INVESCO LTD. ATLANTA, Jan. 26, 2017 /PRNewswire/ -- Invesco Ltd. (NYSE: IVZ) today reported financial results for the year and three months ended December 31, 2016.
"In spite of numerous headwinds in the operating environment of many markets we serve, we delivered strong, long-term investment performance to clients throughout 2016," said Martin L. Flanagan, president and CEO. "Our focus on investment performance and our clients contributed to long-term net inflows of $12.7 billion for the year and helped us return nearly $1 billion of capital to shareholders during 2016. For the year ahead, we are very well positioned to meet the evolving demands and challenges we see in the market, combining the power of our active and factor-based investment capabilities to provide outcome-oriented solutions to our clients. We will continue to take a disciplined approach to advancing our competitive position, balancing our goals of meeting client needs, delivering strong value for shareholders and engaging our employees while positioning our business for the challenges ahead."
2016 2015 % Change
---- ---- --------
U.S. GAAP Financial Measures
----------------------------
Operating revenues $4,734.4 m $5,122.9 m (7.6)%
Operating income $1,176.4 m $1,358.4 m (13.4)%
Operating margin 24.8% 26.5%
Net income attributable to Invesco Ltd. $854.2 m $968.1 m (11.8)%
Diluted EPS $2.06 $2.26 (8.8)%
Adjusted Financial Measures(1)
-----------------------------
Net revenues $3,393.2 m $3,643.2 m (6.9)%
Adjusted operating income $1,312.8 m $1,493.7 m (12.1)%
Adjusted operating margin 38.7% 41.0%
Adjusted net income attributable to Invesco Ltd. $924.1 m $1,048.7 m (11.9)%
Adjusted diluted EPS $2.23 $2.44 (8.6)%
Assets Under Management
-----------------------
Ending AUM $812.9 bn $775.6 bn 4.8%
Average AUM $788.8 bn $794.7 bn (0.7)%
----------- ------ --- ------ --- -----
The adjusted financial measures
are all non-GAAP financial
measures. See the information
on pages 9 through 11 for a
reconciliation to their most
directly comparable U.S. GAAP
(1) measures.
Q4-16 Q3-16 Q4-16 vs. Q4-15 Q4-16 vs.
Q3-16 Q4-15
----- -----
U.S. GAAP Financial Measures
----------------------------
Operating revenues $1,194.7 m $1,201.6 m (0.6)% $1,239.7 m (3.6)%
Operating income $294.2 m $306.3 m (4.0)% $303.6 m (3.1)%
Operating margin 24.6% 25.5% 24.5%
Net income attributable to Invesco Ltd. $226.5 m $241.2 m (6.1)% $201.9 m 12.2%
Diluted EPS $0.55 $0.58 (5.2)% $0.48 14.6%
Adjusted Financial Measures(1)
-----------------------------
Net revenues $863.8 m $854.7 m 1.1% $886.1 m (2.5)%
Adjusted operating income $336.0 m $339.3 m (1.0)% $355.7 m (5.5)%
Adjusted operating margin 38.9% 39.7% 40.1%
Adjusted net income attributable to Invesco Ltd. $240.1 m $246.2 m (2.5)% $243.8 m (1.5)%
Adjusted diluted EPS $0.59 $0.60 (1.7)% $0.58 1.7%
Assets Under Management
-----------------------
Ending AUM $812.9 bn $820.2 bn (0.9)% $775.6 bn 4.8%
Average AUM $809.0 bn $814.1 bn (0.6)% $783.7 bn 3.2%
----------- ------ --- ------ --- ----- ------ --- ---
The adjusted financial measures
are all non-GAAP financial
measures. See the information
on pages 9 through 11 for a
reconciliation to their most
directly comparable U.S. GAAP
(1) measures.
Assets Under Management
Total assets under management (AUM) at December 31, 2016, were $812.9 billion (September 30, 2016: $820.2 billion), a decrease of $7.3 billion during the fourth quarter. Total net inflows were $1.1 billion for the fourth quarter, as detailed below:
Quarter Year
Summary of net flows (in billions) Q4-16 Q3-16 Q4-15 2016 2015
Active ($1.9) $8.3 $3.5 $6.9 $14.1
Passive (0.8) 3.9 0.4 5.8 2.1
---- --- --- --- ---
Long-term net flows (2.7) 12.2 3.9 12.7 16.2
Invesco PowerShares QQQ 2.7 1.1 2.0 (2.6) (1.8)
Institutional money market 1.1 5.9 (1.8) 12.8 (11.9)
Total net flows $1.1 $19.2 $4.1 $22.9 $2.5
==== ===== ==== ===== ====
Annualized long-term organic growth rate* (1.5%) 7.1% 2.4% 1.9% 2.4%
Annualized long-term organic
growth rate is calculated using
long-term net flows
(annualized) divided by opening
long- term AUM for the period.
Long-term AUM excludes
institutional money market AUM
* and PowerShares QQQ AUM.
Net market gains led to a $37.7 billion increase in AUM during 2016, compared to a $2.6 billion decrease in 2015. Foreign exchange rate movements led to a $22.1 billion decrease in AUM during 2016, compared to a $16.0 billion decrease in 2015. Average AUM during 2016 were $788.8 billion, compared to $794.7 billion for 2015, a decrease of 0.7%.
Net market gains led to a $6.4 billion increase in AUM during the fourth quarter, compared to a $23.6 billion increase in the third quarter 2016. Foreign exchange rate movements led to a $14.8 billion decrease in AUM during the fourth quarter, compared to a $2.2 billion decrease in the third quarter 2016. Average AUM during the fourth quarter were $809.0 billion, compared to $814.1 billion for the third quarter 2016, a decrease of 0.6%. Further analysis is included in the supplementary schedules to this release.
Operating Results - year ended December 31, 2016
This section discusses the company's full year 2016 results, as compared to 2015, and comments on significant items that have impacted the company's results as presented in accordance with U.S. GAAP.
Operating revenues decreased $388.5 million (7.6%) to $4,734.4 million in 2016, from $5,122.9 million in 2015, primarily due to decreased investment management fees. Investment management fees decreased by $288.0 million (7.1%) to $3,773.1 million in 2016, from $4,061.1 million in 2015 due to lower average AUM along with the impact of changes in the AUM product and currency mix. Foreign exchange rate changes decreased operating revenues by $136.8 million compared to 2015. The average Pound Sterling exchange rate for 2016 was 1.3556 compared to 1.5282 for 2015, an 11.3% decline. Performance fees decreased $41.6 million (48.4%) to $44.3 million in 2016 from $85.9 million in 2015.
Operating expenses decreased $206.5 million (5.5%) to $3,558.0 million in 2016, from $3,764.5 million in 2015. Third-party distribution, service and advisory expenses comprise $172.7 million of the decrease consistent with the related revenue decline. Foreign exchange rate changes decreased 2016 operating expenses by $83.2 million when compared to 2015. Business optimization charges increased to $49.9 million in 2016, compared to $16.2 million in 2015. As of the end of 2016, this initiative has produced annualized run-rate expense savings of $20.8 million. These savings have helped offset acquisition-related increases in operating expenses.
Non-operating income and expense includes a decrease in equity in earnings of unconsolidated affiliates of $25.8 million from $35.1 million in 2015 to $9.3 million in 2016. The decrease in equity in earnings includes the $17.8 million impairment charge on our Indian asset management joint venture in the first quarter of 2016 related to the weakening of the Indian Rupee against the U.S. Dollar, prior to the company's acquisition of the remaining 51% interest in the joint venture. Interest expense increased in 2016 to $93.4 million from $81.7 million in 2015, related to the senior note issuance in late 2015. Other gains and losses, net was a gain of $22.9 million in 2016 compared to a loss of $1.5 million in 2015. 2016 includes net gains of $22.0 million related to foreign currency hedges, as compared to losses of $7.7 million in 2015. The capital management discussion below includes details of our foreign currency hedges. Also included in non-operating income is other income of CIP, net of $79.2 million in 2016 as compared to $27.1 million in 2015.
Operating Results - fourth quarter ended December 31, 2016
This section discusses the company's fourth quarter 2016 results, as compared to the third quarter 2016, and comments on significant items that have impacted the company's results as presented in accordance with U.S. GAAP.
Operating revenues decreased 0.6% to $1,194.7 million in the fourth quarter, from $1,201.6 million in the third quarter 2016. The change was primarily due to decreased investment management fees, offset by higher performance fees. Foreign exchange rate changes decreased operating revenues by $20.9 million compared to the third quarter 2016.
Investment management fees decreased by $19.0 million (2.0%) to $946.9 million in the fourth quarter, from $965.9 million in the third quarter 2016. Foreign exchange rate changes decreased fourth quarter investment management fees by $20.0 million when compared to third quarter 2016. The average Pound Sterling exchange rate for the fourth quarter was 1.2419 compared to 1.3136 for the third quarter of 2016, a 5.5% decline.
Service and distribution fees decreased $4.3 million (2.0%) to $209.1 million in the fourth quarter, from $213.4 million in the third quarter 2016, reflecting the lower average AUM for products that receive these fees. Foreign exchange rate changes decreased fourth quarter service and distribution fees by $0.2 million when compared to third quarter 2016.
Performance fees were $17.5 million in the fourth quarter, compared to $3.4 million in the third quarter 2016. Performance fees recorded in the fourth quarter arose primarily from global asset allocation, bank loan, fixed income and real estate products. Foreign exchange rate changes decreased fourth quarter performance fees by $0.6 million when compared to the third quarter 2016.
Other revenues increased by $2.3 million (12.2%) to $21.2 million in the fourth quarter, compared to $18.9 million in the third quarter 2016 primarily due to an increase of $5.3 million in transaction fees from real estate products, offset by a $3.8 million decrease in transactional sales charges from unit investment trust products. Foreign exchange rate changes decreased other revenues by $0.1 million in the fourth quarter compared to the third quarter 2016.
Operating expenses increased $5.2 million (0.6%) to $900.5 million in the fourth quarter, from $895.3 million in the third quarter 2016. Business optimization charges were $21.0 million in the fourth quarter, compared to $11.7 million in the third quarter. Foreign exchange rate changes decreased fourth quarter operating expenses by $13.0 million when compared to the third quarter 2016.
Third-party distribution, service and advisory expenses decreased by $12.6 million (3.5%) to $349.5 million in the fourth quarter, from $362.1 million in the third quarter 2016, consistent with the decline in revenues resulting from the decrease in retail AUM. Foreign exchange rate changes decreased third-party distribution, service and advisory expenses by $3.6 million in the fourth quarter when compared to the third quarter 2016.
Employee compensation expenses decreased by $6.1 million (1.8%) to $339.0 million in the fourth quarter, from $345.1 million in the third quarter 2016. Fourth quarter compensation costs included an incremental credit of $8.6 million related to an employee benefit plan termination. Staff severance costs related to business optimization were $12.2 million in the fourth quarter compared to $5.8 million in the third quarter. Foreign exchange rate changes decreased fourth quarter employee compensation expenses by $5.5 million when compared to third quarter 2016.
Marketing expenses increased by $8.8 million (33.3%) to $35.2 million in the fourth quarter from $26.4 million in the third quarter 2016 reflecting seasonal increases in advertising, client events and other marketing costs in support of the business. Foreign exchange rate changes decreased fourth quarter marketing expenses by $0.8 million when compared to third quarter 2016.
Property, office and technology expenses increased $7.1 million (9.1%) to $85.3 million in the fourth quarter, from $78.2 million in the third quarter 2016. The increase reflects a $3.4 million credit recorded in the third quarter associated with a vacated leased property. Technology increases include increased outsourced administration and software costs. Foreign exchange rate changes decreased fourth quarter property, office and technology expenses by $1.3 million when compared to the third quarter 2016.
General and administrative expenses increased $8.0 million (9.6%) to $91.5 million in the fourth quarter, from $83.5 million in the third quarter 2016. General and administrative expenses for the fourth quarter included $7.7 million of professional services fees related to the business optimization initiative compared to $5.4 million in the third quarter 2016. Other increases include fund related costs and travel. Foreign exchange rate changes decreased fourth quarter general and administrative expenses by $1.8 million when compared to the third quarter 2016.
Equity in earnings of unconsolidated affiliates increased $5.9 million (107.3%) to $11.4 million in the fourth quarter from $5.5 million in the third quarter 2016 primarily due to an increase in earnings from our investments in private equity and other funds. Non-operating other income and expenses in the fourth quarter also included a $9.8 million consolidated investment product (CIP) net gain comprised of market-driven gains and losses on investments held by the consolidated funds and net interest income of CIP (third quarter 2016: $39.0 million gain).
Other gains and losses, net was a gain in the fourth quarter of $15.6 million compared to a gain of $16.2 million in the third quarter. The components and variances are included in the table below:
Summary of Other gains and losses, net (in millions) Q4-16 Q3-16 Change
--------------------------------------------------- ----- ----- ------
Investment gains/(losses) $1.2 $3.3 ($2.1)
Market valuation gains/(losses) in deferred compensation plan investments 2.0 7.3 (5.3)
Market valuation gains/(losses) on acquisition-related contingent consideration (1.1) 5.3 (6.4)
Market valuation gains/(losses) on foreign exchange hedge contracts 12.0 0.9 11.1
Foreign exchange gains/(losses) on intercompany loans 1.5 (0.6) 2.1
$15.6 $16.2 ($0.6)
===== ===== =====
The acquisition-related contingent consideration gains and losses relate to the investment management contracts acquired from Deutsche Bank in the first quarter of 2015. The foreign exchange hedge contract gains and losses reflect the mark to market of all the open put option contracts. Further details of these foreign exchange hedge contracts are given below in the capital management section.
The effective tax rate increased to 29.9% for the fourth quarter from 26.0% for the third quarter 2016. The impact of the inclusion of noncontrolling interests in CIP increased our effective tax rate by 0.8% for the fourth quarter, compared to a decrease of 1.1% for the third quarter 2016. The remainder of the rate increase reflects changes in our profit mix resulting from foreign exchange rate movements and gains from our foreign currency hedge contracts.
Capital Management
As of December 31, 2016, the company's cash and cash equivalents were $1,328.0 million, with long-term debt of $2,102.4 million. The credit facility balance was $28.7 million at December 31, 2016.
Dividends paid in the fourth quarter were $114.1 million bringing total 2016 full-year cash dividends to $460.4 million. Today the company is announcing a fourth-quarter cash dividend of 28.0 cents per share to holders of common shares. The dividend is payable on March 3, 2017, to shareholders of record at the close of business on February 16, 2017, with an ex-dividend date of February 14, 2017.
During the fourth quarter the company repurchased $150.0 million of its common shares, representing 4.8 million shares at a weighted average share price of $31.43. Year-to-date repurchases total $535.0 million representing 18.1 million shares. This brings total shareholder return of capital, including dividends, for the year to $995.4 million.
In early January 2017 the company received $7.8 million from the fourth quarter's Pound Sterling - U.S. Dollar hedge contract ($4.9 million received in October from the third quarter's Pound Sterling - U.S. Dollar hedge contract). As previously disclosed, during the third quarter the company entered into put option contracts to hedge 75% of the Pound Sterling-based operating income and 75% of the Euro-based operating income through the end of 2017. These put option contracts are set at a strike level of $1.2496 (Pound Sterling) and $1.0719 (Euro).
Headcount
As of December 31, 2016, the company had 6,790 employees, compared to 6,812 employees as of September 30, 2016, and 6,490 at December 31, 2015.
Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. NYSE: IVZ; www.invesco.com.
Members of the investment community and general public are invited to listen to the conference call today, January 26, 2017, at 9:00 a.m. ET by dialing one of the following numbers: 1-866-803-2143 for U.S. and Canadian callers or 1-210-795-1098 for international callers. An audio replay of the conference call will be available until February 9, 2017 at 5:00 p.m. ET by calling 1-866-421-5864 for U.S. and Canadian callers or 1-203-369-0809 for international callers. A presentation highlighting the company's performance will be available during a live Webcast and on Invesco's Website at www.invesco.com.
This release, and comments made in the associated conference call today, may include "forward-looking statements." Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, assets under management, acquisitions and divestitures, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "projects," "forecasts," and future or conditional verbs such as "will," "may," "could," "should," and "would" as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.
Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission. You may obtain these reports from the SEC's website at www.sec.gov. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.
Invesco Ltd.
U.S. GAAP Condensed Consolidated Income Statements
(Unaudited, in millions, other than per share amounts)
Q4-16 Q3-16 % Change Q4-15 % Change
----- ----- -------- ----- --------
Operating revenues:
Investment management fees $946.9 $965.9 (2.0)% $987.1 (4.1)%
Service and distribution
fees 209.1 213.4 (2.0)% 207.6 0.7%
Performance fees 17.5 3.4 414.7% 16.8 4.2%
Other 21.2 18.9 12.2% 28.2 (24.8)%
Total operating revenues 1,194.7 1,201.6 (0.6)% 1,239.7 (3.6)%
------- ------- ----- ------- -----
Operating expenses:
Third-party distribution,
service and advisory 349.5 362.1 (3.5)% 375.2 (6.8)%
Employee compensation 339.0 345.1 (1.8)% 349.8 (3.1)%
Marketing 35.2 26.4 33.3% 34.1 3.2%
Property, office and
technology 85.3 78.2 9.1% 81.3 4.9%
General and administrative 91.5 83.5 9.6% 95.7 (4.4)%
Total operating expenses 900.5 895.3 0.6% 936.1 (3.8)%
----- ----- --- ----- -----
Operating income 294.2 306.3 (4.0)% 303.6 (3.1)%
Other income/(expense):
Equity in earnings of
unconsolidated affiliates 11.4 5.5 107.3% 3.1 267.7%
Interest and dividend income 3.5 2.6 34.6% 5.5 (36.4)%
Interest expense (23.5) (23.9) (1.7)% (23.0) 2.2%
Other gains and losses, net 15.6 16.2 (3.7)% 3.7 321.6%
Other income/(expense) of
CIP, net 9.8 39.0 (74.9)% (12.0) (181.7)%
Other income/(expense) of
CSIP, net - - N/A 0.8 (100.0)%
--- --- --- --- -------
Income before income taxes 311.0 345.7 (10.0)% 281.7 10.4%
Income tax provision (92.9) (89.8) 3.5% (86.9) 6.9%
--- ---
Net income 218.1 255.9 (14.8)% 194.8 12.0%
Net (income)/loss
attributable to
noncontrolling interests in
consolidated entities 8.4 (14.7) (157.1)% 7.1 18.3%
---
Net income attributable to
Invesco Ltd. $226.5 $241.2 (6.1)% $201.9 12.2%
====== ====== ===== ====== ====
Earnings per share:
---basic $0.55 $0.58 (5.2)% $0.48 14.6%
---diluted $0.55 $0.58 (5.2)% $0.48 14.6%
Average shares outstanding:
---basic 408.6 412.6 (1.0)% 422.9 (3.4)%
---diluted 409.0 412.9 (0.9)% 423.2 (3.4)%
Invesco Ltd.
U.S. GAAP Condensed Consolidated Income Statements
(Unaudited, in millions, other than per share amounts)
Year ended December 31,
2016 2015 % Change
Operating revenues:
Investment management fees $3,773.1 $4,061.1 (7.1)%
Service and distribution
fees 823.6 855.4 (3.7)%
Performance fees 44.3 85.9 (48.4)%
Other 93.4 120.5 (22.5)%
Total operating revenues 4,734.4 5,122.9 (7.6)%
------- ------- -----
Operating expenses:
Third-party distribution,
service and advisory 1,407.2 1,579.9 (10.9)%
Employee compensation 1,378.8 1,395.5 (1.2)%
Marketing 114.8 115.4 (0.5)%
Property, office and
technology 325.7 312.0 4.4%
General and administrative 331.5 361.7 (8.3)%
Total operating expenses 3,558.0 3,764.5 (5.5)%
------- ------- -----
Operating income 1,176.4 1,358.4 (13.4)%
Other income/(expense):
Equity in earnings of
unconsolidated affiliates 9.3 35.1 (73.5)%
Interest and dividend income 12.2 13.0 (6.2)%
Interest expense (93.4) (81.7) 14.3%
Other gains and losses, net 22.9 (1.5) N/A
Other income/(expense) of
CIP, net 79.2 27.1 192.3%
Other income/(expense) of
CSIP, net - 11.7 (100.0)%
---
Income before income taxes 1,206.6 1,362.1 (11.4)%
Income tax provision (338.3) (398.0) (15.0)%
------ ------
Net income 868.3 964.1 (9.9)%
Net (income)/loss
attributable to
noncontrolling interests in
consolidated entities (14.1) 4.0 N/A
Net income attributable to
Invesco Ltd. $854.2 $968.1 (11.8)%
====== ====== ======
Earnings per share:
---basic $2.06 $2.26 (8.8)%
---diluted $2.06 $2.26 (8.8)%
Average shares outstanding:
---basic 414.7 428.9 (3.3)%
---diluted 415.0 429.3 (3.3)%
Invesco Ltd.
Non-GAAP Information and Reconciliations
We are presenting the following non-GAAP performance measures: net revenues (and by calculation, net revenue yield on AUM), adjusted operating income, adjusted operating margin, adjusted net income attributable to Invesco Ltd., and adjusted diluted EPS. We believe these non-GAAP measures provide greater transparency into our business on an ongoing operations basis and allow more appropriate comparisons with industry peers. Management uses these performance measures to evaluate the business and for internal management reporting. The most directly comparable U.S. GAAP measures are operating revenues (and by calculation, gross revenue yield on AUM), operating income, operating margin, net income attributable to Invesco Ltd., and diluted EPS. Non-GAAP measures should not be considered as substitutes for any measures derived in accordance with U.S. GAAP and may not be comparable to other similarly titled measures of other companies.
The following are reconciliations between the presented non-GAAP measures and the most directly comparable U.S. GAAP measures. These measures are described more fully in the company's Forms 10-K and 10-Q. Refer to these public filings for additional information about the company's non-GAAP performance measures. In addition, a reconciliation of adjusted operating expenses is provided below, together with reconciliations of the U.S. GAAP operating expense lines to provide further analysis of the non-GAAP adjustments.
Reconciliation of Operating revenue to Net revenues:
Quarter Year
in millions Q4-16 Q3-16 Q4-15 2016 2015
----- ----- ----- ---- ----
Operating revenues, U.S. GAAP basis $1,194.7 $1,201.6 $1,239.7 $4,734.4 $5,122.9
Proportional share of revenues, net of third-party 12.6 9.5 11.6 43.7 61.0
distribution, service and advisory expenses, from
joint venture investments
Third party distribution, service and advisory expenses (349.5) (362.1) (375.2) (1,407.2) (1,579.9)
CIP 6.0 5.7 10.0 22.3 39.2
--- --- ---- ---- ----
Net revenues $863.8 $854.7 $886.1 $3,393.2 $3,643.2
====== ====== ====== ======== ========
Reconciliation of Operating income to Adjusted operating income:
Quarter Year
in millions Q4-16 Q3-16 Q4-15 2016 2015
----- ----- ----- ---- ----
Operating income, U.S. GAAP basis $294.2 $306.3 $303.6 $1,176.4 $1,358.4
Proportional share of net operating income from joint 5.4 3.0 4.1 15.9 27.4
venture investments
CIP 17.6 13.1 11.6 51.0 63.2
Business combinations 3.8 4.5 3.6 22.3 12.8
Compensation expense related to market valuation changes 2.4 4.1 3.5 8.1 4.3
in deferred compensation plans
Business optimization expenses 21.0 11.7 16.2 49.9 16.2
Vacated property lease credit 0.2 (3.4) - (3.2) (6.4)
Employee benefit plan termination (8.6) - - (8.6) -
Regulatory-related charges - - 13.1 1.0 13.1
Fund reimbursement settlement costs - - - - 4.7
--- --- --- --- ---
Adjusted operating income $336.0 $339.3 $355.7 $1,312.8 $1,493.7
====== ====== ====== ======== ========
Operating margin (1) 24.6% 25.5% 24.5% 24.8% 26.5%
Adjusted operating margin (2) 38.9% 39.7% 40.1% 38.7% 41.0%
Reconciliation of Net income attributable to Invesco Ltd. to Adjusted net income attributable to Invesco Ltd.:
Quarter Year
in millions Q4-16 Q3-16 Q4-15 2016 2015
----- ----- ----- ---- ----
Net income attributable to Invesco Ltd., U.S. GAAP basis $226.5 $241.2 $201.9 $854.2 $968.1
CIP, eliminated upon consolidation (0.2) (3.2) 19.4 (3.0) 40.4
Business combinations:
Changes in the fair value of contingent consideration 1.1 (5.3) (8.7) 7.4 (27.1)
Other-than-temporary impairment - - - 17.8 -
Other business combination-related adjustments 3.8 4.5 3.6 22.3 12.8
Deferred compensation plan market valuation changes and 0.1 (3.5) (1.6) (4.0) 9.1
dividend income less compensation expense
Business optimization expenses 21.0 11.7 16.2 49.9 16.2
Vacated property lease credit 0.2 (3.4) - (3.2) (6.4)
Employee benefit plan termination (8.6) - - (8.6) -
Regulatory-related charges - - 13.1 1.0 13.1
Fund reimbursement expense - - - - 4.7
Foreign exchange hedge (6.6) 2.2 (0.5) (14.2) 1.0
Taxation:
Taxation on business combinations 4.0 6.2 7.7 12.0 28.3
Taxation on deferred compensation plan market valuation - 1.1 0.5 1.5 (3.2)
changes and dividend income less compensation expense
Taxation on business optimization charges (7.0) (3.7) (5.1) (16.2) (5.1)
Taxation on vacated property lease credit - 0.7 - 0.7 1.3
Taxation on employee benefit plan termination 3.3 - - 3.3 -
Taxation on regulatory-related charges - (1.4) (2.7) (1.8) (2.7)
Taxation on foreign exchange hedge 2.5 (0.9) - 5.0 -
Taxation on fund reimbursement expense - - - - (1.8)
--- --- --- --- ----
Adjusted net income attributable to Invesco Ltd. (3) $240.1 $246.2 $243.8 $924.1 $1,048.7
====== ====== ====== ====== ========
Average shares outstanding - diluted 409.0 412.9 423.2 415.0 429.3
Diluted EPS $0.55 $0.58 $0.48 $2.06 $2.26
Adjusted diluted EPS (4) $0.59 $0.60 $0.58 $2.23 $2.44
(1) Operating margin is equal to
operating income divided by
operating revenues.
(2) Adjusted operating margin is
equal to adjusted operating
income divided by net revenues.
(3) The effective tax rate on
adjusted net income attributable
to Invesco Ltd. is 27.7% (third
quarter 2016: 26.5%; fourth
quarter 2015: 26.6%; 2016:
26.8%; 2015: 27.1%). The rate
increase reflects changes in our
profit mix resulting from
foreign exchange rate movements
and gains from our foreign
currency hedge contracts.
(4) Adjusted diluted EPS is equal to
adjusted net income attributable
to Invesco Ltd. divided by the
weighted average number of
common and restricted shares
outstanding. There is no
difference between the
calculated earnings per share
amounts presented above and the
calculated earnings per share
amounts under the two class
method.
Reconciliation of Operating expenses to Adjusted operating expenses:
Quarter Year
in millions Q4-16 Q3-16 Q4-15 2016 2015
----- ----- ----- ---- ----
Operating expenses, U.S. GAAP basis $900.5 $895.3 $936.1 $3,558.0 $3,764.5
Proportional consolidation of joint ventures 7.2 6.5 7.5 27.8 33.6
Third party distribution, service and advisory expenses (349.5) (362.1) (375.2) (1,407.2) (1,579.9)
CIP (11.6) (7.4) (1.6) (28.7) (24.0)
Business combinations (3.8) (4.5) (3.6) (22.3) (12.8)
Compensation expense related to market valuation changes in (2.4) (4.1) (3.5) (8.1) (4.3)
deferred compensation plans
Business optimization (21.0) (11.7) (16.2) (49.9) (16.2)
Vacated property lease credit (0.2) 3.4 - 3.2 6.4
Employee benefit plan termination 8.6 - - 8.6 -
Regulatory-related charges - - (13.1) (1.0) (13.1)
Fund reimbursement settlement costs - - - - (4.7)
--- --- --- --- ----
Adjusted operating expenses $527.8 $515.4 $530.4 $2,080.4 $2,149.5
====== ====== ====== ======== ========
Employee compensation, U.S. GAAP basis $339.0 $345.1 $349.8 $1,378.8 $1,395.5
Proportional consolidation of joint ventures 5.4 4.7 4.7 19.3 20.8
Business combinations (0.5) (0.8) - (7.0) -
Market appreciation/depreciation of deferred compensation (2.4) (4.1) (3.5) (8.1) (4.3)
awards
Business optimization (12.2) (5.8) (12.2) (26.4) (12.2)
Employee benefit plan termination $8.6 $ - $ - $8.6 $ -
---- --- --- --- --- ---- --- ---
Adjusted employee compensation $337.9 $339.1 $338.8 $1,365.2 $1,399.8
====== ====== ====== ======== ========
Marketing, U.S. GAAP basis $35.2 $26.4 $34.1 $114.8 $115.4
Proportional consolidation of joint ventures 0.2 0.4 0.5 1.8 3.1
Adjusted marketing $35.4 $26.8 $34.6 $116.6 $118.5
===== ===== ===== ====== ======
Property, office and technology, U.S. GAAP basis $85.3 $78.2 $81.3 $325.7 $312.0
Proportional consolidation of joint ventures 1.0 1.0 1.1 3.8 3.9
Business optimization (1.1) (0.5) (2.0) (1.7) (2.0)
Vacated property lease credit (0.2) 3.4 - 3.2 6.4
---- --- --- --- ---
Adjusted property, office and technology $85.0 $82.1 $80.4 $331.0 $320.3
===== ===== ===== ====== ======
General and administrative, U.S. GAAP basis $91.5 $83.5 $95.7 $331.5 $361.7
Proportional consolidation of joint ventures 0.6 0.4 1.2 2.9 5.8
Business combinations (3.3) (3.7) (3.6) (15.3) (12.8)
CIP (11.6) (7.4) (1.6) (28.7) (24.0)
Business optimization (7.7) (5.4) (2.0) (21.8) (2.0)
Regulatory-related charges - - (13.1) (1.0) (13.1)
Fund reimbursement settlement costs - - - - (4.7)
--- --- --- --- ----
Adjusted general and administrative $69.5 $67.4 $76.6 $267.6 $310.9
===== ===== ===== ====== ======
Invesco Ltd.
Quarterly Assets Under Management
(in billions) Q4-16 Q3-16 % Change Q4-15
------------ ----- ----- -------- -----
Beginning Assets $820.2 $779.6 5.2% $755.8
Long-term inflows 46.2 51.7 (10.6)% 43.0
Long-term outflows (48.9) (39.5) 23.8% (39.1)
----- ----- -----
Long-term net flows (2.7) 12.2 N/A 3.9
Net flows in Invesco PowerShares QQQ fund 2.7 1.1 145.5% 2.0
Net flows in institutional money market funds 1.1 5.9 (81.4)% (1.8)
--- --- ----
Total net flows 1.1 19.2 (94.3)% 4.1
Market gains and losses/reinvestment 6.4 23.6 (72.9)% 21.0
Foreign currency translation (14.8) (2.2) 572.7% (5.3)
----- ---- ----
Ending Assets $812.9 $820.2 (0.9)% $775.6
====== ====== ======
Average long-term AUM $698.9 $705.9 (1.0)% $678.2
Average AUM $809.0 $814.1 (0.6)% $783.7
Gross revenue yield on AUM(a) 59.8 bps 59.8 bps 63.8 bps
Gross revenue yield on AUM before performance fees(a) 58.9 bps 59.6 bps 62.9 bps
Net revenue yield on AUM(b) 42.7 bps 42.0 bps 45.2 bps
Net revenue yield on AUM before performance fees(b) 41.8 bps 41.8 bps 44.3 bps
-------------------------------------------------- ---- --- ---- --- ---- ---
By active/passive: (in
billions) Total AUM Active(e) Passive(e)
---------------------- --------- -------- ---------
September 30, 2016 $820.2 $676.9 $143.3
Long-term inflows 46.2 35.6 10.6
Long-term outflows (48.9) (37.5) (11.4)
----- ----- -----
Long-term net flows (2.7) (1.9) (0.8)
Net flows in Invesco
PowerShares QQQ fund 2.7 - 2.7
Net flows in institutional
money market funds 1.1 1.1 -
--- --- ---
Total net flows 1.1 (0.8) 1.9
Market gains and losses/
reinvestment 6.4 7.0 (0.6)
Foreign currency translation (14.8) (14.6) (0.2)
----- ----- ----
December 31, 2016 $812.9 $668.5 $144.4
====== ====== ======
Average AUM $809.0 $667.0 $142.0
====== ====== ======
Gross revenue yield on AUM(a) 59.8bps 69.0bps 17.1bps
Net revenue yield on AUM(b) 42.7bps 48.2bps 17.1bps
By channel: (in billions) Total Retail Institutional
------------------------ ----- ------ -------------
September 30, 2016 $820.2 $532.1 $288.1
Long-term inflows 46.2 35.6 10.6
Long-term outflows (48.9) (39.5) (9.4)
----- ----- ----
Long-term net flows (2.7) (3.9) 1.2
Net flows in Invesco
PowerShares QQQ fund 2.7 2.7 -
Net flows in
institutional money
market funds 1.1 - 1.1
--- --- ---
Total net flows 1.1 (1.2) 2.3
Market gains and losses/
reinvestment 6.4 5.5 0.9
Foreign currency
translation (14.8) (9.9) (4.9)
----- ---- ----
December 31, 2016 $812.9 $526.5 $286.4
====== ====== ======
See the footnotes immediately following these tables.
Invesco Ltd.
Quarterly Assets Under Management (continued)
By asset class: (in billions) Total Equity Fixed Income Balanced Money Alternatives(c)
Market (d)
--- ---
September 30, 2016 $820.2 $365.3 $207.0 $48.9 $77.2 $121.8
Long-term inflows 46.2 20.1 11.6 2.0 0.8 11.7
Long-term outflows (48.9) (27.1) (10.9) (2.5) (0.9) (7.5)
----- ----- ----- ---- ---- ----
Long-term net flows (2.7) (7.0) 0.7 (0.5) (0.1) 4.2
Net flows in Invesco PowerShares QQQ fund 2.7 2.7 - - - -
Net flows in institutional money market funds 1.1 - - - 1.1 -
--- --- --- --- --- ---
Total net flows 1.1 (4.3) 0.7 (0.5) 1.0 4.2
Market gains and losses/reinvestment 6.4 8.6 (3.0) - 0.2 0.6
Foreign currency translation (14.8) (5.5) (3.0) (1.6) (0.1) (4.6)
----- ---- ---- ---- ---- ----
December 31, 2016 $812.9 $364.1 $201.7 $46.8 $78.3 $122.0
====== ====== ====== ===== ===== ======
Average AUM $809.0 $359.4 $203.6 $47.2 $79.0 $119.8
By client domicile: (in billions) Total U.S. Canada U.K. Continental
Europe Asia
--------------------------------- ----- ---- ------ ---- ----------- ----
September 30, 2016 $820.2 $537.2 $23.9 $100.7 $75.5 $82.9
Long-term inflows 46.2 25.8 0.9 4.2 7.2 8.1
Long-term outflows (48.9) (31.5) (1.4) (3.8) (7.7) (4.5)
----- ----- ---- ---- ---- ----
Long-term net flows (2.7) (5.7) (0.5) 0.4 (0.5) 3.6
Net flows in Invesco PowerShares QQQ fund 2.7 2.7 - - - -
Net flows in institutional money market funds 1.1 2.3 - (0.1) (0.1) (1.0)
--- --- --- ---- ---- ----
Total net flows 1.1 (0.7) (0.5) 0.3 (0.6) 2.6
Market gains and losses/reinvestment 6.4 3.0 0.2 1.5 1.2 0.5
Foreign currency translation (14.8) - (0.5) (4.3) (4.0) (6.0)
----- --- ---- ---- ---- ----
December 31, 2016 $812.9 $539.5 $23.1 $98.2 $72.1 $80.0
====== ====== ===== ===== ===== =====
See the footnotes immediately following these tables.
Invesco Ltd.
Year-to-Date Assets Under Management
(in billions) December 31, December 31,
2016 2015 % Change
------------ ------------- ------------- --------
Beginning Assets $775.6 $792.4 (2.1)%
Long-term inflows 186.5 189.1 (1.4)%
Long-term outflows (173.8) (172.9) 0.5%
------ ------
Long-term net flows 12.7 16.2 (21.6)%
Net flows in Invesco PowerShares QQQ fund (2.6) (1.8) 44.4%
Net flows in institutional money market funds 12.8 (11.9) N/A
---- -----
Total net flows 22.9 2.5 816.0%
Market gains and losses/reinvestment 37.7 (2.6) N/A
Acquisitions/dispositions, net (1.2) (0.7) 71.4%
Foreign currency translation (22.1) (16.0) 38.1%
----- -----
Ending Assets $812.9 $775.6 4.8%
====== ======
Average long-term AUM $683.9 $688.7 (0.7)%
Average AUM $788.8 $794.7 (0.7)%
Gross revenue yield on AUM(a) 60.7 bps 65.0 bps
Gross revenue yield on AUM before performance
fees(a) 60.2 bps 63.9 bps
Net revenue yield on AUM(b) 43.0 bps 45.8 bps
Net revenue yield on AUM before performance fees(b) 42.4 bps 44.6 bps
-------------------------------------------------- ---- --- ---- ---
By active/passive: (in billions) Total AUM Active(e) Passive(e)
-------------------------------- --------- -------- ---------
December 31, 2015 $775.6 $636.5 $139.1
Long-term inflows 186.5 141.9 44.6
Long-term outflows (173.8) (135.0) (38.8)
------ ------ -----
Long-term net flows 12.7 6.9 5.8
Net flows in Invesco PowerShares
QQQ fund (2.6) - (2.6)
Net flows in institutional money
market funds 12.8 13.1 (0.3)
---- ---- ----
Total net flows 22.9 20.0 2.9
Market gains and losses/
reinvestment 37.7 32.1 5.6
Acquisitions/dispositions, net (1.2) 2.0 (3.2)
Foreign currency translation (22.1) (22.1) -
----- ----- ---
December 31, 2016 $812.9 $668.5 $144.4
====== ====== ======
Average AUM $788.8 $653.4 $135.4
====== ====== ======
Gross revenue yield on AUM(a) 60.7 bps 70.3 bps 15.3 bps
Net revenue yield on AUM(b) 43.0 bps 48.8 bps 15.3 bps
By channel: (in billions) Total Retail Institutional
------------------------ ----- ------ -------------
December 31, 2015 $775.6 $514.8 $260.8
Long-term inflows 186.5 143.8 42.7
Long-term outflows (173.8) (142.1) (31.7)
------ ------ -----
Long-term net flows 12.7 1.7 11.0
Net flows in Invesco PowerShares
QQQ fund (2.6) (2.6) -
Net flows in institutional money
market funds 12.8 - 12.8
---- --- ----
Total net flows 22.9 (0.9) 23.8
Market gains and losses/
reinvestment 37.7 30.4 7.3
Acquisitions/dispositions, net (1.2) 0.4 (1.6)
Foreign currency translation (22.1) (18.2) (3.9)
----- ----- ----
December 31, 2016 $812.9 $526.5 $286.4
====== ====== ======
See the footnotes immediately following these tables.
Invesco Ltd.
Year-to-Date Assets Under Management (continued)
By asset class: (in billions) Total Equity Fixed Balanced Money Alternatives(c)
Income Market (d)
--- ---
December 31, 2015 $775.6 $370.9 $187.9 $48.1 $64.6 $104.1
Long-term inflows 186.5 80.9 50.4 9.8 4.0 41.4
Long-term outflows (173.8) (101.8) (35.3) (11.5) (3.8) (21.4)
------ ------ ----- ----- ---- -----
Long-term net flows 12.7 (20.9) 15.1 (1.7) 0.2 20.0
Net flows in Invesco PowerShares QQQ fund (2.6) (2.6) - - - -
Net flows in institutional money market funds 12.8 - - - 12.8 -
---- --- --- --- ---- ---
Total net flows 22.9 (23.5) 15.1 (1.7) 13.0 20.0
Market gains and losses/reinvestment 37.7 26.6 4.3 2.5 0.5 3.8
Acquisitions/dispositions, net (1.2) 0.4 (1.1) - 0.4 (0.9)
Foreign currency translation (22.1) (10.3) (4.5) (2.1) (0.2) (5.0)
----- ----- ---- ---- ----
December 31, 2016 $812.9 $364.1 $201.7 $46.8 $78.3 $122.0
====== ====== ====== ===== ===== ======
Average AUM $788.8 $356.3 $196.6 $47.3 $74.3 $114.3
----------- ------ ------ ------ ----- ----- ------
By client domicile: (in billions) Total U.S. Canada U.K. Continental Asia
Europe
--- ------
December 31, 2015 $775.6 $510.7 $21.7 $104.2 $75.4 $63.6
Long-term inflows 186.5 110.4 3.5 15.7 25.9 31.0
Long-term outflows (173.8) (108.3) (4.6) (16.2) (29.2) (15.5)
------ ------ ---- ----- ----- -----
Long-term net flows 12.7 2.1 (1.1) (0.5) (3.3) 15.5
Net flows in Invesco PowerShares QQQ fund (2.6) (2.6) - - - -
Net flows in institutional money market funds 12.8 7.9 0.4 3.2 (0.1) 1.4
---- --- --- --- ---- ---
Total net flows 22.9 7.4 (0.7) 2.7 (3.4) 16.9
Market gains and losses/reinvestment 37.7 25.1 1.4 7.1 2.7 1.4
Acquisitions/dispositions, net (1.2) (3.6) - - - 2.4
Foreign currency translation (22.1) (0.1) 0.7 (15.8) (2.6) (4.3)
----- ---- --- ----- ---- ----
December 31, 2016 $812.9 $539.5 $23.1 $98.2 $72.1 $80.0
====== ====== ===== ===== ===== =====
See the footnotes immediately
following these tables.
Invesco Ltd.
Quarterly Assets Under Management - Passive(e)
(in billions) Q4-16 Q3-16 % Change Q4-15
------------ ----- ----- -------- -----
Beginning Assets $143.3 $133.5 7.3% $131.7
Long-term inflows 10.6 11.8 (10.2)% 9.8
Long-term outflows (11.4) (7.9) 44.3% (9.4)
----- ---- ----
Long-term net flows (0.8) 3.9 N/A 0.4
Net flows in Invesco PowerShares QQQ fund 2.7 1.1 145.5% 2.0
Net flows in institutional money market funds - (0.1) (100.0)% 0.3
--- ---- ---
Total net flows 1.9 4.9 (61.2)% 2.7
Market gains and losses/reinvestment (0.6) 4.9 N/A 4.7
Foreign currency translation (0.2) - N/A -
---- --- ---
Ending Assets $144.4 $143.3 0.8% $139.1
====== ====== ======
Average long-term AUM $101.8 $102.2 (0.4)% $97.2
Average AUM $142.0 $141.0 0.7% $139.1
Gross revenue yield on AUM(a) 17.1bps 15.3bps 14.7bps
Gross revenue yield on AUM before performance fees(a) 17.1bps 15.3bps 14.7bps
Net revenue yield on AUM(b) 17.1bps 15.3bps 14.7bps
Net revenue yield on AUM before performance fees(b) 17.1bps 15.3bps 14.7bps
-------------------------------------------------- ------- ------- -------
By channel: (in billions) Total Retail Institutional
------------------------ ----- ------ -------------
September 30, 2016 $143.3 $126.2 $17.1
Long-term inflows 10.6 10.6 -
Long-term outflows (11.4) (10.1) (1.3)
----- ----- ----
Long-term net flows (0.8) 0.5 (1.3)
Net flows in Invesco
PowerShares QQQ fund 2.7 2.7 -
Net flows in institutional
money market funds - - -
--- ---
Total net flows 1.9 3.2 (1.3)
Market gains and losses/
reinvestment (0.6) (0.6) -
Foreign currency translation (0.2) - (0.2)
---- --- ----
December 31, 2016 $144.4 $128.8 $15.6
====== ====== =====
By asset class: (in billions) Total Equity Fixed Income Balanced Money
Market Alternatives(c)
----------------------------- ----- ------ ------------ -------- ------ --------------
September 30, 2016 $143.3 $91.6 $42.4 $- $0.1 $9.2
Long-term inflows 10.6 6.6 3.0 - - 1.0
Long-term outflows (11.4) (8.0) (2.4) - - (1.0)
----- ---- ---- --- --- ----
Long-term net flows (0.8) (1.4) 0.6 - - -
Net flows in Invesco PowerShares QQQ fund 2.7 2.7 - - - -
Net flows in institutional money market funds - - - - - -
--- --- --- --- --- ---
Total net flows 1.9 1.3 0.6 - - -
Market gains and losses/reinvestment (0.6) 0.6 (1.3) - (0.1) 0.2
Foreign currency translation (0.2) - - - - (0.2)
December 31, 2016 $144.4 $93.5 $41.7 $- $- $9.2
====== ===== ===== === === ====
Average AUM $142.0 $91.0 $41.8 $- $- $9.2
By client domicile: (in billions) Total U.S. Canada U.K. Continental Europe Asia
-------------------------------- ----- ---- ------ ---- ------------------ ----
September 30, 2016 $143.3 $138.6 $0.5 $- $1.9 $2.3
Long-term inflows 10.6 10.4 - - 0.2 -
Long-term outflows (11.4) (11.2) - - (0.2) -
----- ----- --- --- ---- ---
Long-term net flows (0.8) (0.8) - - - -
Net flows in Invesco PowerShares QQQ fund 2.7 2.7 - - - -
Net flows in institutional money market funds - - - - - -
--- --- --- --- --- ---
Total net flows 1.9 1.9 - - - -
Market gains and losses/reinvestment (0.6) (0.6) - - - -
Foreign currency translation (0.2) - - - - (0.2)
December 31, 2016 $144.4 $139.9 $0.5 $- $1.9 $2.1
====== ====== ==== === ==== ====
See the footnotes immediately
following these tables.
Invesco Ltd.
Year-to-Date Assets Under Management - Passive(e)
(in billions) December 31, 2016 December 31, 2015 % Change
------------ ----------------- ----------------- --------
Beginning Assets $139.1 $141.4 (1.6)%
Long-term inflows 44.6 35.5 25.6%
Long-term outflows (38.8) (33.4) 16.2%
----- -----
Long-term net flows 5.8 2.1 176.2%
Net flows in Invesco PowerShares QQQ fund (2.6) (1.8) 44.4%
Net flows in institutional money market funds (0.3) 0.4 N/A
---- ---
Total net flows 2.9 0.7 314.3%
Market gains and losses/reinvestment 5.6 (2.3) N/A
Acquisitions/dispositions, net (3.2) (0.7) 357.1%
Foreign currency translation - - N/A
--- ---
Ending Assets $144.4 $139.1 3.8%
====== ======
Average long-term AUM $97.1 $101.2 (4.1)%
Average AUM $135.4 $141.1 (4.0)%
Gross revenue yield on AUM(a) 15.3bps 14.5bps
Gross revenue yield on AUM before performance fees(a) 15.3bps 14.5bps
Net revenue yield on AUM(b) 15.3bps 14.5bps
Net revenue yield on AUM before performance fees(b) 15.3bps 14.5bps
-------------------------------------------------- ------- -------
By channel: (in billions) Total Retail Institutional
------------------------ ----- ------ -------------
December 31, 2015 $139.1 $118.7 $20.4
Long-term inflows 44.6 42.7 1.9
Long-term outflows (38.8) (35.7) (3.1)
----- ----- ----
Long-term net flows 5.8 7.0 (1.2)
Net flows in Invesco PowerShares QQQ fund (2.6) (2.6) -
Net flows in institutional money market funds (0.3) - (0.3)
---- --- ----
Total net flows 2.9 4.4 (1.5)
Market gains and losses/reinvestment 5.6 5.7 (0.1)
Acquisitions/dispositions, net (3.2) - (3.2)
Foreign currency translation - - -
--- --- ---
December 31, 2016 $144.4 $128.8 $15.6
====== ====== =====
By asset class: (in billions) Total Equity Fixed Income Balanced Money Market Alternatives(c)
---------------------------- ----- ------ ------------ -------- ------------ --------------
December 31, 2015 $139.1 $91.0 $38.6 $- $0.4 $9.1
Long-term inflows 44.6 28.3 12.7 - - 3.6
Long-term outflows (38.8) (29.0) (6.4) - - (3.4)
----- ----- ---- --- --- ----
Long-term net flows 5.8 (0.7) 6.3 - - 0.2
Net flows in Invesco PowerShares QQQ fund (2.6) (2.6) - - - -
Net flows in institutional money market funds (0.3) - - - (0.3) -
---- --- --- --- ---- ---
Total net flows 2.9 (3.3) 6.3 - (0.3) 0.2
Market gains and losses/reinvestment 5.6 5.8 (0.5) - (0.1) 0.4
Acquisitions/dispositions, net (3.2) - (2.7) - - (0.5)
Foreign currency translation - - - - - -
December 31, 2016 $144.4 $93.5 $41.7 $- $- $9.2
====== ===== ===== === === ====
Average AUM $135.4 $87.4 $38.9 $- $0.1 $9.0
By client domicile: (in billions) Total U.S. Canada U.K. Continental Europe Asia
-------------------------------- ----- ---- ------ ---- ------------------ ----
December 31, 2015 $139.1 $134.4 $0.4 $- $1.9 $2.4
Long-term inflows 44.6 43.8 0.3 - 0.5 -
Long-term outflows (38.8) (37.9) (0.2) - (0.7) -
----- ----- ---- --- ---- ---
Long-term net flows 5.8 5.9 0.1 - (0.2) -
Net flows in Invesco PowerShares QQQ fund (2.6) (2.6) - - - -
Net flows in institutional money market funds (0.3) - - - - (0.3)
---- --- --- --- --- ----
Total net flows 2.9 3.3 0.1 - (0.2) (0.3)
Market gains and losses/reinvestment 5.6 5.4 - - 0.2 -
Acquisitions/dispositions, net (3.2) (3.2) - - - -
Foreign currency translation - - - - - -
December 31, 2016 $144.4 $139.9 $0.5 $- $1.9 $2.1
====== ====== ==== === ==== ====
See the footnotes immediately
following these tables.
Invesco Ltd.
Footnotes to the Assets Under Management Tables
(a) Gross revenue yield on AUM is equal
to annualized total operating
revenues divided by average AUM,
excluding China joint venture (JV)
AUM. For quarterly AUM, our share of
the average AUM in the fourth
quarter for our JVs in China was
$10.1 billion (third quarter 2016:
$10.4 billion; fourth quarter 2015:
$6.6 billion). For year-to-date
AUM, our share of the average AUM in
the twelve months of 2016 for our
JVs in China was $9.2 billion
(twelve months of 2015: $6.1
billion). It is appropriate to
exclude the average AUM of our China
JVs for purposes of computing gross
revenue yield on AUM, because the
revenues resulting from these AUM
are not presented in our operating
revenues. Under U.S. GAAP, our share
of the net income of the JVs is
recorded as equity in earnings of
unconsolidated affiliates on our
Condensed Consolidated Statements of
Income. Gross revenue yield, the
most comparable U.S. GAAP-based
measure to net revenue yield, is not
considered a meaningful effective
fee rate measure. The numerator of
the gross revenue yield measure,
operating revenues, excludes the
management fees earned from CIP;
however, the denominator of the
measure includes the AUM of these
investment products. Therefore, the
gross revenue yield measure is not
considered representative of the
company's true effective fee rate
from AUM.
(b) Net revenue yield on AUM is equal to
annualized net revenues divided by
average AUM. See the reconciliations
of U.S. GAAP to Non-GAAP
Information on pages 9 through 11 of
this release for a reconciliation of
operating revenues to net revenues.
(c) The alternatives asset class includes
absolute return, commodities,
currencies, financial structures,
global macro, long/short equity,
managed futures, multi-
alternatives, private capital -
direct, private capital - fund of
funds, private direct real estate,
public real estate securities,
senior secured loans and custom
solutions.
(d) Long-term AUM excludes institutional
money market AUM and PowerShares QQQ
AUM. Ending AUM as of December 31,
2016 includes $70.9 billion in
institutional money market AUM and
$42.0 billion in PowerShares QQQ AUM
(September 30, 2016: $69.2 billion
and $39.5 billion, respectively;
December 31, 2015: $58.5 billion and
$42.9 billion, respectively). Ending
retail money market AUM as of
December 31, 2016, included in long-
term AUM, were $7.4 billion
(September 30, 2016: $8.0 billion;
December 31, 2015: $6.1 billion).
(e) Passive AUM includes ETFs, UITs, non-
fee earning leverage and other
passive mandates. Active AUM are
total AUM less Passive AUM.
Invesco Ltd.
Investment Capabilities Performance Overview
Benchmark Comparison Peer Group Comparison
-------------------- ---------------------
% of AUM Ahead of % of AUM In Top Half of
Benchmark Peer Group
Equities 1yr 3yr 5yr 1yr 3yr 5yr
--- --- --- --- --- ---
U.S. Core 12% 0% 0% 45% 5% 4%
--------- --- --- --- --- --- ---
U.S. Growth 30% 30% 38% 74% 38% 38%
----------- --- --- --- --- --- ---
U.S. Value 49% 55% 89% 62% 56% 85%
---------- --- --- --- --- --- ---
Sector 12% 5% 54% 18% 14% 15%
------ --- --- --- --- --- ---
U.K. 5% 93% 100% 12% 98% 73%
---- --- --- --- --- --- ---
Canadian 65% 32% 61% 16% 9% 50%
-------- --- --- --- --- --- ---
Asian 78% 78% 95% 76% 64% 80%
----- --- --- --- --- --- ---
Continental European 60% 99% 100% 50% 75% 95%
-------------------- --- --- --- --- --- ---
Global 57% 48% 73% 79% 69% 91%
------ --- --- --- --- --- ---
Global Ex U.S. and Emerging
Markets 84% 98% 98% 13% 99% 20%
--------------------------- --- --- --- --- --- ---
Other
Alternatives 67% 54% 58% 65% 70% 33%
------------ --- --- --- --- --- ---
Balanced 59% 59% 45% 96% 90% 94%
-------- --- --- --- --- --- ---
Fixed Income
Money Market 99% 68% 68% 97% 97% 98%
------------ --- --- --- --- --- ---
U.S. Fixed Income 73% 90% 95% 74% 80% 86%
----------------- --- --- --- --- --- ---
Global Fixed Income 45% 48% 98% 10% 20% 86%
Stable Value 100% 100% 100% 100% 100% 100%
------------ --- --- --- --- --- ---
Note: AUM measured in the one-, three-,
and five-year peer group rankings
represents 58%, 57%, and 55% of
total Invesco AUM, respectively,
and AUM measured versus benchmark
on a one-, three-, and five-
year basis represents 70%, 68%,
and 64% of total Invesco AUM,
respectively, as of 12/31/2016.
Peer group rankings are sourced
from a widely-used third party
ranking agency in each fund's
market (Lipper, Morningstar, IA,
Russell, Mercer, eVestment
Alliance, SITCA, Value Research)
and are asset-weighted in 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 passive
products, closed-end funds,
private equity limited
partnerships, non-discretionary
funds, unit investment trusts,
fund of funds with component funds
managed by Invesco, stable value
building block funds, and CDOs.
Certain funds and products were
excluded from the analysis because
of limited benchmark or peer group
data. Had these been available,
results may have been different.
These results are preliminary and
subject to revision. Performance
assumes the reinvestment of
dividends. Past performance is not
indicative of future results and
may not reflect an investor's
experience.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/invesco-reports-results-for-the-year-and-three-months-ended-december-31-2016-300397176.html
SOURCE Invesco Ltd.
