Invesco first-quarter 2012 results · This presentation, and comments made in the associated...

Invesco first-quarter 2012 results

Martin L. Flanagan

President and Chief Executive Officer

Loren M. Starr

Chief Financial Officer

April 26, 2012

1

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, 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 www.sec.gov. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.

Forward-looking statements

Discussion topics

First-quarter overview

Investment performance

Capital management priorities

Financial results

Questions

Appendix

2

3

– Maintained strong, long-term investment performance across the enterprise, generally

– Continued positive trend of net long-term inflows – the seventh consecutive quarter of positive net long-term inflows

– Raising the dividend 41% over the prior quarter – to 17.25 cents per share – reflecting continued confidence in the strength of our business

– Repurchased 3.1 million shares for $75 million

Continued positive momentum in a volatile, yet trendless, market environment


Past performance is not indicative of future results.

4

Summary of first-quarter 2012 results

Assets under management

March 31, 2012 AUM of $672.8 billion versus $625.3 billion at December 31, 2011

Average AUM was $658.2 billion versus $621.7 billion for the fourth quarter

Flows

Overall operating results*

Capital management

Total net inflows of $8.1 billion Net long-term inflows of $7.0 billion Money market net flows of $1.1 billion

Adjusted operating income was $269 million versus $256 million in the fourth quarter

Adjusted operating margin was 36.6% in the quarter versus 35.8% in the fourth quarter

Adjusted diluted EPS for the quarter was $0.44 versus $0.42 in the prior quarter

First quarter dividend of 17.25 cents per share, a 41% increase versus the prior quarter

Repurchased $75 million in common stock (3.1 million shares)

* 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.

Discussion topics




Financial results

Questions

Appendix

5

1-Year 3-Year

Assets top half of peer group

Assets bottom half of peer group

5-Year

6

Percent of actively managed assets in top half of peer group*

Investment performance – overview Aggregate performance analysis – asset weighted

*Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary direct real estate, unit investment trusts 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 3/31/2012. Includes AUM of $402.7 billion (60% of total IVZ) for 1 year, $391.8 billion (58% of total IVZ) for three year, and $388.8 billion (58% 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, 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. Performance assumes

the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

7

Quarterly flows – total flows Continued positive momentum in long-term flows during the fourth quarter – the seventh consecutive quarter of positive long-term flows

2Q10* 3Q10 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q10* 3Q10 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12

Total AUM Active AUM Passive AUM

* 2Q10 and 4Q10 exclude the impact of the previously announced passive outflow. 2Q10: $15.8 billion excluded from gross sales 4Q10: $18.6 billion excluded from gross redemptions

Quarterly long-term flows ($ billions)

Gross sales

Gross redemptions

Net long-term sales

8

(a) Retail quarterly flows include retail products in the U.S., Canada, U.K., Europe, Asia and our offshore product line. (b) Institutional quarterly flows include our institutional business in the U.S., Continental Europe and Asia and exclude institutional money market. (c) PWM quarterly flows include our high-net-worth business in the U.S.

Retail(a) Institutional(b) Private Wealth Management(c)

2Q10* 3Q10 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

* 2Q10 and 4Q10 exclude the impact of the previously announced passive outflow. 2Q10: $15.8 billion excluded from gross sales 4Q10: $18.6 billion excluded from gross redemptions

Quarterly long-term flows ($ billions)

Gross sales

Gross redemptions

Net long-term sales

Quarterly flows – total flows Continued strength in net inflows driven by Retail and Private Wealth Management channels

US Retail gross sales up 32% quarter over quarter; redemptions lower than industry average

Invesco US Retail excludes PowerShares QQQ. Industry redemption rates includes proprietary, non-proprietary, direct, institutional, VA and ETFs and reflects Q1 2012 through February 29, 2012

9

+25%

+29%

+36%

(27%) +9%

IVZ

Industry

Percentage above the bars is change in gross sales from prior quarter

($, billions)

Net sales

(15%)

Annualized redemption rate (rolling 3-month average)

Gross and net sales

+32%

Discussion topics




Financial results

Questions

Appendix

10

11

– Reinvestment in the business

– Steady annual growth of dividends

– Share repurchase

– ~$1 billion cash buffer in excess of regulatory requirements

Our capital management priorities have evolved with the growth and success of our business


Executed in a manner consistent with our desire to maintain a strong, investment-grade credit rating

Confident in our ability to meet client needs and grow organically, acquisitions are no longer a strategic priority, but

may present themselves as opportunities that we will consider.

Discussion topics




Financial results

Questions

Appendix

12

($ billions) 1Q-12 4Q-11 % Change

Beginning Assets $625.3 $598.4 4.5%

Long-Term Inflows 42.9 41.1 4.4%

Long-Term Outflows (35.9) (35.5) 1.1%

Long-Term Net flows 7.0 5.6 25.0%

Net flows in Inst. Money Market Funds 1.1 0.4 175.0%

Market Gains and Losses/Reinvestment 37.3 20.8 79.3%

Foreign Currency Translation 2.1 0.1 N/A

Ending Assets $672.8 $625.3 7.6%

Ending Long-Term AUM $602.3 $555.9 8.3%

Average Long-Term AUM $588.0 $552.1 6.5%

Average Institutional Money Market AUM $70.2 $69.6 0.9%

Average AUM $658.2 $621.7 5.9%

Net Revenue Yield (annualized)* 44.7bps 46.1bps

Net Revenue Yield Before Performance Fees (annualized)* 43.5bps 44.6bps

* 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 measure.

13

Total assets under management – 1Q12 vs. 4Q11

($ millions) 1Q-12 4Q-11 % Change

Adjusted Revenues

Investment Management Fees 812 771 5.4%

Service and Distribution Fees 189 181 4.4%

Performance Fees 21 24 (11.7)%

Other 33 45 (26.3)%

Third-Party Distribution, Service and Advisory Expenses (319) (304) 5.0%

Adjusted Net Revenues 736 717 2.7%

Adjusted Operating Expenses

Employee Compensation 313 312 0.2%

Marketing 27 22 22.2%

Property, Office and Technology 66 62 7.1%

General and Administrative 61 64 (5.3)%

Total Adjusted Operating Expenses 467 461 1.4%

Adjusted Operating Income 269 256 5.0%

Adjusted Other Income/(Expense)

Equity in Earnings of Unconsolidated Affiliates 5 (1) N/A

Interest and Dividend Income 6 6 (11.3)%

Interest Expense (14) (14) (4.9)%

Other Gains and Losses, net 2 - N/A

Adjusted Income Before Income Taxes 268 247 8.6%

Effective Tax Rate 25.1% 22.9%

Adjusted Net Income attributed to common shareholders 201 191 5.5%

Adjusted diluted EPS $0.44 $0.42 4.8%

Adjusted Operating Margin 36.6% 35.8%

Average AUM ($ billions) 658.2 621.7 5.9%

Headcount 6,153 6,162 (0.1)%

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. 14

Non-GAAP operating results – 1Q12 vs. 4Q11

15

– Maintained strong, long-term investment performance across the enterprise, generally

– Continued positive trend of net long-term inflows – the seventh consecutive quarter of positive net long-term inflows

– Raising the dividend 41% over the prior quarter – to 17.25 cents per share – reflecting continued confidence in the strength of our business

– Repurchased 3.1 million shares for $75 million

Continued positive momentum in a volatile, yet trendless, market environment


Past performance is not indicative of future results.

Discussion topics




Financial results

Questions

Appendix

16

Discussion topics




Financial results

Questions

Appendix

17

Commitment to investment excellence

Source: Invesco. All data as of March 31, 2012. The listed centers do not all provide products or services that are available in all jurisdictions, nor are their

products and services available on all platforms. All entities listed are wholly owned, indirect subsidiaries of Invesco Ltd., except Invesco Great Wall in

Shenzhen, which is a joint venture between Invesco and Great Wall Securities, and the Huaneng Invesco WLR Investment Consulting Company Ltd. in

Beijing, which is a joint venture between Huaneng Capital Services and WL Ross & Co. Please consult your Invesco representative for more information.

18

% of assets top half of peer group

% of assets bottom half of peer group

Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $388.8 billion)

78

22

93

7

69

31

95

5

42

58

5

95 77

23

54

46

Equities

U.S. Core (7%) U.S. Growth (6%) U.S. Value (9%) Sector (2%)

U.K. (10%) Canadian (1%) Asian (6%) European (2%)




Data as of 3/31/2012. Includes AUM of $388.8 billion (58% 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, 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not

reflect an investor’s experience.

Equities Other

Fixed income

% of assets top half of peer group

% of assets bottom half of peer group

Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $388.8 billion)

19

81

94

6

81

19

78

22 22

78

77

23

80

20

100

-

Global (4%)Global ex-US and

emerging markets (6%) Balanced (8%)Alternatives (6%)

Money market (18%) U.S. fixed income (6%) Global fixed income (5%) Stable value (6%)




Data as of 3/31/2012. Includes AUM of $388.8 billion (58% 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, 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. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not

reflect an investor’s experience.

Investment performance By investment objective (actively managed assets)*

2% 3%4%

98%

2%

90%

100%

13%

97%

1-Yr 3-Yr 5-Yr

U.S. Core U.S. Growth U.S. Value Sector

U.K.

100%

Canadian Asian European

Equities

100% 100% 100%

100% 100%

68% 68%

100%

54%

13%

0%

13%

54%

95%

1-Yr 3-Yr 5-Yr

63% 65%

92%

20%7%

23%

36%53%

31%

1-Yr 3-Yr 5-Yr

28% 28%33%

27%

67%3%

44%

2%

1-Yr 3-Yr 5-Yr

27%

85%

64%

44%31%

41%

1%

1%

1%

1-Yr 3-Yr 5-Yr

2% 2% 0%

17%

47%

5%

42%49%

5%

1-Yr 3-Yr 5-Yr

29%

42%

70%

29%14%

50%

11%

14%

27%

1-Yr 3-Yr 5-Yr

AUM above benchmark 1st quartile 2nd quartile

1-Yr 3-Yr 5-Yr

42%

22%

95%

28%

3%

14%

25%

29%

64%

100%

100%

*Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary direct real estate, unit investment trusts 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 3/31/2012. AUM measured in the one, three, and five year quartile rankings represents 60%, 58%, and 58% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one,

three, and five year basis represents 70%, 68, and 66% of total Invesco AUM, respectively, as of 3/31/12. 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. Performance

assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

20%

50%

83%

15%5%

49%15% 29%

29%

1-Yr 3-Yr 5-Yr

79% 77%

95%

58%

5%

77%

18%

76%

1-Yr 3-Yr 5-Yr

24%

37%

74%

2%23%

10%

94%

73%

84%

1-Yr 3-Yr 5-Yr

68%

82%

70%

64%49%

56%

1%25%

21%

1-Yr 3-Yr 5-Yr

33%

95%

77%

4%

57%

8%15%

25%

72%

1-Yr 3-Yr 5-Yr

80%

43%

83%

16%2%

20%

33%

5%

2%

1-Yr 3-Yr 5-Yr

Global Global ex-U.S. and Emerging markets Alternatives

Money market U.S. fixed income Global fixed income

Equities Other

Fixed income

Balanced

100%

Stable value

100%

100% 100% 100%

100% 100%

Investment performance By investment objective (actively managed assets)*

AUM above benchmark 1st quartile 2nd quartile

79%

49%

64%

19%

39%

13%

60%27%

6%

1-Yr 3-Yr 5-Yr

100% 100% 100%

79%

100% 100%

21%

1-Yr 3-Yr 5-Yr

100%

*Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary direct real estate, unit investment trusts 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 3/31/2012. AUM measured in the one, three, and five year quartile rankings represents 60%, 58%, and 58% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one,

three, and five year basis represents 70%, 68, and 66% of total Invesco AUM, respectively, as of 3/31/12. 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. Performance

assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

23

We are diversified as a firm Delivering a diverse set of solutions to meet client needs

As of March 31, 2012

By client domicile By channel By asset class

$462.9 $24.8 $98.0 $35.7 $51.4

$672.8 Total

U.S. Canada U.K. Europe Asia

6.4% (12.1)%

4.0% (1.4)%

6.9%

4.8%

1-Yr Change ($ billions)

$414.8 $238.6 $19.4

$672.8 Total

Retail Institutional PWM

4.7% 4.5%

11.5%

4.8%


$305.2 $50.5 $74.5

$155.0 $87.6

Total

Equity Balanced Money Market Fixed Income Alternative

0.7% 13.0% 4.9%

11.0% 4.9%

4.8%


$672.8

24

Non-GAAP operating results – quarterly

($ millions) 1Q-12 4Q-11 % Change* 3Q-11 2Q-11 1Q-11 4Q-10 3Q-10 2Q-10

Investment Management Fees 812 771 5.4% 804 844 816 799 749 653

Service and Distribution Fees 189 181 4.4% 189 206 199 202 192 139

Performance Fees 21 24 (11.7)% 3 8 4 19 3 4

Other 33 45 (26.3)% 27 32 33 35 33 16

Third-party distribution, service and advisory expense (319) (304) 5.0% (317) (339) (327) (318) (294) (241)

Total Operating Revenues 736 717 2.7% 706 751 724 736 682 571

Employee Compensation 313 312 0.2% 306 311 300 305 298 260

Marketing 27 22 22.2% 24 27 26 26 20 18

Property, Office and Technology 66 62 7.1% 63 63 65 66 64 56

General and Administrative 61 64 (5.3)% 57 66 62 58 54 48

Adjusted Operating Expenses 467 461 1.4% 450 466 452 456 436 383

Adjusted Operating Income 269 256 5.0% 256 285 272 280 246 189

Equity in Earnings of Unconsolidated Affiliates 5 (1) N/A 3 5 2 7 5 4

Interest and Dividend Income 6 6 (11.3)% 5 3 3 3 2 2

Interest Expense (14) (14) (4.9)% (15) (16) (16) (16) (16) (14)

Other Gains and Losses, net 2 - N/A - 3 4 6 4 (4)

Adjusted Income Before Income Taxes 268 247 8.6% 248 280 265 280 241 178

Effective Tax Rate** 25.1% 22.9% 22.5% 26.0% 27.6% 26.0% 23.1% 29.3%

Adjusted Net Income Attributable to Common Shareholders

201 191 5.5% 192 207 192 209 185 125

Adjusted Diluted EPS $0.44 $0.42 4.8% $0.42 $0.44 $0.41 $0.44 $0.39 $0.27

* % change based on unrounded figures ** Effective tax rate = Adjusted Tax Expense / (Adjusted income before taxes + (gains)/losses attributable to non-controlling interests in consolidated

entities, net) See Reconciliation of US GAAP results to non-GAAP results in this appendix

25

US GAAP operating results – quarterly

($ millions) 1Q-12 4Q-11 % Change* 3Q-11 2Q-11 1Q-11 4Q-10 3Q-10 2Q-10

Investment Management Fees 791 748 5.9% 780 819 792 774 726 628

Service and Distribution Fees 189 181 4.4% 189 211 199 202 192 139

Performance Fees 21 24 (14.2)% 3 8 4 19 3 4

Other 33 45 (26.3)% 27 32 33 34 33 16

Total Operating Revenues 1,034 997 3.7% 998 1,070 1,027 1,029 953 787

Employee Compensation 319 317 0.6% 306 318 306 313 304 261

Third-Party Distribution, Service and Advisory 317 302 5.1% 314 342 325 316 292 238

Marketing 27 21 26.5% 13 26 26 26 20 18

Property, Office and Technology 67 66 1.2% 63 62 64 66 64 56

General and Administrative 73 75 (1.7)% 70 78 74 84 65 64

Transaction & Integration 2 6 (72.7)% 5 11 8 27 27 79

Total Operating Expenses 804 786 2.3% 770 837 802 830 770 716

Operating Income 230 212 8.6% 228 233 226 199 183 71

Equity in Earnings of Unconsolidated Affiliates 10 5 98.0% 8 11 7 13 11 10

Interest and Dividend Income 2 3 (11.1)% 4 2 2 4 3 2

Interest Income of Consolidated Investment Products 69 74 (6.3)% 80 80 74 65 70 53

Gains and (Losses) of Consolidated Investment Products, net

(122) 104 N/A (93) (65) (86) (28) (148) 187

Interest Expense (14) (14) (4.9)% (15) (16) (16) (16) (16) (14)

Interest Expense of Consolidated Investment Products

(46) (52) (12.0)% (49) (47) (40) (37) (36) (26)

Other Gains and Losses, net 19 55 (66.1)% (20) 6 8 12 15 (9)

Income Before Income Taxes 148 386 (61.5)% 143 205 175 212 82 275

Effective Tax Rate** 27.5% 27.3% N/A 26.2% 29.2% 29.9% 24.1% 26.1% 47.4%

(Gains)/Losses Attributable to Noncontrolling Interests in Consolidated Entities, net

119 (108) N/A 84 54 78 19 127 (197)

Net Income Attributable to Common Shareholders 194 202 (4.2)% 167 183 178 175 155 41

EPS Diluted $0.43 $0.44 (2.3)% $0.36 $0.39 $0.38 $0.37 $0.32 $0.09

* % change based on unrounded figures ** Effective tax rate = Tax Expense / (Income before income taxes+ (gains)/losses attributable to noncontrolling interests in consolidated entities, net)

26

Total assets under management – quarterly

($ billions) 1Q-12 4Q-11 % Change 3Q-11 2Q-11 1Q-11

Beginning Assets $625.3 $598.4 4.5% $653.7 $641.9 $616.5

Long-Term Inflows 42.9 41.1 4.4% 45.9 42.7 48.0

Long-Term Outflows (35.9) (35.5) 1.1% (42.6) (38.9) (41.4)

Long-Term Net flows 7.0 5.6 25.0% 3.3 3.8 6.6

Net flows in Inst. Money Market Funds 1.1 0.4 175.0% (1.1) 3.5 2.6

Market Gains and Losses/Reinvestment 37.3 20.8 79.3% (52.2) 3.2 12.9

Foreign Currency Translation 2.1 0.1 N/A (5.3) 1.3 3.3

Ending Assets $672.8 $625.3 7.6% $598.4 $653.7 $641.9

Ending Long-Term AUM $602.3 $555.9 8.3% $529.3 583.3 575.0

Average Long-Term AUM 588.0 552.1 6.5% 564.3 583.0 564.4

Average Institutional Money Market AUM 70.2 69.6 0.9% 68.4 69.8 65.8

Average AUM $658.2 $621.7 5.9% $632.7 $652.8 $630.2

Gross Revenue Yield (annualized)* 63.1bps 64.5bps 63.4bps 65.9bps 65.6bps

Gross Revenue Yield Less Performance Fees (annualized)*

61.9bps 62.9bps 63.2bps 65.4bps 65.3bps

Net Revenue Yield (annualized)** 44.7bps 46.1bps 44.6bps 46.0bps 46.0bps

Net Revenue Yield Less Performance Fees

(annualized)**

43.5bps 44.6bps 44.5bps 45.6bps 45.7bps

* Gross revenue yield on AUM is equal to total operating revenues divided by average AUM, excluding JV AUM. Average AUM for 1Q12, for our joint ventures in China were $3.0 bn (4Q11:$3.1bn;3Q11:$3.3bn;2Q11:$3.5bn;1Q11:$3.5bn;4Q10:$3.6bn;3Q10:$3.4bn)

**Net Revenue Yield on AUM is equal to net revenues divided by average AUM including JV AUM. Average AUM for 1Q12, for our JV in China were $3.0bn (4Q11:$3.1bn;3Q11:$3.3bn;2Q11:$3.5bn;1Q11:$3.5bn;4Q10:$3.6bn;3Q10:$3.4bn)

27

Total assets under management – by asset class

December 31, 2011 $625.3 $271.0 $149.0 $44.6 $74.0 $86.7

Long-Term Inflows 42.9 22.7 9.6 4.9 0.3 5.4

Long-Term Outflows (35.9) (19.4) (7.2) (1.8) (0.9) (6.6)

Long-Term Net flows 7.0 3.3 2.4 3.1 (0.6) (1.2)

Net flows in Inst. Money Market Fund

1.1 - - - 1.1 -

Market Gains and Losses/Reinvestment

37.3 29.3 3.3 2.3 - 2.4

Foreign Currency Translation 2.1 1.6 0.3 0.5 - (0.3)

March 31, 2012 $672.8 $305.2 $155.0 $50.5 $74.5 $87.6

($ billions) Total

Equity

Fixed

Income

Balanced

Money

Market

Alternative

September 30, 2011 $598.4 $253.2 $146.7 $41.5 $73.6 $83.4



Long-Term Net flows 5.6 0.8 1.0 1.6 - 2.2


0.4 - - - 0.4 -


20.8 17.0 1.3 1.4 - 1.1

Foreign Currency Translation 0.1 - - 0.1 - -

28

Total assets under management – by asset class

June 30, 2011 $653.7 $301.9 $145.8 $44.5 $74.4 $87.1



Long-Term Net flows 3.3 (3.2) 2.6 1.2 0.4 2.3


(1.1) - - - (1.1) -


(52.2) (42.3) (1.2) (3.1) - (5.6)

Foreign Currency Translation (5.3) (3.2) (0.5) (1.1) (0.1) (0.4)

September 30, 2011 $598.4 $253.2 $146.7 $41.5 $73.6 $83.4

($ billions) Total

Equity

Fixed

Income

Balanced

Money

Market

Alternative

March 31, 2011 $641.9 $303.0 $139.7 $44.7 $71.0 $83.5



Long-Term Net flows 3.8 (2.6) 3.5 0.5 (0.2) 2.6


3.5 - - - 3.5 -


3.2 0.8 2.4 (0.8) 0.1 0.7

Foreign Currency Translation 1.3 0.7 0.2 0.1 - 0.3

29

Total assets under management – by channel

($ billions) Total Retail Institutional PWM

September 30, 2011 $598.4 $354.4 $227.2 $16.8

Long-Term Inflows 41.1 30.2 9.9 1.0

Long-Term Outflows (35.5) (29.0) (6.0) (0.5)

Long-Term Net flows 5.6 1.2 3.9 0.5

Net flows in Inst. Money Market Funds 0.4 - 0.4 -

Market Gains and Losses/Reinvestment 20.8 18.1 2.1 0.6

Foreign Currency Translation 0.1 0.2 (0.1) -

December 31, 2011 $625.3 $373.9 $233.5 $17.9



Long-Term Net flows 7.0 7.5 (1.1) 0.6


Market Gains and Losses/Reinvestment 37.3 30.8 5.6 0.9

Foreign Currency Translation 2.1 2.6 (0.5) -

March 31, 2012 $672.8 $414.8 $238.6 $19.4

30

Total assets under management – by channel


March 31, 2011 $641.9 $396.2 $228.3 $17.4





Market Gains and Losses/Reinvestment 3.2 2.2 1.1 (0.1)

Foreign Currency Translation 1.3 0.4 0.9 -

June 30, 2011 $653.7 $401.7 $234.5 $17.5




Net flows in Inst. Money Market Funds (1.1) - (1.1) -

Market Gains and Losses/Reinvestment (52.2) (43.9) (7.2) (1.1)

Foreign Currency Translation (5.3) (4.4) (0.9) -

September 30, 2011 $598.4 $354.4 $227.2 $16.8

31

Total assets under management – by client domicile

($ billions) Total U.S. Canada U.K. Continental

Europe Asia

September 30, 2011 $598.4 $411.0 $22.8 $86.7 $31.9 $46.0



Long-Term Net flows 5.6 3.4 (0.7) - (0.2) 3.1

Net flows in Inst. Money Market Funds 0.4 0.2 - - - 0.2

Market Gains and Losses/Reinvestment 20.8 15.4 0.8 3.4 0.7 0.5

Foreign Currency Translation 0.1 - 0.5 (0.3) (0.4) 0.3

December 31, 2011 $625.3 $430.0 $23.4 $89.8 $32.0 $50.1



Long-Term Net flows 7.0 6.4 (0.5) - 1.6 (0.5)

Net flows in Inst. Money Market Funds 1.1 1.0 0.1 0.3 - (0.3)

Market Gains and Losses/Reinvestment 37.3 25.5 1.3 5.6 1.7 3.2

Foreign Currency Translation 2.1 - 0.5 2.3 0.4 (1.1)

March 31, 2012 $672.8 $462.9 $24.8 $98.0 $35.7 $51.4

32

Total assets under management – by client domicile


Europe Asia

March 31, 2011 $641.9 $435.2 $28.2 $94.2 $36.2 $48.1



Long-Term Net flows 3.8 (0.2) (0.8) 1.1 0.8 2.9

Net flows in Inst. Money Market Funds 3.5 3.7 - (0.2) 0.1 (0.1)

Market Gains and Losses/Reinvestment 3.2 1.2 (0.1) 2.0 0.5 (0.4)

Foreign Currency Translation 1.3 - 0.2 - 0.3 0.8

June 30, 2011 $653.7 $439.9 $27.5 $97.1 $37.9 $51.3



Long-Term Net flows 3.3 3.4 (0.6) 0.2 (1.2) 1.5

Net flows in Inst. Money Market Funds (1.1) (0.9) - - (0.2) -

Market Gains and Losses/Reinvestment (52.2) (31.4) (2.1) (8.1) (3.5) (7.1)

Foreign Currency Translation (5.3) - (2.0) (2.5) (1.1) 0.3

September 30, 2011 $598.4 $411.0 $22.8 $86.7 $31.9 $46.0

33

Passive assets under management – by asset class

December 31, 2011 $96.3 $45.6 $30.0 - - $20.7

Long-Term Inflows 16.3 11.8 2.8 - - 1.7

Long-Term Outflows (8.4) (6.1) (0.4) - - (1.9)

Long-Term Net flows 7.9 5.7 2.4 - - (0.2)

Net flows in Inst. Money Market Funds

- - - - - -


8.6 7.7 0.1 - - 0.8

Foreign Currency Translation (0.2) - - - - (0.2)

March 31, 2012 $112.6 $59.0 $32.5 - - $21.1

($ billions) Total

Equity

Fixed

Income

Balanced

Money

Market

Alternative

September 30, 2011 $87.4 $39.7 $29.5 - - $18.2



Long-Term Net flows 5.8 2.8 0.5 - - 2.5


- - - - - -


3.0 3.1 - - - (0.1)

Foreign Currency Translation 0.1 - - - - 0.1

June 30, 2011 $91.8 $45.7 $26.7 - - $19.4



Long-Term Net flows 2.7 - 2.3 - - 0.4


- - - - - -


(7.0) (6.0) 0.5 - - (1.5)


September 30, 2011 $87.4 $39.7 $29.5 - - $18.2

($ billions) Total

Equity

Fixed

Income

Balanced

Money

Market

Alternative

March 31, 2011 $91.7 $47.3 $23.7 $0.0 $0.0 $20.7



Long-Term Net flows 0.9 (0.9) 2.7 - - (0.9)


- - - - - -


(0.9) (0.7) 0.3 - - (0.5)


34

Passive assets under management – by asset class

35

Passive assets under management – by channel


September 30, 2011 $87.4 $71.0 $16.4 -

Long-Term Inflows 19.5 15.6 3.9 -

Long-Term Outflows (13.7) (12.8) (0.9) -

Long-Term Net flows 5.8 2.8 3.0 -

Net flows in Inst. Money Market Funds - - - -

Market Gains and Losses/Reinvestment 3.0 3.1 (0.1) -

Foreign Currency Translation 0.1 - 0.1 -

December 31, 2011 $96.3 $76.9 $19.4 $-





Market Gains and Losses/Reinvestment 8.6 8.3 0.3 -

Foreign Currency Translation (0.2) - (0.2) -

March 31, 2012 $112.6 $92.2 $20.4 $-

36

Passive assets under management – by channel


March 31, 2011 $91.7 $78.2 $13.5 -



Long-Term Net flows 0.9 (0.6) 1.5 -


Market Gains and Losses/Reinvestment (0.9) (0.9) - -

Foreign Currency Translation 0.1 - 0.1 -

June 30, 2011 $91.8 $76.7 $15.1 -





Market Gains and Losses/Reinvestment (7.0) (6.7) (0.3) -

Foreign Currency Translation (0.1) - (0.1) -

September 30, 2011 $87.4 $71.0 $16.4 -

37

Passive assets under management – by client domicile


Europe Asia

September 30, 2011 $87.4 $84.1 - - $1.2 $2.1

Long-Term Inflows 19.5 16.1 - - 0.1 3.3

Long-Term Outflows (13.7) (13.6) - - (0.1) -

Long-Term Net flows 5.8 2.5 - - - 3.3

Net flows in Inst. Money Market Funds - - - - - -

Market Gains and Losses/Reinvestment 3.0 3.0 - - 0.1 (0.1)


December 31, 2011 $96.3 $89.6 - - $1.3 $5.4

Long-Term Inflows 16.3 16.2 - - 0.1 -


Long-Term Net flows 7.9 7.9 - - - -


Market Gains and Losses/Reinvestment 8.6 8.2 - - 0.2 0.2


March 31, 2012 $112.6 $105.7 - - $1.5 $5.4


Europe Asia

March 31, 2011 $91.7 $88.0 - - $1.4 $2.3





Market Gains and Losses/Reinvestment (0.9) (0.9) - - - -


June 30, 2011 $91.8 $88.0 - - $1.4 $2.4





Market Gains and Losses/Reinvestment (7.0) (6.6) - - (0.2) (0.2)


September 30, 2011 $87.4 $84.1 - - $1.2 $2.1

38

Passive assets under management – by client domicile

($ millions)

Operating Revenues

US GAAP

Basis

Proportional Consolidation

of Joint Ventures

3rd 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 791 11 - - - 10 - 812

Service and Distribution Fees 189 - - - - - - 189

Performance Fees 21 - - - - 1 - 21

Other 33 - - - - - - 33

Third-Party Distribution, Service and Advisory - (2) (317) - - - - (319)

Total Operating Revenues reconciled to net revenues

Operating Expenses

1,034 9 (317) - - 10 - 736

Employee Compensation 319 2 - - (7) - (1) 313

Third-Party Distribution, Service and Advisory 317 - (317) - - - - -

Marketing 27 1 - - - - - 27

Property, Office and Technology 67 1 - - - - (1) 66

General and Administrative 73 1 - (6) - (6) (1) 61

Transaction & Integration 2 - - (2) - - - -

Total Operating Expenses 804 5 (317) (8) (7) (6) (4) 467

Operating Income reconciled to adjusted operating income

230 5 - 8 7 16 4 269

Equity in Earnings of Unconsolidated Affiliates 10 (5) - 4 - (3) - 5

Interest and Dividend Income 2 1 - - (1) 3 - 6

Interest Income of Consolidated Investment Products 69 - - - - (69) - -


(122) - - - - 122 - -

Interest Expense (14) - - - - - - (14)


(46) - - - - 46 - -

Other Gains and Losses, net 19 - - (4) (13) - - 2

Income Before Income Taxes 148 - - 8 (7) 115 4 268

Income Tax Provision (74) - - 5 2 - (1) (67)


119 - - - - (119) - -

Net Income Attributable to Common Shareholders reconciled to adjusted net income attributable to common shareholders

194 - - 13 (5) (4) 4 201

Diluted EPS

Diluted Shares Outstanding

Operating margin

$0.43

455.9

22.2%

Adjusted diluted EPS


Adjusted Operating Margin

$0.44

455.9

36.6%

* Other: Please refer to pages 10-12 in the 1Q 2012 earnings press release for a description of the adjustments

Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2012

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products




Performance Fees 24 - - - - - 24

Other 45 - - - - - 45



Operating Expenses

997 10 (302) - - 12 - 717

Employee Compensation 317 3 - - (6) - (1) 312


Marketing 21 1 - - - - - 22






212 4 - 9 6 15 11 256

Equity in Earnings of Unconsolidated Affiliates 5 (5) - - - (1) - (1)

Interest and Dividend Income 3 1 - - - 3 - 6



104 - - - - (104) - -



(52) - - - - 52 - -

Other Gains and Losses, net 55 - - - (10) - (45) -

Income Before Income Taxes 386 - - 9 (5) (110) (34) 247

Income Tax Provision 76 - - 3 1 - 15 (57)


(108) - - - - 108 - -


202 - - 12 (3) (2) (19) 191

Diluted EPS


Operating margin

$0.44

458.3

21.2%




$0.42

458.3

35.8%


Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2011

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products




Performance Fees 3 - - - - - 3

Other 27 - - - - - 27



Operating Expenses

998 10 (314) - - 12 - 706

Employee Compensation 306 3 - (5) 6 - (3) 306


Marketing 13 1 - - - - 10 24




Total Operating Expenses 770 6 (314) (20) 6 (3) 5 450


228 5 - 20 (6) 15 (5) 256

Equity in Earnings of Unconsolidated Affiliates 8 (5) - - - - - 3




(93) - - - - 93 - -



(49) - - - - 49 - -

Other Gains and Losses, net (20) - - - 20 - - -

Income Before Income Taxes 143 - - 20 11 80 (5) 248

Income Tax Provision (59) - - 3 (3) - 4 (56)


84 - - - - (84) - -


167 - - 23 8 (4) (2) 192

Diluted EPS


Operating margin

$0.36

461.0

22.8%




$0.42

461.0

36.2%


Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products

European Infrastructure

Non-GAAP basis


Service and Distribution Fees 211 - - (5) - - - 206

Performance Fees 8 - - - - - - 8

Other 32 - - - - - - 32

Third-Party Distribution, Service and Advisory - (3) (342) 5 - - - (339)


Operating Expenses

1,070 11 (342) - - 12 - 751

Employee Compensation 318 3 - (5) (3) - (3) 311


Marketing 26 1 - - - - - 27

Property, Office and Technology 62 1 - - - - - 63





233 5 - 23 3 16 6 285





(65) - - - - 65 - -



(47) - - - - 47 - -

Other Gains and Losses, net 6 - - - (3) - - 3


Income Tax Provision (75) - - 3 1 - (1) (73)


54 - - - - (54) - -


183 - - 26 (2) (5) 5 207

Diluted EPS


Operating margin

$0.39

467.4

21.8%




$0.44

467.4

37.9%

Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2011

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products

Other Reconciling

Items

Non-GAAP basis




Other 33 - - - - - - 33



Operating Expenses

1,027 10 (325) - - 11 - 724

Employee Compensation 306 3 - (5) (4) - - 300


Marketing 26 1 - - - - - 26


General and Administrative 74 1 - (9) - (4) - 62


Total Operating Expenses 802 5 (325) (22) (4) (4) - 452


226 5 - 22 4 15 - 272

Equity in Earnings of Unconsolidated Affiliates 7 (6) - - - 1 - 2

Interest and Dividend Income 2 - - - (1) 1 - 3



(86) - - - - 86 - -



(40) - - - - 40 - -


Income Before Income Taxes 175 - - 22 (1) 69 - 265

Income Tax Provision (76) - - 2 - - - (73)


78 - - - - (78) - -


178 - - 24 (1) (10) - 192

Diluted EPS


Operating margin

$0.38

472.1

22.0%




$0.41

472.1

37.6%

Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2011

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products

Other Reconciling

Items

Non-GAAP basis




Other 34 1 - - - - - 35



Operating Expenses

1,029 11 (316) - - 12 - 736



Marketing 26 1 - - - - - 26






199 6 - 41 6 14 15 280


Interest and Dividend Income 4 - - - (1) - - 3



(28) - - - - 28 - -



(37) - - - - 37 - -



Income Tax Provision (56) - - (14) 1 - (4) (74)


19 - - - - (15) - 3


175 - - 26 (2) (1) 11 209

Diluted EPS


Operating margin

$0.37

473.1

19.3%




$0.44

473.1

38.1%

Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2010

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products

Other Reconciling

Items

Non-GAAP basis




Other 33 - - - - - - 33



Operating Expenses

953 10 (292) - - 10 - 682



Marketing 20 - - - - - - 20


General and Administrative 65 1 - (9) - (2) - 54


Total Operating Expenses 770 5 (292) (41) (4) (2) - 436


183 6 - 41 4 12 - 246


Interest and Dividend Income 3 - - - (1) - - 2



(148) - - - - 148 - -



(36) - - - - 36 - -


Income Before Income Taxes 82 - - 41 (8) 126 - 241

Income Tax Provision (55) - - (3) 2 - - (56)


127 - - - - (128) - -


155 - - 38 (6) (2) - 185

Diluted EPS


Operating margin

$0.32

479.1

19.2%




$0.39

479.1

36.0%

Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2010

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related



awards


Products

Other Reconciling

Items

Non-GAAP basis




Other 16 - - - - - - 16



Operating Expenses

787 10 (238) - - 12 - 571

Employee Compensation 261 3 - (5) 2 - - 260


Marketing 18 - - - - - - 18




Total Operating Expenses 716 4 (238) (90) 2 (3) (9) 383


71 6 - 90 (2) 15 9 189


Interest and Dividend Income 2 - - - - - - 2



187 - - - - (187) - -



(26) - - - - 26 - -

Other Gains and Losses, net (9) - - - 6 - - (4)

Income Before Income Taxes 275 - - 90 4 (200) 9 178

Income Tax Provision (37) - - (11) (1) - (3) (52)


(197) - - - - 197 - -


41 - - 78 3 (2) 6 125

Diluted EPS


Operating margin

$0.09

457.8

9.1%




$0.27

457.8

33.0%

Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2010

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