JANUS HENDERSON GROUP PLC [JHG] Filings

10-Q 1 jhg-20220930x10q.htm 10-Q

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, 2022

☐ 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 October 24, 2022, there were 165,657,905 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)


	September 30,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,022.9	$	1,107.3
Investment securities		284.1		451.4
Fees and other receivables		220.5		351.6
OEIC and unit trust receivables		233.9		84.4
Assets of consolidated VIEs:
Cash and cash equivalents		12.8		11.3
Investment securities		224.4		250.9
Other current assets		2.5		2.1
Other current assets		113.9		150.2
Total current assets		2,115.0		2,409.2
Non-current assets:
Property, equipment and software, net		49.0		63.3
Intangible assets, net		2,425.5		2,542.7
Goodwill		1,206.0		1,341.5
Retirement benefit asset, net		135.8		165.1
Other non-current assets		192.8		180.6
Total assets	$	6,124.1	$	6,702.4

LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities	$	214.5	$	270.8
Current portion of accrued compensation, benefits and staff costs		230.2		420.0
OEIC and unit trust payables		239.8		92.2
Liabilities of consolidated VIEs:
Accounts payable and accrued liabilities		5.1		2.6
Total current liabilities		689.6		785.6

Non-current liabilities:
Accrued compensation, benefits and staff costs		36.8		45.7
Long-term debt		308.2		310.4
Deferred tax liabilities, net		597.5		619.2
Retirement benefit obligations, net		3.8		4.8
Other non-current liabilities		89.3		134.4
Total liabilities		1,725.2		1,900.1

Commitments and contingencies (See Note 15)

REDEEMABLE NONCONTROLLING INTERESTS		153.1		163.4

EQUITY
Common stock, $1.50 par value; 480,000,000 shares authorized, and 165,657,905 and 169,046,154 shares issued and outstanding as of September 30, 2022, and December 31, 2021, respectively		248.5		253.6
Additional paid-in-capital		3,684.8		3,771.8
Treasury shares, 69,806 and 1,133,934 shares held at September 30, 2022, and December 31, 2021, respectively		(3.4)		(55.1)
Accumulated other comprehensive loss, net of tax		(747.5)		(387.0)
Retained earnings		1,060.6		1,040.2
Total shareholders’ equity		4,243.0		4,623.5
Nonredeemable noncontrolling interests		2.8		15.4
Total equity		4,245.8		4,638.9
Total liabilities, redeemable noncontrolling interests and equity	$	6,124.1	$	6,702.4

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

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

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


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenue:
Management fees	$	426.2	$	564.5	$	1,393.8	$	1,623.5
Performance fees		(13.2)		0.6		(25.0)		95.0
Shareowner servicing fees		54.0		67.6		172.7		192.4
Other revenue		45.9		54.7		146.9		158.9
Total revenue		512.9		687.4		1,688.4		2,069.8
Operating expenses:
Employee compensation and benefits		142.5		166.2		452.1		533.2
Long-term incentive plans		41.1		35.0		133.2		138.3
Distribution expenses		118.7		142.1		388.3		406.8
Investment administration		12.5		13.0		37.6		38.7
Marketing		5.6		7.5		20.8		20.4
General, administrative and occupancy		64.7		65.5		210.1		194.2
Impairment of goodwill and intangible assets		-		-		-		44.4
Depreciation and amortization		7.1		9.8		24.3		30.5
Total operating expenses		392.2		439.1		1,266.4		1,406.5
Operating income		120.7		248.3		422.0		663.3
Interest expense		(3.1)		(3.2)		(9.5)		(9.6)
Investment gains (losses), net		11.0		4.7		(130.6)		8.1
Other non-operating income, net		13.9		3.6		6.7		0.8
Income before taxes		142.5		253.4		288.6		662.6
Income tax provision		(27.9)		(53.3)		(95.3)		(175.7)
Net income		114.6		200.1		193.3		486.9
Net loss (income) attributable to noncontrolling interests		(7.0)		(3.3)		114.1		0.6
Net income attributable to JHG	$	107.6	$	196.8	$	307.4	$	487.5

Earnings per share attributable to JHG common shareholders:
Basic	$	0.65	$	1.15	$	1.84	$	2.81
Diluted	$	0.65	$	1.14	$	1.84	$	2.80
Other comprehensive income (loss), net of tax:
Foreign currency translation losses	$	(139.2)	$	(59.6)	$	(364.0)	$	(53.1)
Actuarial gains		0.1		0.1		0.3		0.4
Other comprehensive loss, net of tax		(139.1)		(59.5)		(363.7)		(52.7)
Other comprehensive loss (income) attributable to noncontrolling interests		(20.2)		0.8		3.2		(0.2)
Other comprehensive loss attributable to JHG	$	(159.3)	$	(58.7)	$	(360.5)	$	(52.9)
Total comprehensive income (loss)	$	(24.5)	$	140.6	$	(170.4)	$	434.2
Total comprehensive loss (income) attributable to noncontrolling interests		(27.2)		(2.5)		117.3		0.4
Total comprehensive income (loss) attributable to JHG	$	(51.7)	$	138.1	$	(53.1)	$	434.6

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)


	Nine months ended
	September 30,
	2022		2021
CASH FLOWS PROVIDED BY (USED FOR):
Operating activities:
Net income	$	193.3	$	486.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		24.3		30.5
Impairment of goodwill and intangible assets		-		44.4
Deferred income taxes		9.2		24.2
Stock-based compensation plan expense		68.0		50.7
Loss on sale of Intech		9.1		-
Investment losses (gains), net		130.6		(8.1)
Contributions to pension plans in excess of costs recognized		0.3		(1.0)
Other, net		(8.3)		(7.4)
Changes in operating assets and liabilities:
OEIC and unit trust receivables and payables		(1.8)		2.1
Other assets		114.7		(14.4)
Other accruals and liabilities		(212.1)		6.3
Net operating activities		327.3		614.2
Investing activities:
Sales (purchases) of:
Investment securities, net		34.8		(196.5)
Property, equipment and software		(10.3)		(5.9)
Investment securities by consolidated seeded investment products, net		21.7		(58.0)
Cash received (paid) on settled seed capital hedges, net		62.6		(12.6)
Dividends received from equity-method investments		0.5		1.1
JHG long-term note with Intech		(13.2)		-
Proceeds from sale of Intech		14.9		-
Receipt of contingent consideration payments from sale of subsidiaries		-		6.1
Net investing activities		111.0		(265.8)
Financing activities:
Proceeds from stock-based compensation plans		3.3		10.9
Purchase of common stock for stock-based compensation plans		(106.7)		(72.1)
Purchase of common stock from Dai-ichi Life and share buyback program		(98.9)		(305.2)
Dividends paid to shareholders		(194.5)		(191.5)
Distributions to noncontrolling interests		(1.0)		(0.4)
Third-party sales (purchases) in consolidated seeded investment products, net		(16.2)		61.2
Principal payments under capital lease obligations		(1.2)		(0.3)
Net financing activities		(415.2)		(497.4)
Cash and cash equivalents:
Effect of foreign exchange rate changes		(106.0)		(14.5)
Net change		(82.9)		(163.5)
At beginning of period		1,118.6		1,108.1
At end of period	$	1,035.7	$	944.6
Supplemental cash flow information:
Cash paid for interest	$	14.6	$	14.6
Cash paid for income taxes, net of refunds	$	122.1	$	169.2
Reconciliation of cash and cash equivalents:
Cash and cash equivalents	$	1,022.9	$	933.1
Cash and cash equivalents held in consolidated VIEs		12.8		11.5
Total cash and cash equivalents	$	1,035.7	$	944.6

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
Three months ended September 30, 2022	shares		stock		capital		shares		loss		earnings		interests		equity
Balance at July 1, 2022	165.7	$	248.5	$	3,673.6	$	(5.9)	$	(588.2)	$	1,017.8	$	2.8	$	4,348.6
Net income	—		—		—		—		—		107.6		—		107.6
Other comprehensive loss	—		—		—		—		(159.3)		—		—		(159.3)
Dividends paid to shareholders ($0.39 per share)	—		—		0.1		—		—		(64.8)		—		(64.7)
Purchase of common stock for stock-based compensation plans	—		—		(9.4)		(0.3)		—		—		—		(9.7)
Vesting of stock-based compensation plans	—		—		(2.8)		2.8		—		—		—		—
Stock-based compensation plan expense	—		—		22.2		—		—		—		—		22.2
Proceeds from stock-based compensation plans	—		—		1.1		—		—		—		—		1.1
Balance at September 30, 2022	165.7	$	248.5	$	3,684.8	$	(3.4)	$	(747.5)	$	1,060.6	$	2.8	$	4,245.8


									Accumulated
					Additional				other				Nonredeemable
	Number of		Common		paid-in		Treasury		comprehensive		Retained		noncontrolling		Total
Three months ended September 30, 2021	shares		stock		capital		shares		loss		earnings		interests		equity
Balance at July 1, 2021	172.3	$	258.5	$	3,743.6	$	(67.6)	$	(309.1)	$	976.3	$	15.6	$	4,617.3
Net income	—		—		—		—		—		196.8		0.1		196.9
Other comprehensive loss	—		—		—		—		(58.7)		—		—		(58.7)
Dividends paid to shareholders ($0.38 per share)	—		—		—		—		—		(64.8)		—		(64.8)
Purchase of common stock for share buyback program	(1.7)		(2.6)		—		—		—		(72.4)		—		(75.0)
Distributions to noncontrolling interests	—		—		—		—		—		—		(0.1)		(0.1)
Fair value adjustments to redeemable noncontrolling interests	—		—		—		—		—		1.0		—		1.0
Purchase of common stock for stock-based compensation plans	—		—		0.5		(0.6)		—		—		—		(0.1)
Vesting of stock-based compensation plans	—		—		(10.1)		10.1		—		—		—		—
Stock-based compensation plan expense	—		—		16.0		—		—		—		—		16.0
Proceeds from stock-based compensation plans	—		—		5.4		—		—		—		—		5.4
Balance at September 30, 2021	170.6	$	255.9	$	3,755.4	$	(58.1)	$	(367.8)	$	1,036.9	$	15.6	$	4,637.9

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

Nine months ended September 30, 2022

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at January 1, 2022

169.0

253.6

3,771.8

(55.1)

(387.0)

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