Invesco Reports Results for Three Months Ended September 30, 2013 Total net inflows of $9.1 billion in Q3 2013

Adjusted operating margin improved to 40.2%

Adjusted diluted EPS of $0.55

$1.5 billion of additional share repurchases authorized by the Board

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

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

"By delivering consistent, long-term investment performance to our clients, we saw strong, total net inflows of $9.1 billion across a broad range of capabilities during the third quarter," said Martin L. Flanagan, president and CEO of Invesco. "The broad diversity of flows and strong investment performance during the quarter further contributed to the firm's operating margin of 40.2% - an increase of 5.7 percentage points from a year ago."

 


Q3-13


Q2-13


Q3-13 vs.
Q2-13


Q3-12


Q3-13 vs. Q3-12


Adjusted Financial Measures(1, 2)











Net revenues

$816.4m


$790.3m


3.3

%


$708.2m


15.3

%


Operating income

$328.1m


$310.6m


5.6

%


$244.3m


34.3

%


Operating margin

40.2

%


39.3

%




34.5

%




Net income attributable to common shareholders

$246.0m


$223.7m


10.0

%


$182.7m


34.6

%


Diluted EPS

$0.55



$0.50



10.0

%


$0.40



37.5

%













U.S. GAAP Financial Measures











Operating revenues(2)

$1,171.8m


$1,135.5m


3.2

%


$1,013.9m


15.6

%


Operating income(2)

$286.0m


$273.9m


4.4

%


$210.9m


35.6

%


Operating margin(2)

24.4

%


24.1

%




20.8

%




Net income attributable to common shareholders

$228.1m


$202.6m


12.6

%


$170.6m


33.7

%


Diluted EPS

$0.51



$0.45



13.3

%


$0.38



34.2

%













Assets Under Management(2)











Ending AUM

$745.5bn


$705.6bn


5.7

%


$663.0bn


12.4

%


Average AUM

$729.4bn


$719.8bn


1.3

%


$648.5bn


12.5

%


(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. 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 September 30, 2013, were $745.5 billion (June 30, 2013: $705.6 billion), an increase of $39.9 billion during the third quarter. Total net inflows were $9.1 billion for the third quarter, as detailed below:

 

Summary of net flows (in billions)


Q3-13


Q2-13


Q3-12

Active


$4.8



$0.1



$3.3


Passive


0.2



1.3



5.2


Long-term net flows


5.0



1.4



8.5


Invesco PowerShares QQQ


0.8



0.7



0.6


Money market


3.3



(0.7)



2.3


Total net flows


$9.1



$1.4



$11.4









Net market gains led to a $22.4 billion increase in AUM during the third quarter, compared to a $1.3 billion decrease in the second quarter 2013. Foreign exchange rate movements led to an $8.4 billion increase in AUM during the third quarter, compared to a $2.2 billion decrease in the second quarter 2013.

Average AUM during the third quarter were $729.4 billion, compared to $719.8 billion for the second quarter 2013, an increase of 1.3%. All AUM amounts quoted above exclude the AUM of the discontinued operation. Further analysis is included in the supplementary schedules to this release.

Recent Developments

On October 15, 2013 the company announced that the Head of U.K. Equities, Neil Woodford, will be leaving on April 29, 2014. Mr. Woodford will remain responsible for all funds for which he is the named manager through a transition period during the six months prior to his departure. At the end of the transition, Mark Barnett will succeed Mr. Woodford as Head of U.K. Equities.

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 ("Atlantic Trust") 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 third quarter 2013 non-GAAP financial results, as compared to the second 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 $26.1 million (3.3%) to $816.4 million in the third quarter, from $790.3 million in the second quarter 2013. The change was principally due to increases in investment management fees. Foreign exchange rate changes increased third quarter net revenues by $4.9 million when compared to the second quarter 2013.

Investment management fees, as adjusted, increased $32.8 million (3.6%) to $938.0 million in the third quarter, from $905.2 million in the second quarter 2013. The increase reflects the higher average AUM together with increasing revenue yields as the average AUM weighting moved towards higher fee-earning asset classes. Foreign exchange rate changes increased third quarter management fees by $6.4 million when compared to second quarter 2013.

Service and distribution fees, as adjusted, increased $5.0 million (2.3%) to $220.7 million in the third quarter, from $215.7 million in the second quarter 2013, also reflecting the higher average AUM. Foreign exchange rate changes increased third quarter service and distribution fees by $0.5 million when compared to second quarter 2013.

Performance fees, as adjusted, were $8.5 million in the third quarter, compared to $9.0 million in the second quarter 2013. Foreign exchange rate changes had no impact on performance fees in the third quarter when compared to the second quarter 2013.

Other revenues, as adjusted, increased by $4.2 million (14.5%) to $33.1 million in the third quarter, compared to $28.9 million in the second quarter 2013, due to increased transaction fees from real estate fund activities. Foreign exchange rate changes increased third quarter other revenues by $0.1 million, when compared to second quarter 2013.

Third-party distribution, service and advisory expenses, as adjusted, increased by $15.4 million (4.2%) to $383.9 million in the third quarter from $368.5 million in the second quarter 2013, increasing with higher related retail management fees and service and distribution fees. Foreign exchange rate changes increased the third quarter third-party distribution, services and advisory expenses by $2.1 million.

Total operating expenses, as adjusted, increased by $8.6 million (1.8%) to $488.3 million in the third quarter, from $479.7 million in the second quarter 2013. Foreign exchange rate changes increased operating expenses, as adjusted, by $1.4 million when compared to the second quarter 2013.

Employee compensation expenses, as adjusted, increased by $5.6 million (1.7%) to $328.3 million in the third quarter, from $322.7 million in the second quarter 2013. The increase reflected higher variable compensation expense that was partly offset by lower sales commissions, seasonally lower payroll tax and retirement costs, and a full quarter of staff cost reductions associated with the transfer of our European transfer agency processes to a third party provider. Foreign exchange rate changes increased third quarter employee compensation expenses by $0.8 million when compared to the second quarter 2013.

Marketing expenses, as adjusted, decreased by $0.8 million (3.3%) to $23.5 million in the third quarter, from $24.3 million in the second quarter 2013. Foreign exchange rate changes increased third quarter marketing expenses by $0.1 million when compared to the second quarter 2013.

Property, office and technology expenses, as adjusted, increased $4.3 million (6.3%) to $72.7 million in the third quarter, from $68.4 million in the second quarter 2013, with the third quarter including a full quarter of additional expense from the outsourcing of our European transfer agency processes together with increased technology systems investment expenses. Foreign exchange rate changes increased third quarter property, office and technology expenses by $0.2 million when compared to the second quarter 2013.

General and administrative expenses, as adjusted, decreased $0.5 million (0.8%) to $63.8 million in the third quarter, from $64.3 million in the second quarter 2013. Foreign exchange rate changes increased third quarter general and administrative expenses by $0.3 million when compared to the second quarter 2013.

Non-operating other income and expenses, as adjusted, included equity in earnings from investments of $7.5 million in the third quarter, compared to $3.6 million in the second quarter 2013. Other gains and losses, net in the third quarter were a gain of $5.8 million compared to a second quarter 2013 loss of $0.7 million. The third quarter included a realized co-investment gain following the liquidation of a CLO product during the quarter. Interest expense, as adjusted, decreased $0.3 million (3.0%) to $9.7 million in the third quarter, from $10.0 million in the second quarter 2013, reflecting lower average borrowings on the credit facility.

The effective tax rate decreased to 26.6% for the third quarter, from 27.1% for the second quarter 2013.  The second quarter incorporated a change in the mix of income before tax, 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 to Canadian Imperial Bank of Commerce (CIBC). The transaction is expected to close, subject to regulatory approval, in the fourth quarter of 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 September 30, 2013, Atlantic Trust total AUM were $22.8 billion. A net loss of $1.4 million was recorded in the third quarter attributable to the discontinued operation, compared to a net loss of $4.6 million in the second quarter 2013. During the three months ended September 30, 2013, Atlantic Trust incurred costs of $10.1 million before tax ($6.5 million after tax) related to the pending transaction, as well as costs related to unauthorized personal transactions of a former employee of Atlantic Trust. This compares to incurred costs of $13.9 million before tax ($8.9 million after tax) during the three months ended June 30, 2013. The commentary below relates to U.S GAAP earnings from continuing operations.

Operating revenues increased 3.2% to $1,171.8 million in the third quarter, from $1,135.5 million in the second quarter 2013. Operating expenses increased by 2.8% to $885.8 million in the third quarter, from $861.6 million in the second quarter 2013.

Operating expenses for the third quarter included $0.5 million of European infrastructure transformational initiative expenses, compared to $3.3 million for the second quarter.

The effective tax rate on continuing operations declined to 27.1% for the third quarter, from 28.6% for the second quarter 2013. The impact of the inclusion of non-controlling interests in consolidated investment products (CIP) reduced our effective tax rate by 1.7 percentage points for the third quarter, compared to a reduction of 0.1 percentage points on our effective tax rate for the second 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 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)




September 30, 2013


December 31, 2012


September 30, 2013


December 31, 2012

$ in millions









Cash and cash equivalents


$1,174.5



$835.5



$1,174.5



$835.5


Investments of CIP






4,514.6



4,550.6


Total assets(1)


$13,824.2



$12,640.9



$18,763.5



$17,492.4











Long-term debt


1,387.6



1,186.0



1,387.6



1,186.0


Debt of CIP






4,003.1



3,899.4


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


$1,387.6



$1,186.0



$5,390.7



$5,085.4











Total liabilities(1)


$5,390.0



$4,448.6



$9,644.1



$8,443.4











Total equity(1)


$8,434.2



$8,192.3



$9,119.4



$9,049.0











Debt/Equity % (1) (2)


16.5

%


14.5

%


59.1

%


56.2

%

(1)   The balance sheet line items excluding CIP 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 long-term debt divided by total equity for the balance sheet excluding CIP and long-term debt plus debt of CIP divided by total equity for the balance sheet including CIP.

 

As of September 30, 2013, the company's cash and cash equivalents were $1,174.5 million, with long-term debt of $1,387.6 million. The credit facility balance was $788.0 million at September 30, 2013, compared to $846.0 million at June 30, 2013 and $586.5 million at December 31, 2012.

During the third quarter the company did not repurchase any of its common shares on the open market. On October 11, 2013, the company's board of directors authorized an additional $1.5 billion for the existing share repurchase program with no stated expiration date.

Dividends paid in the third quarter were $100.8 million. Today the company is announcing a third-quarter cash dividend of 22.5 cents per share to holders of common shares. The dividend is payable on December 9, 2013, to shareholders of record at the close of business on November 19, 2013, with an ex-dividend date of November 15, 2013.

Headcount

As of September 30, 2013, on a continuing operations basis, the company had 5,864 employees, compared to 5,818 employees as of June 30, 2013. The company had 6,115 employees, compared to 6,056 employees as of June 30, 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, Thursday, October 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 Thursday, November 14, 2013 at 5:00 p.m. ET by calling 1-866-515-1613 for U.S. and Canadian callers or 1-203-369-2023 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)

 


Q3-13


Q2-13


% Change


Q3-12


% Change

Adjusted revenues:










Investment management fees

$938.0



$905.2



3.6

%


$812.5



15.4

%

Service and distribution fees

220.7



215.7



2.3

%


196.0



12.6

%

Performance fees

8.5



9.0



(5.6)

%


3.4



150.0

%

Other

33.1



28.9



14.5

%


24.4



35.7

%

Third-party distribution, service and advisory

(383.9)



(368.5)



4.2

%


(328.1)



17.0

%

Net revenues

816.4



790.3



3.3

%


708.2



15.3

%











Adjusted operating expenses:










Employee compensation

328.3



322.7



1.7

%


312.0



5.2

%

Marketing

23.5



24.3



(3.3)

%


26.4



(11.0)

%

Property, office and technology

72.7



68.4



6.3

%


66.3



9.7

%

General and administrative

63.8



64.3



(0.8)

%


59.2



7.8

%

Total adjusted operating expenses

488.3



479.7



1.8

%


463.9



5.3

%











Adjusted operating income

328.1



310.6



5.6

%


244.3



34.3

%











Adjusted other income/(expense):










Equity in earnings of unconsolidated affiliates

7.5



3.6



108.3

%


1.6



N/A

Interest and dividend income

3.3



3.4



(2.9)

%


5.0



(34.0)

%

Interest expense

(9.7)



(10.0)



(3.0)

%


(12.6)



(23.0)

%

Other gains and losses, net

5.8



(0.7)



N/A


9.5



(38.9)

%

Adjusted income before income taxes

335.0



306.9



9.2

%


247.8



35.2

%

Adjusted income tax provision

(89.0)



(83.2)



7.0

%


(65.1)



36.7

%

Adjusted net income

246.0



223.7



10.0

%


182.7



34.6

%

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





N/A




N/A

Adjusted net income attributable to common shareholders

$246.0



$223.7



10.0

%


$182.7



34.6

%











Adjusted diluted EPS

$0.55



$0.50



10.0

%


$0.40



37.5

%

Average diluted shares outstanding

448.8



450.1



(0.3)

%


452.8



(0.9)

%











Ending headcount

5,864



5,818



0.8

%


5,861



0.1

%

Ending AUM (in billions)

$745.5



$705.6



5.7

%


$663.0



12.4

%

Average AUM (in billions)

$729.4



$719.8



1.3

%


$648.5



12.5

%

 

 

 


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

 

 


Q3-13


Q2-13


% Change


Q3-12


% Change

Operating revenues:










Investment management fees

$914.4



$885.5



3.3

%


$790.6



15.7

%

Service and distribution fees

220.7



215.7



2.3

%


196.0



12.6

%

Performance fees

5.1



6.0



(15.0)

%


3.0



70.0

%

Other

31.6



28.3



11.7

%


24.3



30.0

%

Total operating revenues

1,171.8



1,135.5



3.2

%


1,013.9



15.6

%











Operating expenses:










Employee compensation

330.3



324.1



1.9

%


315.2



4.8

%

Third-party distribution, service and advisory

380.9



366.0



4.1

%


326.2



16.8

%

Marketing

22.6



23.8



(5.0)%



26.3



(14.1)

%

Property, office and technology

71.9



68.6



4.8

%


66.1



8.8

%

General and administrative

80.1



77.3



3.6

%


66.2



21.0

%

Transaction and integration



1.8



N/A


3.0



N/A

Total operating expenses

885.8



861.6



2.8

%


803.0



10.3

%











Operating income

286.0



273.9



4.4

%


210.9



35.6

%











Other income/(expense):










Equity in earnings of unconsolidated affiliates

10.3



6.9



49.3

%


5.2



98.1

%

Interest and dividend income

2.5



2.1



19.0

%


2.5



%

Interest expense

(9.7)



(10.0)



(3.0)

%


(12.6)



(23.0)

%

Other gains and losses, net

2.7



0.4



N/A


18.4



(85.3)

%

Consolidated investment products (CIP):










Interest income of CIP

46.5



50.7



(8.3)

%


68.7



(32.3)

%

Interest expense of CIP

(33.5)



(30.6)



9.5

%


(41.9)



(20.0)

%

Other gains/(losses) of CIP, net

38.2



(1.6)



N/A


(25.2)



N/A

Income from continuing operations before income taxes

343.0



291.8



17.5

%


226.0



51.8

%

Income tax provision

(92.9)



(83.5)



11.3

%


(72.3)



28.5

%

Income from continuing operations, net of income taxes

250.1



208.3



20.1

%


153.7



62.7

%

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

(1.4)



(4.6)



(69.6)

%


3.2



N/A

Net income

248.7



203.7



22.1

%


156.9



58.5

%

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

(20.6)



(1.1)



N/A


13.7



N/A

Net income attributable to common shareholders

$228.1



$202.6



12.6

%


$170.6



33.7

%











Earnings per share:










---Basic EPS from continuing operations

$0.51



$0.46



10.9

%


$0.37



37.8

%

---Basic EPS from discontinued operations



($0.01)



N/A


$0.01



N/A

---Total basic

$0.51



$0.45



13.3

%


$0.38



34.2

%











---Diluted EPS from continuing operations

$0.51



$0.46



10.9

%


$0.37



37.8

%

---Diluted EPS from discontinued operations



($0.01)



N/A


$0.01



N/A

---Total diluted

$0.51



$0.45



13.3

%


$0.38



34.2

%











Average shares outstanding:










---basic

447.9



449.1



(0.3)

%


451.3



(0.8)

%

---diluted

448.8



450.1



(0.3)

%


452.8



(0.9)

%

 

 

 

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

 



Nine months ended September 30,





2013


2012


% Change

Operating revenues:






Investment management fees

$2,644.5



$2,309.6



14.5

%

Service and distribution fees

642.7



572.1



12.3

%

Performance fees

47.2



39.0



21.0

%

Other

85.1



83.0



2.5

%

Total operating revenues

3,419.5



3,003.7



13.8

%







Operating expenses:






Employee compensation

995.9



906.0



9.9

%

Third-party distribution, service and advisory

1,093.0



958.2



14.1

%

Marketing

68.6



79.1



(13.3)

%

Property, office and technology

207.0



195.0



6.2

%

General and administrative

224.9



222.7



1.0

%

Transaction and integration

3.2



5.6



(42.9)

%

Total operating expenses

2,592.6



2,366.6



9.5

%







Operating income

826.9



637.1



29.8

%







Other income/(expense):






Equity in earnings of unconsolidated affiliates

25.3



21.8



16.1

%

Interest and dividend income

6.8



7.1



(4.2)

%

Interest expense

(29.4)



(39.6)



(25.8)

%

Other gains and losses, net

20.8



29.3



(29.0)

%

Consolidated investment products (CIP):






Interest income of CIP

147.5



206.4



(28.5)

%

Interest expense of CIP

(96.8)



(134.4)



(28.0)

%

Other gains/(losses) of CIP, net

15.5



(69.9)



N/A

Income from continuing operations before income taxes

916.6



657.8



39.3

%

Income tax provision

(262.7)



(205.8)



27.6

%

Income from continuing operations, net of income taxes

653.9



452.0



44.7

%

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

(1.9)



7.3



N/A

Net income

652.0



459.3



42.0

%

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

0.9



59.1



(98.5)

%

Net income attributable to common shareholders

$652.9



$518.4



25.9

%







Earnings per share:






---Basic EPS from continuing operations

$1.46



$1.13



29.2

%

---Basic EPS from discontinued operations



$0.02



N/A

---Total basic

$1.46



$1.14



28.1

%







---Diluted EPS from continuing operations

$1.46



$1.12



30.4

%

---Diluted EPS from discontinued operations



$0.02



N/A

---Total diluted

$1.45



$1.14



27.2

%







Average shares outstanding:






---basic

448.3



453.1



(1.1)

%

---diluted

449.4



454.6



(1.1)

%

 

 

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


2.5



0.8







(1.0)



1.0





3.3


Interest expense


(9.7)















(9.7)


Other gains and losses, net


2.7









(9.2)



11.8



0.5



5.8


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 from continuing operations


$0.51










Adjusted diluted EPS



$0.55


Diluted EPS from discontinued
   operations

















Diluted EPS


$0.51
















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, 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


$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 expense


(10.0)















(10.0)


Other gains and losses, net


0.4









(0.5)





(0.6)



(0.7)


CIP:

















Interest income of CIP


50.7











(50.7)






Interest expense of CIP


(30.6)











30.6






Other gains/(losses) of CIP, net


(1.6)











1.6






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 form 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 September 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


CIP


Other reconciling items


Non-
GAAP
basis

Operating revenues:

















Investment management fees


$790.6



$10.8



$—



$—



$—



$11.1



$—



$812.5


Service and distribution fees


196.0















196.0


Performance fees


3.0











0.4





3.4


Other


24.3



0.1













24.4


Third-party distribution, service and 
        advisory




(1.9)



(326.2)











(328.1)


Total operating revenues reconciled to 
   net revenues


1,013.9



9.0



(326.2)







11.5





708.2


Operating expenses:

















Employee compensation


315.2



2.8







(4.7)





(1.3)



312.0


Third-party distribution, service and 
        advisory


326.2





(326.2)












Marketing


26.3



0.7











(0.6)



26.4


Property, office and technology


66.1



0.9











(0.7)



66.3


General and administrative


66.2



1.0





(4.3)





(2.3)



(1.4)



59.2


Transaction and integration


3.0







(3.0)










Total operating expenses


803.0



5.4



(326.2)



(7.3)



(4.7)



(2.3)



(4.0)



463.9


Operating income reconciled to
   adjusted operating income


210.9



3.6





7.3



4.7



13.8



4.0



244.3


Other income/(expense):

















Equity in earnings of unconsolidated 
        affiliates


5.2



(4.1)









0.5





1.6


Interest and dividend income


2.5



0.5







(1.4)



3.4





5.0


Interest expense


(12.6)















(12.6)


Other gains and losses, net


18.4







(8.3)



(9.7)



8.7



0.4



9.5


CIP:

















Interest income of CIP


68.7











(68.7)






Interest expense of CIP


(41.9)











41.9






Other gains/(losses) of CIP, net


(25.2)











25.2






Income from continuing operations
   before income taxes


226.0







(1.0)



(6.4)



24.8



4.4



247.8


Income tax provision


(72.3)







6.1



1.9





(0.8)



(65.1)


Income from continuing operations, net
   of income taxes


153.7







5.1



(4.5)



24.8



3.6



182.7


Income from discontinued operations,
   net of taxes


3.2







(3.2)










Net income


156.9







1.9



(4.5)



24.8



3.6



182.7


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


13.7











(13.7)






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


$170.6



$—



$—



$1.9



($4.5)



$11.1



$3.6



$182.7



















Operating margin


20.8

%








Adjusted operating margin





34.5

%


















Average diluted shares outstanding


452.8









Average diluted shares outstanding





452.8



















Diluted EPS form continuing operations


$0.37









Adjusted diluted EPS





$0.40


Diluted EPS from discontinued
   operations


$0.01
















Diluted EPS


$0.38
















See pages 19 through 21 for notes to the reconciliation.

 

 

Invesco Ltd.  
Condensed Consolidated Balance Sheet Information Excluding CIP  
(a non-GAAP presentation, unaudited, in millions)


September 30, 2013


December 31, 2012

ADJUSTED ASSETS




Cash and cash equivalents

$1,174.5



$835.5


Unsettled fund receivables

1,003.1



550.1


Accounts receivable

480.3



453.8


Investments

782.8



677.3


Assets of consolidated sponsored investment products (CSIP)

94.3




Assets held for policyholders

1,449.0



1,153.6


Prepaid assets

111.4



99.9


Assets held for sale

106.7




Other assets

107.6



146.8


Deferred tax asset, net

10.9



38.4


Property and equipment, net

336.4



349.6


Intangible assets, net

1,268.6



1,287.7


Goodwill

6,898.6



7,048.2


Total adjusted assets

$13,824.2



$12,640.9






ADJUSTED LIABILITIES




Accrued compensation and benefits

$565.5



$609.8


Accounts payable and accrued expenses

660.3



635.3


Policyholder payables

1,449.0



1,153.6


Unsettled fund payables

993.8



552.5


Long-term debt

1,387.6



1,186.0


Deferred tax liabilities, net

333.8



311.4


Total adjusted liabilities

5,390.0



4,448.6






ADJUSTED EQUITY




Equity attributable to common shareholders:




Common shares

98.1



98.1


Additional paid-in-capital

6,080.1



6,141.0


Treasury shares

(1,363.5)



(1,382.9)


Retained earnings

3,163.7



2,780.1


Accumulated other comprehensive income, net of tax

446.0



551.4


Total adjusted equity attributable to common shareholders

8,424.4



8,187.7


Adjusted equity attributable to nonredeemable noncontrolling interests in 
        consolidated entities

9.8



4.6


Total adjusted equity

8,434.2



8,192.3


Total adjusted liabilities and equity