Invesco Reports Results for Three Months Ended June 30, 2011
Adjusted diluted EPS of 44 cents
Total net inflows of $7.3 billion
Repurchase of 11.3 million shares of common stock
ATLANTA, July 26, 2011 /PRNewswire/ -- Invesco Ltd. (NYSE: IVZ) today reported financial results for the three months ended June 30, 2011.
(Logo: http://photos.prnewswire.com/prnh/20110131/MM39469LOGO-a )
"Invesco's strong, long-term investment performance contributed to positive net inflows of $7.3 billion and strong operating results for the quarter," said Martin L. Flanagan, president and chief executive officer. "Reflecting confidence in our business, we repurchased 11.3 million shares for $280 million."
Q2-11 |
Q1-11 |
Q2-11 vs. |
Q2-10 |
Q2-11 vs. |
|||||||
Adjusted Financial Measures(1) |
|||||||||||
Net revenues |
$751.2m |
$724.3m |
3.7% |
$571.4m |
31.5% |
||||||
Operating income |
$284.8m |
$272.1m |
4.7% |
$188.7m |
50.9% |
||||||
Operating margin |
37.9% |
37.6% |
33.0% |
||||||||
Net income attributable to common shareholders |
$207.1m |
$191.7m |
8.0% |
$125.4m |
65.2% |
||||||
Diluted EPS |
$0.44 |
$0.41 |
7.3% |
$0.27 |
63.0% |
||||||
U.S. GAAP Financial Measures |
|||||||||||
Operating revenues |
$1,070.0m |
$1,027.3m |
4.2% |
$787.0m |
36.0% |
||||||
Operating income |
$233.0m |
$225.7m |
3.2% |
$71.4m |
226.3% |
||||||
Operating margin |
21.8% |
22.0% |
9.1% |
||||||||
Net income attributable to common shareholders |
$183.0m |
$177.5m |
3.1% |
$40.8m |
348.5% |
||||||
Diluted EPS |
$0.39 |
$0.38 |
2.6% |
$0.09 |
333.3% |
||||||
Assets Under Management |
|||||||||||
Ending AUM |
$653.7bn |
$641.9bn |
1.8% |
$557.7bn |
17.2% |
||||||
Average AUM |
$652.8bn |
$630.2bn |
3.6% |
$480.5bn |
35.9% |
||||||
(1) The adjusted financial measures are all non-GAAP financial measures. See the information on pages 8 through 13 for a reconciliation to their most directly comparable U.S. GAAP measures. |
|||||||||||
(Page 1) |
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Assets Under Management
Total assets under management (AUM) at June 30, 2011 were $653.7 billion (March 31, 2011: $641.9 billion), an increase of $11.8 billion during the second quarter. Total net inflows were $7.3 billion for the second quarter as detailed below:
Summary of net flows (in $billions) |
Quarterly |
Year-to-date |
|||||||
Q2-11 |
Q1-11 |
June 30, |
June 30, |
||||||
AUM excluding ETF, UIT and Passive |
$2.9 |
$(1.5) |
$1.4 |
$2.3 |
|||||
ETF, UIT and Passive |
0.9 |
8.1 |
9.0 |
15.2 |
|||||
Net long-term flows |
3.8 |
6.6 |
10.4 |
17.5 |
|||||
Institutional money market |
3.5 |
2.6 |
6.1 |
(11.5) |
|||||
Total net flows |
$7.3 |
$9.2 |
$16.5 |
$6.0 |
|||||
Net market gains led to a $3.2 billion increase in AUM during the second quarter, compared to a $12.9 billion increase in the first quarter of 2011. Foreign exchange rate movements led to a $1.3 billion increase in AUM during the second quarter, compared to a $3.3 billion increase in the first quarter of 2011.
Average AUM during the second quarter were $652.8 billion, compared to $630.2 billion for the first quarter of 2011, a 3.6% increase.
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, as described more fully in our Form 10-K for the year ended December 31, 2010, 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.
European Infrastructure
The company is undertaking a broad, transformational initiative to build on its strong position in the European market and to position the business for competitive success in light of significant regulatory changes. This initiative is designed to enhance the European business product platform, better leverage our cross-border distribution efforts, and align our European infrastructure in advance of new regulation. Combined, we believe these forward looking steps will enhance our ability to deliver Invesco's comprehensive global investment capabilities to European clients and further strengthen the firm's competitive position in this region.
During the three months ended June 30, 2011, the company incurred $5.8 million of costs directly related to the implementation of this initiative and will incur total implementation costs of up to $40 million by the projected completion date of December 2012. The $40 million estimate is based on the expected cost to outsource our European transfer agency and on our plans to make certain structural changes to our product and distribution platforms. This initiative is expected to generate material ongoing cost savings that will more than fully offset the implementation expense within a three year time frame after completion. These implementation costs will be included within the respective expense line items in the U.S. GAAP Condensed Consolidated Income Statement and will be excluded in arriving at non-GAAP earnings information.
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Marketing Support Expense Presentation Change
As described in our press release on July 12, 2011, this earnings release reflects the change in presentation of marketing support expenses from marketing expenses to third-party distribution, service and advisory expenses. The change is intended to provide investors with improved disclosure of third-party distribution and discretionary marketing expenses and to allow for better comparison with similar methods of presentation used by peer investment managers.
Non-GAAP Earnings
This section discusses the company's second quarter 2011 compared to the first quarter 2011 non-GAAP financial results. 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 8 through 13 of this release.
Net revenues increased by $26.9 million (3.7%) to $751.2 million in the second quarter from $724.3 million in the first quarter of 2011. The increase was principally due to increases in investment management fees earned in the second quarter compared to the first quarter. Foreign exchange rate changes increased second quarter net revenues by $5.4 million when compared to the first quarter of 2011.
Investment management fees, as adjusted, increased $28.2 million (3.5%) to $844.3 million in the second quarter from $816.1 million in the first quarter of 2011. Foreign exchange rate changes increased second quarter management fees by $7.3 million when compared to first quarter of 2011. The increase in management fees correlates with higher average AUM.
Service and distribution fees, as adjusted, increased $7.5 million (3.8%) to $206.2 million in the second quarter from $198.7 million in the first quarter of 2011, also correlating with higher average AUM in the second quarter.
Performance fees, as adjusted, in the second quarter were $7.6 million compared to $3.8 million in the first quarter of 2011. The second quarter performance fees were earned in the U.K. and in the U.S. private equity business. Other revenues, as adjusted, in the second quarter were $32.2 million compared to $32.7 million in the first quarter of 2011.
Third-party distribution, service and advisory expenses, as adjusted, were $339.1 million in the second quarter compared to $327.0 million in the first quarter of 2011. The increase of $12.1 million (3.7%) primarily reflects the increase in investment management fees and service and distribution fees. Foreign exchange rate changes increased the second quarter third-party distribution, services and advisory expenses by $2.6 million.
(Page 3) |
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Total operating expenses, as adjusted, increased by $14.2 million (3.1%) to $466.4 million in the second quarter from $452.2 million in the first quarter of 2011. Foreign exchange rate changes increased operating expenses, as adjusted, by $4.6 million when compared to the first quarter of 2011.
Employee compensation expenses, as adjusted, increased by $11.2 million (3.7%) to $310.9 million in the second quarter from $299.7 million in the first quarter of 2011. The second quarter included a full quarter of the annual base salary increases and share-based awards, both granted late in the first quarter. The second quarter also includes a full quarter of the Hyderabad staff costs that had previously been part of outsourced administration costs, within property, office, and technology expenses. Increased variable compensation expenses also contributed to the increase which was partly offset by reduced payroll taxes. Foreign exchange rate changes increased second quarter employee compensation expenses by $3.3 million when compared to first quarter of 2011.
Marketing expenses, as adjusted, increased by $0.4 million (1.5%) to $26.7 million in the second quarter from $26.3 million in the first quarter of 2011. Additional sales literature costs were partly offset by reduced advertising expenditure.
Property, office and technology expenses, as adjusted, decreased $2.1 million (3.3%) to $62.5 million in the second quarter from $64.6 million in the first quarter of 2011. This was primarily due to the decline in outsourced administration costs as we internalized our Hyderabad operations during the first quarter.
General and administrative expenses, as adjusted, increased $4.7 million (7.6%) to $66.3 million in the second quarter from $61.6 million in the first quarter of 2011. The second quarter included an increase in staff recruitment and travel costs. Foreign exchange rate changes added $0.5 million to these expenses when compared to first quarter of 2011.
Non-operating other income and expenses included increased equity in earnings from partnership investments in the second quarter when compared to the first quarter. The effective tax rate decreased to 26.0% for the second quarter from 27.6% for the first quarter of 2011.
U.S. GAAP Earnings
Operating revenues increased 4.2% to $1,070.0 million in the second quarter from $1,027.3 million in the first quarter of 2011. Operating expenses increased by 4.4% to $837.0 million in the second quarter from $801.6 million in the first quarter of 2011.
Operating expenses included $11.3 million of transaction and integration charges incurred in the second quarter compared to $7.9 million in the first quarter of 2011. Operating expenses also included $5.8 million of European infrastructure expenses for the second quarter as discussed above.
(Page 4) |
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The effective tax rate, excluding noncontrolling interests, decreased to 29.2% for the second quarter from 29.9% for the first quarter of 2011.
Capital Management
Cash and cash equivalents were $621.5 million at June 30, 2011 compared to $471.9 million at March 31, 2011. Total debt was $1,583.7 million at June 30, 2011 compared to $1,332.7 million at March 31, 2011. The credit facility balance was $838.0 million at June 30, 2011 compared to $587.0 million at March 31, 2011.
During the second quarter, the company made share repurchases of $279.9 million, representing 11.3 million shares at a weighted average share price of $24.69 (first quarter 2011: $53.1 million, representing 2.1 million shares at a weighted average share price of $25.58).
In June the company amended and restated the existing $1.25 billion Credit Agreement to extend the term of the facility to five years maturing on June 3, 2016.
Today the company is announcing a second-quarter cash dividend of 12.25 cents per share to holders of common shares. The dividend is payable on September 8, 2011 to shareholders of record at the close of business on August 22, 2011.
Headcount
As of June 30, 2011, the company had 6,189 employees compared to 6,191 employees as at March 31, 2011.
Invesco is a leading independent global investment manager, 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 retail, institutional and high net worth clients around the world. Operating in more than 20 countries, the company 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, Tuesday, July 26, 2011, at 9:00 a.m. ET by dialing one of the following numbers: 1-866-803-2143 for U.S. and Canadian callers and 0800-279-3953 for U.K. callers or 1-210-795-1098 for international callers. An audio replay of the conference call will be available until Tuesday, August 9, 2011 at 5:00 p.m. ET by calling 1-800-468-0310 for U.S. and Canadian callers or 1-402-344-6808 for international callers. The presentation will be made available via a simultaneous Webcast at www.invesco.com. The presentation slides that will be reviewed during the conference call will also be available on Invesco's Web site at www.invesco.com.
(Page 5) |
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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, 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 Web site 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.
(Page 6) |
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Invesco Ltd. Non-GAAP Condensed Consolidated Income Statement Information (Unaudited, in millions, other than per share amounts, headcount and AUM) |
||||||||||
Q2-11 |
Q1-11 |
% Change |
Q2-10 |
% Change |
||||||
Adjusted revenues |
||||||||||
Investment management fees |
$844.3 |
$816.1 |
3.5% |
$653.0 |
29.3% |
|||||
Service and distribution fees |
206.2 |
198.7 |
3.8% |
139.4 |
47.9% |
|||||
Performance fees |
7.6 |
3.8 |
100.0% |
3.5 |
117.1% |
|||||
Other |
32.2 |
32.7 |
(1.5)% |
16.4 |
96.3% |
|||||
Third-party distribution, service and advisory |
(339.1) |
(327.0) |
3.7% |
(240.9) |
40.8% |
|||||
Net revenues |
751.2 |
724.3 |
3.7% |
571.4 |
31.5% |
|||||
Adjusted operating expenses |
||||||||||
Employee compensation |
310.9 |
299.7 |
3.7% |
260.1 |
19.5% |
|||||
Marketing |
26.7 |
26.3 |
1.5% |
17.9 |
49.2% |
|||||
Property, office and technology |
62.5 |
64.6 |
(3.3)% |
56.4 |
10.8% |
|||||
General and administrative |
66.3 |
61.6 |
7.6% |
48.3 |
37.3% |
|||||
Total adjusted operating expenses |
466.4 |
452.2 |
3.1% |
382.7 |
21.9% |
|||||
Adjusted operating income |
284.8 |
272.1 |
4.7% |
188.7 |
50.9% |
|||||
Adjusted other income/(expense) |
||||||||||
Equity in earnings of unconsolidated affiliates |
5.0 |
2.3 |
117.4% |
4.3 |
16.3% |
|||||
Interest and dividend income |
3.2 |
2.7 |
18.5% |
2.1 |
52.4% |
|||||
Interest expense |
(16.0) |
(16.2) |
(1.2)% |
(14.1) |
13.5% |
|||||
Other gains and losses, net |
2.8 |
3.7 |
(24.3)% |
(3.5) |
N/A |
|||||
Adjusted income before income taxes |
279.8 |
264.6 |
5.7% |
177.5 |
57.6% |
|||||
Adjusted income tax provision |
(72.7) |
(73.0) |
(0.4)% |
(52.0) |
39.8% |
|||||
Adjusted net income |
207.1 |
191.6 |
8.1% |
125.5 |
65.0% |
|||||
Adjusted (gains)/losses attributable to noncontrolling interests in consolidated entities, net |
— |
0.1 |
(100.0)% |
(0.1) |
N/A |
|||||
Adjusted net income attributable to common shareholders |
$207.1 |
$191.7 |
8.0% |
$125.4 |
65.2% |
|||||
Adjusted diluted EPS |
$0.44 |
$0.41 |
7.3% |
$0.27 |
63.0% |
|||||
Average diluted shares outstanding |
467.4 |
472.1 |
(1.0)% |
457.8 |
2.1% |
|||||
Ending Headcount |
6,189 |
6,191 |
— |
5,421 |
14.2% |
|||||
Ending AUM (in billions) |
$653.7 |
$641.9 |
1.8% |
$557.7 |
17.2% |
|||||
Average AUM (in billions) |
$652.8 |
$630.2 |
3.6% |
$480.5 |
35.9% |
|||||
(Page 7) |
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Invesco Ltd. Reconciliation of U.S. GAAP Condensed Consolidated Income Statement to (Unaudited, in millions, other than per share amounts) Three months ended June 30, 2011 |
|||||||||||||||||
U.S. GAAP |
Proportional |
Third party |
Acquisition |
Market |
Consolidated |
European |
Non-GAAP |
||||||||||
Operating revenues |
|||||||||||||||||
Investment management fees |
$819.1 |
$13.0 |
$— |
$— |
$— |
$12.2 |
$— |
$844.3 |
|||||||||
Service and distribution fees |
211.4 |
— |
— |
(5.2) |
— |
— |
— |
206.2 |
|||||||||
Performance fees |
7.6 |
— |
— |
— |
— |
— |
— |
7.6 |
|||||||||
Other |
31.9 |
0.3 |
— |
— |
— |
— |
— |
32.2 |
|||||||||
Third-party distribution, service and advisory |
— |
(2.5) |
(341.8) |
5.2 |
— |
— |
— |
(339.1) |
|||||||||
Total operating revenues reconciled to net revenues |
1,070.0 |
10.8 |
(341.8) |
— |
— |
12.2 |
— |
751.2 |
|||||||||
Operating expenses |
|||||||||||||||||
Employee compensation |
318.3 |
3.2 |
— |
(5.0) |
(2.5) |
— |
(3.1) |
310.9 |
|||||||||
Third-party distribution, service and advisory |
341.8 |
— |
(341.8) |
— |
— |
— |
— |
— |
|||||||||
Marketing |
26.1 |
0.6 |
— |
— |
— |
— |
— |
26.7 |
|||||||||
Property, office and technology |
61.9 |
0.8 |
— |
— |
— |
— |
(0.2) |
62.5 |
|||||||||
General and administrative |
77.6 |
1.2 |
— |
(6.5) |
— |
(3.5) |
(2.5) |
66.3 |
|||||||||
Transaction and integration |
11.3 |
— |
— |
(11.3) |
— |
— |
— |
— |
|||||||||
Total operating expenses |
837.0 |
5.8 |
(341.8) |
(22.8) |
(2.5) |
(3.5) |
(5.8) |
466.4 |
|||||||||
Operating income reconciled to adjusted operating income |
233.0 |
5.0 |
— |
22.8 |
2.5 |
15.7 |
5.8 |
284.8 |
|||||||||
Other income/(expense) |
|||||||||||||||||
Equity in earnings of unconsolidated affiliates |
10.8 |
(5.6) |
— |
— |
— |
(0.2) |
— |
5.0 |
|||||||||
Interest and dividend income |
2.4 |
0.6 |
— |
— |
(1.3) |
1.5 |
— |
3.2 |
|||||||||
Interest income of consolidated investment products |
79.8 |
— |
— |
— |
— |
(79.8) |
— |
— |
|||||||||
Gains/(losses) of consolidated investment products, net |
(64.7) |
— |
— |
— |
— |
64.7 |
— |
— |
|||||||||
Interest expense |
(16.0) |
— |
— |
— |
— |
— |
— |
(16.0) |
|||||||||
Interest expense of consolidated investment products |
(46.5) |
— |
— |
— |
— |
46.5 |
— |
— |
|||||||||
Other gains and losses, net |
6.0 |
— |
— |
— |
(3.2) |
— |
— |
2.8 |
|||||||||
Income before income taxes |
204.8 |
— |
— |
22.8 |
(2.0) |
48.4 |
5.8 |
279.8 |
|||||||||
Income tax provision |
(75.4) |
— |
— |
2.8 |
0.5 |
— |
(0.6) |
(72.7) |
|||||||||
Net income |
129.4 |
— |
— |
25.6 |
(1.5) |
48.4 |
5.2 |
207.1 |
|||||||||
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net |
53.6 |
— |
— |
— |
— |
(53.6) |
— |
— |
|||||||||
Net income attributable to common shareholders reconciled to |
$183.0 |
$— |
$— |
$25.6 |
$(1.5) |
$(5.2) |
$5.2 |
$207.1 |
|||||||||
Operating margin |
21.8% |
Adjusted operating margin |
37.9% |
||||||||||||||
Diluted shares outstanding |
467.4 |
Diluted shares outstanding |
467.4 |
||||||||||||||
Diluted EPS |
$0.39 |
Adjusted diluted EPS |
$0.44 |
||||||||||||||
See pages 11 through 13 for notes to the reconciliation. |
|||||||||||||||||
(Page 8) |
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Invesco Ltd. Reconciliation of U.S.GAAP Condensed Consolidated Income Statement to (Unaudited, in millions, other than per share amounts) Three months ended March 31, 2011 |
|||||||||||||||||
U.S. GAAP |
Proportional |
Third party |
Acquisition |
Market |
Consolidated |
Other |
Non-GAAP |
||||||||||
Operating revenues |
|||||||||||||||||
Investment management fees |
$792.3 |
$12.7 |
$— |
$— |
$— |
$11.1 |
$— |
$816.1 |
|||||||||
Service and distribution fees |
198.7 |
— |
— |
— |
— |
— |
— |
198.7 |
|||||||||
Performance fees |
3.8 |
— |
— |
— |
— |
— |
— |
3.8 |
|||||||||
Other |
32.5 |
0.2 |
— |
— |
— |
— |
— |
32.7 |
|||||||||
Third-party distribution, service and advisory |
— |
(2.5) |
(324.5) |
— |
— |
— |
— |
(327.0) |
|||||||||
Total operating revenues reconciled to net revenues |
1,027.3 |
10.4 |
(324.5) |
— |
— |
11.1 |
— |
724.3 |
|||||||||
Operating expenses |
|||||||||||||||||
Employee compensation |
305.9 |
2.9 |
— |
(5.0) |
(4.1) |
— |
— |
299.7 |
|||||||||
Third-party distribution, service and advisory |
324.5 |
— |
(324.5) |
— |
— |
— |
— |
— |
|||||||||
Marketing |
25.7 |
0.6 |
— |
— |
— |
— |
— |
26.3 |
|||||||||
Property, office and technology |
64.0 |
0.6 |
— |
— |
— |
— |
— |
64.6 |
|||||||||
General and administrative |
73.6 |
1.1 |
— |
(9.0) |
— |
(3.7) |
(0.4) |
61.6 |
|||||||||
Transaction and integration |
7.9 |
— |
— |
(7.9) |
— |
— |
— |
— |
|||||||||
Total operating expenses |
801.6 |
5.2 |
(324.5) |
(21.9) |
(4.1) |
(3.7) |
(0.4) |
452.2 |
|||||||||
Operating income reconciled to adjusted operating income |
225.7 |
5.2 |
— |
21.9 |
4.1 |
14.8 |
0.4 |
272.1 |
|||||||||
Other income/(expense) |
|||||||||||||||||
Equity in earnings of unconsolidated affiliates |
6.7 |
(5.6) |
— |
— |
— |
1.2 |
— |
2.3 |
|||||||||
Interest and dividend income |
2.1 |
0.4 |
— |
— |
(1.0) |
1.2 |
— |
2.7 |
|||||||||
Interest income of consolidated investment products |
74.2 |
— |
— |
— |
— |
(74.2) |
— |
— |
|||||||||
Gains/(losses) of consolidated investment products, net |
(85.5) |
— |
— |
— |
— |
85.5 |
— |
— |
|||||||||
Interest expense |
(16.2) |
— |
— |
— |
— |
— |
— |
(16.2) |
|||||||||
Interest expense of consolidated investment products |
(40.0) |
— |
— |
— |
— |
40.0 |
— |
— |
|||||||||
Other gains and losses, net |
7.9 |
— |
— |
— |
(4.2) |
— |
— |
3.7 |
|||||||||
Income before income taxes |
174.9 |
— |
— |
21.9 |
(1.1) |
68.5 |
0.4 |
264.6 |
|||||||||
Income tax provision |
(75.6) |
— |
— |
2.3 |
0.4 |
— |
(0.1) |
(73.0) |
|||||||||
Net income |
99.3 |
— |
— |
24.2 |
(0.7) |
68.5 |
0.3 |
191.6 |
|||||||||
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net |
78.2 |
— |
— |
— |
— |
(78.1) |
— |
0.1 |
|||||||||
Net income attributable to common shareholders reconciled to |
$177.5 |
$— |
$— |
$24.2 |
$(0.7) |
$(9.6) |
$0.3 |
$191.7 |
|||||||||
Operating margin |
22.0% |
Adjusted operating margin |
37.6% |
||||||||||||||
Diluted shares outstanding |
472.1 |
Diluted shares outstanding |
472.1 |
||||||||||||||
Diluted EPS |
$0.38 |
Adjusted diluted EPS |
$0.41 |
||||||||||||||
See pages 11 through 13 for notes to the reconciliation. |
|||||||||||||||||
(Page 9) |
|
Invesco Ltd. Reconciliation of U.S.GAAP Condensed Consolidated Income Statement to (Unaudited, in millions, other than per share amounts) Three months ended June 30, 2010 |
||||||||||||||||
U.S. GAAP |
Proportional |
Third party |
Acquisition |
Market |
Consolidated |
Other |
Non-GAAP |
|||||||||
Operating revenues |
||||||||||||||||
Investment management fees |
$627.9 |
$12.8 |
$— |
$— |
$— |
$12.3 |
$— |
$653.0 |
||||||||
Service and distribution fees |
139.4 |
— |
— |
— |
— |
— |
— |
139.4 |
||||||||
Performance fees |
3.5 |
— |
— |
— |
— |
— |
— |
3.5 |
||||||||
Other |
16.2 |
0.2 |
— |
— |
— |
— |
— |
16.4 |
||||||||
Third-party distribution, service and advisory |
— |
(2.6) |
(238.3) |
— |
— |
— |
— |
(240.9) |
||||||||
Total operating revenues reconciled to net revenues |
787.0 |
10.4 |
(238.3) |
— |
— |
12.3 |
— |
571.4 |
||||||||
Operating expenses |
||||||||||||||||
Employee compensation |
260.5 |
2.5 |
— |
(5.0) |
2.1 |
— |
— |
260.1 |
||||||||
Third-party distribution, service and advisory |
238.3 |
— |
(238.3) |
— |
— |
— |
— |
— |
||||||||
Marketing |
17.6 |
0.3 |
— |
— |
— |
— |
— |
17.9 |
||||||||
Property, office and technology |
55.8 |
0.6 |
— |
— |
— |
— |
— |
56.4 |
||||||||
General and administrative |
64.1 |
1.0 |
— |
(5.2) |
— |
(2.7) |
(8.9) |
48.3 |
||||||||
Transaction and integration |
79.3 |
— |
— |
(79.3) |
— |
— |
— |
— |
||||||||
Total operating expenses |
715.6 |
4.4 |
(238.3) |
(89.5) |
2.1 |
(2.7) |
(8.9) |
382.7 |
||||||||
Operating income reconciled to adjusted operating income |
71.4 |
6.0 |
— |
89.5 |
(2.1) |
15.0 |
8.9 |
188.7 |
||||||||
Other income/(expense) |
||||||||||||||||
Equity in earnings of unconsolidated affiliates |
10.4 |
(6.3) |
— |
— |
— |
0.2 |
— |
4.3 |
||||||||
Interest and dividend income |
1.8 |
0.3 |
— |
— |
— |
— |
— |
2.1 |
||||||||
Interest income of consolidated investment products |
53.1 |
— |
— |
— |
— |
(53.1) |
— |
— |
||||||||
Gains/(losses) of consolidated investment products, net |
187.2 |
— |
— |
— |
— |
(187.2) |
— |
— |
||||||||
Interest expense |
(14.1) |
— |
— |
— |
— |
— |
— |
(14.1) |
||||||||
Interest expense of consolidated investment products |
(25.6) |
— |
— |
— |
— |
25.6 |
— |
— |
||||||||
Other gains and losses, net |
(9.3) |
— |
— |
— |
5.8 |
— |
— |
(3.5) |
||||||||
Income before income taxes |
274.9 |
— |
— |
89.5 |
3.7 |
(199.5) |
8.9 |
177.5 |
||||||||
Income tax provision |
(36.7) |
(11.2) |
(1.2) |
— |
(2.9) |
(52.0) |
||||||||||
Net income |
238.2 |
— |
— |
78.3 |
2.5 |
(199.5) |
6.0 |
125.5 |
||||||||
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net |
(197.4) |
— |
— |
— |
— |
197.3 |
— |
(0.1) |
||||||||
Net income attributable to common shareholders reconciled to |
$40.8 |
$— |
$— |
$78.3 |
$2.5 |
($2.2) |
$6.0 |
$125.4 |
||||||||
Operating margin |
9.1% |
Adjusted operating margin |
33.0% |
|||||||||||||
Diluted shares outstanding |
457.8 |
Diluted shares outstanding |
457.8 |
|||||||||||||
Diluted EPS |
$0.09 |
Adjusted diluted EPS |
$0.27 |
|||||||||||||
See pages 11 through 13 for notes to the reconciliation. |
||||||||||||||||
(Page 10) |
|
Invesco Ltd. |
|
Notes to the Reconciliation of U.S. GAAP Condensed Consolidated Income Statements to Non-GAAP Condensed Consolidated Income Statement Information |
|
The following are notes to the reconciliations presented on pages 8 through 10. Further explanations of the reasons the company considers it appropriate to present these adjustments in arriving at the non-GAAP measures can be found in our Form 10-K for the year ended December 31, 2010. Non-GAAP measures should not be considered as substitutes for any measures derived in accordance with U.S. GAAP and may not be comparable to other similarly titled measures of other companies.
1. Acquisition related adjustments
Acquisition related adjustments are comprised of amounts incurred by the company in connection with business combinations, including transaction and integration expenses, intangible asset amortization, amortization of prepaid compensation related to the October 2006 acquisition of W.L.. Ross & Co. and all related tax effects. Adjustment amounts are as follows:
In millions |
Q2-11 |
Q1-11 |
Q2-10 |
||||
Service and distribution fees |
$(5.2) |
$— |
$— |
||||
Third-party distribution, service and advisory expenses |
5.2 |
— |
— |
||||
Transaction and integration |
11.3 |
7.9 |
79.3 |
||||
Taxation on transaction and integration |
(4.4) |
(2.9) |
(14.8) |
||||
Intangible amortization |
12.9 |
9.0 |
5.2 |
||||
Taxation on amortization |
(1.1) |
(1.2) |
(0.6) |
||||
Prepaid compensation amortization |
5.0 |
5.0 |
5.0 |
||||
Deferred taxation |
8.3 |
6.4 |
4.2 |
||||
Change in contingent consideration estimates |
(6.4) |
— |
— |
||||
$25.6 |
$24.2 |
$78.3 |
|||||
2. Consolidated investment products
Certain collateralized loan obligation products were consolidated on January 1, 2010, upon adoption of additional guidance included in Accounting Standards Codification Topic 810 "Consolidation."
Management fees earned by the company but which were eliminated from operating revenues upon consolidation of investment products were $12.2 million in the second quarter (first quarter 2011: $11.1 million; second quarter 2010: $12.3 million). By deconsolidating these products in the non-GAAP information, the management fees are added back into net revenues. Similarly, the consolidated investment products' operating expenses and impact on interest income, interest expense, gains and losses, and noncontrolling interests are removed in reconciling from the U.S. GAAP income statement to the non-GAAP information. The consolidation of the investment products resulted in an increase of $5.2 million in net income attributable to common shareholders in our first quarter U.S. GAAP earnings (first quarter 2011: $9.6 million increase; second quarter 2010: $2.2 million increase). The above adjustments remove this impact.
(Page 11) |
|
3. Market appreciation / depreciation of deferred compensation awards
This adjustment relates to deferred cash compensation that is linked in value to investment products. The market appreciation of the compensation liability was $2.5 million in the second quarter (first quarter 2011: $4.1 million appreciation; second quarter 2010:$2.1 million depreciation) with an investment gain and interest and dividend income of $4.5 million in the second quarter (first quarter 2011: $5.2 million gain; second quarter 2010: $5.8 million loss) on the assets held to hedge economically the compensation liability. This change in compensation expense and the investment income are adjusted in arriving at the non-GAAP information and, net of the applicable taxation charge of $0.5 million in the second quarter (first quarter 2011: $0.4 million; second quarter 2010: $1.2 million), result in a net income deduction of $1.5 million for the second quarter (first quarter 2011: $0.7 million deduction; second quarter 2010: $2.5 million addition).
4. European Infrastructure
As described on page 2, expenses incurred related to the European infrastructure activities are excluded in arriving at the non-GAAP financial information. For the second quarter of 2011, this adjustment includes $3.1 million in compensation expenses, primarily due to severance costs, $2.5 million in general and administrative costs, primarily related to consulting services and $0.2 million of technology costs. The company's income tax provision included tax benefits of $0.6 million in the second quarter 2011 relating to this charge. Due to the projected magnitude and nature of the implementation costs, the impact has been excluded in calculating the non-GAAP financial measures.
5. Other reconciling items
Included within general and administrative expenses in the first quarter of 2011 was an additional charge of $0.4 million relating to a levy from the U.K. Financial Services Compensation Scheme. Assessments were levied upon all Financial Services Authority (FSA)-registered investment management companies in proportion to their "eligible income" (as defined by the FSA) to cover claims resulting from failures of non-affiliated investment firms. The company's income tax provision included tax benefits of $0.1 million in the first quarter of 2011 relating to this charge.
Included within the second quarter 2010 general and administrative expenses was a charge of $8.9 million representing reimbursement costs from the correction of historical foreign exchange allocations in the fund accounting process that impacted the reporting of fund performance in certain funds. The company's income tax provision includes tax benefits of $2.9 million relating to this charge. The net of tax charge of $6.0 million is equivalent to a reduction in diluted EPS of $0.01. Due to the unique character and magnitude of these charges in current and prior periods, their impact has been excluded in calculating the non-GAAP financial measures.
(Page 12) |
|
6. Definitions of operating margin and adjusted operating margin
Operating margin is equal to operating income divided by operating revenues. Adjusted operating margin is equal to adjusted operating income divided by net revenues.
7. Definition of adjusted diluted EPS
Adjusted diluted EPS is equal to adjusted net income divided by the weighted average number of shares outstanding.
(Page 13) |
|
Invesco Ltd. U.S. GAAP Condensed Consolidated Income Statements (Unaudited, in millions, other than per share amounts) |
||||||||||
Q2-11 |
Q1-11 |
% Change |
Q2-10 |
% Change |
||||||
Operating revenues |
||||||||||
Investment management fees |
$819.1 |
$792.3 |
3.4% |
$627.9 |
30.5% |
|||||
Service and distribution fees |
211.4 |
198.7 |
6.4% |
139.4 |
51.6% |
|||||
Performance fees |
7.6 |
3.8 |
100.0% |
3.5 |
117.1% |
|||||
Other |
31.9 |
32.5 |
(1.8)% |
16.2 |
96.9% |
|||||
Total operating revenues |
1,070.0 |
1,027.3 |
4.2% |
787.0 |
36.0% |
|||||
Operating expenses |
||||||||||
Employee compensation |
318.3 |
305.9 |
4.1% |
260.5 |
22.2% |
|||||
Third-party distribution, service and advisory |
341.8 |
324.5 |
5.3% |
238.3 |
43.4% |
|||||
Marketing |
26.1 |
25.7 |
1.6% |
17.6 |
48.3% |
|||||
Property, office and technology |
61.9 |
64.0 |
(3.3)% |
55.8 |
10.9% |
|||||
General and administrative |
77.6 |
73.6 |
5.4% |
64.1 |
21.1% |
|||||
Transaction and integration |
11.3 |
7.9 |
43.0% |
79.3 |
(85.8)% |
|||||
Total operating expenses |
837.0 |
801.6 |
4.4% |
715.6 |
17.0% |
|||||
Operating income |
233.0 |
225.7 |
3.2% |
71.4 |
226.3% |
|||||
Other income/(expense) |
||||||||||
Equity in earnings of unconsolidated affiliates |
10.8 |
6.7 |
61.2% |
10.4 |
3.8% |
|||||
Interest and dividend income |
2.4 |
2.1 |
14.3% |
1.8 |
33.3% |
|||||
Interest income of consolidated investment products |
79.8 |
74.2 |
7.5% |
53.1 |
50.3% |
|||||
Gains/(losses) of consolidated investment products, net |
(64.7) |
(85.5) |
(24.3)% |
187.2 |
N/A |
|||||
Interest expense |
(16.0) |
(16.2) |
(1.2)% |
(14.1) |
13.5% |
|||||
Interest expense of consolidated investment products |
(46.5) |
(40.0) |
16.3% |
(25.6) |
81.6% |
|||||
Other gains and losses, net |
6.0 |
7.9 |
(24.1)% |
(9.3) |
N/A |
|||||
Income before income taxes |
204.8 |
174.9 |
17.1% |
274.9 |
(25.5)% |
|||||
Income tax provision |
(75.4) |
(75.6) |
(0.3)% |
(36.7) |
105.4% |
|||||
Net income |
129.4 |
99.3 |
30.3% |
238.2 |
(45.7)% |
|||||
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net |
53.6 |
78.2 |
(31.5)% |
(197.4) |
N/A |
|||||
Net income attributable to common shareholders |
$183.0 |
$177.5 |
3.1% |
$40.8 |
348.5% |
|||||
Earnings per share: |
||||||||||
---basic |
$0.39 |
$0.38 |
2.6% |
$0.09 |
333.3% |
|||||
---diluted |
$0.39 |
$0.38 |
2.6% |
$0.09 |
333.3% |
|||||
Average shares outstanding: |
||||||||||
---basic |
465.5 |
469.9 |
(0.9)% |
455.0 |
2.3% |
|||||
---diluted |
467.4 |
472.1 |
(1.0)% |
457.8 |
2.1% |
|||||
(Page 14) |
|
Invesco Ltd. U.S. GAAP Condensed Consolidated Income Statements (Unaudited, in millions, other than per share amounts) |
||||||
Six Months Ended |
||||||
2011 |
2010 |
% Change |
||||
Operating revenues |
||||||
Investment management fees |
$1,611.4 |
$1,221.4 |
31.9% |
|||
Service and distribution fees |
410.1 |
251.9 |
62.8% |
|||
Performance fees |
11.4 |
4.9 |
132.7% |
|||
Other |
64.4 |
27.9 |
130.8% |
|||
Total operating revenues |
2,097.3 |
1,506.1 |
39.3% |
|||
Operating expenses |
||||||
Employee compensation |
624.2 |
498.1 |
25.3% |
|||
Third-party distribution, service and advisory |
666.3 |
446.5 |
49.2% |
|||
Marketing |
51.8 |
33.3 |
55.6% |
|||
Property, office and technology |
125.9 |
109.3 |
15.2% |
|||
General and administrative |
151.2 |
114.1 |
32.5% |
|||
Transaction and integration |
19.2 |
96.5 |
(80.1)% |
|||
Total operating expenses |
1,638.6 |
1,297.8 |
26.3% |
|||
Operating income |
458.7 |
208.3 |
120.2% |
|||
Other income/(expense) |
||||||
Equity in earnings of unconsolidated affiliates |
17.5 |
16.2 |
8.0% |
|||
Interest and dividend income |
4.5 |
3.4 |
32.4% |
|||
Interest income of consolidated investment products |
154.0 |
105.6 |
45.8% |
|||
Gains/(losses) of consolidated investment products, net |
(150.2) |
290.3 |
N/A |
|||
Interest expense |
(32.2) |
(26.5) |
21.5% |
|||
Interest expense of consolidated investment products |
(86.5) |
(46.4) |
86.4% |
|||
Other gains and losses, net |
13.9 |
(11.4) |
N/A |
|||
Income before income taxes |
379.7 |
539.5 |
(29.6)% |
|||
Income tax provision |
(151.0) |
(86.8) |
74.0% |
|||
Net income |
228.7 |
452.7 |
(49.5)% |
|||
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net |
131.8 |
(316.9) |
N/A |
|||
Net income attributable to common shareholders |
$360.5 |
$135.8 |
165.5% |
|||
Earnings per share: |
||||||
---basic |
$0.77 |
$0.30 |
156.7% |
|||
---diluted |
$0.77 |
$0.30 |
156.7% |
|||
Average shares outstanding: |
||||||
---basic |
467.7 |
447.0 |
4.6% |
|||
---diluted |
469.7 |
450.1 |
4.4% |
|||
(Page 15) |
|
Invesco Ltd. Quarterly Assets Under Management |
||||||||
(in billions) |
Q2-11 |
Q1-11 |
% Change |
Q2-10 |
||||
Beginning Assets(a) |
$641.9 |
$616.5 |
4.1% |
$457.7 |
||||
Long-term inflows |
42.7 |
48.0 |
(11.0)% |
45.3 |
||||
Long-term outflows |
(38.9) |
(41.4) |
(6.0)% |
(31.4) |
||||
Long-term net flows |
3.8 |
6.6 |
(42.4)% |
13.9 |
||||
Net flows in institutional money market funds |
3.5 |
2.6 |
34.6% |
(0.9) |
||||
Market gains and losses/reinvestment |
3.2 |
12.9 |
(75.2)% |
(24.2) |
||||
Acquisitions |
— |
— |
— |
114.6 |
||||
Foreign currency translation |
1.3 |
3.3 |
(60.6)% |
(3.4) |
||||
Ending Assets |
$653.7 |
$641.9 |
1.8% |
$557.7 |
||||
Average long-term AUM |
$583.0 |
$564.4 |
3.3% |
$413.4 |
||||
Average institutional money market AUM |
69.8 |
65.8 |
6.1% |
67.1 |
||||
Average AUM |
$652.8 |
$630.2 |
3.6% |
$480.5 |
||||
Gross revenue yield on AUM(b) |
65.9bps |
65.6bps |
66.0bps |
|||||
Gross revenue yield on AUM before performance fees(b) |
65.4bps |
65.3bps |
65.7bps |
|||||
Net revenue yield on AUM(c) |
46.0bps |
46.0bps |
47.6bps |
|||||
Net revenue yield on AUM before performance fees(c) |
45.6bps |
45.7bps |
47.3bps |
|||||
(in billions) |
Total AUM |
AUM (ex ETF, UIT |
ETF, UIT and |
|||
March 31, 2011(a) |
$641.9 |
$550.2 |
$91.7 |
|||
Long-term inflows |
42.7 |
28.0 |
14.7 |
|||
Long-term outflows |
(38.9) |
(25.1) |
(13.8) |
|||
Long-term net flows |
3.8 |
2.9 |
0.9 |
|||
Net flows in institutional money market funds |
3.5 |
3.5 |
— |
|||
Market gains and losses/reinvestment |
3.2 |
4.1 |
(0.9) |
|||
Foreign currency translation |
1.3 |
1.2 |
0.1 |
|||
June 30, 2011 |
$653.7 |
$561.9 |
$91.8 |
|||
Average AUM |
$652.8 |
$559.3 |
$93.5 |
|||
Gross revenue yield on AUM(b) |
65.9bps |
75.1bps |
11.3bps |
|||
Net revenue yield on AUM(c) |
46.0bps |
51.8bps |
11.3bps |
|||
By channel: (in billions) |
Total |
Retail |
Institutional |
Private Wealth |
||||
March 31, 2011(a) |
$641.9 |
$396.2 |
$228.3 |
$17.4 |
||||
Long-term inflows |
42.7 |
33.2 |
8.6 |
0.9 |
||||
Long-term outflows |
(38.9) |
(30.3) |
(7.9) |
(0.7) |
||||
Long-term net flows |
3.8 |
2.9 |
0.7 |
0.2 |
||||
Net flows in institutional money market funds |
3.5 |
— |
3.5 |
— |
||||
Market gains and losses/reinvestment |
3.2 |
2.2 |
1.1 |
(0.1) |
||||
Foreign currency translation |
1.3 |
0.4 |
0.9 |
— |
||||
June 30, 2011 |
$653.7 |
$401.7 |
$234.5 |
$17.5 |
||||
By asset class: (in billions) |
Total |
Equity |
Fixed |
Balanced |
Money |
Alter- |
||||||
March 31, 2011(a) |
$641.9 |
$303.0 |
$139.7 |
$44.7 |
$71.0 |
$83.5 |
||||||
Long-term inflows |
42.7 |
22.9 |
8.8 |
2.7 |
0.3 |
8.0 |
||||||
Long-term outflows |
(38.9) |
(25.5) |
(5.3) |
(2.2) |
(0.5) |
(5.4) |
||||||
Long-term net flows |
3.8 |
(2.6) |
3.5 |
0.5 |
(0.2) |
2.6 |
||||||
Net flows in institutional money market funds |
3.5 |
— |
— |
— |
3.5 |
— |
||||||
Market gains and losses/reinvestment(f) |
3.2 |
0.8 |
2.4 |
(0.8) |
0.1 |
0.7 |
||||||
Foreign currency translation |
1.3 |
0.7 |
0.2 |
0.1 |
— |
0.3 |
||||||
June 30, 2011 |
$653.7 |
$301.9 |
$145.8 |
$44.5 |
$74.4(e) |
$87.1 |
||||||
By client domicile: (in billions) |
Total |
U.S. |
Canada |
U.K. |
Continental |
Asia |
||||||
March 31, 2011(a) |
$641.9 |
$435.2 |
$28.2 |
$94.2 |
$36.2 |
$48.1 |
||||||
Long-term inflows |
42.7 |
26.8 |
0.7 |
4.3 |
4.9 |
6.0 |
||||||
Long-term outflows |
(38.9) |
(27.0) |
(1.5) |
(3.2) |
(4.1) |
(3.1) |
||||||
Long-term net flows |
3.8 |
(0.2) |
(0.8) |
1.1 |
0.8 |
2.9 |
||||||
Net flows in institutional money market funds |
3.5 |
3.7 |
— |
(0.2) |
0.1 |
(0.1) |
||||||
Market gains and losses/reinvestment |
3.2 |
1.2 |
(0.1) |
2.0 |
0.5 |
(0.4) |
||||||
Foreign currency translation |
1.3 |
— |
0.2 |
— |
0.3 |
0.8 |
||||||
June 30, 2011 |
$653.7 |
$439.9 |
$27.5 |
$97.1 |
$37.9 |
$51.3 |
||||||
See the footnotes immediately following these tables. |
||||||||||||
(Page 16) |
|
Invesco Ltd. Year-to-Date Assets Under Management |
||||||
(in billions) |
June 30, 2011 |
June 30, 2010 |
% Change |
|||
Beginning Assets(a) |
$616.5 |
$459.5 |
34.2% |
|||
Long-term inflows |
90.7 |
77.4 |
17.2% |
|||
Long-term outflows |
(80.3) |
(59.9) |
34.1% |
|||
Long-term net flows |
10.4 |
17.5 |
(40.6)% |
|||
Net flows in institutional money market funds |
6.1 |
(11.5) |
N/A |
|||
Market gains and losses/reinvestment |
16.1 |
(14.5) |
N/A |
|||
Acquisitions |
— |
114.6 |
N/A |
|||
Foreign currency translation |
4.6 |
(7.9) |
N/A |
|||
Ending Assets |
$653.7 |
$557.7 |
17.2% |
|||
Average long-term AUM |
$573.6 |
$393.5 |
45.8% |
|||
Average institutional money market AUM |
67.9 |
71.5 |
(5.0)% |
|||
Average AUM |
$641.5 |
$465.0 |
38.0% |
|||
Gross revenue yield on AUM(a,b) |
65.7bps |
65.3bps |
||||
Gross revenue yield on AUM before performance fees(a,b) |
65.4bps |
65.1bps |
||||
Net revenue yield on AUM(a,c) |
46.0bps |
47.4bps |
||||
Net revenue yield on AUM before performance fees(a,c) |
45.6bps |
47.2bps |
||||
(in billions) |
Total AUM |
AUM ex ETF, UIT |
ETF, UIT and |
|||
December 31, 2010(a) |
$616.5 |
$535.7 |
$80.8 |
|||
Long-term inflows |
90.7 |
57.0 |
33.7 |
|||
Long-term outflows |
(80.3) |
(55.6) |
(24.7) |
|||
Long-term net flows |
10.4 |
1.4 |
9.0 |
|||
Net flows in institutional money market funds |
6.1 |
6.1 |
— |
|||
Market gains and losses/reinvestment |
16.1 |
14.2 |
1.9 |
|||
Foreign currency translation |
4.6 |
4.5 |
0.1 |
|||
June 30, 2011 |
$653.7 |
$561.9 |
$91.8 |
|||
Average AUM |
$641.5 |
$551.4 |
$90.1 |
|||
Gross revenue yield on AUM(a,b) |
65.7bps |
74.7bps |
11.1bps |
|||
Net revenue yield on AUM(a,c) |
46.0bps |
51.7bps |
11.1bps |
|||
By channel: (in billions) |
Total |
Retail |
Institutional |
Private Wealth |
||||
December 31, 2010(a) |
$616.5 |
$378.1 |
$221.4 |
$17.0 |
||||
Long-term inflows |
90.7 |
69.7 |
19.3 |
1.7 |
||||
Long-term outflows |
(80.3) |
(62.7) |
(16.2) |
(1.4) |
||||
Long-term net flows |
10.4 |
7.0 |
3.1 |
0.3 |
||||
Net flows in institutional money market funds |
6.1 |
— |
6.1 |
— |
||||
Market gains and losses/reinvestment |
16.1 |
13.5 |
2.4 |
0.2 |
||||
Foreign currency translation |
4.6 |
3.1 |
1.5 |
— |
||||
June 30, 2011 |
$653.7 |
$401.7 |
$234.5 |
$17.5 |
||||
By asset class: (in billions) |
Total |
Equity |
Fixed |
Balanced |
Money |
Alter- |
||||||
December 31, 2010(a) |
$616.5 |
$294.0 |
$132.0 |
$43.5 |
$68.3 |
$78.7 |
||||||
Long-term inflows |
90.7 |
47.9 |
22.1 |
4.8 |
0.7 |
15.2 |
||||||
Long-term outflows |
(80.3) |
(53.3) |
(12.0) |
(4.6) |
(0.9) |
(9.5) |
||||||
Long-term net flows |
10.4 |
(5.4) |
10.1 |
0.2 |
(0.2) |
5.7 |
||||||
Net flows in institutional money market funds |
6.1 |
— |
— |
— |
6.1 |
— |
||||||
Market gains and losses/reinvestment(f) |
16.1 |
10.5 |
3.1 |
0.1 |
0.2 |
2.2 |
||||||
Foreign currency translation |
4.6 |
2.8 |
0.6 |
0.7 |
— |
0.5 |
||||||
June 30, 2011 |
$653.7 |
$301.9 |
$145.8 |
$44.5 |
$74.4(e) |
$87.1 |
||||||
By client domicile: (in billions) |
Total |
U.S. |
Canada |
U.K. |
Continental |
Asia |
||||||
December 31, 2010(a) |
$616.5 |
$415.4 |
$27.9 |
$92.1 |
$35.3 |
$45.8 |
||||||
Long-term inflows |
90.7 |
60.3 |
1.4 |
7.8 |
9.7 |
11.5 |
||||||
Long-term outflows |
(80.3) |
(53.6) |
(3.2) |
(7.5) |
(9.5) |
(6.5) |
||||||
Long-term net flows |
10.4 |
6.7 |
(1.8) |
0.3 |
0.2 |
5.0 |
||||||
Net flows in institutional money market funds |
6.1 |
6.4 |
0.1 |
(0.5) |
0.1 |
— |
||||||
Market gains and losses/reinvestment |
16.1 |
11.4 |
0.5 |
3.0 |
1.3 |
(0.1) |
||||||
Foreign currency translation |
4.6 |
— |
0.8 |
2.2 |
1.0 |
0.6 |
||||||
June 30, 2011 |
$653.7 |
$439.9 |
$27.5 |
$97.1 |
$37.9 |
$51.3 |
||||||
See the footnotes immediately following these tables. |
||||||||||||
(Page 17) |
|
Invesco Ltd. Quarterly Assets Under Management – ETF, UIT & Passive |
||||||||
(in billions) |
Q2-11 |
Q1-11 |
% Change |
Q2-10 |
||||
Beginning Assets |
$91.7 |
$80.8 |
13.5% |
$55.7 |
||||
Long-term inflows |
14.7 |
19.0 |
(22.6)% |
26.6 |
||||
Long-term outflows |
(13.8) |
(10.9) |
26.6% |
(11.9) |
||||
Long-term net flows |
0.9 |
8.1 |
(88.9)% |
14.7 |
||||
Net flows in institutional money market funds |
— |
— |
— |
— |
||||
Market gains and losses/reinvestment |
(0.9) |
2.8 |
N/A |
(4.8) |
||||
Acquisitions |
— |
— |
— |
13.7 |
||||
Foreign currency translation |
0.1 |
— |
N/A |
(0.1) |
||||
Ending Assets |
$91.8 |
$91.7 |
0.1% |
$79.2 |
||||
Average long-term AUM |
93.5 |
86.7 |
7.8% |
57.5 |
||||
Average institutional money market AUM |
— |
— |
— |
— |
||||
Average AUM |
$93.5 |
$86.7 |
7.8% |
$57.5 |
||||
Gross revenue yield on AUM(b) |
11.3bps |
11.0bps |
12.0bps |
|||||
Gross revenue yield on AUM before performance fees(b) |
11.3bps |
11.0bps |
12.0bps |
|||||
Net revenue yield on AUM(c) |
11.3bps |
11.0bps |
12.0bps |
|||||
Net revenue yield on AUM before performance fees(c) |
11.3bps |
11.0bps |
12.0bps |
|||||
By channel: (in billions) |
Total |
Retail |
Institutional |
Private Wealth |
||||
March 31, 2011 |
$91.7 |
$78.2 |
$13.5 |
— |
||||
Long-term inflows |
14.7 |
12.7 |
2.0 |
— |
||||
Long-term outflows |
(13.8) |
(13.3) |
(0.5) |
— |
||||
Long-term net flows |
0.9 |
(0.6) |
1.5 |
— |
||||
Net flows in institutional money market funds |
— |
— |
— |
— |
||||
Market gains and losses/reinvestment |
(0.9) |
(0.9) |
— |
— |
||||
Foreign currency translation |
0.1 |
— |
0.1 |
— |
||||
June 30, 2011 |
$91.8 |
$76.7 |
$15.1 |
— |
||||
By asset class: (in billions) |
Total |
Equity |
Fixed |
Balanced |
Money |
Alter- |
||||||
March 31, 2011 |
$91.7 |
$47.3 |
$23.7 |
— |
— |
$20.7 |
||||||
Long-term inflows |
14.7 |
10.0 |
3.0 |
— |
— |
1.7 |
||||||
Long-term outflows |
(13.8) |
(10.9) |
(0.3) |
— |
— |
(2.6) |
||||||
Long-term net flows |
0.9 |
(0.9) |
2.7 |
— |
— |
(0.9) |
||||||
Net flows in institutional money market funds |
— |
— |
— |
— |
— |
— |
||||||
Market gains and losses/reinvestment |
(0.9) |
(0.7) |
0.3 |
— |
— |
(0.5) |
||||||
Foreign currency translation |
0.1 |
— |
— |
— |
— |
0.1 |
||||||
June 30, 2011 |
$91.8 |
$45.7 |
$26.7 |
— |
— |
$19.4 |
||||||
By client domicile: (in billions) |
Total |
U.S. |
Canada |
U.K. |
Continental |
Asia |
||||||
March 31, 2011 |
$91.7 |
$88.0 |
— |
— |
$1.4 |
$2.3 |
||||||
Long-term inflows |
14.7 |
14.6 |
— |
— |
0.1 |
— |
||||||
Long-term outflows |
(13.8) |
(13.7) |
— |
— |
(0.1) |
— |
||||||
Long-term net flows |
0.9 |
0.9 |
— |
— |
— |
— |
||||||
Net flows in institutional money market funds |
— |
— |
— |
— |
— |
— |
||||||
Market gains and losses/reinvestment |
(0.9) |
(0.9) |
— |
— |
— |
— |
||||||
Foreign currency translation |
0.1 |
— |
— |
— |
— |
0.1 |
||||||
June 30, 2011 |
$91.8 |
$88.0 |
— |
— |
$1.4 |
$2.4 |
||||||
See the footnotes immediately following these tables. |
||||||||||||
(Page 18) |
|
Invesco Ltd. Year-to-Date Assets Under Management – ETF, UIT & Passive |
||||||
(in billions) |
June 30, 2011 |
June 30, 2010 |
% Change |
|||
Beginning Assets |
$80.8 |
$53.0 |
52.5% |
|||
Long-term inflows |
33.7 |
39.1 |
(13.8)% |
|||
Long-term outflows |
(24.7) |
(23.9) |
3.3% |
|||
Long-term net flows |
9.0 |
15.2 |
(40.8)% |
|||
Net flows in institutional money market funds |
— |
— |
— |
|||
Market gains and losses/reinvestment |
1.9 |
(2.6) |
N/A |
|||
Acquisitions |
— |
13.7 |
(100.0)% |
|||
Foreign currency translation |
0.1 |
(0.1) |
N/A |
|||
Ending Assets |
$91.8 |
$79.2 |
15.9% |
|||
Average long-term AUM |
90.1 |
54.6 |
65.0% |
|||
Average institutional money market AUM |
— |
— |
— |
|||
Average AUM |
$90.1 |
$54.6 |
65.0% |
|||
Gross revenue yield on AUM(b) |
11.1bps |
13.0bps |
||||
Gross revenue yield on AUM before performance fees(b) |
11.1bps |
13.0bps |
||||
Net revenue yield on AUM(c) |
11.1bps |
13.0bps |
||||
Net revenue yield on AUM before performance fees(c) |
11.1bps |
13.0bps |
||||
By channel: (in billions) |
Total |
Retail |
Institutional |
Private Wealth |
||||
December 31, 2010 |
$80.8 |
$70.6 |
$10.2 |
— |
||||
Long-term inflows |
33.7 |
28.1 |
5.6 |
— |
||||
Long-term outflows |
(24.7) |
(24.0) |
(0.7) |
— |
||||
Long-term net flows |
9.0 |
4.1 |
4.9 |
— |
||||
Net flows in institutional money market funds |
— |
— |
— |
— |
||||
Market gains and losses/reinvestment |
1.9 |
2.0 |
(0.1) |
— |
||||
Foreign currency translation |
0.1 |
— |
0.1 |
— |
||||
June 30, 2011 |
$91.8 |
$76.7 |
$15.1 |
— |
||||
By asset class: (in billions) |
Total |
Equity |
Fixed |
Balanced |
Money |
Alter- |
||||||
December 31, 2010 |
$80.8 |
$42.8 |
$19.8 |
— |
— |
$18.2 |
||||||
Long-term inflows |
33.7 |
21.2 |
7.5 |
— |
— |
5.0 |
||||||
Long-term outflows |
(24.7) |
(19.7) |
(0.8) |
— |
— |
(4.2) |
||||||
Long-term net flows |
9.0 |
1.5 |
6.7 |
— |
— |
0.8 |
||||||
Net flows in institutional money market funds |
— |
— |
— |
— |
— |
— |
||||||
Market gains and losses/reinvestment |
1.9 |
1.4 |
0.2 |
— |
— |
0.3 |
||||||
Foreign currency translation |
0.1 |
— |
— |
— |
— |
0.1 |
||||||
June 30, 2011 |
$91.8 |
$45.7 |
$26.7 |
— |
— |
$19.4 |
||||||
By client domicile: (in billions) |
Total |
U.S. |
Canada |
U.K. |
Continental |
Asia |
||||||
December 31, 2010 |
$80.8 |
$77.3 |
— |
— |
$1.2 |
$2.3 |
||||||
Long-term inflows |
33.7 |
33.4 |
— |
— |
0.3 |
— |
||||||
Long-term outflows |
(24.7) |
(24.5) |
— |
— |
(0.2) |
— |
||||||
Long-term net flows |
9.0 |
8.9 |
— |
— |
0.1 |
— |
||||||
Net flows in institutional money market funds |
— |
— |
— |
— |
— |
— |
||||||
Market gains and losses/reinvestment |
1.9 |
1.8 |
— |
— |
0.1 |
— |
||||||
Foreign currency translation |
0.1 |
— |
— |
— |
— |
0.1 |
||||||
June 30, 2011 |
$91.8 |
$88.0 |
— |
— |
$1.4 |
$2.4 |
||||||
See the footnotes immediately following these tables. |
||||||||||||
(Page 19) |
|
Invesco Ltd. Footnotes to the Assets Under Management Tables |
||
(a) |
The beginning balances were adjusted to reflect certain asset reclassifications. |
|
(b) |
Gross revenue yield on AUM is equal to annualized total operating revenues divided by average AUM, excluding joint venture (JV) AUM. For quarterly AUM, our share of the average AUM in the second quarter for our JVs in China was $3.5 billion (first quarter 2011: $3.5 billion; second quarter 2010: $3.5 billion). For year to date AUM, our share of the average AUM in the first six months of 2011 for our JVs in China was $3.5 billion (first six months of 2010: $3.6 billion). It is appropriate to exclude the average AUM of our JVs for purposes of computing gross revenue yield on AUM, because the revenues resulting from these AUM are not presented in our operating revenues. Under U.S. GAAP, our share of the pre-tax earnings of the JVs is recorded as equity in earnings of unconsolidated affiliates on our Condensed Consolidated Statements of Income. Gross revenue yield, the most comparable U.S. GAAP-based measure to net revenue yield, is not considered a meaningful effective fee rate measure. The numerator of the gross revenue yield measure, operating revenues, excludes the management fees earned from consolidated investment products; however, the denominator of the measure includes the AUM of these investment products. Therefore, the gross revenue yield measure is not considered representative of the company's true effective fee rate from AUM. The company evaluates net revenue yield instead. See the Reconciliations of U.S. GAAP to Non-GAAP information on pages 8 through 13 of this release for a reconciliation of operating revenues to net revenues. |
|
(c) |
Net revenue yield on AUM is equal to annualized net revenues divided by average AUM. See the reconciliations of U.S. GAAP to Non-GAAP Information on pages 8 through 13 of this release for a reconciliation of operating revenues to net revenues. |
|
(d) |
The alternatives asset class includes absolute return, real estate, commodities, currencies, financial structures, Global Macro, REITS, private capital, and Risk Premia Capture. |
|
(e) |
Ending Money Market AUM includes $70.4 billion in institutional money market AUM and $4.0 billion in retail money market AUM. |
|
(f) |
As a result of fund mergers in the second quarter of 2011, the market gains and losses / reinvestment line includes $0.9 billion transferred from the balanced to the equity asset class. |
|
(Page 20) |
|
Invesco Ltd. Investment Capabilities Performance Overview |
||||||||
Benchmark Comparison |
Peer Group Comparison |
|||||||
% of AUM Ahead of |
% of AUM In Top Half of |
|||||||
Equities |
1yr |
3yr |
5yr |
1yr |
3yr |
5yr |
||
U.S. Core |
31% |
80% |
96% |
19% |
65% |
75% |
||
U.S. Growth |
25% |
61% |
33% |
25% |
62% |
68% |
||
U.S. Value |
89% |
100% |
95% |
88% |
100% |
95% |
||
Sector |
66% |
57% |
79% |
67% |
67% |
65% |
||
U.K. |
6% |
98% |
96% |
0% |
98% |
92% |
||
Canadian |
38% |
100% |
64% |
38% |
94% |
29% |
||
Asian |
60% |
74% |
96% |
41% |
78% |
69% |
||
Continental European |
47% |
89% |
91% |
22% |
85% |
88% |
||
Global |
24% |
70% |
80% |
26% |
56% |
55% |
||
Global Ex U.S. and Emerging Markets |
62% |
99% |
94% |
63% |
99% |
99% |
||
Balanced |
||||||||
Balanced |
48% |
94% |
79% |
39% |
95% |
75% |
||
Money Market |
||||||||
Money Market |
37% |
73% |
73% |
96% |
93% |
94% |
||
Fixed Income |
||||||||
U.S. Fixed Income |
61% |
41% |
43% |
28% |
69% |
66% |
||
Global Fixed Income |
81% |
80% |
88% |
82% |
83% |
80% |
||
Note: AUM measured in the one-, three-, and five-year peer group rankings represents 60%, 59%, and 58% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one-, three-, and five-year basis represents 72%, 70%, and 68% of total Invesco AUM, respectively, as of 6/30/11. Peer group rankings are sourced from a widely-used third party ranking agency in each fund's market (Lipper, Morningstar, Russell, Mercer, eVestment Alliance, SITCA) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and preceding month-end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Excludes Invesco PowerShares, W.L. Ross & Co., Invesco Private Capital, non-discretionary direct real estate products and CLOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor's experience.
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SOURCE Invesco Ltd.
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