Document
Table of Contents    
    

                                    

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)
þ
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2018
OR
o
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 1-13908
invescologoa02a03a04a01a03.gif
Invesco Ltd.
(Exact Name of Registrant as Specified in Its Charter)
Bermuda
(State or Other Jurisdiction of Incorporation or Organization)
 
98-0557567
(I.R.S. Employer Identification No.)
 
 
 
1555 Peachtree Street, N.E., Suite 1800, Atlanta, GA
(Address of Principal Executive Offices)
 
30309
(Zip Code)

(404) 892-0896
(Registrant's telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ
 
Accelerated filer o
 
Non-accelerated filer o (Do not check if a smaller reporting company)
 
Smaller reporting company o
 
 
 
 
 
 
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No þ
As of June 30, 2018, the most recent practicable date, the number of Common Shares outstanding was 410,848,934.

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TABLE OF CONTENTS
We include cross references to captions elsewhere in this Quarterly Report on Form 10-Q, which we refer to as this “Report,” where you can find related additional information. The following table of contents tells you where to find these captions.
 
 
 
Page
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Invesco Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)

 
As of
$ in millions, except per share data
June 30, 2018
 
December 31, 2017
ASSETS
 
 
 
Cash and cash equivalents
1,480.5

 
2,006.4

Unsettled fund receivables
953.7

 
793.8

Accounts receivable
581.8

 
622.5

Investments
732.8

 
674.6

Assets of consolidated investment products (CIP):
 
 
 
Cash and cash equivalents of CIP
353.4

 
511.3

Accounts receivable and other assets of CIP
148.2

 
131.5

Investments of CIP
5,892.4

 
5,658.0

Assets held for policyholders
12,199.6

 
12,444.5

Prepaid assets
122.2

 
124.4

Other assets
52.8

 
61.7

Property, equipment and software, net
475.7

 
490.7

Intangible assets, net
2,174.0

 
1,558.7

Goodwill
7,292.0

 
6,590.7

Total assets
32,459.1

 
31,668.8

LIABILITIES
 
 
 
Accrued compensation and benefits
446.1

 
696.1

Accounts payable and accrued expenses
819.7

 
895.7

Liabilities of CIP:
 
 
 
Debt of CIP
5,014.6

 
4,799.8

Other liabilities of CIP
352.3

 
498.8

Policyholder payables
12,199.6

 
12,444.5

Unsettled fund payables
934.3

 
783.8

Long-term debt
2,955.8

 
2,075.8

Deferred tax liabilities, net
303.5

 
275.5

Total liabilities
23,025.9

 
22,470.0

Commitments and contingencies (See Note 11)


 


TEMPORARY EQUITY
 
 
 
Redeemable noncontrolling interests in consolidated entities
297.0

 
243.2

PERMANENT EQUITY
 
 
 
Equity attributable to Invesco Ltd.:
 
 
 
Common shares ($0.20 par value; 1,050.0 million authorized; 490.4 million shares issued as of June 30, 2018 and December 31, 2017)
98.1

 
98.1

Additional paid-in-capital
6,255.6

 
6,282.0

Treasury shares
(2,720.0
)
 
(2,781.9
)
Retained earnings
5,747.3

 
5,489.1

Accumulated other comprehensive income/(loss), net of tax
(563.7
)
 
(391.2
)
Total equity attributable to Invesco Ltd.
8,817.3

 
8,696.1

Equity attributable to nonredeemable noncontrolling interests in consolidated entities
318.9

 
259.5

Total permanent equity
9,136.2

 
8,955.6

Total liabilities, temporary and permanent equity
32,459.1

 
31,668.8

See accompanying notes.

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Invesco Ltd.
Condensed Consolidated Statements of Income
(Unaudited)

 
Three months ended June 30,
 
Six months ended June 30,
$ in millions, except per share data
2018
 
2017
 
2018
 
2017
Operating revenues:
 
 
 
 
 
 
 
Investment management fees
1,050.5

 
1,010.4

 
2,094.2

 
1,965.6

Service and distribution fees
242.9

 
211.3

 
489.0

 
417.7

Performance fees
11.6

 
16.7

 
20.7

 
28.0

Other
55.6

 
16.0

 
112.5

 
35.7

Total operating revenues
1,360.6

 
1,254.4

 
2,716.4

 
2,447.0

Operating expenses:
 
 
 
 
 
 
 
Third-party distribution, service and advisory
408.9

 
365.9

 
828.0

 
715.2

Employee compensation
381.1

 
366.2

 
771.5

 
763.7

Marketing
32.8

 
29.1

 
60.9

 
53.5

Property, office and technology
101.7

 
89.0

 
203.9

 
174.5

General and administrative
104.8

 
85.9

 
199.7

 
163.9

Total operating expenses
1,029.3

 
936.1

 
2,064.0

 
1,870.8

Operating income
331.3

 
318.3

 
652.4

 
576.2

Other income/(expense):
 
 
 
 
 
 
 
Equity in earnings of unconsolidated affiliates
7.3

 
10.5

 
17.0

 
28.2

Interest and dividend income
2.8

 
1.6

 
7.0

 
4.5

Interest expense
(29.5
)
 
(23.6
)
 
(52.7
)
 
(47.6
)
  Other gains and losses, net
1.4

 
3.1

 
(4.0
)
 
10.0

Other income/(expense) of CIP, net
0.9

 
32.3

 
28.1

 
60.8

Income before income taxes
314.2

 
342.2

 
647.8

 
632.1

Income tax provision
(72.3
)
 
(92.6
)
 
(140.7
)
 
(168.3
)
Net income
241.9

 
249.6

 
507.1

 
463.8

Net (income)/loss attributable to noncontrolling interests in consolidated entities
3.2

 
(10.0
)
 
(8.1
)
 
(12.2
)
Net income attributable to Invesco Ltd.
245.1

 
239.6

 
499.0

 
451.6

Earnings per share:
 
 
 
 
 
 
 
-basic

$0.59

 

$0.58

 

$1.21

 

$1.10

-diluted

$0.59

 

$0.58

 

$1.21

 

$1.10

Dividends declared per share

$0.30

 

$0.29

 

$0.59

 

$0.57


See accompanying notes.


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Invesco Ltd.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
 
Three months ended June 30,
 
Six months ended June 30,
$ in millions
2018
 
2017
 
2018
 
2017
Net income
241.9

 
249.6

 
507.1

 
463.8

Other comprehensive income/(loss), net of tax:
 
 
 
 
 
 
 
Currency translation differences on investments in foreign subsidiaries
(233.6
)
 
147.4

 
(169.0
)
 
210.0

Other comprehensive income/(loss), net of tax
1.3

 
2.1

 
(0.3
)
 
5.1

Other comprehensive income/(loss)
(232.3
)
 
149.5

 
(169.3
)
 
215.1

Total comprehensive income/(loss)
9.6

 
399.1

 
337.8

 
678.9

Comprehensive loss/(income) attributable to noncontrolling interests in consolidated entities
3.2

 
(10.0
)
 
(8.1
)
 
(12.2
)
Comprehensive income/(loss) attributable to Invesco Ltd.
12.8

 
389.1

 
329.7

 
666.7

See accompanying notes.



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Invesco Ltd.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
Six months ended June 30,
$ in millions
2018
 
2017
Operating activities:
 
 
 
Net income
507.1

 
463.8

Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
 
 
 
Amortization and depreciation
66.0

 
52.5

Share-based compensation expense
81.8

 
92.5

Other (gains)/losses, net
4.0

 
(8.7
)
Other (gains)/losses of CIP, net
11.1

 
(38.1
)
Equity in earnings of unconsolidated affiliates
(17.0
)
 
(28.2
)
Distributions from equity method investees
3.4

 
9.8

Changes in operating assets and liabilities:
 
 
 
(Purchase)/sale of investments by CIP, net
9.5

 
(245.8
)
(Purchase)/sale of investments, net
(37.4
)
 
174.5

(Increase)/decrease in receivables
(144.9
)
 
(2,324.5
)
Increase/(decrease) in payables
(86.8
)
 
2,235.4

Net cash provided by/(used in) operating activities
396.8

 
383.2

Investing activities:
 
 
 
Purchase of property, equipment and software
(46.2
)
 
(59.9
)
Purchase of investments by CIP
(2,020.5
)
 
(3,080.5
)
Sale of investments by CIP
1,730.7

 
3,145.8

Purchase of investments
(90.1
)
 
(95.3
)
Sale of investments
75.6

 
120.9

Capital distributions from equity method investees
2.3

 
28.7

Purchase of business
(1,469.3
)
 
—

Net cash provided by/(used in) investing activities
(1,817.5
)
 
59.7

Financing activities:
 
 
 
Purchases of treasury shares
(46.9
)
 
(57.3
)
Dividends paid
(244.0
)
 
(233.7
)
Third-party capital invested into CIP
182.6

 
299.7

Third-party capital distributed by CIP
(62.9
)
 
(62.9
)
Borrowings of debt by CIP
521.5

 
1,459.3

Repayments of debt by CIP
(427.2
)
 
(1,957.1
)
Net borrowings/(repayments) under credit facility
878.9

 
(28.7
)
Payment of contingent consideration
(7.1
)
 
(7.2
)
Net cash provided by/(used in) financing activities
794.9

 
(587.9
)
Increase/(decrease) in cash and cash equivalents
(625.8
)
 
(145.0
)
Foreign exchange movement on cash and cash equivalents
(16.7
)
 
56.1

Foreign exchange movement on cash and cash equivalents of CIP
(2.0
)
 
1.5

Net cash inflows (outflows) upon consolidation/deconsolidation of CIP
(39.3
)
 
(8.6
)
Cash and cash equivalents, beginning of period
2,517.7

 
2,070.2

Cash and cash equivalents, end of period
1,833.9

 
1,974.2

 
 
 
 
Cash and cash equivalents
1,480.5

 
1,646.1

Cash and cash equivalents of CIP
353.4

 
328.1

Total cash and cash equivalents per consolidated statement of cash flows
1,833.9

 
1,974.2

See accompanying notes.

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Invesco Ltd.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
 
Equity Attributable to Invesco Ltd.
 
 
 
 
 
 
$ in millions
Common Shares
 
Additional Paid-in-Capital
 
Treasury Shares
 
Retained Earnings
 
Accumulated Other Comprehensive Income/(Loss)
 
Total Equity Attributable to Invesco Ltd.
 
Nonredeemable Noncontrolling Interests in Consolidated Entities
 
Total Permanent Equity
 
Redeemable Noncontrolling Interests in Consolidated Entities Temporary Equity
January 1, 2018
98.1

 
6,282.0

 
(2,781.9
)
 
5,489.1

 
(391.2
)
 
8,696.1

 
259.5

 
8,955.6

 
243.2

Adjustment for adoption of ASU 2016-01
—

 
—

 
—

 
3.2

 
(3.2
)
 
—

 
—

 
—

 
—

January 1, 2018, as adjusted
98.1

 
6,282.0

 
(2,781.9
)
 
5,492.3

 
(394.4
)
 
8,696.1

 
259.5

 
8,955.6

 
243.2

Net income
—

 
—

 
—

 
499.0

 
—

 
499.0

 
20.1

 
519.1

 
(12.0
)
Other comprehensive income/(loss)
—

 
—

 
—

 
—

 
(169.3
)
 
(169.3
)
 
—

 
(169.3
)
 
—

Change in noncontrolling interests in consolidated entities, net
—

 
—

 
—

 
—

 
—

 
—

 
39.3

 
39.3

 
65.8

Dividends
—

 
—

 
—

 
(244.0
)
 
—

 
(244.0
)
 
—

 
(244.0
)
 
—

Employee share plans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
—

 
81.8

 
—

 
—

 
—

 
81.8

 
—

 
81.8

 
—

Vested shares
—

 
(108.4
)
 
108.4

 
—

 
—

 
—

 
—

 
—

 
—

Other share awards
—

 
0.2

 
0.4

 
—

 
—

 
0.6

 
—

 
0.6

 
—

Purchase of shares
—

 
—

 
(46.9
)
 
—

 
—

 
(46.9
)
 
—

 
(46.9
)
 
—

June 30, 2018
98.1

 
6,255.6

 
(2,720.0
)
 
5,747.3

 
(563.7
)
 
8,817.3

 
318.9

 
9,136.2

 
297.0


See accompanying notes.

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Invesco Ltd.
Consolidated Statements of Changes in Equity (continued)
(Unaudited)
 
Equity Attributable to Invesco Ltd.
 
 
 
 
 
 
$ in millions
Common Shares
 
Additional Paid-in-Capital
 
Treasury Shares
 
Retained Earnings
 
Accumulated Other Comprehensive Income
 
Total Equity Attributable to Invesco Ltd.
 
Nonredeemable Noncontrolling Interests in Consolidated Entities
 
Total Permanent Equity
 
Redeemable Noncontrolling Interests in Consolidated Entities Temporary Equity
January 1, 2017
98.1

 
6,227.4

 
(2,845.8
)
 
4,833.4

 
(809.3
)
 
7,503.8

 
108.0

 
7,611.8

 
283.7

Net income
—

 
—

 
—

 
451.6

 
—

 
451.6

 
(4.4
)
 
447.2

 
16.6

Other comprehensive income
—

 
—

 
—

 
—

 
215.1

 
215.1

 
—

 
215.1

 
—

Change in noncontrolling interests in consolidated entities, net
—

 
—

 
—

 
—

 
—

 
—

 
97.9

 
97.9

 
28.0

Dividends
—

 
—

 
—

 
(233.7
)
 
—

 
(233.7
)
 
—

 
(233.7
)
 
—

Employee share plans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
—

 
92.5

 
—

 
—

 
—

 
92.5

 
—

 
92.5

 
—

Vested shares
—

 
(113.8
)
 
113.8

 
—

 
—

 
—

 
—

 
—

 
—

Other share awards
—

 
0.1

 
0.4

 
—

 
—

 
0.5

 
—

 
0.5

 
—

Purchase of shares
—

 
—

 
(57.3
)
 
—

 
—

 
(57.3
)
 
—

 
(57.3
)
 
—

June 30, 2017
98.1

 
6,206.2

 
(2,788.9
)
 
5,051.3

 
(594.2
)
 
7,972.5

 
201.5

 
8,174.0

 
328.3


See accompanying notes.


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Invesco Ltd.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
1.  ACCOUNTING POLICIES
Corporate Information
Invesco Ltd. (Parent) and all of its consolidated entities (collectively, the company or Invesco) provide retail and institutional clients with an array of global investment management capabilities. The company operates globally and its sole business is investment management.
Certain disclosures included in the company's annual report on Form 10-K for the year ended December 31, 2017 (annual report or Form 10-K) are not required to be included on an interim basis in the company's quarterly reports on Forms 10-Q (Report). The company has condensed or omitted these disclosures. Therefore, this Report should be read in conjunction with the company's annual report.
Basis of Accounting and Consolidation
The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with rules and regulations of the Securities and Exchange Commission and consolidate the financial statements of the Parent and all of its controlled subsidiaries. In the opinion of management, the financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair statement of the financial condition and results of operations for the periods presented. All significant intercompany transactions, balances, revenues and expenses are eliminated upon consolidation. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Accounting Pronouncements Recently Adopted
Revenue Recognition. On January 1, 2018 the company adopted Accounting Standard Update 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09), which revised revenue accounting rules through the creation of Accounting Standard Codification Topic 606 (ACS 606) and expanded the disclosure requirements. The company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective transition method applied to contracts that were not complete as of that date. Under this method, entities are required to report any effect from adoption as a cumulative effect adjustment to retained earnings at the adoption date. The adoption of the standard did not have an effect on opening retained earnings, net income or earnings per share measures. The impact of ASU 2014-09 on the timing of recognition of performance fee revenues may result in future performance fees being recognized earlier under ASU 2014-09, but this will depend on the terms and conditions in the relevant agreement.
The application of the new principal versus agent guidance in ASU 2014-09 resulted in presentation changes in the Consolidated Statements of Income whereby certain costs are now reported on a gross basis, when Invesco is acting as principal, and reported on a net basis, when Invesco is acting as an agent. In accordance with the ASU 2014-09 requirements, the disclosure of the impact of adoption on the Condensed Consolidated Statements of Income was as follows (in millions):

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$ in millions
Three months ended June 30, 2018
 
Six months ended June 30, 2018
Condensed Consolidated Statements of Income
As Reported
 
Adjustments Related to Adoption of
ASC 606
 
Balances Without Adoption of
ASC 606
 
As Reported
 
Adjustments Related to Adoption of
ASC 606
 
Balances Without Adoption of
ASC 606
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
Investment management fees
1,050.5

 
53.8

 
1,104.3

 
2,094.2

 
107.6

 
2,201.8

Service and distribution fees
242.9

 
(31.1
)
 
211.8

 
489.0

 
(63.5
)
 
425.5

Performance fees
11.6

 
—

 
11.6

 
20.7

 
—

 
20.7

Other
55.6

 
(34.5
)
 
21.1

 
112.5

 
(75.5
)
 
37.0

Total operating revenues
1,360.6

 
(11.8
)
 
1,348.8

 
2,716.4

 
(31.4
)
 
2,685.0

 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Third-party distribution, service and advisory
408.9

 
(16.7
)
 
392.2

 
828.0

 
(40.5
)
 
787.5

Employee compensation
381.1

 
—

 
381.1

 
771.5

 
—

 
771.5

Marketing
32.8

 
—

 
32.8

 
60.9

 
—

 
60.9

Property, office and technology
101.7

 
—

 
101.7

 
203.9

 
—

 
203.9

General and administrative
104.8

 
4.9

 
109.7

 
199.7

 
9.1

 
208.8

Total operating expenses
1,029.3

 
(11.8
)
 
1,017.5

 
2,064.0

 
(31.4
)
 
2,032.6

Operating income
331.3

 
—

 
331.3

 
652.4

 
—

 
652.4

Financial Instruments. On January 1, 2018, the company adopted Accounting Standards Update 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" (ASU 2016-01). Under the new standard, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value with any changes recognized in earnings. ASU 2016-01 requires a modified retrospective approach to adoption. Accumulated gains of $3.2 million were reclassified into retained earnings at adoption date. With effect from the adoption of ASU 2016-01, seed money, investments held to settle the company's deferred compensation plan liabilities, and other equity securities are no longer categorized as trading investments or available-for-sale investments but instead are referred to as "equity investments," and all gains or losses arising from changes in the fair value of these equity investments will be included in income. Prior period balances have been conformed to be presented as "equity investments," however the prior period treatment of gains or losses arising from changes in the fair value of the investments was retained. As ASU 2016-01 required a modified retrospective approach to adoption, available-for-sale seed money balances of $69.3 million at December 31, 2017 are presented as "equity investments" to conform to the current period presentation of seed money; however, the related accounting basis in that period was available-for-sale.

Statement of Cash Flows. On January 1, 2018, the company adopted Accounting Standards Update 2016-15, "Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments" (ASU 2016-15), which clarified how certain cash receipts and cash payments are classified and presented on the Statement of Cash Flows, including distributions from equity method investees. The amendments require a retrospective approach to adoption. As a result of adopting this standard, $8.6 million was reclassified from net cash provided by/(used in) investing activities to net cash provided by/(used in) operating activities for the six months ended June 30, 2017.

On January 1, 2018, the company adopted Accounting Standards Update 2016-18, “Statement of Cash Flows: Restricted Cash” (ASU 2016-18). The standard requires the inclusion of restricted cash within cash and cash equivalents when reconciling the beginning and ending cash and cash equivalents balances on the statements of cashflows. ASU 2016-18 requires a retrospective approach to adoption. Accordingly, changes in CIP cash of $407.0 million for the six months ended June 30, 2017 are no longer presented as a component of the company's cash provided by operations as they were reported in the Form 10-Q for the period ended June 30, 2017. These changes in CIP cash now form part of the reconciliation of corporate cash and CIP cash at the end of the Condensed Consolidated Statements of Cash Flows for the period ended June 30, 2017. The adoption of this standard does not impact corporate cash and cash equivalents.

Pension Costs. On January 1, 2018, the company adopted Accounting Standard Update 2017-07, “Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (ASU 2017-07). The amendments require that the service cost component of net periodic pension costs be recorded within employee

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compensation expense and the other components of net benefit cost be recorded in other gains and losses, net in the Condensed Consolidated Statements of Income. The company utilized a practical expedient that permits an employer to use the amounts disclosed in its pension plan footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation. The application of the new rules results in the reclassification of the non-service cost components of the pension costs/(benefit) to other gains and losses, net, and has no impact to net income. For the three and six months ended June 30, 2017, the reclassification decreased operating income by $0.6 million and $1.3 million, respectively, with a corresponding increase to other gains and losses, net.

Other Income. On January 1, 2018, the company adopted Accounting Standard Update 2017-05, "Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” (ASU 2017-05). The standard clarified the scope of accounting for gains and losses from the derecognition of nonfinancial assets and added guidance for partial sales of nonfinancial assets. The adoption of this standard did not have a material impact on the company's financial condition, results of operations or cash flows.
Pending Accounting Pronouncements
In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases” (ASU 2016-02). The standard requires that lessees recognize lease assets and lease liabilities on the balance sheet for all leases with a lease term greater than 12 months. ASU 2016-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018 and requires a modified retrospective approach to adoption. The company is continuing to evaluate the potential impact of this standard through a detailed review of a sample of lease arrangements. A global cross-functional team is analyzing and assessing the impact of adopting the new lease accounting guidance. The company has selected a lease accounting software tool to assist in the accounting for lease arrangements under the new accounting rules and has begun the process of designing and implementing this tool.

Revenue Recognition Accounting Policy
Revenue is measured and recognized based on the five step process outlined in ASC 606, Revenue from Contracts with Customers. Revenue is determined based on the transaction price negotiated with the customer, net of discounts, value added tax and other sales-related taxes.

Investment management fees are derived from providing professional services to manage client accounts and sponsored investment vehicles. Investment management services are satisfied over time as the services are provided and are typically based upon a percentage of the value of the client’s assets under management. Investment management fees for certain arrangements include fees for distribution and administrative-related services. Any fees collected in advance are deferred and recognized as income over the period in which services are rendered.
Service fees are earned for services rendered relating to fund accounting, transfer agent, administrative and/or other maintenance activities performed for sponsored investment vehicles. All of these services are transferred over time. Service fees are generally based upon a percentage of the value of the assets under management.
The Company provides distribution services to certain sponsored investment vehicles. Fees are generally earned based upon a percentage of the value of the assets under management, as the fee amounts do not crystallize completely upon the sale of a share or unit. Accordingly, the distribution fee revenues are recognized over time as the amount of the fees becomes known. For example, U.S. distribution fees can include 12b-1 fees earned from certain mutual funds to cover allowable sales and marketing expenses for those funds and also include asset-based sales charges paid by certain mutual funds for a period of time after the sale of those funds. Generally, retail products offered outside of the U.S. do not generate a separate distribution fee; the quoted management fee rate is inclusive of these services. The Company also has certain arrangements whereby the distribution fees are paid upon the subscription or redemption of a share or unit.

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Performance fee revenues associated with retail funds will fluctuate from period to period and may not correlate with general market changes, since most of the fees are driven by relative performance to the respective benchmark rather than by absolute performance. Performance fee revenues, including carried interests and performance fees related to partnership investments and separate accounts, are generated on certain management contracts when performance hurdles are achieved. Such fee revenues are recorded in operating revenues when the contractual performance criteria have been met and when it is probable that a significant reversal of revenue recognized will not occur in future reporting periods. Cash receipt of performance fees generally occurs after the performance fee revenue is earned; however, the company may receive, from time-to-time, cash distributions of carried interest before any revenue is earned. Such distributions are reflected as deferred carried interest liabilities within accounts payable and accrued expenses on the Condensed Consolidated Balance Sheets. Given the uniqueness of each fee arrangement, performance fee contracts are evaluated on an individual basis to determine the timing of revenue recognition. Performance fees typically arise from investment management activities that were initially undertaken in prior reporting periods.
Other revenues include fees derived primarily from transaction commissions earned upon the sale of new investments into certain of our funds and fees earned upon the completion of transactions in our real estate and private equity asset groups. Real estate transaction fees are derived from commissions earned through the buying and selling of properties. Private equity transaction fees include commissions associated with the restructuring of, and fees from providing advice to, portfolio companies held by the funds. These transaction fees are recorded in the Condensed Consolidated Statements of Income on the date when Invesco’s services are complete which typically coincides with when the transactions are legally complete.
Principal versus Agent
The company utilizes third party service providers to fulfill certain performance obligations in its revenue agreements. Generally, the company is deemed to be the principal in these arrangements, because the company controls the investment management and other related services before they are transferred to customers. Such control is evidenced by the company’s primary responsibility to customers, the ability to negotiate the third party contract price and select and direct third party service providers, or a combination of these factors. Therefore, investment management and service and distribution fee revenues and the related third party distribution, service and advisory expenses are reported on a gross basis.
Third-party distribution, service and advisory expenses include periodic “renewal” commissions paid to brokers and independent financial advisors for the continuing oversight of their clients' assets over the time they are invested and are payments for the servicing of client accounts. Renewal commissions are calculated based upon a percentage of the AUM value and apply to much of the company's non-U.S. retail operations. As discussed above, the revenues from the company’s U.S. retail operations include 12b-1 distribution fees, which are largely passed through to brokers who sell the funds as third-party distribution expenses along with additional marketing support distribution costs. Both the revenues and the costs are dependent on the underlying AUM of the brokers' clients. Third-party distribution expenses also include the amortization of upfront commissions paid to broker-dealers for sales of fund shares with a contingent deferred sales charge (a charge levied to the investor for client redemption of AUM within a certain contracted period of time). The upfront distribution commissions are amortized over the redemption period. Also included in third-party distribution, service and advisory expenses are sub-transfer agency fees that are paid to third parties for processing client share purchases and redemptions, call center support and client reporting. These costs are reimbursed by the related funds.


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2. FAIR VALUE OF ASSETS AND LIABILITIES
The carrying value and fair value of financial instruments are presented in the below summary table. The fair value of financial instruments held by CIP is presented in Note 12, "Consolidated Investment Products." See the company's most recently filed Form 10-K for additional disclosures on valuation methodology and fair value.
 
 
June 30, 2018
 
December 31, 2017
$ in millions
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Cash and cash equivalents
 
1,480.5

 
1,480.5

 
2,006.4

 
2,006.4

Equity investments
 
383.6

 
383.6

 
346.6

 
346.6

Available-for-sale debt investments
 
1.0

 
1.0

 
15.9

 
15.9

Foreign time deposits *
 
27.3

 
27.3

 
28.6

 
28.6

Assets held for policyholders
 
12,199.6

 
12,199.6

 
12,444.5

 
12,444.5

Policyholder payables *
 
(12,199.6
)
 
(12,199.6
)
 
(12,444.5
)
 
(12,444.5
)
Contingent consideration liability
 
(50.1
)
 
(50.1
)
 
(57.4
)
 
(57.4
)
Long-term debt *
 
(2,955.8
)
 
(3,039.1
)
 
(2,075.8
)
 
(2,258.1
)
____________
*
These financial instruments are not measured at fair value on a recurring basis. See the most recently filed Form 10-K for additional information about the carrying and fair values of these financial instruments. Foreign time deposits are measured at cost plus accrued interest, which approximates fair value, and are accordingly classified as Level 2 securities.


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The following table presents, by hierarchy levels, the carrying value of the company's assets and liabilities, including major security type for equity and debt securities, which are measured at fair value on the company's Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, respectively:
 
As of June 30, 2018
$ in millions
Fair Value Measurements
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
472.5

 
472.5

 
—

 
—

Investments:*
 
 
 
 
 
 
 
Equity investments:
 
 
 
 
 
 
 
Seed money
274.3

 
274.3

 
—

 
—

Investments related to deferred compensation plans
93.6

 
93.6

 
—

 
—

Other equity securities
15.7

 
15.7

 
—

 
—

Available-for-sale debt investments:
 
 
 
 
 
 
 
Collateralized loan obligations (CLOs)
1.0

 
—

 
1.0

 
—

Assets held for policyholders
12,199.6

 
12,199.6

 
—

 
—

Total
13,056.7

 
13,055.7

 
1.0

 
—

Liabilities:
 
 
 
 
 
 
 
Contingent consideration liability
(50.1
)
 
—

 
—

 
(50.1
)
Total
(50.1
)
 
—

 
—

 
(50.1
)

 
As of December 31, 2017
$ in millions
Fair Value Measurements
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
875.5

 
875.5

 
—

 
—

Investments:*
 
 
 
 
 
 
 
Equity investments:
 
 
 
 
 
 
 
Seed money
243.0

 
243.0

 
—

 
—

Investments related to deferred compensation plans
92.3

 
92.3

 
—

 
—

Other equity securities
11.3

 
11.3

 
—

 
—

Available-for-sale debt investments:
 
 
 
 
 
 
 
CLOs
6.0

 
—

 
6.0

 
—

Other debt securities
9.9

 
—

 
—

 
9.9

Assets held for policyholders
12,444.5

 
12,444.5

 
—

 
—

Total
13,682.5

 
13,666.6

 
6.0

 
9.9

Liabilities:
 

 
 

 
 

 
 

Contingent consideration liability
(57.4
)
 
—

 
—

 
(57.4
)
Total
(57.4
)
 
—

 
—

 
(57.4
)
____________
*
Foreign time deposits of $27.3 million (December 31, 2017: 28.6 million) are excluded from this table. Equity method and other investments of $315.2 million and $5.7 million, respectively, (December 31, 2017: $277.3 million and $6.2 million, respectively) are also excluded from this table. These investments are not measured at fair value, in accordance with applicable accounting standards.

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The following table shows a reconciliation of the beginning and ending fair value measurements for level 3 assets and liabilities during the three and six months ended June 30, 2018 and June 30, 2017, which are valued using significant unobservable inputs:
 
Three months ended June 30, 2018
 
Six months ended June 30, 2018
$ in millions
Contingent Consideration Liability
 
Other Debt Securities
 
Contingent Consideration Liability
 
Other Debt Securities
Beginning balance
(53.6
)
 
6.2

 
(57.4
)
 
9.9

Net unrealized gains and losses included in other gains and losses, net*
(0.2
)
 
—

 
0.2

 
—

Disposition/settlements
3.7

 
(6.2
)
 
7.1

 
(9.9
)
Ending balance
(50.1
)
 
—

 
(50.1
)
 
—


 
Three months ended June 30, 2017
 
Six months ended June 30, 2017
$ in millions
Contingent Consideration Liability
 
Other Debt Securities
 
Contingent Consideration Liability
 
CLOs
 
Other Debt Securities
Beginning balance
(74.1
)
 
12.9

 
(78.2
)
 
12.9

 
13.2

Purchases/acquisitions
—

 
—

 
—

 
—

 
7.3

Net unrealized gains and losses included in other gains and losses, net*
1.3

 
(2.2
)
 
1.8

 
—

 
(2.2
)
Disposition/settlements
3.6

 
(0.9
)
 
7.2

 
—

 
(8.5
)
Transfer from level 3 to level 2
—

 
—

 
—

 
(12.9
)
 
—

Ending balance
(69.2
)
 
9.8

 
(69.2
)
 
—

 
9.8

_______________
*
These unrealized gains and losses are attributable to balances still held at the respective period ends.
Put option contracts
The company purchased an additional put option contract for $1.1 million in the three months ended June 30, 2018 to hedge economically foreign currency risk on the translation of a portion of its Pound Sterling-denominated earnings into U.S. Dollars, providing coverage through June 28, 2019.
Contingent Consideration Liability
At June 30, 2018 inputs used in the model included assumed growth rates in AUM ranging from (2.34)% to 0.74% (weighted average growth rate of (0.03)%) and a discount rate of 4.62%. Changes in fair value are recorded in other gains and losses, net in the Condensed Consolidated Statements of Income in the period incurred. An increase in AUM levels and/or a decrease in the discount rate would increase the fair value of the contingent consideration liability, while a decrease in forecasted AUM and/or an increase in the discount rate would decrease the liability.


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3.  INVESTMENTS
The disclosures below include details of the company's investments. Investments held by CIP are detailed in Note 12, "Consolidated Investment Products."
$ in millions
June 30, 2018
 
December 31, 2017
Equity investments:
 
 
 
Seed money
274.3

 
243.0

Investments related to deferred compensation plans
93.6

 
92.3

Other equity securities
15.7

 
11.3

Available-for-sale debt investments:
 
 
 
CLOs
1.0

 
6.0

Other debt securities
—

 
9.9

Equity method investments
315.2

 
277.3

Foreign time deposits
27.3

 
28.6

Other
5.7

 
6.2

Total investments
732.8

 
674.6

Available for sale debt investments
Upon adoption of ASU 2016-01, as of January 1, 2018, seed money investments formerly classified as available-for-sale are now included as equity investments. Realized gains and losses recognized in the Condensed Consolidated Statements of Income during the period from investments classified as available-for-sale are as follows:
 
For the three months ended June 30, 2018
 
For the six months ended June 30, 2018
$ in millions
Proceeds from Sales
 
Gross Realized Gains
 
Gross Realized Losses
 
Proceeds from Sales
 
Gross Realized Gains
 
Gross Realized Losses
CLOs
9.7

 
0.8

 
—

 
12.3

 
0.8

 
—

Other debt securities
6.3

 
—

 
(3.5
)
 
6.3

 
—

 
(3.6
)
 
16.0

 
0.8

 
(3.5
)
 
18.6

 
0.8

 
(3.6
)
 
For the three months ended June 30, 2017
 
For the six months ended June 30, 2017
$ in millions
Proceeds from Sales
 
Gross Realized Gains
 
Gross Realized Losses
 
Proceeds from Sales
 
Gross Realized Gains
 
Gross Realized Losses
Seed money
12.3

 
—

 
(0.7
)
 
46.5

 
0.9

 
(1.3
)
CLOs
0.6

 
0.1

 
—

 
2.6

 
0.4

 
—

Other debt securities
0.9

 
0.8

 
—

 
8.5

 
0.8

 
—

 
13.8

 
0.9

 
(0.7
)
 
57.6

 
2.1

 
(1.3
)
Gross unrealized holding gains and losses recognized in accumulated other comprehensive income/(loss) from available-for-sale debt investments are presented in the tables below:
 
June 30, 2018
$ in millions
Cost
 
Gross Unrealized Holding Gains
 
Gross Unrealized Holding Losses
 
Fair Value
CLOs
0.2

 
0.8

 
—

 
1.0

 
0.2

 
0.8

 
—

 
1.0


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December 31, 2017
$ in millions
Cost
 
Gross Unrealized Holding Gains
 
Gross Unrealized Holding Losses
 
Fair Value
Seed money
65.1

 
5.5

 
(1.3
)
 
69.3

CLOs
4.9

 
1.1

 
—

 
6.0

Other debt securities
9.9

 
—

 
—

 
9.9

 
79.9

 
6.6

 
(1.3
)
 
85.2

At December 31, 2017: 50 seed money funds had incurred gross unrealized holding losses. The following table provides a breakdown of the unrealized losses.
 
December 31, 2017
$ in millions
Fair Value
 
Gross Unrealized Losses
Less than 12 months
9.4

 
(0.8
)
12 months or greater
15.0

 
(0.5
)
Total
24.4

 
(1.3
)

Available-for-sale debt securities as of June 30, 2018 by maturity, are set out below:
 
Available-for-Sale (Fair Value)
Less than one year
—

One to five years
0.2

Five to ten years
0.8

Greater than ten years
—

Total available-for-sale
1.0


Equity investments
The unrealized gains and losses for the three and six months ended June 30, 2018, that relate to equity investments still held at June 30, 2018, were a $9.9 million net loss and $9.7 million net loss, respectively (three and six months ended June 30, 2017: $5.4 million net gain and $10.2 million net gain related to trading investments held at June 30, 2017).


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4.  LONG-TERM DEBT
The disclosures below include details of the company's debt. Debt of CIP is detailed in Note 12, “Consolidated Investment Products.”
 
June 30, 2018
 
December 31, 2017
$ in millions
Carrying Value**
 
Fair Value
 
Carrying Value**
 
Fair Value
  Floating rate credit facility expiring August 11, 2022
878.9

 
878.9

 
—

 
—

Unsecured Senior Notes*:
 
 
 
 
 
 
 
$600 million 3.125% - due November 30, 2022
597.2

 
602.1

 
596.9

 
608.8

$600 million 4.000% - due January 30, 2024
594.5

 
606.8

 
594.0

 
634.7

$500 million 3.750% - due January 15, 2026
495.3

 
497.6

 
495.1

 
515.0

$400 million 5.375% - due November 30, 2043
389.9

 
453.7

 
389.8

 
499.6

Long-term debt
2,955.8

 
3,039.1

 
2,075.8

 
2,258.1

____________
*
The company's senior note indentures contain certain restrictions on mergers or consolidations. Beyond these items, there are no other restrictive covenants in the indentures.
**
The difference between the principal amounts and the carrying values of the senior notes in the table above reflect the unamortized debt issuance costs and discounts.

The company maintains approximately $9.9 million in letters of credit from a variety of banks. The letters of credit are generally one-year automatically-renewable facilities and are maintained for various commercial reasons.
5.  SHARE CAPITAL
The number of common shares and common share equivalents issued are represented in the table below:
 
As of
In millions
June 30, 2018
 
December 31, 2017

Common shares issued
490.4

 
490.4

Less: Treasury shares for which dividend and voting rights do not apply
(79.6
)
 
(83.3
)
Common shares outstanding
410.8

 
407.1


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6.  OTHER COMPREHENSIVE INCOME/(LOSS)
The components of accumulated other comprehensive income/(loss) were as follows:
 
For the three months ended June 30, 2018
$ in millions
Foreign currency translation
 
Employee benefit plans
 
Equity method investments
 
Available-for-sale investments
 
Total
Other comprehensive income/(loss) net of tax:
 
 
 
 
 
 
 
 
 
Currency translation differences on investments in foreign subsidiaries
(233.6
)
 
—

 
—

 
—

 
(233.6
)
Other comprehensive income, net
—

 
1.9

 
—

 
(0.6
)
 
1.3

Other comprehensive income/(loss), net of tax
(233.6
)
 
1.9

 
—

 
(0.6
)
 
(232.3
)
 
 
 
 
 
 
 
 
 
 
Beginning balance
(225.9
)
 
(109.3
)
 
2.0

 
1.8

 
(331.4
)
Other comprehensive income/(loss), net of tax
(233.6
)
 
1.9

 
—

 
(0.6
)
 
(232.3
)
Ending balance
(459.5
)
 
(107.4
)
 
2.0

 
1.2

 
(563.7
)

 
For the six months ended June 30, 2018
$ in millions
Foreign currency translation
 
Employee benefit plans
 
Equity method investments
 
Available-for-sale investments
 
Total
Other comprehensive income/(loss) net of tax:
 
 
 
 
 
 
 
 
 
Currency translation differences on investments in foreign subsidiaries
(169.0
)
 
—

 
—

 
—

 
(169.0
)
Other comprehensive income, net
—

 
2.3

 
(2.3
)
 
(0.3
)
 
(0.3
)
Other comprehensive income/(loss), net of tax
(169.0
)
 
2.3

 
(2.3
)
 
(0.3
)
 
(169.3
)
 
 
 
 
 
 
 
 
 
 
Beginning balance
(290.5
)
 
(109.7
)
 
4.3

 
4.7

 
(391.2
)
Adjustment for adoption of ASU 2016-01
—

 
—

 
—

 
(3.2
)
 
(3.2
)
January 1, 2018, as adjusted
(290.5
)
 
(109.7
)
 
4.3

 
1.5

 
(394.4
)
Other comprehensive income/(loss), net of tax
(169.0
)
 
2.3

 
(2.3
)
 
(0.3
)
 
(169.3
)
Ending balance
(459.5
)
 
(107.4
)
 
2.0

 
1.2

 
(563.7
)

 
For the three months ended June 30, 2017
$ in millions
Foreign currency translation
 
Employee benefit plans
 
Equity method investments
 
Available-for-sale investments
 
Total
Other comprehensive income/(loss) net of tax:
 
 
 
 
 
 
 
 
 
Currency translation differences on investments in foreign subsidiaries
147.4

 
—

 
—

 
—

 
147.4

Other comprehensive income, net
—

 
0.5

 
0.9

 
0.7

 
2.1

Other comprehensive income/(loss), net of tax
147.4

 
0.5

 
0.9

 
0.7

 
149.5

 
 
 
 
 
 
 
 
 
 
Beginning balance
(617.3
)
 
(139.0
)
 
5.1

 
7.5

 
(743.7
)
Other comprehensive income/(loss), net of tax
147.4

 
0.5

 
0.9

 
0.7

 
149.5

Ending balance
(469.9
)
 
(138.5
)
 
6.0

 
8.2

 
(594.2
)


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For the six months ended June 30, 2017
$ in millions
Foreign currency translation
 
Employee benefit plans
 
Equity method investments
 
Available-for-sale investments
 
Total
Other comprehensive income/(loss) net of tax:
 
 
 
 
 
 
 
 
 
Currency translation differences on investments in foreign subsidiaries
210.0

 
—

 
—

 
—

 
210.0

Other comprehensive income, net
—

 
0.7

 
1.2

 
3.2

 
5.1

Other comprehensive income/(loss), net of tax
210.0

 
0.7

 
1.2

 
3.2

 
215.1

 
 
 
 
 
 
 
 
 
 
Beginning balance
(679.9
)
 
(139.2
)
 
4.8

 
5.0

 
(809.3
)
Other comprehensive income/(loss), net of tax
210.0

 
0.7

 
1.2

 
3.2

 
215.1

Ending balance
(469.9
)
 
(138.5
)
 
6.0

 
8.2

 
(594.2
)

Net Investment Hedge

The Company designated certain intercompany debt as a non-derivative net investment hedging instrument against foreign currency exposure related to its net investment in foreign operations. At June 30, 2018, £130 million ($171.6 million) of intercompany debt was designated as a net investment hedge.  For the six months ended June 30, 2018, the Company recognized foreign currency gains of $4.3 million resulting from the net investment hedge within currency translation differences on investments in foreign subsidiaries in other comprehensive income. No hedge ineffectiveness was recognized in income.


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7. REVENUE

The geographic disaggregation of revenue for the three and six months ended June 30, 2018 is presented below. There are no revenues attributed to the company's country of domicile, Bermuda.
$ in millions
For the three months ended June 30, 2018
 
For the six months ended June 30, 2018
North America
830.2

 
1,648.2

EMEA
456.4

 
926.3

Asia-Pacific
74.0

 
141.9

Total operating revenues
1,360.6

 
2,716.4


The opening and closing balance of deferred carried interest liabilities for the six months ended June 30, 2018 was $60.4 million. During the six months ended June 30, 2018, no performance fee revenue was recognized that was included in the deferred carried interest liability balance at the beginning of the period.

8.  SHARE-BASED COMPENSATION
The company recognized total expenses of $81.8 million and $92.5 million related to equity-settled share-based payment transactions in the six months ended June 30, 2018 and 2017, respectively.
Share Awards
Movements on share awards during the periods ended June 30, are detailed below:
 
For the six months ended June 30, 2018
 
For the six months ended June 30, 2017
Millions of shares, except fair values
Time- Vested
 
Performance- Vested
 
Weighted Average Grant Date Fair Value ($)
 
Time- Vested
 
Performance- Vested
Unvested at the beginning of period
12.0

 
0.9

 
31.52

 
12.1

 
0.8

Granted during the period
5.2

 
0.4

 
32.52

 
5.1

 
0.3

Forfeited during the period
(0.1
)
 
—

 
31.66

 
(0.3
)
 
—

Vested and distributed during the period
(4.6
)
 
(0.4
)
 
32.14

 
(4.7
)
 
(0.2
)
Unvested at the end of the period
12.5

 
0.9

 
31.72

 
12.2

 
0.9

The total fair value of shares that vested during the six months ended June 30, 2018 was $153.1 million (six months ended June 30, 2017: $155.1 million). The weighted average grant date fair value of the share awards that were granted during the six months ended June 30, 2018 was $32.52 (six months ended June 30, 2017:$32.18).
At June 30, 2018, there was $360.7 million of total unrecognized compensation cost related to non-vested share awards; that cost is expected to be recognized over a weighted average period of 2.75 years.
9.  TAXATION
At June 30, 2018, the total amount of gross unrecognized tax benefits was $19.2 million as compared to the December 31, 2017 total of $19.6 million. At December 31, 2017, the company had not completed the accounting for the tax effects of enacting the Tax Cuts and Jobs Act (the "2017 Tax Act") and therefore recognized a provisional income tax benefit of $130.7 million.  As of June 30, 2018, the company continues to evaluate the accounting and as future guidance is issued, management finalizes its positions, and calculations are refined the estimates could potentially be affected.


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Table of Contents    
    

                                    

10.  EARNINGS PER SHARE
The calculation of earnings per share is as follows:
 
For the three months ended June 30,
 
For the six months ended June 30,
In millions, except per share data
2018
 
2017
 
2018
 
2017
Net income

$241.9

 

$249.6

 

$507.1

 

$463.8

Net (income)/loss attributable to noncontrolling interests in consolidated entities
3.2

 
(10.0
)
 
(8.1
)
 
(12.2
)
Net income attributable to Invesco Ltd.
245.1

 
239.6

 
499.0

 
451.6

Less: Allocation of earnings to restricted shares
(7.5
)
 
(7.2
)
 
(15.1
)
 
(13.6
)
Net income attributable to common shareholders

$237.6

 

$232.4

 

$483.9

 

$438.0

 
 
 
 
 
 
 
 
Invesco Ltd:
 
 
 
 
 
 
 
Weighted average shares outstanding - basic
413.9

 
409.9

 
412.6

 
408.8

Dilutive effect of non-participating share-based awards
0.2

 
0.4

 
0.3

 
0.4

Weighted average shares outstanding - diluted
414.1

 
410.3

 
412.9

 
409.2

 
 
 
 
 
 
 
 
Common shareholders:
 
 
 
 
 
 
 
Weighted average shares outstanding - basic
413.9

 
409.9

 
412.6

 
408.8

Less: Weighted average restricted shares
(12.7
)
 
(12.4
)
 
(12.5
)
 
(12.3
)
Weighted average common shares outstanding - basic
401.2

 
397.5

 
400.1

 
396.5

Dilutive effect of non-participating share-based awards
0.2

 
0.4

 
0.3

 
0.4

Weighted average common shares outstanding - diluted
401.4

 
397.9

 
400.4

 
396.9