UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2021March 31, 2022

OR

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

for the transition period from to

Commission File Number 001-38103

Graphic

JANUS HENDERSON GROUP PLC

(Exact name of registrant as specified in its charter)

Jersey, Channel Islands
(State or other jurisdiction of
incorporation or organization)

98-1376360
(I.R.S. Employer
Identification No.)

201 Bishopsgate

London, United Kingdom
(Address of principal executive offices)

EC2M3AE
(Zip Code)

+44 (0) 20 7818 1818

(Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1.50 Per Share Par Value

JHG

New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

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

Large Accelerated Filer Accelerated Filer Non-Accelerated Filer Smaller Reporting Company Emerging Growth Company

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

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

As of July 26, 2021,May 2, 2022, there were 172,349,989167,787,514 shares of the Company’s common stock, $1.50 par value per share, issued and outstanding.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(U.S. Dollars in Millions, Except Share Data)

June 30, 

December 31, 

March 31, 

December 31, 

    

2021

    

2020

    

2022

    

2021

ASSETS

Current assets:

Cash and cash equivalents

$

966.9

$

1,099.7

$

800.8

$

1,107.3

Investment securities

 

270.2

 

268.1

 

419.3

 

451.4

Fees and other receivables

 

386.0

 

373.6

 

322.6

 

351.6

OEIC and unit trust receivables

 

227.9

 

114.7

 

256.3

 

84.4

Assets of consolidated VIEs:

Cash and cash equivalents

10.4

8.4

12.6

11.3

Investment securities

216.8

214.6

244.5

250.9

Other current assets

1.7

3.5

2.5

2.1

Other current assets

107.1

111.1

147.3

150.2

Total current assets

 

2,187.0

 

2,193.7

 

2,205.9

 

2,409.2

Non-current assets:

Property, equipment and software, net

 

66.4

 

77.9

 

54.6

 

63.3

Intangible assets, net

 

2,637.3

 

2,686.3

 

2,488.9

 

2,542.7

Goodwill

 

1,389.9

 

1,383.9

 

1,316.8

 

1,374.3

Retirement benefit asset, net

193.9

191.3

160.5

165.1

Other non-current assets

 

156.0

 

157.7

 

196.6

 

172.9

Total assets

$

6,630.5

$

6,690.8

$

6,423.3

$

6,727.5

LIABILITIES

Current liabilities:

Accounts payable and accrued liabilities

$

222.2

$

232.1

$

253.4

$

271.6

Current portion of accrued compensation, benefits and staff costs

 

275.2

 

371.0

 

174.7

 

420.0

OEIC and unit trust payables

231.8

121.5

263.5

92.2

Liabilities of consolidated VIEs:

Accounts payable and accrued liabilities

 

4.2

 

3.2

 

2.5

 

2.6

Total current liabilities

 

733.4

 

727.8

 

694.1

 

786.4

Non-current liabilities:

Accrued compensation, benefits and staff costs

32.3

53.7

22.0

45.7

Long-term debt

 

311.9

 

313.3

 

309.7

 

310.4

Deferred tax liabilities, net

 

648.2

 

627.4

 

617.0

 

619.2

Retirement benefit obligations, net

4.8

4.7

4.6

4.8

Other non-current liabilities

 

133.4

 

144.3

 

121.3

 

134.4

Total liabilities

 

1,864.0

 

1,871.2

 

1,768.7

 

1,900.9

Commitments and contingencies (See Note 14)

Commitments and contingencies (See Note 15)

REDEEMABLE NONCONTROLLING INTERESTS

 

124.9

 

85.8

 

150.7

 

163.4

EQUITY

Common stock, $1.50 par value; 480,000,000 shares authorized, and 172,349,989 and 180,403,176 shares issued and outstanding as of June 30, 2021, and December 31, 2020, respectively

 

258.5

 

270.6

Common stock, $1.50 par value; 480,000,000 shares authorized, and 167,787,514 and 169,046,154 shares issued and outstanding as of March 31, 2022, and December 31, 2021, respectively

 

251.7

 

253.6

Additional paid-in-capital

3,743.6

3,815.0

3,684.9

3,771.8

Treasury shares, 1,406,401 and 2,548,063 shares held at June 30, 2021, and December 31, 2020, respectively

 

(67.6)

 

(107.3)

Treasury shares, 830,071 and 1,133,934 shares held at March 31, 2022, and December 31, 2021, respectively

 

(40.3)

 

(55.1)

Accumulated other comprehensive loss, net of tax

 

(318.2)

 

(324.0)

 

(443.2)

 

(396.1)

Retained earnings

1,009.7

1,062.1

1,048.0

1,073.6

Total shareholders’ equity

 

4,626.0

 

4,716.4

 

4,501.1

 

4,647.8

Nonredeemable noncontrolling interests

 

15.6

 

17.4

 

2.8

 

15.4

Total equity

 

4,641.6

 

4,733.8

 

4,503.9

 

4,663.2

Total liabilities, redeemable noncontrolling interests and equity

$

6,630.5

$

6,690.8

$

6,423.3

$

6,727.5

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(U.S. Dollars in Millions, Except per Share Data)

Three months ended

Six months ended

Three months ended

June 30, 

June 30, 

March 31, 

    

2021

    

2020

    

2021

    

2020

    

2022

    

2021

Revenue:

Management fees

$

544.1

$

407.7

$

1,059.0

$

847.3

$

514.0

$

514.9

Performance fees

 

77.4

 

17.2

 

94.4

 

31.8

 

(8.4)

 

17.0

Shareowner servicing fees

 

64.0

 

47.3

 

124.8

 

97.6

 

62.4

 

60.8

Other revenue

52.9

45.8

104.2

96.2

52.0

51.3

Total revenue

 

738.4

 

518.0

 

1,382.4

 

1,072.9

 

620.0

 

644.0

Operating expenses:

Employee compensation and benefits

 

192.4

145.8

 

367.0

 

301.4

 

164.6

 

174.6

Long-term incentive plans

 

49.8

49.1

 

103.3

 

82.7

 

51.4

 

53.5

Distribution expenses

134.8

104.7

262.2

216.9

141.8

127.4

Investment administration

13.1

12.6

25.7

24.3

14.8

12.6

Marketing

 

6.7

3.7

 

12.9

 

10.4

 

7.4

 

6.2

General, administrative and occupancy

 

65.7

58.0

 

128.7

 

123.2

 

73.1

 

63.0

Impairment of goodwill and intangible assets

40.8

26.4

44.4

513.7

32.8

3.6

Depreciation and amortization

 

10.1

11.0

 

20.7

 

26.0

 

9.5

 

10.6

Total operating expenses

 

513.4

 

411.3

 

964.9

 

1,298.6

 

495.4

 

451.5

Operating income (loss)

 

225.0

 

106.7

 

417.5

 

(225.7)

Operating income

 

124.6

 

192.5

Interest expense

 

(3.2)

(3.2)

 

(6.4)

 

(6.5)

 

(3.2)

 

(3.2)

Investment gains (losses), net

 

1.8

50.3

 

3.4

 

(0.2)

 

(32.2)

 

1.6

Other non-operating income (expenses), net

(2.7)

8.6

(2.8)

40.8

Income (loss) before taxes

 

220.9

 

162.4

 

411.7

 

(191.6)

Income tax benefit (provision)

 

(79.7)

(30.1)

 

(122.8)

 

38.7

Net income (loss)

 

141.2

 

132.3

 

288.9

 

(152.9)

Net loss (income) attributable to noncontrolling interests

 

(3.9)

(29.4)

 

3.9

 

8.8

Net income (loss) attributable to JHG

$

137.3

$

102.9

$

292.8

$

(144.1)

Other non-operating expenses, net

(7.8)

(0.1)

Income before taxes

 

81.4

 

190.8

Income tax provision

 

(22.8)

 

(43.1)

Net income

 

58.6

 

147.7

Net loss attributable to noncontrolling interests

 

20.1

 

7.8

Net income attributable to JHG

$

78.7

$

155.5

Earnings (loss) per share attributable to JHG common shareholders:

Earnings per share attributable to JHG common shareholders:

Basic

$

0.80

$

0.55

$

1.68

$

(0.79)

$

0.47

$

0.88

Diluted

$

0.79

$

0.55

$

1.67

$

(0.79)

$

0.47

$

0.88

Other comprehensive income (loss), net of tax:

Foreign currency translation gains (losses)

$

3.2

$

10.6

$

6.5

$

(138.5)

$

(47.0)

$

3.3

Actuarial gains

 

0.2

 

0.1

 

0.3

 

0.2

 

0.1

 

0.1

Other comprehensive income (loss), net of tax

 

3.4

 

10.7

 

6.8

 

(138.3)

 

(46.9)

 

3.4

Other comprehensive loss (income) attributable to noncontrolling interests

 

(0.2)

(1.4)

 

(1.0)

 

3.7

Other comprehensive income attributable to noncontrolling interests

 

(0.2)

 

(0.8)

Other comprehensive income (loss) attributable to JHG

$

3.2

$

9.3

$

5.8

$

(134.6)

$

(47.1)

$

2.6

Total comprehensive income (loss)

$

144.6

$

143.0

$

295.7

$

(291.2)

Total comprehensive loss (income) attributable to noncontrolling interests

 

(4.1)

 

(30.8)

 

2.9

 

12.5

Total comprehensive income (loss) attributable to JHG

$

140.5

$

112.2

$

298.6

$

(278.7)

Total comprehensive income

$

11.7

$

151.1

Total comprehensive loss attributable to noncontrolling interests

 

19.9

 

7.0

Total comprehensive income attributable to JHG

$

31.6

$

158.1

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(U.S. Dollars in Millions)

Six months ended

June 30, 

2021

2020

CASH FLOWS PROVIDED BY (USED FOR):

Operating activities:

Net income (loss)

$

288.9

$

(152.9)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

20.7

26.0

Impairment of goodwill and intangible assets

44.4

513.7

Deferred income taxes

22.8

(117.7)

Stock-based compensation plan expense

34.7

34.1

Gain on sale of Geneva

-

(16.2)

Investment (gains) losses, net

(3.4)

0.2

Contributions to pension plans in excess of costs recognized

(0.5)

(0.2)

Contingent consideration fair value adjustment

-

(7.1)

Other, net

(5.9)

(22.2)

Changes in operating assets and liabilities:

OEIC and unit trust receivables and payables

(2.9)

16.5

Other assets

(33.5)

60.4

Other accruals and liabilities

(70.5)

(92.1)

Net operating activities

294.8

242.5

Investing activities:

Sales (purchases) of:

Investment securities, net

(1.5)

77.5

Property, equipment and software

(1.1)

(12.4)

Investment securities by consolidated seeded investment products, net

(37.5)

(237.4)

Cash received (paid) on settled seed capital hedges, net

(8.0)

6.0

Dividends received from equity-method investments

1.1

0.5

Receipt of contingent consideration payments from sale of Volantis

0.7

2.2

Receipt of contingent consideration payments from sale of Geneva

3.4

-

Proceeds from sale of Geneva

-

38.6

Net investing activities

(42.9)

(125.0)

Financing activities:

Proceeds from stock-based compensation plans

5.5

-

Purchase of common stock for stock-based compensation plans

(72.0)

(45.7)

Purchase of common stock from Dai-ichi Life and share buyback program

(230.2)

(53.2)

Dividends paid to shareholders

(126.7)

(132.3)

Payment of contingent consideration

-

(13.8)

Distributions to noncontrolling interests

(0.3)

(0.5)

Third-party sales in consolidated seeded investment products, net

39.5

237.4

Principal payments under capital lease obligations

(0.3)

(0.5)

Net financing activities

(384.5)

(8.6)

Cash and cash equivalents:

Effect of foreign exchange rate changes

1.8

(25.0)

Net change

(130.8)

83.9

At beginning of period

1,108.1

796.5

At end of period

$

977.3

$

880.4

Supplemental cash flow information:

Cash paid for interest

$

7.3

$

7.3

Cash paid for income taxes, net of refunds

$

113.1

$

32.9

Reconciliation of cash and cash equivalents:

Cash and cash equivalents

$

966.9

$

836.6

Cash and cash equivalents held in consolidated VIEs

10.4

43.8

Total cash and cash equivalents

$

977.3

$

880.4

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(Amounts in Millions)

    

    

    

    

    

Accumulated

    

    

    

Additional

other

Nonredeemable

Number of

Common

paid-in

Treasury

comprehensive

Retained

noncontrolling

Total

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at April 1, 2021

172.3

$

258.5

$

3,769.0

$

(104.4)

$

(321.4)

$

937.7

$

15.8

$

4,555.2

Net income

137.3

 

137.3

Other comprehensive income

3.2

 

3.2

Dividends paid to shareholders ($0.38 per share)

0.1

(65.1)

 

(65.0)

Purchase of common stock from Dai-ichi Life and share buyback program

Distributions to noncontrolling interests

(0.2)

(0.2)

Fair value adjustments to redeemable noncontrolling interests

(0.2)

(0.2)

Purchase of common stock for stock-based compensation plans

(10.2)

(0.3)

 

(10.5)

Vesting of stock-based compensation plans

(37.1)

37.1

Stock-based compensation plan expense

17.1

 

17.1

Proceeds from stock-based compensation plans

4.7

4.7

Balance at June 30, 2021

172.3

$

258.5

$

3,743.6

$

(67.6)

$

(318.2)

$

1,009.7

$

15.6

$

4,641.6

Three months ended

March 31, 

2022

2021

CASH FLOWS PROVIDED BY (USED FOR):

Operating activities:

Net income

$

58.6

$

147.7

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

9.5

10.6

Impairment of goodwill and intangible assets

32.8

3.6

Deferred income taxes

0.2

0.4

Stock-based compensation plan expense

22.6

17.6

Loss on sale of Intech

9.1

-

Investment gains (losses), net

32.2

(1.6)

Contributions to pension plans in excess of costs recognized

(0.1)

-

Other, net

11.3

(2.4)

Changes in operating assets and liabilities:

OEIC and unit trust receivables and payables

(0.6)

(0.3)

Other assets

(1.1)

4.1

Other accruals and liabilities

(232.0)

(153.9)

Net operating activities

(57.5)

25.8

Investing activities:

Sales (purchases) of:

Investment securities, net

(34.2)

51.4

Property, equipment and software

(2.9)

(1.6)

Investment securities by consolidated seeded investment products, net

13.0

(28.1)

Cash received (paid) on settled seed capital hedges, net

11.7

(1.8)

Dividends received from equity-method investments

0.5

1.1

JHG long-term note with Intech

(10.0)

-

Proceeds from sale of Intech

5.0

-

Receipt of contingent consideration payments from sale of subsidiaries

-

2.4

Net investing activities

(16.9)

23.4

Financing activities:

Proceeds from stock-based compensation plans

0.5

0.8

Purchase of common stock for stock-based compensation plans

(94.5)

(61.5)

Purchase of common stock from Dai-ichi Life and share buyback program

(43.3)

(230.2)

Dividends paid to shareholders

(64.3)

(61.7)

Distributions to noncontrolling interests

(1.3)

(0.1)

Third-party sales (purchases) in consolidated seeded investment products, net

(11.7)

30.2

Principal payments under capital lease obligations

(0.2)

-

Net financing activities

(214.8)

(322.5)

Cash and cash equivalents:

Effect of foreign exchange rate changes

(16.0)

1.8

Net change

(305.2)

(271.5)

At beginning of period

1,118.6

1,108.1

At end of period

$

813.4

$

836.6

Supplemental cash flow information:

Cash paid for interest

$

7.3

$

7.3

Cash paid for income taxes, net of refunds

$

18.4

$

9.1

Reconciliation of cash and cash equivalents:

Cash and cash equivalents

$

800.8

$

826.1

Cash and cash equivalents held in consolidated VIEs

12.6

10.5

Total cash and cash equivalents

$

813.4

$

836.6

    

    

    

    

    

Accumulated

    

    

    

Additional

other

Nonredeemable

Number of

Common

paid-in

Treasury

comprehensive

Retained

noncontrolling

Total

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at April 1, 2020

184.9

$

277.4

$

3,803.7

$

(137.9)

$

(511.0)

$

942.8

$

18.4

$

4,393.4

Net income

102.9

0.1

 

103.0

Other comprehensive income

9.3

 

9.3

Dividends paid to shareholders ($0.36 per share)

0.1

(66.5)

 

(66.4)

Share buyback program

(1.0)

(1.6)

(20.4)

(22.0)

Distributions to noncontrolling interests

(0.4)

(0.4)

Fair value adjustments to redeemable noncontrolling interests

0.4

0.4

Purchase of common stock for stock-based compensation plans

(5.8)

(0.1)

 

(5.9)

Vesting of stock-based compensation plans

(23.4)

23.4

Stock-based compensation plan expense

17.5

 

17.5

Balance at June 30, 2020

183.9

$

275.8

$

3,792.1

$

(114.6)

$

(501.7)

$

959.2

$

18.1

$

4,428.9

The accompanying notes are an integral part of these condensed consolidated financial statements.

43

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) (Continued)

(Amounts in Millions)

    

    

    

    

    

Accumulated

    

    

    

Additional

other

Nonredeemable

Number of

Common

paid-in

Treasury

comprehensive

Retained

noncontrolling

Total

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at January 1, 2021

180.4

$

270.6

$

3,815.0

$

(107.3)

$

(324.0)

$

1,062.1

$

17.4

$

4,733.8

Net income

 

292.8

(1.5)

 

291.3

Other comprehensive income

5.8

 

 

5.8

Dividends paid to shareholders ($0.74 per share)

0.1

 

(126.8)

 

(126.7)

Purchase of common stock from Dai-ichi Life and share buyback program

(8.1)

(12.1)

(218.1)

(230.2)

Distributions to noncontrolling interests

(0.3)

(0.3)

Fair value adjustments to redeemable noncontrolling interests

(0.3)

(0.3)

Purchase of common stock for stock-based compensation plans

 

 

(71.4)

(0.6)

 

 

(72.0)

Vesting of stock-based compensation plans

(40.3)

40.3

 

 

Stock-based compensation plan expense

 

34.7

 

 

34.7

Proceeds from stock-based compensation plans

5.5

5.5

Balance at June 30, 2021

172.3

$

258.5

$

3,743.6

$

(67.6)

$

(318.2)

$

1,009.7

$

15.6

$

4,641.6

    

    

    

    

    

Accumulated

    

    

    

Additional

other

Nonredeemable

Number of

Common

paid-in

Treasury

comprehensive

Retained

noncontrolling

Total

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at January 1, 2020

187.0

$

280.5

$

3,828.5

$

(139.5)

$

(367.1)

$

1,284.1

$

19.7

$

4,906.2

Net loss

 

(144.1)

(1.1)

 

(145.2)

Other comprehensive loss

(134.6)

 

 

(134.6)

Dividends paid to shareholders ($0.64 per share)

0.1

 

(132.7)

 

(132.6)

Share buyback program

(3.1)

(4.7)

(48.5)

(53.2)

Distributions to noncontrolling interests

(0.5)

(0.5)

Fair value adjustments to redeemable noncontrolling interests

0.4

0.4

Purchase of common stock for stock-based compensation plans

 

 

(42.8)

(2.9)

 

 

(45.7)

Vesting of stock-based compensation plans

(27.8)

27.8

 

Stock-based compensation plan expense

 

34.1

 

34.1

Balance at June 30, 2020

183.9

$

275.8

$

3,792.1

$

(114.6)

$

(501.7)

$

959.2

$

18.1

$

4,428.9

    

    

    

    

    

Accumulated

    

    

    

Additional

other

Nonredeemable

Number of

Common

paid-in

Treasury

comprehensive

Retained

noncontrolling

Total

Three months ended March 31, 2022

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at January 1, 2022

169.0

$

253.6

$

3,771.8

$

(55.1)

$

(396.1)

$

1,073.6

$

15.4

$

4,663.2

Net income

 

78.7

 

78.7

Other comprehensive loss

(47.1)

 

 

(47.1)

Dividends paid to shareholders ($0.38 per share)

 

(64.3)

 

(64.3)

Purchase of common stock from share buyback program

(1.2)

(1.9)

(41.4)

(43.3)

Distributions to noncontrolling interests

(1.0)

(1.0)

Sale of Intech

(11.6)

(11.6)

Fair value adjustments to redeemable noncontrolling interests

1.4

1.4

Purchase of common stock for stock-based compensation plans

 

 

(94.1)

(0.4)

 

 

(94.5)

Vesting of stock-based compensation plans

(15.2)

15.2

 

 

Stock-based compensation plan expense

 

21.9

 

 

21.9

Proceeds from stock-based compensation plans

0.5

0.5

Balance at March 31, 2022

167.8

$

251.7

$

3,684.9

$

(40.3)

$

(443.2)

$

1,048.0

$

2.8

$

4,503.9

    

    

    

    

    

Accumulated

    

    

    

Additional

other

Nonredeemable

Number of

Common

paid-in

Treasury

comprehensive

Retained

noncontrolling

Total

Three months ended March 31, 2021

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at January 1, 2021

180.4

$

270.6

$

3,815.0

$

(107.3)

$

(324.0)

$

1,062.1

$

17.4

$

4,733.8

Net income

 

155.5

(1.5)

 

154.0

Other comprehensive income

2.6

 

 

2.6

Dividends paid to shareholders ($0.36 per share)

 

(61.7)

 

(61.7)

Purchase of common stock from Dai-ichi Life and share buyback program

(8.1)

(12.1)

(218.1)

(230.2)

Distributions to noncontrolling interests

(0.1)

(0.1)

Fair value adjustments to redeemable noncontrolling interests

(0.1)

(0.1)

Purchase of common stock for stock-based compensation plans

 

 

(61.2)

(0.3)

 

 

(61.5)

Vesting of stock-based compensation plans

(3.2)

3.2

 

Stock-based compensation plan expense

 

17.6

 

17.6

Proceeds from stock-based compensation plans

0.8

0.8

Balance at March 31, 2021

172.3

$

258.5

$

3,769.0

$

(104.4)

$

(321.4)

$

937.7

$

15.8

$

4,555.2

The accompanying notes are an integral part of these condensed consolidated financial statements. 

54

JANUS HENDERSON GROUP PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

In the opinion of management of Janus Henderson Group plc (“JHG,” “the Company,” “we,” “us,” “our” and similar terms), the accompanying unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to fairly state our financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP are not required for interim reporting purposes and have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the annual consolidated financial statements and notes presented in our Annual Report on Form 10-K for the year ended December 31, 2020.2021. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying financial statements through the issuance date.

Note 2 — Dispositions

On February 3, 2022, we announced the strategic decision to sell our 97%-owned Quantitative Equities subsidiary, Intech Investment Management LLC (“Intech”), to a consortium composed of Intech management and certain Intech non-executive directors (“Management Buyout”). The Management Buyout is expected to enable both organizations to refocus on their key value propositions: Janus Henderson on providing active, fundamental investing, and Intech on delivering quantitative investment solutions for institutional investors.

Recent Accounting Pronouncements Adopted

Income Taxes

In December 2019,On March 31, 2022, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, whichManagement Buyout closed and we recognized a $9.1 million loss on disposal of Intech. The loss is recognized in other non-operating expenses, net on our Condensed Consolidated Statements of Comprehensive Income. Consideration received as part of the FASB’s initiativeManagement Buyout included cash proceeds of $14.9 million ($9.9 million will be collected in the third quarter 2022), contingent consideration of up to reduce complexity$17.5 million which is based on future Intech revenue and an option agreement with a fair value of $3.9 million that provides JHG the option to purchase a certain equity stake in accounting standards. The ASU eliminates certain exceptions toIntech at a predetermined price on or before the general principlesseventh anniversary of ASC 740, Income Taxes, and simplifies income tax accounting in several areas. We adopted the ASU, which was effective as of January 1, 2021. The adoption of this ASU did not have a material impact on our results of operations or financial position.Management Buyout.

The terms of the transaction also included a $20.0 million 7-year term note subject to 2 tranches. The first tranche of $10.0 million was paid to Intech at closing while the second tranche of $10.0 million is available to Intech, subject to certain restrictions. The first tranche of the term note pays interest at 5.5%, while the second tranche pays interest at 6.0%.

JHG and Intech entered into a transition services agreement that provides for continuation of support services to help ensure a seamless transition in operations and continuity in serving Intech’s clients.

Note 23 — Consolidation

Variable Interest Entities

Consolidated Variable Interest Entities

Our consolidated variable interest entities (“VIEs”) as of June 30, 2021,March 31, 2022, and December 31, 2020,2021, include certain consolidated seeded investment products in which we have an investment and act as the investment manager. TheThird-party assets of theseheld in consolidated VIEs are not available to us or to our creditors. We may not, under any circumstances, access cash, cash equivalents or otherthird-party assets held by consolidated VIEs to use in our operating activities or otherwise. In addition, the investors in these consolidated VIEs have no recourse to the credit of JHG.

Unconsolidated Variable Interest Entities

The following table presents the carrying value of investment securities included on our Condensed Consolidated Balance Sheets pertaining to unconsolidated VIEs (in millions):

    

June 30, 

    

December 31, 

2021

2020

Unconsolidated VIEs

$

101.6

$

9.6

Our total exposure to unconsolidated VIEs represents the value of our economic ownership interest in the investment securities.

65

Unconsolidated Variable Interest Entities

The following table presents the carrying value of investment securities included on our Condensed Consolidated Balance Sheets pertaining to unconsolidated VIEs (in millions):

    

March 31, 

    

December 31, 

2022

2021

Unconsolidated VIEs

$

94.0

$

102.7

Our total exposure to unconsolidated VIEs represents the value of our economic ownership interest in the investment securities.

Voting Rights Entities

Consolidated Voting Rights Entities

The following table presents the balances related to consolidated voting rights entities (“VREs”) that were recorded on our Condensed Consolidated Balance Sheets, including our net interest in these products (in millions):

    

June 30, 

    

December 31, 

    

March 31, 

    

December 31, 

2021

2020

2022

2021

Investment securities

$

34.9

$

29.3

$

211.6

$

179.6

Cash and cash equivalents

2.2

 

2.8

18.8

 

1.3

Other current assets

0.4

0.4

2.0

0.7

Accounts payable and accrued liabilities

(0.3)

(0.1)

(2.6)

(1.2)

Total

$

37.2

$

32.4

$

229.8

$

180.4

Redeemable noncontrolling interests in consolidated VREs

(1.9)

 

(32.3)

 

(17.5)

JHG's net interest in consolidated VREs

$

35.3

$

32.4

$

197.5

$

162.9

Third-party assets held in consolidated VREs are not available to us or to our creditors. We may not, under any circumstances, access third-party assets held by consolidated VREs to use in our operating activities or otherwise. In addition, the investors in these consolidated VREs have no recourse to the credit of JHG.

Our total exposure to consolidated VREs represents the value of our economic ownership interest in these seeded investment products.

Unconsolidated Voting Rights Entities

The following table presents the carrying value of investment securities included on our Condensed Consolidated Balance Sheets pertaining to unconsolidated VREs (in millions):

    

June 30, 

    

December 31, 

    

March 31, 

    

December 31, 

2021

2020

2022

2021

Unconsolidated VREs

$

21.8

$

63.6

$

25.7

$

56.6

Our total exposure to unconsolidated VREs represents the value of our economic ownership interest in the investment securities.

Note 3 — Investment Securities

Our investment securities as of June 30, 2021, and December 31, 2020, are summarized as follows (in millions):

June 30, 

December 31, 

    

2021

    

2020

Seeded investment products:

Consolidated VIEs

$

216.8

$

214.6

Consolidated VREs

34.9

29.3

Unconsolidated VIEs and VREs

123.4

73.2

Separate accounts

54.5

63.5

Pooled investment funds

0.1

0.1

Total seeded investment products

 

429.7

 

380.7

Investments related to deferred compensation plans

 

51.9

 

96.5

Other investments

5.4

5.5

Total investment securities

$

487.0

$

482.7

76

Note 4 — Investment Securities

Our investment securities as of March 31, 2022, and December 31, 2021, are summarized as follows (in millions):

March 31, 

December 31, 

    

2022

    

2021

Seeded investment products:

Consolidated VIEs

$

244.5

$

250.9

Consolidated VREs

211.6

179.6

Unconsolidated VIEs and VREs

119.7

159.3

Separate accounts

54.3

56.7

Pooled investment funds

0.1

0.1

Total seeded investment products

 

630.2

 

646.6

Investments related to deferred compensation plans

 

26.3

 

50.3

Other investments

7.3

5.4

Total investment securities

$

663.8

$

702.3

Trading Securities

Net unrealized gains (losses) on investment securities held as of the three and six months ended June 30,March 31, 2022 and 2021, and 2020, are summarized as follows (in millions):

Three months ended

Six months ended

Three months ended

June 30, 

June 30, 

March 31, 

    

2021

    

2020

    

2021

    

2020

    

2022

    

2021

Unrealized gains (losses) on investment securities held at period end

 

$

1.8

 

$

48.1

 

$

3.4

 

$

8.6

 

$

(32.2)

 

$

1.6

Investment Gains (Losses), Net

Investment gains (losses), net on our Condensed Consolidated Statements of Comprehensive Income (Loss) included the following for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 (in millions):

Three months ended

Six months ended

    

June 30, 

June 30, 

2021

    

2020

    

2021

    

2020

Seeded investment products and hedges, net

$

(2.6)

$

11.1

$

3.0

$

6.0

Third-party ownership interests in seeded investment products

3.9

29.0

(4.1)

(9.4)

Long Tail Alpha equity method investment

(0.2)

4.4

1.9

5.7

Deferred equity plan

0.2

4.7

2.1

(2.6)

Other

 

0.5

 

1.1

 

0.5

 

0.1

Investment gains (losses), net

$

1.8

$

50.3

$

3.4

$

(0.2)

Cash Flows

Cash flows related to investment securities for the six months ended June 30, 2021 and 2020, are summarized as follows (in millions):

Six months ended June 30, 

2021

2020

    

    

Sales,

    

    

Sales,

Purchases

settlements

Purchases

settlements

and

and

and

and

settlements

maturities

settlements

maturities

Investment securities by consolidated seeded investment products

$

(45.4)

$

7.9

$

(239.6)

$

2.2

Investment securities

(101.6)

100.1

(53.7)

131.2

Three months ended

March 31, 

    

2022

    

2021

Seeded investment products and hedges, net

$

(11.5)

$

5.6

Third-party ownership interests in seeded investment products

(20.1)

(8.0)

Long Tail Alpha investment

1.5

2.1

Deferred equity plan

(1.5)

1.9

Other

 

(0.6)

 

Investment gains (losses), net

$

(32.2)

$

1.6

87

Cash Flows

Cash flows related to investment securities for the three months ended March 31, 2022 and 2021, are summarized as follows (in millions):

Three months ended March 31, 

2022

2021

    

    

Sales,

    

    

Sales,

Purchases

settlements

Purchases

settlements

and

and

and

and

settlements

maturities

settlements

maturities

Investment securities by consolidated seeded investment products

$

(3.9)

$

16.9

$

(30.2)

$

2.1

Investment securities

(40.5)

6.3

(0.5)

51.9

Note 45 — Derivative Instruments

Derivative Instruments Used to Hedge Seeded Investment Products

We maintain an economic hedge program that uses derivative instruments to mitigate against market volatility of certain seeded investments by using index and commodity futures (“futures”), index swaps, total return swaps (“TRSs”) and credit default swaps. Foreign currency exposures associated with our seeded investment products are also hedged by using foreign currency forward contracts and swaps.

We were party to the following derivative instruments as of June 30, 2021,March 31, 2022, and December 31, 20202021 (in millions):

Notional value

Notional value

    

June 30, 2021

    

December 31, 2020

    

March 31, 2022

    

December 31, 2021

Futures

$

216.7

$

164.5

$

352.9

$

368.7

Credit default swaps

95.2

166.2

148.4

207.2

Total return swaps

36.6

35.6

52.7

55.0

Foreign currency forward contracts and swaps

334.8

205.0

456.2

415.6

The derivative instruments are not designated as hedges for accounting purposes. Changes in fair value of the derivatives are recognized in investment gains (losses), net in our Condensed Consolidated Statements of Comprehensive Income (Loss).Income. The change in fair value of the derivative instruments for the three months ended March 31, 2022 and 2021, are summarized as follows (in millions):

Three months ended March 31, 

    

2022

    

2021

Futures

$

15.4

$

(1.5)

Credit default swaps

2.3

Total return swaps

7.4

(2.9)

Foreign currency forward contracts and swaps

(7.0)

6.1

Total gain from derivative instruments

$

18.1

$

1.7

8

Derivative assets and liabilities are generally recognized on a gross basis and included in other current assets or in accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets. The derivative assets and liabilities as of June 30, 2021,March 31, 2022, and December 31, 2020,2021, are summarized as follows (in millions):

Fair value

Fair value

June 30, 2021

December 31, 2020

March 31, 2022

December 31, 2021

Derivative assets

    

$

0.8

    

$

9.1

    

$

3.4

    

$

8.8

Derivative liabilities

 

7.6

 

10.8

 

16.2

 

15.5

In addition to using derivative instruments to mitigate against market volatility of certain seeded investments, we also engage in short sales of securities to hedge seed investments. As of June 30, 2021,March 31, 2022, and December 31, 2020,2021, the fair value of securities sold but not yet purchased were $0.9was $2.6 million and $7.9$3.1 million, respectively. The cash received from the short sale and the obligation to repurchase the shares are classified in other current assets and accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets, respectively. Fair value adjustments are recognized in investment gains (losses), net on our Condensed Consolidated Statements of Comprehensive Income (Loss).Income.

Derivative Instruments in Consolidated Seeded Investment Products

Certain of our consolidated seeded investment products utilize derivative instruments to contribute to the achievement of defined investment objectives. These derivative instruments are classified within other current assets or in accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets. Gains and losses on these derivative instruments are classified within investment gains (losses), net in our Condensed Consolidated Statements of Comprehensive Income (Loss).Income.

9

Our consolidated seeded investment products were party to the following derivative instruments as of June 30, 2021,March 31, 2022, and December 31, 20202021 (in millions):

Notional value

Notional value

    

June 30, 2021

    

December 31, 2020

    

March 31, 2022

    

December 31, 2021

Futures

$

55.1

$

57.0

$

118.8

$

190.1

Credit default swaps

7.3

1.5

2.8

6.1

Interest rate swaps

 

4.1

 

75.0

Total return swaps

13.1

Options

 

0.1

 

0.5

 

0.4

 

0.1

Foreign currency forward contracts and swaps

 

41.6

 

56.1

 

81.0

 

22.1

The derivative assets and liabilities as of March 31, 2022, and December 31, 2021, are summarized as follows (in millions):

Fair value

March 31, 2022

December 31, 2021

Derivative assets

    

$

0.3

    

$

3.2

Derivative liabilities

 

0.8

 

Derivative Instruments — Used in Foreign Currency Hedging Program

In January 2021, we implementedWe maintain a balance sheet foreign currency hedging program (the “Program”) to take reasonable measures to minimize the income statement effects of foreign currency remeasurement of monetary balance sheet accounts. The Program is not designed to eliminate all impacts of foreign currency risk; rather it is designed to reduce income statement volatility. The Program utilizes foreign currency forward contracts and swaps to achieve its objectives, and it is considered an economic hedge for accounting purposes.

9

The notional value of the foreign currency forward contracts and swaps was $135.9 million at June 30, 2021. as of March 31, 2022, and December 31, 2021, is summarized as follows (in millions):

Notional value

    

March 31, 2022

    

December 31, 2021

Foreign currency forward contracts and swaps

$

59.2

$

171.4

The derivative assets and liabilities are generally recognized on a gross basis and included in other current assets or in accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets. The derivative assets and liabilities as of June 30,March 31, 2022, and December 31, 2021, are summarized as follows (in millions):

Fair value

Fair value

June 30, 2021

    

March 31, 2022

December 31, 2021

Derivative assets

    

$

0.2

    

$

0.3

    

$

3.2

Derivative liabilities

 

1.8

 

0.8

 

Changes in fair value of the derivatives are recognized in other non-operating income (expenses),expenses, net on our Condensed Consolidated Statements of Comprehensive Income (Loss), and weIncome. We recognized a gainloss of $0.7 million and $1.3$2.1 million during the three and six months ended June 30, 2021, respectively.March 31, 2022, and a gain of $0.6 million during the three months ended March 31, 2021. Foreign currency remeasurement is also recognized in other non-operating income (expenses),expenses, net on our Condensed Consolidated StatementStatements of Comprehensive Income (Loss).Income.

10

Note 56 — Fair Value Measurements

The following table presents assets and liabilities reflected in the financial statements or disclosed in the notes to the financial statements at fair value on a recurring basis as of June 30, 2021March 31, 2022 (in millions):

Fair value measurements using:

Fair value measurements using:

Quoted prices in

Quoted prices in

    

active markets for

    

    

    

    

active markets for

    

    

    

identical assets

Significant other

Significant

identical assets

Significant other

Significant

and liabilities

observable inputs

unobservable inputs

and liabilities

observable inputs

unobservable inputs

(Level 1)

(Level 2)

(Level 3)

Total

(Level 1)

(Level 2)

(Level 3)

Total

Assets:

Cash equivalents

$

539.5

$

$

$

539.5

$

368.8

$

$

$

368.8

Investment securities:

 

 

Consolidated VIEs

162.4

44.1

10.3

216.8

208.3

30.3

5.9

244.5

Other investment securities

242.6

27.6

270.2

354.5

64.8

419.3

Total investment securities

405.0

71.7

10.3

487.0

562.8

95.1

5.9

663.8

Seed hedge derivatives

 

0.8

 

0.8

 

3.4

 

3.4

Derivatives in consolidated seeded investment products

0.1

0.1

0.5

0.5

Derivatives used in foreign currency hedging program

0.2

0.2

0.3

0.3

Intech option agreement

3.9

3.9

Intech contingent consideration

 

 

 

12.6

 

12.6

Volantis contingent consideration

 

 

 

2.2

 

2.2

0.8

0.8

Geneva contingent consideration

14.0

14.0

Total assets

$

944.5

$

72.8

$

26.5

$

1,043.8

$

931.6

$

99.3

$

23.2

$

1,054.1

Liabilities:

Derivatives in consolidated seeded investment products

$

$

0.8

$

$

0.8

$

$

0.6

$

$

0.6

Derivatives used in foreign currency hedging program

1.8

1.8

0.8

0.8

Securities sold, not yet purchased

0.9

0.9

2.6

2.6

Seed hedge derivatives

7.6

7.6

16.2

16.2

Long-term debt(1)

340.2

340.2

313.4

313.4

Deferred bonuses

35.6

35.6

34.3

34.3

Total liabilities

$

0.9

$

350.4

$

35.6

$

386.9

$

2.6

$

331.0

$

34.3

$

367.9

(1)Carried at amortized cost and disclosed at fair value.

11

The following table presents assets and liabilities reflected in the financial statements or disclosed in the notes to the financial statements at fair value on a recurring basis as of December 31, 20202021 (in millions):

Fair value measurements using:

Fair value measurements using:

Quoted prices in

Quoted prices in

    

active markets for

    

    

    

    

active markets for

    

    

    

identical assets

Significant other

Significant

identical assets

Significant other

Significant

and liabilities

observable inputs

unobservable inputs

and liabilities

observable inputs

unobservable inputs

(Level 1)

(Level 2)

(Level 3)

Total

(Level 1)

(Level 2)

(Level 3)

Total

Assets:

Cash equivalents

$

525.0

$

$

$

525.0

$

585.4

$

$

$

585.4

Investment securities:

Consolidated VIEs

125.7

77.7

11.2

214.6

216.8

26.2

7.9

250.9

Other investment securities

230.9

37.2

268.1

424.1

27.3

451.4

Total investment securities

 

356.6

 

114.9

 

11.2

 

482.7

 

640.9

53.5

7.9

702.3

Seed hedge derivatives

 

9.1

 

9.1

 

8.8

 

8.8

Derivatives in consolidated seeded investment products

0.9

0.9

0.6

0.6

Derivatives used in foreign currency hedging program

3.2

3.2

Volantis contingent consideration

2.8

2.8

0.9

0.9

Geneva contingent consideration

 

 

17.4

 

17.4

Total assets

$

881.6

$

124.9

$

31.4

$

1,037.9

$

1,226.3

$

66.1

$

8.8

$

1,301.2

Liabilities:

Derivatives in consolidated seeded investment products

$

$

0.2

$

$

0.2

$

$

0.4

$

$

0.4

Securities sold, not yet purchased

7.9

7.9

3.1

3.1

Seed hedge derivatives

10.8

10.8

15.5

15.5

Long-term debt(1)

348.4

348.4

328.7

328.7

Deferred bonuses

65.2

65.2

50.5

50.5

Total liabilities

$

7.9

$

359.4

$

65.2

$

432.5

$

3.1

$

344.6

$

50.5

$

398.2

(1)

Carried at amortized cost and disclosed at fair value.

Level 1 Fair Value Measurements

Our Level 1 fair value measurements consist mostly of investments held by seeded investment products, investments in advised mutual funds, cash equivalents, securities sold, not yet purchased and investments related to deferred compensation plans with quoted market prices in active markets. The fair value level of consolidated investments held by seeded investment products is determined by the underlying securities of the product. The fair value level of unconsolidated investments held in seeded investment products is determined by the net asset value (“NAV”), which is considered a quoted price in an active market.

Level 2 Fair Value Measurements

Our Level 2 fair value measurements consist mostly of consolidated seeded investment products, derivative instruments and our long-term debt. The fair value of consolidated seeded investment products is determined by the underlying securities of the product. The fair value of our long-term debt is determined using broker quotes and recent trading activity, which are considered Level 2 inputs.

12

Level 3 Fair Value Measurements

Investment Securities

As of June 30, 2021,March 31, 2022, and December 31, 2020,2021, certain securities within consolidated VIEs were valued using significant unobservable inputs, resulting in Level 3 classification. In addition, we have an investment in a private equity vehicle where the significant valuation inputs are unobservable.

GenevaIntech Option Agreement and Contingent Consideration

On December 3, 2019, Henderson Global Investors (North America), Inc. (“HGINA”), a subsidiaryMarch 31, 2022, we completed the sale of Intech. Consideration received as part of the Company, entered into an agreement to sell its 100% ownership interest in Geneva Capital Management LLC (“Geneva”) to GCM Purchaser, LLC. The sale closed on March 17, 2020. ConsiderationBuyout included aggregate cashcontingent consideration of $38.4up to $17.5 million and an option agreement that provides JHG the option to purchase a certain equity stake in Intech at a predetermined price on or before the seventh anniversary of the Management Buyout.

As of March 31, 2022, the fair value of the option agreement and of the Intech contingent consideration was $3.9 million and $12.6 million, respectively. Significant unobservable inputs were used to value the call option and contingent consideration (the “Earnout”) based on future revenue. Payments under the Earnout are to be made quarterly over a five-year term, with minimum aggregate payments of $20.5 millionincluding revenue estimates, discount rate and maximum aggregate payments of $35.0 million. During the three and six months ended June 30, 2021, we received a $1.8 million and $3.4 million contingent consideration payment, respectively.volatility.

Volantis Contingent Consideration

On April 1, 2017, we completed the sale of the Volantis UK Small Cap (“Volantis”) alternative team assets. Consideration for the sale was a 10% share of the management and performance fees generated by Volantis (excluding one particular fund) for a period of three years following the sale. In addition, consideration for the sale included 50% of the first £12 million of performance fees generated by the excluded fund referenced above. As of June 30, 2021,March 31, 2022, the fund has not reached the £12 million performance fee threshold. As a result, this fee sharing arrangement will remain in effect until the performance threshold is reached.

As of June 30, 2021,March 31, 2022, and December 31, 2020,2021, the fair value of the Volantis contingent consideration was $2.2$0.8 million and $2.8$0.9 million, respectively.

Deferred Bonuses

Deferred bonuses represent liabilities to employees over the vesting period that will be settled by investments in our products. The significant unobservable inputs used to value the liabilities are investment designations and vesting periods.

Changes in Fair Value

Changes in fair value of our Level 3 assets for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, were as follows (in millions):

Three months ended

Six months ended

Three months ended

June 30, 

June 30, 

March 31, 

    

2021

    

2020

    

2021

    

2020

    

2022

    

2021

Beginning of period fair value

$

27.2

$

30.8

$

31.4

$

12.8

$

8.8

$

31.4

Contingent consideration from sale of Geneva

(0.2)

20.3

Settlements

 

(1.8)

 

(2.2)

 

(4.0)

 

(2.2)

Intech option agreement

3.9

Contingent consideration from sale of Intech

12.6

Settlement of contingent consideration

 

 

(2.2)

Fair value adjustments

 

1.4

 

 

(2.5)

 

(0.3)

 

(1.5)

 

(3.9)

Purchases of securities

0.4

0.8

2.7

(0.2)

2.3

Sales of securities

(0.7)

(1.1)

(1.4)

(0.3)

(0.4)

Foreign currency translation

(0.1)

End of period fair value

$

26.5

$

29.2

$

26.5

$

29.2

$

23.2

$

27.2

13

Changes in fair value of our individual Level 3 liabilities for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, were as follows (in millions):

Three months ended June 30, 

2021

2020

Deferred

Deferred

bonuses

bonuses

Beginning of period fair value

$

73.6

$

74.3

Fair value adjustments

 

2.0

 

3.8

Vesting of deferred bonuses

(48.2)

(44.4)

Amortization of deferred bonuses

 

8.1

 

8.8

Foreign currency translation

 

0.1

 

0.4

End of period fair value

$

35.6

$

42.9

Six months ended June 30, 

Three months ended March 31, 

2021

2020

2022

2021

Deferred

Contingent

Deferred

Deferred

Deferred

bonuses

consideration

bonuses

bonuses

bonuses

Beginning of period fair value

$

65.2

$

21.2

$

76.6

$

50.5

$

65.2

Fair value adjustments

 

4.3

 

(7.1)

 

(1.1)

 

(1.6)

 

2.3

Vesting of deferred bonuses

(50.7)

(46.7)

(21.6)

(2.5)

Amortization of deferred bonuses

 

16.1

 

 

18.6

 

8.4

 

8.0

Unrealized gains (losses)

 

 

0.3

 

Distributions

 

 

(13.8)

 

Foreign currency translation

 

0.7

 

(0.6)

 

(4.5)

 

(1.4)

 

0.6

End of period fair value

$

35.6

$

$

42.9

$

34.3

$

73.6

Nonrecurring Fair Value Measurements

Nonrecurring Level 3 fair value measurements include goodwill and intangible assets. We measure the fair value of goodwill and intangible assets on initial recognition using discounted cash flow (“DCF”) analysis that requires assumptions regarding projected future earnings and discount rates. Because of the significance of the unobservable inputs in the fair value measurements of these assets, such measurements are classified as Level 3.

Note 6 — Goodwill and Intangible Assets

The following tables present movements in our intangible assets and goodwill during the six months ended June 30, 2021 and 2020 (in millions):

    

December 31, 

    

    

Foreign 
currency

    

June 30, 

2020

Amortization

Disposal

Impairment

translation

2021

Indefinite-lived intangible assets:

Investment management agreements

$

2,242.9

$

$

$

(40.8)

$

(0.1)

$

2,202.0

Trademarks

 

373.2

 

(3.6)

 

369.6

Definite-lived intangible assets:

Client relationships

 

170.9

 

(0.6)

 

170.3

Accumulated amortization

 

(100.7)

 

(3.9)

 

(104.6)

Net intangible assets

$

2,686.3

$

(3.9)

$

$

(44.4)

$

(0.7)

$

2,637.3

Goodwill

$

1,383.9

$

$

$

$

6.0

$

1,389.9

14

Note 7 — Goodwill and Intangible Assets

The following tables present movements in our intangible assets and goodwill during the three months ended March 31, 2022 and 2021 (in millions):

    

December 31, 

    

    

Foreign 
currency

 

June 30, 

    

December 31, 

    

    

Foreign 
currency

    

March 31, 

2019

Amortization

Disposal

Impairment

translation

2020

2021

Amortization

Disposal

Impairment

translation

2022

Indefinite-lived intangible assets:

Investment management agreements

$

2,490.3

$

$

$

(263.5)

$

(32.5)

$

2,194.3

$

2,114.8

$

$

$

$

(7.8)

$

2,107.0

Trademarks

 

380.8

 

(7.7)

(0.2)

 

372.9

 

366.7

 

(4.7)

 

362.0

Definite-lived intangible assets:

Client relationships

 

364.7

 

(79.3)

(119.0)

(3.3)

 

163.1

 

168.4

 

(84.8)

0.1

 

83.7

Accumulated amortization

 

(147.2)

 

(8.6)

61.4

2.7

 

(91.7)

 

(107.2)

 

(1.9)

44.7

0.6

 

(63.8)

Net intangible assets

$

3,088.6

$

(8.6)

$

(17.9)

$

(390.2)

$

(33.3)

$

2,638.6

$

2,542.7

$

(1.9)

$

(44.8)

$

$

(7.1)

$

2,488.9

Goodwill

$

1,504.3

$

$

(23.5)

$

(123.5)

$

(46.9)

$

1,310.4

$

1,374.3

$

$

(7.0)

$

(32.8)

$

(17.7)

$

1,316.8

    

December 31, 

    

    

Foreign 
currency

 

March 31, 

2020

Amortization

Disposal

Impairment

translation

2021

Indefinite-lived intangible assets:

Investment management agreements

$

2,242.9

$

$

$

$

1.4

$

2,244.3

Trademarks

 

373.2

 

(3.6)

 

369.6

Definite-lived intangible assets:

Client relationships

 

170.9

 

(0.1)

 

170.8

Accumulated amortization

 

(100.7)

 

(1.9)

(0.2)

 

(102.8)

Net intangible assets

$

2,686.3

$

(1.9)

$

$

(3.6)

$

1.1

$

2,681.9

Goodwill

$

1,383.9

$

$

$

$

5.9

$

1,389.8

Interim Impairment Assessment

14

Management Buyout of Intech

DuringAs detailed in Note 2 – Dispositions, on March 31, 2022, the second quarterManagement Buyout of 2021,Intech closed. As part of this disposition, we performed an interim impairment assessment onremoved $4.7 million and $40.1 million of trademarks and client relationships, respectively, from our Condensed Consolidated Balance Sheets as these intangible assets were directly connected to Intech. In addition, we also allocated a certain indefinite-lived intangible assetamount of goodwill to Intech, which was also removed from our Condensed Consolidated Balance Sheets as part of the Management Buyout.

Out-of-Period Incremental Goodwill Impairment

In the first quarter 2020, due to a significant decrease inthe sudden decline of the global financial markets impacting our assets under management (“AUM”) and unfavorable changes, we recognized a $123.5 million goodwill impairment expense. Subsequent to the first quarter 2020, we identified a $32.8 million error in which we did not consider the incremental impairment charge related to the tax-deductible goodwill. We have corrected this error in the forecast on these specific assets. A discounted cash flow (“DCF”) model was used to determine the estimated fair value of the investment management agreements. Some of the inputs used in the DCF model required significant management judgment, including the discount rate, terminal growth rate, forecasted financial results and market returns. The results of the DCF model revealed a fair value of NaN and we therefore impaired the entire $40.8 million balance of the intangible asset. The impairment chargefirst quarter 2022 as an out-of-period adjustment which is includedreflected in the table above and recorded in goodwill and intangible asset impairment charges on theour Condensed Consolidated Statements of Comprehensive Income (Loss).Income.

Perkins Trademark

During the first quarter of 2021, as part of our ongoing strategic initiatives and looking globally at delivering excellent service to our clients and positioning our business for success, we completed a review of Perkins Investment Management (“Perkins”). To right-size our product portfolio and better align with the changing needs of clients, certain strategies were closed and the funds were liquidated during the second quarter of 2021. The majority of the Perkins value equity strategies arewere unaffected by this reorganization and they will continuehave continued under the Janus Henderson brand. The Perkins brand will bewas discontinued and futurethe marketing efforts for value equity strategies will bewere incorporated under the Janus Henderson brand. During the first quarter 2021, we impaired the entire balance of the intangible asset associated with the Perkins trademark. The impairment charge of $3.6 million is included in the table above and recorded in goodwill and intangible asset impairment charges on theour Condensed Consolidated Statements of Comprehensive Income (Loss).

Sale of Geneva

On December 3, 2019, HGINA, a subsidiary of JHG, entered into an agreement to sell its 100% ownership interest in Geneva to GCM Purchaser, LLC. The sale closed on March 17, 2020. The transaction included $17.9 million of net intangible assets and goodwill of $23.5 million, as disclosed in the disposal column above.

15

2020 Goodwill and Intangible Asset Impairments

In March 2020, the World Health Organization declared COVID-19 a pandemic, and global financial markets declined. This drove a sudden and severe decline in our AUM, which was a triggering event for performing an interim impairment assessment of our goodwill and intangible assets. Our interim impairment assessment revealed the carrying value of certain investment management agreements, trademarks, client relationships and goodwill exceeded their estimated fair value, and we recognized impairments of $263.5 million, $7.7 million, $92.6 million and $123.5 million, respectively, during the three months ended March 31, 2020. The results of the March 2020 interim assessment are included in the table above. The impairment charges were recorded in goodwill and intangible asset impairment charges on the Condensed Consolidated Statements of Comprehensive Income (Loss).Income.

Future Amortization

Expected future amortization expense related to client relationships is summarized below (in millions):

Future amortization

    

Amount

    

Amount

2021 (remainder of year)

$

3.9

2022

7.7

2022 (remainder of year)

$

2.1

2023

 

7.4

2.5

2024

 

6.0

 

1.1

2025

 

6.0

 

1.1

2026

 

1.1

Thereafter

 

34.7

 

12.0

Total

$

65.7

$

19.9

Note 78 — Debt

Our debt as of June 30, 2021,March 31, 2022, and December 31, 2020,2021, consisted of the following (in millions):

June 30, 2021

December 31, 2020

March 31, 2022

December 31, 2021

    

Carrying

    

Fair

    

Carrying

    

Fair

    

Carrying

    

Fair

    

Carrying

    

Fair

value

value

value

value

value

value

value

value

4.875% Senior Notes due 2025

$

311.9

$

340.2

$

313.3

$

348.4

$

309.7

$

313.4

$

310.4

$

328.7

15

4.875% Senior Notes Due 2025

The 4.875% Senior Notes due 2025 (“2025 Senior Notes”) have a principal value of $300.0 million, pay interest at 4.875% semiannually on February 1 and August 1 of each year, and mature on August 1, 2025. The 2025 Senior Notes include unamortized debt premium, net at June 30, 2021,March 31, 2022, of $11.9$9.7 million, which will be amortized over the remaining life of the notes. The unamortized debt premium is recorded as a liability within long-term debt on our Condensed Consolidated Balance Sheets. JHG fully and unconditionally guarantees the obligations of Janus Capital GroupHenderson US (Holdings) Inc. (“JCG”) in relation to the 2025 Senior Notes.

Credit Facility

At June 30, 2021,March 31, 2022, we had a $200 million, unsecured, revolving credit facility (“Credit Facility”). JHG and its subsidiaries may use the Credit Facility for general corporate purposes. The rate of interest for each interest period is the aggregate of the applicable margin, which is based on our long-term credit rating and the London Interbank OfferedSecured Overnight Financing Rate (“LIBOR”SOFR”) in relation to any loan in U.S. dollars (“USD”); the Sterling Overnight Index Average (“SONIA”) in relation to any loan in British pounds (“GBP”); the Euro Interbank Offered Rate (“EURIBOR”) in relation to any loan in euroeuros (“EUR”); or the Bank Bill Swap Rate (“BBSW”) in relation to any loan in Australian dollardollars (“AUD”). As a result of the phase out of the London Interbank Offered Rate (“LIBOR”), our Credit Facility was amended to incorporate the benchmarkSOFR as the successor rate for that currency. Asto USD LIBOR is scheduledand the SONIA as the successor rate to be phased out at the end of 2021, we are working with our banking syndicate to find a suitable replacement.GBP LIBOR. We are required to pay a quarterly commitment fee on any unused portion of the Credit Facility, which is also based on our long-term credit rating. Under the Credit Facility, our financing leverage ratio cannot exceed 3.00x EBITDA. At June 30, 2021,March 31, 2022, we were

16

in compliance with all covenants contained in, and there were 0 outstanding borrowings under, the Credit Facility. The maturity date of the Credit Facility is February 16, 2024.

Note 89 — Income Taxes

Our effective tax rates for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, were as follows:

Three months ended

Six months ended

Three months ended

June 30, 

June 30, 

March 31, 

    

2021

    

2020

    

2021

    

2020

    

2022

    

2021

Effective tax rate

36.1

%  

18.5

%  

29.8

%  

20.2

%

28.0

%  

22.6

%

The effective tax rate for the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020,March 31, 2021, was impacted by a decrease in pre-tax book income with an increase in the enactment of Finance Act 2021 during the second quarter of 2021, which increased the United Kingdom (“UK”) corporation tax rate from 19% to 25% beginning in April 2023. As a result, the UK deferred tax assets and liabilities expected to be settled after 2023 were revalued from 19% to 25%, creating a non-cash deferred tax expense of $31.0 million.disallowed non-controlling interest loss. In addition, an intangible asset impairment charge was recognized in the three months ended June 30, 2021 which impacted pre-tax income. The impairment charge was related to temporary differences, which adjusted deferred income taxes and did not have a direct impact on the effective tax rate.

The effective tax rate for the six months ended June 30, 2021, compared to the six months ended June 30, 2020, was also impacted by the enactment of Finance Act 2021 and impairment charges, as discussed above, which is off-set by theexcess tax windfall related to equity compensation plans. In addition, there were significant impairments of intangible assets and goodwill in the first quarter of 2020, which contributed to a pre-tax book loss for the six months ended June 30, 2020. The majority of the impairment charges were related to temporary differences, which adjusted deferred income taxes and did not have a direct impactbenefit on the effective tax rate.equity-based vesting compensation.

As of June 30, 2021, and DecemberMarch 31, 2020,2022, we had $15.3 million and $15.8$18.5 million of unrecognized tax benefits held for uncertain tax positions. We estimate that the existing liability for uncertain tax positions could decrease by up to $1.1$1.6 million within the next 12 months, without giving effect to changes in foreign currency translation.

16

Note 910 — Noncontrolling Interests

Redeemable Noncontrolling Interests

Redeemable noncontrolling interests as of June 30, 2021,March 31, 2022, and December 31, 2020,2021, consisted of the following (in millions):

June 30, 

December 31, 

March 31, 

December 31, 

    

2021

    

2020

    

2022

    

2021

Consolidated seeded investment products

$

109.2

$

70.6

$

150.7

$

148.5

Intech:

Employee appreciation rights

12.5

12.3

12.6

Founding member ownership interests

3.2

2.9

2.3

Total redeemable noncontrolling interests

$

124.9

$

85.8

$

150.7

$

163.4

Consolidated Seeded Investment Products

Noncontrolling interests in consolidated seeded investment products are classified as redeemable noncontrolling interests when there is an obligation to repurchase units at the investor’s request.

Redeemable noncontrolling interests in consolidated seeded investment products may fluctuate from period to period and are impacted by changes in our relative ownership, changes in the amount of third-party investment in seeded products and volatility in the market value of the seeded products’ underlying securities included in the portfolios of seeded products.

17

Redemptionssecurities. Third-party redemption of investments by third parties in any particular seeded product areis redeemed from the respective product’s net assets of such seeded product and cannot be redeemed from the assets of our other seeded products or from our other assets.

The following table presents the movement in redeemable noncontrolling interests in consolidated seeded investment products for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 (in millions):

Three months ended

Six months ended

Three months ended

June 30, 

June 30, 

March 31, 

    

2021

    

2020

    

2021

    

2020

    

2022

    

2021

Opening balance

$

83.7

$

448.7

$

70.6

$

662.8

$

148.5

$

70.6

Changes in market value

 

3.9

 

29.0

 

(2.4)

 

(7.9)

 

(20.1)

 

(6.3)

Changes in ownership

 

21.5

 

(25.3)

 

40.1

 

(196.9)

 

22.2

 

18.6

Foreign currency translation

0.1

1.3

0.9

(4.3)

0.1

0.8

Closing balance

$

109.2

$

453.7

$

109.2

$

453.7

$

150.7

$

83.7

Intech

Intech Investment Management LLC (“Intech”) ownership interests held by a founding member had an estimated fair value of $3.2 million as of June 30, 2021, representing an approximate 1.1% ownership of Intech. This founding member is entitled to retain his remaining Intech interests for the remainder of his life and has the option to require us to purchase his ownership interests in Intech at fair value.

Intech employee appreciation rights are amortized using a graded vesting method over the respective vesting period. The appreciation rights are exercisable upon termination of employment from Intech to the extent vested. Upon exercise, the appreciation rights are settled in Intech equity.

Nonredeemable Noncontrolling Interests

Nonredeemable noncontrolling interests as of June 30, 2021,March 31, 2022, and December 31, 2020,2021, were as follows (in millions):

June 30, 

December 31, 

March 31, 

December 31, 

    

2021

    

2020

    

2022

    

2021

Nonredeemable noncontrolling interests in:

Seed capital investments

$

2.9

$

4.6

$

2.8

$

2.8

Intech

 

12.7

 

12.8

 

 

12.6

Total nonredeemable noncontrolling interests

$

15.6

$

17.4

$

2.8

$

15.4

On March 31, 2022, we completed the sale of our 97%-owned subsidiary, Intech. See Note 2 – Dispositions for further information regarding the sale.

17

Note 1011 — Long-Term Incentive and Employee Compensation

The following table presents restricted stock and mutual fund awards granted during the three and six months ended June 30, 2021March 31, 2022 (in millions):

Three months ended

Six months ended

Three months ended

June 30, 

June 30, 

March 31, 

    

2021

2021

    

2022

Restricted stock

$

3.6

$

68.5

$

100.0

Mutual fund awards

7.8

75.4

98.3

Total

$

11.4

$

143.9

$

198.3

Restricted stock and mutual fund awards generally vest and will be recognized using a graded vesting method over a three- or four-year period.

18

Note 1112 — Retirement Benefit Plans

We operate defined contribution retirement benefit plans and defined benefit pension plans.

Our primary defined benefit pension plan is the defined benefit section of the Janus Henderson Group UK Pension Scheme (“JHGPS”).

Net Periodic Benefit Credit

The components of net periodic benefit credit in respect of defined benefit plans for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, include the following (in millions):

Three months ended

Six months ended

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

Service cost

$

(0.3)

$

(0.2)

$

(0.5)

$

(0.4)

Interest cost

 

(2.8)

 

(4.3)

 

(5.6)

 

(8.6)

Amortization of prior service cost

(0.1)

(0.1)

(0.2)

(0.2)

Expected return on plan assets

 

3.4

 

4.6

 

6.7

 

9.2

Net periodic benefit credit

$

0.2

$

$

0.4

$

Note 12 — Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss, net of tax for the three and six months ended June 30, 2021 and 2020, were as follows (in millions):

Three months ended June 30, 

2021

2020

Foreign

Retirement benefit

Foreign

Retirement
benefit

    

currency

    

asset, net

    

Total

    

currency

    

asset, net

    

Total

Beginning balance

$

(311.1)

$

(10.3)

$

(321.4)

$

(530.2)

$

19.2

$

(511.0)

Other comprehensive income (loss)

3.2

0.1

3.3

12.0

0.1

12.1

Amounts reclassified from accumulated other comprehensive loss

0.1

0.1

(1.4)

(1.4)

Total other comprehensive income (loss)

3.2

0.2

3.4

10.6

0.1

10.7

Less: other comprehensive loss (income) attributable to noncontrolling interests

(0.2)

(0.2)

(1.4)

(1.4)

Ending balance

$

(308.1)

$

(10.1)

$

(318.2)

$

(521.0)

$

19.3

$

(501.7)

Three months ended

March 31, 

    

2022

    

2021

Service cost

$

$

(0.2)

Interest cost

 

(4.5)

 

(2.8)

Amortization of prior service cost

(0.1)

(0.1)

Expected return on plan assets

 

4.5

 

3.3

Net periodic benefit credit

$

(0.1)

$

0.2

1918

Note 13 — Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss, net of tax for the three months ended March 31, 2022 and 2021, were as follows (in millions):

Six months ended June 30, 

Three months ended March 31, 

2021

2020

2022

2021

Foreign

Retirement benefit

Foreign

Retirement
benefit

Foreign

Retirement benefit

Foreign

Retirement
benefit

    

currency

    

asset, net

    

Total

    

currency

    

asset, net

    

Total

    

currency

    

asset, net

    

Total

    

currency

    

asset, net

    

Total

Beginning balance

$

(313.6)

$

(10.4)

$

(324.0)

$

(386.2)

$

19.1

$

(367.1)

$

(363.3)

$

(32.8)

$

(396.1)

$

(313.6)

$

(10.4)

$

(324.0)

Other comprehensive income (loss)

10.7

0.1

10.8

(137.1)

0.2

(136.9)

Other comprehensive loss

(47.8)

(47.8)

7.5

7.5

Amounts reclassified from accumulated other comprehensive loss

(4.2)

0.2

(4.0)

(1.4)

(1.4)

0.8

0.1

0.9

(4.2)

0.1

(4.1)

Total other comprehensive income (loss)

6.5

0.3

6.8

(138.5)

0.2

(138.3)

Less: other comprehensive loss (income) attributable to noncontrolling interests

(1.0)

(1.0)

3.7

3.7

Total other comprehensive loss

(47.0)

0.1

(46.9)

3.3

0.1

3.4

Less: other comprehensive loss attributable to noncontrolling interests

(0.2)

(0.2)

(0.8)

(0.8)

Ending balance

$

(308.1)

$

(10.1)

$

(318.2)

$

(521.0)

$

19.3

$

(501.7)

$

(410.5)

$

(32.7)

$

(443.2)

$

(311.1)

$

(10.3)

$

(321.4)

The components of other comprehensive income (loss), net of tax for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, were as follows (in millions):

Three months ended June 30, 

Three months ended March 31, 

2021

2020

2022

2021

Pre-tax

Tax

Net

Pre-tax

Tax

Net

Pre-tax

Tax

Net

Pre-tax

Tax

Net

    

amount

    

impact

    

amount

    

amount

    

impact

    

amount

    

amount

    

impact

    

amount

    

amount

    

impact

    

amount

Foreign currency translation adjustments

$

2.6

$

0.6

$

3.2

$

12.1

$

(0.1)

$

12.0

$

(49.0)

$

1.2

$

(47.8)

$

7.1

$

0.4

$

7.5

Retirement benefit asset, net

0.1

0.1

0.1

0.1

Reclassifications to net income

0.1

0.1

(1.4)

(1.4)

0.9

0.9

(4.1)

(4.1)

Total other comprehensive income (loss)

$

2.7

$

0.7

$

3.4

$

10.8

$

(0.1)

$

10.7

$

(48.1)

$

1.2

$

(46.9)

$

3.0

$

0.4

$

3.4

Six months ended June 30, 

2021

2020

Pre-tax

Tax

Net

Pre-tax

Tax

Net

    

amount

    

impact

    

Amount

    

amount

    

impact

    

Amount

Foreign currency translation adjustments

$

9.7

$

1.0

$

10.7

$

(139.2)

$

2.1

$

(137.1)

Retirement benefit asset, net

0.1

0.1

0.2

0.2

Reclassifications to net income

(4.0)

(4.0)

(1.4)

(1.4)

Total other comprehensive income (loss)

$

5.7

$

1.1

$

6.8

$

(140.4)

$

2.1

$

(138.3)

2019

Note 1314 — Earnings (Loss) and Dividends Per Share

Earnings (Loss) Per Share

The following is a summary of the earnings (loss) per share calculation for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 (in millions, except per share data):

Three months ended

Six months ended

Three months ended

June 30, 

June 30, 

March 31, 

    

2021

    

2020

    

2021

    

2020

    

2022

    

2021

Net income (loss) attributable to JHG

$

137.3

$

102.9

$

292.8

$

(144.1)

Net income attributable to JHG

$

78.7

$

155.5

Allocation of earnings to participating stock-based awards

(3.9)

(3.0)

(8.6)

(2.0)

(4.8)

Net income (loss) attributable to JHG common shareholders

$

133.4

$

99.9

$

284.2

$

(144.1)

Net income attributable to JHG common shareholders

$

76.7

$

150.7

Weighted-average common shares outstanding — basic

 

167.6

 

181.8

 

169.5

 

181.4

 

164.0

 

171.0

Dilutive effect of nonparticipating stock-based awards

0.5

0.3

0.5

0.5

0.8

Weighted-average common shares outstanding — diluted

 

168.1

 

182.1

 

170.0

 

181.4

 

164.5

 

171.8

Earnings (loss) per share:

Basic (two class)

$

0.80

$

0.55

$

1.68

$

(0.79)

$

0.47

$

0.88

Diluted (two class)

$

0.79

$

0.55

$

1.67

$

(0.79)

$

0.47

$

0.88

The following instruments are anti-dilutive and have not been included in the weighted-average diluted shares outstanding calculation (in millions):

Three months ended

Six months ended

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

Unvested nonparticipating stock awards

 

0.6

 

0.9

 

0.6

 

1.6

Dividends Per Share

The payment of cash dividends is within the discretion of our Board of Directors and depends on many factors, including, but not limited to, our results of operations, financial condition, capital requirements, legal requirements and general business conditions.

The following is a summary of cash dividends declared and paid during the sixthree months ended June 30, 2021:March 31, 2022:

Dividend

Dividend

Date

Dividends paid

Date

Dividend

Date

Dividends paid

Date

per share

per share

    

declared

(in US$ millions)

    

paid

per share

    

declared

(in US$ millions)

    

paid

$

0.36

February 3, 2021

 

$

61.7

March 3, 2021

0.38

February 2, 2022

 

$

64.3

February 28, 2022

$

0.38

April 28, 2021

$

65.0

May 27, 2021

On July 28, 2021, ourMay 3, 2022, the Board of Directorsapproved a 2.6% increase in the quarterly cash dividends and declared a cash$0.39 per share dividend of $0.38 per share.for the first quarter 2022. The quarterly dividend will be paid on August 25, 2021,May 31, 2022, to shareholders of record at the close of business on August 9, 2021.May 16, 2022.

Note 1415 — Commitments and Contingencies

Commitments and contingencies may arise in the normal course of business. As of June 30, 2021, there were no material changes in the commitments and contingencies as reported in our Annual Report on Form 10-K for the year ended December 31, 2020.

21

Related Party Transactions

On February 4, 2021, Dai-ichi Life Holdings, Inc. (“Dai-ichi Life”) announced its intention to sell all 30,668,922 shares of JHG common stock it owned by means of a registered secondary public offering. On February 9, 2021, Dai-ichi Life completed the secondary offering, and as part of the offering, we repurchased 8,048,360 shares of common stock from Dai-ichi Life for approximately $230.0 million through Goldman Sachs & Co. LLC (“as underwriter”) at the price at which the shares of common stock were sold to the public in the secondary offering, less the underwriting discount. As a result of the completion of the secondary offering, Dai-ichi Life no longer owns any shares of JHG common stock. We did not receive any proceeds from Dai-ichi Life’s sale of common stock in the secondary offering.

Litigation and Other Regulatory Matters

We are periodically involved in various legal proceedings and other regulatory matters.

Eisenberg v. Credit Suisse AG and Janus Indices and Qiu v. Credit Suisse AG and Janus Indices

On March 15, 2018, a class action lawsuit was filed in the U.S. District Court for the Southern District of New York (“SDNY”) against a subsidiary of JHG, Janus Index & Calculation Services LLC, which, effective January 1, 2019, was renamed Janus Henderson Indices LLC (“Janus Indices”), on behalf of a class consisting of investors who purchased VelocityShares Daily Inverse VIX Short-Term ETN (Ticker: XIV) between January 29, 2018, and February 5, 2018 (Eisenberg v. Credit Suisse AG and Janus Indices). Credit Suisse AG (“Credit Suisse”), the issuer of the XIV notes, was also named as a defendant in the lawsuit. The plaintiffs generally alleged statements by Credit Suisse and Janus Indices, including those in the registration statement, were materially false and misleading Although there can be no assurances, based on its discussion of how the intraday indicative value (“IIV”) was calculated andinformation currently available, we believe that it is probable that the IIV wasultimate outcome of matters that are pending or threatened will not an accurate gauge of the economic value of the notes.

On May 4, 2018, an additional class action lawsuit was filedhave a material effect on behalf of investors who purchased XIV between January 29, 2018, and February 5, 2018, against Janus Indices and Credit Suisse in the SDNY (Qiu v. Credit Suisse AG and Janus Indices). The Qiu allegations generally copied the allegations in the Eisenberg case.

On August 20, 2018, an amended complaint was filed in the Eisenberg and Qiu cases (which wereour consolidated in the SDNY under the name Set Capital LLC, et al. v. Credit Suisse AG, et al.), adding Janus Distributors LLC, doing business as Janus Henderson Distributors, and Janus Henderson Group plc as parties, and adding allegations of market manipulation by all of the defendants. The Janus Henderson Group plc and Credit Suisse defendants moved to dismiss the Set Capital amended complaint, and on September 25, 2019, the court dismissed all claims against all defendants. The court denied the plaintiffs’ request for an opportunity to further amend their complaint and dismissed the case in its entirety. Plaintiffs thereafter filed an appeal in the U.S. Court of Appeals for the Second Circuit. On April 27, 2021, the Second Circuit affirmed the dismissal of all claims against the Janus defendants except for one claim that it held the district court did not address and remanded to the district court for further proceedings. On June 30, 2021, the plaintiffs voluntarily dismissed all Janus entities from the suit without prejudice, subject to a one-year tolling agreement between the parties, thereby resolving the litigation.financial statements.

20

With respect to the unaudited financial statements of Janus Henderson Group plc as of and for the three-month and six-month periodsperiod ended June 30, 2021,March 31, 2022, appearing herein, PricewaterhouseCoopers LLP (United States) reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated July 29, 2021,May 4, 2022, appearing herein, states that they did not audit and they do not express an opinion on the unaudited financial statements. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP (United States) is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited financial statements because that report is not a “report” or a “part” of the registration statement prepared or certified by PricewaterhouseCoopers LLP (United States) within the meaning of Sections 7 and 11 of the Act.

2221

GraphicGraphic

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Janus Henderson Group plc

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet ofJanus Henderson Group plc and its subsidiaries (the “Company”) as of June 30, 2021,March 31, 2022, and the related condensed consolidated statementsstatement of comprehensive income (loss) and, of changes in equity, for the three-month and six-month periods ended June 30, 2021 and 2020 and the condensed consolidated statements of cash flows for the six-monththree-month periods ended June 30,March 31, 2022 and March 31, 2021, and 2020 including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statementsfor them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2020,2021, and the related consolidated statementsstatement of comprehensive income, of changes in equity and of cash flows for the year then ended (not presented herein), and in our report dated February 24, 2021,2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2020,2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management.We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ PricewaterhouseCoopers LLP

Denver, Colorado

July 29, 2021May 4, 2022

2322

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

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q not based on historical facts are “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). Such forward-looking statements involve known and unknown risks and uncertainties that are difficult to predict and could cause our actual results, performance or achievements to differ materially from those discussed. These include statements as to our future expectations, beliefs, plans, strategies, objectives, events, conditions, financial performance, prospects or future events. In some cases, forward-looking statements can be identified by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and similar words and phrases. Forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of the date they are made, and are not guarantees of future performance. We do not undertake any obligation to publicly update or revise these forward-looking statements.

Various risks, uncertainties, assumptions and factors that could cause our future results to differ materially from those expressed by the forward-looking statements included in this Quarterly Report on Form 10-Q include, but are not limited to, risks, uncertainties, assumptions and factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2020,2021, and this Quarterly Report on Form 10-Q under headings such as “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk,” and in other filings or furnishings made by the Company with the SEC from time to time.

Available Information

We make available free of charge our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments thereto as soon as reasonably practicable after such filings have been made with the SEC. These reports may be obtained through our Investor Relations website (ir.janushenderson.com) and are available in print at no charge upon request by any shareholder. The contents of our website are not incorporated herein for any purpose. The SEC also maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

Charters for the Audit Committee, Compensation Committee, Risk Committee, and Nominating and Corporate Governance Committee of our Board of Directors, as well as our Corporate Governance Guidelines, Code of Business Conduct and Code of Ethics for Senior Financial Officers (our “Senior Officer Code”) are posted on our Investor Relations website (ir.janushenderson.com) and are available in print at no charge upon request by any shareholder. Within the time period prescribed by SEC and New York Stock Exchange (“NYSE”) regulations, we will post on our website any amendment to our Senior Officer Code or our Code of Business Conduct and any waivers thereof for directors or executive officers. The information on our website is not incorporated by reference into this report.

Business Overview

We are an independent global asset manager, specializing in active investment across all major asset classes. We actively manage a broad range of investment products for institutional and retail investors across fivefour capabilities: Equities, Fixed Income, Multi-Asset Quantitative Equities and Alternatives.

On March 23, 2022, we announced our Board’s appointment of Ali Dibadj as our Chief Executive Officer (“CEO”), effective on a mutually agreed date but no later than June 27, 2022. In connection with Mr. Dibadj’s appointment and the retirement of our former CEO, Richard Weil, the Board appointed Roger Thompson to serve as the interim CEO, effective April 1, 2022.

23

Segment Considerations

We are a global asset manager and manage a range of investment products, operating across various product lines, distribution channels and geographic regions. However, information is reported to the chief operating decision-maker, the current interim CEO, on an aggregated basis. Strategic and financial management decisions are determined centrally by the interim CEO and, on this basis, we operate as a single-segment investment management business.

24

Revenue

Revenue primarily consists of management fees and performance fees. Management fees are generally based on a percentage of the market value of our AUM and are calculated using either the daily, month-end or quarter-end average asset balance in accordance with contractual agreements. Accordingly, fluctuations in the financial markets have a direct effect on our operating results. Additionally, our AUM may outperform or underperform the financial markets and, therefore, may fluctuate in varying degrees from that of the general market.

Performance fees are specified in certain fund and client contracts, and are based on investment performance either on an absolute basis or compared to an established index over a specified period of time. These fees are often subject to a hurdle rate. Performance fees are recognized at the end of the contractual period (typically monthly, quarterly or annually) if the stated performance criteria are achieved. Certain fund and client contracts allow for negative performance fees where there is underperformance against the relevant index.

SECONDFIRST QUARTER 20212022 SUMMARY

SecondFirst Quarter 20212022 Highlights

Solid long-term investment performance, with 66%50%, 62%, 74% and 63%83% of our AUM outperforming relevant benchmarks on a one-, three-, five- and five-year10-year basis, respectively, as of June 30, 2021.March 31, 2022.

AUM increasedFirst quarter 2022 operating income was $124.6 million, or $178.8 million on an adjusted basis. Refer to $427.6 billion, up 6.5%, from December 31, 2020, due to positive markets, partially offset by net outflows of $5.8 billion.the Non-GAAP Financial Measures section below for information on adjusted non-GAAP figures.

SecondFirst quarter 20212022 diluted earnings per share was $0.79,$0.47, or $1.16$0.75 on an adjusted basis. Refer to the Non-GAAP Financial Measures section below for information on adjusted non-GAAP figures.

On July 28, 2021,May 3, 2022, the Board approved a 2.6% increase in the quarterly cash dividends and declared a $0.38$0.39 per share dividend for the secondfirst quarter 2021.2022.

During the first quarter 2022, we acquired 1.2 million shares of our common stock for $43.3 million as part of the share buyback program. On May 3, 2022, the Board also approved authorization of $200 million of share buybacks through April 2023.

On July 28, 2021,March 23, 2022, we announced our Board’s appointment of Ali Dibadj as our next CEO, effective on a mutually agreed date but no later than June 27, 2022.

As of March 31, 2022, we completed the Board approved a new on-market share buyback program, which authorized the repurchase of up to $200.0 millionpreviously announced sale of our common stock prior to the Annual General Meeting to be held on May 4, 2022.Quantitative Equities subsidiary, Intech.

Financial Summary

Results are reported on a U.S. GAAP basis. Adjusted non-GAAP figures are presented in the Non-GAAP Financial Measures section below.

Revenue for the secondfirst quarter 20212022 was $738.4$620.0 million, an increasea decrease of $220.4$24.0 million, or 43%, from the second quarter 2020, primarily driven by increases of $136.4 million in management fees due to an increase in average AUM, and $60.2 million in performance fees driven by our Société d’Investissement à Capital Variable (“SICAV”(4%), open endedcompared to the first quarter 2021. Key drivers of the decrease include the following:

investment company (“OEICs”) and investment trust products.

24

A decline of $25.4 million in performance fees primarily due to a reduction in performance fee crystallizations and an increase in negative mutual fund performance fees.

Total operating expenses for the secondfirst quarter 20212022 were $513.4$495.4 million, an increase of $102.1$43.9 million, or 25%10%, compared to operating expenses in the secondfirst quarter 2020, primarily due to increases of $46.6 million, $30.1 million and $14.4 million in employee compensation and benefits, distribution expenses, and impairment of goodwill and intangible assets, respectively. These increases were partially offset by a $26.4 million impairment2021. Key drivers of the VelocityShares exchange-traded note (“ETN”) definite-lived intangible asset recognized duringvariance include the second quarter 2020following:

An increase of $29.2 million in intangible asset and goodwill impairment charges due to the out-of-period incremental goodwill impairment in the first quarter 2022.

.

An increase of $14.4 million in distribution expenses driven by the timing of adjustments to distribution expenses.

An increase of $10.1 million in general, administrative and occupancy expenses primarily due to higher consultancy fees.

A decrease of $10.0 million in employee compensation and benefits primarily due to lower variable compensation charges.

Operating income for the secondfirst quarter 20212022 was $225.0$124.6 million, an increasea decrease of $118.3$67.9 million, or 111%(35%), compared to the secondfirst quarter 2020.2021. Our operating margin was 30.5%20.1% in the secondfirst quarter 2021,2022 compared to 20.6%29.9% in the secondfirst quarter 2020.2021.

Net income attributable to JHG in the secondfirst quarter 20212022 was $137.3$78.7 million, an increasea decrease of $34.4$76.8 million, or 33%(49%), compared to the secondfirst quarter 2020 due2021. In addition to the aforementioned factors impactingaffecting revenue and operating expense discussed above. In

25

addition, net loss (income) attributable to noncontrolling interests improved by $25.5 million from the second quarter 2020, primarily due to the consolidation of third-party ownership interests in seeded investment products and fair value adjustments in relation to our seeded investment products. This increase was partially offset by a $48.5 million decline in investment gains (losses), net and a $49.6 million increase in our income tax provision, primarily driven by the increase in pre-tax book income and a non-cash deferred tax expense of $31.0 million. The deferred tax expense resulted from the enactmentexpenses, key drivers of the Finance Act 2021 duringvariance include the second quarter 2021, which provides for an increase in the UK tax rate from 19% to 25% effective from April 2023.following:

An unfavorable movement of $33.8 million in investment gains, net in the first quarter 2022 compared to the first quarter 2021, partially offset by an improvement of $12.3 million in net loss attributable to noncontrolling interests. Movements in investment gains, net and net loss attributable to noncontrolling interests are primarily due to fair value adjustments in relation to our seeded investment products and derivative instruments and the consolidation of third-party ownership interests in seeded investment products.

A decrease of $20.3 million in our provision for income taxes primarily due to a decrease in pre-tax income.

Investment Performance of Assets Under Management

The following table is a summary of investment performance as of June 30, 2021:March 31, 2022:

Percentage of AUM outperforming benchmark

    

1 year

    

3 years

    

5 years

 

Equities

 

56

%  

56

%  

55

%

Fixed Income

 

98

%  

96

%  

97

%

Multi-Asset

 

98

%  

97

%  

97

%

Quantitative Equities

 

23

%  

23

%  

2

%

Alternatives

 

98

%  

97

%  

100

%

Total JHG

 

66

%  

66

%  

63

%

Percentage of AUM outperforming benchmark

    

1 year

    

3 years

    

5 years

 

10 years

 

Equities

 

32

%  

44

%  

61

%

76

%

Fixed Income

 

68

%  

97

%  

96

%

99

%

Multi-Asset

 

95

%  

96

%  

96

%

99

%

Alternatives

 

92

%  

100

%  

100

%

100

%

Total

 

50

%  

62

%  

74

%

83

%

Assets Under Management

Our AUM as of June 30, 2021,March 31, 2022, was $427.6$361.0 billion, an increasea decrease of $26.0$71.3 billion, or 6.5%(16.5%), from December 31, 2020,2021, driven primarily by positivea $29.6 billion disposition of the Intech Quantitative Equities capability and negative market movements of $32.6 billion, partially offset by net$29.1 billion. Net redemptions of $5.8 billion.$11.9 billion, or $6.2 billion when excluding the Intech Quantitative Equities capability, also contributed to the decline in AUM.

Our non-U.S. dollar (“USD”)non-USD AUM is primarily denominated in British pounds (“GBP”),GBP, EUR and AUD. During the three months ended June 30, 2021,March 31, 2022, the USD strengthened against AUD, and weakened against GBP and EUR, resulting in no net impact to our AUM. During the six months ended June 30, 2021, the USD strengthened against AUD and EUR, and weakened against GBP,AUD, resulting in a $0.8$2.0 billion decrease in our AUM. As of June 30, 2021,March 31, 2022, approximately 31%33.5% of our AUM was non-USD denominated, resulting in a net favorable currency effect, particularly in products exposed to GBP.denominated.

25

VelocityShares ETNsexchange-traded notes (“ETNs”) and certain index products are not included within our AUM because we are not the named adviser or subadviser to ETNs or index products. VelocityShares ETN assets totaled $0.4$0.3 billion and $0.6$0.2 billion as of June 30, 2021,March 31, 2022, and December 31, 2020,2021, respectively. VelocityShares index product assets, not included within our AUM, totaled $2.3$1.7 billion and $2.7$1.9 billion as of June 30, 2021,March 31, 2022, and December 31, 2020,2021, respectively.

26

Our AUM and flows by capability for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, were as follows (in billions):

    

Closing AUM

    

    

    

    

    

    

Closing AUM

March 31,

Net sales

Reclassifications

June 30, 

    

2021

    

Sales

    

Redemptions(1)

    

(redemptions)

    

Markets

    

FX(2)

    

and disposals(3)

    

2021

By capability

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Equities

$

224.9

$

8.6

$

(10.5)

$

(1.9)

$

17.0

$

0.1

$

$

240.1

Fixed Income

 

79.5

 

5.9

 

(6.0)

 

(0.1)

 

1.3

 

(0.2)

 

 

80.5

Multi-Asset

 

49.5

 

2.4

 

(1.9)

 

0.5

 

3.2

 

 

 

53.2

Quantitative Equities

41.3

 

0.2

 

(1.5)

 

(1.3)

 

3.3

 

0.1

 

 

43.4

Alternatives

 

9.9

 

1.3

 

(1.0)

 

0.3

 

0.2

 

 

 

10.4

Total

$

405.1

$

18.4

$

(20.9)

$

(2.5)

$

25.0

$

$

$

427.6

    

Closing AUM

    

    

    

    

    

    

Closing AUM

December 31,

Net sales

             

Reclassifications

March 31, 

2021

Sales

Redemptions(1)

(redemptions)

Markets

FX(2)

and disposals(3)

2022

By capability

 

  

 

  

 

  

  

 

  

 

  

 

  

 

  

Equities

$

244.3

$

8.5

$

(12.3)

$

(3.8)

$

(19.2)

$

(1.3)

$

1.3

$

221.3

Fixed Income

 

79.6

 

6.0

 

(6.0)

 

 

(3.8)

 

(0.3)

 

 

75.5

Multi-Asset

 

59.7

 

2.3

 

(4.5)

 

(2.2)

(3.5)

 

(0.1)

 

 

53.9

Quantitative Equities

 

38.0

 

0.2

 

(5.9)

 

(5.7)

 

(2.6)

(0.1)

 

(29.6)

 

Alternatives

 

10.7

 

0.9

 

(1.1)

 

(0.2)

 

 

(0.2)

 

 

10.3

Total

$

432.3

$

17.9

$

(29.8)

$

(11.9)

$

(29.1)

$

(2.0)

$

(28.3)

$

361.0

    

Closing AUM

    

    

    

    

    

    

Closing AUM

December 31,

Net sales

             

Reclassifications

June 30, 

2020

Sales

Redemptions(1)

(redemptions)

Markets

FX(2)

and disposals(3)

2021

By capability

 

  

 

  

 

  

  

 

  

 

  

 

  

 

  

Equities

$

219.4

$

19.1

$

(22.5)

$

(3.4)

$

24.3

$

(0.2)

$

$

240.1

Fixed Income

 

81.5

 

11.8

 

(11.5)

 

0.3

 

(0.8)

 

(0.5)

 

 

80.5

Multi-Asset

 

48.0

 

5.4

 

(4.1)

 

1.3

3.9

 

 

 

53.2

Quantitative Equities

 

42.0

 

0.4

 

(3.8)

 

(3.4)

 

4.8

 

 

43.4

Alternatives

 

10.7

 

2.4

 

(3.0)

 

(0.6)

 

0.4

 

(0.1)

 

 

10.4

Total

$

401.6

$

39.1

$

(44.9)

$

(5.8)

$

32.6

$

(0.8)

$

$

427.6

    

Closing AUM

    

    

    

    

    

    

Closing AUM

December 31,

Net sales

Reclassifications

March 31, 

    

2020

    

Sales

    

Redemptions(1)

(redemptions)

    

Markets

    

FX(2)

    

and disposals(3)

    

2021

By capability

 

  

 

  

 

  

  

 

  

 

  

 

  

 

  

Equities

$

219.4

$

10.5

$

(12.0)

$

(1.5)

$

7.3

$

(0.3)

$

$

224.9

Fixed Income

 

81.5

 

5.9

 

(5.5)

 

0.4

 

(2.1)

 

(0.3)

 

 

79.5

Multi-Asset

 

48.0

 

3.0

 

(2.2)

 

0.8

 

0.7

 

 

 

49.5

Quantitative Equities

 

42.0

 

0.2

 

(2.3)

 

(2.1)

 

1.5

(0.1)

 

 

41.3

Alternatives

 

10.7

 

1.1

 

(2.0)

 

(0.9)

 

0.2

 

(0.1)

 

 

9.9

Total

$

401.6

$

20.7

$

(24.0)

$

(3.3)

$

7.6

$

(0.8)

$

$

405.1

    

Closing AUM

    

    

    

    

    

    

Closing AUM

March 31,

Net sales

Reclassifications

June 30, 

    

2020

    

Sales

    

Redemptions(1)

    

(redemptions)

    

Markets

    

FX(2)

    

and disposals(3)

    

2020

By capability

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Equities

$

149.9

$

7.9

$

(12.1)

$

(4.2)

$

32.9

$

0.6

$

(0.1)

$

179.1

Fixed Income

 

65.3

 

6.3

 

(7.0)

 

(0.7)

 

3.7

 

1.9

 

 

70.2

Multi-Asset

 

35.3

 

2.5

 

(1.8)

 

0.7

 

4.3

 

 

 

40.3

Quantitative Equities

34.6

 

0.4

 

(4.3)

 

(3.9)

 

6.8

 

 

 

37.5

Alternatives

 

9.3

 

0.8

 

(0.9)

 

(0.1)

 

0.2

 

0.1

 

0.1

 

9.6

Total

$

294.4

$

17.9

$

(26.1)

$

(8.2)

$

47.9

$

2.6

$

$

336.7

    

Closing AUM

    

    

    

    

    

    

Closing AUM

December 31,

Net sales

Reclassifications

June 30, 

    

2019

    

Sales

    

Redemptions(1)

    

(redemptions)

    

Markets

    

FX(2)

    

and disposals(3)

    

2020

By capability

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Equities

$

204.0

$

16.7

$

(27.8)

$

(11.1)

$

(7.4)

$

(2.3)

$

(4.1)

$

179.1

Fixed Income

 

74.8

 

14.3

 

(18.4)

 

(4.1)

 

1.6

 

(2.1)

 

 

70.2

Multi-Asset

 

39.8

 

6.0

 

(4.3)

 

1.7

 

(0.7)

 

(0.3)

 

(0.2)

 

40.3

Quantitative Equities

 

45.2

 

0.8

 

(6.7)

 

(5.9)

 

(1.7)

 

(0.1)

 

 

37.5

Alternatives

 

11.0

 

1.5

 

(2.5)

 

(1.0)

 

(0.1)

 

(0.4)

 

0.1

 

9.6

Total

$

374.8

$

39.3

$

(59.7)

$

(20.4)

$

(8.3)

$

(5.2)

$

(4.2)

$

336.7

(1)Redemptions include the impact of client transfers, which could result in a positive balance on occasion.

(2)FX reflects movements in AUM resulting from changes in foreign currency rates as non-USD denominatednon-USD-denominated AUM is translated into USD.

27

(3)ReclassificationsDisposals relate to the sale of Intech and reclassifications relate to a reclassification of an existing fundfunds from Quantitative Equities to Alternatives, and disposals relate to the sale of Geneva.Equities.

26

Our AUM and flows by client type for the three and six months ended June 30,March 31, 2022 and 2021, were as follows (in billions):

    

Closing AUM

    

    

    

    

    

    

Closing AUM

March 31,

Net sales

             

Reclassifications

June 30, 

2021

Sales

Redemptions

(redemptions)

Markets

FX

and disposals

2021

By client type:

 

  

 

  

 

  

  

 

  

 

  

 

  

 

  

Intermediary

$

196.2

$

13.5

$

(13.5)

$

$

10.4

$

0.1

$

$

206.7

Institutional

 

127.2

 

4.2

 

(6.0)

 

(1.8)

7.9

 

(0.2)

 

 

133.1

Self-directed

 

81.7

 

0.7

 

(1.4)

 

(0.7)

 

6.7

 

0.1

 

 

87.8

Total

$

405.1

$

18.4

$

(20.9)

$

(2.5)

$

25.0

$

$

$

427.6

    

Closing AUM

    

    

    

    

    

    

Closing AUM

December 31,

Net sales

           �� 

Reclassifications

March 31, 

2021

Sales

Redemptions

(redemptions)

Markets

FX

and disposals

2022

By client type:

 

  

 

  

 

  

  

 

  

 

  

 

  

 

  

Intermediary

$

215.0

$

14.0

$

(15.8)

$

(1.8)

$

(13.8)

$

(1.3)

$

(0.9)

$

197.2

Institutional

 

127.2

 

3.3

 

(12.4)

 

(9.1)

(7.8)

 

(0.6)

 

(27.4)

 

82.3

Self-directed

 

90.1

 

0.6

 

(1.6)

 

(1.0)

 

(7.5)

 

(0.1)

 

 

81.5

Total

$

432.3

$

17.9

$

(29.8)

$

(11.9)

$

(29.1)

$

(2.0)

$

(28.3)

$

361.0

    

Closing AUM

    

    

    

    

    

    

Closing AUM

December 31,

Net sales

             

Reclassifications

June 30, 

2020

Sales

Redemptions

(redemptions)

Markets

FX

and disposals

2021

By client type:

 

  

 

  

 

  

  

 

  

 

  

 

  

 

  

Intermediary

$

192.9

$

30.0

$

(28.9)

$

1.1

$

14.8

$

(0.3)

$

(1.8)

$

206.7

Institutional

 

127.6

 

7.5

 

(12.8)

 

(5.3)

9.6

 

(0.6)

 

1.8

 

133.1

Self-directed

 

81.1

 

1.6

 

(3.2)

 

(1.6)

 

8.2

 

0.1

 

 

87.8

Total

$

401.6

$

39.1

$

(44.9)

$

(5.8)

$

32.6

$

(0.8)

$

$

427.6

    

Closing AUM

    

    

    

    

    

    

Closing AUM

December 31,

Net sales

             

Reclassifications

March 31, 

2020

Sales

Redemptions

(redemptions)

Markets

FX

and disposals

2021

By client type:

 

  

 

  

 

  

  

 

  

 

  

 

  

 

  

Intermediary

$

192.9

$

16.5

$

(15.4)

$

1.1

$

4.4

$

(0.4)

$

(1.8)

$

196.2

Institutional

 

127.6

 

3.3

 

(6.8)

 

(3.5)

1.7

 

(0.4)

 

1.8

 

127.2

Self-directed

 

81.1

 

0.9

 

(1.8)

 

(0.9)

 

1.5

 

 

 

81.7

Total

$

401.6

$

20.7

$

(24.0)

$

(3.3)

$

7.6

$

(0.8)

$

$

405.1

Average Assets Under Management

The following table presents our average AUM by capability for the three and six months ended June 30,March 31, 2022 and 2021 (in billions):

Average AUM

Average AUM

Three months ended

Six months ended

By capability

    

June 30, 2021

    

June 30, 2021

Equities

 

$

235.3

 

$

229.5

Fixed Income

 

80.7

 

80.8

Multi-Asset

 

51.8

 

50.2

Quantitative Equities

 

42.9

 

42.2

Alternatives

 

10.1

 

10.4

Total

 

$

420.8

 

$

413.1

Three months ended

Three months ended

March 31, 

March 31, 

By capability

    

2022

    

2021

2022 vs. 2021

Equities

 

$

222.9

 

$

223.6

(0)

%

Fixed Income

 

77.5

 

80.9

(4)

%

Multi-Asset

 

54.5

 

48.7

12

%

Quantitative Equities

 

31.2

 

41.5

(25)

%

Alternatives

 

10.6

 

10.6

0

%

Total

 

$

396.7

 

$

405.3

(2)

%

Closing Assets Under Management

The following table presents the closing AUM split by client type and client location as of June 30, 2021March 31, 2022 (in billions):

    

Closing AUM

By client type

June 30, 2021

Intermediary

$

206.7

Institutional

 

133.1

Self-directed

 

87.8

Total

$

427.6

    

Closing AUM

By client location

December 31, 2021

North America

$

207.6

EMEA and LatAm

 

116.4

Asia Pacific

 

37.0

Total

$

361.0

28

    

Closing AUM

By client location

June 30, 2021

North America

$

236.8

EMEA and LatAm

 

131.2

Asia Pacific

 

59.6

Total

$

427.6

Valuation of Assets Under Management

The fair value of our AUM is based on the value of the underlying cash and investment securities of our funds, trusts and segregated mandates. A significant proportion of these securities is listed or quoted on a recognized securities exchange or market and is regularly traded thereon; these investments are valued based on unadjusted quoted market prices. However, for non-U.S. equity securities held by U.S. mutual funds, excluding exchange-traded funds (“ETFs”), the

27

quoted market prices may be adjusted to capture market movement between the time the local market closes and the NYSE closes. Other investments, including over-the-counter (“OTC”) derivative contracts (which are dealt in or through a clearing firm, exchanges or financial institutions), will beare valued by reference to the most recent official settlement price quoted by the appointed market vendor, and in the event no price is available from this source, a broker quotation may be used. Physical property held is valued monthly by a specialist independent appraiser.

When a readily ascertainable market value does not exist for an investment, the fair value is calculated using a variety of methodologies, including the expected cash flows of its underlying net asset base, taking into account applicable discount rates and other factors; comparable securities or relevant indices; recent financing rounds; revenue multiples; or a combination thereof. Judgment is used to ascertain if a formerly active market has become inactive and to determine fair values when markets have become inactive. Our Fair Value Pricing Committee is responsible for determining or approving these unquoted prices, which are reported to those charged with governance of the funds and trusts. For funds that invest in markets that are closed at their valuation point, an assessment is made daily to determine whether a fair value pricing adjustment is required to the fund’s valuation. This may be due to significant market movements in other correlated open markets, scheduled market closures or unscheduled market closures as a result of natural disaster or government intervention.

Third-party administrators hold a key role in the collection and validation of prices used in the valuation of the securities. Daily price validation is completed using techniques such as day-on-day tolerance movements, invariant prices, excessive movement checks and intra-vendor tolerance checks. Our data management team performs oversight of this process and completes annual due diligence on the processes of third parties.

In other cases, we and the sub-administrators perform a number of procedures to validate the pricing received from third-party providers. For actively traded equity and fixed income securities, prices are received daily from both a primary and secondary vendor. Prices from the primary and secondary vendors are compared to identify any discrepancies. In the event of a discrepancy, a price challenge may be issued to both vendors. Securities with significant day-to-day price changes require additional research, which may include a review of all news pertaining to the issue and issuer, and any corporate actions. All fixed income prices are reviewed by our fixed income trading desk to incorporate market activity information available to our traders. In the event the traders have received price indications from market makers for a particular issue, this information is transmitted to the pricing vendors.

We leverage the expertise of our fund management teams across the business to cross-invest assets and create value for our clients. Where cross investment occurs, assets and flows are identified, and the duplication is removed.

Results of Operations

Foreign Currency Translation

Foreign currency translation impacts our Results of Operations. The translation of GBP to USD is the primary driver of foreign currency translation in expenses. The GBP strengthenedweakened against the USD during the three and six months ended June 30, 2021,March 31, 2022, compared to the three and six months ended June 30, 2020.March 31, 2021. Meaningful foreign currency translation impacts to our operating expenses are discussed in the Operating Expenses section below. Revenue is also impacted by foreign currency translation, but the impact is generally determined by the primary currency of the individual funds.

2928

Revenue

Three months

Six months

 

Three months ended

Six months ended

ended

ended

June 30, 

June 30, 

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

    

2021 vs. 2020

    

2021 vs. 2020

 

Revenue (in millions):

 

  

 

  

 

  

 

  

 

  

 

  

Management fees

$

544.1

$

407.7

$

1,059.0

$

847.3

33

%  

25

%

Performance fees

 

77.4

 

17.2

 

94.4

 

31.8

n/m

*

n/m

*

Shareowner servicing fees

 

64.0

 

47.3

 

124.8

 

97.6

35

%  

28

%

Other revenue

 

52.9

 

45.8

 

104.2

 

96.2

16

%  

8

%

Total revenue

$

738.4

$

518.0

$

1,382.4

$

1,072.9

43

%  

29

%

* n/m - Not meaningful.

Three months

 

Three months ended

ended

March 31, 

March 31, 

    

2022

    

2021

    

2022 vs. 2021

 

Revenue (in millions):

 

  

 

  

 

  

Management fees

$

514.0

$

514.9

(0)

%

Performance fees

 

(8.4)

 

17.0

n/m

*

Shareowner servicing fees

 

62.4

 

60.8

3

%

Other revenue

 

52.0

 

51.3

1

%

Total revenue

$

620.0

$

644.0

(4)

%

* n/m - Not meaningful.

Management feesTotal revenue

Management fees increased by $136.4Total revenue decreased $24.0 million during the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020,March 31, 2021, primarily due to the impact of higher average AUM, which caused a $123.5 million increasedecline in management fees,performance fee crystallizations within Société d’Investissement À Capital Variable (“SICAV”) and UK Open Ended Investment Companies (“OEICs”), and an increase in management fee margins, which led to an $8.3 million increase in management fees.

Managementnegative performance fees increased by $211.7 million during the six months ended June 30, 2021, compared to the six months ended June 30, 2020, primarily due to the impact of higher average AUM, which caused a $188.8 million increaseassociated with U.S. mutual funds. Fluctuations in management fees, shareowner servicing fees and an increase in management fee margins, which led to a $20.8 million increase in management fees.other revenue were insignificant.

Performance fees

Performance fees are derived across a number of product ranges. U.S. mutual fund performance fees are recognized on a monthly basis, while all other product range performance fees are recognized on a quarterly or annual basis. The investment management feefees paid by each U.S. mutual fund subject to a performance fee is the base management fee plus or minus a performance fee adjustment, as determined by the relative investment performance of the fund compared to a specified benchmark index. Performance fees by product type consisted of the following for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 (in millions):

Three months

Six months

 

Three months ended

Six months ended

ended

ended

June 30, 

June 30, 

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

    

2021 vs. 2020

    

2021 vs. 2020

 

Performance fees (in millions):

 

  

 

  

 

  

 

  

 

  

 

  

SICAVs

$

50.2

$

9.2

$

62.6

$

9.4

n/m

*

n/m

*

UK OEICs and unit trusts

 

15.2

 

2.3

 

19.2

 

3.6

n/m

*

n/m

*

Offshore absolute return funds and other

 

0.2

 

 

2.4

 

4.0

n/m

*

(40)

%

Segregated mandates

 

1.9

 

9.3

 

4.2

 

20.3

(80)

%

(79)

%

Investment trusts

12.7

12.7

n/m

*

n/m

*

U.S. mutual funds

 

(2.8)

 

(3.6)

 

(6.7)

 

(5.5)

22

%

(22)

%

Total performance fees

$

77.4

$

17.2

$

94.4

$

31.8

n/m

*

n/m

*

* n/m - Not meaningful.

Three months ended

March 31, 

    

2022

    

2021

Performance fees (in millions):

 

  

 

  

SICAVs

$

$

12.4

UK OEICs and unit trusts

 

 

4.0

Offshore absolute return funds and other funds

 

5.7

 

2.2

Segregated mandates

 

(0.1)

 

2.3

U.S. mutual funds

 

(14.0)

 

(3.9)

Total performance fees

$

(8.4)

$

17.0

29

Operating Expenses

Three months

 

Three months ended

ended

March 31, 

March 31, 

    

2022

    

2021

    

2022 vs. 2021

 

Operating expenses (in millions):

 

  

 

  

 

  

Employee compensation and benefits

$

164.6

$

174.6

(6)

%

Long-term incentive plans

 

51.4

 

53.5

(4)

%

Distribution expenses

 

141.8

 

127.4

11

%

Investment administration

 

14.8

 

12.6

17

%

Marketing

��

 

7.4

 

6.2

19

%

General, administrative and occupancy

 

73.1

 

63.0

16

%

Impairment of goodwill and intangible assets

32.8

3.6

n/m

*

Depreciation and amortization

 

9.5

 

10.6

(10)

%

Total operating expenses

$

495.4

$

451.5

10

%

* n/m - Not meaningful.

ForEmployee compensation and benefits

Employee compensation and benefits decreased by $10.0 million during the three months ended June 30, 2021, performance fees improved $60.2 millionMarch 31, 2022, compared to the three months ended June 30, 2020, primarily due to a $41.0 million improvement in SICAV performance fee crystallizations. The SICAV performance fees consisted of annual fees in several strategies, primarily in European equities, and quarterly fees

30

in the absolute return strategy. A $12.9 million increase in UK OEIC performance fees due to the absolute return strategy also contributed to the improvement in performance fees.

For the six months ended June 30,March 31, 2021, performance fees improved $62.6 million compared to the six months ended June 30, 2020, primarily due to a $53.2 million improvement in SICAV performance fee crystallizations and a $15.6 million increase in performance fees related to UK OEICs. The strategies contributing to the improvement in SICAV and UK OEIC performance fees for the six-month period are similar to what is discussed above in the three-month discussion.

Shareowner servicing fees

Shareowner servicing fees are primarily composed of mutual fund servicing fees, which are driven by AUM. For the three months ended June 30, 2021, servicing fees increased $16.7 million compared to the three months ended June 30, 2020, primarily due to an increase in servicing fees of $14.4 million driven by the increase in average AUM.

For the six months ended June 30, 2021, shareowner servicing fees increased $27.2 million compared to the six months ended June 30, 2020, primarily due to an increase in servicing fees of $23.8 million driven by the increase in average AUM.

Other revenue

Other revenue is primarily composed of 12b-1 distribution fees, general administration charges, VelocityShares ETN fees and other fee revenue. Other revenue increased by $7.1 million during the three months ended June 30, 2021, compared to the three months ended June 30, 2020, primarily due to an increase of $6.2 million in 12b-1 fees and servicing fees driven by an improvement in average AUM, as well as a $2.6 million increase in general administration charges. These increases were partially offset by a $2.3 million decrease in ETN licensing fees due to the delisting and the ongoing liquidation of VelocityShares ETNs.

Other revenue increased by $8.0 million during the six months ended June 30, 2021, compared to the six months ended June 30, 2020, primarily due to an increase of $9.6 million in 12b-1 fees and servicing fees driven by an improvement in average AUM, as well as a $5.4 million increase in general administration charges. These increases were partially offset by an $8.2 million decrease in ETN licensing fees due to the delisting and the ongoing liquidation of VelocityShares ETNs.

Operating Expenses

Three months

Six months

 

Three months ended

Six months ended

ended

ended

June 30, 

June 30, 

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

    

2021 vs. 2020

    

2021 vs. 2020

 

Operating expenses (in millions):

 

  

 

  

 

  

 

  

 

  

 

  

Employee compensation and benefits

$

192.4

$

145.8

$

367.0

$

301.4

32

%  

22

%

Long-term incentive plans

 

49.8

 

49.1

 

103.3

 

82.7

1

%  

25

%

Distribution expenses

 

134.8

 

104.7

 

262.2

 

216.9

29

%  

21

%

Investment administration

 

13.1

 

12.6

 

25.7

 

24.3

4

%  

6

%

Marketing

 

6.7

 

3.7

 

12.9

 

10.4

81

%  

24

%

General, administrative and occupancy

 

65.7

 

58.0

 

128.7

 

123.2

13

%  

4

%

Impairment of goodwill and intangible assets

40.8

26.4

44.4

513.7

55

%  

(91)

%

Depreciation and amortization

 

10.1

 

11.0

 

20.7

 

26.0

(8)

%  

(20)

%

Total operating expenses

$

513.4

$

411.3

$

964.9

$

1,298.6

25

%  

(26)

%

31

Employee compensation and benefits

Employee compensation and benefits increased by $46.6 million during the three months ended June 30, 2021, compared to the three months ended June 30, 2020, primarily driven by increasesa decrease of $43.3$18.1 million in variable compensation, mainly due to a higherlower annual bonus pool and other variable compensation. Variable compensation, including bonus pools, is generally calculated as a percentage of operating income excluding incentive compensation (pre-incentive operating income) and is allocated to employees by management on a discretionary basis. Also contributing to the increase in employee compensation and benefits was unfavorablefavorable foreign currency translation of $4.7$2.7 million and a $3.9$2.3 million decrease in project charges driven by less internal labor costs capitalized during the three months ended March 31, 2022. These decreases were partially offset by a $6.8 million increase in salary and benefits, due to higher headcount driven by the conversion of temporary staff to full-time employees and annual base-pay increases, of $1.3 million. These increases were partially offset by a $6.6 million decrease in temporary staffing charges and project costswhich increased expenses during the three months ended June 30, 2021.March 31, 2022, by $6.2 million.

Employee compensation and benefits increased by $65.6 million during the six months ended June 30, 2021, compared to the six months ended June 30, 2020, primarily driven by increases of $63.7 million in variable compensation mainly due to a higher annual bonus pool and other variable compensation. Also contributing to the increase in employee compensation and benefits was unfavorable foreign currency translation of $8.1 million, a $5.4 million increase in salary and benefits due to higher headcount, and annual base-pay increases of $2.5 million. These increases were partially offset by a $14.1 million decrease in temporary staffing charges and project costs during the six months ended June 30, 2021.

Long-term incentive plans

Long-term incentive plan expenses increased $0.7decreased by $2.1 million during the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020. The increase wasMarch 31, 2021, primarily driven by unfavorable foreign currency translation of $2.8 million, partially offset by a $2.3$17.1 million decrease in payroll taxes on vestings during the three months ended June 30, 2021.

Long-term incentive plan expenses increased $20.6 million during the six months ended June 30, 2021, compared to the six months ended June 30, 2020, primarily driven by $16.0 million in fair valuemark-to-market adjustments related to mutual fund share awards and certain long-term incentive awards,, unfavorable foreign currency translation of $4.1 million, and $1.5 million in payroll taxes on vestings. These increases were partially offset by a decrease$12.5 million for accelerated vesting of $1.0awards due to the retirement of our CEO and Chief Information Officer (“CIO”), and $3.1 million due to the roll-on of new awards exceeding the roll-off of vested awards exceeding new awards during the six months ended June 30, 2021.awards.

Distribution expenses

Distribution expenses are paid to financial intermediaries for the distribution and servicing of our retail investment products and are typically calculated based on the amount of the intermediary-sourced AUM. Distribution expenses increased $30.1by $14.4 million during the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020,March 31, 2021, primarily due to an increasethe timing of $29.2 million from an improvement in average AUM.adjustments to distribution expenses.

DistributionInvestment administration

Investment administration expenses, which represent back-office operations (including fund administration and fund accounting), increased $45.3by $2.2 million during the sixthree months ended June 30, 2021,March 31, 2022, compared to the sixthree months ended June 30, 2020,March 31, 2021, primarily due to ana $1.9 million increase of $48.5 million from an improvement in average AUM.fund accounting and ad valorem expenses.

30

Marketing

Marketing expenses increased $3.0 million and $2.5by $1.2 million during the three and six months ended June 30, 2021,March 31, 2022, compared to the three and six months ended June 30, 2020, respectively,March 31, 2021, primarily due to an increase in marketing events, sponsorships, and advertising campaigns during the three and six months ended June 30, 2021.March 31, 2022.

General, administrative and occupancy

General, administrative and occupancy expenses increased by $7.7$10.1 million during the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020,March 31, 2021, primarily due to unfavorable foreign currency translationincreases of $3.7 million, a $2.4 million increase in information technology costs, primarily related to application and software licensing fees, and a $1.8 million increase in legal and professional costs, primarily driven by non-employee director stock awards during the three months ended June 30, 2021.

32

General, administrative and occupancy expenses increased by $5.5 million during the six months ended June 30, 2021, compared to the six months ended June 30, 2020, primarily due to unfavorable foreign currency translation of $7.0 million, a $3.0 million increase in information technology costs, primarily related to software servicing fees, and a $2.9 million increase in legal and professional costs, primarily driven by non-employee director stock awards and employee recruitment fees. These increases were partially offset by decreases of $3.5 million in travel expenses as a result of reduced travel during the COVID-19 pandemic and $3.0$6.4 million in consultancy fees related to certain project costs, during the six months ended June 30, 2021.$2.8 million in information technology costs, driven by an increased investment in non-capitalizable hardware and software, and $2.5 million in higher market data expenses.

Impairment of goodwill and intangible assets

Goodwill and intangible asset impairment charges increased by $14.4$29.2 million during the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020.March 31, 2021. The increase is primarily due to a $40.8$32.8 million out-of-period incremental impairment of certain indefinite-lived intangible assets, partially offset by a $26.4 million impairment of the VelocityShares ETN definite-lived intangible assetour goodwill recognized during the three months ended June 30, 2020.

Goodwill and intangible asset impairment charges decreased by $469.3 million during the six months ended June 30, 2021, compared to the six months ended June 30, 2020. The decrease is due to a $513.7 million impairment of our goodwill, certain mutual fund investment management agreements and client relationships recognized during the six months ended June 30, 2020,March 31, 2022, partially offset by a $44.4$3.6 million impairment of certain indefinite-lived intangible assets, and the Perkins brand name both recognized during the sixthree months ended June 30,March 31, 2021. During the first quarter of 2021, we completed a review of Perkins. To right-size our product portfolio and better align with the changing needs of clients, certain strategies were closed and the funds liquidated, during the second quarter of 2021. The Perkins brand will be discontinued and future marketing efforts for value equity strategies will be incorporated under the Janus Henderson brand.

Depreciation and amortization

Depreciation and amortization expenses decreased by $0.9 million and $5.3$1.1 million during the three and six months ended June 30, 2021,March 31, 2022, compared to the three and six months ended June 30, 2020, respectively,March 31, 2021, primarily due to a decrease in the amortization of intangibleinternally developed software, as assets resulting from the sale of Geneva and the impairment of certain client relationships recognizedbecame fully amortized during the three months ended March 31, 2020.current year.

Non-Operating Income and Expenses

Three months

Six months

 

Three months ended

Six months ended

ended

ended

June 30, 

June 30, 

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

    

2021 vs. 2020

    

2021 vs. 2020

 

Non-operating income and expenses (in millions):

 

  

 

  

 

  

 

  

 

  

 

  

Interest expense

$

(3.2)

$

(3.2)

$

(6.4)

$

(6.5)

%  

2

%

Investment gains (losses), net

 

1.8

 

50.3

 

3.4

 

(0.2)

(96)

%  

n/m

*

Other non-operating income (expenses), net

 

(2.7)

 

8.6

 

(2.8)

 

40.8

n/m

*

n/m

*

Income tax benefit (provision)

 

(79.7)

 

(30.1)

 

(122.8)

 

38.7

n/m

*

n/m

*

* n/m - Not meaningful.

Three months

 

Three months ended

ended

March 31, 

March 31, 

    

2022

    

2021

    

2022 vs. 2021

 

Non-operating income and expenses (in millions):

 

  

 

  

 

  

Interest expense

$

(3.2)

$

(3.2)

%

Investment gains (losses), net

 

(32.2)

 

1.6

n/m

*

Other non-operating expenses, net

 

(7.8)

 

(0.1)

n/m

*

Income tax provision

 

(22.8)

 

(43.1)

47

%

* n/m - Not meaningful.

3331

Investment gains (losses), net

The components of investment gains (losses), net for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, were as follows (in millions):

Three months

Six months

 

Three months ended

Six months ended

ended

ended

June 30, 

June 30, 

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

    

2021 vs. 2020

    

2021 vs. 2020

 

Investment gains (losses), net (in millions):

 

  

 

  

 

  

 

  

 

  

 

  

Seeded investment products and hedges, net

$

(2.6)

$

11.1

$

3.0

$

6.0

n/m

*

(50)

%

Third-party ownership interests in seeded investment products

3.9

29.0

(4.1)

(9.4)

(87)

%  

56

%

Long Tail Alpha equity method investment

 

(0.2)

 

4.4

 

1.9

5.7

n/m

*

(67)

%

Deferred equity plan

0.2

4.7

2.1

(2.6)

(96)

%  

n/m

*

Other

 

0.5

 

1.1

 

0.5

 

0.1

(55)

%  

n/m

*

Investment gains (losses), net

$

1.8

$

50.3

$

3.4

$

(0.2)

(96)

%  

n/m

*

* n/m - Not meaningful.

March 31, 

    

2022

    

2021

Investment gains (losses), net (in millions):

 

  

 

  

Seeded investment products and hedges, net

$

(11.5)

$

5.6

Third-party ownership interests in seeded investment products

(20.1)

(8.0)

Long Tail Alpha investment

 

1.5

2.1

Deferred equity plan

(1.5)

1.9

Other

 

(0.6)

 

Investment gains (losses), net

$

(32.2)

$

1.6

Investment gains (losses), net moved unfavorably by $48.5$33.8 million during the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020, and favorably by $3.6 million during the six months ended June 30, 2021, compared to the six months ended June 30, 2020.March 31, 2021. Movements in investment gains (losses), net are primarily due to fair value adjustments in relation to our seeded investment products, deferred equity plan and consolidation of third-party ownership interests in seeded investment products.

Other non-operating income (expenses),expenses, net

Other non-operating income (expenses),expenses, net declined $11.3$7.7 million during the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020, primarily due to unfavorable foreign currency translation of $12.4 million recognized during the three months ended June 30,March 31, 2021.

Other non-operating income (expenses), net declined $43.6 million during the six months ended June 30, 2021, compared to the six months ended June 30, 2020. The decrease was primarily due to a $16.2loss of $9.1 million gain and $7.1 million contingent consideration adjustment in relationrelated to the sale of Geneva recognizedIntech during the sixthree months ended June 30, 2020, and $19.6March 31, 2022. This loss was partially offset by $1.9 million of unfavorablefavorable foreign currency translation recognized duringwhen comparing the sixthree months ended June 30,March 31, 2022, to the three months ended March 31, 2021.

Income tax benefit (provision)provision

Our effective tax rates for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, were as follows:

Three months ended

Six months ended

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

Effective tax rate

36.1

%  

18.5

%  

29.8

%  

20.2

%

Three months ended

March 31, 

    

2022

    

2021

Effective tax rate

28.0

%  

22.6

%

The effective tax rate for the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020,March 31, 2021, was impacted by a decrease in pre-tax book income with an increase in the enactment of Finance Act 2021 during the second quarter of 2021, which increased the United Kingdom (“UK”) corporation tax rate from 19% to 25% beginning in April 2023. As a result, the UK deferred tax assets and liabilities expected to be settled after 2023 were revalued from 19% to 25%, creating a non-cash deferred tax expense of $31.0 million.disallowed non-controlling interest loss. In addition, an intangible asset impairment charge was recognized in the three months ended June 30, 2021 which impacted pre-tax income. The impairment charge was related to temporary differences, which adjusted deferred income taxes and did not have a direct impact on the effective tax rate.rate was also impacted by excess tax benefit on equity-based vesting compensation.

3432

The effective tax rate for the six months ended June 30, 2021, compared to the six months ended June 30, 2020, was impacted by the enactment of Finance Act 2021 and impairment charges, as discussed above, which is off-set by the tax windfall related to equity compensation plans. In addition, there were significant impairments of intangible assets and goodwill in the first quarter of 2020, which contributed to a pre-tax book loss for the six months ended June 30, 2020. The majority of the impairment charges were related to temporary differences, which adjusted deferred income taxes and did not have a direct impact on the effective tax rate.

Net loss (income) attributable to noncontrolling interests

The components of net loss (income) attributable to noncontrolling interests for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, were as follows (in millions):

Three months ended

Six months ended

Three months

ended

Six months

ended

June 30, 

June 30, 

June 30, 

June 30, 

2021

2020

2021

2020

2021 vs. 2020

2021 vs. 2020

Net loss (income) attributable to noncontrolling interests (in millions):

  

  

Consolidated seeded investment products

$

(3.9)

$

(29.0)

$

4.1

$

9.4

87

%

(56)

%

Majority-owned subsidiaries

 

 

(0.4)

 

(0.2)

 

(0.6)

100

%

67

%

Total net loss (income) attributable to noncontrolling interests

$

(3.9)

$

(29.4)

$

3.9

$

8.8

87

%

(56)

%

Three months ended

March 31, 

2022

2021

Net loss attributable to noncontrolling interests (in millions):

Consolidated seeded investment products

$

20.1

$

8.0

Majority-owned subsidiaries

 

 

(0.2)

Total net loss attributable to noncontrolling interests

$

20.1

$

7.8

Net loss (income) attributable to noncontrolling interests improved by $25.5$12.3 million during the three months ended June 30, 2021,March 31, 2022, compared to the three months ended June 30, 2020. The increase wasMarch 31, 2021. Movements in net loss attributable to noncontrolling interests primarily duerelate to third-party ownership interests in consolidated seeded investment products and fair value adjustments in relation to our seeded investment products.

Net loss (income) attributable2022 Outlook

Our philosophy of maintaining strong financial discipline while reinvesting in the business to noncontrolling interests declined by $4.9 million during the six months ended June 30, 2021, compareddeliver on our strategic priorities continues in 2022. Current areas of focus for reinvestment include distribution, technology and investment themes, such as environmental, social and governance factors (“ESG”). We also expect an increase in spending on travel and entertainment as pandemic-related restrictions continue to the six months ended June 30, 2020. The decrease was primarily due to third-party ownership interests in consolidated seeded investment products and fair value adjustments in relation to our seeded investment products.

2021 Operating Expenses

The 2021 expectation for non-compensationease. Non-compensation operating expenses growth remains unchanged andare expected to increase in the low teens, on a percentage basis, while adjusted compensation to revenue ratio is expected to be in the mid-single digits. The expectationlow 40s in 2022. In addition, we expect the sale of Intech to have an insignificant effect on our revenue and expenses for full year 2021 adjusted compensationthe remainder of 2022.

Performance fees associated with U.S. mutual funds are expected to further deteriorate in 2022. With benchmark performance for the remainder of 2022, we expect U.S. mutual fund performance fees of approximately negative $60.0 million on an annual basis.

We also anticipate certain macroeconomic headwinds for the remainder of 2022, including volatile and potentially declining markets, rising interest rates, inflation and the Russia/Ukraine conflict which could have an adverse impact to our revenue ratio also remains unchanged and we still anticipate a range of 40% to 42%.expenses.

Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, JHG management evaluates our profitability and our ongoing operations using additional non-GAAP financial measures. These measures are not in accordance with, or a substitute for, GAAP, and our financial measures may be different from non-GAAP financial measures used by other companies. Management uses these performance measures to evaluate the business, and adjusted values are consistent with internal management reporting. We have provided a reconciliation below of our non-GAAP financial measures to the most directly comparable GAAP measures.

3533

Alternative performance measures

The following is a reconciliation of revenue, operating expenses, operating income, net income attributable to JHG and diluted earnings per share to adjusted revenue, adjusted operating expenses, adjusted operating income, adjusted net income attributable to JHG and adjusted diluted earnings per share, respectively, for the three months ended June 30,March 31, 2022 and 2021 and 2020 (in millions, except per share and operating margin data):

    

Three months ended

Three months ended

 

June 30, 

June 30, 

    

2021

2020

Reconciliation of revenue to adjusted revenue

 

  

  

Revenue

$

738.4

$

518.0

Management fees

(49.6)

(40.2)

Shareowner servicing fees

(53.1)

(39.0)

Other revenue

 

(32.1)

 

(25.5)

Adjusted revenue(1)

$

603.6

$

413.3

Reconciliation of operating expenses to adjusted operating expenses

 

  

 

  

Operating expenses

$

513.4

$

411.3

Employee compensation and benefits(2)

 

 

(0.5)

Long-term incentive plans(2)

 

0.1

 

0.2

Distribution expenses(1)

(134.8)

(104.7)

General, administrative and occupancy(2)

 

(1.7)

 

(2.8)

Impairment of goodwill and intangible assets(3)

(40.8)

(26.4)

Depreciation and amortization(3)

 

(1.9)

 

(2.2)

Adjusted operating expenses

$

334.3

$

274.9

Adjusted operating income

269.3

138.4

Operating margin(4)

 

30.5%

 

20.6%

Adjusted operating margin(5)

 

44.6%

 

33.5%

Reconciliation of net income attributable to JHG to adjusted net income attributable to JHG

 

  

 

  

Net income (loss) attributable to JHG

$

137.3

$

102.9

Employee compensation and benefits(2)

 

0.5

Long-term incentive plans(2)

 

(0.1)

(0.2)

General, administrative and occupancy(2)

 

1.7

2.8

Impairment of goodwill and intangible assets(3)

40.8

26.4

Depreciation and amortization(3)

 

1.9

 

2.2

Other non-operating income (expenses), net(6)

 

(1.7)

 

(0.6)

Income tax provision(7)

 

20.6

 

(7.4)

Adjusted net income attributable to JHG

 

200.5

 

126.6

Less: allocation of earnings to participating stock-based awards

 

(5.7)

 

(3.7)

Adjusted net income attributable to JHG common shareholders

$

194.8

$

122.9

Weighted-average common shares outstanding — diluted (two class)

 

168.1

 

182.1

Diluted earnings per share (two class)(8)

$

0.79

$

0.55

Adjusted diluted earnings per share (two class)(9)

$

1.16

$

0.67

    

Three months ended

 

March 31, 

    

2022

2021

Reconciliation of revenue to adjusted revenue

 

  

  

Revenue

$

620.0

$

644.0

Management fees

(57.0)

(46.8)

Shareowner servicing fees

(52.2)

(50.0)

Other revenue

 

(32.6)

 

(30.6)

Adjusted revenue(1)

$

478.2

$

516.6

Reconciliation of operating expenses to adjusted operating expenses

 

  

 

  

Operating expenses

$

495.4

$

451.5

Long-term incentive plans(2)

 

(13.0)

 

0.1

Distribution expenses(1)

(141.8)

(127.4)

General, administrative and occupancy(2)

 

(6.5)

 

(3.6)

Impairment of goodwill and intangible assets(3)

(32.8)

(3.6)

Depreciation and amortization(3)

 

(1.9)

 

(1.9)

Adjusted operating expenses

$

299.4

$

315.1

Adjusted operating income

178.8

201.5

Operating margin(4)

 

20.1%

 

29.9%

Adjusted operating margin(5)

 

37.4%

 

39.0%

Reconciliation of net income attributable to JHG to adjusted net income attributable to JHG

 

  

 

  

Net income attributable to JHG

$

78.7

$

155.5

Long-term incentive plans(2)

 

13.0

(0.1)

General, administrative and occupancy(2)

 

6.5

3.6

Impairment of goodwill and intangible assets(3)

32.8

3.6

Depreciation and amortization(3)

 

1.9

 

1.9

Investment gains (losses), net(6)

0.2

Other non-operating expenses, net(6)

 

7.5

 

(1.8)

Income tax provision(7)

 

(14.6)

 

(1.4)

Adjusted net income attributable to JHG

 

125.8

 

161.5

Less: allocation of earnings to participating stock-based awards

 

(3.2)

 

(5.0)

Adjusted net income attributable to JHG common shareholders

$

122.6

$

156.5

Weighted-average common shares outstanding — diluted (two class)

 

164.5

 

171.8

Diluted earnings per share (two class)(8)

$

0.47

$

0.88

Adjusted diluted earnings per share (two class)(9)

$

0.75

$

0.91

34

(1)We contract with third-party intermediaries to distribute and service certain of our investment products. Fees for distribution and servicing related activities are either provided for separately in an investment product’s prospectus or are part of the management fee. Under both arrangements, the fees are collected by us and passed through to third-party intermediaries who are responsible for performing the applicable services. The majority of distribution

36

and servicing fees we collect are passed through to third-party intermediaries. JHG management believes that the deduction of distribution and servicing fees from revenue in the computation of adjusted revenue reflects the pass-through nature of these revenues. In certain arrangements, we perform the distribution and servicing activities and retain the applicable fee. Revenues for distribution and servicing activities performed by us are not deducted from GAAP revenue.

(2)Adjustments for the three months ended March 31, 2022, consist primarily representof long-term incentive plan expense associated with accelerated vesting of awards related to the retirement of our CEO and CIO, deal costs associated with the sale of Intech and rent expense for subleased office space as well as administrative costs.space. Adjustments for the three months ended March 31, 2021, consist primarily of rent expense for subleased office space. JHG management believes these costs do not represent our ongoing operations.

(3)Investment management contracts have been identified as a separately identifiable intangible asset arising on the acquisition of subsidiaries and businesses. Such contracts are recognized at the net present value of the expected future cash flows arising from the contracts at the date of acquisition. For segregated mandate contracts, the intangible asset is amortized on a straight-line basis over the expected life of the contracts. Adjustments also includeIn addition, the adjustment for the three months ended March 31, 2022, includes an out-of-period incremental goodwill impairment charges ofcharge, and the adjustment for the three months ended March 31, 2021, includes an impairment charge related to our goodwill and certain mutual fund investment management agreements, client relationships and trademarks. JHG management believes these non-cash and acquisition-related costs are not representative of our ongoing operations.

(4)Operating margin is operating income divided by revenue.

(5)Adjusted operating margin is adjusted operating income divided by adjusted revenue.

(6)Adjustments primarily relate to contingent consideration adjustments associated with prior acquisitions. In addition, the adjustment for the three months ended March 31, 2022, includes a one-time charge related to the sale of Intech. JHG management believes these costs are not representative of our ongoing operations.

(7)The tax impact of the adjustments is calculated based on the applicable U.S. or foreign statutory tax rate as it relates to each adjustment. Certain adjustments are either not taxable or not tax-deductible. Adjustments for the three months ended June 30, 2021, include a non-cash deferred tax expense of $31.0 million due to the enactment of Finance Act 2021 during the second quarter 2021.

(8)Diluted earnings per share is net income attributable to JHG common shareholders divided by weighted-average diluted common shares outstanding.

(9)Adjusted diluted earnings per share is adjusted net income attributable to JHG common shareholders divided by weighted-average diluted common shares outstanding.

LIQUIDITY AND CAPITAL RESOURCES

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

35

The following table summarizes key balance sheet data relating to our liquidity and capital resources as of June 30, 2021,March 31, 2022, and December 31, 20202021 (in millions):

June 30, 

December 31, 

    

2021

    

2020

Cash and cash equivalents held by the Company

$

964.7

$

1,096.9

Investment securities held by the Company

$

235.3

$

238.8

Fees and other receivables

$

386.0

$

373.6

Debt

$

311.9

$

313.3

March 31, 

December 31, 

    

2022

    

2021

Cash and cash equivalents held by the Company

$

782.0

$

1,106.0

Investment securities held by the Company

$

510.3

$

551.0

Fees and other receivables

$

322.6

$

351.6

Debt

$

309.7

$

310.4

Cash and cash equivalents consist primarily of cash at banks andheld in money market funds. Cash and cash equivalents and investment securitiesexclude cash held by consolidated VIEs and consolidated VREs, and investment securities exclude noncontrolling interests as these assets are not available for general corporate purposes and have been excluded from the table above.purposes.

37

Investment securities held by us represent seeded investment products (exclusive of investments held by consolidated VIEs and VREs)noncontrolling interests), investments related to deferred compensation plans and other less significant investments.

We believe that existing cash and cash from operations should be sufficient to satisfy our short-term capital requirements. Expected short-term uses of cash include ordinary operating expenditures, seed capital investments, interest expense, dividend payments, income tax payments and common stock repurchases. We may also use available cash for other general corporate purposes and acquisitions.

Regulatory Capital

We are subject to regulatory oversight by the SEC, the Financial Industry Regulatory Authority (“FINRA”), the U.S. Commodity Futures Trading Commission (“CFTC”), the Financial Conduct Authority (“FCA”) and other international regulatory bodies. We strive to ensure that we are compliant with our regulatory obligations at all times. Our primary capital requirement relates to the FCA-supervised regulatory group (a sub-group of our company), comprising Janus Henderson Group(UK) Holdings Asset Management Limited, all of its subsidiaries and Janus CapitalHenderson Investors International Limited (“JCIL”JHIIL”). JCILJHIIL is included as a connected undertaking to meet the requirements of  certain regulations under the Banking Consolidation Directive.Investment Firm Prudential Regime (“IFPR”) for MiFID investment firms (“MIFIDPRU”). The combined capital requirement is £198.4£204.2 million ($274.1268.9 million), resulting in £388.1£256.7 million ($536.2338.0 million) of capital above the requirement as of June 30, 2021,March 31, 2022, based onupon internal calculations.calculations and taking into account the effect of dividends related to first quarter 2022 results that will be paid in the second quarter 2022. Capital requirements in other jurisdictions are not significant.

We recently simplified the structure of our legal entities. Effective July 1, 2021, the FCA supervisedsignificant in aggregate. The FCA-supervised regulatory group was updatedis also subject to reflect the simplification of our legal entity structureliquidity requirements and will comprise Janus Henderson (UK) Holdings Limited and its subsidiaries, and JCIL.holds a sufficient surplus above these requirements.

Short-Term Liquidity and Capital Resources

Common Stock Repurchases

On July 28, 2021,May 3, 2022, the Board approved a new on-market share buyback program (“2022 Corporate Buyback Program”) pursuant to which we are authorized to repurchase up to $200.0 million of our common stock on the NYSE and CHESS Depository Interests (“CDIs”) on the Australian Securities Exchange (“ASX”) at any time prior to the date of our 20222023 Annual General Meeting.Meeting of Shareholders.

On February 3, 2020,July 28, 2021, the Board approved an on-market share buyback program (“2021 Corporate Buyback Program”) pursuant to which we were authorized to repurchase up to $200$200.0 million of our common stock on the NYSE and CDIs on the ASX at any time prior to the date of our 20212022 Annual General Meeting (the “2020 Corporate Buyback Program”).of Shareholders. We commenced repurchases under the 20202021 Corporate Buyback Program in March 2020August 2021, and during the first quarter of 2021,three months ended March 31, 2022, we repurchased 4,8271,258,640 shares of our common stock and CDIs for $0.2 million related to the 2020 Corporate Buyback Program. We terminated the 2020 Corporate Buyback Program on February 9, 2021, following completion of the Block Repurchase described below.

On February 4, 2021, Dai-ichi Life announced its intention to sell all 30,668,922 shares of JHG common stock it owned by means of a registered secondary public offering. On February 9, 2021, Dai-ichi Life completed the secondary offering and as part of the offering, we repurchased 8,048,360 shares of common stock from Dai-ichi Life (the “Block Repurchase”) for approximately $230.0 million through Goldman Sachs & Co. LLC (“as underwriter”) at the price at which the shares of common stock were sold to the public in the secondary offering, less the underwriting discount. The Block Repurchase was authorized by the Board and is distinct from the 2020 Corporate Buyback Program. As a result of the completion of the secondary offering, Dai-ichi Life no longer owns any shares of JHG common stock. We did not receive any proceeds from Dai-ichi Life’s sale of common stock in the secondary offering.$43.3 million.

Some of our executives and employees obtain rights to receive our common stock as part of their remuneration arrangements and employee entitlements. We usually satisfy these entitlements by transferring shares of existing

36

common stock that we repurchase on-market for this purpose. We purchased 280,4922,931,432 shares at an average price of $38.69$32.43 in satisfaction of employee awards and entitlements during the three months ended June 30, 2021.March 31, 2022.

38

Dividends

The payment of cash dividends is within the discretion of our Board of Directors and depends on many factors, including our results of operations, financial condition, capital requirements, general business conditions and legal requirements.

Dividends declared and paid during the sixthree months ended June 30, 2021,March 31, 2022, were as follows:

Dividend

Date

Dividends paid

Date

per share

    

declared

(in US$ millions)

    

paid

$

0.36

February 3, 2021

 

$

61.7

March 3, 2021

$

0.38

April 28, 2021

$

65.0

May 27, 2021

Dividend

Date

Dividends paid

Date

per share

    

declared

(in US$ millions)

    

paid

$

0.38

February 2, 2022

 

$

64.3

February 28, 2022

On July 28, 2021, ourMay 3, 2022, the Board of Directorsapproved a 2.6% increase in the quarterly cash dividends and declared a cash$0.39 per share dividend of $0.38 per share.for the first quarter 2022. The quarterly dividend will be paid on August 25, 2021,May 31, 2022, to shareholders of record at the close of business on August 9, 2021.May 16, 2022.

Long-Term Liquidity and Capital Resources

Expected long-term commitments as of June 30, 2021,March 31, 2022, include principal and interest payments related to the 2025 Senior Notes and operating and finance lease payments, Intech senior profits interests awards, Intech appreciation rights and phantom interests, and Intech noncontrolling interests.payments. We expect to fund our long-term commitments with existing cash and cash generated from operations or by accessing capital and credit markets as necessary.

2025 Senior Notes

The 2025 Senior Notes have a principal amount of $300.0 million, pay interest at 4.875% semiannually on February 1 and August 1 of each year, and mature on August 1, 2025.

Intech

Intech has granted long-term incentive awards to retain and incentivize employees. The awards consist of appreciation rights, profits interests and phantom interests, and are designed to give recipients an equity-like stake in Intech. The grant date fair value of the appreciation rights is amortized using a graded basis over the 10-year vesting period. The awards are exercisable upon termination of employment from Intech to the extent vested. The profits interests and phantom interests awards entitle recipients to 9.0% of Intech’s pre-incentive profits.

Defined Benefit Pension Plan

The latest triennial valuation of our defined benefit pension plan resulted in a surplus of $16.6$2.6 million. An update to the triennial valuation is underway and is expected to be completed in the second half of 2021.

Off-Balance Sheet Arrangements

We are not party to any off-balance sheet arrangements that may provide, or require us to provide, financing, liquidity, market or credit risk support that areAs of March 31, 2022, we have a $10.0 million unfunded loan commitment with Intech, which is not reflected in our condensed consolidated financial statements. Refer to Note 2 Dispositions for further information on the loan commitment.

Other Sources of Liquidity

At June 30, 2021,March 31, 2022, we had a $200 million Credit Facility. The Credit Facility includes an option for us to request an increase to our borrowing capacity under the Credit Facility of up to an additional $50.0 million. The maturity date of the Credit Facility is February 16, 2024. Additionally, as a result of LIBOR’s phase out, our credit facility was amended to incorporate other short-term borrowing rates. Specifically, the SOFR was designated as the successor rate to USD LIBOR and the SONIA was designated as the successor rate to GBP LIBOR.

The Credit Facility may be used for general corporate purposes and bears interest on borrowings outstanding at the relevant interbank offer rate plus a spread.

39

The Credit Facility contains a financial covenant with respect to leverage. The financing leverage ratio cannot exceed 3.00x EBITDA. At the latest practicable date before the date of this report, we were in compliance with all covenants, and there were no outstanding borrowings under the Credit Facility.

37

Cash Flows

Cash flow data for the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, was as follows (in millions):

 

Six months ended

June 30, 

    

2021

    

2020

Cash flows provided by (used for):

 

  

 

  

Operating activities

$

294.8

$

242.5

Investing activities

 

(42.9)

 

(125.0)

Financing activities

 

(384.5)

 

(8.6)

Effect of exchange rate changes on cash and cash equivalents

 

1.8

 

(25.0)

Net change in cash and cash equivalents

 

(130.8)

 

83.9

Cash balance at beginning of period

 

1,108.1

 

796.5

Cash balance at end of period

$

977.3

$

880.4

 

Three months ended

March 31, 

    

2022

    

2021

Cash flows provided by (used for):

 

  

 

  

Operating activities

$

(57.5)

$

25.8

Investing activities

 

(16.9)

 

23.4

Financing activities

 

(214.8)

 

(322.5)

Effect of exchange rate changes on cash and cash equivalents

 

(16.0)

 

1.8

Net change in cash and cash equivalents

 

(305.2)

 

(271.5)

Cash balance at beginning of period

 

1,118.6

 

1,108.1

Cash balance at end of period

$

813.4

$

836.6

Operating Activities

Fluctuations in operating cash flows are attributable to changes in net income and working capital items, which can vary from period to period based on the amount and timing of cash receipts and payments.

Investing Activities

Cash (used for) provided by investing activities for the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, was as follows (in millions):

 

Six months ended

June 30, 

    

2021

    

2020

Sales (purchases) of investment securities, net

$

(1.5)

$

77.5

Purchases of investment securities by consolidated seeded investment products, net

(37.5)

(237.4)

Purchase of property, equipment and software

 

(1.1)

 

(12.4)

Proceeds from sale of Geneva

38.6

Cash received (paid) on settled hedges, net

(8.0)

6.0

Other

 

5.2

 

2.7

Cash (used for) provided by investing activities

$

(42.9)

$

(125.0)

 

Three months ended

March 31, 

    

2022

    

2021

(Purchases) sales of investment securities, net

$

(34.2)

$

51.4

Sales (purchases) of investment securities by consolidated seeded investment products, net

13.0

(28.1)

Purchases of property, equipment and software

 

(2.9)

 

(1.6)

Cash received (paid) on settled seed capital hedges, net

11.7

(1.8)

Other

 

(4.5)

 

3.5

Cash (used for) provided by investing activities

$

(16.9)

$

23.4

Cash outflows from investing activities were $42.9 million and $125.0$16.9 million during the sixthree months ended June 30, 2021March 31, 2022, and 2020, respectively.cash inflows from investing activities were $23.4 million during the three months ended March 31, 2021. Cash outflows from investing activities during the sixthree months ended June 30, 2021,March 31, 2022, were primarily due to net purchases of investment securities by consolidated seeded investment products.securities. When comparing the sixthree months ended June 30, 2021,March 31, 2022, to the sixthree months ended June 30, 2020,March 31, 2021, the change in cash (used for) provided by investing activities was primarily due to a decreaseincreases in net purchases of investment securities, partially offset by increases in net sales of investment securities by consolidated seeded investment products a decrease inand cash received from salesthe settlement of investment securities, and net cash paid to settle hedges related to our seed capital hedge program, partially offset by proceeds from the sale of Geneva in March 2020.program.

4038

Financing Activities

Cash used for financing activities for the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, was as follows (in millions):

 

Six months ended

June 30, 

    

2021

    

2020

Dividends paid to shareholders

$

(126.7)

$

(132.3)

Third-party sales in consolidated seeded investment products, net

 

39.5

 

237.4

Purchase of common stock for stock-based compensation plans

 

(72.0)

 

(45.7)

Purchase of common stock from Dai-ichi and share buyback program

 

(230.2)

 

(53.2)

Payment of contingent consideration

(13.8)

Proceeds from stock-based compensation plans

5.5

Other

 

(0.6)

 

(1.0)

Cash used for financing activities

$

(384.5)

$

(8.6)

 

Three months ended

March 31, 

    

2022

    

2021

Dividends paid to shareholders

$

(64.3)

$

(61.7)

Third-party (purchases) sales in consolidated seeded investment products, net

 

(11.7)

 

30.2

Purchase of common stock for stock-based compensation plans

 

(94.5)

 

(61.5)

Purchase of common stock from Dai-ichi Life and share buyback program

 

(43.3)

 

(230.2)

Proceeds from stock-based compensation plans

0.5

0.8

Other

 

(1.5)

 

(0.1)

Cash used for financing activities

$

(214.8)

$

(322.5)

Cash outflows from financing activities were $384.5$214.8 million and $8.6$322.5 million during the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, respectively. Cash outflows from financing activities during the sixthree months ended June 30, 2021,March 31, 2022, were primarily due to the purchasepurchases of common stock from Dai-ichi Life,for stock-based compensation plans and the share buyback program, and stock-based compensation plans and dividends paid to shareholders partially offset byand net salesthird-party purchases in investment securities within consolidated seeded investment products. When comparing the sixthree months ended June 30, 2021,March 31, 2022, to the sixthree months ended June 30, 2020,March 31, 2021, the change in cash used for financing activities was primarily due to the purchase of common stock from Dai-ichi Lifean increase in third-party purchases in consolidated seeded investment products and the purchase of common stock for stock-based compensation plans,plans. These increases were partially offset by net sales in consolidated seeded investment products.the purchase of common stock from Dai-ichi Life, as part of the Dai-ichi Life secondary public offering, which was recognized during the three months ended March 31, 2021.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in our exposure to market risks from that previously reported in our Annual Report on Form 10-K for the year ended December 31, 2020.2021.

Item 4.   Controls and Procedures

As of June 30, 2021,March 31, 2022, our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Disclosure controls and procedures are designed by us to ensure that we record, process, summarize and report within the time periods specified in the SEC’s rule and forms the information we must disclose in reports that we file with or submit to the SEC. Richard M. Weil,Roger Thompson, our interim CEO and Roger Thompson, Chief Financial Officer, reviewed and participated in management’s evaluation of the disclosure controls and procedures. Based on this evaluation, Mr. Weil and Mr. Thompson concluded that as of the date of their evaluation, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the secondfirst quarter of 20212022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.    Legal Proceedings

See Part I, Item 1. Financial Statements, Note 1415 — Commitments and Contingencies.

4139

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

Common Stock Purchases

On May 3, 2022, the Board approved the 2022 Corporate Buyback Program pursuant to which we are authorized to repurchase up to $200.0 million of our common stock on the NYSE and CDIs on the ASX at any time prior to the date of our 2023 Annual General Meeting of Shareholders.

On July 28, 2021, the Board approved a new on-market share buyback programthe 2021 Corporate Buyback Program pursuant to which we are authorized to repurchase up to $200.0 million of our common stock on the NYSE and CDIs on the ASX at any time prior to the date of our 2022 Annual General Meeting.

On February 3, 2020, the Board approved the 2020 Corporate Buyback Program, pursuant to which we were authorized to repurchase up to $200 millionMeeting of our common stock on the NYSE and CDIs on the ASX at any time prior to the date of our 2021 Annual General Meeting.Shareholders. We commenced repurchases under the 20202021 Corporate Buyback Program in March 2020August 2021, and during the first quarter of 2021,three months ended March 31, 2022, we repurchased 4,8271,258,640 shares of our common stock and CDIs for $0.2 million related to the 2020 Corporate Buyback Program. We terminated the 2020 Corporate Buyback Program on February 9, 2021, following completion of the Block Repurchase described below.

On February 4, 2021, Dai-ichi Life announced its intention to sell all 30,668,922 shares of JHG common stock it owned by means of a registered secondary public offering. On February 9, 2021, Dai-ichi Life completed the secondary offering and as part of the offering, we repurchased 8,048,360 shares of common stock from Dai-ichi Life in the Block Repurchase for approximately $230.0 million through Goldman Sachs & Co. LLC as underwriter at the price at which the shares of common stock were sold to the public in the secondary offering, less the underwriting discount. The Block Repurchase was authorized by the Board and is distinct from the 2020 Corporate Buyback Program. As a result of the completion of the secondary offering, Dai-ichi Life no longer owns any shares of JHG common stock. We did not receive any proceeds from Dai-ichi Life’s sale of common stock in the secondary offering.$43.3 million.

Some of our executives and employees obtain rights to receive our common stock as part of their remuneration arrangements and employee entitlements. We usually satisfy these entitlements by transferring shares of existing common stock that we repurchase on-market for this purpose (“Share Plans Repurchases”). During the secondfirst quarter 2021,2022, we purchased 280,4922,931,432 shares on-market for $10.9$95.1 million in satisfaction of employee awards and entitlements.

The following is a summary of our common stock repurchases by month during the sixthree months ended June 30, 2021,March 31, 2022, including repurchases under the 20202021 Corporate Buyback ProgramPrograms and Share Plans Repurchases.

    

Total

    

    

Total number of shares

    

Approximate U.S. dollar value

    

Total

    

    

Total number of shares

    

Approximate U.S. dollar value

number of

Average

purchased as part of

of shares that may yet

number of

Average

purchased as part of

of shares that may yet

shares

price paid per

publicly announced

be purchased under the

shares

price paid per

publicly announced

be purchased under the

Period

purchased

share

programs

programs (end of month, in millions)

purchased

share

programs

programs (end of month, in millions)

January 1, 2021, through
January 31, 2021

 

2,479

$

32.14

 

 

$

69

February 1, 2021, through
February 28, 2021

 

9,819,360

 

28.80

 

4,827

 

$

March 1, 2021, through
March 31, 2021

 

342,268

 

30.12

 

 

$

April 1, 2021, through
April 30, 2021

 

2,764

 

34.31

 

 

$

May 1, 2021, through
May 31, 2021

 

25,292

 

37.24

 

 

$

June 1, 2021, through
June 30, 2021

 

252,436

 

38.88

 

 

$

January 1, 2022, through
January 31, 2022

 

2,951

$

36.09

 

 

$

58

February 1, 2022, through
February 28, 2022

 

1,343,351

 

33.87

 

 

$

58

March 1, 2022, through
March 31, 2022

 

2,843,770

 

32.62

 

1,258,640

 

$

15

Total

 

10,444,599

$

29.11

 

4,827

 

  

 

4,190,072

$

33.02

 

1,258,640

 

  

Items 3, 4 and 5.

Not applicable.

4240

Item 6.    Exhibits

Filed with this Report:

Exhibit
No.

    

Document

    

Regulation S-K
Item 601(b)
Exhibit No.

15.1

Letter regarding unaudited interim financial information

15

31.1

Certification of Richard M. Weil, Chief Executive Officer of Registrant

31

31.2

Certification of Roger Thompson, Chief Financial Officer of Registrant

31

32.1

Certification of Richard M. Weil, Chief Executive Officer of Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32

32.2

Certification of Roger Thompson, Chief Financial Officer of Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32

101.INS

XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101

101.SCH

XBRL Taxonomy Extension Schema Document

101

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

101

104

Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document)

104

Exhibit
No.

    

Document

    

Regulation S-K
Item 601(b)
Exhibit No.

10.1

CEO Offer Letter, dated March 23, 2022, between Janus Henderson Group plc and Ali Dibadj*

10

10.2

Severance Rights Agreement, dated March 23, 2022, between Janus Henderson Investors US LLC and Ali Dibadj*

10

10.3

Service Agreement between Henderson Administrative Limited and Georgina Fogo, effective from March 15, 2018*

10

15.1

Letter regarding unaudited interim financial information

15

31

Certification of Roger Thompson, interim Chief Executive Officer and Chief Financial Officer of Registrant

31

32

Certification of Roger Thompson, interim Chief Executive Officer and Chief Financial Officer of Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32

101.INS

XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101

104

Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document)

104

*Management contract or compensatory plan or agreement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: July 29, 2021May 4, 2022

Janus Henderson Group plc

/s/ Richard Weil

Richard Weil,

Director and Chief Executive Officer

(Principal Executive Officer)

/s/ Roger Thompson

Roger Thompson,

Interim Chief Executive Officer

Chief Financial Officer

(Interim Principal Executive Officer and Principal Financial Officer)

/s/ Brennan Hughes

Brennan Hughes,

Chief Accounting Officer and Treasurer

(Principal Accounting Officer)

4442