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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, 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 001-13908
Invesco Ltd.
(Exact Name of Registrant as Specified in Its Charter)
| | | | | | | | | | | | | | | | | |
| Bermuda | | 98-0557567 |
| (State or Other Jurisdiction of Incorporation or Organization) | | (I.R.S. Employer Identification No.) |
| | | | | |
| 1555 Peachtree Street, N.E., | Suite 1800, | Atlanta, | GA | | 30309 |
| (Address of Principal Executive Offices) | | (Zip Code) |
(404) 892-0896
(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, $.20 par value | IVZ | 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 registrant was required to file such reports), and (2) has been subject to such 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “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 June 30, 2022, the most recent practicable date, the number of Common Shares outstanding was 454,940,132.
TABLE OF CONTENTS
We include cross references to captions elsewhere in this Quarterly Report on Form 10-Q, which we refer to as this “Report,” where you can find related additional information. The following table of contents tells you where to find these captions.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Invesco Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | |
| As of |
| $ in millions, except per share data | June 30, 2022 | | December 31, 2021 |
| ASSETS | | | |
| Cash and cash equivalents | 936.8 | | | 1,896.4 | |
| | | |
| Accounts receivable | 747.4 | | | 785.0 | |
| Investments | 884.6 | | | 926.3 | |
| Assets of consolidated investment products (CIP): | | | |
| Cash and cash equivalents of CIP | 196.0 | | | 250.7 | |
| Accounts receivable and other assets of CIP | 287.9 | | | 532.6 | |
| Investments of CIP | 8,720.0 | | | 9,042.5 | |
| Assets held for policyholders | 1,067.7 | | | 1,893.6 | |
| | | |
| Other assets | 1,034.3 | | | 729.9 | |
| Property, equipment and software, net | 491.4 | | | 518.1 | |
| Intangible assets, net | 7,174.4 | | | 7,228.0 | |
| Goodwill | 8,646.2 | | | 8,882.5 | |
| Total assets | 30,186.7 | | | 32,685.6 | |
| LIABILITIES | | | |
| Accrued compensation and benefits | 558.0 | | | 1,062.3 | |
| Accounts payable and accrued expenses | 1,352.9 | | | 1,157.1 | |
| Liabilities of CIP: | | | |
| Debt of CIP | 6,731.1 | | | 7,336.1 | |
| Other liabilities of CIP | 443.0 | | | 846.3 | |
| Policyholder payables | 1,067.7 | | | 1,893.6 | |
| | | |
| Debt | 1,671.2 | | | 2,085.1 | |
| Deferred tax liabilities, net | 1,675.2 | | | 1,626.3 | |
| Total liabilities | 13,499.1 | | | 16,006.8 | |
Commitments and contingencies (See Note 12) | | | |
| TEMPORARY EQUITY | | | |
| Redeemable noncontrolling interests in consolidated entities | 892.8 | | | 510.8 | |
| PERMANENT EQUITY | | | |
| Equity attributable to Invesco Ltd.: | | | |
Preferred shares ($0.20 par value; $1,000 liquidation preference; 4.0 million authorized, issued and outstanding as of June 30, 2022 and December 31, 2021) | 4,010.5 | | | 4,010.5 | |
Common shares ($0.20 par value; 1,050.0 million authorized; 566.1 million shares issued as of June 30, 2022 and December 31, 2021) | 113.2 | | | 113.2 | |
| Additional paid-in-capital | 7,563.2 | | | 7,688.0 | |
| Treasury shares | (3,095.3) | | | (3,043.6) | |
| Retained earnings | 7,323.2 | | | 7,169.2 | |
| Accumulated other comprehensive income/(loss), net of tax | (801.1) | | | (441.5) | |
| Total equity attributable to Invesco Ltd. | 15,113.7 | | | 15,495.8 | |
| Equity attributable to nonredeemable noncontrolling interests in consolidated entities | 681.1 | | | 672.2 | |
| Total permanent equity | 15,794.8 | | | 16,168.0 | |
| Total liabilities, temporary and permanent equity | 30,186.7 | | | 32,685.6 | |
See accompanying notes.
Invesco Ltd.
Condensed Consolidated Statements of Income
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| $ in millions, except per common share data | 2022 | | 2021 | | 2022 | | 2021 |
| Operating revenues: | | | | | | | |
| Investment management fees | 1,113.5 | | | 1,247.4 | | | 2,294.0 | | | 2,454.0 | |
| Service and distribution fees | 353.8 | | | 401.0 | | | 732.8 | | | 782.1 | |
| Performance fees | 9.2 | | | 10.5 | | | 10.2 | | | 17.2 | |
| Other | 53.9 | | | 62.5 | | | 122.8 | | | 127.8 | |
| Total operating revenues | 1,530.4 | | | 1,721.4 | | | 3,159.8 | | | 3,381.1 | |
| Operating expenses: | | | | | | | |
| Third-party distribution, service and advisory | 475.0 | | | 539.6 | | | 987.6 | | | 1,062.4 | |
| Employee compensation | 407.2 | | | 487.0 | | | 840.1 | | | 976.2 | |
| Marketing | 33.8 | | | 24.5 | | | 55.5 | | | 40.3 | |
| Property, office and technology | 135.0 | | | 127.2 | | | 267.0 | | | 256.5 | |
| General and administrative | 119.7 | | | 103.3 | | | 221.9 | | | 199.9 | |
| Transaction, integration and restructuring | 0.2 | | | (47.1) | | | 35.4 | | | (1.3) | |
| Amortization of intangibles | 14.8 | | | 16.0 | | | 29.9 | | | 31.9 | |
| Total operating expenses | 1,185.7 | | | 1,250.5 | | | 2,437.4 | | | 2,565.9 | |
| Operating income | 344.7 | | | 470.9 | | | 722.4 | | | 815.2 | |
| Other income/(expense): | | | | | | | |
| Equity in earnings of unconsolidated affiliates | 24.7 | | | 37.2 | | | 58.1 | | | 64.7 | |
| Interest and dividend income | 2.1 | | | 0.4 | | | 3.3 | | | 1.7 | |
| Interest expense | (25.8) | | | (24.6) | | | (49.0) | | | (48.4) | |
| Other gains/(losses), net | (90.0) | | | 43.4 | | | (135.5) | | | 77.5 | |
| Other income/(expense) of CIP, net | 26.2 | | | 122.0 | | | 2.9 | | | 216.7 | |
| Income before income taxes | 281.9 | | | 649.3 | | | 602.2 | | | 1,127.4 | |
| Income tax provision | (63.0) | | | (154.2) | | | (145.8) | | | (260.7) | |
| | | | | | | |
| | | | | | | |
| Net income | 218.9 | | | 495.1 | | | 456.4 | | | 866.7 | |
| Net (income)/loss attributable to noncontrolling interests in consolidated entities | (38.7) | | | (67.6) | | | (19.3) | | | (112.2) | |
| Dividends declared on preferred shares | (59.2) | | | (59.2) | | | (118.4) | | | (118.4) | |
| Net income attributable to Invesco Ltd. | 121.0 | | | 368.3 | | | 318.7 | | | 636.1 | |
| | | | | | | |
| Earnings per common share: | | | | | | | |
| -basic | $0.27 | | | $0.80 | | | $0.70 | | | $1.38 | |
| -diluted | $0.26 | | | $0.79 | | | $0.69 | | | $1.37 | |
See accompanying notes.
Invesco Ltd.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, | | Six months ended June 30, |
| $ in millions | 2022 | | 2021 | | 2022 | | 2021 |
| Net income | 218.9 | | | 495.1 | | | 456.4 | | | 866.7 | |
| | | | | | | |
| Other comprehensive income/(loss), net of tax: | | | | | | | |
| Currency translation differences on investments in foreign subsidiaries | (292.9) | | | 34.9 | | | (360.1) | | | 35.7 | |
| Other comprehensive income/(loss), net of tax | 0.3 | | | 3.0 | | | 0.5 | | | (1.0) | |
| Other comprehensive income/(loss) | (292.6) | | | 37.9 | | | (359.6) | | | 34.7 | |
| | | | | | | |
| Total comprehensive income/(loss) | (73.7) | | | 533.0 | | | 96.8 | | | 901.4 | |
| | | | | | | |
| Comprehensive loss/(income) attributable to noncontrolling interests in consolidated entities | (38.7) | | | (67.6) | | | (19.3) | | | (112.2) | |
| Dividends declared on preferred shares | (59.2) | | | (59.2) | | | (118.4) | | | (118.4) | |
| Comprehensive income/(loss) attributable to Invesco Ltd. | (171.6) | | | 406.2 | | | (40.9) | | | 670.8 | |
See accompanying notes.
Invesco Ltd.
Condensed Consolidated Statements of Cash Flows
(Unaudited) | | | | | | | | | | | |
| Six months ended June 30, |
| $ in millions | 2022 | | 2021 |
| Operating activities: | | | |
Net income | 456.4 | | | 866.7 | |
| Adjustments to reconcile net income to net cash provided by/(used in) operating activities: | | | |
| Amortization and depreciation | 98.8 | | | 103.9 | |
| Common share-based compensation expense | 57.1 | | | 72.8 | |
| | | |
| Other (gains)/losses, net | 135.5 | | | (77.5) | |
| Other (gains)/losses of CIP, net | 66.7 | | | (160.8) | |
| Equity in earnings of unconsolidated affiliates | (58.1) | | | (64.7) | |
| Distributions from equity method investees | 70.3 | | | 43.0 | |
| | | |
| Changes in operating assets and liabilities: | | | |
| | | |
| (Purchase)/sale of investments by CIP, net | (299.7) | | | (135.4) | |
| (Purchase)/sale of investments, net | (25.2) | | | (20.5) | |
| (Increase)/decrease in receivables | 509.3 | | | 4,090.1 | |
| Increase/(decrease) in payables | (1,263.4) | | | (4,236.8) | |
| Net cash provided by/(used in) operating activities | (252.3) | | | 480.8 | |
| Investing activities: | | | |
| Purchase of property, equipment and software | (57.1) | | | (47.2) | |
| | | |
| Purchase of investments by CIP | (1,709.2) | | | (3,224.5) | |
| Sale of investments by CIP | 1,653.9 | | | 3,076.1 | |
| Purchase of investments | (119.9) | | | (100.6) | |
| Sale of investments | 54.9 | | | 76.8 | |
| Capital distributions from equity method investees | 16.9 | | | 4.4 | |
| | | |
| | | |
| | | |
| | | |
| Net cash inflows/(outflows) upon consolidation/deconsolidation of CIP | 4.7 | | | (8.7) | |
| Net cash provided by/(used in) investing activities | (155.8) | | | (223.7) | |
| Financing activities: | | | |
| Purchases of treasury shares | (234.4) | | | (47.6) | |
| Dividends paid - preferred | (118.4) | | | (118.4) | |
| | | |
| Dividends paid - common | (163.4) | | | (150.1) | |
| Third-party capital invested into CIP | 446.8 | | | 247.3 | |
| Third-party capital distributed by CIP | (130.3) | | | (117.1) | |
| Borrowings of debt by CIP | 84.9 | | | 2,138.6 | |
| Repayments of debt by CIP | (2.8) | | | (1,872.3) | |
| Net borrowings/(repayments) under credit facility | 184.6 | | | — | |
| Repayments of senior notes | (600.0) | | | — | |
| Settlement of forward contracts on treasury shares | — | | | (309.4) | |
| Collateral received/(returned), net | — | | | (104.1) | |
| Payment of contingent consideration | — | | | (11.8) | |
| Net cash provided by/(used in) financing activities | (533.0) | | | (344.9) | |
| Increase/(decrease) in cash and cash equivalents | (941.1) | | | (87.8) | |
| Foreign exchange movement on cash and cash equivalents | (65.4) | | (9.7) |
| Foreign exchange movement on cash and cash equivalents of CIP | (7.8) | | (4.7) |
| | | |
| Cash, cash equivalents and restricted cash, beginning of period | 2,147.1 | | 1,839.3 |
| Cash and cash equivalents, end of period | 1,132.8 | | 1,737.1 |
| | | |
| Cash and cash equivalents | 936.8 | | 1,333.0 |
| | | |
| Cash and cash equivalents of CIP | 196.0 | | 404.1 |
| Total cash and cash equivalents per condensed consolidated statement of cash flows | 1,132.8 | | 1,737.1 |
See accompanying notes.
Invesco Ltd.
Condensed Consolidated Statements of Changes in Equity
(Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, 2022 |
| Equity Attributable to Invesco Ltd. | | | | | | |
| $ in millions, except share data | Preferred Shares | | Common Shares | | Additional Paid-in-Capital | | Treasury Shares | | Retained Earnings | | Accumulated Other Comprehensive Income/(Loss) | | Total Equity Attributable to Invesco Ltd. | | Nonredeemable Noncontrolling Interests in Consolidated Entities | | Total Permanent Equity | | Redeemable Noncontrolling Interests in Consolidated Entities Temporary Equity |
| April 1, 2022 | 4,010.5 | | | 113.2 | | | 7,547.0 | | | (3,105.1) | | | 7,287.9 | | | (508.5) | | | 15,345.0 | | | 641.2 | | | 15,986.2 | | | 801.1 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Net income | — | | | — | | | — | | | — | | | 180.2 | | | — | | | 180.2 | | | 60.9 | | | 241.1 | | | (22.2) | |
| Other comprehensive income/(loss) | — | | | — | | | — | | | — | | | — | | | (292.6) | | | (292.6) | | | — | | | (292.6) | | | — | |
Change in noncontrolling interests in consolidated entities, net | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (21.0) | | | (21.0) | | | 113.9 | |
| | | | | | | | | | | | | | | | | | | |
Dividends declared - preferred ($14.75 per share) | — | | | — | | | — | | | — | | | (59.2) | | | — | | | (59.2) | | | — | | | (59.2) | | | — | |
Dividends declared - common ($0.1875 per share) | — | | | — | | | — | | | — | | | (85.7) | | | — | | | (85.7) | | | — | | | (85.7) | | | — | |
| Employee common share plans: | | | | | | | | | | | | | | | | | | | |
Common share-based compensation | — | | | — | | | 27.6 | | | — | | | — | | | — | | | 27.6 | | | — | | | 27.6 | | | — | |
Vested common shares | — | | | — | | | (11.7) | | | 11.7 | | | — | | | — | | | — | | | — | | | — | | | — | |
Other common share awards | — | | | — | | | 0.3 | | | — | | | — | | | — | | | 0.3 | | | — | | | 0.3 | | | — | |
| Purchase of common shares | — | | | — | | | — | | | (1.9) | | | — | | | — | | | (1.9) | | | — | | | (1.9) | | | — | |
| June 30, 2022 | 4,010.5 | | | 113.2 | | | 7,563.2 | | | (3,095.3) | | | 7,323.2 | | | (801.1) | | | 15,113.7 | | | 681.1 | | | 15,794.8 | | | 892.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, 2021 |
| Equity Attributable to Invesco Ltd. | | | | | | |
| $ in millions, except share data | Preferred Shares | | Common Shares | | Additional Paid-in-Capital | | Treasury Shares | | Retained Earnings | | Accumulated Other Comprehensive Income/(Loss) | | Total Equity Attributable to Invesco Ltd. | | Nonredeemable Noncontrolling Interests in Consolidated Entities | | Total Permanent Equity | | Redeemable Noncontrolling Interests in Consolidated Entities Temporary Equity |
| April 1, 2021 | 4,010.5 | | | 113.2 | | | 7,639.6 | | | (3,087.7) | | | 6,279.9 | | | (407.7) | | | 14,547.8 | | | 481.7 | | | 15,029.5 | | | 338.3 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Net income | — | | | — | | | — | | | — | | | 427.5 | | | — | | | 427.5 | | | 51.8 | | | 479.3 | | | 15.8 | |
| Other comprehensive income/(loss) | — | | | — | | | — | | | — | | | — | | | 37.9 | | | 37.9 | | | — | | | 37.9 | | | — | |
Change in noncontrolling interests in consolidated entities, net | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (14.9) | | | (14.9) | | | 9.8 | |
| | | | | | | | | | | | | | | | | | | |
Dividends declared - preferred $14.75 per share) | — | | | — | | | — | | | — | | | (59.2) | | | — | | | (59.2) | | | — | | | (59.2) | | | — | |
Dividends declared - common ($0.17 per share) | — | | | — | | | — | | | — | | | (78.1) | | | — | | | (78.1) | | | — | | | (78.1) | | | — | |
| Employee common share plans: | | | | | | | | | | | | | | | | | | | |
Common share-based compensation | — | | | — | | | 34.2 | | | — | | | — | | | — | | | 34.2 | | | — | | | 34.2 | | | — | |
Vested common shares | — | | | — | | | (9.5) | | | 9.5 | | | — | | | — | | | — | | | — | | | — | | | — | |
Other common share awards | — | | | — | | | — | | | 0.8 | | | — | | | — | | | 0.8 | | | — | | | 0.8 | | | — | |
| Purchase of common shares | — | | | — | | | — | | | (2.9) | | | — | | | — | | | (2.9) | | | — | | | (2.9) | | | — | |
| June 30, 2021 | 4,010.5 | | | 113.2 | | | 7,664.3 | | | (3,080.3) | | | 6,570.1 | | | (369.8) | | | 14,908.0 | | | 518.6 | | | 15,426.6 | | | 363.9 | |
See accompanying notes.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six months ended June 30, 2022 |
| Equity Attributable to Invesco Ltd. | | | | | | |
| $ in millions, except share data | Preferred Shares | | Common Shares | | Additional Paid-in-Capital | | Treasury Shares | | Retained Earnings | | Accumulated Other Comprehensive Income/(Loss) | | Total Equity Attributable to Invesco Ltd. | | Nonredeemable Noncontrolling Interests in Consolidated Entities | | Total Permanent Equity | | Redeemable Noncontrolling Interests in Consolidated Entities Temporary Equity |
| January 1, 2022 | 4,010.5 | | | 113.2 | | | 7,688.0 | | | (3,043.6) | | | 7,169.2 | | | (441.5) | | | 15,495.8 | | | 672.2 | | | 16,168.0 | | | 510.8 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Net income | — | | | — | | | — | | | — | | | 437.1 | | | — | | | 437.1 | | | 52.7 | | | 489.8 | | | (33.4) | |
| Other comprehensive income/(loss) | — | | | — | | | — | | | — | | | — | | | (359.6) | | | (359.6) | | | — | | | (359.6) | | | — | |
Change in noncontrolling interests in consolidated entities, net | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (43.8) | | | (43.8) | | | 415.4 | |
| | | | | | | | | | | | | | | | | | | |
Dividends declared - preferred ($29.50 per share) | — | | | — | | | — | | | — | | | (118.4) | | | — | | | (118.4) | | | — | | | (118.4) | | | — | |
Dividends declared - common ($0.3575 per share) | — | | | — | | | — | | | — | | | (164.7) | | | — | | | (164.7) | | | — | | | (164.7) | | | — | |
| Employee common share plans: | | | | | | | | | | | | | | | | | | | |
Common share-based compensation | — | | | — | | | 57.1 | | | — | | | — | | | — | | | 57.1 | | | — | | | 57.1 | | | — | |
Vested common shares | — | | | — | | | (182.7) | | | 182.7 | | | — | | | — | | | — | | | — | | | — | | | — | |
Other common share awards | — | | | — | | | 0.8 | | | — | | | — | | | — | | | 0.8 | | | — | | | 0.8 | | | — | |
| Purchase of common shares | — | | | — | | | — | | | (234.4) | | | — | | | — | | | (234.4) | | | — | | | (234.4) | | | — | |
| June 30, 2022 | 4,010.5 | | | 113.2 | | | 7,563.2 | | | (3,095.3) | | | 7,323.2 | | | (801.1) | | | 15,113.7 | | | 681.1 | | | 15,794.8 | | | 892.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six months ended June 30, 2021 |
| Equity Attributable to Invesco Ltd. | | | | | | |
| $ in millions, except share data | Preferred Shares | | Common Shares | | Additional Paid-in-Capital | | Treasury Shares | | Retained Earnings | | Accumulated Other Comprehensive Income/(Loss) | | Total Equity Attributable to Invesco Ltd. | | Nonredeemable Noncontrolling Interests in Consolidated Entities | | Total Permanent Equity | | Redeemable Noncontrolling Interests in Consolidated Entities Temporary Equity |
| January 1, 2021 | 4,010.5 | | | 113.2 | | | 7,811.4 | | | (3,253.8) | | | 6,085.0 | | | (404.5) | | | 14,361.8 | | | 447.1 | | | 14,808.9 | | | 211.8 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Net income | — | | | — | | | — | | | — | | | 754.5 | | | — | | | 754.5 | | | 94.6 | | | 849.1 | | | 17.6 | |
| Other comprehensive income/(loss) | — | | | — | | | — | | | — | | | — | | | 34.7 | | | 34.7 | | | — | | | 34.7 | | | — | |
Change in noncontrolling interests in consolidated entities, net | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (23.1) | | | (23.1) | | | 134.5 | |
| | | | | | | | | | | | | | | | | | | |
Dividends declared - preferred ($29.50 per share) | — | | | — | | | — | | | — | | | (118.4) | | | — | | | (118.4) | | | — | | | (118.4) | | | — | |
Dividends declared - common ($0.325 per share) | — | | | — | | | — | | | — | | | (151.0) | | | — | | | (151.0) | | | — | | | (151.0) | | | — | |
| Employee common share plans: | | | | | | | | | | | | | | | | | | | |
Common share-based compensation | — | | | — | | | 72.8 | | | — | | | — | | | — | | | 72.8 | | | — | | | 72.8 | | | — | |
Vested common shares | — | | | — | | | (219.9) | | | 219.9 | | | — | | | — | | | — | | | — | | | — | | | — | |
Other common share awards | — | | | — | | | — | | | 1.2 | | | — | | | — | | | 1.2 | | | — | | | 1.2 | | | — | |
| Purchase of common shares | — | | | — | | | — | | | (47.6) | | | — | | | — | | | (47.6) | | | — | | | (47.6) | | | — | |
| June 30, 2021 | 4,010.5 | | | 113.2 | | | 7,664.3 | | | (3,080.3) | | | 6,570.1 | | | (369.8) | | | 14,908.0 | | | 518.6 | | | 15,426.6 | | | 363.9 | |
See accompanying notes.
Invesco Ltd.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
1. ACCOUNTING POLICIES
Corporate Information
Invesco Ltd. (Parent) and all of its consolidated entities (collectively, the company or Invesco) provide retail and institutional clients with an array of global investment management capabilities. The company operates globally, and its sole business is investment management.
Certain disclosures included in the company’s annual report on Form 10-K for the year ended December 31, 2021 (annual report or Form 10-K) are not required to be included on an interim basis in the company’s quarterly reports on Forms 10-Q (Report). The company has condensed or omitted these disclosures. Therefore, this Report should be read in conjunction with the company’s annual report.
Basis of Accounting and Consolidation
The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with rules and regulations of the Securities and Exchange Commission and consolidate the financial statements of the Parent and all of its controlled subsidiaries. In the opinion of management, the financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair statement of the financial condition and results of operations for the periods presented. All significant intercompany transactions, balances, revenues and expenses are eliminated upon consolidation. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. Certain reclassifications have been made to prior period amounts to conform to the current period presentation.
Accounting Pronouncements Recently Adopted
None.
Pending Accounting Pronouncements
None.
2. FAIR VALUE OF ASSETS AND LIABILITIES
The fair value of financial instruments are presented in the below summary table. The fair value of financial instruments held by CIP is presented in Note 13, "Consolidated Investment Products". See the company’s most recently filed Form 10-K for additional disclosures on valuation methodology and fair value.
| | | | | | | | | | | | |
| | June 30, 2022 | | December 31, 2021 |
| $ in millions | | Fair Value | | Fair Value |
| Cash and cash equivalents | | 936.8 | | | 1,896.4 | |
| | | | |
| Equity investments | | 284.5 | | | 337.9 | |
| | | | |
Foreign time deposits (1) | | 26.6 | | | 30.4 | |
| Assets held for policyholders | | 1,067.7 | | | 1,893.6 | |
Policyholder payables (1) | | (1,067.7) | | | (1,893.6) | |
| Total return swaps related to deferred compensation plans | | (56.0) | | | 1.6 |
| | | | |
____________
(1) These financial instruments are not measured at fair value. See the most recently filed Form 10-K for additional information about the carrying and fair values of these financial instruments. Foreign time deposits are measured at cost plus accrued interest, which approximates fair value. Policyholder payables are indexed to the value of the assets held for policyholders.
The following table presents, by hierarchy levels, the carrying value of the company’s assets and liabilities, including major security type for equity and debt securities, which are measured at fair value on the company’s Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021, respectively:
| | | | | | | | | | | | | | | | | | | | | | | |
| As of June 30, 2022 |
| $ in millions | Fair Value Measurements | | Quoted Prices in Active Markets for Identical Assets
(Level 1) | | Significant Other Observable Inputs
(Level 2) | | Significant Unobservable Inputs
(Level 3) |
| Assets: | | | | | | | |
| Cash equivalents: | | | | | | | |
Money market funds (1) | 482.5 | | | 482.5 | | | — | | | — | |
Investments (2): | | | | | | | |
| Equity investments: | | | | | | | |
| Seed money | 106.2 | | | 106.2 | | | — | | | — | |
| Investments related to deferred compensation plans | 177.2 | | | 177.2 | | | — | | | — | |
| Other equity securities | 1.1 | | | 1.1 | | | — | | | — | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Assets held for policyholders (3) | 1,067.7 | | | 1,067.7 | | | — | | | — | |
| | | | | | | |
| Total | 1,834.7 | | | 1,834.7 | | | — | | | — | |
| Liabilities: | | | | | | | |
| Total return swaps related to deferred compensation plans | (56.0) | | | — | | | (56.0) | | | — | |
| | | | | | | |
| Total | (56.0) | | | — | | | (56.0) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| As of December 31, 2021 |
| $ in millions | Fair Value Measurements | | Quoted Prices in Active Markets for Identical Assets
(Level 1) | | Significant Other Observable Inputs
(Level 2) | | Significant Unobservable Inputs
(Level 3) |
| Assets: | | | | | | | |
| Cash equivalents: | | | | | | | |
Money market funds (1) | 1,270.0 | | | 1,270.0 | | | — | | | — | |
Investments (2): | | | | | | | |
| Equity investments: | | | | | | | |
| Seed money | 109.4 | | | 109.4 | | | — | | | — | |
| Investments related to deferred compensation plans | 226.6 | | | 226.6 | | | — | | | — | |
| Other equity securities | 1.9 | | | 1.9 | | | — | | | — | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Assets held for policyholders (3) | 1,893.6 | | | 1,893.6 | | | — | | | |
