Attached files
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| 8-K - 8-K - FEDERATED HERMES, INC. | a8-kx2014q3epr.htm |
Exhibit 99.1
Federated Investors, Inc. Reports Third Quarter 2014 Earnings
• | Equity and bond assets reach $107 billion at Q3 2014 |
• | Equity assets up 25% from Q3 2013 and top $50 billion at quarter end |
• | Board declares $0.25 per share quarterly dividend |
(PITTSBURGH, Pa., Oct. 23, 2014) — Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.36 for Q3 2014, the same amount reported for the third quarter last year on net income of $37.6 million for Q3 2014, compared to $37.7 million for Q3 2013. Federated reported YTD 2014 EPS of $1.05 on net income of $109.6 million, compared to EPS of $1.16 on net income of $121.1 million for the same period in 2013.
Federated's total managed assets were $352.3 billion at Sept. 30, 2014, down $14.4 billion or 4 percent from $366.7 billion at Sept. 30, 2013 and up slightly from $351.6 billion at June 30, 2014. Federated’s stock and bond assets were up $10.3 billion to $106.7 billion or 11 percent from $96.4 billion at Sept. 30, 2013 and up slightly from $106.4 billion at June 30, 2014. Average managed assets for Q3 2014 were $349.2 billion, down $15.0 billion or 4 percent from $364.2 billion reported for Q3 2013 and down $9.2 billion or 3 percent from $358.4 billion reported for Q2 2014.
"During the third quarter, Federated's stock and bond products generated strong gross and net sales in a range of strategies," said J. Christopher Donahue, president and chief executive officer. "As equity markets reached new highs yet experienced periods of volatility, Federated's clients sought equity-income strategies such as Federated Capital Income Fund, and fixed-income products such as Federated Total Return Bond Fund."
Federated's board of directors declared a quarterly dividend of $0.25 per share. The dividend is payable on Nov. 14, 2014 to shareholders of record as of Nov. 7, 2014. During Q3 2014, Federated purchased 248,679 shares of Federated class B common stock for $7.2 million.
Federated's equity assets were a record $50.3 billion at Sept. 30, 2014, up $10.0 billion or 25 percent from $40.3 billion at Sept. 30, 2013 and up $0.4 billion from $49.9 billion at June 30, 2014. Top-selling equity funds during Q3 2014 on a net basis were Federated Capital Income Fund, Federated Strategic Value Dividend Fund, Federated International Leaders Fund, Federated Muni and Stock Advantage Fund and Federated International Strategic Value Dividend Fund.
Federated's fixed-income assets were $51.2 billion at Sept. 30, 2014, up $1.2 billion or 2 percent from $50.0 billion at Sept. 30, 2013 and up slightly from $51.1 billion at June 30, 2014. Bond assets in the liquidation portfolio were $5.2 billion at Sept. 30, 2014. Top-selling fixed-income funds during Q3 2014 on a net basis were Federated Total Return Bond Fund, Federated Ultrashort Bond Fund, Federated Municipal Ultrashort Fund, Federated Short-Intermediate Duration Municipal Trust and Federated Municipal High Yield Advantage Fund.
MEDIA: | MEDIA: | ANALYSTS: |
Ed Costello 412-288-7538 | Meghan McAndrew 412-288-8103 | Ray Hanley 412-288-1920 |
Federated Reports Q3 2014 Earnings | Page 2 of 10 | |
Money market assets were $245.5 billion at Sept. 30, 2014, down $24.8 billion or 9 percent from $270.3 billion at Sept. 30, 2013 and up $0.3 billion from $245.2 billion at June 30, 2014. Money market mutual fund assets were $215.2 billion at Sept. 30, 2014, down $22.7 billion or 10 percent from $237.9 billion at Sept. 30, 2013 and up $2.8 billion or 1 percent from $212.4 billion at June 30, 2014.
Financial Summary
Q3 2014 vs. Q3 2013
Revenue increased by $5.0 million or 2 percent primarily due to an increase in average equity assets under management, which was partially offset by lower average money market assets.
During Q3 2014, Federated derived 69 percent of its revenue from equity and fixed-income assets (46 percent from equity assets and 23 percent from fixed-income assets), 30 percent from money market assets and 1 percent from other products and services.
Operating expenses increased $2.0 million or 1 percent primarily due to an increase in compensation and related expenses.
Q3 2014 vs. Q2 2014
Revenue increased by $3.9 million or 2 percent primarily due to an increase in revenue from higher average equity assets and an additional day in Q3 2014. This increase was partially offset by a decrease in revenue from lower average money market assets.
Operating expenses increased $1.9 million or 1 percent.
YTD 2014 vs. YTD 2013
Revenue decreased by $22.3 million or 3 percent primarily due to a decrease in revenue from lower average money market assets, increased voluntary fee waivers related to certain money market funds and lower average fixed-income assets. The decrease was partially offset by higher average equity assets. For information about voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields, please see the table at the end of this financial summary.
For the first nine months of 2014, Federated derived 67 percent of its revenue from equity and fixed-income assets (44 percent from equity assets and 23 percent from fixed-income assets), 32 percent from money market assets and 1 percent from other products and services.
Operating expenses decreased $6.6 million or 1 percent primarily due to a decrease in distribution expenses mainly associated with increased fee waivers, which was partially offset by an increase in compensation and related expenses.
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, expenses and regulatory changes, can significantly impact Federated's activity levels and financial results. 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 (SEC).
Fee waivers to maintain positive or zero net yields on money market funds and the resulting negative impact of these waivers could vary significantly in the future as they are contingent on a number of variables including, but not limited to, changes in assets within the money market funds, yields on instruments available for purchase by the money market funds, actions by the
Federated Reports Q3 2014 Earnings | Page 3 of 10 | |
Federal Reserve, the U.S. Department of the Treasury, the SEC, the Financial Stability Oversight Council and other governmental entities, changes in expenses of the money market funds, changes in the mix of money market customer assets, changes in the distribution fee arrangements with third parties, Federated’s willingness to continue the fee waivers and changes in the extent to which the impact of the waivers is shared by third parties.
Unaudited Money Market Fund Yield Waiver Impact to Consolidated Statements of Income
(in millions)
Quarter Ended | Change Q3 2013 to Q3 2014 | Quarter Ended | Change Q2 2014 to Q3 2014 | Nine Months Ended | Change YTD 2013 to YTD 2014 | ||||||||||||||||||||||||||
Sept. 30, 2014 | Sept. 30, 2013 | June 30, 2014 | Sept. 30, 2014 | Sept. 30, 2013 | |||||||||||||||||||||||||||
Investment advisory fees | $ | (69.3 | ) | $ | (70.7 | ) | $ | 1.4 | $ | (69.6 | ) | $ | 0.3 | $ | (212.0 | ) | $ | (185.1 | ) | $ | (26.9 | ) | |||||||||
Other service fees | (32.4 | ) | (34.4 | ) | 2.0 | (32.7 | ) | 0.3 | (98.7 | ) | (99.3 | ) | 0.6 | ||||||||||||||||||
Total revenue | (101.7 | ) | (105.1 | ) | 3.4 | (102.3 | ) | 0.6 | (310.7 | ) | (284.4 | ) | (26.3 | ) | |||||||||||||||||
Less: Reduction in distribution expense | 68.7 | 72.1 | (3.4 | ) | 70.2 | (1.5 | ) | 213.2 | 203.8 | 9.4 | |||||||||||||||||||||
Operating income | (33.0 | ) | (33.0 | ) | 0.0 | (32.1 | ) | (0.9 | ) | (97.5 | ) | (80.6 | ) | (16.9 | ) | ||||||||||||||||
Less: Reduction in noncontrolling interest | 2.8 | 2.7 | 0.1 | 2.5 | 0.3 | 8.0 | 4.8 | 3.2 | |||||||||||||||||||||||
Pre-tax impact | $ | (30.2 | ) | $ | (30.3 | ) | $ | 0.1 | $ | (29.6 | ) | $ | (0.6 | ) | $ | (89.5 | ) | $ | (75.8 | ) | $ | (13.7 | ) | ||||||||
Federated will host an earnings conference call at 9 a.m. Eastern on Oct. 24, 2014. 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 Oct. 31, 2014 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering access code 13592206.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $352.3 billion in assets as of Sept. 30, 2014. With 132 funds and a variety of separately managed account options, Federated provides comprehensive investment management to more than 7,700 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top 3 percent of money market fund managers in the industry, the top 6 percent of equity fund managers and the top 9 percent of fixed-income fund managers1. For more information, visit FederatedInvestors.com.
###
1) Strategic Insight, Aug. 31, 2014. 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 adviser.
Certain statements in this press release, such as those related to the level of fee waivers and expenses incurred by the company, product demand and performance, investor interest and preferences, asset flows and mix, fee arrangements with customers, distribution expense, regulatory changes and market conditions 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 and expenses 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 and mix, 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 2014 Earnings | Page 4 of 10 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Quarter Ended | % Change Q3 2013 to Q3 2014 | Quarter Ended | % Change Q2 2014 to Q3 2014 | ||||||||||
Sept. 30, 2014 | Sept. 30, 2013 | June 30, 2014 | |||||||||||
Revenue | |||||||||||||
Investment advisory fees, net | $ | 141,086 | $ | 134,623 | 5 | % | $ | 137,553 | 3 | % | |||
Administrative service fees, net | 52,244 | 55,052 | (5 | ) | 52,738 | (1 | ) | ||||||
Other service fees, net | 22,249 | 20,022 | 11 | 21,447 | 4 | ||||||||
Other, net | 1,336 | 2,169 | (38 | ) | 1,243 | 7 | |||||||
Total Revenue | 216,915 | 211,866 | 2 | 212,981 | 2 | ||||||||
Operating Expenses | |||||||||||||
Compensation and related | 70,724 | 65,620 | 8 | 70,693 | 0 | ||||||||
Distribution | 50,149 | 51,051 | (2 | ) | 49,256 | 2 | |||||||
Office and occupancy | 8,241 | 6,488 | 27 | 7,286 | 13 | ||||||||
Professional service fees | 7,944 | 9,704 | (18 | ) | 8,177 | (3 | ) | ||||||
Systems and communications | 6,392 | 6,464 | (1 | ) | 6,225 | 3 | |||||||
Advertising and promotional | 3,271 | 3,975 | (18 | ) | 2,959 | 11 | |||||||
Travel and related | 3,028 | 3,344 | (9 | ) | 3,538 | (14 | ) | ||||||
Other | 6,338 | 7,462 | (15 | ) | 6,005 | 6 | |||||||
Total Operating Expenses | 156,087 | 154,108 | 1 | 154,139 | 1 | ||||||||
Operating Income | 60,828 | 57,758 | 5 | 58,842 | 3 | ||||||||
Nonoperating (Expenses) Income | |||||||||||||
Investment income, net | 794 | 6,999 | (89 | ) | 4,311 | (82 | ) | ||||||
Debt expense | (2,162 | ) | (3,078 | ) | (30 | ) | (2,849 | ) | (24 | ) | |||
Other, net | (4 | ) | (3,133 | ) | (100 | ) | (5 | ) | (20 | ) | |||
Total Nonoperating (Expenses) Income, net | (1,372 | ) | 788 | (274 | ) | 1,457 | (194 | ) | |||||
Income before income taxes | 59,456 | 58,546 | 2 | 60,299 | (1 | ) | |||||||
Income tax provision | 22,197 | 20,917 | 6 | 22,985 | (3 | ) | |||||||
Net income including the noncontrolling interests in subsidiaries | 37,259 | 37,629 | (1 | ) | 37,314 | (0 | ) | ||||||
Less: Net (loss) income attributable to the noncontrolling interests in subsidiaries | (301 | ) | (75 | ) | (301 | 445 | (168 | ) | |||||
Net Income | $ | 37,560 | $ | 37,704 | (0 | )% | $ | 36,869 | 2 | % | |||
Amounts Attributable to Federated Investors, Inc. | |||||||||||||
Earnings Per Share1 | |||||||||||||
Basic and diluted | $ | 0.36 | $ | 0.36 | 0 | % | $ | 0.35 | 3 | % | |||
Weighted-average shares outstanding | |||||||||||||
Basic | 100,729 | 100,677 | 100,789 | ||||||||||
Diluted | 100,731 | 100,678 | 100,790 | ||||||||||
Dividends declared per share | $ | 0.25 | $ | 0.25 | $ | 0.25 | |||||||
1) Unvested share-based payment awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the “two-class method.” As such, total net income of $1.5 million, $1.4 million and $1.5 million available to unvested restricted shareholders for the quarterly periods ended Sept. 30, 2014, Sept. 30, 2013 and June 30, 2014, respectively, was excluded from the computation of earnings per share.
Federated Reports Q3 2014 Earnings | Page 5 of 10 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||||
(in thousands, except per share data) | |||||||||||
Nine Months Ended | |||||||||||
Sept. 30, 2014 | Sept. 30, 2013 | % Change | |||||||||
Revenue | |||||||||||
Investment advisory fees, net | $ | 413,732 | $ | 432,901 | (4 | )% | |||||
Administrative service fees, net | 159,708 | 167,133 | (4 | ) | |||||||
Other service fees, net | 64,478 | 59,209 | 9 | ||||||||
Other, net | 3,474 | 4,400 | (21 | ) | |||||||
Total Revenue | 641,392 | 663,643 | (3 | ) | |||||||
Operating Expenses | |||||||||||
Compensation and related | 213,176 | 200,413 | 6 | ||||||||
Distribution | 147,963 | 163,099 | (9 | ) | |||||||
Professional service fees | 24,502 | 27,841 | (12 | ) | |||||||
Office and occupancy | 22,442 | 19,463 | 15 | ||||||||
Systems and communications | 19,021 | 19,173 | (1 | ) | |||||||
Advertising and promotional | 9,668 | 11,333 | (15 | ) | |||||||
Travel and related | 9,427 | 9,563 | (1 | ) | |||||||
Other | 18,878 | 20,773 | (9 | ) | |||||||
Total Operating Expenses | 465,077 | 471,658 | (1 | ) | |||||||
Operating Income | 176,315 | 191,985 | (8 | ) | |||||||
Nonoperating Income (Expenses) | |||||||||||
Investment income, net | 8,719 | 15,486 | (44 | ) | |||||||
Debt expense | (7,824 | ) | (9,468 | ) | (17 | ) | |||||
Other, net | (14 | ) | (3,203 | ) | (100 | ) | |||||
Total Nonoperating Income, net | 881 | 2,815 | (69 | ) | |||||||
Income before income taxes | 177,196 | 194,800 | (9 | ) | |||||||
Income tax provision | 66,978 | 70,621 | (5 | ) | |||||||
Net income including the noncontrolling interests in subsidiaries | 110,218 | 124,179 | (11 | ) | |||||||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 595 | 3,073 | (81 | ) | |||||||
Net Income | $ | 109,623 | $ | 121,106 | (9 | )% | |||||
Amounts Attributable to Federated Investors, Inc. | |||||||||||
Earnings Per Share1 | |||||||||||
Basic and diluted | $ | 1.05 | $ | 1.16 | (9 | )% | |||||
Weighted-average shares outstanding | |||||||||||
Basic | 100,748 | 100,637 | |||||||||
Diluted | 100,749 | 100,638 | |||||||||
Dividends declared per share | $ | 0.75 | $ | 0.73 | |||||||
1) Unvested share-based payment awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the “two-class method.” As such, total net income of $4.3 million and $4.6 million available to unvested restricted shareholders for the nine months ended Sept. 30, 2014 and Sept. 30, 2013, respectively, was excluded from the computation of earnings per share.
Federated Reports Q3 2014 Earnings | Page 6 of 10 | |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | Sept. 30, 2014 | Dec. 31, 2013 | ||||
Assets | ||||||
Cash and other investments | $ | 352,275 | $ | 292,178 | ||
Other current assets | 42,912 | 47,140 | ||||
Intangible assets, net and goodwill | 734,300 | 735,345 | ||||
Other long-term assets | 62,131 | 61,134 | ||||
Total Assets | $ | 1,191,618 | $ | 1,135,797 | ||
Liabilities, Redeemable Noncontrolling Interests and Equity | ||||||
Current liabilities | $ | 137,581 | $ | 214,205 | ||
Long-term debt | 223,125 | 198,333 | ||||
Other long-term liabilities | 156,868 | 141,398 | ||||
Redeemable noncontrolling interests | 78,795 | 15,517 | ||||
Equity excluding treasury stock | 1,353,387 | 1,317,583 | ||||
Treasury stock | (758,138 | ) | (751,239 | ) | ||
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ | 1,191,618 | $ | 1,135,797 | ||
Federated Reports Q3 2014 Earnings | Page 7 of 10 | |
Unaudited Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions; excludes liquidation portfolio)
Quarter Ended | Nine Months Ended | |||||||||||||||
Sept. 30, 2014 | June 30, 2014 | Sept. 30, 2013 | Sept. 30, 2014 | Sept. 30, 2013 | ||||||||||||
Equity funds | ||||||||||||||||
Beginning assets | $ | 31,673 | $ | 29,208 | $ | 25,030 | $ | 28,097 | $ | 23,152 | ||||||
Sales | 2,632 | 2,566 | 1,856 | 7,490 | 5,526 | |||||||||||
Redemptions | (1,389 | ) | (1,464 | ) | (2,571 | ) | (4,686 | ) | (6,588 | ) | ||||||
Net sales (redemptions) | 1,243 | 1,102 | (715 | ) | 2,804 | (1,062 | ) | |||||||||
Net exchanges | 8 | 9 | 77 | 49 | 167 | |||||||||||
Market gains and losses/reinvestments1 | (836 | ) | 1,354 | 1,538 | 1,138 | 3,673 | ||||||||||
Ending assets | $ | 32,088 | $ | 31,673 | $ | 25,930 | $ | 32,088 | $ | 25,930 | ||||||
Equity separate accounts2 | ||||||||||||||||
Beginning assets | $ | 18,215 | $ | 16,671 | $ | 13,675 | $ | 16,051 | $ | 11,858 | ||||||
Sales3 | 1,131 | 1,168 | 971 | 3,144 | 3,108 | |||||||||||
Redemptions3 | (737 | ) | (746 | ) | (798 | ) | (2,261 | ) | (2,303 | ) | ||||||
Net sales3 | 394 | 422 | 173 | 883 | 805 | |||||||||||
Market gains and losses4 | (362 | ) | 1,122 | 505 | 1,313 | 1,690 | ||||||||||
Ending assets | $ | 18,247 | $ | 18,215 | $ | 14,353 | $ | 18,247 | $ | 14,353 | ||||||
Total equity2 | ||||||||||||||||
Beginning assets | $ | 49,888 | $ | 45,879 | $ | 38,705 | $ | 44,148 | $ | 35,010 | ||||||
Sales3 | 3,763 | 3,734 | 2,827 | 10,634 | 8,634 | |||||||||||
Redemptions3 | (2,126 | ) | (2,210 | ) | (3,369 | ) | (6,947 | ) | (8,891 | ) | ||||||
Net sales (redemptions)3 | 1,637 | 1,524 | (542 | ) | 3,687 | (257 | ) | |||||||||
Net exchanges | 8 | 9 | 77 | 49 | 167 | |||||||||||
Market gains and losses/reinvestments1 | (1,198 | ) | 2,476 | 2,043 | 2,451 | 5,363 | ||||||||||
Ending assets | $ | 50,335 | $ | 49,888 | $ | 40,283 | $ | 50,335 | $ | 40,283 | ||||||
Fixed-income funds | ||||||||||||||||
Beginning assets | $ | 40,357 | $ | 40,237 | $ | 40,188 | $ | 39,606 | $ | 42,478 | ||||||
Sales | 3,982 | 3,325 | 4,382 | 11,555 | 14,762 | |||||||||||
Redemptions | (3,744 | ) | (3,940 | ) | (4,789 | ) | (11,709 | ) | (16,675 | ) | ||||||
Net sales (redemptions) | 238 | (615 | ) | (407 | ) | (154 | ) | (1,913 | ) | |||||||
Net exchanges | 1 | (11 | ) | (98 | ) | (69 | ) | (220 | ) | |||||||
Acquisition related | 0 | 301 | 0 | 301 | 0 | |||||||||||
Market gains and losses/reinvestments1 | (161 | ) | 445 | 261 | 751 | (401 | ) | |||||||||
Ending assets | $ | 40,435 | $ | 40,357 | $ | 39,944 | $ | 40,435 | $ | 39,944 | ||||||
Fixed-income separate accounts2 | ||||||||||||||||
Beginning assets | $ | 10,772 | $ | 10,746 | $ | 9,817 | $ | 10,520 | $ | 10,233 | ||||||
Sales3 | 263 | 377 | 498 | 894 | 1,591 | |||||||||||
Redemptions3 | (268 | ) | (537 | ) | (412 | ) | (1,037 | ) | (1,782 | ) | ||||||
Net (redemptions) sales3 | (5 | ) | (160 | ) | 86 | (143 | ) | (191 | ) | |||||||
Net exchanges | 0 | 1 | (10 | ) | 1 | (3 | ) | |||||||||
Market gains and losses4 | (15 | ) | 185 | 125 | 374 | (21 | ) | |||||||||
Ending assets | $ | 10,752 | $ | 10,772 | $ | 10,018 | $ | 10,752 | $ | 10,018 | ||||||
Total fixed income2 | ||||||||||||||||
Beginning assets | $ | 51,129 | $ | 50,983 | $ | 50,005 | $ | 50,126 | $ | 52,711 | ||||||
Sales3 | 4,245 | 3,702 | 4,880 | 12,449 | 16,353 | |||||||||||
Redemptions3 | (4,012 | ) | (4,477 | ) | (5,201 | ) | (12,746 | ) | (18,457 | ) | ||||||
Net sales (redemptions)3 | 233 | (775 | ) | (321 | ) | (297 | ) | (2,104 | ) | |||||||
Net exchanges | 1 | (10 | ) | (108 | ) | (68 | ) | (223 | ) | |||||||
Acquisition related | 0 | 301 | 0 | 301 | 0 | |||||||||||
Market gains and losses/reinvestments1 | (176 | ) | 630 | 386 | 1,125 | (422 | ) | |||||||||
Ending assets | $ | 51,187 | $ | 51,129 | $ | 49,962 | $ | 51,187 | $ | 49,962 | ||||||
1) Reflects the approximate changes in the fair 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 and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses.
4) Reflects the approximate changes in the fair value of the securities held by the portfolios.
Federated Reports Q3 2014 Earnings | Page 8 of 10 | |
Unaudited Total Changes in Equity and Fixed-Income Assets
(in millions; excludes liquidation portfolio)
Quarter Ended | Nine Months Ended | |||||||||||||||
Sept. 30, 2014 | June 30, 2014 | Sept. 30, 2013 | Sept. 30, 2014 | Sept. 30, 2013 | ||||||||||||
Funds | ||||||||||||||||
Beginning assets | $ | 72,030 | $ | 69,445 | $ | 65,218 | $ | 67,703 | $ | 65,630 | ||||||
Sales | 6,614 | 5,891 | 6,238 | 19,045 | 20,288 | |||||||||||
Redemptions | (5,133 | ) | (5,404 | ) | (7,360 | ) | (16,395 | ) | (23,263 | ) | ||||||
Net sales (redemptions) | 1,481 | 487 | (1,122 | ) | 2,650 | (2,975 | ) | |||||||||
Net exchanges | 9 | (2 | ) | (21 | ) | (20 | ) | (53 | ) | |||||||
Acquisition related | 0 | 301 | 0 | 301 | 0 | |||||||||||
Market gains and losses/reinvestments1 | (997 | ) | 1,799 | 1,799 | 1,889 | 3,272 | ||||||||||
Ending assets | $ | 72,523 | $ | 72,030 | $ | 65,874 | $ | 72,523 | $ | 65,874 | ||||||
Separate accounts2 | ||||||||||||||||
Beginning assets | $ | 28,987 | $ | 27,417 | $ | 23,492 | $ | 26,571 | $ | 22,091 | ||||||
Sales3 | 1,394 | 1,545 | 1,469 | 4,038 | 4,699 | |||||||||||
Redemptions3 | (1,005 | ) | (1,283 | ) | (1,210 | ) | (3,298 | ) | (4,085 | ) | ||||||
Net sales3 | 389 | 262 | 259 | 740 | 614 | |||||||||||
Net exchanges | 0 | 1 | (10 | ) | 1 | (3 | ) | |||||||||
Market gains and losses4 | (377 | ) | 1,307 | 630 | 1,687 | 1,669 | ||||||||||
Ending assets | $ | 28,999 | $ | 28,987 | $ | 24,371 | $ | 28,999 | $ | 24,371 | ||||||
Total assets 2 | ||||||||||||||||
Beginning assets | $ | 101,017 | $ | 96,862 | $ | 88,710 | $ | 94,274 | $ | 87,721 | ||||||
Sales3 | 8,008 | 7,436 | 7,707 | 23,083 | 24,987 | |||||||||||
Redemptions3 | (6,138 | ) | (6,687 | ) | (8,570 | ) | (19,693 | ) | (27,348 | ) | ||||||
Net sales (redemptions)3 | 1,870 | 749 | (863 | ) | 3,390 | (2,361 | ) | |||||||||
Net exchanges | 9 | (1 | ) | (31 | ) | (19 | ) | (56 | ) | |||||||
Acquisition related | 0 | 301 | 0 | 301 | 0 | |||||||||||
Market gains and losses/reinvestments1 | (1,374 | ) | 3,106 | 2,429 | 3,576 | 4,941 | ||||||||||
Ending assets | $ | 101,522 | $ | 101,017 | $ | 90,245 | $ | 101,522 | $ | 90,245 | ||||||
1) Reflects the approximate changes in the fair 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 and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses.
4) Reflects the approximate changes in the fair value of the securities held by the portfolios.
Federated Reports Q3 2014 Earnings | Page 9 of 10 | |
(unaudited) | |||||||||||||||
MANAGED ASSETS (in millions) | Sept. 30, 2014 | June 30, 2014 | March 31, 2014 | Dec. 31, 2013 | Sept. 30, 2013 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 50,335 | $ | 49,888 | $ | 45,879 | $ | 44,148 | $ | 40,283 | |||||
Fixed-income | 51,187 | 51,129 | 50,983 | 50,126 | 49,962 | ||||||||||
Money market | 245,536 | 245,201 | 263,648 | 275,952 | 270,293 | ||||||||||
Liquidation portfolio1 | 5,197 | 5,408 | 5,690 | 5,858 | 6,177 | ||||||||||
Total Managed Assets | $ | 352,255 | $ | 351,626 | $ | 366,200 | $ | 376,084 | $ | 366,715 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 32,088 | $ | 31,673 | $ | 29,208 | $ | 28,097 | $ | 25,930 | |||||
Fixed-income | 40,435 | 40,357 | 40,237 | 39,606 | 39,944 | ||||||||||
Money market | 215,237 | 212,434 | 227,470 | 240,048 | 237,949 | ||||||||||
Total Fund Assets | $ | 287,760 | $ | 284,464 | $ | 296,915 | $ | 307,751 | $ | 303,823 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 18,247 | $ | 18,215 | $ | 16,671 | $ | 16,051 | $ | 14,353 | |||||
Fixed-income | 10,752 | 10,772 | 10,746 | 10,520 | 10,018 | ||||||||||
Money market | 30,299 | 32,767 | 36,178 | 35,904 | 32,344 | ||||||||||
Total Separate Accounts | $ | 59,298 | $ | 61,754 | $ | 63,595 | $ | 62,475 | $ | 56,715 | |||||
Total Liquidation Portfolio1 | $ | 5,197 | $ | 5,408 | $ | 5,690 | $ | 5,858 | $ | 6,177 | |||||
Total Managed Assets | $ | 352,255 | $ | 351,626 | $ | 366,200 | $ | 376,084 | $ | 366,715 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | Sept. 30, 2014 | June 30, 2014 | March 31, 2014 | Dec. 31, 2013 | Sept. 30, 2013 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 50,207 | $ | 47,466 | $ | 44,693 | $ | 42,539 | $ | 39,910 | |||||
Fixed-income | 51,115 | 50,774 | 50,658 | 50,268 | 49,983 | ||||||||||
Money market | 242,537 | 254,575 | 273,233 | 267,351 | 267,881 | ||||||||||
Liquidation portfolio1 | 5,307 | 5,569 | 5,791 | 6,050 | 6,434 | ||||||||||
Total Avg. Assets | $ | 349,166 | $ | 358,384 | $ | 374,375 | $ | 366,208 | $ | 364,208 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 32,060 | $ | 30,154 | $ | 28,516 | $ | 27,157 | $ | 25,761 | |||||
Fixed-income | 40,275 | 40,130 | 39,987 | 39,883 | 39,987 | ||||||||||
Money market | 211,571 | 219,936 | 235,228 | 234,788 | 234,528 | ||||||||||
Total Avg. Fund Assets | $ | 283,906 | $ | 290,220 | $ | 303,731 | $ | 301,828 | $ | 300,276 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 18,147 | $ | 17,312 | $ | 16,177 | $ | 15,382 | $ | 14,149 | |||||
Fixed-income | 10,840 | 10,644 | 10,671 | 10,385 | 9,996 | ||||||||||
Money market | 30,966 | 34,639 | 38,005 | 32,563 | 33,353 | ||||||||||
Total Avg. Separate Accounts | $ | 59,953 | $ | 62,595 | $ | 64,853 | $ | 58,330 | $ | 57,498 | |||||
Total Avg. Liquidation Portfolio1 | $ | 5,307 | $ | 5,569 | $ | 5,791 | $ | 6,050 | $ | 6,434 | |||||
Total Avg. Managed Assets | $ | 349,166 | $ | 358,384 | $ | 374,375 | $ | 366,208 | $ | 364,208 | |||||
1) Liquidation portfolio represents a portfolio of distressed bonds at cost. 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 this portfolio are lower than those of traditional separate account mandates.
Federated Reports Q3 2014 Earnings | Page 10 of 10 | |
(unaudited) | ||||||||
AVERAGE MANAGED ASSETS | Nine Months Ended | |||||||
(in millions) | Sept. 30, 2014 | Sept. 30, 2013 | ||||||
By Asset Class | ||||||||
Equity | $ | 47,455 | $ | 38,452 | ||||
Fixed-income | 50,850 | 51,697 | ||||||
Money market | 256,782 | 275,789 | ||||||
Liquidation portfolio1 | 5,555 | 6,828 | ||||||
Total Avg. Assets | $ | 360,642 | $ | 372,766 | ||||
By Product Type | ||||||||
Funds: | ||||||||
Equity | $ | 30,243 | $ | 24,964 | ||||
Fixed-income | 40,131 | 41,609 | ||||||
Money market | 222,245 | 240,990 | ||||||
Total Avg. Fund Assets | $ | 292,619 | $ | 307,563 | ||||
Separate Accounts: | ||||||||
Equity | $ | 17,212 | $ | 13,488 | ||||
Fixed-income | 10,719 | 10,088 | ||||||
Money market | 34,537 | 34,799 | ||||||
Total Avg. Separate Accounts | $ | 62,468 | $ | 58,375 | ||||
Total Avg. Liquidation Portfolio1 | $ | 5,555 | $ | 6,828 | ||||
Total Avg. Managed Assets | $ | 360,642 | $ | 372,766 | ||||
1) Liquidation portfolio represents a portfolio of distressed bonds at cost. 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 this portfolio are lower than those of traditional separate account mandates.