Attached files
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| 8-K - FORM 8-K - FEDERATED HERMES, INC. | a201110-27x118kepr.htm |
Exhibit 99.1
Federated Investors, Inc. Reports Third Quarter 2011 Earnings
• | Net equity sales strong at $560 million during Q3 2011 |
• | Fixed-income assets up $2.7 billion or 7% from Q3 2010 to $42.9 billion at quarter end |
• | Board declares $0.24 per share quarterly dividend |
(PITTSBURGH, Pa., Oct. 27, 2011) - Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.37 for the quarter ended Sept. 30, 2011 compared to $0.42 for the same quarter last year. Net income was $38.3 million for Q3 2011 compared to $43.1 million for Q3 2010.
Federated reported YTD 2011 EPS of $1.09 compared to $1.27 for the same period in 2010. For the nine months ended Sept. 30, 2011, net income was $114.0 million compared to $132.7 million for the same period last year.
Federated's total managed assets were $351.7 billion at Sept. 30, 2011, up $10.4 billion or 3 percent from $341.3 billion at Sept. 30, 2010 and up $2.3 billion or 1 percent from $349.4 billion reported at June 30, 2011. Average managed assets for Q3 2011 were $348.8 billion, up $10.2 billion or 3 percent from $338.6 billion reported for Q3 2010 and down $5.4 billion or 2 percent from $354.2 billion reported for Q2 2011. Combined equity and fixed income net flows for funds and separate accounts were a positive $631 million for the quarter.
“Our reputation for offering a broad line of high-quality income strategies, combined with increased investor demand for such products, helped Federated achieve its highest quarterly gross equity fund sales in more than 11 years,” said J. Christopher Donahue, president and chief executive officer. “Notably, Federated Strategic Value Dividend Fund was among the top-selling U.S. stock funds during the third quarter, as the fund and its related separately managed account strategy had $1.5 billion in combined net sales.''
Federated's board of directors declared a quarterly dividend of $0.24 per share. The dividend is payable on Nov. 15, 2011 to shareholders of record as of Nov. 8, 2011. During Q3 2011, Federated purchased 530,133 shares of Federated class B common stock for $8.8 million.
Federated's fixed-income assets were $42.9 billion at Sept. 30, 2011, up $2.7 billion or 7 percent from $40.2 billion at Sept. 30, 2010 and up $0.5 billion or 1 percent from $42.4 billion at June 30, 2011. Sales were driven by strong net flows into Federated's Capital Preservation Fund, several ultrashort bond products, Federated Bond Fund and Federated Intermediate Corporate Bond Fund.
Federated's equity assets were $28.0 billion at Sept. 30, 2011, down $1.1 billion or 4 percent from $29.1 billion at Sept. 30, 2010 and down $3.4 billion or 11 percent from $31.4 billion at June 30, 2011, primarily due to market depreciation. Top selling equity funds on a net basis were Federated Strategic Value Dividend Fund, Federated Prudent Bear Fund, Federated Clover Small Value Fund, Federated International Strategic Value Dividend Fund and Federated International Leaders Fund.
Money market assets in both funds and separate accounts were $271.7 billion at Sept. 30, 2011, up $10.8 billion or 4 percent from $260.9 billion at Sept. 30, 2010 and up $6.0 billion or 2 percent from $265.7 billion at June 30, 2011. Money market mutual fund assets were $245.3 billion at Sept. 30, 2011, up $11.7 billion or 5 percent from $233.6 billion at Sept. 30, 2010 and up $9.2 billion or 4 percent from $236.1 billion at June 30, 2011.
MEDIA: | MEDIA: | ANALYSTS: |
Meghan McAndrew 412-288-8103 | J.T. Tuskan 412-288-7895 | Ray Hanley 412-288-1920 |
Federated Reports Q3 2011 Earnings | Page 2 of 9 | |
Financial Summary
Q3 2011 vs. Q3 2010
For Q3 2011, revenue decreased by $28.1 million or 12 percent from the same quarter last year. The decrease in revenue primarily reflected an increase in voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields during Q3 2011 compared to Q3 2010. This decrease was partially offset by an increase in revenue from increased average assets in all three major asset classes. See additional information about voluntary fee waivers in the table at the end of this financial summary.
In Q3 2011, Federated derived 55 percent of its revenue from equity and fixed-income assets (33 percent from equity assets and 22 percent from fixed-income assets), 44 percent from money market assets and 1 percent from other products and services.
Operating expenses for Q3 2011 were $147.0 million compared to $167.1 million for Q3 2010. This decrease of $20.1 million was primarily a result of lower distribution expense due to the aforementioned increase in fee waivers.
Q3 2011 vs. Q2 2011
Compared to the prior quarter, revenue decreased by $11.7 million or 5 percent. The decrease in revenue primarily related to an increase in the aforementioned fee waivers and lower average equity assets. This decrease was partially offset by an increase in revenue related to one additional day in Q3 2011 compared to Q2 2011.
Operating expenses for Q3 2011 decreased by $6.7 million or 4 percent compared to Q2 2011 primarily as a result of lower compensation and related expense and distribution expense due to the aforementioned increase in fee waivers.
YTD 2011 vs. YTD 2010
Revenue for the first nine months of 2011 decreased $27.9 million compared to the same period last year. The decrease in revenue primarily reflected an increase in the aforementioned fee waivers. This decrease was partially offset by an increase in revenue from increased average fixed-income and equity assets, as well as money market asset mix.
For YTD 2011, Federated derived 53 percent of its revenue from equity and fixed income assets (33 percent from equity assets and 20 percent from fixed-income assets), 46 percent from money market assets, and 1 percent from other products and services.
Operating expenses for YTD 2011 increased by $7.2 million or 2 percent compared to the same period last year. The increase primarily reflects an increase in professional service fees for YTD 2011 related to the recognition of insurance proceeds in Q2 2010 and nonrecurring legal expenses incurred in Q1 2011. This increase was partially offset by lower distribution expenses due to the aforementioned increase in fee waivers.
Federated's level of business activity and financial results are dependent upon many factors including market conditions, investment performance and investor behavior. These factors and others including asset levels, product sales and redemptions, market appreciation or depreciation, revenues, fee waivers and expenses can impact Federated's activity levels and financial results significantly. Risk factors and uncertainties that can influence Federated's financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission.
Fee waivers to maintain positive or zero net yields could vary significantly based on market conditions. The amount of these waivers will be determined by a variety of factors including, but not limited to, available yields on instruments held by the money market funds, changes in assets within money market funds, actions by the Federal Reserve, the U.S. Department of the
Federated Reports Q3 2011 Earnings | Page 3 of 9 | |
Treasury and other governmental entities, changes in the mix of money market customer assets, changes in expenses of the money market funds and Federated's willingness to continue these waivers.
Money Market Fund Yield Waiver Impact
(in millions)
Quarter Ended | Change Q3 2010 to Q3 2011 | Quarter Ended | Change Q2 2011 to Q3 2011 | Nine Months Ended | Change YTD 2010 to YTD 2011 | |||||||||||||||||||||
(Decrease)/Increase | Sept. 30, 2011 | Sept. 30, 2010 | June 30, 2011 | Sept. 30, 2011 | Sept. 30, 2010 | |||||||||||||||||||||
Investment advisory fees | $ | (57.2 | ) | $ | (28.1 | ) | $ | (29.1 | ) | $ | (49.6 | ) | $ | (7.6 | ) | $ | (142.8 | ) | $ | (101.6 | ) | $ | (41.2 | ) | ||
Other service fees | (31.7 | ) | (25.7 | ) | (6.0 | ) | (29.8 | ) | (1.9 | ) | (88.9 | ) | (80.0 | ) | (8.9 | ) | ||||||||||
Total Revenue | $ | (88.9 | ) | $ | (53.8 | ) | $ | (35.1 | ) | $ | (79.4 | ) | $ | (9.5 | ) | $ | (231.7 | ) | $ | (181.6 | ) | $ | (50.1 | ) | ||
Distribution expense | (63.2 | ) | (42.6 | ) | (20.6 | ) | (57.8 | ) | (5.4 | ) | (170.5 | ) | (138.9 | ) | (31.6 | ) | ||||||||||
Operating income | $ | (25.7 | ) | $ | (11.2 | ) | $ | (14.5 | ) | $ | (21.6 | ) | $ | (4.1 | ) | $ | (61.2 | ) | $ | (42.7 | ) | $ | (18.5 | ) | ||
Noncontrolling interest | (2.5 | ) | (0.2 | ) | (2.3 | ) | (2.2 | ) | (0.3 | ) | (5.5 | ) | (0.9 | ) | (4.6 | ) | ||||||||||
Pre-tax impact | $ | (23.2 | ) | $ | (11.0 | ) | $ | (12.2 | ) | $ | (19.4 | ) | $ | (3.8 | ) | $ | (55.7 | ) | $ | (41.8 | ) | $ | (13.9 | ) | ||
Federated will host an earnings conference call at 9 a.m. Eastern on Oct. 28, 2011. Investors are invited to listen to Federated's earnings teleconference by calling 877-407-0782 (domestic) or 201-689-8567 (international) prior to the 9 a.m. start time. The call may also be accessed in real time on the Internet via the About Federated section of FederatedInvestors.com. A replay will be available after 12:30 p.m. and through Nov. 4, 2011 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering codes 286 and 380485.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $351.7 billion in assets as of Sept. 30, 2011. With 134 funds and a variety of separately managed account options, Federated provides comprehensive investment management to approximately 4,800 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top 2 percent of money market fund managers in the industry, the top 7 percent of fixed-income fund managers and the top 8 percent of equity fund managers1. For more information, visit FederatedInvestors.com.
###
1 Strategic Insight, Aug. 31, 2011. Based on assets under management in open-end funds.
Federated Securities Corp. is distributor of the Federated funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling and Federated MDTA LLC, each a registered investment advisor.
Certain statements in this press release, such as those related to the level of fee waivers incurred by the company, and product demand and asset flows constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Other risks and uncertainties include the ability of the company to predict the level of fee waivers in future quarters, which could vary significantly depending on a variety of factors identified above, and include the ability of the company to sustain product demand and asset flows, which could vary significantly depending on market conditions, investment performance and investor behavior. Other risks and uncertainties also include the risk factors discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness of such statements in the future.
Federated Reports Q3 2011 Earnings | Page 4 of 9 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Quarter Ended | % Change Q3 2010 to Q3 2011 | Quarter Ended | % Change Q2 2011 to Q3 2011 | ||||||||||
Sept. 30, 2011 | Sept. 30, 2010 | June 30, 2011 | |||||||||||
Revenue | |||||||||||||
Investment advisory fees, net | $ | 139,399 | $ | 163,783 | (15 | )% | $ | 149,127 | (7 | )% | |||
Administrative service fees, net | 54,928 | 53,085 | 3 | 54,550 | 1 | ||||||||
Other service fees, net | 19,008 | 24,645 | (23 | ) | 21,465 | (11 | ) | ||||||
Other, net | 713 | 660 | 8 | 635 | 12 | ||||||||
Total Revenue | 214,048 | 242,173 | (12 | ) | 225,777 | (5 | ) | ||||||
Operating Expenses | |||||||||||||
Compensation and related | 57,930 | 61,387 | (6 | ) | 62,493 | (7 | ) | ||||||
General and administrative | |||||||||||||
Distribution | 54,440 | 68,800 | (21 | ) | 57,798 | (6 | ) | ||||||
Professional service fees | 9,437 | 9,401 | 0 | 8,548 | 10 | ||||||||
Office and occupancy | 6,202 | 5,841 | 6 | 6,032 | 3 | ||||||||
Systems and communications | 5,825 | 5,362 | 9 | 5,727 | 2 | ||||||||
Advertising and promotional | 3,887 | 2,724 | 43 | 2,841 | 37 | ||||||||
Travel and related | 2,809 | 2,692 | 4 | 3,253 | (14 | ) | |||||||
Other | 3,906 | 4,494 | (13 | ) | 3,493 | 12 | |||||||
Total general and administrative | 86,506 | 99,314 | (13 | ) | 87,692 | (1 | ) | ||||||
Intangible asset related | 1,263 | 3,397 | (63 | ) | 1,629 | (22 | ) | ||||||
Amortization of deferred sales commissions | 1,338 | 2,987 | (55 | ) | 1,880 | (29 | ) | ||||||
Total Operating Expenses | 147,037 | 167,085 | (12 | ) | 153,694 | (4 | ) | ||||||
Operating Income | 67,011 | 75,088 | (11 | ) | 72,083 | (7 | ) | ||||||
Nonoperating Income (Expenses) | |||||||||||||
Investment (expense) income, net | (1,271 | ) | 4,475 | (128 | ) | 1,178 | (208 | ) | |||||
Debt expense––recourse | (3,972 | ) | (4,958 | ) | (20 | ) | (4,577 | ) | (13 | ) | |||
Other, net | (83 | ) | (65 | ) | 28 | (85 | ) | (2 | ) | ||||
Total Nonoperating Expenses, net | (5,326 | ) | (548 | ) | 872 | (3,484 | ) | 53 | |||||
Income before income taxes | 61,685 | 74,540 | (17 | ) | 68,599 | (10 | ) | ||||||
Income tax provision | 23,165 | 26,477 | (13 | ) | 25,714 | (10 | ) | ||||||
Net income including noncontrolling interests in subsidiaries | 38,520 | 48,063 | (20 | ) | 42,885 | (10 | ) | ||||||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 200 | 5,007 | (96 | ) | 472 | (58 | ) | ||||||
Net Income | $ | 38,320 | $ | 43,056 | (11 | )% | $ | 42,413 | (10 | )% | |||
Amounts Attributable to Federated | |||||||||||||
Earnings Per Share1 | |||||||||||||
Basic and Diluted | $ | 0.37 | $ | 0.42 | (12 | )% | $ | 0.41 | (10 | )% | |||
Weighted-average shares outstanding | |||||||||||||
Basic | 100,684 | 99,916 | 100,907 | ||||||||||
Diluted | 100,684 | 99,954 | 100,917 | ||||||||||
Dividends declared per share | $ | 0.24 | $ | 0.24 | $ | 0.24 | |||||||
1) Unvested share-based payment awards that receive non-forfeitable dividend rights are considered participating securities and are required to be included in the computation of earnings per share under the “two-class method.” Total income available to participating restricted shareholders was $1.2 million, $1.3 million and $1.4 million for the quarterly periods ended September 30, 2011, September 30, 2010 and June 30, 2011, respectively.
Federated Reports Q3 2011 Earnings | Page 5 of 9 | |
Unaudited Condensed Consolidated Statements of Income | ||||||||
(in thousands, except per share data) | ||||||||
Nine Months Ended | % Change | |||||||
Sept. 30, 2011 | Sept. 30, 2010 | |||||||
Revenue | ||||||||
Investment advisory fees, net | $ | 448,115 | $ | 474,230 | (6 | )% | ||
Administrative service fees, net | 163,527 | 161,233 | 1 | |||||
Other service fees, net | 65,136 | 68,981 | (6 | ) | ||||
Other, net | 1,930 | 2,182 | (12 | ) | ||||
Total Revenue | 678,708 | 706,626 | (4 | ) | ||||
Operating Expenses | ||||||||
Compensation and related | 184,819 | 186,469 | (1 | ) | ||||
General and administrative | ||||||||
Distribution | 176,930 | 190,068 | (7 | ) | ||||
Professional service fees | 44,171 | 9,596 | 360 | |||||
Office and occupancy | 18,436 | 16,990 | 9 | |||||
Systems and communications | 17,131 | 16,996 | 1 | |||||
Advertising and promotional | 9,889 | 7,480 | 32 | |||||
Travel and related | 8,501 | 8,005 | 6 | |||||
Other | 10,566 | 14,467 | (27 | ) | ||||
Total general and administrative | 285,624 | 263,602 | 8 | |||||
Intangible asset related | 6,672 | 16,522 | (60 | ) | ||||
Amortization of deferred sales commissions | 5,999 | 9,274 | (35 | ) | ||||
Total Operating Expenses | 483,114 | 475,867 | 2 | |||||
Operating Income | 195,594 | 230,759 | (15 | ) | ||||
Nonoperating Income (Expenses) | ||||||||
Investment income, net | 3,721 | 2,893 | 29 | |||||
Debt expense––recourse | (13,187 | ) | (10,196 | ) | 29 | |||
Other, net | (192 | ) | (310 | ) | (38 | ) | ||
Total Nonoperating Expenses, net | (9,658 | ) | (7,613 | ) | 27 | |||
Income before income taxes | 185,936 | 223,146 | (17 | ) | ||||
Income tax provision | 69,477 | 82,613 | (16 | ) | ||||
Net income including noncontrolling interests in subsidiaries | 116,459 | 140,533 | (17 | ) | ||||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 2,495 | 7,820 | (68 | ) | ||||
Net Income | $ | 113,964 | $ | 132,713 | (14 | )% | ||
Amounts Attributable to Federated | ||||||||
Earnings Per Share1 | ||||||||
Basic and Diluted | $ | 1.09 | $ | 1.27 | (14 | )% | ||
Weighted-average shares outstanding | ||||||||
Basic | 100,725 | 99,907 | ||||||
Diluted | 100,756 | 99,991 | ||||||
Dividends declared per share | $ | 0.72 | $ | 1.98 | ||||
1) Unvested share-based payment awards that receive non-forfeitable dividend rights are considered participating securities and are required to be included in the computation of earnings per share under the “two-class method.” Total income available to participating restricted shareholders was $3.7 million and $5.8 million for the nine months ended September 30, 2011 and September 30, 2010, respectively.
Federated Reports Q3 2011 Earnings | Page 6 of 9 | |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | Sept. 30, 2011 | Dec. 31, 2010 | ||||
Assets | ||||||
Cash and other investments | $ | 322,189 | $ | 333,641 | ||
Other current assets | 41,126 | 39,529 | ||||
Deferred sales commissions, net | 9,903 | 10,317 | ||||
Intangible assets, net and goodwill | 716,022 | 720,825 | ||||
Other long-term assets | 55,941 | 49,192 | ||||
Total Assets | $ | 1,145,181 | $ | 1,153,504 | ||
Liabilities and Equity | ||||||
Current liabilities | $ | 186,227 | $ | 214,352 | ||
Long-term debt—recourse | 329,375 | 361,250 | ||||
Other long-term liabilities | 98,956 | 84,187 | ||||
Equity excluding treasury stock | 1,302,440 | 1,272,324 | ||||
Treasury stock | (771,817 | ) | (778,609 | ) | ||
Total Liabilities and Equity | $ | 1,145,181 | $ | 1,153,504 | ||
Federated Reports Q3 2011 Earnings | Page 7 of 9 | |
Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions)
Quarter Ended | Nine Months Ended | |||||||||||||||
Sept. 30, 2011 | June 30, 2011 | Sept. 30, 2010 | Sept. 30, 2011 | Sept. 30, 2010 | ||||||||||||
Equity Funds | ||||||||||||||||
Beginning assets | $ | 22,678 | $ | 22,848 | $ | 19,344 | $ | 22,626 | $ | 20,960 | ||||||
Sales | 2,434 | 1,456 | 1,639 | 5,448 | 4,532 | |||||||||||
Redemptions | (1,966 | ) | (1,701 | ) | (1,582 | ) | (5,690 | ) | (5,104 | ) | ||||||
Net sales (redemptions) | 468 | (245 | ) | 57 | (242 | ) | (572 | ) | ||||||||
Net exchanges | (40 | ) | (5 | ) | (31 | ) | (44 | ) | (54 | ) | ||||||
Acquisition-related | 463 | 0 | 0 | 463 | 0 | |||||||||||
Market gains and losses/reinvestments1 | (3,429 | ) | 80 | 1,955 | (2,663 | ) | 991 | |||||||||
Ending assets | $ | 20,140 | $ | 22,678 | $ | 21,325 | $ | 20,140 | $ | 21,325 | ||||||
Equity Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 8,702 | $ | 8,793 | $ | 7,470 | $ | 8,176 | $ | 8,713 | ||||||
Sales3 | 723 | 573 | 522 | 1,988 | 1,225 | |||||||||||
Redemptions3 | (631 | ) | (744 | ) | (975 | ) | (1,981 | ) | (2,389 | ) | ||||||
Net sales (redemptions)3 | 92 | (171 | ) | (453 | ) | 7 | (1,164 | ) | ||||||||
Net exchanges | 7 | 8 | 9 | 28 | 31 | |||||||||||
Market gains and losses/reinvestments1 | (970 | ) | 72 | 782 | (380 | ) | 228 | |||||||||
Ending assets | $ | 7,831 | $ | 8,702 | $ | 7,808 | $ | 7,831 | $ | 7,808 | ||||||
Total Equity2 | ||||||||||||||||
Beginning assets | $ | 31,380 | $ | 31,641 | $ | 26,814 | $ | 30,802 | $ | 29,673 | ||||||
Sales3 | 3,157 | 2,029 | 2,161 | 7,436 | 5,757 | |||||||||||
Redemptions3 | (2,597 | ) | (2,445 | ) | (2,557 | ) | (7,671 | ) | (7,493 | ) | ||||||
Net sales (redemptions)3 | 560 | (416 | ) | (396 | ) | (235 | ) | (1,736 | ) | |||||||
Net exchanges | (33 | ) | 3 | (22 | ) | (16 | ) | (23 | ) | |||||||
Acquisition-related | 463 | 0 | 0 | 463 | 0 | |||||||||||
Market gains and losses/reinvestments1 | (4,399 | ) | 152 | 2,737 | (3,043 | ) | 1,219 | |||||||||
Ending assets | $ | 27,971 | $ | 31,380 | $ | 29,133 | $ | 27,971 | $ | 29,133 | ||||||
Fixed-Income Funds | ||||||||||||||||
Beginning assets | $ | 34,874 | $ | 32,689 | $ | 30,651 | $ | 31,933 | $ | 28,427 | ||||||
Sales | 4,049 | 4,335 | 3,655 | 13,294 | 11,775 | |||||||||||
Redemptions | (3,707 | ) | (4,339 | ) | (2,829 | ) | (12,427 | ) | (9,393 | ) | ||||||
Net sales (redemptions)3 | 342 | (4 | ) | 826 | 867 | 2,382 | ||||||||||
Net exchanges | 29 | 1,818 | 20 | 1,835 | 51 | |||||||||||
Acquisition-related | 132 | 0 | 0 | 132 | 0 | |||||||||||
Market gains and losses/reinvestments1 | 243 | 371 | 714 | 853 | 1,351 | |||||||||||
Ending assets | $ | 35,620 | $ | 34,874 | $ | 32,211 | $ | 35,620 | $ | 32,211 | ||||||
Fixed Income Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 7,544 | $ | 9,067 | $ | 7,361 | $ | 8,772 | $ | 5,360 | ||||||
Sales3 | 198 | 534 | 530 | 1,283 | 3,289 | |||||||||||
Redemptions3 | (469 | ) | (405 | ) | (244 | ) | (1,248 | ) | (1,078 | ) | ||||||
Net (redemptions) sales3 | (271 | ) | 129 | 286 | 35 | 2,211 | ||||||||||
Net exchanges | 0 | (1,807 | ) | 0 | (1,807 | ) | 0 | |||||||||
Market gains and losses/reinvestments1 | (10 | ) | 155 | 316 | 263 | 392 | ||||||||||
Ending assets | $ | 7,263 | $ | 7,544 | $ | 7,963 | $ | 7,263 | $ | 7,963 | ||||||
Total Fixed Income2 | ||||||||||||||||
Beginning assets | $ | 42,418 | $ | 41,756 | $ | 38,012 | $ | 40,705 | $ | 33,787 | ||||||
Sales3 | 4,247 | 4,869 | 4,185 | 14,577 | 15,064 | |||||||||||
Redemptions3 | (4,176 | ) | (4,744 | ) | (3,073 | ) | (13,675 | ) | (10,471 | ) | ||||||
Net sales3 | 71 | 125 | 1,112 | 902 | 4,593 | |||||||||||
Net exchanges | 29 | 11 | 20 | 28 | 51 | |||||||||||
Acquisition-related | 132 | 0 | 0 | 132 | 0 | |||||||||||
Market gains and losses/reinvestments1 | 233 | 526 | 1,030 | 1,116 | 1,743 | |||||||||||
Ending assets | $ | 42,883 | $ | 42,418 | $ | 40,174 | $ | 42,883 | $ | 40,174 | ||||||
1) Reflects the approximate changes in the market value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates.
2) Includes separately managed accounts, institutional accounts and sub-advised funds and other managed products.
3) For certain accounts, Sales, Redemptions or Net sales (redemptions) are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses/reinvestments.
Federated Reports Q3 2011 Earnings | Page 8 of 9 | |
Changes in Liquidation Portfolios
(in millions)
Quarter Ended | Nine Months Ended | |||||||||||||||
Sept. 30, 2011 | June 30, 2011 | Sept. 30, 2010 | Sept. 30, 2011 | Sept. 30, 2010 | ||||||||||||
Liquidation Portfolios1 | ||||||||||||||||
Beginning assets | $ | 9,964 | $ | 10,384 | $ | 11,491 | $ | 10,708 | $ | 12,596 | ||||||
Sales2 | 0 | 0 | 3 | 2 | 10 | |||||||||||
Redemptions2 | (820 | ) | (420 | ) | (423 | ) | (1,565 | ) | (1,535 | ) | ||||||
Net redemptions2 | (820 | ) | (420 | ) | (420 | ) | (1,563 | ) | (1,525 | ) | ||||||
Market gains and losses/reinvestments3 | 0 | 0 | 0 | (1 | ) | 0 | ||||||||||
Ending Assets | $ | 9,144 | $ | 9,964 | $ | 11,071 | $ | 9,144 | $ | 11,071 | ||||||
1) Liquidation portfolios include portfolios of distressed fixed-income securities. Federated has been retained by a third party to manage these assets through an orderly liquidation process that will generally occur over a multi-year period. Management-fee rates earned from these portfolios are lower than those of traditional separate account mandates.
2) For certain accounts, Sales, Redemptions or Net sales (redemptions) are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses/reinvestments.
3) Reflects the approximate changes in the market value of the securities held by the portfolios, and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates.
Federated Reports Q3 2011 Earnings | Page 9 of 9 | |
MANAGED ASSETS (in millions) | Sept. 30, 2011 | June 30, 2011 | March 31, 2011 | Dec. 31, 2010 | Sept. 30, 2010 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 27,971 | $ | 31,380 | $ | 31,641 | $ | 30,802 | $ | 29,133 | |||||
Fixed-income | 42,883 | 42,418 | 41,756 | 40,705 | 40,174 | ||||||||||
Money market | 271,653 | 265,651 | 271,141 | 276,026 | 260,899 | ||||||||||
Liquidation portfolios1 | 9,144 | 9,964 | 10,384 | 10,708 | 11,071 | ||||||||||
Total Managed Assets | $ | 351,651 | $ | 349,413 | $ | 354,922 | $ | 358,241 | $ | 341,277 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 20,140 | $ | 22,678 | $ | 22,848 | $ | 22,626 | $ | 21,325 | |||||
Fixed-income | 35,620 | 34,874 | 32,689 | 31,933 | 32,211 | ||||||||||
Money market | 245,293 | 236,077 | 238,990 | 244,796 | 233,611 | ||||||||||
Total Fund Assets | $ | 301,053 | $ | 293,629 | $ | 294,527 | $ | 299,355 | $ | 287,147 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 7,831 | $ | 8,702 | $ | 8,793 | $ | 8,176 | $ | 7,808 | |||||
Fixed-income | 7,263 | 7,544 | 9,067 | 8,772 | 7,963 | ||||||||||
Money market | 26,360 | 29,574 | 32,151 | 31,230 | 27,288 | ||||||||||
Total Separate Accounts | $ | 41,454 | $ | 45,820 | $ | 50,011 | $ | 48,178 | $ | 43,059 | |||||
Total Liquidation Portfolios1 | $ | 9,144 | $ | 9,964 | $ | 10,384 | $ | 10,708 | $ | 11,071 | |||||
Total Managed Assets | $ | 351,651 | $ | 349,413 | $ | 354,922 | $ | 358,241 | $ | 341,277 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | Sept. 30, 2011 | June 30, 2011 | March 31, 2011 | Dec. 31, 2010 | Sept. 30, 2010 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 29,699 | $ | 31,520 | $ | 31,056 | $ | 30,108 | $ | 28,033 | |||||
Fixed-income | 43,001 | 42,127 | 41,187 | 40,686 | 39,192 | ||||||||||
Money market | 266,756 | 270,411 | 273,542 | 263,976 | 260,098 | ||||||||||
Liquidation portfolios1 | 9,309 | 10,138 | 10,534 | 10,926 | 11,313 | ||||||||||
Total Avg. Assets | $ | 348,765 | $ | 354,196 | $ | 356,319 | $ | 345,696 | $ | 338,636 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 21,491 | $ | 22,741 | $ | 22,599 | $ | 22,090 | $ | 20,411 | |||||
Fixed-income | 35,478 | 33,534 | 32,265 | 32,369 | 31,491 | ||||||||||
Money market | 239,406 | 239,642 | 240,375 | 236,500 | 232,230 | ||||||||||
Total Avg. Fund Assets | $ | 296,375 | $ | 295,917 | $ | 295,239 | $ | 290,959 | $ | 284,132 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 8,208 | $ | 8,779 | $ | 8,457 | $ | 8,018 | $ | 7,622 | |||||
Fixed-income | 7,523 | 8,593 | 8,922 | 8,317 | 7,701 | ||||||||||
Money market | 27,350 | 30,769 | 33,167 | 27,476 | 27,868 | ||||||||||
Total Avg. Separate Accts. | $ | 43,081 | $ | 48,141 | $ | 50,546 | $ | 43,811 | $ | 43,191 | |||||
Total Avg. Liquidation Portfolios1 | $ | 9,309 | $ | 10,138 | $ | 10,534 | $ | 10,926 | $ | 11,313 | |||||
Total Avg. Managed Assets | $ | 348,765 | $ | 354,196 | $ | 356,319 | $ | 345,696 | $ | 338,636 | |||||
1) Liquidation portfolios include portfolios of distressed fixed-income securities. Federated has been retained by a third party to manage these assets through an orderly liquidation process that will generally occur over a multi-year period. Management-fee rates earned from these portfolios are lower than those of traditional separate account mandates.