ATLANTA, April 26, 2018
/PRNewswire/ -- Invesco Ltd. (NYSE: IVZ) today reported
financial results for the three months ended March 31,
2018.
"The addition of Guggenheim's products to Invesco's strong and
diversified range of active, passive and alternative capabilities
further enhances our ability to meet the investment needs of our
clients and will contribute to the growth and momentum of our ETF
business," said Martin L. Flanagan,
president and CEO of Invesco. "Strong long-term investment
performance and our focus on clients extended our nine years of
positive net flows while continued investment in our
differentiated capabilities further solidified our long-term
competitive advantage. Reflecting the strength of our
business and our focus on providing a high level of value to
shareholders, we're pleased to announce a 3.4% increase in our
quarterly dividend to $0.30 per
share."
|
Q1-18
|
|
Q4-17
|
|
Q1-18 vs.
Q4-17
|
|
Q1-17
|
|
Q1-18 vs.
Q1-17
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Financial
Measures
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$1,355.8
|
m
|
|
$1,375.6
|
m
|
|
(1.4)
|
%
|
|
$1,192.6
|
m
|
|
13.7
|
%
|
|
Operating
income
|
$321.1
|
m
|
|
$342.6
|
m
|
|
(6.3)
|
%
|
|
$257.9
|
m
|
|
24.5
|
%
|
|
Operating
margin
|
23.7
|
%
|
|
24.9
|
%
|
|
|
|
21.6
|
%
|
|
|
|
Net income
attributable to Invesco Ltd.
|
$253.9
|
m
|
|
$408.2
|
m
|
|
(37.8)
|
%
|
|
$212.0
|
m
|
|
19.8
|
%
|
|
Diluted
EPS
|
$0.62
|
|
|
$0.99
|
|
|
(37.4)
|
%
|
|
$0.52
|
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Financial
Measures(1)
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$958.0
|
m
|
|
$1,004.9
|
m
|
|
(4.7)
|
%
|
|
$867.1
|
m
|
|
10.5
|
%
|
|
Adjusted operating
income
|
$357.3
|
m
|
|
$397.5
|
m
|
|
(10.1)
|
%
|
|
$326.4
|
m
|
|
9.5
|
%
|
|
Adjusted operating
margin
|
37.3
|
%
|
|
39.6
|
%
|
|
|
|
37.6
|
%
|
|
|
|
Adjusted net income
attributable to Invesco Ltd.
|
$273.9
|
m
|
|
$299.1
|
m
|
|
(8.4)
|
%
|
|
$250.5
|
m
|
|
9.3
|
%
|
|
Adjusted diluted
EPS
|
$0.67
|
|
|
$0.73
|
|
|
(8.2)
|
%
|
|
$0.61
|
|
|
9.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under
Management
|
|
|
|
|
|
|
|
|
|
|
Ending AUM
|
$934.2
|
bn
|
|
$937.6
|
bn
|
|
(0.4)
|
%
|
|
$834.8
|
bn
|
|
11.9
|
%
|
|
Average
AUM
|
$951.3
|
bn
|
|
$930.3
|
bn
|
|
2.3
|
%
|
|
$829.8
|
bn
|
|
14.6
|
%
|
|
(1)
|
The adjusted
financial measures are all non-GAAP financial measures. See
the information on pages 8 through 10 for a reconciliation to their
most
directly comparable U.S. GAAP measures.
|
Completed Acquisition of Guggenheim Investments' ETF
business
On April 6, the company completed
its previously announced acquisition of Guggenheim Investments'
exchange-traded funds (ETF) business, which consists of
$38.1 billion of assets under
management (at date of acquisition).
The acquisition strengthens Invesco's market-leading ETF
capabilities as well as the firm's efforts to meet the needs of
institutional and retail clients in the US and across the globe,
which will contribute further to the growth and long-term success
of the business. With this acquisition, Invesco's ETF assets under
management total $211.8 billion
globally (as of March 31, 2018).
The aggregate purchase price paid by Invesco upon completion of
the transaction was $1.2 billion.
Assets Under Management
Total assets under management (AUM) at March 31, 2018, were
$934.2 billion (December 31,
2017: $937.6 billion), a decrease of
$3.4 billion during the first
quarter. Long-term net inflows were $0.3
billion and total net inflows were $0.3 billion for the first quarter.
Summary of net
flows (in billions)
|
|
Q1-18
|
|
Q4-17
|
|
Q1-17
|
Active
|
|
($1.5)
|
|
|
($2.3)
|
|
|
($0.5)
|
|
Passive
|
|
1.8
|
|
|
0.8
|
|
|
2.1
|
|
Long-term net flows
(1)
|
|
0.3
|
|
|
(1.5)
|
|
|
1.6
|
|
Non-management fee
earning AUM
|
|
(0.4)
|
|
|
1.6
|
|
|
1.2
|
|
Institutional money
market
|
|
0.4
|
|
|
(3.3)
|
|
|
(8.1)
|
|
Total net
flows
|
|
$0.3
|
|
|
($3.2)
|
|
|
($5.3)
|
|
|
|
|
|
|
|
|
Annualized long-term
organic growth rate (2)
|
|
0.2
|
%
|
|
(0.8%)
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
(1)
|
In 2018, in response
to investor feedback, the company reverted to its historical
presentation of long-term net flows, which excludes reinvested
distributions. To enhance transparency, reinvested
distributions will be shown in a separate line in the AUM
tables. The fourth quarter 2017 has been reclassified to
conform with the current presentation. For periods prior to
the third quarter of 2017, reinvested distributions were included
in market gains and losses.
|
(2)
|
Annualized long-term
organic growth rate is calculated using long-term net flows
(annualized) divided by opening long-term AUM for the period.
Long-term AUM excludes institutional money market and
non-management fee earning AUM.
|
Net market losses led to decreases of $12.2 billion in AUM during the first quarter,
compared to net market gains of $14.9
billion in the fourth quarter. Reinvested distributions for
the first quarter were $0.6 billion
compared to $5.9 billion for the
fourth quarter. Foreign exchange rate movements led to a
$7.9 billion increase in AUM during
the first quarter, compared to a $2.5
billion increase in the fourth quarter. Average AUM during
the first quarter were $951.3
billion, compared to $930.3
billion for the fourth quarter, an increase of 2.3%. Further
analysis is included in the supplementary schedules to this
release.
Operating Results
This section discusses the company's first quarter 2018 results,
as compared to the fourth quarter 2017, and comments on significant
items that have impacted the company's results as presented in
accordance with U.S. GAAP. The company adopted required
changes in revenue accounting rules as of January 1, 2018. The company's adoption
methodology impacts only the 2018 period, and these impacts are
quantified in the table below.
(in
millions)
|
Three months
ended
March 31,
2018
|
|
Three months
ended
December 31,
2017
|
|
Variance
|
|
Increases/(dec
reases) related
to
Revenue
Recognition
changes
|
|
Variance
(Excluding impact of Revenue Recognition changes)
|
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
Investment management
fees
|
$1,043.7
|
|
|
$1,098.7
|
|
|
($55.0)
|
|
|
($53.8)
|
|
|
($1.2)
|
|
|
Service and
distribution fees
|
246.1
|
|
|
217.5
|
|
|
28.6
|
|
|
32.4
|
|
|
(3.8)
|
|
|
Performance
fees
|
9.1
|
|
|
43.0
|
|
|
(33.9)
|
|
|
—
|
|
|
(33.9)
|
|
|
Other
|
56.9
|
|
|
16.4
|
|
|
40.5
|
|
|
41.0
|
|
|
(0.5)
|
|
|
Total operating
revenues
|
1,355.8
|
|
|
1,375.6
|
|
|
(19.8)
|
|
|
19.6
|
|
|
(39.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Third-party
distribution, service and advisory
|
419.1
|
|
|
390.9
|
|
|
28.2
|
|
|
23.8
|
|
|
4.4
|
|
|
Employee
compensation
|
390.4
|
|
|
383.6
|
|
|
6.8
|
|
|
—
|
|
|
6.8
|
|
|
Marketing
|
28.1
|
|
|
40.7
|
|
|
(12.6)
|
|
|
—
|
|
|
(12.6)
|
|
|
Property, office and
technology
|
102.2
|
|
|
102.8
|
|
|
(0.6)
|
|
|
—
|
|
|
(0.6)
|
|
|
General and
administrative
|
94.9
|
|
|
115.0
|
|
|
(20.1)
|
|
|
(4.2)
|
|
|
(15.9)
|
|
|
Total operating
expenses
|
1,034.7
|
|
|
1,033.0
|
|
|
1.7
|
|
|
19.6
|
|
|
(17.9)
|
|
|
Operating
income
|
$321.1
|
|
|
$342.6
|
|
|
($21.5)
|
|
|
$—
|
|
|
($21.5)
|
|
|
Gross revenue yield
on AUM (1)
|
57.6 bps
|
|
59.7 bps
|
|
(2.1 bps)
|
|
0.8 bps
|
|
(2.9 bps)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Financial
Measures(2)
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$958.0
|
|
|
$1,004.9
|
|
|
($46.9)
|
|
|
($4.2)
|
|
|
($42.7)
|
|
|
Adjusted operating
income
|
$357.3
|
|
|
$397.5
|
|
|
($40.2)
|
|
|
$—
|
|
|
($40.2)
|
|
|
Net revenue yield on
AUM
|
40.3 bps
|
|
43.2 bps
|
|
(2.9 bps)
|
|
(0.2 bps)
|
|
(2.7 bps)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
See note (c) on page
15 for calculation of gross revenue yield on AUM. Gross
revenue yield is not used by management for the reasons provided in
this note.
|
(2)
|
The adjusted
financial measures are all non-GAAP financial measures. See
the information on pages 8 through 10 for a reconciliation to their
most directly comparable U.S. GAAP measures.
|
Operating revenues decreased $19.8
million in the first quarter. The change in revenue
recognition rules increased first quarter 2018 operating revenues
by $19.6 million. Excluding the
change in revenue accounting rules, operating revenues decreased
$39.4 million. Foreign exchange
rate changes increased first quarter operating revenues by
$16.7 million compared to the fourth
quarter.
Investment management fees decreased $55.0 million in the first quarter. The change in
revenue recognition rules decreased first quarter 2018 investment
management fees by $53.8 million.
Excluding the change in revenue accounting rules, investment
management fees decreased by $1.2
million. The decrease reflects two fewer days during
the first quarter, offset by higher average AUM and the impact of
foreign exchange. Foreign exchange rate changes increased
first quarter investment management fees by $16.2 million compared to the fourth quarter.
Service and distribution fees increased $28.6 million in the first quarter. The
change in revenue recognition rules increased first quarter 2018
service and distribution fees $32.4
million. Excluding the change in revenue accounting
rules, service and distribution fees decreased by $3.8 million, reflecting lower day count.
Performance fees decreased $33.9
million compared to the fourth quarter. Performance fees
recorded in the first quarter were primarily generated by our real
estate, U.K. equity, and bank loan teams.
Other revenues increased $40.5
million in the first quarter. The change in revenue
recognition rules increased first quarter 2018 other revenues
$41.0 million. Excluding the
change in revenue accounting rules, other revenues decreased by
$0.5 million.
Operating expenses increased $1.7
million in the first quarter. The change in revenue
recognition rules increased first quarter 2018 operating expenses
$19.6 million. Excluding the
change in revenue accounting rules, operating expenses decreased
$17.9 million. Business optimization
charges were $8.2 million in the
first quarter, compared to $9.0
million in the fourth quarter. Total costs of these
initiatives at completion are estimated to be up to $158 million, of which approximately $27 million related to a large-scale outsourcing
project remains to be incurred through 2018. As of the end of
the first quarter, this initiative has produced annualized run-rate
expense savings of $45 million, and
by completion in 2018, the annualized run-rate savings is expected
to be up to $65 million. Foreign
exchange rate changes increased first quarter operating expenses by
$10.0 million when compared to the
fourth quarter.
Third-party distribution, service and advisory expenses
increased $28.2 million. The
change in revenue recognition rules increased third-party
distribution, service and advisory expenses $23.8 million. Excluding the change in revenue
accounting rules, third-party distribution, service and advisory
expenses increased by $4.4 million.
Foreign exchange rate changes increased first quarter third-party
distribution, service and advisory expenses by $1.1 million when compared to the fourth
quarter.
Employee compensation expenses increased by $6.8 million compared to the fourth quarter. The
first quarter reflects a seasonal increase in payroll tax and
employee benefit costs, partially offset by decreases in variable
compensation costs. Staff severance costs related to business
optimization were $4.3 million in the
first quarter compared to $2.8
million in the fourth quarter. Foreign exchange rate
changes increased first quarter employee compensation expenses by
$5.4 million when compared to the
fourth quarter.
Marketing expenses decreased by $12.6
million compared to the fourth quarter, reflecting the
seasonal decrease from fourth quarter client events and marketing
campaigns.
Property, office and technology expenses decreased $0.6 million compared to the fourth quarter.
General and administrative expenses decreased $20.1 million in the first quarter. The
change in revenue recognition rules decreased general and
administrative expenses $4.2 million.
Excluding the change in revenue accounting rules, general and
administrative expenses decreased by $15.9
million, due to decreased legal and regulatory costs, as
well as lower irrecoverable taxes, travel costs and
acquisition-related amortization expense as compared to the fourth
quarter. Foreign exchange rate changes increased first
quarter general and administrative expenses by $1.7 million when compared to the fourth
quarter.
Equity in earnings of unconsolidated affiliates increased
$6.1 million compared to the fourth
quarter primarily from increases in earnings from our real estate
investments. Non-operating other income and expenses in the first
quarter also included a $27.2 million
net gain comprised of market-driven gains and losses of investments
held by consolidated investment products (CIP) and net interest
income of CIP (fourth quarter: $44.8
million gain).
Other gains and losses, net was a loss in the first quarter of
$5.4 million compared to a gain of
$25.6 million in the fourth quarter.
The components and variances are included in the table below:
Summary of Other
gains and losses, net (in millions)
|
|
Q1-18
|
|
Q4-17
|
|
Change
|
Investment
gains/(losses)
|
|
($2.4)
|
|
|
$12.0
|
|
|
($14.4)
|
|
Market valuation
gains/(losses) in deferred compensation plan investments
|
|
(4.0)
|
|
|
3.7
|
|
|
(7.7)
|
|
Market valuation
gains/(losses) on acquisition-related contingent
consideration
|
|
0.4
|
|
|
7.4
|
|
|
(7.0)
|
|
Other gain/(loss)
items
|
|
0.6
|
|
|
2.5
|
|
|
(1.9)
|
|
|
|
($5.4)
|
|
|
$25.6
|
|
|
($31.0)
|
|
|
|
|
|
|
|
|
The effective tax rate was a 20.5% charge for the first quarter,
compared to a 5.8% tax benefit for the fourth quarter. The
fourth quarter 2017 included a $130.7
million (33.9%) tax benefit related to the revaluation of
deferred tax assets and liabilities following the Tax Cuts and Jobs
Act (the "2017 Tax Act") enacted in the
United States. First quarter 2018 includes a 5.6% tax rate
reduction as a result of lower Federal tax rates effective
January 1, 2018.
The impact of the inclusion of non-controlling interests in CIP
decreased our effective tax rate by 0.7% for the first quarter,
compared to an increase of 0.2% for the fourth quarter.
Capital Management
As of March 31, 2018, the company's cash and cash
equivalents were $1,861.5 million,
with long-term debt of $2,076.4
million. The credit facility balance was zero at
March 31, 2018 and December 31, 2017.
As previously announced, the company completed its acquisition
of the Guggenheim Investments' ETF business on April 6, 2018, for a purchase price of
$1.2 billion. To fund the
purchase, the company borrowed approximately $835 million on its credit facility in early
April 2018. The company plans to repay the amount borrowed
over the course of 2018, returning leverage ratios to
pre-acquisition levels, through the continued curtailment of open
market share repurchases. As a result, the company has not
repurchased common shares in the open market to date in 2018.
Dividends paid in the first quarter were $119.6 million. Today, the company is announcing
a first quarter cash dividend of 30.0
cents. The dividend is payable on June 1, 2018, to
shareholders of record at the close of business on May 11,
2018, with an ex-dividend date of May 10, 2018.
Headcount
As of March 31, 2018, the company had 7,134 employees,
compared to 7,030 employees as of December 31, 2017.
Invesco is an independent investment management firm dedicated
to delivering an investment experience that helps people get more
out of life. NYSE: IVZ; www.invesco.com.
Members of the investment community and general public are
invited to listen to the conference call today, April 26,
2018, at 9:00 a.m. ET by dialing one
of the following numbers: 1-866-803-2143 for U.S. and Canadian
callers or 1-210-795-1098 for international callers. An audio
replay of the conference call will be available until Thursday, May 10, 2018 at 5:00 p.m. ET by calling 1-800-884-1530 for U.S.
and Canadian callers or 1-402-220-3007 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, geopolitical events and their potential impact on
the company, 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.
U.S. GAAP
Condensed Consolidated Income Statements
(Unaudited, in
millions, other than per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1-18
|
|
Q4-17
|
|
%
Change
|
|
Q1-17
|
|
%
Change
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
|
Investment
management fees
|
$1,043.7
|
|
|
$1,098.7
|
|
|
(5.0)
|
%
|
|
$955.2
|
|
|
9.3
|
%
|
Service and
distribution fees
|
246.1
|
|
|
217.5
|
|
|
13.1
|
%
|
|
206.4
|
|
|
19.2
|
%
|
Performance
fees
|
9.1
|
|
|
43.0
|
|
|
(78.8)
|
%
|
|
11.3
|
|
|
(19.5)
|
%
|
Other
|
56.9
|
|
|
16.4
|
|
|
247.0
|
%
|
|
19.7
|
|
|
188.8
|
%
|
Total operating
revenues
|
1,355.8
|
|
|
1,375.6
|
|
|
(1.4)
|
%
|
|
1,192.6
|
|
|
13.7
|
%
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Third-party
distribution, service and advisory
|
419.1
|
|
|
390.9
|
|
|
7.2
|
%
|
|
349.3
|
|
|
20.0
|
%
|
Employee
compensation
|
390.4
|
|
|
383.6
|
|
|
1.8
|
%
|
|
397.5
|
|
|
(1.8)
|
%
|
Marketing
|
28.1
|
|
|
40.7
|
|
|
(31.0)
|
%
|
|
24.4
|
|
|
15.2
|
%
|
Property, office
and technology
|
102.2
|
|
|
102.8
|
|
|
(0.6)
|
%
|
|
85.5
|
|
|
19.5
|
%
|
General and
administrative
|
94.9
|
|
|
115.0
|
|
|
(17.5)
|
%
|
|
78.0
|
|
|
21.7
|
%
|
Total operating
expenses
|
1,034.7
|
|
|
1,033.0
|
|
|
0.2
|
%
|
|
934.7
|
|
|
10.7
|
%
|
Operating
income
|
321.1
|
|
|
342.6
|
|
|
(6.3)
|
%
|
|
257.9
|
|
|
24.5
|
%
|
Other
income/(expense):
|
|
|
|
|
|
|
|
|
|
Equity in earnings
of unconsolidated affiliates
|
9.7
|
|
|
3.6
|
|
|
169.4
|
%
|
|
17.7
|
|
|
(45.2)
|
%
|
Interest and
dividend income
|
4.2
|
|
|
6.4
|
|
|
(34.4)
|
%
|
|
2.9
|
|
|
44.8
|
%
|
Interest
expense
|
(23.2)
|
|
|
(23.6)
|
|
|
(1.7)
|
%
|
|
(24.0)
|
|
|
(3.3)
|
%
|
Other gains and
losses, net
|
(5.4)
|
|
|
25.6
|
|
|
N/A
|
|
6.9
|
|
|
N/A
|
Other
income/(expense) of CIP, net
|
27.2
|
|
|
44.8
|
|
|
(39.3)
|
%
|
|
28.5
|
|
|
(4.6)
|
%
|
Income before
income taxes
|
333.6
|
|
|
399.4
|
|
|
(16.5)
|
%
|
|
289.9
|
|
|
15.1
|
%
|
Income tax
provision
|
(68.4)
|
|
|
23.2
|
|
|
N/A
|
|
(75.7)
|
|
|
(9.6)
|
%
|
Net
income
|
265.2
|
|
|
422.6
|
|
|
(37.2)
|
%
|
|
214.2
|
|
|
23.8
|
%
|
Net (income)/loss
attributable to noncontrolling interests in
consolidated entities
|
(11.3)
|
|
|
(14.4)
|
|
|
(21.5)
|
%
|
|
(2.2)
|
|
|
413.6
|
%
|
Net income
attributable to Invesco Ltd.
|
$253.9
|
|
|
$408.2
|
|
|
(37.8)
|
%
|
|
$212.0
|
|
|
19.8
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
---basic
|
$0.62
|
|
|
$1.00
|
|
|
(38.0)
|
%
|
|
$0.52
|
|
|
19.2
|
%
|
---diluted
|
$0.62
|
|
|
$0.99
|
|
|
(37.4)
|
%
|
|
$0.52
|
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
---basic
|
411.3
|
|
|
410.0
|
|
|
0.3
|
%
|
|
407.7
|
|
|
0.9
|
%
|
---diluted
|
411.8
|
|
|
410.6
|
|
|
0.3
|
%
|
|
408.0
|
|
|
0.9
|
%
|
Invesco Ltd.
Non-GAAP Information and
Reconciliations
We utilize the following non-GAAP performance measures: net
revenues (and by calculation, net revenue yield on AUM), adjusted
operating income, adjusted operating margin, adjusted net income
attributable to Invesco Ltd., and adjusted diluted EPS. We believe
the adjusted measures provide valuable insight into our ongoing
operational performance and assist in comparisons to our
competitors. These measures also assist management with the
establishment of operational budgets and forecasts and assist the
Board of Directors and management in determining incentive
compensation decisions. The most directly comparable U.S. GAAP
measures are operating revenues (and by calculation, gross revenue
yield on AUM), operating income, operating margin, net income
attributable to Invesco Ltd., and diluted EPS.
The following are reconciliations of operating revenues,
operating income (and by calculation, operating margin), and net
income attributable to Invesco Ltd. (and by calculation, diluted
EPS) on a U.S. GAAP basis to a non-GAAP basis of net revenues,
adjusted operating income (and by calculation, adjusted operating
margin), and adjusted net income attributable to Invesco Ltd. (and
by calculation, adjusted diluted EPS). In addition, a
reconciliation of adjusted operating expenses is provided below,
together with reconciliations of the U.S. GAAP operating
expense lines to provide further analysis of the non-GAAP
adjustments. These non-GAAP measures should not be considered
as substitutes for any U.S. GAAP measures and may not be comparable
to other similarly titled measures of other companies. The
tax effect of the reconciling items is based on the tax
jurisdiction attributable to the transactions. These measures
are described more fully in the company's Forms 10-K and
10-Q. Refer to these public filings for additional
information about the company's non-GAAP performance measures.
Reconciliation of Operating revenues to Net revenues:
in
millions
|
Q1-18
|
|
Q4-17
|
|
Q1-17
|
|
Operating revenues,
U.S. GAAP basis
|
$1,355.8
|
|
|
$1,375.6
|
|
|
$1,192.6
|
|
|
Proportional share of
revenues, net of third-party distribution, service
and advisory expenses, from joint venture investments
|
14.3
|
|
|
13.5
|
|
|
10.6
|
|
|
Third party
distribution, service and advisory expenses
|
(419.1)
|
|
|
(390.9)
|
|
|
(349.3)
|
|
|
CIP
|
7.0
|
|
|
6.7
|
|
|
13.2
|
|
|
Net
revenues
|
$958.0
|
|
|
$1,004.9
|
|
|
$867.1
|
|
|
|
|
|
|
|
|
|
Reconciliation of Operating income to Adjusted operating
income:
in
millions
|
Q1-18
|
|
Q4-17
|
|
Q1-17
|
|
Operating income,
U.S. GAAP basis
|
$321.1
|
|
|
$342.6
|
|
|
$257.9
|
|
|
Proportional share of
net operating income from joint venture
investments
|
5.9
|
|
|
6.0
|
|
|
1.3
|
|
|
CIP
|
10.2
|
|
|
12.0
|
|
|
12.0
|
|
|
Business
combinations
|
10.3
|
|
|
21.7
|
|
|
5.1
|
|
|
Compensation expense
related to market valuation changes in deferred
compensation plans
|
1.6
|
|
|
6.2
|
|
|
5.7
|
|
|
Business optimization
expenses
|
8.2
|
|
|
9.0
|
|
|
24.7
|
|
|
Senior executive
retirement and related costs
|
—
|
|
|
—
|
|
|
19.7
|
|
|
Adjusted operating
income
|
$357.3
|
|
$397.5
|
|
|
$326.4
|
|
|
|
|
|
|
|
|
|
Operating margin
(1)
|
23.7
|
%
|
|
24.9
|
%
|
|
21.6
|
%
|
|
Adjusted operating
margin (2)
|
37.3
|
%
|
|
39.6
|
%
|
|
37.6
|
%
|
|
Reconciliation of Net income attributable to Invesco Ltd. to
Adjusted net income attributable to Invesco Ltd.
in
millions
|
Q1-18
|
|
Q4-17
|
|
Q1-17
|
|
Net income
attributable to Invesco Ltd., U.S. GAAP basis
|
$253.9
|
|
|
$408.2
|
|
|
$212.0
|
|
|
CIP
|
(0.6)
|
|
|
(0.8)
|
|
|
(5.7)
|
|
|
Business
combinations:
|
|
|
|
|
|
|
Changes in the fair
value of contingent consideration
|
(0.4)
|
|
|
(7.5)
|
|
|
(0.5)
|
|
|
Other business
combination-related adjustments
|
10.3
|
|
|
21.7
|
|
|
5.1
|
|
|
Deferred compensation
plan market valuation changes and dividend
income less compensation expense
|
5.3
|
|
|
0.2
|
|
|
(4.5)
|
|
|
Business optimization
expenses
|
8.2
|
|
|
9.0
|
|
|
24.7
|
|
|
Senior executive
retirement and related costs
|
—
|
|
|
—
|
|
|
19.7
|
|
|
Foreign exchange
hedge
|
(1.5)
|
|
|
(0.9)
|
|
|
13.9
|
|
|
|
|
|
|
|
|
|
Taxation:
|
|
|
|
|
|
|
Revaluation of
deferred taxes resulting from 2017 Tax Act
|
—
|
|
|
(130.7)
|
|
|
—
|
|
|
Taxation on business
combinations
|
1.5
|
|
|
2.8
|
|
|
4.1
|
|
|
Taxation on deferred
compensation plan market valuation changes and dividend income less
compensation expense
|
(1.2)
|
|
|
(0.1)
|
|
|
1.6
|
|
|
Taxation on business
optimization charges
|
(2.0)
|
|
|
(3.1)
|
|
|
(8.7)
|
|
|
Taxation on senior
executive retirement and related costs
|
—
|
|
|
—
|
|
|
(5.9)
|
|
|
Taxation on foreign
exchange hedge
|
0.4
|
|
|
0.3
|
|
|
(5.3)
|
|
|
Adjusted net income
attributable to Invesco Ltd. (3)
|
$273.9
|
|
|
$299.1
|
|
|
$250.5
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding - diluted
|
411.8
|
|
|
410.6
|
|
|
408.0
|
|
|
Diluted
EPS
|
$0.62
|
|
|
$0.99
|
|
|
$0.52
|
|
|
Adjusted diluted EPS
(4)
|
$0.67
|
|
|
$0.73
|
|
|
$0.61
|
|
|
|
|
|
|
|
|
|
(1)
|
Operating margin is
equal to operating income divided by operating revenues.
|
(2)
|
Adjusted operating
margin is equal to adjusted operating income divided by net
revenues.
|
(3)
|
The effective tax
rate on adjusted net income attributable to Invesco Ltd. is 20.6%
(fourth quarter: 26.7%; first quarter 2017: 26.6%). First quarter
2018 includes a 6.1% tax rate reduction as a result of lower
Federal tax rates effective January 1, 2018.
|
(4)
|
Adjusted diluted EPS
is equal to adjusted net income attributable to Invesco Ltd.
divided by the weighted average number of common and restricted
shares outstanding. There is no difference between the
calculated earnings per share amounts presented above and the
calculated earnings per share amounts under the two class
method.
|
Reconciliation of Operating expenses to Adjusted operating
expenses:
in
millions
|
Q1-18
|
|
Q4-17
|
|
Q1-17
|
|
Operating expenses,
U.S. GAAP basis
|
$1,034.7
|
|
|
$1,033.0
|
|
|
$934.7
|
|
|
Proportional share of
revenues, net of third-party distribution expenses, from joint
venture investments
|
8.4
|
|
|
7.5
|
|
|
9.3
|
|
|
Third party
distribution, service and advisory expenses
|
(419.1)
|
|
|
(390.9)
|
|
|
(349.3)
|
|
|
CIP
|
(3.2)
|
|
|
(5.3)
|
|
|
1.2
|
|
|
Business
combinations
|
(10.3)
|
|
|
(21.7)
|
|
|
(5.1)
|
|
|
Compensation expense
related to market valuation changes in deferred compensation
plans
|
(1.6)
|
|
|
(6.2)
|
|
|
(5.7)
|
|
|
Business
optimization
|
(8.2)
|
|
|
(9.0)
|
|
|
(24.7)
|
|
|
Senior executive
retirement and related costs
|
—
|
|
|
—
|
|
|
(19.7)
|
|
|
Adjusted operating
expenses
|
$600.7
|
|
|
$607.4
|
|
|
$540.7
|
|
|
|
|
|
|
|
|
|
Employee
compensation, U.S. GAAP basis
|
$390.4
|
|
|
$383.6
|
|
|
$397.5
|
|
|
Proportional
consolidation of joint ventures
|
5.9
|
|
|
4.8
|
|
|
5.1
|
|
|
Business
combinations
|
(0.9)
|
|
|
(1.4)
|
|
|
(1.1)
|
|
|
Market
appreciation/depreciation of deferred compensation
awards
|
(1.6)
|
|
|
(6.2)
|
|
|
(5.7)
|
|
|
Business
optimization
|
(4.3)
|
|
|
(2.8)
|
|
|
(15.7)
|
|
|
Senior executive
retirement and related costs
|
—
|
|
|
—
|
|
|
(18.3)
|
|
|
Adjusted employee
compensation
|
$389.5
|
|
|
$378.0
|
|
|
$361.8
|
|
|
|
|
|
|
|
|
|
Marketing, U.S. GAAP
basis
|
$28.1
|
|
|
$40.7
|
|
|
$24.4
|
|
|
Proportional
consolidation of joint ventures
|
0.7
|
|
|
1.0
|
|
|
0.6
|
|
|
Business
combinations
|
(0.1)
|
|
|
(1.9)
|
|
|
—
|
|
|
Adjusted
marketing
|
$28.7
|
|
|
$39.8
|
|
|
$25.0
|
|
|
|
|
|
|
|
|
|
Property, office and
technology, U.S. GAAP basis
|
$102.2
|
|
|
$102.8
|
|
|
$85.5
|
|
|
Proportional
consolidation of joint ventures
|
1.1
|
|
|
1.3
|
|
|
0.9
|
|
|
Business
combinations
|
(2.0)
|
|
|
(2.8)
|
|
|
—
|
|
|
Business
optimization
|
—
|
|
|
(0.5)
|
|
|
(0.8)
|
|
|
Adjusted property,
office and technology
|
$101.3
|
|
|
$100.8
|
|
|
$85.6
|
|
|
|
|
|
|
|
|
|
General and
administrative, U.S. GAAP basis
|
$94.9
|
|
|
$115.0
|
|
|
$78.0
|
|
|
Proportional
consolidation of joint ventures
|
0.7
|
|
|
0.4
|
|
|
2.7
|
|
|
Business
combinations
|
(7.3)
|
|
|
(15.6)
|
|
|
(4.0)
|
|
|
CIP
|
(3.2)
|
|
|
(5.3)
|
|
|
1.2
|
|
|
Business
optimization
|
(3.9)
|
|
|
(5.7)
|
|
|
(8.2)
|
|
|
Senior executive
retirement and related costs
|
—
|
|
|
—
|
|
|
(1.4)
|
|
|
Adjusted general and
administrative
|
$81.2
|
|
|
$88.8
|
|
|
$68.3
|
|
|
|
|
|
|
|
|
|
Invesco
Ltd.
Quarterly Assets
Under Management
|
|
(in
billions)
|
Q1-18
|
|
Q4-17
|
|
%
Change
|
|
Q1-17
|
Beginning
Assets
|
$937.6
|
|
|
$917.5
|
|
|
2.2
|
%
|
|
$812.9
|
|
Long-term inflows
(a)
|
56.6
|
|
|
50.8
|
|
|
11.4
|
%
|
|
46.4
|
|
Long-term
outflows
|
(56.3)
|
|
|
(52.3)
|
|
|
7.6
|
%
|
|
(44.8)
|
|
Long-term net
flows
|
0.3
|
|
|
(1.5)
|
|
|
N/A
|
|
1.6
|
|
Net flows in
non-management fee earning AUM (b)
|
(0.4)
|
|
|
1.6
|
|
|
N/A
|
|
1.2
|
|
Net flows in
institutional money market funds
|
0.4
|
|
|
(3.3)
|
|
|
N/A
|
|
(8.1)
|
|
Total net
flows
|
0.3
|
|
|
(3.2)
|
|
|
N/A
|
|
(5.3)
|
|
Reinvested
distributions (a)
|
0.6
|
|
|
5.9
|
|
|
(89.8)
|
%
|
|
N/A
|
Market gains and
losses (a)
|
(12.2)
|
|
|
14.9
|
|
|
N/A
|
|
23.1
|
|
Foreign currency
translation
|
7.9
|
|
|
2.5
|
|
|
216.0
|
%
|
|
4.1
|
|
Ending
Assets
|
$934.2
|
|
|
$937.6
|
|
|
(0.4)
|
%
|
|
$834.8
|
|
|
|
|
|
|
|
|
|
Average long-term
AUM
|
$783.1
|
|
|
$765.9
|
|
|
2.2
|
%
|
|
$685.9
|
|
Average
AUM
|
$951.3
|
|
|
$930.3
|
|
|
2.3
|
%
|
|
$829.8
|
|
|
|
|
|
|
|
|
|
Gross revenue
yield on AUM(c)
|
57.6
|
bps
|
|
59.7
|
bps
|
|
|
|
58.1
|
bps
|
Gross revenue
yield on AUM before performance fees(c)
|
57.2
|
bps
|
|
57.9
|
bps
|
|
|
|
57.5
|
bps
|
Net revenue yield
on AUM(d)
|
40.3
|
bps
|
|
43.2
|
bps
|
|
|
|
41.8
|
bps
|
Net revenue yield
on AUM before performance fees(d)
|
39.9
|
bps
|
|
41.3
|
bps
|
|
|
|
40.9
|
bps
|
(in
billions)
|
Total
AUM
|
|
Active(g)
|
|
Passive(g)
|
December 31,
2017
|
$937.6
|
|
|
$738.6
|
|
|
$199.0
|
|
Long-term
inflows(a)
|
56.6
|
|
|
40.1
|
|
|
16.5
|
|
Long-term
outflows
|
(56.3)
|
|
|
(41.6)
|
|
|
(14.7)
|
|
Long-term net
flows
|
0.3
|
|
|
(1.5)
|
|
|
1.8
|
|
Net flows in
non-management fee earning AUM(b)
|
(0.4)
|
|
|
—
|
|
|
(0.4)
|
|
Net flows in
institutional money market funds
|
0.4
|
|
|
0.4
|
|
|
—
|
|
Total net
flows
|
0.3
|
|
|
(1.1)
|
|
|
1.4
|
|
Reinvested
distributions (a)
|
0.6
|
|
|
0.6
|
|
|
—
|
|
Market gains and
losses(a)
|
(12.2)
|
|
|
(11.8)
|
|
|
(0.4)
|
|
Foreign currency
translation
|
7.9
|
|
|
7.6
|
|
|
0.3
|
|
March 31,
2018
|
$934.2
|
|
|
$733.9
|
|
|
$200.3
|
|
|
|
|
|
|
|
Average
AUM
|
$951.3
|
|
|
$747.1
|
|
|
$204.2
|
|
Gross revenue
yield on AUM(c)
|
57.6bps
|
|
69.5bps
|
|
14.5bps
|
Net revenue yield
on AUM(d)
|
40.3bps
|
|
47.3bps
|
|
14.5bps
|
|
|
|
|
|
|
By channel: (in
billions)
|
Total
|
|
Retail
|
|
Institutional
|
December 31,
2017
|
$937.6
|
|
|
$637.0
|
|
|
$300.6
|
|
Long-term
inflows(a)
|
56.6
|
|
|
43.7
|
|
|
12.9
|
|
Long-term
outflows
|
(56.3)
|
|
|
(45.8)
|
|
|
(10.5)
|
|
Long-term net
flows
|
0.3
|
|
|
(2.1)
|
|
|
2.4
|
|
Net flows in
non-management fee earning AUM(b)
|
(0.4)
|
|
|
(0.1)
|
|
|
(0.3)
|
|
Net flows in
institutional money market funds
|
0.4
|
|
|
—
|
|
|
0.4
|
|
Total net
flows
|
0.3
|
|
|
(2.2)
|
|
|
2.5
|
|
Reinvested
distributions (a)
|
0.6
|
|
|
0.6
|
|
|
—
|
|
Market gains and
losses(a)
|
(12.2)
|
|
|
(11.0)
|
|
|
(1.2)
|
|
Transfers(h)
|
—
|
|
|
(29.5)
|
|
|
29.5
|
|
Foreign currency
translation
|
7.9
|
|
|
4.5
|
|
|
3.4
|
|
March 31,
2018
|
$934.2
|
|
|
$599.4
|
|
|
$334.8
|
|
|
|
|
|
|
|
See the footnotes immediately following these tables.
Invesco
Ltd.
Quarterly Assets
Under Management (continued)
|
|
By asset class:
(in billions)
|
Total
|
|
Equity
|
|
Fixed
Income
|
|
Balanced
|
|
Money
Market (f)
|
|
Alternatives(e)
|
December 31,
2017
|
$937.6
|
|
|
$431.2
|
|
|
$225.8
|
|
|
$57.7
|
|
|
$78.7
|
|
|
$144.2
|
|
Long-term
inflows(a)
|
56.6
|
|
|
25.6
|
|
|
14.9
|
|
|
5.4
|
|
|
1.7
|
|
|
9.0
|
|
Long-term
outflows
|
(56.3)
|
|
|
(31.3)
|
|
|
(12.6)
|
|
|
(2.9)
|
|
|
(1.4)
|
|
|
(8.1)
|
|
Long-term net
flows
|
0.3
|
|
|
(5.7)
|
|
|
2.3
|
|
|
2.5
|
|
|
0.3
|
|
|
0.9
|
|
Net flows in
non-management fee earning AUM(b)
|
(0.4)
|
|
|
—
|
|
|
(0.4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net flows in
institutional money market funds
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
Total net
flows
|
0.3
|
|
|
(5.7)
|
|
|
1.9
|
|
|
2.5
|
|
|
0.7
|
|
|
0.9
|
|
Reinvested
distributions (a)
|
0.6
|
|
|
0.3
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Market gains and
losses(a)
|
(12.2)
|
|
|
(8.3)
|
|
|
(1.6)
|
|
|
(1.3)
|
|
|
0.1
|
|
|
(1.1)
|
|
Foreign currency
translation
|
7.9
|
|
|
3.1
|
|
|
1.6
|
|
|
0.8
|
|
|
0.1
|
|
|
2.3
|
|
March 31,
2018
|
$934.2
|
|
|
$420.6
|
|
|
$227.9
|
|
|
$59.7
|
|
|
$79.6
|
|
|
$146.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
AUM
|
$951.3
|
|
|
$437.0
|
|
|
$227.2
|
|
|
$59.0
|
|
|
$82.2
|
|
|
$145.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By client
domicile: (in billions)
|
Total
|
|
U.S.
|
|
Canada
|
|
U.K.
|
|
Continental
Europe
|
|
Asia
|
December 31,
2017
|
$937.6
|
|
|
$585.4
|
|
|
$26.8
|
|
|
$110.9
|
|
|
$127.1
|
|
|
$87.4
|
|
Long-term
inflows(a)
|
56.6
|
|
|
26.1
|
|
|
1.5
|
|
|
4.1
|
|
|
17.3
|
|
|
7.6
|
|
Long-term
outflows
|
(56.3)
|
|
|
(28.6)
|
|
|
(1.6)
|
|
|
(5.2)
|
|
|
(15.2)
|
|
|
(5.7)
|
|
Long-term net
flows
|
0.3
|
|
|
(2.5)
|
|
|
(0.1)
|
|
|
(1.1)
|
|
|
2.1
|
|
|
1.9
|
|
Net flows in
non-management fee earning AUM(b)
|
(0.4)
|
|
|
(0.4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net flows in
institutional money market funds
|
0.4
|
|
|
1.2
|
|
|
—
|
|
|
(0.3)
|
|
|
0.1
|
|
|
(0.6)
|
|
Total net
flows
|
0.3
|
|
|
(1.7)
|
|
|
(0.1)
|
|
|
(1.4)
|
|
|
2.2
|
|
|
1.3
|
|
Reinvested
distributions (a)
|
0.6
|
|
|
0.5
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
Market gains and
losses(a)
|
(12.2)
|
|
|
(3.5)
|
|
|
(0.2)
|
|
|
(4.3)
|
|
|
(1.9)
|
|
|
(2.3)
|
|
Foreign currency
translation
|
7.9
|
|
|
—
|
|
|
(0.8)
|
|
|
3.9
|
|
|
2.3
|
|
|
2.5
|
|
March 31,
2018
|
$934.2
|
|
|
$580.7
|
|
|
$25.7
|
|
|
$109.2
|
|
|
$129.7
|
|
|
$88.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See the footnotes
immediately following these tables.
|
Invesco
Ltd.
Quarterly Assets
Under Management - Passive(g)
|
|
(in
billions)
|
Q1-18
|
|
Q4-17
|
|
%
Change
|
|
Q1-17
|
Beginning
Assets
|
$199.0
|
|
|
$190.5
|
|
|
4.5
|
%
|
|
$144.4
|
|
Long-term
inflows
|
16.5
|
|
|
16.5
|
|
|
—
|
%
|
|
9.1
|
|
Long-term
outflows
|
(14.7)
|
|
|
(15.7)
|
|
|
(6.4)
|
%
|
|
(7.0)
|
|
Long-term net
flows
|
1.8
|
|
|
0.8
|
|
|
125.0
|
%
|
|
2.1
|
|
Net flows in
non-management fee earning AUM(b)
|
(0.4)
|
|
|
1.6
|
|
|
N/A
|
|
1.2
|
|
Net flows in
institutional money market funds
|
—
|
|
|
—
|
|
|
N/A
|
|
—
|
|
Total net
flows
|
1.4
|
|
|
2.4
|
|
|
(41.7)
|
%
|
|
3.3
|
|
Market gains and
losses
|
(0.4)
|
|
|
5.9
|
|
|
N/A
|
|
6.5
|
|
Foreign currency
translation
|
0.3
|
|
|
0.2
|
|
|
50.0
|
%
|
|
0.1
|
|
Ending
Assets
|
$200.3
|
|
|
$199.0
|
|
|
0.7
|
%
|
|
$154.3
|
|
|
|
|
|
|
|
|
|
Average long-term
AUM
|
$113.2
|
|
|
$109.9
|
|
|
3.0
|
%
|
|
$76.3
|
|
Average
AUM
|
$204.2
|
|
|
$196.6
|
|
|
3.9
|
%
|
|
$151.4
|
|
|
|
|
|
|
|
|
|
Gross revenue
yield on AUM(c)
|
14.5
|
bps
|
|
16.0
|
bps
|
|
|
|
16.6
|
bps
|
Gross revenue
yield on AUM before performance fees(c)
|
14.5
|
bps
|
|
16.0
|
bps
|
|
|
|
16.6
|
bps
|
Net revenue yield
on AUM(d)
|
14.5
|
bps
|
|
16.0
|
bps
|
|
|
|
16.6
|
bps
|
Net revenue yield
on AUM before performance fees(d)
|
14.5
|
bps
|
|
16.0
|
bps
|
|
|
|
16.6
|
bps
|
By channel: (in
billions)
|
Total
|
|
Retail
|
|
Institutional
|
December 31,
2017
|
$199.0
|
|
|
$182.0
|
|
|
$17.0
|
|
Long-term
inflows
|
16.5
|
|
|
16.5
|
|
|
—
|
|
Long-term
outflows
|
(14.7)
|
|
|
(14.7)
|
|
|
—
|
|
Long-term net
flows
|
1.8
|
|
|
1.8
|
|
|
—
|
|
Net flows in
non-management fee earning AUM(b)
|
(0.4)
|
|
|
(0.1)
|
|
|
(0.3)
|
|
Net flows in
institutional money market funds
|
—
|
|
|
—
|
|
|
—
|
|
Total net
flows
|
1.4
|
|
|
1.7
|
|
|
(0.3)
|
|
Market gains and
losses
|
(0.4)
|
|
|
(0.4)
|
|
|
—
|
|
Foreign currency
translation
|
0.3
|
|
|
0.2
|
|
|
0.1
|
|
March 31,
2018
|
$200.3
|
|
|
$183.5
|
|
|
$16.8
|
|
|
|
|
|
|
|
By asset class:
(in billions)
|
Total
|
|
Equity
|
|
Fixed
Income
|
|
Balanced
|
|
Money
Market
|
|
Alternatives(d)
|
December 31,
2017
|
$199.0
|
|
|
$128.4
|
|
|
$57.3
|
|
|
$—
|
|
|
$—
|
|
|
$13.3
|
|
Long-term
inflows
|
16.5
|
|
|
10.3
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
Long-term
outflows
|
(14.7)
|
|
|
(10.6)
|
|
|
(2.8)
|
|
|
—
|
|
|
—
|
|
|
(1.3)
|
|
Long-term net
flows
|
1.8
|
|
|
(0.3)
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
Net flows in
non-management fee earning AUM(b)
|
(0.4)
|
|
|
—
|
|
|
(0.4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net flows in
institutional money market funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total net
flows
|
1.4
|
|
|
(0.3)
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
Market gains and
losses
|
(0.4)
|
|
|
0.1
|
|
|
(0.7)
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Foreign currency
translation
|
0.3
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
March 31,
2018
|
$200.3
|
|
|
$128.3
|
|
|
$56.8
|
|
|
$—
|
|
|
$—
|
|
|
$15.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
AUM
|
$204.2
|
|
|
$132.8
|
|
|
$56.9
|
|
|
$—
|
|
|
$—
|
|
|
$14.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See the footnotes
immediately following these tables.
|
Invesco
Ltd.
Quarterly Assets
Under Management - Passive(g) (continued)
|
|
By client
domicile: (in billions)
|
Total
|
|
U.S.
|
|
Canada
|
|
U.K.
|
|
Continental
Europe
|
|
Asia
|
December 31,
2017
|
$199.0
|
|
|
$167.3
|
|
|
$0.6
|
|
|
$—
|
|
|
$30.0
|
|
|
$1.1
|
|
Long-term
inflows
|
16.5
|
|
|
9.4
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
Long-term
outflows
|
(14.7)
|
|
|
(8.4)
|
|
|
(0.1)
|
|
|
—
|
|
|
(6.2)
|
|
|
—
|
|
Long-term net
flows
|
1.8
|
|
|
1.0
|
|
|
(0.1)
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
Net flows in
non-management fee earning AUM(b)
|
(0.4)
|
|
|
(0.4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net flows in
institutional money market funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total net
flows
|
1.4
|
|
|
0.6
|
|
|
(0.1)
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
Market gains and
losses
|
(0.4)
|
|
|
(0.2)
|
|
|
—
|
|
|
—
|
|
|
(0.2)
|
|
|
—
|
|
Foreign currency
translation
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
March 31,
2018
|
$200.3
|
|
|
$167.7
|
|
|
$0.5
|
|
|
$—
|
|
|
$31.0
|
|
|
$1.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See the footnotes
immediately following these tables.
|
Invesco
Ltd. Footnotes to the Assets Under Management
Tables
|
(a)
|
In 2018, in response
to investor feedback, the company reverted to its historical
presentation of long-term net flows, which excludes reinvested
distributions. To enhance transparency, reinvested
distributions will be shown in a separate line in the AUM
tables. The fourth quarter 2017 has been reclassified to
conform with the current presentation. For periods prior to
the third quarter of 2017, reinvested distributions were included
in market gains and losses.
|
(b)
|
Non-management fee
earning AUM includes Invesco PowerShares QQQ, UIT and product
leverage.
|
(c)
|
Gross revenue yield
on AUM is equal to annualized total operating revenues divided by
average AUM, excluding China joint venture (JV) AUM. For quarterly
AUM, our share of the average AUM in the first quarter for our JVs
in China was $9.8 billion (fourth quarter: $9.1 billion; first
quarter 2017: $8.4 billion). It is appropriate to exclude the
average AUM of our China 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 net income 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 CIP; 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.
|
(d)
|
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 10 of this release for a reconciliation of operating
revenues to net revenues.
|
(e)
|
The alternatives
asset class includes absolute return, commodities, currencies,
financial structures, global macro, long/short equity, managed
futures, multi-alternatives, private capital - direct, private
capital - fund of funds, private direct real estate, public real
estate securities, senior secured loans and custom
solutions.
|
(f)
|
Long-term AUM
excludes institutional money market and non-management fee earning
AUM. Ending AUM as of March 31, 2018 includes $74.5 billion in
institutional money market AUM and $88.1 billion in non-management
fee earning AUM. (December 31, 2017: $74.0 billion and
$87.8 billion, respectively; March 31, 2017: $65.2 billion and
$77.6 billion, respectively).
|
(g)
|
Passive AUM includes
ETFs, UITs, certain non-fee earning leverage and other passive
mandates. Active AUM are total AUM less Passive AUM.
|
(h)
|
During the first
quarter of 2018, $29.5 billion of AUM were transferred from retail
into institutional to better reflect the activities of
institutional sales teams and the clients they support.
|
Invesco
Ltd.
Investment
Capabilities Performance Overview
|
|
|
|
Benchmark
Comparison
|
Peer Group
Comparison
|
|
|
% of AUM Ahead of
Benchmark
|
% of AUM In Top Half
of
Peer Group
|
Equities
|
|
1yr
|
3yr
|
5yr
|
1yr
|
3yr
|
5yr
|
|
U.S. Core
|
20
|
%
|
10
|
%
|
13
|
%
|
25
|
%
|
6
|
%
|
7
|
%
|
|
U.S.
Growth
|
40
|
%
|
27
|
%
|
83
|
%
|
36
|
%
|
36
|
%
|
83
|
%
|
|
U.S. Value
|
57
|
%
|
47
|
%
|
52
|
%
|
40
|
%
|
47
|
%
|
51
|
%
|
|
Sector
|
45
|
%
|
29
|
%
|
22
|
%
|
22
|
%
|
22
|
%
|
19
|
%
|
|
U.K.
|
13
|
%
|
7
|
%
|
100
|
%
|
9
|
%
|
7
|
%
|
15
|
%
|
|
Canadian
|
5
|
%
|
11
|
%
|
29
|
%
|
—
|
%
|
11
|
%
|
11
|
%
|
|
Asian
|
62
|
%
|
71
|
%
|
90
|
%
|
68
|
%
|
89
|
%
|
87
|
%
|
|
Continental
European
|
95
|
%
|
98
|
%
|
99
|
%
|
77
|
%
|
74
|
%
|
98
|
%
|
|
Global
|
65
|
%
|
63
|
%
|
65
|
%
|
61
|
%
|
72
|
%
|
84
|
%
|
|
Global Ex U.S. and
Emerging Markets
|
11
|
%
|
26
|
%
|
77
|
%
|
2
|
%
|
19
|
%
|
10
|
%
|
Fixed
Income
|
|
|
|
|
|
|
|
|
Money
Market
|
99
|
%
|
99
|
%
|
99
|
%
|
97
|
%
|
98
|
%
|
97
|
%
|
|
U.S. Fixed
Income
|
89
|
%
|
89
|
%
|
87
|
%
|
81
|
%
|
75
|
%
|
84
|
%
|
|
Global Fixed
Income
|
82
|
%
|
74
|
%
|
67
|
%
|
77
|
%
|
40
|
%
|
53
|
%
|
|
Stable
Value
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
Other
|
|
|
|
|
|
|
|
|
Alternatives
|
83
|
%
|
86
|
%
|
74
|
%
|
46
|
%
|
86
|
%
|
56
|
%
|
|
Balanced
|
48
|
%
|
48
|
%
|
51
|
%
|
40
|
%
|
92
|
%
|
90
|
%
|
Note: AUM measured in the one-, three-, and five-year peer
group rankings represents 56%, 55%, and 52% of total Invesco AUM,
respectively, and AUM measured versus benchmark on a one-, three-,
and five-year basis represents 70%, 67%, and 62% of total Invesco
AUM, respectively, as of March 31,
2018. Peer group rankings are sourced from a widely-used
third party ranking agency in each fund's market (Lipper,
Morningstar, IA, Russell, Mercer, eVestment Alliance, SITCA, Value
Research) and are asset-weighted in U.S. Dollars. 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
Global Investment Performance Standard (GIPS) composite are applied
to all products within each GIPS composite. Excludes passive
products, closed-end funds, private equity limited partnerships,
non-discretionary funds, unit investment trusts, fund-of-funds with
component funds managed by Invesco, stable value building block
funds, and Collateralized Debt Obligations (CDOs). 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.
Invesco
Ltd.
Supplemental
Information(1)
|
|
|
Three months ended
March 31, 2018
|
|
Cash flow
information
$ in
millions
|
U.S.
GAAP
|
|
Impact
of CIP
|
|
Excluding
CIP
|
|
Invesco and CIP
cash and cash equivalents, beginning of period
|
$
|
2,517.7
|
|
|
$
|
511.3
|
|
|
$
|
2,006.4
|
|
|
Cash flows from
operating activities
|
(52.2)
|
|
|
(53.3)
|
|
|
1.1
|
|
|
Cash flows from
investing activities
|
(297.8)
|
|
|
(276.6)
|
|
|
(21.2)
|
|
|
Cash flows from
financing activities
|
(44.6)
|
|
|
117.7
|
|
|
(162.3)
|
|
|
Foreign exchange
movement on cash and cash equivalents
|
38.5
|
|
|
1.0
|
|
|
37.5
|
|
|
Increase/(decrease)
in cash and cash equivalents
|
(356.1)
|
|
|
(211.2)
|
|
|
(144.9)
|
|
|
Net cash inflows
(outflows) upon consolidation/deconsolidation of CIP
|
(39.3)
|
|
|
(39.3)
|
|
|
—
|
|
|
Invesco and CIP
cash and cash equivalents, end of the period
|
$
|
2,122.3
|
|
|
$
|
260.8
|
|
|
$
|
1,861.5
|
|
|
|
|
|
|
|
|
|
|
As of March 31,
2018
|
|
Balance Sheet
information
$ in
millions
|
U.S.
GAAP
|
|
Impact of
CIP
|
|
Impact of
Policyholders
|
|
As
Adjusted
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,861.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,861.5
|
|
|
Unsettled fund
receivables
|
837.6
|
|
|
—
|
|
|
—
|
|
|
837.6
|
|
|
Investments
|
713.6
|
|
|
(441.1)
|
|
|
—
|
|
|
1,154.7
|
|
|
Investments and other
assets of CIP
|
5,611.0
|
|
|
5,611.0
|
|
|
—
|
|
|
—
|
|
|
Cash and cash
equivalents of CIP
|
260.8
|
|
|
260.8
|
|
|
—
|
|
|
—
|
|
|
Assets held for
policyholders
|
12,902.2
|
|
|
—
|
|
|
12,902.2
|
|
|
—
|
|
|
Goodwill and
intangible assets, net
|
8,163.6
|
|
|
—
|
|
|
—
|
|
|
8,163.6
|
|
|
Other assets
(2)
|
1,268.8
|
|
|
(3.9)
|
|
|
—
|
|
|
1,272.7
|
|
|
Total
assets
|
31,619.1
|
|
|
5,426.8
|
|
|
12,902.2
|
|
|
13,290.1
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Debt of
CIP
|
4,502.7
|
|
|
4,502.7
|
|
|
—
|
|
|
—
|
|
|
Other liabilities of
CIP
|
349.5
|
|
|
349.5
|
|
|
—
|
|
|
—
|
|
|
Policyholder
payables
|
12,902.2
|
|
|
—
|
|
|
12,902.2
|
|
|
—
|
|
|
Unsettled fund
payables
|
811.5
|
|
|
—
|
|
|
—
|
|
|
811.5
|
|
|
Long-term
debt
|
2,076.4
|
|
|
—
|
|
|
—
|
|
|
2,076.4
|
|
|
Other liabilities
(3)
|
1,505.8
|
|
|
—
|
|
|
—
|
|
|
1,505.8
|
|
|
Total
liabilities
|
22,148.1
|
|
|
4,852.2
|
|
|
12,902.2
|
|
|
4,393.7
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Total equity
attributable to Invesco Ltd.
|
8,895.3
|
|
|
(0.1)
|
|
|
—
|
|
|
8,895.4
|
|
|
Noncontrolling
interests (4)
|
575.7
|
|
|
574.7
|
|
|
—
|
|
|
1.0
|
|
|
Total
equity
|
9,471.0
|
|
|
574.6
|
|
|
—
|
|
|
8,896.4
|
|
|
Total liabilities and
equity
|
$
|
31,619.1
|
|
|
$
|
5,426.8
|
|
|
$
|
12,902.2
|
|
|
$
|
13,290.1
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
These tables include
non-GAAP presentations. Cash held by CIP is not available for
use by Invesco. Additionally, there is no recourse to Invesco
for CIP debt. The cash flows of CIP do not form part of the
company's cash flow management processes, nor do they form part of
the company's significant liquidity evaluations and decisions.
Policyholder assets and liabilities are equal and offsetting and
have no impact on Invesco's shareholder's equity. The impact
of cash inflows/outflows from policyholder assets and liabilities
are reflected within cash flows from operating activities as
changes in receivable and/or payables, as applicable.
|
(2)
|
Amounts include
accounts receivable, prepaid assets, property, equipment and
software and other assets.
|
(3)
|
Amounts include
accrued compensation and benefits, accounts payable and accrued
expenses and deferred tax liabilities.
|
(4)
|
Amounts include
redeemable noncontrolling interests in consolidated entities and
equity attributable to nonredeemable noncontrolling interests in
consolidated entities.
|
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SOURCE Invesco Ltd.