10-Q 1 jhg-20210930x10q.htm 10-Q
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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 001-38103

Graphic

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 25, 2021, there were 170,584,530 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, 

    

2021

    

2020

ASSETS

Current assets:

Cash and cash equivalents

$

933.1

$

1,099.7

Investment securities

 

445.2

 

268.1

Fees and other receivables

 

359.5

 

373.6

OEIC and unit trust receivables

 

180.7

 

114.7

Assets of consolidated VIEs:

Cash and cash equivalents

11.5

8.4

Investment securities

245.3

214.6

Other current assets

2.0

3.5

Other current assets

122.0

111.1

Total current assets

 

2,299.3

 

2,193.7

Non-current assets:

Property, equipment and software, net

 

63.7

 

77.9

Intangible assets, net

 

2,620.9

 

2,686.3

Goodwill

 

1,370.8

 

1,383.9

Retirement benefit asset, net

189.8

191.3

Other non-current assets

 

158.7

 

157.7

Total assets

$

6,703.2

$

6,690.8

LIABILITIES

Current liabilities:

Accounts payable and accrued liabilities

$

229.4

$

232.1

Current portion of accrued compensation, benefits and staff costs

 

351.0

 

371.0

OEIC and unit trust payables

189.6

121.5

Liabilities of consolidated VIEs:

Accounts payable and accrued liabilities

 

2.9

 

3.2

Total current liabilities

 

772.9

 

727.8

Non-current liabilities:

Accrued compensation, benefits and staff costs

36.9

53.7

Long-term debt

 

311.1

 

313.3

Deferred tax liabilities, net

 

644.7

 

627.4

Retirement benefit obligations, net

4.7

4.7

Other non-current liabilities

 

125.6

 

144.3

Total liabilities

 

1,895.9

 

1,871.2

Commitments and contingencies (See Note 14)

REDEEMABLE NONCONTROLLING INTERESTS

 

145.1

 

85.8

EQUITY

Common stock, $1.50 par value; 480,000,000 shares authorized, and 170,584,530 and 180,403,176 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively

 

255.9

 

270.6

Additional paid-in-capital

3,755.4

3,815.0

Treasury shares, 1,208,917 and 2,548,063 shares held at September 30, 2021, and December 31, 2020, respectively

 

(58.1)

 

(107.3)

Accumulated other comprehensive loss, net of tax

 

(376.9)

 

(324.0)

Retained earnings

1,070.3

1,062.1

Total shareholders’ equity

 

4,646.6

 

4,716.4

Nonredeemable noncontrolling interests

 

15.6

 

17.4

Total equity

 

4,662.2

 

4,733.8

Total liabilities, redeemable noncontrolling interests and equity

$

6,703.2

$

6,690.8

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

1

JANUS HENDERSON GROUP PLC

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

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

Three months ended

Nine months ended

September 30, 

September 30, 

    

2021

    

2020

    

2021

    

2020

Revenue:

Management fees

$

564.5

$

457.7

$

1,623.5

$

1,305.0

Performance fees

 

0.6

 

7.0

 

95.0

 

38.8

Shareowner servicing fees

 

67.6

 

53.7

 

192.4

 

151.3

Other revenue

54.7

50.1

158.9

146.3

Total revenue

 

687.4

 

568.5

 

2,069.8

 

1,641.4

Operating expenses:

Employee compensation and benefits

 

166.2

154.9

 

533.2

 

456.3

Long-term incentive plans

 

35.0

42.7

 

138.3

 

125.4

Distribution expenses

142.1

118.8

404.3

335.7

Investment administration

13.0

13.1

38.7

37.4

Marketing

 

7.5

5.3

 

20.4

 

15.7

General, administrative and occupancy

 

65.5

65.6

 

194.2

 

188.8

Impairment of goodwill and intangible assets

-

-

44.4

513.7

Depreciation and amortization

 

9.8

11.6

 

30.5

 

37.6

Total operating expenses

 

439.1

 

412.0

 

1,404.0

 

1,710.6

Operating income (loss)

 

248.3

 

156.5

 

665.8

 

(69.2)

Interest expense

 

(3.2)

(3.2)

 

(9.6)

 

(9.7)

Investment gains, net

 

4.7

25.5

 

8.1

 

25.3

Other non-operating income (expenses), net

3.6

(0.9)

0.8

39.9

Income (loss) before taxes

 

253.4

 

177.9

 

665.1

 

(13.7)

Income tax provision

 

(53.3)

(40.8)

 

(176.1)

 

(2.1)

Net income (loss)

 

200.1

 

137.1

 

489.0

 

(15.8)

Net loss (income) attributable to noncontrolling interests

 

(3.3)

(18.2)

 

0.6

 

(9.4)

Net income (loss) attributable to JHG

$

196.8

$

118.9

$

489.6

$

(25.2)

Earnings (loss) per share attributable to JHG common shareholders:

Basic

$

1.15

$

0.65

$

2.82

$

(0.14)

Diluted

$

1.14

$

0.65

$

2.81

$

(0.14)

Other comprehensive income (loss), net of tax:

Foreign currency translation gains (losses)

$

(59.6)

$

97.4

$

(53.1)

$

(41.1)

Actuarial gains

 

0.1

 

0.1

 

0.4

 

0.3

Other comprehensive income (loss), net of tax

 

(59.5)

 

97.5

 

(52.7)

 

(40.8)

Other comprehensive loss (income) attributable to noncontrolling interests

 

0.8

(11.0)

 

(0.2)

 

(7.3)

Other comprehensive income (loss) attributable to JHG

$

(58.7)

$

86.5

$

(52.9)

$

(48.1)

Total comprehensive income (loss)

$

140.6

$

234.6

$

436.3

$

(56.6)

Total comprehensive loss (income) attributable to noncontrolling interests

 

(2.5)

 

(29.2)

 

0.4

 

(16.7)

Total comprehensive income (loss) attributable to JHG

$

138.1

$

205.4

$

436.7

$

(73.3)

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

2

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(U.S. Dollars in Millions)

Nine months ended

September 30, 

2021

2020

CASH FLOWS PROVIDED BY (USED FOR):

Operating activities:

Net income (loss)

$

489.0

$

(15.8)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

30.5

37.6

Impairment of goodwill and intangible assets

44.4

513.7

Deferred income taxes

24.2

(109.8)

Stock-based compensation plan expense

50.7

52.2

Impairment of right-of-use operating asset

-

1.3

Gain on sale of Geneva

-

(16.2)

Investment gains, net

(8.1)

(25.3)

Contributions to pension plans in excess of costs recognized

(1.0)

(0.4)

Contingent consideration fair value adjustment

-

(7.1)

Other, net

(7.4)

(14.7)

Changes in operating assets and liabilities:

OEIC and unit trust receivables and payables

2.1

8.5

Other assets

(14.0)

54.9

Other accruals and liabilities

3.8

(53.4)

Net operating activities

614.2

425.5

Investing activities:

Sales (purchases) of:

Investment securities, net

(196.5)

48.8

Property, equipment and software

(5.9)

(16.5)

Investment securities by consolidated seeded investment products, net

(58.0)

(64.8)

Cash paid on settled seed capital hedges, net

(12.6)

(0.1)

Dividends received from equity-method investments

1.1

0.4

Receipt of contingent consideration payments from sale of Volantis

0.7

2.2

Receipt of contingent consideration payments from sale of Geneva

5.4

1.6

Proceeds from sale of Geneva

-

38.4

Net investing activities

(265.8)

10.0

Financing activities:

Proceeds from stock-based compensation plans

10.9

(0.1)

Purchase of common stock for stock-based compensation plans

(72.1)

(48.4)

Purchase of common stock from Dai-ichi Life and share buyback program

(305.2)

(103.4)

Dividends paid to shareholders

(191.5)

(198.1)

Payment of contingent consideration

-

(13.8)

Distributions to noncontrolling interests

(0.4)

(0.5)

Third-party sales in consolidated seeded investment products, net

61.2

64.8

Principal payments under capital lease obligations

(0.3)

(0.3)

Net financing activities

(497.4)

(299.8)

Cash and cash equivalents:

Effect of foreign exchange rate changes

(14.5)

(5.7)

Net change

(163.5)

130.0

At beginning of period

1,108.1

796.5

At end of period

$

944.6

$

926.5

Supplemental cash flow information:

Cash paid for interest

$

14.6

$

14.6

Cash paid for income taxes, net of refunds

$

169.2

$

130.6

Reconciliation of cash and cash equivalents:

Cash and cash equivalents

$

933.1

$

909.0

Cash and cash equivalents held in consolidated VIEs

11.5

17.5

Total cash and cash equivalents

$

944.6

$

926.5

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

3

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, 2021

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at July 1, 2021

172.3

$

258.5

$

3,743.6

$

(67.6)

$

(318.2)

$

1,009.7

$

15.6

$

4,641.6

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)

$

(376.9)

$

1,070.3

$

15.6

$

4,662.2

    

    

    

    

    

Accumulated

    

    

    

Additional

other

Nonredeemable

Number of

Common

paid-in

Treasury

comprehensive

Retained

noncontrolling

Total

Three months ended September 30, 2020

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at July 1, 2020

183.9

$

275.8

$

3,792.1

$

(114.6)

$

(501.7)

$

959.2

$

18.1

$

4,428.9

Net income (loss)

118.9

(0.5)

 

118.4

Other comprehensive income

86.5

 

86.5

Dividends paid to shareholders ($0.36 per share)

(65.5)

 

(65.5)

Purchase of common stock for share buyback program

(2.5)

(3.7)

(46.5)

(50.2)

Fair value adjustments to redeemable noncontrolling interests

(0.3)

(0.3)

Purchase of common stock for stock-based compensation plans

(2.1)

(0.6)

 

(2.7)

Vesting of stock-based compensation plans

(4.0)

4.0

Stock-based compensation plan expense

18.1

 

18.1

Proceeds from stock-based compensation plans

(0.1)

(0.1)

Balance at September 30, 2020

181.4

$

272.1

$

3,804.0

$

(111.2)

$

(415.2)

$

965.8

$

17.6

$

4,533.1

4

JANUS HENDERSON GROUP PLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) (Continued)

(Amounts in Millions)

    

    

    

    

    

Accumulated

    

    

    

Additional

other

Nonredeemable

Number of

Common

paid-in

Treasury

comprehensive

Retained

noncontrolling

Total

Nine months ended September 30, 2021

shares

stock

capital

shares

loss

earnings

interests

equity

Balance at January 1, 2021

180.4

$

270.6

$

3,815.0

$

(107.3)

$

(324.0)

$

1,062.1

$

17.4

$

4,733.8

Net income (loss)