Document and Company Informatio
Document and Company Information (USD $) | ||
In Billions, except Share data | 6 Months Ended
Jun. 30, 2009 | Jun. 30, 2008
|
Document and Company Information [Abstract] | ||
Entity Registrant Name | Invesco Ltd. | |
Entity Central Index Key | 0000914208 | |
Document Type | 10-Q | |
Document Period End Date | 2009-06-30 | |
Amendment Flag | false | |
Amendment Description | N/A | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | 7.9 | |
Entity Common Stock, Shares Outstanding (actual number) | 416,052,775 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (USD $) | ||
In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
Current assets: | ||
Cash and cash equivalents | 817.7 | 585.2 |
Cash and cash equivalents of consolidated investment products | 47.4 | 73 |
Unsettled fund receivables | 562.2 | 303.7 |
Accounts receivable | 238.7 | 239.3 |
Investments | 147.3 | 123.6 |
Prepaid assets | 62.5 | 55.6 |
Other current assets | 72.9 | 72.2 |
Deferred tax asset, net | 50 | 86.1 |
Assets held for policyholders | 1057.3 | 840.2 |
Total current assets | 3,056 | 2378.9 |
Non-current assets: | ||
Investments | 128.9 | 121.3 |
Investments of consolidated investment products | 663.6 | 843.8 |
Prepaid assets | 26.2 | 36.3 |
Deferred sales commissions | 21.9 | 24.5 |
Deferred tax asset, net | 44.5 | 37.2 |
Property and equipment, net | 219.1 | 205.3 |
Intangible assets, net | 145 | 142.8 |
Goodwill | 6272.4 | 5966.8 |
Total non-current assets | 7521.6 | 7,378 |
Total assets | 10577.6 | 9756.9 |
Current liabilities: | ||
Current maturities of long-term debt | 294.2 | 297.2 |
Unsettled fund payables | 548.2 | 288.3 |
Income taxes payable | 32.7 | 37.9 |
Other current liabilities | 475.8 | 639.8 |
Policyholder payables | 1057.3 | 840.2 |
Total current liabilities | 2408.2 | 2103.4 |
Non-current liabilities: | ||
Long-term debt | 745.7 | 862 |
Other non-current liabilities | 220.9 | 195.3 |
Total non-current liabilities | 966.6 | 1057.3 |
Total liabilities | 3374.8 | 3160.7 |
Equity attributable to common shareholders: | ||
Common shares ($0.20 par value; 1,050.0 million authorized; 459.5 million and 426.6 million shares issued as of June 30, 2009, and December 31, 2008, respectively) | 91.9 | 85.3 |
Additional paid-in-capital | 5708.3 | 5352.6 |
Treasury shares | -1032.6 | -1128.9 |
Retained earnings | 1,504 | 1476.3 |
Accumulated other comprehensive income/(loss), net of tax | 223.8 | -95.8 |
Total equity attributable to common shareholders | 6495.4 | 5689.5 |
Equity attributable to noncontrolling interests in consolidated entities | 707.4 | 906.7 |
Total equity | 7202.8 | 6596.2 |
Total liabilities and equity | 10577.6 | 9756.9 |
1_Condensed Consolidated Balanc
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | ||
Share data in Millions | Jun. 30, 2009
| Dec. 31, 2008
|
Common shares, par value | 0.2 | 0.2 |
Common shares, shares authorized | 1,050 | 1,050 |
Common shares, shares issued | 459.5 | 426.6 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Operating revenues: | ||||
Investment management fees | 501.6 | 736.8 | 938.1 | 1474.4 |
Service and distribution fees | 100.4 | 143.3 | 189.4 | 281.7 |
Performance fees | 8 | 22.2 | 18.9 | 33.2 |
Other | 15.1 | 33.3 | 27.3 | 56.7 |
Total operating revenues | 625.1 | 935.6 | 1173.7 | 1,846 |
Operating expenses: | ||||
Employee compensation | 229 | 282.9 | 464.8 | 555.7 |
Third-party distribution, service and advisory | 166.3 | 244.9 | 314.5 | 492 |
Marketing | 23.9 | 38.2 | 50.8 | 82.1 |
Property, office and technology | 48.6 | 55.7 | 94.5 | 105.8 |
General and administrative | 46.9 | 73.9 | 76.9 | 142.3 |
Total operating expenses | 514.7 | 695.6 | 1001.5 | 1377.9 |
Operating income | 110.4 | 240 | 172.2 | 468.1 |
Other income/(expense): | ||||
Equity in earnings of unconsolidated affiliates | 7.5 | 9.6 | 10 | 27.5 |
Interest income | 1.2 | 10.5 | 6 | 22 |
Gains and losses of consolidated investment products, net | -48.4 | 40.3 | -134.9 | (4) |
Interest expense | -16.5 | -19.3 | -32.4 | -40.8 |
Other gains and losses, net | 10 | -1.1 | 5.8 | -7.6 |
Income/(loss) before income taxes, including gains and losses attributable to noncontrolling interests | 64.2 | 280 | 26.7 | 465.2 |
Income tax provision | (36) | -77.2 | -56.3 | (151) |
Net income/(loss), including gains and losses attributable to noncontrolling interests | 28.2 | 202.8 | -29.6 | 314.2 |
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net | 47.5 | (40) | 136 | 3.8 |
Net income attributable to common shareholders | 75.7 | 162.8 | 106.4 | $318 |
Earnings per share: | ||||
basic | 0.18 | 0.42 | 0.26 | 0.82 |
diluted | 0.18 | 0.41 | 0.26 | 0.79 |
Dividends declared per share | 0.1025 | 0.1 | 0.2025 | 0.32 |
2_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (USD $) | ||
In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Operating activities: | ||
Net (loss)/income, including losses attributable to noncontrolling interests | -29.6 | 314.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization and depreciation | 32.7 | 33.7 |
Share-based compensation expense | 43.9 | 58 |
(Gain)/Loss on disposal of property, equipment, software, net | 0 | -1.8 |
Purchase of trading investments | (38) | -17.7 |
Sale of trading investments | 8.9 | 17.6 |
Other gains and losses, net | -5.8 | 7.6 |
Gains and losses of consolidated investment products, net | 134.9 | 4 |
Tax benefit from share-based compensation | 31.6 | 40.4 |
Excess tax benefits from share-based compensation | 0 | (19) |
Equity in earnings of unconsolidated affiliates | (10) | -27.5 |
Changes in operating assets and liabilities: | ||
Change in cash held at consolidated investment products | 25.6 | -13.3 |
(Increase)/decrease in receivables | -362.5 | 203 |
Increase/(decrease) in payables | 139.7 | (531) |
Net cash (used in)/provided by operating activities | -28.6 | 68.2 |
Investing activities: | ||
Purchase of property and equipment | -17.1 | -48.2 |
Disposal of property and equipment | 0.3 | 0 |
Dividends from unconsolidated affiliates | 25.8 | 28.1 |
Purchase of available-for-sale investments | -18.3 | (88) |
Proceeds from sale of available-for-sale investments | 29.7 | 50.3 |
Purchase of investments by consolidated investment products | -17.2 | -82.2 |
Proceeds from sale of investments by consolidated investment products | 9.7 | 98.3 |
Returns of capital in investments of consolidated investment products | 8.5 | 58.5 |
Purchase of other investments | -4.8 | -11.9 |
Proceeds from sale of other investments | 7.1 | 27.5 |
Acquisition earn-out payments | 0 | -130.9 |
Net cash used in investing activities | 23.7 | -98.5 |
Financing activities: | ||
Issuance of new shares | 441.8 | 0 |
Proceeds from exercises of share options | 9.6 | 52.1 |
Purchases of treasury shares | 0 | (213) |
Dividends paid | -80.2 | -129.6 |
Excess tax benefits from share-based compensation | 0 | 19 |
Capital invested into consolidated investment products | 2.8 | 66.3 |
Capital distributed by consolidated investment products | -24.5 | -126.4 |
Borrowings of consolidated investment products | 0 | 28.9 |
Repayments of consolidated investment products | 0 | -9.3 |
Net (repayments)/borrowings under credit facility | (12) | 60.6 |
Repayments of senior notes | (103) | 0 |
Acquisition of remaining noncontrolling interest in subsidiary | -10.3 | 0 |
Net cash provided by/(used in) financing activities | 224.2 | -251.4 |
Increase/(decrease) in cash and cash equivalents | 219.3 | -281.7 |
Foreign exchange movement on cash and cash equivalents | 13.2 | 10.7 |
Cash and cash equivalents, beginning of period | 585.2 | 915.8 |
Cash and cash equivalents, end of period | 817.7 | 644.8 |
Supplemental Cash Flow Information: | ||
Interest paid | -31.9 | -37.5 |
Interest received | 6.3 | 22.2 |
Taxes paid | 31.2 | 178.2 |
3_Condensed Consolidated Statem
Condensed Consolidated Statements of Changes in Shareholders Equity (USD $) | |||||||
In Millions | Additional Paid-in-Capital
| Retained Earnings
| Accumulated Other Comprehensive Loss
| Non-controlling interests in consolidated entities
| Total
| ||
Beginning Balance at Dec. 31, 2007 | 84.9 | 5306.3 | -954.4 | 1201.7 | 952.1 | 1121.2 | 7711.8 |
Net income/(loss), including gains and losses attributable to noncontrolling interests | 318 | -3.8 | 314.2 | ||||
Other comprehensive income | |||||||
Currency translation differences on investments in overseas subsidiaries | -8.1 | -8.1 | |||||
Change in minimum pension liability | 0.2 | 0.2 | |||||
Change in net unrealized gains on available-for-sale investments | -4.7 | -4.7 | |||||
Tax impacts of changes in accumulated OCI balances | 0.6 | 0.6 | |||||
Change in noncontrolling interests in consolidated entities, net | -147.3 | -147.3 | |||||
Dividends | -129.6 | -129.6 | |||||
Employee share plans: | |||||||
Share-based compensation | 58 | 58 | |||||
Vested shares | -17.4 | 17.4 | |||||
Exercise of options | 0.4 | 8.2 | 43.6 | 52.2 | |||
Tax impact of share-based payment | 19 | 19 | |||||
Purchase of shares | (213) | (213) | |||||
Ending Balance at Jun. 30, 2008 | 85.3 | 5374.1 | -1106.4 | 1390.1 | 940.1 | 970.1 | 7653.3 |
Employee share plans: | |||||||
Beginning Balance at Dec. 31, 2008 | 85.3 | 5352.6 | -1128.9 | 1476.3 | -95.8 | 906.7 | 6596.2 |
Net income/(loss), including gains and losses attributable to noncontrolling interests | 106.4 | (136) | -29.6 | ||||
Other comprehensive income | |||||||
Currency translation differences on investments in overseas subsidiaries | 319.5 | 319.5 | |||||
Change in minimum pension liability | -3.5 | -3.5 | |||||
Change in net unrealized gains on available-for-sale investments | 3.1 | 3.1 | |||||
Adoption of FSP FAS 115-2 | -1.5 | -1.5 | |||||
Tax impacts of changes in accumulated OCI balances | 2 | 2 | |||||
Adoption of FSP FAS 115-2 | 1.5 | 1.5 | |||||
Change in noncontrolling interests in consolidated entities, net | -61.9 | -61.9 | |||||
Issuance of new shares | 6.6 | 435.2 | 441.8 | ||||
Dividends | -80.2 | -80.2 | |||||
Employee share plans: | |||||||
Share-based compensation | 43.9 | 43.9 | |||||
Vested shares | -83.2 | 83.2 | |||||
Exercise of options | -15.8 | 25.4 | 9.6 | ||||
Tax impact of share-based payment | -2.5 | -2.5 | |||||
Modification of share-based payment awards | (13) | (13) | |||||
Purchase of shares | -12.3 | -12.3 | |||||
Acquisition of remaining noncontrolling interest in subsidiary | -8.9 | -1.4 | -10.3 | ||||
Ending Balance at Jun. 30, 2009 | 91.9 | 5708.3 | -1032.6 | $1,504 | 223.8 | 707.4 | 7202.8 |
Accounting Policies
Accounting Policies | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | 1. ACCOUNTING POLICIES Corporate Information Invesco Ltd. (Parent) and all of its consolidated entities (collectively, the company or Invesco) provide retail, institutional and high-net-worth clients with an array of global investment management capabilities. The companys sole business is investment management. Basis of Accounting and Consolidation The accompanying Condensed Consolidated Balance Sheets, Statements of Income, Statements of Cash Flows, and Statement of Changes in Equity (together, the Condensed Consolidated Financial Statements) have not been audited and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the companys Annual Report on Form 10-K for the year ended December31, 2008. In the opinion of management, the Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair presentation of the financial condition and results of operations for the interim periods presented. All significant intercompany transactions, balances, revenues and expenses are eliminated upon consolidation. The Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and consolidate the financial statements of the Parent, all of its controlled subsidiaries, any variable interest entities (VIEs) required to be consolidated under Financial Accounting Standards Board (FASB)Interpretation (FIN)No.46(R), Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No.51, and any entities required to be consolidated under Emerging Issues Task Force (EITF)Issue No.04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights (EITF 04-5). Under FASB Statement No.94, Consolidation of All Majority-Owned Subsidiaries (FASB Statement No.94), control is deemed to be present when the parent holds a majority voting interest or otherwise has the power to govern the financial and operating policies of the subsidiary so as to obtain the benefits from its activities. FIN 46(R) requires that variable interest entities (VIEs), or entities in which the risks and rewards of ownership are not directly linked to voting interests, for which the company is the primary beneficiary (having the majority of rewards/risks of ownership) be consolidated. Certain of the companys managed products are structured as partnerships in which the company is the general partner receiving a management and/or performance fee. If the company is deemed to have a variable interest in these entities and is determined to be the primary beneficiary, these entities are consolidated into the companys financial statements. If the company is not determined to be the primary beneficiary, the equity method of accounting is used to account for the companys investment in these entities. In accordance with EITF 04-5, non-VIE general partnership investments are deemed to be controlled by the company and would be consolidated, unless the limited partners have the substantiv |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Fair Value of Assets and Liabilities [Abstract] | |
FAIR VALUE OF ASSETS AND LIABILITIES | 2. FAIR VALUE OF ASSETS AND LIABILITIES The carrying value and fair value of financial instruments is presented in the below summary table: June 30, 2009 December 31, 2008 Footnote Carrying Carrying $ in millions Reference Value Fair Value Value Fair Value Cash and cash equivalents 2 817.7 817.7 585.2 585.2 Assets held for policyholders 1,057.3 1,057.3 840.2 840.2 Trading investments 2, 3 71.3 71.3 36.2 36.2 Available for sale investments 2, 3 88.9 88.9 103.9 103.9 Support agreements 9, 12 (2.5 ) (2.5 ) (5.5 ) (5.5 ) Policyholder payables (1,057.3 ) (1,057.3 ) (840.2 ) (840.2 ) Current maturities of long-term debt 4 (294.2 ) (295.8 ) (297.2 ) (277.3 ) Long-term debt 4 (745.7 ) (683.0 ) (862.0 ) (711.2 ) (64.5 ) (3.4 ) (439.4 ) (268.7 ) FASB Statement No.157 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. An asset or liabilitys categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. FASB Statement No.157 allows three types of valuation approaches: a market approach, which uses observable prices and other relevant information that is generated by market transactions involving identical or comparable assets or liabilities; an income approach, which uses valuation techniques to convert future amounts to a single, discounted present value amount; and a cost approach, which is based on the amount that currently would be required to replace the service capacity of an asset. The following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy. Cash equivalents Cash equivalents include cash investments in money market funds and time deposits. Cash and cash equivalents invested in affiliated money market funds totaled $523.4million at June30, 2009 (December31, 2008: $209.4million). Cash investments in money market funds are valued under the market |
Investments
Investments | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Investments [Abstract] | |
INVESTMENTS | 3. INVESTMENTS Current Investments As of June 30, December 31, $ in millions 2009 2008 Available-for-sale investments: Seed money 55.8 69.1 Foreign time deposits 19.7 17.3 Trading investments: Investments related to deferred compensation plans 70.4 35.5 Other 0.9 0.7 Other 0.5 1.0 Total current investments 147.3 123.6 Non-current Investments As of June 30, December 31, $ in millions 2009 2008 Available-for-sale investments: Collateralized loan obligations 13.4 17.5 Other 8.9 8.5 Equity method investments 106.6 95.3 Total non-current investments 128.9 121.3 The portion of trading gains and losses for the period that relates to trading securities still held at June30, 2009 was $5.3million. Realized gains and losses recognized in the income statement during the year from investments classified as available-for-sale are as follows: For the Three Months Ended For the Six Months Ended June 30, 2009 June 30, 2009 Proceeds Gross Gross Proceeds Gross Gross from Realized Realized from Realized Realized $ in millions Sales Gains Losses Sales Gains Losses Current available-for-sale investments 17.2 1.4 (1.1 ) 27.7 3.1 (1.4 ) Non-current available-for-sale investments 0.1 2.0 Upon the sale of available-for-sale securities, net realized gains of $0.3million and $1.7million were transferred from accumulated other comprehensive income into the Condensed Consolidated Statements of Income during the three and six months ended June30, 2009, respectively. The specific identification method is used to determine the realized gain or loss on securities sold or otherwise disposed. Gross unrealized holding gains and losses recognized in other accumulated comprehensive income from available-for-sale investments are presented in the table below: June 30, 2009 December 31, 2008 Gross Gross Gross Gross Unrealized Unrealized Unrealized Unrealized Holding Holding Fair Holding Holding Fair $ in millions Cost Gains Losses Value Cost Gains Losses Value Current: Seed money 63.4 3.0 (10.6 ) 55.8 78.9 3.7 (13.5 ) 69.1 Foreign time deposits 19.7 19.7 17.3 17.3 Current available-for-sale investments 83.1 3.0 (10.6 ) 75.5 96.2 3.7 (13.5 ) 86.4 Non-current: CLOs 13.6 0.4 (0.6 ) 13.4 17.1 0.4 |
Long Term Debt
Long Term Debt | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Long-Term Debt [Abstract] | |
LONG-TERM DEBT | 4. LONG-TERM DEBT June 30, 2009 December 31, 2008 Carrying Carrying $ in millions Value Fair Value Value Fair Value Unsecured Senior Notes*: 4.5% due December15, 2009 294.2 295.8 297.2 277.3 5.625% due April17, 2012 215.1 208.6 300.0 231.0 5.375% due February27, 2013 333.5 306.8 350.0 299.5 5.375% due December15, 2014 197.1 167.6 200.0 168.7 Floating rate credit facility expiring March31, 2010 12.0 12.0 Floating rate credit facility expiring June9, 2012 Total long-term debt 1,039.9 978.8 1,159.2 988.5 Less: current maturities of long-term debt 294.2 295.8 297.2 277.3 Long-term debt 745.7 683.0 862.0 711.2 * There are no restrictive covenants in the companys Senior Note indentures, other than certain restrictions on mergers or consolidations. On June2, 2009, the company commenced a tender offer for the maximum aggregate principal amount of the outstanding 5.625% senior notes due 2012, the 5.375% senior notes due 2013, and the 5.375% senior notes due 2014 (collectively, the Notes) that it could purchase for $100.0million at a purchase price per $1,000 principal amount determined in accordance with the procedures of a modified Dutch Auction (tender offer). The tender offer expired at midnight on June29, 2009, and on June30, 2009, $104.3million of the Notes had been retired, generating a gross gain of $4.3 million upon the retirement of debt at a discount ($3.3million net of related expenses and the write-off of remaining unamortized debt discount costs), which was recorded in other gains and losses, net, on the Condensed Consolidated Statements of Income for the three and six months ended June30, 2009. The fair market value of the companys long term debt was determined by market quotes as well as the outcome of the tender offer. Previously, due to the absence of an active market, the company relied upon the average price quoted by brokers for determining the fair market value of the debt. For the 4.5% senior notes due December15, 2009, the company used market quotes to fair value the notes. The level of trading, both in number and amount of notes traded, in the 2009 maturity has increased substantially since the notes became short-term. Therefore, the company believes the market quotes to be a reasonable representation of the fair market value of the notes. The tender offer facilitated the determination of the fair market value of the companys 2012, 2013, and 2014 maturities. The offering was structured as a modified Dutch Auction, which allowed the investors to decide the price at which they believe to be fair market value of the notes. The transaction settled on June30, 2009, and the prices the company paid to tender the notes were used in the determination of the fair market value of the remaining debt. Analysis of Borrowings by |
Common Shares
Common Shares | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Common Shares [Abstract] | |
COMMON SHARES | 5. COMMON SHARES Movements in the number of common shares issued are represented in the table below: In millions 2009 2008 January 1 426.6 424.7 Issue of new shares 32.9 Exercise of options 1.9 June30 459.5 426.6 On May26, 2009, the company issued 32.9million shares in a public offering that produced gross proceeds of $460.5million ($441.8million net of related expenses). During the six months ended June30, 2009, Invesco Ltd. did not purchase any shares in private transactions with current executive and other officers of the company (six months ended June30, 2008: 0.7million shares at a cost of $20.0million). Separately, an aggregate of 1.1million shares were withheld on vesting events during the six months ended June30, 2009, to meet employees withholding tax obligations. The value of these shares withheld was $12.3million (six months ended June30, 2008: None). |
Other Comprehensive Income
Other Comprehensive Income | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Other Comprehensive Income [Abstract] | |
OTHER COMPREHENSIVE INCOME | 6. OTHER COMPREHENSIVE INCOME The components of accumulated other comprehensive income/(loss) were as follows: June 30, December 31, $ in millions 2009 2008 Net unrealized (losses)/gains on available-for-sale investments (6.1 ) (7.7 ) Tax on unrealized (losses)/gains on available-for-sale investments (0.7 ) 0.1 Cumulative foreign currency translation adjustments 273.2 (46.3 ) Tax on cumulative foreign currency translation adjustments 2.1 1.3 Pension liability adjustments (62.9 ) (59.4 ) Tax on pension liability adjustments 18.2 16.2 Total accumulated other comprehensive income/(loss) 223.8 (95.8 ) Total other comprehensive income details are presented below: Three Months Ended Six Months Ended June 30, June 30, $ in millions 2009 2008 2009 2008 Net income/(loss), including losses attributable to noncontrolling interests 28.2 202.8 (29.6 ) 314.2 Adoption of FSP FAS 115-2 (1.5 ) (1.5 ) Unrealized holding gains and losses on available-for-sale investments 6.6 (1.1 ) (2.3 ) (9.1 ) Tax on net unrealized holding gains and losses on available-for-sale investments (0.2 ) 1.3 (1.2 ) 2.5 Reclassification adjustments for net gains and losses on available-for-sale investments included in net income 0.5 1.0 5.4 4.4 Tax on reclassification adjustments for net gains and losses on available-for-sale investments included in net income (1.8 ) 0.4 (1.8 ) Foreign currency translation adjustments 391.6 (29.3 ) 319.5 (8.1 ) Tax on foreign currency translation adjustments 0.9 (0.3 ) 0.8 (0.1 ) Adjustments to pension liability (3.9 ) 0.8 (3.5 ) 0.2 Tax on adjustments to pension liability 2.2 (0.2 ) 2.0 Total other comprehensive income 424.4 173.2 290.0 302.2 |
Taxation
Taxation | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Taxation [Abstract] | |
TAXATION | 7. TAXATION At June30, 2009, the total amount of gross unrecognized tax benefits calculated pursuant to FASB Interpretation No.48, Accounting for Uncertainty in Income Taxes An Interpretation of FASB Statement No.109 (FIN 48), was $56.7million as compared to the December31, 2008, total amount of $55.9million. The company and its subsidiaries file annual income tax returns in the United States (U.S.) federal jurisdiction, various U.S. state and local jurisdictions, and in numerous foreign jurisdictions. A number of years may elapse before a FIN 48 uncertain tax position, for which the company has unrecognized tax benefits, is finally resolved. To the extent that the company has favorable tax settlements, or determines that accrued amounts are no longer needed due to a lapse in the applicable statute of limitations or other reasons, such liabilities, as well as the related interest and penalty, would be reversed as a reduction of income tax expense (net of federal tax effects, if applicable) in the period such determination is made. |
Earnings Per Share
Earnings Per Share | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 8. EARNINGS PER SHARE Basic earnings per share is calculated by dividing net income attributable to common shareholders by the weighted average number of shares outstanding during the periods, excluding treasury shares. Diluted earnings per share is computed using the treasury stock method outlined in FASB Statement No.128, Earnings per Share, which requires computing share equivalents and dividing net income attributable to common shareholders by the total weighted average number of shares and share equivalents outstanding during the periods. The calculation of earnings per share is as follows: Net Income Attributable to Common Weighted Average Per Share In millions, except per share data Shareholders Number of Shares* Amount For the three months ended June30, 2009 Basic earnings per share $ 75.7 412.8 $ 0.18 Dilutive effect of share-based awards 6.2 Diluted earnings per share $ 75.7 419.0 $ 0.18 For the three months ended June30, 2008 Basic earnings per share $ 162.8 390.1 $ 0.42 Dilutive effect of share-based awards 10.6 Diluted earnings per share $ 162.8 400.7 $ 0.41 Net Income Attributable to Common Weighted Average Per Share In millions, except per share data Shareholders Number of Shares* Amount For the six months ended June30, 2009 Basic earnings per share $ 106.4 403.5 $ 0.26 Dilutive effect of share-based awards 6.2 Diluted earnings per share $ 106.4 409.7 $ 0.26 For the six months ended June30, 2008 Basic earnings per share $ 318.0 390.1 $ 0.82 Dilutive effect of share-based awards 10.6 Diluted earnings per share $ 318.0 400.7 $ 0.79 * The basic weighted average number of shares for the three months ended and the six months ended June30, 2008, was restated upon the adoption of EITF 03-6-1, as discussed in Note 1. The adoption of FSP EITF 03-6-1 resulted in a change to the six months ended June30, 2008 reported diluted earnings per share amount of $0.01. There was no change to the three months ended June30, 2008 reported diluted earnings per share. See Note 10, Share-based Compensation, for a summary of share awards outstanding under the companys share-based payment programs. These programs could result in the issuance of common shares that would affect the measurement of basic and diluted earnings per share. Options to purchase 13.6million shares at a weighted average exercise price of 1,843 pence were outstanding for the six months ended June30, 2009 (six months ended June30, 2008: 13.9 million share options at a weighted average exercise price of 1,891 pence), but were not included |
Consolidated Investment Product
Consolidated Investment Products | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Consolidated Investment Products [Abstract] | |
CONSOLIDATED INVESTMENT PRODUCTS | 9. CONSOLIDATED INVESTMENT PRODUCTS The company provides investment management services to, and has transactions with, various private equity, real estate, fund-of-funds, CLOs and other investment entities sponsored by the company for the investment of client assets in the normal course of business. The company serves as the investment manager, making day-to-day investment decisions concerning the assets of the products. Certain of these investments are considered to be VIEs. If the company is the primary beneficiary of the VIEs, then the investment products are consolidated into the companys financial statements. Other partnership entities are consolidated under EITF 04-5, as the company is the general partner and is presumed to have control, in the absence of simple majority kick-out rights to remove the general partner, simple majority liquidation rights to dissolve the partnership, or any substantive participating rights of the other limited partners. Investment products are also consolidated under FASB Statement No.94, if appropriate. For investment products that are structured as partnerships and are determined to be VIEs, including private equity, real estate and fund-of-funds products, the company evaluates the structure of the partnership to determine if it is the primary beneficiary of the investment product. This evaluation includes assessing the rights of the limited partners to transfer their economic interests in the investment product. If the limited partners lack objective rights to transfer their economic interests, they are considered to be de facto agents of the company, resulting in the company determining that it is the primary beneficiary of the investment product. The company generally takes less than a 1% investment in these entities as the general partner. Interests in unconsolidated private equity, real estate and fund-of-funds products are classified as equity method investments in the companys Condensed Consolidated Balance Sheets. The companys risk with respect to each investment is limited to its equity ownership and any uncollected management fees. Therefore, gains or losses of consolidated investment products have not had a significant impact on the companys results of operations, liquidity or capital resources. The company has no right to the benefits from, nor does it bear the risks associated with, these investments, beyond the companys minimal direct investments in, and management fees generated from, the investment products. If the company were to liquidate, these investments would not be available to the general creditors of the company, and as a result, the company does not consider investments held by consolidated investment products to be company assets. For CLO entities, as discussed in Note 2, Fair Value of Assets and Liabilities, the company generally takes only a relatively small portion of the unrated, junior subordinated positions. The companys investments in CLOs are generally subordinated to other interests in the entities and entitle the investors to receive the residual cash flows, if any, from the entities. Investors in CLOs have no recourse against the company for any loss |
Share Based Compensation
Share Based Compensation | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Share-Based Compensation [Abstract] | |
SHARE-BASED COMPENSATION | 10. SHARE-BASED COMPENSATION The company recognized total share-based compensation expenses of $43.9million in the six months ended June30, 2009 (June30, 2008: $58.0million). The total income tax benefit recognized in the Consolidated Statements of Income for share-based compensation arrangements was $15.2million for the six months ended June30, 2009 (June30, 2008: $18.7million). Cash received from the exercise of share options and sharesave plan awards granted under share-based compensation arrangements was $9.6million in the six months ended June30, 2009 (June 30, 2008: $52.1million). The tax benefit realized from share option exercises was $3.3million in the six months ended June30, 2009 (June30, 2008: $16.8million). Share Awards Share awards are broadly classified into two categories: time-vested and performance-vested share awards. Share awards are measured at fair value at the date of grant and are expensed on a straight-line or accelerated basis over the vesting period, based on the companys estimate of shares that will eventually vest. Time-vested awards vest ratably over or cliff-vest at the end of a period of continued employee service. Performance-vested awards cliff-vest at the end of or vest ratably over a defined vesting period of continued employee service upon the companys attainment of certain performance criteria, generally the attainment of cumulative earnings per share growth targets at the end of the vesting period reflecting a compound annual growth rate of between 10.0% and 15.0% per annum during a three-year period. Time-vested and performance-vested share awards are granted in the form of restricted share awards (RSAs) or restricted share units (RSUs). Dividends accrue directly to the employee holder of RSAs, and cash payments in lieu of dividends are made to employee holders of certain RSUs. There is therefore no discount to the fair value of these share awards at their grant date. Movements on share awards priced in Pounds Sterling prior to the companys primary share listing moving to the New York Stock Exchange from the London Stock Exchange, which occurred on December4, 2007, in connection with the redomicile of the company from the U.K. to Bermuda, are detailed below: Six months ended June 30, 2009 Six months ended June 30, 2008 Weighted Average Time- Performance- Grant Date Time- Performance- Millions of shares, except fair values Vested Vested Fair Value (pence) Vested Vested Unvested at the beginning of period 10.2 6.0 9.62 15.2 6.2 Forfeited during the period (0.2 ) (0.1 ) 8.77 (0.5 ) (0.1 ) Modification of share-based payment awards* (1.4 ) 9.37 Vested and distributed during the period (1.5 ) (2.2 ) 8.32 (0.9 ) Unvested at the end of the period 8.5 2.3 10.14 13.8 6.1 * During the six months ended June30, 2009, the company modified the terms of 1.4million equity-settled sha |
Retirement Benefit Plans
Retirement Benefit Plans | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Retirement Benefit Plans [Abstract] | |
RETIREMENT BENEFIT PLANS | 11. RETIREMENT BENEFIT PLANS Defined Contribution Plans The company operates defined contribution retirement benefit plans for all qualifying employees. The assets of the plans are held separately from those of the company in funds under the control of trustees. When employees leave the plans prior to vesting fully in the contributions, the contributions payable by the company are reduced by the amount of forfeited contributions. The total amounts charged to the Condensed Consolidated Statements of Income for the six months ended June30, 2009 and 2008, of $22.0million and $25.8million, respectively, represent contributions payable or paid to these plans by the company at rates specified in the rules of the plans. As of June30, 2009, accrued contributions of $10.7million (December31, 2008: $21.0million) for the current year will be paid to the plans when due. Defined Benefit Plans The company maintains legacy defined benefit pension plans for qualifying employees of its subsidiaries in the U.K., Ireland, Germany, Taiwan, and the U.S. All defined benefit plans are closed to new participants, and the U.S. plan benefits have been frozen. The company also maintains a post-retirement medical plan in the U.S., which was closed to new participants in 2005. In 2006, the plan was amended to eliminate benefits for all participants who will not meet retirement eligibility by 2008. The assets of all defined benefit schemes are held in separate trustee-administered funds. Under the plans, the employees are generally entitled to retirement benefits based on final salary at retirement. The components of net periodic benefit cost in respect of these defined benefit plans are as follows: Three Months Ended June 30, Six Months Ended June 30, Retirement Plans Medical Plan Retirement Plans Medical Plan $ in millions 2009 2008 2009 2008 2009 2008 2009 2008 Service cost 3.4 1.9 0.1 6.7 3.7 0.2 Interest cost 4.9 4.8 0.7 0.6 9.8 9.7 1.3 1.3 Expected return on plan assets (5.2 ) (5.7 ) (0.1 ) (0.2 ) (10.5 ) (11.3 ) (0.2 ) (0.3 ) Amortization of prior service cost (0.5 ) (0.5 ) (1.0 ) (1.0 ) Amortization of net actuarial (loss)/gain 0.2 0.5 1.0 0.7 0.5 1.0 2.1 1.9 Net periodic benefit cost 3.3 1.5 1.2 0.6 6.5 3.1 2.4 1.9 The estimated amounts of contributions expected to be paid to the plans during 2009 is $6.3million for retirement plans, with no expected contribution to the medical plan. |
Commitments and Contingencies
Commitments and Contingencies | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Commitments and contingencies may arise in the ordinary course of business. The company has transactions with various private equity, real estate and other investment entities sponsored by the company for the investment of client assets in the normal course of business. Many of the companys investment products are structured as limited partnerships. The companys investment may take the form of the general partner or a limited partner, and the entities are structured such that each partner makes capital commitments that are to be drawn down over the life of the partnership as investment opportunities are identified. At June30, 2009, the companys undrawn capital commitments were $66.6million (December31, 2008: $36.5million). The volatility and valuation dislocations that occurred from 2007 to the date of this Report in certain sectors of the fixed income market have generated pricing issues in many areas of the market. As a result of these valuation dislocations, during the fourth quarter of 2007, Invesco elected to enter into contingent support agreements for two of its investment trusts to enable them to sustain a stable pricing structure. These two trusts are unregistered trusts that invest in fixed income securities and are available only to accredited investors. In June2009, the agreements were amended to extend the term through December31, 2009. As of June30, 2009, the committed support under these agreements was $55.0million with an internal approval mechanism to increase the maximum possible support to $65.0million at the option of the company. The recorded fair value of the guarantees related to these agreements at June30, 2009, was estimated to be $2.5 million (December31, 2008: $5.5million), which was recorded in other current liabilities on the Condensed Consolidated Balance Sheet. No payments have been made under either agreement nor has Invesco realized any losses from the support agreements through the date of this Report. These trusts were not consolidated because the company was not deemed to be the primary beneficiary under FIN 46(R). A subsidiary of the company has received an assessment from the Canada Revenue Agency (CRA) for goods and services tax (GST)related to various taxation periods from November1999 to December 2003 in the amount of $15.9million related to GST on sales charges collected from investors upon the redemption of certain mutual funds. Management believes that the CRAs claims are unfounded and that this assessment is unlikely to stand, and accordingly no provision has been recorded in the Condensed Consolidated Financial Statements. Acquisition Contingencies Contingent consideration related to acquisitions includes the following: Earn-outs relating to the Invesco PowerShares acquisition. A contingent payment of up to $500.0million could be due in October2011, five years after the date of acquisition, based on compound annual growth in management fees (as defined and adjusted pursuant to the acquisition agreement) from an assumed base of $17.5million at closing. The Year 5 management fees will be reduced by $50.0million, for purposes of the |
Guarantor Condensed Consolidati
Guarantor Condensed Consolidating Financial Statements | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Guarantor Condensed Consolidating Financial Statements [Abstract] | |
GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | 13. GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS Prior to the December4, 2007, redomicile of the company from the United Kingdom to Bermuda and the relisting of the company from the London Stock Exchange to the New York Stock Exchange, INVESCO PLC (now known as Invesco Holding Company Limited), the Issuer, issued 4.5% $300.0million senior notes due 2009, 5.625% $300.0million senior notes due 2012, 5.375% $350.0million senior notes due 2013 and 5.375% $200.0million senior notes due 2014. These senior notes, are fully and unconditionally guaranteed as to payment of principal, interest and any other amounts due thereon by Invesco Ltd. (the Parent), together with the following wholly owned subsidiaries: Invesco Aim Management Group, Inc., Invesco Aim Advisors, Inc., Invesco North American Holdings, Inc., and Invesco Institutional (N.A.), Inc. (the Guarantors). On June9, 2009, in connection with the new credit facility agreement discussed in Note 4, Long-term Debt, IVZ, Inc. also became a guarantor of the senior notes. The companys remaining consolidated subsidiaries do not guarantee this debt. The guarantees of each of the Guarantors are joint and several. Presented below are Condensed Consolidating Balance Sheets as of June30, 2009, and December31, 2008, Condensed Consolidating Statements of Income for the three and six months ended June30, 2009 and 2008, and Condensed Consolidating Statements of Cash Flows for the six months ended June30, 2009 and 2008. Condensed Consolidating Balance Sheets $ in millions Guarantors Non- Guarantors Issuer Parent Eliminations Consolidated As of June30, 2009 Assets held for policyholders 1,057.3 1,057.3 Other current assets 490.9 1,465.8 13.5 28.5 1,998.7 Total current assets 490.9 2,523.1 13.5 28.5 3,056.0 Goodwill 2,302.8 3,515.7 453.9 6,272.4 Investments in subsidiaries 713.6 35.4 4,174.2 6,038.5 (10,961.7 ) Other non-current assets 191.0 1,046.5 11.7 1,249.2 Total assets 3,698.3 7,120.7 4,653.3 6,067.0 (10,961.7 ) 10,577.6 Policyholder payables 1,057.3 1,057.3 Other current liabilities 29.7 1,015.2 305.6 0.4 1,350.9 Total current liabilities 29.7 2,072.5 305.6 0.4 2,408.2 Intercompany balances 1,573.6 (1,387.0 ) 242.2 (428.8 ) Non-current liabilities 63.4 150.8 752.4 966.6 Total liabilities 1,666.7 836.3 1,300.2 (428.4 ) 3,374.8 Total equ |
Subsequent Events
Subsequent Events | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS The company has evaluated its subsequent events through July31, 2009, which represents the date the financial statements were issued. On July24, 2009, the company declared a second quarter 2009 dividend of 10.25 cents per share, payable on September2, 2009, to shareholders of record at the close of business on August 19, 2009. |