10-Q 1 ivz-20210930.htm 10-Q ivz-20210930
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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 September 30, 2021
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
ivz-20210930_g1.jpg
Invesco Ltd.
(Exact Name of Registrant as Specified in Its Charter)
Bermuda98-0557567
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
1555 Peachtree Street, N.E.,Suite 1800,Atlanta,GA30309
(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 classTrading Symbol(s)Name of each exchange on which registered
Common stock, $.20 par valueIVZNew 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 filerAccelerated filerNon-accelerated filerSmaller 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 September 30, 2021, the most recent practicable date, the number of Common Shares outstanding was 461,206,517.


    



                                    
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.

2

    



                                    
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Invesco Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)

As of
$ in millions, except per share dataSeptember 30, 2021December 31, 2020
ASSETS
Cash and cash equivalents1,773.2 1,408.4 
Unsettled fund receivables237.6 109.4 
Accounts receivable720.1 741.1 
Investments906.4 826.8 
Assets of consolidated investment products (CIP):
Cash and cash equivalents of CIP536.3 301.7 
Accounts receivable and other assets of CIP273.7 175.5 
Investments of CIP8,924.2 7,910.0 
Assets held for policyholders2,232.2 7,582.1 
Prepaid assets144.8 149.2 
Other assets428.1 514.2 
Property, equipment and software, net512.5 563.8 
Intangible assets, net7,246.6 7,305.6 
Goodwill8,878.2 8,916.3 
Total assets32,813.9 36,504.1 
LIABILITIES
Accrued compensation and benefits903.2 973.7 
Accounts payable and accrued expenses1,401.7 1,920.4 
Liabilities of CIP:
Debt of CIP7,224.5 6,714.1 
Other liabilities of CIP864.9 588.6 
Policyholder payables2,232.2 7,582.1 
Unsettled fund payables237.2 98.4 
Long-term debt2,084.5 2,082.6 
Deferred tax liabilities, net1,591.1 1,523.5 
Total liabilities16,539.3 21,483.4 
Commitments and contingencies (See Note 11)
TEMPORARY EQUITY
Redeemable noncontrolling interests in consolidated entities542.6 211.8 
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 September 30, 2021 and December 31, 2020)
4,010.5 4,010.5 
Common shares ($0.20 par value; 1,050.0 million authorized; 566.1 million shares issued as of September 30, 2021 and December 31, 2020)
113.2 113.2 
Additional paid-in-capital7,660.1 7,811.4 
Treasury shares(3,047.6)(3,253.8)
Retained earnings6,821.2 6,085.0 
Accumulated other comprehensive income/(loss), net of tax(477.3)(404.5)
Total equity attributable to Invesco Ltd.15,080.1 14,361.8 
Equity attributable to nonredeemable noncontrolling interests in consolidated entities651.9 447.1 
Total permanent equity15,732.0 14,808.9 
Total liabilities, temporary and permanent equity32,813.9 36,504.1 

See accompanying notes.
3

    



                                    
Invesco Ltd.
Condensed Consolidated Statements of Income
(Unaudited)

Three months ended September 30,Nine months ended September 30,
$ in millions, except per share data2021202020212020
Operating revenues:
Investment management fees1,275.5 1,096.8 3,729.5 3,302.2 
Service and distribution fees409.1 352.7 1,191.2 1,051.2 
Performance fees4.8  22.0 8.3 
Other60.6 48.1 188.4 153.8 
Total operating revenues1,750.0 1,497.6 5,131.1 4,515.5 
Operating expenses:
Third-party distribution, service and advisory546.4 480.8 1,608.8 1,439.9 
Employee compensation476.7 444.5 1,452.9 1,321.0 
Marketing20.3 15.6 60.6 62.7 
Property, office and technology134.2 127.5 390.7 386.2 
General and administrative105.0 89.7 304.9 384.9 
Transaction, integration and restructuring(12.0)55.3 (13.3)171.4 
Amortization of intangibles15.6 15.7 47.5 46.8 
Total operating expenses1,286.2 1,229.1 3,852.1 3,812.9 
Operating income463.8 268.5 1,279.0 702.6 
Other income/(expense):
Equity in earnings of unconsolidated affiliates54.6 18.6 119.3 46.7 
Interest and dividend income1.9 2.6 3.6 11.4 
Interest expense(23.1)(33.8)(71.5)(104.9)
Other gains and losses, net(12.1)31.5 65.4 (15.0)
Other income/(expense) of CIP, net200.2 99.2 416.9 28.6 
Income before income taxes685.3 386.6 1,812.7 669.4 
Income tax provision(139.7)(91.9)(400.4)(192.7)
Net income545.6 294.7 1,412.3 476.7 
Net (income)/loss attributable to noncontrolling interests in consolidated entities(156.3)(43.8)(268.5)14.6 
Dividends declared on preferred shares(59.2)(59.2)(177.6)(177.6)
Net income attributable to Invesco Ltd.330.1 191.7 966.2 313.7 
Earnings per common share:
-basic$0.71 $0.42 $2.09 $0.68 
-diluted$0.71 $0.41 $2.08 $0.68 

See accompanying notes.

4

    



                                    
Invesco Ltd.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three months ended September 30,Nine months ended September 30,
$ in millions2021202020212020
Net income545.6 294.7 1,412.3 476.7 
Other comprehensive income/(loss), net of tax:
Currency translation differences on investments in foreign subsidiaries(108.7)167.4 (73.0)(61.4)
Other comprehensive income/(loss), net1.2 0.7 0.2 0.8 
Other comprehensive income/(loss)(107.5)168.1 (72.8)(60.6)
Total comprehensive income/(loss)438.1 462.8 1,339.5 416.1 
Comprehensive loss/(income) attributable to noncontrolling interests in consolidated entities(156.3)(43.8)(268.5)14.6 
Dividends on preferred shares(59.2)(59.2)(177.6)(177.6)
Comprehensive income/(loss) attributable to Invesco Ltd.222.6 359.8 893.4 253.1 

See accompanying notes.


5

    



                                    
Invesco Ltd.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine months ended September 30,
$ in millions20212020
Operating activities:
Net income
1,412.3 476.7
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Amortization and depreciation154.9 150.3 
Common share-based compensation expense106.0 138.2 
Other (gains)/losses, net(65.4)15.0 
Other (gains)/losses of CIP, net(323.3)61.4 
Equity in earnings of unconsolidated affiliates(119.3)(46.7)
Distributions from equity method investees43.9 29.9 
Changes in operating assets and liabilities:
(Purchase)/sale of investments by CIP, net(176.2)(36.3)
(Purchase)/sale of investments, net99.6 165.3 
(Increase)/decrease in receivables5,251.3 2,800.7 
Increase/(decrease) in payables(5,302.0)(3,091.8)
Net cash provided by/(used in) operating activities1,081.8 662.7 
Investing activities:
Purchase of property, equipment and software(73.2)(73.6)
Purchase of investments by CIP(4,795.5)(3,605.5)
Sale of investments by CIP4,321.6 2,828.3 
Purchase of investments(149.6)(116.5)
Sale of investments103.8 117.4 
Capital distributions from equity method investees13.5 22.8 
Collateral received/(posted), net (1.9)
Net cash provided by/(used in) investing activities(579.4)(829.0)
Financing activities:
Purchases of treasury shares(58.1)(40.7)
Dividends paid - preferred(177.6)(177.6)
Dividends paid - common(228.9)(285.9)
Third-party capital invested into CIP475.1 133.1 
Third-party capital distributed by CIP(351.5)(187.2)
Borrowings of debt by CIP2,752.6 1,218.8 
Repayments of debt by CIP(1,972.1)(773.4)
Settlement of forward contracts on treasury shares(309.4)(190.6)
Collateral received/(returned), net(104.1) 
Net borrowings/(repayments) under credit facility 90.0 
Payment of contingent consideration (11.8)(16.8)
Net cash provided by/(used in) financing activities14.2 (230.3)
Increase/(decrease) in cash and cash equivalents516.6 (396.6)
Foreign exchange movement on cash and cash equivalents(28.6)(5.4)
Foreign exchange movement on cash and cash equivalents of CIP(9.1)12.3
Net cash inflows/(outflows) upon consolidation/deconsolidation of CIP(8.7)9.1
Cash, cash equivalents and restricted cash, beginning of period (1)
1,839.31,701.2
Cash and cash equivalents, end of period2,309.51,320.6
Cash and cash equivalents1,773.21,066.6
Cash and cash equivalents of CIP536.3254.0
Total cash and cash equivalents per consolidated statement of cash flows2,309.51,320.6
______________________________________________________________________________________________________
(1) Restricted cash of $129.2 million as of December 31, 2020 is recorded in Other assets on the Condensed Consolidated Balance Sheets. There was no restricted cash at the end of the period for the nine months ended September 30, 2021.

See accompanying notes.
6

    



                                    
Invesco Ltd.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three months ended September 30, 2021
Equity Attributable to Invesco Ltd.
$ in millions, except per share dataPreferred SharesCommon SharesAdditional Paid-in-CapitalTreasury SharesRetained EarningsAccumulated Other Comprehensive Income/(Loss)Total Equity Attributable to Invesco Ltd.Nonredeemable Noncontrolling Interests in Consolidated EntitiesTotal Permanent EquityRedeemable Noncontrolling Interests in Consolidated Entities Temporary Equity
July 1, 20214,010.5 113.2 7,664.3 (3,080.3)6,570.1 (369.8)14,908.0 518.6 15,426.6 363.9 
Net income— — — — 389.3 — 389.3 135.8 525.1 20.5 
Other comprehensive income/(loss)— — — — — (107.5)(107.5)— (107.5)— 
Change in noncontrolling interests in consolidated entities, net
— — — — — — — (2.5)(2.5)158.2 
Dividends declared - preferred ($14.75 per share)
— — — — (59.2)— (59.2)— (59.2)— 
Dividends declared - common ($0.170 per share)
— — — — (79.0)— (79.0)— (79.0)— 
Employee common share plans:
Common share-based compensation
— — 33.2 — — — 33.2 — 33.2 — 
Vested common shares
— — (36.3)36.2 — — (0.1)— (0.1)— 
Other common share awards
— — (1.1)7.0 — — 5.9 — 5.9 — 
Purchase of common shares— — — (10.5)— — (10.5)— (10.5)— 
September 30, 20214,010.5 113.2 7,660.1 (3,047.6)6,821.2 (477.3)15,080.1 651.9 15,732.0 542.6 
Three months ended September 30, 2020
Equity Attributable to Invesco Ltd.
$ in millions, except per share dataPreferred SharesCommon SharesAdditional Paid-in-CapitalTreasury SharesRetained EarningsAccumulated Other Comprehensive Income/(Loss)Total Equity Attributable to Invesco Ltd.Nonredeemable Noncontrolling Interests in Consolidated EntitiesTotal Permanent EquityRedeemable Noncontrolling Interests in Consolidated Entities Temporary Equity
July 1, 20204,010.5 113.2 7,788.4 (3,319.1)5,825.0 (816.0)13,602.0 365.7 13,967.7 202.8 
Net income— — — — 250.9 — 250.9 32.6 283.5 11.2 
Other comprehensive income/(loss)— — — — — 168.1 168.1 — 168.1 — 
Change in noncontrolling interests in consolidated entities, net
— — — — — — — 18.3 18.3 14.2 
Dividends declared - preferred ($14.75 per share)
— — — — (59.2)— (59.2)— (59.2)— 
Dividends declared - common ($0.155 per share)
— — — — (72.2)— (72.2)— (72.2)— 
Employee common share plans:
Common share-based compensation
— — 43.0 — — — 43.0 — 43.0 — 
Vested common shares
— — (33.3)33.3 — — — — — — 
Other common share awards
— — (9.5)16.7 — — 7.2 — 7.2 — 
Purchase of common shares— — — (5.8)— — (5.8)— (5.8)— 
September 30, 20204,010.5 113.2 7,788.6 (3,274.9)5,944.5 (647.9)13,934.0 416.6 14,350.6 228.2 
7

    



                                    
.
Nine months ended September 30, 2021
Equity Attributable to Invesco Ltd.
$ in millions, except per share dataPreferred SharesCommon SharesAdditional Paid-in-CapitalTreasury SharesRetained EarningsAccumulated Other Comprehensive Income/(Loss)Total Equity Attributable to Invesco Ltd.Nonredeemable Noncontrolling Interests in Consolidated EntitiesTotal Permanent EquityRedeemable Noncontrolling Interests in Consolidated Entities Temporary Equity
January 1, 20214,010.5 113.2 7,811.4 (3,253.8)6,085.0 (404.5)14,361.8 447.1 14,808.9 211.8 
Net income— — — — 1,143.8 — 1,143.8 230.4 1,374.2 38.1 
Other comprehensive income/(loss)— — — — — (72.8)(72.8)— (72.8)— 
Change in noncontrolling interests in consolidated entities, net— — — — — — — (25.6)(25.6)292.7 
Dividends declared - preferred ($44.25 per share)
— — — — (177.6)— (177.6)— (177.6)— 
Dividends declared - common ($0.495 per share)
— — — — (230.0)— (230.0)— (230.0)— 
Employee common share plans:
Common share-based compensation— — 106.0 — — — 106.0 — 106.0 — 
Vested common shares— — (256.2)256.1 — — (0.1)— (0.1)— 
Other common share awards— — (1.1)8.2 — — 7.1 — 7.1 — 
Purchase of common shares— — — (58.1)— — (58.1)— (58.1)— 
September 30, 20214,010.5 113.2 7,660.1 (3,047.6)6,821.2 (477.3)15,080.1 651.9 15,732.0 542.6 
Nine months ended September 30, 2020
Equity Attributable to Invesco Ltd.
$ in millions, except per share dataPreferred SharesCommon SharesAdditional Paid-in-CapitalTreasury SharesRetained EarningsAccumulated Other Comprehensive Income/(Loss)Total Equity Attributable to Invesco Ltd.Nonredeemable Noncontrolling Interests in Consolidated EntitiesTotal Permanent EquityRedeemable Noncontrolling Interests in Consolidated Entities Temporary Equity
January 1, 20204,010.5 113.2 7,860.8 (3,452.5)5,917.8 (587.3)13,862.5 455.8 14,318.3 383.5 
Net income— — — — 491.3 — 491.3 (3.4)487.9 (11.2)
Other comprehensive income/(loss)— — — — — (60.6)(60.6)— (60.6)— 
Change in noncontrolling interests in consolidated entities, net
— — — — — — — (35.8)(35.8)(144.1)
Dividends declared - preferred ($44.25 per share)
— — — — (177.6)— (177.6)— (177.6)— 
Dividends declared - common ($0.620 per share)
— — — — (287.0)— (287.0)— (287.0)— 
Employee common share plans:
Common share-based compensation
— — 138.2 — — — 138.2 — 138.2 — 
Vested common shares
— — (200.3)200.3 — — — — — — 
Other common share awards
— — (10.1)18.0 — — 7.9 — 7.9 — 
Purchase of common shares— — — (40.7)— — (40.7)— (40.7)— 
September 30, 20204,010.5 113.2 7,788.6 (3,274.9)5,944.5 (647.9)13,934.0 416.6 14,350.6 228.2 
See accompanying notes
8

    



                                    
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, 2020 (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

Income Taxes. On January 1, 2021, the company adopted Accounting Standards Update 2019-12, “Simplifying Accounting for Income Taxes” (ASU 2019-12). The update simplifies various aspects related to income taxes and removes certain exceptions to the general principles in Topic 740. The company has adopted ASU 2019-12 using a prospective approach and determined that there is no material impact upon adoption of this standard.

Pending Accounting Pronouncements

None.
9

    



                                    
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 12, "Consolidated Investment Products". See the company’s most recently filed Form 10-K for additional disclosures on valuation methodology and fair value.

September 30, 2021December 31, 2020
$ in millionsFair ValueFair Value
Cash and cash equivalents1,773.2 1,408.4 
Restricted cash (1)
 129.2
Equity investments324.3 360.3 
Foreign time deposits (2)
29.1 29.9 
Assets held for policyholders (2)
2,232.2 7,582.1 
Policyholder payables(2,232.2)(7,582.1)
Total return swaps related to deferred compensation plans(8.2)5.1
Contingent consideration liability(3.4)(18.6)
____________
(1)    Restricted cash is recorded in Other assets on the Condensed Consolidated Balance Sheets.
(2)    These financial instruments are not measured at fair value on a recurring basis. 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, and are accordingly classified as Level 2 securities. 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 September 30, 2021 and December 31, 2020, respectively:

As of September 30, 2021
$ in millionsFair Value MeasurementsQuoted 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)
1,156.2 1,156.2