SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 Under
the Securities Exchange Act of 1934
For the month of August, 2005
------------
Commission File Number 001-13908
---------
AMVESCAP PLC
------------------------------------------------
(Translation of registrant's name into English)
30 Finsbury Square, London EC2A 1AG, ENGLAND
--------------------------------------------------------
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
----- -----
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
------
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
------
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
------- -------
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- N/A
-------------
Description of document filed: AMVESCAP PLC REPORTS RESULTS FOR SIX MONTHS
-------------------------------------------
ENDED 30 JUNE 2005
------------------
For Immediate Release
Contact: James Robertson
Phone: 404-724-4246
Contact: Angus Maitland
Phone: (44) 0207-379-5151
--------------------------------------------------------------------------------
AMVESCAP PLC REPORTS RESULTS
FOR SIX MONTHS ENDED JUNE 30, 2005
London, August 2, 2005 - AMVESCAP reported that profit before tax for the six
months ended June 30, 2005 amounted to (pound)119.3 million ($213.5 million)
compared to (pound)138.1 million ($250.0 million) for the first six months of
2004. The 2004 results included a gain of (pound)6.4 million arising from the
sale of the U.K. business of Atlantic Wealth Management. Operating profit for
the six months ended June 30, 2005 amounted to (pound)141.2 million ($252.7
million), compared to (pound)147.8 million ($267.5 million) for the first six
months of 2004. Revenues totaled (pound)581.5 million ($1,040.9 million) in the
first half of 2005, compared to (pound)577.1 million ($1,044.6 million) in 2004.
Diluted earnings per share amounted to 9.5p for the 2005 period, compared to
11.0p for 2004's six months. (NYSE: AVZ).
Results for Six Months Ended June 30,
2005 2004+/- 2005++ 2004+++/-
-------------- --------------- -------------- ---------------
Revenues (pound)581.5m (pound)577.1m $1,040.9m $1,044.6m
Profit before tax (pound)119.3m (pound)138.1m $213.5m $250.0m
Earnings per share:
--basic 9.6p 11.1p $0.34+ $0.40+
--diluted 9.5p 11.0p $0.34+ $0.40+
+/- 2004 results have been restated in accordance with International Financial
Reporting Standards ("IFRS"). See Note 8 for a reconciliation of AMVESCAP's
U.K. GAAP results to IFRS.
+ Per American Depositary Share equivalent to 2 ordinary shares.
++ For the convenience of the reader, pounds sterling for the six months ended
June 30, 2005 have been translated to US dollars using $1.79 per (pound)1.00
(2004: $1.81 per (pound)1.00). References to "$" in this release are to U.S.
dollars unless otherwise indicated.
Commenting on the results, Chairman Charles W. Brady said, "We have had good
profit growth in our Canadian, U.S. Institutional and U.K. businesses, in the
first half of 2005. These results have been offset by weakness in the U.S.
mutual fund business. Actions during the first half of 2005, including the sale
of our retirement business and our continuing efforts to increase the efficiency
of our shared operating platforms have strengthened the company for the future.
AMVESCAP remains focused on improving investment performance and maintaining the
highest standards of client service." Mr. Brady added, "With the appointment of
Marty Flanagan as Chief Executive Officer, AMVESCAP has the right leadership,
resources and people to take advantage of the significant industry opportunities
available globally for an independent company focused solely on investment
management."
Effective January 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 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:
o The cessation of goodwill amortization (IFRS 3) and redenomination of
goodwill to the currency of the underlying acquired entities (IAS 21)
o The inclusion of a fair value charge in respect of outstanding
employee share options granted after November 7, 2002 (IFRS 2)
o The replacement of existing charges for awards under certain
equity-based compensation plans with fair value charges spread over
revised time periods (IFRS 2)
o 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 (pound)118 million. This reduction is due primarily to the redenomination of
goodwill and management contract intangible 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 31, 2004, the transition to IFRS
resulted in the addition of (pound)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 six months ended June 30, 2004 was
11.0p under IFRS, compared with 1.8p under U.K. GAAP. Diluted earnings per share
under U.K. GAAP before goodwill amortization was 11.2p for the six months ended
June 30, 2004. See Note 8 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.
Financial Summary
Profit before tax for the three months ended June 30, 2005 amounted to
(pound)60.3 million ($107.9 million) compared to (pound)64.5 million ($116.7
million) in the 2004 second quarter. Diluted earnings per share amounted to 4.8p
(2004: 5.1p) for the three months ended June 30, 2005. Revenues for the three
months ended June 30, 2005 amounted to (pound)295.5 million ($528.9 million)
compared to (pound)288.8 million ($522.7 million) from the prior year's quarter.
Funds under management totaled $373.2 billion at June 30, 2005, compared to
$382.1 billion at December 31, 2004. Institutional money market funds, included
above, amounted to $40.6 billion at June 30, 2005, compared to $41.7 billion at
December 31, 2004. Approximately 53% of the total funds under management were
invested in equity securities, and 47% were invested in fixed income securities
at June 30, 2005 (March 31, 2005: 54% equity and 46% fixed income). The equity
securities were invested in the following disciplines at June 30, 2005: 33% in
growth, 38% in core, and 29% in value styles (March 31, 2005: 34% in growth, 38%
in core and 28% in value styles). At June 30, 2005, 48% of funds under
management were managed in institutional products and 52% were managed in retail
products (March 31, 2005: 48% in institutional products and 52% in retail
products).
Average funds under management amounted to $375.1 billion for the first half of
2005 compared to $374.4 billion for the first half of 2004. Of these funds,
average institutional money market fund levels totaled $41.0 billion for the
first half of 2005 compared to $47.0 billion of the first half 2004. Average
funds under management during the second quarter were $372.7 billion compared to
$377.4 billion for the preceding quarter and $372.6 billion for the second
quarter of 2004.
Changes in funds under management during the six months ended June 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/(losses) 4.4 (0.3) 0.9 -- 2.6 1.4 (0.2)
Net new/(lost)
business (8.2) (7.4) 0.6 (3.9) 2.8 (0.6) 0.3
Change in money
market funds (1.4) (1.3) -- -- -- (0.1) --
Foreign currency (3.7) -- 0.1 (0.3) (2.1) (1.4) --
------------ --------- ---------- ---------- ----------- -------------- --------------
June 30, 2005 $373.2 $128.6 $36.2 $116.8 $52.9 $23.4 $15.3
============ ========= =========== ========== =========== ============== ==============
June 30, 2005 + (pound)208.5 (pound)71.8 (pound)20.2 (pound)65.3 (pound)29.6 (pound)13.1 (pound)8.5
============ ========= =========== ========== =========== ============== ==============
Changes in funds under management during the second quarter of 2005 are as
follows:
AIM INVESCO
--------------------- -------------------------------------
(billions) Total U.S. Canada U.S. U.K. Europe/Asia PWM
------------ --------- ---------- ---------- ----------- -------------- --------------
March 31, 2005 $375.4 $131.0 $35.9 $118.0 $51.6 $23.9 $15.0
Market gains/(losses) 5.8 1.5 0.6 0.9 1.8 1.0 --
Net new/(lost)
business (5.7) (4.5) 0.2 (1.9) 0.6 (0.4) 0.3
Change in money
market funds 0.5 0.6 -- -- -- (0.1) --
Foreign currency (2.8) -- (0.5) (0.2) (1.1) (1.0) --
------------ --------- ---------- ---------- ----------- -------------- --------------
June 30, 2005 $373.2 $128.6 $36.2 $116.8 $52.9 $23.4 $15.3
============ ========= ========== ========== =========== ============== ==============
June 30, 2005 + (pound)208.5 (pound)71.8 (pound)20.2 (pound)65.3 (pound)29.6 (pound)13.1 (pound)8.5
============ ========= ========== ========== =========== ============== ==============
+ Translated at $1.79 per (pound)1.00.
Earnings before interest, taxes, depreciation, amortization and certain non cash
and other items ("EBITDA") amounted to (pound)180.2 million ($322.6 million) in
the six months ended June 30, 2005, compared to (pound)193.2 million ($349.7
million) for the six months ended June 30, 2004. Net debt at June 30, 2005
amounted to (pound)500.8 million compared to (pound)590.9 million at the end of
2004, excluding client cash.
The Board has declared an interim dividend of 4.0p per share (2004: 2.5p). The
interim dividend will be paid on October 12, 2005 to shareholders on the
register on September 9, 2005. The ex-dividend date for the dividend will be
September 7, 2005.
Business Highlights
The AIM U.S. group reported revenues of (pound)201.5 million and operating
profit of (pound)67.3 million. Funds under management amounted to $128.6 billion
at June 30, 2005, including $40.6 billion relating to institutional money market
funds. Performance of AIM's institutional money markets funds continues to be
excellent, with several of its largest funds ranked by Lipper as the best
performers in their categories for one, three and five-year periods. Several AIM
funds were recognized by Lipper at their 2005 Fund Awards Ceremony: AIM
International Small Company Fund was named Best International Small/Mid Cap
Growth Fund over three years; AIM Global Equity Fund was named Best Global
Multi-Cap Growth Fund over three years; AIM Real Estate Fund was named the Best
Real Estate Fund over five years.
The AIM Canada group reported revenues of (pound)95.4 million and operating
profit of (pound)50.9 million. Strong investment performance has led to AIM
Trimark being named fund manager of the year in three of the last four years at
the Canadian Investment Awards. Funds under management amounted to $36.2 billion
at June 30, 2005.
The INVESCO U.S. group reported revenues of (pound)103.8 million and operating
profits of (pound)26.7 million in the first half of 2005. Funds under management
amounted to $116.8 billion at June 30, 2005. During the first six months, the
CDO product group closed two deals totaling $1.9 billion in assets. The team
manages 19 structures totaling $8.7 billion in assets and was recently
recognized by EuroMoney magazine which named INVESCO as CDO Manager of the Year
2005.
INVESCO U.K.'s revenues amounted to (pound)110.2 million and operating profits
of (pound)23.3 million for the first half of 2005, compared with (pound)10.9
million from the prior year. This business generated $2.8 billion in net sales
during the period. Investment performance of the INVESCO Perpetual funds remain
strong with over 80% of assets outperforming their peer group over both three
and five years. INVESCO Perpetual was also named the Best Bond Fund Manager at
the Financial Advisor 2005 awards. Funds under management were $52.9 billion at
June 30, 2005.
Business Developments
Concurrent with the new law that allowed foreign investors to increase their
stake to 49%, INVESCO Asia increased its ownership in the INVESCO Great Wall
joint venture company from 33% to 49%. In the second quarter the sale of the
U.S. DC administration business was announced. This transaction closed in July.
In the first quarter the Group renewed its five year credit facility ahead of
schedule and on enhanced terms. The new credit facility will lower ongoing bank
lender fees and borrowing costs, and increase liquidity profile due to
elimination of rollover risk.
AMVESCAP is a leading independent global investment manager dedicated to helping
people worldwide build their financial security. Operating under the AIM, AIM
Trimark, INVESCO, INVESCO Perpetual and Atlantic Trust brands, AMVESCAP strives
to deliver outstanding products and services through a comprehensive array of
retail and institutional products for clients around the world. The Company is
listed on the London, New York and Toronto stock exchanges with the symbol
"AVZ." Additional information is available at www.amvescap.com.
Members of the investment community and general public are invited to listen to
the conference call today, Tuesday, August 2, 2005, at 2:30 p.m. BST (9:30 a.m.
EDT), by dialing one of the following numbers: 210-234-0004 or 1-888-201-4990
for U.S. callers. An audio replay of the conference call will be available until
Tuesday, August 9, 2005, at 10:00 p.m. BST (5:00 p.m. EDT) by calling
402-998-1629 or 1-888-566-0043 for U.S. callers. The presentation slides that
will be reviewed during the conference call will be available on AMVESCAP's Web
site at www.amvescap.com.
# # #
This release may include statements that constitute "forward-looking statements"
under the United States securities laws. Forward-looking statements include
information concerning possible or assumed future results of our operations,
earnings, liquidity, cash flow and capital expenditures, industry or market
conditions, assets under management, acquisition activities and the effect of
completed acquisitions, debt levels and the ability to obtain additional
financing or make payments on our debt, regulatory developments, demand for and
pricing of our products and other aspects of our business or general economic
conditions. In addition, when used in this report, words such as "believes,"
"expects," "anticipates," "intends," "plans," "estimates," "projects" and future
or conditional 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.
AMVESCAP PLC
Consolidated Income Statement
(Unaudited)
(in thousands)
Six Months Ended June 30,
------------------------------------
2005 2004
---------------- --------------
Revenues (pound)581,496 (pound)577,102
Operating expenses (440,341) (429,310)
---------------- --------------
Operating profit 141,155 147,792
Investment income 2,065 10,317
Interest expense (23,888) (20,015)
---------------- --------------
Profit before taxation 119,332 138,094
Taxation (42,642) (49,123)
---------------- --------------
Profit after taxation 76,690 88,971
Minority interests (280) (124)
---------------- --------------
Profit for the period attributable to
equity holders of the parent (pound)76,410 (pound)88,847
================ ==============
Earnings per share:
---basic 9.6p 11.1p
---diluted 9.5p 11.0p
---------------- --------------
Average shares outstanding:
---basic 793,629 803,384
---diluted 801,073 809,942
---------------- --------------
AMVESCAP PLC
Consolidated Income Statement
(Unaudited)
(in thousands)
Three Months Ended June 30,
------------------------------------
2005 2004
---------------- --------------
Revenues (pound)295,512 (pound)288,818
Operating expenses (223,183) (215,267)
---------------- --------------
Operating profit 72,329 73,551
Investment income 657 1,272
Interest expense (12,729) (10,317)
---------------- --------------
Profit before taxation 60,257 64,506
Taxation (21,532) (23,023)
---------------- --------------
Profit after taxation 38,725 41,483
Minority interests (202) (40)
---------------- --------------
Profit for the period attributable to
equity holders of the parent (pound)38,523 (pound)41,443
================ ==============
Earnings per share:
---basic 4.9p 5.2p
---diluted 4.8p 5.1p
---------------- --------------
Average shares outstanding:
---basic 793,822 804,415
---diluted 801,164 810,138
---------------- --------------
AMVESCAP PLC
Consolidated Balance Sheet
(Unaudited)
(in thousands)
June 30, 2005 Dec 31, 2004
-------------------- -------------------
Non-current assets
Goodwill and intangible assets (pound)2,385,655 (pound)2,317,247
Property and equipment 112,603 118,272
Investments 90,962 70,070
-------------------- -------------------
2,589,220 2,505,589
Current assets
Trade and other receivables 575,835 606,264
Investments 589,859 499,439
Cash and cash equivalents 239,650 284,977
-------------------- -------------------
1,405,344 1,390,680
Total assets 3,994,564 3,896,269
-------------------- -------------------
Current liabilities
Current maturities of long-term debt -- (41,411)
Trade and other payables (1,264,415) (1,200,785)
-------------------- -------------------
(1,264,415) (1,242,196)
Net current assets 140,929 148,484
-------------------- -------------------
Non-current liabilities
Long-term debt (650,690) (683,215)
Provisions for liabilities and charges (122,269) (124,793)
-------------------- -------------------
Total liabilities (2,037,374) (2,050,204)
-------------------- -------------------
Net assets (pound)1,957,190 (pound)1,846,065
==================== ===================
Equity
Share capital (pound)202,916 (pound)202,664
Share premium 707,788 700,888
Shares held by employee trusts (237,972) (237,972)
Exchangeable shares 303,507 308,996
Retained earnings 340,018 291,241
Other reserves 639,356 578,934
-------------------- -------------------
Equity attributable to equity holders of the
parent 1,955,613 1,844,751
Minority interests 1,577 1,314
-------------------- -------------------
Total equity (pound)1,957,190 (pound)1,846,065
==================== ===================
AMVESCAP PLC
Consolidated Cash Flow Statement
(Unaudited)
(in thousands)
Six Months Ended June 30,
--------------------------------------
2005 2004
---------------- -----------------
Operating profit (pound)141,155 (pound)147,792
Amortization and depreciation 22,567 24,814
Interest paid, net of investment income (20,962) (17,290)
Taxation (26,669) (33,309)
Change in debtors, creditors, and other (7,529) (62,800)
---------------- -----------------
Net cash inflow from operating activities 108,562 59,207
Investing activities:
Capital expenditures, net of sales (10,230) (9,677)
Purchase of fixed asset investments, net (1,907) (1,385)
Acquisitions and dispositions (1,265) (28,195)
Financing:
Dividends paid (41,002) (53,312)
Net repayment of debt (112,566) (13,716)
Other financing 400 (11,155)
---------------- -----------------
Decrease in cash and cash equivalents (58,008) (58,233)
Foreign exchange 12,681 (8,847)
Cash and cash equivalents, beginning of period 284,977 318,713
---------------- -----------------
Cash and cash equivalents, end of period (pound)239,650 (pound)251,633
================ =================
AMVESCAP PLC
Segmental Information
(Unaudited)
(in thousands)
Six Months Ended June 30, 2005
Operating
Revenues Expenses Profit
---------------- -------------------- -----------------
AIM
U.S. (pound)201,455 (pound)(134,179) (pound)67,276
Canada 95,383 (44,457) 50,926
---------------- -------------------- -----------------
296,838 (178,636) 118,202
---------------- -------------------- -----------------
INVESCO
U.S. 103,774 (77,057) 26,717
U.K. 110,195 (86,897) 23,298
Europe/Asia 32,076 (36,478) (4,402)
---------------- -------------------- -----------------
246,045 (200,432) 45,613
---------------- -------------------- -----------------
Private Wealth/Retirement 38,613 (43,103) (4,490)
---------------- -------------------- -----------------
581,496 (422,171) 159,325
Corporate -- (18,170) (18,170)
---------------- -------------------- -----------------
(pound)581,496 (pound)(440,341) (pound)141,155
================ ==================== =================
Six Months Ended June 30, 2004
Operating
Revenues Expenses Profit
---------------- -------------------- -----------------
AIM
U.S. (pound)226,881 (pound)(140,598) (pound)86,283
Canada 84,699 (38,895) 45,804
---------------- -------------------- --------------
311,580 (179,493) 132,087
---------------- -------------------- --------------
INVESCO
U.S. 90,863 (67,920) 22,943
U.K. 93,778 (82,891) 10,887
Europe/Asia 38,518 (37,681) 837
---------------- -------------------- --------------
223,159 (188,492) 34,667
---------------- -------------------- --------------
Private Wealth/Retirement 42,363 (44,536) (2,173)
---------------- -------------------- --------------
577,102 (412,521) 164,581
Corporate -- (16,789) (16,789)
---------------- -------------------- --------------
(pound)577,102 (pound)(429,310) (pound)147,792
================ ==================== ==============
Notes
1. Accounting policies
The accounting policies used in the preparation of the 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 8). The most significant changes
due to the IFRS transition are:
o The cessation of goodwill amortization (IFRS 3) and redenomination of
goodwill to the currency of the underlying acquired entities (IAS 21)
o The inclusion of a fair value charge in respect of outstanding
employee share options granted after November 7, 2002 (IFRS 2)
o The replacement of existing charges for awards under certain
equity-based compensation plans with fair value charges spread over
revised time periods (IFRS 2)
o 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 earnings 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
The Group 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 and liabilities be recognized on the balance sheet and accounted for
according to their underlying classification. Shareholders equity increased
by (pound)15.2 million as a result of these changes primarily arising from
the recognition of net unrealized gains 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 35.7% in 2005 (2004: 35.6%).
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 ordinary shares.
2005
---------------------------------------------------------------
Profit for the Number of
period shares Per share
(pound)'000 '000 amount
----------------------- -------------------- ----------------
Basic earnings per share 76,410 793,629 9.6p
================
Dilutive effect of share-based 7,444
awards
----------------------- --------------------
Diluted earnings per share 76,410 801,073 9.5p
======================= ==================== ================
2004
---------------------------------------------------------------
Profit for the Number of
period shares Per share
(pound)'000 '000 amount
----------------------- -------------------- ----------------
Basic earnings per share 88,847 803,384 11.1p
================
Dilutive effect of share-based -- 6,558
awards
----------------------- --------------------
Diluted earnings per share 88,847 809,942 11.0p
======================= ==================== ================
5. Dividends
A final dividend in respect of the 2004 year of 5.0p per share or
(pound)41,002,000 ((pound)39,595,000 for ordinary shares and
(pound)1,407,000 for exchangeable shareholders) was approved at the Annual
General Meeting of Shareholders on April 28, 2005. This dividend was
accrued on that date, and a payment was made on May 4, 2005, to
shareholders on the register on April 1, 2005.
6. Credit facility
On March 31, 2005, the Company entered into a new five-year credit
agreement ("credit facility") with a group of lenders, providing a
revolving credit 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 financial ratios to be maintained, including a maximum
debt to EBITDA ratio of 3.25:1 and a minimum interest coverage of 4.0:1.
7. Sale of AMVESCAP Retirement
On April 21, 2005 the sale of AMVESCAP Retirement was announced, and the
transaction closed on July 15, 2005. Total AMVESCAP Retirement assets and
liabilities relating to the transaction held for sale at June 30, 2005 were
(pound)8.7 million and (pound)2.0 million, respectively. For the six months
ended June 30, 2005, AMVESCAP Retirement recorded revenues of (pound)16.7
million.
8. Reconciliations from U.K. GAAP to IFRS
Prior to December 31, 2004, 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 profit/(loss) after taxation for the six months ended June
30, 2004 and the year ended December 31, 2004 from U.K. GAAP to IFRS.
Amounts are presented in millions.
Reconciliation of total U.K. GAAP total shareholders' funds to IFRS total
equity
Dec 31, 2003 Dec 31, 2004
--------------- --------------
U.K. GAAP total shareholders' funds (pound)2,065 (pound)1,864
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 (pound)1,947 (pound)1,846
=============== ==============
Reconciliation of U.K. GAAP profit/(loss) after taxation to IFRS
profit/(loss) after taxation
Six months ended Year ended
June 30, 2004 Dec 31, 2004
--------------- ---------------
U.K. GAAP profit/(loss) after taxation (pound)15 (pound)(173)
IFRS Transition Adjustments:
Goodwill and intangibles 74 153
Defined benefit obligation, net 1 --
Sale of business 3 3
Other (4) (5)
--------------- ---------------
IFRS profit/(loss) after taxation (pound)89 (pound)(22)
=============== ===============
IFRS Transition Adjustments:
Goodwill and intangibles. The Group 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 Group balance sheet at January 1, 2004 and the reversal of any
amortization charged in 2004. The Group has elected to apply IAS 21
retrospectively 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. The Group will recognize a charge in the Profit and
Loss Account for the fair value of outstanding share awards granted to
employees after November 7, 2002. The charge has been calculated using a
stochastic option valuation model and will be charged over the relevant
vesting periods, adjusted to reflect expected and actual levels of vesting.
Defined benefit obligation, net. The Group will recognize the net liability
for defined benefit post retirement plan schemes on the balance sheet and
will take actuarial gains and losses on a systematic basis to the Profit
and Loss Account, in accordance with the permitted methods of recognition
under IAS 19.
Sale of business. During 2004, the Group disposed 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
from equity is not recognized in the opening balance sheet and that
goodwill is not transferred into the Profit and Loss Account upon disposal
of the business. This had the effect of increasing the gain reported under
U.K. GAAP.
Dividends. The Group 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 related to compensated absences, foreign
exchange items and certain tax adjustments.
9. 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 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.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMVESCAP PLC
------------------------------
(Registrant)
Date 2 August, 2005 By /s/ Michael S. Perman
-------------- --------------------------
(Signature)
Michael S. Perman
Company Secretary