Invesco (IVZ) 10-Q 4 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Mar. 31, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	Invesco Ltd.
Entity Central Index Key	0000914208
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
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 Common Stock, Shares Outstanding		436,280,943

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Current assets:
Cash and cash equivalents	$597	$762
Cash and cash equivalents of consolidated investment products	331.8	28
Unsettled fund receivables	758.1	383.1
Accounts receivable	303.8	289.3
Accounts receivable of consolidated investment products	66.2	0
Investments	154	182.4
Prepaid assets	68.5	57.6
Other current assets	79.2	77.9
Deferred tax asset, net	65.7	57.7
Assets held for policyholders	1,221	1,283
Total current assets	3645.3	3,121
Non-current assets:
Investments	141.8	157.4
Investments of consolidated investment products	6105.7	685
Prepaid assets	11.1	16.2
Other non-current assets	18.5	13
Deferred sales commissions	28.3	23.8
Deferred tax asset, net	58	65.8
Property and equipment, net	221.1	220.7
Intangible assets, net	135.9	139.1
Goodwill	6425.8	6467.6
Total non-current assets	13146.2	7788.6
Total assets	16791.5	10909.6
Current liabilities:
Unsettled fund payables	735.9	367.9
Income taxes payable	84.4	82.8
Other current liabilities	378.2	559.9
Other current liabilities of consolidated investment products	281.6	4.8
Policyholder payables	1,221	1,283
Total current liabilities	2701.1	2298.4
Non-current liabilities:
Long-term debt	745.7	745.7
Long-term debt of consolidated investment products	5119.1	0
Other non-current liabilities	224.7	244.7
Total non-current liabilities	6089.5	990.4
Total liabilities	8790.6	3288.8
Commitments and contingencies (See Note 12)
Equity attributable to common shareholders:
Common shares ($0.20 par value; 1,050.0 million authorized; 459.5 million shares issued as of March 31, 2010, and December 31, 2009)	91.9	91.9
Additional paid-in-capital	5652.5	5688.4
Treasury shares	-852.5	-892.4
Retained earnings	1686.8	1631.4
Retained earnings appropriated for investors in consolidated investment products	383.8	0
Accumulated other comprehensive income/(loss), net of tax	340.5	393.6
Total equity attributable to common shareholders	7,303	6912.9
Equity attributable to noncontrolling interests in consolidated entities	697.9	707.9
Total equity	8000.9	7895.1
Total liabilities and equity	16791.5	10909.6
Equity attributable to common shareholders:
Total equity		7620.8

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)
Share data in Millions	Mar. 31, 2010	Dec. 31, 2009
Equity attributable to common shareholders:
Common shares, par value	0.2	0.2
Common shares, shares authorized	1,050	1,050
Common shares, shares issued	459.5	459.5

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Operating revenues:
Investment management fees	593.5	436.5
Service and distribution fees	112.5	89
Performance fees	1.4	10.9
Other	11.7	12.2
Total operating revenues	719.1	548.6
Operating expenses:
Employee compensation	237.6	235.8
Third-party distribution, service and advisory	195.6	148.2
Marketing	28.3	26.9
Property, office and technology	53.5	45.9
General and administrative	50	30
Transaction and integration	17.2
Total operating expenses	582.2	486.8
Operating income	136.9	61.8
Other income/(expense):
Equity in earnings of unconsolidated affiliates	5.8	2.5
Interest income	1.6	4.8
Interest Income of consolidated investment products	52.5
Gains/(losses) of consolidated investment products, net	103.1	-86.5
Interest expense	-12.4	-15.9
Interest expense of consolidated investment products	-20.8
Other gains and losses, net	-2.1	-4.2
Income/(loss) before income taxes, including gains and losses attributable to noncontrolling interests	264.6	-37.5
Income tax provision	-50.1	-20.3
Net income/(loss), including gains and losses attributable to noncontrolling interests	214.5	-57.8
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net	-119.5	88.5
Net income attributable to common shareholders	$95	30.7
Earnings per share:
- basic	0.22	0.08
- diluted	0.21	0.08
Dividends declared per share	0.1025	0.1

2_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Operating activities:
Net income/(loss), including gains and losses attributable to noncontrolling interests of $119.5 million during the three months ended March 31, 2010 (losses of $88.5 million during the three months ended March 31, 2009)	214.5	-57.8
Adjustments to reconcile net income to net cash used in operating activities:
Amortization and depreciation	18.3	16
Share-based compensation expense	24.2	23.7
Gains on disposal of property, equipment, software, net		0.1
Purchase of trading investments	(7)	(7)
Proceeds from sale of trading investments	39.7	7.8
Other gains and losses, net	2.1	4.2
(Gains)/losses of consolidated investment products, net	-103.1	86.5
Tax benefit from share-based compensation	22.3	29.8
Excess tax benefits from share-based compensation	-6.8
Equity in earnings of unconsolidated affiliates	-5.8	-2.5
Dividends from unconsolidated affiliates	1.2
Changes in operating assets and liabilities:
Change in cash held by consolidated investment products	-116.1	14
(Increase)/decrease in receivables	-449.1	-61.7
Increase/(decrease) in payables	188.6	-233.1
Net cash used in operating activities	(177)	(180)
Investing activities:
Purchase of property and equipment	-15.5	-5.3
Disposal of property and equipment		0.3
Purchase of available-for-sale investments	-20.2	-5.8
Proceeds from sale of available-for-sale investments	16.2	12.4
Purchase of investments by consolidated investment products	-325.4	-26.2
Proceeds from sale of investments by consolidated investment products	453.1	16.1
Returns of capital in investments of consolidated investment products	23.2	4.7
Purchase of other investments	-11.6	-1.9
Proceeds from sale of other investments	14.3	3.1
Net cash provided by/(used in) investing activities	134.1	-2.6
Financing activities:
Proceeds from exercises of share options	3.7	1.7
Dividends paid	-44.8	-38.9
Excess tax benefits from share-based compensation	6.8
Capital invested into consolidated investment products	0.8	8
Capital distributed by consolidated investment products	-27.5	-14.6
Repayments of debt of consolidated investment products	-48.3
Net repayments under credit facility		-4.5
Repayments of senior notes		(3)
Acquisition of remaining noncontrolling interest in subsidiary		-10.3
Net cash used in financing activities	-109.3	-61.6
Decrease in cash and cash equivalents	-152.2	-244.2
Foreign exchange movement on cash and cash equivalents	-12.8	-7.9
Cash and cash equivalents, beginning of period	762	585.2
Cash and cash equivalents, end of period	597	333.1
Supplemental Cash Flow Information:
Interest paid	-9.6	-9.7
Interest received	1.6	5.2
Taxes paid	-34.8	-15.5

3_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Operating activities:
(Gains)/losses attributable to noncontrolling interests	-119.5	88.5

4_Condensed Consolidated Statem

Condensed Consolidated Statements of Changes in Equity (Unaudited) (USD $)
In Millions	Common Shares	Additional Paid-in-Capital	Treasury Shares	Retained Earnings	Retained Earnings Appropriated for Investors in Consolidated Investment Products	Accumulated Other Comprehensive Income (Loss)	Non-Controlling Interests in Consolidated Entities	Total
Beginning Balance at Dec. 31, 2008	85.3	5352.6	-1128.9	1476.3		-95.8	906.7	6596.2
January 1, 2010 as adjusted	85.3	5272.3	-1048.6	1468.1		-172.4	758.3	6,363
Net income/(loss), including gains and losses attributable to noncontrolling interests				30.7			-88.5	-57.8
Other comprehensive income:
Currency translation differences on investments in overseas subsidiaries						-72.1		-72.1
Change in accumulated OCI related to employee benefit plans						0.4		0.4
Change in net unrealized gains on available-for-sale investments						(4)		(4)
Tax impacts of changes in accumulated other comprehensive income balances						-0.9		-0.9
Total comprehensive income								-134.4
Change in noncontrolling interests in consolidated entities, net							-58.5	-58.5
Dividends				-38.9				-38.9
Employee share plans:
Share-based compensation		23.7						23.7
Vested shares		-81.4	81.4
Exercise of options		-8.7	10.4					1.7
Tax impact of share-based payment		(5)						(5)
Purchase of shares			-11.5					-11.5
Acquisition of remaining noncontrolling interest in subsidiary		-8.9					-1.4	-10.3
Ending Balance at Mar. 31, 2009	85.3	5272.3	-1048.6	1468.1		-172.4	758.3	6,363
Beginning Balance at Dec. 31, 2008	85.3	5352.6	-1128.9	1476.3		-95.8	906.7	6596.2
Adoption of FASB Statement No. 167				5.2	274.3	-5.2		274.3
January 1, 2010 as adjusted	91.9	5688.4	-892.4	1636.6	274.3	388.4	707.9	7895.1
Employee share plans:
Ending Balance at Dec. 31, 2009	91.9	5688.4	-892.4	1636.6	274.3	388.4	707.9	7895.1
January 1, 2010 as adjusted	91.9	5652.5	-852.5	1686.8	383.8	340.5	697.9	8000.9
Net income/(loss), including gains and losses attributable to noncontrolling interests				95	104.4		15.1	214.5
Other comprehensive income:
Currency translation differences on investments in overseas subsidiaries					5.1	-57.4		-52.3
Change in accumulated OCI related to employee benefit plans						5.3		5.3
Change in net unrealized gains on available-for-sale investments						6		6
Tax impacts of changes in accumulated other comprehensive income balances						-1.8		-1.8
Total comprehensive income								171.7
Change in noncontrolling interests in consolidated entities, net							-25.1	-25.1
Dividends				-44.8				-44.8
Employee share plans:
Share-based compensation		24.2						24.2
Vested shares		-56.9	56.9
Exercise of options		(10)	13.9					3.9
Tax impact of share-based payment		6.8						6.8
Purchase of shares			-30.9					-30.9
Ending Balance at Mar. 31, 2010	91.9	5652.5	-852.5	1686.8	383.8	340.5	697.9	8000.9

Accounting Policies

Accounting Policies
	3 Months Ended Mar. 31, 2010
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, 2009. 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, and any non-VIE general partnership investments where the company is deemed to have control. 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. The company provides investment management services to, and has transactions with, various private equity funds, real estate funds, fund-of-funds, collateralized loan obligations (CLOs), and other investment products 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 these products. Certain of these entities are considered to be VIEs. The company follows the provisions of Accounting Standards Codification (ASC)Topic 810, Consolidation, when accounting for VIEs, including Accounting Standards Update (ASU)No.2010-10, Amendments for Certain Investment Funds (ASU 2010-10), detailed in Accounting Pronouncements Recently Adopted below. 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 are consolidated. For all investment products with the exception of CLOs, if the company is deemed to have a variable interest in, and to have the majority of rewards/risks of ownership associated with, these entities, then the company is deemed to be their primary beneficiary and is required to consolidate these entities. For CLOs, if the company is deemed to have the power to direct the activities of the CLO that most significantly impact the CLOs economic performance, and the obligation to absorb l

Fair Value of Assets and Liabil

Fair Value of Assets and Liabilities
	3 Months Ended Mar. 31, 2010
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. The fair value of financial instruments held by consolidated investment products is presented in Note 9, Consolidated Investment Products. March 31, 2010 December 31, 2009 Footnote Carrying Carrying $ in millions Reference Value Fair Value Value Fair Value Cash and cash equivalents 2 597.0 597.0 762.0 762.0 Available for sale investments 2, 3 102.1 102.1 115.2 115.2 Assets held for policyholders 1,221.0 1,221.0 1,283.0 1,283.0 Trading investments 2, 3 51.8 51.8 84.6 84.6 Support agreements 9, 12 (2.5 ) (2.5 ) (2.5 ) (2.5 ) Policyholder payables (1,221.0 ) (1,221.0 ) (1,283.0 ) (1,283.0 ) Long-term debt 4 (745.7 ) (778.0 ) (745.7 ) (765.5 ) 2.7 (29.6 ) 213.6 193.8 A three-level valuation hierarchy exists for disclosure of fair value measurements 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. There are 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 $318.0million at March31, 2010 (December31, 2009: $465.1million). Cash investments in money market funds are valued under the market approach through the use of quoted market prices in

Investments

Investments
	3 Months Ended Mar. 31, 2010
Investments [Abstract]
INVESTMENTS	3. INVESTMENTS The disclosures below include details of the companys investments. Investments held by consolidated investment products are detailed in Note 9, Consolidated Investment Products. Current Investments As of March 31, December 31, $ in millions 2010 2009 Available-for-sale investments: Seed money 77.9 74.8 Foreign time deposits 23.8 22.5 Trading investments: Investments related to deferred compensation plans 51.8 84.6 Other 0.5 0.5 Total current investments 154.0 182.4 Non-current Investments As of March 31, December 31, $ in millions 2010 2009 Available-for-sale investments: CLOs 0.4 17.9 Equity method investments 136.9 134.7 Other 4.5 4.8 Total non-current investments 141.8 157.4 The portion of trading gains and losses for the three months ended March31, 2010, that relates to trading securities still held at March31, 2010, was $2.7million net loss (three months ended March31, 2009: $1.1million net loss). 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 March 31, 2010 Proceeds Gross Realized Gross Realized $ in millions from Sales Gains Losses Current available-for-sale investments 16.0 0.4 (0.5 ) Non-current available-for-sale investments 0.2 Upon the sale of available-for-sale securities, net realized losses of $0.1million were transferred from accumulated other comprehensive income into the Condensed Consolidated Statements of Income during the three months ended March31, 2010. 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: March 31, 2010 December 31, 2009 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 73.3 7.7 (3.1 ) 77.9 74.7 5.9 (5.8 ) 74.8 Foreign time deposits 23.8 23.8 22.5 22.5 Current available-for-sale investments 97.1 7.7 (3.1 ) 101.7 97.2 5.9 (5.8 ) 97.3 Non-current: CLOs* 0.4 0.4 12.6 5.3 17.9

Debt

Debt
	3 Months Ended Mar. 31, 2010
Debt [Abstract]
DEBT	4. DEBT The disclosures below include details of the companys investments. Debt of consolidated investment products is detailed in Note 9, Consolidated Investment Products. March 31, 2010 December 31, 2009 Carrying Carrying $ in millions Value Fair Value Value Fair Value Unsecured Senior Notes*: 5.625% due April17, 2012 215.1 228.7 215.1 227.0 5.375% due February27, 2013 333.5 351.7 333.5 343.4 5.375% due December15, 2014 197.1 197.6 197.1 195.1 Floating rate credit facility expiring June9, 2012 Total debt 745.7 778.0 745.7 765.5 Less: current maturities of total debt Long-term debt 745.7 778.0 745.7 765.5 * The companys Senior Note indentures contain certain restrictions on mergers or consolidations. Beyond these items, there are no other restrictive covenants in the indentures. The fair market value of the companys total debt was determined by market quotes provided by Bloomberg. In the absence of an active market, the company relies upon the average price quoted by brokers for determining the fair market value of the debt. The level of trading, both in number of trades and amount of Notes traded, has increased to a level that the company believes market quotes to be a reasonable representation of the current fair market value of the Notes. Analysis of Borrowings by Maturity: $ in millions March 31, 2010 2010 2011 2012 215.1 2013 333.5 Thereafter 197.1 Total debt 745.7 Amounts borrowed under the credit facility are repayable at maturity on June9, 2012, provided that such maturity date will automatically be accelerated to March16, 2012, if 90% or more of the $300.0million face amount of the companys 5.625% senior notes due 2012, are not repaid, repurchased or defeased prior to March16, 2012. Subject to certain conditions, the company has the right to increase the aggregate borrowings under the credit facility up to $750.0million. At March31, 2010, there was no outstanding balance on the credit facility expiring June9, 2012. Borrowings under the credit facility will bear interest at (i)LIBOR for specified interest periods or (ii)a floating base rate (based upon the highest of (a)the Bank of America prime rate, (b)the Federal Funds rate plus 0.50% and (c)LIBOR for an interest period of one month plus 1.00%), plus, in either case, an applicable margin determined with reference to the companys credit ratings and specified credit default spreads. Based on credit ratings as of March31, 2010, of the company and such credit default spreads, the applicable margin for LIBOR-based loans was 1.50% and for base rate loans was 0.50%. In addition, the company is required to pay the lenders a facility fee on the aggregate commitments of the lenders (whether or not used) at a rate per annum which is based

Common Shares and Shares Outsta

Common Shares and Shares Outstanding
	3 Months Ended Mar. 31, 2010
Common Shares and Shares Outstanding [Abstract]
COMMON SHARES AND SHARES OUTSTANDING	5. COMMON SHARES AND SHARES OUTSTANDING Movements in the number of common shares issued are represented in the table below: Three Months Three Months Ended March 31, Ended March 31, In millions 2010 2009 Shares Issued Beginning Balance 459.5 426.6 Issue of new shares Shares Issued Ending Balance 459.5 426.6 Less: Treasury shares for which dividend and voting rights do not apply (23.2 ) (33.3 ) Shares outstanding 436.3 393.3 Total treasury shares at March31, 2010, were 35.8million (March31, 2009: 46.3million), including 12.6million unvested restricted stock awards (March31, 2009: 13.0million) for which dividend and voting rights apply. Separately, an aggregate of 1.3million shares were withheld on vesting events during the three months ended March31, 2010, to meet employees withholding tax obligations (three months ended March31, 2009: 1.0 shares). The value of these shares withheld was $30.9million (three months ended March31, 2009: $11.5million). Approximately $1.4billion remained authorized under the companys share repurchase plan at March31, 2010.

Other Comprehensive Income

Other Comprehensive Income
	3 Months Ended Mar. 31, 2010
Other Comprehensive Income [Abstract]
OTHER COMPREHENSIVE INCOME	6. OTHER COMPREHENSIVE INCOME The components of accumulated other comprehensive income, which includes our proportionate share of equity method investees accumulated other comprehensive income, were as follows: March 31, December 31, $ in millions 2010 2009 Net unrealized gains/(losses) on available-for-sale investments 6.2 5.4 Tax on unrealized (losses)/gains on available-for-sale investments (1.9 ) (1.6 ) Cumulative foreign currency translation adjustments 384.6 442.0 Tax on cumulative foreign currency translation adjustments 2.0 2.0 Employee benefit plan liability adjustments (69.2 ) (74.5 ) Tax on employee benefit plan liability adjustments 18.8 20.3 Total accumulated other comprehensive income 340.5 393.6 Total other comprehensive income details are presented below: Three Months Ended March 31, $ in millions 2010 2009 Net income/(loss), including gains and losses attributable to noncontrolling interests 214.5 (57.8 ) Unrealized holding gains and losses on available-for-sale investments* 3.8 (8.9 ) Tax on net unrealized holding gains and losses on available-for-sale investments (0.2 ) (1.0 ) Reclassification adjustments for net gains and losses on available-for-sale investments included in net income 2.2 4.9 Tax on reclassification adjustments for net gains and losses on available-for-sale investments included in net income (0.1 ) 0.4 Foreign currency translation adjustments (52.3 ) (72.1 ) Tax on foreign currency translation adjustments (0.1 ) Adjustments to employee benefit plan liability 5.3 0.4 Tax on adjustments to pension liability (1.5 ) (0.2 ) Total other comprehensive income/(loss) 171.7 (134.4 ) Less: other comprehensive income attributable to consolidated investment products (5.1 ) Total other comprehensive income/(loss) attributable to Invesco Ltd. 166.6 (134.4 ) * The company adopted FASB Statement No.167, now encompassed in ASC Topic 810, Consolidation, on January1, 2010, resulting in the consolidation of certain CLOs. Upon adoption, accumulated other comprehensive income was reduced by $5.2million, as accumulated net unrealized gains at January1, 2010, relating to the companys equity interests in certain CLOs were reclassified into retained earnings upon their consolidation.

Taxation

Taxation
	3 Months Ended Mar. 31, 2010
Taxation [Abstract]
TAXATION	7. TAXATION At March31, 2010, the total amount of gross unrecognized tax benefits was $39.6million as compared to the December31, 2009, total amount of $39.0million. 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 an 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
	3 Months Ended Mar. 31, 2010
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, 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 March31, 2010 Basic earnings per share $ 95.0 439.0 $ 0.22 Dilutive effect of share-based awards 3.4 Diluted earnings per share $ 95.0 442.4 $ 0.21 For the three months ended March31, 2009 Basic earnings per share $ 30.7 394.1 $ 0.08 Dilutive effect of share-based awards 5.8 Diluted earnings per share $ 30.7 399.9 $ 0.08 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 9.3million shares at a weighted average exercise price of 2,053 pence were outstanding for the three months ended March31, 2010 (three months ended March31, 2009: 13.5 million share options at a weighted average exercise price of 1,836 pence), but were not included in the computation of diluted earnings per share because the options exercise price was greater than the average market price of the shares and therefore their inclusion would have been anti-dilutive. The company excluded 0.0million contingently issuable shares from the diluted earnings per share computation for the three months ended March31, 2010 (three months ended March31, 2009: 1.6million contingently issuable shares), because the necessary performance conditions for the shares to be issuable had not yet been satisfied at the end of the respective period. There were no contingently issuable shares that were excluded from the computation of diluted earnings per share during the three months ended March31, 2010 and 2009, due to their inclusion being anti-dilutive.

Consolidated Investment Product

Consolidated Investment Products
	3 Months Ended Mar. 31, 2010
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 funds, real estate funds, 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 and generally has a small investment in certain of these products to demonstrate skin in the game to other potential unaffiliated investors in these products. Certain of these investments are considered to be variable interest entities (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 a voting interest entity (VOE)model where 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. The companys risk with respect to each investment is limited to its equity ownership and any uncollected management fees. Therefore, the 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. CLOs For CLO entities, as discussed in Note 1, Accounting Policies, and Note 2, Fair Value of Assets and Liabilities, the company generally invests in 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 company and other subordinated tranche investors to receive the residual cash flows, if any, from the entities. The companys underlying equity interests in the CLOs of $19.0million (before consolidation) at March31, 2010 (December31, 2009: $17.9million) represent its maximum risk of loss. Prior to the adoption of FASB Statement No.167, now encompassed in ASC Topic 810, Consolidation, and the issuance of ASU 2010-10, Amendments for Certain Investment Funds (discussed in Note 1, Accounting Policies), the companys ownership interests, which were classified as available-for-sale investments on the companys Consolidated Balance Sheets, combined with its other interests (management and incentive fees), were quantitatively assessed to determine if the company is the primary beneficiary of these entities. The company determined, for periods prior to the adoption of FASB Statemen

Share-Based Compensation

Share-Based Compensation
	3 Months Ended Mar. 31, 2010
Share-Based Compensation [Abstract]
SHARE-BASED COMPENSATION	10. SHARE-BASED COMPENSATION The company recognized total expenses of $24.2million in the three months ended March31, 2010 (March31, 2009: $23.7million) related to equity-settled share-based payment transactions. The total income tax benefit recognized in the Consolidated Statements of Income for share-based compensation arrangements was $8.3million for the three months ended March31, 2010 (March31, 2009: $9.4million). Cash received from the exercise of share options granted under share-based compensation arrangements was $3.7million in the three months ended March31, 2010 (March31, 2009: $1.7 million). The total tax benefit realized from share based payment awards was $22.3million in the three months ended March31, 2010 (March31, 2009: $29.8million). 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, based on the companys estimate of shares that will eventually vest, on a straight-line or accelerated basis over the vesting period. 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: Three months ended March 31, 2010 Three months ended March 31, 2009 Weighted Average Weighted Average Time- Performance- Grant Date Time- Performance- Grant Date Millions of shares, except fair values Vested Vested Fair Value (pence) Vested Vested Fair Value (pence) Unvested at the beginning of period 5.4 2.0 11.24 10.2 6.0 9.62 Forfeited during the period (1.4 ) 12.02 (0.2 ) 9.21 Vested and distributed during the period (1.0 ) (0.5 ) 8.89 (1.4 ) (2.2 ) 8.30 Unvested at the end of the period 4.4 0.1 11.83 8.6 3.8 10.02 Subsequent to the companys primary share listing moving t

Retirement Benefit Plans

Retirement Benefit Plans
	3 Months Ended Mar. 31, 2010
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 three months ended March31, 2010 and 2009, of $12.4million and $11.9million, respectively, represent contributions paid or payable to these plans by the company at rates specified in the rules of the plans. As of March31, 2010, accrued contributions of $5.1million (December31, 2009: $17.1million) 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. Further, during the year ended December31, 2009, the company terminated one of its U.S. defined benefit retirement plans. The company also maintains a postretirement 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 March 31, Retirement Plans Medical Plan $ in millions 2010 2009 2010 2009 Service cost (1.0 ) (3.3 ) (0.1 ) (0.1 ) Interest cost (3.9 ) (4.9 ) (0.7 ) (0.6 ) Expected return on plan assets 3.4 5.3 0.1 0.1 Amortization of prior service cost 0.5 0.5 Amortization of net actuarial (loss)/gain (0.7 ) (0.3 ) (0.9 ) (1.1 ) Net periodic benefit cost (2.2 ) (3.2 ) (1.1 ) (1.2 ) The estimated amounts of contributions expected to be paid to the plans during 2010 is $7.9 million for retirement plans, with no expected contribution to the medical plan.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
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 March31, 2010, the companys undrawn capital commitments were $84.5million (December31, 2009: $77.6million). 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 December2009, the agreements were amended to extend the term through June30, 2010. As of March31, 2010, the committed support under these agreements was $36.0million with an internal approval mechanism to increase the maximum possible support to $66.0million at the option of the company. The recorded fair value of the guarantees related to these agreements at March31, 2010, was estimated to be $2.5million (December31, 2009: $2.5million), 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. A subsidiary of the company has received assessments from the Canada Revenue Agency (CRA)for goods and services tax (GST)related to various taxation periods from April1999 to December2006 in the amount of $21.2million related to GST on sales charges collected from investors upon the redemption of certain mutual funds. The company has objected to the assessments and sought remedial action in the Ontario Superior Court of Justice. In November2009, the company was successful in such remedial action and, as a result, anticipates successfully contesting the assessments. As a result of such actions, the CRA is currently considering its next steps and has not responded to the company in this regard. 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 Consolidated Financial Statements. Acquisition Contingencies Contingent consideration related to acquisitions includes the following: Earn-outs relating to the Invesco PowerShares acquisition. A contingen

Guarantor Condensed Consolidati

Guarantor Condensed Consolidating Financial Statements
	3 Months Ended Mar. 31, 2010
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 Advisers, Inc., Invesco North American Holdings, Inc., and Invesco Institutional (N.A.), Inc. (the Guarantors). On June9, 2009, IVZ, Inc. also became a guarantor of the senior notes. On December31, 2009, Invesco Aim Advisors, Inc. merged with Invesco Institutional (N.A.), Inc., which was renamed Invesco Advisors, Inc. 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 March31, 2010, and December31, 2009, Condensed Consolidating Statements of Income for the three months ended March31, 2010 and 2009, and Condensed Consolidating Statements of Cash Flows for the three months ended March31, 2010 and 2009. Condensed Consolidating Balance Sheets Non- $ in millions Guarantors Guarantors Issuer Parent Eliminations Consolidated As of March31, 2010 Assets held for policyholders 1,221.0 1,221.0 Other current assets 195.9 2,178.6 3.0 46.8 2,424.3 Total current assets 195.9 3,399.6 3.0 46.8 3,645.3 Goodwill 2,302.8 3,687.0 436.0 6,425.8 Investments in subsidiaries 309.2 5.7 4,847.1 6,936.7 (12,098.7 ) Other non-current assets 260.0 6,452.2 4.9 3.3 6,720.4 Total assets 3,067.9 13,544.5 5,291.0 6,986.8 (12,098.7 ) 16,791.5 Policyholder payables 1,221.0 1,221.0 Other current liabilities 26.6 1,448.1 4.7 0.7 1,480.1 Total current liabilities 26.6 2,669.1 4.7 0.7 2,701.1 Intercompany balances 834.4 (1,638.6 ) 732.1 72.1 Non-current liabilities 29.8 5,314.0 745.7 6,089.5 Total liabilities 890.8 6,344.5 1,482.5 72.8 8,79

Subsequent Events

Subsequent Events
	3 Months Ended Mar. 31, 2010
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	14. SUBSEQUENT EVENTS On April27, 2010, the company declared a first quarter 2010 dividend of 11 cents per share, payable on June9, 2010, to shareholders of record at the close of business on May24, 2010. Item2. Managements Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements The following Managements Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes thereto, which appear elsewhere in this Report. Except for the historical financial information, this Report may include statements that constitute forward-looking statements under the United States securities laws. Forward-looking statements include information concerning possible or assumed future results of our operations, expenses, earnings, liquidity, cash flows and capital expenditures, industry or market conditions, assets under management, acquisition activities and the effect of completed acquisitions, debt levels and our ability to obtain additional financing or make payments on our debt, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, when used in this Report, the documents incorporated by reference herein or such other documents or statements, words such as believes, expects, anticipates, intends, plans, estimates, projects, forecasts, and future or conditional verbs such as will, may, could, should, and would, and any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission. References In this Report, unless otherwise specified, the terms we, our, us, company, Invesco, and Invesco Ltd. refer to Invesco Ltd., a company incorporated in Bermuda, and its subsidiaries. Executive Overview The following executive overview summarizes the significant trends affecting our results of operations and financial condition for the periods presented. This overview and the remainder of this managements discussion and analysis supplements, and should be read in conjunction with, the Condensed Consolidated Financial Statements of Invesco Ltd. and its subsidiaries and the notes thereto contained elsewhere in this Report. Invesco is a leading independent global investment manager with offices in 20 countries. As of March31, 2010, we managed $419.6billion in assets for retail, institutional and high-net-worth investors around the world. By delivering the combined power of our distinctive worldwide investment management capabilities, I