Invesco Reports Results for Three Months Ended June 30, 2013 Adjusted operating income increased 26.9% compared to Q2 2012

Adjusted operating margin improved to 39.3%

Adjusted diluted EPS of $0.50

Total Q2 shareholder return of capital of $176.7 million

ATLANTA, July 31, 2013 /PRNewswire/ -- Invesco Ltd. (NYSE: IVZ) today reported financial results for the three months ended June 30, 2013.

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

"Invesco's focus on delivering strong, long-term investment performance to our clients contributed to a 26.9% increase in operating income in the second quarter compared to the same period last year," said Martin L. Flanagan, president and CEO of Invesco.  "Strong investment performance and a continued focus on meeting client needs drove positive long-term net flows during the quarter and helped the firm strengthen its operating margin to 39.3% from 35.7% a year ago."


Q2-13


Q1-13


Q2-13 vs.

Q1-13


Q2-12


Q2-13 vs.

Q2-12


Adjusted Financial Measures(1, 2)











Net revenues

$790.3m


$788.0m


0.3

%


$685.9m


15.2

%


Operating income

$310.6m


$306.2m


1.4

%


$244.8m


26.9

%


Operating margin

39.3

%


38.9

%




35.7

%




Net income attributable to common

shareholders

$223.7m


$225.5m


(0.8)

%


$180.1m


24.2

%


Diluted EPS

$0.50



$0.50



%


$0.40



25.0

%













U.S. GAAP Financial Measures











Operating revenues(2)

$1,135.5m


$1,112.2m


2.1

%


$981.8m


15.7

%


Operating income(2)

$273.9m


$267.0m


2.6

%


$199.8m


37.1

%


Operating margin(2)

24.1

%


24.0

%




20.4

%




Net income attributable to common

shareholders

$202.6m


$222.2m


(8.8)

%


$153.9m


31.6

%


Diluted EPS

$0.45



$0.49



(8.2)

%


$0.34



32.4

%













Assets Under Management(2)











Ending AUM

$705.6bn


$707.7bn


(0.3)%



$627.6bn


12.4

%


Average AUM

$719.8bn


$691.6bn


4.1

%


$631.9bn


10.6

%


(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.

(2)   The company has adopted a discontinued operations presentation for the Atlantic Trust Private Wealth Management business as of June 30, 2013.  Amounts presented represent continuing operations and exclude Atlantic Trust Private Wealth Management.  Prior period amounts have been reclassified to conform with this presentation.

Assets Under Management

Total assets under management (AUM) at June 30, 2013, were $705.6 billion (March 31, 2013: $707.7 billion), a decrease of $2.1 billion during the second quarter. Total net inflows were $1.4 billion for the second quarter, as detailed below:

Summary of net flows (in billions)


Q2-13


Q1-13


Q2-12

Active


$0.1



$7.9



($3.4)


Passive


1.3



6.4



0.4


Long-term net flows


1.4



14.3



(3.0)


Invesco PowerShares QQQ


0.7



(0.4)



(2.1)


Money market


(0.7)



4.8



(3.4)


Total net flows


$1.4



$18.7



($8.5)









Net market losses led to a $1.3 billion decrease in AUM during the second quarter, compared to a $30.5 billion increase in the first quarter 2013. Foreign exchange rate movements led to a $2.2 billion decrease in AUM during the second quarter, compared to a $8.9 billion decrease in the first quarter 2013.

Average AUM during the second quarter were $719.8 billion, compared to $691.6 billion for the first quarter 2013, a 4.1% increase. 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. As described more fully in the Form 10-K for the year ended December 31, 2012, the company believes that the additional disclosure of non-GAAP earnings provides further transparency into the business 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.

U.S. GAAP earnings information reflects the presentation of Atlantic Trust Private Wealth Management as a discontinued operation.  Non-GAAP earnings information excludes the discontinued operation from both current and prior periods.

Non-GAAP Earnings

This section discusses the company's second quarter 2013 non-GAAP financial results, as compared to the first 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 10 through 12 of this release.

Net revenues increased by $2.3 million (0.3%) to $790.3 million in the second quarter, from $788.0 million in the first quarter 2013. The change was principally due to increases in investment management fees, offset by a decrease in performance fees. Foreign exchange rate changes decreased second quarter net revenues by $4.1 million when compared to the first quarter 2013.

Investment management fees, as adjusted, increased $42.4 million (4.9%) to $905.2 million in the second quarter, from $862.8 million in the first quarter 2013. The increase is in line with the higher average AUM.  Foreign exchange rate changes decreased second quarter management fees by $4.9 million when compared to first quarter 2013.

Service and distribution fees, as adjusted, increased $9.4 million (4.6%) to $215.7 million in the second quarter, from $206.3 million in the first quarter 2013, also reflecting the higher average AUM. Foreign exchange rate changes decreased second quarter service and distribution fees by $0.4 million when compared to first quarter 2013.

Performance fees, as adjusted, were $9.0 million in the second quarter, compared to $38.6 million in the first quarter 2013.  The second quarter performance fees were generated from a variety of products.  Foreign exchange rate changes decreased second quarter performance fees by $0.1 million when compared to first quarter 2013.

Other revenues, as adjusted, increased by $3.1 million (12.0%) to $28.9 million in the second quarter, compared to $25.8 million in the first quarter 2013, due to increased transaction fees from real estate fund activities.  Foreign exchange rate changes decreased second quarter other revenues by $0.2 million, when compared to first quarter 2013.

Third-party distribution, service and advisory expenses, as adjusted, increased by $23.0 million (6.7%) to $368.5 million in the second quarter from $345.5 million in the first quarter 2013, increasing with higher related management fees and service and distribution fees.  Foreign exchange rate changes decreased the second quarter third-party distribution, services and advisory expenses by $1.5 million.

Total operating expenses, as adjusted, decreased by $2.1 million (0.4%) to $479.7 million in the second quarter, from $481.8 million in the first quarter 2013. Foreign exchange rate changes decreased operating expenses, as adjusted, by $3.0 million when compared to the first quarter 2013.

Employee compensation expenses, as adjusted, decreased by $12.1 million (3.6%) to $322.7 million in the second quarter, from $334.8 million in the first quarter 2013.  The first quarter included seasonally higher payroll tax costs that decreased in the second quarter.  Staff costs also reduced during the second quarter as we completed the transfer of our European transfer agency processes to a third party provider. These expense reductions were partly offset by the impact of a full quarter of annual salary increases and share-based awards, both effective from March 1.   Foreign exchange rate changes decreased second quarter employee compensation expenses by $2.1 million when compared to the first quarter 2013.

Marketing expenses, as adjusted, increased by $1.2 million (5.2%) to $24.3 million in the second quarter, from $23.1 million in the first quarter 2013. Foreign exchange rate changes decreased second quarter marketing expenses by $0.1 million when compared to the first quarter 2013.

Property, office and technology expenses, as adjusted, increased $2.1 million (3.2%) to $68.4 million in the second quarter, from $66.3 million in the first quarter 2013, the second quarter including $1.4 million of additional expense from the outsourcing of our European transfer agency processes.  Foreign exchange rate changes decreased second quarter property, office and technology expenses by $0.4 million when compared to the first quarter 2013.

General and administrative expenses, as adjusted, increased $6.7 million (11.6%) to $64.3 million in the second quarter, from $57.6 million in the first quarter 2013. Professional services expenses account for $5.6 million of the increase.  The first quarter included a $2.5 million legal settlement credit while the second quarter includes additional costs associated with increased compliance and risk management in Europe and increased costs from new product development. Foreign exchange rate changes decreased second quarter general and administrative expenses by $0.4 million when compared to the first quarter 2013.

Non-operating other income and expenses, as adjusted, included equity in earnings from investments of $3.6 million in the second quarter, compared to $3.9 million in the first quarter 2013.   Other gains and losses, net in the second quarter were a loss of $0.7 million compared to a first quarter 2013 loss of $0.5 million. Interest expense, as adjusted, increased $0.3 million (3.1%) to $10.0 million in the second quarter, from $9.7 million in the first quarter 2013, reflecting higher average borrowings on the credit facility.  The effective tax rate increased to 27.1% for the second quarter, from 26.6% for the first quarter 2013, as the mix of profit has changed, reflecting a higher proportion from the U.S. and Continental Europe. 

U.S. GAAP Earnings

As previously announced, the company has entered into a definitive agreement to sell Atlantic Trust Private Wealth Management (Atlantic Trust) to Canadian Imperial Bank of Commerce (CIBC). The transaction is expected to close, subject to regulatory approval, in the second half of 2013.  As of June 30, 2013, Atlantic Trust has been classified in the balance sheet as held for sale and is reflected in the income statement as a discontinued operation for all periods presented.  As of June 30, 2013, Atlantic Trust total AUM were $21.7 billion.  A net loss of $4.6 million was recorded in the second quarter attributable to the discontinued operation, compared to a net profit of $4.1 million in the first quarter 2013. During the three months ended June 30, 2013, Atlantic Trust incurred costs of $13.9 million before tax ($8.9 million after tax) related to the pending transaction, as well as costs related to unauthorized personal transactions of a former employee of Atlantic Trust.  The commentary below relates to U.S GAAP earnings from continuing operations.

Operating revenues increased 2.1% to $1,135.5 million in the second quarter, from $1,112.2 million in the first quarter 2013. Operating expenses increased by 1.9% to $861.6 million in the second quarter, from $845.2 million in the first quarter 2013.

Operating expenses included $1.8 million of transaction and integration charges incurred in the second quarter relating to the remaining closed-end fund merger expenses associated with prior acquisitions.  Transaction and integration charges were $1.4 million in the first quarter 2013.  Transaction costs associated with the Atlantic Trust sale are included within the net results of the discontinued operation. Operating expenses for the second quarter also included $3.3 million of European infrastructure transformational initiative expenses, compared to $5.7 million for the first quarter.  General and administrative expenses in the first quarter included a charge of $3.0 million relating to the true-up of a prior year levy from the U.K. Financial Services Compensation Scheme.  Employee compensation expenses in the first quarter also included $2.4 million of employee severance expense associated with the cessation of activities related to a previous acquisition.

The effective tax rate on continuing operations declined to 28.6% for the second quarter, from 30.6% for the first quarter 2013.  The impact of the inclusion of non-controlling interests in consolidated investment products reduced our effective tax rate by 0.1 percentage points for the second quarter, compared to an increase of 2.3 percentage points on our effective tax rate for the first 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 consolidated investment products, along with a U.S. GAAP statement of cash flows and cash flow statement information excluding consolidated investment products.  The information presented excluding consolidated investment products 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 provide 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 consolidated investment products 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 Consolidated

Investment Products (CIP)

(Non-GAAP)(1)



Including Consolidated

Investment Products (CIP)

(U.S. GAAP)




June 30, 2013


December 31,

2012


June 30, 2013


December 31,

2012

$ in millions









Cash and cash equivalents


$916.2



$835.5



$916.2



$835.5


Investments of CIP






4,531.3



4,550.6


Total assets(1)


$13,205.0



$12,640.9



$18,138.6



$17,492.4











Current debt of CIP






206.0




Long-term debt


1,445.6



1,186.0



1,445.6



1,186.0


Long-term debt of CIP






3,838.3



3,899.4


Total debt / Total debt plus CIP debt


$1,445.6



$1,186.0



$5,489.9



$5,085.4











Total liabilities(1)


$5,132.1



$4,448.6



$9,384.6



$8,443.4











Total equity(1)


$8,072.9



$8,192.3



$8,754.0



$9,049.0











Debt/Equity % (1) (2)


17.9

%


14.5

%


62.7

%


56.2

%

(1)   The balance sheet line items excluding consolidated investment products are non-GAAP financial measures. See the reconciliation information on page 15 for a fully expanded balance sheet 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 total debt divided by total equity for the balance sheet excluding CIP and total debt plus debt of CIP divided by equity for the balance sheet including CIP.

As of June 30, 2013, the company's cash and cash equivalents were $916.2 million, with total debt of $1,445.6 million.  The credit facility balance was $846.0 million at June 30, 2013, compared to $915.0 million at March 31, 2013 and $586.5 million at December 31, 2012.

During the second quarter the company repurchased $75.5 million of its common shares, representing 2.2 million shares at a weighted average share price of $34.24.

Dividends paid in the second quarter were $101.2 million.  Today the company is announcing a second-quarter cash dividend of 22.5 cents per share to holders of common shares. The dividend is payable on September 6, 2013, to shareholders of record at the close of business on August 21, 2013.

Headcount

As of June 30, 2013, on a continuing operations basis, the company had 5,818 employees, compared to 5,894 employees as of March 31, 2013.  The company had 6,056 employees, compared to 6,132 employees as of March 31, 2013, including employees of Atlantic Trust. 

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, Wednesday, July 31, 2013, 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, August 14, 2013 at 5:00 p.m. ET by calling 1-800-944-1518 for U.S. and Canadian callers or 1-203-369-3416 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, AUM, 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. 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)



Q2-13


Q1-13


% Change


Q2-12


% Change

Adjusted revenues:










Investment management fees

$905.2



$862.8



4.9

%


$774.7



16.8

%

Service and distribution fees

215.7



206.3



4.6

%


187.1



15.3

%

Performance fees

9.0



38.6



(76.7)

%


15.7



(42.7)

%

Other

28.9



25.8



12.0

%


26.0



11.2

%

Third-party distribution, service and advisory

(368.5)



(345.5)



6.7

%


(317.6)



16.0

%

Net revenues

790.3



788.0



0.3

%


685.9



15.2

%











Adjusted operating expenses:










Employee compensation

322.7



334.8



(3.6)

%


290.2



11.2

%

Marketing

24.3



23.1



5.2

%


26.6



(8.6)

%

Property, office and technology

68.4



66.3



3.2

%


64.6



5.9

%

General and administrative

64.3



57.6



11.6

%


59.7



7.7

%

Total adjusted operating expenses

479.7



481.8



(0.4)

%


441.1



8.8

%











Adjusted operating income

310.6



306.2



1.4

%


244.8



26.9

%











Adjusted other income/(expense):










Equity in earnings of unconsolidated affiliates

3.6



3.9



(7.7)

%


5.5



(34.5)

%

Interest and dividend income

3.4



3.9



(12.8)

%


5.2



(34.6)

%

Interest expense

(10.0)



(9.7)



3.1

%


(13.4)



(25.4)

%

Other gains and losses, net

(0.7)



(0.5)



40.0

%


(1.7)



(58.8)

%

Adjusted income before income taxes

306.9



303.8



1.0

%


240.4



27.7

%

Adjusted income tax provision

(83.2)



(80.7)



3.1

%


(60.3)



38.0

%

Adjusted net income

223.7



223.1



0.3

%


180.1



24.2

%

Adjusted net (income)/loss attributable to

noncontrolling interests in consolidated entities



2.4



N/A





%

Adjusted net income attributable to common

shareholders

$223.7



$225.5



(0.8)

%


$180.1



24.2

%











Adjusted diluted EPS

$0.50



$0.50



%


$0.40



25.0

%











Average diluted shares outstanding

450.1



449.0



0.2

%


455.3



(1.1)

%











Ending Headcount

5,818



5,894



(1.3)

%


5,899



(1.4)

%











Ending AUM (in billions)

$705.6



$707.7



(0.3)

%


$627.6



12.4

%











Average AUM (in billions)

$719.8



$691.6



4.1

%


$631.9



13.9

%

 

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



Q2-13


Q1-13


% Change


Q2-12


% Change

Operating revenues:










Investment management fees

$885.5



$844.6



4.8

%


$753.2



17.6

%

Service and distribution fees

215.7



206.3



4.6

%


187.1



15.3

%

Performance fees

6.0



36.1



(83.4)

%


15.6



(61.5)

%

Other

28.3



25.2



12.3

%


25.9



9.3

%

Total operating revenues

1,135.5



1,112.2



2.1

%


981.8



15.7

%











Operating expenses:










Employee compensation

324.1



341.5



(5.1)

%


288.3



12.4

%

Third-party distribution, service and advisory

366.0



346.1



5.7

%


315.6



16.0

%

Marketing

23.8



22.2



7.2

%


26.4



(9.8)

%

Property, office and technology

68.6



66.5



3.2

%


65.3



5.1

%

General and administrative

77.3



67.5



14.5

%


85.3



(9.4)

%

Transaction and integration

1.8



1.4



28.6

%


1.1



63.6

%

Total operating expenses

861.6



845.2



1.9

%


782.0



10.2

%











Operating income

273.9



267.0



2.6

%


199.8



37.1

%











Other income/(expense):










Equity in earnings of unconsolidated affiliates

6.9



8.1



(14.8)

%


6.9



%

Interest and dividend income

2.1



2.2



(4.5)

%


2.2



(4.5)

%

Interest income of consolidated investment products

50.7



50.3



0.8

%


68.7



(26.2)

%

Other gains/(losses) of consolidated investment products,

net

(1.6)



(21.1)



(92.4)

%


77.2



N/A


Interest expense

(10.0)



(9.7)



3.1

%


(13.4)



(25.4)

%

Interest expense of consolidated investment products

(30.6)



(32.7)



(6.4)

%


(46.9)



(34.8)

%

Other gains and losses, net

0.4



17.7



(97.7)

%


(7.7)



N/A


Income from continuing operations before income taxes

291.8



281.8



3.5

%


286.8



1.7

%

Income tax provision

(83.5)



(86.3)



(3.2)

%


(61.2)



36.4

%

Income from continuing operations, net of income taxes

208.3



195.5



6.5

%


225.6



(7.7)

%

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

(4.6)



4.1



N/A



2.0



N/A


Net income

203.7



199.6



2.1

%


227.6



(10.5)

%

Net (income)/loss attributable to noncontrolling interests

in consolidated entities

(1.1)



22.6



N/A



(73.7)



(98.5)

%

Net income attributable to common shareholders

$202.6



$222.2



(8.8)

%


$153.9



31.6

%











Earnings per share:










---Basic EPS from continuing operations

$0.46



$0.49



(6.1)

%


$0.33



39.4

%

---Basic EPS from discontinued operations

($0.01)



$0.01



N/A





N/A


---Total basic

$0.45



$0.50



(10.0)

%


$0.34



32.4

%











---Diluted EPS from continuing operations

$0.46



$0.49



(6.1)

%


$0.33



39.4

%

---Diluted EPS from discontinued operations

($0.01)



$0.01



N/A





N/A


---Total diluted

$0.45



$0.49



(8.2)

%


$0.34



32.4

%











Average shares outstanding:










---basic

449.1



447.8



0.3

%


453.8



(1.0)

%

---diluted

450.1



449.0



0.2

%


455.3



(1.1)

%

 


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



Six months ended June 30,




2013


2012


% Change

Operating revenues:






Investment management fees

$1,730.1



$1,519.0



13.9

%

Service and distribution fees

422.0



376.1



12.2

%

Performance fees

42.1



36.0



16.9

%

Other

53.5



58.7



(8.9)

%

Total operating revenues

2,247.7



1,989.8



13.0

%







Operating expenses:






Employee compensation

665.6



590.8



12.7

%

Third-party distribution, service and advisory

712.1



632.0



12.7

%

Marketing

46.0



52.8



(12.9)

%

Property, office and technology

135.1



128.9



4.8

%

General and administrative

144.8



156.5



(7.5)

%

Transaction and integration

3.2



2.6



23.1

%

Total operating expenses

1,706.8



1,563.6



9.2

%







Operating income

540.9



426.2



26.9

%







Other income/(expense):






Equity in earnings of unconsolidated affiliates

15.0



16.6



(9.6)

%

Interest and dividend income

4.3



4.6



(6.5)

%

Interest income of consolidated investment products

101.0



137.7



(26.7)

%

Other gains/(losses) of consolidated investment products, net

(22.7)



(44.7)



(49.2)

%

Interest expense

(19.7)



(27.0)



(27.0)

%

Interest expense of consolidated investment products

(63.3)



(92.5)



(31.6)

%

Other gains and losses, net

18.1



10.9



66.1

%

Income from continuing operations before income taxes

573.6



431.8



32.8

%

Income tax provision

(169.8)



(133.5)



27.2

%

Income from continuing operations, net of income taxes

403.8



298.3



35.4

%

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

(0.5)



4.1



N/A


Net income

403.3



302.4



33.4

%

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

entities

21.5



45.4



(52.6)

%

Net income attributable to common shareholders

$424.8



$347.8



22.1

%







Earnings per share:






---Basic EPS from continuing operations

$0.95



$0.76



25.0

%

---Basic EPS from discontinued operations

$—



$0.01



(100.0)

%

---Total basic

$0.95



$0.77



23.4

%







---Diluted EPS from continuing operations

$0.95



$0.75



26.7

%

---Diluted EPS from discontinued operations

$—



$0.01



N/A


---Total diluted

$0.94



$0.76



23.7

%







Average shares outstanding:






---basic

448.5



454.0



(1.2)%

%

---diluted

449.6



455.6



(1.3)%

%

 

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, 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


Consolidated investment products


Other

reconciling items


Non-GAAP basis


















Operating revenues:

















Investment management fees


$885.5



$13.3



$—



$—



$—



$6.4



$—



$905.2


Service and distribution fees


215.7















215.7


Performance fees


6.0











3.0





9.0


Other


28.3



1.0









(0.4)





28.9


Third-party distribution, service and

advisory




(2.5)



(366.0)











(368.5)


Total operating revenues reconciled to

net revenues


1,135.5



11.8



(366.0)







9.0





790.3



















Operating expenses:

















Employee compensation


324.1



2.5







(3.0)





(0.9)



322.7


Third-party distribution, service and

advisory


366.0





(366.0)












Marketing


23.8



0.6











(0.1)



24.3


Property, office and technology


68.6



0.9











(1.1)



68.4


General and administrative


77.3



1.3





(3.8)





(9.3)



(1.2)



64.3


Transaction and integration


1.8







(1.8)










Total operating expenses


861.6



5.3



(366.0)



(5.6)



(3.0)



(9.3)



(3.3)



479.7



















Operating income reconciled to

adjusted operating income


273.9



6.5





5.6



3.0



18.3



3.3



310.6



















Other income/(expense):

















Equity in earnings of unconsolidated

affiliates


6.9



(4.1)









0.8





3.6


Interest and dividend income


2.1



0.6







(1.1)



1.8





3.4


Interest income of consolidated

investment products


50.7











(50.7)






Other gains/(losses) of consolidated

investment products, net


(1.6)











1.6






Interest expense


(10.0)















(10.0)


Interest expense of consolidated

investment products


(30.6)











30.6






Other gains and losses, net


0.4









(0.5)





(0.6)



(0.7)


Income from continuing operations

before income taxes


291.8



3.0





5.6



1.4



2.4



2.7



306.9


Income tax provision


(83.5)



(3.0)





4.2



(0.4)





(0.5)



(83.2)


Income from continuing operations, net

of income taxes


208.3







9.8



1.0



2.4



2.2



223.7


Loss from discontinued operations, net

of taxes


(4.6)







4.6










Net income


203.7







14.4



1.0



2.4



2.2



223.7


Net (income)/loss attributable to

noncontrolling interests in

consolidated entities


(1.1)











1.1






Net income attributable to common

shareholders reconciled to adjusted

net income attributable to common

shareholders


$202.6



$—



$—



$14.4



$1.0



$3.5



$2.2



$223.7



















Operating margin


24.1

%









Adjusted operating margin



39.3

%


















Average diluted shares outstanding


450.1










Average diluted shares outstanding



450.1



















Diluted EPS from continuing

operations


$0.46










Adjusted diluted EPS



$0.50


Diluted EPS from discontinued

operations


($0.01)
















Diluted EPS


$0.45
















See pages 19 through 21 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, 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


Consolidated investment products


Other

reconciling items


Non-GAAP basis


















Operating revenues:

















Investment management fees


$844.6



$11.9



$—



$—



$—



$6.3



$—



$862.8


Service and distribution fees


206.3















206.3


Performance fees


36.1











2.5





38.6


Other


25.2



0.6













25.8


Third-party distribution, service and

advisory




(2.1)



(346.1)









2.7



(345.5)


Total operating revenues reconciled to

net revenues


1,112.2



10.4



(346.1)







8.8



2.7



788.0



















Operating expenses:

















Employee compensation


341.5



3.6





(2.4)



(7.5)





(0.4)



334.8


Third-party distribution, service and

advisory


346.1





(346.1)












Marketing


22.2



1.0











(0.1)



23.1


Property, office and technology


66.5



0.7











(0.9)



66.3


General and administrative


67.5



1.2





(4.0)





(2.5)



(4.6)



57.6


Transaction and integration


1.4







(1.4)










Total operating expenses


845.2



6.5



(346.1)



(7.8)



(7.5)



(2.5)



(6.0)



481.8



















Operating income reconciled to

adjusted operating income


267.0



3.9





7.8



7.5



11.3



8.7



306.2



















Other income/(expense):

















Equity in earnings of unconsolidated

affiliates


8.1



(4.6)









0.4





3.9


Interest and dividend income


2.2



0.7







(0.9)



1.9





3.9


Interest income of consolidated

investment products


50.3











(50.3)






Other gains/(losses) of consolidated

investment products, net


(21.1)











21.1






Interest expense


(9.7)















(9.7)


Interest expense of consolidated

investment products


(32.7)











32.7






Other gains and losses, net


17.7









(18.0)





(0.2)



(0.5)


Income from continuing operations

before income taxes


281.8







7.8



(11.4)



17.1



8.5



303.8


Income tax provision


(86.3)







4.5



2.9





(1.8)



(80.7)


Income from continuing operations, net

of income taxes


195.5







12.3



(8.5)



17.1



6.7



223.1


Income from discontinued operations,

net of taxes


4.1







(4.1)










Net income


199.6







8.2



(8.5)



17.1



6.7



223.1


Net (income)/loss attributable to

noncontrolling interests in

consolidated entities


22.6











(20.2)





2.4


Net income attributable to common

shareholders reconciled to adjusted

net income attributable to common

shareholders


$222.2



$—



$—



$8.2



($8.5)



($3.1)



$6.7



$225.5



















Operating margin


24.0

%









Adjusted operating margin



38.9

%


















Average diluted shares outstanding


449.0










Average diluted shares outstanding



449.0



















Diluted EPS form continuing

operations


$0.49










Adjusted diluted EPS



$0.50


Diluted EPS from discontinued

operations


$0.01
















Diluted EPS


$0.49
















See pages 19 through 21 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 June 30, 2012




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


Consolidated investment products


Other

reconciling items


Non-GAAP basis


















Operating revenues:

















Investment management fees


$753.2



$11.1



$—



$—



$—



$10.4



$—



$774.7


Service and distribution fees


187.1















187.1


Performance fees


15.6











0.1





15.7


Other


25.9



0.1













26.0


Third-party distribution, service and

advisory




(2.0)



(315.6)











(317.6)


Total operating revenues reconciled to

net revenues


981.8



9.2



(315.6)







10.5





685.9



















Operating expenses:

















Employee compensation


288.3



2.9







0.2





(1.2)



290.2


Third-party distribution, service and

advisory


315.6





(315.6)












Marketing


26.4



0.8











(0.6)



26.6


Property, office and technology


65.3



0.8











(1.5)



64.6


General and administrative


85.3



1.2





(9.6)





(14.7)



(2.5)



59.7


Transaction and integration


1.1







(1.1)










Total operating expenses


782.0



5.7



(315.6)



(10.7)



0.2



(14.7)



(5.8)



441.1



















Operating income reconciled to

adjusted operating income


199.8



3.5





10.7



(0.2)



25.2



5.8



244.8



















Other income/(expense):

















Equity in earnings of unconsolidated

affiliates


6.9



(4.2)









2.8





5.5


Interest and dividend income


2.2



0.7







(1.2)



3.5





5.2


Interest income of consolidated

investment products


68.7











(68.7)






Other gains/(losses) of consolidated

investment products, net


77.2











(77.2)






Interest expense


(13.4)















(13.4)


Interest expense of consolidated

investment products


(46.9)











46.9






Other gains and losses, net


(7.7)









5.0





1.0



(1.7)


Income from continuing operations before income taxes


286.8







10.7



3.6



(67.5)



6.8



240.4


Income tax provision


(61.2)







3.8



(1.2)





(1.7)



(60.3)


Income from continuing operations, net of income taxes


225.6







14.5



2.4



(67.5)



5.1



180.1


Income from discontinued operations, net of taxes


2.0







(2.0)










Net income


227.6







12.5



2.4



(67.5)



5.1



180.1


Net (income)/loss attributable to

noncontrolling interests in

consolidated entities


(73.7)











73.7






Net income attributable to common

shareholders reconciled to adjusted

net income attributable to common

shareholders


$153.9



$—



$—



$12.5



$2.4



$6.2



$5.1



$180.1



















Operating margin


20.4

%








Adjusted operating margin





35.7

%


















Average diluted shares outstanding


455.3









Average diluted shares outstanding





455.3



















Diluted EPS form continuing

operations


$0.33









Adjusted diluted EPS





$0.40


Diluted EPS from discontinued

operations


$—
















Diluted EPS


$0.34