THOMSON REUTERS STREETEVENTS PRELIMINARY TRANSCRIPT. IVZ - Invesco Ltd. to Hold Analyst Call To Discuss The Acquisition Of Atlantic Trust By CIBC

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1 THOMSON REUTERS STREETEVENTS PRELIMINARY TRANSCRIPT IVZ - Invesco Ltd. to Hold Analyst Call To Discuss The Acquisition Of Atlantic Trust EVENT DATE/TIME: APRIL 11, 2013 / 8:30PM GMT

2 TRANSCRIPT TRANSCRIPT Editor Please stand by for realtime transcript. This presentation and comments made in the associated conference call today may include forward-looking statements. Forward-looking statements include information concerning future results of our operations, e xpenses, earnings liquidity cash flow and capital expenditures, industry or market conditions, a U N, acquisition, 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 believe expects, anticipates, intends, plans, estimates, project, forecasts and future or conditional verbs such as will, may, should could, should, and wood as well as any other statement that necessarily depends on future events are intended to identify forward-looking statements. Forward-looking statement 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 SEC. You may obtain these reports from the SEC 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. Ladies and gentlemen, thank you for standing by and welcome to the Invesco analyst call. Please remember to shut down all electronic devices including blackberries and cell phones. During the presentation all participants will be in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded. Your speaker for today is Mr. Lauren Starr. Mr. Starr, you may begin. Thank you very much and thank you to everyone who's dialed in. Today we announced the sale of Atlantic Trust to CIBC. 2

3 And what I'd like to do is take the next few minutes to walk through the strategic rationale and the financial impact of the transaction and then we can open it up to Q&A. So let's get started. So let me start out by saying that investor strategic focus continues to meet our client needs across the globe by delivering investment capabilities managed by our own investment team and leveraging the common platform. We think that's the right model for a global independent asset manager. Atlantic Trust is an excellent business and is extremely successful in what it does. And contrast to Invesco's focus it meets its client needs by leveraging an open architecture investment platform. And this is a different model but we think it's the right model for this business. Given the implications of these strategic differences to both Invesco and Atlantic Trust, the agreement to sell the business to CIBC offers compelling advantages for Atlantic Trust's clients and ultimately to the shareholders of both Invesco and CIBC. Critically we think there are strong cultural alignment between Atlantic Trust clients and CIBC and we expect of the businesses should come together easily. We believe Atlantic Trust clients will ultimately benefit from the expanded set of resources that CIBC has to offer and in addition, the opportunity set for Atlantic Trust employees should be broader and bigger as part of CIBC. From the perspective invest so at Invesco shareholders important benefits include improved allocation of allocation and resources to support future growth in the core investment management business, and the immediate ins expansion of Invesco's operating margin. While not material in the whole, we did feel it would be useful to outline the key financial measures that will be impacted by the disposition. So some background as of D ecember 31, 2012, Atlantic Trust represented 3% of Invesco's total a UN or $20.3 billion. In 2012 Atlantic Trust generated $1.9 billion of long-term net flows of roughly 15% of our total long-term flows. We anticipate that the transaction will result in the reduction of approximately $115 million of annualized net revenue, $85 million of annualized adjusted operating expenses and $0.05 of EPS for Invesco. In addition, this transaction will increase Invesco's adjusted operating margin by 50 basis p oints. It's our intention to use the $212 million of proceeds received to repurchase our shares. The buyback will help offset the dilution by $0.03 per share so the net impact after buyback will be approximately $0.02 per share annualized. And finally we expect to be able to close in the second half of And with that I'd like to now open the lines up for Q&A. Operator? 3

4 (Operator Instructions) Daniel Fannon, Jefferies. Thanks. Good afternoon. I guess, Loren, first on some of the specifics on the numbers, what is the time period you're assuming for the redeployment of the proceeds to get to the $0.03? We would expect to buy back the shares fairly soon after close. So that would be our expectation. Obviously depending on market and other timing it could vary, but we would expect to deploy it pretty quickly. Okay. And then can you discuss other factors as we look at your business over the next 12 months and you look at the margins are there other businesses or segments that are either not of scale or maybe not core as you think about longer-term that you might be exiting or what other levers are there that you think can help drive margins higher going forward? Thanks for that question, Dan. I think a good one. Importantly I'd like to say this is a bit of a distinct situation where we obviously have engaging selling a part of the business that is not something that we would be looking to do or thinking about at all. So this was really a business that was operating independently. With that said, it is absolutely our priorities to continue to focus on optimizing our business, something that we have done over the last many, many years. And we have discussed and we'll probably give even more clarity as we go into the next earnings call about how we continue to refine our business model to improve margins and improve earnings growth. Believe we do feel we are very much on the past and the scale is one element of it as you mentioned and importantly, as you are able to take some of our core products and allow them to grow on a global basis, we think that's where the greatest opportunity for margin expansion lives. 4

5 Great. Thank you. Bill Katz, Citigroup. Amtrak to New York so you're going to some background noise. I apologize. Two questions for you. First one is any kind of distribution arrangement with CIBC on the other side of this? Second question is if I'm doing the math right, looks like it's about 10 times after-tax earnings at about 1% of assets, seems to be pretty seeing multiples in my opinion for the natural benefits that I think that business brings to CIBC, any thoughts there? So on the first point in terms of distribution arrangements, there's nothing formal in place with CIBC. We have a very good obviously relationship and have had one historically we'll continue to have one going forward. But nothing specifically related to this transaction. And in terms of the math and the deal value, I'm not going to get into a discussion around the value to either party other than we do believe strongly both of us that this is absolutely the right thing for the client and the value is there for both parties, it's a win-win. But again it will be inappropriate for for me to get into the detail on what the value metrics are relative to other deals. Any recourse risk back to Invesco with assets fall -- post the transaction or is it once you're out, there's no recourse? There is fairly standard, there's certain adjustments that would happen if there was a significant loss of assets as a result of the transaction, absolutely not our expedition and obviously a lot of work is being done to make sure that the clients see the value in this transaction and understand its business as usual if not sort of a better situation. 5

6 Okay. All right. Thanks for taking the questions. No problem. James Shanahan, Edward Jones. I had a question about your disclosure hear about revenues and earnings, historically, Atlantic Trust particularly NOP segment had been a source of pretty significant performance fee revenue, does this sale actually reduce revenue and earnings volatility associated with performance fees going forward? Or perhaps does it say something about your outlook for performance fees within the NOP space over the course of the next year or two? Thanks. Thank you for that question. No. It really has nothing to do specifically with the MLP. Fantastic product it's done incredible things for clients. It certainly is part of the Atlantic Trust business and it goes with the business. It does mean of course that we will no longer have the benefit of enjoying those performance fees after the sale. But we think it's a great product and one that I clients have enjoyed Atlantic Trust clients will continue to enjoy. Michael Lipper, Lipper advisory services. 6

7 Two questions. One, do you have any covenants not to compete? And are they time sensitive? And then I have a second question. I think in terms of the actual deal elements, I think they've been fairly standard elements in terms of what we can and won't do. Obviously to the scale of this business, we are making the statement that we are not pursuing this line strategically. It's not where we are. So again I don't want to get into specific comments on what the covenants are or how they work but you can certainly assume from what I'm saying that is not our intention strategically to pursue this line of business. Okay. Second question, does this have any implications for you in your non-north American business? No. It does not. This has been a folks to business in the US, national business but it has had no elements of it going to go beyond the US. But you would be free to do something analogous -- outside of the US? It's strategically not connected to the US -- the same reasons would apply outside of the US. So again, I can't comment specifically on what the covenants suggest are going to be in place related to this deal, but I can say that our strategy is not one that would have a pursuit outside of US. Thank you and good luck. 7

8 Thank you. Ken Worthington, JPMC. You've been pretty successful across your different businesses in cross-selling. So to what extent did you either cross sell Atlantic Trust products in other areas of your business? Or sell other product areas through Atlantic Trust? And are there kind of other revenue dis-synergies that haven't been Incorporated into the numbers you gave us earlier on the call? That's a great question, Kevin. The reality is that the business has really been extremely separate. There has not been cross-selling of its product outside of -- to Invesco distribution, very limited, very, very limited. So there's probably in the MLP, $200 million or something that has been sold outside of the Atlantic Trust client base but again vice versa, very little if anything of Invesco product has been distributed into the Atlantic Trust client base. So it's pretty clean in terms of the separation. Okay. Great. Thank you very much. (Operator Instructions) Mike carrier, Bank of America Merrill Lynch. Loren, just on timing, why now? 8

9 And then when I think about you explained it very well right there, in terms of separate business and long-term maybe it makes more strategic sense and this isn't exactly new, meaning people expected this at some point, but on the flipside, granted it's a small number, but it seemed like the value of the business would have been a little bit more and if you did the buybacks it would have been neutral to earnings. So what drove it now? And maybe expectations were just maybe a little bit too high? In the past? But evaluation versus what you can do with that cash between the buyback -- it seems like even though we're talking about pennies here, it's not a big deal but it seems like it's a battle -- little bit of surprise that he went up on the accretive side. Yes. I think right now, right partner, right -- really was not something that we were out looking for -- to sell the business. I think we were really pleased to see a partner, for -- forward that made sense for the client and so that's what drove the timing and continues to drive the timing of how these are going to close. Essentially, the value was what the value was in terms of having two partners come together and figure out what made sense. And again, you can try to markets time things so you get exact maximum value and that just doesn't work in transactions like this. You just kind of go and when it's ready -- so we're very pleased with how this ended up. We think it's the right thing as I mentioned before for our clients for CIBC for us, we think this will be a long-term very positive and accretive thing for us even though short-term dilution we see it with the allocation of our resources and capital, not just what we use for buyback but in terms of future expenses and what we're committing to in terms of technology and so forth, it's far more leverageable for our core business than it would be for Atlantic Trust and that will have great value. Okay. All right. Thanks a lot. At this time we've had no further responses for questions. Well, by thanking everybody for calling and hopefully it was helpful to give a little more clarity, there's only so much you can do in a press release so again there will be more opportunity to draw -- talk about the deal when we get onto our earnings call if anybody still has any questions. 9

10 Thank you very much. Ladies and gentlemen, that concludes the conference call for today. We thank you for your participation and ask that you please disconnect your lines. [End of transcript. ] DISCLAIMER Thomson Reuters reserves the right to make changes to documents, content, or other information on this web site without obligation to notify any person of such changes. In the conference calls upon which Event Transcripts are based, companies may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks, which are more specifically identified in the companies' most recent SEC filings. Although the companies may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES THOMSON REUTERS OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. 2013, Thomson Reuters. All Rights Reserved T20:48: