Attached files
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| 8-K - 8-K - FEDERATED HERMES, INC. | a8-kx2015q3epr.htm |
Exhibit 99.1
Federated Investors, Inc. Reports Third Quarter 2015 Earnings
• | Earnings per share increases 17 percent to $0.42 per share compared to Q3 2014 |
• | Net equity sales positive for eighth consecutive quarter |
• | Board declares $0.25 per share dividend |
(PITTSBURGH, Pa., Oct. 22, 2015) — Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.42 for Q3 2015, up 17 percent from $0.36 for the same quarter last year on net income of $44.1 million for Q3 2015, compared to $37.6 million for Q3 2014. Federated reported YTD 2015 EPS of $1.17 compared to $1.05 for the same period in 2014 and YTD 2015 net income of $122.2 million compared to $109.6 million for the same period last year.
Federated's total managed assets were $351.0 billion at Sept. 30, 2015. Total managed assets were down $1.3 billion from $352.3 billion at Sept. 30, 2014 and up $1.3 billion from $349.7 billion at June 30, 2015. Growth in money market assets was offset by lower equity and fixed-income assets in Q3 2015 compared to Q2 2015. Average managed assets for Q3 2015 were $351.9 billion, up $2.7 billion or 1 percent from $349.2 billion reported for Q3 2014 and up $3.3 billion or 1 percent from $348.6 billion reported for Q2 2015.
"Federated again saw positive net equity sales in the third quarter, as investors continued to seek alpha from a range of our historically strong-performing Federated products, including our Kaufmann growth strategies and the Federated International Leaders Fund," said J. Christopher Donahue, president and chief executive officer. "Additionally, as investors navigated volatile markets, we saw renewed interest in alternative strategies, such as the Federated Prudent Bear and Absolute Return funds."
Federated's board of directors declared a dividend of $0.25 per share. The dividend is payable on Nov. 13, 2015 to shareholders of record as of Nov. 6, 2015. During Q3 2015, Federated purchased 539,805 shares of Federated class B common stock for $16.4 million.
Federated's equity assets were $52.0 billion at Sept. 30, 2015, up $1.7 billion or 3 percent from $50.3 billion at Sept. 30, 2014 and down $2.8 billion or 5 percent from $54.8 billion at June 30, 2015. Top-selling equity funds during Q3 2015 on a net basis were Federated Kaufmann Large Cap Fund, Federated International Leaders Fund, Federated Kaufmann Small Cap Fund, Federated Prudent Bear Fund and Federated MDT Stock Trust.
Federated's fixed-income assets were $52.1 billion at Sept. 30, 2015, up $0.9 billion or 2 percent from $51.2 billion at Sept. 30, 2014 and down $0.8 billion or 2 percent from $52.9 billion at June 30, 2015. Top-selling fixed-income funds during Q3 2015 on a net basis were Capital Preservation Fund, Federated Sterling Cash Plus Fund, Federated Floating Rate Strategic Income Fund, Federated U.S. Government Securities Fund: 2-5 Years and Federated Ultrashort Bond Fund.
Money market assets were $246.9 billion at Sept. 30, 2015, up $1.4 billion or 1 percent from $245.5 billion at Sept. 30, 2014 and up $4.9 billion or 2 percent from $242.0 billion at June 30, 2015. Money market mutual fund assets were $216.3 billion at Sept. 30, 2015, up $1.1 billion or 1 percent from $215.2 billion at Sept. 30, 2014 and up $7.5 billion or 4 percent from $208.8 billion at June 30, 2015.
MEDIA: | MEDIA: | ANALYSTS: |
Ed Costello 412-288-7538 | Meghan McAndrew 412-288-8103 | Ray Hanley 412-288-1920 |
Federated Reports Q3 2015 Earnings | Page 2 of 11 | |
Financial Summary
Q3 2015 vs. Q3 2014
Revenue increased by $17.4 million or 8 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 (voluntary yield-related fee waivers) and an increase in revenue from higher average equity assets. See additional information about voluntary yield-related fee waivers in the table at the end of this financial summary.
During Q3 2015, Federated derived 67 percent of its revenue from equity and fixed-income assets (46 percent from equity assets and 21 percent from fixed-income assets) and 33 percent from money market assets.
Operating expenses increased by $4.0 million or 3 percent primarily due to an increase in distribution expenses as a result of a decrease in voluntary yield-related fee waivers.
Nonoperating expenses, net increased by $2.7 million primarily due to a decrease in net investment income due largely to an increase in losses incurred on investments, partially offset by a decrease in debt expense primarily due to a lower average interest rate on Federated's term loan.
Q3 2015 vs. Q2 2015
Revenue increased by $6.2 million or 3 percent primarily due to an increase in revenue from higher average money market assets and an additional day in Q3 2015. The increase in revenue was partially offset by a decrease in revenue from lower average equity and fixed-income assets.
Operating expenses increased by $1.2 million or 1 percent primarily due to an increase in distribution expenses resulting from higher average money market assets and an additional day in Q3 2015.
Nonoperating expenses, net increased by $3.5 million primarily due to a decrease in net investment income resulting from an increase in losses incurred on investments.
YTD 2015 vs. YTD 2014
Revenue increased by $41.6 million or 6 percent primarily due to a decrease in voluntary yield-related fee waivers and an increase in revenue from higher average equity assets. The increase in revenue was partially offset by a decrease in revenue from lower average money-market assets.
For the first nine months of 2015, Federated derived 68 percent of its revenue from equity and fixed-income assets (47 percent from equity assets and 21 percent from fixed-income assets) and 32 percent from money market assets.
Operating expenses increased by $15.3 million or 3 percent primarily due to an increase in distribution expenses and compensation and related expenses. The increase in distribution expenses primarily resulted from a decrease in voluntary yield-related fee waivers, coupled with higher average equity assets, partially offset by lower average money market assets. Compensation and related expenses increased primarily due to higher incentive compensation.
Nonoperating (expenses) income, net decreased by $6.0 million primarily due to a decrease in net investment income resulting from an increase in losses incurred on investments in 2015 compared to investment gains realized in 2014, partially offset by a decrease in debt expense primarily due to a lower average interest rate on Federated's term loan.
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
Federated Reports Q3 2015 Earnings | Page 3 of 11 | |
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 financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission (SEC).
Voluntary yield-related fee waivers 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 customer relationships, 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 Q3 2014 to Q3 2015 | Quarter Ended | Change Q2 2015 to Q3 2015 | Nine Months Ended | Change YTD 2014 to YTD 2015 | ||||||||||||||||||||||||||
Sept. 30, 2015 | Sept. 30, 2014 | June 30, 2015 | Sept. 30, 2015 | Sept. 30, 2014 | |||||||||||||||||||||||||||
Investment advisory fees | $ | (49.3 | ) | $ | (69.3 | ) | $ | 20.0 | $ | (53.4 | ) | $ | 4.1 | $ | (165.0 | ) | $ | (212.0 | ) | $ | 47.0 | ||||||||||
Other service fees | (34.0 | ) | (32.4 | ) | (1.6 | ) | (30.8 | ) | (3.2 | ) | (96.6 | ) | (98.7 | ) | 2.1 | ||||||||||||||||
Total revenue | (83.3 | ) | (101.7 | ) | 18.4 | (84.2 | ) | 0.9 | (261.6 | ) | (310.7 | ) | 49.1 | ||||||||||||||||||
Less: Reduction in distribution expense | 61.3 | 68.7 | (7.4 | ) | 60.2 | 1.1 | 186.1 | 213.2 | (27.1 | ) | |||||||||||||||||||||
Operating income | (22.0 | ) | (33.0 | ) | 11.0 | (24.0 | ) | 2.0 | (75.5 | ) | (97.5 | ) | 22.0 | ||||||||||||||||||
Less: Reduction in noncontrolling interest | 1.7 | 2.8 | (1.1 | ) | 1.8 | (0.1 | ) | 6.0 | 8.0 | (2.0 | ) | ||||||||||||||||||||
Pre-tax impact | $ | (20.3 | ) | $ | (30.2 | ) | $ | 9.9 | $ | (22.2 | ) | $ | 1.9 | $ | (69.5 | ) | $ | (89.5 | ) | $ | 20.0 | ||||||||||
Federated will host an earnings conference call at 9 a.m. Eastern on Oct. 23, 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 Oct. 30, 2015 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering access code 13621743.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $351.0 billion in assets as of Sept. 30, 2015. With 129 funds and a variety of separately managed account options, Federated provides comprehensive investment management to more than 8,400 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top 4 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, Aug. 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 customer relationships,
Federated Reports Q3 2015 Earnings | Page 4 of 11 | |
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 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 yield-related 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 Q3 2015 Earnings | Page 5 of 11 | |
Unaudited Condensed Consolidated Statements of Income | ||||||||||||||
(in thousands, except per share data) | ||||||||||||||
Quarter Ended | % Change Q3 2014 to Q3 2015 | Quarter Ended | % Change Q2 2015 to Q3 2015 | |||||||||||
Sept. 30, 2015 | Sept. 30, 2014 | June 30, 2015 | ||||||||||||
Revenue | ||||||||||||||
Investment advisory fees, net | $ | 158,898 | $ | 141,086 | 13 | % | $ | 154,429 | 3 | % | ||||
Administrative service fees, net—affiliates | 53,275 | 52,244 | 2 | 51,605 | 3 | |||||||||
Other service fees, net | 21,198 | 22,249 | (5 | ) | 21,031 | 1 | ||||||||
Other, net | 950 | 1,336 | (29 | ) | 1,062 | (11 | ) | |||||||
Total Revenue | 234,321 | 216,915 | 8 | 228,127 | 3 | |||||||||
Operating Expenses | ||||||||||||||
Compensation and related | 70,624 | 70,724 | 0 | 70,940 | 0 | |||||||||
Distribution | 58,823 | 53,487 | 10 | 54,058 | 9 | |||||||||
Professional service fees | 7,823 | 7,944 | (2 | ) | 7,285 | 7 | ||||||||
Systems and communications | 6,684 | 6,392 | 5 | 6,979 | (4 | ) | ||||||||
Office and occupancy | 6,552 | 8,241 | (20 | ) | 6,710 | (2 | ) | |||||||
Advertising and promotional | 3,310 | 3,271 | 1 | 3,504 | (6 | ) | ||||||||
Travel and related | 3,183 | 3,028 | 5 | 3,533 | (10 | ) | ||||||||
Other | 3,078 | 3,000 | 3 | 5,839 | (47 | ) | ||||||||
Total Operating Expenses | 160,077 | 156,087 | 3 | 158,848 | 1 | |||||||||
Operating Income | 74,244 | 60,828 | 22 | 69,279 | 7 | |||||||||
Nonoperating (Expenses) Income | ||||||||||||||
Investment (loss) income, net | (3,049 | ) | 794 | (484 | ) | 410 | (844 | ) | ||||||
Debt expense | (979 | ) | (2,162 | ) | (55 | ) | (974 | ) | 1 | |||||
Other, net | (8 | ) | (4 | ) | 100 | (15 | ) | (47 | ) | |||||
Total Nonoperating Expenses, net | (4,036 | ) | (1,372 | ) | 194 | (579 | ) | 597 | ||||||
Income before income taxes | 70,208 | 59,456 | 18 | 68,700 | 2 | |||||||||
Income tax provision | 26,072 | 22,197 | 17 | 26,437 | (1 | ) | ||||||||
Net income including the noncontrolling interests in subsidiaries | 44,136 | 37,259 | 18 | 42,263 | 4 | |||||||||
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries | 5 | (301 | ) | 102 | 504 | (99 | ) | |||||||
Net Income | $ | 44,131 | $ | 37,560 | 17 | % | $ | 41,759 | 6 | % | ||||
Amounts Attributable to Federated Investors, Inc. | ||||||||||||||
Earnings Per Share1 | ||||||||||||||
Basic and diluted | $ | 0.42 | $ | 0.36 | 17 | % | $ | 0.40 | 5 | % | ||||
Weighted-average shares outstanding | ||||||||||||||
Basic | 100,449 | 100,729 | 100,732 | |||||||||||
Diluted | 100,451 | 100,731 | 100,734 | |||||||||||
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 $1.7 million available to unvested restricted shareholders for the quarterly periods ended Sept. 30, 2015, Sept. 30, 2014 and June 30, 2015, respectively, was excluded from the computation of earnings per share.
Federated Reports Q3 2015 Earnings | Page 6 of 11 | |
Unaudited Condensed Consolidated Statements of Income | |||||||||
(in thousands, except per share data) | |||||||||
Nine Months Ended | |||||||||
Sept. 30, 2015 | Sept. 30, 2014 | % Change | |||||||
Revenue | |||||||||
Investment advisory fees, net | $ | 459,885 | $ | 413,732 | 11 | % | |||
Administrative service fees, net - affiliates | 157,897 | 159,708 | (1 | ) | |||||
Other service fees, net | 62,014 | 64,478 | (4 | ) | |||||
Other, net | 3,174 | 3,474 | (9 | ) | |||||
Total Revenue | 682,970 | 641,392 | 6 | ||||||
Operating Expenses | |||||||||
Compensation and related | 218,062 | 213,176 | 2 | ||||||
Distribution | 166,376 | 156,877 | 6 | ||||||
Professional service fees | 22,990 | 24,502 | (6 | ) | |||||
Systems and communications | 20,533 | 19,021 | 8 | ||||||
Office and occupancy | 20,115 | 22,442 | (10 | ) | |||||
Advertising and promotional | 10,285 | 9,668 | 6 | ||||||
Travel and related | 9,474 | 9,427 | 0 | ||||||
Other | 12,574 | 9,964 | 26 | ||||||
Total Operating Expenses | 480,409 | 465,077 | 3 | ||||||
Operating Income | 202,561 | 176,315 | 15 | ||||||
Nonoperating (Expenses) Income | |||||||||
Investment (loss) income, net | (1,749 | ) | 8,719 | (120 | ) | ||||
Debt expense | (3,325 | ) | (7,824 | ) | (58 | ) | |||
Other, net | (37 | ) | (14 | ) | 164 | ||||
Total Nonoperating (Expenses) Income, net | (5,111 | ) | 881 | (680 | ) | ||||
Income before income taxes | 197,450 | 177,196 | 11 | ||||||
Income tax provision | 74,633 | 66,978 | 11 | ||||||
Net income including the noncontrolling interests in subsidiaries | 122,817 | 110,218 | 11 | ||||||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 620 | 595 | 4 | ||||||
Net Income | $ | 122,197 | $ | 109,623 | 11 | % | |||
Amounts Attributable to Federated Investors, Inc. | |||||||||
Earnings Per Share1 | |||||||||
Basic and diluted | $ | 1.17 | $ | 1.05 | 11 | % | |||
Weighted-average shares outstanding | |||||||||
Basic | 100,606 | 100,748 | |||||||
Diluted | 100,607 | 100,749 | |||||||
Dividends declared per share | $ | 0.75 | $ | 0.75 | |||||
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 $4.8 million and $4.3 million available to unvested restricted shareholders for the nine months ended Sept. 30, 2015 and Sept. 30, 2014, respectively, was excluded from the computation of earnings per share.
Federated Reports Q3 2015 Earnings | Page 7 of 11 | |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | Sept. 30, 2015 | Dec. 31, 2014 | ||||
Assets | ||||||
Cash and other investments | $ | 321,762 | $ | 297,338 | ||
Other current assets | 41,132 | 44,717 | ||||
Intangible assets, net and goodwill | 734,808 | 733,847 | ||||
Other long-term assets | 58,998 | 64,617 | ||||
Total Assets | $ | 1,156,700 | $ | 1,140,519 | ||
Liabilities, Redeemable Noncontrolling Interests and Equity | ||||||
Current liabilities | $ | 141,661 | $ | 149,321 | ||
Long-term debt | 197,625 | 216,750 | ||||
Other long-term liabilities | 171,259 | 161,099 | ||||
Redeemable noncontrolling interests | 8,611 | 3,697 | ||||
Equity excluding treasury stock | 827,157 | 774,910 | ||||
Treasury stock | (189,613 | ) | (165,258 | ) | ||
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ | 1,156,700 | $ | 1,140,519 | ||
Federated Reports Q3 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 | Nine Months Ended | |||||||||||||||
Sept. 30, 2015 | June 30, 2015 | Sept. 30, 2014 | Sept. 30, 2015 | Sept. 30, 2014 | ||||||||||||
Equity funds | ||||||||||||||||
Beginning assets | $ | 35,533 | $ | 34,951 | $ | 31,673 | $ | 33,141 | $ | 28,097 | ||||||
Sales | 2,464 | 2,389 | 2,632 | 7,658 | 7,490 | |||||||||||
Redemptions | (2,043 | ) | (1,923 | ) | (1,389 | ) | (5,880 | ) | (4,686 | ) | ||||||
Net sales | 421 | 466 | 1,243 | 1,778 | 2,804 | |||||||||||
Net exchanges | (110 | ) | 6 | 8 | (65 | ) | 49 | |||||||||
Market gains and losses/reinvestments1 | (2,571 | ) | 110 | (836 | ) | (1,581 | ) | 1,138 | ||||||||
Ending assets | $ | 33,273 | $ | 35,533 | $ | 32,088 | $ | 33,273 | $ | 32,088 | ||||||
Equity separate accounts2 | ||||||||||||||||
Beginning assets | $ | 19,256 | $ | 19,086 | $ | 18,215 | $ | 18,285 | $ | 16,051 | ||||||
Sales3 | 1,456 | 1,449 | 1,131 | 4,598 | 3,144 | |||||||||||
Redemptions3 | (1,350 | ) | (1,084 | ) | (737 | ) | (3,388 | ) | (2,261 | ) | ||||||
Net sales3 | 106 | 365 | 394 | 1,210 | 883 | |||||||||||
Net exchanges | (1 | ) | 0 | 0 | (1 | ) | 0 | |||||||||
Market gains and losses4 | (678 | ) | (195 | ) | (362 | ) | (811 | ) | 1,313 | |||||||
Ending assets | $ | 18,683 | $ | 19,256 | $ | 18,247 | $ | 18,683 | $ | 18,247 | ||||||
Total equity2 | ||||||||||||||||
Beginning assets | $ | 54,789 | $ | 54,037 | $ | 49,888 | $ | 51,426 | $ | 44,148 | ||||||
Sales3 | 3,920 | 3,838 | 3,763 | 12,256 | 10,634 | |||||||||||
Redemptions3 | (3,393 | ) | (3,007 | ) | (2,126 | ) | (9,268 | ) | (6,947 | ) | ||||||
Net sales3 | 527 | 831 | 1,637 | 2,988 | 3,687 | |||||||||||
Net exchanges | (111 | ) | 6 | 8 | (66 | ) | 49 | |||||||||
Market gains and losses/reinvestments1 | (3,249 | ) | (85 | ) | (1,198 | ) | (2,392 | ) | 2,451 | |||||||
Ending assets | $ | 51,956 | $ | 54,789 | $ | 50,335 | $ | 51,956 | $ | 50,335 | ||||||
Fixed-income funds | ||||||||||||||||
Beginning assets | $ | 40,042 | $ | 41,039 | $ | 40,357 | $ | 40,456 | $ | 39,606 | ||||||
Sales | 3,277 | 3,251 | 3,982 | 11,019 | 11,555 | |||||||||||
Redemptions | (4,173 | ) | (4,004 | ) | (3,744 | ) | (12,370 | ) | (11,709 | ) | ||||||
Net (redemptions) sales | (896 | ) | (753 | ) | 238 | (1,351 | ) | (154 | ) | |||||||
Net exchanges | 90 | (22 | ) | 1 | 31 | (69 | ) | |||||||||
Acquisition related | 0 | 0 | 0 | 0 | 301 | |||||||||||
Market gains and losses/reinvestments1 | (254 | ) | (222 | ) | (161 | ) | (154 | ) | 751 | |||||||
Ending assets | $ | 38,982 | $ | 40,042 | $ | 40,435 | $ | 38,982 | $ | 40,435 | ||||||
Fixed-income separate accounts2 | ||||||||||||||||
Beginning assets | $ | 12,862 | $ | 12,523 | $ | 10,772 | $ | 12,251 | $ | 10,520 | ||||||
Sales3 | 638 | 754 | 263 | 1,631 | 894 | |||||||||||
Redemptions3 | (336 | ) | (277 | ) | (268 | ) | (817 | ) | (1,037 | ) | ||||||
Net sales (redemptions)3 | 302 | 477 | (5 | ) | 814 | (143 | ) | |||||||||
Net exchanges | (6 | ) | 0 | 0 | (6 | ) | 1 | |||||||||
Market gains and losses4 | (75 | ) | (138 | ) | (15 | ) | 24 | 374 | ||||||||
Ending assets | $ | 13,083 | $ | 12,862 | $ | 10,752 | $ | 13,083 | $ | 10,752 | ||||||
Total fixed income2 | ||||||||||||||||
Beginning assets | $ | 52,904 | $ | 53,562 | $ | 51,129 | $ | 52,707 | $ | 50,126 | ||||||
Sales3 | 3,915 | 4,005 | 4,245 | 12,650 | 12,449 | |||||||||||
Redemptions3 | (4,509 | ) | (4,281 | ) | (4,012 | ) | (13,187 | ) | (12,746 | ) | ||||||
Net (redemptions) sales3 | (594 | ) | (276 | ) | 233 | (537 | ) | (297 | ) | |||||||
Net exchanges | 84 | (22 | ) | 1 | 25 | (68 | ) | |||||||||
Acquisition related | 0 | 0 | 0 | 0 | 301 | |||||||||||
Market gains and losses/reinvestments1 | (329 | ) | (360 | ) | (176 | ) | (130 | ) | 1,125 | |||||||
Ending assets | $ | 52,065 | $ | 52,904 | $ | 51,187 | $ | 52,065 | $ | 51,187 | ||||||
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 Q3 2015 Earnings | Page 9 of 11 | |
Unaudited Total Changes in Equity and Fixed-Income Assets
(in millions; excludes liquidation portfolio)
Quarter Ended | Nine Months Ended | |||||||||||||||
Sept. 30, 2015 | June 30, 2015 | Sept. 30, 2014 | Sept. 30, 2015 | Sept. 30, 2014 | ||||||||||||
Funds | ||||||||||||||||
Beginning assets | $ | 75,575 | $ | 75,990 | $ | 72,030 | $ | 73,597 | $ | 67,703 | ||||||
Sales | 5,741 | 5,640 | 6,614 | 18,677 | 19,045 | |||||||||||
Redemptions | (6,216 | ) | (5,927 | ) | (5,133 | ) | (18,250 | ) | (16,395 | ) | ||||||
Net (redemptions) sales | (475 | ) | (287 | ) | 1,481 | 427 | 2,650 | |||||||||
Net exchanges | (20 | ) | (16 | ) | 9 | (34 | ) | (20 | ) | |||||||
Acquisition related | 0 | 0 | 0 | 0 | 301 | |||||||||||
Market gains and losses/reinvestments1 | (2,825 | ) | (112 | ) | (997 | ) | (1,735 | ) | 1,889 | |||||||
Ending assets | $ | 72,255 | $ | 75,575 | $ | 72,523 | $ | 72,255 | $ | 72,523 | ||||||
Separate accounts2 | ||||||||||||||||
Beginning assets | $ | 32,118 | $ | 31,609 | $ | 28,987 | $ | 30,536 | $ | 26,571 | ||||||
Sales3 | 2,094 | 2,203 | 1,394 | 6,229 | 4,038 | |||||||||||
Redemptions3 | (1,686 | ) | (1,361 | ) | (1,005 | ) | (4,205 | ) | (3,298 | ) | ||||||
Net sales3 | 408 | 842 | 389 | 2,024 | 740 | |||||||||||
Net exchanges | (7) | 0 | 0 | (7) | 1 | |||||||||||
Market gains and losses4 | (753 | ) | (333 | ) | (377 | ) | (787 | ) | 1,687 | |||||||
Ending assets | $ | 31,766 | $ | 32,118 | $ | 28,999 | $ | 31,766 | $ | 28,999 | ||||||
Total assets 2 | ||||||||||||||||
Beginning assets | $ | 107,693 | $ | 107,599 | $ | 101,017 | $ | 104,133 | $ | 94,274 | ||||||
Sales3 | 7,835 | 7,843 | 8,008 | 24,906 | 23,083 | |||||||||||
Redemptions3 | (7,902 | ) | (7,288 | ) | (6,138 | ) | (22,455 | ) | (19,693 | ) | ||||||
Net (redemptions) sales3 | (67 | ) | 555 | 1,870 | 2,451 | 3,390 | ||||||||||
Net exchanges | (27 | ) | (16 | ) | 9 | (41 | ) | (19 | ) | |||||||
Acquisition related | 0 | 0 | 0 | 0 | 301 | |||||||||||
Market gains and losses/reinvestments1 | (3,578 | ) | (445 | ) | (1,374 | ) | (2,522 | ) | 3,576 | |||||||
Ending assets | $ | 104,021 | $ | 107,693 | $ | 101,522 | $ | 104,021 | $ | 101,522 | ||||||
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 Q3 2015 Earnings | Page 10 of 11 | |
(unaudited) | |||||||||||||||
MANAGED ASSETS (in millions) | Sept. 30, 2015 | June 30, 2015 | March 31, 2015 | Dec. 31, 2014 | Sept. 30, 2014 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 51,956 | $ | 54,789 | $ | 54,037 | $ | 51,426 | $ | 50,335 | |||||
Fixed-income | 52,065 | 52,904 | 53,562 | 52,707 | 51,187 | ||||||||||
Money market | 246,937 | 241,982 | 248,160 | 258,772 | 245,536 | ||||||||||
Liquidation portfolio1 | 0 | 0 | 0 | 0 | 5,197 | ||||||||||
Total Managed Assets | $ | 350,958 | $ | 349,675 | $ | 355,759 | $ | 362,905 | $ | 352,255 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 33,273 | $ | 35,533 | $ | 34,951 | $ | 33,141 | $ | 32,088 | |||||
Fixed-income | 38,982 | 40,042 | 41,039 | 40,456 | 40,435 | ||||||||||
Money market | 216,252 | 208,786 | 214,310 | 225,471 | 215,237 | ||||||||||
Total Fund Assets | $ | 288,507 | $ | 284,361 | $ | 290,300 | $ | 299,068 | $ | 287,760 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 18,683 | $ | 19,256 | $ | 19,086 | $ | 18,285 | $ | 18,247 | |||||
Fixed-income | 13,083 | 12,862 | 12,523 | 12,251 | 10,752 | ||||||||||
Money market | 30,685 | 33,196 | 33,850 | 33,301 | 30,299 | ||||||||||
Total Separate Accounts | $ | 62,451 | $ | 65,314 | $ | 65,459 | $ | 63,837 | $ | 59,298 | |||||
Total Liquidation Portfolio1 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 5,197 | |||||
Total Managed Assets | $ | 350,958 | $ | 349,675 | $ | 355,759 | $ | 362,905 | $ | 352,255 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | Sept. 30, 2015 | June 30, 2015 | March 31, 2015 | Dec. 31, 2014 | Sept. 30, 2014 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 54,238 | $ | 55,476 | $ | 52,784 | $ | 50,901 | $ | 50,207 | |||||
Fixed-income | 52,577 | 53,319 | 53,405 | 52,782 | 51,115 | ||||||||||
Money market | 245,133 | 239,774 | 253,261 | 246,698 | 242,537 | ||||||||||
Liquidation portfolio1 | 0 | 0 | 0 | 1,563 | 5,307 | ||||||||||
Total Avg. Assets | $ | 351,948 | $ | 348,569 | $ | 359,450 | $ | 351,944 | $ | 349,166 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 35,181 | $ | 35,998 | $ | 34,162 | $ | 32,705 | $ | 32,060 | |||||
Fixed-income | 39,526 | 40,574 | 41,013 | 41,072 | 40,275 | ||||||||||
Money market | 213,633 | 205,943 | 218,168 | 216,235 | 211,571 | ||||||||||
Total Avg. Fund Assets | $ | 288,340 | $ | 282,515 | $ | 293,343 | $ | 290,012 | $ | 283,906 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 19,057 | $ | 19,478 | $ | 18,622 | $ | 18,196 | $ | 18,147 | |||||
Fixed-income | 13,051 | 12,745 | 12,392 | 11,710 | 10,840 | ||||||||||
Money market | 31,500 | 33,831 | 35,093 | 30,463 | 30,966 | ||||||||||
Total Avg. Separate Accounts | $ | 63,608 | $ | 66,054 | $ | 66,107 | $ | 60,369 | $ | 59,953 | |||||
Total Avg. Liquidation Portfolio1 | $ | 0 | $ | 0 | $ | 0 | $ | 1,563 | $ | 5,307 | |||||
Total Avg. Managed Assets | $ | 351,948 | $ | 348,569 | $ | 359,450 | $ | 351,944 | $ | 349,166 | |||||
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 Q3 2015 Earnings | Page 11 of 11 | |
(unaudited) | ||||||||
AVERAGE MANAGED ASSETS | Nine Months Ended | |||||||
(in millions) | Sept. 30, 2015 | Sept. 30, 2014 | ||||||
By Asset Class | ||||||||
Equity | $ | 54,166 | $ | 47,455 | ||||
Fixed-income | 53,100 | 50,850 | ||||||
Money market | 246,057 | 256,782 | ||||||
Liquidation portfolio1 | 0 | 5,555 | ||||||
Total Avg. Assets | $ | 353,323 | $ | 360,642 | ||||
By Product Type | ||||||||
Funds: | ||||||||
Equity | $ | 35,114 | $ | 30,243 | ||||
Fixed-income | 40,371 | 40,131 | ||||||
Money market | 212,582 | 222,245 | ||||||
Total Avg. Fund Assets | $ | 288,067 | $ | 292,619 | ||||
Separate Accounts: | ||||||||
Equity | $ | 19,052 | $ | 17,212 | ||||
Fixed-income | 12,729 | 10,719 | ||||||
Money market | 33,475 | 34,537 | ||||||
Total Avg. Separate Accounts | $ | 65,256 | $ | 62,468 | ||||
Total Avg. Liquidation Portfolio1 | $ | 0 | $ | 5,555 | ||||
Total Avg. Managed Assets | $ | 353,323 | $ | 360,642 | ||||
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. |