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Section 1: 8-K (8-K)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

July 19, 2017

 

 

Janus Henderson Group plc

(Exact name of registrant as specified in its charter)

 

Jersey, Channel Islands

 

001-38103

 

N/A

(State or other jurisdiction

 

(Commission file

 

(IRS Employer

of incorporation)

 

number)

 

Identification Number)

 

201 Bishopsgate

EC2M 3AE

United Kingdom

(Address of principal executive offices)  (Zip Code)

 

Registrant’s telephone number, including area code

+44 (0) 20 7818 1818

 

Henderson Group plc

(Former name or former address if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 



 

Item 7.01  Regulation FD Disclosure.

 

On May 30, 2017, pursuant to an agreement and plan of merger previously announced on October 3, 2016, Janus Capital Group (“JCG”) and Henderson Group plc (‘Henderson”) completed the merger. Upon closing the merger, Henderson became the parent holding company for the combined group and was renamed Janus Henderson Group plc (“JHG”) or (the “Group”).

 

The unaudited pro forma condensed Statements of Income presents the pro forma GAAP basis results of JHG as if the merger had occurred on January 1, 2016. The results are presented for the quarterly periods in 2016 and the first quarter 2017. To provide greater transparency into JHG’s business on an ongoing operations basis, JHG also presents non-GAAP financial measures and reconciliations to GAAP basis results. Each non-GAAP adjustment includes a note reference and corresponds with the explanatory notes below the tables.

 

Assets and flows by investment capability are also presented on a pro forma basis. The unaudited pro forma financial information and non-GAAP financial measures are furnished as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.

 

The unaudited pro forma financial information has been prepared for illustrative purposes only, and is not necessarily indicative of the operating results that would have occurred if the merger had been consummated on January 1, 2016, nor is necessarily indicative of the results of operations that may be expected for any future period or date. The unaudited pro forma financial information does not include any adjustments related to potential profit improvements or potential cost savings.

 

Non-GAAP Financial Measures

 

JHG reports its financial results in accordance with U.S. GAAP. However, in the opinion of management, the profitability of the Group and its ongoing operations is best evaluated using additional non-GAAP financial measures. Management uses these performance measures to evaluate the business and adjusted values are consistent with internal management reporting.

 

Non-GAAP measures should not be considered as substitutes for any measure derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. Additional reconciling items may be added to these non-GAAP measures in the future.

 

Forward-looking statements

 

This announcement contains forward-looking statements with respect to the financial condition, results and business of Janus Henderson Group plc. By their nature, forward-looking statements involve risk and uncertainty because they relate to events, and depend on circumstances, that will occur in the future. Janus Henderson’s actual future results may differ materially from the results expressed or implied in these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.

 

The content of the websites referred to in this announcement is not incorporated into and does not form part of this announcement. Nothing in this announcement should be construed as, or is intended to be, a solicitation for or an offer to provide investment advisory services.

 



 

Item 9.01  Financial Statements and Exhibits

 

(d)  Exhibits. The following exhibit is being furnished herewith.

 

Exhibit
Number

 

Description

 

 

 

99.1

 

Unaudited pro forma financial information of Janus Henderson Group plc

 

2



 

SIGNATURE

 

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 hereunto duly authorized.

 

 

 

Janus Henderson Group plc

 

 

Date: July 19, 2017

By:

/s/ Andrew Formica

 

Name:

Andrew Formica

 

Title:

Co-Chief Executive Officer

 

3



 

EXHIBIT INDEX

 

Exhibit
Number

 

Description

 

 

 

99.1

 

Unaudited pro forma financial information of Janus Henderson Group plc

 

4


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Section 2: EX-99.1 (EX-99.1)

Exhibit 99.1

 

JANUS HENDERSON GROUP PLC

UNAUDITED

PRO FORMA CONDENSED STATEMENT OF INCOME

(US dollars in millions except per share data)

 

 

 

Three months ended,

 

 

 

March 31,

 

June 30,

 

September 30,

 

December 31,

 

March 31,

 

 

 

2016

 

2016

 

2016

 

2016

 

2017

 

Operating revenues

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

$

428.6

 

$

440.8

 

$

444.4

 

$

432.2

 

$

427.6

 

Performance fees

 

12.4

 

5.6

 

(2.5

)

2.7

 

1.0

 

Shareowner servicing fees

 

27.3

 

28.4

 

29.1

 

28.6

 

28.6

 

Other revenue

 

34.6

 

34.2

 

32.9

 

31.3

 

29.9

 

Total operating revenues

 

502.9

 

509.0

 

503.9

 

494.8

 

487.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

156.7

 

152.8

 

153.5

 

161.7

 

163.3

 

Long-term incentive compensation

 

40.6

 

49.2

 

30.3

 

46.3

 

34.5

 

Marketing and advertising

 

8.8

 

10.6

 

6.8

 

10.7

 

21.7

 

Distribution expenses

 

87.0

 

90.6

 

84.7

 

79.8

 

81.1

 

Depreciation and amortization

 

15.6

 

15.4

 

15.7

 

20.2

 

14.4

 

Investment administration

 

11.7

 

12.8

 

10.9

 

10.8

 

10.2

 

General, administrative and occupancy

 

55.2

 

54.2

 

58.6

 

69.3

 

56.0

 

Total operating expenses

 

375.6

 

385.6

 

360.5

 

398.8

 

381.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

127.3

 

123.4

 

143.4

 

96.0

 

105.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(7.9

)

(5.0

)

(4.3

)

(4.2

)

(4.8

)

Investment gains(losses), net

 

8.5

 

(8.2

)

(0.5

)

(14.0

)

0.5

 

Other non-operating income (expense), net

 

2.4

 

(2.0

)

1.5

 

0.1

 

2.4

 

Income before taxes

 

130.3

 

108.2

 

140.1

 

77.9

 

104.0

 

Income tax provision

 

(37.7

)

(26.7

)

(33.8

)

(25.4

)

(28.2

)

Net income

 

92.6

 

81.5

 

106.3

 

52.5

 

75.8

 

Net income attributable to noncontrolling interests

 

(5.0

)

4.9

 

(2.1

)

8.7

 

(1.4

)

Net income attributable to JHG

 

$

87.6

 

$

86.4

 

$

104.2

 

$

61.2

 

$

74.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - Diluted

 

$

0.42

 

$

0.41

 

$

0.50

 

$

0.30

 

$

0.36

 

 

1



 

JANUS HENDERSON GROUP PLC

UNAUDITED

NON-GAAP FINANCIAL MEASURES

(US dollars in millions except per share data)

 

 

 

Three months ended

 

 

 

March 31,

 

June 30,

 

September 30,

 

December 31,

 

March 31,

 

 

 

2016

 

2016

 

2016

 

2016

 

2017

 

Reconciliation of operating revenues to adjusted operating revenues

 

 

 

 

 

 

 

 

 

 

 

Operating revenues, GAAP basis

 

$

502.9

 

$

509.0

 

$

503.9

 

$

494.8

 

$

487.1

 

Distribution expenses(1)

 

(87.0

)

(90.6

)

(84.7

)

(79.8

)

(81.1

)

Adjusted operating revenues

 

$

415.9

 

$

418.4

 

$

419.2

 

$

415.0

 

$

406.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of operating income to adjusted operating income

 

 

 

 

 

 

 

 

 

 

 

Operating income, GAAP basis

 

$

127.3

 

$

123.4

 

$

143.4

 

$

96.0

 

$

105.9

 

Employee compensation and benefits(3)

 

1.0

 

1.6

 

0.8

 

10.1

 

3.6

 

Marketing and advertising(3)

 

 

 

 

0.9

 

14.5

 

Depreciation and amortization(2)

 

7.8

 

7.8

 

7.8

 

12.6

 

7.6

 

General, administration and occupancy(3)

 

3.7

 

0.9

 

7.9

 

15.3

 

12.0

 

Adjusted operating income

 

$

139.8

 

$

133.7

 

$

159.9

 

$

134.9

 

$

143.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

25.3

%

24.2

%

28.5

%

19.4

%

21.7

%

Adjusted operating margin

 

33.6

%

32.0

%

38.1

%

32.5

%

35.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income attributable to JHG to adjusted net income attributable to JHG

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to JHG, GAAP basis

 

$

87.6

 

$

86.4

 

$

104.2

 

$

61.2

 

$

74.4

 

Employee compensation and benefits(3)

 

1.0

 

1.6

 

0.8

 

10.1

 

3.6

 

Marketing and advertising(3)

 

 

 

 

0.9

 

14.5

 

Depreciation and amortization(2)

 

7.8

 

7.8

 

7.8

 

12.6

 

7.6

 

General, administration and occupancy(3)

 

3.7

 

0.9

 

7.9

 

15.3

 

12.0

 

Other non-operating income, net(4)

 

0.5

 

4.2

 

0.5

 

0.6

 

0.9

 

Income tax provision(5)

 

(3.0

)

(2.0

)

(1.0

)

(14.2

)

(10.7

)

Adjusted net income attributable to JHG

 

$

97.6

 

$

98.9

 

$

120.2

 

$

86.5

 

$

102.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.42

 

$

0.41

 

$

0.50

 

$

0.30

 

$

0.36

 

Adjusted diluted earnings per share

 

$

0.47

 

$

0.47

 

$

0.57

 

$

0.42

 

$

0.50

 

 


(1)  Distribution expenses are paid to financial intermediaries for the distribution of JHG’s investment products. Management believes that the deduction of third-party distribution, service and advisory expenses from operating revenues in the computation of net revenues reflects the nature of these expenses as revenue-sharing activities, as these costs are passed through to external parties who perform functions on behalf of, and distribute, JHG’s managed AUM.

 

(2)  Investment management contracts have been identified as a separately identifiable intangible asset arising on the acquisition of subsidiaries and businesses. Such contracts are recognized at the net present value of the expected future cash flows arising from the contracts at the date of acquisition. For segregated mandate contracts, the intangible asset is amortized on a straight line basis over the expected life of the contracts. Management believes these non cash and acquisition related costs do not represent the ongoing operations of the JHG.

 

(3)  For the three months ended March 31, 2016 and June 30, 2016, adjustments represent void property costs and deferred consideration costs associated with acquisitions prior to the merger. For the three months ended September 30, 2016, December 31, 2016 and March 31, 2017, adjustments primarily represent transaction-related costs due to the merger. Management believes these costs do not represent the ongoing operations of JHG.

 

(4)  Adjustment represents void property costs and deferred consideration costs associated with acquisitions prior to the Merger.

 

(5)  The tax impact of the non-GAAP adjustments are calculated based on the U.S. or foreign statutory tax rates as they relate to each non-GAAP adjustment. Certain non-GAAP adjustments are either not taxable or not tax deductible.

 

2



 

JANUS HENDERSON GROUP PLC(1)

UNAUDITED

ASSETS AND FLOWS BY INVESTMENT CAPABILITY

(US dollars in billions)

 

 

 

 

 

Quantitative

 

Fixed

 

Multi

 

 

 

 

 

 

 

Equity

 

Equity (2)

 

Income

 

Asset

 

Alternative

 

Total (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AUM 31-Dec 2015

 

$

158.5

 

$

47.5

 

$

72.8

 

$

26.4

 

$

19.6

 

$

324.8

 

Sales

 

7.4

 

2.1

 

5.6

 

1.3

 

2.9

 

19.3

 

Redemptions

 

(9.6

)

(1.5

)

(6.2

)

(1.2

)

(2.1

)

(20.5

)

Net Sales (Redemptions)

 

(2.1

)

0.7

 

(0.6

)

0.1

 

0.7

 

(1.2

)

Market/Fund Performance (3)

 

(4.0

)

0.5

 

1.7

 

(0.3

)

(0.1

)

(2.2

)

AUM 31-Mar 2016

 

$

152.3

 

$

48.6

 

$

74.0

 

$

26.2

 

$

20.3

 

$

321.4

 

Sales

 

8.0

 

1.3

 

6.6

 

1.0

 

2.2

 

19.0

 

Redemptions

 

(9.5

)

(2.0

)

(5.2

)

(1.4

)

(2.7

)

(20.8

)

Net Sales (Redemptions)

 

(1.5

)

(0.7

)

1.3

 

(0.4

)

(0.6

)

(1.9

)

Market/Fund Performance (3)

 

(0.8

)

1.0

 

(0.5

)

(0.1

)

(1.0

)

(1.4

)

AUM 30-Jun 2016

 

$

150.0

 

$

48.9

 

$

74.8

 

$

25.7

 

$

18.7

 

$

318.1

 

Sales

 

8.5

 

0.6

 

5.2

 

0.7

 

1.3

 

16.3

 

Redemptions

 

(9.6

)

(2.4

)

(4.7

)

(1.4

)

(1.4

)

(19.6

)

Net Sales (Redemptions)

 

(1.1

)

(1.8

)

0.4

 

(0.8

)

(0.1

)

(3.3

)

Market/Fund Performance (3)

 

8.3

 

0.9

 

1.8

 

0.7

 

(0.1

)

11.6

 

AUM 30-Sep 2016

 

$

157.2

 

$

48.1

 

$

77.0

 

$

25.6

 

$

18.5

 

$

326.3

 

Sales

 

10.8

 

1.1

 

7.6

 

1.1

 

1.5

 

22.1

 

Redemptions

 

(10.7

)

(2.6

)

(7.2

)

(1.5

)

(2.1

)

(24.1

)

Net Sales (Redemptions)

 

0.1

 

(1.6

)

0.4

 

(0.5

)

(0.6

)

(2.1

)

Market/Fund Performance (3)

 

(0.7

)

0.1

 

(3.8

)

0.3

 

(0.7

)

(4.9

)

AUM 31-Dec 2016

 

$

156.6

 

$

46.6

 

$

73.6

 

$

25.4

 

$

17.1

 

$

319.3

 

Sales

 

9.4

 

1.5

 

6.3

 

1.3

 

1.3

 

19.9

 

Redemptions

 

(11.9

)

(5.2

)

(6.0

)

(1.8

)

(2.0

)

(26.9

)

Net Sales (Redemptions)

 

(2.5

)

(3.7

)

0.3

 

(0.5

)

(0.7

)

(7.0

)

Market/Fund Performance (3)

 

11.6

 

3.2

 

2.2

 

1.1

 

0.4

 

18.5

 

AUM 31-Mar 2017

 

$

165.6

 

$

46.2

 

$

76.1

 

$

26.0

 

$

16.9

 

$

330.8

 

 


Notes:

(1) Historical AUM and Flows reflect the PRELIMINARY analysis of Janus Capital Group Inc. and Henderson Group plc individual results, reflecting historical methodologies used by each respective firm, and are subject to change. Numbers may not cast due to rounding.

(2) First quarter 2017 gross sales and redemptions exclude an intra-strategy transfer of US$1.6 billion from a Danish krone-denominated account into a US dollar-denominated account.

(3) Market/Fund Performance includes gains/(losses) from changes in foreign exchange rates. Going forward, Janus Henderson Group plc will break out Market/Fund Performance and FX separately.

(4) Excludes ETN assets, for which JHG is not the named advisor or subadvisor and therefore does not earn a management fee on these assets.

 

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