Janus Henderson Group Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

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, 2020

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

for the transition period from to

Commission File Number 001-38103

JANUS HENDERSON GROUP PLC

(Exact name of registrant as specified in its charter)

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

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

201 Bishopsgate

London, United Kingdom
(Address of principal executive offices)

EC2M3AE
(Zip Code)

+44 (0) 20 7818 1818

(Registrant’s telephone number, including area code)

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

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.50 Per Share Par Value	JHG	New York Stock Exchange

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

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

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

Large Accelerated Filer ⌧ Accelerated Filer ◻ Non-Accelerated Filer ◻ Smaller Reporting Company ☐ Emerging Growth Company ☐

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

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

As of July 27, 2020, there were 183,852,855 shares of the Company’s common stock, $1.50 par value per share, issued and outstanding.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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


	June 30,		December 31,
	2020		2019
ASSETS
Current assets:
Cash and cash equivalents	$	836.6	$	733.9
Investment securities		219.1		253.5
Fees and other receivables		284.5		334.8
OEIC and unit trust receivables		194.4		131.7
Assets of consolidated VIEs:
Cash and cash equivalents		43.8		62.6
Investment securities		632.2		924.8
Other current assets		36.4		23.5
Other current assets		91.6		116.0
Total current assets		2,338.6		2,580.8
Non-current assets:
Property, equipment and software, net		82.5		84.7
Intangible assets, net		2,638.6		3,088.6
Goodwill		1,310.4		1,504.3
Retirement benefit asset, net		199.8		214.0
Other non-current assets		155.3		149.3
Total assets	$	6,725.2	$	7,621.7

LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities	$	242.2	$	246.0
Current portion of accrued compensation, benefits and staff costs		202.2		335.7
OEIC and unit trust payables		210.2		130.9
Liabilities of consolidated VIEs:
Accounts payable and accrued liabilities		81.0		57.1
Total current liabilities		735.6		769.7

Non-current liabilities:
Accrued compensation, benefits and staff costs		35.1		59.4
Long-term debt		314.8		316.2
Deferred tax liabilities, net		600.5		729.1
Retirement benefit obligations, net		4.2		4.4
Other non-current liabilities		137.4		158.8
Total liabilities		1,827.6		2,037.6

Commitments and contingencies (See Note 14)

REDEEMABLE NONCONTROLLING INTERESTS		468.7		677.9

EQUITY
Common stock ($1.50 par, 480,000,000 shares authorized and 183,852,855 and 186,975,693 shares issued and outstanding as of June 30, 2020, and December 31, 2019, respectively)		275.8		280.5
Additional paid-in-capital		3,792.1		3,828.5
Treasury shares (2,739,678 and 3,545,812 shares held, respectively)		(114.6)		(139.5)
Accumulated other comprehensive loss, net of tax		(501.7)		(367.1)
Retained earnings		959.2		1,284.1
Total shareholders’ equity		4,410.8		4,886.5
Nonredeemable noncontrolling interests		18.1		19.7
Total equity		4,428.9		4,906.2
Total liabilities, redeemable noncontrolling interests and equity	$	6,725.2	$	7,621.7

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

JANUS HENDERSON GROUP PLC

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

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


	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenue:
Management fees	$	407.7	$	446.4	$	847.3	$	888.3
Performance fees		17.2		3.5		31.8		(2.1)
Shareowner servicing fees		47.3		38.3		97.6		74.2
Other revenue		45.8		47.7		96.2		94.8
Total revenue		518.0		535.9		1,072.9		1,055.2
Operating expenses:
Employee compensation and benefits		145.8		146.5		301.4		291.5
Long-term incentive plans		49.1		49.2		82.7		97.6
Distribution expenses		104.7		101.5		216.9		203.4
Investment administration		12.6		11.1		24.3		22.9
Marketing		3.7		8.1		10.4		15.6
General, administrative and occupancy		58.0		67.7		123.2		132.9
Impairment of goodwill and intangible assets		26.4		18.0		513.7		18.0
Depreciation and amortization		11.0		15.3		26.0		30.3
Total operating expenses		411.3		417.4		1,298.6		812.2
Operating income (loss)		106.7		118.5		(225.7)		243.0
Interest expense		(3.2)		(4.2)		(6.5)		(8.3)
Investment gains (losses), net		50.3		4.8		(0.2)		18.1
Other non-operating income, net		8.6		28.5		40.8		24.6
Income (loss) before taxes		162.4		147.6		(191.6)		277.4
Income tax benefit (provision)		(30.1)		(35.3)		38.7		(65.2)
Net income (loss)		132.3		112.3		(152.9)		212.2
Net loss (income) attributable to noncontrolling interests		(29.4)		(2.9)		8.8		(8.7)
Net income (loss) attributable to JHG	$	102.9	$	109.4	$	(144.1)	$	203.5

Earnings (loss) per share attributable to JHG common shareholders:
Basic	$	0.55	$	0.56	$	(0.79)	$	1.04
Diluted	$	0.55	$	0.56	$	(0.79)	$	1.03
Other comprehensive income (loss), net of tax:
Foreign currency translation gains (losses)	$	10.6	$	(37.3)	$	(138.5)	$	(0.5)
Actuarial gains		0.1		—		0.2		—
Other comprehensive income (loss), net of tax		10.7		(37.3)		(138.3)		(0.5)
Other comprehensive loss (income) attributable to noncontrolling interests		(1.4)		0.1		3.7		—
Other comprehensive income (loss) attributable to JHG	$	9.3	$	(37.2)	$	(134.6)	$	(0.5)
Total comprehensive income (loss)	$	143.0	$	75.0	$	(291.2)	$	211.7
Total comprehensive loss (income) attributable to noncontrolling interests		(30.8)		(2.8)		12.5		(8.7)
Total comprehensive income (loss) attributable to JHG	$	112.2	$	72.2	$	(278.7)	$	203.0

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

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(U.S. Dollars in Millions)


	Six months ended
	June 30,
	2020		2019
CASH FLOWS PROVIDED BY (USED FOR):
Operating activities:
Net income (loss)	$	(152.9)	$	212.2
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		26.0		30.3
Impairment of goodwill and intangible assets		513.7		18.0
Deferred income taxes		(117.7)		(0.5)
Stock-based compensation plan expense		34.1		38.1
Impairment of right-of-use operating asset		—		4.7
Gain on sale of Geneva		(16.2)		—
Investment (gains) losses, net		0.2		(18.1)
Contributions to pension plans in excess of costs recognized		(0.2)		(3.4)
Contingent consideration adjustment		(7.1)		(20.0)
Other, net		(22.2)		(9.0)
Changes in operating assets and liabilities:
OEIC and unit trust receivables and payables		16.5		8.2
Other assets		60.4		14.5
Other accruals and liabilities		(92.1)		(192.0)
Net operating activities		242.5		83.0
Investing activities:
Proceeds from (purchase of):
Investment securities, net		77.5		57.5
Property, equipment and software		(12.4)		(14.8)
Investment securities by consolidated seeded investment products, net		(237.4)		(22.2)
Cash received (paid) on settled hedges, net		6.0		(10.7)
Dividends received from equity-method investments		0.5		0.5
Proceeds from sale of Volantis		2.2		1.2
Proceeds from sale of Geneva		38.6		—
Net investing activities		(125.0)		11.5
Financing activities:
Purchase of common stock for stock-based compensation plans		(45.7)		(38.1)
Purchase of common stock for share buyback program		(53.2)		(106.1)
Dividends paid to shareholders		(132.3)		(138.3)
Payment of contingent consideration		(13.8)		(14.1)
Distributions to noncontrolling interests		(0.5)		(0.5)
Third-party sales (redemptions) in consolidated seeded investment products, net		237.4		22.2
Principal payments under capital lease obligations		(0.5)		(0.6)
Net financing activities		(8.6)		(275.5)
Cash and cash equivalents:
Effect of foreign exchange rate changes		(25.0)		(4.6)
Net change		83.9		(185.6)
At beginning of period		796.5		916.6
At end of period	$	880.4	$	731.0
Supplemental cash flow information:
Cash paid for interest	$	7.3	$	7.3
Cash paid for income taxes, net of refunds	$	32.9	$	114.7
Reconciliation of cash and cash equivalents:
Cash and cash equivalents	$	836.6	$	707.0
Cash and cash equivalents held in consolidated VIEs		43.8		24.0
Total cash and cash equivalents	$	880.4	$	731.0

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

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(Amounts in Millions)


									Accumulated
					Additional				other				Nonredeemable
	Number of		Common		paid-in		Treasury		comprehensive		Retained		noncontrolling		Total
	shares		stock		capital		shares		loss		earnings		interests		equity
Balance at April 1, 2020	184.9	$	277.4	$	3,803.7	$	(137.9)	$	(511.0)	$	942.8	$	18.4	$	4,393.4
Net income	—		—		—		—		—		102.9		0.1		103.0
Other comprehensive loss	—		—		—		—		9.3		—		—		9.3
Dividends paid to shareholders ($0.36 per share)	—		—		0.1		—		—		(66.5)		—		(66.4)
Share buyback program	(1.0)		(1.6)		—		—		—		(20.4)		—		(22.0)
Distributions to noncontrolling interests	—		—		—		—		—		—		(0.4)		(0.4)
Fair value adjustments to redeemable noncontrolling interests	—		—		—		—		—		0.4		—		0.4
Purchase of common stock for stock-based compensation plans	—		—		(5.8)		(0.1)		—		—		—		(5.9)
Vesting of stock-based compensation plans	—		—		(23.4)		23.4		—		—		—		—
Stock-based compensation plan expense	—		—		17.5		—		—		—		—		17.5
Balance at June 30, 2020	183.9	$	275.8	$	3,792.1	$	(114.6)	$	(501.7)	$	959.2	$	18.1	$	4,428.9


									Accumulated
					Additional				other				Nonredeemable
	Number of		Common		paid-in		Treasury		comprehensive		Retained		noncontrolling		Total
	shares		stock		capital		shares		loss		earnings		interests		equity
Balance at April 1, 2019	195.2	$	292.7	$	3,802.1	$	(165.4)	$	(386.8)	$	1,309.9	$	22.6	$	4,875.1
Net income	—		—		—		—		—		109.4		0.2		109.6
Other comprehensive loss	—		—		—		—		(37.2)		—		—		(37.2)
Dividends paid to shareholders ($0.36 per share)	—		—		0.1		—		—		(68.7)		—		(68.6)
Share buyback program	(3.6)		(5.2)		—		—		—		(70.0)		—		(75.2)
Distributions to noncontrolling interests	—		—

Price	22.12	EPS	2
Shares	190	P/E	10
MCap	4,201	P/FCF	16
Net Debt	-457	EBIT	539
TEV	3,744	TEV/EBIT	7
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-29
10-Q	2020-03-31	Filed 2020-04-30
10-K	2019-12-31	Filed 2020-02-26
10-Q	2019-09-30	Filed 2019-10-30
10-Q	2019-06-30	Filed 2019-07-31
10-Q	2019-03-31	Filed 2019-05-02
10-K	2018-12-31	Filed 2019-02-26
10-Q	2018-09-30	Filed 2018-11-01
10-Q	2018-06-30	Filed 2018-07-31
10-Q	2018-03-31	Filed 2018-05-09
10-K	2017-12-31	Filed 2018-02-27
10-Q	2017-09-30	Filed 2017-11-09
10-Q	2017-06-30	Filed 2017-08-08

8-K	2020-07-29	Earnings, Exhibits
8-K	2020-05-06
8-K	2020-04-30
8-K	2020-04-30
8-K	2020-04-29
8-K	2020-04-20
8-K	2020-03-19
8-K	2020-03-06
8-K	2020-02-04
8-K	2019-10-30
8-K	2019-07-31
8-K	2019-05-02
8-K	2019-05-02
8-K	2019-03-21
8-K	2019-03-05
8-K	2019-02-25
8-K	2019-02-05
8-K	2018-12-11
8-K	2018-11-01
8-K	2018-08-06
8-K	2018-07-31
8-K	2018-05-09
8-K	2018-05-03
8-K	2018-03-22
8-K	2018-02-28
8-K	2018-02-06

EX-15.1	jhg-20200630xex15d1.htm
EX-31.1	jhg-20200630xex31d1.htm
EX-31.2	jhg-20200630xex31d2.htm
EX-32.1	jhg-20200630xex32d1.htm
EX-32.2	jhg-20200630xex32d2.htm

JHG 10Q Quarterly Report

Janus Henderson Group Earnings 2020-06-30