Attached files
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| 8-K - FORM 8-K - FEDERATED HERMES, INC. | a8-kx2012q3epr.htm |
Exhibit 99.1
Federated Investors, Inc. Reports Third Quarter 2012 Earnings; Board Declares Cash Dividend Per Share of $1.75 Including $0.24 Quarterly and $1.51 Special Dividend
• | Equity and fixed-income assets increase $4 billion during Q3 2012 to a record $94 billion |
• | Assets in strategic-value dividend strategies increase $3.6 billion for YTD 2012 to $13.8 billion |
(PITTSBURGH, Pa., Oct. 25, 2012) — Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.54 for the quarter ended Sept. 30, 2012 as compared to $0.37 for the same quarter last year. Net income was $55.8 million for Q3 2012 compared to $38.3 million for Q3 2011. Federated's Q3 2012 financial results include the recognition of insurance proceeds, which reduced pre-tax operating expenses by $17.3 million and increased EPS by $0.11 per share, after tax. Federated reported YTD 2012 EPS of $1.33 compared to $1.09 for the same period in 2011 and net income of $138.5 million compared to $114.0 million for the same period last year.
Federated's total managed assets were $364.1 billion at Sept. 30, 2012, up $12.4 billion or 4 percent from $351.7 billion at Sept. 30, 2011 and up $8.2 billion or 2 percent from $355.9 billion reported at June 30, 2012. Average managed assets for Q3 2012 were $360.9 billion, up $12.1 billion or 3 percent from $348.8 billion reported for Q3 2011 and up $0.3 billion from $360.6 billion reported for Q2 2012. Net sales of equity and fixed-income funds and separate accounts were $1.9 billion for Q3 2012.
"Federated continued to see client demand for our dividend-paying equity portfolios with more than $2.5 billion in net sales in those products in the first nine months of the year," said J. Christopher Donahue, president and chief executive officer. "On the international side, Federated made significant moves to grow our global profile by hiring an executive to lead our new Asia Pacific initiative and expanding our European distribution capabilities through an agreement with Bury Street Capital, a successful European distribution firm based in London."
Federated's board of directors declared a dividend of $1.75 per share. The dividend, which will be paid from Federated's existing cash balance, is considered an ordinary dividend for tax purposes and consists of a $0.24 quarterly dividend and a $1.51 special dividend. The dividend is payable on Nov. 15, 2012 to shareholders of record as of Nov. 8, 2012. The special dividend is expected to decrease EPS for Q4 2012 by approximately $0.04 and for full-year 2012 by approximately $0.02 due to the application of the two-class method of calculating EPS. During Q3 2012, Federated purchased 152,244 shares of Federated class B common stock for $3.0 million.
"The payment of the November special dividend returns cash to shareholders and is a recognition that Federated's business mix of equity, fixed-income and money market strategies allows the company to continue to succeed in challenging markets," said Thomas R. Donahue, chief financial officer.
Federated's equity assets were $35.4 billion at Sept. 30, 2012, up $7.4 billion or 26 percent from $28.0 billion at Sept. 30, 2011 and up $2.2 billion or 7 percent from $33.2 billion at June 30, 2012. Top-selling equity funds during Q3 2012 on a net basis were Federated Strategic Value Dividend Fund, Federated International Strategic Value Dividend Fund, Federated Capital Income Fund, Federated Managed Volatility Fund II and Federated Clover Small Value Fund.
MEDIA: | MEDIA: | ANALYSTS: |
Meghan McAndrew 412-288-8103 | J.T. Tuskan 412-288-7895 | Ray Hanley 412-288-1920 |
Federated Reports Q3 2012 Earnings | Page 2 of 11 | |
Federated's fixed-income assets were a record $51.4 billion at Sept. 30, 2012, up $8.5 billion or 20 percent from $42.9 billion at Sept. 30, 2011 and up $2.4 billion or 5 percent from $49.0 billion at June 30, 2012. Fixed-income assets in liquidation portfolios were $7.7 billion at Sept. 30, 2012. Fixed-income sales were driven by strong net flows into Federated Institutional High Yield Bond Fund, Federated's Capital Preservation Fund, Federated Municipal Ultrashort Fund, Federated Short-Intermediate Duration Municipal Trust and Federated Strategic Income Fund.
Money market assets in both funds and separate accounts were $269.6 billion at Sept. 30, 2012, down $2.1 billion or 1 percent from $271.7 billion at Sept. 30, 2011 and up $4.1 billion or 2 percent from $265.5 billion at June 30, 2012. Money market mutual fund assets were $244.8 billion at Sept. 30, 2012, down $0.5 billion from $245.3 billion at Sept. 30, 2011 and up $6.2 billion or 3 percent from $238.6 billion at June 30, 2012. Additionally, Federated announced in July that the commonwealth of Massachusetts had selected the company to manage two pools of assets with more than $9 billion in liquidity and short-term bond assets. Federated is expected to begin managing those assets in early 2013.
Financial Summary
Q3 2012 vs. Q3 2011
Revenue increased by $24.4 million or 11 percent due primarily to a decrease of $19.4 million in voluntary fee waivers related to certain money market funds in order for these funds to maintain positive or zero net yields. The reduction in fee waivers was primarily the result of improved yields available on securities held by money market funds. In addition, revenue increased due to an increase in average fixed-income and equity assets. See additional information about voluntary fee waivers in the table at the end of this financial summary.
During Q3 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 increased $1.4 million or 1 percent primarily as a result of an increase in distribution expense related primarily to reduced fee waivers and increased compensation and related expense. These increases were offset by the aforementioned recognition of insurance proceeds recorded as a reduction to professional service fees.
Q3 2012 vs. Q2 2012
Revenue increased by $6.3 million or 3 percent primarily due to one additional day in the quarter, an increase in average fixed-income and equity assets and a decrease in the aforementioned voluntary fee waivers due mainly to improved yields available on securities held by money market funds.
Operating expenses decreased by $14.7 million or 9 percent primarily related to the aforementioned recognition of insurance proceeds.
YTD 2012 vs. YTD 2011
Revenue for the first nine months of 2012 increased by $22.2 million, or 3 percent compared to the first nine months of 2011. The increase in revenue was primarily related to an increase in average fixed-income assets and decrease in the aforementioned voluntary fee waivers primarily as a result of improved yields available on securities held by money market funds partially offset by higher average money market fund assets. These revenue increases were partially offset by a decrease due to a change in the mix of average equity assets.
Federated Reports Q3 2012 Earnings | Page 3 of 11 | |
For the first nine months 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 nine months of 2012 decreased by $11.6 million or 2 percent compared to the same period last year. The decrease primarily reflects lower professional service fees due to the aforementioned recognition of insurance proceeds and nonrecurring legal expenses incurred in Q1 2011. This decrease was partially offset by increases in distribution and 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 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 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 Q3 2011 to Q3 2012 | Quarter Ended | Change Q2 2012 to Q3 2012 | Nine Months Ended | Change YTD 2011 to YTD 2012 | |||||||||||||||||||||
(Decrease)/Increase | Sept. 30, 2012 | Sept. 30, 2011 | June 30, 2012 | Sept. 30, 2012 | Sept. 30, 2011 | |||||||||||||||||||||
Investment advisory fees | $ | (41.2 | ) | $ | (57.2 | ) | $ | 16.0 | $ | (43.0 | ) | $ | 1.8 | $ | (137.2 | ) | $ | (142.8 | ) | $ | 5.6 | |||||
Other service fees | (28.3 | ) | (31.7 | ) | 3.4 | (27.3 | ) | (1.0 | ) | (83.0 | ) | (88.9 | ) | 5.9 | ||||||||||||
Total Revenue | $ | (69.5 | ) | $ | (88.9 | ) | $ | 19.4 | $ | (70.3 | ) | $ | 0.8 | $ | (220.2 | ) | $ | (231.7 | ) | $ | 11.5 | |||||
Distribution expense | (52.9 | ) | (63.2 | ) | 10.3 | (53.1 | ) | 0.2 | (163.6 | ) | (170.5 | ) | 6.9 | |||||||||||||
Operating income | $ | (16.6 | ) | $ | (25.7 | ) | $ | 9.1 | $ | (17.2 | ) | $ | 0.6 | $ | (56.6 | ) | $ | (61.2 | ) | $ | 4.6 | |||||
Noncontrolling interest | (0.3 | ) | (2.5 | ) | 2.2 | 0.0 | (0.3 | ) | (0.9 | ) | (5.5 | ) | 4.6 | |||||||||||||
Pre-tax impact | $ | (16.3 | ) | $ | (23.2 | ) | $ | 6.9 | $ | (17.2 | ) | $ | 0.9 | $ | (55.7 | ) | $ | (55.7 | ) | $ | 0.0 | |||||
Federated will host an earnings conference call at 9 a.m. Eastern on Oct. 26, 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 Nov. 2, 2012 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering access code 401060.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $364.1 billion in assets as of Sept. 30, 2012. With 136 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.
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Federated Reports Q3 2012 Earnings | Page 4 of 11 | |
1 Strategic Insight, Aug. 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, product demand and asset flows, growth opportunities, and expected impact of the dividend to EPS, 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 or achieve new growth opportunities, 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 2012 Earnings | Page 5 of 11 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Quarter Ended | % Change Q3 2011 to Q3 2012 | Quarter Ended | % Change Q2 2012 to Q3 2012 | ||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | June 30, 2012 | |||||||||||
Revenue | |||||||||||||
Investment advisory fees, net | $ | 160,306 | $ | 139,399 | 15 | % | $ | 154,367 | 4 | % | |||
Administrative service fees, net | 55,879 | 54,928 | 2 | 54,986 | 2 | ||||||||
Other service fees, net | 21,421 | 19,008 | 13 | 22,007 | (3 | ) | |||||||
Other, net | 862 | 713 | 21 | 772 | 12 | ||||||||
Total Revenue | 238,468 | 214,048 | 11 | 232,132 | 3 | ||||||||
Operating Expenses | |||||||||||||
Compensation and related | 65,131 | 57,930 | 12 | 65,215 | 0 | ||||||||
Distribution | 64,146 | 54,440 | 18 | 62,328 | 3 | ||||||||
Professional service fees | (7,864 | ) | 9,437 | (183 | ) | 9,932 | (179 | ) | |||||
Systems and communications | 6,532 | 5,825 | 12 | 6,773 | (4 | ) | |||||||
Office and occupancy | 6,108 | 6,202 | (2 | ) | 6,119 | 0 | |||||||
Advertising and promotional | 3,559 | 3,887 | (8 | ) | 3,316 | 7 | |||||||
Travel and related | 2,913 | 2,809 | 4 | 3,336 | (13 | ) | |||||||
Intangible asset related | 799 | 1,263 | (37 | ) | 822 | (3 | ) | ||||||
Other | 7,111 | 5,244 | 36 | 5,271 | 35 | ||||||||
Total Operating Expenses | 148,435 | 147,037 | 1 | 163,112 | (9 | ) | |||||||
Operating Income | 90,033 | 67,011 | 34 | 69,020 | 30 | ||||||||
Nonoperating Income (Expenses) | |||||||||||||
Investment income (loss), net | 3,706 | (1,271 | ) | 392 | 2,272 | 63 | |||||||
Debt expense | (3,534 | ) | (3,972 | ) | (11 | ) | (3,690 | ) | (4 | ) | |||
Other, net | (29 | ) | (83 | ) | (65 | ) | (128 | ) | (77 | ) | |||
Total Nonoperating Income (Expenses), net | 143 | (5,326 | ) | 103 | (1,546 | ) | 109 | ||||||
Income before income taxes | 90,176 | 61,685 | 46 | 67,474 | 34 | ||||||||
Income tax provision | 31,983 | 23,165 | 38 | 24,401 | 31 | ||||||||
Net income including noncontrolling interest in subsidiaries | 58,193 | 38,520 | 51 | 43,073 | 35 | ||||||||
Less: Net income attributable to the noncontrolling interest in subsidiaries | 2,420 | 200 | 1,110 | 2,663 | (9 | ) | |||||||
Net Income | $ | 55,773 | $ | 38,320 | 46 | % | $ | 40,410 | 38 | % | |||
Amounts Attributable to Federated | |||||||||||||
Earnings Per Share1 | |||||||||||||
Basic and Diluted | $ | 0.54 | $ | 0.37 | 46 | % | $ | 0.39 | 38 | % | |||
Weighted-average shares outstanding | |||||||||||||
Basic and diluted | 100,417 | 100,684 | 100,347 | ||||||||||
Dividends declared per share | $ | 0.24 | $ | 0.24 | $ | 0.24 | |||||||
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 $2.0 million, $1.2 million and $1.5 million available to unvested restricted shares for the quarterly periods ended Sept. 30, 2012, Sept. 30, 2011 and June 30, 2012, respectively, was excluded from the computation of earnings per share.
Federated Reports Q3 2012 Earnings | Page 6 of 11 | |
Unaudited Condensed Consolidated Statements of Income | ||||||||
(in thousands, except per share data) | ||||||||
Nine Months Ended | % Change | |||||||
Sept. 30, 2012 | Sept. 30, 2011 | |||||||
Revenue | ||||||||
Investment advisory fees, net | $ | 464,020 | $ | 448,115 | 4 | % | ||
Administrative service fees, net | 168,157 | 163,527 | 3 | |||||
Other service fees, net | 66,084 | 65,136 | 1 | |||||
Other, net | 2,620 | 1,930 | 36 | |||||
Total Revenue | 700,881 | 678,708 | 3 | |||||
Operating Expenses | ||||||||
Compensation and related | 194,411 | 184,819 | 5 | |||||
Distribution | 188,168 | 176,930 | 6 | |||||
Systems and communications | 19,615 | 17,131 | 15 | |||||
Office and occupancy | 18,479 | 18,436 | 0 | |||||
Professional service fees | 12,376 | 44,171 | (72 | ) | ||||
Advertising and promotional | 9,802 | 9,889 | (1 | ) | ||||
Travel and related | 9,000 | 8,501 | 6 | |||||
Intangible asset related | 1,642 | 6,672 | (75 | ) | ||||
Other | 17,988 | 16,565 | 9 | |||||
Total Operating Expenses | 471,481 | 483,114 | (2 | ) | ||||
Operating Income | 229,400 | 195,594 | 17 | |||||
Nonoperating Income (Expenses) | ||||||||
Investment income, net | 9,325 | 3,721 | 151 | |||||
Debt expense | (10,935 | ) | (13,187 | ) | (17 | ) | ||
Other, net | (195 | ) | (192 | ) | 2 | |||
Total Nonoperating Expenses, net | (1,805 | ) | (9,658 | ) | (81 | ) | ||
Income before income taxes | 227,595 | 185,936 | 22 | |||||
Income tax provision | 81,922 | 69,477 | 18 | |||||
Net income including noncontrolling interest in subsidiaries | 145,673 | 116,459 | 25 | |||||
Less: Net income attributable to the noncontrolling interest in subsidiaries | 7,165 | 2,495 | 187 | |||||
Net Income | $ | 138,508 | $ | 113,964 | 22 | % | ||
Amounts Attributable to Federated | ||||||||
Earnings Per Share1 | ||||||||
Basic and Diluted | $ | 1.33 | $ | 1.09 | 22 | % | ||
Weighted-average shares outstanding | ||||||||
Basic | 100,292 | 100,725 | ||||||
Diluted | 100,292 | 100,756 | ||||||
Dividends declared per share | $ | 0.72 | $ | 0.72 | ||||
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 $5.0 million and $3.7 million available to unvested restricted shares for the nine months ended Sept. 30, 2012 and Sept. 30, 2011, respectively, was excluded from the computation of earnings per share.
Federated Reports Q3 2012 Earnings | Page 7 of 11 | |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | Sept. 30, 2012 | Dec. 31, 2011 | ||||
Assets | ||||||
Cash and other investments | $ | 367,777 | $ | 322,317 | ||
Other current assets | 46,282 | 44,194 | ||||
Intangible assets, net and goodwill | 725,268 | 720,926 | ||||
Other long-term assets | 65,659 | 63,419 | ||||
Total Assets | $ | 1,204,986 | $ | 1,150,856 | ||
Liabilities and Equity | ||||||
Current liabilities | $ | 166,270 | $ | 178,486 | ||
Long-term debt | 286,875 | 318,750 | ||||
Other long-term liabilities | 128,362 | 110,437 | ||||
Equity excluding treasury stock | 1,393,607 | 1,315,664 | ||||
Treasury stock | (770,128 | ) | (772,481 | ) | ||
Total Liabilities and Equity | $ | 1,204,986 | $ | 1,150,856 | ||
Federated Reports Q3 2012 Earnings | Page 8 of 11 | |
Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions)
Quarter Ended | Nine Months Ended | |||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Sept. 30, 2011 | Sept. 30, 2012 | Sept. 30, 2011 | ||||||||||||
Equity Funds | ||||||||||||||||
Beginning assets | $ | 22,671 | $ | 23,612 | $ | 22,678 | $ | 21,930 | $ | 22,626 | ||||||
Sales | 1,454 | 1,529 | 2,434 | 4,806 | 5,448 | |||||||||||
Redemptions | (1,527 | ) | (1,797 | ) | (1,966 | ) | (5,511 | ) | (5,690 | ) | ||||||
Net (redemptions) sales | (73 | ) | (268 | ) | 468 | (705 | ) | (242 | ) | |||||||
Net exchanges | (14 | ) | 3 | (40 | ) | (23 | ) | (44 | ) | |||||||
Acquisition-related | 190 | 0 | 463 | 190 | 463 | |||||||||||
Market gains and losses/reinvestments1 | 884 | (676 | ) | (3,429 | ) | 2,266 | (2,663 | ) | ||||||||
Ending assets | $ | 23,658 | $ | 22,671 | $ | 20,140 | $ | 23,658 | $ | 20,140 | ||||||
Equity Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 10,550 | $ | 10,505 | $ | 8,702 | $ | 8,957 | $ | 8,176 | ||||||
Sales3 | 1,062 | 836 | 723 | 3,359 | 1,988 | |||||||||||
Redemptions3 | (503 | ) | (697 | ) | (631 | ) | (1,686 | ) | (1,981 | ) | ||||||
Net sales3 | 559 | 139 | 92 | 1,673 | 7 | |||||||||||
Net exchanges | 0 | (9 | ) | 7 | (9 | ) | 28 | |||||||||
Market gains and losses/reinvestments1 | 588 | (85 | ) | (970 | ) | 1,076 | (380 | ) | ||||||||
Ending assets | $ | 11,697 | $ | 10,550 | $ | 7,831 | $ | 11,697 | $ | 7,831 | ||||||
Total Equity2 | ||||||||||||||||
Beginning assets | $ | 33,221 | $ | 34,117 | $ | 31,380 | $ | 30,887 | $ | 30,802 | ||||||
Sales3 | 2,516 | 2,365 | 3,157 | 8,165 | 7,436 | |||||||||||
Redemptions3 | (2,030 | ) | (2,494 | ) | (2,597 | ) | (7,197 | ) | (7,671 | ) | ||||||
Net sales (redemptions)3 | 486 | (129 | ) | 560 | 968 | (235 | ) | |||||||||
Net exchanges | (14 | ) | (6 | ) | (33 | ) | (32 | ) | (16 | ) | ||||||
Acquisition-related | 190 | 0 | 463 | 190 | 463 | |||||||||||
Market gains and losses/reinvestments1 | 1,472 | (761 | ) | (4,399 | ) | 3,342 | (3,043 | ) | ||||||||
Ending assets | $ | 35,355 | $ | 33,221 | $ | 27,971 | $ | 35,355 | $ | 27,971 | ||||||
Fixed-Income Funds | ||||||||||||||||
Beginning assets | $ | 39,494 | $ | 38,526 | $ | 34,874 | $ | 37,241 | $ | 31,933 | ||||||
Sales | 5,120 | 5,636 | 4,049 | 15,578 | 13,294 | |||||||||||
Redemptions | (3,770 | ) | (3,639 | ) | (3,707 | ) | (11,396 | ) | (12,427 | ) | ||||||
Net sales | 1,350 | 1,997 | 342 | 4,182 | 867 | |||||||||||
Net exchanges | (92 | ) | (1,510 | ) | 29 | (1,661 | ) | 1,835 | ||||||||
Acquisition-related | 144 | 0 | 132 | 144 | 132 | |||||||||||
Market gains and losses/reinvestments1 | 651 | 481 | 243 | 1,641 | 853 | |||||||||||
Ending assets | $ | 41,547 | $ | 39,494 | $ | 35,620 | $ | 41,547 | $ | 35,620 | ||||||
Fixed-Income Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 9,474 | $ | 7,695 | $ | 7,544 | $ | 7,573 | $ | 8,772 | ||||||
Sales3 | 309 | 624 | 198 | 1,153 | 1,283 | |||||||||||
Redemptions3 | (202 | ) | (521 | ) | (469 | ) | (1,003 | ) | (1,248 | ) | ||||||
Net sales (redemptions)3 | 107 | 103 | (271 | ) | 150 | 35 | ||||||||||
Net exchanges | 1 | 1,592 | 0 | 1,593 | (1,807 | ) | ||||||||||
Market gains and losses/reinvestments1 | 260 | 84 | (10 | ) | 526 | 263 | ||||||||||
Ending assets | $ | 9,842 | $ | 9,474 | $ | 7,263 | $ | 9,842 | $ | 7,263 | ||||||
Total Fixed Income2 | ||||||||||||||||
Beginning assets | $ | 48,968 | $ | 46,221 | $ | 42,418 | $ | 44,814 | $ | 40,705 | ||||||
Sales3 | 5,429 | 6,260 | 4,247 | 16,731 | 14,577 | |||||||||||
Redemptions3 | (3,972 | ) | (4,160 | ) | (4,176 | ) | (12,399 | ) | (13,675 | ) | ||||||
Net sales3 | 1,457 | 2,100 | 71 | 4,332 | 902 | |||||||||||
Net exchanges | (91 | ) | 82 | 29 | (68 | ) | 28 | |||||||||
Acquisition-related | 144 | 0 | 132 | 144 | 132 | |||||||||||
Market gains and losses/reinvestments1 | 911 | 565 | 233 | 2,167 | 1,116 | |||||||||||
Ending assets | $ | 51,389 | $ | 48,968 | $ | 42,883 | $ | 51,389 | $ | 42,883 | ||||||
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, 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 2012 Earnings | Page 9 of 11 | |
Changes in Liquidation Portfolios
(in millions)
Quarter Ended | Nine Months Ended | |||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Sept. 30, 2011 | Sept. 30, 2012 | Sept. 30, 2011 | ||||||||||||
Liquidation Portfolios1 | ||||||||||||||||
Beginning assets | $ | 8,124 | $ | 8,583 | $ | 9,964 | $ | 8,856 | $ | 10,708 | ||||||
Sales2 | 0 | 0 | 0 | 0 | 2 | |||||||||||
Redemptions2 | (406 | ) | (458 | ) | (820 | ) | (1,137 | ) | (1,565 | ) | ||||||
Net redemptions2 | (406 | ) | (458 | ) | (820 | ) | (1,137 | ) | (1,563 | ) | ||||||
Market gains and losses/reinvestments3 | 0 | (1 | ) | 0 | (1 | ) | (1 | ) | ||||||||
Ending Assets | $ | 7,718 | $ | 8,124 | $ | 9,144 | $ | 7,718 | $ | 9,144 | ||||||
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 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.
Federated Reports Q3 2012 Earnings | Page 10 of 11 | |
MANAGED ASSETS (in millions) | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 35,355 | $ | 33,221 | $ | 34,117 | $ | 30,887 | $ | 27,971 | |||||
Fixed-income | 51,389 | 48,968 | 46,221 | 44,814 | 42,883 | ||||||||||
Money market | 269,622 | 265,548 | 274,704 | 285,140 | 271,653 | ||||||||||
Liquidation portfolios1 | 7,718 | 8,124 | 8,583 | 8,856 | 9,144 | ||||||||||
Total Managed Assets | $ | 364,084 | $ | 355,861 | $ | 363,625 | $ | 369,697 | $ | 351,651 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 23,658 | $ | 22,671 | $ | 23,612 | $ | 21,930 | $ | 20,140 | |||||
Fixed-income | 41,547 | 39,494 | 38,526 | 37,241 | 35,620 | ||||||||||
Money market | 244,826 | 238,610 | 245,232 | 255,857 | 245,293 | ||||||||||
Total Fund Assets | $ | 310,031 | $ | 300,775 | $ | 307,370 | $ | 315,028 | $ | 301,053 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 11,697 | $ | 10,550 | $ | 10,505 | $ | 8,957 | $ | 7,831 | |||||
Fixed-income | 9,842 | 9,474 | 7,695 | 7,573 | 7,263 | ||||||||||
Money market | 24,796 | 26,938 | 29,472 | 29,283 | 26,360 | ||||||||||
Total Separate Accounts | $ | 46,335 | $ | 46,962 | $ | 47,672 | $ | 45,813 | $ | 41,454 | |||||
Total Liquidation Portfolios1 | $ | 7,718 | $ | 8,124 | $ | 8,583 | $ | 8,856 | $ | 9,144 | |||||
Total Managed Assets | $ | 364,084 | $ | 355,861 | $ | 363,625 | $ | 369,697 | $ | 351,651 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 34,158 | $ | 32,993 | $ | 32,827 | $ | 29,965 | $ | 29,699 | |||||
Fixed-income | 50,195 | 47,747 | 45,792 | 43,980 | 43,001 | ||||||||||
Money market | 268,573 | 271,507 | 282,801 | 275,295 | 266,756 | ||||||||||
Liquidation portfolios1 | 7,948 | 8,353 | 8,703 | 9,030 | 9,309 | ||||||||||
Total Avg. Assets | $ | 360,874 | $ | 360,600 | $ | 370,123 | $ | 358,270 | $ | 348,765 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 23,133 | $ | 22,642 | $ | 23,075 | $ | 21,451 | $ | 21,491 | |||||
Fixed-income | 40,579 | 38,901 | 38,128 | 36,546 | 35,478 | ||||||||||
Money market | 243,111 | 243,454 | 251,825 | 249,324 | 239,406 | ||||||||||
Total Avg. Fund Assets | $ | 306,823 | $ | 304,997 | $ | 313,028 | $ | 307,321 | $ | 296,375 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 11,025 | $ | 10,351 | $ | 9,752 | $ | 8,514 | $ | 8,208 | |||||
Fixed-income | 9,616 | 8,846 | 7,664 | 7,434 | 7,523 | ||||||||||
Money market | 25,462 | 28,053 | 30,976 | 25,971 | 27,350 | ||||||||||
Total Avg. Separate Accounts | $ | 46,103 | $ | 47,250 | $ | 48,392 | $ | 41,919 | $ | 43,081 | |||||
Total Avg. Liquidation Portfolios1 | $ | 7,948 | $ | 8,353 | $ | 8,703 | $ | 9,030 | $ | 9,309 | |||||
Total Avg. Managed Assets | $ | 360,874 | $ | 360,600 | $ | 370,123 | $ | 358,270 | $ | 348,765 | |||||
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 Q3 2012 Earnings | Page 11 of 11 | |
AVERAGE MANAGED ASSETS | Nine Months Ended | |||||
(in millions) | Sept. 30, 2012 | Sept. 30, 2011 | ||||
By Asset Class | ||||||
Equity | $ | 33,326 | $ | 30,758 | ||
Fixed-income | 47,912 | 42,105 | ||||
Money market | 274,293 | 270,236 | ||||
Liquidation portfolios1 | 8,334 | 9,994 | ||||
Total Avg. Assets | $ | 363,865 | $ | 353,093 | ||
By Product Type | ||||||
Funds: | ||||||
Equity | $ | 22,950 | $ | 22,277 | ||
Fixed-income | 39,203 | 33,759 | ||||
Money market | 246,130 | 239,807 | ||||
Total Avg. Fund Assets | $ | 308,283 | $ | 295,843 | ||
Separate Accounts: | ||||||
Equity | $ | 10,376 | $ | 8,481 | ||
Fixed-income | 8,709 | 8,346 | ||||
Money market | 28,163 | 30,429 | ||||
Total Avg. Separate Accounts | $ | 47,248 | $ | 47,256 | ||
Total Avg. Liquidation Portfolios1 | $ | 8,334 | $ | 9,994 | ||
Total Avg. Managed Assets | $ | 363,865 | $ | 353,093 | ||
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.