December 31, 2013, on a continuing operations basis, the company had 5,932 employees, compared to 5,864 employees as of September 30, 2013.

# # #

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, January 30, 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 Wednesday, February 12, 2014 at 5:00 p.m. ET by calling 1-866-400-9658 for U.S. and Canadian callers or 1-203-369-0550 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.

 

Invesco Ltd.

Non-GAAP Condensed Consolidated Income Statement Information

(Unaudited, in millions, other than per share amounts, headcount and AUM)



Q4-13


Q3-13


% Change


Q4-12


% Change

Adjusted revenues:










Investment management fees

$982.8



$938.0



4.8

%


$836.3



17.5

%

Service and distribution fees

230.1



220.7



4.3

%


199.5



15.3

%

Performance fees

11.1



8.5



30.6

%


3.6



208.3

%

Other

33.3



33.1



0.6

%


27.3



22.0

%

Third-party distribution, service and advisory

(400.0)



(383.9)



4.2

%


(336.1)



19.0

%

Net revenues

857.3



816.4



5.0

%


730.6



17.3

%

Adjusted operating expenses:










Employee compensation

332.3



328.3



1.2

%


320.3



3.7

%

Marketing

31.1



23.5



32.3

%


23.6



31.8

%

Property, office and technology

74.9



72.7



3.0

%


68.6



9.2

%

General and administrative

71.8



63.8



12.5

%


59.9



19.9

%

Total adjusted operating expenses

510.1



488.3



4.5

%


472.4



8.0

%

Adjusted operating income

347.2



328.1



5.8

%


258.2



34.5

%

Adjusted other income/(expense):










Equity in earnings of unconsolidated affiliates

5.0



7.5



(33.3)

%


2.8



78.6

%

Interest and dividend income

4.0



3.2



25.0

%


4.1



(2.4)

%

Interest expense

(15.2)



(9.7)



56.7

%


(12.7)



19.7

%

Other gains and losses, net

1.7



6.5



(73.8)

%


(0.4)



N/A

Other income/(loss) of CSIP, net

3.5



(0.6)



N/A




N/A

Adjusted income before income taxes

346.2



335.0



3.3

%


252.0



37.4

%

Adjusted income tax provision

(87.9)



(89.0)



(1.2)

%


(62.6)



40.4

%

Adjusted net income

258.3



246.0



5.0

%


189.4



36.4

%

Adjusted net (income)/loss attributable to noncontrolling

   interests in consolidated entities

(0.2)





N/A




N/A

Adjusted net income attributable to common

   shareholders

$258.1



$246.0



4.9

%


$189.4



36.3

%











Adjusted diluted EPS

$0.58



$0.55



5.5

%


$0.42



38.1

%

Average diluted shares outstanding

445.9



448.8



(0.6)

%


451.2



(1.2)

%











Ending headcount

5,932



5,864



1.2

%


5,889



0.7

%

Ending AUM (in billions)

$778.7



$745.5



4.5

%


$667.4



16.7

%

Average AUM (in billions)

$761.7



$729.4



4.4

%


$660.2



15.4

%

 

 

Invesco Ltd.

Non-GAAP Condensed Consolidated Income Statement Information

(Unaudited, in millions, other than per share amounts, headcount and AUM)



Year Ended December 31,





2013


2012


% Change

Adjusted revenues:






Investment management fees

$3,688.8



$3,210.0



14.9

%

Service and distribution fees

872.8



771.6



13.1

%

Performance fees

67.2



43.8



53.4

%

Other

121.1



110.8



9.3

%

Third-party distribution, service and advisory

(1,497.9)



(1,300.2)



15.2

%

Net revenues

3,252.0



2,836.0



14.7

%

Adjusted operating expenses:






Employee compensation

1,318.1



1,219.5



8.1

%

Marketing

102.0



103.3



(1.3)

%

Property, office and technology

282.3



262.6



7.5

%

General and administrative

257.5



238.5



8.0

%

Total adjusted operating expenses

1,959.9



1,823.9



7.5

%

Adjusted operating income

1,292.1



1,012.1



27.7

%

Adjusted other income/(expense):






Equity in earnings of unconsolidated affiliates

20.0



14.6



37.0

%

Interest and dividend income

14.5



19.8



(26.8)

%

Interest expense

(44.6)



(52.3)



(14.7)

%

Other gains and losses, net

7.0



9.8



(28.6)

%

Other income/(loss) of CSIP, net

2.9





N/A

Adjusted income before income taxes

1,291.9



1,004.0



28.7

%

Adjusted income tax provision

(340.8)



(255.4)



33.4

%

Adjusted net income

951.1



748.6



27.1

%

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

   consolidated entities

2.2





N/A

Adjusted net income attributable to common shareholders

$953.3



$748.6



27.3

%







Adjusted diluted EPS

$2.13



$1.65



29.1

%

Average diluted shares outstanding

448.5



453.8



(1.2)%








Ending headcount

5,932



5,889



0.7

%

Ending AUM (in billions)

$778.7



$667.4



16.7

%

Average AUM (in billions)

$725.6



$645.3



12.4

%

 

 

Invesco Ltd.

U.S. GAAP Condensed Consolidated Income Statements

(Unaudited, in millions, other than per share amounts)



Q4-13


Q3-13


% Change


Q4-12


% Change

Operating revenues:










Investment management fees

$955.1



$914.4



4.5

%


$818.2



16.7

%

Service and distribution fees

230.1



220.7



4.3

%


199.5



15.3

%

Performance fees

8.7



5.1



70.6

%


2.4



262.5

%

Other

31.2



31.6



(1.3)

%


26.6



17.3

%

Total operating revenues

1,225.1



1,171.8



4.5

%


1,046.7



17.0

%

Operating expenses:










Employee compensation

333.4



330.3



0.9

%


322.0



3.5

%

Third-party distribution, service and advisory

396.2



380.9



4.0

%


350.0



13.2

%

Marketing

30.0



22.6



32.7

%


23.1



29.9

%

Property, office and technology

85.8



71.9



19.3

%


70.1



22.4

%

General and administrative

86.4



80.1



7.9

%


73.4



17.7

%

Transaction and integration





N/A


2.6



N/A

Total operating expenses

931.8



885.8



5.2

%


841.2



10.8

%

Operating income

293.3



286.0



2.6

%


205.5



42.7

%

Other income/(expense):










Equity in earnings of unconsolidated affiliates

10.2



10.3



(1.0)

%


7.9



29.1

%

Interest and dividend income

3.3



2.4



37.5

%


2.7



22.2

%

Interest expense

(15.2)



(9.7)



56.7

%


(12.7)



19.7

%

Other gains and losses, net

(18.9)



3.4



N/A


(21.0)



(10.0)

%

Other income/(loss) of CSIP, net

3.5



(0.6)



N/A




N/A

Consolidated investment products (CIP):










Interest income of CIP

42.5



46.5



(8.6)

%


52.1



(18.4)

%

Interest expense of CIP

(26.5)



(33.5)



(20.9)

%


(33.9)



(21.8)

%

Other gains/(losses) of CIP, net

46.4



38.2



21.5

%


(27.8)



N/A

Income from continuing operations before income taxes

338.6



343.0



(1.3)

%


172.8



95.9

%

Income tax provision

(74.2)



(92.9)



(20.1)

%


(55.6)



33.5

%

Income from continuing operations, net of income taxes

264.4



250.1



5.7

%


117.2



125.6

%

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

66.4



(1.4)



N/A


10.8



N/A

Net income

330.8



248.7



33.0

%


128.0



158.4

%

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

   entities

(43.4)



(20.6)



110.7

%


30.7



N/A

Net income attributable to common shareholders

$287.4



$228.1



26.0

%


$158.7



81.1

%

Earnings per share:










---Basic EPS from continuing operations

$0.50



$0.51



(2.0)

%


$0.33



51.5

%

---Basic EPS from discontinued operations

$0.15





N/A


$0.02



N/A

---Total basic

$0.65



$0.51



27.5

%


$0.35



85.7

%











---Diluted EPS from continuing operations

$0.50



$0.51



(2.0)

%


$0.33



51.5

%

---Diluted EPS from discontinued operations

$0.15





N/A


$0.02



N/A

---Total diluted

$0.64



$0.51



25.5

%


$0.35



82.9

%











Average shares outstanding:










---basic

445.0



447.9



(0.6)

%


449.9



(1.1)

%

---diluted

445.9



448.8



(0.6)

%


451.2



(1.2)

%

 

 

Invesco Ltd.

U.S. GAAP Condensed Consolidated Income Statements

(Unaudited, in millions, other than per share amounts)



Year ended December 31,





2013


2012


% Change

Operating revenues:






Investment management fees

$3,599.6



$3,127.8



15.1

%

Service and distribution fees

872.8



771.6



13.1

%

Performance fees

55.9



41.4



35.0

%

Other

116.3



109.6



6.1

%

Total operating revenues

4,644.6



4,050.4



14.7

%

Operating expenses:






Employee compensation

1,329.3



1,228.0



8.2

%

Third-party distribution, service and advisory

1,489.2



1,308.2



13.8

%

Marketing

98.6



102.2



(3.5)%


Property, office and technology

292.8



265.1



10.4

%

General and administrative

311.3



296.1



5.1

%

Transaction and integration

3.2



8.2



(61.0)

%

Total operating expenses

3,524.4



3,207.8



9.9

%

Operating income

1,120.2



842.6



32.9

%

Other income/(expense):






Equity in earnings of unconsolidated affiliates

35.5



29.7



19.5

%

Interest and dividend income

10.0



9.8



2.0

%

Interest expense

(44.6)



(52.3)



(14.7)

%

Other gains and losses, net

2.6



8.3



(68.7)

%

Other income/(loss) of CSIP, net

2.9





N/A

Consolidated investment products (CIP):






Interest income of CIP

190.0



258.5



(26.5)

%

Interest expense of CIP

(123.3)



(168.3)



(26.7)

%

Other gains/(losses) of CIP, net

61.9



(97.7)



N/A

Income from continuing operations before income taxes

1,255.2



830.6



51.1

%

Income tax provision

(336.9)



(261.4)



28.9

%

Income from continuing operations, net of income taxes

918.3



569.2



61.3

%

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

64.5



18.1



256.4

%

Net income

982.8



587.3



67.3

%

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

   entities

(42.5)



89.8



N/A

Net income attributable to common shareholders

$940.3



$677.1



38.9

%

Earnings per share:






---Basic EPS from continuing operations

$1.96



$1.46



34.2

%

---Basic EPS from discontinued operations

$0.14



$0.04



250.0

%

---Total basic

$2.10



$1.50



40.0

%







---Diluted EPS from continuing operations

$1.95



$1.45



34.5

%

---Diluted EPS from discontinued operations

$0.14



$0.04



250.0

%

---Total diluted

$2.10



$1.49



40.9

%







Average shares outstanding:






---basic

447.5



452.3



(1.1)

%

---diluted

448.5



453.8



(1.2)

%

 

 

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 December 31, 2013




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


$955.1



$17.7



$—



$—



$—



$5.7



$4.3



$982.8


Service and distribution fees


230.1















230.1


Performance fees


8.7











2.4





11.1


Other


31.2



2.1













33.3


Third-party distribution, service

   and advisory




(3.8)



(396.2)











(400.0)


Total operating revenues reconciled to

   net revenues


1,225.1



16.0



(396.2)







8.1



4.3



857.3


Operating expenses:

















Employee compensation


333.4



7.6







(8.1)





(0.6)



332.3


Third-party distribution, service

   and advisory


396.2





(396.2)












Marketing


30.0



1.1













31.1


Property, office and technology


85.8



1.0











(11.9)



74.9


General and administrative


86.4



1.7





(5.8)





(10.3)



(0.2)



71.8


Transaction and integration

















Total operating expenses


931.8



11.4



(396.2)



(5.8)



(8.1)



(10.3)



(12.7)



510.1


Operating income reconciled to

   adjusted operating income


293.3



4.6





5.8



8.1



18.4



17.0



347.2


Other income/(expense):

















Equity in earnings of

   unconsolidated affiliates


10.2



(4.3)









(0.9)





5.0


Interest and dividend income


3.3



0.9







(1.0)



0.8





4.0


Interest expense


(15.2)















(15.2)


Other gains and losses, net


(18.9)









(10.8)



(0.2)



31.6



1.7


Other income/(loss) of CSIP, net


3.5















3.5


CIP:

















Interest income of CIP


42.5











(42.5)






Interest expense of CIP


(26.5)











26.5






Other gains/(losses) of CIP, net


46.4











(46.4)






Income from continuing operations

   before income taxes


338.6



1.2





5.8



(3.7)



(44.3)



48.6



346.2


Income tax provision


(74.2)



(1.2)





4.0



1.1





(17.6)



(87.9)


Income from continuing operations,

   net of income taxes


264.4







9.8



(2.6)



(44.3)



31.0



258.3


Income from discontinued operations,

   net of taxes


66.4







(66.4)










Net income


330.8







(56.6)



(2.6)



(44.3)



31.0



258.3


Net (income)/loss attributable to

   noncontrolling interests in

   consolidated entities


(43.4)











43.2





(0.2)


Net income attributable to common

   shareholders reconciled to adjusted

   net income attributable to common

   shareholders


$287.4



$—



$—



($56.6)



($2.6)



($1.1)



$31.0



$258.1


Operating margin


23.9

%








Adjusted operating margin





40.5

%

Average diluted shares outstanding


445.9









Average diluted shares

outstanding





445.9


Diluted EPS from continuing

   operations


$0.50










Adjusted diluted EPS



$0.58


Diluted EPS from discontinued

   operations


$0.15
















Diluted EPS


$0.64
















      See pages 23 through 26 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 September 30, 2013




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


$914.4



$15.0



$—



$—



$—



$8.6



$—



$938.0


Service and distribution fees


220.7















220.7


Performance fees


5.1











3.4





8.5


Other


31.6



1.5













33.1


Third-party distribution, service and

   advisory




(3.0)



(380.9)











(383.9)


Total operating revenues reconciled to

   net revenues


1,171.8



13.5



(380.9)







12.0





816.4


Operating expenses:

















Employee compensation


330.3



4.2







(6.5)





0.3



328.3


Third-party distribution, service and

   advisory


380.9





(380.9)












Marketing


22.6



0.9













23.5


Property, office and technology


71.9



0.9











(0.1)



72.7


General and administrative


80.1



1.2





(3.8)





(13.0)



(0.7)



63.8


Transaction and integration

















Total operating expenses


885.8



7.2



(380.9)



(3.8)



(6.5)



(13.0)



(0.5)



488.3


Operating income reconciled to

   adjusted operating income


286.0



6.3





3.8



6.5



25.0



0.5



328.1


Other income/(expense):

















Equity in earnings of

   unconsolidated affiliates


10.3



(5.0)









2.2





7.5


Interest and dividend income


2.4



0.8







(1.0)



1.0





3.2


Interest expense


(9.7)















(9.7)


Other gains and losses, net


3.4









(9.2)



11.8



0.5



6.5


Other income/(loss) of CSIP, net


(0.6)















(0.6)


CIP:

















Interest income of CIP


46.5











(46.5)






Interest expense of CIP


(33.5)











33.5






Other gains/(losses) of CIP, net


38.2











(38.2)






Income from continuing operations

   before income taxes


343.0



2.1





3.8



(3.7)



(11.2)



1.0



335.0


Income tax provision


(92.9)



(2.1)





5.0



1.2





(0.2)



(89.0)


Income from continuing operations,

   net of income taxes


250.1







8.8



(2.5)



(11.2)



0.8



246.0


Loss from discontinued operations, net

   of taxes


(1.4)







1.4










Net income


248.7







10.2



(2.5)



(11.2)



0.8



246.0


Net (income)/loss attributable to

   noncontrolling interests in

   consolidated entities


(20.6)











20.6






Net income attributable to common

   shareholders reconciled to adjusted

   net income attributable to common

   shareholders


$228.1



$—



$—



$10.2



($2.5)



$9.4



$0.8



$246.0



















Operating margin


24.4

%








Adjusted operating

margin





40.2

%


















Average diluted shares outstanding


448.8









Average diluted shares

outstanding





448.8



















Diluted EPS form continuing

   operations


$0.51










Adjusted diluted EPS



$0.55


Diluted EPS from discontinued

   operations

















Diluted EPS


$0.51
















      See pages 23 through 26 for notes to the reconciliation.