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INVESCO LTDSHS Reports Operating Results (10-K)

February 24, 2012 | About:
10qk

10qk

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INVESCO LTDSHS (IVZ) filed Annual Report for the period ended 2011-12-31.

Invesco Ltd has a market cap of $11.14 billion; its shares were traded at around $24.88 with a P/E ratio of 14.6 and P/S ratio of 2.7. The dividend yield of Invesco Ltd stocks is 2%. Invesco Ltd had an annual average earning growth of 2.2% over the past 10 years.

Highlight of Business Operations:

In the year ended December 31, 2011, other revenues increased by $40.3 million (42.3%) to $135.5 million (year ended December 31, 2010: $95.2 million). Other revenues included an increase of $15.3 million in UIT revenues reflecting a full year of the acquisition, higher real estate acquisition and disposition fees of $11.5 million, due to increased real estate fund property activity, an $11.3 million increase in transaction commissions generated by our private equity group, and an increase in mutual funds front end fees of $1.3 million, offset by a $0.7 million decline in other revenues during the year ended December 31, 2011 as compared to the year ended December 31, 2010. The impact of foreign exchange rate movements accounted for $1.4 million (3.5%) of the increase in other revenues during the year ended December 31, 2011 as compared to the year ended December 31, 2010.

Marketing expenses increased by $7.5 million (9.6%) in the year ended December 31, 2011 to $86.0 million (year ended December 31, 2010: $78.5 million). The increase in marketing includes the impact of the acquisition. Additionally, the increase during the year ended December 31, 2011 includes an increase in advertising expense of $15.1 million as our U.S. retail business launched an advertising program focusing on re-branding after the acquisition. The full year expense in 2011 of the acquisition-related additional sales force resulted in an increase in travel expense of $3.2 million and increase in other marketing costs of $2.5 million. These increases were partly offset by a decrease in marketing expense of $13.4 million due to the reversal of a cumulative deferred credit, as well as a reduction in recurring costs, from the termination of our sponsorship and naming rights commitments related to a sports stadium in Denver, Colorado, a decrease in client event costs of $0.9 million, and a decrease in sales literature and research of $0.9 million, as compared to the year ended December 31, 2010. The impact of foreign exchange rate movements accounted for $2.1 million (28.0%) of the increase in marking expense during the year ended December 31, 2011 as compared to the year ended December 31, 2010.

Operating revenues increased by 32.7% in 2010 to $3,487.7 million (year ended December 31, 2009: $2,627.3 million). Net revenues increased by 29.9% in 2010 to $2,521.1 million (year ended December 31, 2009: $1,941.0 million). Net revenues are operating revenues less third-party distribution, service and advisory expenses, plus our proportional share of net revenues from joint venture arrangements. See “Schedule of Non-GAAP Information” for additional important disclosures regarding the use of net revenues. The impact of foreign exchange rate movements accounted for $18.0 million (2.1%) of the increase in operating revenues, and was 0.5% of total operating revenues, during the year ended December 31, 2010 when compared to the year ended December 31, 2009.

Employee compensation increased $164.1 million (17.3%) to $1,114.9 million in the year ended December 31, 2010 (year ended December 31, 2009: $950.8 million). Base salaries and variable compensation increased $114.3 million during the year ended December 31, 2010 from the year ended December 31, 2009 due to incremental costs associated with the acquisition, the impact of annual merit increases, and the increase in variable compensation accruals to reflect the overall earnings growth of the company, including improving operating results and sales. Included in compensation expenses during the year ended December 31, 2010 are share-based costs of $114.1 million compared to $90.8 million during the year ended December 31, 2009, also due to the incremental impact of the acquisition and to the additional amortization of share awards granted February 28, 2010 as part of the company's annual share award cycle. Foreign exchange rate movement led to an increase in employee compensation expenses of $6.3 million (3.9%) in the year ended December 31, 2010 compared to the year ended December 31, 2009. Additionally, employee compensation costs for the year ended December 31, 2010 and 2009 included $20.0 million of prepaid compensation amortization expenses related to the 2006 acquisition of W.L. Ross & Co.

Net cash provided by investing activities totaled $348.1 million for the year ended December 31, 2011 (2010: net cash used of $337.8 million). As shown in the tables above, consolidated investment products, including investment purchases, sales and returns of capital, contributed $487.6 million (2010: $498.6 million contributed). Excluding these consolidated investment product cash flows, net cash used in investing activities was $138.4 million (2010: net cash used of $840.0 million). Investing activities in 2010 included acquisition related payments totaling $775.9 million, as compared to 2011, which reflected acquisition payments totaling $31.7 million.

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