AMVESCAP PLC Reports Results for Nine Months Ended September 30, 2005.LONDON London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. -- AMVESCAP (NYSE NYSE See: New York Stock Exchange :AVZ)(LSE LSE - Language Sensitive Editor :AVZ)(TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :AVZ) reported that profit before tax for the nine months ended September September: see month. 30, 2005 amounted to GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 186.9 million ($330.8 million), compared to a loss of GBP 46.2 million ($83.6 million) for the same period in 2004. The 2004 results included a charge of GBP 229.2 million representing the U.S. regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. settlement. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the nine months ended September 30, 2005 amounted to GBP 205.1 million ($363.0 million), compared to GBP 199.3 million ($360.7 million) before the settlement charge for the first nine months of 2004. Revenues totaled GBP 884.2 million ($1,565.0 million) for the first nine months of 2005, compared to GBP 858.0 million ($1,553.0 million) in the 2004 period. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of amounted to 14.8p for the 2005 period, compared to 14.4p before the settlement charge for the 2004 period. (NYSE:AVZ). Commenting on his first months as AMVESCAP's new president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Martin L. Flanagan Flanagan may refer to: People named:
above all, most especially , dedicated professional team necessary to succeed as one of the premier global asset managers. We are working to eliminate any barriers that may have limited our ability to leverage the full power of our organization, and I am confident that we will unlock AMVESCAP's tremendous potential for our clients and shareholders."
Results for Nine Months Ended September
30,
2005 2004(a) 2005(c) 2004(a)(c)
--------- ---------- ---------- ----------
Revenues GBP884.2m GBP 858.0m $1,565.0m $1,553.0m
Profit before tax GBP186.9m GBP(46.2)m $330.8m $(83.6)m
Profit before tax and U.S.
regulatory settlement GBP186.9m GBP 182.9m $330.8m $331.1m
Earnings per share:
--basic 15.0p (7.4)p $0.53(b) $(0.27)(b)
--diluted 14.8p (7.4)p $0.52(b) $(0.27)(b)
Earnings per share before
U.S. regulatory
settlement:
--basic 15.0p 14.5p $0.53(b) $0.52(b)
--diluted 14.8p 14.4p $0.52(b) $0.52(b)
--------------------------- ------------------------------------------
(a) 2004 results have been restated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). ("IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System "). See Note 9 for a reconciliation of AMVESCAP's U.K. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). results to IFRS. (b) Per American Depositary Share American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. equivalent to 2 ordinary shares. (c) For the convenience of the reader, pounds sterling for the nine months ended September 30, 2005 have been translated to U.S. dollars using $1.77 per GBP 1.00 (2004: $1.81 per GBP 1.00). References to "$" in this release are to U.S. dollars unless otherwise indicated. Effective January January: see month. 1, 2005, AMVESCAP began recording its results of operations under International Financial Reporting Standards ("IFRS"). Prior to this date, AMVESCAP prepared its consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge under U.K. Generally Accepted Accounting Practice ("U.K. GAAP"). The most significant changes affecting AMVESCAP's financial reporting due to the IFRS transition are: --The cessation cessation Vox populi The stopping of a thing. See Smoking cessation. of goodwill amortization (IFRS 3) and redenomination Redenomination The process of changing the currency value on a financial security. Notes: A great example is when the denomination on many European securities needed to be changed to the Euro. See also: Currency of goodwill into the currency of the underlying acquired entities (IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 21) --The inclusion of a fair value charge in respect of outstanding employee share options granted after November November: see month. 7, 2002 (IFRS 2) --The replacement of existing charges for awards under certain equity-based compensation plans with fair value charges spread over revised time periods (IFRS 2) --The inclusion in the balance sheet of all employee benefit liabilities (IAS 19) The underlying business transactions and cashflows of AMVESCAP did not change upon transition to IFRS. The transition to IFRS resulted in the reduction of total shareholders' funds under U.K. GAAP at January 1, 2004 (transition date) of GBP 118 million. This reduction is due primarily to the redenomination of goodwill and management contract intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. into the currency of the underlying acquired entities. Under U.K. GAAP, these balances were recorded in pounds sterling. For the year ended December December: see month. 31, 2004, the transition to IFRS resulted in the addition of GBP 151 million to profit for the year, primarily due to the cessation of goodwill amortization previously recorded under U.K. GAAP. Diluted earnings per share for the nine months ended September 30, 2004 was (7.4)p under IFRS, compared with (21.4)p under U.K. GAAP. See Note 9 for further details. AMVESCAP's first Annual Report under IFRS will be for the year ended December 31, 2005. The information presented in this earnings release is subject to the ongoing development of IFRS. As announced on October October: see month. 4, 2005, AMVESCAP intends to change its presentation currency from pounds sterling to U.S. dollars in December and will begin reporting results in U.S. dollars with the issuance of the fourth quarter results and the 2005 Annual Report. Profit before tax for the three months ended September 30, 2005 amounted to GBP 67.6 million ($119.7 million), compared to GBP 44.9 million ($81.3 million) before the settlement charge in the 2004 third quarter. Diluted earnings per share for the three months ended September 30, 2005 amounted to 5.3p (2004: 3.5p before the settlement charge). Revenues for the three months ended September 30, 2005 amounted to GBP 302.7 million ($535.8 million), compared to GBP 280.9 million ($508.4 million) from the prior year's third quarter. Funds under management totaled $380.5 billion at September 30, 2005, compared to $382.1 billion at December 31, 2004. Institutional money market funds, included above, amounted to $41.2 billion at September 30, 2005, compared to $41.7 billion at December 31, 2004. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 54% of the total funds under management were invested in equity securities, and 46% were invested in fixed income securities at September 30, 2005 (June June: see month. 30, 2005: 53% equity and 47% fixed income). The equity securities were invested in the following disciplines at September 30, 2005: 33% in growth, 38% in core, and 29% in value styles (June 30, 2005: 33% in growth, 38% in core and 29% in value styles). At September 30, 2005, 46% of funds under management were managed in institutional products and 54% were managed in retail products (June 30, 2005: 48% in institutional products and 52% in retail products). Average funds under management amounted to $376.1 billion for the nine months ended September 30, 2005, compared to $371.0 billion for the same period in 2004. Of these funds, average institutional money market fund levels totaled $41.1 billion for the nine months of 2005, compared to $45.7 billion for the same period of 2004. Average funds under management during the third quarter were $378.1 billion, compared to $372.7 billion for the preceding quarter and $364.0 billion for the third quarter of 2004. Changes in funds under management during the nine months ended September 30, 2005 are as follows:
AIM INVESCO
--------------- ---------------------------
(billions) Total U.S. Canada U.S. U.K. Europe/Asia PWM
-------- ------- ------- ------- ------- ----------- -----
December
31, 2004 $382.1 $137.6 $34.6 $121.0 $49.6 $24.1 $15.2
Market
gains 15.5 3.5 1.4 2.5 5.4 2.5 0.2
Net
new/(lost)
business (12.5) (11.2) 0.5 (6.0) 4.6 (0.7) 0.3
Change in
money
market
funds (1.3) (1.2) -- -- -- (0.1) --
Foreign
currency (3.3) -- 1.9 (0.3) (3.2) (1.7) --
-------- ------- ------- ------- ------- ----------- -----
September
30, 2005 $380.5 $128.7 $38.4 $117.2 $56.4 $24.1 $15.7
======== ======= ======= ======= ======= =========== =====
September GBP215.0 GBP72.7 GBP21.7 GBP66.2 GBP31.9 GBP13.6 GBP8.9
30, 2005 +
======== ======= ======= ======= ======= =========== =====
Changes in funds under management during the third quarter of 2005 are as follows:
AIM INVESCO
--------------- ---------------------------
(billions) Total U.S. Canada U.S. U.K. Europe/Asia PWM
-------- ------- ------- ------- ------- ----------- ------
June 30,
2005 $373.2 $128.6 $36.2 $116.8 $52.9 $23.4 $15.3
Market
gains 11.1 3.8 0.5 2.5 2.8 1.1 0.4
Net
new/(lost)
business (4.3) (3.8) (0.1) (2.1) 1.8 (0.1) --
Change in
money
market
funds 0.1 0.1 -- -- -- -- --
Foreign
currency 0.4 -- 1.8 -- (1.1) (0.3) --
-------- ------- ------- ------- ------- ----------- ------
September
30, 2005 $380.5 $128.7 $38.4 $117.2 $56.4 $24.1 $15.7
======== ======= ======= ======= ======= =========== ======
September GBP215.0 GBP72.7 GBP21.7 GBP66.2 GBP31.9 GBP13.6 GBP8.9
30, 2005 +
======== ======= ======= ======= ======= =========== ======
+ Translated at $1.77 per GBP 1.00. Earnings before interest, taxes, depreciation, amortization and certain non-cash and other items ("EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ") amounted to GBP 277.2 million ($490.6 million) for the nine months ended September 30, 2005, compared to GBP 260.8 million ($472.0 million) for the nine months ended September 30, 2004. Net debt at September 30, 2005, excluding client cash, totaled GBP 362.7 million, compared to GBP 590.9 million at the end of 2004. AMVESCAP is a leading independent global investment manager dedicated to helping people worldwide build their financial security. Operating under the AIM, INVESCO INVESCO, (NYSE: IVZ) is an investment management company based in London, England, UK. It is quoted on the London Stock Exchange and is a member of the FTSE 100 Index. It has branches in 19 countries, but more than half of its business is in the United States. , AIM Trimark, INVESCO Perpetual Invesco Perpetual is an investment company based in Henley-on-Thames, Oxfordshire, England. It was originally founded as by Sir Martyn Arbib and before it merged with Invesco it was known first as Perpetual Mutual then as Perpetual plc. and Atlantic Trust brands, AMVESCAP strives to deliver outstanding products and services through a comprehensive array of retail and institutional investment solutions for clients around the world. The Company is listed on the London, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Toronto stock exchanges Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. 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, Thursday Thursday: see week. , October 27, 2005, at 2:30 p.m. BST (convention) BST - British Summer Time. The name for daylight-saving time in the UK GMT time zone. (9:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ), by dialing one of the following numbers: 773-756-0108 or 1-888-455-2053 for U.S. callers. An audio replay of the conference call will be available until Thursday, November 3, 2005, at 10:00 p.m. BST (5:00 p.m. EDT) by calling 402-220-0354 or 1-800-739-2817 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " under the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. 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 Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. , 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 report, words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "projects" and future or conditional Subject to change; dependent upon or granted based on the occurrence of a future, uncertain event. A conditional payment is the payment of a debt or obligation contingent upon the performance of a certain specified act. verbs such as "will," "may," "could," "should," and "would" or 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 See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . AMVESCAP PLC Consolidated Income Statement consolidated income statement An income statement that combines the income statements of two or more organizations. As with other consolidated statements, a consolidated income statement eliminates any funds owed to or due from firms within the same group. (Unaudited) (in thousands)
Nine Months Ended Sept 30,
-------------------------------
2005 2004
-------------- --------------
Revenues GBP 884,160 GBP 858,009
Expenses:
Operating (679,039) (658,731)
U.S. regulatory settlement -- (229,167)
-------------- --------------
Operating profit/(loss) 205,121 (29,889)
Other income 16,996 13,568
Interest expense (35,212) (29,898)
-------------- --------------
Profit/(loss) before taxation 186,905 (46,219)
Taxation (67,491) (13,326)
-------------- --------------
Profit/(loss) after taxation 119,414 (59,545)
Minority interests (489) (51)
-------------- --------------
Profit/(loss) for the period GBP 118,925 GBP (59,596)
attributable to equity holders
of the parent
============== ==============
Earnings per share:
---basic 15.0p (7.4)p
---diluted 14.8p (7.4)p
Earnings per share before U.S.
regulatory settlement:
---basic 15.0p 14.5p
---diluted 14.8p 14.4p
-------------- --------------
Average shares outstanding:
---basic 793,772 803,678
---diluted 803,463 808,779
-------------- --------------
AMVESCAP PLC Consolidated Income Statement (Unaudited) (in thousands)
Three Months Ended Sept 30,
-------------------------------
2005 2004
-------------- --------------
Revenues GBP 302,664 GBP 280,907
Expenses:
Operating (238,698) (229,421)
U.S. regulatory settlement -- (229,167)
-------------- --------------
Operating profit/(loss) 63,966 (177,681)
Other income 14,931 3,251
Interest expense (11,324) (9,883)
-------------- --------------
Profit/(loss) before taxation 67,573 (184,313)
Taxation (24,849) 35,797
-------------- --------------
Profit/(loss) after taxation 42,724 (148,516)
Minority interests (209) 73
-------------- --------------
Profit/(loss) for the period GBP 42,515 GBP (148,443)
attributable to equity holders
of the parent
============== ==============
Earnings per share:
---basic 5.4p (18.5)p
---diluted 5.3p (18.5)p
Earnings per share before U.S.
regulatory settlement:
---basic 5.4p 3.5p
---diluted 5.3p 3.5p
-------------- --------------
Average shares outstanding:
---basic 794,052 804,260
---diluted 807,516 806,179
-------------- --------------
AMVESCAP PLC Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (Unaudited) (in thousands)
Sept 30, 2005 Dec 31, 2004
------------ ------------
Non-current assets
Goodwill and intangible assets GBP2,454,146 GBP2,317,247
Property and equipment 107,564 118,272
Deferred tax assets 70,996 78,217
Investments 98,369 70,070
------------ ------------
2,731,075 2,583,806
Current assets
Trade and other receivables 588,511 502,500
Investments 669,027 499,439
Cash and cash equivalents 407,114 284,977
------------ ------------
1,664,652 1,286,916
Total assets 4,395,727 3,870,722
Current liabilities
Current maturities of long-term debt -- (41,411)
Trade and other payables (1,514,846) (1,156,139)
------------ ------------
(1,514,846) (1,197,550)
Net current assets 149,806 89,366
Non-current liabilities
Long-term debt (653,948) (683,215)
Deferred tax liabilities (18,937) (19,099)
Provisions for liabilities and charges (130,282) (124,793)
------------ ------------
Total liabilities (2,318,013) (2,024,657)
Net assets
GBP2,077,714 GBP1,846,065
============ ============
Equity
Share capital GBP203,011 GBP202,664
Share premium 708,779 700,888
Shares held by employee trusts (237,972) (237,972)
Exchangeable shares 303,507 308,996
Retained earnings 390,519 291,241
Other reserves 708,075 578,934
------------ ------------
Equity attributable to equity holders of
the parent 2,075,919 1,844,751
Minority interests 1,795 1,314
------------ ------------
Total equity
GBP2,077,714 GBP1,846,065
============ ============
AMVESCAP PLC Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Cash Flow Statement (Unaudited) (in thousands)
Nine Months Ended Sept
30,
----------------------
2005 2004
---------- -----------
Operating profit GBP205,121 GBP(29,889)
Amortization and depreciation 32,767 37,086
Interest paid, net of investment income (36,238) (25,660)
Taxation (45,173) (43,428)
Change in other assets and liabilities 99,797 229,361
---------- -----------
Net cash inflow from operating activities 256,274 167,470
Investing activities:
Capital expenditures, net of sales (13,463) (19,258)
(Purchase)/sale of fixed asset investments, net (4,381) 611
Dispositions and acquisitions 30,871 (28,195)
Financing:
Dividends paid (41,002) (53,312)
Net repayment of debt (126,899) (42,057)
Other financing 1,447 (25,077)
---------- -----------
Increase in cash and cash equivalents 102,847 182
Foreign exchange 19,290 (3,422)
Cash and cash equivalents, beginning of period 284,977 318,713
---------- -----------
Cash and cash equivalents, end of period GBP407,114 GBP315,473
========== ===========
AMVESCAP PLC Segmental segmental /seg·men·tal/ (seg-men´t'l) 1. pertaining to or forming a segment or a product of division, especially into serially arranged or nearly equal parts. 2. undergoing segmentation. Information (Unaudited) (in thousands)
Nine Months Ended September 30,
2005
Operating
Revenues Expenses Profit
---------- ------------ ----------
AIM
U.S. GBP306,350 GBP(205,676)GBP100,674
Canada 149,461 (65,471) 83,990
---------- ------------ ----------
455,811 (271,147) 184,664
---------- ------------ ----------
INVESCO
U.S. 160,157 (116,791) 43,366
U.K. 166,913 (136,166) 30,747
Europe/Asia 49,803 (57,528) (7,725)
---------- ------------ ----------
376,873 (310,485) 66,388
---------- ------------ ----------
Private Wealth/Retirement 51,476 (58,011) (6,535)
---------- ------------ ----------
Corporate -- (39,396) (39,396)
---------- ------------ ----------
GBP884,160 GBP(679,039)GBP205,121
========== ============ ==========
Nine Months Ended September 30,
2004
Operating
Revenues Expenses Profit*
---------- ------------ ----------
AIM
U.S.* GBP334,616 GBP(220,474)GBP114,142
Canada 127,077 (58,235) 68,842
---------- ------------ ----------
461,693 (278,709) 182,984
---------- ------------ ----------
INVESCO
U.S. 137,630 (102,292) 35,338
U.K. 137,936 (132,056) 5,880
Europe/Asia 57,426 (53,083) 4,343
---------- ------------ ----------
332,992 (287,431) 45,561
---------- ------------ ----------
Private Wealth/Retirement 63,324 (67,510) (4,186)
---------- ------------ ----------
Corporate -- (25,081) (25,081)
---------- ------------ ----------
GBP858,009 GBP(658,731)GBP199,278
========== ============ ==========
* before U.S. regulatory settlement Notes 1. Accounting policies The accounting policies used in the preparation of this earnings release follow International Financial Reporting Standards ("IFRS") in effect as of the date of this release. The comparative period has been restated to apply these IFRS on a consistent basis (see Note 9). The most significant changes due to the IFRS transition are: --The cessation of goodwill amortization (IFRS 3) and redenomination of goodwill into the currency of the underlying acquired entities (IAS 21) --The inclusion of a fair value charge in respect of outstanding employee share options granted after November 7, 2002 (IFRS 2) --The replacement of existing charges for awards under certain equity-based compensation plans with fair value charges spread over revised time periods (IFRS 2) --The inclusion in the balance sheet of all employee benefit liabilities (IAS 19) AMVESCAP's first Annual Report under IFRS will be for the year ended December 31, 2005. The information presented in this earnings release is subject to the ongoing development of IFRS; however the policies applied to the information in this release are consistent with those that are expected to be applied in the 2005 Annual Report. Please refer to www.amvescap.com for a more detailed discussion of these policies. 2. Adoption of accounting standards AMVESCAP has adopted IAS 32, "Financial Instruments: Disclosure and Presentation" and IAS 39, "Financial Instruments: Recognition and Measurement" as of January 1, 2005. These standards require that financial assets Financial assets Claims on real assets. and liabilities be recognized on the balance sheet and accounted for according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. their underlying classification. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased by GBP 15.2 million as a result of these changes, primarily arising from the recognition of net unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. on investments classified as available for sale. 3. Taxation The taxation charge is primarily due to overseas taxation. A significant proportion of the tax charge is expected to arise from U.S. operations. The estimated effective tax rate is 36.1% in 2005 (2004: 36.1% before the U.S. regulatory settlement charge). 4. 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.
2005
------------------------
Profit Number Per
for the of share
period shares
GBP'000 '000 amount
-------- -------- ------
Basic earnings per share 118,925 793,772 15.0p
======
Dilutive effect of share-based awards 9,691
-------- --------
Diluted earnings per share 118,925 803,463 14.8p
======== ======== =====
2004
-------------------------
Loss for Number Per
the of share
period shares
GBP '000 '000 amount
-------- -------- -------
Basic and diluted earnings per share (59,596) 803,678 (7.4)p
======== ======== =======
5. Sale of AMVESCAP Retirement On July July: see month. 15, 2005, AMVESCAP completed the disposal of the AMVESCAP Retirement business. The results of this business are included through the closing date of the transaction. A gain of GBP 18.7 million has been recorded within other income. Revenues of GBP 18.0 million were derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. by the AMVESCAP Retirement business in 2005 through the date of disposal. The disposal is analyzed an·a·lyze tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es 1. To examine methodically by separating into parts and studying their interrelations. 2. Chemistry To make a chemical analysis of. 3. as follows:
GBP '000
----------------------------------------------------------------------
Total net assets 13,451
Gain on disposal 18,705
-------
Cash consideration 32,156
----------------------------------------------------------------------
6. U.S. regulatory settlement The consolidated income statement for 2004 includes a charge of GBP 229.2 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the mutual fund market timing investigations by regulators in the United States. The charge comprised settlement payments and civil penalties of GBP 208.9 million, along with related costs of GBP 20.3 million, primarily additional legal costs associated with the investigations. Previously, when reporting under U.K. GAAP, the settlement charge was included in exceptional items totaling GBP 249.7 million. The exceptional items, as reported in 2004, also included GBP 20.5 million primarily relating to estimates of lease payments in excess of the expected sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. proceeds over the remaining lives of the leases. These amounts have been reclassified as operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . 7. Dividends A final dividend in respect of the 2004 year of 5.0p per share or GBP 41,002,000 (GBP 39,595,000 for ordinary shares and GBP 1,407,000 for exchangeable shares) was approved at the Annual General Meeting of Shareholders on April 28, 2005. This dividend was accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. on that date, and a payment was made on May 4, 2005, to shareholders on the register on April 1, 2005. An interim 2005 dividend of 4.0p per share (2004: 2.5p) or GBP 32,818,000 (GBP 31,712,000 for ordinary shares and GBP 1,106,000 for exchangeable shares) was declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. by the Board of Directors on August 2, 2005, and was paid on October 12, 2005 to shareholders on the register on September 9, 2005. 8. Credit facility On March 31, 2005, AMVESCAP entered into a new five-year credit agreement ("credit facility") with a group of lenders, providing a revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility in an aggregate principal amount of up to $900 million. Under certain conditions, the aggregate commitments under the credit facility may be increased to $1.2 billion. The credit facility requires specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. financial ratios to be maintained, including a maximum debt-to-EBITDA ratio of 3.25:1 and a minimum interest coverage ratio of 4.0:1. 9. Reconciliations from U.K. GAAP to IFRS Prior to January 1, 2005, AMVESCAP reported its results of operations under U.K. Generally Accepted Accounting Practice ("U.K. GAAP"). Beginning January 1, 2005, AMVESCAP transitioned from U.K. GAAP to International Financial Reporting Standards ("IFRS"). The tables below reconcile total shareholders' funds at December 31, 2003, and December 31, 2004 under U.K. GAAP to total equity under IFRS, and loss after taxation for the nine months ended September 30, 2004 and the year ended December 31, 2004 from U.K. GAAP to IFRS. Amounts are presented in millions. Reconciliation of U.K. GAAP total shareholders' funds to IFRS total equity
Dec 31, Dec 31,
2003 2004
-----------------
U.K. GAAP total shareholders' funds GBP2,065 GBP1,864
IFRS Transition Adjustments:
Goodwill and intangibles (130) (16)
Shared based payment (7) (7)
Defined benefit obligation, net (31) (30)
Dividends 53 41
Other (3) (6)
-----------------
IFRS total equity GBP1,947 GBP1,846
=================
Reconciliation of U.K. GAAP loss after taxation to IFRS loss after taxation
Nine Year
months ended
ended Dec 31,
Sept 30, 2004
2004
-----------------
U.K. GAAP loss after taxation GBP(172) GBP(173)
IFRS Transition Adjustments:
Goodwill and intangibles 111 153
Defined benefit obligation, net 1 --
Sale of business 3 3
Other (3) (5)
-----------------
IFRS loss after taxation GBP(60) GBP(22)
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IFRS Transition Adjustments: Goodwill and intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. . AMVESCAP has chosen to apply IFRS 3 prospectively from the date of transition. This has resulted in the value of goodwill arising from previous acquisitions being frozen at the value held on the AMVESCAP balance sheet at January 1, 2004 and the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of any amortization charged in 2004. AMVESCAP has elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to apply IAS 21 retrospectively ret·ro·spec·tive adj. 1. Looking back on, contemplating, or directed to the past. 2. Looking or directed backward. 3. Applying to or influencing the past; retroactive. 4. to its goodwill and intangible asset balances, which were previously recorded in pounds sterling from their respective acquisition dates. The result of this application is that the goodwill and intangible assets have been redenominated into their underlying currencies and will subsequently be re-measured each reporting date for the effect of changes in foreign exchange rates. Share-based payment. AMVESCAP will recognize a charge in the Income Statement for the fair value of outstanding share awards granted to employees after November 7, 2002. The charge has been calculated using a stochastic By guesswork; by chance; using or containing random values. stochastic - probabilistic option valuation model and will be charged over the relevant vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: periods, adjusted to reflect expected and actual levels of vesting. Defined benefit obligation, net. AMVESCAP will recognize the net liability for defined benefit post retirement plan schemes on the balance sheet and will take actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin gains and losses on a systematic basis to the Income Statement, in accordance with the permitted methods of recognition under IAS 19. Sale of business. During 2004, AMVESCAP disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of its U.K. and Jersey businesses of Atlantic Wealth Management and included the previously written off goodwill related to this business in the calculation of the net gain resulting from the sale. Under IFRS 1 goodwill previously deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. from equity is not recognized in the opening balance sheet and that goodwill is not transferred into the Income Statement upon disposal of the business. This had the effect of increasing the gain reported under U.K. GAAP. Dividends. AMVESCAP will recognize dividends declared after the balance sheet date in the reporting period in which they are declared, as they represent non-adjusting events after the balance sheet date. Other. Other adjustments upon transition to IFRS include the recognition and establishment of accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. related to compensated compensated /com·pen·sat·ed/ (kom´pen-sa?tid) counterbalanced; offset. absences, foreign exchange items and certain tax adjustments. 10. Statutory financial statements The financial information shown in this earnings release is unaudited and does not constitute statutory financial statements. The 2004 Annual Report has been filed with the Register of Companies on which the auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together issued a report, which was unqualified and did not contain a statement under section 237(2) or section 237(3) of the Companies Act 1985. |
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