IVZ Invesco Ltd. - 10-K

Item 1A.  Risk Factors

Risks Related to Market Dynamics and Volatility

Volatility and disruption in global or regional capital and credit markets, equity, debt, private and commodity markets, as well as adverse changes in the global economy, could negatively affect our AUM, revenues, net income and liquidity.

In recent years, capital and credit markets have experienced substantial volatility. In this regard:

• In the event of extreme circumstances, including an economic, political or business crisis, such as widespread systemic failures or disruptions in the global or regional financial systems or failures of firms that have significant obligations as counterparties on financial instruments, we may suffer significant declines in AUM and severe liquidity or valuation issues in managed investment products in which client and company assets are invested, all of which would adversely affect our operating results, financial condition, liquidity, credit ratings, ability to access capital markets and ability to retain and attract key employees. Additionally, these factors could impact our ability to realize the carrying value of our goodwill and other intangible assets and have impacted the carrying value of our intangible assets in the past.

• Illiquidity and/or volatility of the global or regional risk asset markets could negatively affect our ability to manage investment products in which client and company assets are invested or client inflows and outflows or to timely meet client redemption requests.

• In the event that market values of companies involved directly in AI or exposed to AI trends, including those that are part of the Nasdaq-100 Index, decline, we may suffer declines in AUM and revenue, particularly relating to products we advise that track the Nasdaq-100 Index, such as the Invesco QQQ Trust and the Invesco NASDAQ 100 ETF.

• Uncertainties regarding geopolitical developments, such as nation state sovereignty, border disputes, diplomatic developments, social instability or changes in governmental policies, can produce volatility in global financial markets and regulatory environments. This volatility, including volatility arising from tensions between the U.S. and China, may impact the level and composition of our AUM and also negatively impact investor sentiment, which could result in reduced or negative flows. Geopolitical risks may also lead to economic sanctions, trade restrictions, or regulatory changes that adversely affect global markets and our business.

• Changes to tax, tariff and import/export regulations and economic sanctions may have a negative effect on global or regional economic conditions, financial markets and our business. Any changes with respect to trade policies, treaties, taxes, government regulations and tariffs, or the perception that any of these changes could occur, may have a material adverse effect on global or regional economic conditions and the stability of global financial markets and may significantly reduce global trade or trade between certain nations. Given we are a global business, we could be more adversely affected than others by such market uncertainties.

Our revenues and net income would likely be adversely affected by any reduction in AUM as a result of either a decline in market value of such assets or net outflows, each of which would reduce the investment management fees we earn.

We derive substantially all our revenues from investment management contracts with clients. Under these contracts, the investment management fees paid to us are generally based on the market value of AUM. AUM may decline for various reasons. For any period in which revenues decline, our net income and operating margin would likely decline by a greater proportion because a majority of our expenses remain fixed. Factors that could decrease AUM, revenues, and net income include the following:

Declines in the market value of AUM in client portfolios. We cannot predict whether volatility in the markets will result in substantial or sustained declines in the markets generally or result in price declines in market segments in which our AUM are concentrated. Any of the foregoing could negatively impact the market value of our AUM, revenues and net income. Market declines may be driven by interest rate volatility, foreign exchange fluctuations, geopolitical instability, or other macroeconomic factors.

Redemptions and other withdrawals from, or shifting among, client portfolios. These changes could be caused by investors reducing their investments in client portfolios in general or in the market segments in which we focus; investors taking profits from their investments; and portfolio risk characteristics, which could cause investors to move assets to other investment managers. Furthermore, the fees we earn vary with the types of assets being managed, with higher fees earned on actively managed equity and balanced accounts, alternative asset products, and lower fees earned on fixed income, stable value accounts and passively managed products. Our revenues and net income may decline further if clients continue to shift their investments to lower fee accounts.

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Our revenues and net income from money market and other fixed income assets may be harmed by interest rate volatility, prolonged high or low rates, liquidity, and credit volatility.

While inflation remained relatively flat in 2025, our business is exposed to risks associated with inflation and fluctuations in interest rates including rapid changes or uncertainty in rate direction. Certain institutional investors using money market products and other short-term duration fixed income products for cash management purposes may shift these investments to direct investments in comparable instruments in order to realize higher yields. These redemptions would reduce AUM, thereby reducing our revenues and net income. If securities within a money market portfolio default or investor redemptions force the portfolio to realize losses, there could be negative pressure on its net asset value (NAV). Although money market investments are not guaranteed instruments, the company might decide, under such a scenario, that it is in its best interest to provide support in the form of a support agreement, capital infusion or other methods to help stabilize a declining NAV, which may have an adverse impact on our profitability. Additionally, we have investments, including collateralized loan obligations (CLOs), real estate-related loans, commercial loans, income based products inclusive of private strategies, and seed capital in fixed income funds, the valuation of which could vary with changes in interest and default rates as well as credit quality deterioration. Declines in the values of AUM could lead to reduced revenues and net income as management fees are generally calculated based upon the size of AUM.

Our financial condition and liquidity would be adversely affected by losses on our seed capital and co-investments .

The company has investments in managed investment products that invest in a variety of asset classes, including equities, fixed income products, commodities, derivatives, other similar financial instruments, and alternative investment products. Investments in these products are generally made to establish a track record, meet purchase size requirements for trading blocks or demonstrate economic alignment with other investors in our funds. Adverse market conditions may result in the need to write down the value of these seed capital and co-investments, which may adversely affect our results of operations or liquidity. As of December 31, 2025, we had approximately $1,166.3 million in seed capital and co-investments.

As many of our subsidiary operations are located outside of the U.S. and have functional currencies other than the U.S. Dollar, changes in the exchange rates to the U.S. Dollar impact our reported financial results.

The largest component of our net assets, revenues and expenses, as well as our AUM, is presently denominated in U.S. Dollars. However, we have a large number of subsidiaries outside of the U.S. whose functional currencies are not the U.S. Dollar. As a result, fluctuations in the exchange rates to the U.S. Dollar impact our reported financial results. Currency movements can also directly affect the value of AUM and related fee revenues when client assets are denominated in non-U.S. currencies. Significant strengthening of the U.S. Dollar relative to the United Kingdom (U.K.) Pound Sterling, Euro, Chinese RMB, Japanese Yen or Canadian Dollar, among other currencies, could have a material negative impact on our reported financial results.

Risks Related to Investment Performance and Competition

Poor investment performance of our products could reduce the level of our AUM or affect our sales, and negatively impact our revenues and net income.

Our investment performance is critical to the success of our business. Strong investment performance often stimulates sales of our products. Poor investment performance (on a relative or absolute basis) as compared to third-party benchmarks or competitive products has in the past led, and could in the future lead, to a termination of investment management agreements, a decrease in sales of our products or stimulate redemptions from existing products, each of which could lower the overall level of AUM, reduce our management fees and negatively impact our revenues and net income. There is no assurance that past or present investment performance in our products will be indicative of future performance. If we fail, or appear to fail, to address successfully and promptly the underlying causes of any poor investment performance, we may be unsuccessful in reversing such underperformance, which could result in client loss or redemptions and the loss of future business prospects, both of which would negatively impact our revenues and net income.

Failure to properly address the increased transformative pressures affecting the asset management industry could negatively impact our business.

The asset management industry is facing transformative pressures and trends from a variety of different sources, including increased fee pressure; a continued shift away from actively managed fundamental equities and fixed income strategies towards alternatives, passive index and smart beta strategies; increased demands from clients and distributors for client engagement and services; a trend towards institutions concentrating on fewer relationships and partners and reducing the number of investment

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managers they work with; consolidation among distributors and competitive pricing pressures; growth in private markets and alternatives requiring new capabilities; increased regulatory activity and scrutiny of many aspects of the asset management industry, including ESG practices and related matters, transparency/unbundling of fees, inducements, conflicts of interest, capital, liquidity, solvency, leverage, operational risk management, controls and compensation; divergent global regulatory requirements and evolving sustainability disclosure mandates; addressing the key emerging markets in the world, such as China and India, which often have populations with different needs, preferences and horizons than the more developed U.S. and European markets; advances in technology and digital wealth and distribution tools and increasing client interest in interacting digitally with their investment portfolios; cybersecurity, data privacy, and integration of artificial intelligence (AI) into investment and client service processes; and growing digital asset markets that remain subject to substantial volatility and significant regulatory uncertainty. As a result of these trends and pressures, the asset management industry is facing an increased level of disruption. If we are unable to adapt our strategy and business to adequately address these trends and pressures, we may be unable to satisfactorily meet client needs, our competitive position may weaken, and our AUM, revenues, and net income may be adversely affected.

Competitive pressures may force us to reduce the fees we charge to clients, which could reduce our profitability.

The investment management business is highly competitive, and we compete based on a variety of factors, including investment performance, range of products offered, brand recognition, business reputation, financial strength, stability and continuity of client and financial intermediary relationships, quality of service, level of fees charged for services and the level of compensation paid and distribution support offered to financial intermediaries. We continue to face market pressures regarding fee levels in many products, including low fee, passively managed products that compete with our actively managed products.

Our competitors include many investment management firms and other financial institutions. Some of these institutions have greater capital and other resources, and offer more comprehensive lines of products and services, than we do. There are relatively few barriers to entry by new investment management firms, and the successful efforts of new entrants around the world have also resulted in increased competition. Further, our competitors may increase their market share to our detriment by reducing fees. Failure to achieve scale or operational efficiencies in response to these pressures could further compress margins and negatively impact profitability. The increasing size and market influence of certain distributors of our products and of certain direct competitors may have a negative impact on our ability to compete at the same levels of profitability in the future. Competitive pressures may affect our economics in multiple ways, including forcing us to reduce the fees we charge clients and increasing the cost of delivering our products through higher or more expansive revenue share, all of which could adversely impact our profitability.

In addition, technology is subject to rapid advancements and changes and our competitors may, from time to time, implement newer technologies or more advanced platforms for their services and products, including digital advisers, low cost, high speed financial applications and services and investment platforms based on AI and other advanced electronic systems, which could adversely affect our business if we are unable to remain competitive. Nontraditional competitors, including fintech firms and global platforms, may accelerate these trends and intensify pricing pressure.

Our private market products include investments in private credit, real estate, private market funds of funds and direct equity investments in operating companies that may expose our investment products, our clients and, to the extent of our investment in such investment products, us to risks and liabilities and reputational harm.

Our private market products include investments in private credit, real estate, private market funds of funds and direct equity investments in operating companies that may expose our investment products, our clients and, to the extent of our investment in such investment products, us to risks and liabilities that are inherent in the ownership, management and operation of such investments as well as reputational harm. These may include:

• risks related to the potential illiquidity, valuation and disposition of such investments;

• risks related to emerging and less established companies that have, among other things, short operating histories, not yet achieved or sustained profitability, new technologies and products, nascent control functions, quickly evolving markets and limited financial resources;

• construction risks, including as a result of force majeure, labor disputes or work stoppages, shortages of material or interruptions to the availability of necessary equipment;

• credit risks, including interest-rate movements and an issuer’s ability to make principal and interest payments on the debt it issues;

• risks related to investment in “stressed” and “distressed” securities, including abrupt and erratic market movements, above-average price volatility and bankruptcy;

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• risks related to the ability to detect or prevent irregular accounting, employee misconduct or other fraudulent practices by any issuer or portfolio investment;

• risks relating to minority equity investments and joint ventures, including limited control over the applicable portfolio investments or joint ventures;

• risks associated with a lack of diversification, such that any adverse change in one or a small number of issuers could have a material adverse effect on an investment product’s or client’s investments;

• accidents, pandemics, health crises or catastrophic events, climate-related risks, including greater frequency or intensity of adverse weather and natural disasters, that are beyond our control;

• personal injury or property damage;

• risks relating to reliance on underlying managers and funds to effect fund of funds programs;

• risks relating to the use of leverage, including as a result of increasing interest rates or an inability to timely obtain and effectively deploy leverage;

• failures on the part of third-party managers, service providers or sub-contractors appointed in connection with investments or projects to adequately perform their contractual duties or operate in accordance with applicable laws;

• exposure to stringent and complex foreign, federal, state and local laws, ordinances and regulations, including those related to private fund advisers, financial crime, permits, government contracting, conservation, exploration and production, lending, tenancy, housing affordability, occupational health and safety, employment law and regulation, foreign investment and environmental protection;

• environmental hazards;

• changes to the supply and demand for properties and/or tenancies;

• risks related to the availability, cost, coverage and other limitations on insurance;

• the financial resources of tenants or loan counterparties;

• contingent liabilities on disposition of investments; and

• conflicts of interest related to investments in operating companies.

The above risks may expose our investment products, clients and us, to the extent of our investment in such investment products, to expenses and liabilities, including costs associated with delays or remediation and increased legal or regulatory costs, all of which could impact the returns earned by our investment products and clients.

These risks could also result in direct liability for us by exposing us to losses, regulatory sanctions or litigation, including claims for compensatory or punitive damages. In addition, market conditions may change during the course of real estate development projects in which our investment products and clients invest that make such developments less attractive than at the time it commenced and potentially harm the investment returns of our investment products, our clients and, to the extent of our investment in such investment products, us.

The occurrence of any such events may expose us to reputational harm, or cause our AUM, revenues and net income to decline.

Our investment products, clients and, to the extent of our investment in such investment products, we could incur losses if the allowance for credit losses, including loan and lending-related commitment reserves, of portfolio-level investments is inadequate or if our expectations of future economic conditions deteriorate.

When our investment products or clients loan money, commit to loan money, provide credit or enter into a credit-related contract or mortgage loan with a counterparty, our investment products, clients and, to the extent of our investment in such investment products, we incur credit risk or the risk of loss if the borrower or counterparty does not timely repay its loans or fails to perform according to the terms of its agreement. The revenues and profitability of investment products and clients may be subordinated (and thus exposed to the first level of default risk) or otherwise subject to substantial credit risks. Certain investments, including second lien debt, have a comparatively higher degree of risk of a loss of capital and may not show any return for a considerable period of time.

The revenues and profitability of investment products, clients and, to the extent of our investment in such investment products, us are adversely affected when borrowers and counterparties default, in whole or in part, on their obligations or when there is a significant deterioration in the credit quality of the loan portfolio or decline in the value of collateral. In the event of a default, investment returns will depend on the ability to foreclose and liquidate the collateral. Certain debt-related holdings may be difficult or impossible to dispose of readily at what we believe to be a fair price. Investment products and clients can have exposure to lower-rated instruments and securities, which generally reflects a greater possibility that adverse changes in the financial condition of the borrower or in general economic conditions, including rising interest rates, inflation, geopolitical instability, or sector-specific stress, may impair the ability of the borrower to make payment of principal and interest.

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Current and future market and economic developments may increase default and delinquency rates and negatively impact the quality of the credit portfolio. Although our estimates contemplate current conditions and how we expect them to change over the life of the investment portfolio, it is possible that actual conditions could be worse than anticipated, which could cause our revenues and net income to decline.

We may be unable to develop new products and services, and the development of new products and services may expose us to additional costs or operational risk.

Our financial performance depends, in part, on our ability to develop, market and manage new investment products and services. The development and introduction of new products and services requires continued innovative efforts on our part and may require significant time and resources as well as ongoing support and investment. Substantial risk and uncertainties are associated with the introduction of new products and services, including the implementation of new and appropriate operational controls and procedures, technology integration, shifting client and market preferences, the introduction of competing products or services and compliance with regulatory requirements. New products often must be in the market place for three or more years in order to generate the track records required to attract significant AUM inflows. Increasingly, clients and intermediaries are looking to investment managers to deliver investment outcomes tailored to particular circumstances and needs, and to augment traditional investment management products and services with additional value-added services. A failure to continue to innovate and introduce successful new products and services or to manage effectively the risks associated with such products and services may impact our market share relevance and may cause our AUM, revenues and net income to decline.

The failure or negative performance of products offered by competitors may have a negative impact on similar Invesco products irrespective of our performance.

Many competitors offer similar products to those offered by us, and the failure or negative performance of competitors’ products could lead to a loss of confidence in similar Invesco products, irrespective of the performance of our products. Any loss of confidence in a product type could lead to withdrawals, redemptions and liquidity issues in such products, and may also increase regulatory focus and compliance costs, which could have a material adverse effect on our AUM, revenues and net income or liquidity.

Risks Related to Human Capital, Operations and Technology

Our investment management professionals and other key employees are a vital part of our ability to attract and retain clients, and the loss of key individuals or a significant portion of those professionals could result in a reduction of our AUM, revenues and net income.

Retaining highly skilled investment management and other personnel in-high demand is important to our ability to attract and retain our clients. The market for skilled investment management professionals and other key personnel is highly competitive. Our policy has been to provide our investment management professionals and other key personnel with a supportive professional working environment and compensation and benefits that we believe are competitive with other leading investment management firms. However, we may not be successful in retaining our investment management professionals and other key personnel, and the loss of significant investment professionals or other key personnel could reduce the attractiveness of our products and services to potential and current clients and could, therefore, adversely affect our AUM, revenues and net income.

Changes in the distribution channels on which we depend could reduce our net income and hinder our growth.

We sell substantially all of our retail investment products through a variety of third-party financial intermediaries. Increasing competition for these distribution channels could cause our distribution costs to rise, which would lower our net income. Certain of the third-party intermediaries upon whom we rely to distribute our investment products also sell their own competing proprietary investment products, which could limit the distribution of our products and certain distributors may demand higher levels of revenue sharing. Similarly, particularly in the U.S., certain distributors have substantially reduced the number of investment funds they make available to their customers. If a material portion of our distributors were to substantially narrow their product offerings, it could have a significant adverse effect on our AUM, revenues and net income. More broadly, in both retail and institutional channels, intermediaries (distribution firms and consultants) are seeking to reduce the number of investment management firms they do business with. While this offers opportunities to the company to have broader and deeper relationships with firms that continue to do business with us, it also poses risks of additional lost business if a particular firm chooses to stop or significantly reduce its business relationship with the company. Any failure to maintain strong business relationships with these intermediaries due to any of the above-described factors would impair our ability to sell our products, which in turn could have a negative effect on our AUM, revenues and net income.

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Investors, particularly in the institutional market, rely on external consultants and other third parties for advice on the choice of investment manager. These consultants and third parties tend to exert a significant degree of influence over their clients' choices, and they may favor one of our competitors over us as better meeting their particular clients' needs. There is no assurance that our investment products will be among their recommended choices in the future. Any failure to maintain strong business relationships with the consultant community would impair our ability to sell our products, which in turn could have a negative effect on our AUM, revenues and net income.

Failure to comply with client contractual requirements and/or investment guidelines could result in costs of correction, damage awards and/or regulatory fines and penalties against us and loss of revenues due to client terminations.

Many of the investment management agreements under which we manage assets or provide products or services specify investment guidelines or requirements, such as adherence to investment restrictions or limits, that we are required to observe in the provision of our services. Laws and regulations impose similar requirements for certain investment products. A failure to comply with these guidelines or requirements could result in damage to our reputation or in our clients seeking to recover losses, withdrawing their assets or terminating their contracts. Regulators likewise may commence enforcement actions for violations of such requirements, which could lead to fines and penalties against the company, which could cause our AUM, revenues and net income to decline. We maintain various compliance procedures and other controls to seek to prevent, detect and correct such errors. Significant errors by the company could impact our reputation, AUM, revenues, net income or liquidity.

Our investment advisory agreements are subject to termination or non-renewal, and our fund and other investors may withdraw their assets at any time.

Substantially all our revenues are derived from investment management agreements. Investment management agreements are generally terminable upon 30 or fewer days' notice. Agreements with U.S. registered funds may be terminated with notice or terminated in the event of an “assignment” (as defined in the U.S. Investment Company Act of 1940, as amended), and must be renewed and approved annually by the disinterested members of each fund's Board of Trustees or Directors, as required by law. In addition, the Boards of Trustees or Directors of certain other funds generally may terminate these investment management agreements upon written notice for any reason. Open-end registered fund and unit trust investors may generally withdraw their funds at any time without prior notice. Institutional clients may elect to terminate their relationships with us or reduce the aggregate amount of AUM, generally on short notice. Any termination of or failure to renew a significant number of these agreements, or any other loss of a significant number of our clients or AUM, would adversely affect our revenues, net income, and liquidity.

The quantitative models we use and our index tracking investment solutions may contain errors, which could result in financial losses or adversely impact product performance and client relationships.

We use various quantitative models to support investment decisions and investment processes, including those related to portfolio management, portfolio risk analysis, and client investment guidance. While we maintain controls to seek to prevent, detect and correct any errors, even effective controls and procedures can only provide reasonable assurance of achieving their control objectives. Any errors in the underlying models or model assumptions could have unanticipated and adverse consequences on our business and reputation. These risks may be heightened by the rapid growth and complexity of new models, evolving data sets and standards, and market volatility. In addition, we offer index tracking investment solutions for our passive products, and any errors or disruptions in our ability to accurately track a subject index could materially adversely affect our business or reputation, which would adversely affect our AUM, revenues, net income, and liquidity.

Disclosure requirements and expectations related to sustainability or ESG are evolving. Our inability to meet these requirements and expectations could cause regulatory or reputational harm and affect our ability to attract and retain clients.

Requirements and expectations related to commitment to and disclosures around sustainability or ESG topics continue to evolve globally. These requirements are distinct from typical financial reporting constructs, given their focus on the disclosure of future sustainability or ESG related goals and targets, the strategy and governance designed to achieve those targets, and reporting of relevant metrics delineating progress towards those targets. Additionally, sustainability or ESG related disclosure requirements may use different definitions of materiality than those used for financial statement disclosures, including a focus on so-called “double materiality,” which can evaluate a sustainability or ESG matter as material, regardless of its direct impact on us, based on broader societal impacts.

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Given evolving requirements and the associated standards, methodologies, processes, and controls related to sustainability and ESG related requirements and disclosures that may impact us or our clients, diverging requirements across jurisdictions, and distinct definitions and standards for materiality that could result in conflicting disclosures across frameworks, we may make disclosures that are incorrect or incomplete or fail to make required disclosures, which may result in regulatory or reputational consequences or that may directly or indirectly impact our ability to attract and retain clients. Meeting these requirements may require significant investment in data collection, verification, and reporting systems, and reliance on third-party data providers introduces additional risk.

Further, fiduciary, anti-competitive, voting power, governance, and other concerns with ESG investment strategies continue to be the subject of legislative and regulatory debate globally, particularly at both the federal and state levels in the U.S., the outcomes of which could impact both our asset management business and our clients, as well as, potentially, our investment activities more broadly. Certain U.S. officials have suggested that sustainability or ESG related investing practices may result in violations of law, including antitrust laws, and breaches of fiduciary duty. Views on sustainability or ESG practices, particularly those related to climate issues, have also become part of political discourse, which can amplify the reputational and business risks associated with such allegations. Further risks related to ESG investment strategies include negative market perception and diminished sales effectiveness and regulatory and litigation consequences associated with greenwashing claims or driven by association with certain clients, industries or products that may be inconsistent with our other clients’ ESG priorities.

If our reputation is harmed, we could suffer losses in our AUM, revenues and net income.

Our business depends on earning and maintaining the trust and confidence of clients, other market participants and regulators, and our good reputation is critical to our business. Our reputation is vulnerable to many threats that can be difficult or impossible to control, and costly or impossible to remediate. Regulatory inquiries, investigations or findings of wrongdoing, intentional or unintentional misrepresentation of our products and services in regulatory filings, product literature, advertising materials, public relations information, social media or other external communications, operational failures (including portfolio management errors or cyber breaches), employee dishonesty or other misconduct and rumors, among other things, can substantially damage our reputation, even if they are baseless or eventually satisfactorily addressed.

Our business also requires us to continuously manage actual and potential conflicts of interest, including situations where our services to a particular client conflict, or are perceived to conflict, with the interests of other clients or our own interests. The willingness of clients to enter into transactions in which such a conflict might arise may be affected if we fail - or appear to fail - to deal appropriately with conflicts of interest. In addition, potential or perceived conflicts could give rise to litigation or regulatory enforcement actions.

We have policies, procedures and controls that are designed to address and manage these risks; however, even effective procedures and controls can only provide reasonable assurance of achieving their objectives. If our policies, procedures or controls fail, our reputation could be damaged. Any damage to our reputation could impede our ability to attract and retain clients and key personnel, and lead to a reduction in the amount of our AUM, any of which could have a material adverse effect on our revenues, net income or liquidity.

The lack of soundness of other financial institutions could adversely affect us or the client portfolios we manage.

Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We, and the client portfolios that we manage, have exposure to many different industries and counterparties, and routinely execute transactions with counterparties in the financial services industry. Many of these transactions expose us or such client portfolios to credit risk in the event of default of their counterparties. While we regularly conduct assessments of such risk posed by counterparties, an event of default may occur due to market factors, such as sudden swings in the financial and credit markets that may occur swiftly and without warning. Counterparty defaults could result in financial losses for us or our clients, regulatory scrutiny, and reputational harm.

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We depend on information technology, and any failures of or damage to, attack on or unauthorized access to our information technology systems or facilities, or those of third parties with which we do business or that facilitate our business activities, including as a result of cyber-attacks, could result in significant limits on our ability to conduct our operations and activities, costs and reputational damage.

We are highly dependent upon the use of various proprietary and third-party information and security technology, software applications and other technology systems to operate our business. We are also dependent on the effectiveness of our information and cyber security infrastructure, policies, procedures and capabilities to protect our technology and digital systems and the data that reside on or are transmitted through them, including data provided by third parties that is significant to portions of our business and products. We use our technology to, among other things, manage and trade portfolio investments, obtain securities pricing information, process client transactions, protect the privacy of clients', employees' and business partners' data, support our other operations and provide other services to our clients.

In recent years, several financial services firms suffered cyber-attacks launched both domestically and from abroad, resulting in the disruption of services to clients, loss or misappropriation of confidential data, litigation and regulatory enforcement actions and reputational harm. Cyber security incidents and cyber-attacks have been occurring globally at a more frequent and severe level. Our status as a global financial institution and the nature of our client base may enhance the risk that we are targeted by such cyber threats. Although we take protective measures, including measures to secure information effectively through system security technology, have many controls, processes, digital backup and recovery processes in place, and seek to continually monitor and develop our systems to protect our technology infrastructure and data from misappropriation or corruption, our technology systems may still be vulnerable to unauthorized access as a result of an external attack, actions by employees or vendors with access to our systems, computer malware or other events that have a security impact and that result in the disclosure or release of confidential information inadvertently or through malfeasance, or result in the loss (temporarily or permanently) of data, applications or systems. The third parties with which we do business or which facilitate our business activities, including financial intermediaries and technology infrastructure, data storage and service providers, are also susceptible to the foregoing risks (including those related to the third parties with which they are similarly interconnected or on which they otherwise rely), and our or their business operations and activities may therefore be adversely affected, perhaps materially, by failures, terminations, errors or malfeasance by, or attacks or constraints on, one or more financial, technology or infrastructure institutions or intermediaries with whom we or they are interconnected or conduct business. Further, third-party service providers may have limited indemnification obligations to us in the event a cyber incident causes us to incur loss or damages.

A breach of our technology systems could damage our reputation and could result in the unauthorized disclosure or modification or loss of sensitive or confidential information (including client data); unauthorized disclosure, modification or loss of proprietary information relating to our business; inability to process client or company transactions and processes; breach and termination of client contracts; liability for stolen assets, information or identity; remediation costs to repair damage caused by the breach, including damage to systems and recovery of lost data; additional security costs to mitigate against future incidents; regulatory actions (including fines and penalties, which could be material); and litigation costs resulting from the incident. Such consequences could have a negative effect on our AUM, revenues and net income.

Our ability to manage and grow our business successfully can be impeded by systems and other technological limitations.

Our continued success in effectively managing and growing our business depends on our ability to integrate our varied accounting, financial, information and operational systems on a global basis. Moreover, adapting or developing the existing technology systems we use to meet our internal needs, as well as client needs, industry demands and new regulatory requirements, is also critical for our business. The introduction of new technologies, such as our Alpha/Hybrid investment platform, presents new challenges and new potential risks to us. On an ongoing basis, we need to upgrade and improve our technology, including our data processing, financial, accounting, shareholder servicing and trading systems. Implementing any such upgrades, updates or other changes or replacements for our systems may be expensive and time-consuming, could divert management’s focus away from core business activities and may adversely affect our business if additional or unanticipated time or resources are necessary to complete any such changes to our systems. If the updated or new systems, such as our Alpha/Hybrid investment platform, do not operate as anticipated or if other unforeseen issues arise with the transition to the new or updated systems, our business may be adversely affected. Further, we also must be proactive and prepared to implement new technology when growth opportunities present themselves, whether as a result of a business acquisition or rapidly increasing business activities in particular markets or regions. These needs could present operational issues or require significant capital and may require us to reevaluate the current value and/or expected useful lives of the technology we use, which could negatively impact our AUM, revenues, net income and liquidity.

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If we are unable to successfully recover from a man-made or natural disaster, severe weather event, health crisis or pandemic or other business continuity problem, we could suffer material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.

If we were to experience a man-made or natural disaster, severe weather event, health crisis or pandemic, or other business continuity problem, our continued success will depend, in part, on the availability of our personnel, our office facilities and the proper functioning of our computer, telecommunication and other related systems and operations. In such an event, we believe our operational size, multiple office locations and our existing back-up systems should mitigate adverse impacts. Nevertheless, given our global presence, we could still experience near-term operational problems with regard to particular areas of our operations. Although we seek to regularly assess and improve our existing business continuity plans, a major disaster, a disaster that affected certain important operating areas, or our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.

The extent to which our business, revenues, AUM and net income are affected by a future pandemic will largely depend on future events, which cannot be accurately predicted, including the duration, severity and the length of time it will take for the economy to recover from the negative impacts on human capital and potentially permanent impacts on how we operate.

Our business is vulnerable to deficiencies and failures in support systems, including data management, and customer service functions that could lead to breaches and errors or reputational harm, resulting in loss of customers or claims against us or our subsidiaries.

In addition to investment management, our services include fund administration, sales, distribution, marketing, shareholder servicing and trust, custody and other fiduciary services and portfolio management software services. We must properly perform our responsibilities associated with the forgoing services, including portfolio recordkeeping and accounting, security pricing, corporate actions, investment restrictions compliance, daily NAV computations, account reconciliations and required distributions to fund shareholders. The ability to consistently and reliably perform such services is essential to our continuing success. Certain types of securities may experience liquidity constraints that could impact fair value pricing, which is dependent on certain subjective judgments that have the potential to be challenged. Any delays or inaccuracies in obtaining pricing information, processing transactions or reports, other breaches and errors and/or any inadequacies in customer service, could result in reimbursement obligations or other liabilities, or alienate clients or distributors and/or claims against us. Our ability to conduct any of the foregoing actions is highly dependent on communications and information systems and on third-party service providers and their related technology systems and platforms. Certain of these processes involve a degree of manual input, and thus errors could occur. In addition, our operations and processes rely on commercially available data provided by third parties as well as providers of services, including technology services, and operating errors, process failures or failures to comply with data usage requirements with respect to these service providers may adversely impact us. Our data providers commonly disclaim the accuracy and completeness of data and we do not have the ability to validate or verify the accuracy and completeness of commercially sourced datasets . Our failure to properly perform and monitor our operations, including data management, or our otherwise suffering deficiencies and failures in these systems or service functions due to a failure of a third-party service provider or other key vendor could result in material financial loss or costs, regulatory actions, breach of client contracts, reputational harm or legal claims and liability, which in turn could have a negative effect on our AUM, revenues and net income.

Disruptions in the markets, to market participants and to the operations of third parties whose functions are integral to our ETF platforms may adversely affect the prices at which ETFs trade, particularly during periods of market volatility.

The trading price of an ETF’s shares or units fluctuates continuously throughout trading hours. While an ETF’s creation/redemption feature and the arbitrage mechanism are designed to make it more likely that the ETF’s shares or units normally will trade at prices close to the ETF’s NAV, exchange prices may deviate significantly from the NAV. ETF market prices are subject to numerous potential risks, including significant market volatility; imbalances in supply and demand; trading halts invoked by a stock exchange; and inability or unwillingness of market makers, authorized participants, settlement systems or other market participants to perform functions necessary for an ETF’s arbitrage. Operational disruptions, technology failures, or cybersecurity incidents affecting exchanges, clearing systems, or third-party service providers could further impair ETF trading and settlement. Regulatory changes or restrictions on arbitrage or liquidity requirements may also negatively impact ETF pricing and functioning.

If market events lead to instances where an ETF trades at prices that deviate significantly from the ETF’s NAV or indicative value, or trading halts are invoked by the relevant stock exchange or market, investors may lose confidence in ETF products and sell their holdings, which could result in reputational harm and cause our AUM, revenue and net income to decline.

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The recent advancements in and increased use of AI present risks and challenges that may adversely impact our business.

We or our third-party vendors, clients or counterparties have developed and may continue to develop or incorporate AI technology in certain business processes, services or products. The development and use of AI present a number of risks and challenges to our business. The legal and regulatory environment relating to AI is rapidly evolving, in the U.S., E.U., and internationally, and includes regulation targeted specifically at AI technology, including the EU AI Act, portions of which have already come into force with more to follow this year and in future years, as well as provisions in intellectual property, privacy, consumer protection, employment and other laws applicable to the use of AI. Global divergence in AI regulations and evolving standards could create conflicting requirements across jurisdictions, increase compliance costs, and heighten enforcement risk. These evolving laws and regulations could require changes in our implementation of AI technology, increase our compliance costs and the risk of non-compliance, and restrict or impede our ability to develop, adopt and deploy AI technologies efficiently and effectively. If not appropriately governed, managed and controlled, AI models, particularly generative AI models, may produce output or take action that is incorrect or outdated, that result in the release of personal, confidential or proprietary information, that reflect biases included in the data on which they are trained or introduced during the training or fine tuning process, that infringe on the intellectual property rights of others, or that is otherwise harmful. The complexity and limited transparency of many AI models make it challenging to understand why they generate particular outputs, increasing governance and monitoring risks. Use of third-party AI models may introduce additional risk, as we may have limited visibility into their training data, validation processes, and controls to prevent unauthorized or harmful content. This results in potential risks arising from the inclusion of any unauthorized material in the training data for their models, and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility. Further, AI tools, whether embedded in third party systems or in tools that we develop, that are used to support regulated activities such as investment decision making and client reporting present unique risks, including errors in algorithms or assumptions, data quality issues, and potential bias, that could adversely affect investment performance and increase business and compliance risks. Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures. In addition to our use of AI technologies, we are exposed to risks arising from the use of AI technologies by bad actors to commit fraud and misappropriate funds and to facilitate cyberattacks. Generative AI may be exploited to create sophisticated phishing schemes, ransomware attacks, or other cyber threats, which could result in financial losses, liquidity outflows, or systemic market disruptions. If our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.

Risks Related to Accounting, Capital Management and Liquidity

The carrying value of goodwill and other intangible assets on our balance sheet has become impaired in the past and could become impaired in the future, which would adversely affect our results of operations.

We have goodwill and indefinite-lived intangible assets on our balance sheet that are subject to annual impairment reviews. We also have definite-lived intangible assets on our balance sheet that are subject to impairment testing. Goodwill and intangible assets totaled $ 8,477.1 million and $ 3,927.3 million, respectively, at December 31, 2025. We recorded a non-cash impairment of $ 1,794.9  million related to our indefinite-lived intangible assets related to acquired management contracts of U.S. retail mutual funds during the year ended December 31, 2025, and we may not realize the full value of our remaining goodwill and indefinite-lived intangible assets. We perform impairment reviews of these assets on an annual basis, or more frequently if impairment indicators are present. A variety of factors can result in impairment. Should the fair value be less than the carrying amount of either the goodwill or intangible assets, a write-down of the related assets would occur, adversely affecting our net income for the period. See Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies - Goodwill” and “- Intangibles,” for additional details of our impairment analysis process.

Our Credit Agreements impose operating covenants that impact our ability to conduct certain activities and, if amounts borrowed under our Credit Agreements were subject to accelerated repayment, we might not have sufficient assets or liquidity to repay such amounts in full.

Our Credit Agreements require us to maintain specified financial ratios, including maximum debt-to-earnings and minimum interest coverage ratios. The Credit Agreements also contain customary affirmative operating covenants and negative covenants that, among other things, limit certain of our subsidiaries' ability to incur debt and restrict our ability to transfer assets, merge, make loans and other investments and create liens. The breach of any covenant could result in a default under the applicable Credit agreement. Compliance with these covenants may be affected by factors outside our control, including market volatility, declines in AUM or revenues, increased regulatory or operational costs, and adverse macroeconomic conditions. In the event of any such default, lenders that are party to the Revolving Credit Agreement could refuse to make further extensions of credit to us and require all amounts borrowed under the Credit Agreements, together with accrued interest and other fees, to be

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immediately due and payable. If any indebtedness under the Credit Agreements were subject to accelerated repayment, and if we had at that time a significant amount of outstanding debt under the Credit Agreements, we might not have sufficient liquid assets to repay such indebtedness in full.

We issued perpetual preferred stock having a value of approximately $4 billion, of which approximately $2.5 billion remains outstanding, which could adversely affect our ability to raise additional capital and may limit our ability to fund other priorities.

We issued approximately $4 billion of 5.9% fixed rate perpetual preferred stock in connection with the acquisition of OppenheimerFunds Inc., and we repurchased $1.5 billion of such preferred stock in 2025, leaving approximately $2.5 billion remaining outstanding. This issuance may limit our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes, may restrict our ability to pay dividends to holders of common shares in certain circumstances, may increase our vulnerability to general economic and industry conditions, and will require a significant portion of cash flow from operations to make required dividend payments to preferred shareholders.

Failure to maintain adequate corporate and contingent liquidity may cause our AUM, revenues and net income to decline, as well as harm our prospects for growth.

Our ability to meet anticipated cash needs depends upon a number of factors, including our creditworthiness and ability to generate operating cash flows. Failure to maintain adequate liquidity could lead to unanticipated costs and force us to revise existing strategic and business initiatives. Liquidity needs may also arise from unexpected client redemptions, collateral requirements for derivatives or financing arrangements, or obligations related to seed capital and fund support. Our access to equity and debt markets on reasonable terms may be limited by adverse market conditions, including tax and interest rates, a reduction in our long- or short-term credit ratings, or changes in government regulations. Inadequate liquidity could force us to sell assets at unfavorable prices or limit our ability to invest in growth initiatives. Failure to obtain funds and/or financing, or any adverse change to the cost of obtaining such funds and/or financing, may cause our AUM, revenues and net income to decline, curtail our operations and limit or impede our prospects for growth.

Distribution of earnings of our subsidiaries may be subject to limitations, including regulatory net capital requirements.

Substantially all of our operations are conducted through our subsidiaries. As a result, our cash flow and ability to fund operations are dependent upon the earnings of our subsidiaries and the distribution of earnings, intercompany loans or other payments by our subsidiaries to us. Any payments to us by our subsidiaries could be subject to statutory, regulatory or contractual restrictions and are contingent upon our subsidiaries' earnings and business or regulatory considerations. Our financial condition or liquidity could be adversely affected if certain of our subsidiaries are unable to distribute funds to us.

All of our regulated European Union (EU) and U.K. subsidiaries are subject to capital requirements under applicable EU and U.K. requirements, and we maintain capital within this European sub-group to satisfy these regulations. We meet these requirements in part by holding cash and cash equivalents. This retained cash can be used for general business purposes in the European sub-group in the countries where it is located. Due to the capital restrictions, the ability to transfer cash between certain jurisdictions may be limited. In addition, transfers of cash between international jurisdictions may have adverse tax consequences. As of December 31, 2025, our minimum regulatory capital requirement was $309.9 million. Complying with our regulatory commitments may result in an increase in the capital requirements applicable to the European sub-group. Finally, as a result of regulatory requirements, certain of these subsidiaries may be required to limit their dividends to the company.

Risks Related to Strategic Transactions

We may engage in strategic transactions that could create risks.

We regularly review, and from time-to-time engage in strategic transactions, some of which may be material. Strategic transactions also pose the risk that any business we acquire may lose customers or employees or could underperform relative to expectations. We could also experience financial or other setbacks if potential or actual acquisitions or divestitures encounter unanticipated problems, including problems related to closing or integration. Transactions may also involve unexpected costs or delays in achieving anticipated synergies. Following the completion of a strategic acquisition, we may have to rely on the seller to provide administrative and other support, including financial reporting and internal controls, to the acquired business for a period of time. There can be no assurance that such sellers will do so in a manner that is acceptable to us.

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Risks Related to our Significant Shareholders

Future sales of shares of our common stock could adversely impact the trading price of our common stock.

If our significant shareholders sell substantial amounts of our common stock or express an intention to sell, or there is the perception that such sales may occur, such actions could have a significant impact on our common share trading price. In addition, if we sell substantial amounts of our common stock in the public market, or there is a perception that such sales may occur, the market price of our common stock could be negatively impacted.

MassMutual has the ability to significantly influence our business, and MassMutual’s interest in our business may be different from that of other shareholders.

MassMutual is entitled to designate an individual to serve on our board so long as it beneficially owns at least (i) 10% of our issued and outstanding shares of common stock; or (ii) 5% of our issued and outstanding shares of common stock and $2.0 billion in aggregate liquidation preference of our Series A preferred shares. Additionally, we are not permitted to take certain actions without the prior written approval of MassMutual, including making certain changes in our capital structure or our organizational documents, adopting a shareholder rights plan or effectuating certain business combination transactions. MassMutual’s level of ownership and influence may make some transactions (such as those involving mergers, material share issuances or changes in control) more difficult or impossible without the support of MassMutual, which in turn could adversely affect the market price of our shares of common stock or prevent our shareholders from realizing a premium over the market price for their shares of our common stock. The interests of MassMutual may conflict with the interests of other shareholders.

Further, MassMutual has made significant capital or seed investments in several of our products. If MassMutual decides not to provide additional capital or seed investments in the future or to withdraw material amounts of capital or seed investments in existing products, it could impact our ability to timely launch new products or impact existing products.

Risks Related to Regulatory and Legal Matters

We operate in an industry that is highly regulated in most countries, and any enforcement action or proceeding against us or significant changes in the laws or regulations governing our business or industry could damage our reputation or decrease our AUM, revenues, net income or liquidity.

Like other investment management companies, our activities are highly regulated in nearly every country in which we conduct business. The regulatory environment in which we operate frequently changes, and in recent years we have observed a significant increase in both regulatory changes and enforcement actions and proceedings brought by governmental agencies and self-regulatory authorities against financial services companies. Laws and regulations generally grant governmental agencies and industry self-regulatory authorities broad administrative discretion over our activities, including the power to require registrations or licenses, limit or restrict our business activities, conduct examinations, risk assessments, investigations and capital adequacy reviews and impose remedial programs to address perceived deficiencies. As a result of regulatory oversight, we could face requirements, actions or proceedings that negatively impact the way in which we conduct business, delay or deny approval for new products or service offerings, cause or contribute to reduced sales of or increased redemptions of our existing products or services, impair the investment performance of certain of our products or services, impact our product mix, increase our compliance costs and/or impose additional capital requirements. Our regulators likewise have the authority to commence enforcement actions or proceedings that could lead to penalties and sanctions up to and including the revocation of registrations or licenses necessary to operate certain businesses, the suspension or expulsion from a particular jurisdiction or market of any of our business organizations or their key personnel or the imposition of fines and censures on us or our employees. Further, regulators across borders can coordinate actions against us resulting in impacts on our business in multiple jurisdictions. Judgments or findings of wrongdoing or non-compliance with applicable laws or regulations by governmental authorities or industry self-regulatory authorities, or in private civil litigation against us, could affect our reputation, increase our costs of doing business and/or negatively impact our revenues. Any of the effects discussed above could have a material negative impact on our AUM, revenues, net income or liquidity.

Current and anticipated regulatory developments include requirements related to AI, cybersecurity, and digital operational resilience, as well as evolving ESG disclosure standards and cross-border data transfer restrictions. Global divergence in these regulations could create conflicting obligations and increase compliance complexity. These changes may require significant investment of management time and resources, impact product design and distribution, and materially increase compliance costs or capital requirements. Failure to comply with these evolving requirements could result in enforcement actions, reputational harm, and restrictions on our ability to operate in certain jurisdictions.

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A substantial portion of the products and services we offer in the U.S. are regulated by the SEC, Financial Industry Regulatory Authority, Commodity Futures Trading Commission, National Futures Association, Department of Labor and Texas Department of Banking, in the U.K. are regulated by the Financial Conduct Authority and in Hong Kong, China, and Japan are regulated by the Securities and Futures Commission of Hong Kong, the China Securities Regulatory Commission, and the Financial Services Agency, respectively. Subsidiaries operating in the EU and the products and services they provide are mainly regulated by the Commission de Surveillance du Secteur Financier in Luxembourg and Central Bank of Ireland, and by the European Securities and Markets Authority. Such subsidiaries are also subject to various EU Directives, which generally are implemented by member state national legislation and by EU Regulations. Our operations elsewhere in the world are regulated by similar agencies and authorities.

Regulators in the U.S., U.K., EU and Asia, have promulgated or are considering whether to promulgate various new or revised regulatory measures pertaining to financial services, including investment management.

Regulatory developments and changes specific to our business will or may include, without limitation:

• Regulations that place restrictions on certain outbound investments from the United States or by U.S. persons to companies operating in certain countries and/or industries perceived to be adverse to national security interests of the United States, such as the U.S. Department of Treasury’s Outbound Investment Security Program Rule that became effective in 2025, may impede our ability to provide certain products and/or make certain investments and add complexity to our compliance program with heightened regulatory requirements.

• Regulations pertaining to privacy and the use, protection, transfer and management of personal data with respect to clients, employees and business partners. Privacy laws, such as the European and U.K. General Data Protection Regulation, U.S. state privacy laws and financial sector regulations, India’s Digital Personal Data Protection Act, China’s Personal Information Protection Law and Bermuda's Personal Information Protection Act, have strengthened privacy requirements for organizations handling personal data, granted individuals more rights and control over the use of their personal data and greatly increased penalties for non-compliance. In addition, rules and legal requirements for international transfers of personal data from Europe and Asia create additional complexity and risk, particularly regarding integrated global cloud-based systems and business services employed by us. An emerging risk is the use of personal data in AI systems, including privacy regulations related to automated decision making based on personal data.

• Regulations aimed at addressing concerns associated with open-end funds making investments in less liquid asset classes. Financial regulators in the U.S., U.K. and EU have periodically expressed concern that the daily redeemability features of these funds may create a “liquidity mismatch” with the assets in which they invest, and that this mismatch can give rise to investor dilution and systemic risk, especially in times of financial market stress. In the EU, recent amendments to the Undertakings for the Collective Investment in Transferable Securities (UCITS) and Alternative Investment Fund Managers directive frameworks introduce new rules regarding the use of certain liquidity management tools by UCITS funds and AIFs. Regulations intended to address such perceived liquidity risk could impede our ability to provide certain types of investment strategies in open-end funds or impair the investment performance of certain of our existing open-end fund products.

• Regulations pertaining to the integration of ESG in asset management. These regulations have materially impacted the asset management industry in the EU and U.K in recent years. In particular, these regulations have required the integration of sustainability risks within investment management processes and imposed enhanced disclosure requirements on the ESG characteristics of EU and U.K. investment products. In the EU, proposed changes to the Sustainable Finance Disclosure Regulation were released in 2025 and will lead to significant changes to funds’ ESG features and categorizations. The EU Corporate Sustainability Reporting Directive sets out new ESG disclosure requirements for EU domiciled companies and non-EU groups having substantial activities in the EU (like we do) based on new European standards. Certain U.S. states are pursuing similar initiatives, albeit with varying requirements. Further, the SEC in the recent past has increased its enforcement activity relating to ESG disclosures and practices of asset managers and may do so again. Equally, several Asian jurisdictions are introducing climate-related risk and reporting requirements as well as ESG product disclosure standards. Varying or inconsistent ESG-related regulations across multiple jurisdictions in which we operate can adversely impact the types of investment products and services that we can provide, increase our compliance costs and increase the risk that we could be subject to enforcement actions or proceedings for ESG-related compliance failures.

• More rigorous laws and regulations applicable to asset managers with respect to anti-money laundering and the financing of terrorism (AML/CFT), which may increase our compliance costs and regulatory enforcement risk. For example, recent amendments to regulations under the U.S. Bank Secrecy Act will require our subsidiaries that are U.S. registered investment advisers to implement reasonably designed AML/CFT programs, file suspicious activity reports with the Financial Crimes Enforcement Network, maintain certain associated records and fulfill certain other obligations, similar to requirements imposed on banks and broker-dealers in the U.S.

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• Regulations promulgated from time-to-time to mitigate cybersecurity and information, technology and communication (ICT) risks, including regulations that could require asset managers and certain types of investment funds to adopt and implement procedures that are reasonably designed to address cybersecurity and ICT risks and to promptly report significant cybersecurity and ICT-related incidents to relevant regulators or even publicly. New cybersecurity and ICT-related requirements may raise our compliance costs, while compelled disclosure of cybersecurity or ICT-related incidents could cause us reputational harm.

• The application of antitrust, change in bank control and similar competition laws and regulations to the asset management industry, including proposed amendments to these laws and regulations that could require large asset managers like us to, in certain circumstances, make acquisition notification filings or requests for approval with the U.S. Federal Trade Commission, Department of Justice and/or U.S. banking regulators before we acquire securities for the accounts of our clients, and the potential for antitrust regulators to promulgate regulations limiting common ownership of competitive companies by a single fund or by affiliated funds in a single fund complex. Developments in these laws and regulations and their application to our business could impede our ability to provide certain products or limit the AUM of certain investment strategies that we provide.

We cannot predict the full impact of legal and regulatory changes, changes in the interpretation of existing laws and regulations or possible enforcement actions or proceedings on our business. Such matters have imposed, and are likely to continue to impose, new compliance costs and/or capital requirements or impact us in other ways that could have a material adverse impact on our AUM, revenues, net income or liquidity. Moreover, certain legal or regulatory changes could require us to modify our strategies, businesses, product portfolios or operations, and we may incur other new costs or impacts, including the investment of significant management time and resources, to satisfy new regulatory requirements or to compete in a changed regulatory environment. In recent years, certain regulatory developments have also added to downward pressures on our fee levels.

Civil litigation and governmental investigations and enforcement actions or proceedings against us could adversely affect our AUM and future net income and increase our costs of doing business.

We and certain of our subsidiaries have in recent years been subject to various legal proceedings, including civil litigation and governmental investigations and enforcement actions and proceedings. These proceedings can arise from normal business operations and/or matters that have been the subject of previous regulatory examinations. As a global company with investment products registered and/or regulated in numerous countries and subject to the jurisdiction of one or more regulators in each country, at any given time our business operations may be subject to review, investigation or disciplinary action. For example, governmental agencies and authorities regularly make inquiries, conduct investigations and administer examinations with respect to the company's compliance with applicable laws and regulations. Lawsuits or regulatory enforcement actions arising out of these inquiries may in the future be filed against the company, its subsidiaries and/or its employees. Judgments in civil litigation or findings of wrongdoing by these agencies or authorities against us could affect our reputation, result in damages, fines, penalties or sanctions for which we would be responsible and/or increase our costs of doing business, any of which could have a material negative impact on our AUM, revenues, net income or liquidity.

Legislative and other measures that may be taken by governmental authorities could materially increase our tax burden or otherwise adversely affect our net income or liquidity.

The international tax environment continues to change as a result of both coordinated actions by governments and unilateral measures designed by individual countries, both intended to address concerns over tax base erosion, profit shifting, and perceived international tax avoidance. A growing number of jurisdictions have enacted, or have announced that they will enact, legislation to implement aspects of the Organization for Economic Cooperation and Development’s (OECD) global anti-base erosion rules intended to ensure that multinational companies pay a 15% minimum level of tax on a jurisdictional basis. In most jurisdictions, the new minimum tax rules were effective in 2024 with certain aspects of the rules becoming effective in 2025. In addition, in response to the OECD’s minimum tax proposal, Bermuda has enacted a corporate tax regime with a tax rate of 15%, effective January 1, 2025. As a result of these developments, our tax liabilities could increase.

We continually assess the impact of various U.S. federal, state and foreign legislative proposals and modifications to existing tax treaties, which could result in a material increase in our tax liability. We cannot predict the outcome of any specific legislative proposals. However, if unfavorable legislation were to be enacted, or if modifications were to be made to certain existing tax treaties, the consequences could have a materially adverse impact on the company, including increasing our tax burden, increasing the cost of our tax compliance or otherwise adversely affecting our future net income and liquidity.

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In addition, changes in individual and corporate income tax rates, including the capital gains and dividend tax rates, could cause investors to view certain investment products we manage less favorably and reduce investor demand for the products and services we offer, which could have an adverse effect on our AUM, revenues and net income.

Examinations and audits by tax authorities could result in additional tax payments for prior periods.

The company and its subsidiaries are subject to income and non-income based taxes in numerous jurisdictions as well as current and potentially future tax audits. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions. Tax authorities may disagree with certain positions we have taken and assess additional taxes (and, in certain cases, interest, fines or penalties). We accrue tax liabilities for certain tax issues based on our estimate of whether, and the extent to which, additional taxes may be due. We adjust these liabilities periodically due to changes in interpretations of tax laws, status of tax authority examinations and new regulatory or judicial guidance that could impact the relative merits and risks of tax positions. Due to the complexity of these tax issues, the ultimate resolution may result in a payment of tax that is materially different from the liability that has been accrued or an increase in the cost of our tax compliance, which could have an adverse effect on our net income and liquidity.

Bermuda law differs from the laws in effect in the U.S. and may afford less protection to shareholders.

Our shareholders may have more difficulty protecting their interests than shareholders of a company incorporated in a jurisdiction of the U.S. As a Bermuda company, we are governed by the Companies Act 1981 of Bermuda (the Companies Act). The Companies Act differs in some material respects from laws generally applicable to U.S. corporations and shareholders, including provisions relating to interested directors, mergers, amalgamations and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.

Under Bermuda law, the duties of directors and officers of a company are generally owed to the company only. Shareholders of Bermuda companies do not generally have rights to take action against directors or officers of the company, and may do so only in limited circumstances described in the following paragraph. However, directors and officers may owe duties to a company's creditors in cases of impending insolvency. Directors and officers of a Bermuda company must, in exercising their powers and performing their duties, act honestly and in good faith with a view to the best interests of the company and must exercise the care and skill that a reasonably prudent person would exercise in comparable circumstances. Directors have a duty not to put themselves in a position in which their duties to the company and their personal interests may conflict and also are under a duty to disclose any personal interest in any material contract or proposed material contract with the company or any of its subsidiaries. If a director or officer of a Bermuda company is found to have breached such director’s duties to that company, the director may be held personally liable to the company in respect of that breach of duty.

Class actions and derivative actions are generally not available to shareholders under the laws of Bermuda. However, Bermuda courts ordinarily would be expected to follow English case law precedent, which would permit a shareholder to commence an action in a company's name against the directors and officers to remedy a wrong done to the company where the act complained of is alleged to be beyond the company's corporate power or is illegal or would result in the violation of the company's memorandum of association or Bye-Laws. Furthermore, consideration would be given by the court to acts that are alleged to constitute a fraud against the minority shareholders or where an act requires the approval of a greater percentage of shareholders than actually approved it. Under our Bye-Laws, each of our shareholders agrees to waive any claim or right of action, both individually and on our behalf, other than those involving fraud or dishonesty, against the company or any of our officers, directors or employees. The waiver applies to any action taken by a director, officer or employee, or the failure of such person to take any action, in the performance of his or her duties, except with respect to any matter involving any fraud or dishonesty on the part of the director, officer or employee. This waiver limits the right of shareholders to assert claims against our directors, officers and employees unless the act or failure to act involves fraud or dishonesty.

Our Bye-Laws also provide for indemnification of our directors and officers in respect of any loss arising or liability attaching to them in respect of any negligence, default, breach of duty or breach of trust of which a director or officer may be guilty in relation to the company other than in respect of his or her own fraud or dishonesty, which is the maximum extent of indemnification permitted under the Companies Act.

Because we are incorporated in Bermuda, it may be difficult for shareholders to enforce non-monetary judgments against us or any judgment against us or our directors and officers. Shareholders may have to seek independent advice regarding the commencement of proceedings or service of foreign process in Bermuda.

The company is organized under the laws of Bermuda. In addition, certain of our officers and directors reside in countries outside the U.S. A substantial portion of the company's assets and the assets of these officers and directors are or may be

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located outside the U.S. Investors may have difficulty effecting service of process within the U.S. on our directors and officers who reside outside the U.S., even though the company has appointed an agent in the U.S. to receive service of process.

Further, it may not be possible in Bermuda or in countries other than the U.S. where the company has assets, to enforce court judgments obtained in the U.S. against the company based on the civil liability provisions of U.S. federal or state securities laws. We have been advised by our legal advisors in Bermuda that the U.S. and Bermuda do not currently have a treaty providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Some remedies available under the laws of the U.S. or the states therein, including some remedies available under the U.S. federal securities laws, may not be allowed in Bermuda courts because they may be found to be contrary to Bermuda public policy. Therefore, a final judgment for the payment of money rendered by any federal or state court in the U.S. based on civil liability, whether or not based solely on U.S. federal or state securities laws, would not automatically be enforceable in Bermuda. Similarly, those judgments may not be enforceable in countries other than the U.S.

We have anti-takeover provisions in our Bye-Laws that may discourage a change of control.

Our Bye-Laws contain provisions that could make it more difficult for a third-party to acquire us or to obtain majority representation on our Board of Directors (Board) without the consent of our Board. As a result, shareholders may be limited in their ability to obtain a premium for their shares under such circumstances.

Specifically, our Bye-Laws contain the following provisions that may impede or delay a third-party to acquire or obtain majority representation on our Board:

• we are prohibited from engaging, under certain circumstances, in a business combination (as defined in our Bye-Laws) with any interested shareholder (as defined in our Bye-Laws) for three years following the date that the shareholder became an interested shareholder;

• our Board, without further shareholder action, is permitted by our Bye-Laws to issue preference shares, in one or more series, and determine by resolution any designations, preferences, qualifications, privileges, limitations, restrictions or special or relative rights of an additional series. The rights of preferred shareholders may supersede the rights of common shareholders;

• shareholders may only remove directors for “cause” (defined in our Bye-Laws to mean willful misconduct or gross negligence which is materially injurious to the company, fraud or embezzlement, or a conviction of, or a plea of “guilty” or “no contest” to, a felony);

• our Board is authorized to expand its size and fill vacancies; and

• shareholders cannot act by written consent unless the consent is unanimous.

General Risk Factors

Our ability to maintain our credit ratings and to access the capital markets in a timely manner should we seek to do so depends on a number of factors.

Our access to the capital markets depends significantly on our credit ratings. We anticipate that the rating agencies will continue to review our ratings regularly based on our results of operations and developments in our business. We believe that, in addition to factors specific to our company, rating agency concerns include the fact that our revenues are exposed to financial market volatility and the potential impact from regulatory changes to the industry. Additionally, the rating agencies could decide to downgrade the entire investment management industry based on their perspective of future growth and solvency. As further described below, any material deterioration of these factors, and others defined by each rating agency, could result in downgrades to our credit ratings, thereby limiting our ability to access additional financing, increasing the cost of such financing and/or limiting our ability to maintain investment management mandates, particularly in the institutional channel.

Our Credit Agreements borrowing rates are tied to our credit ratings. A reduction in our long-term credit ratings could increase our borrowing costs, could limit our access to the capital markets and may result in outflows, thereby reducing AUM, revenues and net income. Volatility in global financing markets may also affect our ability to access the capital markets should we seek to do so. If we are unable to access capital markets in a timely manner, our business could be adversely affected.

Insurance may not be available at a reasonable cost to protect us from loss or liability.

We face inherent risks of loss or liability arising from client claims, third-party actions, regulatory proceedings, and operational failures, including cyber incidents. To mitigate these risks, we purchase insurance in amounts and at deductible levels we consider appropriate, where coverage is available at reasonable cost. However, there is no assurance that a claim will be covered, that coverage limits will be sufficient, that insurers will fulfill their obligations, or that coverage will remain available on cost-effective terms. Insurance costs are influenced by market conditions, claims experience, and our risk profile,

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and may rise sharply over short periods. In some cases, coverage may be unavailable or only obtainable at prohibitive cost. Renewals may also result in higher premiums, increased deductibles, or greater co-insurance obligations, which could adversely affect our liquidity and financial condition.

Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis disclosed herein apply to material changes in the Consolidated Financial Statements for 2025 and 2024. For the comparison of 2024 and 2023, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the company’s 2024 Annual Report on Form 10-K, filed with the SEC on February 25, 2025. The following discussion and analysis of the results of operations and financial condition of Invesco should be read in conjunction with the “Forward-looking Statements” disclosure set forth before Part I and the “Risk Factors” set forth in Item 1A of Part I of this Annual Report on Form 10‑K, each of which describe our risks, uncertainties and other important factors in more detail.

Executive Overview

The following executive overview summarizes the significant trends affecting our results of operations and financial condition for the periods presented. This overview and the remainder of this management's discussion and analysis and supplements should be read in conjunction with the Consolidated Financial Statements of Invesco Ltd. and the notes thereto contained elsewhere in this Annual Report on Form 10-K. The company’s financial results are impacted by the fluctuations in exchange rates against the U.S. Dollar, as discussed in the “Results of Operations” section as applicable.

The table below summarizes the year ended December 31 returns based on price appreciation/(depreciation) of several major market indices for 2025 and 2024:

Year ended December 31,

Equity Indices - Domestic

S&P 500 Equal-Weight

S&P 500 Growth

S&P 500 Value

NASDAQ 100

Equity Indices - Global

FTSE 100 (local currency)

MSCI AC Asia Pacific

MSCI China (local currency)

MSCI Emerging Markets

MSCI Europe (local currency)

MSCI Japan (local currency)

Fixed Income Indices

Bloomberg US Aggregate Bond

Bloomberg Global Aggregate Bond (local currency)

Bloomberg China Aggregate Bond

We continued to make progress on strengthening our capital management, simplifying and focusing our organization, investing in our key capabilities, and accelerating growth to position the company for greater scale, performance and improved profitability.

We are delivering on our commitment to deleverage and maintain a strong balance sheet. We repaid in full the $500.0 million three-year Term Loan Agreement entered into in the second quarter of 2025 and ended the year with cash and cash equivalents of $1.0 billion. Additionally, on January 15, 2026, we redeemed the $500.0 million of senior notes that matured on January 15, 2026. We believe the progress we have made to build financial flexibility has Invesco well-positioned to navigate various market conditions and deliver long-term growth. We remain committed to returning capital to shareholders longer term through a combination of share repurchases and modestly increasing dividends. During the year, the company repurchased 5.4 million common shares for $100.4 million in the open market, and we expect to continue common share repurchases on a regular basis going forward. Additionally, we repurchased $1.5 billion of Invesco’s outstanding Series A Preferred Stock during the year. We also amended and restated the $2.0 billion floating rate Revolving Credit Agreement, increasing the borrowing capacity to $2.5 billion and extending the expiration date to May 16, 2030.

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In addition to our previously announced broader strategic product and distribution partnership with Barings (MassMutual's global asset management subsidiary), we also announced a new strategic partnership with LGT Capital Partners during the fourth quarter. These partnerships aim to develop a suite of multi-alternative private markets solutions focused on the U.S. wealth and retirement channels.

On December 20, 2025, Invesco QQQ Trust converted from a unit investment trust (UIT) to an open-end fund ETF. The modernized QQQ ETF provides investors with a more beneficial way to access the companies of the Nasdaq-100 Index, including a reduced expense ratio and enhanced operational flexibility. This change also deepens the company's ability to generate new revenues and drive profitability.

During the fourth quarter, we completed the sale of the intelliflo business as part of our efforts to sharpen our strategic focus. We also completed the sale of 60% of our interest in Invesco Asset Management (India) Private Limited to IndusInd

International Holdings Limited to enhance the revenue generation of the business by combining our asset management expertise with their domestic distribution network.

On January 13, 2026, we announced that we entered into an agreement to sell our Canadian fund management agreements to CI Global Asset Management and form a long-term strategic partnership under which we will continue to provide portfolio management services through a sub-advisory arrangement to approximately 66 of the 104 Canadian mutual funds and ETFs with approximately $9 billion of AUM.

Presentation of Management's Discussion and Analysis of Financial Condition and Results of Operations - Impact of Consolidated Investment Products (CIP)

The company provides investment management services to, and has transactions with, investment products sponsored by the company in the normal course of business. The company's investment adviser subsidiaries serve as investment managers to these products, making day-to-day investment decisions concerning the assets of the products. The company is required to consolidate certain of these managed funds from time-to-time, as discussed more fully in Part II, Item 8, Financial Statements and Supplementary Data, Note 1, "Accounting Policies -- Basis of Accounting and Consolidation." Investment products that are consolidated are referred to in this Report as CIP. The company's economic risk with respect to each investment in CIP is limited to its equity ownership, unfunded equity commitments and any uncollected management and performance fees.

The majority of the company's CIP balances are CLO-related. The collateral assets of the CLOs are held solely to satisfy the obligations of the CLOs. The company has no right to the benefits from, nor does it bear the risks associated with, the collateral assets held by the CLOs beyond the company's direct investments in, and management and performance fees generated from, the CLOs. If the company were to liquidate, the collateral assets would not be available to the general creditors of the company, and as a result, the company does not consider these assets to be company assets. Likewise, the investors in the CLOs have no recourse to the general credit of the company for the notes issued by the CLOs. The company therefore does not consider this debt to be a company liability.

Due to the significant impact that CIP has on the presentation of the company’s Consolidated Financial Statements, the company has elected to deconsolidate these products in its non-GAAP disclosures (among other adjustments). See "Schedule of Non-GAAP Information" for additional information regarding these adjustments. The following discussion therefore combines the results presented under U.S. Generally Accepted Accounting Principles (U.S. GAAP) with the company’s non-GAAP presentation.

To assess the impact of CIP on the company's Results of Operations and Balance Sheet Discussion, refer to Part II, Item 8, Financial Statements and Supplementary Data, Note 18, "Consolidated Investment Products."

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Summary Operating Information

Wherever a non-GAAP measure is referenced, a disclosure will follow in the narrative or in the note referring the reader to the Schedule of Non-GAAP Information, where additional details regarding the use of the non-GAAP measure by the company are disclosed, along with reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures. To enhance the readability of the Results of Operations section, separate tables for each of the revenue, expense and other income and expenses sections of the income statement introduce the narrative that follows, providing a section-by-section review of the company’s income statements for the periods presented.

Summary operating information for 2025, 2024 and 2023 is presented in the table below.

(in millions, other than per common share amounts, operating margins and AUM)

Year ended December 31,

U.S. GAAP Financial Measures Summary

Operating revenues

Operating income/(loss)

Operating margin

Net income/(loss) attributable to Invesco Ltd.

Diluted earnings per share (EPS)

Non-GAAP Financial Measures Summary (1)

Net revenues

Adjusted operating income

Adjusted operating margin

Adjusted net income attributable to Invesco Ltd.

Adjusted diluted earnings per share (EPS)

Assets Under Management

Ending AUM (billions)

Average AUM (billions)

(1) Net revenues, Adjusted operating income (and by calculation, Adjusted operating margin), and Adjusted net income (and by calculation, Adjusted diluted EPS) are non-GAAP financial measures, based on methodologies other than U.S. GAAP. See “Schedule of Non-GAAP Information” for a reconciliation of the most directly comparable U.S. GAAP measures to the non-GAAP measures.

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Investment Capabilities Performance Overview

Among Invesco's strategic objectives is a commitment to deliver the excellence our clients expect, which includes strong investment performance over the long-term for our clients. The table below presents investment performance of our actively managed investment products measured by the percentage of our AUM in the first and second quartile compared to our peers and above benchmark for the investment capabilities for which peer and benchmark data are available. (1)

1 st Quartile

2 nd Quartile

Above Benchmark

Overall

Fundamental Equities

Fundamental Fixed Income

Multi-Asset

(1)     Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, UITs, fund of funds with component funds managed by Invesco, stable value building block funds and collateralized debt obligations. 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 and five year quartile rankings represents 35%, 34% and 33% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three and five year basis represents 44%, 43%, and 42% of total Invesco AUM as of 12/31/2025. Peer group rankings are sourced from a widely-used third-party ranking agency in each fund’s market (Morningstar, IA, Lipper, eVestment, Mercer, Galaxy, 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.

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Assets Under Management

Movements in global capital market levels, net inflows (or outflows), and changes in the mix of investment products between and within asset classes and geographies may materially affect our revenues from period to period.

The AUM tables and the discussion below refer to certain AUM as long-term. Long-term inflows and the underlying reasons for the movements in this line item include investments from new clients, existing clients adding new accounts/funds or contributions/subscriptions into existing accounts/funds. Long-term outflows reflect client redemptions from accounts/funds and include the return of invested capital upon maturity. We present net flows into money market funds separately because shareholders of those funds typically use them as short-term funding vehicles and the flows are particularly sensitive to short-term interest rate movements.

Changes in AUM were as follows:

(in billions)

Total AUM

Total AUM

Total AUM

Beginning Assets (January 1)

Long-term inflows

Long-term outflows

Net long-term flows (1)

Net flows in non-management fee earning AUM (1)

Net flows in money market funds

Total net flows

Reinvested distributions

Market gains and losses

Dispositions

Foreign currency translation

Ending Assets (December 31)

Average AUM

Average long-term AUM

Average AUM

Average QQQ AUM

Revenue yield (bps)

U.S. GAAP gross revenue yield (2)

Net revenue yield ex performance fees (3)

(1)     Non-management fee earning flows include Invesco QQQ Trust’s flows prior to its restructuring from an UIT to an open-end fund ETF on December 20, 2025. Net long-term flows include Invesco QQQ Trust’s flows beginning on December 20, 2025.

(2)     U.S. GAAP g ross revenue yield on AUM is equal to U.S. GAAP annualized total operating revenues divided by average AUM, excluding IGW A UM. The average AUM for IGW was $109.0 billion in 2025 (2024: $88.6 billion, 2023: $87.2 billion). It is appropriate to exclude the average AUM of IGW as the revenues resulting from these AUM are not pr esented in our U.S. GAAP operating revenues. Th e U.S. GAAP gross revenue yield is not a good measure b ecause the numerator excludes the management fees earned from CIP, although the denominator of the measure includes the AUM of these investment products. Net revenue yield metrics include the Net revenues and average AUM of IGW and CIP. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues to net revenues.

(3)     Performance fees are earned when defined performance metrics are achieved. Therefore, net revenue yield is calculated excluding performance fees. Net revenue yield includes net revenues from Invesco QQQ Trust beginning on December 20, 2025.

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Flows

There are numerous drivers of AUM inflows and outflows, including individual investor decisions to change investment preferences, fiduciaries and other gatekeepers making broad asset allocation decisions on behalf of their clients, and reallocation of investments within portfolios. We are not a party to these asset allocation decisions, as the company does not generally have access to the underlying investors' decision-making process, including their risk appetite or liquidity needs. Therefore, the company is not in a position to provide meaningful information regarding the drivers of inflows and outflows.

Market Returns

Market gains and losses include the net change in AUM resulting from changes in market values of the underlying securities from period to period. The table in the “Executive Overview” section of this Management's Discussion and Analysis summarizes returns based on price appreciation/(depreciation) of several major market indices for the years ended December 31, 2025 and December 31, 2024.

Foreign Exchange Rates

During the year ended December 31, 2025, we experienced an increase in AUM of $17.0 billion due to changes in foreign exchange rates (December 31, 2024: AUM decreased $16.3 billion; December 31, 2023: AUM decreased $0.4 billion).

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Total AUM by Channel (1)

(in billions)

Total

Retail

Institutional

Total

Retail

Institutional

Total

Retail

Institutional

Beginning Assets (January 1)

Long-term inflows

Long-term outflows

Net long-term flows

Net flows in non-management fee earning AUM

Net flows in money market funds

Total net flows

Reinvested distributions

Market gains and losses

Transfers

Dispositions

Foreign currency translation

Ending Assets (December 31)

Total AUM by Client Domicile (2)

(in billions)

Total

Americas

APAC

EMEA

Total

Americas

APAC

EMEA

Total

Americas

APAC

EMEA

Beginning Assets (January 1)

Long-term inflows

Long-term outflows

Net long-term flows

Net flows in non-management fee earning AUM

Net flows in money market funds

Total net flows

Reinvested distributions

Market gains and losses

Transfer

Dispositions

Foreign currency translation

Ending Assets (December 31)

See accompanying notes immediately following these AUM tables.

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Total AUM by Investment Capability (3)

Twelve months ended December 31, 2025

(in billions)

Total

ETFs and Index (4)

Fundamental Fixed Income (5)

Fundamental Equities (6)

Private Markets (7)

China JV (8)

Multi-Asset/ Other (9)

Global Liquidity (10)

QQQ (11)

Beginning Assets (January 1)

Long-term inflows

Long-term outflows

Net long-term flows

Net flows in non-management fee earning AUM

Net flows in money market funds

Total net flows

Reinvested distributions

Market gains and losses

Dispositions

Foreign currency translation

Ending Assets (December 31)

Average AUM

Twelve months ended December 31, 2024

(in billions)

Total

ETFs and Index (4)

Fundamental Fixed Income (5)

Fundamental Equities (6)

Private Markets (7)

China JV (8)

Multi-Asset/ Other (9)

Global Liquidity (10)

QQQ (11)

Beginning Assets (January 1)

Long-term inflows

Long-term outflows

Net long-term flows

Net flows in non-management fee earning AUM

Net flows in money market funds

Total net flows

Reinvested distributions

Market gains and losses

Foreign currency translation

Ending Assets (December 31)

Average AUM

See accompanying notes immediately following these AUM tables.

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Twelve months ended December 31, 2023

(in billions)

Total

ETFs and Index (4)

Fundamental Fixed Income (5)

Fundamental Equities (6)

Private Markets (7)

China JV (8)

Multi-Asset/ Other (9)

Global Liquidity (10)

QQQ (11)

Beginning Assets (January 1)

Long-term inflows

Long-term outflows

Net long-term flows

Net flows in non-management fee earning AUM

Net flows in money market funds

Total net flows

Reinvested distributions

Market gains and losses

Dispositions

Foreign currency translation

Ending Assets (December 31)

Average AUM

See accompanying notes immediately following these AUM tables.

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Invesco Ltd.

Footnotes to the Assets Under Management Tables

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

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

(3)     Investment capabilities are descriptive groupings of AUM by investment strategy.

(4)      ETFs and Index includes ETFs and Indexed Strategies and excludes Invesco QQQ Trust.

(5)      Fundamental Fixed Income includes Fixed Income products, including certain ETFs managed within this capability.

(6)      Fundamental Equities includes Equity products.

(7)     Private Markets includes Private Credit and Real Estate investments comprised primarily of Real Estate, CLOs, Private Credit and listed real assets, including certain ETFs managed within this capability.

(8)     China JV includes AUM managed by IGW. Comparative periods have been recast to align with the current period’s investment capability presentation.

(9)      Multi-Asset/Other includes Global Asset Allocation, Invesco Quantitative Strategies, Global Targeted Returns, Solutions, UITs, including certain ETFs managed within this capability, and AUM managed by Invesco Asset Management (India) Private Limited until the October 31, 2025 sale. Comparative periods have been recast to align with the current period’s investment capability presentation.

(10)      Global Liquidity is comprised mainly of Money Market funds.

(11)     QQQ includes Invesco QQQ Trust.

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Results of Operations for the Year Ended December 31, 2025 compared to December 31, 2024

The discussion below includes the use of non-GAAP financial measures. See “Schedule of Non-GAAP Information” for additional details and reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures.

Operating Revenues and Net Revenues

The main categories of revenues, and the dollar and percentage change between the periods, are as follows:

Years ended December 31,

(in millions)

$ Change

% Change

$ Change

% Change

Investment management fees

Service and distribution fees

Performance fees

Other

Total operating revenues

Revenue Adjustments:

Investment management fees

Service and distribution fees

Other

Total Revenue Adjustments (1)

Invesco Great Wall

CIP

Net revenues (2)

(1)     Total Revenue Adjustments remove pass through investment management fees, service and distribution fees, and other revenues and equal the same amount as the Third-party distribution, service and advisory expenses.

(2)     See “Schedule of Non-GAAP Information” for additional important disclosures regarding the use of net revenues.

Our revenues are directly influenced by the level and composition of our AUM. Therefore, movements in global capital market levels, net inflows (or outflows), and changes in the mix of investment products betwe en and within asset classes and geographies may materially affect our revenues from period to period. See the company’s disclosures regarding the changes in AUM during the year ended December 31, 2025 and December 31, 2024 in the “Assets Under Management” section above for additional informati on. In addition, as fee rates differ across geographic locations, changes to the mix of AUM between geographies and exchange rates have an impact on operating revenues and net revenue yields.

Average AUM was $2,000.1 billion for the year ended December 31, 2025 as compared to $1,712.2 billion for the year ended December 31, 2024. As secular shifts in client demand continue, our broad set of investment capabilities have allowed us to capture evolving client product preferences, including products that have lower net revenue yields. As a result, net revenue yield excluding performance fees declined to 23.0 basis points (bps) for the year ended December 31, 2025 from 25.4 bps for the year ended December 31, 2024.

Investment Management Fees

Investment management fees were $4,615.3 million for the year ended December 31, 2025 as compared to $4,342.3 million for the year ended December 31, 2024. The impact of foreign exchange rate movements increased Investment management fees by $35.9 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. After allowing for foreign exchange movements, Investment management fees increased by $237.1 million as a result of higher average AUM. See discussion above on how AUM changes impact our Investment management fees.

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Service and Distribution Fees

For the year ended December 31, 2025, Service and distribution fees were $1,518.1 million as compared to $1,479.7 million for the year ended December 31, 2024. After allowing for foreign exchange movements, Service and distribution fees increased by $31.9 million due to higher distribution fees of $61.4 million resulting from higher average AUM, partially offset by lower fund-related service fees.

Performance Fees

For the years ended December 31, 2025, Performance fees were $41.5 million as compared to $46.4 million for the year ended December 31, 2024. Performance fees for the years ended December 31, 2025 and 2024 were primarily generated from multi-asset/other, private markets and fundamental equities products.

Other Revenues

For the year ended December 31, 2025, Other revenues were $202.2 million as compared to $198.6 million for the year ended December 31, 2024.

Invesco Great Wall

The company’s most significant joint venture is our investment in IGW. The company reflects 100% of IGW's results in its Net revenues and Adjusted operating expenses because it is important to evaluate the contribution that IGW is making to the business. The company’s non-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income attributable to Invesco Ltd. is reduced by the amount of earnings attributable to the noncontrolling interests. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of Net revenues.

Net revenues from IGW were $364.0 million and average AUM was $109.0 billion for the year ended December 31, 2025 (Net revenues were $318.1 million and average AUM was $88.6 billion, for the year ended December 31, 2024). The increase in IGW revenues was primarily due to higher average AUM partially offset by the shift in AUM toward lower yield products.

CIP

Management believes that the consolidation of investment products may impact a reader's analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, management believes that it is appropriate to adjust operating revenues for the impact of CIP in calculating Net revenues. As Investment management and Performance fees earned by Invesco from the CIP are eliminated upon consolidation of the CIP, management believes that it is appropriate to add these Operating revenues back in the calculation of Net revenues. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of Net revenues.

Investment management and Performance fees earned from CIP were $44.5 million in the year ended December 31, 2025, as compared to $41.0 million for the year ended December 31, 2024.

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Operating Expenses

The main categories of operating expenses, and the dollar and percentage changes between periods, are as follows:

Years ended December 31,

(in millions)

$ Change

% Change

$ Change

% Change

Third-party distribution, service and advisory

Employee compensation

Marketing

Property, office and technology

General and administrative

Transaction, integration and restructuring (1)

Amortization and impairment of intangibles

Total operating expenses

The table below sets forth these expense categories as a percentage of total Operating expenses and Operating revenues, which we believe provides useful information as to the relative significance of each type of expense.

(in millions)

% of Total Operating Expenses

% of Total Operating Revenues

% of Total Operating Expenses

% of Total Operating Revenues

% of Total Operating Expenses

% of Total Operating Revenues

Third-party distribution, service and advisory

Employee compensation

Marketing

Property, office and technology

General and administrative

Transaction, integration and restructuring (1)

Amortization and impairment of intangibles

Total operating expenses

( 1)     Transaction, integration and restructuring charges were primarily restructuring costs relating to our strategic evaluation which we completed in the first quarter of 2023.

Operating expenses increased $1,837.9 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024 and included a $1,794.9 million non-cash impairment of our indefinite-lived intangible assets related to prior acquisitions of management contracts of U.S. retail mutual funds. Excluding the intangible asset impairment, Operating expenses increased $43.0 million. The impact of foreign exchange rate movements increased operating expenses by $36.9 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

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Third-Party Distribution, Service and Advisory

Third-party distribution, service and advisory expenses include periodic “renewal” commissions which are paid to brokers and independent financial advisors for providing services to their client accounts while they are invested in an Invesco product. Renewal commissions are calculated based upon a percentage of the AUM value and apply to much of the company's non-U.S. retail operations. The revenues from the company’s U.S. retail operations include 12b-1 distribution fees, which are largely passed through to brokers who sell the funds as third-party distribution expenses along with additional marketing support distribution costs. Both the revenues and the costs are dependent on the underlying AUM of the brokers' clients. The upfront distribution commissions are amortized over the redemption period. Also included in Third-party distribution, service and advisory expenses are sub-transfer agency fees that are paid to third parties for processing client common share purchases and redemptions, call center support and client reporting. These costs are reimbursed by the related funds.

Third-party distribution, service and advisory expenses were $2,127.1 million for the year ended December 31, 2025 as compared to $2,025.6 million for the year ended December 31, 2024. The impact of foreign exchange rate movements increased third-party expenses by $13.8 million for the year ended December 31, 2025 as compared for the year ended December 31, 2024. After allowing for foreign exchange rate changes, the increase in expenses was $87.7 million primarily due to higher average AUM, partially offset by lower fund related costs. See "Schedule of Non-GAAP Information" for additional disclosures.

Employee Compensation

Employee compensation includes salary, cash bonuses and long-term incentive plans designed to attract and retain the highest caliber employees. Employee staff benefit plan costs and payroll taxes are also included in Employee compensation.

Employee compensation was $2,002.8 million for the year ended December 31, 2025 as compared to $2,014.2 million for the year ended December 31, 2024. The impact of foreign exchange rate movements increased Employee compensation by $13.6 million for the year ended December 31, 2025 as compared for the year ended December 31, 2024. After allowing for foreign exchange rate changes, there was a decrease in Employee compensation of $25.0 million. The decrease primarily resulted from a net decrease of $122.9 million in expense related to common share-based awards and other long-term awards (collectively, Long-Term Awards) due to changes to the retirement criteria for vesting adopted in the third quarter of 2024, partially offset by higher variable compensation costs of $51.4 million primarily driven by higher revenues. The decrease was also offset by higher benefits and payroll taxes of $22.0 million and $16.9 million of severance expense related to the reorganization of the fundamental equities investment teams.

Headcount at December 31, 2025 was 7,499 (December 31, 2024; 8,508). The decrease in headcount was primarily due to the sale of the intelliflo business and the sale of 60% of our interest in Invesco Asset Management (India) Private Limited that were completed in the fourth quarter of 2025.

Marketing

Marketing expenses include the cost of direct advertising of our products through trade publications, television and other media, and public relations costs, such as the marketing of the company's products through conferences or other sponsorships.

Marketing expenses were $84.0 million for the year ended December 31, 2025 as compared to $81.3 million for the year ended December 31, 2024.

Property, Office and Technology

Property, office and technology expenses include rent and utilities for our various leased facilities, depreciation of company-owned property, equipment and software, and other technology expenses including maintenance and licensing fees.

Property, office and technology expenses were $450.0 million for the year ended December 31, 2025 as compared to $474.3 million for the year ended December 31, 2024. The decrease was primarily due to lower property and technology costs, partially offset by an $8.0 million software impairment related to a strategic change to the company's fixed income investment platform in the second quarter of 2025.

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General and Administrative

General and administrative expenses include information service subscriptions, irrecoverable indirect taxes, employee travel, professional fees, recruitment and training costs as well as costs for outsourced services such as technology, middle office and back office management services.

General and administrative expenses were $576.5 million for the year ended December 31, 2025 as compared to $594.7 million for the year ended December 31, 2024. After allowing for foreign exchange rate changes, General and administrative expenses decreased by $25.1 million. The decrease was primarily due to a $52.5 million expense related to the settlement of certain regulatory matters in the year ended December 31, 2024, partially offset by higher costs of $22.6 million in the year ended December 31, 2025 related to newly launched CIP.

Amortization and impairment of intangible assets

Amortization and impairment of intangible assets was $1,832.4 million for the year ended December 31, 2025 as compared to $44.8 million for the year ended December 31, 2024. The increase was primarily due to a $1,794.9 million non-cash impairment of our indefinite-lived intangible assets related to management contracts of U.S. retail mutual funds.

Operating Income, Adjusted Operating Income, Operating Margin and Adjusted Operating Margin

Operating loss was $(695.7) million for the year ended December 31, 2025, as compared to an operating gain of $832.1 million for the year ended December 31, 2024. Operating margin (operating income divided by operating revenues) decreased to (10.9)% for the year ended December 31, 2025 from 13.7% in the year ended December 31, 2024 primarily as a result of the $1,794.9 million intangible asset impairment as discussed above.

Adjusted operating income increased to $1,557.8 million for the year ended December 31, 2025 from $1,370.7 million for the year ended December 31, 2024. Adjusted operating margin increased to 33.4% for the year ended December 31, 2025 from 31.1% for the year ended December 31, 2024. See “Schedule of Non-GAAP Information” for a reconciliation of Operating revenues to Net revenues, a reconciliation of Operating income to Adjusted operating income and additional important disclosures regarding Net revenues, Adjusted operating income and Adjusted operating margin.

Other Income and Expenses

The main categories of other income and expenses, and the dollar and percentage changes between periods are as follows:

Years ended December 31,

(in millions)

$ Change

% Change

$ Change

% Change

Equity in earnings of unconsolidated affiliates

Interest and dividend income

Interest expense

Other gains and losses, net

Other income/(expense) of CIP, net

Total other income and expenses

Equity in earnings of unconsolidated affiliates

Equity in earnings of unconsolidated affiliates increased to $104.8 million for the year ended December 31, 2025 as compared to $43.0 million for the year ended December 31, 2024. The increase was primarily driven by an increase in income of $28.9 million from our private markets real estate investments and $27.7 million from our joint venture investment in IGW.

Interest and dividend income

Interest and dividend income was $53.9 million for the year ended December 31, 2025 as compared to $58.9 million for the year ended December 31, 2024. The decrease was primarily due to a decrease in interest income earned from Cash and cash equivalents, partially offset by higher dividend income earned on our private markets investments.

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Interest expense

Interest expense was $82.5 million for the year ended December 31, 2025 as compared to $58.0 million for the year ended December 31, 2024. The year ended December 31, 2025 included interest expense related to the new Term Loan Agreements entered into on May 16, 2025.

Other gains and losses, net

Other gains and losses, net was a gain of $55.9 million for the year ended December 31, 2025 as compared to a net gain of $47.7 million for the year ended December 31, 2024. The net gains for the years ended December 31, 2025 and 2024 included net market gains on deferred compensation related investments and hedging instruments of $55.1 million and $39.7 million, respectively.

Other income/(expense) of CIP, net

Other income/(expense) of CIP, net includes interest and dividend income, interest expense, and realized and unrealized gains and losses on the underlying investments and debt owned by CIP. For the year ended December 31, 2025, net interest income of CIP was $116.3 million as compared to $139.5 million for the year ended December 31, 2024. The decrease in net interest income was primarily a result of a newly consolidated investment product in the year ended December 31, 2024 which was deconsolidated in the year ended December 31, 2025 as well as lower net interest income earned by the CLOs. For the year ended December 31, 2025, other gains and losses of CIP were a net gain of $67.9 million as compared to a net loss of $57.9 million for the year ended December 31, 2024. The net gain for the year ended December 31, 2025 was attributable to market-driven gains on investments held by consolidated funds. The net loss for the year ended December 31, 2024 was attributable to market-driven losses on investments held by consolidated funds.

Net impact of CIP and related noncontrolling interests in consolidated entities

The adjustment to Net income for the Net income/(loss) attributable to noncontrolling interests in consolidated entities removes the income/(expense) of CIP which is attributable to third-party investors. Therefore, the consolidation of investment products did not have an impact on Net income attributable to Invesco for the years ended December 31, 2025 and 2024. Also, the net income or loss of CIP is taxed at the investor level, not at the product level; therefore, a tax provision is not reflected in the net impact of CIP.

Income Tax Expense

The income tax provision was a benefit of $(204.6) million for the year ended December 31, 2025, compared to an expense of $252.9 million for the year ended December 31, 2024, resulting in effective tax rates of 53.9% and 25.2% for the years ended December 31, 2025 and 2024, respectively. The net benefit for the year ended December 31, 2025 was primarily due to the federal and state income tax benefit related to the loss before income taxes which was further increased by the favorable resolution of an income tax matter, including the impact of a decrease in the deferred income tax rate and the reversal of a reserve for uncertain tax positions, and the favorable impact of the net income attributable to non-controlling interests in consolidated entities and equity method investments in corporate joint ventures. For additional income tax information, please refer to Note 14, “Taxation,” in Part II, Item 8, Financial Statements and Supplementary Data.

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Schedule of Non-GAAP Information

We utilize the following non-GAAP performance measures: Net revenue (and by calculation, Net revenue yield on AUM), Adjusted operating income, Adjusted operating margin, Adjusted net income attributable to Invesco and Adjusted diluted EPS. The company believes the adjusted measures provide valuable insight into the company’s ongoing operational performance and assist in comparisons to its competitors. These measures also assist the company’s management with the establishment of operational budgets and forecasts. The most directly comparable U.S. GAAP measures are Operating revenues (and by calculation, Gross revenue yield on AUM), Operating income, Operating margin, Net income/(loss) attributable to Invesco and Diluted EPS. Each of these measures is discussed more fully below.

The following are reconciliations of the U.S. GAAP measures to the non-GAAP measures. The non-GAAP measures should not be considered as substitutes for any U.S. GAAP measures and may not be comparable to other similarly titled measures of other companies. Additional reconciling items may be added in the future to the non-GAAP measures if deemed appropriate. The tax effects related to the reconciling items have been calculated based on the tax rate attributable to the jurisdiction to which the transaction relates. Notes to the reconciliations follow the tables.

Reconciliation of Operating revenues to Net revenues:

(in millions)

Operating revenues, U.S. GAAP basis

Revenue adjustments: (1)

Investment management fees

Service and distribution fees

Other

Total revenue adjustments

Invesco Great Wall (2)

CIP (3)

Net revenues

Reconciliation of Operating income/(loss) to Adjusted operating income:

(in millions)

Operating income/(loss), U.S. GAAP basis

Invesco Great Wall (2)

CIP (3)

Transaction, integration and restructuring (4)

Amortization and impairment of intangible assets (5)

Compensation expense related to market valuation changes of deferred compensation

liabilities (6)

One-time acceleration of compensation expense for outstanding Long-Term Awards (7)

Severance (8)

Software impairment (9)

General and administrative (10)

Adjusted operating income

Operating margin (11)

Adjusted operating margin (12)

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Reconciliation of Net income/(loss) attributable to Invesco to Adjusted net income attributable to Invesco:

(in millions, except per common share data)

Net income/(loss) attributable to Invesco Ltd., U.S. GAAP basis

Adjustments (excluding tax):

Transaction, integration and restructuring (4)

Amortization and impairment of intangible assets (5)

Deferred compensation net market valuation changes (6)

One-time acceleration of compensation expense for outstanding Long-Term Awards (7)

Severance (8)

Software impairment (9)

General and administrative (10)

Total adjustments excluding tax

Impact of deferred income tax rate change (13)

Tax adjustment for amortization of intangible assets and goodwill (14)

Tax adjustment for impairment of intangible assets (15)

Other tax effects of adjustments above

Cost of preferred stock repurchase (16)

Adjusted net income attributable to Invesco Ltd.

Average common shares outstanding - diluted

Diluted EPS

Adjusted diluted EPS (17)

(1)     Revenue adjustments: The company calculates Net revenues by reducing Operating revenues to exclude fees that are passed through to external parties who perform functions on behalf of, and distribute, the company’s managed funds. The Net revenue presentation assists in identifying the revenue contribution generated by the company, removing distortions caused by the differing distribution channel fees and allowing for a fair comparison with U.S. peer investment managers and within Invesco’s own investment units. Additionally, management evaluates Net revenue yield on AUM, which is equal to Net revenues divided by Average AUM during the reporting period, as an indicator of the Net revenues we receive for each dollar of AUM we manage.

Investment management fees are adjusted by renewal commissions and certain administrative fees. Service and distributions fees are primarily adjusted by distribution fees passed through to broker dealers for certain share classes and pass through fund-related costs. Other revenues are primarily adjusted by transaction fees passed through to third parties.

(2)     Invesco Great Wall: The company reflects 100% of IGW in its Net revenues and Adjusted operating income (and by calculation, Adjusted operating margin ) . The company’s non-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income is reduced by the amount of earning attributable to the noncontrolling interests.

(3)     CIP: See Item 8, Financial Statements and Supplementary Data, Note 18, “Consolidated Investment Products,” for a detailed analysis of the impact to the company’s Condensed Consolidated Financial Statements from the consolidation of CIP. The company believes that the CIP may impact a reader’s analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, the company believes that it is appropriate to adjust Operating revenues and Operating income for the impact of CIP in calculating the respective Net revenues and Adjusted operating income (and by calculation, Adjusted operating margin).

(4)     Transaction, integration and restructuring: The company believes it is useful to adjust for the Transaction, integration and restructuring charges in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition and restructuring related charges. Transaction, integration and restructuring charges were primarily restructuring costs relating to our strategic evaluation which we completed in the first quarter of 2023.

(5)     Amortization and impairment of intangible assets: The company removes amortization and non-cash impairment expense related to acquired assets in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income and Adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition-related charges.

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(6)     Market valuation changes related to deferred compensation plan liabilities: Certain deferred compensation plan awards provide a return to the employee linked to the appreciation (depreciation) of specified investments. The company economically hedges the exposure to market movements on these deferred compensation liabilities. Since these liabilities are economically hedged, the company believes it is useful to remove the market movements related to the deferred compensation plan liabilities from the calculation of Adjusted operating income (and by calculation, Adjusted operating margin) and to remove the net impact of the economic hedge in arriving at Adjusted net income (and by calculation, Adjusted diluted EPS) to produce results that will be more comparable period to period.

(7)     One-time acceleration of compensation expense for outstanding Long-Term Awards: In the third quarter of 2024, the company recorded a one-time acceleration of Compensation expense of $147.6 million resulting from changes to the retirement criteria for vesting of outstanding Long-Term Awards. Due to the non-recurring nature of this item, the company removed this expense in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS as this will aid comparability of our results period to period.

(8)     Severance: In the second quarter of 2025, the company removed the severance expense related to the reorganization of its fundamental equities investment teams. The company removed this expense in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS, as this will aid comparability of our results period to period and aid comparability with peer companies that may not have similar reorganization related charges.

(9)     Software impairment: In the second quarter of 2025, the company removed the non-cash software impairment related to a strategic change in our fixed income investment platform. The company removed the expense in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS as this will aid comparability of our results period to period.

(10)     General and administrative: In 2024, the company removed the expense related to the settlement of regulatory matters. In 2023, the company removed insurance recoveries related to fund-related losses incurred in prior periods. Due to the non-recurring nature of these items, the company removed these expenses in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income and Adjusted diluted EPS as this will aid comparability of our results period to period.

(11)     Operating margin is equal to Operating income divided by Operating revenues.

(12)     Adjusted operating margin is equal to Adjusted operating income divided by Net revenues.

(13)     Impact of deferred income tax rate change: In the third quarter of 2025, the company removed a non-cash income tax benefit of $39.0 million related to the revaluation of the deferred tax liabilities for indefinite-lived intangible assets as a result of a decrease in the tax rate. The company removed this discrete tax benefit in arriving at Adjusted net income and Adjusted diluted EPS as it does not have a cash flow impact and will aid comparability of our results period to period.

(14)     Tax adjustment for amortization of intangible assets and goodwill: The company reflects the tax benefit realized on the tax amortization of goodwill and intangible assets in Adjusted net income. The company believes it is useful to include this tax benefit in arriving at Adjusted net income and Adjusted diluted EPS measure.

(15)     Tax adjustment for impairment of intangible assets: The company removed the non-cash income tax benefit related to the impairment of our indefinite-lived intangible assets. The company removed this discrete tax benefit in arriving at Adjusted net income and Adjusted diluted EPS as it does not have a cash flow impact and will aid comparability of our results period to period.

(16)     Cost of preferred stock repurchase: In 2025, the company repurchased $1.5 billion of the company’s outstanding Series A Preferred Stock held by MassMutual. The company removed the costs associated with the repurchase in arriving at Adjusted net income (and by calculation, Adjusted diluted EPS) as this will aid comparability of our results period to period and aid comparability with peer companies that may not have similar repurchase related charges.

(17)     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.

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Balance Sheet Discussion (1)

The following table represents a reconciliation of the balance sheet information presented on a U.S. GAAP basis to the balance sheet information excluding the impact of CIP for the reasons outlined in footnote 1 to the table:

December 31, 2025

December 31, 2024

Balance sheet information

(in millions)

U.S. GAAP

Impact of CIP

Excluding CIP

U.S. GAAP

Impact of CIP

Excluding CIP

ASSETS

Cash and cash equivalents

Investments

Goodwill and intangible assets, net

Other assets (2)

Investments and other assets of CIP (3)

Total assets

LIABILITIES

Debt

Other liabilities (4)

Debt and other liabilities of CIP

Total liabilities

EQUITY

Total equity attributable to Invesco Ltd.

Noncontrolling interests (5)

Total equity

Total liabilities and equity

(1)      This table includes non-GAAP presentations. Assets of CIP are not available for use by Invesco. Additionally, there is no recourse to Invesco for CIP debt.

(2)     Amounts include Accounts receivable, Property, equipment and software, and Other assets.

(3)     Amounts also include Cash and cash equivalents, Accounts receivable, and Other assets of CIP.

(4)     Amounts include Accrued compensation and benefits, Accounts payable and accrued expenses, and Deferred tax liabilities.

(5)     Amounts include Redeemable noncontrolling interests in consolidated entities and Equity attributable to nonredeemable noncontrolling interests in consolidated entities.

Cash and cash equivalents

Cash and cash equivalents increased $51.0 million from $986.5 million at December 31, 2024 to $1,037.5 million at December 31, 2025. See “ Cash Flows Discussion” below within this Management's Discussion and Analysis for additional discussion regarding the movements in cash flows during the periods. See Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies - Cash and Cash Equivalents,” regarding capital adequacy requirements in certain jurisdictions.

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Investments

Investments are comprised primarily of the equity method investment in IGW, seed capital and co-investments in affiliated funds, and investments related to the company’s deferred compensation plans.

As of December 31, 2025 and December 31, 2024, the company had $1,166.3 million and $1,125.6 million in seed capital and co-investments, respectively, including direct investments in CIP. The following table reconciles the Investment balance to the total seed capital and co-investment balance.

(in millions)

December 31, 2025

December 31, 2024

Investments

Net investment in CIP

Less: Investments related to deferred compensation plans, joint ventures, and other investments

Total seed capital and co-investments (1)

(1)     Included in the total seed and co-investment balance as of December 31, 2025 is $477.8 million of seed capital and $688.5 million of co-investments (December 31, 2024: $414.0 million of seed capital and $711.6 million of co-investments).

Goodwill and intangible assets, net

Goodwill and intangible assets, net decreased to $12,404.4 million at December 31, 2025 from $14,067.4 million at December 31, 2024. The decrease was due to a $1,794.9 million non-cash impairment of our indefinite-lived intangible assets related to prior acquisitions of management contracts of U.S. retail mutual funds, $71.6 million impact from the sale of the intelliflo business and the sale of 60% of our interest in Invesco Asset Management (India) Private Limited, and amortization expense of $37.5 million, partially offset by foreign exchange impacts of $241.0 million. See "Critical Accounting Policies and Estimates” and Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies,” for additional information.

Liquidity and Capital Resources

Our capital structure, together with available cash balances, cash flows generated from operations, existing capacity under our Revolving Credit Agreement and further capital market activities, if necessary, should provide us with sufficient resources to meet present and future cash needs, including operating expenses, debt and other obligations as they come due and anticipated future capital requirements.

Sources of Liquidity by Type

(in millions)

December 31, 2025

December 31, 2024

Cash and cash equivalents

Available Revolving Credit Agreement

Total sources of liquidity by type

The Revolving Credit Agreement was amended and restated on May 16, 2025 increasing borrowing capacity from $2.0 billion to $2.5 billion and extending the expiration date from April 26, 2028 to May 16, 2030. As of December 31, 2025, the balance on the $2.5 billion Revolving Credit Agreement was $437.7 million.

During 2025, the company repaid in full the $500.0 million three-year Term Loan Agreement entered into on May 16, 2025.

In the ordinary course of business, Invesco enters into contracts or purchase obligations with third parties whereby the third parties provide services to or on behalf of Invesco. Purchase obligations represent fixed-price contracts, which are either non-cancelable or cancellable with a penalty. As of December 31, 2025, the company's purchase obligations totaled $1,015.2 million (December 31, 2024: $694.4 million) and primarily reflect standard service contracts for portfolio, market data, office-related services, and third-party marketing and promotional services. Purchase obligations are recorded as liabilities in the company's Consolidated Financial Statements when services are provided.

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Capital Management

Our capital management priorities have evolved with the growth and success of our business and include, in no particular order of priority: reinvestment in the business, maintaining a strong balance sheet and returning capital to shareholders longer term through a combination of share repurchases and modestly increasing dividends.

During the year ended December 31, 2025, the company repurchased 5.4 million common shares for $100.4 million in the open market. As of December 31, 2025, approximately $232.2 million remained authorized under the company’s common share repurchase authorization approved by the Board on July 22, 2016. Additionally, the company repurchased $1.5 billion of the outstanding Series A Preferred Stock held by MassMutual, reducing the outstanding balance of the Series A Preferred Stock to $2.5 billion.

Our capital process is executed in a manner consistent with our desire to maintain strong, investment grade credit ratings. As of the date of our filing, Invesco held credit ratings of BBB+/Stable, A3/Stable and A/Stable from S&P Ratings Service, Moody’s Investor Services and Fitch Ratings, respectively.

Other Items

Certain of our subsidiaries are required to maintain minimum levels of regulatory capital, liquidity, and working capital. Such requirements may change from time-to-time as additional guidance is released based on a variety of factors, including balance sheet composition, assessment of risk exposures and governance, and review from regulators. These and other similar provisions of applicable laws and regulations may have the effect of limiting withdrawals of capital, repayment of intercompany loans and payment of dividends by such entities. Our financial condition or liquidity could be adversely affected if certain of our subsidiaries are unable to distribute funds to us.

We are in compliance with all regulatory minimum net capital requirements. As of December 31, 2025, the company's minimum regulatory capital requirement was $309.9 million (December 31, 2024: $324.9 million).

We meet the regulatory liquidity and working capital requirements by holding cash and cash equivalents in the European sub-group. This retained cash can be used for general business purposes in the European sub-group in the countries where it is located. Due to the liquidity and working capital requirements, the ability to transfer cash between certain jurisdictions may be limited. In addition, transfers of cash between international jurisdictions may have adverse tax consequences.

The consolidation of $10,149.8 million and $8,967.6 million of Investments and other assets and Debt and other liabilities of CIP, respectively, as of December 31, 2025, did not impact the company’s liquidity and capital resources. See Item 8, Financial Statements and Supplementary Data - Note 18, “Consolidated Investment Products,” for additional details.

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Cash Flows Discussion

The following table represents a reconciliation of the cash flow information presented on a U.S. GAAP basis to the cash flow information, excluding the impact of the cash flows of CIP for the reasons outlined in footnote 1 to the table:

Years ended December 31,

Cash flows information (1)

(in millions)

U.S. GAAP

Impact of CIP

Excluding CIP

U.S. GAAP

Impact of CIP

Excluding CIP

U.S. GAAP

Impact of CIP

Excluding CIP

Cash and cash equivalents, beginning of the period

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Increase/(decrease) in cash and cash equivalents

Foreign exchange movement on cash and cash equivalents

Cash and cash equivalents, end of the period

Cash and cash equivalents

Cash and cash equivalents of CIP

Total cash and cash equivalents per consolidated statement of cash flows

(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 liquidity evaluations and decisions.

Operating Activities

Operating cash flows include the receipt of Investment management and other fees generated from AUM, offset by Operating expenses and changes in operating assets and liabilities. After allowing for the change in cash held by CIP, investment activities, non-cash activity, and seasonal payments, such as bonus payments in the first quarter, our operating cash flows generally move in the same direction as our Operating income/(loss).

Cash inflows for the year ended December 31, 2025, excluding the impact of CIP, were primarily driven by operating income and changes in receivables, other assets, payables, and accrued liabilities due to the timing of receipts and payments.

Investing Activities

Cash outflows for the year ended December 31, 2025, excluding the impact of CIP, includes purchases of investments of $147.9 million (year ended December 31, 2024: $307.0 million) and property, equipment and software of $84.3 million (year ended December 31, 2024: $69.1 million), partially offset by proceeds of $156.0 million from capital distributions from equity method investees (year ended December 31, 2024: $135.9 million). Cash outflows were also partially offset by proceeds of $236.5 million from the sale of the intelliflo business and the sale of 60% of our interest in Invesco Asset Management (India) Private Limited.

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Financing Activities

Financing cash outflows during the year ended December 31, 2025 included cash outflows of $1.5 billion to repurchase the company’s Series A Preferred Stock and net cash inflows of $992.7 million related to the Term Loan Agreements entered into in the second quarter of 2025 to fund the repurchase. Financing cash outflows also included $500.0 million for the repayment of the three-year Term Loan Agreement entered into in the second quarter of 2025, $240.0 million for the premium paid on the repurchase of Series A Preferred Stock, $377.3 million of common dividend payments for dividends declared in January, April, July and October 2025 (year ended December 31, 2024: common dividends paid of $371.5 million), $204.6 million of preferred dividend payments for dividends declared in January, April, July and October 2025 (year ended December 31, 2024: $236.8 million), $100.0 million for the repurchase of common shares through the open market (year ended December 31, 2024: $49.6 million), and the payment of $23.6 million to meet employees' withholding tax obligations on common share vestings (2024: $29.7 million). Financing cash inflows included net borrowings under the Revolving Credit Agreement of $437.7 million during the year ended December 31, 2025 (year ended December 31, 2024: zero). Financing cash outflows during the year ended December 31, 2024 also included a $600.0 million redemption of senior notes.

Dividends

When declared, Invesco pays dividends on a quarterly basis in arrears. Holders of our preferred shares are eligible to receive dividends at an annual rate of 5.9% of the liquidation preference of $1,000 per share, or $59 per share per annum. The preferred stock dividend is payable quarterly on a non-cumulative basis when, if and as declared by our Board. However, if we have not declared and paid or set aside for payment full quarterly dividends on the preferred stock for a particular dividend period, we may not declare or pay dividends on, redeem, purchase or acquire our common stock or other junior securities in the next succeeding dividend period. In addition, if we have not declared and paid or set aside for payment quarterly dividends on the preferred stock for six quarterly periods, whether or not consecutive, the number of directors of the company will be increased by two and the holders of the preferred shares shall have the right to elect such two additional members of the Board.

On January 26, 2026, the company declared a fourth quarter 2025 cash dividend of $0.21 per common share to the holders of common shares. The dividend is payable on March 3, 2026, to common shareholders of record at the close of business on February 13, 2026, with an ex-dividend date of February 13, 2026.

On January 26, 2026, the company declared a preferred dividend of $14.75 per preferred share representing the period from December 1, 2025 through February 28, 2026. The preferred dividend is payable on March 2, 2026.

The declaration, payment and amount of any future dividends will depend upon, among other factors, our earnings, financial condition and capital requirements at the time such declaration and payment are considered. The company has a policy of managing dividends in a prudent fashion, with due consideration given to profit levels, overall debt levels and historical dividend payouts.

Common Share Repurchase Plan

During 2025, the company repurchased 5.4 million shares for $100.4 million in the open market as compared to 2.9 million shares for $49.6 million during 2024. At December 31, 2025, approximately $232.2 million remained authorized under the company's common share repurchase authorization approved by the Board on July 22, 2016 (December 31, 2024: $332.6 million).

Preferred Stock Repurchase

During 2025, the company repurchased $1.5 billion of the $4.0 billion outstanding Series A Preferred Stock held by MassMutual for $1.74 billion.

Debt

The carrying value of our debt at December 31, 2025 was $1,825.1 million (December 31, 2024: $890.6 million), See Item 8, Financial Statements and Supplementary Data, Note 8, “Debt,” for additional disclosures.

For the year ended December 31, 2025, the company's weighted average cost of debt was 4.81% (year ended December 31, 2024: 4.64%).

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Financial covenants under the Revolving Credit Agreement and Term Loan Agreements (collectively, Credit Agreements) include: (i) the quarterly maintenance of an Adjusted debt/Earnings before income tax, depreciation, amortization, interest expense, common share-based compensation expense, unrealized (gains)/losses from investments, net, and unusual or otherwise non-recurring gains and losses (Covenant Adjusted EBITDA) leverage ratio, as defined in the Credit Agreements, of not greater than 3.25:1.00, and (ii) an interest coverage ratio (Covenant Adjusted EBITDA, as defined in the Credit Agreements, divided by interest expense for the four consecutive fiscal quarters ended on or immediately prior to the date of determination) of not less than 4.00:1.00. As of December 31, 2025, we were in compliance with our financial covenants. At December 31, 2025, our leverage ratio was 0.73:1.00 (December 31, 2024: 0.25:1.00), and our interest coverage ratio was 20.34:1.00 (December 31, 2024: 26.84:1.00).

The December 31, 2025 and 2024 coverage ratio calculations are as follows:

(in millions)

December 31, 2025

December 31, 2024

Net income/(loss) attributable to Invesco Ltd.

Dividends on preferred shares

Interest expense

Tax expense/(benefit)

Amortization/depreciation/impairment (1)

Common share-based compensation expense

One-time acceleration of compensation expense for outstanding Long-Term Awards (2)

Severance (2)

Regulatory matters (2)

Cost of preferred stock repurchase (2)

Unrealized (gains)/losses from investments, net (3)

Covenant Adjusted EBITDA (4)

Adjusted debt (4)

Leverage ratio (Adjusted debt/Covenant Adjusted EBITDA - maximum 3.25:1.00)

Interest coverage (Covenant Adjusted EBITDA/Interest expense - minimum 4.00:1.00)

(1)     Includes the 2025 $1,794.9 million non-cash impairment of our indefinite-lived intangible assets and the impairment of software implementation costs.

(2)     Unusual or otherwise non-recurring gains and losses, as defined in our C redit Agreements, are adjusted for in the determination of Covenant Adjusted EBITDA. Severance expense related to the reorganization of the company’s fundamental equities investment teams and costs associated with the repurchase of the company’s outstanding Series A Preferred Stock in 2025 were non-recurring expenses and have been removed from Covenant Adjusted EBITDA. Adjustments to Covenant Adjusted EBITDA in 2024 included the one-time acceleration of expense related to changes to the criteria for retirements for Long-Term Awards and the settlement of regulatory matters.

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

(4)     Covenant Adjusted EBITDA and Adjusted debt are non-GAAP financial measures that are used by management in connection with certain debt covenant calculations under our Credit Agreements. The calculation of Covenant Adjusted EBITDA above (a reconciliation from Net income attributable to Invesco Ltd.) is defined by our Credit Agreements, and therefore Net income attributable to Invesco Ltd. is the most appropriate GAAP measure from which to reconcile to Covenant Adjusted EBITDA. The calculation of 2025 Adjusted debt is defined in our Credit Agreements and equals debt of $1,825.1 million plus $3.6 million in letters of credit less $600.0 million of excess unrestricted cash (cash and cash equivalents less the minimum regulatory capital requirement, not to exceed $600 million (2024: $500.0 million).

On January 15, 2026, Invesco Finance PLC, a wholly-owned indirect subsidiary of the Parent, paid in full the outstanding balance of the $500.0 million senior notes which matured on January 15, 2026. The redemption was primarily funded by the Revolving Credit Agreement which had an outstanding balance of $790.0 million on January 31, 2026.

The discussion that follows identifies risks associated with the company's liquidity and capital resources. The Item 1. Business - Risk Management section contains a broader discussion of the company's overall approach to risk management.

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Credit and Liquidity Risk

The company manages its capital by reviewing annual and projected cash flow forecasts and by monitoring credit, liquidity and market risks, such as interest rate and foreign currency risks (as discussed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk”).

Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to meet an obligation. The company is primarily exposed to credit risk through its cash and cash equivalent deposits, which are held by external firms. The company invests its cash balances in its own institutional money market products, as well as with external high credit-quality financial institutions. These arrangements create exposure to concentrations of credit risk. As of December 31, 2025, our maximum exposure to credit risk related to our Cash and cash equivalent balance is $1,037.5 million, of which $477.9 million is invested in affiliated money market funds. See Item 8, Financial Statements and Supplementary Data - Note 2, "Fair Value of Assets and Liabilities" for information regarding Cash and cash equivalents invested in affiliated money market funds.

Liquidity Risk

Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with its financial liabilities as the same become due. The company is exposed to liquidity risk through its $1,825.1 million in total debt. The company actively manages liquidity risk by preparing cash flow forecasts for future periods, reviewing them regularly with senior management, maintaining a committed Revolving Credit Agreement, scheduling significant gaps between major debt maturities and engaging external financing sources in regular dialogue.

Effects of Inflation

Inflation can impact our organization primarily in two ways. First, inflationary pressures can result in increases in our cost structure, especially to the extent that large expense components such as compensation are impacted. To the degree that these expense increases are not recoverable or cannot be counterbalanced through pricing increases due to the competitive environment, our net income could be negatively impacted. Secondly, the value of the assets that we manage may be negatively impacted when inflationary expectations result in a rising interest rate environment. A decline in the value of AUM could lead to reduced revenues as management fees are generally calculated based upon the value of AUM.

Off Balance Sheet Commitments

See Item 8, Financial Statements and Supplementary Data - Note 17, “Commitments and Contingencies,” for more information regarding undrawn capital commitments.

Critical Accounting Policies and Estimates

Our significant accounting policies are disclosed in Part II, Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies." Critical accounting policies and estimates are those that require complex management judgment regarding matters that are highly uncertain at the time policies were applied and estimates were made. Different estimates reasonably could have been used in the current period that would have had a material effect on these Consolidated Financial Statements, and changes in these estimates are likely to occur from period-to-period in the future. The discussion below provides information on the significant judgments and assumptions applied in each area and should be read in conjunction with the significant accounting policies footnote previously referenced.

Intangible Assets

Management has the option to first assess indefinite-lived intangible assets for qualitative factors to determine whether it is necessary to perform a quantitative impairment test. Definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable (i.e., the carrying amount exceeds the fair value of the intangible asset). In addition, management's judgment is required to estimate the period over which definite-lived intangible assets will contribute to the company's cash flows and the pattern in which these assets will be consumed. A change in the remaining useful life of any of these assets, or the reclassification of an indefinite-lived intangible asset to a definite-lived intangible asset, could have a significant impact on the company's amortization expense.

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Intangible assets not subject to amortization are tested for impairment annually as of October 1 or more frequently if events or changes in circumstances indicate that the asset might be impaired. If a quantitative assessment is required, the impairment test consists of a comparison of the fair value of an intangible asset to its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Management used an income approach to value indefinite-lived intangible assets related to acquired management contracts of U.S. retail mutual funds. An income approach includes assumptions for current market conditions, including the asset’s updated forecasts of AUM to take into consideration market gains or losses, net long-term flows and the corresponding changes in revenue and expenses. The most sensitive assumptions used in the income approach are the revenue forecast, the long-term growth rate and the discount rate applied to the cash flow forecast to determine present value. The revenue forecast for the U.S. retail mutual funds incorporated market conditions, management judgment and other economic indicators, as well as industry growth projections. The revenue projections used reflect declines ranging from 3% to 9% over the forecast period. Taking into consideration the AUM mix, the long-term growth rate was determined using the historical returns of the S&P 500 index, treasury bonds and treasury bills. The long-term growth rate used by management in the annual impairment test was 2.0% which decreased from the long-term growth rate used in the prior year of 2.5% due to sustained net long-term outflows of AUM related to U.S. retail mutual funds. The discount rate is an estimate of the weighted average cost of capital for the investment management sector reflecting the overall industry risks associated with future cash flows and considers an applicable size premium for the intangible asset. The discount rate used by management was 13.0%, which increased 12 bps from the prior year primarily due to an increase in the risk-free rate. We continued to factor an asset-specific risk premium into the discount rate to account for the uncertainty around future AUM flows given the continued shift in investor preferences away from actively managed funds. We assessed the reasonableness of the estimated fair value of the intangible assets by considering applicable market data.

Based on our annual impairment analysis as of October 1, 2025, we determined that the carrying value of the indefinite-lived intangible assets related to acquired management contracts of U.S. retail mutual funds of $4,571.7 million exceeded the estimated fair value. As such, a $1,794.9 million impairment was recorded in Amortization and impairment of intangibles expense in the Consolidated Statements of Income which reduced the carrying value to $2,776.8 million. The impairment was driven by a decrease in the long-term growth rate and lower projected earnings as a result of lower revenues for these management contracts. While the company believes all assumptions utilized in our assessment are reasonable and appropriate, changes in these estimates could produce different fair value amounts which could drive impairment in future periods. For example, assuming all other assumptions remain static, a decrease to the revenue forecast of 2% would result in an incremental impairment of $56 million. A decrease to the long-term growth rate of 25 bps would result in an incremental impairment of $46 million. Also, an increase to the discount rate of 15 bps would result in an incremental impairment of $36 million. The impairment does not impact the company’s liquidity or capital resources.

Our annual impairment reviews of our other indefinite-lived intangible assets determined that there was not an impairment of these intangibles. The classifications of indefinite-lived and definite-lived intangible assets remain appropriate, and no changes to the expected lives of definite-lived intangible assets were required.

Goodwill

Management has the option to first assess goodwill for qualitative factors to determine whether it is necessary to perform a quantitative impairment test. For our annual impairment tests in 2025 and 2024, management performed the optional qualitative approach which indicated that a quantitative assessment of the goodwill impairment test was not necessary. The qualitative impairment analysis indicated that it is more likely than not that the estimated fair value of the reporting unit was greater than the carrying value.

The company cannot predict the occurrence of future events that might adversely affect the reported value of goodwill of $8,477.1 million at December 31, 2025. Such events include, but are not limited to, strategic decisions made in response to economic and competitive conditions or a significant and prolonged decline in our revenue and operating income or a sustained decrease in our stock price. However, an impairment in the future would not impact the company’s liquidity or capital resources.

Income Taxes

The company files U.S. federal, state and numerous foreign income tax returns. The income tax laws are complex and subject to different interpretations by the taxpayer and the relevant taxing authorities. Significant judgment is required in the determination of our annual income tax provision, which includes the assessment of deferred tax assets and uncertain tax positions, as well as the interpretation and application of existing and newly enacted tax laws, regulation changes and new judicial rulings. Therefore, it is possible that actual results will vary from those recognized in our Consolidated Financial Statements due to changes in the interpretation of applicable guidance or as a result of examinations by taxing authorities.

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Deferred tax assets, net of any associated valuation allowance, have been recognized based on management's belief that taxable income of the appropriate character, more likely than not, will be sufficient to realize the benefits of these assets over time. In the event that actual results differ from our expectations, or if our historical trends of positive operating income changes, we may be required to record a valuation allowance on some or all of these deferred tax assets, which may have a significant effect on our financial condition and results of operations. In assessing whether a valuation allowance should be established against a deferred income tax asset, the company considers all available evidence, which includes the nature, frequency and severity of recent losses, forecasts of future profitability and the duration of statutory carry back and carry forward periods, among other factors.

In the assessment of uncertain tax positions, significant judgment is required to estimate the range of possible outcomes and determine the probability, on a more likely than not basis, of favorable or unfavorable outcomes upon ultimate settlement of an issue. Changes in the estimate of uncertain tax positions occur periodically due to changes in interpretations of tax laws, the status of examinations by tax authorities and new regulatory or judicial guidance that could impact the relative merits and risk of tax positions. These changes, when they occur, impact tax expense and can materially impact results of operations. The company recognizes any interest and penalties related to unrecognized tax benefits (UTBs) on the Consolidated Statements of Income as components of income tax expense.

CIP

The company consolidates certain investment products in which it has a controlling financial interest, either through a majority voting interest or as the primary beneficiary of a variable interest entity (VIE). Assessing if an entity is a VIE or voting interest entity (VOE) involves judgment and analysis on a structure-by-structure basis. Factors assessed as part of the analysis include the legal organization of the entity, the company's contractual involvement with the entity and any related party or de facto agent implications of the company's involvement with the entity. If the entity qualifies as a VIE and the company is deemed to have the power to direct the activities of the fund that most significantly impact the fund's economic performance and the obligation to absorb losses/right to receive benefits from the fund that could potentially be significant to the fund, then the company is deemed to be the fund's primary beneficiary and is required to consolidate the fund. Assessing if the company has the power to direct the activities that most significantly impact the fund’s economic results may involve significant judgment.

Recent Accounting Standards

See Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies - Accounting Pronouncements Recently Adopted and Pending Accounting Pronouncements.”

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