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 October, 2005
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Commission File Number 001-13908
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AMVESCAP PLC
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(Translation of registrant's name into English)
30 Finsbury Square, London EC2A 1AG, ENGLAND
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
------
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
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Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- N/A
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Description of document filed: AMVESCAP PLC REPORTS RESULTS FOR NINE MONTHS
--------------------------------------------
ENDED SEPTEMBER 30, 2005
------------------------
For Immediate Release
Contact: James Robertson
Phone: 404-724-4246
Contact: Angus Maitland
Phone: (44) 0207-379-5151
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AMVESCAP PLC REPORTS RESULTS
FOR NINE MONTHS ENDED SEPTEMBER 30, 2005
London, October 27, 2005 - AMVESCAP reported that profit before tax for the nine
months ended September 30, 2005 amounted to (pound)186.9 million ($330.8
million), compared to a loss of (pound)46.2 million ($83.6 million) for the same
period in 2004. The 2004 results included a charge of (pound)229.2 million
representing the U.S. regulatory settlement. Operating profit for the nine
months ended September 30, 2005 amounted to (pound)205.1 million ($363.0
million), compared to (pound)199.3 million ($360.7 million) before the
settlement charge for the first nine months of 2004. Revenues totaled
(pound)884.2 million ($1,565.0 million) for the first nine months of 2005,
compared to (pound)858.0 million ($1,553.0 million) in the 2004 period. Diluted
earnings per share 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, Martin L.
Flanagan said, "My short time at AMVESCAP has confirmed that we have the range
of products, global scale and most importantly, 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 (pound)884.2m (pound)858.0m $1,565.0m $1,553.0m
Profit before tax (pound)186.9m (pound)(46.2)m $330.8m $(83.6)m
Profit before tax and U.S. regulatory settlement (pound)186.9m (pound)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 with International Financial
Reporting Standards ("IFRS"). See Note 9 for a reconciliation of AMVESCAP's
U.K. GAAP results to IFRS.
(b) Per American Depositary Share 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 (pound)1.00 (2004: $1.81 per (pound)1.00). References to "$" in this
release are to U.S. dollars unless otherwise indicated.
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 into 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 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 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
(pound)67.6 million ($119.7 million), compared to (pound)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 (pound)302.7 million ($535.8 million),
compared to (pound)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 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 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 30, 2005 + (pound)215.0 (pound)72.7 (pound)21.7 (pound)66.2 (pound)31.9 (pound)13.6 (pound)8.9
============ =========== ========== =========== =========== ============== ==============
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 30, 2005 + (pound)215.0 (pound)72.7 (pound)21.7 (pound)66.2 (pound)31.9 (pound)13.6 (pound)8.9
============ =========== ========== =========== =========== ============== ==============
+ Translated at $1.77 per (pound)1.00.
Earnings before interest, taxes, depreciation, amortization and certain non-cash
and other items ("EBITDA") amounted to (pound)277.2 million ($490.6 million) for
the nine months ended September 30, 2005, compared to (pound)260.8 million
($472.0 million) for the nine months ended September 30, 2004. Net debt at
September 30, 2005, excluding client cash, totaled (pound)362.7 million,
compared to (pound)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, AIM Trimark, INVESCO Perpetual 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 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, Thursday, October 27, 2005, at 2:30 p.m. BST (9:30
a.m. 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"
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)
Nine Months Ended Sept 30,
------------------------------------
2005 2004
---------------- --------------
Revenues (pound)884,160 (pound)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 attributable
to equity holders of the parent
(pound)118,925 (pound)(59,596)
================ ================
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 (pound)302,664 (pound)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 attributable
to equity holders of the parent
(pound)42,515 (pound)(148,443)
================ ================
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
(Unaudited)
(in thousands)
Sept 30, 2005 Dec 31, 2004
-------------------- -------------------
Non-current assets
Goodwill and intangible assets (pound)2,454,146 (pound)2,317,247
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 (pound)2,077,714 (pound)1,846,065
==================== ===================
Equity
Share capital (pound)203,011 (pound)202,664
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 (pound)2,077,714 (pound)1,846,065
==================== ===================
AMVESCAP PLC
Consolidated Cash Flow Statement
(Unaudited)
(in thousands)
Nine Months Ended Sept 30,
--------------------------------------
2005 2004
---------------- -----------------
Operating profit (pound)205,121 (pound)(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 (pound)407,114 (pound)315,473
================ =================
AMVESCAP PLC
Segmental Information
(Unaudited)
(in thousands)
Nine Months Ended September 30, 2005
Operating
Revenues Expenses Profit
---------------- -------------------- --------------
AIM
U.S. (pound)306,350 (pound)(205,676) (pound)100,674
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)
---------------- -------------------- --------------
(pound)884,160 (pound)(679,039) (pound)205,121
================ ==================== ==============
Nine Months Ended September 30, 2004
Operating
Revenues Expenses Profit*
---------------- -------------------- --------------
AIM
U.S.* (pound)334,616 (pound)(220,474) (pound)114,142
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)
---------------- -------------------- --------------
(pound)858,009 (pound)(658,731) (pound)199,278
================ ==================== ==============
* 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:
o The cessation of goodwill amortization (IFRS 3) and redenomination of
goodwill into 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 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 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 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 for the period Number of shares
Per share
(pound)'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 the Number of shares
period Per share
(pound)'000 '000 amount
----------------------- -------------------- ----------------
Basic and diluted earnings per share (59,596) 803,678 (7.4)p
======================= ==================== ================
5. Sale of AMVESCAP Retirement
On July 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 (pound)18.7 million has been
recorded within other income. Revenues of (pound)18.0 million were derived
by the AMVESCAP Retirement business in 2005 through the date of disposal.
The disposal is analyzed as follows:
(pound)'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
(pound)229.2 million relating to the mutual fund market timing
investigations by regulators in the United States. The charge comprised
settlement payments and civil penalties of (pound)208.9 million, along with
related costs of (pound)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
(pound)249.7 million. The exceptional items, as reported in 2004, also
included (pound)20.5 million primarily relating to estimates of lease
payments in excess of the expected sublease proceeds over the remaining
lives of the leases. These amounts have been reclassified as operating
expenses.
7. 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 shares) 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.
An interim 2005 dividend of 4.0p per share (2004: 2.5p) or
(pound)32,818,000 ((pound)31,712,000 for ordinary shares and
(pound)1,106,000 for exchangeable shares) was declared 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
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 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, 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 loss after taxation to IFRS loss after taxation
Nine months ended Year ended
Sept 30, 2004 Dec 31, 2004
------------------- --------------------
U.K. GAAP loss after taxation (pound)(172) (pound)(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 (pound)(60) (pound)(22)
============= ============
IFRS Transition Adjustments:
Goodwill and intangibles. 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 of any
amortization charged in 2004. AMVESCAP 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. 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 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. AMVESCAP 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 Income
Statement, in accordance with the permitted methods of recognition under
IAS 19.
Sale of business. During 2004, AMVESCAP 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 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 related to compensated 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 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
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(Registrant)
Date 27 October, 2005 By /s/ Michael Perman
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(Signature)
Michael Perman
Company Secretary