martin l. flanagan · 2016-06-13 · invesco second-quarter 2012 results martin l. flanagan...

Invesco second-quarter 2012 results

Martin L. FlanaganPresident and Chief Executive Officer

Loren M. StarrChief Financial Officer

July 26, 2012

1

This presentation, and comments made in the associated conference call today, may include “forward-looking statements.” Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, AUM, acquisitions, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.

Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission.

You may obtain these reports from the SEC’s 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.

Forward-looking statements

Discussion topics

Second‐quarter overview

Investment performance

Financial results

Questions

Appendix

2

3

– Maintained strong, long-term investment performance across all time periods

– Achieved solid operating results in a challenging quarter and volatile market environment

– Dividend is 17.25 cents per share – 41% above last year’s level – reflecting continued confidence in the strength of our business

– Total return of capital to shareholders totaled $153 million

Strong investment performance and solid operating results in a volatile, yet trendless, market environment

Second-quarter overview

Past performance is not indicative of future results.

4

Summary of second-quarter 2012 results

Assets under management

June 30, 2012, AUM of $646.6 billion versus $672.8 billion at March 31, 2012

Average AUM was $651.2 billion versus $658.2 billion for the first quarter

Flows

Overall operating results*

Capital management

Total net outflows of $8.3 billion Net long-term outflows of $4.9 billion Money market outflows of $3.4 billion

Adjusted operating income was $249 million versus $269 million in the first quarter

Adjusted operating margin was 35.0% in the quarter versus 36.6% in the first quarter

Adjusted diluted EPS for the quarter was $0.41 versus $0.44 in the prior quarter

Second quarter dividend of 17.25 cents per share, a 41% increase over last year’s level

Repurchased $75 million in common stock (3.2 million shares)

* Non-GAAP financial measures - See Appendix to this presentation for a reconciliation of net revenues, adjusted operating income (and by calculation adjusted operating margin), and adjusted net income (and by calculation adjusted diluted EPS) to the most directly comparable U.S. GAAP financial measure.

Discussion topics



Financial results

Questions

Appendix

5

1-Year 3-Year

Assets top half of peer group

Assets bottom half of peer group

5-Year

6

Percent of actively managed assets in top half of peer group*

Investment performance – overviewAggregate performance analysis – asset weighted

*Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary direct real estate, unit investment trusts 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.

Data as of 6/30/2012. Includes AUM of $381.5 billion (59% of total IVZ) for 1 year, $377.5 billion (58% of total IVZ) for three year, and $365.6 billion (57% of total IVZ) for 5 year. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, Russell, Mercer, eVestment Alliance, SITCA) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

7

Quarterly flows – total flows

3Q10 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q10 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

Total AUM Active AUM Passive AUM

* 4Q10 exclude the impact of the previously announced passive outflow. 2Q10: $15.8 billion excluded from gross sales 4Q10: $18.6 billion excluded from gross redemptions

Quarterly long-term flows ($ billions)

Gross sales

Gross redemptions

Net long-term sales

8

(a) Retail quarterly flows include retail products in the U.S., Canada, U.K., Europe, Asia and our offshore product line.(b) Institutional quarterly flows include our institutional business in the U.S., Continental Europe and Asia and exclude institutional money market.(c) PWM quarterly flows include our high-net-worth business in the U.S.

Retail(a) Institutional(b) Private Wealth Management(c)

3Q10 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q123Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

* 4Q10 exclude the impact of the previously announced passive outflow. 2Q10: $15.8 billion excluded from gross sales 4Q10: $18.6 billion excluded from gross redemptions

Quarterly long-term flows ($ billions)

Gross sales

Gross redemptions

Net long-term sales

Quarterly flows – total flows

US Retail net inflows of $700 million; redemptions remain lower than industry average

Invesco US Retail excludes PowerShares QQQ. Industry redemption rates includes proprietary, non-proprietary, direct, institutional, VA and ETFs and reflects Q1 2012 through February 29, 2012

9

+29%

+36%

(27%)+9%

(15%)

IVZIndustry

Percentage above the bars is change in gross sales from prior quarter

($ billions)

Net sales

+32%

Annualized redemption rate (rolling 3-month average)

Gross and net sales

(11%)

Continued strong demand for asset allocation strategies, with $3 billion of net inflows in the second quarter

Invesco Balanced-Risk Allocation strategies (global aggregate)

Asset allocation extension strategies (global aggregate)

Source: Invesco. Asset allocation extension strategies include balanced-risk commodity, balanced-risk income and active balanced strategies

This is not to be construed as an offer to buy or sell any financial instruments nor does it constitute a recommendation of the suitability of any investment strategy for a particular investor. Additionally , this strategy may not be available to all investors or in all jurisdictions. To determine if this strategy is available in your jurisdiction, contact your local Invesco office and carefully read all legal documents before investing. The strategy is managed and distributed by wholly-owned affiliates of Invesco Ltd. See appendix for additional disclosure.

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Discussion topics



Financial results

Questions

Appendix

11

($ billions) 2Q-12 1Q-12 % Change

Beginning Assets $672.8 $625.3 7.6%

Long-Term Inflows 37.1 42.9 (13.5)%

Long-Term Outflows (42.0) (35.9) 17.0%

Long-Term Net flows (4.9) 7.0 N/A

Net flows in Inst. Money Market Funds (3.4) 1.1 N/A

Market Gains and Losses/Reinvestment (15.5) 37.3 N/A

Foreign Currency Translation (2.4) 2.1 N/A

Ending Assets $646.6 $672.8 (3.9)%

Ending Long-Term AUM $579.6 $602.3 (3.8)%

Average Long-Term AUM $583.1 $588.0 (0.8)%

Average Institutional Money Market AUM $68.1 $70.2 (3.0)%

Average AUM $651.2 $658.2 (1.1)%

Net Revenue Yield (annualized)* 43.7bps 44.7bps

Net Revenue Yield Before Performance Fees (annualized)* 42.8bps 43.5bps

* Non-GAAP financial measure - See the Appendix to this presentation for a reconciliation of net revenues, adjusted operating income (and by calculation adjusted operating margin), and adjusted net income (and by calculation adjusted diluted EPS) to the most directly comparable U.S. GAAP financial measure.

12

Total assets under management – 2Q12 vs. 1Q12

($ millions) 2Q-12 1Q-12 % ChangeAdjusted Revenues

Investment Management Fees 802 812 (1.2)%Service and Distribution Fees 187 189 (1.0)%Performance Fees 16 21 (26.9)%Other 26 33 (21.5)%Third-Party Distribution, Service and Advisory Expenses (319) (319) (0.2)%

Adjusted Net Revenues 712 736 (3.3)%Adjusted Operating Expenses

Employee Compensation 307 313 (2.1)%Marketing 27 27 (0.7)%Property, Office and Technology 68 66 2.3%General and Administrative 62 61 2.0%

Total Adjusted Operating Expenses 463 467 (0.9)%Adjusted Operating Income 249 269 (7.5)%Adjusted Other Income/(Expense)

Equity in Earnings of Unconsolidated Affiliates 6 5 17.0%Interest and Dividend Income 5 6 (5.5)%Interest Expense (13) (14) (1.5)%Other Gains and Losses, net (2) 2 N/A

Adjusted Income Before Income Taxes 245 268 (8.8)%Effective Tax Rate 24.5% 25.1%Adjusted Net Income attributed to common shareholders 185 201 (8.1)%Adjusted diluted EPS $0.41 $0.44 (6.8)%Adjusted Operating Margin 35.0% 36.6%

Average AUM ($ billions) 651.2 658.2 (1.1)%Headcount 6,141 6,153 (0.2)%

Non-GAAP financial measures - See the Appendix to this presentation for a reconciliation of net revenues, adjusted operating income (and by calculation adjusted operating margin), and adjusted net income (and by calculation adjusted diluted EPS) to the most directly comparable U.S. GAAP financial measure.13

Non-GAAP operating results – 2Q12 vs. 1Q12

14

– Maintained strong, long-term investment performance across all time periods

– Achieved solid operating results in a challenging quarter and volatile market environment

– Dividend is 17.25 cents per share – 41% above last year’s level – reflecting continued confidence in the strength of our business

– Total return of capital to shareholders totaled $153 million

Strong investment performance and solid operating results in a volatile, yet trendless, market environment

Second-quarter overview

Past performance is not indicative of future results.

Discussion topics



Financial results

Questions

Appendix

15

Discussion topics



Financial results

Questions

Appendix

16

17

Additional Disclosure for Invesco Balanced-Risk Allocation Fund

Invesco Balanced Risk Allocation Fund is a US registered ’40-Act mutual fund that is distributed by Invesco Distributors, Inc., a wholly-owned indirect subsidiary of Invesco Ltd.

*Source: ©2012 Morningstar Inc. All rights reserved. The information contained herein is proprietary to Morningstar and/or its content providers. It may not be copied or distributed and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Ratings are based on a risk-adjusted return measure that accounts for variation in a fund's monthly performance, placing more emphasis on the downward variations and rewarding consistent performance. With-load ratings include the effect of sales charges, loads and redemption fees. Load-waived ratings exclude sales charges, loads and redemption fees, and are only applicable to investors not subject to sales charges. Had fees not been waived and/or expenses reimbursed currently or in the past, the Morningstar rating would have been lower. The overall rating is derived from a weighted average of three-, five- and 10-year rating metrics, as applicable. Ratings are as of the most recent quarter end and are subject to change every month. A fund is eligible for a Morningstar rating three years after inception. The top 10% of funds in a category receive five stars, the next 22.5% four stars, the next 35% three stars, the next 22.5% two stars and the bottom 10% one star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) Ratings for other share classes may differ due to different performance characteristics. Past performance does not guarantee future results.**Source: Morningstar Inc. Morningstar rankings are based on total return, excluding sales charges and including fees and expenses, versus all funds in the category tracked by Morningstar.***Source: Lipper Inc. Lipper fund percentile rankings are based on total returns, excluding sales charges and including fees and expenses, and are versus all funds in the category tracked by Lipper.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEEBefore investing, investors should carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks, charges and expenses. For this and more complete information about the fund(s), investors should ask their advisors for aprospectus/summary prospectus or visit invesco.com/fundprospectus.

Commitment to investment excellence

Source: Invesco. All data as of June 30, 2012. The listed centers do not all provide products or services that are available in all jurisdictions, nor are their products and services available on all platforms. All entities listed are wholly owned, indirect subsidiaries of Invesco Ltd., except Invesco Great Wall in Shenzhen, which is a joint venture between Invesco and Great Wall Securities, and the Huaneng Invesco WLR Investment Consulting Company Ltd. in Beijing, which is a joint venture between Huaneng Capital Services and WL Ross & Co. Please consult your Invesco representative for more information.18

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% of assets top half of peer group

% of assets bottom half of peer group

Investment performance (5-year)By investment objective (actively managed assets)*Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $365.6 billion)

73

27

96

4

70

30 39

61

52 48

37

63 56

44

EquitiesU.S. Core (6%) U.S. Growth (6%) U.S. Value (10%)

Asian (5%)Canadian (1%)U.K. (10%)

Sector (2%)

European (2%)


Data as of 6/30/2012. Includes AUM of $365.6 billion (57% of total IVZ) for 5 year. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, Russell, Mercer, eVestment Alliance, SITCA) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

19

Equities Other

Fixed income

% of assets top half of peer group

% of assets bottom half of peer group

Investment performance (5-year)By investment objective (actively managed assets)*Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $365.6 billion)

22

78

93

7

85

15

77

23 25

75

79

21

81

19

100

-

Global (3%)Global ex-US and emerging markets (6%) Alternatives (6%) Balanced (8%)

Money market (17%) U.S. fixed income (6%) Global fixed income (5%) Stable value (7%)


Data as of 6/30/2012. Includes AUM of $365.6 billion (57% of total IVZ) for 5 year. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, Russell, Mercer, eVestment Alliance, SITCA) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

20

Investment performance By investment objective (actively managed assets)*

5%2%

95%98%

2%

91%

1-Yr 3-Yr 5-Yr

U.S. Core U.S. Growth U.S. Value Sector

U.K.

100%

Canadian Asian European

Equities

100%100%100%

100%100%

58%

96%

15%

76%

31%

63%

1%

23%

95%

1-Yr 3-Yr 5-Yr

66%

94%

50%

4%

36%

2%20%

39%52%

1-Yr 3-Yr 5-Yr

22%31%

2%20%

68%3%

39%

2%

1-Yr 3-Yr 5-Yr

59%66%

25%

16%28% 33%7%

1% 6%

1-Yr 3-Yr 5-Yr

47%

30%

5%20%

50%

73%

50% 53%

1-Yr 3-Yr 5-Yr

40% 41%

26%

15% 21%12%

14%12% 25%

1-Yr 3-Yr 5-Yr

AUM above benchmark1st quartile 2nd quartile

1-Yr 3-Yr 5-Yr

20%

96%

25%

4%15%

5%

39%

16%

58%

100%

100%


Data as of 6/30/2012. AUM measured in the one, three, and five year quartile rankings represents 59%, 58%, and 57% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis represents 70%, 69, and 66% of total Invesco AUM, respectively, as of 6/30/12. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, Russell, Mercer, eVestment Alliance, SITCA) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

21

47%

80%

27%56%

66%

34%

57%

16%11%

1-Yr 3-Yr 5-Yr

82%

94%

80%

81%69%

2%

79%

16%

1-Yr 3-Yr 5-Yr

38%

71%

35%

75%

9%21%

2%

94% 84%

1-Yr 3-Yr 5-Yr

94%

66%

93%

52%

30%

56%

47%

23%36%

1-Yr 3-Yr 5-Yr

60%

75%

27%

11% 12%

25%

13%6%

69%

1-Yr 3-Yr 5-Yr

32%

64%64%

23%22%3%

39%

33% 2%

1-Yr 3-Yr 5-Yr

GlobalGlobal ex-U.S. andEmerging markets Alternatives

Money market U.S. fixed income Global fixed income

Equities Other

Fixed income

Balanced100%

Stable value100%

100%100%100%

100%100%

Investment performanceBy investment objective (actively managed assets)*

AUM above benchmark1st quartile 2nd quartile

71%

59%65%

6%

33%

9%

45%

59%

13%

1-Yr 3-Yr 5-Yr

100% 100% 100%

100%

92%

100%

8%

1-Yr 3-Yr 5-Yr

100%


Data as of 6/30/2012. AUM measured in the one, three, and five year quartile rankings represents 59%, 58%, and 57% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis represents 70%, 69, and 66% of total Invesco AUM, respectively, as of 6/30/12. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, Russell, Mercer, eVestment Alliance, SITCA) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

22

69%

4%

14%

5%

8%

44%

8%

11%

24%

13%

23

We are diversified as a firmDelivering a diverse set of solutions to meet client needs

As of June 30, 2012

By client domicile By channel By asset class

$447.3$23.5$92.8$34.4$48.6

$646.6Total

U.S.CanadaU.K.Europe Asia

1.7%(14.5)%(4.4)%(9.2)%(5.3)%

(1.1)%

1-Yr Change($ billions)

$396.7$231.0$18.9

$646.6Total

RetailInstitutionalPWM

(1.2)%(1.5)%

8.0%

(1.1)%


$283.8$51.5$71.0

$155.6$84.7

Total

Equity BalancedMoney MarketFixed IncomeAlternative

(6.0)% 15.7%(4.6)%

6.7%(2.8)%

(1.1)%


$646.6

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Non-GAAP operating results – quarterly

($ millions) 2Q-12 1Q-12 % Change* 4Q-11 3Q-11 2Q-11 1Q-11 4Q-10 3Q-10

Investment Management Fees 802 812 (1.2)% 771 804 844 816 799 749

Service and Distribution Fees 187 189 (1.0)% 181 189 206 199 202 192

Performance Fees 16 21 (26.9)% 24 3 8 4 19 3

Other 26 33 (21.5)% 45 27 32 33 35 33

Third-party distribution, service and advisory expense (319) (319) (0.2)% (304) (317) (339) (327) (318) (294)

Total Operating Revenues 712 736 (3.3)% 717 706 751 724 736 682

Employee Compensation 307 313 (2.1)% 312 306 311 300 305 298

Marketing 27 27 (0.7)% 22 24 27 26 26 20

Property, Office and Technology 68 66 2.3% 62 63 63 65 66 64

General and Administrative 62 61 2.0% 64 57 66 62 58 54

Adjusted Operating Expenses 463 467 (0.9)% 461 450 466 452 456 436

Adjusted Operating Income 249 269 (7.5)% 256 256 285 272 280 246

Equity in Earnings of Unconsolidated Affiliates 6 5 17.0% (1) 3 5 2 7 5

Interest and Dividend Income 5 6 (5.5)% 6 5 3 3 3 2

Interest Expense (13) (14) (1.5)% (14) (15) (16) (16) (16) (16)

Other Gains and Losses, net (2) 2 N/A - - 3 4 6 4

Adjusted Income Before Income Taxes 245 268 (8.8)% 247 248 280 265 280 241

Effective Tax Rate** 24.5% 25.1% 22.9% 22.5% 26.0% 27.6% 26.0% 23.1%

Adjusted Net Income Attributable to Common Shareholders

185 201 (8.1)% 191 192 207 192 209 185

Adjusted Diluted EPS $0.41 $0.44 (6.8)% $0.42 $0.42 $0.44 $0.41 $0.44 $0.39

* % change based on unrounded figures** Effective tax rate = Adjusted Tax Expense / (Adjusted income before taxes + (gains)/losses attributable to non-controlling interests in consolidated

entities, net) See Reconciliation of US GAAP results to non-GAAP results in this appendix

25

US GAAP operating results – quarterly

($ millions) 2Q-12 1Q-12 % Change* 4Q-11 3Q-11 2Q-11 1Q-11 4Q-10 3Q-10

Investment Management Fees 781 791 (1.4)% 748 780 819 792 774 726

Service and Distribution Fees 187 189 (1.0)% 181 189 211 199 202 192

Performance Fees 15 21 (24.9)% 24 3 8 4 19 3

Other 26 33 (21.0)% 45 27 32 33 34 33

Total Operating Revenues 1,009 1,034 (2.4)% 997 998 1,070 1,027 1,029 953

Employee Compensation 305 319 (4.4)% 317 306 318 306 313 304

Third-Party Distribution, Service and Advisory 317 317 (0.2)% 302 314 342 325 316 292

Marketing 27 27 (0.4)% 21 13 26 26 26 20

Property, Office and Technology 69 67 2.5% 66 63 62 64 66 64

General and Administrative 89 73 21.0% 75 70 78 74 84 65

Transaction & Integration 1 2 (26.7)% 6 5 11 8 27 27

Total Operating Expenses 806 804 0.3% 786 770 837 802 830 770

Operating Income 203 230 (11.7)% 212 228 233 226 199 183

Equity in Earnings of Unconsolidated Affiliates 7 10 (28.9)% 5 8 11 7 13 11

Interest and Dividend Income 2 2 (8.3)% 3 4 2 2 4 3

Interest Income of Consolidated Investment Products 69 69 (0.4)% 74 80 80 74 65 70

Other Gains and (Losses) of Consolidated Investment Products, net

77 (122) N/A 104 (93) (65) (86) (28) (148)

Interest Expense (13) (14) (1.5)% (14) (15) (16) (16) (16) (16)

Interest Expense of Consolidated Investment Products

(47) (46) 2.9% (52) (49) (47) (40) (37) (36)

Other Gains and Losses, net (8) 19 N/A 55 (20) 6 8 12 15

Income Before Income Taxes 290 148 95.4% 386 143 205 175 212 82

Effective Tax Rate** 28.8% 27.5% N/A 27.3% 26.2% 29.2% 29.9% 24.1% 26.1%

Net (Income)/Loss Attributable to Noncontrolling Interests in Consolidated Entities

(74) 119 N/A (108) 84 54 78 19 127

Net Income Attributable to Common Shareholders 154 194 (20.6)% 202 167 183 178 175 155

EPS Diluted $0.34 $0.43 (20.9)% $0.44 $0.36 $0.39 $0.38 $0.37 $0.32

* % change based on unrounded figures** Effective tax rate = Tax Expense / (Income before income taxes+ (gains)/losses attributable to noncontrolling interests in consolidated entities, net)

26

Total assets under management – quarterly

($ billions) 2Q-12 1Q-12 % Change 4Q-11 3Q-11 2Q-11

Beginning Assets $672.8 $625.3 7.6% $598.4 $653.7 $641.9

Long-Term Inflows 37.1 42.9 (13.5)% 41.1 45.9 42.7

Long-Term Outflows (42.0) (35.9) 17.0% (35.5) (42.6) (38.9)

Long-Term Net flows (4.9) 7.0 N/A 5.6 3.3 3.8

Net flows in Inst. Money Market Funds (3.4) 1.1 N/A 0.4 (1.1) 3.5

Market Gains and Losses/Reinvestment (15.5) 37.3 N/A 20.8 (52.2) 3.2

Foreign Currency Translation (2.4) 2.1 N/A 0.1 (5.3) 1.3

Ending Assets $646.6 $672.8 (3.9)% $625.3 $598.4 $653.7

Ending Long-Term AUM $579.6 $602.3 (3.8)% $555.9 $529.3 583.3

Average Long-Term AUM 583.1 588.0 (0.8)% 552.1 564.3 583.0

Average Institutional Money Market AUM 68.1 70.2 (3.0)% 69.6 68.4 69.8

Average AUM $651.2 $658.2 (1.1)% $621.7 $632.7 $652.8

Gross Revenue Yield (annualized)* 62.3bps 63.1bps 64.5bps 63.4bps 65.9bps

Gross Revenue Yield Less Performance Fees (annualized)*

61.3bps 61.9bps 62.9bps 63.2bps 65.4bps

Net Revenue Yield (annualized)** 43.7bps 44.7bps 46.1bps 44.6bps 46.0bps

Net Revenue Yield Less Performance Fees

(annualized)**42.8bps 43.5bps 44.6bps 44.5bps 45.6bps

* Gross revenue yield on AUM is equal to total operating revenues divided by average AUM, excluding JV AUM. Average AUM for 2Q12, for our joint ventures in China were $3.1bn (1Q12:$3.0bn;4Q11:$3.1bn;3Q11:$3.3bn;2Q11:$3.5bn;1Q11:$3.5bn;4Q10:$3.6bn;3Q10:$3.4bn)

**Net Revenue Yield on AUM is equal to net revenues divided by average AUM including JV AUM. Average AUM for 2Q12, for our JV in China were $3.1bn (1Q12:$3.0bn;4Q11:$3.1bn;3Q11:$3.3bn;2Q11:$3.5bn;1Q11:$3.5bn;4Q10:$3.6bn;3Q10:$3.4bn)

27

Total assets under management – by asset class

March 31, 2012 $672.8 $305.2 $155.0 $50.5 $74.5 $87.6

Long-Term Inflows 37.1 19.5 8.1 4.6 1.1 3.8

Long-Term Outflows (42.0) (25.6) (8.0) (2.3) (0.9) (5.2)

Long-Term Net flows (4.9) (6.1) 0.1 2.3 0.2 (1.4)

Net flows in Inst. Money Market Fund

(3.4) - - - (3.4) -

Market Gains and Losses/Reinvestment

(15.5) (13.7) 0.8 (0.9) (0.3) (1.4)

Foreign Currency Translation (2.4) (1.6) (0.3) (0.4) - (0.1)

June 30, 2012 $646.6 $283.8 $155.6 $51.5 $71.0 $84.7

($ billions)Total Equity

Fixed

Income Balanced

Money

Market Alternative

December 31, 2011 $625.3 $271.0 $149.0 $44.6 $74.0 $86.7



Long-Term Net flows 7.0 3.3 2.4 3.1 (0.6) (1.2)


1.1 - - - 1.1 -


37.3 29.3 3.3 2.3 - 2.4

Foreign Currency Translation 2.1 1.6 0.3 0.5 - (0.3)

28

Total assets under management – by asset class

September 30, 2011 $598.4 $253.2 $146.7 $41.5 $73.6 $83.4



Long-Term Net flows 5.6 0.8 1.0 1.6 - 2.2


0.4 - - - 0.4 -


20.8 17.0 1.3 1.4 - 1.1

Foreign Currency Translation 0.1 - - 0.1 - -

December 31, 2011 $625.3 $271.0 $149.0 $44.6 $74.0 $86.7


Fixed

Income Balanced

Money

Market Alternative

June 30, 2011 $653.7 $301.9 $145.8 $44.5 $74.4 $87.1



Long-Term Net flows 3.3 (3.2) 2.6 1.2 0.4 2.3


(1.1) - - - (1.1) -


(52.2) (42.3) (1.2) (3.1) - (5.6)

Foreign Currency Translation (5.3) (3.2) (0.5) (1.1) (0.1) (0.4)

29

Total assets under management – by channel

($ billions) Total Retail Institutional PWM

December 31, 2011 $625.3 $373.9 $233.5 $17.9

Long-Term Inflows 42.9 35.1 6.8 1.0

Long-Term Outflows (35.9) (27.6) (7.9) (0.4)

Long-Term Net flows 7.0 7.5 (1.1) 0.6

Net flows in Inst. Money Market Funds 1.1 - 1.1 -

Market Gains and Losses/Reinvestment 37.3 30.8 5.6 0.9

Foreign Currency Translation 2.1 2.6 (0.5) -

March 31, 2012 $672.8 $414.8 $238.6 $19.4



Long-Term Net flows (4.9) (3.0) (2.1) 0.2

Net flows in Inst. Money Market Funds (3.4) - (3.4) -

Market Gains and Losses/Reinvestment (15.5) (13.0) (1.8) (0.7)

Foreign Currency Translation (2.4) (2.1) (0.3) -

June 30, 2012 $646.6 $396.7 $231.0 $18.9

30

Total assets under management – by channel


June 30, 2011 $653.7 $401.7 $234.5 $17.5



Long-Term Net flows 3.3 1.0 1.9 0.4

Net flows in Inst. Money Market Funds (1.1) - (1.1) -

Market Gains and Losses/Reinvestment (52.2) (43.9) (7.2) (1.1)

Foreign Currency Translation (5.3) (4.4) (0.9) -

September 30, 2011 $598.4 $354.4 $227.2 $16.8



Long-Term Net flows 5.6 1.2 3.9 0.5

Net flows in Inst. Money Market Funds 0.4 - 0.4 -

Market Gains and Losses/Reinvestment 20.8 18.1 2.1 0.6

Foreign Currency Translation 0.1 0.2 (0.1) -

December 31, 2011 $625.3 $373.9 $233.5 $17.9

31

Total assets under management – by client domicile

($ billions) Total U.S. Canada U.K.Continental

Europe Asia

December 31, 2011 $625.3 $430.0 $23.4 $89.8 $32.0 $50.1



Long-Term Net flows 7.0 6.4 (0.5) - 1.6 (0.5)

Net flows in Inst. Money Market Funds 1.1 1.0 0.1 0.3 - (0.3)

Market Gains and Losses/Reinvestment 37.3 25.5 1.3 5.6 1.7 3.2

Foreign Currency Translation 2.1 - 0.5 2.3 0.4 (1.1)

March 31, 2012 $672.8 $462.9 $24.8 $98.0 $35.7 $51.4



Long-Term Net flows (4.9) (2.7) (0.4) (1.4) 0.6 (1.0)

Net flows in Inst. Money Market Funds (3.4) (3.2) - (0.2) 0.1 (0.1)

Market Gains and Losses/Reinvestment (15.5) (9.7) (0.4) (1.6) (1.6) (2.2)

Foreign Currency Translation (2.4) - (0.5) (2.0) (0.4) 0.5

June 30, 2012 $646.6 $447.3 $23.5 $92.8 $34.4 $48.6

32

Total assets under management – by client domicile


Europe Asia

June 30, 2011 $653.7 $439.9 $27.5 $97.1 $37.9 $51.3



Long-Term Net flows 3.3 3.4 (0.6) 0.2 (1.2) 1.5

Net flows in Inst. Money Market Funds (1.1) (0.9) - - (0.2) -

Market Gains and Losses/Reinvestment (52.2) (31.4) (2.1) (8.1) (3.5) (7.1)

Foreign Currency Translation (5.3) - (2.0) (2.5) (1.1) 0.3

September 30, 2011 $598.4 $411.0 $22.8 $86.7 $31.9 $46.0



Long-Term Net flows 5.6 3.4 (0.7) - (0.2) 3.1

Net flows in Inst. Money Market Funds 0.4 0.2 - - - 0.2

Market Gains and Losses/Reinvestment 20.8 15.4 0.8 3.4 0.7 0.5

Foreign Currency Translation 0.1 - 0.5 (0.3) (0.4) 0.3

December 31, 2011 $625.3 $430.0 $23.4 $89.8 $32.0 $50.1

33

Passive assets under management – by asset class

March 31, 2012 $112.6 $59.0 $32.5 - - $21.1

Long-Term Inflows 12.5 9.8 2.0 - - 0.7

Long-Term Outflows (14.2) (11.6) (0.8) - - (1.8)

Long-Term Net flows (1.7) (1.8) 1.2 - - (1.1)

Net flows in Inst. Money Market Funds

- - - - - -


(3.4) (2.6) 0.2 - - (1.0)

Foreign Currency Translation 0.1 - - - - 0.1

June 30, 2012 $107.6 $54.6 $33.9 - - $19.1


Fixed

Income Balanced

Money

Market Alternative

December 31, 2011 $96.3 $45.6 $30.0 - - $20.7



Long-Term Net flows 7.9 5.7 2.4 - - (0.2)


- - - - - -


8.6 7.7 0.1 - - 0.8

Foreign Currency Translation (0.2) - - - - (0.2)

September 30,2011 $87.4 $39.7 $29.5 - - $18.2



Long-Term Net flows 5.8 2.8 0.5 - - 2.5


- - - - - -


3.0 3.1 - - - (0.1)


December 31, 2011 $96.3 $45.6 $30.0 - - $20.7


Fixed

Income Balanced

Money

Market Alternative

June 30, 2011 $91.8 $45.7 $26.7 - - $19.4



Long-Term Net flows 2.7 - 2.3 - - 0.4


- - - - - -


(7.0) (6.0) 0.5 - - (1.5)


34

Passive assets under management – by asset class

35

Passive assets under management – by channel


December 31, 2011 $96.3 $76.9 $19.4 $-

Long-Term Inflows 16.3 15.0 1.3 -

Long-Term Outflows (8.4) (8.0) (0.4) -

Long-Term Net flows 7.9 7.0 0.9 -

Net flows in Inst. Money Market Funds - - - -

Market Gains and Losses/Reinvestment 8.6 8.3 0.3 -

Foreign Currency Translation (0.2) - (0.2) -

March 31, 2012 $112.6 $92.2 $20.4 $-



Long-Term Net flows (1.7) (2.1) 0.4 -


Market Gains and Losses/Reinvestment (3.4) (3.2) (0.2) -

Foreign Currency Translation 0.1 - 0.1 -

June 30, 2012 $107.6 $86.9 $20.7 $-

36

Passive assets under management – by channel


June 30, 2011 $91.8 $76.7 $15.1 -





Market Gains and Losses/Reinvestment (7.0) (6.7) (0.3) -

Foreign Currency Translation (0.1) - (0.1) -

September 30, 2011 $87.4 $71.0 $16.4 -





Market Gains and Losses/Reinvestment 3.0 3.1 (0.1) -

Foreign Currency Translation 0.1 - 0.1 -

December 31, 2011 $96.3 $76.9 $19.4 $-

37

Passive assets under management – by client domicile


Europe Asia

December 31, 2011 $96.3 $89.6 - - $1.3 $5.4

Long-Term Inflows 16.3 16.2 - - 0.1 -

Long-Term Outflows (8.4) (8.3) - - (0.1) -

Long-Term Net flows 7.9 7.9 - - - -

Net flows in Inst. Money Market Funds - - - - - -

Market Gains and Losses/Reinvestment 8.6 8.2 - - 0.2 0.2


March 31, 2012 $112.6 $105.7 - - $1.5 $5.4

Long-Term Inflows 12.5 12.3 - - 0.1 0.1


Long-Term Net flows (1.7) (1.8) - - - 0.1


Market Gains and Losses/Reinvestment (3.4) (3.2) - - (0.1) (0.1)


June 30, 2012 $107.6 $100.7 - - $1.4 $5.5


Europe Asia

June 30, 2011 $91.8 $88.0 - - $1.4 $2.4

Long-Term Inflows 18.1 18.0 - - 0.1 -


Long-Term Net flows 2.7 2.7 - - - -


Market Gains and Losses/Reinvestment (7.0) (6.6) - - (0.2) (0.2)


September 30, 2011 $87.4 $84.1 - - $1.2 $2.1

Long-Term Inflows 19.5 16.1 - - 0.1 3.3


Long-Term Net flows 5.8 2.5 - - - 3.3


Market Gains and Losses/Reinvestment 3.0 3.0 - - 0.1 (0.1)


December 31, 2011 $96.3 $89.6 - - $1.3 $5.4

38

Passive assets under management – by client domicile

($ millions)

Operating Revenues

US GAAP

Basis

Proportional Consolidation

of Joint Ventures

3rd party distribution, service and

advisory expenses

Acquisition related

Market appreciation / depreciation of

deferred compensation

awards

Consolidated Investment

Products

Other* Non-GAAP basis

Investment Management Fees 781 11 - - - 10 - 802

Service and Distribution Fees 187 - - - - - - 187

Performance Fees 15 - - - - - - 16

Other 26 - - - - - - 26

Third-Party Distribution, Service and Advisory - (2) (317) - - - - (319)

Total Operating Revenues reconciled to net revenues

Operating Expenses

1,009 9 (317) - - 11 - 712

Employee Compensation 305 3 - - - - (1) 307

Third-Party Distribution, Service and Advisory 317 - (317) - - - - -

Marketing 27 1 - - - - (1) 27

Property, Office and Technology 69 1 - - - - (2) 68

General and Administrative 89 1 - (11) - (15) (3) 62

Transaction & Integration 1 - - (1) - - - -

Total Operating Expenses 806 6 (317) (12) - (15) (6) 463

Operating Income reconciled to adjusted operating income

203 4 - 12 - 25 6 249

Equity in Earnings of Unconsolidated Affiliates 7 (4) - 12 - 3 - 6

Interest and Dividend Income 2 1 - - (1) 4 - 5

Interest Income of Consolidated Investment Products 69 - - - - (69) - -


77 - - - - (77) - -

Interest Expense (13) - - - - - - (13)


(47) - - - - 47 - -

Other Gains and Losses, net (8) - - - 5.0 - 1 (2)

Income Before Income Taxes 290 - - 12 4 (68) 7 245

Income Tax Provision (62) - - 5 (1) - (2) (60)


(74) - - - - 74 - -

Net Income Attributable to Common Shareholders reconciled to adjusted net income attributable to common shareholders

154 - - 17 2 6 5 185

Diluted EPS

Diluted Shares Outstanding

Operating margin

$0.34

455.3

20.1%

Adjusted diluted EPS


Adjusted Operating Margin

$0.41

455.3

35.0%

* Other: Please refer to pages 19-21 in the 2Q 2012 earnings press release for a description of the adjustments

Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2012

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products




Performance Fees 21 - - - - 1 - 21

Other 33 - - - - - - 33



Operating Expenses

1,034 9 (317) - - 10 - 736

Employee Compensation 319 2 - - (7) - (1) 313


Marketing 27 1 - - - - - 27




Total Operating Expenses 804 5 (317) (8) (7) (6) (4) 467


230 5 - 8 7 16 4 269

Equity in Earnings of Unconsolidated Affiliates 10 (5) - 4 - (3) - 5




(122) - - - - 122 - -



(46) - - - - 46 - -

Other Gains and Losses, net 19 - - (4) (13) - - 2

Income Before Income Taxes 148 - - 8 (7) 115 4 268

Income Tax Provision (74) - - 5 2 - (1) (67)


119 - - - - (119) - -


194 - - 13 (5) (4) 4 201

Diluted EPS


Operating margin

$0.43

455.9

22.2%




$0.44

455.9

36.6%


Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2012

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products




Performance Fees 24 - - - - - 24

Other 45 - - - - - 45



Operating Expenses

997 10 (302) - - 12 - 717

Employee Compensation 317 3 - - (6) - (1) 312


Marketing 21 1 - - - - - 22






212 4 - 9 6 15 11 256

Equity in Earnings of Unconsolidated Affiliates 5 (5) - - - (1) - (1)

Interest and Dividend Income 3 1 - - - 3 - 6



104 - - - - (104) - -



(52) - - - - 52 - -

Other Gains and Losses, net 55 - - - (10) - (45) -

Income Before Income Taxes 386 - - 9 (5) (110) (34) 247

Income Tax Provision (76) - - 3 1 - 15 (57)


(108) - - - - 108 - -


202 - - 12 (3) (2) (19) 191

Diluted EPS


Operating margin

$0.44

458.3

21.2%




$0.42

458.3

35.8%


Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2011

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products




Performance Fees 3 - - - - - 3

Other 27 - - - - - 27



Operating Expenses

998 10 (314) - - 12 - 706

Employee Compensation 306 3 - (5) 6 - (3) 306


Marketing 13 1 - - - - 10 24




Total Operating Expenses 770 6 (314) (20) 6 (3) 5 450


228 5 - 20 (6) 15 (5) 256

Equity in Earnings of Unconsolidated Affiliates 8 (5) - - - - - 3




(93) - - - - 93 - -



(49) - - - - 49 - -

Other Gains and Losses, net (20) - - - 20 - - -

Income Before Income Taxes 143 - - 20 11 80 (5) 248

Income Tax Provision (59) - - 3 (3) - 4 (56)


84 - - - - (84) - -


167 - - 23 8 (4) (2) 192

Diluted EPS


Operating margin

$0.36

461.0

22.8%




$0.42

461.0

36.2%


Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products

European Infrastructure

Non-GAAP basis


Service and Distribution Fees 211 - - (5) - - - 206


Other 32 - - - - - - 32

Third-Party Distribution, Service and Advisory - (3) (342) 5 - - - (339)


Operating Expenses

1,070 11 (342) - - 12 - 751

Employee Compensation 318 3 - (5) (3) - (3) 311


Marketing 26 1 - - - - - 27

Property, Office and Technology 62 1 - - - - - 63





233 5 - 23 3 16 6 285





(65) - - - - 65 - -



(47) - - - - 47 - -

Other Gains and Losses, net 6 - - - (3) - - 3


Income Tax Provision (75) - - 3 1 - (1) (73)


54 - - - - (54) - -


183 - - 26 (2) (5) 5 207

Diluted EPS


Operating margin

$0.39

467.4

21.8%




$0.44

467.4

37.9%

Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2011

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products

Other Reconciling

Items

Non-GAAP basis




Other 33 - - - - - - 33



Operating Expenses

1,027 10 (325) - - 11 - 724

Employee Compensation 306 3 - (5) (4) - - 300


Marketing 26 1 - - - - - 26


General and Administrative 74 1 - (9) - (4) - 62


Total Operating Expenses 802 5 (325) (22) (4) (4) - 452


226 5 - 22 4 15 - 272

Equity in Earnings of Unconsolidated Affiliates 7 (6) - - - 1 - 2

Interest and Dividend Income 2 - - - (1) 1 - 3



(86) - - - - 86 - -



(40) - - - - 40 - -


Income Before Income Taxes 175 - - 22 (1) 69 - 265

Income Tax Provision (76) - - 2 - - - (73)


78 - - - - (78) - -


178 - - 24 (1) (10) - 192

Diluted EPS


Operating margin

$0.38

472.1

22.0%




$0.41

472.1

37.6%

Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2011

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products

Other Reconciling

Items

Non-GAAP basis




Other 34 1 - - - - - 35



Operating Expenses

1,029 11 (316) - - 12 - 736



Marketing 26 1 - - - - - 26






199 6 - 41 6 14 15 280


Interest and Dividend Income 4 - - - (1) - - 3



(28) - - - - 28 - -



(37) - - - - 37 - -



Income Tax Provision (56) - - (14) 1 - (4) (74)


19 - - - - (15) - 3


175 - - 26 (2) (1) 11 209

Diluted EPS


Operating margin

$0.37

473.1

19.3%




$0.44

473.1

38.1%

Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2010

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products

Other Reconciling

Items

Non-GAAP basis




Other 33 - - - - - - 33



Operating Expenses

953 10 (292) - - 10 - 682



Marketing 20 - - - - - - 20


General and Administrative 65 1 - (9) - (2) - 54


Total Operating Expenses 770 5 (292) (41) (4) (2) - 436


183 6 - 41 4 12 - 246


Interest and Dividend Income 3 - - - (1) - - 2



(148) - - - - 148 - -



(36) - - - - 36 - -


Income Before Income Taxes 82 - - 41 (8) 126 - 241

Income Tax Provision (55) - - (3) 2 - - (56)


127 - - - - (128) - -


155 - - 38 (6) (2) - 185

Diluted EPS


Operating margin

$0.32

479.1

19.2%




$0.39

479.1

36.0%

Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2010

martin l. flanagan · 2016-06-13 · invesco second-quarter 2012 results martin l. flanagan...

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