Attached files
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| 8-K - FORM 8-K - FEDERATED HERMES, INC. | a8-kx2011q4epr.htm |
Exhibit 99.1
Federated Investors, Inc. Reports Fourth Quarter and Year-End 2011 Earnings
• | Equity and fixed-income assets increased $4.6 billion during Q4 2011 to $84.6 billion |
• | Net sales in equity and fixed-income funds and separate accounts were $2.2 billion in Q4 2011 |
• | Average money market assets increased $8.5 billion during Q4 2011 compared to Q3 2011 |
(PITTSBURGH, Pa., Jan. 26, 2012) - Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.36 for the quarter ended Dec. 31, 2011 as compared to $0.45 for the same quarter last year. Net income was $36.9 million for Q4 2011 compared to $46.4 million for Q4 2010. The decrease of $9.5 million primarily relates to an increase in the negative impact of money market fund minimum-yield waivers.
Federated reported EPS for the year ended Dec. 31, 2011 of $1.45 compared to $1.73 for the year ended Dec. 31, 2010. For the year ended Dec. 31, 2011, net income was $150.9 million compared to $179.1 million for the prior year. The decrease of $28.2 million primarily relates to an increase in the negative impact of money market fund minimum-yield waivers and an increase in professional service fees related to the recognition of insurance proceeds in Q2 2010.
Federated's total managed assets were $369.7 billion at Dec. 31, 2011, up $11.5 billion or 3 percent from $358.2 billion at Dec. 31, 2010 and up $18.0 billion or 5 percent from $351.7 billion reported at Sept. 30, 2011. Average managed assets for Q4 2011 were $358.3 billion, up $12.6 billion or 4 percent from $345.7 billion reported for Q4 2010 and up $9.5 billion or 3 percent from $348.8 billion reported for Q3 2011. Combined equity and fixed-income net sales for funds and separate accounts were a positive $2.2 billion for Q4 2011 and $2.9 billion for the year ended Dec. 31, 2011.
"In a year when income-seeking strategies were in demand, investors found a range of opportunities at Federated, from our multi-sector and high-yield bond strategies to the particular interest in equity portfolios investing in dividend-paying companies in the U.S. and across the globe," said J. Christopher Donahue, president and chief executive officer. "Combined assets in Federated's strategic-value portfolios more than doubled in 2011 to reach $10 billion, while our Strategic Value Dividend Fund became one of the best selling equity-income funds in the industry last year."
Federated's board of directors declared a quarterly dividend of $0.24 per share. The dividend is payable on Feb. 15, 2012 to shareholders of record as of Feb. 8, 2012. During Q4 2011, Federated purchased 561,850 shares of Federated class B common stock for $9.0 million. In 2011, the company purchased 1,540,795 shares of Federated class B common stock for $28.1 million.
Federated's equity assets were $30.9 billion at Dec. 31, 2011, up slightly from $30.8 billion at Dec. 31, 2010 and up $2.9 billion or 10 percent from $28.0 billion at Sept. 30, 2011. Net sales were positive in both equity funds and separate accounts for Q4 2011 and for the year ended Dec. 31, 2011. Top-selling equity funds during Q4 2011 on a net basis were Federated Strategic Value Dividend Fund, Federated International Strategic Value Dividend Fund and Federated Clover Small Value Fund.
Federated's fixed-income assets were $44.8 billion at Dec. 31, 2011, up $4.1 billion or 10 percent from $40.7 billion at Dec. 31, 2010 and up $1.9 billion or 4 percent from $42.9 billion at Sept. 30, 2011. Fixed-income assets in liquidation portfolios were $8.9 billion at Dec. 31, 2011. Sales were driven by strong net flows into Federated Total Return Bond Fund, Federated
MEDIA: | MEDIA: | ANALYSTS: |
Meghan McAndrew 412-288-8103 | J.T. Tuskan 412-288-7895 | Ray Hanley 412-288-1920 |
Federated Reports Q4 and Year-End 2011 Earnings | Page 2 of 10 | |
Municipal Ultrashort Fund, Federated Institutional High Yield Bond Fund, Federated Total Return Government Bond Fund and Federated's Capital Preservation Fund.
Money market assets in both funds and separate accounts were $285.1 billion at Dec. 31, 2011, up $9.1 billion or 3 percent from $276.0 billion at Dec. 31, 2010 and up $13.4 billion or 5 percent from $271.7 billion at Sept. 30, 2011. Money market mutual fund assets were $255.9 billion at Dec. 31, 2011, up $11.1 billion or 5 percent from $244.8 billion at Dec. 31, 2010 and up $10.6 billion or 4 percent from $245.3 billion at Sept. 30, 2011.
Financial Summary
Q4 2011 vs. Q4 2010
Revenue decreased by $28.9 million or 12 percent due primarily to an increase in voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields and a decrease in, as well as a change in the mix of, average equity assets. These decreases were partially offset by an increase in revenue from increased average money market and fixed-income assets. See additional information about voluntary fee waivers in the table at the end of this financial summary.
Federated derived 53 percent of its revenue from equity and fixed-income assets (31 percent from equity assets and 22 percent from fixed-income assets), 46 percent from money market assets and 1 percent from other products and services.
Operating expenses were $154.5 million compared to $166.3 million. This decrease of $11.8 million was primarily a result of lower distribution expense due to the aforementioned increase in fee waivers.
Q4 2011 vs. Q3 2011
Revenue increased by $2.4 million or 1 percent primarily related to an increase in money market and fixed-income assets, partially offset by a decrease in revenue related to changes in equity asset mix.
Operating expense increased by $7.5 million or 5 percent. This primarily related to a $4.3 million increase in distribution expense largely due to improved prime money market fund yields and increased assets.
2011 vs. 2010
Revenue decreased $56.8 million or 6 percent due primarily to an increase in the aforementioned fee waivers, partially offset by increased assets in all asset categories.
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 decreased by $4.5 million or 1 percent. The decrease primarily reflects lower distribution expense due to the aforementioned increase in fee waivers. This decrease was partially offset by an increase in professional service fees for 2011 related to the recognition of insurance proceeds in Q2 2010 and nonrecurring legal expenses in Q1 2011.
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.
Federated Reports Q4 and Year-End 2011 Earnings | Page 3 of 10 | |
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 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 Q4 2010 to Q4 2011 | Quarter Ended | Change Q3 2011 to Q4 2011 | Year Ended | Change 2010 to 2011 | |||||||||||||||||||||
(Decrease)/Increase | Dec. 31, 2011 | Dec. 31, 2010 | Sept. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | |||||||||||||||||||||
Investment advisory fees | $ | (58.8 | ) | $ | (32.6 | ) | $ | (26.2 | ) | $ | (57.2 | ) | $ | (1.6 | ) | $ | (201.6 | ) | $ | (134.3 | ) | $ | (67.3 | ) | ||
Other service fees | (30.2 | ) | (27.4 | ) | (2.8 | ) | (31.7 | ) | 1.5 | (119.1 | ) | (107.3 | ) | (11.8 | ) | |||||||||||
Total Revenue | $ | (89.0 | ) | $ | (60.0 | ) | $ | (29.0 | ) | $ | (88.9 | ) | $ | (0.1 | ) | $ | (320.7 | ) | $ | (241.6 | ) | $ | (79.1 | ) | ||
Distribution expense | (61.9 | ) | (47.7 | ) | (14.2 | ) | (63.2 | ) | 1.3 | (232.3 | ) | (186.6 | ) | (45.7 | ) | |||||||||||
Operating income | $ | (27.1 | ) | $ | (12.3 | ) | $ | (14.8 | ) | $ | (25.7 | ) | $ | (1.4 | ) | $ | (88.4 | ) | $ | (55.0 | ) | $ | (33.4 | ) | ||
Noncontrolling interest | (1.0 | ) | (0.2 | ) | (0.8 | ) | (2.5 | ) | 1.5 | (6.5 | ) | (1.0 | ) | (5.5 | ) | |||||||||||
Pre-tax impact | $ | (26.1 | ) | $ | (12.1 | ) | $ | (14.0 | ) | $ | (23.2 | ) | $ | (2.9 | ) | $ | (81.9 | ) | $ | (54.0 | ) | $ | (27.9 | ) | ||
Federated will host an earnings conference call at 9 a.m. Eastern on Jan. 27, 2012. 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 Feb. 3, 2012 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering codes 286 and 386349.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $369.7 billion in assets as of Dec. 31, 2011. With 134 funds and a variety of separately managed account options, Federated provides comprehensive investment management to approximately 4,700 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 equity fund managers and the top 7 percent of fixed-income fund managers1. For more information, visit FederatedInvestors.com.
###
1 Strategic Insight, Nov. 30, 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 Q4 and Year-End 2011 Earnings | Page 4 of 10 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Quarter Ended | % Change Q4 2010 to Q4 2011 | Quarter Ended | % Change Q3 2011 to Q4 2011 | ||||||||||
Dec. 31, 2011 | Dec. 31, 2010 | Sept. 30, 2011 | |||||||||||
Revenue | |||||||||||||
Investment advisory fees, net | $ | 138,225 | $ | 165,174 | (16 | )% | $ | 139,399 | (1 | )% | |||
Administrative service fees, net | 56,830 | 54,410 | 4 | 54,928 | 3 | ||||||||
Other service fees, net | 20,249 | 25,054 | (19 | ) | 19,008 | 7 | |||||||
Other, net | 1,102 | 679 | 62 | 713 | 55 | ||||||||
Total Revenue | 216,406 | 245,317 | (12 | ) | 214,048 | 1 | |||||||
Operating Expenses | |||||||||||||
Compensation and related | 60,620 | 56,384 | 8 | 57,930 | 5 | ||||||||
General and administrative | |||||||||||||
Distribution | 58,740 | 69,141 | (15 | ) | 54,440 | 8 | |||||||
Professional service fees | 9,567 | 9,385 | 2 | 9,437 | 1 | ||||||||
Office and occupancy | 6,254 | 5,968 | 5 | 6,202 | 1 | ||||||||
Systems and communications | 5,839 | 5,831 | 0 | 5,825 | 0 | ||||||||
Travel and related | 3,673 | 3,456 | 6 | 2,809 | 31 | ||||||||
Advertising and promotional | 3,524 | 2,630 | 34 | 3,887 | (9 | ) | |||||||
Other | 3,707 | 4,577 | (19 | ) | 3,906 | (5 | ) | ||||||
Total general and administrative | 91,304 | 100,988 | (10 | ) | 86,506 | 6 | |||||||
Amortization of deferred sales commissions | 1,378 | 2,924 | (53 | ) | 1,338 | 3 | |||||||
Intangible asset related | 1,243 | 5,989 | (79 | ) | 1,263 | (2 | ) | ||||||
Total Operating Expenses | 154,545 | 166,285 | (7 | ) | 147,037 | 5 | |||||||
Operating Income | 61,861 | 79,032 | (22 | ) | 67,011 | (8 | ) | ||||||
Nonoperating Income (Expenses) | |||||||||||||
Investment income (expense), net | 2,538 | 3,980 | (36 | ) | (1,271 | ) | 300 | ||||||
Debt expense––recourse | (3,860 | ) | (4,853 | ) | (20 | ) | (3,972 | ) | (3 | ) | |||
Other, net | (103 | ) | (184 | ) | (44 | ) | (83 | ) | 24 | ||||
Total Nonoperating Expenses, net | (1,425 | ) | (1,057 | ) | 35 | (5,326 | ) | (73 | ) | ||||
Income before income taxes | 60,436 | 77,975 | (22 | ) | 61,685 | (2 | ) | ||||||
Income tax provision | 21,811 | 29,344 | (26 | ) | 23,165 | (6 | ) | ||||||
Net income including noncontrolling interests in subsidiaries | 38,625 | 48,631 | (21 | ) | 38,520 | 0 | |||||||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 1,682 | 2,230 | (25 | ) | 200 | 741 | |||||||
Net Income | $ | 36,943 | $ | 46,401 | (20 | )% | $ | 38,320 | (4 | )% | |||
Amounts Attributable to Federated | |||||||||||||
Earnings Per Share1 | |||||||||||||
Basic and Diluted | $ | 0.36 | $ | 0.45 | (20 | )% | $ | 0.37 | (3 | )% | |||
Weighted-average shares outstanding | |||||||||||||
Basic | 100,264 | 99,976 | 100,684 | ||||||||||
Diluted | 100,264 | 99,998 | 100,684 | ||||||||||
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, $1.4 million and $1.2 million for the quarterly periods ended Dec. 31, 2011, Dec. 31, 2010 and Sept. 30, 2011, respectively.
Federated Reports Q4 and Year-End 2011 Earnings | Page 5 of 10 | |
Unaudited Condensed Consolidated Statements of Income | ||||||||
(in thousands, except per share data) | ||||||||
Year Ended | % Change | |||||||
Dec. 31, 2011 | Dec. 31, 2010 | |||||||
Revenue | ||||||||
Investment advisory fees, net | $ | 586,340 | $ | 639,404 | (8 | )% | ||
Administrative service fees, net | 220,356 | 215,643 | 2 | |||||
Other service fees, net | 85,385 | 94,035 | (9 | ) | ||||
Other, net | 3,033 | 2,861 | 6 | |||||
Total Revenue | 895,114 | 951,943 | (6 | ) | ||||
Operating Expenses | ||||||||
Compensation and related | 245,439 | 242,853 | 1 | |||||
General and administrative | ||||||||
Distribution | 235,670 | 259,210 | (9 | ) | ||||
Professional service fees | 53,737 | 18,980 | 183 | |||||
Office and occupancy | 24,689 | 22,958 | 8 | |||||
Systems and communications | 22,971 | 22,828 | 1 | |||||
Advertising and promotional | 13,413 | 10,110 | 33 | |||||
Travel and related | 12,174 | 11,461 | 6 | |||||
Other | 14,273 | 19,044 | (25 | ) | ||||
Total general and administrative | 376,927 | 364,591 | 3 | |||||
Intangible asset related | 7,915 | 22,511 | (65 | ) | ||||
Amortization of deferred sales commissions | 7,378 | 12,197 | (40 | ) | ||||
Total Operating Expenses | 637,659 | 642,152 | (1 | ) | ||||
Operating Income | 257,455 | 309,791 | (17 | ) | ||||
Nonoperating Income (Expenses) | ||||||||
Investment income, net | 6,259 | 6,872 | (9 | ) | ||||
Debt expense––recourse | (17,047 | ) | (15,049 | ) | 13 | |||
Other, net | (296 | ) | (494 | ) | (40 | ) | ||
Total Nonoperating Expenses, net | (11,084 | ) | (8,671 | ) | 28 | |||
Income before income taxes | 246,371 | 301,120 | (18 | ) | ||||
Income tax provision | 91,288 | 111,957 | (18 | ) | ||||
Net income including noncontrolling interests in subsidiaries | 155,083 | 189,163 | (18 | ) | ||||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 4,177 | 10,049 | (58 | ) | ||||
Net Income | $ | 150,906 | $ | 179,114 | (16 | )% | ||
Amounts Attributable to Federated | ||||||||
Earnings Per Share1 | ||||||||
Basic and Diluted | $ | 1.45 | $ | 1.73 | (16 | )% | ||
Weighted-average shares outstanding | ||||||||
Basic | 100,609 | 99,925 | ||||||
Diluted | 100,632 | 99,993 | ||||||
Dividends declared per share | $ | 0.96 | $ | 2.22 | ||||
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 $4.9 million and $6.4 million for the twelve months ended Dec. 31, 2011 and Dec. 31, 2010, respectively.
Federated Reports Q4 and Year-End 2011 Earnings | Page 6 of 10 | |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | Dec. 31, 2011 | Dec. 31, 2010 | ||||
Assets | ||||||
Cash and other investments | $ | 322,317 | $ | 333,641 | ||
Other current assets | 44,194 | 39,529 | ||||
Deferred sales commissions, net | 10,888 | 10,317 | ||||
Intangible assets, net and goodwill | 720,926 | 720,825 | ||||
Other long-term assets | 52,531 | 49,192 | ||||
Total Assets | $ | 1,150,856 | $ | 1,153,504 | ||
Liabilities and Equity | ||||||
Current liabilities | $ | 187,356 | $ | 214,352 | ||
Long-term debt—recourse | 318,750 | 361,250 | ||||
Other long-term liabilities | 101,567 | 84,187 | ||||
Equity excluding treasury stock | 1,315,664 | 1,272,324 | ||||
Treasury stock | (772,481 | ) | (778,609 | ) | ||
Total Liabilities and Equity | $ | 1,150,856 | $ | 1,153,504 | ||
Federated Reports Q4 and Year-End 2011 Earnings | Page 7 of 10 | |
Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions)
Quarter Ended | Year Ended | |||||||||||||||
Dec. 31, 2011 | Sept. 30, 2011 | Dec. 31, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||
Equity Funds | ||||||||||||||||
Beginning assets | $ | 20,140 | $ | 22,678 | $ | 21,325 | $ | 22,626 | $ | 20,960 | ||||||
Sales | 2,185 | 2,434 | 1,756 | 7,633 | 6,288 | |||||||||||
Redemptions | (1,771 | ) | (1,966 | ) | (1,937 | ) | (7,461 | ) | (7,041 | ) | ||||||
Net sales (redemptions) | 414 | 468 | (181 | ) | 172 | (753 | ) | |||||||||
Net exchanges | (32 | ) | (40 | ) | 7 | (76 | ) | (47 | ) | |||||||
Acquisition-related | 0 | 463 | 0 | 463 | 0 | |||||||||||
Market gains and losses/reinvestments1 | 1,408 | (3,429 | ) | 1,475 | (1,255 | ) | 2,466 | |||||||||
Ending assets | $ | 21,930 | $ | 20,140 | $ | 22,626 | $ | 21,930 | $ | 22,626 | ||||||
Equity Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 7,831 | $ | 8,702 | $ | 7,808 | $ | 8,176 | $ | 8,713 | ||||||
Sales3 | 873 | 723 | 464 | 2,861 | 1,689 | |||||||||||
Redemptions3 | (549 | ) | (631 | ) | (760 | ) | (2,530 | ) | (3,149 | ) | ||||||
Net sales (redemptions)3 | 324 | 92 | (296 | ) | 331 | (1,460 | ) | |||||||||
Net exchanges | 26 | 7 | 10 | 54 | 41 | |||||||||||
Market gains and losses/reinvestments1 | 776 | (970 | ) | 654 | 396 | 882 | ||||||||||
Ending assets | $ | 8,957 | $ | 7,831 | $ | 8,176 | $ | 8,957 | $ | 8,176 | ||||||
Total Equity2 | ||||||||||||||||
Beginning assets | $ | 27,971 | $ | 31,380 | $ | 29,133 | $ | 30,802 | $ | 29,673 | ||||||
Sales3 | 3,058 | 3,157 | 2,220 | 10,494 | 7,977 | |||||||||||
Redemptions3 | (2,320 | ) | (2,597 | ) | (2,697 | ) | (9,991 | ) | (10,190 | ) | ||||||
Net sales (redemptions)3 | 738 | 560 | (477 | ) | 503 | (2,213 | ) | |||||||||
Net exchanges | (6 | ) | (33 | ) | 17 | (22 | ) | (6 | ) | |||||||
Acquisition-related | 0 | 463 | 0 | 463 | 0 | |||||||||||
Market gains and losses/reinvestments1 | 2,184 | (4,399 | ) | 2,129 | (859 | ) | 3,348 | |||||||||
Ending assets | $ | 30,887 | $ | 27,971 | $ | 30,802 | $ | 30,887 | $ | 30,802 | ||||||
Fixed-Income Funds | ||||||||||||||||
Beginning assets | $ | 35,620 | $ | 34,874 | $ | 32,211 | $ | 31,933 | $ | 28,427 | ||||||
Sales | 4,696 | 4,049 | 3,820 | 17,990 | 15,595 | |||||||||||
Redemptions | (3,417 | ) | (3,707 | ) | (3,743 | ) | (15,844 | ) | (13,136 | ) | ||||||
Net sales3 | 1,279 | 342 | 77 | 2,146 | 2,459 | |||||||||||
Net exchanges | 38 | 29 | (71 | ) | 1,873 | (20 | ) | |||||||||
Acquisition-related | 0 | 132 | 0 | 132 | 0 | |||||||||||
Market gains and losses/reinvestments1 | 304 | 243 | (284 | ) | 1,157 | 1,067 | ||||||||||
Ending assets | $ | 37,241 | $ | 35,620 | $ | 31,933 | $ | 37,241 | $ | 31,933 | ||||||
Fixed-Income Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 7,263 | $ | 7,544 | $ | 7,963 | $ | 8,772 | $ | 5,360 | ||||||
Sales3 | 415 | 198 | 1,014 | 1,698 | 4,303 | |||||||||||
Redemptions3 | (195 | ) | (469 | ) | (150 | ) | (1,443 | ) | (1,228 | ) | ||||||
Net sales (redemptions)3 | 220 | (271 | ) | 864 | 255 | 3,075 | ||||||||||
Net exchanges | 1 | 0 | 0 | (1,806 | ) | 0 | ||||||||||
Market gains and losses/reinvestments1 | 89 | (10 | ) | (55 | ) | 352 | 337 | |||||||||
Ending assets | $ | 7,573 | $ | 7,263 | $ | 8,772 | $ | 7,573 | $ | 8,772 | ||||||
Total Fixed Income2 | ||||||||||||||||
Beginning assets | $ | 42,883 | $ | 42,418 | $ | 40,174 | $ | 40,705 | $ | 33,787 | ||||||
Sales3 | 5,111 | 4,247 | 4,834 | 19,688 | 19,898 | |||||||||||
Redemptions3 | (3,612 | ) | (4,176 | ) | (3,893 | ) | (17,287 | ) | (14,364 | ) | ||||||
Net sales3 | 1,499 | 71 | 941 | 2,401 | 5,534 | |||||||||||
Net exchanges | 39 | 29 | (71 | ) | 67 | (20 | ) | |||||||||
Acquisition-related | 0 | 132 | 0 | 132 | 0 | |||||||||||
Market gains and losses/reinvestments1 | 393 | 233 | (339 | ) | 1,509 | 1,404 | ||||||||||
Ending assets | $ | 44,814 | $ | 42,883 | $ | 40,705 | $ | 44,814 | $ | 40,705 | ||||||
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 Q4 and Year-End 2011 Earnings | Page 8 of 10 | |
Changes in Liquidation Portfolios
(in millions)
Quarter Ended | Year Ended | |||||||||||||||
Dec. 31, 2011 | Sept. 30, 2011 | Dec. 31, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||
Liquidation Portfolios1 | ||||||||||||||||
Beginning assets | $ | 9,144 | $ | 9,964 | $ | 11,071 | $ | 10,708 | $ | 12,596 | ||||||
Sales2 | 0 | 0 | 2 | 2 | 12 | |||||||||||
Redemptions2 | (289 | ) | (820 | ) | (365 | ) | (1,854 | ) | (1,900 | ) | ||||||
Net redemptions2 | (289 | ) | (820 | ) | (363 | ) | (1,852 | ) | (1,888 | ) | ||||||
Market gains and losses/reinvestments3 | 1 | 0 | 0 | 0 | 0 | |||||||||||
Ending Assets | $ | 8,856 | $ | 9,144 | $ | 10,708 | $ | 8,856 | $ | 10,708 | ||||||
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 Q4 and Year-End 2011 Earnings | Page 9 of 10 | |
MANAGED ASSETS (in millions) | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | March 31, 2011 | Dec. 31, 2010 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 30,887 | $ | 27,971 | $ | 31,380 | $ | 31,641 | $ | 30,802 | |||||
Fixed-income | 44,814 | 42,883 | 42,418 | 41,756 | 40,705 | ||||||||||
Money market | 285,140 | 271,653 | 265,651 | 271,141 | 276,026 | ||||||||||
Liquidation portfolios1 | 8,856 | 9,144 | 9,964 | 10,384 | 10,708 | ||||||||||
Total Managed Assets | $ | 369,697 | $ | 351,651 | $ | 349,413 | $ | 354,922 | $ | 358,241 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 21,930 | $ | 20,140 | $ | 22,678 | $ | 22,848 | $ | 22,626 | |||||
Fixed-income | 37,241 | 35,620 | 34,874 | 32,689 | 31,933 | ||||||||||
Money market | 255,857 | 245,293 | 236,077 | 238,990 | 244,796 | ||||||||||
Total Fund Assets | $ | 315,028 | $ | 301,053 | $ | 293,629 | $ | 294,527 | $ | 299,355 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 8,957 | $ | 7,831 | $ | 8,702 | $ | 8,793 | $ | 8,176 | |||||
Fixed-income | 7,573 | 7,263 | 7,544 | 9,067 | 8,772 | ||||||||||
Money market | 29,283 | 26,360 | 29,574 | 32,151 | 31,230 | ||||||||||
Total Separate Accounts | $ | 45,813 | $ | 41,454 | $ | 45,820 | $ | 50,011 | $ | 48,178 | |||||
Total Liquidation Portfolios1 | $ | 8,856 | $ | 9,144 | $ | 9,964 | $ | 10,384 | $ | 10,708 | |||||
Total Managed Assets | $ | 369,697 | $ | 351,651 | $ | 349,413 | $ | 354,922 | $ | 358,241 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | March 31, 2011 | Dec. 31, 2010 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 29,965 | $ | 29,699 | $ | 31,520 | $ | 31,056 | $ | 30,108 | |||||
Fixed-income | 43,980 | 43,001 | 42,127 | 41,187 | 40,686 | ||||||||||
Money market | 275,295 | 266,756 | 270,411 | 273,542 | 263,976 | ||||||||||
Liquidation portfolios1 | 9,030 | 9,309 | 10,138 | 10,534 | 10,926 | ||||||||||
Total Avg. Assets | $ | 358,270 | $ | 348,765 | $ | 354,196 | $ | 356,319 | $ | 345,696 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 21,451 | $ | 21,491 | $ | 22,741 | $ | 22,599 | $ | 22,090 | |||||
Fixed-income | 36,546 | 35,478 | 33,534 | 32,265 | 32,369 | ||||||||||
Money market | 249,324 | 239,406 | 239,642 | 240,375 | 236,500 | ||||||||||
Total Avg. Fund Assets | $ | 307,321 | $ | 296,375 | $ | 295,917 | $ | 295,239 | $ | 290,959 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 8,514 | $ | 8,208 | $ | 8,779 | $ | 8,457 | $ | 8,018 | |||||
Fixed-income | 7,434 | 7,523 | 8,593 | 8,922 | 8,317 | ||||||||||
Money market | 25,971 | 27,350 | 30,769 | 33,167 | 27,476 | ||||||||||
Total Avg. Separate Accounts | $ | 41,919 | $ | 43,081 | $ | 48,141 | $ | 50,546 | $ | 43,811 | |||||
Total Avg. Liquidation Portfolios1 | $ | 9,030 | $ | 9,309 | $ | 10,138 | $ | 10,534 | $ | 10,926 | |||||
Total Avg. Managed Assets | $ | 358,270 | $ | 348,765 | $ | 354,196 | $ | 356,319 | $ | 345,696 | |||||
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.
Federated Reports Q4 and Year-End 2011 Earnings | Page 10 of 10 | |
AVERAGE MANAGED ASSETS | Year Ended | |||||
(in millions) | Dec. 31, 2011 | Dec. 31, 2010 | ||||
By Asset Class | ||||||
Equity | $ | 30,560 | $ | 29,104 | ||
Fixed-income | 42,573 | 37,690 | ||||
Money market | 271,501 | 268,701 | ||||
Liquidation Portfolios | 9,753 | 11,579 | ||||
Total Avg. Assets | $ | 354,387 | $ | 347,074 | ||
By Product Type | ||||||
Funds: | ||||||
Equity | $ | 22,071 | $ | 21,016 | ||
Fixed-income | 34,455 | 30,864 | ||||
Money market | 242,187 | 238,767 | ||||
Total Avg. Fund Assets | $ | 298,713 | $ | 290,647 | ||
Separate Accounts: | ||||||
Equity | $ | 8,489 | $ | 8,088 | ||
Fixed-income | 8,118 | 6,826 | ||||
Money market | 29,314 | 29,934 | ||||
Total Avg. Separate Accounts | $ | 45,921 | $ | 44,848 | ||
Total Avg. Liquidation Portfolios1 | $ | 9,753 | $ | 11,579 | ||
Total Avg. Managed Assets | $ | 354,387 | $ | 347,074 | ||
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.