SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 Under
the Securities Exchange Act of 1934
For the month of February, 2007
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Commission File Number 001-13908
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AMVESCAP PLC
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(Translation of registrant's name into English)
30 Finsbury Square, London EC2A 1AG, ENGLAND
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
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Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- N/A
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Description of document filed: AMVESCAP REPORTS RESULTS FOR YEAR ENDED
DECEMBER 31, 2006
----------------------------------------
For Immediate Release
Contact: Aaron Uhde Michael Perman
Phone: +1 404 479 2956 +44 (0) 207 065 3942
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AMVESCAP REPORTS RESULTS FOR YEAR ENDED DECEMBER 31, 2006
London, February 13, 2007 - AMVESCAP (NYSE: AVZ) reported operating profit for
2006 of $785.4 million (2005: $424.6 million). Diluted earnings per share were
$0.60 for 2006 (2005: $0.26). The results for the year ended December 31, 2005
included a restructuring charge of $75.7 million ($58.3 million after tax, or
$0.072 per share). Operating profit for 2006 increased 57.0% over 2005 before
the restructuring charge. Assets under management at December 31, 2006, were
$462.6 billion, an increase of 19.8% (December 31, 2005: $386.3 billion).
"The growing financial strength of our company during 2006 is demonstrated by
record assets under management of $462.6 billion and a 57% increase in operating
profits over the previous year," said AMVESCAP President and CEO Martin L.
Flanagan. "Clients responding to AMVESCAP's investment quality and the depth and
breadth of our investment capabilities has increased business momentum."
"The addition during 2006 of PowerShares's distinctive line of exchange traded
funds (ETFs) and the recognized financial restructuring expertise of WL Ross &
Co. to our broad line of established investment solutions provides our clients
with one of the industry's most comprehensive ranges of investment
capabilities," added Mr. Flanagan. "During 2007 we will continue to focus on the
successful execution of our multiyear strategic plan and the continuous
improvement of our products and services for our diverse global clients."
-------------------------------------------------------------------------------
Results for Year Ended
-------------------------------------------------------
Dec 31, 2005
(before the
Dec 31, Dec 31, % restructuring
2006 2005 Change charge)(c) % Change
--------- --------- ------ ------------- --------
Assets under management $462.6b $386.3b 19.8% $386.3b 19.8%
Net revenues(a) $2,414.6m $2,173.2m 11.1% $2,173.2m 11.1%
Operating expenses $1,629.2m $1,748.6m (6.8)% $1,672.9m (2.6)%
Operating profit $785.4m $424.6m 85.0% $500.3m 57.0%
Net operating margin(b) 32.5% 19.5% N/A 23.0% N/A
Profit before tax $754.6m $360.1m 109.6% $435.8m 73.2%
Earnings per share:
--basic $0.62 $0.27 N/A $0.34 N/A
--diluted $0.60 $0.26 N/A $0.34 N/A
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(a) Net revenues represent total revenues less third-party distribution, service
and advisory fees.
(b) Net operating margin is equal to operating profit divided by net revenues.
(c) The restructuring charge was $75.7 million ($58.3 million after tax, or
$0.072 per share).
--------------------------------------------------------------------------------
Results for Three Months Ended
------------------------------------------------------
Dec 31, 2005
(before the
Dec 31, Sept 30, Dec 31, restructuring
2006 2006 % Change 2005 charge)(c)
------- -------- -------- -------- --------------
Assets under management $462.6b $440.6b 5.0% $386.3b $386.3b
Net revenues(a) $655.3m $587.1m 11.6% $551.4m $551.4m
Operating expenses $405.0m $430.3m (5.9)% $503.0m $427.3m
Operating profit $250.3m $156.8m 59.6% $48.4m $124.1m
Net operating margin(b) 38.2% 26.7% N/A 8.8% 22.5%
Profit before tax $248.2m $150.5m 64.9% $18.6m $94.3m
Earnings per share:
--basic $0.21 $0.13 N/A ($0.01) $0.07
--diluted $0.20 $0.13 N/A ($0.01) $0.07
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(a) Net revenues represent total revenues less third-party distribution, service
and advisory fees.
(b) Net operating margin is equal to operating profit divided by net revenues.
(c) The restructuring charge was $75.7 million ($58.3 million after tax, or
$0.072 per share).
Quarterly Earnings Summary
Net revenues for the three months ended December 31, 2006 included performance
fees of $25.9 million (three months ended September 30, 2006: $10.4 million;
three months ended December 31, 2005: $16.4 million). Operating expenses for the
three months ended December 31, 2006 included the benefit of $21.8 million of
insurance recoveries. Operating expenses for the three months ended September
30, 2006 included a charge of $41.1 million, representing the cumulative
previously unrecognized cost of performance-based options awarded to AMVESCAP
employees in 2003. The remaining cost amortization for these options of $3.6
million is included in the operating expenses for the three months ended
December 31, 2006.
Annual Earnings Summary
Net Revenues for 2006 were $2,414.6 million (2005: $2,173.2 million) and
included performance fees of $82.2 million (2005: $33.5 million). Operating
expenses for 2006 were $1,629.2 million (2005: $1,672.9 million before the
restructuring charge). The 2005 restructuring charge of $75.7 million ($58.3
million after tax, or $0.072 per share) included staff termination, property,
and fund rationalization costs associated with the multiyear strategic plan.
Operating expenses for 2006 included a non-cash charge of $44.7 million ($0.04
per share, net of tax) relating to the performance options granted in 2003. No
expense for these options was recorded in 2004 or 2005 as it was not considered
probable at that time that the required performance targets for the vesting of
these options would be attained. These options have now vested.
Net non-operating income increased $33.7 million as a result of increased
interest income, gains from investments and net foreign exchange gains. In 2005,
a gain of $32.6 million was recognized from the sale of the Retirement business.
Net Debt and Cash Flow
Net debt (total debt of $1,272.7 million, less cash and cash equivalents of
$786.7 million, which excludes client cash of $2.9 million) as of December 31,
2006 was $486.0 million compared to $608.5 million as of September 30, 2006, and
$733.6 million as of December 31, 2005. Client cash for 2006 decreased $224.3
million since December 31, 2005. The decrease in client cash, which contributed
to the movement in our operating cashflows, was primarily due to one depository
account previously sponsored by one of our banking subsidiaries being replaced
by an unaffiliated investment fund.
Dividends
The Board has recommended a final dividend for 2006 of $0.104 per share,
approximately $85.9 million (2005: $0.098 per share, $80.3 million), resulting
in a total dividend of $0.181 per share, approximately $149.2 million for 2006
(2005: $0.172 per share, or $139.4 million). The final dividend, if approved by
shareholders at the Annual General Meeting on May 23, 2007, will be paid on May
30, 2007, to shareholders on the register as of April 27, 2007. The ex-dividend
date will be April 25, 2007.
Assets Under Management
Assets under management (AUM) at December 31, 2006, were $462.6 billion (2005:
$386.3 billion). Average AUM during the fourth quarter of 2006 were $452.7
billion, compared to $426.4 billion for the third quarter of 2006 and $380.9
billion for the fourth quarter of 2005. Average AUM for 2006 were $424.2
billion, compared to $377.6 billion in 2005.
Long-term net outflows for 2006 were $1.4 billion, with inflows of $85.8 billion
and outflows of $87.2 billion. Long-term net outflows for the three months ended
December 31, 2006 were $4.5 billion, largely due to outflows in the
institutional channel. Money market assets grew during the year with net inflows
(not included in long-term flows above) of $12.8 billion for the 2006 year.
There were money market net outflows of $1.5 billion in the fourth quarter of
2006. Further analysis of AUM is included in the supplemental schedules to this
release.
Business Developments
The acquisition of PowerShares Capital Management was completed on September 18,
2006. Exchange-traded funds offered by PowerShares complement the fund lineup
and expand the breadth of products available to AMVESCAP clients. PowerShares's
assets under management at September 18, 2006 were $6.3 billion and had grown to
$8.5 billion at December 31, 2006. Net inflows since acquisition were $1.1
billion. Toward the end of 2006, PowerShares entered into an agreement to assume
sponsorship of the NASDAQ-100 Index Tracking Stock "QQQQ" and other NASDAQ
sponsored products, pending regulatory approval.
On October 3, 2006, the company completed the acquisition of WL Ross & Co. LLC,
a recognized leader in financial restructuring. WL Ross & Co.'s assets under
management at October 3, 2006 were $2.6 billion and $2.8 billion as of December
31, 2006. The WL Ross team has assumed responsibility for the direct private
equity business of AMVESCAP and will serve the company's institutional and high
net worth clients.
AMVESCAP is a leading independent global investment manager, dedicated to
helping people worldwide build their financial security. Operating under the
AIM, INVESCO, AIM Trimark, Invesco Perpetual, Atlantic Trust, PowerShares and WL
Ross brands, AMVESCAP strives to deliver outstanding products and services
through a comprehensive array of enduring investment solutions for our retail,
institutional and private wealth management clients around the world. The
company is listed on the London, New York and Toronto stock exchanges with the
symbol "AVZ." Additional information is available at www.amvescap.com.
Members of the investment community and general public are invited to listen to
the conference call today, Tuesday, February 13, 2007, at 2:00 p.m. GMT (9:00
a.m. EST), by dialing one of the following numbers: 1-517-268-4676 or
1-888-455-2053 for U.S. callers. An audio replay of the conference call will be
available until Tuesday, February 20, 2007, at 10:00 p.m. GMT (5:00pm EST) by
calling 1-402-220-9768 or 1-800-294-3089 for U.S. callers. The presentation
slides that will be reviewed during the conference call will be available on
AMVESCAP's Web site at www.amvescap.com.
# # #
This release may include statements that constitute "forward-looking statements"
under the United States securities laws. Forward-looking statements include
information concerning possible or assumed future results of our operations,
earnings, liquidity, cash flow and capital expenditures, industry or market
conditions, assets under management, acquisition activities and the effect of
completed acquisitions, debt levels and the ability to obtain additional
financing or make payments on our debt, regulatory developments, demand for and
pricing of our products and other aspects of our business or general economic
conditions. In addition, when used in this release, words such as "believes,"
"expects," "anticipates," "intends," "plans," "estimates," "projects" and future
or conditional verbs such as "will," "may," "could," "should," and "would" and
any other statement that necessarily depends on future events, are intended to
identify forward-looking statements.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. Although we make such statements based on
assumptions that we believe to be reasonable, 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. In connection
with any forward-looking statements, you should carefully consider the areas of
risk described in our most recent Annual Report on Form 20-F, as filed with the
United States Securities and Exchange Commission ("SEC"). You may obtain these
reports from the SEC's Web site at www.sec.gov.
AMVESCAP PLC
Consolidated Income Statement
(Unaudited, in millions, other than per share amounts and headcount)
Year Ended December 31,
----------------------------------------------
2006 2005 % Change
---------- ---------- ----------
Revenues:
Management $2,609.7 $2,213.7 17.9%
Service and distribution 534.9 538.2 (0.6)%
Other 96.8 127.3 (24.0)%
---------- ---------- ----------
Total revenues 3,241.4 2,879.2 12.6%
Third-party distribution,
service and advisory fees (826.8) (706.0) 17.1%
---------- ---------- ----------
Net revenues 2,414.6 2,173.2 11.1%
---------- ---------- ----------
Operating expenses:
Compensation 1,061.7 1,044.7 1.6%
Marketing 140.6 139.5 0.8%
Property and office 109.7 130.3 (15.8)%
Technology/telecommunications 123.2 139.0 (11.4)%
General and administrative 194.0 219.4 (11.6)%
Restructuring charge -- 75.7 N/A
---------- ---------- ----------
Total operating expenses 1,629.2 1,748.6 (6.8)%
---------- ---------- ----------
Operating profit 785.4 424.6 85.0%
Gain on sale of business 1.9 32.6 (94.2)%
Interest income 27.0 16.7 61.7%
Other realized gains/(losses) 21.6 (28.7) N/A
Interest expense (81.3) (85.1) (4.5)%
---------- ---------- ----------
Profit before taxation 754.6 360.1 109.6%
Taxation - U.K. (73.0) (18.0) 305.6%
Taxation - outside of the U.K. (190.8) (128.7) 48.3%
---------- ---------- ----------
Profit after taxation 490.8 213.4 130.0%
Minority interests (0.7) (1.2) (41.7)%
---------- ---------- ----------
Profit for the period
attributable to equity
holders of the parent $490.1 $212.2 131.0%
========== ========== ==========
Earnings per share:
---basic $0.62 $0.27
---diluted $0.60 $0.26
Earnings per share before
restructuring charge (2005):
---basic $0.62 $0.34
---diluted $0.60 $0.34
Average shares outstanding:
---basic 792.2 794.0
---diluted 812.2 805.1
Ending Headcount 5,574 5,798
Dividends paid $143.6 $134.1
Final dividends proposed per
share $0.104 $0.098
Final dividends proposed (2006
estimated) $85.9 $80.3
AMVESCAP PLC
Consolidated Income Statement
(Unaudited, in millions, other than per share amounts and headcount)
Q406 Q306 % Change Q405 % Change
------ ------ -------- ------ --------
Revenues:
Management $722.0 $641.7 12.5% $573.6 25.9%
Service and distribution 135.5 130.8 3.6% 129.3 4.8%
Other 21.3 18.8 13.3% 31.7 (32.8)%
------ ------ -------- ------ --------
Total revenues 878.8 791.3 11.1% 734.6 19.6%
Third-party distribution, service
and advisory fees (223.5) (204.2) 9.5% (183.2) 22.0%
------ ------ -------- ------ --------
Net revenues 655.3 587.1 11.6% 551.4 18.8%
------ ------ -------- ------ --------
Operating expenses:
Compensation 268.6 288.3 (6.8)% 263.4 2.0%
Marketing 37.2 31.6 17.7% 33.6 10.7%
Property and office 28.6 27.1 5.5% 26.9 6.3%
Technology/telecommunications 30.5 30.5 0.0% 31.6 (3.5)%
General and administrative 40.1 52.8 (24.1)% 71.8 (44.2)%
Restructuring charge -- N/A 75.7 N/A
------ ------ -------- ------ --------
Total operating expenses 405.0 430.3 (5.9)% 503.0 (19.5)%
------ ------ -------- ------ --------
Operating profit 250.3 156.8 59.6% 48.4 417.1%
Gain on sale of business -- 1.7 N/A -- N/A
Interest income 10.1 6.7 50.7% 5.2 94.2%
Other realized gains/(losses) 12.8 5.0 156.0% (14.5) N/A
Interest expense (25.0) (19.7) 26.9% (20.5) 22.0%
------ ------ -------- ------ --------
Profit before taxation 248.2 150.5 64.9% 18.6 N/A
Taxation - U.K. (20.2) (15.4) 31.2% (6.9) 192.8%
Taxation - outside of the U.K. (65.1) (32.9) 97.9% (16.5) 294.5%
------ ------ -------- ------ --------
Profit/(loss) after taxation 162.9 102.2 59.4% (4.8) N/A
Minority interests 0.6 (0.2) N/A (0.2) N/A
------ ------ -------- ------ --------
Profit/(loss) for the period
attributable to equity holders
of the parent $163.5 $102.0 60.3% $(5.0) N/A
====== ====== ======== ====== ========
Earnings per share:
---basic $0.21 $0.13 $(0.01)
---diluted $0.20 $0.13 $(0.01)
Earnings per share before restructuring
charge (Q4 2005):
---basic $0.21 $0.13 $0.07
---diluted $0.20 $0.13 $0.07
Average shares outstanding:
---basic 795.8 790.3 794.5
---diluted 816.3 809.6 810.1
Ending Headcount 5,574 5,499 5,798
AMVESCAP PLC
Consolidated Balance Sheet
(Unaudited, in millions)
December 31, 2006 December 31, 2005
----------------------- ---------------------
Non-current assets
Goodwill $5,006.6 $4,213.6
Intangible assets 196.7 99.0
Property and equipment 165.8 180.0
Deferred sales commissions 55.9 78.9
Deferred tax assets 212.1 140.4
Investments 158.1 149.4
----------------------- ---------------------
5,795.2 4,861.3
urrent assets
Trade and other receivables 997.4 805.3
Investments 134.9 31.3
Assets held for policyholders 1,574.9 1,170.8
Cash and cash equivalents 789.6 715.7
----------------------- ---------------------
3,496.8 2,723.1
Total assets 9,292.0 7,584.4
Non-current liabilities
Long-term debt (972.7) (1,212.2)
Provisions (461.8) (182.5)
----------------------- ---------------------
(1,434.5) (1,394.7)
Current liabilities
Current maturities of
long-term debt (300.0) (10.0)
Trade and other payables (1,384.3) (1,300.5)
Taxation payables (95.4) (40.0)
Policyholder payables (1,574.9) (1,170.8)
Provisions (227.8) (52.1)
----------------------- ---------------------
(3,582.4) (2,573.4)
Total liabilities (5,016.9) (3,968.1)
Net assets $4,275.1 $3,616.3
======================= =====================
Equity
Share capital $83.2 $81.8
Share premium 205.1 85.0
Shares held by employee trusts (601.7) (413.5)
Exchangeable shares 377.4 431.8
Retained earnings 1,054.9 638.7
Other reserves 3,151.2 2,789.2
----------------------- ---------------------
Equity attributable to equity
holders of the parent 4,270.1 3,613.0
Minority interests 5.0 3.3
----------------------- ---------------------
Total equity $4,275.1 $3,616.3
======================= =====================
AMVESCAP PLC
Consolidated Statement of Changes in Equity
(Unaudited, in millions)
Year Ended December 31,
-----------------------
2006 2005
---------- ----------
January 1 $3,616.3 $3,572.0
Profit for the period attributable to equity holders of 490.1 212.2
the parent
Currency translation differences 241.3 (111.0)
Net movement in available for sale reserve (8.1) 5.4
---------- ----------
Total recognized income and expense attributable to
equity holders of the parent 723.3 106.6
---------- ----------
Total equity attributable to equity holders of the parent 4,339.6 3,678.6
Employee share plans:
Share-based compensation credi 140.6 52.6
Increase in shares held by employee share ownership
trusts (188.2) --
Shares issued 66.9 7.7
Issuance of new shares for acquisition earn-out 0.8 2.2
Tax taken to equity 58.5 8.1
Dividends (143.6) (134.1)
Total amounts attributable to minority interests 0.5 1.2
---------- ----------
December 31 $4,275.1 $3,616.3
---------- ----------
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AMVESCAP PLC
Consolidated Cash Flow Statement
(Unaudited, in millions)
Year Ended December 31,
-----------------------
2006 2005
---------- ----------
Operating activities:
Profit for the period attributable to equity holders of
the parent $490.1 $212.2
Adjustments to reconcile profit for the period to net
cash provided by operating activities:
Amortization, depreciation, and goodwill impairment 67.6 94.4
Amortization of share-related compensation 148.5 64.3
(Increase)/decrease in receivables (129.5) 41.9
Decrease in payables (32.8) (75.8)
Gain on disposal of assets (4.4) (29.3)
(Increase)/decrease in current investments (32.8) 122.4
---------- ----------
Net cash inflow from operating activities 506.7 430.1
Investing activities:
Capital expenditures, net of sales (35.2) (36.0)
(Purchase)/disposal of long-term investments, net (51.0) 13.3
Acquisition of businesses (200.2) --
Disposal of businesses 2.1 53.6
---------- ----------
Net cash (outflow)/inflow from investing activities (284.3) 30.9
Financing:
Dividends paid (143.6) (134.1)
Purchases of shares held by employee share ownership
trusts (155.9) --
Net borrowings/(repayment of debt) 49.0 (160.5)
Issuance of new shares 66.6 7.7
---------- ----------
Net cash outflow from financing activities (183.9) (286.9)
Increase in cash and cash equivalents 38.5 174.1
Foreign exchange 35.4 (5.3)
Cash and cash equivalents, beginning of period 715.7 546.9
---------- ----------
Cash and cash equivalents, end of period $789.6 $715.7
========== ==========
Notes
1. Accounting policies
The accounting policies applied to the information in the earnings release
follow International Financial Reporting Standards in effect as of the date
of this release and are consistent with those applied in the 2005 Annual
Report. Refer to the 2005 Annual Report, available at www.amvescap.com, for
a more detailed discussion of these policies. The accounting policies
applied to the information in this earnings release are also consistent
with those that are expected to be applied in the 2006 Annual Report.
Certain prior year balance sheet amounts have been reclassified to conform
to the current year presentation of those amounts.
2. Taxation
A significant proportion of the tax charge arose from U.S., U.K., and
Canadian operations. The effective tax rate was 35.0% for 2006
(2005: 40.7%; 37.7% before the restructuring charge).
3. Earnings per share
Basic earnings per share is based on the weighted average number of
ordinary and exchangeable shares outstanding during the respective periods,
excluding shares purchased and held by employee share ownership trusts.
Diluted earnings per share takes into account the effect of the potential
issuance of ordinary shares.
Year Ended December 31, 2006
----------------------------------------------
(in millions other than per Profit for the period
share amounts) attributable to equity Number of Per share
holders of the parent shares amount
---------------------- --------- --------
Basic earnings per share $490.1 792.2 $0.62
=========
Dilutive effect of share-based
awards -- 20.0
---------------------- --------- ---------
Diluted earnings per share $490.1 812.2 $0.60
====================== ========= =========
Year Ended December 31, 2005
----------------------------------------------
(in millions other than per Profit for the period
share amounts) attributable to equity Number of Per share
holders of the parent shares amount
---------------------- --------- ---------
Basic earnings per share $212.2 794.0 $0.27
=========
Dilutive effect of share-based
awards -- 11.1
---------------------- --------- ---------
Diluted earnings per share $212.2 805.1 $0.26
====================== ========= =========
4. Legal costs
Included in general and administrative expenses are $24.0 million in 2006
(2005: $20.8 million) of amounts recovered from insurers relating primarily
to legal and other related costs associated with the mutual fund market
timing investigations and private litigation involving the AIM Funds. The
related legal costs were incurred over the period from 2003 as follows:
2006 $10.3 million
2005 $8.7 million
Prior periods $50.0 million
5. Acquisition of PowerShares Capital Management LLC
On September 18, 2006, the company acquired 100% of the limited liability
company interests of PowerShares Capital Management LLC ("PowerShares").
Consideration for the transaction was $399.1 million, which includes
estimates of future earn-out provisions of $291.6 million, payable in the
future depending on the achievement of various management fee growth
targets and transaction costs of $6.3 million. Goodwill and management
contract intangible assets of $398.7 million have been recorded on this
acquisition. Net cash paid at closing was $99.1 million.
The book and fair values of net assets acquired were determined as follows:
Book/Fair Value
(in millions)
----------------
Property and equipment $2.6
Receivables 3.4
Cash and cash equivalents 2.1
Payables (7.7)
----------------
Net assets 0.4
Goodwill 299.0
Management contract intangibles 99.7
----------------
399.1
----------------
Satisfied by:
Cash and cash equivalents paid and
provisions established 399.1
----------------
Total fair value of net assets 399.1
----------------
The book value of net assets acquired is approximately equal to the fair
value of these assets and liabilities. No accounting policy alignment
adjustments have been made because PowerShares's financial results
maintained under U.S. Generally Accepted Accounting Principles are
materially the same as they would be under International Financial
Reporting Standards followed by the company.
6. Acquisition of WL Ross & Co. LLC
On October 3, 2006, the company acquired 100% of the limited liability
company interests of WL Ross & Co. LLC ("WL Ross").
Consideration for the transaction was $294.7 million, which includes
earn-out provisions of $190.6 million, payable in the future depending on
the achievement of annual fund launch targets over the five years following
the completion of the transaction and transaction costs of $4.1 million. WL
Ross is an investment management company sponsoring alternative investments
including private equity funds, co-investment vehicles and hedge funds in
the steel, textile, coal, automotive and financial services industries in
the U.S., U.K., France, China, India, Japan and Korea.
At the time of acquisition, WL Ross managed assets of approximately $2.6
billion. Goodwill and management contract intangible assets of $288.0
million have been recorded on this acquisition. Net cash paid at closing
was $93.2 million.
The book and fair values of net assets acquired were determined as follows:
Book/Fair Value
(in millions)
----------------
Property and equipment $3.0
Receivables 4.8
Cash and cash equivalents 6.8
Other 0.9
Payables (8.8)
----------------
Net assets 6.7
Goodwill 277.1
Management contract intangibles 10.9
----------------
294.7
----------------
Satisfied by:
Cash and cash equivalents paid and
provisions established 294.7
----------------
Total fair value of net assets 294.7
----------------
The book value of net assets acquired is approximately equal to the fair
value of these assets and liabilities. No accounting policy alignment
adjustments have been made because WL Ross financial results maintained
under U. S. Generally Accepted Accounting Principles are materially the
same as they would be under International Financial Reporting Standards
followed by the company.
7. 2005 Restructuring charge
The consolidated income statement for 2005 included a restructuring charge
of $75.7 million. The charge related to operational and structural changes
made in 2005 as a result of a review of the business. The charge comprised
of the following:
(in millions)
Staff termination costs $45.1
Property costs 20.4
Fund rationalization costs 6.9
Other 3.3
--------------------
Total restructuring charge 75.7
--------------------
Taxation (17.4)
--------------------
Net income charge 58.3
--------------------
Per share impact $0.072
--------------------
8. Dividends
A final dividend in respect of 2006 of $0.104 per share ($85.9 million:
$83.8 million for ordinary shares and $2.1 million for exchangeable shares)
has been proposed by the Board and will be paid, subject to shareholder
approval, on May 30, 2007. The dividend will be accrued when approved by
shareholders. A final dividend in respect of 2005 of $0.098 per share
($80.3 million: $78.1 million for ordinary shares and $2.2 million for
exchangeable shares) was approved at the Annual General Meeting of
Shareholders on April 27, 2006, and charged to retained earnings at that
time. This dividend was paid on May 4, 2006, to shareholders on the
register on March 31, 2006.
An interim 2006 dividend of $0.077 per share ($63.3 million: $61.7 million
for ordinary shares and $1.6 million for exchangeable shares) was declared
by the Board of Directors on July 26, 2006, and was paid on October 11,
2006 to shareholders on the register on September 8, 2006.
9. Post-balance sheet event
On January 15, 2007, $300.0 million in senior notes matured. The company
utilized its credit facility to satisfy the maturity but expects to issue
additional debt in 2007.
10. Statutory financial statements
The financial information shown in this earnings release, which was
approved by the Board of Directors on February 12, 2007, is unaudited and
does not constitute statutory financial statements. The 2005 Annual Report,
which was filed with the Registrar of Companies on May 31, 2006, includes
an unqualified audit report in accordance with Section 235 of the Companies
Act 1985. This audit report does not contain a statement under section
237(2) or section 237(3) of the Companies Act 1985.
AMVESCAP PLC
Quarterly Assets Under Management
--------------------------------------------------------------------------------
(in billions) Q406 Q306 % Change Q405
-------------------------------------- -------- -------- -------- --------
-------------------------------------- -------- -------- -------- --------
Beginning Assets $440.6 $413.8 6.5% $380.5
Inflows 22.9 16.3 40.5% 15.8
Outflows (27.4) (17.0) 61.2% (19.5)
-------- -------- --------
Net flows (4.5) (0.7) 542.9% (3.7)
Net flows in money market funds and other (1.5) 4.6 n/a 1.8
Market gains/reinvestment 24.0 13.4 79.1% 8.9
Acquisitions 2.6 6.3 (58.7)% --
Foreign currency 1.4 3.2 (56.3)% (1.2)
-------- -------- --------
Ending Assets $462.6 $ 440.6 5.0% $386.3
======== ======== ========
Average long-term AUM 391.2 366.1 6.9% 334.6
Average institutional money market AUM 61.5 60.3 2.0% 46.3
-------- -------- --------
Average AUM $452.7 $426.4 6.2% $380.9
======== ======== ========
Net revenue yield on AUM (annualized)(a) 57.9bps 55.1bps 57.9bps
Net revenue yield on AUM before performance
fees (annualized) 55.6bps 54.1bps 56.2bps
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Private Wealth
By channel: (in billions) Total Retail Institutional Management
--------------------------------------------------------------------------------
September 30, 2006 $440.6 $218.8 $204.8 $17.0
Inflows 22.9 14.5 7.4 1.0
Outflows (27.4) (15.6) (10.1) (1.7)
------- ------- ------------- -------------
Net flows (4.5) (1.1) (2.7) (0.7)
Net flows in money market funds
and other (1.5) (0.3) (1.2) --
Market gains/reinvestment 24.0 16.4 7.1 0.5
Acquisitions 2.6 -- 2.6 --
Foreign currency 1.4 0.2 1.2 --
------- ------- ------------- -------------
December 31, 2006 $462.6 $234.0 $211.8 $16.8
======= ======= ============= =============
--------------------------------------------------------------------------------
By asset class: Fixed Money Stable Alter-
(in billions) Total Equity(c) Income Balanced Market Value natives
--------------------------------------------------------------------------------
September 30, 2006(b) $440.6 $198.7 $59.6 $43.2 $65.8 $48.1 25.2
Inflows 22.9 13.2 5.3 2.1 0.6 0.6 1.1
Outflows (27.4) (11.9) (6.9) (3.2) (0.9) (2.8) (1.7)
------- --------- ------ -------- ------ ------- ------
Net flows (4.5) 1.3 (1.6) (1.1) (0.3) (2.2) (0.6)
Net flows in money
market funds and other (1.5) -- -- -- (1.5) -- --
Market gains/
reinvestment 24.0 18.0 1.2 2.4 0.2 0.9 1.3
Acquisitions 2.6 -- -- -- -- -- 2.6
Foreign currency 1.4 1.1 0.3 (0.2) 0.1 0.1 --
------- --------- ------ -------- ------ ------- ------
December 31, 2006 $462.6 $219.1 $59.5 $44.3 $64.3 $46.9 $28.5
======= ========= ====== ======== ====== ======= ======
--------------------------------------------------------------------------------
By client domicile:
(in billions) Total U.S. Canada U.K. Europe Asia
--------------------------------------------------------------------------------
September 30, 2006 $440.6 $258.4 $44.6 $65.4 $44.3 $27.9
Inflows 22.9 10.1 1.3 4.2 4.6 2.7
Outflows (27.4) (14.8) (1.7) (2.9) (5.7) (2.3)
------- -------- -------- -------- ------- --------
Net flows (4.5) (4.7) (0.4) 1.3 (1.1) 0.4
Net flows in money
market funds and other (1.5) (1.2) -- -- (0.1) (0.2)
Market gains/
reinvestment 24.0 11.1 4.4 4.5 2.1 1.9
Acquisitions 2.6 2.6 -- -- -- --
Foreign currency 1.4 (0.5) (1.5) 2.6 0.4 0.4
------- -------- -------- -------- ------- --------
December 31, 2006 $462.6 $265.7 $47.1 $73.8 $45.6 $30.4
======= ======== ======== ======== ======== ========
--------------------------------------------------------------------------------
(a) Net revenue yield on AUM is equal to net revenue divided by average AUM.
(b) The asset class beginning balances were adjusted to reflect certain asset
reclassifications.
(c) Includes PowerShares's ETF AUM which are primarily invested in equity
securities.
AMVESCAP PLC
Year-to-Date Assets Under Management
--------------------------------------------------------------------------------
(in billions) December 31, December 31, % Change
2006 2005
--------------------------------------------------------------------------------
Beginning Assets $386.3 $382.1 1.1%
Inflows 85.8 66.3 29.4%
Outflows (87.2) (82.5) 5.7%
------------- -------------
Net flows (1.4) (16.2) (91.4)%
Net flows in money market
funds and other 12.8 0.5 2460.0%
Market gains/reinvestment 46.5 24.4 90.6%
Acquisitions 8.9 -- n/a
Foreign currency 9.5 (4.5) n/a
------------- -------------
Ending Assets $462.6 $386.3 19.8%
============= =============
Average long-term AUM 366.3 331.7 10.4%
Average institutional money
market AUM 57.9 45.9 26.1%
------------- -------------
Average AUM $424.2 $377.6 12.3%
============= =============
Net revenue yield on AUM(a) 56.9bps 57.6bps
Net revenue yield on AUM
before performance fees 55.0bps 56.7bps
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Private Wealth
By channel: (in billions) Total Retail Institutional Management
--------------------------------------------------------------------------------
December 31, 2005 $386.3 $190.2 $179.8 $16.3
Inflows 85.8 58.4 23.2 4.2
Outflows (87.2) (57.9) (24.4) (4.9)
------- ------- ------------- ---------------
Net flows (1.4) 0.5 (1.2) (0.7)
Net flows in money market
funds and other 12.8 (0.3) 13.1 --
Market gains/reinvestment 46.5 31.4 13.9 1.2
Acquisitions 8.9 6.3 2.6 --
Foreign currency 9.5 5.9 3.6 --
------- ------- ------------- ---------------
December 31, 2006 $462.6 $234.0 $211.8 $16.8
======== ======= ============= ===============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
By asset class: Fixed Money Stable Alter-
(in billions) Total Equity(c) Income Balanced Market Value natives
--------------------------------------------------------------------------------
December 31, 2005(b) $386.3 $177.6 $48.7 $40.4 $52.1 $45.7 $21.8
Inflows 85.8 42.5 24.3 7.4 1.9 4.3 5.4
Outflows (87.2) (46.6) (17.9) (9.6) (3.1) (5.6) (4.4)
------- --------- ------ -------- ------ ------ -------
Net flows (1.4) (4.1) 6.4 (2.2) (1.2) (1.3) 1.0
Net flows in money
market funds and
other 12.8 -- --- -- 12.8 -- --
Market gains/
reinvestment 46.5 32.6 2.8 5.7 0.5 2.5 2.4
Acquisitions 8.9 6.3 -- -- -- -- 2.6
Foreign currency 9.5 6.7 1.6 0.4 0.1 -- 0.7
------- --------- ------ -------- ------ ------ -------
December 31, 2006 $462.6 $219.1 $59.5 $44.3 $64.3 $46.9 $28.5
======= ========= ====== ======== ====== ====== =======
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
By client domicile:
(in billions) Total U.S. Canada U.K. Europe Asia
--------------------------------------------------------------------------------
December 31, 2005 $386.3 $235.9 $42.6 $52.9 $32.5 $22.4
Inflows 85.8 30.0 4.5 14.5 23.6 13.2
Outflows (87.2) (42.2) (7.7) (10.2) (18.0) (9.1)
------- -------- -------- ------- --------- ---------
Net flows (1.4) (12.2) (3.2) 4.3 5.6 4.1
Net flows in money
market funds and
other 12.8 11.5 0.4 0.2 0.7 --
Market gains/
reinvestment 46.5 21.9 6.9 9.9 4.1 3.7
Acquisitions 8.9 8.9 -- -- -- --
Foreign currency 9.5 (0.3) 0.4 6.5 2.7 0.2
------- -------- -------- ------- --------- ---------
December 31, 2006 $462.6 $265.7 $47.1 $73.8 $45.6 $30.4
======= ======== ======== ======= ========= =========
--------------------------------------------------------------------------------
(a) Net revenue yield on AUM is equal to net revenue divided by average AUM.
(b) The asset class beginning balances were adjusted to reflect certain asset
reclassifications.
(c) Includes PowerShares's ETF AUM which are primarily invested in equity
securities.
AMVESCAP PLC
Additional Income and Expense Information
The Consolidated Income Statements for 2006 and 2005 include the following
items:
2006 2005
--------------------------- ------------------
$ millions Q406 Q306 Full Year Q405 Full Year
-------- ------ --------- ------- ---------
Operating items:
Management revenues:
- Performance fees 25.9 10.4 82.2 16.4 33.5
Compensation:
- 2003 share option expense (3.6) (41.1) (44.7) -- --
- Expenses related to German
Bank -- -- -- -- (4.7)
- Recruitment -- -- -- -- (11.8)
Property and office:
- Leasehold charges -- -- -- -- (11.4)
General and administration:
- Goodwill impairment -- -- -- (16.6) (16.6)
- Legal settlements (6.0) -- (6.0) -- --
- Insurance recoveries 21.8 0.9 24.0 2.1 20.8
Non-operating income/(loss)
items:
- Gain on sale of businesses -- 1.7 1.9 -- 32.6
- Outsourcing U.K. DC platform -- -- -- -- (7.2)
- Taiwan bond funds capital
infusion -- -- -- (11.3) (11.3)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMVESCAP PLC
------------------------------
(Registrant)
Date 13 February, 2007 By /s/ Michael S. Perman
----------------- ---------------------------
(Signature)
Michael S. Perman
Company Secretary