Press Release

Janus Henderson Reports Second Quarter 2017 Diluted EPS of $0.28, or $0.68 on a Pro Forma Adjusted Basis

Company Release - 8/8/2017 5:00 AM ET

(All currencies presented are U.S. dollars unless otherwise noted)

LONDON & DENVER--(BUSINESS WIRE)-- Janus Henderson Group plc (NYSE:JHG, ASX:JHG) published its second quarter and interim results for the three month and six month periods ended 30 June 2017, its first set of results as a combined Group.

The Group presents its financial results in accordance with U.S. GAAP which includes the results of Janus Capital Group from the merger closing date. However, in the opinion of Management the profitability of the Group and its ongoing operations is best evaluated using additional non-GAAP financial measures on a pro forma adjusted basis. See Adjusted Pro Forma Statements of Income reconciliation below for additional information.

Janus Henderson today reported second quarter 2017 net income of $41.7 million, or $0.28 per diluted share, compared with first quarter 2017 net income of $42.6 million, or $0.38 per diluted share, and net income of $46.3 million, or $0.41 per diluted share in the second quarter 2016.

Second quarter 2017 net income on a pro forma adjusted basis, adjusted for acquisition and transaction related costs, was $139.8 million, or $0.68 per diluted share. First quarter 2017 net income attributable to Janus Henderson on a pro forma adjusted basis was $102.3 million, or $0.50 per diluted share.

EXECUTIVE SUMMARY

  • Assets under management increased to $345 billion, up 4% on a pro forma basis from the first quarter 2017, driven by positive markets and foreign currency translation gains.
  • Investment performance was strong and improved notably from the prior quarters to, as at 30 June 2017, 69%, 71% and 89% outperformance of benchmark on a 1-, 3- and 5-year basis, respectively.
    • 31 March 2017 50%, 60% and 82% outperformance of benchmark on a 1-, 3- and 5-year basis, respectively.
  • Total Group net outflows of $1.0 billion, on a pro forma basis, reflect a $6.0 billion improvement from the first quarter 2017, driven by positive Equity flows and moderation in Quantitative Equity outflows.
  • The Board declared a dividend of $0.32 per share.
  • Solid progress with integration and accelerated delivery of cost synergies.

MERGER INTEGRATION UPDATE

Since closing the merger on 30 May 2017, we have been focused on integration. We are very pleased with the results of the integration thus far and execution is ongoing. As part of these efforts, we have completed $57 million of net run-rate cost synergies, as of 30 June 2017, comprised largely of savings from a reduced combined headcount. Additionally, we are now expecting that we will be able to realize at least $85 million of net run-rate synergies by the end of the first 12 months of the combination, and we remain confident that we will be able to achieve at least $110 million of recurring annual run rate pre-tax net cost synergies within three years post completion.

RESULTS FOR ANNOUNCEMENT TO THE MARKET

These results for announcement to the market include the interim information required to be provided to the Australian Securities Exchange (ASX) under Listing Rule 4.2A and Appendix 4D.

SUMMARY OF FINANCIAL RESULTS

 
Six months ended
30 June

(dollars in millions, except per
share data or as noted)

2017   2016   % change
 
Revenue $ 614.3 $ 511.5 20.1 %
Operating expenses $ 506.8 $ 389.5 30.1 %
Operating income $ 107.5 $ 122.0 -11.9 %
Operating margin 17.5 % 23.9 %
Net income attributable to JHG $ 84.3 $ 97.8 -13.8 %
Diluted Earnings per share $ 0.64 $ 0.86 -25.6 %
 
 
Three Months Ended
(dollars in millions, 30 June   31 March   30 June
except per share data or as noted) 2017 2017 2016

GAAP basis:

Revenue $ 384.8 $ 229.5 $ 257.1
Operating Expenses $ 328.1 $ 178.7 $ 200.7
Operating Income $ 56.7 $ 50.8 $ 56.4
Operating Margin 14.7 % 22.1 % 21.9 %
Net Income Attributable to JHG $ 41.7 $ 42.6 $ 46.3
Diluted Earnings per Share $ 0.28 $ 0.38 $ 0.41

Pro Forma adjusted basis:

Pro Forma Adjusted Revenue (1) $ 482.2 $ 406.0 $ 418.4
Pro Forma Adjusted Operating Income (1) $ 199.5 $ 143.6 $ 133.7
Pro Forma Adjusted Operating Margin (1) 41.4 % 35.4 % 32.0 %
Pro Forma Adjusted Net Income Attributable to JHG (1) $ 139.8 $ 102.3 $ 98.9
Pro Forma Diluted Earnings per Share (1) $ 0.68 $ 0.50 $ 0.47
 

DIVIDEND

On 7 August 2017, the Board of Directors of Janus Henderson Group plc (the “Board”) declared a second quarter dividend in respect of the three months ended 30 June 2017 of $0.32 per share. Shareholders who are on the register on the record date of 18 August 2017 will be paid the dividend on 1 September 2017. Janus Henderson Group plc does not offer a dividend reinvestment plan.

   

Amount per security

Franked amount per
US dollar security US dollar
 
2017 second quarter dividend per share $ 0.32 $
 
Record date 18 August 2017
Payment date 1 September 2017
 

A first quarter dividend in respect of the three months ended 31 March 2017 of GBP 0.0185 per share was paid on 19 May 2017.

Going forward, dividends will be declared on a quarterly basis.

Net Tangible (Liabilities)/Assets per Share

   
30 June 2017 US dollar

30 June 2016 US dollar (2)

 
Net tangible (liabilities)/assets per ordinary share $ (1.51) $ 4.44
 

Net tangible (liabilities)/assets are defined by the ASX as being total assets less intangible assets less total liabilities ranking ahead of, or equally with, claims of ordinary shares.

(1)   See Adjusted Pro Forma Statements of Income reconciliation for additional information.
(2) 30 June 2016 share number was updated for the share consolidation.
 

ASSETS UNDER MANAGEMENT AND FLOWS

Total Group Comparative Pro Forma Flows

 
Three Months Ended
(in billions) 30 June 2017   31 March 2017   30 June 2016
 
Total assets under management $ 330.8 $ 319.2 $ 321.4
Sales 20.2 19.4 18.2
Redemptions (21.2 ) (26.4 ) (20.1 )
Net sales / (redemptions) (1.0 ) (7.0 ) (1.9 )
Market / fund performance / FX 15.9 18.6 (1.6 )
Acquisitions / (disposals) (0.7 )    
Total $ 344.9   $ 330.8   $ 317.9  
 

Note: Numbers may not cast due to rounding

Second Quarter Pro Forma Flows by Capability

           
(in billions) Equities

Fixed
Income

Quantitative
Equities
Multi-Asset Alternatives Total
 
31 March 2017 $ 162.3 $ 76.3 $ 46.2 $ 28.6 $ 17.4 $ 330.8
Sales 10.6 5.3 0.7 1.2 2.3 20.2
Redemptions (9.4 ) (6.2 ) (2.5 ) (1.5 ) (1.5 ) (21.2 )
Net sales / (redemptions) 1.2 (0.9 ) (1.8 ) (0.4 ) 0.8 (1.0 )
Market/fund performance / FX 9.9 1.9 2.1 1.1 0.8 15.9
Acquisitions / (disposals)   (0.1 )     (0.7 ) (0.7 )
30 June 2017 $ 173.4   $ 77.2   $ 46.6   $ 29.4   $ 18.4   $ 344.9  
 

Note: Numbers may not cast due to rounding

Average Pro Forma Assets Under Management(1)

 
Three Months Ended
(in billions) 30 June 2017   31 March 2017   30 June 2016
Average assets under management:
Equities $ 169.7 $ 160.4 $ 150.1
Fixed Income 76.8 75.5 74.9
Quantitative Equities 47.4 48.2 48.9
Multi-asset 28.5 27.9 28.4
Alternatives 17.5 17.0 20.1
Total $ 339.9 $ 329.0 $ 322.4
 
(1)   Assets under management have been reclassified between capabilities following the completion of the merger.
 

INVESTMENT PERFORMANCE

% of assets outperforming benchmark
(as of 30 June 2017)

     
Capability 1 year 3 years 5 years
Equities 68 % 77 % 84 %
Fixed Income 93 % 92 % 91 %
Quantitative Equities 6 % 48 % 91 %
Multi-asset 97 % 21 % 100 %
Alternatives 97 % 67 % 100 %
Firm-wide 69 % 71 % 89 %
 

% of mutual fund AUM in top 2 Morningstar quartiles
(as of 30 June 2017)

     
Capability 1 year 3 years 5 years
Equities 53 % 87 % 90 %
Fixed Income 38 % 41 % 98 %
Quantitative Equities 3 % 58 % 100 %
Multi-asset 79 % 80 % 97 %
Alternatives 63 % 24 % 69 %
Firm-wide 54 % 74 % 90 %
 

Note: Includes Janus Investment Fund, Janus Aspen Series and Clayton Street Trust (US Trusts), Janus Capital Funds (Dublin based), Dublin and UK OEIC and Investment Trusts and Luxembourg SICAVs. The top two Morningstar quartiles represent funds in the top half of their category based on total return. On an asset-weighted basis, 79%, 79% and 82% of total mutual fund AUM were in the top 2 Morningstar quartiles for the 10-year periods ended 31 Dec 2016, 31 Mar 2017 and 30 Jun 2017, respectively. For the 1-, 3-, 5- and 10-year periods ending 30 Jun 2017, 53%, 64%, 72% and 65% of the 215, 193, 170 and 139 total mutual funds were in the top 2 Morningstar quartiles.

Analysis based on “primary” share class (Class I Shares or Institutional Shares for US mutual funds; share class with the longest history or as defined by Morningstar for other funds). Performance may vary by share class.

ETFs and funds not ranked by Morningstar are excluded from the analysis. Capabilities defined by Janus Henderson. Data presents the pro forma assets as if the merger had occurred at the beginning of the period shown. © 2017 Morningstar, Inc. All Rights Reserved.

SECOND QUARTER 2017 EARNINGS CALL INFORMATION

Co-Chief Executives, Andrew Formica, Dick Weil and Chief Financial Officer, Roger Thompson will present these results on 8 August 2017 in a conference call and webcast to be held at 10pm AEST, 1pm BST, 8am EDT.

Those wishing to participate should call:

   
United Kingdom

0800 404 7656 (free call)

US & Canada 888 427 9414 (free call)
Australia 1 800 094 765 (free call)
All other countries:

+1 719 325 2157 (This is not a free call number)

 

Access to the webcast and accompanying slides will be available via the investor relations section of Janus Henderson’s website (www.janushenderson.com/IR). A webcast replay will be available for a period of at least seven days following the call.

About Janus Henderson

Janus Henderson is a leading global active asset manager dedicated to helping investors achieve long-term financial goals through a broad range of investment solutions, including equities, quantitative equities, fixed income, multi-asset and alternative asset class strategies.

As at 30 June 2017, Janus Henderson had approximately US$345 billion in assets under management, more than 2,000 employees and offices in 27 cities worldwide. Headquartered in London, the company is listed on the New York Stock Exchange (NYSE) and the Australian Securities Exchange (ASX).

FINANCIAL DISCLOSURES

 
JANUS HENDERSON GROUP PLC
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data or as noted), (unaudited)
 
  Three Months Ended
30 June   31 March   30 June
2017 2017 2016
Revenue:
Management fees $ 296.0 $ 197.5 $ 222.9
Performance fees 57.7 14.8 13.9
Shareowner servicing fees 9.9
Other revenue 21.2   17.2   20.3  
Total revenue 384.8   229.5   257.1  
 
Operating expenses:
Employee compensation and benefits 123.6 70.4 67.2
Long-term incentive plans 47.3 16.4 30.2
Distribution expenses 60.7 47.1 57.3
Investment administration 9.7 10.2 12.8
Marketing 10.1 3.2 3.7
General, administrative and occupancy 67.3 25.1 23.9
Depreciation and amortization 9.4   6.3   5.6  
Total operating expenses 328.1   178.7   200.7  
 
Operating income 56.7 50.8 56.4
Interest expense (2.0 ) (1.1 ) (1.4 )
Investment gains (losses), net 9.8 (0.9 ) (8.9 )
Other non-operating (expenses) income, net (2.0 ) 1.3 (3.2 )
Income tax provision (21.0 ) (7.5 ) (2.7 )
 
Net income 41.5 42.6 40.2
Net loss attributable to noncontrolling interests 0.2     6.1  
Net income attributable to JHG $ 41.7   $ 42.6   $ 46.3  
 
Net income attributable to JHG $ 41.7 $ 42.6 $ 46.3
Less: Allocation of earnings to participating stock-based awards 1.1   1.1   0.9  
Net income attributable to JHG common shareholders $ 40.6   $ 41.5   $ 45.4  
 
Basic weighted-average shares outstanding (in millions) 140.2 109.3 109.3
Diluted weighted-average shares outstanding (in millions) 143.8 110.6 110.2
 
Diluted earnings per share $ 0.28 $ 0.38 $ 0.41
Average assets under management (in billions) $ 204.3 $ 127.6 $ 133.1
 

Pro Forma Statements of Income

The table below reflects the pro forma results of Janus Henderson for the three months ended 30 June 2017, 31 March 2017 and 30 June 2016, as though the merger had taken place on 1 January 2016:

 
Pro-forma results

Three Months Ended
30 June 2017

  Three Months Ended
31 March 2017
  Three Months Ended
30 June 2016
 
Revenue:
Management fees 454.3 427.6 440.8
Performance fees 52.3 1.0 5.6
Shareowner servicing fees 29.5 28.6 28.4
Other revenue 30.0   29.9   34.2  
Total revenue 566.1 487.1 509.0
Operating expenses:
Employee compensation and benefits 185.7 163.3 152.8
Long-term incentive compensation 61.2 34.5 49.2
Distribution expenses 83.9 81.1 90.6
Investment administration 9.7 10.2 12.8
Marketing 23.2 21.7 10.6
General, administrative and occupancy 98.7 56.0 54.2
Depreciation and amortization 15.2   14.4   15.4  
Total operating expenses 477.6   381.2   385.6  
 
Operating income 88.5   105.9   123.4  
 
Interest expense (5.1 ) (4.8 ) (5.0 )
Investment gains/(losses), net 9.9 0.5 (8.2 )
Other non-operating (expenses)/income, net (1.6 ) 2.4   (2.0 )
Income before taxes 91.7   104.0   108.2  
Income tax provision (31.7 ) (28.2 ) (26.7 )
Net income attributable to JHG 60.0   75.8   81.5  
Noncontrolling interests (1.0 ) (1.4 ) 4.9  
Net income attributable to JHG 59.0   74.4   86.4  
 

Adjusted Pro Forma Statements of Income

The following are reconciliations of pro forma basis revenues, operating income, net income attributable to Janus Henderson and diluted earnings per share to adjusted revenues, adjusted operating income, adjusted net income attributable to Janus Henderson and adjusted diluted earnings per share based on the combined results Janus Henderson on a pro forma basis for the three months ended 30 June 2017, 31 March 2017 and 30 June 2016, as though the merger has taken place on 1 January 2016:

 
Three Months Ended
30 June   31 March   30 June
2017 2017 2016
Reconciliation of pro forma revenue to pro forma adjusted revenue
Pro forma revenue 566.1 487.1 509.0
Distribution expenses(1) (83.9 ) (81.1 ) (90.6 )
Pro forma adjusted revenue 482.2   406.0   418.4  
 
Reconciliation of pro forma operating income to pro forma adjusted operating income
Pro forma operating income 88.5 105.9 123.4
Employee compensation and benefits(3) 25.4 3.6 1.6
Long term incentive plans (3) 13.2
Marketing(3) 14.4 14.5
Depreciation and amortization(2) 7.8 7.6 7.8
General, administration and occupancy(3) 50.2   12.0   0.9  
Pro forma adjusted operating income 199.5   143.6   133.7  
 
Pro forma operating margin 15.6 % 21.7 % 24.2 %
Pro forma adjusted operating margin 41.4 % 35.4 % 32.0 %
 
Reconciliation of pro forma net income attributable to JHG to pro forma adjusted net income attributable to JHG
Pro forma net income attributable to JHG 59.0 74.4 86.4
Employee compensation and benefits(3) 25.4 3.6 1.6
Long term incentive plans (3) 13.2
Marketing and advertising(3) 14.4 14.5
Depreciation and amortization(2) 7.8 7.6 7.8
General, administration and occupancy(3) 50.2 12.0 0.9
Investment gains (5) (10.2 )
Interest expense (3) 0.7
Other non-operating expenses, net(4) 2.6 0.9 4.2
Income tax provision(6) (23.3 ) (10.7 ) (2.0 )
Pro forma adjusted net income attributable to JHG 139.8   102.3   98.9  
 
Less: allocation of earnings to participating stock-based awards (4.0 ) (3.0 ) (2.8 )
Pro forma adjusted net income attributable to JHG Common stockholders 135.8   99.3   96.1  
 
Weighted average diluted common shares outstanding - diluted (two class) 200.0 196.5 203.7
Pro forma diluted earnings per share (two class) 0.29 0.36 0.41
Pro forma adjusted diluted earnings per share (two class) 0.68 0.50 0.47
 
(1) Distribution expenses are paid to financial intermediaries for the distribution of JHG’s investment products. JHG management believes that the deduction of third-party distribution, service and advisory expenses from revenues in the computation of net revenue 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, the Group’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. JHG management believes these non-cash and acquisition related costs do not represent the ongoing operations of the Group.
(3) Adjustments in 2017 primarily represent transaction and integration costs in relation to the merger. Adjustments in 2016 relate to costs associated with acquisitions prior to the merger. JHG management believes these costs do not represent the ongoing operations of the Group.
(4) Adjustments represent fair value movements on options issued to Dai-ichi and deferred consideration costs associated with acquisitions prior to the merger. JHG management believes these costs do not represent the ongoing operations of the Group.
(5) Adjustment relates to the gain recognized on disposal of the alternative UK small cap team (‘Volantis team’) on 1 April 2017. JHG management believes this gain does not represent the ongoing operations of the Group.

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

 

Balance Sheet

 
JANUS HENDERSON GROUP PLC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 
  30 June   31 December
(dollars in millions) 2017 2016
Assets
Cash and cash equivalents $ 640.0 $ 279.0
Investment securities 274.1 79.6
Other assets 924.2 524.8
Property, equipment and software, net 76.5 41.2
Intangible assets and goodwill, net 4,677.0 1,142.8
Assets of consolidated variable interest entities 441.0 366.0
Total assets $ 7,032.8 $ 2,433.4
 
Liabilities, redeemable noncontrolling interests and equity
Debt $ 438.9 $
Other liabilities 931.1 486.2
Deferred tax liabilities, net 1,091.8 70.7
Liabilities of consolidated variable interest entities 23.9 26.2
Redeemable noncontrolling interests 172.0 158.0
Total equity 4,375.1 1,692.3
Total liabilities, redeemable noncontrolling interests and equity $ 7,032.8 $ 2,433.4
 

Pro Forma Assets Under Management

           
(dollars in billions) Equities Fixed Income Quantitative
Equities
Multi Assets Alternatives Total (3)
 
30 June 2016 $ 146.5 $ 74.9 $ 48.9 $ 28.3 $ 19.2 $ 317.7
Sales 8.1 4.9 0.6 0.7 1.3 15.6
Redemptions (1) (9.0 ) (4.4 ) (2.3 ) (1.5 ) (1.5 ) (18.8 )
Net Sales / (Redemptions) (0.9 ) 0.4 (1.8 ) (0.8 ) (0.2 ) (3.2 )
Market/Fund Performance/FX 8.2 1.8 0.9 0.7 11.6
30 September 2016 $ 153.8 $ 77.2 $ 48.1 $ 28.3 $ 19.0 $ 326.2
Sales 10.1 7.3 1.0 1.0 1.5 20.9
Redemptions (1) (9.9 ) (6.9 ) (2.6 ) (1.5 ) (2.1 ) (23.0 )
Net Sales / (Redemptions) 0.2 0.4 (1.6 ) (0.5 ) (0.6 ) (2.1 )
Market/Fund Performance/FX (0.7 ) (3.8 ) 0.1 0.2 (0.7 ) (4.9 )
31 December 2016 $ 153.3 $ 73.8 $ 46.6 $ 27.9 $ 17.6 $ 319.2
Sales 8.3 5.8 3.1 0.9 1.4 19.4
Redemptions (1) (10.8 ) (5.4 ) (6.7 ) (1.4 ) (2.0 ) (26.4 )
Net Sales / (Redemptions) (2.4 ) 0.3 (3.7 ) (0.6 ) (0.6 ) (7.0 )
Market/Fund Performance/FX 11.5 2.2 3.3 1.2 0.4 18.6
31 March 2017 $ 162.3 $ 76.3 $ 46.2 $ 28.6 $ 17.4 $ 330.8
Sales 10.6 5.3 0.7 1.2 2.3 20.2
Redemptions (1) (9.4 ) (6.2 ) (2.5 ) (1.5 ) (1.5 ) (21.2 )
Net Sales / (Redemptions) 1.2 (0.9 ) (1.8 ) (0.4 ) 0.8 (1.0 )
Market/Fund Performance/FX 9.9 1.9 2.1 1.1 0.8 15.9
Acquisitions/(disposals) (0.1 ) (0.7 ) (0.7 )
30 June 2017 $ 173.4 $ 77.2 $ 46.6 $ 29.4 $ 18.4 $ 344.9
 

Notes:

(1) Redemptions include impact of client switches which could cause a positive balance on occasion.
(2) FX reflects movement in AUM resulting from changes in foreign currency rates as non-USD denominated AUM is translated into USD.
(3) Numbers may not cast due to rounding.
 

STATUTORY DISCLOSURES

Associates and Joint Ventures

As at 30 June 2017, Group holds interests in the following associates and joint ventures managed through shareholder agreements with third party investors, accounted for under the equity method:

  • Optimum Investment Management Ltd. Ownership 30%
  • Long Tail Alpha Ownership 20%

Movement in Controlled Entities

There have been the following acquisitions of controlled entities in the six month period to 30 June 2017.

  • Janus Capital Group Inc.
  • Janus Capital Management LLC
  • Perkins Investment Management LLC
  • INTECH Investment Management LLC
  • Janus Distributors LLC
  • Janus Services LLC
  • Janus Management Holdings Corporation
  • Janus Capital Institutional Advisers LLC
  • Janus Holdings LLC
  • Janus International Holdings LLC
  • Janus Capital International Limited
  • Janus Capital Trust Manager Limited
  • Janus Capital (Switzerland) LLC
  • Janus Capital Asia Limited
  • Janus Capital Singapore Pte. Limited
  • Janus Capital Taiwan Ltd.
  • Janus UK Holdings Corporation
  • Kapstream Capital Pty Limited
  • VS Holdings Inc.
  • VelocityCapital Management LLC
  • Janus Index & Calculation Services LLC

Basis of Preparation

The interim consolidated financial statements contain all adjustments necessary to fairly present the financial position, results of operations and cash flows of Janus Henderson in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All such adjustments are of a normal recurring nature. Such financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The financial statements should be read in conjunction with the annual consolidated financial statements and notes for the year ended 31 December 2016, which can be found in JHG’s prospectus dated 21 March 2017 as filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (File no. 333-216824).

Corporate Governance Principles and Recommendations

In the opinion of the Directors, the financial records of the Group have been properly maintained and the Interim Condensed Consolidated Financial Statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the Group and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

FORWARD-LOOKING STATEMENTS DISCLAIMER

Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value.

This document includes statements concerning potential future events involving Janus Henderson Group plc that could differ materially from the events that actually occur. The differences could be caused by a number of factors including those factors identified in Janus Henderson Group’s Registration Statement, on file with the Securities and Exchange Commission (Commission file no. 333-216824), including those that appear under headings such as “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Many of these factors are beyond the control of the company and its management. Any forward-looking statements contained in this presentation are as of the date on which such statements were made. The company assumes no duty to update them, even if experience, unexpected events, or future changes make it clear that any projected results expressed or implied therein will not be realised.

Annualised, pro forma, projected and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results.

The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of any offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments.

Not all products or services are available in all jurisdictions.

Mutual funds in the U.S. distributed by Janus Henderson Distributors.

Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary prospectus containing this and other information, please contact your investment professional or call 800.668.0434. Read it carefully before you invest or send money.

Janus Henderson, Janus, Henderson and INTECH are trademarks or registered trademarks of Janus Henderson Investors. © Janus Henderson Investors. The name Janus Henderson Investors includes HGI Group Limited, Henderson Global Investors (Brand Management) Sarl and Janus International Holding LLC.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

 
JANUS HENDERSON GROUP PLC
 
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Millions, Except Share Data)
 
  June 30,   December 31,
2017 2016
ASSETS
 
Current assets:
Cash and cash equivalents $ 640.0 $ 279.0
Investment securities 274.1 79.6
Fees and other receivables 346.3 165.5
OEIC and unit trust debtors 274.8 142.1
Assets of consolidated VIEs:
Cash and cash equivalents 43.7 44.2
Investment securities 384.4 313.7
Other current assets 12.9 8.1
Other current assets 85.1   28.5  
Total current assets 2,061.3 1,060.7
 
Non-current assets:
Property, equipment and software, net 76.5 41.2
Intangible assets, net 3,202.1 401.3
Goodwill 1,474.9 741.5
Retirement benefit asset, net 196.0 180.2
Other non-current assets 22.0   8.5  
Total assets $ 7,032.8   $ 2,433.4  
 
LIABILITIES
 
Current liabilities:
Accounts payable and accrued liabilities $ 330.6 $ 141.7
Current portion of accrued compensation, benefits and staff costs 205.1 147.0
Current portion of long-term debt 115.4
OEIC and unit trust creditors 273.2 137.9
Liabilities of consolidated VIEs:
Accounts payable and accrued liabilities 23.9   26.2  
Total current liabilities 948.2 452.8
 
Non-current liabilities:
Accrued compensation, benefits and staff costs 21.0 8.7
Long-term debt 323.5
Deferred tax liabilities, net 1,091.8 70.7
Retirement benefit obligations, net 6.5 11.9
Other non-current liabilities 94.7   39.0  
Total liabilities 2,485.7 583.1
 
Commitments and contingencies (See Note 13)
 
REDEEMABLE NONCONTROLLING INTERESTS 172.0   158.0  
 
EQUITY

Common stock ($1.50 par and £0.125 par, 480,000,000 and 2,194,910,776
shares authorized; 200,406,138 and 1,131,842,109 shares issued and
outstanding, respectively)

300.6 234.4
Additional paid-in-capital 3,824.5 1,237.9
Treasury shares (4,115,574 and 38,848,749 shares held, respectively) (157.9 ) (155.1 )
Accumulated other comprehensive loss, net of tax (344.1 ) (434.5 )
Retained earnings 708.0   764.8  
Total shareholders’ equity 4,331.1 1,647.5
Nonredeemable noncontrolling interests 44.0   44.8  
Total equity 4,375.1   1,692.3  
Total liabilities, redeemable noncontrolling interests and equity $ 7,032.8   $ 2,433.4  
 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 
JANUS HENDERSON GROUP PLC
 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(Dollars in Millions, Except per Share Data)
 
  Three months ended   Six months ended
June 30, June 30,
2017   2016 2017   2016
Revenue:
Management fees $ 296.0 $ 222.9 $ 493.5 $ 441.2
Performance fees 57.7 13.9 72.5 28.7
Shareowner servicing fees 9.9 9.9
Other revenue 21.2   20.3   38.4   41.6  
Total revenue 384.8   257.1   614.3   511.5  
 
Operating expenses:
Employee compensation and benefits 123.6 67.2 194.0 134.6
Long-term incentive plans 47.3 30.2 63.7 51.3
Distribution expenses 60.7 57.3 107.8 111.9
Investment administration 9.7 12.8 19.9 24.5
Marketing 10.1 3.7 13.3 7.1
General, administrative and occupancy 67.3 23.9 92.4 48.9
Depreciation and amortization 9.4   5.6   15.7   11.2  
Total operating expenses 328.1   200.7   506.8   389.5  
 
Operating income 56.7 56.4 107.5 122.0
 
Interest expense (2.0 ) (1.4 ) (3.1 ) (5.6 )
Investment gains (losses), net 9.8 (8.9 ) 8.9 (2.1 )
Other non-operating expenses, net