Invesco. Morgan Stanley U.S. Financials Conference. Colin D. Meadows. Loren M. Starr. February 2, Senior Managing Director, CAO

Transcription

1 Invesco Morgan Stanley U.S. Financials Conference Colin D. Meadows Senior Managing Director, CAO Loren M. Starr Senior Managing Director, CFO February 2, 2010

2 Forward-looking statements This presentation, and comments made in the associated Q&A, may include forward-looking statements. Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, AUM, acquisitions, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, words such as believes, expects, anticipates, intends, plans, estimates, projects, forecasts, and future or conditional verbs such as will, may, could, should, and would as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission. You may obtain these reports from the SEC s website at We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate. 2

3 Invesco Strategic Priorities Remain Consistent The markets are global and so is our company 1 Achieve strong investment performance Long-Term Goals Ensure clearly articulated investment disciplines aligned with client expectations underpinned by diligent oversight and rigorous quality control processes Create truly enduring investment solutions Foster a culture of investment excellence that attracts, retains and motivates top talent 2 Deliver our investment capabilities anywhere in the world to meet client needs 4 Build a high- performance organization Long-Term Goals Commit to continuous improvement and performance excellence throughout the organization Foster a true meritocracy where performance is rewarded Drive greater transparency, accountability and execution at all levels Our Aspiration: Take advantage of our world of opportunity to become the premier global investment management firm Long-Term Goals Delivering the combined power of our distinctive worldwide investment management capabilities globally Strengthen our position in prioritized developed and emerging markets Innovate to capitalize on new opportunities 3 Unlock the power of our global operating platform Long-Term Goals Act as one firm, not a collection of many Simplify our global operating model Prioritize for profitable growth Continue the diversification of our investment objectives, clients and channels 3

4 Investment Performance Overview Aggregate Performance Analysis Asset Weighted Strong overall peer group performance (asset-weighted) 58%, 69%, and 73% of assets are in the top half of peer groups for the 1, 3, and 5-year time periods as of December 31, % Assets in Top Half of Peer Group* 1-Year 3-Year 5-Year 42% 58% 31% 69% 27% 73% % Assets top half of peer group % Assets bottom half of peer group * Includes AUM of $290.7 billion (69% of total IVZ) for 1 year, $287.5 billion (68% of total IVZ) for 3 year, and billion (65% of total IVZ) for 5 year as of 12/31/09. Peer group rankings are sourced from a widely used third party ranking agency in each fund s market (Lipper, Morningstar, Russell, Mercer, evestment, Alliance, SITCA) and asset weighted in USD. Rankings are as of prior quarter end for most institutional products and prior month end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Excludes Invesco Powershares, Invesco Private Capital, WL Ross, non-discretionary direct real estate, bank loans, and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may 4 not reflect an investor s experience.

5 The Value We Deliver to Our Clients Delivering investment strategies that meet diverse needs Diversified Investment Strategies Fixed Income Asset Allocation Equities Alternatives Customized Solutions Duration Quality Sector Global/ regional/ single country Developed/ emerging Taxability Traditional balanced Target maturity Target risk Market cap Investment style Global/ regional/ single country Developed/ emerging Sector Quantitative Directional long/short (130/30) Absolute Return Market neutral GTAA Multi-Strategy Private Equity Direct (Distressed) Fund of Funds Buyout, VC, Emerging Alternative Beta Risk premia capture Real Estate Public real Estate securities Private direct US, Asian, European, Global Financial Structures CLO/CDO/CSO Opportunistic Portable Alpha Liability- Driven Investing Strategic Partnerships Delivered the Way Our Clients Want Institutional Separate Accounts Collective Trusts Mutual Funds (On/Offshore) Exchange Traded Funds (ETFs) Private Placements Sub- Advised SMA/UMA Variable Insurance Funds 5

6 Invesco PowerShares Strategic Priorities Goal: Be one of the top ETF-based product providers globally by bringing innovative and unique products to investors in the markets where we compete Strategic Priorities: Investment integrity Broad product line-up Strong relationships High-performance organization 6

7 Overview of Invesco PowerShares Invesco PowerShares $48 billion in global assets ranks it as the 4 th largest ETF provider in the U.S. and 6 th largest on a global basis. Invesco PowerShares Global AUM of $48B: PowerShares Europe $1.0B Traditional PowerShares PowerShares QQQ's & BLDRS $19.4B $14.0B $13.6B PowerShares Deutsche Bank ETFs/ ETNs U.S. ETF Net Asset Flow Leaders in 2009: Rank by Flows ETF Provider # of ETFs 12/31/09 Assets (M) 2009 US Net Flows (M) 2009 % of US Total Industry Net Flows 1 ishares 190 $372,749 $43,496 37% 2 Vanguard 46 $91,346 $29,416 25% 3 PowerShares $48,000 2 $10,300 9% 4 ProShares 90 $24,292 $8,274 7% 5 State Street 89 $188,814 $4,264 4% 1 Includes all US and International ETFs/ETns 2 AUM includes Traditional PowerShares, Deutsche Bank ETF/ETNs, BLDRS, QQQs, and Europe 7 Source: PowerShares Research Team, data as of Dec. 31, Franchise assets includes PowerShares, PowerShares QQQ/BLDRS and PowerShares Deutsche Bank, does not include ETNs

8 Invesco PowerShares Industry Leadership Uniquely positioned to meet client needs Brand strength Broadly recognized by advisors and investors Recognized industry innovator First mover in value-add and actively managed ETF market space Broad product line Tailored to meet unique client needs Strategic partnership NASDAQ QQQ product Global reach Creative Canadian solution is first to market with Fund of ETF. Products on five European exchanges with over $1B in assets Award winner Industry recipient of innovation and leadership awards from thestreet.com, Global ETF Awards, Smartmoney.com, Capital Link ETF Awards and William F. Sharpe Indexing Awards 8 Source: PowerShares Research Team, data as of Dec. 31, Franchise assets includes PowerShares, PowerShares QQQ/BLDRS and PowerShares Deutsche Bank, does not include ETNs

9 Target Allocation: PS Auton Bal Growth NFA Glbl Asset PS Auton Bal NFA Global Asset PS Auton Grwth NFA Global Asset Commodity and Currency: PS DB Energy PS DB Base Metals PS DB Agricultur PS DB Silver PS DB Oil PS DB Precious Metals PS DB Gold PS DB Commodity Index Tracking PS DB G10 Currency Harvest PS DB US Dollar Bearish PS DB US Dollar Bullish PS Global Agriculture PS Global Coal PS Global Gold and Precious Metals PS Global Steel 9 Invesco PowerShares Offers Product Diversity Diversity by asset class, style, geography and sector to help build better portfolios Fixed Income (9) Taxable Fixed Income: PS 1-30 Laddered Treasury PS EM Sovereign Debt PS High Yield Corporate Bond PS Preferred Bruild America Bond Portfolio Tax-Free Fixed Income: PS Insured CA Municipal Bond PS Insured Ntl Municipal Bond PS Insured NY Municipal Bond PS VRDO Tax-Free Weekly Asset Allocation (3) Comm/Currency (15) Intl / Global Equity (21) Regional Equity: PS FTSE RAFI Europe PS FTS RAFI Japan PS Golden Dragon Halter USX China PS India PS FTSE RAFI Asia Pacific ex-japan International / Global Equity: PS Cleantech PS DWA Dev Mkts Technical Ldrs PS DWA EM Technical Ldrs PS Dynamic Developed International Opp PS Emerging Markets Infrastructure PS FTSE RAFI Dev Mkts ex-us PS FTSE RAFI Dev Mkts ex-us Small-Mid PS FTSE RAFI Emerging Markets PS Global Biotech PS Global Clean Energy PS Global Nuclear Energy PS Global Progressive Transportation PS Global Water PS Global Wind Energy PS International Dividend Achievers PS MENA Frontiers Countries Actively Managed (5) Actively Managed: PS Active Alpha Multi-Cap PS Active Alpha Q PS Active Low Duration PS Active Mega-Cap PS Active U.S. Real Estate Actively ETNs Managed (18) (5) Broad Market: PS Dynamic Market PS Dynamic OTC PS Dynamic MagniQuant PS FTSE RAFI US 1000 PS FTSE RAFI US 1500 Small-Mid Sector Equity: PS Aerospace & Defense PS Listed Private Equity PS Dynamic Banking PS Dynamic Basic Materials Sector PS Dynamic Biotechnology & Genome PS Dynamic Building & Construction PS Dynamic Consumer Discretionary Sector PS Dynamic Consumer Staples Sector PS Dynamic Energy Exploration & Production PS Dynamic Energy Sector PS Dynamic Financials Sector PS Dynamic Food & Beverage PS Dynamic Healthcare Sector PS Dynamic Healthcare Services PS Dynamic Industrials Sector PS Dynamic Insurance PS Dynamic Leisure & Entertainment PS Dynamic Software PS Dynamic Technology Sector PS Dynamic Telecommunications & Wireless PS Dynamic Utilities PS Dynamic Media PS Dynamic Networking PS Dynamic Oil & Gas Services PS Dynamic Pharmaceuticals PS Dynamic Retail PS Dynamic Semiconductors PS Water Resources PS WilderHill Clean Energy PS WilderHill Progressive Energy PS Lux Nanotech PS Nasdaq Internet Deutsche Bank ETNs: PS DB Gold Double Long PS DB Commodity Double Long PS DB Base Metals Double Long PS DB Gold Short PS DB Commodity Long PS DB Base Metals Long PS DB Gold Double Short PS DB Commodity Double Short PS DB Base Metals Short PS DB Agriculture Double Long PS DB Commodity Short PS DB Base Metals Double Short PS DB Agriculture Long PS DB Agriculture Double Short PS DB Agriculture Short PS DB Crude Oil Long PS DB Crude Oil Short PS DB Crude Oil Double Short Domestic and Sector Equity (64) U.S. Equity Large Cap: PS Dynamic Large Cap Growth PS Dynamic Large Cap PS Dynamic Large Cap Value U.S.Equity Mid Cap: PS Dynamic Mid Cap Growth PS Dynamic Mid Cap PS Dynamic Mid Cap Value U.S. Equity Small Cap: PS Dynamic Small Cap Growth PS Dynamic Small Cap PS Dynamic Small Cap Value PS Zacks Small Cap PS Zacks Micro Cap PS FTSE Nasdaq Small Cap Equity Income: PS Buyback Achievers PS Dividend Achievers PS Financial Preferred PS High Yield Equity Div Achievers Specialized: PS DWA Technical Leaders PS Nasdaq 100 Buywrite PS NXQ PS S&P 500 Buywrite PS Value Line Industry Rotation PS Value Line Timeless Select QQQ/BLDRS: PS BLDRS Asia 50 ADR Index PS BLDRS Dev Mkts 100 ADR Index PS BLDRS EMMKTS 50 ADR Index PS BLDRS Europe 100 ADR Index PS QQQ

10 The Global ETF Landscape is Expanding Invesco PowerShares is using its global reach to create solutions in key markets such as Canada, UK, and Continental Europe P T PowerShares presence Other ETF markets Primary listings Total listings 10 Confidential - For Internal Use Only Source: PowerShares Research; Data as of March 31, 2009

11 Unlocking The Power of Our Global Operating Platform Global Investment Operations and Information Technology Platform Rationalized platforms and reduced the number of systems and streamlined processes around the globe (e.g. Single Security Master and Accounting Platforms). Global Client Communication Platform Developed a common platform to provide consistent messaging across the globe leveraging management commentary, work flow and data integration to efficiently and effectively produce quarterly reports, meeting presentations, fund fact sheets and other marketing materials. Global Equity Trading Platform Implemented a single platform that allows us to source liquidity in the various regions in which we invest real-time with local traders linked by common technologies, policies, and procedures. Functionalized Support Roles Established a single global organization to allow the sharing of best practices, creation of standards and policies, and centralization of common processes. Includes IT/Operations, Finance, Legal, HR, Compliance, among others. Global Procurement and Contract Management Improved pricing through leveraging larger global relationships. 11

12 Operational Centre in Hyderabad, India Global Enterprise Center developed in partnership with Ness Technologies in a Build-Operate-Transfer Model Build-out started Feb 2007 Operating currently with 401 staff* Operations = 164 Technology = 195 Finance/Other = 42 Transfer of ownership to Invesco in 2011 Run-rate savings of ~$13.5MM annually * As of 31 Dec

13 Building a High Performance Organization People development & communication Global performance reviews for all employees. Formal talent management process for senior leaders (3-4 layers deep) that enables the identification, development, and retention of key talent. Constant stream of communications with employees including regular employee town halls with senior leaders across locations. Consistent compensation philosophy throughout the organization. Clearly articulated plans for investment teams based on investment performance. Plans include retention component of deferred compensation in IVZ stock and investments in funds. Firm operating performance largely dictates discretionary compensation for non-investment personnel. Defined capital planning strategy Capital allocation is guided by four priorities: reinvestment in the business, acquisitions that make strategic and financial sense, steadily increasing dividends, and share repurchase. Disciplined planning process Achieves balance between reinvestment in the business and operating efficiency with clear linkage between strategic planning and the operating budget, including disciplined approach to new product launches, technology investment, and marketing initiatives. 13

14 Questions & Answers

15 Appendix

16 Distribution Channels Quarterly LT Flows Improvement in gross sales across the institutional channel led to net positive flows Retail net flows benefited from strong flows in the U.K. and U.S. Retail quarterly long-term flows ($ billions) Institutional quarterly long-term flows ($ billions) PWM quarterly long-term flows ($ billions) Gross sales Gross redemptions Net long-term sales Q08 2Q08 3Q08 4Q08 1Q08 2Q09 3Q09 4Q09 1Q08 2Q08 3Q08 4Q08 1Q08 2Q09 3Q09 4Q09 1Q08 2Q08 3Q08 4Q08 1Q08 2Q09 3Q09 4Q09 Retail quarterly flows include retail products in the U.S., Canada, U.K., Europe, Asia and our offshore product line. Institutional quarterly flows include our institutional business in the U.S., Continental Europe and Asia and exclude institutional money market. PWM quarterly flows include our high-net-worth business in the U.S. 16

17 Focusing on Investment Excellence By Investment Objective* Equities % of AUM above benchmark 1 st quartile 2 nd quartile 100% 93% US Core US Growth US Value Sector 96% 96% 94% 84% 76% 75% 20% 69% 0% 74% 40% 3% 56% 30% 9% 15% 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr UK 19% 20% 19% 20% 19% 13% 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr Canadian 83% 22% 7% 3% 7% 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr Asian 34% 35% 59% 32% 22% 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr European 100% 0% 91% 91% 2% 88% 89% 3% 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr 38% 29% 26% 1-yr 3-yr 5-yr 35% 23% 3% 2% 1-yr 3-yr 5-yr 50% 85% 85% 1-yr 3-yr 5-yr 25% 17% 19% 55% 56% 34% 1-yr 3-yr 5-yr 91% 74% 46% 1-yr 3-yr 5-yr 15% 28% 37% 48% 33% 1% 1-yr 3-yr 5-yr *AUM measured in the one, three, and five year quartile rankings represents 69%, 68%, and 65% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis represents 84%, 82%, and 75% of total Invesco AUM, respectively, as of 12/31/09. Peer group rankings are sourced from a widely used third party ranking agency in each fund s market (Lipper, Morningstar, Russell, Mercer, evestment, Alliance, SITCA) and asset weighted in USD. Rankings are as of prior quarter end for most institutional products and prior month end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Excludes Invesco PowerShares, WL Ross, Invesco Private Capital, non-discretionary direct real estate, bank loans and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. Performance assumes 17 the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience.

18 100% Focusing on Investment Excellence By Investment Objective* Equities Global 78% Global Ex US and Emerging Markets 96% 95% 97% 48% 56% Balanced 86% Balanced % of AUM above benchmark 1 st quartile 2 nd quartile 0% 100% 62% 55% 60% 48% 15% 7% 63% 32% 48% 42% 26% 10% 7% 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr Fixed Income 36% 32% 36% 16% 20% 7% 1-yr 3-yr 5-yr Money Market US Fixed Income Global Fixed Income 70% 71% 69% 83% 83% 83% 78% 62% 72% 39% 39% 83% 64% 80% 71% 73% 71% 0% 5% 12% 12% 12% 20% 31% 31% 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr 1-yr 3-yr 5-yr *AUM measured in the one, three, and five year quartile rankings represents 69%, 68%, and 65% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis represents 84%, 82%, and 75% of total Invesco AUM, respectively, as of 12/31/09. Peer group rankings are sourced from a widely used third party ranking agency in each fund s market (Lipper, Morningstar, Russell, Mercer, evestment, Alliance, SITCA) and asset weighted in USD. Rankings are as of prior quarter end for most institutional products and prior month end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Excludes Invesco PowerShares, WL Ross, Invesco Private Capital, non-discretionary direct real estate, bank loans and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. Performance 18 assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience. 20% 4% 5%

19 The Value We Deliver To Our Clients Distinctive investment capabilities globally 19 As of December 31, The listed investment centers do not all provide products or services that are available in all countries, nor are their products and services available on all platforms. Please consult Invesco for more information.

20 We Are Diversified As A Firm Delivering a diverse set of solutions to meet a broad set of global investment needs By Client Domicile By Channel By Asset Class Canada 6.8% Balanced 9.8% Money Market 19.7% U.S. 60.9% Asia 6.5% U.K. 20.0% Europe 5.8% Institutional 47.5% Retail 48.9% Private Wealth Management 3.6% Equity 41.0% Alternative 11.7% Fixed Income 17.8% ($ billions) 1-Yr Change ($ billions) 1-Yr Change ($ billions) 1-Yr Change U.S. Canada U.K. Europe Asia $257.7 $29.0 $84.5 $24.4 $ % 20.3% 49.0% 8.9% 27.9% Retail Institutional PWM $206.9 $201.0 $ % 3.3% 14.3% Equity Balanced Money Market Fixed Income Alternative $173.4 $41.5 $83.5 $75.2 $ % 26.5% (0.8)% 22.3% (3.1)% Total $ % Total $ % Total $ % 20 As of December 31, 2009

21 Assets Under Management Annual ($ billions) % Change Beginning Assets $357.2 $500.1 (28.6)% Long-Term Inflows (2.1)% Long-Term Outflows (62.2) (94.6) (34.2)% Long-Term Net flows 9.0 (21.9) N/A Net flows in Money Market Funds and Other (0.1) 8.4 N/A Market Gains/Reinvestment 46.1 (102.8) N/A Foreign Currency 10.9 (26.6) N/A Ending Assets $423.1 $ % Average Long-Term AUM (16.4)% Average Institutional Money Market AUM % 2007 $ (123.3) (3.4) $ Average AUM $388.7 $440.6 (11.8)% Net Revenue Yield (annualized)* 50.9 bps 56.5 bps (5.6)pts $ bps Net Revenue Yield less performance fees (annualized)* 50.1 bps 54.8 bps (4.7)pts 57.7 bps 21 * Refer to appendix for net revenue calculation

22 Operating Results Annual ($ millions) % Change* Investment Management Fees 2,120 2,618 (19.0)% Service and Distribution Fees Performance Fees (60.1)% Other (36.9)% Total Operating Revenues 2,627 3,308 (20.6)% Employee Compensation 951 1,056 (9.9)% Third-Party Distribution, Service and Advisory (20.8)% Marketing (26.5)% Property, Office and Technology (0.9)% General and Administrative Interest Expense (16.1)% * % change based on unrounded figures 22 ** Effective tax rate = Tax Expense / (Income before income taxes, including losses attributable to noncontrolling interests + (gains)/losses attributable to noncontrolling interests in consolidated entities) 167 (65) 266 (77) 32.9% (37.3)% Transaction & Integration 11 - N/A Total Operating Expenses 2,143 2,560 (16.3)% Operating Income (35.2)% Equity in Earnings of Unconsolidated Affiliates Interest Income (73.7)% Gains and (Losses) of Consolidated Investment Products, net (107) (58) 84.3% Other gains and Losses, net 8 (40) N/A Income Before Taxes, Including Gains and Losses Attributable to Noncontrolling Interests (45.6)% Net Income Attributable to Common Shareholders (33.0)% EPS Diluted (37.2)% Average AUM ($ billions) (11.8)% Headcount 4,890 5,325 (8.2)% 413 Effective Tax Rate** 31.5% (Gains)/Losses Attributable to Noncontrolling Interests in Consolidated Entities, net (19.5)% (42.3)% 86.5% , ,879 1,138 1, , (71) 10 1, % (213) ,475

23 Assets Under Management 2009 by Channel ($ billions) Total Retail Institutional PWM December 31, 2007* $500.1 $264.4 $218.4 $17.3 Inflows Outflows (94.6) (58.7) (31.2) (4.7) Net flows (21.9) (10.6) (11.5) 0.2 Net flows in Money Market Funds and Other Market Gains/Reinvestment (102.8) (79.2) (19.4) (4.2) Foreign currency (26.6) (25.3) (1.3) -- December 31, 2008* $357.2 $149.3 $194.6 $13.3 Inflows Outflows (62.2) (39.6) (18.1) (4.5) Net flows (2.4) 0.4 Net flows in Money Market Funds and Other (0.1) -- (0.1) -- Market Gains/Reinvestment Foreign currency December 31, 2009 $423.1 $206.9 $201.0 $15.2 * Certain beginning balances were adjusted to reflect a refinement to asset classifications 23

24 Assets Under Management 2009 by Asset Class ($ billions) Total Equity Fixed Income Balanced Money Market Alternative December * $500.1 $244.7 $68.8 $48.8 $75.4 $62.4 Inflows Outflows (94.6) (52.8) (17.4) (10.3) (3.7) (10.4) Net flows (21.9) (14.6) (3.6) (1.3) - (2.4) Net flows in Money Market Funds and Other Market Gains/Reinvestment (102.8) (84.5) (1.3) (10.2) 0.7 (7.5) Foreign currency (26.6) (18.0) (2.4) (4.5) (0.3) (1.4) December 31, 2008* $357.2 $127.6 $61.5 $32.8 $84.2 $51.1 Inflows Outflows (62.2) (31.9) (12.5) (7.9) (3.1) (6.8) Net flows (0.9) (0.3) Net flows in Money Market Funds and Other (0.1) (0.1) -- Market Gains/Reinvestment (1.7) Foreign currency December 31, 2009 $423.1 $ $41.5 $83.5 $ * Certain beginning balances were adjusted to reflect a refinement to asset classifications

25 Assets Under Management 2009 by Client Domicile ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2007* $500.1 $289.7 $46.7 $89.1 $37.7 $36.9 Inflows Outflows (94.6) (46.4) (9.7) (9.9) (16.8) (11.8) Net flows (21.9) (10.2) (6.8) 7.3 (6.8) (5.4) Net flows in Money Market Funds and Other Market Gains/Reinvestment (102.8) (51.5) (8.5) (21.5) (8.1) (13.2) Foreign currency (26.6) - (7.3) (18.4) (1.6) 0.7 December 31, 2008* $357.2 $232.5 $24.1 $56.7 $22.4 $21.5 Inflows Outflows (62.2) (31.1) (5.3) (8.4) (9.9) (7.5) Net flows (3.3) 10.1 (0.1) (0.5) Net flows in Money Market Funds and Other (0.1) (0.1) (1.4) (1.5) Market Gains/Reinvestment Foreign currency December 31, 2009 $423.1 $257.7 $29.0 $84.5 $24.4 $27.5 * Certain beginning balances were adjusted to reflect a refinement to asset classifications 25

26 Assets Under Management - Quarterly ($ billions) 4Q09 3Q09 % Change 2Q09 1Q09 4Q08 Beginning Assets $416.9 $ % $348.2 $357.2 $409.6 Long-Term Inflows Long-Term Outflows (16.8) (16.8) - (15.1) (13.6) (19.9) Long-Term Net flows (4.4) Net flows in Money Market Funds (7.7) (2.6) 196.2% Market Gains and Losses/Reinvestment (62.8)% 24.8 (16.3) (33.7) Foreign Currency Translation % 11.0 (2.0) (16.7) Ending Assets $423.1 $ % $388.7 $348.2 $357.2 Ending Long-Term AUM $343.6 $ % $299.0 $260.4 $278.0 Average Long-Term AUM % Average Institutional Money Market AUM (8.0)% Average AUM $420.3 $ % $376.5 $351.0 $356.8 Gross Revenue Yield (annualized)* 71.8bps 70.1bps 1.7Pts 67.1bps 63.1bps 71.7bps Gross Revenue Yield Less Performance Fees (annualized)* 71.2bps 69.6bps 1.6Pts 66.2bps 61.8bps 69.1bps Net Revenue Yield (annualized)** 53.7bps 52.6bps 1.1Pts 49.9bps 46.7bps 54.0bps Net Revenue Yield Less Performance Fees 53.0bps 52.1bps 0.9Pts 49.1bps 45.5bps 51.4bps (annualized)** 26 * Gross revenue yield on AUM is equal to total operating revenues divided by average AUM, excluding JV AUM. Average AUM for 4Q09, for our joint ventures in China were $3.9bn (3Q09: $3.9bn; 2Q09: $3.6bn; 1Q09: $3.2bn; 4Q08; $3.1bn). **Refer to appendix for net revenue calculation

27 Operating Results Quarterly ($ millions) 4Q09 3Q09 % Change* 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 Investment Management Fees % Service and Distribution Fees (0.4)% Performance Fees % Other (8.2)% Total Operating Revenues % Employee Compensation % Third-Party Distribution, Service and Advisory % Marketing % Property, Office and Technology (13.0)% General and Administrative % Transaction & Integration 10 1 N/A Total Operating Expenses % Operating Income % Equity in Earnings of Unconsolidated Affiliates % Interest Income % Gains and (Losses) of Consolidated Investment Products, net 26 2 N/A (48) (87) (57) 3 40 (44) Interest Expense (15) (17) (10.1)% (17) (16) (18) (18) (19) (22) Other Gains and Losses, net (0) 2 (100.0%) 10 (4) (22) (10) (1) (7) Income Before Income Taxes, Including Gains and Losses Attributable to Noncontrolling Interests % 64 (38) Effective Tax Rate** 30.3% 29.3% 32.2% 39.8% 52.9% 27.2% 32.2% 32.2% (Gains)/Losses Attributable to Noncontrolling Interests in Consolidated Entities, net (23) 1 N/A (4) (40) 44 Net Income Attributable to Common Shareholders % EPS Diluted $0.25 $ % $0.18 $0.08 $0.08 $0.33 $0.41 $0.39 Average AUM ($ billions) % Headcount 4,890 4,908 (0.4)% 5,084 5,122 5,325 5,354 5,331 5, * % change based on unrounded figures ** Effective tax rate = Tax Expense / (Income before income taxes, including losses attributable to noncontrolling interests + (gains)/losses attributable to noncontrolling interests in consolidated entities)

28 Assets Under Management by Channel ($ billions) Total Retail Institutional PWM June 30, 2009 * $388.7 $169.0 $205.9 $13.8 Long-Term Inflows Long-Term Outflows (16.8) (10.1) (5.6) (1.1) Long-Term Net flows (1.9) 0.1 Net flows in Money Market Funds (2.6) 0.0 (2.6) 0.0 Market Gains and Losses/Reinvestment Foreign Currency Translation September 30, 2009 $416.9 $197.1 $204.8 $15.0 Long-Term Inflows Long-Term Outflows (16.8) (12.1) (4.2) (0.5) Long-Term Net flows Net flows in Money Market Funds Market Gains and Losses/Reinvestment (7.7) 0.0 (7.7) Foreign Currency Translation (0.2) 0.0 December 31, 2009 $423.1 $206.9 $201.0 $15.2 * The beginning balances were adjusted to reflect certain asset reclassifications 28

29 Assets Under Management by Asset Class ($ billions) Total Equity Fixed Income Balanced Money Market Alternative June 30, 2009 $388.7 $141.1 $68.4 $36.3 $94.3 $48.6 Long-Term Inflows Long-Term Outflows (16.8) (8.5) (3.0) (1.9) (0.6) (2.8) Long-Term Net flows (0.3) (1.3) Net flows in Money Market Funds Market Gains and Losses/Reinvestment (2.6) (2.6) Foreign Currency Translation September 30, 2009 $416.9 $163.3 $73.3 $40.3 $91.5 $48.5 Long-Term Inflows Long-Term Outflows (16.8) (10.0) (3.5) (1.7) (0.6) (1.0) Long-Term Net flows (0.3) 1.0 Net flows in Money Market Fund Market Gains and Losses/Reinvestment (7.7) (7.7) Foreign Currency Translation December 31, 2009 $423.1 $173.4 $75.2 $41.5 $83.5 $49.5 * The beginning balances were adjusted to reflect certain asset reclassifications 29

30 Assets Under Management by Client Domicile ($ billions) Total U.S. Canada U.K. Continental Europe June 30, 2009 $388.7 $243.6 $25.3 $68.3 $26.6 $24.9 Inflows Outflows (16.8) (8.2) (1.2) (2.4) (3.1) (1.9) Long-Term Net flows (0.9) 3.2 (0.5) 0.2 Net flows in Money Market Funds (2.6) (1.1) (0.1) (0.2) (0.1) (1.1) Asia Market Gains and Losses/Reinvestment Foreign Currency Translation (2.1) September ($ billions) 30, 2009 $416.9 Total $254.2 U.S. Canada $28.6 $78.5 U.K. Europe $28.7 $26.9 Asia Inflows Outflows (16.8) (7.3) (1.6) (2.0) (3.7) (2.2) Long-Term Net flows (1.2) 2.9 (0.3) (0.3) Net flows in Money Market Funds (7.7) (2.3) (4.6) (0.8) Market Gains and Losses/Reinvestment Foreign Currency Translation (0.2) (0.1) December 31, 2009 $423.1 $257.7 $29.0 $84.5 $24.4 $27.5 * The beginning balances were adjusted to reflect certain asset reclassifications 30

31 Schedule of Non-GAAP Information For the three months ended For year ended Dec 31, 2009 Sep 30, 2009 Dec 31, 2007 Dec 31, 2009 Dec 31, 2008 Operating revenues, GAAP basis $747.8 $705.8 $634.4 $2,627.3 $3,307.6 Third-party distribution, service and advisory expenses (195.4) (183.5) (162.6) (693.4) (875.5) Proportional share of revenues, net of third-party distribution expenses, from joint venture investments Net revenues (1) $563.9 $534.8 $481.9 $1,978.7 $2,489.4 Operating income, GAAP basis $160.5 $151.6 $84.5 $484.3 $747.8 Proportional share of operating income from joint venture investments Net operating income (1) $167.2 $159.8 $91.5 $512.7 $787.5 Operating margin* 21.5% 21.5% 13.3% 18.4% 22.6% Net operating margin** (1) 29.7% 29.9% 19.0% 25.9% 31.6% * Operating margin is equal to operating income divided by operating revenues. ** Net operating margin is equal to net operating income divided by net revenues. (1) Net revenues, net operating income and net operating margin are non-gaap financial measures. Management believes that these measures are additional meaningful measures to evaluate our operating performance. The most comparable U.S. GAAP measures are operating revenues, operating income and operating margin. Management believes that the deduction of third-party distribution, service and advisory expenses from operating revenues in the computation of net revenues and the related computation of net operating margin provides useful information to investors because the distribution, service and advisory fee amounts represent costs that are passed through to external parties, which essentially are a share of the related revenues. Management also believes that the addition of our proportional share of revenues, net of distribution expenses, from joint venture investments in the computation of net revenues and the addition of our proportional share of operating income in the related computations of net operating income and net operating margin also provide useful information to investors, as management considers it appropriate to evaluate the contribution of its growing joint venture investment to the operations of the business. Net revenues, net operating income and net operating margin should not be considered as substitutes for any measures derived in accordance with U.S. GAAP and may not be comparable to other similarly titled measures of other 31 companies.

32 Schedule of Non-GAAP Information For the three months ended Dec 31, 2008 March 31, 2009 June 30, 2009 September 30, 2009 Operating revenues, GAAP basis $634.4 $548.6 $625.1 $705.8 Third-party distribution, service and advisory expenses (162.6) (148.2) (166.3) (183.5) Proportional share of net revenues from joint venture arrangements Net revenues (1) $481.9 $410.0 $469.9 $534.8 Operating income, GAAP basis $84.5 $61.8 $110.4 $151.6 Proportional share of operating income from joint venture investments Net operating income (1) $91.5 $67.6 $118.1 $159.8 Operating margin* 13.3% 11.3% 17.7% 21.5% Net operating margin** (1) 19.0% 16.5% 25.1% 29.9% * Operating margin is equal to operating income divided by operating revenues. ** Net operating margin is equal to net operating income divided by net revenues. 32