Invesco Ltd. (Form: 10-Q, Received: 04/25/2019 16:28:35)

Large accelerated filer þ

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

Emerging growth company o

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)



þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019



o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-13908

Invesco Ltd.

(Exact Name of Registrant as Specified in Its Charter)



Bermuda (State or Other Jurisdiction of Incorporation or Organization)		98-0557567 (I.R.S. Employer Identification No.)

1555 Peachtree Street, N.E., Suite 1800, Atlanta, GA (Address of Principal Executive Offices)		30309 (Zip Code)

(404) 892-0896

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No þ

As of March 31, 2019 , the most recent practicable date, the number of Common Shares outstanding was 400,857,751 .

Table of Contents

TABLE OF CONTENTS

We include cross references to captions elsewhere in this Quarterly Report on Form 10-Q, which we refer to as this “Report,” where you can find related additional information. The following table of contents tells you where to find these captions.




	Page
TABLE OF CONTENTS

PART I. Financial Information
Item 1. Financial Statements (unaudited)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Income	4
Condensed Consolidated Statements of Comprehensive Income	5
Condensed Consolidated Statements of Cash Flows	6
Condensed Consolidated Statements of Changes in Equity	7
Notes to the Condensed Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk	56
Item 4. Controls and Procedures	57

PART II. OTHER INFORMATION
Item 1. Legal Proceedings	58
Item 1A. Risk Factors	58
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 6. Exhibits	59
Signatures	60

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Invesco Ltd.

Condensed Consolidated Balance Sheets

(Unaudited)



	As of
$ in millions, except per share data	March 31, 2019		December 31, 2018
ASSETS
Cash and cash equivalents	1,017.1		1,147.7
Unsettled fund receivables	474.6		191.3
Accounts receivable	598.7		604.0
Investments	640.9		613.5
Assets of consolidated investment products (CIP):
Cash and cash equivalents of CIP	251.2		657.7
Accounts receivable and other assets of CIP	141.8		110.8
Investments of CIP	6,728.1		6,213.5
Assets held for policyholders	12,102.7		11,384.8
Prepaid assets	116.8		127.1
Other assets	292.8		126.1
Property, equipment and software, net	462.8		468.7
Intangible assets, net	2,181.5		2,176.1
Goodwill	7,197.6		7,157.1
Total assets	32,206.6		30,978.4
LIABILITIES
Accrued compensation and benefits	340.2		646.5
Accounts payable and accrued expenses	1,250.6		1,087.2
Liabilities of CIP:
Debt of CIP	5,211.7		5,226.0
Other liabilities of CIP	511.6		387.6
Policyholder payables	12,102.7		11,384.8
Unsettled fund payables	446.0		178.7
Long-term debt	2,515.7		2,408.8
Deferred tax liabilities, net	367.6		326.4
Total liabilities	22,746.1		21,646.0
Commitments and contingencies (See Note 12)
TEMPORARY EQUITY
Redeemable noncontrolling interests in consolidated entities	451.1		396.2
PERMANENT EQUITY
Equity attributable to Invesco Ltd.:
Common shares ($0.20 par value; 1,050.0 million authorized; 490.4 million shares issued as of March 31, 2019 and December 31, 2018)	98.1		98.1
Additional paid-in-capital	6,273.7		6,334.8
Treasury shares	(2,971.0	)	(3,003.6	)
Retained earnings	5,942.1		5,884.5
Accumulated other comprehensive income/(loss), net of tax	(673.6	)	(735.0	)
Total equity attributable to Invesco Ltd.	8,669.3		8,578.8
Equity attributable to nonredeemable noncontrolling interests in consolidated entities	340.1		357.4
Total permanent equity	9,009.4		8,936.2
Total liabilities, temporary and permanent equity	32,206.6		30,978.4

See accompanying notes.

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Invesco Ltd.

Condensed Consolidated Statements of Income

(Unaudited)



	Three months ended March 31,
$ in millions, except per share data	2019			2018
Operating revenues:
Investment management fees	923.7			1,043.7
Service and distribution fees	219.3			246.1
Performance fees	21.8			9.1
Other	49.8			56.9
Total operating revenues	1,214.6			1,355.8
Operating expenses:
Third-party distribution, service and advisory	368.0			419.1
Employee compensation	381.3			385.2
Marketing	28.0			28.0
Property, office and technology	107.2			100.2
General and administrative	83.8			83.7
Transaction, integration, and restructuring	46.1			18.5
Total operating expenses	1,014.4			1,034.7
Operating income	200.2			321.1
Other income/(expense):
Equity in earnings of unconsolidated affiliates	15.0			9.7
Interest and dividend income	4.7			4.2
Interest expense	(33.1		)	(23.2		)
Other gains and losses, net	31.1			(5.4		)
Other income/(expense) of CIP, net	38.9			27.2
Income before income taxes	256.8			333.6
Income tax provision	(66.2		)	(68.4		)
Net income	190.6			265.2
Net (income)/loss attributable to noncontrolling interests in consolidated entities	(12.9		)	(11.3		)
Net income attributable to Invesco Ltd.	177.7			253.9
Earnings per share:
-basic		$0.44			$0.62
-diluted		$0.44			$0.62

See accompanying notes.

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Invesco Ltd .

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)



	Three months ended March 31,
$ in millions	2019		2018
Net income	190.6		265.2
Other comprehensive income/(loss), net of tax:
Currency translation differences on investments in foreign subsidiaries	60.9		64.6
Other comprehensive income/(loss), net of tax	0.5		(1.6	)
Other comprehensive income/(loss)	61.4		63.0
Total comprehensive income/(loss)	252.0		328.2
Comprehensive loss/(income) attributable to noncontrolling interests in consolidated entities	(12.9	)	(11.3	)
Comprehensive income/(loss) attributable to Invesco Ltd.	239.1		316.9

See accompanying notes.

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Invesco Ltd.

Condensed Consolidated Statements of Cash Flows

(Unaudited)



	Three months ended March 31,
$ in millions	2019		2018
Operating activities:
Net income	190.6		265.2
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Amortization and depreciation	36.3		33.6
Share-based compensation expense	49.8		40.9
Other (gains)/losses, net	(31.1	)	5.4
Other (gains)/losses of CIP, net	(12.2	)	(8.8	)
Equity in earnings of unconsolidated affiliates	(15.0	)	(9.7	)
Distributions from equity method investees	2.0		0.9
Changes in operating assets and liabilities:
(Purchase)/sale of investments by CIP, net	(56.4	)	3.2
(Purchase)/sale of investments, net	29.6		(31.8	)
(Increase)/decrease in receivables	(720.3	)	26.4
Increase/(decrease) in payables	406.3		(377.5	)
Net cash provided by/(used in) operating activities	(120.4	)	(52.2	)
Investing activities:
Purchase of property, equipment and software	(21.1	)	(20.6	)
Purchase of investments by CIP	(745.0	)	(938.6	)
Sale of investments by CIP	395.1		661.2
Purchase of investments	(72.9	)	(28.8	)
Sale of investments	27.9		29.0
Capital distributions from equity method investees	40.2		—
Collateral received/(posted), net	42.4		—
Net cash provided by/(used in) investing activities	(333.4	)	(297.8	)
Financing activities:
Purchases of treasury shares	(78.6	)	(39.3	)
Dividends paid	(120.1	)	(119.6	)
Third-party capital invested into CIP	74.5		95.6
Third-party capital distributed by CIP	(27.4	)	(29.0	)
Borrowings of debt by CIP	8.4		53.0
Repayments of debt by CIP	(46.1	)	(1.9	)
Net borrowings/(repayments) under credit facility	106.3		—
Payment of contingent consideration	(4.0	)	(3.4	)
Net cash provided by/(used in) financing activities	(87.0	)	(44.6	)
Increase/(decrease) in cash and cash equivalents	(540.8	)	(394.6	)
Foreign exchange movement on cash and cash equivalents	8.8		37.5
Foreign exchange movement on cash and cash equivalents of CIP	(5.2	)	1.0
Net cash inflows (outflows) upon consolidation/deconsolidation of CIP	0.1		(39.3	)
Cash and cash equivalents, beginning of period	1,805.4		2,517.7
Cash and cash equivalents, end of period	1,268.3		2,122.3

Cash and cash equivalents	1,017.1		1,861.5
Cash and cash equivalents of CIP	251.2		260.8
Total cash and cash equivalents per consolidated statement of cash flows	1,268.3		2,122.3

See accompanying notes .

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Invesco Ltd.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)



	Equity Attributable to Invesco Ltd.
$ in millions	Co mmon Shares	Additional Paid-in-Capital		Treasury Shares		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Total Equity Attributable to Invesco Ltd.		Nonredeemable Noncontrolling Interests in Consolidated Entities		Total Permanent Equity		Redeemable Noncontrolling Interests in Consolidated Entities Temporary Equity
January 1, 2019	98.1	6,334.8		(3,003.6	)	5,884.5		(735.0	)	8,578.8		357.4		8,936.2		396.2
Net income	—	—		—		177.7		—		177.7		(6.1	)	171.6		19.0
Other comprehensive income/(loss)	—	—		—		—		61.4		61.4		—		61.4		—
Change in noncontrolling interests in consolidated entities, net	—	—		—		—		—		—		(11.2	)	(11.2	)	35.9
Dividends	—	—		—		(120.1	)	—		(120.1	)	—		(120.1	)	—
Employee share plans:
Share-based compensation	—	49.8		—		—		—		49.8		—		49.8		—
Vested shares	—	(110.8	)	110.8		—		—		—		—		—		—
Other share awards	—	(0.1	)	0.4		—		—		0.3		—		0.3		—
Purchase of shares	—	—		(78.6	)	—		—		(78.6	)	—		(78.6	)	—
March 31, 2019	98.1	6,273.7		(2,971.0	)	5,942.1		(673.6	)	8,669.3		340.1		9,009.4		451.1

See accompanying notes.

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Invesco Ltd.

Consolidated Statements of Changes in Equity (continued)

(Unaudited)



	Equity Attributable to Invesco Ltd.
$ in millions	Co mmon Shares	Additional Paid-in-Capital		Treasury Shares		Retained Earnings		Accumulated Other Comprehensive Income		Total Equity Attributable to Invesco Ltd.		Nonredeemable Noncontrolling Interests in Consolidated Entities	Total Permanent Equity		Redeemable Noncontrolling Interests in Consolidated Entities Temporary Equity
January 1, 2018	98.1	6,282.0		(2,781.9	)	5,489.1		(391.2	)	8,696.1		259.5	8,955.6		243.2
Adjustment for adoption of ASU 2016-01	—	—		—		3.2		(3.2	)	—		—	—		—
January 1, 2018, as adjusted	98.1	6,282.0		(2,781.9	)	5,492.3		(394.4	)	8,696.1		259.5	8,955.6		243.2
Net income	—	—		—		253.9		—		253.9		7.3	261.2		4.0
Other comprehensive income	—	—		—		—		63.0		63.0		—	63.0		—
Change in noncontrolling interests in consolidated entities, net	—	—		—		—		—		—		27.9	27.9		33.8
Dividends	—	—		—		(119.6	)	—		(119.6	)	—	(119.6	)	—
Employee share plans:
Share-based compensation	—	40.9		—		—		—		40.9		—	40.9		—
Vested shares	—	(105.6	)	105.6		—		—		—		—	—		—
Other share awards	—	0.1		0.2		—		—		0.3		—	0.3		—
Purchase of shares	—	—		(39.3	)	—		—		(39.3	)	—	(39.3	)	—
March 31, 2018	98.1	6,217.4		(2,715.4	)	5,626.6		(331.4	)	8,895.3		294.7	9,190.0		281.0

See accompanying notes.

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Invesco Ltd.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

1 . ACCOUNTING POLICIES

Corporate Information

Invesco Ltd. (Parent) and all of its consolidated entities (collectively, the company or Invesco) provide retail and institutional clients with an array of global investment management capabilities. The company operates globally, and its sole business is investment management.

Certain disclosures included in the company’s annual report on Form 10-K for the year ended December 31, 2018 (annual report or Form 10-K) are not required to be included on an interim basis in the company’s quarterly reports on Forms 10-Q (Report). The company has condensed or omitted these disclosures. Therefore, this Report should be read in conjunction with the company’s annual report.

Basis of Accounting and Consolidation

The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with rules and regulations of the Securities and Exchange Commission and consolidate the financial statements of the Parent and all of its controlled subsidiaries. In the opinion of management, the financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair statement of the financial condition and results of operations for the periods presented. All significant intercompany transactions, balances, revenues and expenses are eliminated upon consolidation. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Accounting Pronouncements Recently Adopted

Leases. In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases” (Topic 842). Topic 842 requires that lessees recognize lease assets and lease liabilities on the balance sheet for all leases with a lease term greater than 12 months. The company adopted the leases standard on January 1, 2019 using the modified retrospective approach.

The company recorded a right-of-use asset of approximately $200.9 million and lease liability of approximately $251.5 million , primarily related to real estate operating leases on January 1, 2019 with no cumulative-effect adjustment to opening retained earnings. The impact of the adoption of the standard on the Condensed Consolidated Statement of Income for the three months ended March 31, 2019 was not material as we continue to recognize lease expenses on a straight-line basis over the lease term. The initial recognition of the right-of-use asset and lease liability represented a non-cash activity.

The package of three practical expedients applicable to the company have been elected which resulted in the company not having to reassess whether expired or existing contracts upon adoption contained a lease as well as retaining the historical classifications of our leases and initial direct costs. The company also elected the hindsight practical expedient in evaluating lessee options.

The company elected both at transition and on an ongoing basis, to combine lease and non-lease components in calculating the lease liability and right-of-use asset for all operating leases.

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2 . FAIR VALUE OF ASSETS AND LIABILITIES

The carrying value and fair value of financial instruments are presented in the below summary table. The fair value of financial instruments held by CIP is presented in Note 13 , “ Consolidated Investment Products .” See the company’s most recently filed Form 10-K for additional disclosures on valuation methodology and fair value.



	March 31, 2019				December 31, 2018
$ in millions	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	1,017.1		1,017.1		1,147.7		1,147.7
Equity investments	290.0		290.0		283.2		283.2
Foreign time deposits ⁽¹⁾	28.3		28.3		28.1		28.1
Assets held for policyholders	12,102.7		12,102.7		11,384.8		11,384.8
Policyholder payables ⁽¹⁾	(12,102.7	)	(12,102.7	)	(11,384.8	)	(11,384.8	)
Contingent consideration liability	(38.4	)	(38.4	)	(40.9	)	(40.9	)
Long-term debt ⁽¹⁾	(2,515.7	)	(2,600.1	)	(2,408.8	)	(2,418.2	)

____________


(1)	These financial instruments are not measured at fair value on a recurring basis. See the most recently filed Form 10-K for additional information about the carrying and fair values of these financial instruments. Foreign time deposits are measured at cost plus accrued interest, which approximates fair value, and are accordingly classified as Level 2 securities.

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The following table presents, by hierarchy levels, the carrying value of the company’s assets and liabilities, including major security type for equity and debt securities, which are measured at fair value on the company’s Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 , respectively:



	As of March 31, 2019
$ in millions	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	474.0		474.0	—	—
Investments:*
Equity investments:
Seed money	219.9		219.9	—	—
Investments related to deferred compensation plans	67.0		67.0	—	—
Other equity securities	3.1		3.1	—	—
Assets held for policyholders	12,102.7		12,102.7	—	—
Total	12,866.7		12,866.7	—	—
Liabilities:
Contingent consideration liability	(38.4	)	—	—	(38.4	)
Total	(38.4	)	—	—	(38.4	)



	As of December 31, 2018
$ in millions	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	367.6		367.6	—	—
Investments:*
Equity investments:
Seed money	202.8		202.8	—	—
Investments related to deferred compensation plans	78.6		78.6	—	—
Other equity securities	1.8		1.8	—	—
Assets held for policyholders	11,384.8		11,384.8	—	—
Total	12,035.6		12,035.6	—	—
Liabilities:
Contingent consideration liability	(40.9	)	—	—	(40.9	)
Total	(40.9	)	—	—	(40.9	)

____________


*	Foreign time deposits of $28.3 million ( December 31, 2018 : 28.1 million ) are excluded from this table. Equity method and other investments of $316.7 million and $5.9 million , respectively, ( December 31, 2018 : $296.3 million and $5.9 million , respectively) are also excluded from this table. These investments are not measured at fair value, in accordance with applicable accounting standards.

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The following table shows a reconciliation of the beginning and ending fair value measurements for level 3 assets and liabilities during the three months ended March 31, 2019 and March 31, 2018 , which are valued using significant unobservable inputs:



	Three months ended March 31, 2019
$ in millions	Contingent Consideration Liability
Beginning balance	(40.9	)
Net unrealized gains and losses included in other gains and losses, net*	(1.5	)
Disposition/settlements	4.0
Ending balance	(38.4	)



	Three months ended March 31, 2018
$ in millions	Contingent Consideration Liability		Other Debt Securities
Beginning balance	(57.4	)	9.9
Net unrealized gains and losses included in other gains and losses, net*	0.4		(3.2	)
Disposition/settlements	3.4		—
Other	—		(0.5	)
Ending balance	(53.6	)	6.2

_______________


*	These unrealized gains and losses are attributable to balances still held at the respective period ends.

Put option contracts

The company purchased an additional put option contract for $2.8 million in the three months ended March 31, 2019 to hedge economically foreign currency risk on the translation of a portion of its Pound Sterling-denominated earnings into U.S. Dollars, providing coverage through December 31, 2019 .

Total Return Swaps

In addition to holding equity investments, the company has a total return swap (TRS) to hedge economically certain of these deferred compensation liabilities. The notional value of the total return swap at March 31, 2019 was $136.2 million . During the three months ended March 31, 2019 , market valuation gains of $9.3 million were recognized in other gains and losses, net.

The company also has total return swaps with respect to certain ETFs. Under the terms of each total return swap, the company receives the related market gains or losses on the underlying investments and pays a floating rate to the respective counterparty. At March 31, 2019 , the aggregate notional value of the total return swaps was $172.9 million . For the three months ended March 31, 2019 , market valuation gains of $4.7 million were recognized in other gains and losses, net.

Contingent Consideration Liability

At March 31, 2019 inputs used in the model to determine the liability included assumed growth rates in AUM ranging from (9.44)% to 5.73% (weighted average growth rate of (0.22)% ) and a discount rate of 4.79% . Changes in fair value are recorded in other gains and losses, net in the Condensed Consolidated Statements of Income in the period incurred. An increase in AUM levels and/or a decrease in the discount rate would increase the fair value of the contingent consideration liability, while a decrease in forecasted AUM and/or an increase in the discount rate would decrease the liability.

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3 . INVESTMENTS

The disclosures below include details of the company’s investments. Investments held by CIP are detailed in Note 13 , “ Consolidated Investment Products .”



$ in millions	March 31, 2019	December 31, 2018
Equity investments:
Seed money	219.9	202.8
Investments related to deferred compensation plans	67.0	78.6
Other equity securities	3.1	1.8
Equity method investments	316.7	296.3
Foreign time deposits	28.3	28.1
Other	5.9	5.9
Total investments	640.9	613.5

Available for sale debt investments

Realized gains and losses recognized in the Condensed Consolidated Statements of Income during the period from investments classified as available-for-sale are as follows:



	For the three months ended March 31, 2018
$ in millions	Proceeds from Sales	Gross Realized Gains	Gross Realized Losses
CLOs	2.6	—	—
Other debt securities	0.2	—	(0.1	)
	2.8	—	(0.1	)

Equity investments

The unrealized gains and losses for the three months ended March 31, 2019 , that relate to equity investments still held at March 31, 2019 , was a $23.0 million net gain ( three months ended March 31, 2018 : $0.2 million net gain ).

4 . LONG-TERM DEBT

The disclosures below include details of the company’s debt. Debt of CIP is detailed in Note 13 , “ Consolidated Investment Products .”



	March 31, 2019		December 31, 2018
$ in millions	Carrying Value ⁽²⁾	Fair Value	Carrying Value ⁽²⁾	Fair Value
$1.5 billion floating rate credit facility expiring August 11, 2022	437.1	437.1	330.8	330.8
Unsecured Senior Notes ⁽¹⁾ :
$600 million 3.125% - due November 30, 2022	597.6	608.6	597.5	585.2
$600 million 4.000% - due January 30, 2024	595.2	620.6	594.9	594.5
$500 million 3.750% - due January 15, 2026	495.7	508.3	495.6	487.6
$400 million 5.375% - due November 30, 2043	390.1	425.5	390.0	420.1
Long-term debt	2,515.7	2,600.1	2,408.8	2,418.2

____________


(1)	The company’s senior note indentures contain certain restrictions on mergers or consolidations. Beyond these items, there are no other restrictive covenants in the indentures.


(2)	The difference between the principal amounts and the carrying values of the senior notes in the table above reflect the unamortized debt issuance costs and discounts.

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The company maintains approximately $11.4 million in letters of credit from a variety of banks. The letters of credit are generally one -year automatically-renewable facilities and are maintained for various commercial reasons.

5 . SHARE CAPITAL

The number of common shares and common share equivalents issued are represented in the table below:



	As of
In millions	March 31, 2019		December 31, 2018
Common shares issued	490.4		490.4
Less: Treasury shares for which dividend and voting rights do not apply	(89.6	)	(93.3	)
Common shares outstanding	400.8		397.1

6 . OTHER COMPREHENSIVE INCOME/(LOSS)

The components of accumulated other comprehensive income/(loss) were as follows:



	For the three months ended March 31, 2019
$ in millions	Foreign currency translation		Employee benefit plans		Available-for-sale investments	Total
Other comprehensive income/(loss) net of tax:
Currency translation differences on investments in foreign subsidiaries	60.9		—		—	60.9
Other comprehensive income, net	—		0.2		0.3	0.5
Other comprehensive income/(loss), net of tax	60.9		0.2		0.3	61.4

Beginning balance	(617.6	)	(117.7	)	0.3	(735.0	)
Other comprehensive income/(loss), net of tax	60.9		0.2		0.3	61.4
Ending balance	(556.7	)	(117.5	)	0.6	(673.6	)



	For the three months ended March 31, 2018
$ in millions	Foreign currency translation		Employee benefit plans		Equity method investments		Available-for-sale investments		Total
Other comprehensive income/(loss) net of tax:
Currency translation differences on investments in foreign subsidiaries	64.6		—		—		—		64.6
Other comprehensive income, net	—		0.4		(2.3	)	0.3		(1.6	)
Other comprehensive income/(loss), net of tax	64.6		0.4		(2.3	)	0.3		63.0

Beginning balance	(290.5	)	(109.7	)	4.3		4.7		(391.2	)
Adjustment for adoption of ASU 2016-01	—		—		—		(3.2	)	(3.2	)
January 1, 2018, as adjusted	(290.5	)	(109.7	)	4.3		1.5		(394.4	)
Other comprehensive income/(loss), net of tax	64.6		0.4		(2.3	)	0.3		63.0
Ending balance	(225.9	)	(109.3	)	2.0		1.8		(331.4	)

Net Investment Hedge

The company designated certain intercompany debt as a non-derivative net investment hedging instrument against foreign currency exposure related to its net investment in foreign operations. At March 31, 2019 and December 31, 2018 , £130 million ( $169.7 million and $165.6 million , respectively) of intercompany debt was designated as a net investment hedge. For the three months ended March 31, 2019 , the Company recognized foreign currency losses of $4.1 million ( three months ended March 31,

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2018 : losses of $6.6 million ) resulting from the net investment hedge within currency translation differences on investments in foreign subsidiaries in other comprehensive income.

7 . REVENUE

The geographic disaggregation of revenue for the three months ended March 31, 2019 and 2018 are presented below. There are no revenues attributed to the company’s country of domicile, Bermuda.



	For the three months ended March 31,
$ in millions	2019	2018
North America	760.0	818.0
EMEA (Europe, Middle East, and Africa)	380.3	469.9
Asia-Pacific	74.3	67.9
Total operating revenues	1,214.6	1,355.8

The opening and closing balance of deferred carried interest liabilities for the three months ended March 31, 2019 was $61.3 million and $55.8 million , respectively ( December 31, 2018 : $60.4 million and $61.3 million , respectively). During the three months ended March 31, 2019 , $5.9 million ( March 31, 2018 : none ) performance fee revenue was recognized that was included in the deferred carried interest liability balance at the beginning of the period.

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8 . SHARE-BASED COMPENSATION

The company recognized total expenses of $49.8 million and $40.9 million related to equity-settled share-based payment transactions in the three months ended March 31, 2019 and 2018 , respectively.

Share Awards

Movements on share awards during the periods ended March 31 , are detailed below:



	For the three months ended March 31, 2019					For the three months ended March 31, 2018
Millions of shares, except fair values	Time- Vested		Performance- Vested		Weighted Average Grant Date Fair Value ($)	Time- Vested		Performance- Vested
Unvested at the beginning of period	12.5		0.9		31.46	12.0		0.9
Granted during the period	8.9		0.6		19.34	5.1		0.4
Forfeited during the period	(0.3	)	—		27.18	(0.1	)	—
Vested and distributed during the period	(4.6	)	(0.1	)	32.08	(4.2	)	(0.3	)
Unvested at the end of the period	16.5		1.4		24.93	12.8		1.0

The total fair value of shares that vested during the three months ended March 31, 2019 was $89.8 million ( three months ended March 31, 2018 : $142.7 million ). The weighted average grant date fair value of the share awards that were granted during the three months ended March 31, 2019 was $19.34 ( three months ended March 31, 2018 : $32.55 ).

At March 31, 2019 , there was $405.6 million of total unrecognized compensation cost related to non-vested share awards; that cost is expected to be recognized over a weighted average period of 2.95 years .

9 . OPERATING LEASES

The company leases office space in almost all of its locations of business, data centers and certain equipment under non-cancelable operating leases. The operating leases have a weighted-average remaining lease term of 5.72 years and generally include one or more options to renew, with renewal terms that can extend the lease term from 2 to 10 years. Certain lease arrangements include an option to terminate the lease if a notification is provided to the landlord within 1 - 2 years prior to the end of the lease term. The company has sole discretion in exercising lease renewal and termination options. The lease terms used in our lease measurements do not include renewal options as they are not reasonably certain to be exercised as of the date of this report.

The company elected to combine lease and non-lease components in calculating the lease liability and right-of-use asset for operating leases.

Variable lease payments are determined based on the terms and conditions outlined in the lease contracts and are primarily determined in relation to the extent of the company’s usage of the right-of use-asset or the nature and extent of services received from the lessor.

As of March 31, 2019 , the right-of-use asset of $202.7 million was included within Other assets, and the lease liability of $249.8 million was included within Accounts payable and accrued expenses, on the Condensed Consolidated Balance Sheet.

The components of lease expense for the three months ended March 31, 2019 were as follows:



$ in millions	Three months ended March 31, 2019
Operating lease cost	12.8
Variable lease cost	6.8
Less: sublease income	(0.1	)
Total lease expense	19.5

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Supplemental cash flow information related to leases for the three months ended March 31, 2019 was as follows:



$ in millions	Three months ended March 31, 2019
Operating cash flows from operating leases included in the measurement of lease liabilities	15.0
Right-of-use assets obtained in exchange for new operating lease liabilities	4.1

In determining the discount rate, the company considered the interest rate yield for specific interest rate environments and the company’s credit spread at the inception of the lease.

The weighted-average discount rate for the operating lease liability for the three months ended March 31, 2019 was 3.33% .

The maturities of the company’s lease liabilities (primarily related to real estate leases) were as follows:



$ in millions
Year Ended December 31,	Lease Liabilities
2019 (excluding the three months ended March 31, 2019)	44.3
2020	52.5
2021	48.4
2022	42.0
2023	35.3
Thereafter	52.1
Total lease payments	274.6
Less: interest	24.8
Present value of lease liabilities	249.8

As of December 31, 2018 , the company’s total future commitments by year under non-cancelable operating leases are as follows:



$ in millions	Total
2019	61.6
2020	56.3
2021	49.3
2022	42.8
2023	36.7
Thereafter	53.5
Gross lease commitments	300.2
Less: future minimum payments expected to be received under non-cancelable subleases	(2.5	)
Net lease commitments	297.7

10 . TAXATION

At March 31, 2019 , the total amount of gross unrecognized tax benefits was $20.4 million as compared to the December 31, 2018 total of $20.0 million .

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11 . EARNINGS PER SHARE

The calculation of earnings per share is as follows:



	For the three months ended March 31,
In millions, except per share data	2019			2018
Net income		$190.6			$265.2
Net (income)/loss attributable to noncontrolling interests in consolidated entities	(12.9		)	(11.3		)
Net income attributable to Invesco Ltd.	177.7			253.9
Less: Allocation of earnings to restricted shares	(6.0		)	(7.5		)
Net income attributable to common shareholders		$171.7			$246.4

Invesco Ltd:
Weighted average shares outstanding - basic	401.6			411.3
Dilutive effect of non-participating share-based awards	0.3			0.5
Weighted average shares outstanding - diluted	401.9			411.8

Common shareholders:
Weighted average shares outstanding - basic	401.6			411.3
Less: Weighted average restricted shares	(13.7		)	(12.2		)
Weighted average common shares outstanding - basic	387.9			399.1
Dilutive effect of non-participating share-based awards	0.3			0.5
Weighted average common shares outstanding - diluted	388.2			399.6

Earnings per share:
Basic earnings per share		$0.44			$0.62
Diluted earnings per share		$0.44			$0.62
Dividends declared per share		$0.30			$0.29

See Note 8 , “ Share-Based Compensation ,” for a summary of share awards outstanding under the company’s share-based compensation programs. These programs could result in the issuance of common shares from time to time that would affect the measurement of basic and diluted earnings per share.

There were 0.7 million shares of performance-vested awards and no time-vested awards excluded from the computation of diluted earnings per share during the three months ended March 31 , 2019 due to their inclusion being anti-dilutive ( three months ended March 31, 2018 : none ). There were no contingently issuable shares excluded from the diluted earnings per share computation during the three months ended March 31, 2019 ( three months ended March 31, 2018 : 0.1 million ), because the necessary performance conditions for the shares to be issuable had not yet been satisfied at the end of the respective period.

12 . COMMITMENTS AND CONTINGENCIES

Commitments and contingencies may arise in the ordinary course of business.

Off Balance Sheet Commitments

The company has committed to co-invest in certain sponsored investment products which may be called in future periods. At March 31, 2019 , the company’s undrawn capital commitments were $348.8 million ( December 31, 2018 : $391.6 million ).

The Parent and various company subsidiaries have entered into agreements with financial institutions to guarantee certain obligations of other company subsidiaries. The company would be required to perform under these guarantees in the event of certain defaults. The company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

Legal Contingencies

The company is from time to time involved in litigation relating to claims arising in the ordinary course of its business. The

nature and progression of litigation can make it difficult to predict the impact a particular lawsuit will have on the company.

There are many reasons that the company cannot make these assessments, including, among others, one or more of the

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following: the proceeding is in its early stages; the damages sought are unspecified, unsupportable, unexplained or uncertain;

the claimant is seeking relief other than compensatory damages; the matter presents novel legal claims or other meaningful

legal uncertainties; discovery has not started or is not complete; there are significant facts in dispute; and there are other parties

who may share in any ultimate liability.

In management’s opinion, adequate accrual has been made as of March 31, 2019 to provide for any such losses that may arise from matters for which the company could reasonably estimate an amount. Management is of the opinion that the ultimate resolution of such claims will not materially affect the company’s business, financial position, results of operation or liquidity. Furthermore, in management’s opinion, it is not possible to estimate a range of reasonably possible losses with respect to other litigation contingencies.

The investment management industry also is subject to extensive levels of ongoing regulatory oversight and examination. In

the United States, United Kingdom, and other jurisdictions in which the company operates, governmental authorities regularly

make inquiries, hold investigations and administer market conduct examinations with respect to the company’s compliance with

applicable laws and regulations. Additional lawsuits or regulatory enforcement actions arising out of these inquiries may in the

future be filed against the company and related entities and individuals in the United States, United Kingdom, and other

jurisdictions in which the company and its affiliates operate. Any material loss of investor and/or client confidence as a result of

such inquiries and/or litigation could result in a significant decline in AUM, which would have an adverse effect on the

company’s future financial results and its ability to grow its business.

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13 . CONSOLIDATED INVESTMENT PRODUCTS (CIP)

The following table presents the balances related to CIP that are included on the Condensed Consolidated Balance Sheets as well as Invesco’s net interest in the CIP for each period presented. See the company’s most recently filed Form 10-K for additional disclosures on valuation methodology and fair value.



	As of
$ in millions	March 31, 2019		December 31, 2018
Cash and cash equivalents of CIP	251.2		657.7
Accounts receivable and other assets of CIP	141.8		110.8
Investments of CIP	6,728.1		6,213.5
Less: Debt of CIP	(5,211.7	)	(5,226.0	)
Less: Other liabilities of CIP	(511.6	)	(387.6	)
Less: Retained earnings	8.9		7.9
Less: Accumulated other comprehensive income, net of tax	(8.8	)	(7.8	)
Less: Equity attributable to redeemable noncontrolling interests	(451.1	)	(396.2	)
Less: Equity attributable to nonredeemable noncontrolling interests	(339.2	)	(356.5	)
Invesco’s net interests in CIP	607.6		615.8

The following table reflects the impact of consolidation of investment products into the Condensed Consolidated Statements of Income for the three months ended March 31 , 2019 and 2018 :



	Three months ended March 31,
$ in millions	2019		2018
Total operating revenues	(8.7	)	(7.0	)
Total operating expenses	2.8		3.2
Operating income	(11.5	)	(10.2	)
Equity in earnings of unconsolidated affiliates	6.5		(4.2	)
Interest and dividend income	(1.3	)	—
Other gains and losses, net	(20.7	)	(0.9	)
Interest and dividend income of CIP	84.7		57.8
Interest expense of CIP	(58.0	)	(39.4	)
Other gains/(losses) of CIP, net	12.2		8.8
Income before income taxes	11.9		11.9
Income tax provision	—		—
Net income	11.9		11.9
Net (income)/loss attributable to noncontrolling interests in consolidated entities	(12.9	)	(11.3	)
Net income attributable to Invesco Ltd.	(1.0	)	0.6

Non-consolidated VIEs

At March 31, 2019 , the company’s carrying value and maximum risk of loss with respect to variable interest entities (VIEs) in which the company is not the primary beneficiary was $190.7 million ( December 31, 2018 : $181.8 million ).

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Balance Sheet information - newly consolidated VIEs/VOEs

During the three months ended March 31, 2019 , there was one newly consolidated VIE ( March 31, 2018 : the company consolidated no new VIEs). The table below illustrates the summary balance sheet amounts related to these products before consolidation into the company. The balances below are reflective of the balances existing at the consolidation date after the initial funding of the investments by the company and unrelated third-party investors. The current period activity for the consolidated funds, including the initial funding and subsequent investment of initial cash balances into underlying investments of CIP, is reflected in the company’s Condensed Consolidated Financial Statements.



	For the three months ended March 31, 2019
$ in millions	VIEs
Cash and cash equivalents of CIP	0.4
Accounts receivable and other assets of CIP	2.7
Investments of CIP	105.9
Total assets	109.0

Debt of CIP	97.8
Other liabilities of CIP	11.2
Total liabilities	109.0
Total equity	—
Total liabilities and equity	109.0

Balance Sheet information - deconsolidated VIEs/VOEs

During the three months ended March 31, 2019 , the company determined that it was no longer the primary beneficiary of one VIE and no longer held the majority voting interest in two VOEs ( March 31, 2018 : there were two newly deconsolidated VIEs). The amounts deconsolidated from the Condensed Consolidated Balance Sheets are illustrated in the table below. There was no net impact to the Condensed Consolidated Statements of Income for the three months ended March 31, 2019 and 2018 from the deconsolidation of these investment products.



	For the three months ended March 31, 2019		For the three months ended March 31, 2018
$ in millions	VIEs	VOEs	VIEs
Cash and cash equivalents of CIP	—	—	39.3
Accounts receivable and other assets of CIP	—	—	8.3
Investments of CIP	6.3	4.6	339.9
Total assets	6.3	4.6	387.5
		—
Debt of CIP	—	—	375.3
Other liabilities of CIP	—	—	3.2
Total liabilities	—	—	378.5
Total equity	6.3	4.6	9.0
Total liabilities and equity	6.3	4.6	387.5

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The following tables present the fair value hierarchy levels of certain CIP balances which are measured at fair value as of March 31, 2019 and December 31, 2018 :



	As of March 31, 2019
$ in millions	Fair Value Measurements	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Investments Measured at NAV as a practical expedient
Assets:
Bank loans	5,536.8	—	5,536.8	—	—
Bonds	711.6	1.0	710.6	—	—
Equity securities	270.3	232.6	37.7	—	—
Equity and fixed income mutual funds	23.5	23.5	—	—	—
Investments in other private equity funds	173.7	—	—	—	173.7
Real estate investments	12.2	—	—	12.2	—
Total assets at fair value	6,728.1	257.1	6,285.1	12.2	173.7



	As of December 31, 2018
$ in millions	Fair Value Measurements	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Investments Measured at NAV as a practical expedient
Assets:
Bank loans	5,117.0	—	5,117.0	—	—
Bonds	636.0	—	636.0	—	—
Equity securities	241.2	208.1	33.1	—	—
Equity and fixed income mutual funds	18.8	18.8	—	—	—
Investments in other private equity funds	188.7	—	—	—	188.7
Real estate investments	11.8	—	—	11.8	—
Total assets at fair value	6,213.5	226.9	5,786.1	11.8	188.7

The following tables show a reconciliation of the beginning and ending fair value measurements for level 3 assets and liabilities using significant unobservable inputs:



	Three months ended March 31, 2019	Three months ended March 31, 2018
$ in millions	Level 3 Assets	Level 3 Assets
Beginning balance	11.8	76.2
Purchases	—	—
Sales	—	(0.7	)
Gains and losses included in the Condensed Consolidated Statements of Income ⁽¹⁾	0.3	5.7
Ending balance	12.2	81.2

____________


(1)	Included in gains/(losses) of CIP, net in the Condensed Consolidated Statements of Income for the three months ended March 31, 2019 are $0.3 million , in net unrealized gains attributable to investments still held at March 31, 2019 by CIP (for the three months ended March 31, 2018 : $5.7 million , in net unrealized gains are attributable to investments still held at March 31, 2018 by CIP).

The collateral assets held by consolidated CLOs are primarily invested in senior secured bank loans, bonds, and equity securities. Bank loan investments of $5,536.2 million , which comprise the majority of consolidated CLO portfolio collateral, are senior secured corporate loans from a variety of industries, including but not limited to the aerospace and defense, broadcasting, technology, utilities, household products, healthcare, oil and gas, and finance industries. Bank loan investments

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mature at various dates between 2019 and 2027 pay interest at LIBOR plus a spread of up to 8.3% , and typically range in S&P credit rating categories from BBB down to unrated. Interest income on bank loans and bonds is recognized based on the unpaid principal balance and stated interest rate of these investments on an accrual basis. At March 31, 2019 , the unpaid principal balance exceeds the fair value of the senior secured bank loans and bonds by approximately $112.9 million ( December 31, 2018 : the unpaid principal balance exceeded the fair value of the senior secured bank loans and bonds by approximately $134.3 million ). Approximately less than 1% of the collateral assets were in default as of March 31, 2019 and 2018 . CLO investments are valued based on price quotations provided by third-party pricing sources. These third-party sources aggregate indicative price quotations daily to provide the company with a price for the CLO investments. The company has developed internal controls to review the reasonableness and completeness of these price quotations on a daily basis. If necessary, price quotations are challenged through a third-party pricing challenge process.

Notes issued by consolidated CLOs mature at various dates between 2026 and 2031 and have a weighted average maturity of 10.42 years . The notes are issued in various tranches with different risk profiles. The interest rates are generally variable rates based on LIBOR plus a pre-defined spread, which varies from 0.55% for the more senior tranches to 7.45% for the more subordinated tranches. The investors in this debt are not affiliated with the company and have no recourse to the general credit of the company for this debt .

Quantitative Information about Level 3 Fair Value Measurements

At March 31, 2019 , there were $12.2 million of investments held by consolidated real estate funds that were valued using recent private market transactions.

At December 31, 2018, there were $11.8 million of investments held by consolidated real estate funds that were valued using recent private market transactions.

The table below summarizes as of March 31, 2019 and December 31, 2018 , the nature of investments that are valued using the NAV as a practical expedient and any related liquidation restrictions or other factors which may impact the ultimate value realized.

March 31, 2019

December 31, 2018

in millions, except term data

Fair Value

Total Unfunded Commitments

Weighted Average Remaining Term ⁽²⁾

Fair Value

Total Unfunded Commitments

Weighted Average Remaining Term ⁽²⁾

Private equity funds ⁽¹⁾

$173.7

$110.3

6.7 years

$188.7

$101.9

6.1 years

____________


(1)	These investments are not subject to redemption; however, for certain funds, the investors may sell or transfer their interest, which may require approval by the general partner of the underlying funds.


(2)	These investments are expected to be returned through distributions as a result of liquidations of the funds’ underlying assets over the weighted average periods indicated.

14 . RELATED PARTIES

Certain managed funds are deemed to be affiliated entities under the related party definition in ASC 850, “Related Party Disclosures.” Additionally, related parties include those defined in the company’s proxy statement. Affiliated balances are illustrated in the tables below:



	Three months ended March 31,
$ in millions	2019	2018
Affiliated operating revenues:
Investment management fees	816.3	916.1
Service and distribution fees	209.9	245.3
Performance fees	10.5	4.1
Other	46.8	54.8
Total affiliated operating revenues	1,083.5	1,220.3

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$ in millions	March 31, 2019	December 31, 2018
Affiliated asset balances:
Cash and cash equivalents	474.0	367.6
Unsettled fund receivables	228.2	105.0
Accounts receivable	376.0	391.4
Investments	591.0	655.7
Assets held for policyholders	12,102.4	11,384.5
Other assets	3.4	3.2
Total affiliated asset balances	13,775.0	12,907.4

Affiliated liability balances:
Accrued compensation and benefits	64.3	83.2
Accounts payable and accrued expenses	59.8	64.8
Unsettled fund payables	241.8	100.3
Total affiliated liability balances	365.9	248.3

15 . SUBSEQUENT EVENTS

On April 25, 2019 , the company announced a first quarter 2019 dividend of $0.31 per share, payable on June 3, 2019 , to shareholders of record at the close of business on May 10, 2019 with an ex-dividend date of May 9, 2019 .

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes thereto, which appear elsewhere in this Report. Except for the historical financial information, this Report may include statements that constitute “forward-looking statements” under the United States securities laws. 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 this Report and our most recent Form 10-K filed with the Securities and Exchange Commission (“SEC”).

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.

References

In this Report, unless otherwise specified, the terms “we,” “our,” “us,” “company,” “firm,” “Invesco,” and “Invesco Ltd.” refer to Invesco Ltd., a company incorporated in Bermuda, and its subsidiaries.

Executive Overview

The following executive overview summarizes the significant trends affecting our results of operations and financial condition for the periods presented. This overview and the remainder of this management’s discussion and analysis supplements and should be read in conjunction with the Condensed Consolidated Financial Statements of Invesco Ltd. and its subsidiaries (collectively, the “company” or “Invesco”) and the notes thereto contained elsewhere in this Report.

The three months ended March 31, 2019 , saw strong gains across equity markets globally. The returns marked a rebound from the broad market decline that ended the prior year as concerns around global trade tensions and slowing economic growth eased while the Federal Reserve indicated a softening in expectations for additional interest rate increases.

In the US, indications from the Federal Reserve that further interest rate increases would be slowed or halted to offset slowing economic growth pushed investors into equity markets early in the quarter while progress on trade negotiations between the US and China drove positive sentiment throughout the period. Strong job growth at the end of the quarter helped to stabilize lingering concerns around growth and led the S&P 500 higher ultimately finishing up 13.1% .

European markets were similarly buoyed by a move towards more accommodative monetary policies from central banks and the potential for resolution to the planned UK and European Union separation. While concerns around a slowdown in growth continued to linger, indications from the European Central Bank that interest rates would remain stable at current levels helped to drive European markets higher during the quarter. Additionally, the temporary delay of the UK and EU separation as well as the potential for a softer separation agreement aided markets leading the FTSE 100 to end the quarter up 8.2% .

In Japan, returns were more muted than other global markets as positive economic indicators were offset by a slowdown in China’s growth and broadly lower corporate profits. Market returns remained volatile through the period as investors digested the improving trade relations between the US and China with the Nikkei 225 ultimately finishing the quarter up 6.0% .

Bond returns for the quarter were widely positive as the change in tone from global central banks was moderated by concerns around slowing global growth. The desire for lower-risk assets resulting from concerns regarding growth pushed government bonds higher and US markets assessed the impact of a yield curve inversion during the quarter reflecting weakening market sentiment. Corporate bonds were aided by reduced concerns around liquidity and leverage and finished the period higher, which helped to move the U.S. Aggregate Bond Index to finish up 2.9% for the quarter.

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The table below summarizes returns based on price appreciation/(depreciation) of several major market indices for the three months ended March 31 , 2019 and 2018 :



	Index expressed in currency	Three months ended March 31,
Equity Index	Index expressed in currency	2019		2018
S&P 500	U.S. Dollar	13.1	%	(1.2	)%
FTSE 100	British Pound	8.2	%	(8.2	)%
FTSE 100	U.S. Dollar	10.3	%	(4.9	)%
Nikkei 225	Japanese Yen	6.0	%	(7.1	)%
Nikkei 225	U.S. Dollar	5.6	%	(1.7	)%
MSCI Emerging Markets	U.S. Dollar	9.6	%	0.9	%
Bond Index
Barclays U.S. Aggregate Bond	U.S. Dollar	2.9	%	(1.5	)%

The company’s financial results are impacted by the fluctuations in exchange rates against the U.S. Dollar, as discussed in the “Foreign Exchange Impact on Balance Sheet, Assets Under Management and Results of Operations” section and the “Results of Operations” section below.

Our revenues are directly influenced by the level and composition of our AUM. Therefore, movements in global capital market levels, net new business inflows (or outflows) and changes in the mix of investment products between asset classes and geographies may materially affect our revenues from period to period. As fee rates differ across geographic locations, changes to exchange rates have an impact on the net revenue yields.

Invesco benefits from our long-term efforts to ensure a diversified base of AUM. One of Invesco’s core strengths, and a key differentiator for the company within the industry, is our broad diversification across client domiciles, asset classes and distribution channels. Our geographic diversification recognizes growth opportunities in different parts of the world. This broad diversification mitigates the impact on Invesco of different market cycles and enables the company to take advantage of growth opportunities in various markets and channels.

Invesco announced in October 2018 that it intended to acquire MassMutual’s asset management affiliate, OppenheimerFunds, and expects to close the transaction on May 24, 2019. The strategic combination will bring Invesco’s total assets under management to $1.2 trillion, making it the 13th-largest global investment manager and the sixth-largest US retail investment manager as of the announcement date of the acquisition, further enhancing the company’s ability to meet client needs through its comprehensive range of high-conviction active, passive and alternative capabilities.

The highly complementary investment and distribution capabilities of Invesco and OppenheimerFunds will strengthen the combined organization’s ability to provide more relevant investment outcomes to an expanded number of institutional and retail clients in the US and around the globe. Both Invesco’s and OppenheimerFunds’ clients will benefit from the resulting combination, which will incorporate OppenheimerFunds’ high-performing investment capabilities, including a strong international and emerging markets equity franchise, and its powerful US third-party distribution platform with Invesco’s strong and diversified product lineup and global presence, supported by solutions-driven and technology-enabled client outreach.

“The combination with OppenheimerFunds and the strategic partnership with MassMutual will meaningfully enhance our ability to meet client needs, accelerate growth and strengthen our business over the long term,” said Mr. Flanagan. “This is a compelling, highly strategic and accretive transaction for Invesco that will help us achieve a number of objectives: enhance our leadership in the US and global markets, deliver the outcomes clients seek, broaden our relevance among top clients, deliver strong financial results and continue attracting the best talent in the industry.”

Since announcement, Invesco and OppenheimerFunds have made significant progress toward the integration of the two firms and achieving targeted expense synergies of $475 million through a planned combination of middle- and back-office rationalization, location strategy and leveraging the scale of the global operating platform. Bringing the two firms together is intended to accelerate Invesco’s growth strategy and further strengthen the firm’s ability to meet client needs across the globe. Total integration costs are expected to be approximately $450 million.

As part of the transaction, MassMutual and the OppenheimerFunds employee shareholders will receive a combination of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with an approximate 15.7% stake. Under the terms of the agreement, the consideration will consist of 81.9 million shares of Invesco

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common equity and $4 billion in perpetual, non-cumulative preferred shares with a 21-year non-call period and a fixed rate of 5.9%. Based on Invesco’s stock price as of March 29, 2019, this represents an estimated purchase price of $5.6 billion.

In October 2018, the company announced a common stock buyback program of $1.2 billion to be completed within the next

two years, which will be financed through the strong operating cash flows of the combined Invesco and OppenheimerFunds

organization. The company repurchased 2.6 million common shares in open market transactions utilizing $50 million in cash during the first quarter of 2019, bringing purchases to date under this program to $350 million.

In addition, during the first quarter of 2019 :


•	Invesco won the Deal of the Year honor at the 26th annual Mutual Fund Industry Awards for its $5.6bn acquisition of MassMutual subsidiary OppenheimerFunds. The Deal Of The Year is awarded to the M&A deal that has most changed the landscape of the fund or retirement industry.


•	Invesco QQQ celebrated 20 years of curating innovation. Since its inception in 1999, Invesco QQQ has grown to become one of the largest, most-traded and highest-performing ETFs in the history of the industry.


•	Invesco launched a Blockchain ETF on the London Stock Exchange, providing an innovative way for investors to participate in this technology.


•	Invesco launched Gilt ETFs, giving investors access to UK government bonds across the full maturity spectrum of up to 55 years and with maturities of between 12 months and five years.


•	Invesco was named one of the Top 5 dividend funds for the past 5 years by Barron’s.


•	Invesco was cited as leading the way in Taiwan’s target-maturity fund space with the highest percentage of market share as of end of 2018.

Other External Factors Impacting Invesco

As one of the leading investment managers in the UK and Europe, we continue to be impacted by continuing uncertainties surrounding Brexit. The recent agreement between the UK and the EU27 to extend the deadline for the UK to leave the EU to as late as October 31, 2019 likely will continue such uncertainties. The UK economy has been in a period of uncertainty with volatility expected in financial markets until the terms of withdrawal are agreed upon. We believe uncertainty in the markets was a factor in the decline in AUM within our UK operations, where AUM from clients domiciled in the UK were $86.5 billion at March 31, 2019 ( March 31, 2018 : $109.2 billion ). At March 31, 2019 , approximately 9.1% of our AUM are UK entities providing investment services to EU based fund management subsidiaries and EU-based clients. Most of this activity is anticipated to be able to continue even if a formal UK exit agreement is not reached.

Presentation of Management’s Discussion and Analysis of Financial Condition and Results of Operations - Impact of Consolidated Investment Products

The company provides investment management services to, and has transactions with, various retail mutual funds and similar

entities, private equity, real estate, fund-of-funds, collateralized loan obligation products (CLOs), and other investment entities

sponsored by the company for the investment of client assets in the normal course of business. The company serves as the investment manager, making day-to-day investment decisions concerning the assets of the products. Investment products that are consolidated are referred to in this Form 10-Q (Report) as consolidated investments products (CIP). The company’s economic risk with respect to each investment in CIP is limited to its equity ownership and any uncollected management and performance fees. See also Note 13 , “ Consolidated Investment Products ,” for additional information regarding the impact of the consolidation of managed funds.

The majority of the company’s CIP balances are CLO-related. The collateral assets of the CLOs are held solely to satisfy the

obligations of the CLOs. The company has no right to the benefits from, nor does it bear the risks associated with, the collateral

assets held by the CLOs, beyond the company’s direct investments in, and management and performance fees generated from, the CLOs. If the company were to liquidate, the collateral assets would not be available to the general creditors of the company, and as a result, the company does not consider them to be company assets. Likewise, the investors in the CLOs have no recourse to the general credit of the company for the notes issued by the CLOs. The company therefore does not consider this debt to be a company liability.

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The impact of CIP is so significant to the presentation of the company’s Condensed Consolidated Financial Statements that the company has elected to deconsolidate these products in its non-GAAP disclosures. The following discussion therefore combines the results presented under U.S. generally accepted accounting principles (U.S. GAAP) with the company’s non-GAAP presentation. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains four distinct sections, which follow the AUM discussion:


•	Results of Operations ( three months ended March 31, 2019 compared to three months ended March 31, 2018 );


•	Schedule of Non-GAAP Information;


•	Balance Sheet Discussion; and


•	Liquidity and Capital Resources.

Wherever a non-GAAP measure is referenced, a disclosure will follow in the narrative or in the note referring the reader to the Schedule of Non-GAAP Information, where additional details regarding the use of the non-GAAP measure by the company are disclosed, along with reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures. To further enhance the readability of the Results of Operations section, separate tables for each of the revenue, expense, and other income and expenses (non-operating income/expense) sections of the income statement introduce the narrative that follows, providing a section-by-section review of the company’s income statements for the periods presented.

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Summary Operating Information

Summary operating information is presented in the table below:



$ in millions, other than per share amounts, operating margins and AUM	Three months ended March 31,
U.S. GAAP Financial Measures Summary	2019		2018
Operating revenues	1,214.6		1,355.8
Operating income	200.2		321.1
Operating margin	16.5	%	23.7	%
Net income attributable to Invesco Ltd.	177.7		253.9
Diluted EPS	0.44		0.62

Non-GAAP Financial Measures Summary
Net revenues ⁽¹⁾	887.1		958.0
Adjusted operating income ⁽²⁾	284.3		357.3
Adjusted operating margin ⁽²⁾	32.0	%	37.3	%
Adjusted net income attributable to Invesco Ltd. ⁽³⁾	224.8		273.9
Adjusted diluted EPS ⁽³⁾	0.56		0.67

Assets Under Management
Ending AUM (billions)	954.8		934.2
Average AUM (billions)	932.8		951.3

_________


(1)	Net revenues is a non-GAAP financial measure. Net revenues are operating revenues plus the net revenues of Invesco Great Wall, less third-party distribution, service and advisory expenses, plus management and performance fees earned from CIP. See “Schedule of Non-GAAP Information,” for the reconciliation of operating revenues to net revenues.

(2)

Adjusted operating income and adjusted operating margin are non-GAAP financial measures. Adjusted operating margin is adjusted operating income divided by net revenues. Adjusted operating income includes operating income plus the net operating income of Invesco Great Wall, the operating income impact of the consolidation of investment products, transaction, integration, and restructuring expenses, compensation expense related to market valuation changes in deferred compensation plans, and other reconciling items. See “Schedule of Non-GAAP Information,” for the reconciliation of operating income to adjusted operating income.

(3)

Adjusted net income attributable to Invesco Ltd. and adjusted diluted EPS are non-GAAP financial measures. Adjusted net income attributable to Invesco Ltd. is net income attributable to Invesco Ltd. adjusted to exclude the net income of CIP, transaction, integration, and restructuring expenses, the net income impact of deferred compensation plans and other reconciling items. Adjustments made to net income attributable to Invesco Ltd. are tax-affected in arriving at adjusted net income attributable to Invesco Ltd. By calculation, adjusted diluted EPS is adjusted net income attributable to Invesco Ltd. divided by the weighted average number of shares outstanding (for diluted EPS). See “Schedule of Non-GAAP Information,” for the reconciliation of net income attributable to Invesco Ltd. to adjusted net income attributable to Invesco Ltd.

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Investment Capabilities Performance Overview

Invesco’s first strategic priority is to achieve strong investment performance over the long-term for our clients. The table below presents the one-, three- and five-year performance of our actively managed investment products measured by the percentage of AUM ahead of benchmark and AUM in the top half of peer group. ⁽¹⁾



	Benchmark Comparison						Peer Group Comparison
	% of AUM Ahead of Benchmark						% of AUM In Top Half of Peer Group
	1yr		3yr		5yr		1yr		3yr		5yr
Equities
U.S. Core	—	%	9	%	15	%	23	%	19	%	9	%
U.S. Growth	4	%	87	%	30	%	13	%	10	%	10	%
U.S. Value	42	%	52	%	40	%	43	%	53	%	3	%
Sector Funds	79	%	89	%	53	%	70	%	66	%	29	%
U.K.	6	%	7	%	16	%	11	%	8	%	8	%
Canadian	5	%	5	%	—	%	5	%	36	%	—	%
Asian	71	%	84	%	82	%	58	%	94	%	87	%
Continental European	4	%	6	%	76	%	—	%	21	%	74	%
Global	27	%	10	%	44	%	37	%	50	%	46	%
Global Ex U.S. and Emerging Markets	80	%	8	%	17	%	87	%	8	%	2	%
Fixed Income
Money Market	98	%	98	%	99	%	80	%	83	%	83	%
U.S. Fixed Income	55	%	89	%	91	%	41	%	81	%	87	%
Global Fixed Income	30	%	54	%	47	%	35	%	55	%	47	%
Stable Value	100	%	100	%	100	%	100	%	100	%	100	%
Other
Alternatives	24	%	66	%	66	%	23	%	40	%	78	%
Balanced	41	%	53	%	45	%	53	%	87	%	58	%

_________

(1)

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 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. AUM measured in the one, three, and five year quartile rankings represents 51%, 51%, and 50% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis represents 64%, 62%, and 59% of total Invesco AUM as of 3/31/19. 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 asset-weighted in USD. Rankings are as of prior quarter end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings are calculated against all funds in each peer group. Rankings for the primary share class of the most representative fund in each composite are applied to all products within each composite. 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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Foreign Exchange Impact on Balance Sheet, Assets Under Management and Results of Operations

A significant portion of our business is based outside of the U.S. The strengthening or weakening of the U.S. Dollar against other currencies, primarily the Pound Sterling, Canadian Dollar, Euro and Japanese Yen will impact our assets, liabilities, AUM and reported revenues and expenses from period to period. The assets, liabilities and AUM of foreign subsidiaries are translated at period end spot foreign currency exchange rates. The income statements of foreign currency subsidiaries are translated into U.S. Dollars, the reporting currency of the company, using average foreign exchange rates.

The table below illustrates the spot foreign exchange rates used for translation of non-U.S. Dollar denominated assets, liabilities and AUM into U.S. Dollars:



Spot Foreign Exchange Rates	March 31, 2019	December 31, 2018	March 31, 2018	December 31, 2017
Pound Sterling ($ per £)	1.306	1.274	1.404	1.353
Canadian Dollar (CAD per $)	1.344	1.365	1.290	1.253
Japan (¥ per $)	110.575	109.735	106.202	112.645
Euro ($ per Euro)	1.122	1.143	1.232	1.201

The table below illustrates the average foreign exchange rates used for translation of non-U.S. Dollar denominated income, including revenues and expenses, into U.S. Dollars:



	Three months ended March 31,
Average Foreign Exchange Rates	2019	2018
Pound Sterling ($ per £)	1.302	1.391
Canadian Dollar (CAD per $)	1.330	1.263
Japan (¥ per $)	110.122	108.303
Euro ($ per Euro)	1.136	1.229

A comparison of period end spot rates between March 31, 2019 and December 31, 2018 shows a strengthening of the Pound Sterling and the Canadian Dollar relative to the U.S. Dollar, while the Euro and the Japanese Yen weakened, which is reflected in the translation of our Pound Sterling-based, Euro-based, Japanese Yen-based and Canadian Dollar-based assets, liabilities and AUM into U.S. Dollars, respectively.

A comparison of the average foreign exchange rates used for the three months ended March 31, 2019 when compared to the three months ended March 31, 2018 shows a weakening of the Pound Sterling, the Euro, the Canadian Dollar and the Japanese Yen relative to the U.S. Dollar, which is reflected in the translation of our Pound Sterling-based, Euro-based, Canadian Dollar-based and Japanese Yen-based revenue and expenses into U.S. Dollars.

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Assets Under Management movements for the three months ended March 31, 2019 compared with the three months ended March 31, 2018

The following presentation and discussion of AUM includes Passive and Active AUM. Passive AUM include index-based ETFs, unit investment trusts (UITs), non-management fee earning AUM, foreign exchange overlays and other passive mandates. Active AUM is total AUM less Passive AUM.

Non-management fee earning AUM includes non-management fee earning ETFs, UIT and product leverage. The net flows in non-management fee earning AUM can be relatively short-term in nature and, due to the relatively low revenue yield, these can have a significant impact on overall net revenue yield.

The AUM tables and the discussion below refer to AUM as long-term. Long-term inflows and the underlying reasons for the movements in this line item include investments from new clients, existing clients adding new accounts/funds or contributions/subscriptions into existing accounts/funds, and new funding commitments into private equity funds. Long-term outflows reflect client redemptions from accounts/funds and include the return of invested capital on the maturity or liquidation of private equity funds. We present net flows into institutional money market funds separately because shareholders of those funds typically use them as short-term funding vehicles and because their flows are particularly sensitive to short-term interest rate movements.

Changes in AUM were as follows:



	For the three months ended March 31,
	2019						2018
$ in billions	Total AUM		Active		Passive		Total AUM		Active		Passive
December 31	888.2		667.2		221.0		937.6		738.6		199.0
Long-term inflows	53.8		33.7		20.1		56.6		40.1		16.5
Long-term outflows	(59.2	)	(43.0	)	(16.2	)	(56.3	)	(41.6	)	(14.7	)
Long-term net flows	(5.4	)	(9.3	)	3.9		0.3		(1.5	)	1.8
Net flows in non-management fee earning AUM	2.1		—		2.1		(0.4	)	—		(0.4	)
Net flows in institutional money market funds	6.8		6.8		—		0.4		0.4		—
Total net flows	3.5		(2.5	)	6.0		0.3		(1.1	)	1.4
Reinvested distributions	0.7		0.7		—		0.6		0.6		—
Market gains and losses	60.9		37.3		23.6		(12.2	)	(11.8	)	(0.4	)
Foreign currency translation	1.5		1.6		(0.1	)	7.9		7.6		0.3
March 31	954.8		704.3		250.5		934.2		733.9		200.3
Average AUM
Average long-term AUM	735.9		599.1		136.8		783.1		669.9		113.2
Average AUM	932.8		694.8		238.0		951.3		747.1		204.2
Revenue yield
Gross revenue yield on AUM ⁽¹⁾	53.9		68.4		13.5		57.6		69.5		14.5
Gross revenue yield on AUM before performance fees ⁽¹⁾	52.9		67.1		13.5		57.2		69.0		14.5
Net revenue yield on AUM ⁽²⁾	38.0		46.5		13.5		40.3		47.3		14.5
Net revenue yield on AUM before performance fees ⁽²⁾	37.1		45.2		13.5		39.9		46.8		14.5

____________

(1)

Gross revenue yield on AUM is equal to annualized total operating revenues divided by average AUM, excluding Invesco Great Wall AUM. Prior to the third quarter 2018, management reflected its interests in Invesco Great Wall on a proportional consolidation basis, which was consistent with the presentation of our share of the AUM from these investments. Given the company's influence on Invesco Great Wall, a change in regulation allowing increased foreign ownership, and reaching agreement in principle to obtain majority stake of the joint venture, the company began reporting 100% of the flows and AUM for Invesco Great Wall beginning in the third quarter 2018. For quarterly AUM, the average AUM for Invesco Great Wall included in the yield calculation in the three months ended March 31, 2019 was $31.5 billion ( three months ended March 31, 2018 : $9.8 billion ). It is appropriate to exclude the average AUM of Invesco Great Wall 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 Invesco Great Wall 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. Additionally, the numerator of the gross revenue yield measure, operating

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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 effective fee rate from AUM.


(2)	Net revenue yield on AUM is equal to annualized net revenues divided by average AUM. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues to net revenues.

Flows

There are numerous drivers of AUM inflows and outflows, including individual investor decisions to change investment preferences, fiduciaries and other gatekeepers making broad asset allocation decisions on behalf of their clients and reallocation of investments within portfolios. We are not a party to these asset allocation decisions, as the company does not generally have access to the underlying investor’s decision-making process, including their risk appetite or liquidity needs. Therefore, the company is not in a position to provide meaningful information regarding the drivers of inflows and outflows.

Average AUM during the three months ended March 31, 2019 were $932.8 billion , compared to $951.3 billion for the three months ended March 31, 2018 .

Market Returns and Reinvested Distributions

Market gains and losses include the net change in AUM resulting from changes in market values of the underlying securities from period to period. As discussed in the “Executive Overview” section of this Management’s Discussion and Analysis, during the three months ended March 31, 2019 , markets saw strong gains across equity markets globally as concerns were relieved around global trade tensions and slowing economic growth.

Foreign Exchange Rates

During the three months ended March 31, 2019 , we experienced increases in AUM of $1.5 billion due to changes in foreign exchange rates. In the three months ended March 31, 2018 , AUM increased by $7.9 billion due to foreign exchange rate changes. See the company’s disclosures regarding the changes in foreign exchange rates during three months ended March 31, 2019 in the “Foreign Exchange Impact on Balance Sheet, Assets Under Management and Results of Operations” section above for additional information regarding the movement of foreign exchange rates.

Revenue Yield

As a significant proportion of our AUM is based outside of the U.S., changes in foreign exchange rates result in a change to the mix of U.S. Dollar denominated AUM with AUM denominated in other currencies. As fee rates differ across geographic locations, changes to exchange rates have an impact on the net revenue yields. See the company’s disclosures regarding the changes in foreign exchange rates in the “Foreign Exchange Impact on Balance Sheet, Assets Under Management and Results of Operations” section above for additional information regarding the movement of foreign exchange rates.

Additionally, changes in our AUM mix significantly impact our net revenue yield. Passive AUM generally earn a lower effective fee rate than active asset classes. The company has experienced net outflows from active AUM as compared to net inflows from passive AUM, increasing the proportion of passive to active AUM during the three months ended March 31, 2019 .

At March 31, 2019 , passive AUM were $250.5 billion , representing 26.2% of total AUM at that date; whereas at March 31, 2018 , passive AUM were $200.3 billion , representing 21.4% of our total AUM at that date. In the three months ended March 31, 2019 , the net revenue yield on passive AUM was 13.5 basis points compared to 14.5 basis points in the three months ended March 31, 2018 , a decrease of 1.0 basis points.

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Changes in our AUM by channel, asset class, and client domicile, and average AUM by asset class, are presented below:

Total AUM by Channel ⁽¹⁾ As of and for the Three Months Ended March 31, 2019 and 2018 :



$ in billions	Total		Retail		Institutional
December 31, 2018	888.2		566.7		321.5
Long-term inflows	53.8		40.3		13.5
Long-term outflows	(59.2	)	(44.8	)	(14.4	)
Long-term net flows	(5.4	)	(4.5	)	(0.9	)
Net flows in non-management fee earning AUM	2.1		(0.7	)	2.8
Net flows in institutional money market funds	6.8		3.3		3.5
Total net flows	3.5		(1.9	)	5.4
Reinvested distributions	0.7		0.6		0.1
Market gains and losses	60.9		53.0		7.9
Foreign currency translation	1.5		1.1		0.4
March 31, 2019	954.8		619.5		335.3

December 31, 2017	937.6		637.0		300.6
Long-term inflows	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	(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	0.6		0.6		—
Transfers ⁽⁵⁾	—		(29.5	)	29.5
Market gains and losses	(12.2	)	(11.0	)	(1.2	)
Foreign currency translation	7.9		4.5		3.4
March 31, 2018	934.2		599.4		334.8

___________

See accompanying notes immediately following these AUM tables.

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Passive AUM by Channel ⁽¹⁾

As of and for the Three Months Ended March 31, 2019 and 2018 :



$ in billions	Total		Retail		Institutional
December 31, 2018	221.0		204.6		16.4
Long-term inflows	20.1		20.1		—
Long-term outflows	(16.2	)	(16.2	)	—
Long-term net flows	3.9		3.9		—
Net flows in non-management fee earning AUM	2.1		(0.6	)	2.7
Net flows in institutional money market funds	—		—		—
Total net flows	6.0		3.3		2.7
Market gains and losses	23.6		23.5		0.1
Foreign currency translation	(0.1	)	(0.1	)	—
March 31, 2019	250.5		231.3		19.2

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	(0.4	)	(0.1	)	(0.3	)
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

____________

See accompanying notes immediately following these AUM tables.

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Total AUM by Asset Class ⁽²⁾

As of and for the Three Months Ended March 31, 2019 and 2018 :



$ in billions	Total		Equity		Fixed Income		Balanced		Money Market ⁽³⁾		Alternatives
December 31, 2018	888.2		385.2		225.1		50.4		91.0		136.5
Long-term inflows	53.8		25.5		16.5		2.1		1.1		8.6
Long-term outflows	(59.2	)	(28.9	)	(13.6	)	(5.3	)	(0.4	)	(11.0	)
Long-term net flows	(5.4	)	(3.4	)	2.9		(3.2	)	0.7		(2.4	)
Net flows in non-management fee earning AUM	2.1		(1.0	)	3.1		—		—		—
Net flows in institutional money market funds	6.8		—		—		—		6.8		—
Total net flows	3.5		(4.4	)	6.0		(3.2	)	7.5		(2.4	)
Reinvested distributions	0.7		0.3		0.2		0.1		—		0.1
Market gains and losses	60.9		48.5		5.7		2.9		(0.7	)	4.5
Foreign currency translation	1.5		1.0		0.2		—		0.3		—
March 31, 2019	954.8		430.6		237.2		50.2		98.1		138.7
Average AUM	932.8		416.7		230.9		51.1		95.6		138.5
% of total average AUM	100.0	%	44.7	%	24.8	%	5.5	%	10.2	%	14.8	%

December 31, 2017	937.6		431.2		225.8		57.7		78.7		144.2
Long-term inflows	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	(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	0.6		0.3		0.2		—		—		0.1
Market gains and losses	(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
% of total average AUM	100.0	%	45.9	%	24.0	%	6.2	%	8.6	%	15.3	%

____________

See accompanying notes immediately following these AUM tables.

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Passive AUM by Asset Class ⁽²⁾

As of and for the Three Months Ended March 31, 2019 and 2018 :



$ in billions	Total		Equity		Fixed Income		Balanced		Money Market		Alternatives
December 31, 2018	221.0		150.5		58.3		—		—		12.2
Long-term inflows	20.1		14.0		4.5		—		—		1.6
Long-term outflows	(16.2	)	(11.3	)	(2.9	)	—		—		(2.0	)
Long-term net flows	3.9		2.7		1.6		—		—		(0.4	)
Net flows in non-management fee earning AUM	2.1		(1.1	)	3.2		—		—		—
Net flows in institutional money market funds	—		—		—		—		—		—
Total net flows	6.0		1.6		4.8		—		—		(0.4	)
Market gains and losses	23.6		21.9		1.2		—		—		0.5
Foreign currency translation	(0.1	)	(0.1	)	—		—		—		—
March 31, 2019	250.5		173.9		64.3		—		—		12.3
Average AUM	238.0		164.6		60.8		—		—		12.6
% of total average AUM	100.0	%	69.2	%	25.5	%	—	%	—	%	5.3	%

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	(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
% of total average AUM	100.0	%	65.0	%	27.9	%	—	%	—	%	7.1	%

____________

See accompanying notes immediately following these AUM tables.

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Total AUM by Client Domicile ⁽⁴⁾

As of and for the Three Months Ended March 31, 2019 and 2018 :



$ in billions	Total		U.S.		Canada		U.K.		Continental Europe		Asia
December 31, 2018	888.2		566.3		21.7		85.1		112.5		102.6
Long-term inflows	53.8		28.4		1.2		3.2		12.4		8.6
Long-term outflows	(59.2	)	(29.2	)	(1.4	)	(7.1	)	(12.8	)	(8.7	)
Long-term net flows	(5.4	)	(0.8	)	(0.2	)	(3.9	)	(0.4	)	(0.1	)
Net flows in non-management fee earning AUM	2.1		1.4		0.1		(0.1	)	0.6		0.1
Net flows in institutional money market funds	6.8		3.4		—		—		(0.1	)	3.5
Total net flows	3.5		4.0		(0.1	)	(4.0	)	0.1		3.5
Reinvested distributions	0.7		0.6		—		0.1		—		—
Market gains and losses	60.9		41.0		2.6		3.5		7.5		6.3
Foreign currency translation	1.5		—		0.3		1.8		(1.2	)	0.6
March 31, 2019	954.8		611.9		24.5		86.5		118.9		113.0

December 31, 2017	937.6		585.4		26.8		110.9		127.1		87.4
Long-term inflows	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	(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	0.6		0.5		—		0.1		—		—
Market gains and losses	(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 accompanying notes immediately following these AUM tables.

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Passive AUM by Client Domicile ⁽⁴⁾

As of and for the Three Months Ended March 31, 2019 and 2018 :



$ in billions	Total		U.S.		Canada		U.K.	Continental Europe		Asia
December 31, 2018	221.0		190.3		0.6		—	28.8		1.3
Long-term inflows	20.1		13.4		0.1		—	6.4		0.2
Long-term outflows	(16.2	)	(11.8	)	(0.1	)	—	(4.1	)	(0.2	)
Long-term net flows	3.9		1.6		—		—	2.3		—
Net flows in non-management fee earning AUM	2.1		1.7		—		—	0.4		—
Net flows in institutional money market funds	—		—		—		—	—		—
Total net flows	6.0		3.3		—		—	2.7		—
Market gains and losses	23.6		21.2		0.1		—	2.2		0.1
Foreign currency translation	(0.1	)	—		—		—	(0.1	)	—
March 31, 2019	250.5		214.8		0.7		—	33.6		1.4

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	(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

____________


(1)	Channel refers to the internal distribution channel from which the AUM originated. Retail AUM represents AUM distributed by the company’s retail sales team. Institutional AUM represents AUM distributed by our institutional sales team. This aggregation is viewed as a proxy for presenting AUM in the retail and institutional markets in which the company operates.


(2)	Asset classes are descriptive groupings of AUM by common type of underlying investments.

(3) Ending Money Market AUM includes $95.9 billion in institutional money market AUM.


(4)	Client domicile disclosure groups AUM by the domicile of the underlying clients.

(5) 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.

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Results of Operations for the three months ended March 31, 2019 compared to the three months ended March 31, 2018

The discussion below includes the use of non-GAAP financial measures. See “Schedule of Non-GAAP Information” for additional details and reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures.

Operating Revenues and Net Revenues

The main categories of revenues, and the dollar and percentage change between the periods, are as follows:



					Variance
	Three months ended March 31,				2019 vs 2018
$ in millions	2019		2018		$ Change		% Change
Investment management fees	923.7		1,043.7		(120.0	)	(11.5	)%
Service and distribution fees	219.3		246.1		(26.8	)	(10.9	)%
Performance fees	21.8		9.1		12.7		139.6	%
Other	49.8		56.9		(7.1	)	(12.5	)%
Total operating revenues	1,214.6		1,355.8		(141.2	)	(10.4	)%
Third-party distribution, service and advisory expenses	(368.0	)	(419.1	)	51.1		(12.2	)%
Invesco Great Wall	31.8		14.3		17.5		122.4	%
CIP	8.7		7.0		1.7		24.3	%
Net revenues ^(*)	887.1		958.0		(70.9	)	(7.4	)%

____________

*Net revenues are operating revenues less third-party distribution, service and advisory expenses, plus net revenues from Invesco Great Wall, plus management and performance fees earned from CIP. See “Schedule of Non-GAAP Information” for additional important disclosures regarding the use of net revenues.

The impact of foreign exchange rate movements decreased operating revenues by $26.7 million , equivalent to 2.2% of total operating revenues, during the three months ended March 31, 2019 when compared to the three months ended March 31, 2018 .

Additionally, our revenues are directly influenced by the level and composition of our AUM. Therefore, movements in global capital market levels, net new business inflows (or outflows) and changes in the mix of investment products between asset classes and geographies may materially affect our revenues from period to period. As discussed in the Executive Overview, returns showed strong gains across equity markets globally in the three months ended March 31, 2019 .

Investment Management Fees

Investment management fees decreased by $120.0 million ( 11.5% ) in the three months ended March 31, 2019 to $923.7 million ( three months ended March 31, 2018 : $1,043.7 million ). This compares to a 1.9% decrease in average AUM. The impact of foreign exchange rate movements decreased investment management fees by $25.1 million during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 . After allowing for foreign exchange movements, investment management fees decreased by $94.9 million ( 9.1% ).

See the company’s disclosures regarding the changes in AUM and revenue yields during the three months ended March 31, 2019 and March 31, 2018 in the “Assets Under Management” section above for additional information regarding the impact of changes in AUM on management fee yields.

Service and Distribution Fees

In the three months ended March 31, 2019 , service and distribution fees decreased by $26.8 million ( 10.9% ) to $219.3 million when compared to three months ended March 31, 2018 of $246.1 million . The impact of foreign exchange rate movements decreased service and distribution fees by $1.3 million during the three months ended March 31, 2019 as compared to the first quarter of 2018 . The decrease is due to lower administrative fees of $13.3 million, distribution fees of $7.7 million and transfer agency fees of $7.2 million. The decreases relate to lower AUM that earn these fees.

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Performance Fees

Of our $954.8 billion in AUM at March 31, 2019 , approximately $47.2 billion or 4.9% , could potentially earn performance fees , including carried interests and performance fees related to partnership investments and separate accounts.

In the three months ended March 31, 2019 , performance fees increased by $12.7 million ( 139.6% ) to $21.8 million when compared to the performance fees in the three months ended March 31, 2018 of $9.1 million . Performance fees during the first quarter of 2019 were primarily generated by real estate products.

Other Revenues

In the three months ended March 31, 2019 , other revenues decreased by $7.1 million ( 12.5% ) to $49.8 million ( three months ended March 31, 2018 : $56.9 million ). The decrease was driven by lower real estate transaction fees and front end fees of $9.0 million. There was no impact of foreign exchange rate movements during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 .

Third-Party Distribution, Service and Advisory Expenses

Third-party distribution, service and advisory expenses decreased by $51.1 million ( 12.2% ) in the three months ended March 31, 2019 to $368.0 million ( three months ended March 31, 2018 : $419.1 million ). The impact of foreign exchange rate movements decreased third-party distribution, service and advisory expenses by $3.7 million during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 . After allowing for foreign exchange rate changes, the decrease in third-party distribution, service and advisory expenses was $47.4 million . Included in this decrease is $20.3 million in renewal commissions, $22.5 million of service fees and $6.4 million in transaction fees, partially offset by increases in unitary fees of $4.8 million.

Revenues, net of third-party distribution expenses, from Invesco Great Wall

The company’s most significant joint venture arrangement is our 49% investment in Invesco Great Wall Fund Management Company Limited (the “Invesco Great Wall” joint venture). Management believes that the revenues, net of third-party distribution expenses, from Invesco Great Wall should be added to operating revenues to arrive at net revenues, as it is important to evaluate the contribution to the business that Invesco Great Wall is making. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of net revenues.

Prior to the third quarter 2018, management reflected its interests in Invesco Great Wall on a proportional consolidation basis, which was consistent with the presentation of our share of the AUM from Invesco Great Wall. Given the company’s influence on the Invesco Great Wall joint venture, a change in regulation allowing increased foreign ownership, and reaching agreement in principle to obtain a majority stake of the joint venture, the company began reporting 100% of the flows and AUM for Invesco Great Wall beginning in the third quarter 2018. The company’s non-GAAP operating results now reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income is reduced by the amount of earnings attributable to non-controlling interests.

Revenues, net of third-party distribution expenses, from Invesco Great Wall were $31.8 million and average AUM was $31.5 billion , reflecting 100% of the flows and AUM for the three months ended March 31, 2019 . The 2018 period included $14.3 million of revenues, net of third-party distribution expenses, from Invesco Great Wall and average AUM of $9.8 billion , reflecting 49% of the flows and AUM.

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Management, performance and other fees earned from CIP

Management believes that the consolidation of investment products may impact a reader’s analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, management believes that it is appropriate to adjust operating revenues for the impact of CIP in calculating net revenues. As management and performance fees earned by Invesco from the consolidated products are eliminated upon consolidation of the investment products, management believes that it is appropriate to add these operating revenues back in the calculation of net revenues. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of net revenues.

The elimination of management fees earned from CIP was $8.7 million in the three months ended March 31, 2019 ( three months ended March 31, 2018 : $7.0 million ). The increase is due to the increase in management fees earned from CLOs.

Operating Expenses

The main categories of operating expenses, and the dollar and percentage changes between periods, are as follows:



			Variance
	Three months ended March 31,		2019 vs 2018
$ in millions	2019	2018	$ Change		% Change
Third-party distribution, service and advisory	368.0	419.1	(51.1	)	(12.2	)%
Employee compensation	381.3	385.2	(3.9	)	(1.0	)%
Marketing	28.0	28.0	—		—	%
Property, office and technology	107.2	100.2	7.0		7.0	%
General and administrative	83.8	83.7	0.1		0.1	%
Transaction, integration and restructuring	46.1	18.5	27.6		149.2	%
Total operating expenses	1,014.4	1,034.7	(20.3	)	(2.0	)%

The tables below set forth these expense categories as a percentage of total operating expenses and operating revenues, which we believe provides useful information as to the relative significance of each type of expense.



$ in millions	Three months ended March 31, 2019	% of Total Operating Expenses		% of Operating Revenues		Three months ended March 31, 2018	% of Total Operating Expenses		% of Operating Revenues
Third-party distribution, service and advisory	368.0	36.3	%	30.3	%	419.1	40.5	%	30.9	%
Employee compensation	381.3	37.6	%	31.4	%	385.2	37.2	%	28.4	%
Marketing	28.0	2.8	%	2.3	%	28.0	2.7	%	2.1	%
Property, office and technology	107.2	10.6	%	8.8	%	100.2	9.7	%	7.4	%
General and administrative	83.8	8.3	%	6.9	%	83.7	8.1	%	6.2	%
Transaction, integration and restructuring	46.1	4.5	%	3.8	%	18.5	1.8	%	1.4	%
Total operating expenses	1,014.4	100.0	%	83.5	%	1,034.7	100.0	%	76.3	%

During the three months ended March 31, 2019 , operating expenses decreased by $20.3 million ( 2.0% ) to $1,014.4 million ( three months ended March 31, 2018 : $1,034.7 million ). The impact of foreign exchange rate movements decreased operating expenses by $20.2 million , or 2.0% of total operating expenses, during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 . The remaining variances are from the activities of the business and are addressed below on a line-item by line-item basis.

Third-Party Distribution, Service and Advisory Expenses

Third-party distribution, service and advisory expenses are discussed above in the operating and net revenues section.

Employee Compensation

Employee compensation decreased $3.9 million ( 1.0% ) to $381.3 million in the three months ended March 31, 2019 ( three months ended March 31, 2018 : $385.2 million ). The impact of foreign exchange rate movements decreased employee

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compensation by $10.2 million during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 . After allowing for foreign exchange rate changes, there was an increase in employee compensation of $6.3 million .

During the three months ended March 31, 2019 , after allowing for foreign exchange rate changes, the increases in employee compensation were related to increases in base salaries of $12.4 million and deferred compensation expense of $16.4 million. These increases were partially offset by decreases in commissions and staff bonus expenses of $22.9 million.

Headcount at March 31, 2019 was 7,663 ( March 31, 2018 : 7,134 ), with the increase primarily attributable to acquisitions.

Marketing

Marketing expenses remained flat in the three months ended March 31, 2019 at $28.0 million ( three months ended March 31, 2018 : $28.0 million ). The impact of foreign exchange rate movements decreased marketing expenses by $0.7 million during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 . After allowing for foreign exchange rate changes, the increase in marketing expenses was $0.7 million .

Property, Office and Technology

Property, office and technology costs increased by $7.0 million ( 7.0% ) to $107.2 million in the three months ended March 31, 2019 ( three months ended March 31, 2018 : $100.2 million ). The impact of foreign exchange rate movements decreased property, office and technology expenses by $2.4 million during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 . After allowing for foreign exchange rate movements, the increase was $9.4 million . This increase was comprised of depreciation and maintenance of $3.9 million, outsourced administration costs of $2.6 million and other technology costs of $0.9 million.

General and Administrative

General and administrative expenses increased by $0.1 million ( 0.1% ) to $83.8 million in the three months ended March 31, 2019 ( three months ended March 31, 2018 : $83.7 million ). The impact of foreign exchange rate movements decreased general and administrative expenses by $3.2 million during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 . After allowing for foreign exchange rate movements, the increase was $3.3 million .

Transaction, Integration, and Restructuring

Transaction, integration, and restructuring charges were $46.1 million for the three months ended March 31, 2019 (three months ended March 31, 2018 : $18.5 million ). Transaction and integration costs of $43.8 million during the three months ended March 31, 2019 (March 31, 2018: none ) Within the acquisition-related cost, $34.9 million resulted from the OppenheimerFunds combination, which included severance related charges of $15.7 million, legal, consulting and other professional fees of $18.7 million, while other acquisition-related items included amortization of management contracts and other intangible assets of $7.3 million, and $0.4 million of marketing. Restructuring expenses of $2.3 million included severance costs of $1.0 million and consulting expenses of $0.8 million.

Other Income and Expenses

The main categories of other income and expenses, and the dollar and percentage changes between periods are as follows:



					Variance
	Three months ended March 31,				2019 vs 2018
$ in millions	2019		2018		$ Change		% Change
Equity in earnings of unconsolidated affiliates	15.0		9.7		5.3		54.6	%
Interest and dividend income	4.7		4.2		0.5		11.9	%
Interest expense	(33.1	)	(23.2	)	(9.9	)	42.7	%
Other gains and losses, net	31.1		(5.4	)	36.5		N/A
Other income/(expense) of CIP, net	38.9		27.2		11.7		43.0	%
Total other income and expenses	56.6		12.5		44.1		352.8	%

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Equity in earnings of unconsolidated affiliates

Equity in earnings of unconsolidated affiliates increased by $5.3 million to $15.0 million in the three months ended March 31, 2019 ( three months ended March 31, 2018 : $9.7 million ). The increase in equity in earnings is driven by increase in earnings from our private equity, real estate and other investments.

Other gains and losses, net

Other gains and losses, net was a gain of $31.1 million in the three months ended March 31, 2019 . Included in the $31.1 million gain were $17.5 million of gains on the appreciation of investments and instruments held for our deferred compensation plans, $17.3 million of net gains related to the mark-to-market on seed money investments, $3.2 million of net foreign exchange gains on intercompany loans and $1.5 million related to defined pension plans. These gains were partially offset by net losses during the period of $2.6 million related to the mark-to-market of foreign put option contracts and $5.8 million related to the change in acquisition-related contingent consideration liability.

Other gains and losses, net was a loss of $5.4 million in the three months ended March 31, 2018 . Included in the $5.4 million loss were net losses of $4.0 million on the depreciation of investments and instruments held for our deferred compensation plans, an investment impairment charge of $3.2 million, net foreign exchange gains on intercompany loans of$0.9 million and $0.6 million loss related to the mark-to-market of foreign exchange put option contracts. These losses were partially offset by net gains during the period of $2.0 million related to defined benefit pension plan, $0.5 million related to an acquisition-related change in the fair value of a contingent consideration liability, $0.3 million of net gains related to the mark-to-market on seed money investments and $0.4 million of net realized gains.

Other income/(expense) of CIP

Other income/(expense) of CIP includes interest and dividend income, interest expense, and other gains/(losses of CIP).

In the three months ended March 31, 2019 , interest and dividend income of CIP increased by $26.9 million ( 46.5% ) to $84.7 million ( three months ended March 31, 2018 : $57.8 million ). Interest expense of CIP increased by $18.6 million ( 47.2% ) to $58.0 million ( three months ended March 31, 2018 : $39.4 million ).

The increase in interest income and interest expense of CIP in 2019 is primarily due to the impact of newly consolidated CLOs and other funds during 2019, partially offset by the impact of funds deconsolidated during the three months ended March 31, 2019 .

Included in other gains/(losses) of CIP, net, are realized and unrealized gains and losses on the underlying investments and debt of CIP. In the three months ended March 31, 2019 , other gains and losses of CIP were net gains of $12.2 million as compared to net gains of $8.8 million in the three months ended March 31, 2018 . The net gains during the three months ended March 31, 2019 were attributable to market-driven gains of investments held by consolidated funds.

Net impact of CIP and related noncontrolling interests in consolidated entities

The net impact to net income attributable to Invesco Ltd. in each period primarily represents the changes in the value of the company’s holding in its consolidated CLOs, which is reclassified into other gains/(losses) from accumulated other comprehensive income upon consolidation. The consolidation of investment products during the three months ended March 31, 2019 resulted in a net decrease in net income attributable to Invesco Ltd. of $1.0 million ( three months ended March 31, 2018 : $0.6 million increase ). CIP are taxed at the investor level and not at the product level; therefore, there is no tax provision reflected in the net impact of CIP.

Noncontrolling interests in consolidated entities represent the profit or loss amounts attributed to third-party investors in CIP. The impact of any gains or losses resulting from valuation changes in the investments of non-CLO CIP attributable to the interests of third-parties are offset by resulting changes in gains and losses attributable to noncontrolling interests in consolidated entities and therefore do not have a material effect on the financial condition, operating results (including earnings per share), liquidity or capital resources of the company’s common shareholders. Similarly, any gains or losses resulting from valuation changes in the investments of CLOs attributable to the interests of third-parties are offset by the calculated value of the notes issued by the CLOs (offsetting in other gains/(losses) of CIP) and therefore also do not have a material effect on the financial condition, operating results (including earnings per share), liquidity or capital resources of the company’s common shareholders.

Additionally, CIP represent less than 1% of the company’s AUM. Therefore, the net gains or losses of CIP are not indicative of the performance of the company’s aggregate AUM.

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Income Tax Expense

The company’s subsidiaries operate in several taxing jurisdictions around the world, each with its own statutory income tax rate. As a result, the blended average statutory tax rate will vary from year to year depending on the mix of the profits and losses of the company’s subsidiaries.

Our effective tax rate increased to 25.8% for the three months ended March 31, 2019 ( three months ended March 31, 2018 : 20.5% ). The inclusion of income from non-controlling interests in consolidated entities decreased our effective tax rate by 1.3% in 2019 and 0.7% in 2018 . 2019 includes a 3.4% rate increase related to vestings of our annual share based compensation awards, a 0.5% rate increase resulting from non-tax deductible transaction, integration, and restructuring costs and a 0.6% rate increase due to other non-tax deductible expenses. The remainder of the rate movement for 2019 was primarily due to changes in the mix of pre-tax income.

Schedule of Non-GAAP Information

We utilize the following non-GAAP performance measures: net revenue (and by calculation, net revenue yield on AUM), adjusted operating income, adjusted operating margin, adjusted net income attributable to Invesco Ltd. and adjusted diluted earnings per share (EPS). The company believes the adjusted measures provide valuable insight into the company’s ongoing operational performance and assist in comparisons to its competitors. These measures also assist the company’s management with the establishment of operational budgets and forecasts and assist the Board of Directors and management of the company 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. Each of these measures is discussed more fully below.

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). 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. Additional reconciling items may be added in the future to these non-GAAP measures if deemed appropriate. The tax effects related to the reconciling items have been calculated based on the tax rate attributable to the jurisdiction to which the transaction relates. Notes to the reconciliations follow the tables.

Reconciliation of Operating revenues to Net revenues:



	Three months ended March 31,
$ in millions	2019		2018
Operating revenues, U.S. GAAP basis	1,214.6		1,355.8
Invesco Great Wall ⁽¹⁾	31.8		14.3
Third party distribution, service and advisory expenses ⁽²⁾	(368.0	)	(419.1	)
CIP ⁽³⁾	8.7		7.0
Net revenues	887.1		958.0

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Reconciliation of Operating income to Adjusted operating income:



	Three months ended March 31,
$ in millions	2019		2018
Operating income, U.S. GAAP basis	200.2		321.1
Invesco Great Wall ⁽¹⁾	14.9		5.9
CIP ⁽³⁾	11.5		10.2
Transaction, integration, and restructuring ⁽⁴⁾	46.1		18.5
Compensation expense related to market valuation changes in deferred compensation plans ⁽⁵⁾	11.6		1.6
Adjusted operating income	284.3		357.3

Operating margin*	16.5	%	23.7	%
Adjusted operating margin**	32.0	%	37.3	%

Reconciliation of Net income attributable to Invesco Ltd. to Adjusted net income attributable to Invesco Ltd.:



	Three months ended March 31,
$ in millions, except per share data	2019			2018
Net income attributable to Invesco Ltd., U.S. GAAP basis	177.7			253.9
CIP ⁽³⁾	1.0			(0.6		)
Transaction, integration and restructuring, net of tax ⁽⁴⁾	44.8			17.9
Deferred compensation plan market valuation changes and dividend income less compensation expense, net of tax ⁽⁵⁾	(4.7		)	4.1
Other reconciling items, net of tax ⁽⁶⁾	6.0			(1.4		)
Adjusted net income attributable to Invesco Ltd.	224.8			273.9

Average shares outstanding - diluted	401.9			411.8
Diluted EPS		$0.44			$0.62
Adjusted diluted EPS***		$0.56			$0.67

____________


*	Operating margin is equal to operating income divided by operating revenues.


**	Adjusted operating margin is equal to adjusted operating income divided by net revenues.


***	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.


(1)	Invesco Great Wall

Prior to the third quarter 2018, management reflected its interests in Invesco Great Wall Fund Management Company (“Invesco Great Wall”) on a proportional consolidation basis, which was consistent with the presentation of our share of the AUM from these investments. Given the company’s influence on Invesco Great Wall, a change in regulation allowing increased foreign ownership and reaching agreement in principle in the third quarter to obtain a majority stake of the joint venture, the company began reporting 100% of the flows and AUM for Invesco Great Wall beginning in the third quarter. The company’s non-GAAP operating results now reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income is reduced by the amount of earnings attributable to non-controlling interests.

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(2)	Third-party distribution, service and advisory expenses

Third-party distribution, service and advisory expenses include renewal commissions and distribution costs (12b-1 and marketing support) paid to brokers and independent financial advisors, and other service and administrative fees paid to third parties. While the terms used for these types of expenses vary by geography, they are all expense items that are closely linked to the value of AUM and the revenue earned by Invesco from AUM. Since the company has been deemed to be the principal in the third-party arrangements, the company must reflect these expenses gross of operating revenues under U.S. GAAP.

Management believes that the deduction of third-party distribution, service and advisory expenses from operating revenues appropriately reflects the nature of these expenses as being passed through to external parties who perform functions on behalf of, and distribute, the company’s managed funds. Further, these expenses vary extensively by geography due to the differences in distribution channels. The net presentation assists in identifying the revenue contribution generated by the business, removing distortions caused by the differing distribution channel fees and allowing for a fair comparison with U.S. peer investment managers and within Invesco’s own investment units. Additionally, management evaluates net revenue yield on AUM, which is equal to net revenues divided by average AUM during the reporting period. This financial measure is an indicator of the basis point net revenues we receive for each dollar of AUM we manage and is useful when evaluating the company’s performance relative to industry competitors and within the company for capital allocation purposes.


(3)	CIP

See Part I, Item 1, Financial Statements, Note 13 - “ Consolidated Investment Products ” for a detailed analysis of the impact to the company’s Condensed Consolidated Financial Statements from the consolidation of CIP. The reconciling items add back the management and performance fees earned by Invesco from the consolidated products and remove the revenues and expenses recorded by the consolidated products that have been included in the U.S. GAAP Condensed Consolidated Statements of Income.

(4) Transaction, integration and restructuring related adjustments

Management believes it is useful to investors and other users of our Consolidated Financial Statements to adjust for the

transaction, integration and restructuring charges in arriving at adjusted operating income, adjusted operating margin and adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition and disposition related income or charges. See “Results of Operations for the three months ended March 31, 2019 and 2018 -- Transaction, Integration and Restructuring” for additional details.


(5)	Market movement on deferred compensation plan liabilities

Certain deferred compensation plan awards involve a return to the employee linked to the appreciation (depreciation) of specified investments, typically the funds managed by the employee. Invesco hedges economically the exposure to market movements.

Since these plans are hedged economically, management believes it is useful to reflect the offset ultimately achieved from hedging the investment market exposure in the calculation of adjusted operating income (and by calculation, adjusted operating margin) and adjusted net income attributable to Invesco Ltd. (and by calculation, adjusted diluted EPS), to produce results that will be more comparable period to period.

See below for a reconciliation of deferred compensation related items:

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	Three months ended March 31,
$ in millions	2019		2018
Market movement on deferred compensation plan liabilities:
Compensation expense related to market valuation changes in deferred compensation liability	11.6		1.6
Adjustments to operating income	11.6		1.6
Market valuation changes and dividend income from investments and instruments held related to deferred compensation plans in other income/(expense)	(17.7	)	3.7
Taxation:
Taxation on deferred compensation plan market valuation changes and dividend income less compensation expense	1.4		(1.2	)
Adjustments to net income attributable to Invesco Ltd.	(4.7	)	4.1


(6)	Other reconciling items

Each of these other reconciling items has been adjusted from U.S. GAAP to arrive at the company’s non-GAAP financial measures for the reasons either outlined in the paragraphs above, due to the unique character and magnitude of the reconciling item, or because the item represents a continuation of a reconciling item adjusted from U.S. GAAP in a prior period.



$ in millions	Three months ended March 31,
Other non-GAAP adjustments:	2019		2018
Foreign exchange hedge ^(a)	2.1		(1.5	)
Acquisition-related contingent consideration	5.8		(0.4	)
Taxation on foreign exchange hedge amortization ^(a)	(0.5	)	0.4
Taxation on acquisition-related contingent consideration	(1.4	)	0.1
Adjustments to net income attributable to Invesco Ltd.	6.0		(1.5	)

____________

(a)

Included within other gains and losses, net is the mark-to-market of foreign exchange put option contracts intended to provide protection against the impact of a significant decline in the Pound Sterling/U.S. Dollar foreign exchange rates. The Pound Sterling contracts provide coverage through December 31, 2019 . The adjustment from U.S. GAAP to non-GAAP earnings removes the impact of market volatility; therefore, the company’s non-GAAP results include only the amortization of the cost of the contracts during the contract period.

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Balance Sheet Discussion ⁽¹⁾

The following table represents a reconciliation of the balance sheet information presented on a U.S. GAAP basis to the balance sheet information excluding the impact of CIP and policyholder balances for the reasons outlined in footnote 1 to the table:



	As of March 31, 2019					As of December 31, 2018
Balance sheet information $ in millions	U.S. GAAP	Impact of CIP		Impact of Policyholders	As Adjusted	U.S. GAAP	Impact of CIP		Impact of Policyholders	As Adjusted
ASSETS
Cash and cash equivalents	1,017.1	—		—	1,017.1	1,147.7	—		—	1,147.7
Unsettled fund receivables	474.6	—		—	474.6	191.3	—		—	191.3
Investments	640.9	(603.3	)	—	1,244.2	613.5	(610.9	)	—	1,224.4
Assets of CIP:					—					—
Investments and other assets of CIP	6,869.9	6,869.9		—	—	6,324.3	6,324.3		—	—
Cash and cash equivalents of CIP	251.2	251.2		—	—	657.7	657.7		—	—
Assets held for policyholders	12,102.7	—		12,102.7	—	11,384.8	—		11,384.8	—
Goodwill and intangible assets, net	9,379.1	—		—	9,379.1	9,333.2	—		—	9,333.2
Other assets ⁽²⁾	1,471.1	(4.3	)	—	1,475.4	1,325.9	(5.0	)	—	1,330.9
Total assets	32,206.6	6,513.5		12,102.7	13,590.4	30,978.4	6,366.1		11,384.8	13,227.5
LIABILITIES
Liabilities of CIP:
Debt of CIP	5,211.7	5,211.7		—	—	5,226.0	5,226.0		—	—
Other liabilities of CIP	511.6	511.6		—	—	387.6	387.6		—	—
Policyholder payables	12,102.7	—		12,102.7	—	11,384.8	—		11,384.8	—
Unsettled fund payables	446.0	—		—	446.0	178.7	—		—	178.7
Long-term debt	2,515.7	—		—	2,515.7	2,408.8	—		—	2,408.8
Other liabilities ⁽³⁾	1,958.4	—		—	1,958.4	2,060.1	—		—	2,060.1
Total liabilities	22,746.1	5,723.3		12,102.7	4,920.1	21,646.0	5,613.6		11,384.8	4,647.6
EQUITY
Total equity attributable to Invesco Ltd.	8,669.3	(0.1	)	—	8,669.4	8,578.8	(0.1	)	—	8,578.9
Noncontrolling interests ⁽⁴⁾	791.2	790.3		—	0.9	753.6	752.6		—	1.0
Total equity	9,460.5	790.2		—	8,670.3	9,332.4	752.5		—	8,579.9
Total liabilities and equity	32,206.6	6,513.5		12,102.7	13,590.4	30,978.4	6,366.1		11,384.8	13,227.5

____________

(1) These tables include non-GAAP presentations. Assets of CIP are not available for use by Invesco. Additionally, there is no recourse to Invesco for CIP debt. Policyholder assets and liabilities are equal and offsetting and have no impact on Invesco’s shareholder’s equity.


(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

Cash and cash equivalents

Cash and cash equivalents decreased by $130.6 million from $1,147.7 million at December 31, 2018 to $1,017.1 million at March 31, 2019 . See “Cash Flows Discussion” in the following section within this Management’s Discussion and Analysis for additional discussion regarding the movements in cash flows during the period.

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Unsettled fund receivables and payables

Unsettled fund receivables increased by $283.3 million from $191.3 million at December 31, 2018 to $474.6 million at March 31, 2019 , due primarily to higher transaction activity between funds and investors in during March 2019 when compared to late December 2018 in our U.K. funds offset by lower activity in our UITs. In our U.K. operations, unsettled fund receivables are created by the normal settlement periods on transactions initiated by certain clients. In the company’s capacity as sponsor of UITs, the company records receivables from brokers, dealers, and clearing organizations for unsettled sell trades of securities and UITs in addition to receivables from customers for unsettled sell trades of UITs. The presentation of the unsettled fund receivables and substantially offsetting payables ( $446.0 million at March 31, 2019 up from $178.7 million at December 31, 2018 ) at trade date reflects the legal relationship between the underlying investor and the company.

Investments

As of March 31, 2019 , we had $640.9 million in total investments ( December 31, 2018 : $613.5 million ). Included in investments are $219.9 million of seed money investments in affiliated funds used to seed funds as we launch new products, and $67.0 million of investments related to assets held for deferred compensation plans, which are also held primarily in affiliated funds. Seed investments increased by a net $17.1 million during the three months ended March 31, 2019 . The increase in the period reflects increases due to purchases of $7.5 million, a non-cash increase of $3.0 million due to the deconsolidation of certain CIP in the period (restoring the company’s formerly eliminated investment balances) and $12.7 million driven by market valuation changes and foreign exchange movements. These increases were partially offset by redemptions of $6.2 million. Investments related to deferred compensation awards decreased by a net $11.6 million during the period.

Included in investments are $316.7 million in equity method investments in Invesco Great Wall and in certain of the company’s private equity partnerships, real estate partnerships and other co-investments ( December 31, 2018 : $296.3 million ). The increase of $20.4 million in equity method investments was driven by an increase from partnership contributions of $44.5 million, $15.8 million in current period earnings, and $2.6 million in foreign exchange rates. This increase was partially offset primarily by a decrease of $41.8 million due to distributions from partnership investments. Also included in investments are foreign time deposits of $28.3 million , an increase of $0.2 million from the December 31, 2018 balance of $28.1 million .

Assets held for policyholders and policyholder payables

One of our subsidiaries, Invesco Perpetual Life Limited, is an insurance company that was established to facilitate retirement savings plans in the U.K. The entity holds assets that are managed for its clients on its balance sheet with an equal and offsetting liability. The increase in the balance of these accounts from $11,384.8 million at December 31, 2018 to $12,102.7 million at March 31, 2019 was the result of positive foreign exchange rate movements of $285.4 million and market movements of $76.0 million and net business inflows of $356.5 million.

Intangible Assets, net

Intangible assets increased from $2,176.1 million at December 31, 2018 , to $2,181.5 million at March 31, 2019 . The increase includes a $13.3 million adjustment related to updated purchase price allocation estimates, offset by amortization of $7.4 million, and decreases in foreign exchange movement of $0.5 million.

Goodwill

Goodwill increased from $7,157.1 million at December 31, 2018 , to $7,197.6 million at March 31, 2019 . The increase includes foreign exchange movements of $51.6 million, partially offset by a decrease of $11.1 million related to updated purchase price allocation estimates. The company’s annual goodwill impairment review is performed as of October 1 of each year.

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Liquidity and Capital Resources

Our capital structure, together with available cash balances, cash flows generated from operations, existing capacity under our credit facility and further capital market activities, if necessary, should provide us with sufficient resources to meet present and future cash needs, including operating, debt and other obligations as they come due and anticipated future capital requirements.

Our capital management priorities have evolved with the growth and success of our business and include:

• reinvestment in the business;

• moderate annual growth of dividends (as further discussed in the “Dividends” section below);

• share repurchase; and

• target an approximate $1 billion cash buffer in excess of European regulatory and liquidity requirements.

These priorities are executed in a manner consistent with our desire to maintain strong, investment grade credit ratings. As of the filing of the Report, Invesco held credit ratings of BBB+/Stable, A2/Stable and A-/Positive from Standard & Poor’s Ratings Service (“S&P”), Moody’s Investor Services (“Moody’s”) and Fitch Ratings (“Fitch”), respectively. Our ability to continue to access the capital markets in a timely manner depends on a number of factors, including our credit ratings, the condition of the global economy, investors’ willingness to purchase our securities, interest rates, credit spreads and the valuation levels of equity markets. If we are unable to access capital markets in a timely manner, our business could be adversely impacted.

Invesco announced in October 2018 that it intended to acquire MassMutual’s asset management affiliate, OppenheimerFunds, and expects to close on May 24, 2019. As part of the transaction, MassMutual and the OppenheimerFunds employee shareholders will receive a combination of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with an approximate 15.7% stake. Under the terms of the agreement, the consideration will consist of 81.9 million shares of Invesco common equity and $4 billion in perpetual, non-cumulative preferred shares with a 21-year non-call period and a fixed rate of 5.9%. Based on Invesco’s stock price as of March 29, 2019, this represents an estimated purchase price of $5.6 billion.

The Preferred Stock dividend is payable quarterly on a non-cumulative basis when, if and as declared by the Board of Directors of Invesco. However, if Invesco has not declared and paid or set aside for payment full quarterly dividends on the Preferred Stock for a particular dividend period, it may not declare or pay dividends on, or redeem, purchase or acquire, its Common Stock or other junior securities in the next succeeding dividend period. Shares of Preferred Stock can not be redeemed prior to the 21st anniversary of their original issue date, and are redeemable at the option of Invesco thereafter. The Preferred Stock has no put feature to accelerate redemption.

In October 2018, the company announced a common stock buyback program of $1.2 billion to be completed within the next

two years, which will be financed through the strong operating cash flows of the combined Invesco and OppenheimerFunds

Certain of our subsidiaries are required to maintain minimum levels of capital. Such requirements may change from time-to-time as additional guidance is released based on a variety of factors, including balance sheet composition, assessment of risk exposures and governance, and review from regulators. These and other similar provisions of applicable laws and regulations may have the effect of limiting withdrawals of capital, repayment of intercompany loans and payment of dividends by such entities. All of our regulated EU subsidiaries (the European sub-group) are subject to consolidated capital requirements under EU Directives, including those arising from the EU’s Capital Requirements Directive and the U.K.’s Internal Capital Adequacy Assessment Process (ICAAP), and capital is maintained within this sub-group to satisfy these regulations. We meet these requirements in part by holding cash and cash equivalents. This retained cash can be used for general business purposes in the European sub-group in the countries where it is located. Due to the capital restrictions, the ability to transfer cash between certain jurisdictions may be limited. In addition, transfers of cash between international jurisdictions may have adverse tax consequences. We are in compliance with all regulatory minimum net capital requirements. As of March 31, 2019 , the company’s minimum regulatory capital requirement was $738.4 million ( December 31, 2018 : $720.2 million ); the increase was driven primarily by the strengthening of the Pound Sterling against the U.S. Dollar. The total amount of non-U.S. cash and cash equivalents was $865.4 million at March 31, 2019 ( December 31, 2018 : $996.7 million ).

The consolidation of $7.1 billion and $5.2 billion of assets and long-term debt of CIP as of March 31, 2019 , respectively, did not impact the company’s liquidity and capital resources. The company’s risk with respect to each investment in CIP is limited to its equity ownership and any uncollected management and performance fees. The majority of CIP balances related to consolidated CLOs. The collateral assets of the CLOs are held solely to satisfy the obligations of the CLOs. The company has

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no right to the benefits from, nor does it bear the risks associated with, the collateral assets held by the CLOs, beyond the company’s minimal direct investments in, and management and performance fees generated from, these products, which are eliminated upon consolidation. If the company were to liquidate, the collateral assets would not be available to the general creditors of the company, and as a result, the company does not consider them to be company assets. Likewise, if the CLOs were to liquidate, their investors would have no recourse to the general credit of the company. The company therefore does not consider this debt to be an obligation of the company. See Part I, Item 1, Financial Statements - Note 13 , “ Consolidated Investment Products ,” for additional details.

Cash Flows Discussion

The ability to consistently generate cash flow from operations in excess of dividend payments, share repurchases, capital expenditures, and ongoing operating expenses is one of our company’s fundamental financial strengths. Operations continue to be financed from current earnings and borrowings. Our principal uses of cash, other than for operating expenses, include dividend payments, capital expenditures, acquisitions, purchase of our shares in the open market and investments in certain new investment products.

The following table represents a reconciliation of the cash flow information presented on a U.S. GAAP basis to the cash flow information, excluding the impact of the cash flows of Consolidated Investment Products for the reasons outlined in footnote 1 to the table:



Cash flow information ⁽¹⁾	Three months ended March 31, 2019						Three months ended March 31, 2018
$ in millions	U.S. GAAP		Impact of CIP		Excluding CIP		U.S. GAAP		Impact of CIP		Excluding CIP
Cash and cash equivalents, beginning of the period	1,805.4		657.7		1,147.7		2,517.7		511.3		2,006.4
Cash flows from operating activities ⁽¹⁾	(120.4	)	(61.3	)	(59.1	)	(52.2	)	(53.3	)	1.1
Cash flows from investing activities	(333.4	)	(349.5	)	16.1		(297.8	)	(276.6	)	(21.2	)
Cash flows from financing activities	(87.0	)	9.4		(96.4	)	(44.6	)	117.7		(162.3	)
Increase/(decrease) in cash and cash equivalents	(540.8	)	(401.4	)	(139.4	)	(394.6	)	(212.2	)	(182.4	)
Foreign exchange movement on cash and cash equivalents	3.6		(5.2	)	8.8		38.5		1.0		37.5
Net cash inflows (outflows) upon consolidation/deconsolidation of CIP	0.1		0.1		—		(39.3	)	(39.3	)	—
Cash and cash equivalents, end of the period	1,268.3		251.2		1,017.1		2,122.3		260.8		1,861.5

Cash and cash equivalents	1,017.1		—		1,017.1		1,861.5		—		1,861.5
Cash and cash equivalents of CIP	251.2		251.2		—		260.8		260.8		—
Total cash and cash equivalents per consolidated statement of cash flows	1,268.3		251.2		1,017.1		2,122.3		260.8		1,861.5

____________

(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.

Operating Activities

Operating cash flows include the receipt of investment management and other fees generated from AUM, offset by operating expenses and changes in operating assets and liabilities. Although some receipts and payments are seasonal, particularly bonus payments which are paid out during the first quarter, in general, after allowing for the change in cash held by CIP, and investment activities, our operating cash flows move in the same direction as our operating income.

During the three months ended March 31, 2019 , cash used in operating activities was $120.4 million compared to $52.2 million used in during the three months ended March 31, 2018 . As shown in the tables above, the impact of CIP to cash used in operating activities was $61.3 million of cash used during the three months ended March 31, 2019 compared to $53.3 million of cash used during the three months ended March 31, 2018 . Excluding the impact of CIP, cash used in operations was $59.1 million during the three months ended March 31, 2019 compared to $1.1 million of cash provided by operating activities during the three months ended March 31, 2018 .

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There were no significant non-cash items that impacted the comparison between the periods of operating income to net cash provided by operations.

Investing Activities

Net cash used in investing activities totaled $333.4 million for the three months ended March 31, 2019 ( three months ended March 31, 2018 : net cash used of $297.8 million ). As shown in the tables above, the impact of CIP on investing activities, including investment purchases, sales and returns of capital, was $349.5 million used ( three months ended March 31, 2018 : $276.6 million used ). Excluding the impact of CIP cash flows, net cash provided by investing activities was $16.1 million ( three months ended March 31, 2018 : net cash used of $21.2 million ).

Cash inflows for the three months ended March 31, 2019 , excluding the impact of CIP, were collected proceeds of $71.4 million from sales and returns of capital of investments ( three months ended March 31, 2018 : $38.1 million ) and collateral received of $42.4 million on the forward contract that the company entered into during the fourth quarter 2018 for the purpose of share repurchases. These inflows were partially offset by purchases of investments of $76.6 million ( three months ended March 31, 2018 : $38.7 million ).

During the three months ended March 31, 2019 , the company had capital expenditures of $21.1 million ( three months ended March 31, 2018 : $20.6 million ). Our capital expenditures related principally in each period to technology initiatives, including enhancements to platforms from which we maintain our portfolio management systems, improvements in computer hardware and software desktop products for employees, new telecommunications products to enhance our internal information flow, and back-up business recovery systems. Also, in each period, a portion of these costs related to improvements made to the various buildings and workspaces used in our offices. These projects have been funded with proceeds from our operating cash flows.

Financing Activities

Net cash used in financing activities totaled $87.0 million for the three months ended March 31, 2019 ( three months ended March 31, 2018 : net cash used of $44.6 million ). As shown in the tables above, the impact of CIP on financing activities provided cash of $9.4 million ( three months ended March 31, 2018 : cash provided of $117.7 million ). Excluding the impact of CIP, financing activities used cash of $96.4 million in the three months ended March 31, 2019 ( three months ended March 31, 2018 : cash used of $162.3 million ).

Financing cash inflows during the three months ended March 31, 2019 included a borrowing of $106.3 million on the credit facility ( three months ended March 31, 2018 : none ). Financing cash outflows during the three months ended March 31, 2019 included $120.1 million of dividend payments for the dividends declared in January ( three months ended March 31, 2018 : dividends paid of $119.6 million ), the purchase of shares through market transactions totaling $50.0 million (three months ended March 31, 2018: none ), the payment of $28.6 million to meet employees’ withholding tax obligations on share vestings ( three months ended March 31, 2018 : $39.3 million ) and a payment of $4.0 million of contingent consideration ( three months ended March 31, 2018 : $3.4 million ).

There were no non-CIP related financing cash inflows for the three months ended March 31, 2018 .

Dividends

Invesco declares and pays dividends on a quarterly basis in arrears. On April 25, 2019 , the company announced a first quarter 2019 cash dividend of $0.31 per share to holders of common shares, which will be paid on June 3, 2019 , to shareholders of record as of May 10, 2019 with an ex-dividend date of May 9, 2019 .

The declaration, payment and amount of any future dividends will be declared by our board of directors and will depend upon, among other factors, our earnings, financial condition and capital requirements at the time such declaration and payment are considered. The board has a policy of managing dividends in a prudent fashion, with due consideration given to profit levels, overall debt levels, and historical dividend payouts.

Share Repurchase Plan

During the three months ended March 31, 2019 , the company repurchased 2.6 million shares in the market at a cost of $50.0 million ( three months ended March 31, 2018 : none ). Separately, an aggregate of 1.4 million shares were withheld on vesting events during the three months ended March 31, 2019 to meet employees’ withholding tax obligations ( three months ended March 31, 2018 : 1.4 million shares). The fair value of these shares withheld at the respective withholding dates was $28.6 million during the three months ended March 31, 2019 ( three months ended March 31, 2018 : $39.3 million ). At March 31, 2019 , approximately $1,293.0 million remains available under the share repurchase authorizations approved by the Board on October 11, 2013 and July 22, 2016.

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Long-term debt

Our long-term debt at March 31, 2019 was $2,515.7 million ( December 31, 2018 : $2,408.8 million ) and was comprised of the following:



$ in millions	March 31, 2019	December 31, 2018
$1.5 billion floating rate credit facility expiring August 11, 2022	437.1	330.8
Unsecured Senior Notes:
$600 million 3.125% - due November 30, 2022	597.6	597.5
$600 million 4.000% - due January 30, 2024	595.2	594.9
$500 million 3.750% - due January 15, 2026	495.7	495.6
$400 million 5.375% - due November 30, 2043	390.1	390.0
Long-term debt	2,515.7	2,408.8

For the three months ended March 31, 2019 , the company’s weighted average cost of debt was 3.93% ( three months ended March 31, 2018 : 3.95% ).

Financial covenants under the credit agreement include: (i) the quarterly maintenance of a debt/EBITDA leverage ratio, as defined in the credit agreement, of not greater than 3.25:1.00, (ii) a coverage ratio (EBITDA, as defined in the credit agreement/interest payable for the four consecutive fiscal quarters ended before the date of determination) of not less than 4.00:1.00. As of March 31, 2019 , we were in compliance with our financial covenants. At March 31, 2019 , our leverage ratio was 1.66 :1.00 ( December 31, 2018 : 1.51 :1.00), and our interest coverage ratio was 12.54 :1.00 ( December 31, 2018 : 14:37:1.00).

The March 31, 2019 coverage ratio calculations are as follows:



$ millions	Total			Q1 2019		Q4 2018	Q3 2018		Q2 2018
Net income attributable to Invesco Ltd.	806.6			177.7		114.2	269.6		245.1
Impact of CIP on net income attributable to Invesco Ltd.	(7.2		)	1.0		0.9	(11.3	)	2.2
Tax expense	252.8			66.2		53.2	61.1		72.3
Amortization/depreciation	144.8			36.3		36.5	39.6		32.4
Interest expense	121.4			33.1		29.2	29.6		29.5
Share-based compensation expense	181.3			49.8		47.9	42.8		40.8
Unrealized gains and losses from investments, net *	22.2			(13.1	)	28.3	(4.7	)	11.7
EBITDA **	1,521.9			351.0		310.2	426.7		434.0
Adjusted debt **		$2,527.1
Leverage ratio (Debt/EBITDA - maximum 3.25:1.00)	1.66
Interest coverage (EBITDA/Interest Expense - minimum 4.00:1.00)	12.54

____________


*	Adjustments for unrealized gains and losses from investments, as defined in our credit facility, may also include non-cash gains and losses on investments to the extent that they do not represent anticipated future cash receipts or expenditures.

EBITDA and Adjusted debt are non-GAAP financial measures; however, management does not use these measures for anything other than these debt covenant calculations. The calculation of EBITDA above (a reconciliation from net income attributable to Invesco Ltd.) is defined by our credit agreement, and therefore net income attributable to Invesco Ltd. is the most appropriate GAAP measure from which to reconcile to EBITDA. The calculation of Adjusted debt is defined in our credit facility and equals total debt of $2,515.7 million plus $11.4 million in letters of credit.

Credit and Liquidity Risk

Capital management involves the management of the company’s liquidity and cash flows. The company manages its capital by reviewing annual and projected cash flow forecasts and by monitoring credit, liquidity and market risks, such as interest rate and foreign currency risks (as discussed in Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk”), through measurement and analysis. The company is primarily exposed to credit risk through its cash and cash equivalent deposits, which are held by external firms. The company invests its cash balances in its own institutional money market products, as well as with external high credit-quality financial institutions. These arrangements create exposure to concentrations of credit risk.

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Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to meet an obligation. All cash and cash equivalent balances are subject to credit risk, as they represent deposits made by the company with external banks and other institutions. As of March 31, 2019 , our maximum exposure to credit risk related to our cash and cash equivalent balances is $1,017.1 million . See Item 1, Financial Statements - Note 14 , “ Related Parties ,” for information regarding cash and cash equivalents invested in affiliated money market funds.

The company does not utilize credit derivatives or similar instruments to mitigate the maximum exposure to credit risk. The company does not expect any counterparties to its financial instruments to fail to meet their obligations.

Liquidity Risk

Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with its financial liabilities as the same become due. The company is exposed to liquidity risk through its $2,515.7 million in total debt. The company actively manages liquidity risk by preparing cash flow forecasts for future periods, reviewing them regularly with senior management, maintaining a committed credit facility, scheduling significant gaps between major debt maturities and engaging external financing sources in regular dialogue.

Effects of Inflation

Inflation can impact our organization primarily in two ways. First, inflationary pressures can result in increases in our cost structure, especially to the extent that large expense components such as compensation are impacted. To the degree that these expense increases are not recoverable or cannot be counterbalanced through pricing increases due to the competitive environment, our profitability could be negatively impacted. Secondly, the value of the assets that we manage may be negatively impacted when inflationary expectations result in a rising interest rate environment. Declines in the values of these AUM could lead to reduced revenues as management fees are generally calculated based upon the size of AUM.

Off Balance Sheet Commitments

See Part I, Item 1, Financial Statements - Note 12 , “Commitments and Contingencies - Off Balance Sheet Commitments,” for more information regarding undrawn capital commitments.

Contractual Obligations

We have future obligations under various contracts relating to debt and interest payments, financing and operating leases, long-term defined benefit pension and acquisition contracts. During the three months ended March 31, 2019 , there were no material changes to the company’s contractual obligations.

Critical Accounting Policies and Estimates

There have been no significant changes to the critical accounting policies disclosed in our most recent Form 10-K for the year ended December 31, 2018 . Critical accounting policies are those that require management’s most difficult, subjective or complex judgments and would therefore be deemed the most critical to an understanding of our results of operations and financial condition.

Recent Accounting Standards

See Part I, Item 1, Financial Statements - Note 1 , “ Accounting Policies - Accounting Pronouncements Recently Adopted and Pending Accounting Pronouncements.”

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of its business, the company is primarily exposed to market risk in the form of AUM market price risk, securities market risk, interest rate risk, and foreign exchange rate risk. There have not been any material changes to the company’s exposures to market risks during the period ended March 31, 2019 that would require an update to the disclosures provided in the most recent Form 10-K.

AUM Market Price Risk

The company’s investment management revenues are comprised of fees based on the value of AUM. Declines in the market prices of equity and fixed income securities, commodities and derivatives, or other similar financial instruments held in client portfolios could cause revenues to decline because of lower investment management fees by:


•	Causing the value of AUM to decrease.


•	Causing the returns realized on AUM to decrease (impacting performance fees).


•	Causing clients to withdraw funds in favor of investments in markets that they perceive to offer greater opportunity and that the company does not serve.


•	Causing clients to rebalance assets away from investments that the company manages into investments that the company does not manage.


•	Causing clients to reallocate assets away from products that earn higher revenues into products that earn lower revenues.

Underperformance of client accounts relative to competing products could exacerbate these factors.

Securities Market Risk

The company has investments in managed investment products that invest in a variety of asset classes. Investments are generally made to establish a track record for a new fund or investment vehicle or to hedge economically exposure to certain deferred compensation plans. The company’s exposure to market risk from financial instruments measured at fair value arises from its investments.

Interest Rate Risk

Interest rate risk relates to the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company is exposed to interest rate risk primarily through its external debt and cash and cash equivalent investments. On March 31, 2019 , the interest rates on 82.6% of the company’s borrowings were fixed for a weighted average period of 8.7 years, and the company had a $437.1 million balance on its floating rate credit facility.

Foreign Exchange Rate Risk

The company has certain investments in foreign operations, whose net assets and results of operations are exposed to foreign currency translation risk when translated into U.S. Dollars upon consolidation into Invesco Ltd. During the first quarter, the company entered into additional put option contracts to hedge its Pound-Sterling-based operating income through the end of 2019. These new put option contracts are set at a strike level of $1.250 based on the average daily foreign exchange rates for the applicable time period.

The company is exposed to foreign exchange revaluation into the Condensed Consolidated Statements of Income on monetary assets and liabilities that are held by subsidiaries in different functional currencies than the subsidiaries’ functional currencies. Net foreign exchange revaluation gains were $0.5 million in the three months ended March 31, 2019 ( three months ended March 31, 2018 : $1.3 million gains ), and are included in general and administrative expenses and other gains and losses, net on the Condensed Consolidated Statements of Income. We continue to monitor our exposure to foreign exchange revaluation and have put in place net investment hedge structures discussed in Part I, Item 1, Financial Statements, Note 6 -- “ Other Comprehensive Income/(Loss) .”

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Item 4. Controls and Procedures

Our management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information the company is required to disclose in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in the reports that the company files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

We have evaluated, with the participation of our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures as of March 31, 2019 . There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

We have evaluated any change in our internal control over financial reporting that occurred during the three months ended March 31, 2019 and have concluded that there was no change that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Part I, Item I, Note 12 , “Commitments and Contingencies - Legal Contingencies,” for information regarding legal proceedings.

Item 1A. Risk Factors

The company has had no significant changes in its risk factors from those previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Repurchases of Equity Securities

The following table sets forth information regarding purchases of our common shares by us and any affiliated purchases during the three months ended March 31, 2019 :



Month	Total Number of Shares Purchased ⁽¹⁾	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽²⁾	Maximum Number at end of period (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs ⁽²⁾ (millions)
January 1-31, 2019	36,736	$	17.16	—		$1,343.0
February 1-28, 2019	1,301,782	$	19.29	600,000		$1,331.5
March 1-31, 2019	62,595	$	19.19	2,004,814		$1,293.0
Total	1,401,113			2,604,814


(1)	An aggregate of 1,401,113 shares were surrendered to us by Invesco employees to satisfy tax withholding obligations in connection with the vesting of equity awards.


(2)	At March 31, 2019 , a balance of $1,293.0 million remains available under the share repurchase authorizations approved by the Board on October 11, 2013 and July 22, 2016.

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Item 6. Exhibits

Exhibit Index



10.1	Form of Restricted Stock Unit Award Agreement - Performance Vesting - with respect to Martin L. Flanagan - under the Invesco Ltd. 2016 Global Equity Incentive Plan
10.2	Form of Restricted Stock Unit Award Agreement - Performance Vesting under the Invesco Ltd. 2016 Global Equity Incentive Plan
10.3	Form of Restricted Stock Unit Award Agreement - Performance Vesting - Canada - under the Invesco Ltd. 2016 Global Equity Incentive Plan
10.4	First Amendment, dated as of April 11, 2019, to the Agreement and Plan of Merger, dated as of October 17, 2018, by and among Invesco Ltd., Gem Acquisition Corp., Gem Acquisition Two Corp., MM Asset Management Holding LLC and Oppenheimer Acquisition Corp.
31.1	Certification of Martin L. Flanagan pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Loren M. Starr pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Martin L. Flanagan pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Loren M. Starr pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	XBRL Taxonomy Extension Labels Linkbase Document
101.DEF	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.



	INVESCO LTD.
April 25, 2019	/s/ MARTIN L. FLANAGAN
	Martin L. Flanagan
	President and Chief Executive Officer

April 25, 2019	/s/ LOREN M. STARR
	Loren M. Starr
	Senior Managing Director and Chief Financial Officer

Exhibit 10.1

INVESCO LTD. 2016 GLOBAL EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT - PERFORMANCE VESTING

Non-transferable

Invesco Ltd. (“Company”)

hereby awards to

Martin L. Flanagan

(“Participant” or “you”)

[ Number of Shares Granted ]

Restricted Stock Units (“ Target Total Award ”)

as of [Grant Date] (“Grant Date”)

Subject to the conditions of (i) the Invesco Ltd. 2016 Global Equity Incentive Plan as in effect from time to time (“Plan”), (ii) the Remuneration Policy of Invesco Ltd. or any of its Affiliates as in effect from time to time to the extent such policy is applicable to you (the “Remuneration Policy”) and (iii) this Award Agreement, the Company hereby grants to you the number of Restricted Stock Units (“RSUs”) set forth above, which shall become vested and non-forfeitable as follows:

On the third anniversary of the Grant Date (the “Determination Date”), the number of RSUs that shall become vested and non-forfeitable shall equal 100% of the Target Total Award multiplied by the Vesting Percentage (as defined in Exhibit 1), rounded down to the nearest full Share, all as calculated by the Committee in accordance with the Performance Vesting Formula set forth on Exhibit 1.

This Award shall be effective as of the Grant Date set forth above. By accepting this Award Agreement, you acknowledge that you have received a copy of the Plan’s prospectus, that you have read and understood the following Terms and Conditions, which are incorporated herein by reference, and that you agree to the following Terms and Conditions and the terms of the Plan, the Remuneration Policy and this Award Agreement. If you fail to accept this Award Agreement within sixty (60) days after the Grant Date set forth above, the Company may determine that this Award has been forfeited.

ACCEPTED AND AGREED TO by the Participant as of the Grant Date set forth above.

Participant:

____________________________________

Signature

Continued on the following page

TERMS AND CONDITIONS - Restricted Stock Units - Performance Vesting

1. Plan Controls; Restricted Stock Units . In consideration of this Award, you hereby promise to honor and to be bound by the Plan, the Remuneration Policy, and this Award Agreement, including the following terms and conditions, which serve as the agreed basis for your Award. The terms contained in the Plan are incorporated into and made a part of this Award Agreement, and this Award Agreement shall be governed by and construed in accordance with the Plan and, if applicable, the Remuneration Policy. The terms contained in the Plan and the Remuneration Policy are incorporated into and made a part of this Award Agreement, and this Award Agreement shall be governed by and construed in accordance with the Plan and, if applicable, the Remuneration Policy. In the event of any actual or alleged conflict between the provisions of any of the Plan, the Remuneration Policy, if applicable, and this Award Agreement, (i) the provisions of the Remuneration Policy, if applicable, shall control and, to the extent of any conflict, be deemed to amend the Plan and the Award Agreement, and (ii) the provisions of the Plan shall control and, to the extent of any conflict, be deemed to amend the Award Agreement. The RSUs represent a contractual obligation of the Company to deliver the number of Shares specified on page 1 hereof pursuant to the terms of Section 10 of the Plan and the additional terms and restrictions hereunder. Unless the context otherwise requires, and solely for purposes of these Terms and Conditions, the term “Company” means Invesco Ltd., its Affiliates and their respective successors and assigns, as applicable, and “Employer” means the Company or the Affiliate that employs you. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Plan.

2. Restrictions and Forfeiture . The RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered. Upon your Termination of Service for any reason, other than as set forth in paragraphs (b) - (e) of Paragraph 3 hereof, you shall forfeit all of your right, title and interest in and to all unvested RSUs, except as provided in the Second Amended and Restated Master Employment Agreement (“Employment Agreement”) between you and Invesco Ltd., dated April 1, 2011, as amended from time to time, or as determined by the Committee pursuant to Paragraph 3.1 hereof. In addition, upon the Determination Date, you shall forfeit all of your right, title and interest in and to any RSUs that are eligible to vest and become non-forfeitable on such date, but which fail to vest and become non-forfeitable on such date pursuant to the Performance Vesting Formula.

3. Vesting and Conversion to Shares . The Target Total Award will vest and become non-forfeitable upon the earliest to occur of the following, or as otherwise provided in the Employment Agreement (the “Vesting Date”):


(a)	the Determination Date, to the extent provided under the Performance Vesting Formula, if you have not experienced a Termination of Service before such date, or


(b)	as of your Termination of Service due to death or Disability, or

(c)

as of your involuntary Termination of Service, other than for Cause or unsatisfactory performance, as determined in the sole discretion by the Head of Human Resources, provided that you sign and do not revoke a severance agreement in the form stipulated by the Company within 60 days after your Termination of Service or such other time as the Company may determine and the severance agreement has become irrevocable, or


(d)	immediately before a Change in Control, if this Award Agreement is not assumed, converted or replaced in connection with the transaction that constitutes the Change in Control, or


(e)	your Termination of Service during the 24-month period following a Change in Control either (i) by the Company other than for Cause or unsatisfactory performance, or (ii) by you for Good Reason.

3.1 Discretionary Vesting . If any or all of your RSUs would be forfeited upon your voluntary Termination of Service, you may appeal the forfeiture pursuant to the procedures established by the Committee, and the Committee, in its sole discretion, may vest some or all of such RSUs to the extent permitted under the applicable guidelines adopted by the Committee.

3.2 Conversion and Payment . Unless the RSUs are forfeited on or before the Vesting Date, the RSUs will be converted into an equal number of Shares, which will be registered in your name as of the Vesting Date, and such Shares will be delivered as soon as practicable thereafter, but not later than March 15 of the year following the year in which the Vesting Date occurs if you are subject to U.S. federal income tax on such Shares. Notwithstanding anything in these Terms and Conditions or the Plan to the contrary, the Company may, in its sole discretion, settle the RSUs in the form of a cash payment to the extent settlement in Shares is prohibited under local law, rules and regulations, or would require the Company, the Employer and/or you to secure any legal or regulatory approvals, complete any legal or regulatory filings or is administratively burdensome.

4. No Shareholder Rights; Payment in Lieu of Dividends . You shall have none of the rights of a shareholder of the Company with respect to the RSUs. Dividend equivalents shall accrue at the same rate as cash dividends paid on the Shares and applied to the number of Shares that vest. Such dividend equivalents shall be paid to you in cash at the time the Shares are delivered to you, or as soon as administratively practicable thereafter, but not later than March 15 of the year following the year in which the Vesting Date occurs if you are subject to U.S. federal income tax on such dividends. No dividends will be paid with respect to RSUs that are forfeited for any reason.

5. [Reserved]

6. [Reserved]

7. [Reserved]

8. Employee Data Privacy . Pursuant to applicable personal data protection laws, the Company hereby notifies you of the following in relation to your personal data and the collection, use, processing and transfer (collectively, the “Use”) of such data in relation to the Company’s grant of the RSUs and your participation in the Plan. The Use of your personal data is necessary for the Company’s administration of the Plan and your participation in the Plan. Your denial and/or objection to the Use of personal data may affect your participation in the Plan. As such, you voluntarily acknowledge, consent and agree (where required by applicable law) to the Use of personal data as described in this Paragraph 8.

The Company and the Employer hold certain personal information about you, which may include your name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any Shares held by you, details of all RSUs or any other entitlement to Shares awarded in your favor, for the purpose of managing and administering the Plan (“Data”). The Data may be provided by you or collected, where lawful, from the Company, Affiliates or third parties, and the Company or Employer will process the Data for the exclusive purpose of implementing, administering and managing your participation in the Plan. The data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which Data are collected and with confidentiality and security provisions as set forth by applicable laws and regulations in your country of residence (and country of employment, if different). Data processing operations will be performed minimizing the use of personal and identification data when such data are unnecessary for the processing purposes sought. Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for your participation in the Plan.

The Company and the Employer will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan, and the Company and the Employer may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. You hereby authorize them to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf to a broker or other third party with whom you may elect to deposit any Shares acquired pursuant to the Plan.

You may, at any time, exercise your rights provided under applicable personal data protection laws, which may include the right to (a) obtain confirmation as to the existence of the Data, (b) verify the content, origin and accuracy of the Data, (c) request the integration, update, amendment, deletion, or blockage (for breach of applicable laws) of the Data, and (d) oppose, for legal reasons, the Use of the Data that is not necessary or required for the implementation, administration and/or operation of the Plan and your participation in the Plan. You may seek to exercise these rights by contacting your Employer’s human resources manager or Invesco, Ltd., Manager, Executive Compensation, 1555 Peachtree Street, NE, Atlanta, Georgia 30309.

9. Income Taxes and Social Insurance Contribution Withholding . Regardless of any action the Company or the Employer takes with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (i) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including the grant of the RSUs, the vesting of the RSUs, the settlement of the RSUs, the subsequent sale of any Shares acquired pursuant to the RSUs and the receipt of any dividends or dividend equivalents; and (ii) does not commit to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate your liability for Tax-Related Items.

If your country of residence (and/or the country of employment, if different) requires withholding of Tax-Related Items, the Company may withhold a portion of the Shares otherwise issuable upon vesting of the RSUs that have an aggregate Fair Market Value on the vesting date sufficient to pay the minimum Tax-Related Items required to be withheld with respect to the Shares. For purposes of the foregoing, no fractional Shares will be withheld or issued pursuant to the grant of the RSUs and the issuance of Shares hereunder. Alternatively (or in combination), the Company or the Employer may, in its discretion, withhold any amount necessary to pay the Tax-Related Items from your regular salary or other amounts payable to you, with no withholding of Shares, or may require you to submit payment equivalent to the minimum Tax-Related Items required to be withheld with respect to the Shares by means of certified check, cashier’s check or wire transfer. By accepting the RSUs, you expressly consent to the methods of withholding as provided hereunder. All other Tax-Related Items related to the RSUs and any Shares delivered in payment thereof shall be your sole responsibility. Further, if you become subject to taxation in more than one country between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company may be required to withhold or account for Tax-Related Items in more than one country.

To the extent the Company or the Employer pays any Tax-Related Items that are your responsibility (“Advanced Tax Payments”), the Company or the Employer shall be entitled to recover such Advanced Tax Payments from you in any and all manner that the Company determines appropriate in its sole discretion. For purposes of the foregoing, the manner of recovery of the Advanced Tax Payments shall include (but is not limited to) offsetting the Advanced Tax Payments against any and all amounts that may be otherwise owed to you by the Company or the Employer (including regular salary/wages, bonuses, incentive payments and Shares acquired by you pursuant to any equity compensation plan that are otherwise held by the Company for your benefit).

10. Recovery Pursuant to Restatement of Financial Results . Notwithstanding any other provision of this Award Agreement or the Plan, if the Company issues a restatement of financial results to correct a material error and the Committee determines, in good faith, that fraud or willful misconduct by you was a significant contributing factor to the need to issue such restatement, you agree to return immediately to the Company and to forfeit all right, title and interest in and to the following, less any taxes paid or withheld thereon that in the good faith determination of the Committee cannot reasonably be expected to be recoverable by you or your estate: (i) any RSUs or Shares that are granted, become vested or are delivered pursuant to this Award Agreement that would not have been granted, become vested or been delivered, as applicable, based upon the restated financial results, as determined by the Committee in its sole discretion, (ii) any cash dividends or dividend equivalents paid with respect to such RSUs or Shares (either before or after vesting) and (iii) if applicable, any proceeds from the disposition of the Shares described in clause (i) above (collectively, the “Repayment Obligation”). You agree that the Company shall have the right to enforce the Repayment Obligation by all legal means available, including without limitation, by withholding other amounts or property owed to you by the Company.

11. [Reserved]

12. Notice . Notices and communications under this Award Agreement must be in writing and either personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to Invesco Ltd., Manager, Executive Compensation, 1555 Peachtree Street, NE, Atlanta, Georgia 30309, or to any other address designated by the Company in a written notice to you. Notices to you will be directed to your address then currently on file with the Company, or to any other address given by you in a written notice to the Company.

13. Repatriation; Compliance with Laws . As a condition to the grant of these RSUs, you agree to repatriate all amounts attributable to the RSUs in accordance with local foreign exchange rules and regulations in your country of residence (and country of employment, if different). In addition, you also agree to take any and all actions, and consent to any and all actions taken by the Company, the Employer and the Company’s local Affiliates, as may be required to allow the Company, the Employer and the Company’s local Affiliates to comply with local laws, rules and regulations in your country of residence (and country of employment, if different). Finally, you agree to take any and all actions as may be required to comply with your personal legal and tax obligations under local laws, rules and regulations in your country of residence (and country of employment, if different).

14. Discretionary Nature of Plan; No Vested Rights . You acknowledge and agree that the Plan is discretionary in nature and limited in duration, and may be amended, cancelled or terminated by the Company, in its sole discretion, at any time as provided under the Plan. The grant of the RSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive RSUs or other awards or benefits in lieu of RSUs in the future. Except as otherwise provided in the Employment Agreement, future awards, if any, will be at the sole discretion of the Committee, including, but not limited to, the form and timing of an award, the number of Shares subject to an award and the vesting provisions.

15. [Reserved]

16. [Reserved]

17. Use of English Language . You acknowledge and agree that it is your express intent that this Award Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted with respect to the RSUs be drawn up in English. If you have received this Award Agreement, the Plan or any other documents related to the RSUs translated into a language other than English, and if the meaning of the translated version is different from the English version, the English version shall control.

18. Addendum to Award Agreement . Notwithstanding any provisions in this Award Agreement to the contrary, the RSUs shall be subject to any special terms and conditions for your country of residence (and country of employment, if different), as may be set forth in an addendum to this Award Agreement (“Addendum”). Further, if you transfer residency and/or employment to another country as may be reflected in an Addendum to this Award Agreement, the special terms and conditions for such country will apply to your RSUs to the extent the Company determines, in its sole discretion, that the application of such terms

and conditions is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan. Any applicable Addendum shall constitute part of this Award Agreement.

19. Additional Requirements . The Company reserves the right to impose other requirements on the Award and your participation in the Plan, to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the Award and the Plan. Such requirements may include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing.

20. Electronic Delivery . The Committee may, in its sole discretion, decide to deliver any documents related to the RSUs by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. Further, to the extent applicable, all references to signatures and delivery of documents in this Award Agreement can be satisfied by procedures that the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents, including this Award Agreement. Your electronic signature is the same as, and shall have the same force and effect as, your manual signature. Any such procedures and delivery may be effected by a third party engaged by the Company to provide administrative services related to the Plan.

T&C - Flanagan

2016 GEIP RSU PERF Agreement (Jan 2019)

Exhibit 1

to the

Invesco Ltd. 2016 Global Equity Incentive Plan

Restricted Stock Unit Award Agreement - Performance Vesting


I.	Definitions

The term “ AOM Calculation ” means the adjusted operating margin of the Company as set forth in the Company’s Form 10-K filed with the Securities and Exchange Commission for each fiscal year of the Grant Performance Measurement Period, which will not be adjusted for any accounting expense or credit associated with the Vesting Percentage falling below (or rising above) 100% with respect to any Award.

The term “ TSR Calculation ” means the total shareholder return (“TSR”) of the Company and the constituents of the S&P 500 asset management sub-index.

The term “ Vesting Percentage ” means the percentage by which the Target Total Award is multiplied as set forth in the chart in Section II below.

The term “ Grant Performance Measurement Period ” means the period commencing January 1 of the grant year and ending December 31 of the second year after the grant.

The term “ Grant Average AOM ” means the sum of the AOM Calculation for each fiscal year of the Grant Performance Measurement Period divided by three.

The term “ Relative TSR Ranking ” means the percentile ranking of the TSR Calculation for the Grant Performance Measurement Period.


II.	Performance Vesting Formula

On the third anniversary of the Grant Date, the number of RSUs that shall become vested and non-forfeitable shall equal 100% of the Target Total Award multiplied by the Vesting Percentage associated with the both Grant Average AOM and relative TSR ranking on the chart below, rounded down to the nearest full Share, as the same shall be calculated by the Committee. The Committee’s good faith calculation of the number of RSUs that become vested and non-forfeitable pursuant to the Performance Vesting Formula shall be final and binding upon you and the Company. Vesting to range from 0% to 150%; straight line interpolation to be used for actual results.

INVESCO LTD. 2016 GLOBAL EQUITY INCENTIVE PLAN

Addendum to

RESTRICTED STOCK UNIT AGREEMENT - PERFORMANCE VESTING

Non-transferable

In addition to the terms of the Invesco Ltd. 2016 Global Equity Incentive Plan (the “Plan”) and the Restricted Stock Unit Agreement - Performance Vesting (the “Agreement”), the performance-vesting RSUs are subject to the following additional terms and conditions as set forth in this addendum (the “Addendum”). All defined terms as contained in this Addendum shall have the same meaning as set forth in the Plan and the Agreement. To the extent you relocate your residency and/or employment to another country, the additional terms and conditions as set forth in the addendum for such country (if any) also shall apply to the performance-vesting RSUs to the extent the Company determines, in its sole discretion, that the application of such addendum is necessary or advisable in order to comply with local laws, rules and regulations, or to facilitate the operation and administration of the performance-vesting RSUs and the Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer).

HONG KONG

1. Settlement in Shares . Notwithstanding anything to the contrary in the Agreement, Addendum or the Plan, the RSUs shall be settled only in Shares (and may not be settled in cash).

2. Lapse of Restrictions . If, for any reason, Shares are issued to you within six (6) months of the Grant Date, you may not sell or otherwise dispose of any such Shares prior to the six-month anniversary of the Grant Date.

2. Nature of the Plan . The Company specifically intends that the Plan will not be treated as an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance (“ORSO”). To the extent any court, tribunal or legal/regulatory body in Hong Kong determines that the Plan constitutes an occupational retirement scheme for the purposes of ORSO, the grant of the RSU shall be null and void.

3. Wages . The RSUs and Shares subject to the RSUs do not form part of your wages for the purposes of calculating any statutory or contractual payments under Hong Kong law.

4. IMPORTANT NOTICE . WARNING: The contents of the Agreement, the Addendum, the Plan, and all other materials pertaining to the RSUs and/or the Plan have not been reviewed by any regulatory authority in Hong Kong. You are hereby advised to exercise caution in relation to the offer thereunder. If you have any doubts about any of the contents of the aforesaid materials, you should obtain independent professional advice.

UNITED KINGDOM

1. Income Tax and Social Insurance Contribution Withholding . The following provision shall replace Section 9 of the Agreement:

Regardless of any action the Company and the Employer takes with respect to any or all income tax, primary Class 1 National Insurance contributions, payroll tax or other tax-related withholding attributable to or payable in connection with or pursuant to the grant or vesting of any Restricted Shares or the release or assignment of any Restricted Shares for consideration, or the receipt of any other benefit in connection with the Restricted Shares (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility. Furthermore, the Company and the Employer: (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Shares, including the grant or vesting of the Restricted Shares, the subsequent sale of any unrestricted Shares and the receipt of any dividends or dividend equivalents; and (b) do not commit to structure the terms of the grant or any aspect of the Restricted Shares to reduce or eliminate your liability for Tax-Related Items.

As a condition of the lifting of restrictions on the Restricted Shares upon vesting of the Restricted Shares, the Company and/or the Employer shall be entitled to withhold and you agree to pay, or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy, all obligations of the Company and/or the Employer to account to HM Revenue & Customs (“HMRC”) for any Tax-Related Items. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from any salary/wages or any other cash compensation payable to you. Alternatively, or in addition, if permissible under local law, you authorize the Company and/or the Employer, at its discretion and pursuant to such procedures as it may specify from time to time, to satisfy the obligations with regard to all Tax-Related Items legally payable by you by one or a combination of the following: (a) withholding otherwise deliverable Shares; (b) arranging for the sale of Shares otherwise deliverable to you (on your behalf and at your direction pursuant to this authorization); or (c) withholding from the proceeds of the sale of Shares acquired upon the vesting of the Restricted Shares. If the obligation for Tax-Related Items is satisfied by withholding a number of Shares as described herein, you shall be deemed to have been issued the full number of Shares subject to the Restricted Shares, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Restricted Shares. If, by the date on which the event giving rise to the Tax-Related Items occurs (the “Chargeable Event”), you have relocated to a jurisdiction other than the United Kingdom, you acknowledge that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction, including the United Kingdom. You also agree that the Company and the Employer may determine the amount of Tax-Related Items to be withheld and accounted for by reference to the maximum applicable rates, without prejudice to any right which you may have to recover any overpayment from the relevant tax authorities.

You shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to account to HMRC with respect to the Chargeable Event that cannot be satisfied by the means previously described. If payment or withholding is not made within 90 calendar days of the Chargeable Event or such other period as required under U.K. law (the “Due Date”), you agree that the amount of any uncollected Tax-Related Items shall (assuming you are not a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), constitute a loan owed by you to the Employer, effective on the Due Date. You agree that the loan will bear interest at the then-current HMRC Official Rate and it will be immediately due and repayable, and the Company and/or the Employer may recover it at any time thereafter by any of the means referred to above.

2. Exclusion of Claim . You acknowledge and agree that you shall have no entitlement to compensation or damages insofar as such entitlement arises or may arise from you ceasing to have rights under or to be entitled to vest in your Restricted Shares as a result of such termination (whether the termination is in breach of contract or otherwise), or from the loss or diminution in value of your Restricted Shares. Upon the grant of your Restricted Shares, you shall be deemed to have waived irrevocably any such entitlement.

Exhibit 10.2

INVESCO LTD. 2016 GLOBAL EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT - PERFORMANCE VESTING

Non-transferable

Invesco Ltd. (“Company”)

hereby awards to

[ Participant Name ]

(“Participant” or “you”)

[ Number of Shares Granted ]

Restricted Stock Units (“ Target Total Award ”)

as of [Grant Date] (“Grant Date”)

ACCEPTED AND AGREED TO by the Participant as of the Grant Date set forth above.

Participant:

____________________________________

Signature

Continued on the following page

TERMS AND CONDITIONS - Restricted Stock Units - Performance Vesting

2. Restrictions and Forfeiture . The RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered. Upon your Termination of Service for any reason, other than as set forth in paragraphs (b) - (e) of Paragraph 3 hereof, you shall forfeit all of your right, title and interest in and to all unvested RSUs, except as determined by the Committee pursuant to Paragraph 3.1 hereof. In addition, upon the Determination Date, you shall forfeit all of your right, title and interest in and to any RSUs that are eligible to vest and become non-forfeitable on such date, but which fail to vest and become non-forfeitable on such date pursuant to the Performance Vesting Formula.

3. Vesting and Conversion to Shares . The Target Total Award will vest and become non-forfeitable upon the earliest to occur of the following (the “Vesting Date”):


(a)	the Determination Date, to the extent provided under the Performance Vesting Formula, if you have not experienced a Termination of Service before such date, or


(b)	as of your Termination of Service due to death or Disability, or

(c)


(d)	immediately before a Change in Control, if this Award Agreement is not assumed, converted or replaced in connection with the transaction that constitutes the Change in Control, or


(e)	your Termination of Service during the 24-month period following a Change in Control either (i) by the Company other than for Cause or unsatisfactory performance, or (ii) by you for Good Reason.

5. Notice Period Requirement . During your employment with the Employer, you and, in the absence of Cause, the Employer shall be required to give to the other xxx (xx) days’ advance written notice of the intent to terminate your employment

relationship (the “Notice Period”). Your employment with the Employer shall not terminate until the expiration of the Notice Period, provided, however, that the Employer shall have the right, in its sole discretion, to relieve you of any or all of your duties and responsibilities by placing you on paid administrative leave during the Notice Period and shall not be required to provide you with work or access to the Employer's offices during such leave. You shall be entitled to continue to receive your salary and certain other employee benefits for the entire Notice Period, regardless of whether the Employer exercises its right to place you on paid administrative leave. You are prohibited from working in any capacity for yourself or any other business during the Notice Period without the prior written consent of the Company. Notwithstanding the foregoing, at any time during your employment relationship the Employer may, effective immediately and without the benefit of the Notice Period, terminate the employment relationship for Cause. The date on which your employment terminates shall be your “Termination Date” for purposes of this Award Agreement.

6. Employment Matters . You agree that this Award Agreement is entered into and is reasonably necessary to protect the Company’s investment in your advancement opportunity, training and development and to protect the goodwill and other legitimate business interests of the Company. You also agree that, in consideration of the confidential information, trade secrets and training and development provided to you, you will abide by the restrictions set forth in this Paragraph 6, and you further agree and acknowledge that the restrictions set forth in this Paragraph 6 are reasonably necessary to protect the confidential and trade secret information provided to you.

6.1 Nondisclosure . You agree that, in the event of your Termination of Service for any reason, whether during or following the period when the RSUs are subject to vesting restrictions (the “Restriction Period”), you shall not directly or indirectly use for yourself or any other business or disclose to any person any Confidential Information (as defined below) without the prior written consent of the Company during the period that it remains confidential and non public or a trade secret under applicable law. “Confidential Information” means all non-public information (whether a trade secret or not and whether proprietary or not) relating to the Company’s business and its customers that the Company either treats as confidential or is of value to the Company or is important to the Company’s business and operations, including but not limited to the following specific items: trade secrets (as defined by applicable law); actual or prospective customers and customer lists; marketing strategies; sales; actual and prospective pricing; products; know-how; research and development; intellectual property; information systems and software; business plans and projections; negotiations and contracts; financial or cost data; employment, compensation and personnel information; and any other non-public business information regarding the Company and the Company’s Affiliates. In addition, trade secrets will be entitled to all of the protections and benefits available under applicable law.

6.2 Nonrecruitment; Nonsolicitation . You agree that during your employment with the Company and until six (6) months following your Termination Date, in the event of your Termination of Service for any reason, whether during or following the Restriction Period (the “Covenant Period”), you shall not directly or indirectly, individually or in concert with any other person or entity (i) recruit, induce or attempt to recruit or induce any employee of the Company with whom you worked or otherwise had Material Contact (as defined below) during your employment to leave the employ of the Company or otherwise lessen that party’s affiliation with the Company, or (ii) solicit, divert, take away or attempt to solicit, divert or take away any then-current or proposed client or customer of the Company with whom you had Material Contact during your employment for purposes of offering, providing or selling investment management products or services offered by the Company at the date of your Termination of Service that were offered, provided and/or sold by you on the Company’s behalf. For purposes of this provision, you had “Material Contact” with an employee if (i) you had a supervisory relationship with the employee or (ii) you worked or communicated with the employee on a regular basis; and you had “Material Contact” with a current or proposed client or customer if (i) you had business dealings with the current or proposed client or customer on behalf of the Company or (ii) you supervised or coordinated the dealings between the Company and the current or proposed client or customer.

6.3 Enforceability of Covenants . You acknowledge that the Company has a current and future expectation of business from the current and proposed customers of the Company. You acknowledge that the term and scope of the covenants set forth herein are reasonable, and you agree that you will not, in any proceeding, assert the unreasonableness of the premises, consideration or scope of the covenants set forth herein. You and the Company agree that if any portion of the foregoing covenants is deemed to be unenforceable because any of the restrictions contained in this Award Agreement are deemed too broad, the court shall be authorized to provide partial enforcement of such covenants, substitute an enforceable term or otherwise modify the Award Agreement in a manner that will enable the enforcement of the covenants to the maximum extent possible under applicable law. You agree that any breach of these covenants will result in irreparable damage and injury to the Company and that the Company will be entitled to injunctive relief without the necessity of posting any bond. You also agree that you shall be responsible for all damages incurred by the Company due to any breach of the restrictive covenants contained in this Award Agreement and that the Company shall be entitled to have you pay all costs and attorneys’ fees incurred by the Company in enforcing the restrictive covenants in this Award Agreement.

7. Relationship to Other Agreements . Subject to the limitations set forth below, in the event of any actual or alleged conflict between the provisions of this Award Agreement and (i) any other agreement regarding your employment with the Employer (“Employment Agreement”), or (ii) any prior agreement or certificate governing any award of a direct or indirect equity interest

in the Company (the documents described in clauses (i) and (ii) hereof being collectively referred to as the “Other Agreements”), the provisions of this Award Agreement shall control and, to the extent of any conflict, be deemed to amend such Other Agreements. Notwithstanding the foregoing, in the event that the Notice Period referred to in Paragraph 5 or the Nondisclosure Period or Covenant Period referred to in Paragraph 6 of this Award Agreement is shorter in duration than that provided in an Employment Agreement, the Notice Period, Nondisclosure Period or Covenant Period (as applicable) set forth in the Employment Agreement shall apply.

than one country between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company may be required to withhold or account for Tax-Related Items in more than one country.

11. Code Section 409A . The RSUs granted under this Award Agreement are not intended to constitute a nonqualified deferred compensation plan within the meaning of Section 409A of the Code, and the Plan and this Award Agreement shall be interpreted, administered and deemed amended, if applicable, in a manner consistent with this intention. Notwithstanding the terms of this Award Agreement, if you are subject to U.S. federal income tax on any amounts payable hereunder and if any such amounts, including amounts payable pursuant to Paragraph 5 hereof, constitute nonqualified deferred compensation under Section 409A of the Code, those amounts shall be subject to the provisions of Section 13(g) of the Plan (as if the amounts were Awards under the Plan, to the extent applicable).

14. Discretionary Nature of Plan; No Vested Rights . You acknowledge and agree that the Plan is discretionary in nature and limited in duration, and may be amended, cancelled or terminated by the Company, in its sole discretion, at any time as provided under the Plan. The grant of the RSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive RSUs or other awards or benefits in lieu of RSUs in the future. Future awards, if any, will be at the sole discretion of the Committee, including, but not limited to, the form and timing of an award, the number of Shares subject to an award and the vesting provisions.

15. Termination Indemnities . The value of the RSUs is an extraordinary item of compensation outside the scope of your employment contract, if any. As such, the RSUs are not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments to which you may be otherwise entitled.

16. Compliance with Age Discrimination Rules . For purposes of this Award Agreement, if you are a local national of and employed in a country that is a member of the European Union, the grant of the RSUs and the terms and conditions governing

the RSUs are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent a court or tribunal of competent jurisdiction determines that any provision of the RSUs or this Award Agreement or the Plan is invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, the Company shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.

T&C - xx days’ notice

2016 GEIP RSU PERF Agreement (Jan 2019) MASTER

Exhibit 1

to the

Invesco Ltd. 2016 Global Equity Incentive Plan

Restricted Stock Unit Award Agreement - Performance Vesting


I.	Definitions

The term “ TSR Calculation ” means the total shareholder return (“TSR”) of the Company and the constituents of the S&P 500 asset management sub-index.

The term “ Vesting Percentage ” means the percentage by which the Target Total Award is multiplied as set forth in the chart in Section II below.

The term “ Grant Performance Measurement Period ” means the period commencing January 1 of the grant year and ending December 31 of the second year after the grant.

The term “ Grant Average AOM ” means the sum of the AOM Calculation for each fiscal year of the Grant Performance Measurement Period divided by three.

The term “ Relative TSR Ranking ” means the percentile ranking of the TSR Calculation for the Grant Performance Measurement Period.


II.	Performance Vesting Formula

INVESCO LTD. 2016 GLOBAL EQUITY INCENTIVE PLAN

Addendum to

RESTRICTED STOCK UNIT AGREEMENT - PERFORMANCE VESTING

Non-transferable

HONG KONG

1. Settlement in Shares . Notwithstanding anything to the contrary in the Agreement, Addendum or the Plan, the RSUs shall be settled only in Shares (and may not be settled in cash).

3. Wages . The RSUs and Shares subject to the RSUs do not form part of your wages for the purposes of calculating any statutory or contractual payments under Hong Kong law.

UNITED KINGDOM

1. Income Tax and Social Insurance Contribution Withholding . The following provision shall replace Section 9 of the Agreement:

unrestricted Shares and the receipt of any dividends or dividend equivalents; and (b) do not commit to structure the terms of the grant or any aspect of the Restricted Shares to reduce or eliminate your liability for Tax-Related Items.

Exhibit 10.3

INVESCO LTD. 2016 GLOBAL EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT - PERFORMANCE VESTING - CANADA

Non-transferable

Invesco Ltd. (“Company”)

hereby awards to

[ Participant Name ]

(“Participant” or “you”)

[ Number of Shares Granted ]

Restricted Stock Units (“Target Total Award”)

as of [Grant Date] (“Grant Date”)

Subject to the conditions of (i) the Invesco Ltd. 2016 Global Equity Incentive Plan as in effect from time to time (“Plan”), (ii) the Remuneration Policy of Invesco Ltd. or any of its Affiliates as in effect from time to time to the extent such policy is applicable to you (the “Remuneration Policy”), and (iii) this Award Agreement, the Company hereby grants to you the number of Restricted Stock Units (“RSUs”) set forth above, which shall become vested and non-forfeitable as follows:

On December 15 of the second calendar year after the Grant Date (the “Determination Date”), the number of RSUs that shall become vested and non-forfeitable shall equal 100% of the Target Total Award multiplied by the Vesting Percentage (as defined in Exhibit 1), rounded down to the nearest full Share, all as calculated by the Committee in accordance with the Performance Vesting Formula set forth on Exhibit 1.

ACCEPTED AND AGREED TO by the Participant as of the Grant Date set forth above.

Participant:

____________________________________

Signature

Continued on the following page

TERMS AND CONDITIONS - Restricted Stock Units - Performance Vesting - Canada

1. Plan Controls; Restricted Stock Units . In consideration of this Award, you hereby promise to honor and to be bound by the Plan, the Remuneration Policy and this Award Agreement, including the following terms and conditions, which serve as the agreed basis for your Award. The terms contained in the Plan and the Remuneration Policy are incorporated into and made a part of this Award Agreement, and this Award Agreement shall be governed by and construed in accordance with the Plan and, if applicable, the Remuneration Policy. The terms contained in the Plan and the Remuneration Policy are incorporated into and made a part of this Award Agreement, and this Award Agreement shall be governed by and construed in accordance with the Plan and, if applicable, the Remuneration Policy. In the event of any actual or alleged conflict between the provisions of any of the Plan, the Remuneration Policy, if applicable, and this Award Agreement, (i) the provisions of the Remuneration Policy, if applicable, shall control and, to the extent of any conflict, be deemed to amend the Plan and the Award Agreement, and (ii) the provisions of the Plan shall control and, to the extent of any conflict, be deemed to amend the Award Agreement. The RSUs represent a contractual obligation of the Company to deliver the number of Shares specified on page 1 hereof pursuant to the terms of Section 10 of the Plan and the additional terms and restrictions hereunder. Unless the context otherwise requires, and solely for purposes of these Terms and Conditions, the term “Company” means Invesco Ltd., its Affiliates and their respective successors and assigns, as applicable, and “Employer” means the Company or the Affiliate that employs you. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Plan.

2. Restrictions and Forfeiture . The RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered. Upon your Termination of Service for any reason, other than as set forth in paragraphs (b) - (e) of Paragraph 3 hereof, you shall forfeit all of your right, title and interest in and to all unvested RSUs, except as determined by the Committee pursuant to Paragraph 3.1 hereof. In addition, upon the Determination Date, you shall forfeit all of your right, title and interest in and to any RSUs that are eligible to vest and become non-forfeitable on such date, but which fail to vest and become non-forfeitable on such date pursuant to the Performance Vesting Formula.

3. Vesting and Conversion to Shares . The Target Total Award will vest and become non-forfeitable upon the earliest to occur of the following (the “Vesting Date”):


(a)	the Determination Date, to the extent provided under the Performance Vesting Formula, if you have not experienced a Termination of Service before such respective dates, or


(b)	your Termination of Service due to death or Disability, or

(c)

your involuntary Termination of Service, other than for just cause under applicable Canadian law, provided that you sign a Final Release and Indemnity as part of a severance agreement in the form stipulated by the Company, within 90 days after your Termination of Service, and it has become irrevocable. In the event that the Final Release and Indemnity in a form acceptable to the Company is not signed within the 90 day period after your Termination of Service, then RSUs scheduled to vest during the applicable statutory notice period will vest on the respective vesting dates, subject to the terms and conditions of the Award Agreement. All other RSUs will be forfeited immediately upon the cessation of the statutory notice period, or


(d)	immediately before a Change in Control, if this Award Agreement is not assumed, converted or replaced in connection with the transaction that constitutes the Change in Control, or


(e)	your Termination of Service during the 24-month period following a Change in Control either (i) by the Employer other than for just cause, or (ii) by you for Good Reason.

3.3. Source of Shares . Upon any conversion of the RSUs as provided in Paragraph 3.2, the Shares delivered to you shall be from a trust established pursuant to applicable Canadian law.

5. Notice Period Requirement for Voluntary Termination . During your employment with the Employer, you shall be required to give to the Employer twelve (12) months’ advance written notice of the intent to terminate your employment relationship (the “Notice Period”). Your employment with the Employer shall not terminate until the expiration of the Notice Period, provided, however, that the Employer shall have the right, in its sole discretion, to relieve you of any or all of your duties and responsibilities by placing you on paid administrative leave during the Notice Period and shall not be required to provide you with work or access to the Employer's offices during such leave. You shall be entitled to continue to receive your salary and certain other employee benefits for the entire Notice Period, regardless of whether the Employer exercises its right to place you on paid administrative leave. You are prohibited from working in any capacity for yourself or any other business during the Notice Period without the prior written consent of the Company. The date on which your employment terminates, either voluntarily or involuntarily, shall be your “Termination Date” for purposes of this Award Agreement.

6.1 Nondisclosure . You agree that, in the event of your Termination of Service for any reason, whether during or following the period when the RSUs are subject to vesting restrictions (the “Restriction Period”), you shall not directly or indirectly use for yourself or any other business or disclose to any person any Confidential Information (as defined below) without the prior written consent of the Company during the period that it remains confidential and non-public or a trade secret under applicable law. “Confidential Information” means all non-public information (whether a trade secret or not and whether proprietary or not) relating to the Company’s business and its customers that the Company either treats as confidential or is of value to the Company or is important to the Company’s business and operations, including but not limited to the following specific items: trade secrets (as defined by applicable law); actual or prospective customers and customer lists; marketing strategies; sales; actual and prospective pricing; products; know-how; research and development; intellectual property; information systems and software; business plans and projections; negotiations and contracts; financial or cost data; employment, compensation and personnel information; and any other non-public business information regarding the Company and the Company’s Affiliates. In addition, trade secrets will be entitled to all of the protections and benefits available under applicable law.

6.2 Nonrecruitment; Nonsolicitation . You agree that during your employment with the Employer and until six (6) months following your Termination Date, in the event of your Termination of Service for any reason, whether during or following the Restriction Period, (the “Covenant Period”), you shall not directly or indirectly, individually or in concert with any other person or entity (i) recruit, induce or attempt to recruit or induce any employee of the Company or its Affiliates with whom you worked or otherwise had Material Contact (as defined below) during your employment to leave the employ of the Company or otherwise lessen that party’s affiliation with the Company, or (ii) solicit, divert, take away or attempt to solicit, divert or take away any then-current or proposed client or customer of the Company with whom you had Material Contact during your employment for purposes of offering, providing or selling investment management products or services offered by the Company at the date of your Termination of Service that were offered, provided and/or sold by you on the Company’s behalf. For purposes of this provision, you had “Material Contact” with an employee if (i) you had a supervisory relationship with the employee or (ii) you worked or communicated with the employee on a regular basis; and you had “Material Contact” with a current or proposed client or customer if (i) you had business dealings with the current or proposed client or customer on behalf of the Company or (ii) you supervised or coordinated the dealings between the Company and the current or proposed client or customer.

(“Employment Agreement”), or (ii) any prior agreement or certificate governing any award of a direct or indirect equity interest in the Company (the documents described in clauses (i) and (ii) hereof being collectively referred to as the “Other Agreements”), the provisions of this Award Agreement shall control and, to the extent of any conflict, be deemed to amend such Other Agreements. Notwithstanding the foregoing, in the event that the Notice Period referred to in Paragraph 5 or the Nondisclosure Period or Covenant Period referred to in Paragraph 6 of this Award Agreement is shorter in duration than that provided in an Employment Agreement, the Notice Period, Nondisclosure Period or Covenant Period (as applicable) set forth in the Employment Agreement shall apply.

The Company and the Employer hold certain personal information about you, which may include your name, home address and telephone number, date of birth, social security number or other employee identification number, salary, job title, any Shares held by you, details of all RSUs or any other entitlement to Shares awarded in your favor, for the purpose of managing and administering the Plan (“Data”). The Data may be provided by you or collected, where lawful, from the Company, Affiliates or third parties, and the Company or Employer will process the Data for the exclusive purpose of implementing, administering and managing your participation in the Plan. The data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which Data are collected and with confidentiality and security provisions as set forth by applicable laws and regulations in your country of residence (and country of employment, if different). Data processing operations will be performed minimizing the use of personal and identification data when such data are unnecessary for the processing purposes sought. Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for your participation in the Plan.

If your country of residence (and/or the country of employment, if different) requires withholding of Tax-Related Items, the Company may withhold a portion of the Shares otherwise issuable upon vesting of the RSUs that have an aggregate Fair Market Value as of the vesting date sufficient to pay the minimum Tax-Related Items required to be withheld with respect to the Shares. For purposes of the foregoing, no fractional Shares will be withheld or issued pursuant to the grant of the RSUs and the issuance of Shares hereunder. Alternatively (or in combination), the Company or the Employer may, in its discretion, withhold any amount necessary to pay the Tax-Related Items from your regular salary or other amounts payable to you, with no withholding of Shares, or may require you to submit payment equivalent to the minimum Tax-Related Items required to be withheld with respect to the Shares by means of certified check, cashier’s check or wire transfer. By accepting the RSUs, you expressly consent to the methods of withholding as provided hereunder. All other Tax-Related Items related to the RSUs and

any Shares delivered in payment thereof shall be your sole responsibility. Further, if you become subject to taxation in more than one country between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company may be required to withhold or account for Tax-Related Items in more than one country.

14. Discretionary Nature of Plan; No Vested Rights . You acknowledge and agree that the Plan is discretionary in nature and limited in duration, and may be amended, cancelled or terminated by the Company, in its sole discretion, at any time as provided under the Plan. The grant of the RSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive RSUs or other awards or benefits in lieu of RSUs in the future. Future awards, if any, will be at the sole discretion of the Committee, including, but not limited to, the form and timing of an award, the number of Shares subject to an award and the vesting provisions.

15. Termination Indemnities. The value of the RSUs is an extraordinary item of compensation outside the scope of your employment contract, if any. As such, the RSUs are not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments to which you may be otherwise entitled.

16. Compliance With Age Discrimination Rules. For purposes of this Award Agreement, if you are a local national of and employed in a country that is a member of the European Union, the grant of the RSUs and the terms and conditions governing the RSUs are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent a court or tribunal of competent jurisdiction determines that any provision of the RSUs or this Award Agreement or the Plan is invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, the Company shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.

T&C - 12m notice

2016 GEIP RSU PERF Agreement (Jan 2019) Canada

Exhibit 1

to the

Invesco Ltd. 2016 Global Equity Incentive Plan

Restricted Stock Unit Award Agreement - Performance Vesting


I.	Definitions

The term “ AOM Calculation ” means the adjusted operating margin of the Company as set forth in the Company’s Form 10-K filed with the Securities and Exchange Commission for each fiscal year of the Grant Performance Measurement Period or Form 10-Q for the quarter ending September 30 of the second calendar year following the grant, which will not be adjusted for any accounting expense or credit associated with the Vesting Percentage falling below (or rising above) 100% with respect to any Award.

The term “ TSR Calculation ” means the total shareholder return (“TSR”) of the Company and the constituents of the S&P 500 asset management sub-index.

The term “ Vesting Percentage ” means the percentage by which the Target Total Award is multiplied as set forth in the chart in Section II below.

The term “ Grant Performance Measurement Period ” means the period commencing January 1 of the grant year and ending September 30 of the second year after the grant.

The term “ Grant Average AOM ” means the sum of the AOM Calculation for each fiscal period of the Grant Performance Measurement Period divided by three.

The term “ Relative TSR Ranking ” means the percentile ranking of the TSR Calculation for the Grant Performance Measurement Period.


II.	Performance Vesting Formula

On December 15 of the second calendar year after the Grant Date, the number of RSUs that shall become vested and non-forfeitable shall equal 100% of the Target Total Award multiplied by the Vesting Percentage associated with the both Grant Average AOM and relative TSR ranking on the chart below, rounded down to the nearest full Share, as the same shall be calculated by the Committee. The Committee’s good faith calculation of the number of RSUs that become vested and non-forfeitable pursuant to the Performance Vesting Formula shall be final and binding upon you and the Company. Vesting to range from 0% to 150%; straight line interpolation to be used for actual results.

INVESCO LTD. 2016 GLOBAL EQUITY INCENTIVE PLAN

Addendum to

RESTRICTED STOCK UNIT AGREEMENT - PERFORMANCE VESTING

Non-transferable

CANADA

1. Settlement in Shares Only . Notwithstanding any provision of the Agreement, the RSUs shall be settled in Shares only (and shall not be settled in cash).

2. Securities Law Information . You are permitted to sell Shares acquired under the Plan through the designated broker appointed under the Plan, if any, provided the resale of Shares acquired under the Plan takes place outside Canada through the facilities of a stock exchange on which the Shares are listed. The Shares currently are listed on the New York Stock Exchange.

3. Use of English Language . If you are a resident of Quebec, by accepting the RSUs, you acknowledge and agree that it is your express wish that the Agreement, this Addendum, as well as all other documents, notices and legal proceedings entered into, given or instituted pursuant to the RSUs, either directly or indirectly, be drawn up in English.

L'utilisation de la langue anglaise . Si le participant est un résident du Québec, en acceptant le RSUs, le participant reconnaît et accepte que ce est la volonté expresse du participant que l'Accord, le présent addenda, ainsi que tous les autres documents, avis et procédures judiciaires exécutés, donnés ou engagée conformément à la RSUs, soit directement ou indirectement, être rédigés en anglais.

Exhibit 10.4

FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER

This First Amendment (this “ Amendment ”) is made and entered into as of April 11, 2019, by and among Invesco Ltd., a Bermuda exempted company (“ Buyer ”), Gem Acquisition Corp., a Delaware corporation (“ Merger Sub ”), Gem Acquisition Two Corp., a Delaware corporation (“ Merger Sub 2 ”), MM Asset Management Holding LLC, a Delaware limited liability company (“ Parent ”), and Oppenheimer Acquisition Corp., a Delaware corporation (the “ Company ,” and together with Buyer, Merger Sub, Merger Sub 2 and Parent, the “ Parties ,” and each a “ Party ”), and amends the Agreement and Plan of Merger, dated as of October 17, 2018 (the “ Agreement ”), by and among the Parties. Capitalized terms not otherwise defined in this Amendment shall have the respective meanings set forth in the Agreement.

WITNESSETH :

WHEREAS, the Parties desire to enter into this Amendment to amend the Agreement pursuant to Section 10.1 of the Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements contained in this Amendment and the Agreement, the Parties, each intending to be legally bound, agree as follows:


1.	Amendments .

(a) The definition of “ Accredited Shareholder ” in Section 1.1 of the Agreement is deleted and replaced in its entirety with the following definition:

“ Accredited Shareholder ” means any holder of Shares (other than Restricted Shares) who has completed and delivered to the Company, prior to the Election Deadline, an investor questionnaire certifying that such Shareholder is an “accredited investor” as defined in Rule 501 of the Securities Act.

(b) The following definition of “Certification” is added to Section 1.1 of the Agreement, immediately following the definition of “Certificates”:

“ Certification ” has the meaning set forth in Section 2.5(b) .

(c) The following definitions of “Election”, “Election Deadline” and “Election Period” are added to Section 1.1 of the Agreement, immediately following the definition of “Effective Time”:

“ Election ” has the meaning set forth in Section 2.5(b) .

“ Election Deadline ” has the meaning set forth in Section 2.5(b) .

“ Election Period ” has the meaning set forth in Section 2.5(b) .

(d) The definition of “Per Share Accredited Closing Stock Consideration” in Section 1.1 of the Agreement is deleted in its entirety and replaced with the following definition of “Per Share Accredited Closing Cash Consideration.” All instances of the defined term “Per Share Accredited Closing Stock Consideration” in the Agreement are replaced with the defined term “Per Share Accredited Closing Cash Consideration.”

“ Per Share Accredited Closing Cash Consideration ” means the dollar amount equal to the Adjusted Preferred Stock Consideration multiplied by the Liquidation Preference divided by the Fully-

Diluted Shares.

(e) The following definitions of “Per Share Accredited Closing Preferred Stock Consideration” and “Per Share Accredited Closing Consideration” are added to Section 1.1 of the Agreement, immediately following the definition of “Per Share Accredited Closing Cash Consideration”:

“ Per Share Accredited Closing Preferred Stock Consideration ” means the Adjusted Preferred Stock Consideration divided by the Fully-Diluted Shares.

“ Per Share Accredited Closing Consideration ” means, collectively, (a) the Common Stock Consideration divided by the Fully-Diluted Shares and (b) the Per Share Accredited Closing Cash Consideration; provided , that solely with respect to Shares as to which a valid Election is made pursuant to Section 2.5(b) , this clause (b) shall instead be deemed to refer to the Per Share Accredited Closing Preferred Stock Consideration in lieu of the Per Share Accredited Closing Cash Consideration.

(f) Section 2.5(a) of the Agreement is amended and restated in its entirety to read as follows:

(a) Exchange Agent . Prior to the Effective Time, Buyer shall engage a bank or trust company reasonably satisfactory to the Company to act as exchange agent in connection with the Merger (the “ Exchange Agent ”). At or prior to the Effective Time, Buyer shall deposit, or cause to be deposited, with the Exchange Agent, in trust for the benefit of the holders of Shares issued and outstanding immediately prior to the Effective Time, (i) cash and evidence of book-entry shares representing an amount of cash and a number of shares of Buyer Common Stock and Buyer Preferred Stock sufficient to pay the Accredited Shareholders the Per Share Accredited Closing Consideration pursuant to Section 2.4(a) in respect of each Share held by such holders, (ii) an amount of cash sufficient to pay the Non-Accredited Shareholders the Per Share Closing Consideration Value pursuant to Section 2.4(a) in respect of each Share held by such holders, and (iii) an amount of cash sufficient to pay such holders in lieu of fractional shares pursuant to Section 2.5(i) (such shares of Buyer Common Stock and Buyer Preferred Stock, together with such cash, the “ Exchange Fund ”). The Exchange Fund shall not be used for any purpose that is not expressly provided for in this Agreement.

(g) Section 2.5(b) of the Agreement is amended and restated in its entirety to read as follows:

(b) Election and Exchange Procedures .

(i) To receive the Per Share Accredited Closing Consideration, each eligible Shareholder must certify, in accordance with the provisions of this Section 2.5(b) and the terms of the Letter of Transmittal, that such Shareholder is an “accredited investor” as defined in Rule 501 of the Securities Act (the “ Certification ”).

(ii) Each Accredited Shareholder may elect (the “ Election ”), in a request made in accordance with the provisions of this Section 2.5(b) and the terms of the Letter of Transmittal, to receive the Per Share Accredited Closing Preferred Stock Consideration in lieu of the Per Share Accredited Closing Cash Consideration.

(iii) The Company will deliver or mail or will cause to be delivered or mailed to each holder of Shares (other than Restricted Shares) a letter of transmittal, substantially in the form of Exhibit G hereto (a “ Letter of Transmittal ”), which shall specify (A) that delivery of Shares (other than Restricted Shares) shall be effected only upon proper delivery of a fully completed and duly executed Letter of Transmittal together with the related certificates representing Shares (“ Certificates ”), if any, in accordance therewith to the Company, the Subsequent Surviving Corporation or the Exchange Agent, as applicable, (B) instructions for use in surrendering such Shares and receiving the applicable Per Share Merger Consideration in respect of the Shares evidenced thereby, and (C) in the case of Accredited

Shareholders, instructions to permit eligible Shareholders to make the Certification and exercise their right to make an Election.

(iv) The Company shall initially make available and mail the Letter of Transmittal, not less than twenty (20) business days prior to the anticipated Election Deadline, to each Shareholder as of the Business Day prior to such mailing date, and following such mailing date, shall use all reasonable efforts to make available as promptly as possible the Letter of Transmittal to any Shareholder who requests such Letter of Transmittal prior to the Election Deadline. The time period between such mailing date and the Election Deadline is referred to herein as the “ Election Period .”

-(v) Any Certification and Election shall have been made properly only if the Exchange Agent shall have received, during the Election Period, a Letter of Transmittal properly completed and signed and each such Certificate, if applicable. As used herein, unless otherwise agreed upon in advance by the Parties, “ Election Deadline ” means 5:00 p.m., New York time, on the date that the Parties shall agree is as near as practicable to five (5) Business Days preceding the Closing Date.

(vi) If an eligible Shareholder fails to make a proper Certification (none of Parent, the Company, the Buyer or the Exchange Agent being under any duty to notify any Shareholder of any such defect) but otherwise completes a valid Letter of Transmittal, such Shareholder, subject to this Section 2.5 (b), shall only be entitled to receive the Per Share Closing Consideration Value as a Non-Accredited Shareholder, unless a proper Certification is thereafter timely made prior to the Election Deadline. For the avoidance of doubt and subject to Section 2.5(f) , any Shareholder who submits a properly completed Letter of Transmittal after the Election Deadline, shall only be entitled to receive the Per Share Closing Consideration Value as a Non-Accredited Shareholder.

(vii) Any Accredited Shareholder may, at any time during the Election Period, change or revoke such Accredited Shareholder’s Election by written notice to the Exchange Agent prior to the Election Deadline accompanied, if applicable, by a properly completed and signed revised Letter of Transmittal or, if applicable, by withdrawal prior to the Election Deadline of his or her Certificates previously deposited with the Exchange Agent. If any Election is not properly made (none of Parent, the Company, the Buyer or the Exchange Agent being under any duty to notify any Accredited Shareholder of any such defect), such Election shall be deemed to be not in effect, and the Accredited Shareholder shall not be entitled to receive the Per Share Accredited Closing Preferred Stock Consideration in lieu of the Per Share Accredited Closing Cash Consideration, unless a proper Election is thereafter timely made.

(viii) All Elections shall be automatically deemed revoked upon receipt by the Exchange Agent of written notification from the Parties that this Agreement has been terminated in accordance with the terms hereof.

(ix) Upon the receipt of a properly completed and duly executed Letter of Transmittal and each such Certificate, if applicable, prior to the Election Deadline, Buyer shall cause the Exchange Agent to, on the Closing Date following the Effective Time, pay the holder of such Shares the applicable Per Share Merger Consideration in consideration therefor, and such Shares and any related Certificate shall be cancelled at and as of the Effective Time.

(x) Any Per Share Merger Consideration not paid at Closing due to a failure by a Shareholder to deliver a properly completed and duly executed Letter of Transmittal and any such Certificate, if applicable, prior to the Election Deadline shall be held by the Exchange Agent in the Exchange Fund. Upon the receipt of a properly completed and duly executed Letter of Transmittal and each such Certificate, if applicable, any time after the Election Deadline, the Exchange Agent shall, as soon as reasonably practicable thereafter, which shall not exceed five (5) Business Days from receipt by the Exchange Agent of such properly completed and duly executed Letter of Transmittal and Certificates, if applicable, pay the holders of such Shares the applicable Per Share Merger Consideration in

consideration therefor, and such Shares and any related Certificate shall be cancelled at and as of the Effective Time. Until so surrendered, each such Shares (other than Shares representing Dissenting Shares) shall represent solely the right to receive the Per Share Merger Consideration relating thereto.

(xi) Subject to the terms of this Agreement and the Letter of Transmittal, the Buyer, in the exercise of its reasonable, good faith discretion, shall have the right to make all determinations, not inconsistent with the terms of this Agreement, governing the validity of the Letter of Transmittal and compliance by any Shareholder with the Certification and Election procedures set forth herein.

(h) The word “Parent” in the first sentence of Section 6.2(a)(iii) of the Agreement is replaced with the word “Company”.

(i) Section 2.7(a)(iii) of the Agreement is amended and restated in its entirety to read as follows:

the Seed Capital Redemption Agreement, duly executed by Massachusetts Mutual Life Insurance Company and OppenheimerFunds, Inc.;

(j) Section 8.8(a) of the Agreement is amended by deleting the last sentence thereof and replacing such sentence with the following:

To the extent included in the books and records of Parent or its Affiliates (other than the Acquired Companies) and not included in the books and records of the Acquired Companies, Parent and such Affiliates shall retain all Tax Returns, schedules, and work papers and all material records and other documents relating thereto of the Acquired Companies until the expiration of the later of (a) the tenth (10 ^th ) anniversary of the Closing Date or (b) the date on which Taxes may no longer be assessed under the applicable statutes of limitation, including any waivers or extensions thereof.

(k) Exhibit B to the Agreement is deleted and replaced in its entirety with Exhibit B attached hereto.

(l) Exhibit G to the Agreement is deleted and replaced in its entirety with Exhibit G attached hereto.

2. Registration Rights for Accredited Shareholders . Buyer hereby agrees to comply with the obligations applicable to it under Annex C of the Letter of Transmittal, subject to the terms and conditions thereof, for the benefit of each Accredited Shareholder (other than Parent and its Affiliates) that validly delivers a Letter of Transmittal and receives Buyer Common Stock and/or Buyer Preferred Stock in accordance with the terms of the Merger Agreement and the Letter of Transmittal.

3. Authorizations . Each Party hereby represents to the other Parties that it has the requisite corporate or limited liability company, as applicable, power and authority and has taken all corporate or limited liability company, as applicable, action necessary to execute, deliver and perform its obligations under this Amendment. This Amendment has been duly authorized, executed and delivered by each Party and constitutes a valid and binding obligation of such Party enforceable against such Party in accordance with its terms.

4. Effectiveness; Waiver . This Amendment shall be effective as of the date first written above following the execution of this Amendment by the Parties. Any reference in the Agreement to “this Agreement” shall hereafter be deemed to refer to the Agreement as amended by this Amendment, and any reference in the Company Disclosure Schedule, the Buyer Disclosure Schedule and any of the Ancillary Agreements to “the Agreement” or the “Merger Agreement”, as applicable, shall refer to the Agreement as amended by this Amendment. Except as expressly provided in this Amendment, all references in the Agreement, the Company Disclosure Schedule and the Parent Disclosure Schedule to “the date hereof” and “the date of this Agreement” and any references in any Ancillary Agreements to the date of the Agreement shall refer to October 17, 2018. The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a

waiver of any provision of, or operate as a waiver of any right, power or remedy of the Parties under the Agreement. In the event of any conflict or inconsistency between the terms of this Amendment and the terms of the Agreement, the terms of this Amendment shall control.

5. Other Miscellaneous Terms . Sections 10.4, 10.6, 10.7, 10.8, 10.9, 10.10, 10.11 and 10.12 of the Agreement shall apply to this Amendment, mutatis mutandis , as if they were restated in full, with each reference to “this Agreement” in such sections of the Agreement being deemed a reference to this Amendment.

6. Full Force and Effect . Except as specifically amended herein, the Parties hereby acknowledge and agree that all of the terms and provisions set forth in the Agreement remain in full force and effect in all respects.

7. Further Assurances . In connection with this Amendment and all the transactions contemplated by this Amendment, each Party agrees to execute and deliver such additional documents and instruments as may be required and to perform such other additional acts as may be necessary or appropriate to effectuate, carry out, and perform all of the terms and provisions of this Amendment.IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.



	INVESCO LTD. By: /s/ Loren M. Starr Name: Loren M. Starr Title: Senior Managing Director and Chief Financial Officer
	GEM ACQUISITION CORP. By: /s/ Loren M. Starr Name: Loren M. Starr Title: Chief Executive Officer and Chief Financial Officer
	GEM ACQUISITION TWO CORP. By: /s/ Loren M. Starr Name: Loren M. Starr Title: Chief Executive Officer and Chief Financial Officer
	MM ASSET MANAGEMENT HOLDING LLC By: /s/ Elizabeth Ward Name: Elizabeth Ward Title: Executive Vice President
	OPPENHEIMER ACQUISITION CORP. By: /s/ Arthur P. Steinmetz Name: Arthur P. Steinmetz Title: President and Chief Executive Officer

Exhibit 31.1

Certification Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Martin L. Flanagan, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Invesco Ltd.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



April 25, 2019		/s/ MARTIN L. FLANAGAN
		Martin L. Flanagan
		President and Chief Executive Officer

Exhibit 31.2

Certification Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Loren M. Starr, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Invesco Ltd.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



April 25, 2019		/s/ LOREN M. STARR
		Loren M. Starr
		Senior Managing Director and Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF MARTIN L. FLANAGAN

PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with Invesco Ltd.'s (the “Company”) Quarterly Report on Form 10-Q for the period ended March 31, 2019 (the “Report”), I, Martin L. Flanagan, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:


1.	the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and


2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



April 25, 2019		/s/ MARTIN L. FLANAGAN
		Martin L. Flanagan
		President and Chief Executive Officer

Exhibit 32.2

CERTIFICATION OF LOREN M. STARR

PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with Invesco Ltd.'s (the “Company”) Quarterly Report on Form 10-Q for the period ended March 31, 2019 (the “Report”), I, Loren M. Starr, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:


1.	the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and


2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



April 25, 2019		/s/ LOREN M. STARR
		Loren M. Starr
		Senior Managing Director and Chief Financial Officer