Janus Henderson Group Earnings 2021-03-31

Janus Henderson Group Earnings 2021-03-31

JHG 10Q Quarterly Report

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 March 31, 2021

☐ 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 April 26, 2021, there were 172,349,989 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)


	March 31,		December 31,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	826.1	$	1,099.7
Investment securities		255.5		268.1
Fees and other receivables		366.5		373.6
OEIC and unit trust receivables		237.0		114.7
Assets of consolidated VIEs:
Cash and cash equivalents		10.5		8.4
Investment securities		187.4		214.6
Other current assets		4.1		3.5
Other current assets		111.8		111.1
Total current assets		1,998.9		2,193.7
Non-current assets:
Property, equipment and software, net		74.0		77.9
Intangible assets, net		2,681.9		2,686.3
Goodwill		1,389.8		1,383.9
Retirement benefit asset, net		193.2		191.3
Other non-current assets		156.9		157.7
Total assets	$	6,494.7	$	6,690.8

LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities	$	261.7	$	232.1
Current portion of accrued compensation, benefits and staff costs		223.5		371.0
OEIC and unit trust payables		243.5		121.5
Liabilities of consolidated VIEs:
Accounts payable and accrued liabilities		5.5		3.2
Total current liabilities		734.2		727.8

Non-current liabilities:
Accrued compensation, benefits and staff costs		22.2		53.7
Long-term debt		312.6		313.3
Deferred tax liabilities, net		627.2		627.4
Retirement benefit obligations, net		4.8		4.7
Other non-current liabilities		139.2		144.3
Total liabilities		1,840.2		1,871.2

Commitments and contingencies (See Note 14)

REDEEMABLE NONCONTROLLING INTERESTS		99.3		85.8

EQUITY
Common stock, $1.50 par value; 480,000,000 shares authorized, and 172,349,989 and 180,403,176 shares issued and outstanding as of March 31, 2021, and December 31, 2020, respectively		258.5		270.6
Additional paid-in-capital		3,769.0		3,815.0
Treasury shares, 2,483,056 and 2,548,063 shares held at March 31, 2021, and December 31, 2020, respectively		(104.4)		(107.3)
Accumulated other comprehensive loss, net of tax		(321.4)		(324.0)
Retained earnings		937.7		1,062.1
Total shareholders’ equity		4,539.4		4,716.4
Nonredeemable noncontrolling interests		15.8		17.4
Total equity		4,555.2		4,733.8
Total liabilities, redeemable noncontrolling interests and equity	$	6,494.7	$	6,690.8

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
	March 31,
	2021		2020
Revenue:
Management fees	$	514.9	$	439.6
Performance fees		17.0		14.6
Shareowner servicing fees		60.8		50.3
Other revenue		51.3		50.4
Total revenue		644.0		554.9
Operating expenses:
Employee compensation and benefits		174.6		155.6
Long-term incentive plans		53.5		33.6
Distribution expenses		127.4		112.2
Investment administration		12.6		11.7
Marketing		6.2		6.7
General, administrative and occupancy		63.0		65.2
Impairment of goodwill and intangible assets		3.6		487.3
Depreciation and amortization		10.6		15.0
Total operating expenses		451.5		887.3
Operating income (loss)		192.5		(332.4)
Interest expense		(3.2)		(3.3)
Investment gains (losses), net		1.6		(50.5)
Other non-operating income (expenses), net		(0.1)		32.2
Income (loss) before taxes		190.8		(354.0)
Income tax benefit (provision)		(43.1)		68.8
Net income (loss)		147.7		(285.2)
Net loss attributable to noncontrolling interests		7.8		38.2
Net income (loss) attributable to JHG	$	155.5	$	(247.0)

Earnings (loss) per share attributable to JHG common shareholders:
Basic	$	0.88	$	(1.35)
Diluted	$	0.88	$	(1.35)
Other comprehensive income (loss), net of tax:
Foreign currency translation gains (losses)	$	3.3	$	(149.1)
Actuarial gains		0.1		0.1
Other comprehensive income (loss), net of tax		3.4		(149.0)
Other comprehensive (income) loss attributable to noncontrolling interests		(0.8)		5.1
Other comprehensive income (loss) attributable to JHG	$	2.6	$	(143.9)
Total comprehensive income (loss)	$	151.1	$	(434.2)
Total comprehensive loss attributable to noncontrolling interests		7.0		43.3
Total comprehensive income (loss) attributable to JHG	$	158.1	$	(390.9)

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)


	Three months ended
	March 31,
	2021		2020
CASH FLOWS PROVIDED BY (USED FOR):
Operating activities:
Net income (loss)	$	147.7	$	(285.2)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		10.6		15.0
Impairment of goodwill and intangible assets		3.6		487.3
Deferred income taxes		0.4		(110.8)
Stock-based compensation plan expense		17.6		16.6
Gain on sale of Geneva		—		(17.4)
Investment (gains) losses, net		(1.6)		50.5
Contingent consideration fair value adjustment		—		(7.1)
Other, net		(2.4)		(13.3)
Changes in operating assets and liabilities:
OEIC and unit trust receivables and payables		(0.3)		8.3
Other assets		4.1		57.4
Other accruals and liabilities		(153.9)		(163.4)
Net operating activities		25.8		37.9
Investing activities:
Sales (purchases) of:
Investment securities, net		51.4		98.3
Property, equipment and software		(1.6)		(8.2)
Investment securities by consolidated seeded investment products, net		(28.1)		(105.3)
Cash received (paid) on settled seed capital hedges, net		(1.8)		17.9
Dividends received from equity-method investments		1.1		0.5
Receipt of contingent consideration payments from sale of Volantis		0.8		—
Receipt of contingent consideration payments from sale of Geneva		1.6		—
Proceeds from sale of Geneva		—		38.6
Net investing activities		23.4		41.8
Financing activities:
Proceeds from stock-based compensation plans		0.8		—
Purchase of common stock for stock-based compensation plans		(61.5)		(39.8)
Purchase of common stock from Dai-ichi Life and share buyback program		(230.2)		(31.2)
Dividends paid to shareholders		(61.7)		(66.2)
Payment of contingent consideration		—		(13.8)
Distributions to noncontrolling interests		(0.1)		(0.1)
Third-party sales in consolidated seeded investment products, net		30.2		105.3
Principal payments under capital lease obligations		—		(0.2)
Net financing activities		(322.5)		(46.0)
Cash and cash equivalents:
Effect of foreign exchange rate changes		1.8		(28.0)
Net change		(271.5)		5.7
At beginning of period		1,108.1		796.5
At end of period	$	836.6	$	802.2
Supplemental cash flow information:
Cash paid for interest	$	7.3	$	7.3
Cash paid for income taxes, net of refunds	$	9.1	$	4.9
Reconciliation of cash and cash equivalents:
Cash and cash equivalents	$	826.1	$	732.5
Cash and cash equivalents held in consolidated VIEs		10.5		69.7
Total cash and cash equivalents	$	836.6	$	802.2

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 January 1, 2021	180.4	$	270.6	$	3,815.0	$	(107.3)	$	(324.0)	$	1,062.1	$	17.4	$	4,733.8
Net income	—		—		—		—		—		155.5		(1.5)		154.0
Other comprehensive income	—		—		—		—		2.6		—		—		2.6
Dividends paid to shareholders ($0.36 per share)	—		—		—		—		—		(61.7)		—		(61.7)
Purchase of common stock from Dai-ichi Life and share buyback program	(8.1)		(12.1)		—		—		—		(218.1)		—		(230.2)
Distributions to noncontrolling interests	—		—		—		—		—		—		(0.1)		(0.1)
Fair value adjustments to redeemable noncontrolling interests	—		—		—		—		—		(0.1)		—		(0.1)
Purchase of common stock for stock-based compensation plans	—		—		(61.2)		(0.3)		—		—		—		(61.5)
Vesting of stock-based compensation plans	—		—		(3.2)		3.2		—		—		—		—
Stock-based compensation plan expense	—		—		17.6		—		—		—		—		17.6
Proceeds from stock-based compensation plans	—		—		0.8		—		—		—		—		0.8
Balance at March 31, 2021	172.3	$	258.5	$	3,769.0	$	(104.4)	$	(321.4)	$	937.7	$	15.8	$	4,555.2

									Accumulated
					Additional				other				Nonredeemable
	Number of		Common		paid-in		Treasury		comprehensive		Retained		noncontrolling		Total
	shares		stock		capital		shares		loss		earnings		interests		equity
Balance at January 1, 2020	187.0	$	280.5	$	3,828.5	$	(139.5)	$	(367.1)	$	1,284.1	$	19.7	$	4,906.2
Net loss	—		—		—		—		—		(247.0)		(1.2)		(248.2)
Other comprehensive loss	—		—		—		—		(143.9)		—		—		(143.9)
Dividends paid to shareholders ($0.36 per share)	—		—		—		—		—		(66.2)		—		(66.2)
Share buyback program	(2.1)		(3.1)		—		—		—		(28.1)		—		(31.2)
Distributions to noncontrolling interests	—		—		—		—		—		—		(0.1)		(0.1)
Purchase of common stock for stock-based compensation plans	—		—		(37.0)		(2.8)		—		—		—		(39.8)
Vesting of stock-based compensation plans	—		—		(4.4)		4.4		—		—		—		—
Stock-based compensation plan expense	—		—		16.6		—		—		—		—		16.6
Balance at March 31, 2020	184.9	$	277.4	$	3,803.7	$	(137.9)	$	(511.0)	$	942.8	$	18.4	$	4,393.4

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

JANUS HENDERSON GROUP PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

In the opinion of management of Janus Henderson Group plc (“JHG,” “the Company,” “we,” “us,” “our” and similar terms), the accompanying unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to fairly state our financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP are not required for interim reporting purposes and have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the annual consolidated financial statements and notes presented in our Annual Report on Form 10-K for the year ended December 31, 2020. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying financial statements through the issuance date.

Recent Accounting Pronouncements Adopted

Income Taxes

In December 2019, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is part of the FASB’s initiative to reduce complexity in accounting standards. The ASU eliminates certain exceptions to the general principles of ASC 740, Income Taxes, and simplifies income tax accounting in several areas. We adopted the ASU, which was effective as of January 1, 2021. The adoption of this ASU did not have a material impact on our results of operations or financial position.

Note 2 — Consolidation

Variable Interest Entities

Consolidated Variable Interest Entities

Our consolidated variable interest entities (“VIEs”) as of March 31, 2021, and December 31, 2020, include certain consolidated seeded investment products in which we have an investment and act as the investment manager. The assets of these VIEs are not available to us or our creditors. We may not, under any circumstances, access cash, cash equivalents or other assets held by consolidated VIEs to use in our operating activities or otherwise. In addition, the investors in these VIEs have no recourse to the credit of JHG.

Unconsolidated Variable Interest Entities

The following table presents the carrying value of investment securities included on our Condensed Consolidated Balance Sheets pertaining to unconsolidated VIEs (in millions):


	March 31,		December 31,
	2021		2020
Unconsolidated VIEs	$	4.6	$	9.6

Our total exposure to unconsolidated VIEs represents the value of our economic ownership interest in the investment securities.

Voting Rights Entities

Consolidated Voting Rights Entities

The following table presents the balances related to consolidated voting rights entities (“VREs”) that were recorded on our Condensed Consolidated Balance Sheets, including our net interest in these products (in millions):


	March 31,		December 31,
	2021		2020
Investment securities	$	31.4	$	29.3
Cash and cash equivalents		2.1		2.8
Other current assets		0.4		0.4
Accounts payable and accrued liabilities		(0.2)		(0.1)
Total	$	33.7	$	32.4

Our total exposure to consolidated VREs represents the value of our economic ownership interest in these seeded investment products.

Unconsolidated Voting Rights Entities

The following table presents the carrying value of investment securities included on our Condensed Consolidated Balance Sheets pertaining to unconsolidated VREs (in millions):


	March 31,		December 31,
	2021		2020
Unconsolidated VREs	$	56.3	$	63.6

Our total exposure to unconsolidated VREs represents the value of our economic ownership interest in the investment securities.

Note 3 — Investment Securities

Our investment securities as of March 31, 2021, and December 31, 2020, are summarized as follows (in millions):


	March 31,		December 31,
	2021		2020
Seeded investment products:
Consolidated VIEs	$	187.4	$	214.6
Consolidated VREs		31.4		29.3
Unconsolidated VIEs and VREs		60.9		73.2
Separate accounts		61.0		63.5
Pooled investment funds		0.1		0.1
Total seeded investment products		340.8		380.7
Investments related to deferred compensation plans		96.6		96.5
Other investments		5.5		5.5
Total investment securities	$	442.9	$	482.7

Trading Securities

Net unrealized gains (losses) on investment securities held as of the three months ended March 31, 2021 and 2020, are summarized as follows (in millions):

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	2021-03-31	Filed 2021-04-29
10-K	2020-12-31	Filed 2021-02-24
10-Q	2020-09-30	Filed 2020-10-29
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	2020-10-29
8-K	2020-07-29
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-20210331xex15d1.htm
EX-31.1	jhg-20210331xex31d1.htm
EX-31.2	jhg-20210331xex31d2.htm
EX-32.1	jhg-20210331xex32d1.htm
EX-32.2	jhg-20210331xex32d2.htm

Three months ended

March 31,