Attached files
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| 8-K - 8-K - FEDERATED HERMES, INC. | a8-kx2015q2epr.htm |
Exhibit 99.1
Federated Investors, Inc. Reports Second Quarter 2015 Earnings
• | Diluted EPS increases 14 percent to $0.40 per share compared to Q2 2014 |
• | Equity assets reach record $55 billion at quarter end |
• | Board declares $0.25 per share dividend |
(PITTSBURGH, Pa., July 23, 2015) — Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.40 for Q2 2015, up 14 percent from $0.35 for the same quarter last year on net income of $41.8 million for Q2 2015, compared to $36.9 million for Q2 2014. Federated reported YTD 2015 EPS of $0.74 compared to $0.69 for the same period in 2014 and YTD 2015 net income of $78.1 million compared to $72.1 million for the same period last year.
Federated's total managed assets were $349.7 billion at June 30, 2015. Total managed assets were down $1.9 billion or 1 percent from $351.6 billion at June 30, 2014 and down $6.1 billion or 2 percent from $355.8 billion at March 31, 2015. Growth in equity assets was offset by lower fixed-income and money market assets in Q2 2015 compared to Q1 2015. Average managed assets for Q2 2015 were $348.6 billion, down $9.8 billion or 3 percent from $358.4 billion reported for Q2 2014 and down $10.9 billion or 3 percent from $359.5 billion reported for Q1 2015.
"Investors in the second quarter sought alpha from a range of strong-performing Federated products, including our Kaufmann growth strategies and Federated International Leaders Fund," said J. Christopher Donahue, president and chief executive officer. "Additionally, we saw continued interest in income-oriented strategies such as our balanced and high-yield offerings."
Federated's board of directors declared a dividend of $0.25 per share. The dividend is payable on Aug. 14, 2015 to shareholders of record as of Aug. 7, 2015. During Q2 2015, Federated purchased 317,747 shares of Federated class B common stock for $10.5 million.
Federated's equity assets were a record $54.8 billion at June 30, 2015, up $4.9 billion or 10 percent from $49.9 billion at June 30, 2014 and up $0.8 billion or 1 percent from $54.0 billion at March 31, 2015. Top-selling equity funds during Q2 2015 on a net basis were Federated Kaufmann Large Cap Fund, Federated International Leaders Fund, Federated Kaufmann Small Cap Fund, Federated Capital Income Fund and Federated Muni and Stock Advantage Fund.
Federated's fixed-income assets were $52.9 billion at June 30, 2015, up $1.8 billion or 4 percent from $51.1 billion at June 30, 2014 and down $0.7 billion or 1 percent from $53.6 billion at March 31, 2015. Top-selling fixed-income funds during Q2 2015 on a net basis were Federated Institutional High Yield Bond Fund, Federated Total Return Bond Fund, Federated Sterling Cash Plus Fund, Federated High Yield Trust and Federated Government Ultrashort Duration Fund.
Money market assets were $242.0 billion at June 30, 2015, down $3.2 billion or 1 percent from $245.2 billion at June 30, 2014 and down $6.2 billion or 2 percent from $248.2 billion at March 31, 2015. Money market mutual fund assets were $208.8 billion at June 30, 2015, down $3.6 billion or 2 percent from $212.4 billion at June 30, 2014 and down $5.5 billion or 3 percent from $214.3 billion at March 31, 2015.
MEDIA: | MEDIA: | ANALYSTS: |
Ed Costello 412-288-7538 | Meghan McAndrew 412-288-8103 | Ray Hanley 412-288-1920 |
Federated Reports Q2 2015 Earnings | Page 2 of 11 | |
Financial Summary
Q2 2015 vs. Q2 2014
Revenue increased by $15.1 million or 7 percent primarily due to a decrease in voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields and an increase in revenue from higher average equity assets. These increases in revenue were partially offset by a decrease in revenue from lower average money market assets. See additional information about voluntary fee waivers in the table at the end of this financial summary.
During Q2 2015, Federated derived 69 percent of its revenue from equity and fixed-income assets (48 percent from equity assets and 21 percent from fixed-income assets) and 31 percent from money market assets.
Operating expenses increased $4.7 million or 3 percent primarily due to an increase in distribution expenses as a result of a decrease in fee waivers related to the low-yield environment for money market funds as well as higher average equity assets. These increases were partially offset by decreases in distribution expenses as a result of lower average money market assets.
Nonoperating (expenses) income, net decreased $2.0 million primarily due to a decrease in investment income, net due largely to a decrease in gains on investments, partially offset by a decrease in debt expense primarily due to a lower average interest rate.
Q2 2015 vs. Q1 2015
Revenue increased by $7.6 million or 3 percent primarily due to a decrease in voluntary fee waivers, an increase in revenue from higher average equity assets and an additional day in Q2 2015. These increases in revenue were partially offset by a decrease in revenue from lower average money market assets.
Operating expenses decreased $2.6 million or 2 percent primarily due to a decrease in compensation and related expenses.
YTD 2015 vs. YTD 2014
Revenue increased by $24.2 million or 6 percent primarily due to a decrease in voluntary fee waivers and an increase in revenue from higher average equity assets. These increases in revenue were partially offset by a decrease in revenue from lower average money market assets.
For the first half of 2015, Federated derived 69 percent of its revenue from equity and fixed-income assets (47 percent from equity assets and 22 percent from fixed-income assets) and 31 percent from money market assets.
Operating expenses increased by $11.3 million or 4 percent primarily due to an increase in compensation and related expenses, resulting mostly from higher incentive compensation, and an increase in distribution expenses as a result of a decrease in fee waivers related to the low-yield environment for money market funds as well as higher average equity assets. These increases were partially offset by decreases in distribution expenses as a result of lower average money market assets.
Nonoperating (expenses) income, net decreased $3.3 million primarily due to a decrease in investment income, net due largely to a decrease in gains on investments, partially offset by a decrease in debt expense primarily due to a lower average interest rate.
Federated's level of business activity and financial results are dependent upon many factors including market conditions, investment performance and investor behavior. These factors and others, including asset levels, product sales and redemptions, market appreciation or depreciation, revenues, fee waivers, expenses and regulatory changes, can significantly impact Federated's business activity levels and financial results. Risk factors and uncertainties that can influence Federated's
Federated Reports Q2 2015 Earnings | Page 3 of 11 | |
financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission (SEC).
Fee waivers to maintain positive or zero net yields on money market funds and the resulting negative impact of these waivers could vary significantly in the future as they are contingent on a number of variables including, but not limited to, changes in assets within the money market funds, yields on instruments available for purchase by the money market funds, actions by the Federal Reserve, the U.S. Department of the Treasury, the SEC, the Financial Stability Oversight Council and other governmental entities, changes in fees and expenses of the money market funds, changes in the mix of money market customer assets, changes in the money market product structures and offerings, demand for competing products, changes in the distribution fee arrangements with third parties, Federated’s willingness to continue the fee waivers and changes in the extent to which the impact of the waivers is shared by third parties.
Unaudited Money Market Fund Yield Waiver Impact to the Consolidated Statements of Income
(in millions)
Quarter Ended | Change Q2 2014 to Q2 2015 | Quarter Ended | Change Q1 2015 to Q2 2015 | Six Months Ended | Change YTD 2014 to YTD 2015 | ||||||||||||||||||||||||||
June 30, 2015 | June 30, 2014 | March 31, 2015 | June 30, 2015 | June 30, 2014 | |||||||||||||||||||||||||||
Investment advisory fees | $ | (53.4 | ) | $ | (69.6 | ) | $ | 16.2 | $ | (62.3 | ) | $ | 8.9 | $ | (115.7 | ) | $ | (142.7 | ) | $ | 27.0 | ||||||||||
Other service fees | (30.8 | ) | (32.7 | ) | 1.9 | (31.8 | ) | 1.0 | (62.6 | ) | (66.3 | ) | 3.7 | ||||||||||||||||||
Total revenue | (84.2 | ) | (102.3 | ) | 18.1 | (94.1 | ) | 9.9 | (178.3 | ) | (209.0 | ) | 30.7 | ||||||||||||||||||
Less: Reduction in distribution expense | 60.2 | 70.2 | (10.0 | ) | 64.6 | (4.4 | ) | 124.8 | 144.5 | (19.7 | ) | ||||||||||||||||||||
Operating income | (24.0 | ) | (32.1 | ) | 8.1 | (29.5 | ) | 5.5 | (53.5 | ) | (64.5 | ) | 11.0 | ||||||||||||||||||
Less: Reduction in noncontrolling interest | 1.8 | 2.5 | (0.7 | ) | 2.5 | (0.7 | ) | 4.3 | 5.2 | (0.9 | ) | ||||||||||||||||||||
Pre-tax impact | $ | (22.2 | ) | $ | (29.6 | ) | $ | 7.4 | $ | (27.0 | ) | $ | 4.8 | $ | (49.2 | ) | $ | (59.3 | ) | $ | 10.1 | ||||||||||
Federated will host an earnings conference call at 9 a.m. Eastern on July 24, 2015. 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 July 31, 2015 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering access code 13613559.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $349.7 billion in assets as of June 30, 2015. With 130 funds and a variety of separately managed account options, Federated provides comprehensive investment management to more than 7,900 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 5 percent of equity fund managers and the top 9 percent of fixed-income fund managers1. For more information, visit FederatedInvestors.com.
###
1) Strategic Insight, May 31, 2015. Based on assets under management in open-end funds.
Federated Securities Corp. is distributor of the Federated funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling and Federated MDTA LLC, each a registered investment adviser.
Certain statements in this press release, such as those related to the level of fee waivers and expenses incurred by the company, product demand and performance, investor interest and preferences, asset flows and mix, changes in product structure, fee arrangements with customers, distribution expense, regulatory changes and market conditions constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the
Federated Reports Q2 2015 Earnings | Page 4 of 11 | |
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 SEC. 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 2015 Earnings | Page 5 of 11 | |
Unaudited Condensed Consolidated Statements of Income | ||||||||||||||
(in thousands, except per share data) | ||||||||||||||
Quarter Ended | % Change Q2 2014 to Q2 2015 | Quarter Ended | % Change Q1 2015 to Q2 2015 | |||||||||||
June 30, 2015 | June 30, 2014 | March 31, 2015 | ||||||||||||
Revenue | ||||||||||||||
Investment advisory fees, net | $ | 154,429 | $ | 137,553 | 12 | % | $ | 146,559 | 5 | % | ||||
Administrative service fees, net—affiliates | 51,605 | 52,738 | (2 | ) | 53,017 | (3 | ) | |||||||
Other service fees, net | 21,031 | 21,447 | (2 | ) | 19,787 | 6 | ||||||||
Other, net | 1,062 | 1,243 | (15 | ) | 1,159 | (8 | ) | |||||||
Total Revenue | 228,127 | 212,981 | 7 | 220,522 | 3 | |||||||||
Operating Expenses | ||||||||||||||
Compensation and related | 70,940 | 70,693 | 0 | 76,498 | (7 | ) | ||||||||
Distribution | 54,058 | 52,193 | 4 | 53,495 | 1 | |||||||||
Professional service fees | 7,285 | 8,177 | (11 | ) | 7,882 | (8 | ) | |||||||
Systems and communications | 6,979 | 6,225 | 12 | 6,870 | 2 | |||||||||
Office and occupancy | 6,710 | 7,286 | (8 | ) | 6,853 | (2 | ) | |||||||
Travel and related | 3,533 | 3,538 | 0 | 2,759 | 28 | |||||||||
Advertising and promotional | 3,504 | 2,959 | 18 | 3,471 | 1 | |||||||||
Other | 5,839 | 3,068 | 90 | 3,656 | 60 | |||||||||
Total Operating Expenses | 158,848 | 154,139 | 3 | 161,484 | (2 | ) | ||||||||
Operating Income | 69,279 | 58,842 | 18 | 59,038 | 17 | |||||||||
Nonoperating (Expenses) Income | ||||||||||||||
Investment income, net | 410 | 4,311 | (90 | ) | 890 | (54 | ) | |||||||
Debt expense | (974 | ) | (2,849 | ) | (66 | ) | (1,373 | ) | (29 | ) | ||||
Other, net | (15 | ) | (5 | ) | 200 | (13 | ) | 15 | ||||||
Total Nonoperating (Expenses) Income, net | (579 | ) | 1,457 | (140 | ) | (496 | ) | 17 | ||||||
Income before income taxes | 68,700 | 60,299 | 14 | 58,542 | 17 | |||||||||
Income tax provision | 26,437 | 22,985 | 15 | 22,124 | 19 | |||||||||
Net income including the noncontrolling interests in subsidiaries | 42,263 | 37,314 | 13 | 36,418 | 16 | |||||||||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 504 | 445 | 13 | 111 | 354 | |||||||||
Net Income | $ | 41,759 | $ | 36,869 | 13 | % | $ | 36,307 | 15 | % | ||||
Amounts Attributable to Federated Investors, Inc. | ||||||||||||||
Earnings Per Share1 | ||||||||||||||
Basic and diluted | $ | 0.40 | $ | 0.35 | 14 | % | $ | 0.35 | 14 | % | ||||
Weighted-average shares outstanding | ||||||||||||||
Basic | 100,732 | 100,789 | 100,641 | |||||||||||
Diluted | 100,734 | 100,790 | 100,642 | |||||||||||
Dividends declared per share | $ | 0.25 | $ | 0.25 | $ | 0.25 | ||||||||
1) Unvested share-based 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 $1.7 million, $1.5 million and $1.5 million available to unvested restricted shareholders for the quarterly periods ended June 30, 2015, June 30, 2014 and March 31, 2015, respectively, was excluded from the computation of earnings per share.
Federated Reports Q2 2015 Earnings | Page 6 of 11 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||
(in thousands, except per share data) | |||||||||
Six Months Ended | |||||||||
June 30, 2015 | June 30, 2014 | % Change | |||||||
Revenue | |||||||||
Investment advisory fees, net | $ | 300,987 | $ | 272,646 | 10 | % | |||
Administrative service fees, net - affiliates | 104,622 | 107,465 | (3 | ) | |||||
Other service fees, net | 40,817 | 42,227 | (3 | ) | |||||
Other, net | 2,223 | 2,139 | 4 | ||||||
Total Revenue | 448,649 | 424,477 | 6 | ||||||
Operating Expenses | |||||||||
Compensation and related | 147,438 | 142,452 | 4 | ||||||
Distribution | 107,553 | 103,390 | 4 | ||||||
Professional service fees | 15,167 | 16,558 | (8 | ) | |||||
Systems and communications | 13,849 | 12,629 | 10 | ||||||
Office and occupancy | 13,563 | 14,201 | (4 | ) | |||||
Advertising and promotional | 6,975 | 6,398 | 9 | ||||||
Travel and related | 6,291 | 6,399 | (2 | ) | |||||
Other | 9,496 | 6,963 | 36 | ||||||
Total Operating Expenses | 320,332 | 308,990 | 4 | ||||||
Operating Income | 128,317 | 115,487 | 11 | ||||||
Nonoperating (Expenses) Income | |||||||||
Investment income, net | 1,300 | 7,924 | (84 | ) | |||||
Debt expense | (2,347 | ) | (5,662 | ) | (59 | ) | |||
Other, net | (28 | ) | (9 | ) | 211 | ||||
Total Nonoperating (Expenses) Income, net | (1,075 | ) | 2,253 | (148 | ) | ||||
Income before income taxes | 127,242 | 117,740 | 8 | ||||||
Income tax provision | 48,561 | 44,781 | 8 | ||||||
Net income including the noncontrolling interests in subsidiaries | 78,681 | 72,959 | 8 | ||||||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 615 | 896 | (31 | ) | |||||
Net Income | $ | 78,066 | $ | 72,063 | 8 | % | |||
Amounts Attributable to Federated Investors, Inc. | |||||||||
Earnings Per Share1 | |||||||||
Basic and diluted | $ | 0.74 | $ | 0.69 | 7 | % | |||
Weighted-average shares outstanding | |||||||||
Basic | 100,686 | 100,757 | |||||||
Diluted | 100,688 | 100,759 | |||||||
Dividends declared per share | $ | 0.50 | $ | 0.50 | |||||
1) Unvested share-based 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 $3.1 million and $2.9 million available to unvested restricted shareholders for the six months ended June 30, 2015 and June 30, 2014, respectively, was excluded from the computation of earnings per share.
Federated Reports Q2 2015 Earnings | Page 7 of 11 | |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | June 30, 2015 | Dec. 31, 2014 | ||||
Assets | ||||||
Cash and other investments | $ | 299,877 | $ | 297,338 | ||
Other current assets | 46,298 | 44,717 | ||||
Intangible assets, net and goodwill | 734,741 | 733,847 | ||||
Other long-term assets | 61,905 | 64,617 | ||||
Total Assets | $ | 1,142,821 | $ | 1,140,519 | ||
Liabilities, Redeemable Noncontrolling Interests and Equity | ||||||
Current liabilities | $ | 123,820 | $ | 149,321 | ||
Long-term debt | 204,000 | 216,750 | ||||
Other long-term liabilities | 170,756 | 161,099 | ||||
Redeemable noncontrolling interests | 12,223 | 3,697 | ||||
Equity excluding treasury stock | 805,294 | 774,910 | ||||
Treasury stock | (173,272 | ) | (165,258 | ) | ||
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ | 1,142,821 | $ | 1,140,519 | ||
Federated Reports Q2 2015 Earnings | Page 8 of 11 | |
Unaudited Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions; excludes liquidation portfolio)
Quarter Ended | Six Months Ended | |||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | ||||||||||||
Equity funds | ||||||||||||||||
Beginning assets | $ | 34,951 | $ | 33,141 | $ | 29,208 | $ | 33,141 | $ | 28,097 | ||||||
Sales | 2,389 | 2,805 | 2,566 | 5,194 | 4,858 | |||||||||||
Redemptions | (1,923 | ) | (1,914 | ) | (1,464 | ) | (3,837 | ) | (3,297 | ) | ||||||
Net sales | 466 | 891 | 1,102 | 1,357 | 1,561 | |||||||||||
Net exchanges | 6 | 39 | 9 | 45 | 41 | |||||||||||
Market gains and losses/reinvestments1 | 110 | 880 | 1,354 | 990 | 1,974 | |||||||||||
Ending assets | $ | 35,533 | $ | 34,951 | $ | 31,673 | $ | 35,533 | $ | 31,673 | ||||||
Equity separate accounts2 | ||||||||||||||||
Beginning assets | $ | 19,086 | $ | 18,285 | $ | 16,671 | $ | 18,285 | $ | 16,051 | ||||||
Sales3 | 1,449 | 1,693 | 1,168 | 3,142 | 2,013 | |||||||||||
Redemptions3 | (1,084 | ) | (954 | ) | (746 | ) | (2,038 | ) | (1,524 | ) | ||||||
Net sales3 | 365 | 739 | 422 | 1,104 | 489 | |||||||||||
Market gains and losses4 | (195 | ) | 62 | 1,122 | (133 | ) | 1,675 | |||||||||
Ending assets | $ | 19,256 | $ | 19,086 | $ | 18,215 | $ | 19,256 | $ | 18,215 | ||||||
Total equity2 | ||||||||||||||||
Beginning assets | $ | 54,037 | $ | 51,426 | $ | 45,879 | $ | 51,426 | $ | 44,148 | ||||||
Sales3 | 3,838 | 4,498 | 3,734 | 8,336 | 6,871 | |||||||||||
Redemptions3 | (3,007 | ) | (2,868 | ) | (2,210 | ) | (5,875 | ) | (4,821 | ) | ||||||
Net sales3 | 831 | 1,630 | 1,524 | 2,461 | 2,050 | |||||||||||
Net exchanges | 6 | 39 | 9 | 45 | 41 | |||||||||||
Market gains and losses/reinvestments1 | (85 | ) | 942 | 2,476 | 857 | 3,649 | ||||||||||
Ending assets | $ | 54,789 | $ | 54,037 | $ | 49,888 | $ | 54,789 | $ | 49,888 | ||||||
Fixed-income funds | ||||||||||||||||
Beginning assets | $ | 41,039 | $ | 40,456 | $ | 40,237 | $ | 40,456 | $ | 39,606 | ||||||
Sales | 3,251 | 4,491 | 3,325 | 7,742 | 7,573 | |||||||||||
Redemptions | (4,004 | ) | (4,193 | ) | (3,940 | ) | (8,197 | ) | (7,965 | ) | ||||||
Net (redemptions) sales | (753 | ) | 298 | (615 | ) | (455 | ) | (392 | ) | |||||||
Net exchanges | (22 | ) | (37 | ) | (11 | ) | (59 | ) | (70 | ) | ||||||
Acquisition related | 0 | 0 | 301 | 0 | 301 | |||||||||||
Market gains and losses/reinvestments1 | (222 | ) | 322 | 445 | 100 | 912 | ||||||||||
Ending assets | $ | 40,042 | $ | 41,039 | $ | 40,357 | $ | 40,042 | $ | 40,357 | ||||||
Fixed-income separate accounts2 | ||||||||||||||||
Beginning assets | $ | 12,523 | $ | 12,251 | $ | 10,746 | $ | 12,251 | $ | 10,520 | ||||||
Sales3 | 754 | 239 | 377 | 993 | 631 | |||||||||||
Redemptions3 | (277 | ) | (204 | ) | (537 | ) | (481 | ) | (769 | ) | ||||||
Net sales (redemptions)3 | 477 | 35 | (160 | ) | 512 | (138 | ) | |||||||||
Net exchanges | 0 | 0 | 1 | 0 | 1 | |||||||||||
Market gains and losses4 | (138 | ) | 237 | 185 | 99 | 389 | ||||||||||
Ending assets | $ | 12,862 | $ | 12,523 | $ | 10,772 | $ | 12,862 | $ | 10,772 | ||||||
Total fixed income2 | ||||||||||||||||
Beginning assets | $ | 53,562 | $ | 52,707 | $ | 50,983 | $ | 52,707 | $ | 50,126 | ||||||
Sales3 | 4,005 | 4,730 | 3,702 | 8,735 | 8,204 | |||||||||||
Redemptions3 | (4,281 | ) | (4,397 | ) | (4,477 | ) | (8,678 | ) | (8,734 | ) | ||||||
Net (redemptions) sales3 | (276 | ) | 333 | (775 | ) | 57 | (530 | ) | ||||||||
Net exchanges | (22 | ) | (37 | ) | (10 | ) | (59 | ) | (69 | ) | ||||||
Acquisition related | 0 | 0 | 301 | 0 | 301 | |||||||||||
Market gains and losses/reinvestments1 | (360 | ) | 559 | 630 | 199 | 1,301 | ||||||||||
Ending assets | $ | 52,904 | $ | 53,562 | $ | 51,129 | $ | 52,904 | $ | 51,129 | ||||||
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, sub-advised funds and other managed products.
3) For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses.
4) Reflects the approximate changes in the fair value of the securities held by the portfolios.
Federated Reports Q2 2015 Earnings | Page 9 of 11 | |
Unaudited Total Changes in Equity and Fixed-Income Assets
(in millions; excludes liquidation portfolio)
Quarter Ended | Six Months Ended | |||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | ||||||||||||
Funds | ||||||||||||||||
Beginning assets | $ | 75,990 | $ | 73,597 | $ | 69,445 | $ | 73,597 | $ | 67,703 | ||||||
Sales | 5,640 | 7,296 | 5,891 | 12,936 | 12,431 | |||||||||||
Redemptions | (5,927 | ) | (6,107 | ) | (5,404 | ) | (12,034 | ) | (11,262 | ) | ||||||
Net (redemptions) sales | (287 | ) | 1,189 | 487 | 902 | 1,169 | ||||||||||
Net exchanges | (16 | ) | 2 | (2 | ) | (14 | ) | (29 | ) | |||||||
Acquisition related | 0 | 0 | 301 | 0 | 301 | |||||||||||
Market gains and losses/reinvestments1 | (112 | ) | 1,202 | 1,799 | 1,090 | 2,886 | ||||||||||
Ending assets | $ | 75,575 | $ | 75,990 | $ | 72,030 | $ | 75,575 | $ | 72,030 | ||||||
Separate accounts2 | ||||||||||||||||
Beginning assets | $ | 31,609 | $ | 30,536 | $ | 27,417 | $ | 30,536 | $ | 26,571 | ||||||
Sales3 | 2,203 | 1,932 | 1,545 | 4,135 | 2,644 | |||||||||||
Redemptions3 | (1,361 | ) | (1,158 | ) | (1,283 | ) | (2,519 | ) | (2,293 | ) | ||||||
Net sales3 | 842 | 774 | 262 | 1,616 | 351 | |||||||||||
Net exchanges | 0 | 0 | 1 | 0 | 1 | |||||||||||
Market gains and losses4 | (333 | ) | 299 | 1,307 | (34 | ) | 2,064 | |||||||||
Ending assets | $ | 32,118 | $ | 31,609 | $ | 28,987 | $ | 32,118 | $ | 28,987 | ||||||
Total assets 2 | ||||||||||||||||
Beginning assets | $ | 107,599 | $ | 104,133 | $ | 96,862 | $ | 104,133 | $ | 94,274 | ||||||
Sales3 | 7,843 | 9,228 | 7,436 | 17,071 | 15,075 | |||||||||||
Redemptions3 | (7,288 | ) | (7,265 | ) | (6,687 | ) | (14,553 | ) | (13,555 | ) | ||||||
Net sales3 | 555 | 1,963 | 749 | 2,518 | 1,520 | |||||||||||
Net exchanges | (16 | ) | 2 | (1 | ) | (14 | ) | (28 | ) | |||||||
Acquisition related | 0 | 0 | 301 | 0 | 301 | |||||||||||
Market gains and losses/reinvestments1 | (445 | ) | 1,501 | 3,106 | 1,056 | 4,950 | ||||||||||
Ending assets | $ | 107,693 | $ | 107,599 | $ | 101,017 | $ | 107,693 | $ | 101,017 | ||||||
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, sub-advised funds and other managed products.
3) For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses.
4) Reflects the approximate changes in the fair value of the securities held by the portfolios.
Federated Reports Q2 2015 Earnings | Page 10 of 11 | |
(unaudited) | |||||||||||||||
MANAGED ASSETS (in millions) | June 30, 2015 | March 31, 2015 | Dec. 31, 2014 | Sept. 30, 2014 | June 30, 2014 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 54,789 | $ | 54,037 | $ | 51,426 | $ | 50,335 | $ | 49,888 | |||||
Fixed-income | 52,904 | 53,562 | 52,707 | 51,187 | 51,129 | ||||||||||
Money market | 241,982 | 248,160 | 258,772 | 245,536 | 245,201 | ||||||||||
Liquidation portfolio1 | 0 | 0 | 0 | 5,197 | 5,408 | ||||||||||
Total Managed Assets | $ | 349,675 | $ | 355,759 | $ | 362,905 | $ | 352,255 | $ | 351,626 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 35,533 | $ | 34,951 | $ | 33,141 | $ | 32,088 | $ | 31,673 | |||||
Fixed-income | 40,042 | 41,039 | 40,456 | 40,435 | 40,357 | ||||||||||
Money market | 208,786 | 214,310 | 225,471 | 215,237 | 212,434 | ||||||||||
Total Fund Assets | $ | 284,361 | $ | 290,300 | $ | 299,068 | $ | 287,760 | $ | 284,464 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 19,256 | $ | 19,086 | $ | 18,285 | $ | 18,247 | $ | 18,215 | |||||
Fixed-income | 12,862 | 12,523 | 12,251 | 10,752 | 10,772 | ||||||||||
Money market | 33,196 | 33,850 | 33,301 | 30,299 | 32,767 | ||||||||||
Total Separate Accounts | $ | 65,314 | $ | 65,459 | $ | 63,837 | $ | 59,298 | $ | 61,754 | |||||
Total Liquidation Portfolio1 | $ | 0 | $ | 0 | $ | 0 | $ | 5,197 | $ | 5,408 | |||||
Total Managed Assets | $ | 349,675 | $ | 355,759 | $ | 362,905 | $ | 352,255 | $ | 351,626 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | June 30, 2015 | March 31, 2015 | Dec. 31, 2014 | Sept. 30, 2014 | June 30, 2014 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 55,476 | $ | 52,784 | $ | 50,901 | $ | 50,207 | $ | 47,466 | |||||
Fixed-income | 53,319 | 53,405 | 52,782 | 51,115 | 50,774 | ||||||||||
Money market | 239,774 | 253,261 | 246,698 | 242,537 | 254,575 | ||||||||||
Liquidation portfolio1 | 0 | 0 | 1,563 | 5,307 | 5,569 | ||||||||||
Total Avg. Assets | $ | 348,569 | $ | 359,450 | $ | 351,944 | $ | 349,166 | $ | 358,384 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 35,998 | $ | 34,162 | $ | 32,705 | $ | 32,060 | $ | 30,154 | |||||
Fixed-income | 40,574 | 41,013 | 41,072 | 40,275 | 40,130 | ||||||||||
Money market | 205,943 | 218,168 | 216,235 | 211,571 | 219,936 | ||||||||||
Total Avg. Fund Assets | $ | 282,515 | $ | 293,343 | $ | 290,012 | $ | 283,906 | $ | 290,220 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 19,478 | $ | 18,622 | $ | 18,196 | $ | 18,147 | $ | 17,312 | |||||
Fixed-income | 12,745 | 12,392 | 11,710 | 10,840 | 10,644 | ||||||||||
Money market | 33,831 | 35,093 | 30,463 | 30,966 | 34,639 | ||||||||||
Total Avg. Separate Accounts | $ | 66,054 | $ | 66,107 | $ | 60,369 | $ | 59,953 | $ | 62,595 | |||||
Total Avg. Liquidation Portfolio1 | $ | 0 | $ | 0 | $ | 1,563 | $ | 5,307 | $ | 5,569 | |||||
Total Avg. Managed Assets | $ | 348,569 | $ | 359,450 | $ | 351,944 | $ | 349,166 | $ | 358,384 | |||||
1) | The liquidation portfolio represented a portfolio of distressed bonds at cost. Federated had been retained by a third party to manage these assets through an orderly liquidation process that was completed during the fourth quarter of 2014. Management-fee rates earned from this portfolio were lower than those of traditional separate account mandates. |
Federated Reports Q2 2015 Earnings | Page 11 of 11 | |
(unaudited) | ||||||||
AVERAGE MANAGED ASSETS | Six Months Ended | |||||||
(in millions) | June 30, 2015 | June 30, 2014 | ||||||
By Asset Class | ||||||||
Equity | $ | 54,130 | $ | 46,079 | ||||
Fixed-income | 53,362 | 50,716 | ||||||
Money market | 246,518 | 263,904 | ||||||
Liquidation portfolio1 | 0 | 5,680 | ||||||
Total Avg. Assets | $ | 354,010 | $ | 366,379 | ||||
By Product Type | ||||||||
Funds: | ||||||||
Equity | $ | 35,080 | $ | 29,335 | ||||
Fixed-income | 40,793 | 40,058 | ||||||
Money market | 212,056 | 227,582 | ||||||
Total Avg. Fund Assets | $ | 287,929 | $ | 296,975 | ||||
Separate Accounts: | ||||||||
Equity | $ | 19,050 | $ | 16,744 | ||||
Fixed-income | 12,569 | 10,658 | ||||||
Money market | 34,462 | 36,322 | ||||||
Total Avg. Separate Accounts | $ | 66,081 | $ | 63,724 | ||||
Total Avg. Liquidation Portfolio1 | $ | 0 | $ | 5,680 | ||||
Total Avg. Managed Assets | $ | 354,010 | $ | 366,379 | ||||
1) | The liquidation portfolio represented a portfolio of distressed bonds at cost. Federated had been retained by a third party to manage these assets through an orderly liquidation process that was completed during the fourth quarter of 2014. Management-fee rates earned from this portfolio were lower than those of traditional separate account mandates. |