AMVESCAP PLC Reports Results for Year Ended December 31, 2002.Business Editors LONDON--(BUSINESS WIRE)--Feb. 4, 2003 AMVESCAP reported that profit before tax, goodwill amortization and exceptional items decreased 33% to 320.9 million ($516.6 million) from 477.9 million ($693.0 million) in 2001. 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 before goodwill amortization and exceptional items was 27.2p for the 2002 year (2001: 40.0p). Revenues amounted to 1,345.3 million ($2,165.9 million) compared to 1,619.8 million ($2,348.7 million) in 2001 (NYSE NYSE See: New York Stock Exchange : AVZ).
Results for Year Ended
2002 2001 2002++ 2001++
---------- ------------- ----------- ---------
Revenues (pounds) (pounds)
1,345.3m 1,619.8m $2,165.9m $2,348.7m
Profit before tax,
goodwill amortization
and exceptional (pounds) (pounds)
items 320.9m 477.9m $516.6m $693.0m
Earnings per share
before goodwill
amortization:
--basic 20.5p 36.3p $0.66+ $1.05+
--diluted 20.3p 35.2p $0.65+ $1.02+
Earnings per share
before goodwill
amortization and
exceptional items:
--basic 27.5p 41.2p $0.89+ $1.19+
--diluted 27.2p 40.0p $0.88+ $1.16+
Dividends per share 11.5p 11.0p $0.37+ $0.32+
---------------------- ----------------------------------------------
+ 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. ++ For the convenience of the reader, pounds sterling for the year ended December December: see month. 31, 2002 have been translated to US dollars using $1.61 per 1.00 (2001: $1.45 per 1.00). "We reduced expenses in a controlled manner throughout 2002 while maintaining our breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is of product, distribution capabilities and quality of service. We have aligned our corporate structure under our primary brands in response to clients' and distributors' increasing need for integrated solutions," said Mr. Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by W. Brady Bra·dy , James Buchanan Known as "Diamond Jim." 1856-1917. American financier and philanthropist who gained his nickname because of his attraction to diamonds and his extravagant lifestyle. Noun 1. , Executive Chairman. "We achieved fundamental change that has strengthened the firm and will benefit us in the future." The Company previously announced that it has initiated a cost reduction program to reduce 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. by $150 million by the end of 2003. An exceptional charge of 69.2 million (including 49.2 million recorded in the fourth quarter) relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc these cost reduction initiatives was recorded in 2002. This charge amounts to 56.4 million after tax or 6.9p per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Funds under management totaled $332.6 billion (206.6 billion) at December 31, 2002 compared to $397.9 billion at December 31, 2001. Money market funds, included above, amounted to $57.0 billion at December 31, 2002 compared to $63.6 billion at the end of the prior year. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 50% of the total funds under management was invested in equity securities and 50% was invested in fixed income and other securities at December 31, 2002. The equity securities were invested in the following disciplines at December 31, 2002: 36% in growth, 38% in core and 26% in value styles. Average funds under management amounted to $336.6 billion for the fourth quarter compared to $348.4 billion for the previous quarter and $384.9 billion for the fourth quarter of 2001. Average funds under management amounted to $365.8 billion for 2002 compared to $395.0 billion for the prior year. The average money market fund levels totaled $59.6 billion for the year ($60.7 billion for 2001). Net debt at December 31, 2002 amounted to 652.4 million (excluding client cash) compared to 837.0 million at December 31, 2001. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
The Board has recommended a final dividend of 6.5p resulting in a total dividend of 11.5p for 2002 (2001: 11.0p), an increase of 5% over the prior year but the same level as the 2001 final dividend. This dividend, if approved by the shareholders at the Annual General Meeting in May, will be paid on May 3, 2003 to shareholders on the register on April 4, 2003. The ex-dividend date Ex-dividend date The first day of trading when the buyer of a stock is no longer entitled to the most recently announced dividend payment ( i.e. the trade will settle the day after the record date, too late for the buyer to appear on the shareholder record and receive the dividend. for the dividend will be April 2, 2003. THE YEAR IN REVIEW Effective January January: see month. 1, 2003, the Company realigned several business units under the AIM and 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. brands. The following summary of activities for 2002 is presented under the former business unit structure. The operating data for 2002, recast re·cast tr.v. re·cast, re·cast·ing, re·casts 1. To mold again: recast a bell. 2. into the new structure, is included for comparison purposes in the attached schedules. Managed Products The Managed Products group reported revenues of 770.3 million during 2002 compared to 986.2 million for the prior year. Operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. were 322.6 million, compared to 436.5 million in 2001. The group generated approximately $34.9 billion of gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. in 2002. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite this, market declines of $31.5 billion and net redemptions of $7.0 billion led to a reduction in funds under management for the year. Funds under management amounted to $166.1 billion at December 31, 2002, including $57.0 billion of money market funds. INVESCO Institutional The INVESCO Institutional group reported revenues and operating profits of 199.2 million and 49.3 million in the 2002 period. This group generated approximately $20.2 billion in gross sales during 2002; market declines and net redemptions were $8.4 billion and $5.7 billion, respectively for the year. Funds under management amounted to $102.9 billion at December 31, 2002. INVESCO Global INVESCO Global's revenues amounted to 281.7 million for 2002 compared to 340.3 million in 2001. Operating profit totaled 33.9 million for the year ended December 31, 2002 versus 76.4 million for the prior year. Funds under management were $55.3 billion at December 31, 2002. Gross sales for 2002 totaled approximately $29.2 billion; market declines totaled $9.3 billion and net redemptions were $1.3 billion for the year. AMVESCAP Retirement AMVESCAP Retirement's assets under administration were $30.9 billion at December 31, 2002. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the group amounted to $2.5 billion for 2002. This group services 1,400 plans with 624,000 participants at December 31, 2002. Private Wealth Management Revenues and operating profits for the Private Wealth Management (PWM (Pulse Width Modulation) A modulation technique that generates variable-width pulses to represent the amplitude of an analog input signal. Like its fixed-width pulse density modulation (PDM) cousin, the output switching transistor is on more of the time for a ) division totaled 34.5 million and 1.8 million for 2002, its first full year of operation. Funds under management were $8.3 billion at December 31, 2002. OUTLOOK "The global economic and political climate contains many uncertainties that are directly affecting the capital markets and our business. The worst bear market in over 65 years has badly eroded e·rode v. e·rod·ed, e·rod·ing, e·rodes v.tr. 1. To wear (something) away by or as if by abrasion: Waves eroded the shore. 2. To eat into; corrode. investor and business confidence, and it will understandably take some time to restore this confidence after the markets have stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. ," noted Mr. Brady. "As we enter 2003, AMVESCAP will continue to maintain our focus on the business fundamentals business fundamentals The general background within which an economy operates including earnings, sales, wage rates, taxes, and inflation. Improving business fundamentals are generally viewed as bullish for stocks, although stock prices at any given point within our control - serving our clients well and prudently pru·dent adj. 1. Wise in handling practical matters; exercising good judgment or common sense. 2. Careful in regard to one's own interests; provident. 3. Careful about one's conduct; circumspect. managing our business." AMVESCAP is a leading independent global investment manager, dedicated to helping people worldwide build their financial security. Operating under the AIM, INVESCO and Atlantic Trust brands, AMVESCAP strives to deliver outstanding investment performance and service through a comprehensive array of retail and institutional products for clients in over 100 countries. The Company is listed on the 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. , 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 , Paris 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." Members of the investment community and general public are invited to listen to the conference call today, Tuesday Tuesday: see week. , February February: see month. 4, 2003 at 9:30 a.m. Eastern Time (2:30 p.m. London Time), by dialing one of the following numbers: 1-888-201-4990 for US callers or 630-395-0027 for international callers. An audio replay of the conference call will be available until Tuesday, February 11, 2003 at 5:00 pm Eastern Time by calling 1-888-568-0380 for US callers or 402-530-7921 for international callers.
AMVESCAP PLC
Group Profit and Loss Account
(in thousands)
Year Ended December 31,
-------------------------------------
2002 2001
------------------ ------------------
Revenues (pounds)1,345,263 (pounds)1,619,847
Expenses:
Operating (978,338) (1,096,487)
Exceptional (69,248) (59,997)
Goodwill amortization (149,415) (137,477)
------------------ ------------------
Operating profit 148,262 325,886
Investment income 6,561 10,433
Interest expense (52,558) (55,881)
------------------ ------------------
Profit before taxation 102,265 280,438
Taxation (85,372) (125,635)
------------------ ------------------
Profit after taxation 16,893 154,803
Dividends (93,479) (89,260)
------------------ ------------------
Retained profit for the period (pounds)(76,586) (pounds)65,543
================== ==================
Earnings per share before
goodwill amortization and
exceptional items:
--basic 27.5p 41.2p
--diluted 27.2p 40.0p
------------------ ------------------
Earnings per share:
--basic 2.1p 19.2p
--diluted 2.1p 18.6p
------------------ ------------------
Average shares outstanding:
--basic 810,042 805,061
--diluted 819,518 829,983
------------------ ------------------
AMVESCAP PLC
Group Balance Sheet
(in thousands)
Dec 31, 2002 Dec 31, 2001
------------------ ------------
Fixed assets
Goodwill (pounds) (pounds)
2,542,306 2,696,045
Investments 248,408 224,282
Tangible assets 197,060 213,579
------------------ ------------
2,987,774 3,133,906
Currents assets
Debtors 725,547 882,516
Investments 69,195 81,495
Cash 355,111 350,978
------------------ ------------
1,149,853 1,314,989
Current liabilities
Current maturities of long-term
debt (222,089) (125,828)
Creditors (917,216) (1,025,344)
------------------ ------------
(1,139,305) (1,151,172)
Net current assets 10,548 163,817
------------------ ------------
Total assets less current liabilities 2,998,322 3,297,723
Long-term debt (595,600) (844,285)
Provisions for liabilities and
charges (119,234) (171,974)
------------------ ------------
Net assets (pounds) (pounds)
2,283,488 2,281,464
================== ============
Capital and reserves
Called up share capital (pounds) (pounds)
198,614 196,037
Share premium account 619,250 552,524
Exchangeable shares 383,105 433,597
Profit and loss account 609,298 685,884
Other reserves 473,221 413,422
------------------ ------------
Shareholders' funds, equity (pounds) (pounds)
interests 2,283,488 2,281,464
================== ============
AMVESCAP PLC
Group Cash Flow Statement
(in thousands)
Year Ended
----------------------------------
Dec 31, 2002 Dec 31, 2001
------------------ ---------------
Operating profit (pounds) (pounds)
148,262 325,886
Amortization and depreciation 209,647 207,102
Change in debtors, creditors and
other 68,609 10,245
------------------ ---------------
Net cash inflow from operating
activities 426,518 543,233
------------------ ---------------
Interest paid, net of investment
income (41,558) (45,596)
Taxation (105,557) (166,573)
Capital expenditures, net of sales (54,584) (71,542)
Net purchases of fixed asset
investments (37,322) (8,640)
Acquisitions -- (311,441)
Dividends paid (93,531) (84,365)
Net (repayment)/incurrence of debt (54,304) 15,035
Change in bank overdraft (5,656) 2,040
Foreign exchange on cash at bank and
in hand (29,873) (6,532)
------------------ ---------------
Increase/(decrease) in cash at bank (pounds) (pounds)
and in hand 4,133 (134,381)
================== ===============
AMVESCAP PLC
Segmental Information
(in thousands)
Year Ended Dec 31, 2002
-----------------------------------------------------
Revenues Expenses Profit
------------------ ----------------- ----------------
Managed Products (pounds) (pounds) (pounds)
770,313 (447,748) 322,565
INVESCO
Institutional 199,187 (149,853) 49,334
INVESCO Global 281,653 (247,749) 33,904
INVESCO
Retirement 57,552 (53,493) 4,059
Private Wealth 34,538 (32,742) 1,796
New Business 2,020 (14,068) (12,048)
Corporate -- (32,685) (32,685)
------------------ ----------------- ----------------
(pounds) (pounds) (pounds)
1,345,263 (978,338) 366,925
================== ================= ================
Year Ended Dec 31, 2001
-------------------------------------------------------
Revenues Expenses Profit
------------------ ------------------- ----------------
Managed (pounds) (pounds) (pounds)
Products 986,234 (549,763) 436,471
INVESCO
Institutional 211,917 (158,365) 53,552
INVESCO Global 340,293 (263,871) 76,422
INVESCO
Retirement 58,224 (53,247) 4,977
Private Wealth 21,211 (19,972) 1,239
New Business 1,968 (12,179) (10,211)
Corporate -- (39,090) (39,090)
------------------ ------------------- ----------------
(pounds) (pounds) (pounds)
1,619,847 (1,096,487) 523,360
================== =================== ================
Organizational Structure
Effective January 1, 2003
Year Ended Dec 31, 2002
----------------------------------------------------
Revenues Expenses Profit
------------------ ----------------- ---------------
AIM
US (pounds) (pounds) (pounds)
487,956 (281,350) 206,606
Canada 151,345 (73,702) 77,643
------------------ ----------------- ---------------
639,301 (355,052) 284,249
------------------ ----------------- ---------------
INVESCO
US 333,457 (244,614) 88,843
UK 195,265 (165,555) 29,710
Europe/Asia 86,969 (84,744) 2,225
------------------ ----------------- ---------------
615,691 (494,913) 120,778
------------------ ----------------- ---------------
Private
Wealth/Retirement 90,271 (95,688) (5,417)
Corporate -- (32,685) (32,685)
------------------ ----------------- ---------------
(pounds) (pounds) (pounds)
1,345,263 (978,338) 366,925
================== ================= ===============
Notes
1. The taxation charge is primarily made up from overseas taxation.
After adjusting for the amortization of goodwill and the exceptional
items, the effective tax rate for 2002 and 2001 was 30.6%.
2. The calculation of earnings per share is as follows:
2002
--------------------------------------
Number of
Profit after shares Per share
taxation
(pounds)'000 '000 amount
------------- ------------- ----------
Basic earnings per share 16,893 810,042 2.1p
==========
Dilutive effect of options -- 9,476
------------- -------------
Diluted earnings per share 16,893 819,518 2.1p
============= ============= ==========
Profit before goodwill amortization and exceptional items is a
more appropriate basis for the calculation of earnings per share since
this represents a more consistent measure of the year by year
performance of the business, therefore the calculation below is
presented on that basis. Basic earnings per share is based on the
weighted average number of ordinary and exchangeable shares
outstanding during the respective periods. Diluted earnings per share
takes into account the effect of dilutive potential ordinary and
exchangeable shares outstanding during the period.
2002
---------------------------------------
Profit before
goodwill Number of
amortization and shares Per share
exceptional
items
(pounds) amount
'000 '000
----------------- ---------- ----------
Basic earnings per share 222,724 810,042 27.5p
==========
Dilutive effect of options -- 9,476
----------------- ----------
Diluted earnings per share 222,724 819,518 27.2p
================= ========== ==========
2001
---------------------------------------
Profit before
goodwill Number of
amortization and shares Per share
exceptional
items
(pounds) amount
'000 '000
----------------- ---------- ----------
Basic earnings per share 331,670 805,061 41.2p
==========
Dilutive effect of options -- 24,922
----------------- ----------
Diluted earnings per share 331,670 829,983 40.0p
================= ========== ==========
Number of shares outstanding at December 31, 2002 (in thousands):
Ordinary shares 794,456
Exchangeable shares 34,899
Less: ESOT shares (19,264)
Shares in stock plans (5,000)
------------------
Shares outstanding 805,091
==================
Shares reserved for:
Options 129,192
ESD's 6,107
------------------
Total shares 940,390
==================
3. The consolidated profit and loss includes exceptional charges in
2002 and 2001 as follows:
(pounds)
'000 2002 2001
--------------------------------------------------------- -----------
Acquisitions -- 43,310
Redundancy and reorganizations 44,544 9,993
Project costs 12,882 --
Leases and other 11,822 6,694
----------------------- -----------
Total exceptional items 69,248 59,997
----------------------- -----------
Total exceptional items net of tax 56,416 39,390
======================= ===========
The restructuring charges include costs associated with redundancy
programs and expenses associated with internal reorganizations.
Project costs include charges for systems and other terminated
initiatives. The leases and other provisions relate to moves to new
office facilities, office closures and the write-off of other fixed
assets.
4. Dividends for 2002 and 2001 were as follows:
2002 2001
(pounds) (pounds)
'000 '000
------------- -------------
Interim paid: 5.0p per share (2001: 4.5p) 40,823 36,552
Final proposed: 6.5p per share (2001: 6.5p) 52,656 52,708
------------- -------------
93,479 89,260
============= =============
5. The 2001 balance sheet presentation has been reclassified to
conform to the current year presentation of the Group's banking and
insurance subsidiaries. Certain amounts previously shown as credits to
the share premium account, and which arose on various acquisitions,
have now been reclassified to other reserves in accordance with the
requirements of S131 of the Companies Act.
6. The financial information set out above does not constitute the
Company's statutory accounts for the years ended December 31, 2002 or
2001. Statutory accounts for 2001 have been reported on by the
Company's Auditors and delivered to the Registrar of Companies. The
report of the Auditors was unqualified and did not contain a statement
under Section 237 (2) or (3) of the Companies Act 1985.
AMVESCAP PLC
Funds Under Management
(in billions)
Managed Products
-----------------------------
Total AIM INVESCO
---------------- --------------- -------------
Dec 31, 2001 $397.9 $179.8 $31.4
Market gains/(loss) (50.8) (23.6) (7.9)
Net new (lost) business (14.2) (3.7) (3.3)
Change in Money
Market Funds (5.8) (6.3) (0.5)
Transfers -- (0.1) --
Foreign currency 5.5 0.3 --
---------------- --------------- -------------
Dec 31, 2002 $332.6 $146.4 $19.7
================ =============== =============
Dec 31, 2002 + (pounds) (pounds) (pounds)
206.6 91.0 12.2
================ =============== =============
INVESCO INVESCO Private
--------------------- ------------- -----------
Inst Global Wealth
--------------------- ------------- -----------
Dec 31, 2001 $116.8 $60.0 $9.9
Market gains/(loss) (8.4) (9.3) (1.6)
Net new (lost) business (5.7) (1.3) (0.2)
Change in Money
Market Funds -- 1.0 --
Transfers 0.1 -- --
Foreign currency 0.1 4.9 0.2
--------------------- ------------- -----------
Dec 31, 2002 $102.9 $55.3 $8.3
===================== ============= ===========
Dec 31, 2002 + (pounds) (pounds) (pounds)
63.9 34.3 5.2
===================== ============= ===========
Organizational Structure
Effective January 1, 2003
AIM
------------------------------
Total US Canada
---------------------- --------------- --------------
Dec 31, 2001 $397.9 $157.7 $22.1
Market
gains/(loss) (50.8) (21.5) (2.1)
Net new (lost)
business (14.2) (5.4) 1.7
Change in Money
Market Funds (5.8) (6.4) 0.1
Transfers -- -- (0.1)
Foreign currency 5.5 -- 0.3
---------------------- --------------- --------------
Dec 31, 2002 $332.6 $124.4 $22.0
====================== =============== ==============
Dec 31, 2002 + (pounds) (pounds) (pounds)
206.6 77.3 13.7
====================== =============== ==============
INVESCO PWM/
----------------------------------------
US UK Europe/Asia Retirement
--------------- ------------ ----------- ------------
Dec 31, 2001 $148.8 $38.1 $21.8 $9.4
Market
gains/(loss) (16.3) (6.8) (2.5) (1.6)
Net new
(lost)
business (9.0) (1.3) (0.1) (0.1)
Change in
Money
Market
Funds (0.5) 1.2 (0.2) --
Transfers 0.1 -- -- --
Foreign
currency 0.1 2.8 2.1 0.2
--------------- ------------ ----------- ------------
Dec 31, 2002 $123.2 $34.0 $21.1 $7.9
=============== ============ =========== ============
Dec 31, 2002 (pounds) (pounds) (pounds) (pounds)
+ 76.5 21.1 13.1 4.9
=============== ============ =========== ============
+ Translated at $1.61 per 1.00. Note: INVESCO Retirement has
$30.9 billion in assets under administration as of December 31, 2002,
compared to $34.6 billion as of December 31, 2001.
AMVESCAP PLC
Reconciliation to US Accounting Principles
(in thousands)
Year Ended December 31,
-------------------------------------
2002 2001
------------------ ------------------
Net profit under UK GAAP (pounds) (pounds)
16,893 154,803
US GAAP Adjustments:
Acquisition
accounting 137,790 (35,538)
Redundancy and
reorganizations 11,961 --
Taxation (5,198) (40,539)
Other 420 1,495
------------------ ------------------
Net income under US GAAP (pounds) (pounds)
161,866 80,221
================== ==================
Earnings per share before
amortization:
--basic 20.4p 34.8p
--diluted 20.2p 33.8p
Earnings per share:
--basic 20.0p 10.0p
--diluted 19.8p 9.7p
Dec 31, 2002 Dec 31, 2001
------------------ ------------------
Shareholders' funds under UK GAAP (pounds) (pounds)
2,283,488 2,281,464
US GAAP Adjustments:
Acquisition
accounting 1,034,168 984,436
Redundancy and
reorganizations 11,961 --
Treasury stock (162,104) (97,580)
Dividends 52,656 52,708
Other (11,934) (20,443)
------------------ ------------------
Shareholders' equity under US (pounds) (pounds)
GAAP 3,208,235 3,200,585
================== ==================
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