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Corporate Information

Invesco Ltd. (Parent) and all of its consolidated entities (collectively, the company or Invesco) provide retail and institutional clients with an array of global investment management capabilities. The company operates globally, and its sole business is investment management.

Certain disclosures included in the company’s annual report on Form 10-K for the year ended December 31, 2019 (annual report or Form 10-K) are not required to be included on an interim basis in the company’s quarterly reports on Forms 10-Q (Report). The company has condensed or omitted these disclosures. Therefore, this Report should be read in conjunction with the company’s annual report.

Basis of Accounting and Consolidation

The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with rules and regulations of the Securities and Exchange Commission and consolidate the financial statements of the Parent and all of its controlled subsidiaries. In the opinion of management, the financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair statement of the financial condition and results of operations for the periods presented. All significant intercompany transactions, balances, revenues and expenses are eliminated upon consolidation. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Use of Estimates

The three months ended March 31, 2020 were characterized by heightened uncertainty due to the COVID-19 pandemic which could impact estimates and assumptions made by management. The primary estimates and assumptions made relate to goodwill and intangible impairment, the impact of legal contingencies, certain investments which are carried at fair value, post-employment benefit plan obligations and taxes. Additionally, estimation is involved when determining investment and debt valuation for certain CIP; however, changes in the fair values of these amounts are largely offset by noncontrolling interests. Use of available information and application of judgment are inherent in the formation of estimates. Actual results in the future could differ from such estimates, and the differences may be material to the Condensed Consolidated Financial Statements.

Accounting Pronouncements Recently Adopted

Financial Instruments. On January 1, 2020 the company adopted Accounting Standard Update 2016-13, “Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments” (ASU 2016-13) using the modified retrospective approach. ASU 2016-13 amends guidance related to reporting credit losses for financial assets measured at amortized cost and available for sale securities and adds an impairment model that is based on expected losses rather than incurred losses. Under the modified retrospective approach, entities are required to report any effect from adoption as a cumulative effect adjustment to retained earnings at the adoption date. The company has determined that there is no material impact upon adoption of this amendment.

Goodwill. On January 1, 2020 the company adopted Accounting Standards Update 2017-04, “Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment” (ASU 2017-04), which revised the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The company has adopted ASU 2017-04 using a prospective approach. In the event a reporting unit’s carrying amount exceeds fair value, the amount of impairment will equal the excess carrying value, not to exceed the total amount of goodwill allocated to the reporting unit. To the extent carrying amount exceeds fair value in a future goodwill impairment test, the amendment will change the amount of impairment expense the company records.

Cloud Computing Arrangements. On January 1, 2020 the company adopted Accounting Standards Update 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract” (ASU 2018-15), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The company has adopted ASU 2018-15 using a

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prospective approach to all implementation costs incurred after adoption. The company has determined that there is no material impact upon adoption of this standard.

Pending Accounting Pronouncements

On May 24, 2019, the company acquired OppenheimerFunds, an investment management subsidiary of Massachusetts Mutual Life Insurance Company’s (MassMutual), with consideration to MassMutual and OppenheimerFunds employee shareholders consisting of $35.0 million in cash, 81.9 million shares of common stock and $4.0 billion in perpetual, non-cumulative preferred shares with a 21-year non-call period and a fixed rate of 5.9%. The 81.9 million shares are composed of 75.7 million common shares issued on the closing date and 6.2 million Invesco restricted common stock awards granted to employee shareholders. MassMutual has an approximate 16.5% stake in the common stock of the combined firm as of March 31, 2020. Invesco and MassMutual entered into a shareholder agreement, in which MassMutual has customary minority shareholder rights, including representation on Invesco’s board of directors. The shareholder agreement with MassMutual specifies a lock-up period of two years for the common stock and five years for the preferred stock. MassMutual may not sell common or preferred shares received as purchase consideration during the respective lock-up periods.

The acquired business enhances the company’s ability to meet client needs through its comprehensive range of high-conviction active, passive and alternative capabilities.

The transaction was accounted for under the acquisition method of accounting. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the transaction. The issuance of common stock and preferred stock consideration represents a non-cash financing activity related to the statement of cash flows.

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The following table summarizes the estimate of amounts of identified assets acquired and liabilities assumed at the acquisition date, as well as the consideration transferred to acquire OppenheimerFunds. Additional changes to the allocation to certain assets, liabilities and tax estimates are not expected but could occur. The company will finalize the acquisition accounting (including the valuation) within the required measurement period, but in no event not later than one year from May 24, 2019.

	March 31, 2020
$ in millions	Fair Value Estimate
ASSETS
Cash and cash equivalents	360.0
Accounts receivable	133.1
Investments	178.4
Prepaid assets	24.8
Other assets	181.2
Property, equipment and software, net	104.1
Intangible assets (1)	5,189.0
Goodwill (2)	1,507.6
Total assets	7,678.2
LIABILITES
Accrued compensation and benefits	263.9
Accounts payable and accrued expenses(2)	730.4
Deferred tax liabilities, net	1,088.0
Total liabilities	2,082.3
Total identifiable net assets	5,595.9
Summary of consideration
Cash consideration	35.0
Common stock consideration (3)	1,453.6
Preferred stock consideration (4)	4,010.5
Other consideration (5)	96.8
Total cash and stock consideration	5,595.9

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(1)	Intangible assets are comprised of the following:

•	indefinite-lived intangible asset related to management contracts of $4,907.0 million consists primarily of contracts related to mutual funds.

•	finite-lived intangible asset related to management contracts of $255.0 million consists primarily of contracts related to sub-advised accounts and has an estimated useful life of eight years.

•	acquired trade name asset of $27.0 million has an estimated useful life of six years.

The intangible assets created in the acquisition are not expected to be deductible for tax purposes.

(2)

Goodwill is calculated as the difference between the acquisition date fair value of the total consideration transferred and the aggregate values assigned to the assets acquired and liabilities assumed. The goodwill created in the acquisition is not expected to be deductible for tax purposes. The goodwill balance resulted primarily from the opening balance sheet net deferred tax liability. Additionally, an adjustment was made to goodwill during first quarter 2020 as a result of the matter described below.  See Note 6 -- "Goodwill" for additional details regarding the accounting matter.

As part of the acquisition, the company acquired the management contracts of the Invesco Oppenheimer SteelPath-branded MLP funds and became the Adviser to the funds. In the fourth quarter 2019, the company identified an accounting matter related to the funds’ financial statements and concluded that it was reasonably possible, but not probable, that the company would incur at least some costs associated with the matter. Accordingly, no accrual was made at December 31, 2019.

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Following a regulatory consultation on the matter that concluded after the company filed its 2019 Annual Report on Form 10-K, the company changed its assessment of the likelihood of a loss to probable. Based on this new information about the facts and circumstances, the company adjusted the initial accounting for the acquisition by recording a liability of an estimated amount of $380.5 million and a deferred tax asset of $93.5 million (for expected future tax benefits) during the first quarter of 2020 for pre-acquisition activity related to the matter. The liability and associated deferred tax asset recorded represents management’s current best estimate based on its current understanding of the relevant facts.  As this accounting adjustment was recorded during the measurement period of one year after the acquisition date, a corresponding adjustment of $287.0 million ($380.5 million net of $93.5 million of deferred tax asset) was made to goodwill. As additional information about the matter is finalized, the estimate may change. In accordance with ASC 805 Business Combinations, any further adjustments made during the measurement period, will be recorded as an adjustment to goodwill. See Note 15 --  "Commitments and Contingencies" for additional details regarding the accounting matter.

(3)

The common shares were fair valued using the company’s market price on closing date and reflects a discount for the common shares issued to MassMutual (75,563,041 shares) with a two-year lock-up period, resulting in a value of approximately $19.195 per share. Common shares issued to OppenheimerFunds employee shareholders (153,574 shares) were valued at the market price on closing date, which was $20.42.

(4)	The preferred shares were fair valued using a discounted cash flow model, resulting in a value of $1,000 per share.

(5)	Other consideration primarily consists of the fair value of the vested portion of replacement employee common share-based awards.

The changes in the carrying amount of goodwill from December 31, 2019 to March 31, 2020 are primarily due to the OppenheimerFunds acquisition. See Note 6 -- "Goodwill" for additional details regarding changes in goodwill.

Transaction and integration costs related to the OppenheimerFunds acquisition included within the Transaction, integration, and restructuring line item on the Condensed Consolidated Statements of Income were $71.1 million, for the three months ended March 31, 2020. Included in this amount was a loss of $7.3 million, representing the post-acquisition activity and related costs for the MLP fund-related liability discussed above.

Supplemental Pro Forma Information

The following pro forma summary presents consolidated information of the company as if the business combination had occurred on January 1, 2019, the earliest period presented herein.

	Three months ended March 31,
$ in millions	2019
Operating revenues	1,720.8
Net income	215.6

The pro forma adjustments include dividends on preferred shares, transaction costs, and adjustments to depreciation and intangible asset amortization expense. Cost savings or operating synergies expected to result from the acquisition are not included in the pro forma results. These pro forma results are not indicative of the actual results of operations that would have been achieved nor are they indicative of future results of operations.

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The fair value of financial instruments are presented in the below summary table. The fair value of financial instruments held by CIP is presented in Note 16, "Consolidated Investment Products". See the company’s most recently filed Form 10-K for additional disclosures on valuation methodology and fair value.

	March 31, 2020			December 31, 2019
$ in millions	Fair Value			Fair Value
Cash and cash equivalents	940.5			1,049.0
Equity investments	334.1			432.5
Foreign time deposits (1)	25.8			32.0
Assets held for policyholders	9,137.3			10,835.6
Policyholder payables (1)	(9,137.3	)		(10,835.6	)
Contingent consideration liability	(33.6	)		(60.2	)
Long-term debt (1) (2)	(2,806.9	)		(2,281.5	)

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(1)	These financial instruments are not recorded on the balance sheet at fair value on a recurring basis. See the most recently filed Form 10-K for additional information about the carrying and fair values of these financial instruments. Foreign time deposits are measured at cost plus accrued interest, which approximates fair value, and are accordingly classified as Level 2 securities.

(2) All assets and liabilities are carried at fair value except debt which has a carrying value of $2,588.8 million as of March 31, 2020 (December 31, 2019: $2,080.3 million).

The following table presents, by hierarchy levels, the carrying value of the company’s assets and liabilities, including major security type for equity and debt securities, which are measured at fair value on the company’s Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, respectively:

	As of March 31, 2020
$ in millions	Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	379.9			379.9			—			—
Investments:*
Equity investments:
Seed money	175.7			175.7			—			—
Investments related to deferred compensation plans	155.8			155.8			—			—
Other equity securities	2.6			2.6			—			—
Assets held for policyholders	9,137.3			9,137.3			—			—
Total	9,851.3			9,851.3			—			—
Liabilities:
Contingent consideration liability	(33.6	)		—			—			(33.6	)
Total	(33.6	)		—			—			(33.6	)

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	As of December 31, 2019
$ in millions	Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	620.9			620.9			—			—
Investments:*
Equity investments:
Seed money	235.5			235.5			—			—
Investments related to deferred compensation plans	192.4			192.4			—			—
Other equity securities	4.6			4.6			—			—
Assets held for policyholders	10,835.6			10,835.6			—			—
Total	11,889.0			11,889.0			—			—
Liabilities:
Contingent consideration liability	(60.2	)		—			—			(60.2	)
Total	(60.2	)		—			—			(60.2	)

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*	Foreign time deposits of $25.8 million (December 31, 2019: 32.0 million) are excluded from this table. Equity method and other investments of $373.0 million and $11.6 million, respectively, (December 31, 2019: $350.8 million and $14.2 million, respectively) are also excluded from this table. These investments are not measured at fair value, in accordance with applicable accounting standards.

The following tables show a reconciliation of the beginning and ending fair value measurements for level 3 assets and liabilities during the three months ended March 31, 2020 and March 31, 2019, which are valued using significant unobservable inputs:

	Three months ended March 31, 2020
$ in millions	Contingent Consideration Liability
Beginning balance	(60.2	)
Revision to purchase price allocation	5.5
Net unrealized gains and losses included in other gains and losses, net*	8.2
Disposition/settlements	12.9
Ending balance	(33.6	)

	Three months ended March 31, 2019
$ in millions	Contingent Consideration Liability
Beginning balance	(40.9	)
Net unrealized gains and losses included in other gains and losses, net*	(1.5	)
Disposition/settlements	4.0
Ending balance	(38.4	)

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*	These unrealized gains and losses are attributable to balances still held at the respective period ends.

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Total Return Swaps

In addition to holding equity investments, the company has a total return swap (TRS) to economically hedge certain deferred compensation liabilities. The notional value of the total return swap at March 31, 2020 was $215.3 million. During the three months ended March 31, 2020, market valuation losses of $31.4 million were recognized in other gains and losses, net.

Contingent Consideration Liability

The contingent consideration liability related to the investment management contracts acquired from Deutsche Bank was recorded at fair value as of the date of acquisition using a discounted cash flow model and is categorized within level 3 of the valuation hierarchy. At March 31, 2020 inputs used in the model to determine the liability related to the pre-existing contingent consideration arrangement assumed no growth rates in forecasted AUM. Changes in fair value are recorded in other gains and losses, net in the period incurred. An increase in forecasted AUM levels and a decrease in the discount rate would increase the fair value of the contingent consideration liability while a decrease in forecasted AUM and an increase in the discount rate would decrease the liability.

In connection with the OppenheimerFunds acquisition (see Note 2, “"Business Combinations"”), Invesco acquired a $13.6 million contingent consideration liability related to a historical OppenheimerFunds transaction. The liability is contingent upon the attainment of certain revenue growth objectives during 2019 and 2020. As of March 31, 2020, inputs used to determine the liability related to these arrangements primarily include an assumed growth rate in management fees of 4% and a discount rate of 10.7%.

The disclosures below include details of the company’s investments. Investments held by CIP are detailed in Note 16, "Consolidated Investment Products".

$ in millions	March 31, 2020			December 31, 2019
Equity investments:
Seed money	175.7			235.5
Investments related to deferred compensation plans	155.8			192.4
Other equity securities	2.6			4.6
Equity method investments*	373.0			350.8
Foreign time deposits	25.8			32.0
Other	11.6			14.2
Total investments	744.5			829.5

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*	Certain co-investments in managed funds accounted for under the equity method are valued on a one-month or a three-month lag based upon the availability of fund financial information which means the equity in earnings may not reflect the market disruption that occurred during March 2020.

Equity investments

The unrealized gains and losses for the three months ended March 31, 2020, that relate to equity investments still held at March 31, 2020, was a $86.1 million net loss (three months ended March 31, 2019: $23.0 million net gain).

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The following table presents the major classes of the company's intangible assets at March 31, 2020 and December 31, 2019:

$ in millions	Gross Book Value			Accumulated Amortization			Net Book Value
March 31, 2020
Management contracts - indefinite-lived	6,962.0			N/A			6,962.0
Management contracts - finite-lived	319.2			(92.7	)		226.5
Developed technology	92.5			(35.0	)		57.5
Other	106.1			(27.0	)		79.1
Total	7,479.8			(154.7	)		7,325.1
December 31, 2019
Management contracts - indefinite-lived	6,969.1			N/A			6,969.1
Management contracts - finite-lived	319.3			(84.5	)		234.8
Developed technology	98.6			(31.7	)		66.9
Other	112.2			(24.7	)		87.5
Total	7,499.2			(140.9	)		7,358.3

During the three months ended March 31, 2020, the company did not acquire any intangible assets.

During 2019, the company acquired $4,907.0 million in indefinite lived management contracts, $255.0 million of finite-lived intangible asset related management contracts, and $27.0 million of trade name assets related to the Oppenheimer acquisition. Other 2019 additions to intangible assets related to the preliminary valuations of acquisitions of digital wealth technology companies. Amortizable intangible assets of $315.4 million related to 2019 acquisitions have a weighted-average amortization period of 7.15 years.

The 2019 annual impairment review of indefinite-lived intangible assets determined that no impairment existed. Due to the decline in our assets under management in the three months ended March 31, 2020, management determined that an interim impairment test was necessary for certain of our indefinite-lived management contract assets.

The impairment analysis involves determining whether the estimated fair value of each intangible asset exceeds its carrying amount. If the fair value of the intangible asset exceeds its carrying amount, then the asset is not impaired. However, if the carrying amount exceeds the fair value of the asset, the amount of impairment would equal the excess carrying value.

The principal method of determining fair value of indefinite-lived intangible assets is an income approach where estimated future cash flows are discounted to arrive at a single present value amount. The discount rate used is derived based on the time value of money and the risk profile of the stream of future cash flows. Recent results and projections based on expectations regarding revenue, expenses, capital expenditure and acquisition earn out payments produce a present value for the company, or its fair value.

The company’s impairment analysis at March 31, 2020 incorporated revised forecasts that took into account the market disruptions during the quarter and expectations for a continued strain on results over the remainder of the year. Given the significant level of uncertainty that currently exists, management applied several alternative scenarios for market and company performance over the next several years to determine fair value. Other key assumptions were updated as appropriate, including the discount rate, which increased as a result of an increase in the equity risk premium, which was partially offset by a decrease in the risk free rate.

The analysis resulted in no impairment because the fair value of indefinite-lived intangible assets exceeded their carrying value, although the amount of excess has decreased since the last quantitative test. To the extent that markets remain depressed for a prolonged period of time and market conditions stagnate or worsen as a result of the COVID-19 pandemic, our assets under management, revenues, and profitability would likely be adversely affected. As a result, subsequent impairment tests may be based upon different assumptions and future cash flow projections, which may result in an impairment. Any impairment could reduce materially the recorded amount of indefinite-lived intangible assets with a corresponding charge to our earnings.

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Amortization expense for the three months ended March 31, 2020 was $15.9 million. Amortization expense for the three months ended December 31, 2019 was $20 million. Estimated amortization expense for each of the five succeeding fiscal years based upon the company's intangible assets at March 31, 2020 is as follows:

$ in millions Years Ended December 31,	Estimated Amortization Expense
2020 (excluding the three months ended March 31, 2020)	(46.2	)
2021	(62.5	)
2022	(59.5	)
2023	(52.0	)
2024	(46.8	)
2025	(38.9	)

6. GOODWILL

The table below details changes in the goodwill balance:

$ in millions	Net Book Value
January 1, 2020	8,509.4
Business combinations	288.1
Foreign exchange and other	(253.4	)
March 31, 2020	8,544.1
January 1, 2019	7,157.1
Business combinations	1,229.1
Foreign exchange and other	123.2
December 31, 2019	8,509.4

The 2020 additions to goodwill of $288.1 million related primarily to adjustments to the preliminary purchase price allocation of the Oppenheimer acquisition. See Note 2, "Business Combinations" and Note 15, "Commitments and Contingencies" for additional details. The 2019 addition to goodwill consists of the initial preliminary valuation of the Oppenheimer acquisition and other additions related to the preliminary valuations of acquired digital wealth technology companies.

The 2019 annual impairment review determined that no impairment existed at the annual review dates. Due to the decline in our assets under management in the three months ended March 31, 2020, management determined that an interim impairment test was necessary as of March 31, 2020.

The impairment analysis involves determining whether the estimated fair value of the company (a single reporting unit) exceeds its book value. If the fair value of the company exceeds its book value, then goodwill is not impaired. However, if the book value exceeds the fair value of the company, the amount of impairment would equal the excess book value.

The principal method of determining fair value of the company is an income approach where estimated future cash flows are discounted to arrive at a single present value amount. The discount rate used is derived based on the time value of money and the risk profile of the stream of future cash flows. Recent results and projections based on expectations regarding revenue, expenses, capital expenditure and acquisition earn out payments produce a present value for the company, or its fair value.

The company’s impairment analysis at March 31, 2020 incorporated revised forecasts that took into account the market disruptions during the quarter and expectations for a continued strain on results over the remainder of the year. Given the significant level of uncertainty that currently exists, management also considered several alternative scenarios for market and company performance over the next several years. Other key assumptions were updated as appropriate, including the discount rate, which increased as a result of an increase in the equity risk premium, which was partially offset by a decrease in the risk free rate.

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The analysis resulted in no impairment because fair value of the company exceeded book value, although the amount of excess has decreased significantly since the last quantitative test. To the extent that markets remain depressed for a prolonged period of time and market conditions stagnate or worsen as a result of the COVID-19 pandemic, our assets under management, revenues, and profitability would likely be adversely affected. As a result, subsequent impairment tests may be based upon different assumptions and future cash flow projections, which may result in an impairment of goodwill. Any impairment could reduce materially the recorded amount of goodwill with a corresponding charge to our earnings.

The disclosures below include details of the company’s debt. Debt of CIP is detailed in Note 16, “"Consolidated Investment Products".”

	March 31, 2020						December 31, 2019
$ in millions	Carrying Value (2)			Fair Value			Carrying Value (2)			Fair Value
$1.5 billion floating rate credit facility expiring August 11, 2022	508.0			508.0			—			—
Unsecured Senior Notes(1):
$600 million 3.125% - due November 30, 2022	598.3			599.5			598.1			617.5
$600 million 4.000% - due January 30, 2024	596.1			629.3			595.8			639.2
$500 million 3.750% - due January 15, 2026	496.3			521.3			496.1			533.0
$400 million 5.375% - due November 30, 2043	390.1			548.8			390.3			491.8
Long-term debt	2,588.8			2,806.9			2,080.3			2,281.5

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(1)	The company’s senior note indentures contain certain restrictions on mergers or consolidations. Beyond these items, there are no other restrictive covenants in the indentures.

(2)	The difference between the principal amounts and the carrying values of the senior notes in the table above reflect the unamortized debt issuance costs and discounts.

The company maintains approximately $10.3 million in letters of credit from a variety of banks. The letters of credit are generally one-year automatically-renewable facilities and are maintained for various commercial reasons.

The preferred shares issued in connection with the acquisition of OppenheimerFunds have a $0.20 par value, liquidation preference of $1,000 per share and fixed cash dividend rate of 5.90% per annum, payable quarterly on a non-cumulative basis. Shares of preferred stock are not redeemable prior to the 21^st anniversary of their original issue date of May 24, 2019. The number of preferred shares issued and outstanding is represented in the table below:

	As of
in millions	March 31, 2020		December 31, 2019
Preferred shares issued (1)	4.0		4.0
Preferred shares outstanding (1)	4.0		4.0

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(1)	Preferred shares are held by MassMutual and are subject to a lock-up period of five years, which disallows the sale of preferred shares by MassMutual during the five-year period beginning on the original issue date of May 24, 2019.

The number of common shares and common share equivalents issued are represented in the table below:

	As of
In millions	March 31, 2020			December 31, 2019
Common shares issued	566.1			566.1
Less: Treasury shares for which dividend and voting rights do not apply	(107.2	)		(112.8	)
Common shares outstanding	458.9			453.3

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In 2019, the company entered into three forward contracts to purchase its common shares. The details of the forward contracts as of March 31, 2020 and December 31, 2019, are as follows:

In millions, except strike price	March 31, 2020
	Common Shares Purchased			Initial Strike Price				Forward Price				Hedge Completion Date		Total Treasury Shares Recorded				Settlement Date		Total Liability Recorded
$200 million - entered on May 13, 2019	9.8			$	20.51			$	12.00			05/30/2019		$	198.7			01/04/2021		$	(116.6	)
$200 million - entered on July 2, 2019	10.0			$	20.00			$	12.00			07/30/2019		$	193.7			04/01/2021		$	(117.7	)
$100 million - entered on August 27, 2019	6.0			$	16.59			$	12.00			09/27/2019		$	102.6			04/01/2021		$	(73.5	)
	25.8													$	495.0					$	(307.8	)

In millions, except strike price	December 31, 2019
	Common Shares Purchased			Initial Strike Price				Forward Price				Hedge Completion Date		Total Treasury Shares Recorded				Settlement Date		Total Liability Recorded
$200 million - entered on May 13, 2019	9.8			$	20.51			$	20.51			05/30/2019		$	198.7			01/04/2021		$	(199.1	)
$200 million - entered on July 2, 2019	10.0			$	20.00			$	20.00			07/30/2019		$	193.7			04/01/2021		$	(195.3	)
$100 million - entered on August 27, 2019	6.0			$	16.59			$	16.59			09/27/2019		$	102.6			04/01/2021		$	(102.1	)
	25.8													$	495.0					$	(496.5	)

The components of accumulated other comprehensive income/(loss) were as follows:

	For the three months ended March 31, 2020
$ in millions	Foreign currency translation			Employee benefit plans			Equity method investments			Available-for-sale investments			Total
Other comprehensive income/(loss) net of tax:
Currency translation differences on investments in foreign subsidiaries	(315.0	)		—			—			—			(315.0	)
Other comprehensive income, net	—			(3.1	)		—			(0.1	)		(3.2	)
Other comprehensive income/(loss), net of tax	(315.0	)		(3.1	)		—			(0.1	)		(318.2	)
Beginning balance	(462.0	)		(126.1	)		0.1			0.7			(587.3	)
Other comprehensive income/(loss), net of tax	(315.0	)		(3.1	)		—			(0.1	)		(318.2	)
Ending balance	(777.0	)		(129.2	)		0.1			0.6			(905.5	)

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	For the three months ended March 31, 2019
$ in millions	Foreign currency translation			Employee benefit plans			Equity method investments			Available-for-sale investments			Total
Other comprehensive income/(loss) net of tax:
Currency translation differences on investments in foreign subsidiaries	60.9			—			—			—			60.9
Other comprehensive income, net	—			0.2			—			0.3			0.5
Other comprehensive income/(loss), net of tax	60.9			0.2			—			0.3			61.4
Beginning balance	(617.6	)		(117.7	)		—			0.3			(735.0	)
Other comprehensive income/(loss), net of tax	60.9			0.2			—			0.3			61.4
Ending balance	(556.7	)		(117.5	)		—			0.6			(673.6	)

Net Investment Hedge

The company designated certain intercompany debt as a non-derivative net investment hedging instrument against foreign currency exposure related to its net investment in foreign operations. At March 31, 2020 and December 31, 2019, £130 million ($160.8 million and $172.1 million, respectively) of intercompany debt was designated as a net investment hedge. For the three months ended March 31, 2020, the Company recognized foreign currency gains of $11.3 million (three months ended March 31, 2019: losses of $4.1 million) resulting from the net investment hedge within currency translation differences on investments in foreign subsidiaries in other comprehensive income.

The geographic disaggregation of revenue for the three months ended March 31, 2020 and 2019 are presented below. There are no revenues attributed to the company’s country of domicile, Bermuda.

	For the three months ended March 31,
$ in millions	2020			2019
Americas	1,180.7			760.0
UK	170.8			210.7
EMEA ex UK (Europe, Middle East, and Africa)	164.4			169.6
Asia	83.0			74.3
Total operating revenues	1,598.9			1,214.6

The opening and closing balance of deferred carried interest liabilities for the three months ended March 31, 2020 were $45.8 million and $57.9 million, respectively (December 31, 2019: $61.3 million and $45.8 million, respectively). During the three months ended March 31, 2020, no performance fee revenue was recognized that had been included in the deferred carried interest liability balance at the beginning of the period (March 31, 2019: $5.9 million).

The company recognized total expenses of $47.4 million and $49.8 million related to equity-settled common share-based payment transactions in the three months ended March 31, 2020 and 2019, respectively.

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Movements on common share awards during the periods ended March 31, are detailed below:

	For the three months ended March 31, 2020									For the three months ended March 31, 2019
Millions of common shares, except fair values	Time- Vested			Performance- Vested			Weighted Average Grant Date Fair Value ($)			Time- Vested			Performance- Vested
Unvested at the beginning of period	18.7			1.1			21.94			12.5			0.9
Granted during the period (1)	7.8			0.9			14.37			8.9			0.6
Forfeited during the period	(0.2	)		—			22.90			(0.3	)		—
Vested and distributed during the period	(6.1	)		(0.2	)		25.65			(4.6	)		(0.1	)
Unvested at the end of the period	20.2			1.8			19.70			16.5			1.4

___________

(1) With respect to the time-vested awards granted in 2019, includes 6.2 million restricted shares as employment inducement

awards in connection with completed acquisitions.

The total fair value of common shares that vested during the three months ended March 31, 2020 was $91.8 million (three months ended March 31, 2019: $89.8 million). The weighted average grant date fair value of the common share awards that were granted during the three months ended March 31, 2020 was $14.37 (three months ended March 31, 2019: $19.34).

At March 31, 2020, there was $369.0 million of total unrecognized compensation cost related to non-vested common share awards; that cost is expected to be recognized over a weighted average period of 2.78 years.

The company leases office space in almost all its locations of business, data centers and certain equipment under non-cancelable operating leases. The operating leases have a weighted-average remaining lease term of 6.22 years and generally include one or more options to renew, with renewal terms that can extend the lease term from 1 to 10 years. Certain lease arrangements include an option to terminate the lease if a notification is provided to the landlord within 1 to 9 years prior to the end of the lease term. The company has sole discretion in exercising lease renewal and termination options. The lease terms used in the company’s lease measurements do not include renewal options as they are not reasonably certain to be exercised as of the date of this report.

The company elected to combine lease and non-lease components in calculating the lease liability and right-of-use asset for operating leases.

Variable lease payments are determined based on the terms and conditions outlined in the lease contracts and are primarily determined in relation to the extent of the company’s usage of the right-of use-asset or the nature and extent of services received from the lessor.

As of March 31, 2020, the right-of-use asset of $312.4 million was included within Other assets, and the lease liability of $353.1 million was included within Accounts payable and accrued expenses, on the Condensed Consolidated Balance Sheet.

The components of lease expense for the three months ended March 31, 2020 were as follows:

$ in millions	Three months ended March 31, 2020			Three months ended March 31, 2019
Operating lease cost	20.6			12.8
Variable lease cost	5.3			6.8
Less: sublease income	(0.2	)		(0.1	)
Total lease expense	25.7			19.5

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Supplemental cash flow information related to leases for the three months ended March 31, 2020 was as follows:

$ in millions	Three months ended March 31, 2020			Three months ended March 31, 2019
Operating cash flows from operating leases included in the measurement of lease liabilities	18.7			15.0
Right-of-use assets obtained in exchange for new operating lease liabilities	9.5			4.1

In determining the discount rate, the company considered the interest rate yield for specific interest rate environments and the company’s credit spread at the inception of the lease.

The weighted-average discount rate for the operating lease liability for the three months ended March 31, 2020 was 3.49%.

As of March 31, 2020 the maturities of the company’s lease liabilities (primarily related to real estate leases) were as follows:

$ in millions
Year Ending December 31,	Lease Liabilities
2020 (excluding the three months ended March 31, 2020)	59.2
2021	73.0
2022	64.6
2023	55.8
2024	42.0
Thereafter	99.3
Total lease payments	393.9
Less: interest	(40.8	)
Present value of lease liabilities	353.1

Excluded from the table above is an additional operating lease for the company’s new Atlanta headquarters that was entered into during third quarter of 2019, but has not yet commenced.  The expected lease obligations are approximately $232.5 million which will be paid over an expected lease term of 15 years.  This operating lease will commence in fiscal year 2022 and will replace the company’s existing lease for the current headquarters.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act as a result of the Coronavirus pandemic, which contains among other things, numerous income tax provisions. Some of these tax provisions are expected to be effective retroactively for years ending before the date of enactment. The company has evaluated the current legislation and at this time, does not anticipate the CARES Act to have a material impact on its financial statements.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

$ in millions	Gross Unrecognized Income Tax Benefits
Balance at December 31, 2019	69.9
Additions for tax positions related to the current year	0.7
Additions for tax positions related to prior years	1.0
Other reductions for tax positions related to prior years	(0.8	)
Reductions for statute closings	(9.3	)
Balance at March 31, 2020	61.5

At March 31, 2020, the total amount of gross unrecognized tax benefits was $61.5 million as compared to the December 31, 2019 total of $69.9 million. During the three months ended March 31, 2020 the company recognized a $9.3 million tax benefit that resulted primarily from the expiration of a state statute of limitations for a previously recorded position. The remainder of the movement is comprised of additions to existing positions net of other settlements and reductions. Of the total amount of gross unrecognized tax benefits, $47.8 million (net of tax benefits in other jurisdictions and the federal benefit of state taxes) represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate in future periods.

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As a result of potential legislative changes; settlements with taxing authorities and the expiration of statutes of limitations for certain jurisdictions, it is reasonably possible that the company's gross unrecognized tax benefits balance may change within the next twelve months by a range of $5.0 million to $10.0 million.

The calculation of earnings per common share is as follows:

	For the three months ended March 31,
In millions, except per share data	2020				2019
Net income attributable to Invesco Ltd.	81.5				177.7
Invesco Ltd:
Weighted average common shares outstanding - basic	455.7				401.6
Dilutive effect of non-participating common share-based awards	3.2				0.3
Weighted average common shares outstanding - diluted	458.9				401.9
Earnings per common share:
-basic		$0.18				$0.44
-diluted		$0.18				$0.44

See Note 11, "Common Share-Based Compensation", for a summary of common share awards outstanding under the company’s common share-based compensation programs. These programs could result in the issuance of common shares from time to time that would affect the measurement of basic and diluted earnings per common share.

Commitments and contingencies may arise in the ordinary course of business.

Off Balance Sheet Commitments

The company has committed to co-invest in certain investment products which may be called in future periods. At March 31, 2020, the company’s undrawn capital commitments were $352.3 million (December 31, 2019: $357.0 million).

The Parent and various company subsidiaries have entered into agreements with financial institutions to guarantee certain obligations of other company subsidiaries. The company would be required to perform under these guarantees in the event of certain defaults. The company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

On October 18, 2018, the company announced plans to buy back $1.2 billion of the company's common shares within the next two years. In connection with this effort, the company entered into several forward contracts to purchase its common shares. See Note 8. "Share Capital" for details of these forward contracts and the related liability outstanding at March 31, 2020.

Pursuant to an agreement entered into at the consummation of the acquisition of OppenheimerFunds, MassMutual, as the holder of seed capital investments in certain funds and accounts included in the acquisition, has the right to redeem its seed capital investments in accordance with an agreed upon schedule. In the event MassMutual exercises its redemption rights and the applicable fund or account is unable to meet such redemption (for example, due to illiquid investments or the need to maintain a level of investment in the fund), the company would be required to fund such redemption to MassMutual and seek reimbursement from the applicable fund or account at a later time when the fund or account is able to fulfill a redemption request. At March 31, 2020, the total amount of seed capital subject to this agreement is approximately $445.8 million. Since March 31, 2020, MassMutual exercised its redemption rights and redeemed a portion of the seed capital per the agreed upon schedule. As of the date of this report, the company was not required to fund these redemptions nor does the company anticipate having to fund any of the seed capital subject to this agreement.

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Legal Contingencies

The company is from time to time involved in pending or threatened litigation relating to claims arising in the ordinary course of its business. The nature and progression of litigation can make it difficult to predict the impact a particular lawsuit or claim will have on the company. There are many reasons that the company cannot make these assessments, including, among others, one or more of the following: the proceeding is in its early stages (or merely threatened); the damages sought are unspecified, unsupportable, unexplained or uncertain; the claimant is seeking relief other than compensatory damages; the matter presents novel legal claims or other meaningful legal uncertainties; discovery has not started or is not complete; there are significant facts in dispute; and there are other parties who may share in any ultimate liability.

In assessing the impact that a legal or regulatory matter will have on the company, management evaluates the need for an accrual on a case-by-case basis. If the likelihood of a loss is deemed probable and is reasonably estimable, the estimated loss is accrued. If the likelihood of a loss is assessed as less than probable, or an amount or range of loss cannot be reasonably estimated, a loss is not accrued. In management’s opinion, adequate accrual has been made as of March 31, 2020 to provide for any such losses that may arise from matters for which the company could reasonably estimate an amount. Management is of the opinion that the ultimate resolution of such claims will not materially affect the company’s business, financial position, results of operation or liquidity. Furthermore, in management’s opinion, it is not possible to estimate a range of reasonably possible losses with respect to other litigation contingencies.

The investment management industry also is subject to extensive levels of ongoing regulatory oversight and examination. In the United States, United Kingdom, and other jurisdictions in which the company operates, governmental authorities regularly make inquiries, hold investigations and administer market conduct examinations with respect to the company’s compliance with applicable laws and regulations. Additional lawsuits or regulatory enforcement actions arising out of these inquiries may in the future be filed against the company and related entities and individuals in the United States, United Kingdom, and other jurisdictions in which the company and its affiliates operate. Any material loss of investor and/or client confidence as a result of such inquiries and/or litigation could result in a significant decline in AUM, which would have an adverse effect on the company’s future financial results and its ability to grow its business.

OppenheimerFunds acquisition-related matter

In the fourth quarter 2019, the company identified an accounting matter which has required that the historical financial statements for certain funds identified below be restated. This matter also will result in remediation costs, all or at least some portion of which the company expects to bear. Uncertainties remain as of the date of this report regarding the nature, scope and amounts of such costs, as well as the degree to which the company will ultimately be financially responsible for bearing such costs. Set forth below is a more detailed description of this matter, based on information available as of the date of this report.

This matter pertains to the following four Master Limited Partnership ("MLP") funds: (1) the Invesco Oppenheimer Steelpath MLP Income Fund; (2) the Invesco Oppenheimer Steelpath MLP Select 40 Fund; (3) the Invesco Oppenheimer Steelpath MLP Alpha Fund; and (4) the Invesco Oppenheimer Steelpath MLP Alpha Plus Fund (each a “Fund” and together the “Funds”). The company acquired sponsorship and management of the Funds on May 24, 2019 as part of its acquisition of OppenheimerFunds.

The Funds invest substantially all their assets in entities that are MLPs for tax purposes. As a result, the Funds are taxable entities subject to Subchapter C of the Internal Revenue Code of 1986, as amended (the “Tax Code”). This is unusual, as most mutual funds are instead subject to Subchapter M of the Tax Code (and, in general, operate as flow through vehicles for tax purposes thereunder). Because of their tax status, the Funds have tax attributes, including deferred tax assets and deferred tax liabilities, and must make assessments as to the amount of deferred tax assets that may be realizable in accordance with ASC 740 Income Taxes (“ASC 740”).

In preparing their financial statements for the fiscal year ended November 30, 2019, questions arose as to whether the Funds’ previously issued financial statements for certain years failed to include appropriate valuation allowances against the Funds’ deferred tax assets in accordance with ASC 740. Following a regulatory consultation on these matters that concluded after the company filed its 2019 Annual Report on Form 10-K, the Funds determined that certain previously issued financial statements had to be restated (which the Funds have now done), and the Funds have recorded incorrect Net Asset Values (“NAVs”) for periods dating back to 2015. Remediating these matters has, will or may produce the following costs:

•	Costs of processing the restated historical financial statements, and related costs of communicating with present and former Fund shareholders;

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•	Costs of reimbursing shareholders for transactions in Fund shares made at incorrect NAVs and for certain fees paid by the Funds based thereon; and

•	Certain additional costs in connection with these matters.

As stated above, uncertainties remain regarding the nature, scope and amount of these costs. Furthermore, there is uncertainty as to the degree to which the company will become ultimately responsible to absorb some or all such costs. The sources of such uncertainties include, among other things, the following:

•	The process and method for determining such remediation is subject to various factors that are not yet certain and information that is not yet readily available. In this regard, a significant amount of the investors in the Funds are held in omnibus accounts where the company does not at this time have access to the level of data necessary to determine the appropriate remediation.

•	The company and/or the Funds may be entitled to seek reimbursement for certain of such costs under applicable insurance policies (subject to the terms of such policies, including applicable deductibles and policy limits).

•	The company may be entitled to seek indemnification for certain of such costs from MassMutual under the OppenheimerFunds acquisition agreement (subject to the terms of such indemnification, including the specified deductible and limit).

The following table presents the balances related to CIP that are included on the Condensed Consolidated Balance Sheets as well as Invesco’s net interest in the CIP for each period presented. See the company’s most recently filed Form 10-K for additional disclosures on valuation methodology and fair value.

	As of
$ in millions	March 31, 2020			December 31, 2019
Cash and cash equivalents of CIP	289.0			652.2
Accounts receivable and other assets of CIP	359.5			172.9
Investments of CIP	7,563.9			7,808.0
Less: Debt of CIP	(6,172.7	)		(6,234.6	)
Less: Other liabilities of CIP	(881.6	)		(949.6	)
Less: Retained earnings	9.6			9.5
Less: Accumulated other comprehensive income, net of tax	(9.5	)		(9.4	)
Less: Equity attributable to redeemable noncontrolling interests	(176.5	)		(383.5	)
Less: Equity attributable to nonredeemable noncontrolling interests	(442.2	)		(454.9	)
Invesco’s net interests in CIP	539.5			610.6

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The following table reflects the impact of consolidation of investment products into the Condensed Consolidated Statements of Income for the three months ended March 31, 2020 and 2019:

	Three months ended March 31,
$ in millions	2020			2019
Total operating revenues	(8.9	)		(8.7	)
Total operating expenses	17.0			2.8
Operating income	(25.9	)		(11.5	)
Equity in earnings of unconsolidated affiliates	(16.6	)		6.5
Interest and dividend income	(0.1	)		(1.3	)
Other gains and losses, net	41.8			(20.7	)
Interest and dividend income of CIP	85.2			84.7
Interest expense of CIP	(56.9	)		(58.0	)
Other gains/(losses) of CIP, net	(48.4	)		12.2
Income before income taxes	(20.8	)		11.9
Income tax provision	—			—
Net income	(20.8	)		11.9
Net (income)/loss attributable to noncontrolling interests in consolidated entities	20.7			(12.9	)
Net income attributable to Invesco Ltd.	(0.1	)		(1.0	)

Non-consolidated VIEs

At March 31, 2020, the company’s carrying value and maximum risk of loss with respect to variable interest entities (VIEs) in which the company is not the primary beneficiary was $163 million (December 31, 2019: $188 million).

Balance Sheet information - newly consolidated VIEs/VOEs

During the three months ended March 31, 2020, there were three newly consolidated VIEs and no newly consolidated voting rights entities (VOEs) (March 31, 2019: there was one newly consolidated VIE). The table below illustrates the summary balance sheet amounts related to these products before consolidation into the company. The balances below are reflective of the balances existing at the consolidation date after the initial funding of the investments by the company and unrelated third-party investors. The current period activity for the consolidated funds, including the initial funding and subsequent investment of initial cash balances into underlying investments of CIP, is reflected in the company’s Condensed Consolidated Financial Statements.

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
$ in millions	VIEs			VIEs
Cash and cash equivalents of CIP	2.4			0.4
Accounts receivable and other assets of CIP	0.1			2.7
Investments of CIP	26.3			105.9
Total assets	28.8			109.0
Debt of CIP	2.0			97.8
Other liabilities of CIP	15.9			11.2
Total liabilities	17.9			109.0
Total equity	10.9			—
Total liabilities and equity	28.8			109.0

Balance Sheet information - deconsolidated VIEs/VOEs

During the three months ended March 31, 2020, the company determined that it was no longer the primary beneficiary of five VIEs and no longer held the majority voting interest in nine VOEs (March 31, 2019: the company determined that it was

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no longer the primary beneficiary of one VIE and no longer held the majority voting interest in two VOEs). The amounts deconsolidated from the Condensed Consolidated Balance Sheets are illustrated in the table below. There was no net impact to the Condensed Consolidated Statements of Income for the three months ended March 31, 2020 and 2019 from the deconsolidation of these investment products.

	For the three months ended March 31, 2020						For the three months ended March 31, 2019
$ in millions	VIEs			VOEs			VIEs			VOEs
Cash and cash equivalents of CIP	0.1			0.2			—			—
Accounts receivable and other assets of CIP	2.9			1.0			—			—
Investments of CIP	127.3			106.0			6.3			4.6
Total assets	130.3			107.2			6.3			4.6
Debt of CIP	—			—			—			—
Other liabilities of CIP	1.5			—			—			—
Total liabilities	1.5			—			—			—
Total equity	128.8			107.2			6.3			4.6
Total liabilities and equity	130.3			107.2			6.3			4.6

The following tables present the fair value hierarchy levels of certain CIP balances which are measured at fair value as of March 31, 2020 and December 31, 2019:

	As of March 31, 2020
$ in millions	Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Investments Measured at NAV as a practical expedient
Assets:
Bank loans	6,467.6			—			6,467.6			—			—
Bonds	552.3			0.4			551.9			—			—
Equity securities	206.8			124.9			81.9			—			—
Equity and fixed income mutual funds	27.0			17.5			9.5			—			—
Investments in other private equity funds	220.8			—			9.0			—			211.8
Real estate investments	89.4			—			—			89.4			—
Total assets at fair value	7,563.9			142.8			7,119.9			89.4			211.8

	As of December 31, 2019
$ in millions	Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Investments Measured at NAV as a practical expedient
Assets:
Bank loans	6,504.4			—			6,504.4			—			—
Bonds	705.9			0.5			705.4			—			—
Equity securities	275.9			204.4			71.5			—			—
Equity and fixed income mutual funds	29.8			20.3			9.5			—			—
Investments in other private equity funds	213.4			—			—			—			213.4
Real estate investments	78.6			—			—			78.6			—
Total assets at fair value	7,808.0			225.2			7,290.8			78.6			213.4

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The following tables show a reconciliation of the beginning and ending fair value measurements for level 3 assets using significant unobservable inputs:

	Three months ended March 31, 2020			Three months ended March 31, 2019
$ in millions	Level 3 Assets			Level 3 Assets
Beginning balance	78.6			11.8
Purchases	—			—
Gains and losses included in the Condensed Consolidated Statements of Income (1)	10.8			0.3
Ending balance	89.4			12.2

____________

(1)	Included in gains/(losses) of CIP, net in the Condensed Consolidated Statements of Income for the three months ended March 31, 2020 are $10.8 million in net unrealized gains attributable to investments still held at March 31, 2020 by CIP (for the three months ended March 31, 2019: $0.3 million in net unrealized gains are attributable to investments still held at March 31, 2019 by CIP).

The collateral assets held by consolidated CLOs are primarily invested in senior secured bank loans, bonds, and equity securities. Bank loan investments of $6,427.7 million, which comprise the majority of consolidated CLO portfolio collateral, are senior secured corporate loans from a variety of industries, including but not limited to the aerospace and defense, broadcasting, technology, utilities, household products, healthcare, oil and gas, and finance industries. Bank loan investments mature at various dates between 2020 and 2029, pay interest at LIBOR plus a spread of up to 10.0%, and typically range in S&P credit rating categories from BBB down to unrated. Approximately less than 0.09% of the collateral assets were in default as of March 31, 2020 and 2019. Interest income on bank loans and bonds is recognized based on the unpaid principal balance and stated interest rate of these investments on an accrual basis. At March 31, 2020, the unpaid principal balance exceeds the fair value of the senior secured bank loans and bonds by approximately $198.5 million (December 31, 2019: the unpaid principal balance exceeded the fair value of the senior secured bank loans and bonds by approximately $181.2 million). However, these investments are accounted for on a one-month lag based on the availability of fund financial information which means the fair value does not reflect the market disruption that occurred during March 2020. CLO investments are valued based on price quotations provided by third-party pricing sources. These third-party sources aggregate indicative price quotations to provide the company with a price for the CLO investments. The company has developed internal controls to review the reasonableness and completeness of these price quotations. If necessary, price quotations are challenged through a third-party pricing challenge process.

Notes issued by consolidated CLOs mature at various dates between 2026 and 2032 and have a weighted average maturity of 10.61 years. The notes are issued in various tranches with different risk profiles. The interest rates are generally variable rates based on LIBOR plus a pre-defined spread, which varies from 0.55% for the more senior tranches to 8.07% for the more subordinated tranches. The investors in this debt are not affiliated with the company and have no recourse to the general credit of the company for this debt.

Quantitative Information about Level 3 Fair Value Measurements

At March 31, 2020, there were $89.4 million of investments held by consolidated real estate funds that were valued using recent private market transactions.

At December 31, 2019, there were $78.6 million of investments held by consolidated real estate funds that were valued using recent private market transactions.

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The table below summarizes as of March 31, 2020 and December 31, 2019, the nature of investments that are valued using the NAV as a practical expedient and any related liquidation restrictions or other factors which may impact the ultimate value realized. These investments are valued on a three-month lag based on the availability of fund financial information.

March 31, 2020

December 31, 2019

in millions, except term data

Fair Value

Total Unfunded Commitments

Weighted Average Remaining Term (2)

Fair Value

Total Unfunded Commitments

Weighted Average Remaining Term (2)

Private equity funds (1)

$211.8

$72.3

6.8 years

$213.4

$78.3

6.7 years

____________

(1)	These investments are not subject to redemption; however, for certain funds, the investors may sell or transfer their interest, which may require approval by the general partner of the underlying funds.

(2)	These investments are expected to be returned through distributions because of liquidations of the funds’ underlying assets over the weighted average periods indicated.

Certain managed funds are deemed to be affiliated entities under the related party definition in ASC 850, “Related Party Disclosures.” Related parties include those defined in the company’s proxy statement. As a result of the OppenheimerFunds acquisition (see Note 2, “"Business Combinations"”), MassMutual has an approximate 16.5% stake in the common stock of the company and owns all of the outstanding $4.0 billion in perpetual, non-cumulative preferred shares. Based on the level of shares owned by MassMutual and the corresponding customary minority shareholder rights, which includes representation on Invesco’s board of directors, the company considers MassMutual a related party. Affiliated balances are illustrated in the tables below:

	Three months ended March 31,
$ in millions	2020			2019
Affiliated operating revenues:
Investment management fees	1,055.9			816.3
Service and distribution fees	349.2			209.9
Performance fees	1.0			10.5
Other	59.4			46.8
Total affiliated operating revenues	1,465.5			1,083.5

$ in millions	March 31, 2020			December 31, 2019
Affiliated asset balances:
Cash and cash equivalents	379.9			620.9
Unsettled fund receivables	136.4			113.6
Accounts receivable	466.9			599.8
Investments	584.6			633.5
Assets held for policyholders	9,137.0			10,835.3
Other assets	22.5			24.5
Total affiliated asset balances	10,727.3			12,827.6
Affiliated liability balances:
Accrued compensation and benefits	48.6			65.7
Accounts payable and accrued expenses	61.3			53.8
Unsettled fund payables	153.4			116.6
Total affiliated liability balances	263.3			236.1

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On April 23, 2020, the company announced a first quarter 2020 dividend of $0.155 per common share, payable on June 3, 2020, to common shareholders of record at the close of business on May 11, 2020 with an ex-dividend date of May 8, 2020.

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•	Results of Operations (three months ended March 31, 2020 compared to three months ended March 31, 2019);

•	Schedule of Non-GAAP Information;

•	Balance Sheet Discussion; and

•	Liquidity and Capital Resources.

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(1)

Net revenues is a non-GAAP financial measure. Net revenues are operating revenues plus the net revenues of our Great Wall joint venture; less pass-through revenue adjustments to investment management fees, service and distribution fees and other; plus management and performance fees earned from CIP. See "Schedule of Non-GAAP Information" for the reconciliation of operating revenues to net revenues.

(2)

Adjusted operating income and adjusted operating margin are non-GAAP financial measures. Adjusted operating margin is adjusted operating income divided by net revenues. Adjusted operating income includes operating income plus the net operating income of our joint venture investments, the operating income impact of the consolidation of investment products, transaction, integration and restructuring adjustments, compensation expense related to market valuation changes in deferred compensation plans and other reconciling items. See "Schedule of Non-GAAP Information," for the reconciliation of operating income to adjusted operating income.

(3)

Adjusted net income attributable to Invesco Ltd. and adjusted diluted EPS are non-GAAP financial measures. Adjusted net income attributable to Invesco Ltd. is net income attributable to Invesco Ltd. adjusted to exclude the net income of CIP, transaction, integration and restructuring adjustments, the net income impact of deferred compensation plans and other reconciling items. Adjustments made to net income attributable to Invesco Ltd. are tax-affected in arriving at adjusted net income attributable to Invesco Ltd. By calculation, adjusted diluted EPS is adjusted net income attributable to Invesco Ltd. divided by the weighted average number of common shares outstanding (for diluted EPS). See "Schedule of Non-GAAP Information," for the reconciliation of net income attributable to Invesco Ltd. to adjusted net income attributable to Invesco Ltd.

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(1)

Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. AUM measured in the one, three, five and ten year quartile rankings represents 57%, 57%, 56% and 51% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, five and ten year basis represents 68%, 67%, 64% and 56% of total Invesco AUM as of 3/31/20. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, IA, Russell, Mercer, eVestment Alliance, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings are calculated against all funds in each peer group. Rankings for the primary share class of the most representative fund in each composite are applied to all products within each composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

(2)	Numbers in parenthesis reflect percentage of Total Ranked AUM. Total Ranked AUM is $589.7 billion for the first quarter.

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(1)

Gross revenue yield on AUM is equal to annualized total operating revenues divided by average AUM, excluding Invesco Great Wall AUM. The average AUM for Invesco Great Wall in the three months ended March 31, 2020 was $43.3 billion (three months ended March 31, 2019: $31.5 billion). It is appropriate to exclude the average AUM of Invesco Great Wall for purposes of computing gross revenue yield on AUM, because the revenues resulting from these AUM are not presented in our operating revenues. Under U.S. GAAP, our share of the net income of Invesco Great Wall Fund Management Company (“Invesco Great Wall”) is recorded as equity in earnings of unconsolidated affiliates on our Condensed Consolidated Statements of Income. Gross revenue yield, the most comparable U.S. GAAP-based measure to net revenue yield, is not considered a meaningful effective fee rate measure. Additionally, the numerator of the gross

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(2)	Net revenue yield on AUM is equal to annualized net revenues divided by average AUM. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues to net revenues.

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(1)	Channel refers to the internal distribution channel from which the AUM originated. Retail AUM represents AUM distributed by the company’s retail sales team. Institutional AUM represents AUM distributed by our institutional sales team. This aggregation is viewed as a proxy for presenting AUM in the retail and institutional markets in which the company operates.

(2)	Asset classes are descriptive groupings of AUM by common type of underlying investments.

(3)	Client domicile disclosure groups AUM by the domicile of the underlying clients.

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(1)	Total revenue adjustments includes passed through investment management, service and distribution, and other revenues and equal the same amount as the third party distribution, service and advisory expenses.

(2)	Net revenues are operating revenues less third-party distribution, service and advisory expenses, plus net revenues from Invesco Great Wall, plus management and performance fees earned from CIP. See “Schedule of Non-GAAP Information” for additional important disclosures regarding the use of net revenues.

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*	Operating margin is equal to operating income divided by operating revenues.

**	Adjusted operating margin is equal to adjusted operating income divided by net revenues.

***	Adjusted diluted EPS is equal to adjusted net income attributable to Invesco Ltd. divided by the weighted average number of common and restricted common shares outstanding. There is no difference between the calculated EPS amounts presented above and the calculated EPS amounts under the two class method.

(1)	Invesco Great Wall

(2)	Revenue Adjustments

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(3)	CIP

(4)	Transaction, integration, and restructuring related adjustments

(5)	Market movement on deferred compensation plan liabilities

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(6)	Other reconciling items

(a)

Included within other gains and losses, net is the mark-to-market of foreign exchange put option contracts intended to provide protection against the impact of a significant decline in the Pound Sterling/U.S. Dollar foreign exchange rates. The Pound Sterling contracts provide coverage through June 30, 2020. The adjustment from U.S. GAAP to non-GAAP earnings removes the impact of market volatility; therefore, the company’s non-GAAP results include only the amortization of the cost of the contracts during the contract period.

(b)	The income tax provision for the three months ended March 31, 2020 includes a tax benefit of $9.0 million resulting from the reversal of an uncertain tax position due to the expiration of statute of limitations. This benefit has been removed from the company’s non–GAAP results to be consistent with the exclusion of the original provision in a prior period.

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(2)	Amounts include accounts receivable, prepaid assets, property, equipment and software and other assets.

(3)	Amounts include accrued compensation and benefits, accounts payable and accrued expenses and deferred tax liabilities.

(4)	Amounts include redeemable noncontrolling interests in consolidated entities and equity attributable to nonredeemable noncontrolling interests in consolidated entities.

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(1)

These tables include non-GAAP presentations.  Cash held by CIP is not available for use by Invesco.  Additionally, there is no recourse to Invesco for CIP debt.  The cash flows of CIP do not form part of the company’s cash flow management processes, nor do they form part of the company’s significant liquidity evaluations and decisions. Policyholder assets and liabilities are equal and offsetting and have no impact on Invesco’s shareholder’s equity.  The impact of cash inflows/outflows from policyholder assets and liabilities are reflected within cash flows from operating activities as changes in receivables and/or payables, as applicable.

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*	Adjustments for unrealized gains and losses from investments, as defined in our credit facility, may also include non-cash gains and losses on investments to the extent that they do not represent anticipated future cash receipts or expenditures.

**

EBITDA and Adjusted debt are non-GAAP financial measures; however, management does not use these measures for anything other than these debt covenant calculations. The calculation of EBITDA above (a reconciliation from net income attributable to Invesco Ltd.) is defined by our credit agreement, and therefore net income attributable to Invesco Ltd. is the most appropriate GAAP measure from which to reconcile to EBITDA. The calculation of Adjusted debt is defined in our credit facility and equals total debt of $2,588.8 million plus $10.3 million in letters of credit.

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•	Causing the value of AUM to decrease.

•	Causing the returns realized on AUM to decrease (impacting performance fees).

•	Causing clients to withdraw funds in favor of investments in markets that they perceive to offer greater opportunity and that the company does not serve.

•	Causing clients to rebalance assets away from investments that the company manages into investments that the company does not manage.

•	Causing clients to reallocate assets away from products that earn higher revenues into products that earn lower revenues.

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(1)	An aggregate of 2,317,604 shares were surrendered to us by Invesco employees to satisfy tax withholding obligations in connection with the vesting of equity awards.

(2)	At March 31, 2020, a balance of $732.2 million remains available under the share repurchase authorization approved by the Board on July 22, 2016.

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