Attached files
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| 8-K - 8-K - FEDERATED HERMES, INC. | a8-kx2013q4epr.htm |
Exhibit 99.1
Federated Investors, Inc. Reports Fourth Quarter and Full-Year 2013 Earnings
• | Equity and bond assets surpass $100 billion at year end |
• | Net equity sales top $800 million during Q4 2013 |
• | Board declares $0.25 per share quarterly dividend |
(PITTSBURGH, Pa., Jan. 23, 2014) — Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.39 for Q4 2013 compared to $0.44 for the same quarter last year on net income of $41.1 million for Q4 2013 compared to $49.6 million for Q4 2012. Federated reported 2013 EPS of $1.55 compared to $1.79 for 2012 on 2013 net income of $162.2 million compared to $188.1 million for 2012. Federated's financial results for 2012 included the recognition of insurance proceeds that reduced pre-tax operating expenses by $20.2 million and increased EPS by $0.12 per share, after tax.
Federated's total managed assets were $376.1 billion at Dec. 31, 2013, down $3.7 billion or 1 percent from $379.8 billion at Dec. 31, 2012 and up $9.4 billion or 3 percent from $366.7 billion reported at Sept. 30, 2013. Average managed assets for Q4 2013 were $366.2 billion, down $2.5 billion or 1 percent from $368.7 billion reported for Q4 2012 and up $2.0 billion or 1 percent from $364.2 billion reported for Q3 2013.
“With nearly three-quarters of Federated's equity funds delivering one-year performance that beat a majority of their peers in 2013, we are well positioned to meet increased investor interest in our broad range of equity strategies," said J. Christopher Donahue, president and chief executive officer. "Such strong performance in a range of styles expanded client interest beyond our dividend-oriented strategies to additional options such as large-cap growth, international, small-cap value and balanced strategies, as well.”
Federated's board of directors declared a quarterly dividend of $0.25 per share. The dividend is payable on Feb. 14, 2014 to shareholders of record as of Feb. 7, 2014. In 2013, the company paid total dividends of $0.98 per share. During Q4 2013, Federated purchased 295,638 shares of Federated class B common stock for $7.0 million, bringing the total for 2013 to 645,343 shares purchased for $14.2 million.
Federated's equity assets were $44.1 billion at Dec. 31, 2013, up $9.1 billion or 26 percent from $35.0 billion at Dec. 31, 2012 and up $3.8 billion or 9 percent from $40.3 billion at Sept. 30, 2013. Top-selling equity funds during Q4 2013 on a net basis were Federated Capital Income Fund, Federated Kaufmann Large Cap Fund, Federated International Leaders Fund, Federated International Strategic Value Dividend Fund and Federated Clover Small Value Fund.
Federated's fixed-income assets were $50.1 billion at Dec. 31, 2013, down $2.6 billion or 5 percent from $52.7 billion at Dec. 31, 2012 and up slightly from $50.0 billion at Sept. 30, 2013. Bond assets in the liquidation portfolio were $5.9 billion at Dec. 31, 2013. Top-selling fixed-income funds during Q4 2013 on a net basis were Federated Institutional High Yield Bond Fund, Federated Sterling Cash Plus Fund, Federated Short-Term Income Fund, Federated Floating Rate Strategic Income Fund and Federated High Yield Trust.
MEDIA: | MEDIA: | ANALYSTS: |
Meghan McAndrew 412-288-8103 | J.T. Tuskan 412-288-7895 | Ray Hanley 412-288-1920 |
Federated Reports Q4 and Full-Year 2013 Earnings | Page 2 of 11 | |
Money market assets in both funds and separate accounts were $276.0 billion at Dec. 31, 2013, down $8.7 billion or 3 percent from $284.7 billion at Dec. 31, 2012 and up $5.7 billion or 2 percent from $270.3 billion at Sept. 30, 2013. Money market mutual fund assets were $240.0 billion at Dec. 31, 2013, down $15.7 billion or 6 percent from $255.7 billion at Dec. 31, 2012 and up $2.1 billion or 1 percent from $237.9 billion at Sept. 30, 2013.
Financial Summary
Q4 2013 vs. Q4 2012
Revenue decreased by $30.1 million or 12 percent due primarily to an increase in voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields and a decrease in revenue due to lower average money market and fixed-income assets. The decrease was partially offset by an increase in revenue from higher average equity assets. See additional information about voluntary fee waivers in the table at the end of this financial summary.
During Q4 2013, Federated derived 63 percent of its revenue from equity and fixed-income assets (40 percent from equity assets and 23 percent from fixed-income assets), 36 percent from money market assets and 1 percent from other products and services.
Operating expenses decreased $6.7 million or 4 percent primarily due to a decrease in distribution expenses associated with increased fee waivers related to the low-yield environment for money market funds, partially offset by an increase in compensation and related expense.
Nonoperating income, net, increased $6.7 million or 296 percent. The change primarily reflects an increase in investment income from gains realized on investments and a reduction in the level of pre-tax non-cash impairment charges related to changes in the fair value of a minority interest investment.
Q4 2013 vs. Q3 2013
Revenue increased by $2.9 million or 1 percent primarily due to higher average equity assets.
Operating expenses increased by $0.9 million or 1 percent primarily due to an increase in compensation and related expense.
Nonoperating income, net, increased $3.7 million or 466 percent due primarily to a reduction in the level of pre-tax non-cash impairment charges related to changes in the fair value of a minority interest investment.
YTD 2013 vs. YTD 2012
Revenue decreased by $67.3 million or 7 percent primarily due to an increase in voluntary fee waivers and was partially offset by an increase in revenue due to higher average equity assets.
During 2013, Federated derived 60 percent of its revenue from equity and fixed-income assets (37 percent from equity assets and 23 percent from fixed-income assets), 39 percent from money market assets and 1 percent from other products and services.
Operating expenses decreased by $6.5 million or 1 percent primarily due to a decrease in distribution expenses related to the low-yield environment and were partially offset by an increase in professional service fees due to the aforementioned insurance proceeds recorded as a reduction to professional service fees in 2012 and an increase in compensation and related expense.
Nonoperating income, net, increased $11.4 million or 278 percent primarily reflecting an increase in investment income from gains realized on investments and a reduction in debt expense.
Federated Reports Q4 and Full-Year 2013 Earnings | Page 3 of 11 | |
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 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, available yields on instruments held by the money market funds, actions by the Federal Reserve, the U.S. Department of the Treasury, the Securities and Exchange Commission, 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 customers, 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 2012 to Q4 2013 | Quarter Ended | Change Q3 2013 to Q4 2013 | Year Ended | Change YTD 2012 to YTD 2013 | ||||||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||||||
Investment advisory fees | $ | (70.9 | ) | $ | (40.0 | ) | $ | (30.9 | ) | $ | (70.7 | ) | $ | (0.2 | ) | $ | (255.9 | ) | $ | (177.2 | ) | $ | (78.7 | ) | |||||||
Other service fees | (33.7 | ) | (30.7 | ) | (3.0 | ) | (34.4 | ) | 0.7 | (133.1 | ) | (113.8 | ) | (19.3 | ) | ||||||||||||||||
Total revenue | $ | (104.6 | ) | $ | (70.7 | ) | $ | (33.9 | ) | $ | (105.1 | ) | $ | 0.5 | $ | (389.0 | ) | $ | (291.0 | ) | $ | (98.0 | ) | ||||||||
Less: Reduction in distribution expense | 73.3 | 54.9 | 18.4 | 72.1 | 1.2 | 277.1 | 218.5 | 58.6 | |||||||||||||||||||||||
Operating income | $ | (31.3 | ) | $ | (15.8 | ) | $ | (15.5 | ) | $ | (33.0 | ) | $ | 1.7 | $ | (111.9 | ) | $ | (72.5 | ) | $ | (39.4 | ) | ||||||||
Less: Reduction in noncontrolling interest | 2.0 | 0.3 | 1.7 | 2.7 | (0.7 | ) | 6.8 | 1.3 | 5.5 | ||||||||||||||||||||||
Pre-tax impact | $ | (29.3 | ) | $ | (15.5 | ) | $ | (13.8 | ) | $ | (30.3 | ) | $ | 1.0 | $ | (105.1 | ) | $ | (71.2 | ) | $ | (33.9 | ) | ||||||||
Federated will host an earnings conference call at 9 a.m. Eastern on Jan. 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 Jan. 31, 2014 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering access code 13574383.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $376.1 billion in assets as of Dec. 31, 2013. With 135 funds and a variety of separately managed account options, Federated provides comprehensive investment management to approximately 6,000 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 9 percent of fixed-income fund managers1. For more information, visit FederatedInvestors.com.
###
1 Strategic Insight, Nov. 30, 2013. 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.
Federated Reports Q4 and Full-Year 2013 Earnings | Page 4 of 11 | |
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, asset flows and mix, fee arrangements with customers 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 Q4 and Full-Year 2013 Earnings | Page 5 of 11 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Quarter Ended | % Change Q4 2012 to Q4 2013 | Quarter Ended | % Change Q3 2013 to Q4 2013 | ||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2013 | |||||||||||
Revenue | |||||||||||||
Investment advisory fees, net | $ | 138,051 | $ | 166,813 | (17 | )% | $ | 134,623 | 3 | % | |||
Administrative service fees, net | 55,354 | 57,372 | (4 | ) | 55,052 | 1 | |||||||
Other service fees, net | 20,399 | 19,818 | 3 | 20,022 | 2 | ||||||||
Other, net | 918 | 821 | 12 | 2,169 | (58 | ) | |||||||
Total Revenue | 214,722 | 244,824 | (12 | ) | 211,866 | 1 | |||||||
Operating Expenses | |||||||||||||
Compensation and related | 68,725 | 63,211 | 9 | 65,620 | 5 | ||||||||
Distribution | 49,802 | 65,278 | (24 | ) | 51,051 | (2 | ) | ||||||
Professional service fees | 9,241 | 6,549 | 41 | 9,704 | (5 | ) | |||||||
Office and occupancy | 6,838 | 6,349 | 8 | 6,488 | 5 | ||||||||
Systems and communications | 6,628 | 6,100 | 9 | 6,464 | 3 | ||||||||
Travel and related | 4,108 | 3,837 | 7 | 3,344 | 23 | ||||||||
Advertising and promotional | 3,760 | 3,611 | 4 | 3,975 | (5 | ) | |||||||
Intangible asset related | (453 | ) | 951 | (148 | ) | 634 | (171 | ) | |||||
Other | 6,315 | 5,746 | 10 | 6,828 | (8 | ) | |||||||
Total Operating Expenses | 154,964 | 161,632 | (4 | ) | 154,108 | 1 | |||||||
Operating Income | 59,758 | 83,192 | (28 | ) | 57,758 | 3 | |||||||
Nonoperating Income (Expenses) | |||||||||||||
Investment income, net | 8,089 | 4,343 | 86 | 6,999 | 16 | ||||||||
Debt expense | (2,996 | ) | (3,506 | ) | (15 | ) | (3,078 | ) | (3 | ) | |||
Other, net | (636 | ) | (3,112 | ) | (80 | ) | (3,133 | ) | (80 | ) | |||
Total Nonoperating Income (Expenses), net | 4,457 | (2,275 | ) | 296 | 788 | 466 | |||||||
Income before income taxes | 64,215 | 80,917 | (21 | ) | 58,546 | 10 | |||||||
Income tax provision | 22,039 | 28,961 | (24 | ) | 20,917 | 5 | |||||||
Net income including noncontrolling interest in subsidiaries | 42,176 | 51,956 | (19 | ) | 37,629 | 12 | |||||||
Less: Net income (loss) attributable to the noncontrolling interest in subsidiaries | 1,105 | 2,375 | (53 | ) | (75 | ) | 1,573 | ||||||
Net Income | $ | 41,071 | $ | 49,581 | (17 | )% | $ | 37,704 | 9 | % | |||
Amounts Attributable to Federated | |||||||||||||
Earnings Per Share1 | |||||||||||||
Basic and diluted | $ | 0.39 | $ | 0.44 | (11 | )% | $ | 0.36 | 8 | % | |||
Weighted-average shares outstanding | |||||||||||||
Basic | 100,760 | 100,374 | 100,677 | ||||||||||
Diluted | 100,762 | 100,374 | 100,678 | ||||||||||
Dividends declared per share | $ | 0.25 | $ | 1.75 | $ | 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 $1.4 million, $5.7 million and $1.4 million available to unvested restricted shares for the quarterly periods ended Dec. 31, 2013, Dec. 31, 2012 and Sept. 30, 2013, respectively, was excluded from the computation of earnings per share.
Federated Reports Q4 and Full-Year 2013 Earnings | Page 6 of 11 | |
Unaudited Condensed Consolidated Statements of Income | ||||||||
(in thousands, except per share data) | ||||||||
Year Ended | % Change | |||||||
Dec. 31, 2013 | Dec. 31, 2012 | |||||||
Revenue | ||||||||
Investment advisory fees, net | $ | 570,952 | $ | 630,834 | (9 | )% | ||
Administrative service fees, net | 222,487 | 225,529 | (1 | ) | ||||
Other service fees, net | 79,608 | 85,902 | (7 | ) | ||||
Other, net | 5,318 | 3,441 | 55 | |||||
Total Revenue | 878,365 | 945,706 | (7 | ) | ||||
Operating Expenses | ||||||||
Compensation and related | 269,138 | 257,622 | 4 | |||||
Distribution | 212,901 | 253,445 | (16 | ) | ||||
Professional service fees | 37,082 | 18,925 | 96 | |||||
Office and occupancy | 26,301 | 24,828 | 6 | |||||
Systems and communications | 25,801 | 25,716 | 0 | |||||
Advertising and promotional | 15,094 | 13,413 | 13 | |||||
Travel and related | 13,671 | 12,838 | 6 | |||||
Intangible asset related | 1,597 | 2,593 | (38 | ) | ||||
Other | 25,037 | 23,733 | 5 | |||||
Total Operating Expenses | 626,622 | 633,113 | (1 | ) | ||||
Operating Income | 251,743 | 312,593 | (19 | ) | ||||
Nonoperating Income (Expenses) | ||||||||
Investment income, net | 23,576 | 13,667 | 73 | |||||
Debt expense | (12,464 | ) | (14,441 | ) | (14 | ) | ||
Other, net | (3,840 | ) | (3,308 | ) | 16 | |||
Total Nonoperating Income (Expenses), net | 7,272 | (4,082 | ) | 278 | ||||
Income before income taxes | 259,015 | 308,511 | (16 | ) | ||||
Income tax provision | 92,660 | 110,883 | (16 | ) | ||||
Net income including noncontrolling interest in subsidiaries | 166,355 | 197,628 | (16 | ) | ||||
Less: Net income attributable to the noncontrolling interest in subsidiaries | 4,178 | 9,540 | (56 | ) | ||||
Net Income | $ | 162,177 | $ | 188,088 | (14 | )% | ||
Amounts Attributable to Federated | ||||||||
Earnings Per Share1 | ||||||||
Basic and diluted | $ | 1.55 | $ | 1.79 | (13 | )% | ||
Weighted-average shares outstanding | ||||||||
Basic | 100,668 | 100,313 | ||||||
Diluted | 100,669 | 100,313 | ||||||
Dividends declared per share | $ | 0.98 | $ | 2.47 | ||||
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 $6.1 million and $8.4 million available to unvested restricted shares for the years ended Dec. 31, 2013 and Dec. 31, 2012, respectively, was excluded from the computation of earnings per share.
Federated Reports Q4 and Full-Year 2013 Earnings | Page 7 of 11 | |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Assets | ||||||
Cash and other investments | $ | 292,178 | $ | 258,628 | ||
Other current assets | 47,140 | 41,434 | ||||
Intangible assets, net and goodwill | 735,345 | 727,857 | ||||
Other long-term assets | 61,134 | 62,142 | ||||
Total Assets | $ | 1,135,797 | $ | 1,090,061 | ||
Liabilities, Redeemable Noncontrolling Interests and Equity | ||||||
Current liabilities | $ | 214,205 | $ | 181,134 | ||
Long-term debt | 198,333 | 276,250 | ||||
Other long-term liabilities | 141,398 | 128,733 | ||||
Redeemable noncontrolling interests | 15,517 | 7,268 | ||||
Equity excluding treasury stock | 1,317,583 | 1,256,698 | ||||
Treasury stock | (751,239 | ) | (760,022 | ) | ||
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ | 1,135,797 | $ | 1,090,061 | ||
Federated Reports Q4 and Full-Year 2013 Earnings | Page 8 of 11 | |
Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions)
Quarter Ended | Year Ended | |||||||||||||||
Dec. 31, 2013 | Sept. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||||||
Equity Funds | ||||||||||||||||
Beginning assets | $ | 25,930 | $ | 25,030 | $ | 23,658 | $ | 23,152 | $ | 21,930 | ||||||
Sales | 1,913 | 1,856 | 1,415 | 7,439 | 6,221 | |||||||||||
Redemptions | (1,740 | ) | (2,571 | ) | (1,866 | ) | (8,328 | ) | (7,377 | ) | ||||||
Net sales (redemptions) | 173 | (715 | ) | (451 | ) | (889 | ) | (1,156 | ) | |||||||
Net exchanges | 47 | 77 | (47 | ) | 214 | (70 | ) | |||||||||
Acquisition-related | 0 | 0 | 0 | 0 | 190 | |||||||||||
Market gains and losses/reinvestments1 | 1,947 | 1,538 | (8 | ) | 5,620 | 2,258 | ||||||||||
Ending assets | $ | 28,097 | $ | 25,930 | $ | 23,152 | $ | 28,097 | $ | 23,152 | ||||||
Equity Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 14,353 | $ | 13,675 | $ | 11,697 | $ | 11,858 | $ | 8,957 | ||||||
Sales3 | 1,337 | 971 | 893 | 4,445 | 4,252 | |||||||||||
Redemptions3 | (701 | ) | (798 | ) | (605 | ) | (3,004 | ) | (2,291 | ) | ||||||
Net sales3 | 636 | 173 | 288 | 1,441 | 1,961 | |||||||||||
Net exchanges | 0 | 0 | 1 | 0 | (8 | ) | ||||||||||
Market gains and losses/reinvestments1 | 1,062 | 505 | (128 | ) | 2,752 | 948 | ||||||||||
Ending assets | $ | 16,051 | $ | 14,353 | $ | 11,858 | $ | 16,051 | $ | 11,858 | ||||||
Total Equity2 | ||||||||||||||||
Beginning assets | $ | 40,283 | $ | 38,705 | $ | 35,355 | $ | 35,010 | $ | 30,887 | ||||||
Sales3 | 3,250 | 2,827 | 2,308 | 11,884 | 10,473 | |||||||||||
Redemptions3 | (2,441 | ) | (3,369 | ) | (2,471 | ) | (11,332 | ) | (9,668 | ) | ||||||
Net sales (redemptions)3 | 809 | (542 | ) | (163 | ) | 552 | 805 | |||||||||
Net exchanges | 47 | 77 | (46 | ) | 214 | (78 | ) | |||||||||
Acquisition-related | 0 | 0 | 0 | 0 | 190 | |||||||||||
Market gains and losses/reinvestments1 | 3,009 | 2,043 | (136 | ) | 8,372 | 3,206 | ||||||||||
Ending assets | $ | 44,148 | $ | 40,283 | $ | 35,010 | $ | 44,148 | $ | 35,010 | ||||||
Fixed-Income Funds | ||||||||||||||||
Beginning assets | $ | 39,944 | $ | 40,188 | $ | 41,547 | $ | 42,478 | $ | 37,241 | ||||||
Sales | 3,944 | 4,382 | 4,848 | 18,706 | 20,426 | |||||||||||
Redemptions | (4,400 | ) | (4,789 | ) | (4,268 | ) | (21,075 | ) | (15,664 | ) | ||||||
Net (redemptions) sales | (456 | ) | (407 | ) | 580 | (2,369 | ) | 4,762 | ||||||||
Net exchanges | (131 | ) | (98 | ) | 141 | (351 | ) | (1,520 | ) | |||||||
Acquisition-related | 0 | 0 | 0 | 0 | 144 | |||||||||||
Market gains and losses/reinvestments1 | 249 | 261 | 210 | (152 | ) | 1,851 | ||||||||||
Ending assets | $ | 39,606 | $ | 39,944 | $ | 42,478 | $ | 39,606 | $ | 42,478 | ||||||
Fixed-Income Separate Accounts2 | ||||||||||||||||
Beginning assets | $ | 10,018 | $ | 9,817 | $ | 9,842 | $ | 10,233 | $ | 7,573 | ||||||
Sales3 | 751 | 498 | 393 | 2,342 | 1,546 | |||||||||||
Redemptions3 | (368 | ) | (412 | ) | (125 | ) | (2,150 | ) | (1,128 | ) | ||||||
Net sales3 | 383 | 86 | 268 | 192 | 418 | |||||||||||
Net exchanges | 7 | (10 | ) | 0 | 4 | 1,593 | ||||||||||
Market gains and losses/reinvestments1 | 112 | 125 | 123 | 91 | 649 | |||||||||||
Ending assets | $ | 10,520 | $ | 10,018 | $ | 10,233 | $ | 10,520 | $ | 10,233 | ||||||
Total Fixed Income2 | ||||||||||||||||
Beginning assets | $ | 49,962 | $ | 50,005 | $ | 51,389 | $ | 52,711 | $ | 44,814 | ||||||
Sales3 | 4,695 | 4,880 | 5,241 | 21,048 | 21,972 | |||||||||||
Redemptions3 | (4,768 | ) | (5,201 | ) | (4,393 | ) | (23,225 | ) | (16,792 | ) | ||||||
Net (redemptions) sales3 | (73 | ) | (321 | ) | 848 | (2,177 | ) | 5,180 | ||||||||
Net exchanges | (124 | ) | (108 | ) | 141 | (347 | ) | 73 | ||||||||
Acquisition-related | 0 | 0 | 0 | 0 | 144 | |||||||||||
Market gains and losses/reinvestments1 | 361 | 386 | 333 | (61 | ) | 2,500 | ||||||||||
Ending assets | $ | 50,126 | $ | 49,962 | $ | 52,711 | $ | 50,126 | $ | 52,711 | ||||||
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/reinvestments.
Federated Reports Q4 and Full-Year 2013 Earnings | Page 9 of 11 | |
Changes in Liquidation Portfolio
(in millions)
Quarter Ended | Year Ended | |||||||||||||||
Dec. 31, 2013 | Sept. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||||||
Liquidation Portfolio1 | ||||||||||||||||
Beginning assets | $ | 6,177 | $ | 6,561 | $ | 7,718 | $ | 7,346 | $ | 8,856 | ||||||
Liquidiations2 | (319 | ) | (384 | ) | (372 | ) | (1,488 | ) | (1,510 | ) | ||||||
Ending assets | $ | 5,858 | $ | 6,177 | $ | 7,346 | $ | 5,858 | $ | 7,346 | ||||||
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.
2) Liquidations reflect the cost of liquidated assets.
Federated Reports Q4 and Full-Year 2013 Earnings | Page 10 of 11 | |
MANAGED ASSETS (in millions) | Dec. 31, 2013 | Sept. 30, 2013 | June 30, 2013 | March 31, 2013 | Dec. 31, 2012 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 44,148 | $ | 40,283 | $ | 38,705 | $ | 37,852 | $ | 35,010 | |||||
Fixed-income | 50,126 | 49,962 | 50,005 | 52,770 | 52,711 | ||||||||||
Money market | 275,952 | 270,293 | 268,532 | 279,668 | 284,704 | ||||||||||
Liquidation portfolio1 | 5,858 | 6,177 | 6,561 | 7,019 | 7,346 | ||||||||||
Total Managed Assets | $ | 376,084 | $ | 366,715 | $ | 363,803 | $ | 377,309 | $ | 379,771 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 28,097 | $ | 25,930 | $ | 25,030 | $ | 24,491 | $ | 23,152 | |||||
Fixed-income | 39,606 | 39,944 | 40,188 | 42,612 | 42,478 | ||||||||||
Money market | 240,048 | 237,949 | 232,874 | 242,734 | 255,689 | ||||||||||
Total Fund Assets | $ | 307,751 | $ | 303,823 | $ | 298,092 | $ | 309,837 | $ | 321,319 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 16,051 | $ | 14,353 | $ | 13,675 | $ | 13,361 | $ | 11,858 | |||||
Fixed-income | 10,520 | 10,018 | 9,817 | 10,158 | 10,233 | ||||||||||
Money market | 35,904 | 32,344 | 35,658 | 36,934 | 29,015 | ||||||||||
Total Separate Accounts | $ | 62,475 | $ | 56,715 | $ | 59,150 | $ | 60,453 | $ | 51,106 | |||||
Total Liquidation Portfolio1 | $ | 5,858 | $ | 6,177 | $ | 6,561 | $ | 7,019 | $ | 7,346 | |||||
Total Managed Assets | $ | 376,084 | $ | 366,715 | $ | 363,803 | $ | 377,309 | $ | 379,771 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | Dec. 31, 2013 | Sept. 30, 2013 | June 30, 2013 | March 31, 2013 | Dec. 31, 2012 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 42,539 | $ | 39,910 | $ | 38,762 | $ | 36,685 | $ | 35,016 | |||||
Fixed-income | 50,268 | 49,983 | 52,375 | 52,732 | 52,211 | ||||||||||
Money market | 267,351 | 267,881 | 274,899 | 284,588 | 273,943 | ||||||||||
Liquidation portfolio1 | 6,050 | 6,434 | 6,834 | 7,215 | 7,559 | ||||||||||
Total Avg. Assets | $ | 366,208 | $ | 364,208 | $ | 372,870 | $ | 381,220 | $ | 368,729 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 27,157 | $ | 25,761 | $ | 25,094 | $ | 24,037 | $ | 23,209 | |||||
Fixed-income | 39,883 | 39,987 | 42,258 | 42,581 | 42,156 | ||||||||||
Money market | 234,788 | 234,528 | 237,790 | 250,652 | 248,534 | ||||||||||
Total Avg. Fund Assets | $ | 301,828 | $ | 300,276 | $ | 305,142 | $ | 317,270 | $ | 313,899 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 15,382 | $ | 14,149 | $ | 13,668 | $ | 12,648 | $ | 11,807 | |||||
Fixed-income | 10,385 | 9,996 | 10,117 | 10,151 | 10,055 | ||||||||||
Money market | 32,563 | 33,353 | 37,109 | 33,936 | 25,409 | ||||||||||
Total Avg. Separate Accounts | $ | 58,330 | $ | 57,498 | $ | 60,894 | $ | 56,735 | $ | 47,271 | |||||
Total Avg. Liquidation Portfolio1 | $ | 6,050 | $ | 6,434 | $ | 6,834 | $ | 7,215 | $ | 7,559 | |||||
Total Avg. Managed Assets | $ | 366,208 | $ | 364,208 | $ | 372,870 | $ | 381,220 | $ | 368,729 | |||||
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 Q4 and Full-Year 2013 Earnings | Page 11 of 11 | |
AVERAGE MANAGED ASSETS | Year Ended | ||||||
(in millions) | Dec. 31, 2013 | Dec. 31, 2012 | |||||
By Asset Class | |||||||
Equity | $ | 39,474 | $ | 33,816 | |||
Fixed-income | 51,340 | 48,986 | |||||
Money market | 273,680 | 274,206 | |||||
Liquidation portfolio1 | 6,633 | 8,141 | |||||
Total Avg. Assets | $ | 371,127 | $ | 365,149 | |||
By Product Type | |||||||
Funds: | |||||||
Equity | $ | 25,512 | $ | 23,015 | |||
Fixed-income | 41,177 | 39,941 | |||||
Money market | 239,440 | 246,731 | |||||
Total Avg. Fund Assets | $ | 306,129 | $ | 309,687 | |||
Separate Accounts: | |||||||
Equity | $ | 13,962 | $ | 10,801 | |||
Fixed-income | 10,163 | 9,045 | |||||
Money market | 34,240 | 27,475 | |||||
Total Avg. Separate Accounts | $ | 58,365 | $ | 47,321 | |||
Total Avg. Liquidation Portfolio1 | $ | 6,633 | $ | 8,141 | |||
Total Avg. Managed Assets | $ | 371,127 | $ | 365,149 | |||
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.