Attached files
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| 8-K - 8-K - FEDERATED HERMES, INC. | a8-kx2012q4epr.htm |
Exhibit 99.1
Federated Investors, Inc. Reports Fourth Quarter and Year-End 2012 Earnings
• | Equity and bond assets increase $11 billion during 2012 to a record $95 billion |
• | 2012 equity and bond net sales reach $6 billion |
• | Q4 2012 net income increases by 34 percent compared to Q4 2011 |
• | Board declares $0.24 per share quarterly dividend |
(PITTSBURGH, Pa., Jan. 24, 2013) — Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.44 for the quarter ended Dec. 31, 2012 as compared to $0.36 for the same quarter last year. Q4 2012 EPS reflects a $0.04 reduction due to the application of the two-class method of computing EPS in connection with the special dividend paid in Q4 2012. Net income was $49.6 million for Q4 2012 compared to $36.9 million for Q4 2011. Federated reported 2012 EPS of $1.79 compared to $1.45 for 2011 and net income of $188.1 million for 2012 compared to $150.9 million for 2011.
Federated's total managed assets were $379.8 billion at Dec. 31, 2012, up $10.1 billion or 3 percent from $369.7 billion at Dec. 31, 2011 and up $15.7 billion or 4 percent from $364.1 billion reported at Sept. 30, 2012. Average managed assets for Q4 2012 were $368.7 billion, up $10.4 billion or 3 percent from $358.3 billion reported for Q4 2011 and up $7.6 billion or 2 percent from $361.1 billion reported for Q3 2012. Net sales of equity and fixed-income funds and separate accounts were $685 million for Q4 2012.
"In 2012, Federated's range of income-oriented investment strategies proved to be highly attractive options for investors," said J. Christopher Donahue, president and chief executive officer. "On the equity side, assets in our strategic-value dividend strategies increased more than 35 percent during the year to $14 billion, while on the fixed-income side, Federated had record sales of nearly $22 billion in our funds and separate accounts."
Federated's board of directors declared a quarterly dividend of $0.24 per share. The dividend is payable on Feb. 15, 2013 to shareholders of record as of Feb. 8, 2013. During Q4 2012, Federated paid a regular quarterly dividend of $0.24 per share and a special dividend of $1.51 per share. In 2012, the company paid total dividends in the amount of $2.47 per share. During Q4 2012, Federated purchased 50,000 shares of Federated class B common stock for $1.0 million. In 2012, the company purchased 321,687 shares of Federated class B common stock for $6.3 million.
Federated's equity assets were $35.0 billion at Dec. 31, 2012, up $4.1 billion or 13 percent from $30.9 billion at Dec. 31, 2011 and down $0.4 billion or 1 percent from $35.4 billion at Sept. 30, 2012. Top-selling equity funds during Q4 2012 on a net basis were Federated Capital Income Fund, Federated International Strategic Value Dividend Fund, Federated Managed Volatility Fund II, Federated Muni and Stock Advantage Fund and Federated Clover Small Value Fund.
Federated's fixed-income assets were a record $52.7 billion at Dec. 31, 2012, up $7.9 billion or 18 percent from $44.8 billion at Dec. 31, 2011 and up $1.3 billion or 3 percent from $51.4 billion at Sept. 30, 2012. Fixed-income assets in liquidation portfolios were $7.3 billion at Dec. 31, 2012. Fixed-income sales during Q4 2012 were driven by strong net flows into Federated's short-duration products, Federated Total Return Bond Fund and Federated Institutional High Yield Bond Fund.
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 2012 Earnings | Page 2 of 11 | |
Money market assets in both funds and separate accounts were $284.7 billion at Dec. 31, 2012, down $0.4 billion from $285.1 billion at Dec. 31, 2011 and up $15.1 billion or 6 percent from $269.6 billion at Sept. 30, 2012. Money market mutual fund assets were $255.7 billion at Dec. 31, 2012, down $0.2 billion from $255.9 billion at Dec. 31, 2011 and up $10.9 billion or 4 percent from $244.8 billion at Sept. 30, 2012. The Q4 2012 increase in money market assets reflects a variety of factors including the ongoing confidence of clients in money market funds as an investment vehicle, favorable market conditions and seasonality.
Financial Summary
Q4 2012 vs. Q4 2011
Revenue increased by $28.4 million or 13 percent due primarily to a decrease 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 Q4 2012, Federated derived 52 percent of its revenue from equity and fixed-income assets (30 percent from equity assets and 22 percent from fixed-income assets), 47 percent from money market assets and 1 percent from other products and services.
Operating expenses increased $7.1 million or 5 percent primarily as a result of an increase in distribution expense related to reduced fee waivers and an increase in compensation and related expense. These increases were partially offset by a reduction in professional service fees due to the recognition of insurance proceeds in Q4 2012.
Nonoperating expenses, net, increased $0.9 million due primarily to a $3.0 million impairment charge in Q4 2012 related to a change in the value of a minority interest investment, partially offset by an increase in investment income.
Q4 2012 vs. Q3 2012
Revenue increased by $6.4 million or 3 percent primarily due to an increase in total average assets.
Operating expenses increased by $13.2 million or 9 percent primarily related to an increase in professional service fees due to a decrease in the recognition of insurance proceeds.
Nonoperating expenses, net, increased $2.4 million due primarily to the aforementioned impairment charge.
YTD 2012 vs. YTD 2011
Revenue increased by $50.6 million, or 6 percent primarily due to a decrease in the aforementioned voluntary fee waivers mainly as a result of improved yields available on securities held by money market funds and an increase in average fixed-income assets.
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 decreased by $4.5 million or 1 percent. The decrease primarily reflects lower professional service fees due to the recognition of insurance proceeds in 2012 and nonrecurring legal expenses incurred in Q1 2011. This decrease was
Federated Reports Q4 and Year-End 2012 Earnings | Page 3 of 11 | |
partially offset by increases in distribution expenses related to reduced fee waivers and increased average fixed-income assets and an increase in compensation and related expenses.
Nonoperating expenses, net, decreased by $7.0 million or 63 percent. The decrease reflects an increase in investment income primarily as a result of realized and unrealized gains on investments and a reduction in debt expense. These decreases were partially offset by the aforementioned impairment charge.
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, 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, 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 to Consolidated Statements of Income
(in millions)
Quarter Ended | Change Q4 2011 to Q4 2012 | Quarter Ended | Change Q3 2012 to Q4 2012 | Year Ended | Change 2011 to 2012 | |||||||||||||||||||||
Dec. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||||||||||||||
Investment advisory fees | $ | (40.0 | ) | $ | (58.8 | ) | $ | 18.8 | $ | (41.2 | ) | $ | 1.2 | $ | (177.2 | ) | $ | (201.6 | ) | $ | 24.4 | |||||
Other service fees | (30.7 | ) | (30.2 | ) | (0.5 | ) | (28.3 | ) | (2.4 | ) | (113.8 | ) | (119.1 | ) | 5.3 | |||||||||||
Total Revenue | $ | (70.7 | ) | $ | (89.0 | ) | $ | 18.3 | $ | (69.5 | ) | $ | (1.2 | ) | $ | (291.0 | ) | $ | (320.7 | ) | $ | 29.7 | ||||
Less: Reduction in distribution expense | 54.9 | 61.9 | (7.0 | ) | 52.9 | 2.0 | 218.5 | 232.3 | (13.8 | ) | ||||||||||||||||
Operating income | $ | (15.8 | ) | $ | (27.1 | ) | $ | 11.3 | $ | (16.6 | ) | $ | 0.8 | $ | (72.5 | ) | $ | (88.4 | ) | $ | 15.9 | |||||
Less: Reduction in noncontrolling interest | 0.3 | 1.0 | (0.7 | ) | 0.3 | 0.0 | 1.3 | 6.5 | (5.2 | ) | ||||||||||||||||
Pre-tax impact | $ | (15.5 | ) | $ | (26.1 | ) | $ | 10.6 | $ | (16.3 | ) | $ | 0.8 | $ | (71.2 | ) | $ | (81.9 | ) | $ | 10.7 | |||||
Federated will host an earnings conference call at 9 a.m. Eastern on Jan. 25, 2013. 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. 1, 2013 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering access code 407161.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $379.8 billion in assets as of Dec. 31, 2012. With 137 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 8 percent of fixed-income fund managers1. For more information, visit FederatedInvestors.com.
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Federated Reports Q4 and Year-End 2012 Earnings | Page 4 of 11 | |
1 Strategic Insight, Nov. 30, 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 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 2012 Earnings | Page 5 of 11 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Quarter Ended | % Change Q4 2011 to Q4 2012 | Quarter Ended | % Change Q3 2012 to Q4 2012 | ||||||||||
Dec. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2012 | |||||||||||
Revenue | |||||||||||||
Investment advisory fees, net | $ | 166,813 | $ | 138,225 | 21 | % | $ | 160,306 | 4 | % | |||
Administrative service fees, net | 57,372 | 56,830 | 1 | 55,879 | 3 | ||||||||
Other service fees, net | 19,818 | 20,249 | (2 | ) | 21,421 | (7 | ) | ||||||
Other, net | 821 | 1,102 | (25 | ) | 862 | (5 | ) | ||||||
Total Revenue | 244,824 | 216,406 | 13 | 238,468 | 3 | ||||||||
Operating Expenses | |||||||||||||
Distribution | 65,278 | 58,740 | 11 | 64,146 | 2 | ||||||||
Compensation and related | 63,211 | 60,620 | 4 | 65,131 | (3 | ) | |||||||
Professional service fees | 6,549 | 9,567 | (32 | ) | (7,864 | ) | 183 | ||||||
Office and occupancy | 6,349 | 6,254 | 2 | 6,108 | 4 | ||||||||
Systems and communications | 6,100 | 5,839 | 4 | 6,532 | (7 | ) | |||||||
Travel and related | 3,837 | 3,673 | 4 | 2,913 | 32 | ||||||||
Advertising and promotional | 3,611 | 3,524 | 2 | 3,559 | 1 | ||||||||
Intangible asset related | 951 | 1,243 | (23 | ) | 799 | 19 | |||||||
Other | 5,746 | 5,085 | 13 | 7,111 | (19 | ) | |||||||
Total Operating Expenses | 161,632 | 154,545 | 5 | 148,435 | 9 | ||||||||
Operating Income | 83,192 | 61,861 | 34 | 90,033 | (8 | ) | |||||||
Nonoperating Income (Expenses) | |||||||||||||
Investment income, net | 4,343 | 2,538 | 71 | 3,706 | 17 | ||||||||
Debt expense | (3,506 | ) | (3,860 | ) | (9 | ) | (3,534 | ) | (1 | ) | |||
Other, net | (3,112 | ) | (103 | ) | 2,921 | (29 | ) | 10,631 | |||||
Total Nonoperating (Expenses) Income, net | (2,275 | ) | (1,425 | ) | 60 | 143 | 1,691 | ||||||
Income before income taxes | 80,917 | 60,436 | 34 | 90,176 | (10 | ) | |||||||
Income tax provision | 28,961 | 21,811 | 33 | 31,983 | (9 | ) | |||||||
Net income including noncontrolling interest in subsidiaries | 51,956 | 38,625 | 35 | 58,193 | (11 | ) | |||||||
Less: Net income attributable to the noncontrolling interest in subsidiaries | 2,375 | 1,682 | 41 | 2,420 | (2 | ) | |||||||
Net Income | $ | 49,581 | $ | 36,943 | 34 | % | $ | 55,773 | (11 | )% | |||
Amounts Attributable to Federated | |||||||||||||
Earnings Per Share1 | |||||||||||||
Basic and diluted | $ | 0.44 | $ | 0.36 | 22 | % | $ | 0.54 | (19 | )% | |||
Weighted-average shares outstanding | |||||||||||||
Basic and diluted | 100,374 | 100,264 | 100,417 | ||||||||||
Dividends declared per share | $ | 1.75 | $ | 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 $5.7 million, $1.2 million and $2.0 million available to unvested restricted shares for the quarterly periods ended Dec. 31, 2012, Dec. 31, 2011 and Sept. 30, 2012, respectively, was excluded from the computation of earnings per share.
Federated Reports Q4 and Year-End 2012 Earnings | Page 6 of 11 | |
Unaudited Condensed Consolidated Statements of Income | ||||||||
(in thousands, except per share data) | ||||||||
Year Ended | % Change | |||||||
Dec. 31, 2012 | Dec. 31, 2011 | |||||||
Revenue | ||||||||
Investment advisory fees, net | $ | 630,834 | $ | 586,340 | 8 | % | ||
Administrative service fees, net | 225,529 | 220,356 | 2 | |||||
Other service fees, net | 85,902 | 85,385 | 1 | |||||
Other, net | 3,441 | 3,033 | 13 | |||||
Total Revenue | 945,706 | 895,114 | 6 | |||||
Operating Expenses | ||||||||
Compensation and related | 257,622 | 245,439 | 5 | |||||
Distribution | 253,445 | 235,670 | 8 | |||||
Systems and communications | 25,716 | 22,971 | 12 | |||||
Office and occupancy | 24,828 | 24,689 | 1 | |||||
Professional service fees | 18,925 | 53,737 | (65 | ) | ||||
Advertising and promotional | 13,413 | 13,413 | 0 | |||||
Travel and related | 12,838 | 12,174 | 5 | |||||
Intangible asset related | 2,593 | 7,915 | (67 | ) | ||||
Other | 23,733 | 21,651 | 10 | |||||
Total Operating Expenses | 633,113 | 637,659 | (1 | ) | ||||
Operating Income | 312,593 | 257,455 | 21 | |||||
Nonoperating Income (Expenses) | ||||||||
Investment income, net | 13,667 | 6,259 | 118 | |||||
Debt expense | (14,441 | ) | (17,047 | ) | (15 | ) | ||
Other, net | (3,308 | ) | (296 | ) | 1,018 | |||
Total Nonoperating Expenses, net | (4,082 | ) | (11,084 | ) | (63 | ) | ||
Income before income taxes | 308,511 | 246,371 | 25 | |||||
Income tax provision | 110,883 | 91,288 | 21 | |||||
Net income including noncontrolling interest in subsidiaries | 197,628 | 155,083 | 27 | |||||
Less: Net income attributable to the noncontrolling interest in subsidiaries | 9,540 | 4,177 | 128 | |||||
Net Income | $ | 188,088 | $ | 150,906 | 25 | % | ||
Amounts Attributable to Federated | ||||||||
Earnings Per Share1 | ||||||||
Basic and diluted | $ | 1.79 | $ | 1.45 | 23 | % | ||
Weighted-average shares outstanding | ||||||||
Basic | 100,313 | 100,609 | ||||||
Diluted | 100,313 | 100,632 | ||||||
Dividends declared per share | $ | 2.47 | $ | 0.96 | ||||
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 $8.4 million and $4.9 million available to unvested restricted shares for the years ended Dec. 31, 2012 and Dec. 31, 2011, respectively, was excluded from the computation of earnings per share.
Federated Reports Q4 and Year-End 2012 Earnings | Page 7 of 11 | |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Assets | ||||||
Cash and other investments | $ | 258,628 | $ | 322,317 | ||
Other current assets | 41,434 | 44,194 | ||||
Intangible assets, net and goodwill | 727,857 | 720,926 | ||||
Other long-term assets | 62,142 | 63,419 | ||||
Total Assets | $ | 1,090,061 | $ | 1,150,856 | ||
Liabilities and Equity | ||||||
Current liabilities | $ | 181,134 | $ | 178,486 | ||
Long-term debt | 276,250 | 318,750 | ||||
Other long-term liabilities | 128,733 | 110,437 | ||||
Equity excluding treasury stock | 1,263,966 | 1,315,664 | ||||
Treasury stock | (760,022 | ) | (772,481 | ) | ||
Total Liabilities and Equity | $ | 1,090,061 | $ | 1,150,856 | ||
Federated Reports Q4 and Year-End 2012 Earnings | Page 8 of 11 | |
Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions)
Quarter Ended | Year Ended | |||||||||||||||
Dec. 31, 2012 | Sept. 30, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||||
Equity Funds | ||||||||||||||||
Beginning assets | $ | 23,658 | $ | 22,671 | $ | 20,140 | $ | 21,930 | $ | 22,626 | ||||||
Sales | 1,415 | 1,454 | 2,185 | 6,221 | 7,633 | |||||||||||
Redemptions | (1,866 | ) | (1,527 | ) | (1,771 | ) | (7,377 | ) | (7,461 | ) | ||||||
Net (redemptions) sales | (451 | ) | (73 | ) | 414 | (1,156 | ) | 172 | ||||||||
Net exchanges | (47 | ) | (14 | ) | (32 | ) | (70 | ) | (76 | ) | ||||||
Acquisition-related | 0 | 190 | 0 | 190 | 463 | |||||||||||
Market gains and losses/reinvestments1 | (8 | ) | 884 | 1,408 | 2,258 | (1,255 | ) | |||||||||
Ending assets | $ | 23,152 | $ | 23,658 | $ | 21,930 | $ | 23,152 | $ | 21,930 | ||||||
Equity Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 11,697 | $ | 10,550 | $ | 7,831 | $ | 8,957 | $ | 8,176 | ||||||
Sales3 | 893 | 1,062 | 873 | 4,252 | 2,861 | |||||||||||
Redemptions3 | (605 | ) | (503 | ) | (549 | ) | (2,291 | ) | (2,530 | ) | ||||||
Net sales3 | 288 | 559 | 324 | 1,961 | 331 | |||||||||||
Net exchanges | 1 | 0 | 26 | (8 | ) | 54 | ||||||||||
Market gains and losses/reinvestments1 | (128 | ) | 588 | 776 | 948 | 396 | ||||||||||
Ending assets | $ | 11,858 | $ | 11,697 | $ | 8,957 | $ | 11,858 | $ | 8,957 | ||||||
Total Equity2 | ||||||||||||||||
Beginning assets | $ | 35,355 | $ | 33,221 | $ | 27,971 | $ | 30,887 | $ | 30,802 | ||||||
Sales3 | 2,308 | 2,516 | 3,058 | 10,473 | 10,494 | |||||||||||
Redemptions3 | (2,471 | ) | (2,030 | ) | (2,320 | ) | (9,668 | ) | (9,991 | ) | ||||||
Net (redemptions) sales3 | (163 | ) | 486 | 738 | 805 | 503 | ||||||||||
Net exchanges | (46 | ) | (14 | ) | (6 | ) | (78 | ) | (22 | ) | ||||||
Acquisition-related | 0 | 190 | 0 | 190 | 463 | |||||||||||
Market gains and losses/reinvestments1 | (136 | ) | 1,472 | 2,184 | 3,206 | (859 | ) | |||||||||
Ending assets | $ | 35,010 | $ | 35,355 | $ | 30,887 | $ | 35,010 | $ | 30,887 | ||||||
Fixed-Income Funds | ||||||||||||||||
Beginning assets | $ | 41,547 | $ | 39,494 | $ | 35,620 | $ | 37,241 | $ | 31,933 | ||||||
Sales | 4,848 | 5,120 | 4,696 | 20,426 | 17,990 | |||||||||||
Redemptions | (4,268 | ) | (3,770 | ) | (3,417 | ) | (15,664 | ) | (15,844 | ) | ||||||
Net sales | 580 | 1,350 | 1,279 | 4,762 | 2,146 | |||||||||||
Net exchanges | 141 | (92 | ) | 38 | (1,520 | ) | 1,873 | |||||||||
Acquisition-related | 0 | 144 | 0 | 144 | 132 | |||||||||||
Market gains and losses/reinvestments1 | 210 | 651 | 304 | 1,851 | 1,157 | |||||||||||
Ending assets | $ | 42,478 | $ | 41,547 | $ | 37,241 | $ | 42,478 | $ | 37,241 | ||||||
Fixed-Income Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 9,842 | $ | 9,474 | $ | 7,263 | $ | 7,573 | $ | 8,772 | ||||||
Sales3 | 393 | 309 | 415 | 1,546 | 1,698 | |||||||||||
Redemptions3 | (125 | ) | (202 | ) | (195 | ) | (1,128 | ) | (1,443 | ) | ||||||
Net sales3 | 268 | 107 | 220 | 418 | 255 | |||||||||||
Net exchanges | 0 | 1 | 1 | 1,593 | (1,806 | ) | ||||||||||
Market gains and losses/reinvestments1 | 123 | 260 | 89 | 649 | 352 | |||||||||||
Ending assets | $ | 10,233 | $ | 9,842 | $ | 7,573 | $ | 10,233 | $ | 7,573 | ||||||
Total Fixed Income2 | ||||||||||||||||
Beginning assets | $ | 51,389 | $ | 48,968 | $ | 42,883 | $ | 44,814 | $ | 40,705 | ||||||
Sales3 | 5,241 | 5,429 | 5,111 | 21,972 | 19,688 | |||||||||||
Redemptions3 | (4,393 | ) | (3,972 | ) | (3,612 | ) | (16,792 | ) | (17,287 | ) | ||||||
Net sales3 | 848 | 1,457 | 1,499 | 5,180 | 2,401 | |||||||||||
Net exchanges | 141 | (91 | ) | 39 | 73 | 67 | ||||||||||
Acquisition-related | 0 | 144 | 0 | 144 | 132 | |||||||||||
Market gains and losses/reinvestments1 | 333 | 911 | 393 | 2,500 | 1,509 | |||||||||||
Ending assets | $ | 52,711 | $ | 51,389 | $ | 44,814 | $ | 52,711 | $ | 44,814 | ||||||
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 Q4 and Year-End 2012 Earnings | Page 9 of 11 | |
Changes in Liquidation Portfolios
(in millions)
Quarter Ended | Year Ended | |||||||||||||||
Dec. 31, 2012 | Sept. 30, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||||
Liquidation Portfolios1 | ||||||||||||||||
Beginning assets | $ | 7,718 | $ | 8,124 | $ | 9,144 | $ | 8,856 | $ | 10,708 | ||||||
Sales2 | 0 | 0 | 0 | 0 | 2 | |||||||||||
Redemptions2 | (372 | ) | (406 | ) | (289 | ) | (1,509 | ) | (1,854 | ) | ||||||
Net redemptions2 | (372 | ) | (406 | ) | (289 | ) | (1,509 | ) | (1,852 | ) | ||||||
Market gains and losses/reinvestments3 | 0 | 0 | 1 | (1 | ) | 0 | ||||||||||
Ending Assets | $ | 7,346 | $ | 7,718 | $ | 8,856 | $ | 7,346 | $ | 8,856 | ||||||
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 Q4 and Year-End 2012 Earnings | Page 10 of 11 | |
MANAGED ASSETS (in millions) | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 35,010 | $ | 35,355 | $ | 33,221 | $ | 34,117 | $ | 30,887 | |||||
Fixed-income | 52,711 | 51,389 | 48,968 | 46,221 | 44,814 | ||||||||||
Money market | 284,704 | 269,622 | 265,548 | 274,704 | 285,140 | ||||||||||
Liquidation portfolios1 | 7,346 | 7,718 | 8,124 | 8,583 | 8,856 | ||||||||||
Total Managed Assets | $ | 379,771 | $ | 364,084 | $ | 355,861 | $ | 363,625 | $ | 369,697 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 23,152 | $ | 23,658 | $ | 22,671 | $ | 23,612 | $ | 21,930 | |||||
Fixed-income | 42,478 | 41,547 | 39,494 | 38,526 | 37,241 | ||||||||||
Money market | 255,689 | 244,826 | 238,610 | 245,232 | 255,857 | ||||||||||
Total Fund Assets | $ | 321,319 | $ | 310,031 | $ | 300,775 | $ | 307,370 | $ | 315,028 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 11,858 | $ | 11,697 | $ | 10,550 | $ | 10,505 | $ | 8,957 | |||||
Fixed-income | 10,233 | 9,842 | 9,474 | 7,695 | 7,573 | ||||||||||
Money market | 29,015 | 24,796 | 26,938 | 29,472 | 29,283 | ||||||||||
Total Separate Accounts | $ | 51,106 | $ | 46,335 | $ | 46,962 | $ | 47,672 | $ | 45,813 | |||||
Total Liquidation Portfolios1 | $ | 7,346 | $ | 7,718 | $ | 8,124 | $ | 8,583 | $ | 8,856 | |||||
Total Managed Assets | $ | 379,771 | $ | 364,084 | $ | 355,861 | $ | 363,625 | $ | 369,697 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 35,016 | $ | 34,429 | $ | 32,993 | $ | 32,827 | $ | 29,965 | |||||
Fixed-income | 52,211 | 50,195 | 47,747 | 45,792 | 43,980 | ||||||||||
Money market | 273,943 | 268,573 | 271,507 | 282,801 | 275,295 | ||||||||||
Liquidation portfolios1 | 7,559 | 7,948 | 8,353 | 8,703 | 9,030 | ||||||||||
Total Avg. Assets | $ | 368,729 | $ | 361,145 | $ | 360,600 | $ | 370,123 | $ | 358,270 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 23,209 | $ | 23,133 | $ | 22,642 | $ | 23,075 | $ | 21,451 | |||||
Fixed-income | 42,156 | 40,579 | 38,901 | 38,128 | 36,546 | ||||||||||
Money market | 248,534 | 243,111 | 243,454 | 251,825 | 249,324 | ||||||||||
Total Avg. Fund Assets | $ | 313,899 | $ | 306,823 | $ | 304,997 | $ | 313,028 | $ | 307,321 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 11,807 | $ | 11,296 | $ | 10,351 | $ | 9,752 | $ | 8,514 | |||||
Fixed-income | 10,055 | 9,616 | 8,846 | 7,664 | 7,434 | ||||||||||
Money market | 25,409 | 25,462 | 28,053 | 30,976 | 25,971 | ||||||||||
Total Avg. Separate Accounts | $ | 47,271 | $ | 46,374 | $ | 47,250 | $ | 48,392 | $ | 41,919 | |||||
Total Avg. Liquidation Portfolios1 | $ | 7,559 | $ | 7,948 | $ | 8,353 | $ | 8,703 | $ | 9,030 | |||||
Total Avg. Managed Assets | $ | 368,729 | $ | 361,145 | $ | 360,600 | $ | 370,123 | $ | 358,270 | |||||
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 2012 Earnings | Page 11 of 11 | |
AVERAGE MANAGED ASSETS | Year Ended | |||||
(in millions) | Dec. 31, 2012 | Dec. 31, 2011 | ||||
By Asset Class | ||||||
Equity | $ | 33,816 | $ | 30,560 | ||
Fixed-income | 48,986 | 42,573 | ||||
Money market | 274,206 | 271,501 | ||||
Liquidation portfolios1 | 8,141 | 9,753 | ||||
Total Avg. Assets | $ | 365,149 | $ | 354,387 | ||
By Product Type | ||||||
Funds: | ||||||
Equity | $ | 23,015 | $ | 22,071 | ||
Fixed-income | 39,941 | 34,455 | ||||
Money market | 246,731 | 242,187 | ||||
Total Avg. Fund Assets | $ | 309,687 | $ | 298,713 | ||
Separate Accounts: | ||||||
Equity | $ | 10,801 | $ | 8,489 | ||
Fixed-income | 9,045 | 8,118 | ||||
Money market | 27,475 | 29,314 | ||||
Total Avg. Separate Accounts | $ | 47,321 | $ | 45,921 | ||
Total Avg. Liquidation Portfolios1 | $ | 8,141 | $ | 9,753 | ||
Total Avg. Managed Assets | $ | 365,149 | $ | 354,387 | ||
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.