Attached files
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| 8-K - FORM 8-K - FEDERATED HERMES, INC. | a8-kx2012q2epr.htm |
Exhibit 99.1
Federated Investors, Inc. Reports Second Quarter 2012 Earnings
• | Record equity and fixed-income assets increase $1.4 billion during Q2 2012 to $90 billion |
• | Equity and fixed-income fund gross sales reach a record $7 billion for Q2 2012 |
• | Board declares $0.24 per share quarterly dividend |
(PITTSBURGH, Pa., July 26, 2012) - Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.39 for the quarter ended June 30, 2012 as compared to $0.41 for the same quarter last year. Net income was $40.4 million for Q2 2012 compared to $42.4 million for Q2 2011.
Federated's total managed assets were $355.9 billion at June 30, 2012, up $6.5 billion or 2 percent from $349.4 billion at June 30, 2011 and down $7.7 billion or 2 percent from $363.6 billion reported at March 31, 2012. Average managed assets for Q2 2012 were $360.6 billion, up $6.4 billion or 2 percent from $354.2 billion reported for Q2 2011 and down $9.5 billion or 3 percent from $370.1 billion reported for Q1 2012. Net sales of equity and fixed-income funds and separate accounts were a positive $2.0 billion for Q2 2012.
“Continued demand for high-quality, income-oriented investment strategies fueled Federated's record gross sales of mutual funds, which topped $7 billion, during the quarter," said J. Christopher Donahue, president and chief executive officer. "Federated continued to meet investor demand for bond products from short-duration strategies to high yield, while a variety of dividend-oriented equity products, including an international-dividend strategy, were among the top sellers during the quarter."
Federated's board of directors declared a quarterly dividend of $0.24 per share. The dividend is payable on Aug. 15, 2012 to shareholders of record as of Aug. 8, 2012. During Q2 2012, Federated purchased 69,443 shares of Federated class B common stock for $1.2 million.
Federated's equity assets were $33.2 billion at June 30, 2012, up $1.8 billion or 6 percent from $31.4 billion at June 30, 2011 and down $0.9 billion or 3 percent from $34.1 billion at March 31, 2012. Top-selling equity funds during Q2 2012 on a net basis were Federated Strategic Value Dividend Fund, Federated International Leaders Fund and Federated International Strategic Value Dividend Fund.
Federated's fixed-income assets were a record $49.0 billion at June 30, 2012, up $6.6 billion or 16 percent from $42.4 billion at June 30, 2011 and up $2.8 billion or 6 percent from $46.2 billion at March 31, 2012. Fixed-income assets in liquidation portfolios were $8.1 billion at June 30, 2012. Fixed-income sales were driven by strong net flows into Federated Government Ultrashort Duration Fund, Federated Short-Term Income Fund, Federated Intermediate Government/Corporate Fund and Federated Institutional High Yield Bond Fund.
Money market assets in both funds and separate accounts were $265.5 billion at June 30, 2012, down slightly from $265.7 billion at June 30, 2011 and down $9.2 billion or 3 percent from $274.7 billion at March 31, 2012. Money market mutual fund assets were $238.6 billion at June 30, 2012, up $2.5 billion or 1 percent from $236.1 billion at June 30, 2011 and down $6.6 billion or 3 percent from $245.2 billion at March 31, 2012.
MEDIA: | MEDIA: | ANALYSTS: |
Meghan McAndrew 412-288-8103 | J.T. Tuskan 412-288-7895 | Ray Hanley 412-288-1920 |
Federated Reports Q2 2012 Earnings | Page 2 of 10 | |
Financial Summary
Q2 2012 vs. Q2 2011
Revenue increased by $6.4 million or 3 percent due primarily to a decrease of $9.1 million in voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields and due to an increase in average fixed-income assets. The reduction in fee waivers was primarily the result of improved yields available on securities held by money market funds. The revenue increase was partially offset by a decrease due to a change in the mix of average equity assets. See additional information about voluntary fee waivers in the table at the end of this financial summary.
Federated derived 52 percent of its revenue from equity and fixed-income assets (31 percent from equity assets and 21 percent from fixed-income assets), 47 percent from money market assets and 1 percent from other products and services.
Operating expenses increased $9.4 million or 6 percent primarily as a result of a $4.5 million increase in distribution expense related primarily to reduced fee waivers and increased compensation and related expense.
Q2 2012 vs. Q1 2012
Revenue increased by $1.9 million or 1 percent primarily related to a decrease in the aforementioned voluntary fee waivers due mainly to improved yields available on securities held by money market funds. This increase was partially offset by lower average money market assets and a change in the mix of average equity assets.
Operating expenses increased by $3.2 million or 2 percent. This increase was primarily related to an increase in compensation and related expense and intangible asset related expense.
YTD 2012 vs. YTD 2011
Revenue for the first half of 2012 decreased by $2.2 million, or less than 1 percent from the first half of 2011. The decrease in revenue was primarily related to an increase in the aforementioned voluntary fee waivers primarily as a result of higher average money market assets along with lower average yields available on securities held by money market funds in the first half of 2012, compared to the first half of 2011, and a change in the mix of average equity assets. This revenue decrease was partially offset by an increase related to higher average fixed-income and money market assets.
For the first half of 2012, Federated derived 52 percent of its revenue from equity and fixed-income assets (31 percent from equity assets and 21 percent from fixed-income assets), 47 percent from money market assets and 1 percent from other products and services.
Operating expenses for the first half of 2012 decreased by $13.0 million or 4 percent compared to the same period last year. The decrease primarily reflects a decrease in professional service fees due to nonrecurring legal expenses incurred in Q1 2011. Additionally, intangible asset related expense decreased due to certain intangible assets becoming fully amortized in 2011 as well as mark-to-market adjustments of an acquisition-related contingent payment liability in both periods.
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 in the future as they are contingent on a number of
Federated Reports Q2 2012 Earnings | Page 3 of 10 | |
variables including, but not limited to, changes in assets within the money market funds, available yields on instruments held by the money market funds, actions by the Federal Reserve, the U.S. Department of the Treasury and other governmental entities, changes in expenses of the money market funds, changes in the mix of money market customer assets, 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.
Money Market Fund Yield Waiver Impact
(in millions)
Quarter Ended | Change Q2 2011 to Q2 2012 | Quarter Ended | Change Q1 2012 to Q2 2012 | Six Months Ended | Change YTD 2011 to YTD 2012 | |||||||||||||||||||||
(Decrease)/Increase | June 30, 2012 | June 30, 2011 | March 31, 2012 | June 30, 2012 | June 30, 2011 | |||||||||||||||||||||
Investment advisory fees | $ | (43.0 | ) | $ | (49.6 | ) | $ | 6.6 | $ | (52.9 | ) | $ | 9.9 | $ | (95.9 | ) | $ | (85.6 | ) | $ | (10.3 | ) | ||||
Other service fees | (27.3 | ) | (29.8 | ) | 2.5 | (27.5 | ) | 0.2 | (54.8 | ) | (57.2 | ) | 2.4 | |||||||||||||
Total Revenue | $ | (70.3 | ) | $ | (79.4 | ) | $ | 9.1 | $ | (80.4 | ) | $ | 10.1 | $ | (150.7 | ) | $ | (142.8 | ) | $ | (7.9 | ) | ||||
Distribution expense | (53.1 | ) | (57.8 | ) | 4.7 | (57.5 | ) | 4.4 | (110.6 | ) | (107.3 | ) | (3.3 | ) | ||||||||||||
Operating income | $ | (17.2 | ) | $ | (21.6 | ) | $ | 4.4 | $ | (22.9 | ) | $ | 5.7 | $ | (40.1 | ) | $ | (35.5 | ) | $ | (4.6 | ) | ||||
Noncontrolling interest | 0.0 | (2.2 | ) | 2.2 | (0.6 | ) | 0.6 | (0.6 | ) | (3.0 | ) | 2.4 | ||||||||||||||
Pre-tax impact | $ | (17.2 | ) | $ | (19.4 | ) | $ | 2.2 | $ | (22.3 | ) | $ | 5.1 | $ | (39.5 | ) | $ | (32.5 | ) | $ | (7.0 | ) | ||||
Federated will host an earnings conference call at 9 a.m. Eastern on July 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 Aug. 3, 2012 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering codes 286 and 397419.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $355.9 billion in assets as of June 30, 2012. With 138 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 3 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, May 31, 2012. 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 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 Q2 2012 Earnings | Page 4 of 10 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Quarter Ended | % Change Q2 2011 to Q2 2012 | Quarter Ended | % Change Q1 2012 to Q2 2012 | ||||||||||
June 30, 2012 | June 30, 2011 | March 31, 2012 | |||||||||||
Revenue | |||||||||||||
Investment advisory fees, net | $ | 154,367 | $ | 149,127 | 4 | % | $ | 149,348 | 3 | % | |||
Administrative service fees, net | 54,986 | 54,550 | 1 | 57,292 | (4 | ) | |||||||
Other service fees, net | 22,007 | 21,465 | 3 | 22,655 | (3 | ) | |||||||
Other, net | 772 | 635 | 22 | 986 | (22 | ) | |||||||
Total Revenue | 232,132 | 225,777 | 3 | 230,281 | 1 | ||||||||
Operating Expenses | |||||||||||||
Compensation and related | 65,215 | 62,493 | 4 | 64,065 | 2 | ||||||||
Distribution | 62,328 | 57,798 | 8 | 61,693 | 1 | ||||||||
Professional service fees | 9,932 | 8,548 | 16 | 10,308 | (4 | ) | |||||||
Systems and communications | 6,773 | 5,727 | 18 | 6,310 | 7 | ||||||||
Office and occupancy | 6,119 | 6,032 | 1 | 6,253 | (2 | ) | |||||||
Travel and related | 3,336 | 3,253 | 3 | 2,751 | 21 | ||||||||
Advertising and promotional | 3,316 | 2,841 | 17 | 2,928 | 13 | ||||||||
Intangible asset related | 822 | 1,629 | (50 | ) | 21 | 3,814 | |||||||
Other | 5,271 | 5,373 | (2 | ) | 5,605 | (6 | ) | ||||||
Total Operating Expenses | 163,112 | 153,694 | 6 | 159,934 | 2 | ||||||||
Operating Income | 69,020 | 72,083 | (4 | ) | 70,347 | (2 | ) | ||||||
Nonoperating Income (Expenses) | |||||||||||||
Investment income, net | 2,272 | 1,178 | 93 | 3,346 | (32 | ) | |||||||
Debt expense | (3,690 | ) | (4,577 | ) | (19 | ) | (3,711 | ) | (1 | ) | |||
Other, net | (128 | ) | (85 | ) | 51 | (37 | ) | 246 | |||||
Total Nonoperating Expenses, net | (1,546 | ) | (3,484 | ) | (56 | ) | (402 | ) | 285 | ||||
Income before income taxes | 67,474 | 68,599 | (2 | ) | 69,945 | (4 | ) | ||||||
Income tax provision | 24,401 | 25,714 | (5 | ) | 25,538 | (4 | ) | ||||||
Net income including noncontrolling interest in subsidiaries | 43,073 | 42,885 | 0 | 44,407 | (3 | ) | |||||||
Less: Net income attributable to the noncontrolling interest in subsidiaries | 2,663 | 472 | 464 | 2,082 | 28 | ||||||||
Net Income | $ | 40,410 | $ | 42,413 | (5 | )% | $ | 42,325 | (5 | )% | |||
Amounts Attributable to Federated | |||||||||||||
Earnings Per Share1 | |||||||||||||
Basic and Diluted | $ | 0.39 | $ | 0.41 | (5 | )% | $ | 0.41 | (5 | )% | |||
Weighted-average shares outstanding | |||||||||||||
Basic | 100,347 | 100,907 | 100,112 | ||||||||||
Diluted | 100,347 | 100,917 | 100,112 | ||||||||||
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 $1.5 million, $1.4 million and $1.5 million for the quarterly periods ended June 30, 2012, June 30, 2011 and March 31, 2012 respectively.
Federated Reports Q2 2012 Earnings | Page 5 of 10 | |
Unaudited Condensed Consolidated Statements of Income | ||||||||
(in thousands, except per share data) | ||||||||
Six Months Ended | % Change | |||||||
June 30, 2012 | June 30, 2011 | |||||||
Revenue | ||||||||
Investment advisory fees, net | $ | 303,714 | $ | 308,717 | (2 | )% | ||
Administrative service fees, net | 112,278 | 108,598 | 3 | |||||
Other service fees, net | 44,663 | 46,128 | (3 | ) | ||||
Other, net | 1,758 | 1,217 | 44 | |||||
Total Revenue | 462,413 | 464,660 | 0 | |||||
Operating Expenses | ||||||||
Compensation and related | 129,280 | 126,889 | 2 | |||||
Distribution | 124,021 | 122,490 | 1 | |||||
Professional service fees | 20,240 | 34,734 | (42 | ) | ||||
Systems and communications | 13,084 | 11,306 | 16 | |||||
Office and occupancy | 12,371 | 12,233 | 1 | |||||
Advertising and promotional | 6,244 | 6,003 | 4 | |||||
Travel and related | 6,087 | 5,692 | 7 | |||||
Intangible asset related | 843 | 5,408 | (84 | ) | ||||
Other | 10,876 | 11,322 | (4 | ) | ||||
Total Operating Expenses | 323,046 | 336,077 | (4 | ) | ||||
Operating Income | 139,367 | 128,583 | 8 | |||||
Nonoperating Income (Expenses) | ||||||||
Investment income, net | 5,618 | 4,991 | 13 | |||||
Debt expense | (7,401 | ) | (9,215 | ) | (20 | ) | ||
Other, net | (166 | ) | (109 | ) | 52 | |||
Total Nonoperating Expenses, net | (1,949 | ) | (4,333 | ) | (55 | ) | ||
Income before income taxes | 137,418 | 124,250 | 11 | |||||
Income tax provision | 49,938 | 46,312 | 8 | |||||
Net income including noncontrolling interest in subsidiaries | 87,480 | 77,938 | 12 | |||||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 4,745 | 2,295 | 107 | |||||
Net Income | $ | 82,735 | $ | 75,643 | 9 | % | ||
Amounts Attributable to Federated | ||||||||
Earnings Per Share1 | ||||||||
Basic and Diluted | $ | 0.80 | $ | 0.73 | 10 | % | ||
Weighted-average shares outstanding | ||||||||
Basic | 100,229 | 100,748 | ||||||
Diluted | 100,229 | 100,793 | ||||||
Dividends declared per share | $ | 0.48 | $ | 0.48 | ||||
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 $3.0 million and $2.5 million for the six months ended June 30, 2012 and June 30, 2011, respectively.
Federated Reports Q2 2012 Earnings | Page 6 of 10 | |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | June 30, 2012 | Dec. 31, 2011 | ||||
Assets | ||||||
Cash and other investments | $ | 327,129 | $ | 322,317 | ||
Other current assets | 50,019 | 44,194 | ||||
Intangible assets, net and goodwill | 721,310 | 720,926 | ||||
Other long-term assets | 64,153 | 63,419 | ||||
Total Assets | $ | 1,162,611 | $ | 1,150,856 | ||
Liabilities and Equity | ||||||
Current liabilities | $ | 162,702 | $ | 187,356 | ||
Long-term debt | 297,500 | 318,750 | ||||
Other long-term liabilities | 113,990 | 101,567 | ||||
Equity excluding treasury stock | 1,355,504 | 1,315,664 | ||||
Treasury stock | (767,085 | ) | (772,481 | ) | ||
Total Liabilities and Equity | $ | 1,162,611 | $ | 1,150,856 | ||
Federated Reports Q2 2012 Earnings | Page 7 of 10 | |
Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions)
Quarter Ended | Six Months Ended | |||||||||||||||
June 30, 2012 | March 31, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | ||||||||||||
Equity Funds | ||||||||||||||||
Beginning assets | $ | 23,612 | $ | 21,930 | $ | 22,848 | $ | 21,930 | $ | 22,626 | ||||||
Sales | 1,529 | 1,823 | 1,456 | 3,352 | 3,014 | |||||||||||
Redemptions | (1,797 | ) | (2,187 | ) | (1,701 | ) | (3,984 | ) | (3,724 | ) | ||||||
Net redemptions | (268 | ) | (364 | ) | (245 | ) | (632 | ) | (710 | ) | ||||||
Net exchanges | 3 | (12 | ) | (5 | ) | (9 | ) | (4 | ) | |||||||
Market gains and losses/reinvestments1 | (676 | ) | 2,058 | 80 | 1,382 | 766 | ||||||||||
Ending assets | $ | 22,671 | $ | 23,612 | $ | 22,678 | $ | 22,671 | $ | 22,678 | ||||||
Equity Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 10,505 | $ | 8,957 | $ | 8,793 | $ | 8,957 | $ | 8,176 | ||||||
Sales3 | 836 | 1,461 | 573 | 2,297 | 1,265 | |||||||||||
Redemptions3 | (697 | ) | (486 | ) | (744 | ) | (1,183 | ) | (1,350 | ) | ||||||
Net sales (redemptions)3 | 139 | 975 | (171 | ) | 1,114 | (85 | ) | |||||||||
Net exchanges | (9 | ) | 0 | 8 | (9 | ) | 21 | |||||||||
Market gains and losses/reinvestments1 | (85 | ) | 573 | 72 | 488 | 590 | ||||||||||
Ending assets | $ | 10,550 | $ | 10,505 | $ | 8,702 | $ | 10,550 | $ | 8,702 | ||||||
Total Equity2 | ||||||||||||||||
Beginning assets | $ | 34,117 | $ | 30,887 | $ | 31,641 | $ | 30,887 | $ | 30,802 | ||||||
Sales3 | 2,365 | 3,284 | 2,029 | 5,649 | 4,279 | |||||||||||
Redemptions3 | (2,494 | ) | (2,673 | ) | (2,445 | ) | (5,167 | ) | (5,074 | ) | ||||||
Net (redemptions) sales3 | (129 | ) | 611 | (416 | ) | 482 | (795 | ) | ||||||||
Net exchanges | (6 | ) | (12 | ) | 3 | (18 | ) | 17 | ||||||||
Market gains and losses/reinvestments1 | (761 | ) | 2,631 | 152 | 1,870 | 1,356 | ||||||||||
Ending assets | $ | 33,221 | $ | 34,117 | $ | 31,380 | $ | 33,221 | $ | 31,380 | ||||||
Fixed-Income Funds | ||||||||||||||||
Beginning assets | $ | 38,526 | $ | 37,241 | $ | 32,689 | $ | 37,241 | $ | 31,933 | ||||||
Sales | 5,636 | 4,822 | 4,335 | 10,458 | 9,245 | |||||||||||
Redemptions | (3,639 | ) | (3,987 | ) | (4,339 | ) | (7,626 | ) | (8,720 | ) | ||||||
Net sales (redemptions) | 1,997 | 835 | (4 | ) | 2,832 | 525 | ||||||||||
Net exchanges | (1,510 | ) | (59 | ) | 1,818 | (1,569 | ) | 1,806 | ||||||||
Market gains and losses/reinvestments1 | 481 | 509 | 371 | 990 | 610 | |||||||||||
Ending assets | $ | 39,494 | $ | 38,526 | $ | 34,874 | $ | 39,494 | $ | 34,874 | ||||||
Fixed-Income Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 7,695 | $ | 7,573 | $ | 9,067 | $ | 7,573 | $ | 8,772 | ||||||
Sales3 | 624 | 220 | 534 | 844 | 1,085 | |||||||||||
Redemptions3 | (521 | ) | (280 | ) | (405 | ) | (801 | ) | (779 | ) | ||||||
Net sales (redemptions)3 | 103 | (60 | ) | 129 | 43 | 306 | ||||||||||
Net exchanges | 1,592 | 0 | (1,807 | ) | 1,592 | (1,807 | ) | |||||||||
Market gains and losses/reinvestments1 | 84 | 182 | 155 | 266 | 273 | |||||||||||
Ending assets | $ | 9,474 | $ | 7,695 | $ | 7,544 | $ | 9,474 | $ | 7,544 | ||||||
Total Fixed Income2 | ||||||||||||||||
Beginning assets | $ | 46,221 | $ | 44,814 | $ | 41,756 | $ | 44,814 | $ | 40,705 | ||||||
Sales3 | 6,260 | 5,042 | 4,869 | 11,302 | 10,330 | |||||||||||
Redemptions3 | (4,160 | ) | (4,267 | ) | (4,744 | ) | (8,427 | ) | (9,499 | ) | ||||||
Net sales3 | 2,100 | 775 | 125 | 2,875 | 831 | |||||||||||
Net exchanges | 82 | (59 | ) | 11 | 23 | (1 | ) | |||||||||
Market gains and losses/reinvestments1 | 565 | 691 | 526 | 1,256 | 883 | |||||||||||
Ending assets | $ | 48,968 | $ | 46,221 | $ | 42,418 | $ | 48,968 | $ | 42,418 | ||||||
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 Q2 2012 Earnings | Page 8 of 10 | |
Changes in Liquidation Portfolios
(in millions)
Quarter Ended | Six Months Ended | |||||||||||||||
June 30, 2012 | March 31, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | ||||||||||||
Liquidation Portfolios1 | ||||||||||||||||
Beginning assets | $ | 8,583 | $ | 8,856 | $ | 10,384 | $ | 8,856 | $ | 10,708 | ||||||
Sales2 | 0 | 0 | 0 | 0 | 2 | |||||||||||
Redemptions2 | (458 | ) | (273 | ) | (420 | ) | (731 | ) | (745 | ) | ||||||
Net redemptions2 | (458 | ) | (273 | ) | (420 | ) | (731 | ) | (743 | ) | ||||||
Market gains and losses/reinvestments3 | (1 | ) | 0 | 0 | (1 | ) | (1 | ) | ||||||||
Ending Assets | $ | 8,124 | $ | 8,583 | $ | 9,964 | $ | 8,124 | $ | 9,964 | ||||||
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) Sales, Redemptions or Net 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 Q2 2012 Earnings | Page 9 of 10 | |
MANAGED ASSETS (in millions) | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 33,221 | $ | 34,117 | $ | 30,887 | $ | 27,971 | $ | 31,380 | |||||
Fixed-income | 48,968 | 46,221 | 44,814 | 42,883 | 42,418 | ||||||||||
Money market | 265,548 | 274,704 | 285,140 | 271,653 | 265,651 | ||||||||||
Liquidation portfolios1 | 8,124 | 8,583 | 8,856 | 9,144 | 9,964 | ||||||||||
Total Managed Assets | $ | 355,861 | $ | 363,625 | $ | 369,697 | $ | 351,651 | $ | 349,413 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 22,671 | $ | 23,612 | $ | 21,930 | $ | 20,140 | $ | 22,678 | |||||
Fixed-income | 39,494 | 38,526 | 37,241 | 35,620 | 34,874 | ||||||||||
Money market | 238,610 | 245,232 | 255,857 | 245,293 | 236,077 | ||||||||||
Total Fund Assets | $ | 300,775 | $ | 307,370 | $ | 315,028 | $ | 301,053 | $ | 293,629 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 10,550 | $ | 10,505 | $ | 8,957 | $ | 7,831 | $ | 8,702 | |||||
Fixed-income | 9,474 | 7,695 | 7,573 | 7,263 | 7,544 | ||||||||||
Money market | 26,938 | 29,472 | 29,283 | 26,360 | 29,574 | ||||||||||
Total Separate Accounts | $ | 46,962 | $ | 47,672 | $ | 45,813 | $ | 41,454 | $ | 45,820 | |||||
Total Liquidation Portfolios1 | $ | 8,124 | $ | 8,583 | $ | 8,856 | $ | 9,144 | $ | 9,964 | |||||
Total Managed Assets | $ | 355,861 | $ | 363,625 | $ | 369,697 | $ | 351,651 | $ | 349,413 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 32,993 | $ | 32,827 | $ | 29,965 | $ | 29,699 | $ | 31,520 | |||||
Fixed-income | 47,747 | 45,792 | 43,980 | 43,001 | 42,127 | ||||||||||
Money market | 271,507 | 282,801 | 275,295 | 266,756 | 270,411 | ||||||||||
Liquidation portfolios1 | 8,353 | 8,703 | 9,030 | 9,309 | 10,138 | ||||||||||
Total Avg. Assets | $ | 360,600 | $ | 370,123 | $ | 358,270 | $ | 348,765 | $ | 354,196 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 22,642 | $ | 23,075 | $ | 21,451 | $ | 21,491 | $ | 22,741 | |||||
Fixed-income | 38,901 | 38,128 | 36,546 | 35,478 | 33,534 | ||||||||||
Money market | 243,454 | 251,825 | 249,324 | 239,406 | 239,642 | ||||||||||
Total Avg. Fund Assets | $ | 304,997 | $ | 313,028 | $ | 307,321 | $ | 296,375 | $ | 295,917 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 10,351 | $ | 9,752 | $ | 8,514 | $ | 8,208 | $ | 8,779 | |||||
Fixed-income | 8,846 | 7,664 | 7,434 | 7,523 | 8,593 | ||||||||||
Money market | 28,053 | 30,976 | 25,971 | 27,350 | 30,769 | ||||||||||
Total Avg. Separate Accounts | $ | 47,250 | $ | 48,392 | $ | 41,919 | $ | 43,081 | $ | 48,141 | |||||
Total Avg. Liquidation Portfolios1 | $ | 8,353 | $ | 8,703 | $ | 9,030 | $ | 9,309 | $ | 10,138 | |||||
Total Avg. Managed Assets | $ | 360,600 | $ | 370,123 | $ | 358,270 | $ | 348,765 | $ | 354,196 | |||||
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 Q2 2012 Earnings | Page 10 of 10 | |
AVERAGE MANAGED ASSETS | Six months ended | |||||
(in millions) | June 30, 2012 | June 30, 2011 | ||||
By Asset Class | ||||||
Equity | $ | 32,910 | $ | 31,288 | ||
Fixed-income | 46,769 | 41,657 | ||||
Money market | 277,154 | 271,976 | ||||
Liquidation portfolios1 | 8,528 | 10,336 | ||||
Total Avg. Assets | $ | 365,361 | $ | 355,257 | ||
By Product Type | ||||||
Funds: | ||||||
Equity | $ | 22,859 | $ | 22,670 | ||
Fixed-income | 38,514 | 32,899 | ||||
Money market | 247,640 | 240,008 | ||||
Total Avg. Fund Assets | $ | 309,013 | $ | 295,577 | ||
Separate Accounts: | ||||||
Equity | $ | 10,051 | $ | 8,618 | ||
Fixed-income | 8,255 | 8,758 | ||||
Money market | 29,514 | 31,968 | ||||
Total Avg. Separate Accounts | $ | 47,820 | $ | 49,344 | ||
Total Avg. Liquidation Portfolios1 | $ | 8,528 | $ | 10,336 | ||
Total Avg. Managed Assets | $ | 365,361 | $ | 355,257 | ||
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.