Invesco third quarter 2014 results

Transcription

1 Invesco third quarter 2014 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer October 30, 2014

2 Forward-looking statements 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, expenses, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, AUM, acquisitions and divestitures, 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. 1

3 Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 2

4 Third quarter overview Strong investment performance contributed to solid operating results In spite of market volatility, maintained strong, long-term investment performance 81% of actively managed assets ahead of peers on a 3- and 5-year basis. Strong investment performance and the comprehensive range of strategies and solutions we offer to help clients achieve their desired outcomes contributed to net long-term inflows of $6 billion. Adjusted operating income 1 up 16.4% over same quarter a year ago. Adjusted operating margin 1 improved to 41.8% from 40.2% in same quarter a year ago an increase of 1.6 percentage points. Quarterly dividend of 25 cents up 11.1% from quarterly dividend paid last year reflecting strong business results. 1. Non-GAAP financial measures - See Appendix to this presentation for a reconciliation of adjusted operating income (and by calculation adjusted operating margin), to the most directly comparable U.S. GAAP financial measure. NOTE: All Non-GAAP operating results and AUM disclosures in this presentation exclude Atlantic Trust for all periods presented which was sold to CIBC on December 31, See the disclosure on the bottom of page 6 of this presentation for more information on the calculation of investment performance.

5 Summary of third quarter 2014 results Assets under management September 30,2014 AUM of $789.6 billion versus $802.4 billion at June 30, 2014 Average AUM was $801.7 billion versus $790.1 billion for the second quarter Flows Total net inflows of $2.0 billion Long-term net inflows of $6.0 billion Overall operating results* Capital management Adjusted operating income was $382 million versus $377 million in the second quarter Adjusted operating margin was 41.8% in the quarter versus 41.8% in the second quarter Adjusted diluted EPS for the quarter was $0.64 versus $0.65 in the second quarter Quarterly dividend of 25 cents per share, an increase of 11.1% versus the prior year Repurchased $50 million in common stock (1.3 million shares) 4 * Non-GAAP financial measures - See Appendix to this presentation for a reconciliation of net revenues, adjusted operating income (and by calculation adjusted operating margin), and adjusted net income (and by calculation adjusted diluted EPS) to the most directly comparable U.S. GAAP financial measure.

6 Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 5

7 Investment performance overview Strong, long-term investment performance in spite of market volatility Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 76% 81% 81% 24% 19% 19% Assets top half of peer group Assets bottom half of peer group Percent of actively managed assets in the top third of peer group* 1-year: 51% 3-year: 52% 5-year: 65% *Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds 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. Data as of 9/30/2014. Includes AUM of $478.8 billion (61% of total IVZ) for 1 year, $476.2 billion (60% of total IVZ) for three year, and $472.5 billion (60% of total IVZ) for 5 year. Peer group rankings are sourced from a widely-used third party ranking agency in each fund s market (Lipper, Morningstar, IMA, Russell, Mercer, evestment Alliance, SITCA, Value Research) 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience. 6

8 Investment performance highlights Among the firm s strongest investment performance historically U.S. Retail U.K. Retail Cross Border Retail 30% 43% 90% 70% 57% 10% % 19% 22% 96% 81% 78% % 58% 69% 82% 42% 31% Percent of AUM ranked 4 or 5 stars by Morningstar 1 Percent of AUM ranked 3 stars or less by Morningstar 1 1 Includes Morningstar ratings for open ended funds domiciled in the U.S., the U.K., Ireland and Luxembourg. The U.K. retail is represented by Invesco Perpetual s U.K. domiciled ICVC funds and excludes pensions funds. Cross Border retail is represented by Invesco s cross border UCITS funds domiciled in Ireland and Luxembourg. Excludes passive products, closed-end funds, US variable annuity underlying funds, money market funds, non-ucits funds, PowerShares ETFs, fund of funds with component funds managed by Invesco and on the UK data excludes pension funds. Morningstar does not calculate star ratings for funds less than three years since inception of oldest share class. Morningstar s star ratings are based on a risk-adjusted measure that accounts for variation in a fund s monthly performance, placing more emphasis on downward variations and rewarding consistent performance. The overall rating is derived from a weighted average of three, five and 10-year rating metrics as applicable. Star ranking in the US are on a load-waived basis, while ratings in the UK and Cross Border include the entry charge paid by investors, calculated in local currency. 7 Data as of 12/31/2004, 12/31/2009 and 9/30/14. Peer group ratings are sourced from Morningstar and asset-weighted in USD. Any reference to a rating, a ranking or an award is not a guarantee of investment performance and is not constant over time. Past performance is not a guarantee of future results.

9 Quarterly long-term flows Strong global flows driven by active capabilities Quarterly long-term flows ($ billions) Total Active Passive Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Gross flows Gross redemptions Net long-term flows 8

10 Quarterly long-term flows Strong global flows across all channels Quarterly long-term flows ($ billions) Retail (a) Institutional (b) Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Gross flows Gross redemptions Net long-term flows 9 (a) Retail AUM are distributed by the company s retail sales team and generally includes retail products in the U.S., Canada, U.K., Continental Europe, Asia and our offshore product line. Retail AUM excludes the Powershares QQQ product (b) Institutional AUM are distributed by the company s institutional sales team and generally includes our institutional investment capabilities in the U.S., Canada, U.K., Continental Europe and Asia. Institutional excludes money market

11 Third quarter highlights Strong momentum across our global business Americas US Retail gross flows up 9% from prior quarter to $17.7 billion. Flows in US driven by international growth equities, US value equities, high-yield municipal, diversified dividend and UITs. Redemption rates for US retail remain favorable to industry. Recently launched liquid alternative capabilities in the US are gaining awareness and shelf space. US IBRA net outflows have improved steadily over the past four quarters ($1.5 billion in Q4 13; $1.2 billion in Q1; $0.4 billion in Q2; $0.2 billion in Q3); focused client effort and market volatility support a trend toward positive monthly net flows. 10

12 Third quarter highlights Strong momentum across our global business Asia-Pacific Average AUM for the region increased by 6% during the quarter, from $55 billion to $58.4 billion, driven mainly by strong overall long-term flows. Continued strong net inflows in the Shinko US REIT Fund ($840 million) and the Australia Bond Fund ($290 million) in Japan. Institutional long-term net flows were positive ($1.1 billion), driven by the Asia ex- Japan equities and real estate mandates. Offshore retail net inflows increased by approximately 90% during the quarter, from $260 million to $490 million, driven mainly by the Asia Balanced Fund. Year-to-date net inflows reached $1.5 billion. EMEA Investment performance across the complex remained strong. YTD performance (through 3Q 14) for the Invesco Perpetual High Income and Income funds was strong with both funds in the top 10 of 262 funds in their peer group 1. Outflows from UK equity income are normalizing, with $1.9 billion of net withdrawals during the third quarter. Invesco Global Targeted Return (GTR) fund continues to see strong flows AUM for UK/cross border funds was $1.2 billion at the end of the quarter. EMEA long-term net flows were up $3.3 billion for the quarter. 1 Peer group is the IMA UK All Companies sector. Past performance is not a guarantee of future results. 11

13 EMEA AUM lower in 3Q due to markets and FX Thoughtfully managed transition mitigates impact to the business Ending AUM ($ billions) 3Q Q 2014 Invesco Ltd Invesco EMEA UK Equity Income AUM EMEA Ex-UK Equity Income AUM 3Q14 LT Net Flows (billions) 2Q14 LT Net Flows (billions) Change in Ending AUM (3Q14 vs. 2Q14) Invesco Ltd. +$6.0 ($6.9) (1.6%) Invesco EMEA (ex-uk Equity Income) +$5.3 +$0.3 (1.4%) UK Equity Income ($1.9) ($9.5) (9.2%) 12

14 Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 13

15 Total assets under management 3Q14 vs. 2Q14 ($ billions) 3Q-14 2Q-14 % Change Beginning Assets $802.4 $ % Long-Term Inflows % Long-Term Outflows (38.4) (49.4) (22.3)% Long-Term Net flows 6.0 (6.9) N/A Net flows in Invesco PowerShares QQQ (3.2) (3.0) 6.7% Net flows in Inst. Money Market Funds (0.8) 1.1 N/A Total Net Flows 2.0 (8.8) N/A Market Gains and Losses/Reinvestment (5.1) 19.9 N/A Foreign Currency Translation (9.7) 4.0 N/A Ending Assets $789.6 $802.4 (1.6)% Average Long-Term AUM $683.4 $ % Average Short-Term AUM* $118.3 $ % Average AUM $801.7 $ % Net Revenue Yield (annualized)** 45.6bps 45.6bps Net Revenue Yield Before Performance Fees (annualized)** 45.1bps 45.2bps * Short-term average AUM includes money market of $72.5 billion and PowerShares QQQ $45.8 billion ** Non-GAAP financial measure - See the Appendix to this presentation for a reconciliation of net revenues, adjusted operating income (and by calculation adjusted operating margin), and adjusted net income (and by calculation adjusted diluted EPS) to the most directly comparable U.S. GAAP financial 14 measure.

16 Non-GAAP operating results 3Q14 vs. 2Q14 ($ millions) 3Q-14 2Q-14 % Change Adjusted Revenues Investment Management Fees 1,071 1, % Service and Distribution Fees % Performance Fees % Other (11.3)% Third-Party Distribution, Service and Advisory Expenses (424) (414) 2.4% Adjusted Net Revenues % Adjusted Operating Expenses Employee Compensation % Marketing (11.3)% Property, Office and Technology % General and Administrative % Total Adjusted Operating Expenses % Adjusted Operating Income % Adjusted Other Income/(Expense) Equity in Earnings of Unconsolidated Affiliates % Interest and Dividend Income 3 4 (17.9)% Interest Expense (18) (18) (0.5)% Other Gains and Losses, net 2 15 (87.2)% Other income/(loss) of CSIP,net 7 8 (3.9)% Adjusted Income from continuing operations before income taxes (1.4)% Effective Tax Rate 26.7% 26.5% N/A Adjusted Net Income (1.6)% Adjusted net (income)/loss attributable to non-controlling interests (3) (4) (8.3)% in consolidated entities Adjusted Net Income attributable to common shareholders (1.5)% Adjusted diluted EPS $0.64 $0.65 (1.5)% Adjusted Operating Margin 41.8% 41.8% Average AUM ($ billions) % Headcount 6,155 6, % 15 Non-GAAP financial measures - See the Appendix to this presentation for a reconciliation of net revenues, adjusted operating income (and by calculation adjusted operating margin), and adjusted net income (and by calculation adjusted diluted EPS) to the most directly comparable U.S. GAAP financial measure.

17 Third quarter overview Strong investment performance contributed to solid operating results In spite of market volatility, maintained strong, long-term investment performance 81% of actively managed assets ahead of peers on a 3- and 5-year basis. Strong investment performance and the comprehensive range of strategies and solutions we offer to help clients achieve their desired outcomes contributed to net long-term inflows of $6 billion. Adjusted operating income 1 up 16.4% over same quarter a year ago. Adjusted operating margin 1 improved to 41.8% from 40.2% in same quarter a year ago an increase of 1.6 percentage points. Quarterly dividend of 25 cents up 11.1% from quarterly dividend paid last year reflecting strong business results. 1. Non-GAAP financial measures - See Appendix to this presentation for a reconciliation of adjusted operating income (and by calculation adjusted operating margin), to the most directly comparable U.S. GAAP financial measure. NOTE: All Non-GAAP operating results and AUM disclosures in this presentation exclude Atlantic Trust for all periods presented which was sold to CIBC on December 31, See the disclosure on the bottom of page 6 of this presentation for more information on the calculation of investment performance.

18 Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix Appendix 17

19 Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 18

20 Investment performance By investment objective (actively managed assets)* Equities U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 1 st quartile 2 nd quartile 98% 100% AUM above benchmark 82% 7% 80% 48% 3% 51% 45% 26% 8% 49% 10% 30% 82% 14% 32% 24% 8% 28% 24% 50% 55% 57% 72% 54% 25% 54% 45% 10% 14% 23% 68% 10% 10% 3% 3% 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr U.K. 100% 100% 100% 12% 100% Canadian Asian European 100% 100% 100% 100% 100% 20% 17% 96% 98% 87% 85% 28% 70% 100% 79% 87% 86% 98% 32% 80% 83% 25% 55% 58% 57% 86% 3% 0% 1-Yr 0% 3-Yr 0% 5-Yr 14% 18% 17% 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr *Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds 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. Data as of 9/30/2014. AUM measured in the one, three, and five year quartile rankings represents 61%, 60%, and 60% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis represents 72%, 70, and 69% of total Invesco AUM, respectively, as of 9/30/14. Peer group rankings are sourced from a widely-used third party ranking agency in each fund s market (Lipper, Morningstar, IMA, Russell, Mercer, evestment Alliance, SITCA, Value Research) 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience. 7% 1-Yr 3-Yr 3% 5-Yr 20%

21 Equities Global 39% Investment performance By investment objective (actively managed assets)* 100% 15% 47% Fixed income Global ex-u.s. and Emerging markets 100% 1-Yr 3-Yr 5-Yr Other Alternatives 100% 1-Yr 3-Yr 5-Yr Money market U.S. fixed income Global fixed income 100% 64% 50% 38% 1-Yr 3-Yr 5-Yr 65% 66% 87% 87% 91% 34% 72% 19% 94% 9% 9% 3% 83% 89% 6% 77% 100% 45% 31% 96% 82% 100% 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1% 95% 38% 40% 99% 90% 97% 2% 34% 61% 41% 66% 41% 1 st quartile 2 nd quartile Balanced 49% 47% 100% 1-Yr 3-Yr 5-Yr Stable value 100% AUM above benchmark 1-Yr 3-Yr 5-Yr *Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds 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. Data as of 9/30/2014. AUM measured in the one, three, and five year quartile rankings represents 61%, 60%, and 60% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis represents 72%, 70, and 69% of total Invesco AUM, respectively, as of 9/30/14. Peer group rankings are sourced from a widely-used third party ranking agency in each fund s market (Lipper, Morningstar, IMA, Russell, Mercer, evestment Alliance, SITCA, Value Research) 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience. 63% 91% 21% 10% 76% 41% 22% 43% 45% 39% 26% 54% 65% 27% 72% 92% 4% 98% 100% 100% 100% 16% 23% 38% 6% 10% 100% 77% 84%

22 We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 4% 12% 67% 13% 67% 23% 9% 33% 49% 7% 10% 6% ($ billions) 1-Yr Change ($ billions) 1-Yr Change ($ billions) 1-Yr Change U.S. Canada U.K. Europe Asia $532.1 $26.8 $101.5 $70.9 $ % 1.5% (10.3) 37.4% 12.3% Retail Institutional $532.2 $ % 1.5% Equity Balanced Money Market Fixed Income Alternative $386.3 $51.5 $76.6 $179.2 $ % (3.7)% (5.5)% 3.9% 12.5% Total $ % Total $ % Total $ % As of September 30,

23 Non-GAAP operating results quarterly ($ millions) 3Q-14 2Q-14 % Change* 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 Investment Management Fees 1,071 1, % Service and Distribution Fees % Performance Fees % Other (11.3)% Third-party distribution, service and advisory expense (424) (414) 2.4% (409) (400) (384) (369) (346) (336) Total Operating Revenues % Employee Compensation % Marketing (11.3)% Property, Office and Technology % General and Administrative % Adjusted Operating Expenses % Adjusted Operating Income % Equity in Earnings of Unconsolidated Affiliates % Interest and Dividend Income 3 4 (17.9)% Interest Expense (18) (18) (0.5)% (19) (15) (10) (10) (10) (13) Other Gains and Losses, net 2 15 (87.2)% (1) (1) - Other income/(loss) of CSIP, net 7 8 (3.9)% 8 4 (1) Adjusted Income from Continuing Operations before income taxes and minority interest (1.4)% Effective Tax Rate** 26.7% 26.5% N/A 27.0% 25.4% 26.6% 27.1% 26.6% 24.8% Adjusted Net Income (1.6)% Adjusted net (income)/loss attributable to noncontrolling interests in consolidated entities (3) (4) (8.3)% (3) Adjusted Net Income Attributable to Common Shareholders (1.5)% Adjusted Diluted EPS $0.64 $0.65 (1.5)% $0.60 $0.58 $0.55 $0.50 $0.50 $0.42 * % change based on unrounded figures ** Effective tax rate = Adjusted tax expense / Adjusted income from continuing operations before taxes. See Reconciliation of US GAAP results to non- 22 GAAP results in this appendix

24 US GAAP operating results quarterly ($ millions) 3Q-14 2Q-14 % Change* 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 Investment Management Fees 1,047 1, % Service and Distribution Fees % Performance Fees % Other (12.8)% Total Operating Revenues 1,311 1, % 1,270 1,225 1,172 1,136 1,112 1,047 Employee Compensation % Third-Party Distribution, Service and Advisory % Marketing (11.9)% Property, Office and Technology % General and Administrative % Transaction & Integration - - N/A Total Operating Expenses % 1, Operating Income (7.1)% Equity in Earnings of Unconsolidated Affiliates % Interest and Dividend Income 3 3 (16.1)% Interest Expense (18) (18) (0.5)% (19) (15) (10) (10) (10) (13) Other Gains and Losses, net (1) 16 N/A 7 (19) (21) Other income/(loss) of CSIP,net 7 8 (3.9)% 8 4 (1) Interest Income of Consolidated Investment Products % Interest Expense of Consolidated Investment Products (38) (30) 23.8% (30) (27) (34) (31) (33) (34) Other Gains and (Losses) of Consolidated Investment Products, net - 37 (99.7)% (2) (21) (28) Income from continuing operations before income taxes (18.1)% Effective Tax Rate** 27.3% 25.3% N/A 29.9% 21.9% 27.1% 28.6% 30.6% 32.2% Income from continuing operations, net of taxes (20.3)% Income/(loss) from discontinued operations, net of taxes (1) - N/A (2) 66 (1) (5) 4 11 Net Income (20.6)% Net (Income)/Loss Attributable to Noncontrolling Interests in Consolidated Entities 4 (42) N/A (19) (43) (21) (1) Net Income Attributable to Common Shareholders (6.7)% Diluted EPS from continuing operations 0.59 $0.63 (6.3)% $0.43 $0.50 $0.51 $0.46 $0.49 $0.33 Diluted EPS from discontinued operations $- $- N/A $- $ ($0.01) $0.01 $0.02 Total diluted $0.59 $0.63 (6.3)% $0.43 $0.64 $0.51 $0.45 $0.49 $0.35 * % change based on unrounded figures 23 ** Effective tax rate = Tax expense / Income from continuing operations before income taxes and minority interest

25 Total assets under management quarterly ($ billions) 3Q-14 2Q-14 % Change 1Q-14 4Q-13 3Q-13 Beginning Assets $802.4 $ % $778.7 $745.5 $705.6 Long-Term Inflows % Long-Term Outflows (38.4) (49.4) (22.3)% (43.7) (44.8) (36.8) Long-Term Net flows 6.0 (6.9) N/A Net flows in Invesco PowerShares QQQ (3.2) (3.0) 6.7% (1.3) Net flows in Inst. Money Market Funds (0.8) 1.1 N/A (6.1) Total Net Flows 2.0 (8.8) N/A (0.9) Market Gains and Losses/Reinvestment (5.1) 19.9 N/A Foreign Currency Translation (9.7) 4.0 N/A Ending Assets $789.6 $802.4 (1.6)% $787.3 $778.7 $745.5 Average Long-Term AUM $683.4 $ % $659.7 $643.5 $616.2 Average Short-Term AUM $118.3 $ % $119.9 $118.2 $113.2 Average AUM $801.7 $ % $779.6 $761.7 $729.4 Gross Revenue Yield (annualized)* 65.8bps 65.7bps 65.6bps 64.7bps 64.6bps Gross Revenue Yield Less Performance Fees (annualized)* 65.4bps 65.4bps 64.0bps 64.3bps 64.3bps Net Revenue Yield (annualized)** 45.6bps 45.6bps 45.6bps 45.0bps 44.8bps Net Revenue Yield Less Performance Fees (annualized)** 45.1bps 45.2bps 43.8bps 44.4bps 44.3bps * Gross revenue yield on AUM is equal to total operating revenues divided by average AUM, excluding JV AUM. Average AUM for 3Q14, for our joint ventures in China were $5.1bn (2Q14:$4.7bn;1Q14:$5.1bn; 4Q13:$4.8bn;3Q13:$4.0bn;2Q13:$3.6bn) **Net Revenue Yield on AUM is equal to net revenues divided by average AUM including JV AUM. Average AUM for 3Q14, for our JV in China were $5.1bn (2Q14:$4.7bn;1Q14:$5.1bn;4Q13:$4.8bn;3Q13:$4.0bn;2Q13:$3.6bn) 24

26 Total assets under management by asset class ($ billions) Total Equity Fixed Income Balanced Money Market Alternative March 31, 2014 $787.3 $388.0 $177.0 $54.6 $76.1 $91.6 Long-Term Inflows Long-Term Outflows (49.4) (29.3) (6.2) (8.4) (0.7) (4.8) Long-Term Net flows (6.9) (7.9) 2.2 (4.1) (0.1) 3.0 Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Fund Market Gains and Losses/Reinvestment (3.0) (3.0) Foreign Currency Translation June 30, 2014 $802.4 $394.2 $181.9 $52.6 $77.1 $96.6 Long-Term Inflows Long-Term Outflows (38.4) (19.8) (9.0) (3.0) (0.9) (5.7) Long-Term Net flows (0.7) Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Fund Market Gains and Losses/Reinvestment (3.2) (3.2) (0.8) (0.8) - (5.1) (1.2) (0.5) (1.4) 0.1 (2.1) Foreign Currency Translation (9.7) (5.8) (1.5) (1.3) - (1.1) September 30, 2014 $789.6 $386.3 $179.2 $51.5 $76.6 $

27 Total assets under management by asset class ($ billions) Total Equity Fixed Income Balanced Money Market Alternative September 30, 2013 $745.5 $353.2 $172.4 $53.5 $81.1 $85.3 Long-Term Inflows Long-Term Outflows (44.8) (24.7) (8.9) (4.6) (0.9) (5.7) Long-Term Net flows (1.7) (1.2) (0.1) 2.5 Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Fund Market Gains and Losses/Reinvestment Foreign Currency Translation (0.2) December 31, 2013 $778.7 $383.1 $171.7 $53.3 $82.7 $87.9 Long-Term Inflows Long-Term Outflows (43.7) (26.2) (6.7) (4.4) (1.0) (5.4) Long-Term Net flows (0.2) 2.0 Net flows in Invesco PowerShares QQQ (1.3) (1.3) Net flows in Inst. Money Market Fund Market Gains and Losses/Reinvestment (6.1) (6.1) (0.3) 1.6 Foreign Currency Translation (0.1) March 31, 2014 $787.3 $388.0 $177.0 $54.6 $76.1 $

28 Total assets under management by channel ($ billions) Total Retail Institutional March 31, 2014 $787.3 $534.6 $252.7 Long-Term Inflows Long-Term Outflows (49.4) (44.5) (4.9) Long-Term Net flows (6.9) (8.2) 1.3 Net flows in Invesco PowerShares QQQ (3.0) (3.0) - Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment Foreign Currency Translation June 30, 2014 $802.4 $544.8 $257.6 Long-Term Inflows Long-Term Outflows (38.4) (30.0) (8.4) Long-Term Net flows Net flows in Invesco PowerShares QQQ (3.2) (3.2) - Net flows in Inst. Money Market Funds (0.8) - (0.8) Market Gains and Losses/Reinvestment (5.1) (7.0) 1.9 Foreign Currency Translation (9.7) (7.2) (2.5) September 30, 2014 $789.6 $532.2 $

29 Total assets under management by channel ($ billions) Total Retail Institutional September 30, 2013 $745.5 $492.0 $253.5 Long-Term Inflows Long-Term Outflows (44.8) (36.1) (8.7) Long-Term Net flows 1.0 (0.3) 1.3 Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment Foreign Currency Translation (0.5) December 31, 2013 $778.7 $519.6 $259.1 Long-Term Inflows Long-Term Outflows (43.7) (32.0) (11.7) Long-Term Net flows (1.1) Net flows in Invesco PowerShares QQQ (1.3) (1.3) - Net flows in Inst. Money Market Funds (6.1) - (6.1) Market Gains and Losses/Reinvestment Foreign Currency Translation 0.1 (0.1) 0.2 March 31, 2014 $787.3 $534.6 $

30 Total assets under management by client domicile ($ billions) Total U.S. Canada U.K. Continental Europe Asia March 31, 2014 $787.3 $526.1 $27.1 $115.9 $63.4 $54.8 Long-Term Inflows Long-Term Outflows (49.4) (19.5) (1.1) (19.9) (5.3) (3.6) Long-Term Net flows (6.9) 0.2 (0.2) (13.8) Net flows in Invesco PowerShares QQQ (3.0) (3.0) Net flows in Inst. Money Market Funds 1.1 (0.7) Market Gains and Losses/Reinvestment Foreign Currency Translation June 30, 2014 $802.4 $537.5 $28.7 $107.6 $70.4 $58.2 Long-Term Inflows Long-Term Outflows (38.4) (22.5) (1.1) (5.1) (5.6) (4.1) Long-Term Net flows (0.1) (1.1) Net flows in Invesco PowerShares QQQ (3.2) (3.2) Net flows in Inst. Money Market Funds (0.8) (0.7) (0.1) 0.1 (0.1) - Market Gains and Losses/Reinvestment (5.1) (2.0) (0.2) 0.1 (2.3) (0.7) Foreign Currency Translation (9.7) (0.1) (1.5) (5.2) (1.4) (1.5) September 30, 2014 $789.6 $532.1 $26.8 $101.5 $70.9 $

31 Total assets under management by client domicile ($ billions) Total U.S. Canada U.K. Continental Europe Asia September 30, 2013 $745.5 $502.5 $26.4 $113.1 $51.6 $51.9 Long-Term Inflows Long-Term Outflows (44.8) (24.5) (1.1) (8.4) (5.9) (4.9) Long-Term Net flows 1.0 (1.2) (0.2) (4.2) Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Funds 1.6 (1.6) 0.1 (0.3) Market Gains and Losses/Reinvestment Foreign Currency Translation (0.9) (1.0) December 31, 2013 $778.7 $521.3 $27.1 $114.8 $60.9 $54.6 Long-Term Inflows Long-Term Outflows (43.7) (21.1) (1.2) (6.9) (6.5) (8.0) Long-Term Net flows (0.1) (1.8) Net flows in Invesco PowerShares QQQ (1.3) (1.3) Net flows in Inst. Money Market Funds (6.1) (3.4) (0.1) 0.5 (3.1) - Market Gains and Losses/Reinvestment (0.1) Foreign Currency Translation (1.0) March 31, 2014 $787.3 $526.1 $27.1 $115.9 $63.4 $

32 Passive assets under management by asset class ($ billions) Total Equity Fixed Income Balanced Money Market Alternative March 31, 2014 $142.9 $87.0 $ $15.0 Long-Term Inflows Long-Term Outflows (5.3) (3.6) (0.6) - - (1.1) Long-Term Net flows (0.4) Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment (3.0) (3.0) Foreign Currency Translation June 30, 2014 $145.8 $89.0 $ $14.8 Long-Term Inflows Long-Term Outflows (8.2) (3.5) (3.5) - - (1.2) Long-Term Net flows (1.1) - - (0.3) Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment (3.2) (3.2) (0.3) 0.8 (0.1) - - (1.0) Foreign Currency Translation (0.2) (0.2) September 30, 2014 $142.1 $88.0 $ $

33 Passive assets under management by asset class ($ billions) Total Equity Fixed Income Balanced Money Market Alternative September 30, 2013 $129.6 $74.1 $ $15.9 Long-Term Inflows Long-Term Outflows (7.9) (4.5) (1.6) - - (1.8) Long-Term Net flows (1.2) Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment (0.2) Foreign Currency Translation (0.2) (0.2) December 31, 2013 $139.7 $85.6 $ $14.6 Long-Term Inflows Long-Term Outflows (5.3) (3.2) (1.2) - - (0.9) Long-Term Net flows Net flows in Invesco PowerShares QQQ (1.3) (1.3) - - Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment Foreign Currency Translation March 31, 2014 $142.9 $87.0 $ $

34 Passive assets under management by channel ($ billions) Total Retail Institutional March 31, 2014 $142.9 $121.5 $21.4 Long-Term Inflows Long-Term Outflows (5.3) (5.0) (0.3) Long-Term Net flows Net flows in Invesco PowerShares QQQ (3.0) (3.0) - Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment Foreign Currency Translation June 30, 2014 $145.8 $123.9 $21.9 Long-Term Inflows Long-Term Outflows (8.2) (5.7) (2.5) Long-Term Net flows (0.8) Net flows in Invesco PowerShares QQQ (3.2) (3.2) - Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment (0.3) (0.4) 0.1 Foreign Currency Translation (0.2) - (0.2) September 30, 2014 $142.1 $121.1 $

35 Passive assets under management by channel ($ billions) Total Retail Institutional September 30, 2013 $129.6 $108.3 $21.3 Long-Term Inflows Long-Term Outflows (7.9) (7.1) (0.8) Long-Term Net flows Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment Foreign Currency Translation (0.2) - (0.2) December 31, 2013 $139.7 $118.2 $21.5 Long-Term Inflows Long-Term Outflows (5.3) (4.5) (0.8) Long-Term Net flows (0.1) Net flows in Invesco PowerShares QQQ (1.3) (1.3) - Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment Foreign Currency Translation March 31, 2014 $142.9 $121.5 $

36 Passive assets under management by client domicile ($ billions) Total U.S. Canada U.K. Continental Europe Asia March 31, 2014 $142.9 $138.5 $0.1 - $1.8 $2.5 Long-Term Inflows Long-Term Outflows (5.3) (4.8) - - (0.2) (0.3) Long-Term Net flows (0.1) (0.3) Net flows in Invesco PowerShares QQQ (3.0) (3.0) - - Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment Foreign Currency Translation June 30, 2014 $145.8 $141.7 $0.1 - $1.8 $2.2 Long-Term Inflows Long-Term Outflows (8.2) (8.0) - - (0.1) (0.1) Long-Term Net flows (0.1) - Net flows in Invesco PowerShares QQQ (3.2) (3.2) - - Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment (0.3) (0.3) Foreign Currency Translation (0.2) (0.2) September 30, 2014 $142.1 $138.2 $0.2 - $1.7 $2.0 35

37 Passive assets under management by client domicile ($ billions) Total U.S. Canada U.K. Continental Europe Asia September 30, 2013 $129.6 $125.4 $0.1 - $1.4 $2.7 Long-Term Inflows Long-Term Outflows (7.9) (7.9) Long-Term Net flows Net flows in Invesco PowerShares QQQ Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment Foreign Currency Translation (0.2) (0.2) December 31, 2013 $139.7 $135.2 $0.1 - $1.8 $2.6 Long-Term Inflows Long-Term Outflows (5.3) (5.1) - - (0.1) (0.1) Long-Term Net flows (0.1) Net flows in Invesco PowerShares QQQ (1.3) (1.3) - - Net flows in Inst. Money Market Funds Market Gains and Losses/Reinvestment Foreign Currency Translation March 31, 2014 $142.9 $138.5 $0.1 - $1.8 $2.5 36

38 Reconciliation of US GAAP results to non-gaap results three months ended September 30, 2014 Please refer to pages in the 3Q 2014 earnings press release for a description of the adjustments ($ millions) Operating Revenues US GAAP Basis Proportional Consolidation of Joint Ventures 3 rd party distribution, service and advisory expenses Acquisition related Market appreciation / depreciation of deferred compensation awards Consolidated Investment Products Other reconciling items Non-GAAP basis Investment Management Fees 1, ,071 Service and Distribution Fees Performance Fees Other Third-Party Distribution, Service and Advisory - (4) (420) (424) Total Operating Revenues reconciled to net revenues Operating Expenses 1, (420) Employee Compensation Third-Party Distribution, Service and Advisory (420) Marketing Property, Office and Technology General and Administrative (3) - (11) (24) 78 Total Operating Expenses (420) (3) - (11) (24) 532 Operating Income reconciled to adjusted operating income Equity in Earnings of Unconsolidated Affiliates 11 (4) Interest and Dividend Income (1) 1-3 Interest Expense (18) (18) Other Gains and Losses, net (1) Other income/(loss) of CSIP, net Interest Income of Consolidated Investment Products (53) - - Interest Expense of Consolidated Investment Products (38) Other Gains and (Losses) of Consolidated Investment Products, net Income from continuing operations before income taxes Income Tax Provision (95) (2) - 5 (1) - (9) (102) Income from continuing operations, net of income taxes Income/(loss) from discontinued operations, net of taxes (1) Net income Net (Income)/Loss Attributable to Noncontrolling Interests in Consolidated Entities Net Income Attributable to Common Shareholders reconciled to adjusted net income attributable to common shareholders (8) - (3) (2) Diluted EPS from continuing operations Diluted EPS from discontinued operations Diluted EPS Diluted Shares Outstanding Operating margin 37 $ $ % Adjusted diluted EPS Diluted Shares Outstanding Adjusted Operating Margin $ %

39 Reconciliation of US GAAP results to non-gaap results three months ended June 30, 2014 Please refer to pages in the 2Q 2014 earnings press release for a description of the adjustments ($ millions) Operating Revenues US GAAP Basis Proportional Consolidation of Joint Ventures 3 rd party distribution, service and advisory expenses Acquisition related Market appreciation / depreciation of deferred compensation awards Consolidated Investment Products Non-GAAP basis Investment Management Fees 1, ,055 Service and Distribution Fees Performance Fees Other Third-Party Distribution, Service and Advisory - (4) (411) (414) Total Operating Revenues reconciled to net revenues Operating Expenses 1, (411) Employee Compensation (4) Third-Party Distribution, Service and Advisory (411) Marketing Property, Office and Technology General and Administrative (3) - (2) 72 Total Operating Expenses (411) (3) (4) (2) 524 Operating Income reconciled to adjusted operating income Equity in Earnings of Unconsolidated Affiliates 6 (4) Interest and Dividend Income (1) 1 4 Interest Expense (18) (18) Other Gains and Losses, net (6) 5 15 Other income/(loss) of CSIP, net Interest Income of Consolidated Investment Products (48) - Interest Expense of Consolidated Investment Products (30) Other Gains and (Losses) of Consolidated Investment Products, net (37) - Income from continuing operations before income taxes (3) (37) 389 Income Tax Provision (107) (2) (103) Income from continuing operations, net of income taxes (2) (37) 286 Income/(loss) from discontinued operations, net of taxes Net income (2) (37) 286 Net (Income)/Loss Attributable to Noncontrolling Interests in Consolidated Entities Net Income Attributable to Common Shareholders reconciled to adjusted net income attributable to common shareholders (42) (4) (2) Diluted EPS from continuing operations Diluted EPS from discontinued operations Diluted EPS Diluted Shares Outstanding Operating margin 38 $ $ % Adjusted diluted EPS Diluted Shares Outstanding Adjusted Operating Margin $ %

40 Reconciliation of US GAAP results to non-gaap results three months ended March 31, 2014 * Other: Please refer to pages in the 1Q 2014 earnings press release for a description of the adjustments ($ millions) Operating Revenues US GAAP Basis Proportional Consolidation of Joint Ventures 3 rd party distribution, service and advisory expenses Acquisition related Market appreciation / depreciation of deferred compensation awards Consolidated Investment Products Other* Non-GAAP basis Investment Management Fees Service and Distribution Fees Performance Fees Other Third-Party Distribution, Service and Advisory - (4) (405) (409) Total Operating Revenues reconciled to net revenues Operating Expenses 1, (405) Employee Compensation (4) - (7) 353 Third-Party Distribution, Service and Advisory (405) Marketing Property, Office and Technology (36) 78 General and Administrative (4) - (13) (37) 70 Transaction & Integration Total Operating Expenses 1,025 6 (405) (4) (4) (13) (80) 525 Operating Income reconciled to adjusted operating income Equity in Earnings of Unconsolidated Affiliates 10 (8) Interest and Dividend Income (1) 1-4 Interest Expense (19) (19) Other Gains and Losses, net (4) Other income/(loss) of CSIP, net Interest Income of Consolidated Investment Products (48) - - Interest Expense of Consolidated Investment Products (30) Other Gains and (Losses) of Consolidated Investment Products, net (27) - - Income from continuing operations before income taxes (21) Income Tax Provision (89) (3) (11) (98) Income from continuing operations, net of income taxes (21) Income/(loss) from discontinued operations, net of taxes (2) Net income (21) Net (Income)/Loss Attributable to Noncontrolling Interests in Consolidated Entities Net Income Attributable to Common Shareholders reconciled to adjusted net income attributable to common shareholders (19) (3) (5) Diluted EPS from continuing operations $0.43 Adjusted diluted EPS $0.60 Diluted EPS from discontinued operations - Diluted Shares Outstanding Diluted EPS $0.43 Adjusted Operating Margin 40.9% Diluted Shares Outstanding Operating margin %

41 Reconciliation of US GAAP results to non-gaap results three months ended December 31, 2013 * Other: Please refer to pages in the 4Q 2013 earnings press release for a description of the adjustments ($ millions) Operating Revenues US GAAP Basis Proportional Consolidation of Joint Ventures 3 rd party distribution, service and advisory expenses Acquisition related Market appreciation / depreciation of deferred compensation awards Consolidated Investment Products Other* Non-GAAP basis Investment Management Fees Service and Distribution Fees Performance Fees Other Third-Party Distribution, Service and Advisory - (4) (396) (400) Total Operating Revenues reconciled to net revenues Operating Expenses 1, (396) Employee Compensation (8) - (1) 332 Third-Party Distribution, Service and Advisory (396) Marketing Property, Office and Technology (12) 75 General and Administrative (6) - (10) - 72 Transaction & Integration Total Operating Expenses (396) (6) (8) (10) (13) 510 Operating Income reconciled to adjusted operating income Equity in Earnings of Unconsolidated Affiliates 10 (4) (1) - 5 Interest and Dividend Income (1) 1-4 Interest Expense (15) (15) Other Gains and Losses, net (19) (11) Other income/(loss) of CSIP, net Interest Income of Consolidated Investment Products (43) - - Interest Expense of Consolidated Investment Products (27) Other Gains and (Losses) of Consolidated Investment Products, net (46) - - Income from continuing operations before income taxes (4) (44) Income Tax Provision (74) (1) (18) (88) Income from continuing operations, net of income taxes (3) (44) Income/(loss) from discontinued operations, net of taxes (66) Net income (57) (3) (44) Net (Income)/Loss Attributable to Noncontrolling Interests in Consolidated Entities Net Income Attributable to Common Shareholders reconciled to adjusted net income attributable to common shareholders (43) (57) (3) (1) Diluted EPS from continuing operations $0.50 Adjusted diluted EPS $0.58 Diluted EPS from discontinued operations $0.15 Diluted Shares Outstanding Diluted EPS $0.64 Adjusted Operating Margin 40.5% Diluted Shares Outstanding Operating margin %

42 Reconciliation of US GAAP results to non-gaap results three months ended September 30, 2013 * Other: Please refer to pages in the 3Q 2013 earnings press release for a description of the adjustments ($ millions) Operating Revenues US GAAP Basis Proportional Consolidation of Joint Ventures 3 rd party distribution, service and advisory expenses Acquisition related Market appreciation / depreciation of deferred compensation awards Consolidated Investment Products Other* Non-GAAP basis Investment Management Fees Service and Distribution Fees Performance Fees Other Third-Party Distribution, Service and Advisory - (3) (381) (384) Total Operating Revenues reconciled to net revenues Operating Expenses 1, (381) Employee Compensation (7) Third-Party Distribution, Service and Advisory (381) Marketing Property, Office and Technology General and Administrative (4) - (13) (1) 64 Transaction & Integration Total Operating Expenses (381) (4) (7) (13) (1) 488 Operating Income reconciled to adjusted operating income Equity in Earnings of Unconsolidated Affiliates 10 (5) Interest and Dividend Income (1) 1-3 Interest Expense (10) (10) Other Gains and Losses, net (9) Other income/(loss) of CSIP, net (1) (1) Interest Income of Consolidated Investment Products (47) - - Interest Expense of Consolidated Investment Products (34) Other Gains and (Losses) of Consolidated Investment Products, net (38) - - Income from continuing operations before income taxes (4) (11) Income Tax Provision (93) (2) (89) Income from continuing operations, net of income taxes (3) (11) Income/(loss) from discontinued operations, net of taxes (1) Net income (3) (11) Net (Income)/Loss Attributable to Noncontrolling Interests in Consolidated Entities Net Income Attributable to Common Shareholders reconciled to adjusted net income attributable to common shareholders (21) (3) Diluted EPS from continuing operations $0.51 Adjusted diluted EPS $0.55 Diluted EPS from discontinued operations - Diluted Shares Outstanding Diluted EPS $0.51 Adjusted Operating Margin 40.2% Diluted Shares Outstanding Operating margin %