þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Bermuda | 98-0557567 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) | |
1555 Peachtree Street, N.E., Suite 1800, Atlanta, GA | 30309 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of Each Class | Name of Exchange on Which Registered | |
Common Shares, $0.20 par value per share | New York Stock Exchange |
Large accelerated filer
þ
|
Accelerated filer o |
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
Page | ||||||||
PART I Financial Information
|
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3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
31 | ||||||||
60 | ||||||||
61 | ||||||||
|
||||||||
62 | ||||||||
62 | ||||||||
62 | ||||||||
62 | ||||||||
62 | ||||||||
63 | ||||||||
64 | ||||||||
EX=10.1 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-32.2 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
2
As of | ||||||||
$ in millions, except share data | March 31, 2011 | December 31, 2010 | ||||||
ASSETS
|
||||||||
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
471.9 | 740.5 | ||||||
Cash and cash equivalents of consolidated investment products
|
656.8 | 636.7 | ||||||
Unsettled fund receivables
|
826.4 | 513.4 | ||||||
Accounts receivable
|
478.1 | 424.7 | ||||||
Accounts receivable of consolidated investment products
|
208.2 | 158.8 | ||||||
Investments
|
344.2 | 308.8 | ||||||
Prepaid assets
|
64.0 | 64.0 | ||||||
Other current assets
|
109.1 | 101.8 | ||||||
Deferred tax asset, net
|
29.0 | 30.4 | ||||||
Assets held for policyholders
|
1,341.1 | 1,295.4 | ||||||
|
||||||||
Total current assets
|
4,528.8 | 4,274.5 | ||||||
Non-current assets:
|
||||||||
Investments
|
197.5 | 164.4 | ||||||
Investments of consolidated investment products
|
7,522.2 | 7,206.0 | ||||||
Security deposit assets and receivables
|
140.3 | 146.3 | ||||||
Other non-current assets
|
27.2 | 20.9 | ||||||
Deferred sales commissions
|
43.9 | 42.2 | ||||||
Property and equipment, net
|
276.1 | 272.4 | ||||||
Intangible assets, net
|
1,329.8 | 1,337.2 | ||||||
Goodwill
|
7,072.8 | 6,980.2 | ||||||
|
||||||||
Total non-current assets
|
16,609.8 | 16,169.6 | ||||||
|
||||||||
Total assets
|
21,138.6 | 20,444.1 | ||||||
|
||||||||
|
||||||||
LIABILITIES AND EQUITY
|
||||||||
|
||||||||
Current liabilities:
|
||||||||
Unsettled fund payables
|
808.2 | 504.8 | ||||||
Income taxes payable
|
53.9 | 72.2 | ||||||
Other current liabilities
|
647.0 | 905.7 | ||||||
Other current liabilities of consolidated investment products
|
572.9 | 486.4 | ||||||
Policyholder payables
|
1,341.1 | 1,295.4 | ||||||
|
||||||||
Total current liabilities
|
3,423.1 | 3,264.5 | ||||||
Non-current liabilities:
|
||||||||
Long-term debt
|
1,332.7 | 1,315.7 | ||||||
Long-term debt of consolidated investment products
|
6,291.0 | 5,865.4 | ||||||
Deferred tax liabilities, net
|
267.9 | 229.0 | ||||||
Security deposits payable
|
140.3 | 146.3 | ||||||
Other non-current liabilities
|
270.4 | 262.3 | ||||||
|
||||||||
Total non-current liabilities
|
8,302.3 | 7,818.7 | ||||||
|
||||||||
Total liabilities
|
11,725.4 | 11,083.2 | ||||||
|
||||||||
Commitments and contingencies (See Note 10)
|
||||||||
Equity:
|
||||||||
Equity attributable to common shareholders:
|
||||||||
Common shares ($0.20 par value; 1,050.0 million authorized; 490.4 million
shares issued as of March 31, 2011 and December 31, 2010)
|
98.1 | 98.1 | ||||||
Additional paid-in-capital
|
6,123.3 | 6,262.6 | ||||||
Treasury shares
|
(922.9 | ) | (991.5 | ) | ||||
Retained earnings
|
2,030.3 | 1,904.4 | ||||||
Retained earnings appropriated for investors in consolidated investment products
|
389.1 | 495.5 | ||||||
Accumulated other comprehensive income, net of tax
|
615.7 | 495.5 | ||||||
|
||||||||
Total equity attributable to common shareholders
|
8,333.6 | 8,264.6 | ||||||
Equity attributable to noncontrolling interests in consolidated entities
|
1,079.6 | 1,096.3 | ||||||
|
||||||||
Total equity
|
9,413.2 | 9,360.9 | ||||||
|
||||||||
Total liabilities and equity
|
21,138.6 | 20,444.1 | ||||||
|
3
Three months Ended | ||||||||
March 31, | ||||||||
$ in millions, except per share data | 2011 | 2010 | ||||||
Operating revenues:
|
||||||||
Investment management fees
|
792.3 | 593.5 | ||||||
Service and distribution fees
|
198.7 | 112.5 | ||||||
Performance fees
|
3.8 | 1.4 | ||||||
Other
|
32.5 | 11.7 | ||||||
|
||||||||
Total operating revenues
|
1,027.3 | 719.1 | ||||||
|
||||||||
|
||||||||
Operating expenses:
|
||||||||
Employee compensation
|
305.9 | 237.6 | ||||||
Third-party distribution, service and advisory
|
297.0 | 195.6 | ||||||
Marketing
|
53.2 | 28.3 | ||||||
Property, office and technology
|
64.0 | 53.5 | ||||||
General and administrative
|
73.6 | 50.0 | ||||||
Transaction and integration
|
7.9 | 17.2 | ||||||
|
||||||||
Total operating expenses
|
801.6 | 582.2 | ||||||
|
||||||||
|
||||||||
Operating income
|
225.7 | 136.9 | ||||||
|
||||||||
|
||||||||
Other income/(expense):
|
||||||||
Equity in earnings of unconsolidated affiliates
|
6.7 | 5.8 | ||||||
Interest and dividend income
|
2.1 | 1.6 | ||||||
Interest income of consolidated investment products
|
74.2 | 52.5 | ||||||
Gains/(losses) of consolidated investment products, net
|
(85.5 | ) | 103.1 | |||||
Interest expense
|
(16.2 | ) | (12.4 | ) | ||||
Interest expense of consolidated investment products
|
(40.0 | ) | (20.8 | ) | ||||
Other gains and losses, net
|
7.9 | (2.1 | ) | |||||
|
||||||||
Income before income taxes, including gains and losses attributable to noncontrolling interests
|
174.9 | 264.6 | ||||||
Income tax provision
|
(75.6 | ) | (50.1 | ) | ||||
|
||||||||
Net income, including gains and losses attributable to noncontrolling interests
|
99.3 | 214.5 | ||||||
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net
|
78.2 | (119.5 | ) | |||||
|
||||||||
Net income attributable to common shareholders
|
177.5 | 95.0 | ||||||
|
||||||||
|
||||||||
Earnings per share:
|
||||||||
basic
|
$ | 0.38 | $ | 0.22 | ||||
diluted
|
$ | 0.38 | $ | 0.21 | ||||
Dividends declared per share
|
$ | 0.1100 | $ | 0.1025 |
4
Three months ended March 31, | ||||||||
$ in millions | 2011 | 2010 | ||||||
Operating activities:
|
||||||||
Net income, including losses attributable to noncontrolling interests of
$78.2 million during the three months ended March 31, 2011 (gains of $119.5
million during the three months ended March
31, 2010
)
|
99.3 | 214.5 | ||||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Amortization and depreciation
|
27.9 | 18.3 | ||||||
Share-based compensation expense
|
26.3 | 24.2 | ||||||
Purchase of trading investments
|
(2,891.8 | ) | (7.0 | ) | ||||
Proceeds from sale of trading investments
|
2,860.4 | 39.7 | ||||||
Other gains and losses, net
|
(7.9 | ) | 2.1 | |||||
(Gains)/losses of consolidated investment products, net
|
85.5 | (103.1 | ) | |||||
Tax benefit from share-based compensation
|
48.7 | 22.3 | ||||||
Excess tax benefits from share-based compensation
|
(13.0 | ) | (6.8 | ) | ||||
Equity in earnings of unconsolidated affiliates
|
(6.7 | ) | (5.8 | ) | ||||
Dividends from unconsolidated affiliates
|
1.5 | 1.2 | ||||||
Changes in operating assets and liabilities:
|
||||||||
(Increase)/decrease in cash held by consolidated investment products
|
(13.4 | ) | (116.1 | ) | ||||
(Increase)/decrease in receivables
|
(378.7 | ) | (449.1 | ) | ||||
Increase/(decrease) in payables
|
56.8 | 188.6 | ||||||
|
||||||||
Net cash used in operating activities
|
(105.1 | ) | (177.0 | ) | ||||
|
||||||||
|
||||||||
Investing activities:
|
||||||||
Purchase of property and equipment
|
(20.8 | ) | (15.5 | ) | ||||
Purchase of available-for-sale investments
|
(9.3 | ) | (9.8 | ) | ||||
Proceeds from sale of available-for-sale investments
|
16.3 | 7.0 | ||||||
Purchase of investments by consolidated investment products
|
(802.0 | ) | (325.4 | ) | ||||
Proceeds from sale of investments by consolidated investment products
|
844.9 | 453.1 | ||||||
Returns of capital in investments of consolidated investment products
|
53.0 | 23.2 | ||||||
Purchase of other investments
|
(40.3 | ) | (22.0 | ) | ||||
Proceeds from sale of other investments
|
9.2 | 9.5 | ||||||
Returns of capital and distributions from equity method investments
|
2.4 | 14.0 | ||||||
Acquisition of businesses
|
(14.9 | ) | | |||||
Acquisition earn-out payments
|
(5.1 | ) | | |||||
|
||||||||
Net cash provided by investing activities
|
33.4 | 134.1 | ||||||
|
||||||||
|
||||||||
Financing activities:
|
||||||||
Proceeds from exercises of share options
|
8.7 | 3.7 | ||||||
Purchases of treasury shares
|
(53.1 | ) | | |||||
Dividends paid
|
(51.6 | ) | (44.8 | ) | ||||
Excess tax benefits from share-based compensation
|
13.0 | 6.8 | ||||||
Capital invested into consolidated investment products
|
9.7 | 0.8 | ||||||
Capital distributed by consolidated investment products
|
(53.8 | ) | (27.5 | ) | ||||
Repayments of debt of consolidated investment products
|
(98.7 | ) | (48.3 | ) | ||||
Net borrowings/(repayments) under credit facility
|
17.0 | | ||||||
|
||||||||
Net cash used in financing activities
|
(208.8 | ) | (109.3 | ) | ||||
|
||||||||
|
||||||||
(Decrease)/increase in cash and cash equivalents
|
(280.5 | ) | (152.2 | ) | ||||
Foreign exchange movement on cash and cash equivalents
|
11.9 | (12.8 | ) | |||||
Cash and cash equivalents, beginning of period
|
740.5 | 762.0 | ||||||
|
||||||||
Cash and cash equivalents, end of period
|
471.9 | 597.0 | ||||||
|
||||||||
|
||||||||
Supplemental Cash Flow Information:
|
||||||||
Interest paid
|
(12.0 | ) | (9.6 | ) | ||||
Interest received
|
1.4 | 1.6 | ||||||
Taxes paid
|
(41.7 | ) | (34.8 | ) |
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
Equity Attributable to Common Shareholders
Retained Earnings
Appropriated for
Total Equity
Noncontrolling
Additional
Investors in
Accumulated Other
Attributable to
Interests in
Common
Paid-in-
Treasury
Retained
Consolidated
Comprehensive
Common
Consolidated
Total
$ in millions
Shares
Capital
Shares
Earnings
Investment Products
Income
Shareholders
Entities
Equity
98.1
6,262.6
(991.5
)
1,904.4
495.5
495.5
8,264.6
1,096.3
9,360.9
177.5
177.5
(78.2
)
99.3
111.1
111.1
9.6
120.7
10.0
10.0
10.0
1.2
1.2
1.2
0.3
0.3
0.3
(2.4
)
(2.4
)
(2.4
)
297.7
(68.6
)
229.1
(116.0
)
(116.0
)
116.0
9.6
9.6
(9.6
)
(54.5
)
(54.5
)
(51.6
)
(51.6
)
(51.6
)
26.3
26.3
26.3
(173.2
)
173.2
(5.4
)
14.1
8.7
8.7
13.0
13.0
13.0
(118.7
)
(118.7
)
(118.7
)
98.1
6,123.3
(922.9
)
2,030.3
389.1
615.7
8,333.6
1,079.6
9,413.2
Equity Attributable to Common Shareholders
Retained Earnings
Appropriated for
Total Equity
Non-Controlling
Additional
Investors in
Accumulated Other
Attributable to
Interests in
Common
Paid-in-
Treasury
Retained
Consolidated
Comprehensive
Common
Consolidated
Total
$ in millions
Shares
Capital
Shares
Earnings
Investment Products
Income
Shareholders
Entities
Equity
91.9
5,688.4
(892.4
)
1,631.4
393.6
6,912.9
707.9
7,620.8
5.2
274.3
(5.2
)
274.3
274.3
91.9
5,688.4
(892.4
)
1,636.6
274.3
388.4
7,187.2
707.9
7,895.1
95.0
95.0
119.5
214.5
(57.4
)
(57.4
)
5.1
(52.3
)
5.3
5.3
5.3
6.0
6.0
6.0
(1.8
)
(1.8
)
(1.8
)
47.1
124.6
171.7
104.4
104.4
(104.4
)
5.1
5.1
(5.1
)
(25.1
)
(25.1
)
(44.8
)
(44.8
)
(44.8
)
24.2
24.2
24.2
(56.9
)
56.9
(10.0
)
13.9
3.9
3.9
6.8
6.8
6.8
(30.9
)
(30.9
)
(30.9
)
91.9
5,652.5
(852.5
)
1,686.8
383.8
340.5
7,303.0
697.9
8,000.9
Table of Contents
Table of Contents
March 31, 2011
December 31, 2010
Footnote
Carrying
Carrying
$ in millions
Reference
Value
Fair Value
Value
Fair Value
471.9
471.9
740.5
740.5
3
97.9
97.9
100.0
100.0
1,341.1
1,341.1
1,295.4
1,295.4
3
218.6
218.6
180.6
180.6
3
27.9
27.9
28.2
28.2
10, 11
(1.0
)
(1.0
)
(2.0
)
(2.0
)
(1,341.1
)
(1,341.1
)
(1,295.4
)
(1,295.4
)
(7.4
)
(7.4
)
(0.7
)
(0.7
)
(0.1
)
(0.1
)
(18.5
)
(18.5
)
(18.9
)
(18.9
)
4
(1,332.7
)
(1,378.9
)
(1,315.7
)
(1,339.3
)
*
These financial instruments are not measured at fair value on a
recurring basis. See the indicated footnotes 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.
Table of Contents
Investments related to deferred compensation plans
Investments related to deferred compensation plans are primarily invested in affiliated
funds that are held to hedge economically current and non-current deferred compensation
liabilities. Investments related to deferred compensation plans are valued under the market
approach through the use of quoted prices in an active market and are classified within
level 1 of the valuation hierarchy.
UIT-related equity and debt securities
At March 31, 2011, UIT-related equity and debt securities consisted of investments in
corporate stock, UITs, U.S. state and political subdivisions. Each is discussed more fully
below.
o
Corporate stock
The company temporarily holds investments in corporate stock for purposes of
creating a UIT. Corporate stocks are valued under the market approach through use of
quoted prices on an exchange. To the extent these securities are actively traded,
valuation adjustments are not applied and they are categorized within Level 1 of the
valuation hierarchy; otherwise, they are categorized in Level 2.
o
UITs
The company may hold units of its sponsored UITs at period-end for sale in the
primary market or secondary market. Equity UITs are valued under the market approach
through use of quoted prices on an exchange. Fixed income UITs are valued using
recently executed transaction prices, market price quotations (where observable),
bond spreads, or credit default swap spreads. The spread data used is for the same
maturities as the underlying bonds. If the spread data does not reference the
issuers, then data that references comparable issuers is used. When observable price
quotations are not available, fair value is determined based on cash flow models
with yield curves, bond or single name credit default spreads, and recovery rates
based on collateral value as key inputs. Depending on the nature of the inputs,
these investments are categorized as Level 1, 2, or 3.
o
U.S. state and political subdivision securities
U.S. state and political subdivision (collectively municipal) securities are
valued using recently executed transaction prices, market price quotations (where
observable), bond spreads, or credit default swap spreads. The spread data used is
for the same maturities as the underlying bonds. If the spread data does not
reference the issuers, then data that references comparable issuers is used. When
observable price quotations are not available, fair value is determined based on
cash flow models with yield curves, bond or single name credit default spreads, and
recovery rates based on collateral value as key inputs. Depending on the nature of
the inputs, these investments are categorized as Level 1, 2, or 3.
Table of Contents
As of March 31, 2011
Quoted Prices in
Active Markets for
Significant Other
Significant
Fair Value
Identical Assets
Observable Inputs
Unobservable Inputs
$ in millions
Measurements
(Level 1)
(Level 2)
(Level 3)
221.9
221.9
97.2
97.2
194.8
194.8
0.9
0.9
3.8
3.8
19.1
19.1
1,341.1
1,341.1
1,878.8
1,859.7
19.1
0.7
0.7
1,879.5
1,859.7
19.1
0.7
(1,341.1
)
(1,341.1
)
(0.3
)
(0.3
)
(7.1
)
(7.1
)
(1.4
)
(1.4
)
(17.1
)
(17.1
)
(1,367.0
)
(1,348.5
)
(18.5
)
*
Current foreign time deposits of $27.9 million and other current
investments of $0.5 million are excluded from this table. Other
non-current equity and other investments of $189.9 million and $6.9
million, respectively, are also excluded from this table. These
investments are not measured at fair value, in accordance with
applicable accounting standards.
Table of Contents
As of December 31, 2010
Quoted Prices in
Active Markets for
Significant Other
Significant
Fair Value
Identical Assets
Observable Inputs
Unobservable Inputs
$ in millions
Measurements
(Level 1)
(Level 2)
(Level 3)
316.4
316.4
99.5
99.5
165.5
165.5
1.2
1.2
4.0
4.0
9.9
9.9
1,295.4
1,295.4
1,891.9
1,882.0
9.9
0.5
0.5
1,892.4
1,882.0
9.9
0.5
(1,295.4
)
(1,295.4
)
(0.7
)
(0.7
)
(0.1
)
(0.1
)
(18.9
)
(18.9
)
(1,315.1
)
(1,296.2
)
(18.9
)
*
Current foreign time deposits of $28.2 million and other current
investments of $0.5 million are excluded from this table. Other
non-current equity and other investments of $156.9 million and $7.0
million, respectively, are also excluded from this table. These
investments are not measured at fair value, in accordance with
applicable accounting standards.
Table of Contents
Three months Ended
Three months Ended
March 31, 2011
March 31, 2010
$ in millions
CLO Investment
Note Payable
CLO Investment
0.5
(18.9
)
17.9
(17.4
)
0.5
(18.9
)
0.5
0.2
(0.1
)
0.4
0.7
(18.5
)
0.4
*
The company adopted guidance now encompassed in ASC Topic 810,
Consolidation, on January 1, 2010, resulting in the consolidation of
CLOs for which the company has an underlying investment of $32.0
million at March 31, 2011. The adjustment of $17.4 million in the
table above reflects the elimination of the companys equity interest
upon adoption.
**
Of these net unrealized gains and losses included in accumulated other
comprehensive income/(loss), $0.2 million for the three months ended
March 31, 2011 is attributed to the change in unrealized gains and
losses related to assets still held at March 31, 2011. Of these net
unrealized gains and losses included in earnings, $0.4 million for the
three months ended March 31, 2011 is attributed to the change in
unrealized gains and losses related to the note payable still held at
March 31, 2011.
***
Prior to the adoption of guidance included in ASU 2010-06, discussed
in Note 1, Accounting Policies, purchases, sales, issuances, and
settlements were presented net. For the three months ended March 31,
2011, no purchase, sales, issuance, or settlement activity occurred
related to the note payable and CLO investment.
As of
March 31,
December 31,
$ in millions
2011
2010
97.2
99.5
194.8
165.5
23.8
15.1
27.9
28.2
0.5
0.5
344.2
308.8
Table of Contents
As of
March 31,
December 31,
$ in millions
2011
2010
0.7
0.5
189.9
156.9
6.9
7.0
197.5
164.4
For the Three months Ended
For the Three months Ended
March 31, 2011
March 31, 2010
Proceeds
Gross
Gross
Proceeds
Gross
Gross
from
Realized
Realized
from
Realized
Realized
$ in millions
Sales
Gains
Losses
Sales
Gains
Losses
16.2
3.3
(0.1
)
6.8
0.4
(0.5
)
0.1
0.2
$ in millions
Available-for-Sale
(Fair Value)
0.7
0.7
Table of Contents
Three months ended
Three months ended
In millions
March 31, 2011
March 31, 2010
0.8
18.8
(18.0
)
0.8
0.8
0.8
0.8
*
The company adopted guidance now encompassed in ASC Topic 810,
Consolidation, on January 1, 2010, resulting in the consolidation of
CLOs for which the company has an underlying investment of $32.0
million at March 31, 2011. Of the $18.8 million cumulative
credit-related OTTI balance at January 1, 2010, $18.0 million relates
to CLOs that were consolidated into the companys Condensed
Consolidated Balance Sheet, resulting in the elimination of our equity
interest.
Table of Contents
March 31, 2011
December 31, 2010
Carrying
Carrying
$ in millions
Value
Fair Value
Value
Fair Value
215.1
224.2
215.1
223.7
333.5
353.1
333.5
335.2
197.1
214.6
197.1
210.4
587.0
587.0
570.0
570.0
1,332.7
1,378.9
1,315.7
1,339.3
1,332.7
1,378.9
1,315.7
1,339.3
*
The companys Senior Note indentures contain certain restrictions on
mergers or consolidations. Beyond these items, there are no other
restrictive covenants in the indentures.
$ in millions
March 31, 2011
215.1
920.5
197.1
1,332.7
Table of Contents
Three months Ended
Three months Ended
In millions
March 31, 2011
March 31, 2010
490.4
459.5
490.4
459.5
(28.3
)
(23.2
)
462.1
436.3
Three months ended March 31, 2011
Three months ended March 31, 2010
Weighted Average
Weighted Average
Time-
Grant Date
Time-
Grant Date
Millions of shares, except fair values
Vested
Fair Value ($)
Vested
Fair Value ($)
17.4
17.25
11.6
15.24
5.4
26.81
6.7
19.61
(4.5
)
18.95
(2.7
)
14.37
18.3
20.13
15.6
17.26
Table of Contents
Three months ended March 31, 2011
Three months ended March 31, 2010
Weighted
Weighted
Average
Average
Grant Date
Grant Date
Time-
Performance-
Fair Value
Time-
Performance-
Fair Value
Vested
Vested
(£ Sterling)
Vested
Vested
(£ Sterling)
3.3
0.1
11.80
5.4
2.0
11.24
(1.4
)
12.02
(2.3
)
(0.1
)
11.94
(1.0
)
(0.5
)
8.89
1.0
11.47
4.4
0.1
11.83
Three months ended March 31, 2011
Three months ended March 31, 2010
Weighted Average
Weighted Average
Options
Exercise Price
Options
Exercise Price
(millions of shares)
(£ Sterling)
(millions of shares)
(£ Sterling)
10.7
13.85
16.4
14.99
(0.1
)
27.08
(0.3
)
20.24
(0.6
)
8.49
(0.5
)
5.16
10.0
13.94
15.6
15.26
10.0
13.94
15.6
15.26
Table of Contents
Three months Ended March 31,
Retirement Plans
Medical Plan
$ in millions
2011
2010
2011
2010
(1.0
)
(1.0
)
(0.2
)
(0.1
)
(4.6
)
(3.9
)
(0.7
)
(0.7
)
3.7
3.4
0.1
0.1
(0.8
)
0.5
0.5
0.1
(0.7
)
(0.7
)
(0.9
)
(2.6
)
(2.2
)
(1.0
)
(1.1
)
Net Income
Attributable to
Common
Weighted Average
Per Share
In millions, except per share data
Shareholders
Number of Shares
Amount
$
177.5
469.9
$
0.38
2.2
$
177.5
472.1
$
0.38
$
95.0
439.0
$
0.22
3.4
$
95.0
442.4
$
0.21
Table of Contents
Table of Contents
Earn-outs relating to the Invesco PowerShares acquisition. A contingent payment of up to
$500.0 million could be due in October 2011, five years after the date of acquisition, based
on compound annual growth in management fees (as defined and adjusted pursuant to the
acquisition agreement) from an assumed base of $17.5 million at closing. The Year 5
management fees will be reduced by $50.0 million, for purposes of the calculation, since the
second contingent payment was earned. For a compound annual growth rate (CAGR) in Year 5
below 15%, no additional payment will be made. For a CAGR in Year 5 between 15% and 75%, $5.0
million for each CAGR point above 15%, for a maximum payment of $300.0 million for a 75%
CAGR. For a CAGR in Year 5 between 75% and 100%, $300.0 million, plus an additional $8.0
million for each CAGR point above 75%, for a maximum total payment of $500.0 million for a
100% CAGR.
Earn-outs relating to the W.L. Ross & Co. acquisition. Contingent payments of up to $55.0
million are due each year for the five years following the October 2006 date of acquisition
based on the size and number of future fund launches in which W.L. Ross & Co. is integrally
involved.
Table of Contents
Table of Contents
Companys Maximum
$ in millions
Footnote Reference
Carrying Value
Risk of Loss
3
0.7
0.7
42.7
42.7
34.0
34.0
10
(1.0
)
36.0
113.4
*
As of March 31, 2011, the committed support under these agreements was
$36.0 million with an internal approval mechanism to increase the
maximum possible support to $66.0 million at the option of the
company.
$ in millions
CLOs - VIEs
238.5
5,425.8
5,664.3
137.9
5,252.1
5,390.0
274.3
5,664.3
Table of Contents
Before
Other
$ in millions
Consolidation
(1)
CLOsVIEs
VIEs
VOEs
Adjustments
(2)
Total
3,670.2
762.6
1.0
136.6
(41.6
)
4,528.8
9,159.1
6,538.0
52.4
931.8
(71.5
)
16,609.8
12,829.3
7,300.6
53.4
1,068.4
(113.1
)
21,138.6
2,868.9
588.4
0.6
6.8
(41.6
)
3,423.1
6,323.1
(32.1
)
6,291.0
2,011.3
2,011.3
4,880.2
6,911.5
0.6
6.8
(73.7
)
11,725.4
389.1
389.1
7,944.4
0.1
39.4
(39.4
)
7,944.5
4.7
52.7
1,022.2
1,079.6
12,829.3
7,300.6
53.4
1,068.4
(113.1
)
21,138.6
$ in millions
Before
Consolidation
(1)
CLOsVIEs
Other
VIEs
VOEs
Adjustments
(2)
Total
3,480.0
679.3
3.7
133.8
(22.3
)
4,274.5
9,025.1
6,204.6
59.6
941.3
(61.0
)
16,169.6
12,505.1
6,883.9
63.3
1075.1
(83.3
)
20,444.1
2,777.9
500.2
0.9
7.8
(22.3
)
3,264.5
5,888.2
(22.8
)
5,865.4
1,953.3
1,953.3
4,731.2
6,388.4
0.9
7.8
(45.1
)
11,083.2
495.5
495.5
7,769.1
0.1
38.1
(38.2
)
7,769.1
4.8
62.3
1,029.2
1,096.3
12,505.1
6,883.9
63.3
1,075.1
(83.3
)
20,444.1
(1)
The Before Consolidation column includes Invescos equity interest in
the investment products subsequently consolidated, accounted for as
equity method and available-for-sale investments.
(2)
Adjustments include the elimination of intercompany transactions
between the company and its consolidated investment products,
primarily the elimination of the companys equity at risk recorded as
investments by the company (before consolidation) against either the
equity (private equity and real estate partnership funds) or debt
(CLOs) of the consolidated investment products.
Table of Contents
Before
Other
$ in millions
Consolidation
(1)
CLOsVIEs
VIEs
VOEs
Adjustments
(1)(2)
Total
1,038.4
(11.1
)
1,027.3
797.9
12.2
0.3
2.3
(11.1
)
801.6
240.5
(12.2
)
(0.3
)
(2.3
)
225.7
7.9
(1.2
)
6.7
3.3
74.2
(1.2
)
76.3
7.9
(136.8
)
0.3
41.1
9.9
(77.6
)
(16.2
)
(41.2
)
1.2
(56.2
)
243.4
(116.0
)
38.8
8.7
174.9
(75.6
)
(75.6
)
167.8
(116.0
)
38.8
8.7
99.3
0.1
116.0
(37.9
)
78.2
167.9
0.9
8.7
177.5
Before
Other
$ in millions
Consolidation
(1)
CLOsVIEs
VIEs
VOEs
Adjustments
(1)(2)
Total
729.5
0.2
(10.6
)
719.1
579.0
11.0
0.4
2.4
(10.6
)
582.2
150.5
(11.0
)
(0.4
)
(2.2
)
136.9
6.0
(0.2
)
5.8
1.6
53.1
(0.6
)
54.1
(2.1
)
83.7
3.2
14.8
1.4
101.0
(12.4
)
(21.4
)
0.6
(33.2
)
143.6
104.4
2.8
12.6
1.2
264.6
(50.1
)
(50.1
)
93.5
104.4
2.8
12.6
1.2
214.5
(0.1
)
(104.4
)
(2.8
)
(12.2
)
(119.5
)
93.4
0.4
1.2
95.0
(1)
The Before Consolidation column includes Invescos equity interest in
the investment products accounted for as equity method (private equity
and real estate partnership funds) and available-for-sale investments
(CLOs). Upon consolidation of the CLOs, the companys and the CLOs
accounting policies were effectively aligned, resulting in the
reclassification of the companys gain for the three months ended
March 31, 2011 of $9.9 million (representing the increase in the
market value of the companys holding in the consolidated CLOs) from
other comprehensive income into other gains/losses (three months ended
March 31, 2010: $1.4 million). The companys gain on its investments
in the CLOs (before consolidation) eliminates with the companys share
of the offsetting loss on the CLOs debt. The net income arising from
consolidation of CLOs is therefore completely attributed to other
investors in these CLOs, as the companys share has been eliminated
through consolidation.
(2)
Adjustments include the elimination of intercompany transactions
between the company and its consolidated investment products,
primarily the elimination of management fees expensed by the funds and
recorded as operating revenues (before consolidation) by the company.
Table of Contents
As of March 31, 2011
Quoted Prices in
Active Markets for
Significant Other
Significant
Fair Value
Identical Assets
Observable Inputs
Unobservable
$ in millions
Measurements
(Level 1)
(Level 2)
Inputs (Level 3)
6,172.1
6,172.1
328.4
328.4
37.6
37.6
16.6
16.6
134.1
25.3
108.8
554.4
554.4
8.5
8.5
287.1
287.1
7,538.8
399.8
6,188.7
950.3
(6,291.0
)
(6,291.0
)
(6.1
)
(6.1
)
(6,297.1
)
(6.1
)
(6,291.0
)
As of December 31, 2010
Quoted Prices in
Active Markets for
Significant Other
Significant
Fair Value
Identical Assets
Observable Inputs
Unobservable
$ in millions
Measurements
(Level 1)
(Level 2)
Inputs (Level 3)
5,910.6
5,910.6
261.1
261.1
32.9
32.9
20.2
20.2
114.4
17.6
96.8
586.1
586.1
11.0
11.0
289.9
289.9
7,226.2
332.6
5,930.8
972.8
(5,865.4
)
(5,865.4
)
(6.6
)
(6.6
)
(5,872.0
)
(6.6
)
(5,865.4
)
Table of Contents
Three months Ended March 31, 2011
Three months Ended March 31, 2010
$ in millions
Level 3 Assets
Level 3 Liabilities
Level 3 Assets
Level 3 Liabilities
972.8
(5,865.4
)
667.1
(5,234.9
)
(64.3
)
99.2
(17.2
)
47.4
41.8
(380.9
)
15.6
(63.1
)
(143.9
)
131.5
950.3
(6,291.0
)
665.5
(5,119.1
)
*
Prior to the adoption of guidance included in ASU 2010-06, discussed
in Note 1, Accounting Policies, purchases and sales, were presented
net. For the three months ended March 31, 2011, the consolidated funds
recorded $9.2 million and $73.5 million related to purchase and sale
activity, respectively, of Level 3 assets and $99.2 million related to
the settlement of Level 3 liabilities.
**
Included in gains and losses of consolidated investment products in
the Condensed Consolidated Statement of Income for the three months
ended March 31, 2011 are $17.7 million in net unrealized gains
attributable to investments still held at March 31, 2011 by
consolidated investment products (three months ended March 31, 2010:
$18.6 million attributable to investments still held at March 31,
2010).
Table of Contents
Table of Contents
Table of Contents
Non-
$ in millions
Guarantors
Guarantors
Issuer
Parent
Adjustments
Consolidated
1,341.1
1,341.1
185.3
2,965.0
2.9
34.5
3,187.7
185.3
4,306.1
2.9
34.5
4,528.8
2,321.7
4,297.3
453.8
7,072.8
1,240.8
8.2
4,887.1
8,376.3
(14,512.4
)
553.5
8,976.3
4.4
2.8
9,537.0
4,301.3
17,587.9
5,348.2
8,413.6
(14,512.4
)
21,138.6
1,341.1
1,341.1
86.6
1,977.0
17.6
0.8
2,082.0
86.6
3,318.1
17.6
0.8
3,423.1
1,106.4
(1,227.3
)
41.7
79.2
628.4
6,928.2
745.7
8,302.3
1,821.4
9,019.0
805.0
80.0
11,725.4
2,479.9
7,489.3
4,543.2
8,333.6
(14,512.4
)
8,333.6
1,079.6
1,079.6
2,479.9
8,568.9
4,543.2
8,333.6
(14,512.4
)
9,413.2
4,301.3
17,587.9
5,348.2
8,413.6
(14,512.4
)
21,138.6
Non-
$ in millions
Guarantors
Guarantors
Issuer
Parent
Adjustments
Consolidated
1,295.4
1,295.4
175.7
2,766.7
3.0
33.7
2,979.1
175.7
4,062.1
3.0
33.7
4,274.5
2,322.9
4,216.5
440.8
6,980.2
1,333.8
5.5
4,766.1
8,400.6
(14,506.0
)
557.0
8,625.0
4.5
2.9
9,189.4
4,389.4
16,909.1
5,214.4
8,437.2
(14,506.0
)
20,444.1
1,295.4
1,295.4
112.5
1,850.4
5.5
0.7
1,969.1
112.5
3,145.8
5.5
0.7
3,264.5
1,299.8
(1,449.6
)
(22.1
)
171.9
597.0
6,476.0
745.7
7,818.7
2,009.3
8,172.2
729.1
172.6
11,083.2
2,380.1
7,640.6
4,485.3
8,264.6
(14,506.0
)
8,264.6
1,096.3
1,096.3
2,380.1
8,736.9
4,485.3
8,264.6
(14,506.0
)
9,360.9
4,389.4
16,909.1
5,214.4
8,437.2
(14,506.0
)
20,444.1
Table of Contents
Non-
$ in millions
Guarantors
Guarantors
Issuer
Parent
Adjustments
Consolidated
330.2
697.1
1,027.3
206.3
590.8
(0.2
)
4.7
801.6
123.9
106.3
0.2
(4.7
)
225.7
(1.7
)
8.2
122.3
181.8
(303.9
)
6.7
(33.0
)
(24.5
)
(0.4
)
0.4
(57.5
)
89.2
90.0
122.1
177.5
(303.9
)
174.9
(30.1
)
(34.2
)
(11.3
)
(75.6
)
59.1
55.8
110.8
177.5
(303.9
)
99.3
78.2
78.2
59.1
134.0
110.8
177.5
(303.9
)
177.5
Non-
$ in millions
Guarantors
Guarantors
Issuer
Parent
Adjustments
Consolidated
181.2
537.9
719.1
140.4
438.7
0.6
2.5
582.2
40.8
99.2
(0.6
)
(2.5
)
136.9
(0.4
)
6.0
49.4
99.9
(149.1
)
5.8
(18.0
)
156.9
(14.6
)
(2.4
)
121.9
22.4
262.1
34.2
95.0
(149.1
)
264.6
(17.4
)
(36.8
)
4.1
(50.1
)
5.0
225.3
38.3
95.0
(149.1
)
214.5
(119.5
)
(119.5
)
5.0
105.8
38.3
95.0
(149.1
)
95.0
Non-
$ in millions
Guarantors
Guarantors
Issuer
Parent
Adjustments
Consolidated
(7.7
)
(107.1
)
64.6
120.9
(175.8
)
(105.1
)
(10.0
)
133.5
(64.5
)
(25.6
)
33.4
17.0
(305.6
)
(96.0
)
175.8
(208.8
)
(0.7
)
(279.2
)
0.1
(0.7
)
(280.5
)
Non-
$ in millions
Guarantors
Guarantors
Issuer
Parent
Adjustments
Consolidated
(7.3
)
(291.4
)
59.4
78.6
(16.3
)
(177.0
)
(26.9
)
283.0
(59.3
)
(62.7
)
134.1
(124.3
)
(1.3
)
16.3
(109.3
)
(34.2
)
(132.7
)
0.1
14.6
(152.2
)
Table of Contents
Table of Contents
Three months ended March 31,
Index
2011
2010
5.4
%
4.9
%
0.1
%
4.9
%
(4.6
)%
5.2
%
2.7
%
0.2
%
Results of Operations (for the three months ended March 31, 2011 compared with the
three months ended March 31, 2010);
Schedule of Non-GAAP Information;
Balance Sheet Discussion; and
Liquidity and Capital Resources.
Table of Contents
Three months ended March 31,
U.S. GAAP Financial Measures Summary
2011
2010
$
1,027.3m
$
719.1m
22.0
%
19.0
%
$
177.5m
$
95.0m
$
0.38
$
0.21
$
630.2
$
449.6
Three months ended March 31,
Non-GAAP Financial Measures Summary
2011
2010
$
751.8m
$
544.4m
36.2
%
33.6
%
$
191.7m
$
120.0m
$
0.41
$
0.27
$
630.2
$
449.6
(1)
Net revenues are operating revenues less third-party distribution,
service and advisory expenses, plus our proportional share of the net
revenues of our joint venture investments, plus management fees earned
from, less other revenue recorded by, consolidated investment
products. See Schedule of Non-GAAP Information for the
reconciliation of operating revenues to net revenues.
(2)
Adjusted operating margin is adjusted operating income divided by net
revenues. Adjusted operating income includes operating income plus our
proportional share of the operating income of our joint venture
investments, transaction and integration charges, amortization of
acquisition-related prepaid compensation and other intangibles,
compensation expense related to market valuation changes in deferred
compensation plans, the operating income impact of the consolidation
of investment products, and other reconciling items. See Schedule of
Non-GAAP Information for the reconciliation of operating income to
adjusted operating income.
(3)
Adjusted net income is net income attributable to common shareholders
adjusted to add back transaction and integration charges, amortization
of acquisition-related prepaid compensation and other intangibles, and
the tax cash flow benefits resulting from tax amortization of goodwill
and indefinite-lived intangible assets. Adjusted net income excludes
the net income of consolidated investment products, and the net income
impact of deferred compensation plans and other reconciling items. By
calculation, adjusted EPS is adjusted net income divided by the
weighted average number of shares outstanding (for diluted EPS). See
Schedule of Non-GAAP Information for the reconciliation of net
income to adjusted net income.
Table of Contents
Benchmark Comparison
Peer Group Comparison
% of AUM Ahead of
% of AUM In Top Half of
Benchmark
Peer Group
1yr
3yr
5yr
1yr
3yr
5yr
Equities
16
%
64
%
96
%
10
%
69
%
63
%
60
%
48
%
55
%
60
%
61
%
56
%
63
%
96
%
95
%
63
%
94
%
94
%
61
%
87
%
75
%
47
%
65
%
53
%
99
%
94
%
95
%
1
%
91
%
91
%
44
%
78
%
77
%
66
%
73
%
28
%
50
%
76
%
95
%
37
%
83
%
79
%
62
%
84
%
83
%
44
%
33
%
76
%
33
%
54
%
78
%
28
%
52
%
40
%
69
%
93
%
92
%
63
%
94
%
93
%
Balanced
43
%
80
%
82
%
34
%
78
%
72
%
Money Market
36
%
75
%
75
%
96
%
93
%
94
%
Fixed Income
53
%
43
%
41
%
67
%
38
%
60
%
82
%
83
%
86
%
89
%
86
%
87
%
Note:
AUM measured in the one-, three-, and five-year peer group rankings represents 60%, 60%, and
58% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one-, three-,
and five-year basis represents 73%, 71%, and 69% of total Invesco AUM, respectively, as of
3/31/11. Peer group rankings are sourced from a widely-used third party ranking agency in each
funds market (Lipper, Morningstar, Russell, Mercer, eVestment Alliance, SITCA) and
asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products
and preceding month-end for Australian retail funds due to their late release by third
parties. Rankings for the most representative fund in each GIPS composite are applied to all
products within each GIPS composite. Excludes Invesco PowerShares, W.L. Ross & Co., Invesco
Private Capital, non-discretionary direct real estate products and CLOs. Certain funds and
products were excluded from the analysis because of limited benchmark or peer group data. Had
these been available, results may have been different. These results are preliminary and
subject to revision. Performance assumes the reinvestment of dividends. Past performance is
not indicative of future results and may not reflect an investors experience.
Table of Contents
Post-
Previously
Reporting
$ in billions
Disclosed
Alignment
419.6
457.7
417.6
449.6
52.1bps
48.4bps
52.0bps
48.3bps
69.5bps
64.5bps
69.4bps
64.4bps
*
Net and gross revenue yield are defined in the paragraphs that follow this table.
Table of Contents
March 31, 2011
December 31, 2010
March 31, 2010
December 31, 2009
1.60
1.56
1.52
1.61
0.97
0.99
1.02
1.05
1.42
1.34
1.35
1.43
Table of Contents
AUM ex
AUM ex
ETF, UIT &
ETF, UIT &
ETF, UIT
ETF, UIT &
Total AUM
Passive
Passive
Total AUM
& Passive
Passive
$ in billions
2011
2011
2011
2010
2010
2010
616.5
535.7
80.8
459.5
406.5
53.0
48.0
29.0
19.0
32.1
19.6
12.5
(41.4
)
(30.5
)
(10.9
)
(28.5
)
(16.5
)
(12.0
)
6.6
(1.5
)
8.1
3.6
3.1
0.5
2.6
2.6
(10.6
)
(10.6
)
12.9
10.1
2.8
9.7
7.5
2.2
3.3
3.3
(4.5
)
(4.5
)
641.9
550.2
91.7
457.7
402.0
55.7
564.4
477.7
86.7
374.3
322.5
51.8
65.8
65.8
75.3
75.3
630.2
543.5
86.7
449.6
397.8
51.8
65.6 bps
74.3 bps
11.0 bps
64.5 bps
71.2 bps
14.0 bps
65.3 bps
74.1 bps
11.0 bps
64.4 bps
71.0 bps
14.0 bps
47.7 bps
53.6 bps
11.0 bps
48.4 bps
52.9 bps
14.0 bps
47.5 bps
53.3 bps
11.0 bps
48.3 bps
52.8 bps
14.0 bps
(1)
Gross revenue yield on AUM is equal to annualized total operating
revenues divided by average AUM, excluding joint venture (JV) AUM. Our
share of the average AUM in the three months ended March 31, 2011 for
our JVs in China was $3.5 billion (three months ended March 31, 2010:
$3.8 billion). It is appropriate to exclude the average AUM of our JVs
for purposes of computing gross revenue yield on AUM, because the
revenues resulting from these AUM are not presented in our operating
revenues. Under U.S. GAAP, our share of the pre-tax earnings of the
JVs is recorded as equity in earnings of unconsolidated affiliates on
our Condensed Consolidated Statements of Income.
(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.
Table of Contents
Private
Wealth
$ in billions
Total
Retail
Institutional
Management
616.5
378.1
221.4
17.0
48.0
36.5
10.7
0.8
(41.4
)
(32.4
)
(8.3
)
(0.7
)
6.6
4.1
2.4
0.1
2.6
2.6
12.9
11.3
1.3
0.3
3.3
2.7
0.6
641.9
396.2
228.3
17.4
459.5
239.1
205.2
15.2
32.1
24.6
6.7
0.8
(28.5
)
(23.9
)
(4.1
)
(0.5
)
3.6
0.7
2.6
0.3
(10.6
)
(10.6
)
9.7
7.5
2.1
0.1
(4.5
)
(3.7
)
(0.8
)
457.7
243.6
198.5
15.6
Private
Wealth
$ in billions
Total
Retail
Institutional
Management
80.8
70.6
10.2
19.0
15.4
3.6
(10.9
)
(10.7
)
(0.2
)
8.1
4.7
3.4
2.8
2.9
(0.1
)
91.7
78.2
13.5
53.0
47.9
5.1
12.5
12.5
(12.0
)
(12.0
)
0.5
0.5
2.2
1.2
1.0
55.7
49.6
6.1
See accompanying notes to these AUM tables on the following page.
Table of Contents
Fixed
Money
$ in billions
Total
Equity
Income
Balanced
Market
Alternatives
(4)
616.5
294.0
132.0
43.5
68.3
78.7
48.0
25.0
13.3
2.1
0.4
7.2
(41.4
)
(27.8
)
(6.7
)
(2.4
)
(0.4
)
(4.1
)
6.6
(2.8
)
6.6
(0.3
)
3.1
2.6
2.6
12.9
9.7
0.7
0.9
0.1
1.5
3.3
2.1
0.4
0.6
0.2
641.9
303.0
139.7
44.7
71.0
(5)
83.5
459.5
192.7
76.1
40.0
83.5
67.2
32.1
19.4
6.9
1.8
0.3
3.7
(28.5
)
(17.2
)
(4.5
)
(1.7
)
(0.6
)
(4.5
)
3.6
2.2
2.4
0.1
(0.3
)
(0.8
)
(10.6
)
(10.6
)
9.7
6.6
1.7
1.0
0.4
(4.5
)
(3.0
)
(0.8
)
(0.4
)
(0.3
)
457.7
198.5
79.4
40.7
72.6
66.5
Fixed
Money
$ in billions
Total
Equity
Income
Balanced
Market
Alternatives
(4)
80.8
42.8
19.8
18.2
19.0
11.2
4.5
3.3
(10.9
)
(8.8
)
(0.5
)
(1.6
)
8.1
2.4
4.0
1.7
2.8
2.1
(0.1
)
0.8
91.7
47.3
23.7
20.7
53.0
31.1
3.9
18.0
12.5
10.1
0.5
1.9
(12.0
)
(8.4
)
(0.3
)
(3.3
)
0.5
1.7
0.2
(1.4
)
2.2
1.5
0.4
0.3
55.7
34.3
4.5
16.9
Table of Contents
Continental
$ in billions
Total
U.S.
Canada
U.K.
Europe
Asia
616.5
415.4
27.9
92.1
35.3
45.8
48.0
33.5
0.7
3.5
4.8
5.5
(41.4
)
(26.6
)
(1.7
)
(4.3
)
(5.4
)
(3.4
)
6.6
6.9
(1.0
)
(0.8
)
(0.6
)
2.1
2.6
2.7
0.1
(0.3
)
0.1
12.9
10.2
0.6
1.0
0.8
0.3
3.3
0.6
2.2
0.7
(0.2
)
641.9
435.2
28.2
94.2
36.2
48.1
459.5
294.1
29.0
84.9
24.4
27.1
32.1
21.0
0.6
4.5
3.8
2.2
(28.5
)
(18.7
)
(1.7
)
(4.3
)
(2.1
)
(1.7
)
3.6
2.3
(1.1
)
0.2
1.7
0.5
(10.6
)
(11.6
)
(0.6
)
1.7
(0.1
)
9.7
5.6
0.5
3.9
(0.3
)
(4.5
)
0.8
(4.5
)
(0.8
)
457.7
290.4
29.2
83.9
27.0
27.2
Continental
$ in billions
Total
U.S.
Canada
U.K.
Europe
Asia
80.8
77.3
1.2
2.3
19.0
18.8
0.2
(10.9
)
(10.8
)
(0.1
)
8.1
8.0
0.1
2.8
2.7
0.1
91.7
88.0
1.4
2.3
53.0
50.2
1.1
1.7
12.5
12.5
(12.0
)
(12.0
)
0.5
0.5
2.2
2.2
55.7
52.9
1.1
1.7
(1)
Channel refers to the distribution channel from which the AUM originated. Retail AUM arose from client investments into
funds available to the public with shares or units. Institutional AUM originated from individual corporate clients,
endowments, foundations, government authorities, universities, or charities. Private Wealth Management AUM arose from high
net worth client investments.
(2)
The beginning balances were adjusted to reflect certain asset reclassifications, including the previously discussed AUM
reporting alignment to include ETF, UIT and passive AUM.
(3)
Asset classes are descriptive groupings of AUM by common type of underlying investments.
(4)
The alternatives asset class includes absolute return, real estate, commodities, currencies, financial structures, Global
Macro, REITS, private capital, and Risk Premia Capture.
(5)
Ending Money Market AUM includes $66.9 billion in institutional money market AUM and $4.1 billion in retail money market AUM.
(6)
Client domicile disclosure groups AUM by the domicile of the underlying clients.
Table of Contents
Table of Contents
Consolidated
Before
Investment
$ in millions
Consolidation
(1)
Products
Adjustments
(1)(2)
Total
1,038.4
(11.1
)
1,027.3
797.9
14.8
(11.1
)
801.6
240.5
(14.8
)
225.7
7.9
(1.2
)
6.7
3.3
74.2
(1.2
)
76.3
7.9
(95.4
)
9.9
(77.6
)
(16.2
)
(41.2
)
1.2
(56.2
)
243.4
(77.2
)
8.7
174.9
(75.6
)
(75.6
)
167.8
(77.2
)
8.7
99.3
0.1
78.1
78.2
167.9
0.9
8.7
177.5
Consolidated
Before
Investment
$ in millions
Consolidation
(1)
Products
Adjustments
(1)(2)
Total
729.5
0.2
(10.6
)
719.1
579.0
13.8
(10.6
)
582.2
150.5
(13.6
)
136.9
6.0
(0.2
)
5.8
1.6
53.1
(0.6
)
54.1
(2.1
)
101.7
1.4
101.0
(12.4
)
(21.4
)
0.6
(33.2
)
143.6
119.8
1.2
264.6
(50.1
)
(50.1
)
93.5
119.8
1.2
214.5
(0.1
)
(119.4
)
(119.5
)
93.4
0.4
1.2
95.0
(1)
The Before Consolidation column includes Invescos equity interest in
the investment products accounted for as equity method (private equity
and real estate partnership funds) and available-for-sale investments
(CLOs). Upon consolidation of the CLOs, the companys and the CLOs
accounting policies were effectively aligned, resulting in the
reclassification of the companys gain for the three months ended
March 31, 2011 of $9.9 million (representing the increase in the
market value of the companys holdings in the consolidated CLOs) from
other comprehensive income into other gains/losses (three months ended
March 31, 2010: $1.4 million). The companys gain on its investments
in the CLOs (before consolidation) eliminates with the companys share
of the offsetting loss on the CLOs debt. The net income arising from
consolidation of CLOs is therefore completely attributed to other
investors in these CLOs, as the companys share has been eliminated
through consolidation.
(2)
Adjustments include the elimination of intercompany transactions
between the company and its consolidated investment products,
primarily the elimination of management fees expensed by the funds and
recorded as operating revenues (before consolidation) by the company.
Table of Contents
Three months ended
March 31,
$ in millions
2011
2010
$ Change
% Change
792.3
593.5
198.8
33.5
%
198.7
112.5
86.2
76.6
%
3.8
1.4
2.4
N/A
32.5
11.7
20.8
N/A
1,027.3
719.1
308.2
42.9
%
(297.0
)
(195.6
)
(101.4
)
51.8
%
10.4
10.5
(0.1
)
(1.0
)%
11.1
10.6
0.5
4.7
%
(0.2
)
0.2
100.0
%
751.8
544.4
207.4
38.1
%
Table of Contents
Table of Contents
Three months ended
March 31,
$ in millions
2011
2010
$ Change
% Change
305.9
237.6
68.3
28.7
%
297.0
195.6
101.4
51.8
%
53.2
28.3
24.9
88.0
%
64.0
53.5
10.5
19.6
%
73.6
50.0
23.6
47.2
%
7.9
17.2
(9.3
)
(54.1
)%
801.6
582.2
219.4
37.7
%
Three months ended:
% of Total
% of
% of Total
% of
Operating
Operating
March 31,
Operating
Operating
$ in millions
March 31, 2011
Expenses
Revenues
2010
Expenses
Revenues
305.9
38.2
%
29.8
%
237.6
40.8
%
33.0
%
297.0
37.0
%
28.9
%
195.6
33.6
%
27.2
%
53.2
6.6
%
5.2
%
28.3
4.9
%
3.9
%
64.0
8.0
%
6.2
%
53.5
9.2
%
7.4
%
73.6
9.2
%
7.1
%
50.0
8.6
%
7.0
%
7.9
1.0
%
0.8
%
17.2
2.9
%
2.4
%
801.6
100.0
%
78.0
%
582.2
100.0
%
80.9
%
Table of Contents
Table of Contents
Three months ended
March 31,
$ in millions
2011
2010
$ Change
% Change
6.7
5.8
0.9
15.5
%
2.1
1.6
0.5
31.3
%
74.2
52.5
21.7
41.3
%
(85.5
)
103.1
(188.6
)
N/A
(16.2
)
(12.4
)
(3.8
)
30.6
%
(40.0
)
(20.8
)
(19.2
)
92.3
%
7.9
(2.1
)
10.0
N/A
(50.8
)
127.7
(178.5
)
N/A
Table of Contents
Table of Contents
Three months ended March 31,
$ in millions, except per share data
2011
2010
1,027.3
719.1
(297.0
)
(195.6
)
10.4
10.5
11.1
10.6
(0.2
)
751.8
544.4
225.7
136.9
5.2
5.3
7.9
17.2
5.0
5.0
9.0
3.1
4.1
1.9
14.8
13.6
0.4
272.1
183.0
22.0
%
19.0
%
36.2
%
33.6
%
177.5
95.0
5.0
15.3
5.0
5.0
7.8
3.0
(0.7
)
(0.3
)
6.4
3.6
(9.6
)
(1.6
)
0.3
191.7
120.0
472.1
442.4
$
0.38
$
0.21
$
0.41
$
0.27
*
Operating margin is equal to operating income divided by operating revenues.
**
Adjusted operating margin is equal to net operating income divided by net revenues.
***
Adjusted EPS is equal to adjusted net income divided by the weighted average
shares outstanding amount used in the calculation of diluted EPS.
Table of Contents
(1)
Third-party distribution, service and advisory expenses
Third-party distribution, service and advisory expenses include renewal commissions, management
fee rebates and distribution costs (12b-1) paid to brokers and independent financial advisors.
While the terms used for these types of expense 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 in the computation of net revenues (and by calculation, net revenue yield on AUM) and
the related computation of adjusted operating income (and by calculation, adjusted operating
margin) appropriately reflects the nature of these expenses as revenue-sharing activities, as
these costs are passed through to external parties who perform functions on behalf of the
companys 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 Invescos 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 companys performance relative to industry
competitors and within the company for capital allocation purposes.
(2)
Proportional share of net revenues and operating income from joint venture investments
The company has two joint venture investments in China. Enhancing our operations in China is one
effort that we believe could improve our competitive position over time. Accordingly, we believe
that it is appropriate to evaluate the contribution of our joint venture investments to the
operations of the business.
(3)
Consolidated investment products
See Part I, Item 1, Financial Statements, Note 11, Consolidated Investment Products for a
detailed analysis of the impact to the companys Condensed Consolidated Financial Statements
from the consolidation of investment products. 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)
Acquisition-related reconciling items
Acquisition-related adjustments include transaction and integration expenses and intangible
asset amortization related to acquired assets, amortization of prepaid compensation related to
the 2006 acquisition of W.L. Ross & Co., and tax cash flow benefits resulting from tax
amortization of goodwill and indefinite-lived intangible assets. These charges reflect the
legal, regulatory, advisory, valuation, integration-related employee incentive awards and other
professional or consulting fees, general and administrative costs, including travel costs
related to the transaction and the costs of temporary staff involved in executing the
transaction, and the post closing costs of integrating the acquired business into the companys
existing operations including incremental costs associated with achieving synergy savings.
Additionally, transaction and integration expenses include legal costs related to the defense of
auction rate preferred securities complaints raised in the pre-acquisition period with respect
to various closed-end funds included in the acquisition. See Part I, Item 1, Financial
Statements, Note 10, Commitments and Contingencies for additional information.
(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 by holding these
investments on its balance sheet. U.S. GAAP requires the appreciation (depreciation) in the
compensation liability to be expensed over the award vesting period in proportion to the vested
amount of the award as part of compensation expense. The full value of the investment
appreciation (depreciation) is immediately recorded below operating income in other gains and
losses. This creates a timing difference between the recognition of the compensation expense and
the investment gain or loss impacting net income attributable to common shareholders and diluted
EPS which will reverse over the life of the award and net to zero at the end of the multi-year
vesting period. During periods of high market volatility these timing differences impact
compensation expense, operating income and operating margin in a manner which, over the life of
the award, will ultimately be offset by gains and losses recorded below operating income on the
Consolidated Statements of Income. The non-GAAP measures exclude the mismatch created by
differing U.S. GAAP treatments of the market movement on the liability and the investments.
Table of Contents
Additionally, dividend income from investments held to hedge economically deferred compensation
plans is recorded as dividend income and as compensation expense on the companys Consolidated
Statements of Income on the record dates. This dividend income is passed through to the employee
participants in the plan and is not retained by the company. The non-GAAP measures exclude this
dividend income and related compensation expense.
(6)
Other reconciling items
Included within general and administrative expenses in the three months ended December 31, 2010
was a charge of $15.3 million relating to a levy from the U.K. Financial Services Compensation
Scheme. An additional $0.4 million charge has been recorded in the three months ended March 31,
2011 reflecting revised estimates of the levy. Assessments were levied upon all Financial
Services Authority (FSA)-registered investment management companies in proportion to their
eligible income (as defined by the FSA) to cover claims resulting from failures of
non-affiliated investment firms. The companys income tax provision includes tax benefits of
$0.1 million in the three months ended March 31, 2011 and $4.3 million in the three months ended
December 31, 2010 relating to this charge. Due to the unique character and magnitude of these
charges, the impact has been excluded in calculating the non-GAAP financial measures.
Table of Contents
Consolidated
Before
Investment
$ in millions
Consolidation
(1)
Products
Adjustments
(2)
Total
3,670.2
900.2
(41.6
)
4,528.8
9,159.1
7,522.2
(71.5
)
16,609.8
12,829.3
8,422.4
(113.1
)
21,138.6
2,868.9
595.8
(41.6
)
3,423.1
6,323.1
(32.1
)
6,291.0
2,011.3
2,011.3
4,880.2
6,918.9
(73.7
)
11,725.4
389.1
389.1
7,944.4
39.5
(39.4
)
7,944.5
4.7
1,074.9
1,079.6
12,829.3
8,422.4
(113.1
)
21,138.6
Consolidated
Before
Investment
$ in millions
Consolidation
(1)
Products
Adjustments
(2)
Total
3,480.0
816.8
(22.3
)
4,274.5
9,025.1
7,205.5
(61.0
)
16,169.6
12,505.1
8,022.3
(83.3
)
20,444.1
2,777.9
508.9
(22.3
)
3,264.5
5,888.2
(22.8
)
5,865.4
1,953.3
1,953.3
4731.2
6,397.1
(45.1
)
11,083.2
495.5
495.5
7,769.1
38.2
(38.2
)
7,769.1
4.8
1,091.5
1,096.3
12,505.1
8,022.3
(83.3
)
20,444.1
(1)
The Before Consolidation column includes Invescos equity interest
in the investment products, accounted for as equity method and
available-for-sale investments and does not include any other
adjustments related to non-GAAP financial measure presentation.
(2)
Adjustments include the elimination of intercompany transactions
between the company and its consolidated investment products,
primarily the elimination of the companys equity at risk recorded
as investments by the company (before consolidation) against
either the equity (private equity and real estate partnership
funds) or debt (CLOs) of the consolidated investment products.
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March 31,
December 31,
$ in millions
2011
2010
$ Change
% Change
471.9
740.5
(268.6
)
(36.3
)%
826.4
513.4
313.0
61.0
%
344.2
308.8
35.4
11.5
%
1,341.1
1,295.4
45.7
3.5
%
197.5
164.4
33.1
20.1
%
1,329.8
1,337.2
(7.4
)
(0.6
)%
7,072.8
6,980.2
92.6
1.3
%
1,341.1
1,295.4
45.7
3.5
%
1,332.7
1,315.7
17.0
1.3
%
8,333.6
8,264.6
69.0
0.8
%
1,079.6
1,096.3
(16.7
)
(1.5
)%
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Table of Contents
Consolidated
Before
Investment
$ in millions
Consolidation
Products
Adjustments
Total
167.8
(77.2
)
8.7
99.3
(31.4
)
(31.4
)
75.6
95.4
(8.7
)
162.3
(13.4
)
(13.4
)
(364.4
)
42.5
(321.9
)
(152.4
)
47.3
(105.1
)
95.9
95.9
(49.8
)
0.2
(49.6
)
28.5
(0.6
)
27.9
(40.8
)
(40.8
)
(62.1
)
95.9
(0.4
)
33.4
(143.2
)
0.4
(142.8
)
(66.0
)
(66.0
)
(66.0
)
(143.2
)
0.4
(208.8
)
(280.5
)
(280.5
)
11.9
11.9
740.5
740.5
471.9
471.9
Table of Contents
Consolidated
Before
Investment
$ in millions
Consolidation
Products
Adjustments
Total
93.5
121.2
(0.2
)
214.5
32.7
32.7
55.3
(103.1
)
0.2
(47.6
)
(116.1
)
(116.1
)
(282.6
)
22.1
(260.5
)
(101.1
)
(75.9
)
(177.0
)
150.9
150.9
(31.8
)
(31.8
)
30.5
30.5
(15.5
)
(15.5
)
(16.8
)
150.9
134.1
(75.0
)
(75.0
)
(34.3
)
(34.3
)
(34.3
)
(75.0
)
(109.3
)
(152.2
)
(152.2
)
(12.8
)
(12.8
)
762.0
762.0
597.0
597.0
net purchases of trading investments of $31.4 million. Trading investments are held to
provide an economic hedge against staff deferred compensation plan awards together with
investments held for a short period, often only a few days, for the purpose of creating a
UIT.
net cash used from the other operating activities of $121.0 million, representing net
income, as adjusted for non-cash items, and the changes in operating assets and
liabilities. This three month period included the use of $304.7 million of cash to pay
the annual staff bonuses, related payroll taxes, payroll taxes on annual share award
vesting, and annual pension contributions.
net proceeds from the sale of trading investments of $32.7 million principally for
staff deferred compensation plan awards.
net cash used from the other operating activities of $133.8 million, representing net
income, as adjusted for non-cash items, and the changes in operating assets and
liabilities. This three month period included the use of $212.3 million of cash to pay
the annual staff bonuses, related payroll taxes, payroll taxes on annual share award
vesting, and annual pension contributions.
Table of Contents
Table of Contents
March 31,
December 31,
$ in millions
2011
2010
215.1
215.1
333.5
333.5
197.1
197.1
587.0
570.0
1,332.7
1,315.7
1,332.7
1,315.7
Table of Contents
$ millions
Total
Q1 2011
Q4 2010
Q3 2010
Q2 2010
548.2
177.5
175.2
154.7
40.8
(17.8
)
(9.6
)
(4.2
)
(1.8
)
(2.2
)
222.5
75.6
55.7
54.5
36.7
106.3
27.9
31.3
26.3
20.8
62.4
16.2
16.0
16.1
14.1
119.9
26.3
30.8
31.5
31.3
5.2
(2.1
)
8.4
(8.8
)
7.7
35.7
35.7
1,082.4
311.8
313.2
272.5
184.9
$
1,378.3
1.27
17.35
*
Adjustments for unrealized gains and losses from investments, as
defined in our credit facility, include non-cash gains and losses on
investments to the extent that they do not represent anticipated
future cash receipts or expenditures.
**
The credit facility agreement requires that the company shall
calculate EBITDA on a proforma basis including the impact of the
acquired business as if the acquisition had occurred on the first day
of the EBITDA period.
***
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 EBTIDA above (a
reconciliation from net income attributable to common shareholders) is
defined by our credit agreement, and therefore net income attributable
to common shareholders 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 long-term debt of $1,332.7
million plus $45.6 million in letters of credit.
Table of Contents
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, and/or
Causing clients to reallocate assets away from products that earn higher revenues into
products that earn lower revenues.
Table of Contents
Table of Contents
62
63
64
Maximum Number at end of
period (or Approximate
Total Number of
Dollar Value) of Shares that
Shares Purchased as
May Yet Be Purchased
Part of Publicly
Under the Plans
Total Number of
Average Price
Announced Plans
or Programs
(2)
Month
Shares Purchased
(1)
Paid Per Share
or Programs
(2)
(billions)
700,150
24.46
$
1.2
1,791,989
26.55
$
1.2
2,089,322
25.58
2,075,078
$
1.1
4,581,461
2,075,078
(1)
An aggregate of 2,506,383 shares were surrendered to us by Invesco
employees to satisfy tax withholding obligations or loan repayments in
connection with the vesting of equity awards.
(2)
On April 23, 2008, our board of directors authorized a share
repurchase authorization of up to $1.5 billion of our common shares
with no stated expiration date.
Table of Contents
Memorandum of Association of Invesco Ltd., incorporating amendments
up to and including December 4, 2007, incorporated by reference to
exhibit 3.1 to Invescos Current Report on Form 8-K, filed with the
Securities and Exchange Commission on December 12, 2007
Amended and Restated Bye-Laws of Invesco Ltd., incorporating
amendments up to and including December 4, 2007, incorporated by
reference to exhibit 3.2 to Invescos Current Report on Form 8-K,
filed with the Securities and Exchange Commission on December 12,
2007
Second Amended and Restated Master Employment Agreement, dated
April 1, 2011, between Invesco Ltd. and Martin L. Flanagan
Certification of Martin L. Flanagan pursuant to Rule 13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Loren M. Starr pursuant to Rule 13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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
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
Table of Contents
INVESCO LTD.
April 29, 2011
By:
/s/ MARTIN L. FLANAGAN
Martin L. Flanagan
President and Chief Executive Officer
April 29, 2011
By:
/s/ LOREN M. STARR
Loren M. Starr
Senior Managing Director and Chief Financial Officer
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- 16 -
|
To Company: | Invesco Ltd. | ||
|
1555 Peachtree Street NE | |||
|
Atlanta, GA 30309 | |||
|
Attention: General Counsel | |||
|
||||
|
To Executive: | Mr. Martin L. Flanagan | ||
|
700 Fairfield Road N.W. | |||
|
Atlanta, Georgia 30324 |
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- 19 -
INVESCO LTD. | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Title: Chairman of the Board of Directors | |||||
|
||||||
EXECUTIVE: | ||||||
|
||||||
Martin L. Flanagan |
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1. | The Chief Executive Officer (CEO) is generally responsible for managing the business of Invesco Ltd. and its subsidiaries (collectively, the Company), and is accountable to and reports to the Board of Directors (the Board) of the Company with regard thereto. | ||
2. | The CEO has general supervision of the business of the Company and is responsible for all senior management matters affecting the Company. All members of senior management report, either directly or indirectly, to him. |
3. | The CEO is responsible for conducting the affairs of the Company with the highest standards of integrity and probity and in compliance with all applicable laws, principles and rules of corporate governance, including the Companys Articles of Association, its Corporate Governance Manual and the resolutions of the Board, as the same shall be in effect from time to time. | ||
4. | The CEO is responsible for proposing and developing the Companys strategy and overall commercial objectives, which he does in close consultation with the senior management team, the Chairman of the Board of Directors (the Chairman) and the Board. | ||
5. | The CEO is responsible for ensuring that the Company has in place all necessary financial, operational and compliance controls and risk management systems. | ||
6. | The CEO is responsible with the senior management team for implementing the decisions of the Board and its committees. |
7. | Providing input to the Boards agenda from himself and other members of senior management; |
8. | Ensuring that he communicates with the Chairman on the important and strategic issues facing the Company, and proposing Board agendas to the Chairman which reflect these; | ||
9. | Ensuring that the senior management team gives appropriate priority to providing reports to him and, where required, the Board which contain accurate, timely and clear information; | ||
10. | Ensuring, in consultation with the Chairman, that he and the other members of senior management comply with the Boards approved procedures; | ||
11. | Providing information and advice on succession planning to the Chairman, the Nomination and Corporate Governance Committee and other members of the Board, in respect of members of senior management; | ||
12. | Leading the communication program with shareholders; | ||
13. | Ensuring that the development needs of the members of senior management reporting to him are identified and met; | ||
14. | Ensuring that performance reviews for each of the members of senior management are carried out at least once a year and providing input to the wider Board evaluation process; and | ||
15. | Performing such other duties and exercising such other powers as from time to time may be assigned to him by the Board. |
2
2
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants 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 registrants 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 registrants internal control over financial reporting. |
April 29, 2011 | /s/ MARTIN L. FLANAGAN | |||
Martin L. Flanagan | ||||
President and Chief Executive Officer |
65
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants 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 registrants 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 registrants internal control over financial reporting. |
April 29, 2011 | /s/ LOREN M. STARR | |||
Loren M. Starr | ||||
Senior Managing Director and Chief Financial Officer |
66
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 29, 2011 | /s/ MARTIN L. FLANAGAN | |||
Martin L. Flanagan | ||||
President and Chief Executive Officer |
67
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 29, 2011 | /s/ LOREN M. STARR | |||
Loren M. Starr | ||||
Senior Managing Director and Chief Financial Officer | ||||
68