Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | ||
Mar. 31, 2014 | Apr. 21, 2014 | Apr. 21, 2014 | |
Class A [Member] | Class B [Member] | ||
Entity Registrant Name | 'FEDERATED INVESTORS INC /PA/ | ' | ' |
Entity Central Index Key | '0001056288 | ' | ' |
Trading Symbol | 'FII | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
Document Fiscal Period Focus | 'Q1 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 9,000 | 105,095,309 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets | ' | ' |
Cash and cash equivalents | $71,575 | $104,443 |
Investmentsbaffiliates | 126,748 | 129,413 |
Investmentsbconsolidated investment companies | 53,589 | 53,476 |
Investmentsbother | 4,797 | 4,846 |
Receivables, net of reserve of $28 and $59, respectively | 28,653 | 29,320 |
Prepaid expenses | 10,401 | 12,860 |
Other current assets | 4,597 | 4,960 |
Total current assets | 300,360 | 339,318 |
Long-Term Assets | ' | ' |
Goodwill | 658,743 | 658,743 |
Renewable investment advisory contracts | 68,595 | 68,595 |
Other intangible assets, net of accumulated amortization of $42,990 and $42,453, respectively | 7,469 | 8,007 |
Property and equipment, net of accumulated depreciation of $57,273 and $54,791, respectively | 38,590 | 40,088 |
Other long-term assets | 21,116 | 21,046 |
Total long-term assets | 794,513 | 796,479 |
Total assets | 1,094,873 | 1,135,797 |
Current Liabilities | ' | ' |
Short-term debt | 95,625 | 77,917 |
Accounts payable and accrued expenses | 37,387 | 36,364 |
Accrued compensation and benefits | 25,951 | 70,272 |
Other current liabilities | 27,217 | 29,652 |
Total current liabilities | 186,180 | 214,205 |
Long-Term Liabilities | ' | ' |
Long-term debt | 170,000 | 198,333 |
Long-term deferred tax liability, net | 128,781 | 121,203 |
Other long-term liabilities | 17,392 | 20,195 |
Total long-term liabilities | 316,173 | 339,731 |
Total liabilities | 502,353 | 553,936 |
Commitments and contingencies (Note (12)) | ' | ' |
TEMPORARY EQUITY | ' | ' |
Redeemable noncontrolling interest in subsidiaries | 16,573 | 15,517 |
PERMANENT EQUITY | ' | ' |
Retained earnings | 1,018,448 | 1,022,608 |
Treasury stock, at cost, 24,406,513 and 24,715,473 shares Class B common stock, respectively | -745,121 | -751,239 |
Accumulated other comprehensive loss, net of tax | -788 | -1,208 |
Total Federated Investors, Inc. shareholders' equity | 575,796 | 566,119 |
Nonredeemable noncontrolling interest in subsidiary | 151 | 225 |
Total permanent equity | 575,947 | 566,344 |
Total liabilities, temporary equity and permanent equity | 1,094,873 | 1,135,797 |
Class A [Member] | ' | ' |
PERMANENT EQUITY | ' | ' |
Common stock | 189 | 189 |
Class B [Member] | ' | ' |
PERMANENT EQUITY | ' | ' |
Common stock | $303,068 | $295,769 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Receivables, reserve | $28 | $59 |
Other intangible assets, accumulated amortization | 42,990 | 42,453 |
Property and equipment, accumulated depreciation | $57,273 | $54,791 |
Treasury stock, shares | 24,406,513 | 24,715,473 |
Class A [Member] | ' | ' |
Common stock, no par value | $0 | $0 |
Common stock, shares authorized | 20,000 | 20,000 |
Common stock, shares issued | 9,000 | 9,000 |
Common stock, shares outstanding | 9,000 | 9,000 |
Class B [Member] | ' | ' |
Common stock, no par value | $0 | $0 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 129,505,456 | 129,505,456 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Revenue | ' | ' | ||
Investment advisory fees, netbaffiliates | $112,437 | $132,128 | ||
Investment advisory fees, netbother | 22,656 | 18,635 | ||
Administrative service fees, netbaffiliates | 54,727 | 56,828 | ||
Other service fees, netbaffiliates | 17,542 | 16,188 | ||
Other service fees, netbother | 3,238 | 3,144 | ||
Other, net | 896 | 1,049 | ||
Total revenue | 211,496 | 227,972 | ||
Operating Expenses | ' | ' | ||
Compensation and related | 71,759 | 66,937 | ||
Distribution | 48,558 | 58,240 | ||
Professional service fees | 8,381 | 8,844 | ||
Office and occupancy | 6,915 | 6,432 | ||
Systems and communications | 6,404 | 6,623 | ||
Advertising and promotional | 3,439 | 3,422 | ||
Travel and related | 2,861 | 2,686 | ||
Other | 6,534 | 6,589 | ||
Total operating expenses | 154,851 | 159,773 | ||
Operating income | 56,645 | 68,199 | ||
Nonoperating Income (Expenses) | ' | ' | ||
Investment income, net | 1,700 | 1,535 | ||
Gain on securities, net | 1,913 | [1] | 2,893 | [1] |
Debt expense | -2,812 | -3,253 | ||
Other, net | -5 | -40 | ||
Total nonoperating income, net | 796 | 1,135 | ||
Income before income taxes | 57,441 | 69,334 | ||
Income tax provision | 21,796 | 24,646 | ||
Net income including the noncontrolling interests in subsidiaries | 35,645 | 44,688 | ||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 451 | 1,694 | ||
Net income | $35,194 | $42,994 | ||
Amounts attributable to Federated Investors, Inc. | ' | ' | ||
Earnings per common sharebBasic and Diluted | $0.34 | [2] | $0.41 | [2] |
Cash dividends per share | $0.25 | $0.24 | ||
[1] | Amounts related to consolidated investment companies totaled $0.3 million and $0.4 million for the three months ended MarchB 31, 2014, and MarchB 31, 2013, respectively. | |||
[2] | Federated Common Stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net income including the noncontrolling interests in subsidiaries | $35,645 | $44,688 |
Permanent Equity | ' | ' |
Unrealized loss on interest rate swap | -79 | -17 |
Reclassification adjustment related to interest rate swap | 921 | 1,066 |
Unrealized gain on securities available for sale | 419 | 2,993 |
Reclassification adjustment related to securities available for sale | -932 | -1,510 |
Foreign currency items | 91 | -31 |
Temporary Equity | ' | ' |
Foreign currency translation loss | 0 | -35 |
Other comprehensive income | 420 | 2,466 |
Comprehensive income including the noncontrolling interests in subsidiaries | 36,065 | 47,154 |
Less: Comprehensive income attributable to redeemable noncontrolling interest in subsidiaries | 481 | 3 |
Less: Comprehensive (loss) income attributable to nonredeemable noncontrolling interest in subsidiary | -30 | 1,656 |
Comprehensive income attributable to Federated Investors, Inc. | $35,614 | $45,495 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Total | Common Stock [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss, Net of Tax [Member] | Total Shareholders' Equity [Member] | Nonredeemable Noncontrolling Interest in Subsidiary [Member] | Redeemable Noncontrolling Interest in Subsidiaries/Temporary Equity [Member] |
In Thousands | ||||||||
Balance at Dec. 31, 2012 | $496,676 | $273,886 | $984,505 | ($760,022) | ($2,937) | $495,432 | $1,244 | $7,268 |
Net Income | 44,650 | 0 | 42,994 | 0 | 0 | 42,994 | 1,656 | 38 |
Other comprehensive income (loss), net of tax | 2,501 | 0 | 0 | 0 | 2,501 | 2,501 | 0 | -35 |
Subscriptionsbredeemable noncontrolling interest holders | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 5,024 |
Consolidation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 67,384 |
Stock award activity | 5,887 | 5,887 | -11,314 | 11,314 | 0 | 5,887 | 0 | 0 |
Dividends declared/Distributions to noncontrolling interest holders | -26,848 | 0 | -25,063 | 0 | 0 | -25,063 | -1,785 | -748 |
Purchase of treasury stock | -2,710 | 0 | 0 | -2,710 | 0 | -2,710 | 0 | 0 |
Other | -104 | 0 | -104 | 0 | 0 | -104 | 0 | 0 |
Balance at Mar. 31, 2013 | 520,052 | 279,773 | 991,018 | -751,418 | -436 | 518,937 | 1,115 | 78,931 |
Balance at Dec. 31, 2013 | 566,344 | 295,958 | 1,022,608 | -751,239 | -1,208 | 566,119 | 225 | 15,517 |
Net Income | 35,164 | 0 | 35,194 | 0 | 0 | 35,194 | -30 | 481 |
Other comprehensive income (loss), net of tax | 420 | 0 | 0 | 0 | 420 | 420 | 0 | 0 |
Subscriptionsbredeemable noncontrolling interest holders | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2,049 |
Stock award activity | 7,779 | 7,299 | -13,155 | 13,635 | 0 | 7,779 | 0 | 0 |
Dividends declared/Distributions to noncontrolling interest holders | -26,243 | 0 | -26,199 | 0 | 0 | -26,199 | -44 | -1,474 |
Purchase of treasury stock | -7,517 | 0 | 0 | -7,517 | 0 | -7,517 | 0 | 0 |
Balance at Mar. 31, 2014 | $575,947 | $303,257 | $1,018,448 | ($745,121) | ($788) | $575,796 | $151 | $16,573 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Operating Activities | ' | ' |
Net income including the noncontrolling interests in subsidiaries | $35,645 | $44,688 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities | ' | ' |
Amortization of deferred sales commissions | 2,639 | 2,113 |
Depreciation and other amortization | 2,744 | 2,492 |
Share-based compensation expense | 6,317 | 5,714 |
Gain on disposal of assets | -1,626 | -2,928 |
Provision for deferred income taxes | 7,655 | 10,132 |
Fair-value adjustments for contingent liabilities | 0 | -48 |
Tax benefit from share-based compensation | 983 | 173 |
Excess tax benefits from share-based compensation | -1,007 | -463 |
Net sales (purchases) of trading securities | 130 | -1,145 |
Deferred sales commissions paid | -3,477 | -3,157 |
Contingent deferred sales charges received | 585 | 425 |
Other changes in assets and liabilities: | ' | ' |
Decrease (increase) in receivables, net | 666 | -487 |
Decrease in prepaid expenses and other assets | 2,801 | 7,017 |
Decrease in accounts payable and accrued expenses | -46,046 | -48,710 |
Increase in other liabilities | 9,741 | 3,957 |
Net cash provided by operating activities | 17,750 | 19,773 |
Investing Activities | ' | ' |
Purchases of securities available for sale | -6,017 | -859 |
Cash paid for business acquisitions | -9,229 | -3,365 |
Proceeds from redemptions of securities avaliable for sale | 9,371 | 11,758 |
Cash paid for property and equipment | -1,212 | -3,083 |
Net cash (used) provided by investing activities | -7,087 | 4,451 |
Financing Activities | ' | ' |
Dividends paid | -26,199 | -25,063 |
Purchases of treasury stock | -8,709 | -2,473 |
Distributions to noncontrolling interest in subsidiaries | -1,518 | -2,533 |
Contributions from noncontrolling interest in subsidiaries | 2,049 | 5,024 |
Proceeds from shareholders for share-based compensation | 480 | 0 |
Excess tax benefits from share-based compensation | 1,007 | 463 |
Payments on debt | -10,625 | -10,625 |
Other financing activities | -16 | -175 |
Net cash used by financing activities | -43,531 | -35,382 |
Net decrease in cash and cash equivalents | -32,868 | -11,158 |
Cash and cash equivalents, beginning of period | 104,443 | 67,585 |
Cash and cash equivalents, end of period | $71,575 | $56,427 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Basis of Accounting [Abstract] | ' |
Basis of Accounting | ' |
Basis of Presentation | |
The interim Consolidated Financial Statements of Federated Investors, Inc. and its consolidated subsidiaries (collectively, Federated) included herein have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). In the opinion of management, the financial statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods presented. | |
In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates, and such differences may be material to the Consolidated Financial Statements. | |
These financial statements should be read in conjunction with Federated’s Annual Report on Form 10-K for the year ended December 31, 2013. Certain items previously reported have been reclassified to conform to the current period’s presentation, including, but not limited, to the combination of an immaterial line item into Operating Expenses - Other on the Consolidated Statements of Income and items included on the Consolidated Statements of Comprehensive Income. |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies | ' |
Significant Accounting Policies | |
For a listing of Federated’s significant accounting policies, please refer to Federated’s Annual Report on Form 10-K for the year ended December 31, 2013. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
Effective January 1, 2014, Federated adopted the Financial Accounting Standards Board (FASB) accounting standards update 2013-08, Financial Services-Investment Companies (Topic 946) amending the criteria for an entity to qualify as an investment company under GAAP. Any entity regulated under the Investment Company Act of 1940 is automatically an investment company under the new definition. The update also amends certain disclosure requirements and measurement criteria. The adoption of the update did not have a material impact on Federated's Consolidated Financial Statements. |
Concentration_Risk
Concentration Risk | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Risks and Uncertainties [Abstract] | ' | ||||||||
Concentration Risk | ' | ||||||||
Concentration Risk | |||||||||
(a) Revenue Concentration by Asset Class | |||||||||
The following table summarizes the percentage of total revenue earned from Federated's asset classes for the periods presented: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Money market assets | 34 | % | 43 | % | |||||
Equity assets | 42 | % | 33 | % | |||||
Fixed-income assets | 23 | % | 23 | % | |||||
The decline in the relative proportion of Federated's revenue attributable to money market assets for the first three months of 2014 as compared to the same period in 2013 was primarily the result of increases in fee waivers for certain money market funds to maintain positive or zero net yields. A significant change in Federated’s money market business or a significant reduction in money market assets due to regulatory changes, changes in the financial markets, including significant and rapid increases in interest rates over a short period of time causing certain investors to prefer direct investments in interest-bearing securities, significant deterioration in investor confidence, further persistent declines in or additional prolonged periods of historically low short-term interest rates and resulting fee waivers or other circumstances, could have a material adverse effect on Federated’s business, results of operations, financial condition and/or cash flows. | |||||||||
Current Regulatory Environment | |||||||||
Domestic | |||||||||
In January 2010, the Securities and Exchange Commission (SEC) adopted extensive amendments to Rule 2a-7 of the Investment Company Act of 1940 (Rule 2a-7) to enhance the resiliency of money market funds. These amendments included rules that require all money market funds to meet specific portfolio liquidity standards and rules that significantly enhance the public disclosure and regulatory reporting obligations of these funds. In 2010 and 2011, Federated dedicated internal resources to comply with these amendments including efforts to enhance our information systems and improve related reporting capabilities. These efforts were internally sourced and not material to Federated's results of operations, financial condition or cash flows for those years. In Federated's view, the amendments of 2010 meaningfully and sufficiently strengthened money market funds as demonstrated in meeting heightened requests for redemptions occurring in connection with the U.S. debt ceiling debate and subsequent downgrade of the country's credit rating in 2011, the European debt crisis in 2011/2012 and its ongoing fallout as well as the U.S. debt ceiling debate in 2013. | |||||||||
Since January 2010, the SEC has been working to develop a proposal for additional reforms related to money market funds. On June 5, 2013, the SEC issued such a rule proposal for public comment. The SEC's proposal was lengthy (approximately 700 pages) and included two principal alternative reforms that could be adopted alone or in combination. One alternative would require a floating net asset value (NAV) for institutional prime money market funds and other money market funds (such as, for example, municipal money market funds) other than government and retail money market funds. The other alternative would allow a fund's board to use liquidity fees and redemption gates when the fund fails to maintain the prescribed liquidity threshold. In addition, in the case of either alternative, the proposal would eliminate the amortized cost method of valuation of securities maturing in more than 60 days while permitting the use of the penny rounding method to maintain a stable share price for money market funds not required to have a floating NAV. The proposal also included additional diversification and disclosure measures that would apply under either alternative. | |||||||||
Federated supports liquidity fees and redemption gates in certain contexts. Federated believes the floating NAV, if enacted, would significantly reduce the utility and attractiveness of money market funds for investors who, in Federated's view, value money market funds in their current form as an efficient and effective cash management investment product offering daily liquidity at par. The elimination of the amortized cost method of valuation of securities also could impact the usefulness of money market funds as a cash management product. If ultimately enacted, the floating NAV would be detrimental to Federated's money market fund business and could materially and adversely affect Federated’s business, results of operations, financial condition and/or cash flows. The elimination of the amortized cost method of valuation of securities, if ultimately enacted, also could be detrimental to Federated's money market fund business and could materially and adversely affect Federated’s business, results of operations, financial condition and/or cash flows. | |||||||||
Management reviewed the SEC proposal and actively participated in the public comment process both individually through the filing of 13 comment letters and with industry groups. While the public comment period formally closed on September 17, 2013, comments on the SEC's proposal have continued to be submitted, including additional comment letters submitted on behalf of Federated. Comment letters are available on the SEC's website at http://www.sec.gov/comments/s7-03-13/s70313.shtml. Management does not expect final rules to be adopted until later in the second quarter or the third quarter of 2014 given, among other things, the number of industry comments and the complexity of the proposed rule amendments, as well as the SEC's regulatory agenda published in late 2013, which specifies an October 2014 timetable for final action on the SEC's proposal. Federated is unable to assess the degree of any potential impact the SEC proposed reforms may have on its business, results of operations, financial condition and/or cash flows until any rule amendments are finalized, as the final amendments could vary significantly from the form in which proposed. Moreover, the SEC's proposal also contemplates that, once the final amendments become effective, there would be staggered compliance dates: (1) if the fluctuating NAV alternative is adopted, an additional two years after the effective date for any reforms relating to that alternative; (2) if the liquidity fee and redemption gate alternative is adopted, an additional one year after the effective date for any reforms relating to that alternative; and (3) any reforms not specifically related to either the fluctuating NAV nor liquidity fee and redemption gate alternatives would have a compliance date of nine months after the final amendments become effective. | |||||||||
On March 24, 2014, the SEC published a series of four analyses conducted by the SEC's Division of Economic and Risk Analysis, which the SEC staff believes "have the potential to be informative for evaluating final rule amendments for the regulation of money market funds." The analyses examine (1) the spread between same-day buy and sell transaction prices for certain corporate bonds from January 2, 2008 to January 31, 2009, (2) the extent of government money market fund exposure to non-government securities, (3) academic literature reviewing recent evidence on the availability of "safe assets" in the U.S. and global economies and (4) the extent various types of money market funds are holding in their portfolios guarantees and demand features from a single institution. The SEC staff requested that any comments on this supplemental information be submitted to the comment file to the SEC’s June 5, 2013 money market fund reform proposal (discussed above) by April 23, 2014. Federated filed three comment letters with respect to this supplemental information published by the Division of Economic and Risk Analysis. One comment letter addressed the analysis regarding the spread between same-day buy and sell transaction prices for certain money market eligible securities from January 2, 2008 to January 31, 2009. In that comment letter, Federated expressed its view that, while Federated generally agrees with the SEC staff's methodology for considering the cost of liquidity in evaluating an appropriate liquidity fee, the staff’s use of Trade Reporting and Compliance Engine (TRACE) bond data as the basis for spread analysis led the staff to find significantly larger spreads than it would have found had it based its analysis on the short-term instruments in which money market funds actually invest. Management believes that the staff’s analysis overstates the spreads for Rule 2a-7 eligible securities during crisis periods by several multiples of actual spreads, and thus may lead the SEC to adopt a far larger-than-necessary liquidity fee requirement as part of its final rule on money market fund reform. Another comment letter addressed the analysis regarding municipal money market funds' exposure to parents of guarantors. In that comment letter, Federated expressed its view that it does not believe that the SEC staff’s analysis supports the conclusion that elimination of the "25% basket" in Rule 2a-7, under which up to 25% of the value of securities held in a money market fund’s portfolio may be subject to guarantees or demand features from a single guarantor in municipal money market funds, would not increase the credit risks of municipal and other money market funds. Management does not believe that there is a basis for concluding that elimination of the 25% basket would protect investors, or promote efficiency, competition, and capital formation. The third comment letter addressed the staff’s analyses regarding the demand and supply of safe assets in the economy and government money market fund exposure to non-government securities. In that comment letter, Federated expressed its reservations about the data and analysis underlying both analyses on the basis that neither analysis appears focused on the market sector that the SEC's June 5, 2013 money market fund reform proposal would most directly affect, namely, the market for short-term U.S. government securities and repurchase agreements for U.S. government securities (the government money market). Management believes that any money market reform proposal that would have the effect of shifting large amounts of capital into the government money market would certainly create problems for investors who are required to invest in government securities or who cannot afford the risks associated with other classes of "safe assets" included in the SEC staff's analysis (such as gold, investment grade bonds, securitized assets and foreign sovereign obligations). | |||||||||
The Financial Stability Oversight Council (FSOC) may recommend new or heightened regulation for "nonbank financial companies" under Section 120 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). On April 3, 2013, the Board of Governors of the Federal Reserve System (the Governors) issued a final regulation, which became effective on May 6, 2013, that defines the term "predominantly engaged in financial activities" for purposes of identifying "nonbank financial companies" under the Dodd-Frank Act. In the adopting release for the regulation, the Governors stated that they believe "that it is clear that open-end investment companies, such as mutual funds including money market funds, ... engage in financial activities" for the purpose of asserting regulatory jurisdiction. Management respectfully disagrees with this position. Management believes that (1) the final regulation is inconsistent with the clear language and intent of the Dodd-Frank Act, (2) the conclusion that mutual funds, including money market mutual funds, fall within the scope of "financial activities" is without a valid statutory basis and (3) Congress intended the scope of "financial activities" for Dodd-Frank Act regulation to be strictly limited to specific lines of business previously defined under the Bank Holding Company Act, which historically have not been viewed as including mutual funds as a specific line of business. | |||||||||
In a Congressional Appropriations Committee conference report that accompanied the Consolidated Appropriations Act, 2014, which was signed into law by President Obama on January 17, 2014, Congress instructed the SEC to undertake a “rigorous economic analysis” before promulgating its final money market fund proposal, and indicated that the “Committee expects that the final rules will take into account the substantive concerns of stakeholders who use these products for short-term financing needs.” In the conference report, Congress also expressed that “[i]mpairing or restricting the use of money market funds could potentially result in a decrease in the ability of these products to provide liquidity, potentially resulting in hundreds of market participants issuing longer-term debt, significantly increasing their funding costs, slowing expansion rates, and depressing jobs and economic growth.” In addition to underscoring the importance to the capital markets of money market funds as currently structured, management believes that the conference report reflects Congress’ view that the regulation of money market funds is within the purview of the SEC, not FSOC. | |||||||||
On November 1, 2013, Federated also responded to the SEC’s request for comment on a September 2013 report of the U.S. Department of the Treasury's (Treasury Department) Office of Financial Research entitled “Asset Management and Financial Stability” (the OFR Report), which was prepared at the request of FSOC. Federated believes that the OFR Report is lacking in both substance and depth of analysis in its effort to justify FSOC’s and the Governors' role in fundamentally changing the structure and operation of investment managers, investors and the markets. While the SEC requested comments to be submitted by November 1, 2013, comments have continued to be submitted. Comment letters are available on the SEC's website at http://www.sec.gov/comments/am-1/am-1.shtml. | |||||||||
Federated is unable to assess whether, or the degree to which, any of the Federated Funds, including money market funds, could ultimately be designated a systematically important nonbank financial company by FSOC. In management's view, the issuance of final regulations is, and any reforms ultimately put into effect would be, detrimental to Federated's money market fund business and could materially and adversely affect Federated’s business, results of operations, financial condition and/or cash flows. Federated is unable to assess the degree of any potential impact any reforms or other actions by the Governors, FSOC or other governmental entities may have on its business, results of operations, financial condition and/or cash flows at this time. | |||||||||
International | |||||||||
European-based money market funds face regulatory reform pressure in Europe similar to that faced in the U.S. The European Commission released its money market fund reform proposal on September 4, 2013. The proposal would have permitted either floating NAV money market funds or constant NAV money market funds subject to capital requirements. Under the proposal, a constant NAV money market fund generally would have had to either build a capital buffer of 3% or convert to a floating NAV money market fund. On March 10, 2014, the European Parliament's economic and monetary affairs committee postponed a vote on the proposal until the next European Parliament, which will convene after parliamentary elections. Any proposal must be approved by the European Parliament and European Council and any final regulation could vary materially from that of any proposal. Management does not anticipate agreement on a final regulation before late fourth quarter 2014. | |||||||||
Eleven European countries continue to develop the financial transactions tax (FTT) proposal. Although a revised draft of this proposal may be presented during the second quarter of 2014, management does not expect the FTT to be effective in 2014. Notwithstanding challenges to its legality, the participating countries continue to consider whether the FTT should be introduced in stages, with perhaps stocks being taxed first. Debate also continues regarding whether certain types of transactions, such as certain derivatives and bonds, should be exempted, in which country the transaction should be taxed (country of issue, country of purchase, or both), the allocation of taxes collected and certain other fundamental principles. Once agreed upon, final terms of the proposed FTT also will be subject to additional government approval prior to enactment. | |||||||||
European money market reform and the imposition of the FTT, particularly with its initially proposed broad application, would each be detrimental to Federated's fund business and could materially and adversely affect Federated’s business, results of operations, financial condition and/or cash flows. Federated is unable to assess the degree of any potential impact that European money market reform proposals or the FTT may have on its business, results of operations, financial condition and/or cash flows until such proposals are finalized and approved or the FTT is enacted. | |||||||||
On January 8, 2014, the Financial Stability Board (FSB) also published for comment as a consultative document “Assessment Methodologies for Identifying Non-Bank Non-Insurer Global Systemically Important Financial Institutions” (Consultation). The FSB is an international organization, of which the Governors, the SEC and the Treasury Department are members, that was established to coordinate, at the international level, the work of national authorities and bodies in developing and promoting the implementation of regulatory policies. The Consultation sets forth proposed methodologies for identifying systemically important non-bank, non-insurance company financial institutions, including, among others, “market intermediaries” which the Consultation appears to define as including investment advisers, brokers and certain other intermediaries, and “investment funds,” which the Consultation appears to define as including money market funds, other open-end or closed-end mutual funds, and hedge funds and other private funds. The proposed methodologies include consideration of size (U.S. $100 billion is a proposed materiality threshold), exposures, complexity, interconnectedness, leverage and other factors. The Consultation specifically notes that, in addition to individual funds, it may also be necessary to consider families of funds following the same or similar investment strategies. The deadline for the formal comment period on the Consultation ended on April 7, 2014. On April 4, 2014, Federated filed a comment letter addressing various aspects of the Consultation. Management generally agrees with the Consultation’s approach of developing specific, measurable, published criteria for designating systemically important non-bank, non-insurance company financial institutions, and believes that (1) the proposed criteria or methodologies, to the extent applied to the investment fund sector, should focus on individual funds and not investment managers or fund families, and that a size criteria for investment funds that is based on net assets under management at a fixed amount that is not tied to the overall size of the investment market in which the fund participates is flawed, and (2) key aspects of investment funds, particularly money market funds, such as lack of leverage and their substitutability, simplicity and transparency, and applicable legal requirements and risk mitigation practices, weigh strongly against listing them as systemically important non-bank, non-insurance company financial institutions. Federated concluded in its comment letter that it does not believe that money market funds should be designated as systemically important non-bank, non-insurance company financial institutions under the Consultation. Federated is unable to assess whether, or the degree to which Federated, any of its investment management subsidiaries or any of the Federated Funds, including money market funds, could ultimately be determined to be a systemically important non-bank, non-insurance company financial institution. | |||||||||
Historically Low Short-Term Interest Rates | |||||||||
For several years, the Governors have kept the near-zero federal funds rate unchanged and short-term interest rates continued at all-time low levels. In certain money market funds, the gross yield earned by the fund is not sufficient to cover all of the fund's operating expenses due to these historically low short-term interest rates. Since the fourth quarter 2008, Federated has voluntarily waived fees (either through fee waivers or reimbursements or assumptions of expenses) in order for certain money market funds to maintain positive or zero net yields. These fee waivers have been partially offset by related reductions in distribution expense and net income attributable to noncontrolling interests as a result of Federated's mutual understanding and agreement with third-party intermediaries to share the impact of the waivers. | |||||||||
These voluntary fee waivers are calculated as a percent of assets under management (AUM or managed assets) in certain money market funds and thus will vary depending upon the asset levels in such funds. In addition, the level of waivers are dependent on several other factors including, but not limited to, yields on instruments available for purchase by the money market funds, changes in expenses of the money market funds and changes in the mix of money market assets. In any given period, a combination of these factors drives the amount of fee waivers necessary in order for certain funds to maintain positive or zero net yields. As an isolated variable, an increase in yields on instruments held by the money market funds will cause the pre-tax impact of fee waivers to decrease. Conversely, as an isolated variable, an increase in expenses of the money market funds would cause the pre-tax impact of fee waivers to increase. | |||||||||
With regard to asset mix, changes in the relative amount of money market fund assets in prime and government money market funds as well as the distribution among certain share classes that vary in pricing structure will impact the level of fee waivers. Generally, prime money market funds waive less than government money market funds as a result of higher gross yields on the underlying investments. As such, as an isolated variable, an increase in the relative proportion of average managed assets invested in prime money market funds as compared to total average money market fund assets should typically result in lower waivers to maintain positive or zero net yields. Conversely, the opposite would also be true. | |||||||||
The impact of such fee waivers on various components of Federated's Consolidated Statements of Income was as follows for the periods presented: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
(in millions) | 2014 | 2013 | |||||||
Revenue | $ | (106.7 | ) | $ | (87.3 | ) | |||
Less: Reduction in Distribution expense | 74.3 | 64.8 | |||||||
Operating income | (32.4 | ) | (22.5 | ) | |||||
Less: Reduction in Noncontrolling interest | 2.7 | 0.8 | |||||||
Pre-tax impact | $ | (29.7 | ) | $ | (21.7 | ) | |||
The negative pre-tax impact of fee waivers to maintain positive or zero net yields on certain money market funds increased for the three months ended March 31, 2014 as compared to the same period in 2013 primarily as a result of lower yields on instruments held by the money market funds. | |||||||||
Based on recent commentary from the Governors in a March 19, 2014 press release, "a highly accommodative stance of monetary policy remains appropriate," Federated is unable to predict when the Governors will increase their target for the federal funds rate. As such, fee waivers to maintain positive or zero net yields on certain money market funds and the related reduction in distribution expense and net income attributable to noncontrolling interests could continue for the foreseeable future. Assuming asset levels and mix remain constant and based on recent market conditions, fee waivers for the second quarter 2014 may result in a negative pre-tax impact on income of approximately $29 million. See Management's Discussion and Analysis for additional information on management's expectations regarding fee waivers. While the level of fee waivers are impacted by various factors, increases in short-term interest rates that result in higher yields on securities purchased in money market fund portfolios would reduce the negative pre-tax impact of these waivers. The actual amount of future fee waivers and the resulting negative impact of these waivers 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 Governors, the Treasury Department, the SEC, FSOC 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 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. | |||||||||
(b) Revenue Concentration by Investment Fund | |||||||||
A significant portion of Federated's total revenue for the three-month period ended March 31, 2014 was derived from services provided to two sponsored funds, the Federated Kaufmann Fund (12%) and the Federated Prime Obligations Fund (10%). A significant and prolonged decline in the AUM in these funds could have a material adverse effect on Federated’s future revenues and, to a lesser extent, net income, due to a related reduction to distribution expenses associated with these funds. | |||||||||
A listing of Federated’s risk factors is included in Federated’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. |
Variable_Interest_Entities
Variable Interest Entities | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Variable Interest Entities [Abstract] | ' | ||||||||
Variable Interest Entities | ' | ||||||||
Variable Interest Entities | |||||||||
Federated is involved with various entities in the normal course of business that may be deemed to be voting rights entities (VREs) or variable interest entities (VIEs). In accordance with Federated’s consolidation accounting policy, Federated first determines whether the entity being evaluated is a VRE or a VIE. Once this determination is made, Federated proceeds with its evaluation of whether or not to consolidate the entity. The disclosures below represent the results of such evaluations pertaining to March 31, 2014 and December 31, 2013. | |||||||||
(a) Consolidated Variable Interest Entities | |||||||||
From time to time, Federated invests in investment companies that meet the definition of a VIE for general corporate investment purposes or, in the case of newly launched products, in order to provide investable cash to establish a performance history. Most of Federated’s sponsored investment companies meet the definition of a VIE primarily due to their typical series fund structure in which the shareholders of each participating portfolio underlying the series fund generally lack the ability as an individual group to make decisions through voting rights regarding the board of directors/trustees of the fund. Federated’s investment in investment companies represents its maximum exposure to loss. Federated’s conclusion to consolidate an investment company may vary from period to period, most commonly as a result of changes in its percentage interest in the entity resulting from changes in the number of shares held by either Federated or third parties. Given that the entities follow investment company accounting, which prescribes fair-value accounting, a deconsolidation generally does not result in gains or losses for Federated. | |||||||||
The following table presents the balances related to the consolidated investment companies that were included on the Consolidated Balance Sheets as well as Federated's net interest in the investment companies for each period presented: | |||||||||
(in millions) | March 31, 2014 | December 31, 2013 | |||||||
Cash and cash equivalents | $ | 1.8 | $ | 1.1 | |||||
Investments—consolidated investment companies | 53.6 | 53.5 | |||||||
Receivables | 0.9 | 0.9 | |||||||
Less: Liabilities | 2.3 | 1.6 | |||||||
Less: Redeemable noncontrolling interest in subsidiaries | 16.6 | 15.5 | |||||||
Federated's net interest in consolidated investment companies | $ | 37.4 | $ | 38.4 | |||||
Federated's net interest in the consolidated investment companies of $37.4 million and $38.4 million at March 31, 2014 and December 31, 2013, respectively, represents the value of Federated's economic ownership interest in these sponsored investment companies. The assets of the consolidated investment companies are restricted for use by the respective investment company. The liabilities of the consolidated investment companies primarily represent investments sold short for one fund, and otherwise represent operating liabilities of the entities. The liabilities are primarily classified as Other current liabilities on Federated’s Consolidated Balance Sheets. | |||||||||
Federated did not deconsolidate any investment companies during the three-month period ended March 31, 2014. | |||||||||
Neither creditors nor equity investors in the investment companies have any recourse to Federated’s general credit. In the ordinary course of business, from time to time, Federated may choose to waive certain fees or assume operating expenses of sponsored investment companies for competitive, regulatory or contractual reasons (see Note (1)(o) of Federated’s Annual Report on Form 10-K for the year ended December 31, 2013 for information regarding fee waivers). Federated has not provided financial support to any of these entities outside the ordinary course of business. | |||||||||
(b) Non-Consolidated Variable Interest Entities | |||||||||
Federated's involvement with certain investment companies that are deemed to be VIEs includes serving as the investment manager, or at times, holding a minority interest or both. Federated’s variable interest is not deemed to absorb the majority of the variability of the entity’s net assets. Therefore, Federated is not the primary beneficiary of these VIEs and has not consolidated these entities. | |||||||||
At March 31, 2014 and December 31, 2013, Federated’s investment and maximum risk of loss related to unconsolidated VIEs were entirely related to investment companies and totaled $189.1 million and $220.5 million, respectively. AUM for these unconsolidated investment companies totaled $269.5 billion and $280.3 billion at March 31, 2014 and December 31, 2013, respectively. Accounts receivable from sponsored investment companies for advisory and other services totaled $14.7 million and $13.5 million at March 31, 2014 and December 31, 2013, respectively. | |||||||||
In the ordinary course of business, from time to time, Federated may choose to waive certain fees or assume operating expenses of these sponsored investment companies for competitive, regulatory or contractual reasons (see Note (1)(o) of Federated’s Annual Report on Form 10-K for the year ended December 31, 2013 for information regarding fee waivers). Federated has not provided financial support to any of these entities outside the ordinary course of business. |
Investments
Investments | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||||||||
Investments on the Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013 included available-for-sale and trading securities. At March 31, 2014 and December 31, 2013, Federated held investments totaling $126.7 million and $129.4 million, respectively, in fluctuating-value Federated-sponsored mutual funds that were classified as available-for-sale securities and were included in Investments—affiliates on the Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||||
Available-for-sale securities were as follows: | |||||||||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
Gross Unrealized | Estimated | Gross Unrealized | Estimated | ||||||||||||||||||||||||||||||
Fair | Fair | ||||||||||||||||||||||||||||||||
(in thousands) | Cost | Gains | (Losses) | Value | Cost | Gains | (Losses) | Value | |||||||||||||||||||||||||
Equity mutual funds | $ | 21,976 | $ | 1,608 | $ | 0 | $ | 23,584 | $ | 24,737 | $ | 2,423 | $ | 0 | $ | 27,160 | |||||||||||||||||
Fixed-income mutual funds | 103,009 | 608 | (453 | ) | 103,164 | 102,072 | 786 | (605 | ) | 102,253 | |||||||||||||||||||||||
Total fluctuating-value mutual funds | $ | 124,985 | $ | 2,216 | $ | (453 | ) | $ | 126,748 | $ | 126,809 | $ | 3,209 | $ | (605 | ) | $ | 129,413 | |||||||||||||||
The decrease in available-for-sale securities at March 31, 2014 as compared to December 31, 2013, was primarily due to $9.4 million in redemptions of equity mutual funds during the first three months of 2014, partially offset by purchases of $6.0 million of equity and fixed-income mutual funds during the same period. | |||||||||||||||||||||||||||||||||
Federated’s trading securities totaled $58.4 million and $58.3 million at March 31, 2014 and December 31, 2013, respectively. Federated consolidates certain investment companies into its Consolidated Financial Statements as a result of Federated’s controlling financial interest in the companies (see Note (5)). All investments held by these investment companies, which primarily represented Federated-sponsored investment companies, were included in Investments—consolidated investment companies on Federated’s Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013. Investments—other on the Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013 represented other trading investments held in separate accounts for which Federated is the beneficiary. | |||||||||||||||||||||||||||||||||
Federated’s trading securities as of March 31, 2014 were primarily composed of domestic and foreign debt securities ($37.5 million) and stocks of large U.S. and international companies ($15.4 million). Federated's trading securities as of December 31, 2013 were primarily composed of domestic and foreign debt securities ($36.5 million), stocks of large U.S. and international companies ($17.0 million) and an offshore master fund invested in global project and trade finance transactions ($2.5 million). | |||||||||||||||||||||||||||||||||
The following table presents gains and losses recognized in Gain on securities, net on the Consolidated Statements of Income in connection with investments and economic derivatives held by certain consolidated investment companies: | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Unrealized gain (loss) | |||||||||||||||||||||||||||||||||
Trading securities | $ | 349 | $ | 547 | |||||||||||||||||||||||||||||
Derivatives1 | (62 | ) | (587 | ) | |||||||||||||||||||||||||||||
Realized gains2 | |||||||||||||||||||||||||||||||||
Available-for-sale securities | 1,528 | 2,322 | |||||||||||||||||||||||||||||||
Trading securities | 953 | 349 | |||||||||||||||||||||||||||||||
Derivatives1 | 66 | 384 | |||||||||||||||||||||||||||||||
Realized losses2 | |||||||||||||||||||||||||||||||||
Trading securities | (914 | ) | (122 | ) | |||||||||||||||||||||||||||||
Derivatives1 | (7 | ) | 0 | ||||||||||||||||||||||||||||||
Gain on securities, net3 | $ | 1,913 | $ | 2,893 | |||||||||||||||||||||||||||||
1 | Amounts related to economic derivatives held by certain consolidated investment companies. | ||||||||||||||||||||||||||||||||
2 | Realized gains and losses are computed on a specific-identification basis. | ||||||||||||||||||||||||||||||||
3 | Amounts related to consolidated investment companies totaled $0.3 million and $0.4 million for the three months ended March 31, 2014, and March 31, 2013, respectively. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||
Fair value is the price that would be received to sell an asset or the price paid to transfer a liability as of the measurement date. A three-tier, fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The three levels are: | |||||||||||||||||||||||||||||||||
Level 1 – Quoted prices for identical instruments in active markets. Level 1 assets may include equity and debt securities that are traded in an active exchange market, including shares of mutual funds. | |||||||||||||||||||||||||||||||||
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs. | |||||||||||||||||||||||||||||||||
Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets. | |||||||||||||||||||||||||||||||||
(a) Fair Value Measurements on a Recurring Basis | |||||||||||||||||||||||||||||||||
The following table presents fair value measurements for classes of Federated’s financial assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
Fair Value Measurements Using | Fair Value Measurements Using | ||||||||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Financial Assets | |||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 71,575 | $ | 0 | $ | 0 | $ | 71,575 | $ | 104,443 | $ | 0 | $ | 0 | $ | 104,443 | |||||||||||||||||
Available-for-sale equity securities | 78,477 | 48,271 | 0 | 126,748 | 81,550 | 47,863 | 0 | 129,413 | |||||||||||||||||||||||||
Trading securities—equity | 18,184 | 2,672 | 0 | 20,856 | 11,925 | 9,906 | 0 | 21,831 | |||||||||||||||||||||||||
Trading securities—debt | 0 | 37,530 | 0 | 37,530 | 0 | 36,491 | 0 | 36,491 | |||||||||||||||||||||||||
Foreign currency forward contracts | 0 | 111 | 0 | 111 | 0 | 159 | 0 | 159 | |||||||||||||||||||||||||
Total financial assets | $ | 168,236 | $ | 88,584 | $ | 0 | $ | 256,820 | $ | 197,918 | $ | 94,419 | $ | 0 | $ | 292,337 | |||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||||||||||||
Interest rate swap | $ | 0 | $ | 3,706 | $ | 0 | $ | 3,706 | $ | 0 | $ | 5,061 | $ | 0 | $ | 5,061 | |||||||||||||||||
Acquisition-related future consideration liabilities | 0 | 0 | 6,489 | 6,489 | 0 | 0 | 6,489 | 6,489 | |||||||||||||||||||||||||
Other1 | 1,687 | 11 | 0 | 1,698 | 1,118 | 2 | 0 | 1,120 | |||||||||||||||||||||||||
Total financial liabilities | $ | 1,687 | $ | 3,717 | $ | 6,489 | $ | 11,893 | $ | 1,118 | $ | 5,063 | $ | 6,489 | $ | 12,670 | |||||||||||||||||
1 | Amounts include investments sold short within one of the consolidated investment companies and foreign currency forward contracts recorded within Other current liabilities on the Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||||
The following is a description of the valuation methodologies used for financial assets and liabilities measured at fair value on a recurring basis. Federated did not hold any nonfinancial assets or liabilities measured at fair value on a recurring basis at March 31, 2014 or December 31, 2013. | |||||||||||||||||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||||||||||||||||
Cash and cash equivalents include investments in money market funds and deposits with banks. Investments in Federated money market funds totaled $61.7 million and $94.4 million at March 31, 2014 and December 31, 2013, respectively. Cash investments in money market funds are valued under the market approach through the use of quoted market prices in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy. | |||||||||||||||||||||||||||||||||
Available-for-sale equity securities | |||||||||||||||||||||||||||||||||
Available-for-sale equity securities include investments in sponsored fluctuating-value mutual funds and are included in Investments—affiliates on the Consolidated Balance Sheets. For investments in mutual funds that are publicly available, the securities are valued under the market approach through the use of quoted market prices available in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy. For one investment in a mutual fund that is not publicly available but for which the NAV is calculated daily and for which there are no redemption restrictions, the security is valued using NAV as a practical expedient and is classified as Level 2. There is no modeling or additional information needed to arrive at the fair values of any of these investments. | |||||||||||||||||||||||||||||||||
Trading securities—equity | |||||||||||||||||||||||||||||||||
Trading securities - equity primarily included the equity securities held by consolidated investment companies (included in Investments—consolidated investment companies on the Consolidated Balance Sheets) as well as certain equity investments held in separate accounts for which Federated is the beneficiary (included in Investments—other on the Consolidated Balance Sheets). For the publicly traded equity securities available in an active market, whether domestic or foreign, the fair value of these securities is often classified as Level 1 and is based on unadjusted quoted market prices. From time to time, however, the fair value of certain equity securities traded principally in foreign markets and held by consolidated investment companies may be determined by third-party pricing services when a country's exchange is closed due to a holiday or when there has been a significant trend in the U.S. equity markets or in index futures trading between the time the foreign market closes and the pricing time of the consolidated investment company. The determination to use the third-party pricing service versus the unadjusted quoted market price is the cause for transfers between Level 1 and Level 2 for these securities. For the period between December 31, 2013 and March 31, 2014, there were $4.8 million of investments transferred from Level 2 to Level 1. For the period between December 31, 2012 and March 31, 2013, there were no investments transferred between Level 2 and Level 1. Transfers into and out of Levels 1 and 2 of the fair value hierarchy are reported at fair values as of the beginning of the period in which the transfers occur. | |||||||||||||||||||||||||||||||||
At March 31, 2014 and December 31, 2013, equity trading securities also included shares of certain non-publicly traded mutual funds that were valued using NAV as a practical expedient (Level 2). Most significantly, Federated held shares of an offshore master investment fund as a result of consolidating one of its feeder funds as of March 31, 2014 and December 31, 2013. The offshore master investment fund, which is not publicly available, makes investments in global project and trade finance transactions. The $1.7 million and $2.5 million fair value at March 31, 2014 and December 31, 2013, respectively, of the feeder fund's investment in the master fund was determined using the NAV of the master fund, as a practical expedient, and was classified as Level 2 in the valuation hierarchy at March 31, 2014 and December 31, 2013. | |||||||||||||||||||||||||||||||||
Trading securities—debt | |||||||||||||||||||||||||||||||||
Trading securities - debt primarily represent fixed-income securities held by consolidated Federated-sponsored investment companies at March 31, 2014 and December 31, 2013. The fair value of these securities may include observable market data such as valuations provided by independent pricing services after considering factors such as the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions (Level 2). | |||||||||||||||||||||||||||||||||
Foreign currency forward contracts | |||||||||||||||||||||||||||||||||
The fair value of foreign currency forward contracts is primarily included in Receivables, net or Other current liabilities on the Consolidated Balance Sheets, representing contracts held by certain consolidated Federated-sponsored investment companies as part of their investment strategy. Pricing is determined by interpolating a value by utilizing the spot foreign exchange rate and forward points (based on the spot rate and currency interest rate differentials), which are all inputs that are observable in active markets (Level 2). | |||||||||||||||||||||||||||||||||
Interest rate swap | |||||||||||||||||||||||||||||||||
The fair value of Federated's interest rate swap (the Swap) at March 31, 2014 is included in Other current liabilities ($3.7 million) on the Consolidated Balance Sheets. Pricing is determined based on a third-party, model-derived valuation in which all significant inputs are observable in active markets (Level 2) including the Eurodollar future rate and yields for three- and thirty-year Treasury securities. See Note (8) for more information regarding the Swap. | |||||||||||||||||||||||||||||||||
Acquisition-related future consideration liabilities | |||||||||||||||||||||||||||||||||
From time to time, pursuant to purchase and sale agreements entered into in connection with certain business combinations, Federated may be required to make future consideration payments if certain contingencies are met. See Note (12)(a) for additional information regarding the nature and timing of these payments. In connection with these arrangements entered into after January 1, 2009, Federated records a liability representing the estimated fair value of future consideration payments as of the acquisition date. The liability is subsequently remeasured at fair value on a recurring basis with changes in fair value recorded in earnings. As of March 31, 2014, acquisition-related future consideration liabilities were recorded in Other current liabilities ($3.0 million) and Other long-term liabilities ($3.5 million) on the Consolidated Balance Sheets. Management estimated the fair value of future consideration payments based primarily upon expected future cash flows using an income approach valuation methodology with unobservable data inputs (Level 3). As of March 31, 2014, significant inputs involving unobservable market data included (1) an estimated rate of change for underlying AUM ranging from (5)% - 6% per year (weighted average of 3%); (2) an estimate ranging from 0.02% - 0.03% per year of the impact of fee waivers to maintain positive or zero net yields on the contractually-derived net revenue per managed asset assumptions (weighted average of 0.02%); and (3) an estimated discount rate ranging from 17% - 19% based on the current estimated market rate of return (weighted average of 17%). Assuming no other changes in model inputs, the fair value of the future consideration liability will increase, resulting in additional expense recorded in Operating Expenses - Other in the period of change if: (1) the underlying AUM grow at a rate that is greater than the assumed rate, (2) the actual impact of fee waivers to maintain positive or zero net yields on the net revenue is less than the assumed amount or (3) the discount rate decreases. Conversely, the fair value of the future consideration liability will decrease if the inverse occurs for any of these inputs, assuming no other changes. | |||||||||||||||||||||||||||||||||
The following table presents a reconciliation of the beginning and ending balances for Federated’s liability for future consideration payments related to these acquisitions for each period presented: | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Beginning balance | $ | 6,489 | $ | 11,759 | |||||||||||||||||||||||||||||
Changes in fair value1 | 0 | (48 | ) | ||||||||||||||||||||||||||||||
Ending balance | $ | 6,489 | $ | 11,711 | |||||||||||||||||||||||||||||
1 | For the three months ended March 31, 2013, the amount was primarily included as Operating Expenses - Other on the Consolidated Statements of Income and primarily represented a foreign currency loss. | ||||||||||||||||||||||||||||||||
Investments sold short | |||||||||||||||||||||||||||||||||
The fair value of investments sold short within a consolidated investment company is included in Other current liabilities on the Consolidated Balance Sheets. The investments primarily relate to domestic equity securities that are available in an active exchange market. The fair value of these investments is classified as Level 1 and is based on unadjusted quoted market prices. | |||||||||||||||||||||||||||||||||
(b) Fair Value Measurements on a Nonrecurring Basis | |||||||||||||||||||||||||||||||||
Federated did not hold any assets or liabilities measured at fair value on a nonrecurring basis at March 31, 2014. | |||||||||||||||||||||||||||||||||
(c) Fair Value Measurements of Other Financial Instruments | |||||||||||||||||||||||||||||||||
The fair value of Federated’s debt is estimated by management based upon expected future cash flows utilizing a discounted cash flow methodology under the income approach. The fair value of the liability is estimated using observable market data (Level 2) in estimating inputs including the discount rate. Based on this fair value estimate, the carrying value of debt appearing on the Consolidated Balance Sheets approximates fair value. |
Debt_and_Interest_Rate_Swap
Debt and Interest Rate Swap | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Debt And Interest Rate Swap [Abstract] | ' | ||||||||||||
Debt and Interest Rate Swap | ' | ||||||||||||
Debt and Interest Rate Swap | |||||||||||||
Debt consisted of the following: | |||||||||||||
(dollars in thousands) | Weighted-Average Interest Rate1 | March 31, 2014 | December 31, 2013 | ||||||||||
Term Loan | 3.65% | $ | 265,625 | $ | 276,250 | ||||||||
Less: Short-term debt | 95,625 | 77,917 | |||||||||||
Long-term debt | $ | 170,000 | $ | 198,333 | |||||||||
1 | See additional information below regarding the interest rate fixed at 3.646% in connection with the Swap. | ||||||||||||
In 2011, Federated entered into an Amended and Restated Credit Agreement with a syndicate of banks that included a $382.5 million term loan (Term Loan) and a $200 million revolving credit facility (collectively, as amended, Credit Agreement). The Credit Agreement expires on June 10, 2016. The Term Loan, a variable-rate note, requires principal payments of $10.6 million per quarter for the first three years and $28.3 million per quarter for the fourth and fifth years and a final payment of $28.3 million due upon its expiration. Certain subsidiaries entered into an Amended and Restated Continuing Agreement of Guaranty and Suretyship whereby these subsidiaries guarantee payment of all obligations incurred through the Credit Agreement. | |||||||||||||
The borrowings under the Term Loan bear interest at a spread over the London Interbank Offering Rate (LIBOR). Federated is a party to an interest rate swap (the Swap) with PNC Bank, National Association and certain other banks to hedge its interest rate risk on the Term Loan. Under the Swap, which expires on April 1, 2015, Federated receives payments based on LIBOR plus a spread and makes payments based on an annual fixed rate of 3.646%. The Swap requires monthly cash settlements of interest paid or received. The differential between the interest paid or interest received from the monthly settlements is recorded as adjustments to Debt expense on the Consolidated Statements of Income. The Swap is accounted for as a cash flow hedge and has been determined to be highly effective. Federated evaluates effectiveness using the long-haul method. Changes in the fair value of the Swap will likely be offset by an equal and opposite change in the fair value of the hedged item, therefore very little, if any, net impact on reported earnings is expected. The fair value of the Swap agreement at March 31, 2014 was a liability of $3.7 million which was recorded in Other current liabilities on the Consolidated Balance Sheets. The entire amount of this loss in fair value was recorded in Accumulated other comprehensive loss, net of tax on the Consolidated Balance Sheets at March 31, 2014. During the next twelve months management expects to charge the entire $3.7 million loss to Debt expense on the Consolidated Statements of Income as a component of Federated’s fixed interest rate of 3.646%. This amount could differ from amounts actually recognized due to changes in interest rates subsequent to March 31, 2014 and will not affect the amount of interest expense recognized in total on the Term Loan for any period presented. During the three-month periods ended March 31, 2014 and 2013, $1.5 million and $1.7 million, respectively, were charged to Debt expense on the Consolidated Statements of Income as a component of Federated’s fixed interest rate associated with the Swap. | |||||||||||||
As of March 31, 2014, the entire $200 million revolving credit facility was available for borrowings. | |||||||||||||
The Credit Agreement includes representations, warranties and other covenants, including an interest coverage ratio covenant and a leverage ratio covenant. Federated was in compliance with all covenants at and during the three months ended March 31, 2014. The Credit Agreement and the Swap also have certain stated events of default and cross default provisions which would permit the lenders/counterparties to accelerate the repayment of the debt or to terminate the Swap if not cured within the applicable grace periods. The events of default generally include breaches of contract, failure to make required loan payments, insolvency, cessation of business, deterioration in credit rating to below investment grade, notice of lien or assessment and other proceedings, whether voluntary or involuntary, that would require the repayment of amounts borrowed. |
ShareBased_Compensation_Plans
Share-Based Compensation Plans | 3 Months Ended |
Mar. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Share-Based Compensation Plans | ' |
Share-Based Compensation Plans | |
(a) Restricted Stock | |
During the first three months of 2014, Federated awarded 586,931 shares of restricted Federated Class B common stock, the majority of which were awarded in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under Federated’s Stock Incentive Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, will generally vest over a three-year period. | |
Federated awarded 989,050 shares of restricted Federated Class B common stock under its Stock Incentive Plan during 2013. Of this amount, 474,050 shares of restricted Federated Class B common stock were awarded in connection with the aforementioned bonus program in 2013. The remaining shares were awarded to certain key employees and generally vest over a ten-year period. | |
(b) Stock Options | |
During the three months ended March 31, 2014 and the year ended December 31, 2013, there were no stock options issued or exercised. | |
(c) Non-Management Director Stock Award | |
There were no shares of Federated Class B common stock awarded to non-management directors during the first quarter of 2014. Federated awarded 5,100 shares of Federated Class B common stock to non-management directors during 2013. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2014 | |
Equity [Abstract] | ' |
Equity | ' |
Equity | |
During 2008, the board of directors authorized a share repurchase program that allows Federated to buy back up to 5 million shares of Class B common stock. The program has no stated expiration date and no other programs existed as of March 31, 2014. The program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased shares are held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities. During the first three months of 2014, Federated repurchased 0.3 million shares of common stock for $7.5 million, the majority of which were repurchased in the open market. The remaining shares were repurchased in connection with employee separations and are not counted against the board-approved share repurchase program. At March 31, 2014, 1.1 million shares remained available to be purchased under the current buyback program. |
Earnings_Per_Share_attributabl
Earnings Per Share attributable to Federated Investors, Inc. Shareholders | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings Per Share Attributable to Federated Investors, Inc. Shareholders | ' | ||||||||
Earnings Per Share attributable to Federated Investors, Inc. Shareholders | |||||||||
The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Federated Investors, Inc.: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
(in thousands, except per share data) | 2014 | 2013 | |||||||
Numerator – Basic and Diluted | |||||||||
Net income attributable to Federated Investors, Inc. | $ | 35,194 | $ | 42,994 | |||||
Less: Total income available to participating unvested restricted shareholders1 | (1,387 | ) | (1,657 | ) | |||||
Total net income attributable to Federated Common Stock2 | $ | 33,807 | $ | 41,337 | |||||
Denominator | |||||||||
Basic weighted-average common shares outstanding | 100,725 | 100,518 | |||||||
Dilutive potential shares from stock options | 2 | 0 | |||||||
Diluted weighted-average common shares outstanding | 100,727 | 100,518 | |||||||
Earnings per share | |||||||||
Net income attributable to Federated Common Stock – Basic and Diluted2 | $ | 0.34 | $ | 0.41 | |||||
1 | Income available to participating unvested restricted shareholders includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings. | ||||||||
2 | Federated Common Stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share. | ||||||||
For the three-month periods ended March 31, 2014 and 2013, 27 thousand and 55 thousand awarded stock options, respectively, were not included in the computation of diluted earnings per share for each period. In all cases, these options were antidilutive because the exercise price was greater than the average market price of Federated Class B common stock for each respective period. In the event the options become dilutive, these shares would be included in the calculation of diluted earnings per share and would result in a proportional amount of dilution. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
(a) Contractual | |
In 2010, Federated acquired the money market management business of SunTrust Banks, Inc. (SunTrust Acquisition). As part of the SunTrust Acquisition, Federated is required to make annual contingent purchase price payments in the fourth quarters of each of the five years following the acquisition date. The contingent purchase price payments are calculated as a percentage of revenue less distribution expenses directly attributed to certain eligible assets. The first three contingent purchase price payments of $5.0 million, $4.2 million and $3.8 million were paid in the fourth quarters of 2011, 2012 and 2013, respectively. At March 31, 2014, management estimated remaining contingent payments could total $5 million over the two years that remain; however, the actual amount of the contingent payments will vary based on asset levels and related net revenues and is not limited by any maximum amount. A wide range of outcomes for actual payments is possible due to the extent of reasonably possible flow-rate volatility for the respective AUM. As of March 31, 2014, a liability of $4.4 million representing the estimated fair value of future consideration payments was recorded in Other current liabilities ($2.2 million) and Other long-term liabilities ($2.2 million) (see Note (7)(a) for a discussion regarding the valuation methodology). This liability is remeasured at each reporting date with changes in the fair value recognized in Operating Expenses - Other on the Consolidated Statements of Income. | |
In 2008, Federated completed the acquisition of certain assets of Clover Capital Management, Inc., an investment manager that specializes in value investing (Clover Capital Acquisition). As part of the Clover Capital Acquisition, Federated was required to make contingent purchase price payments based upon growth in revenues over the five-year period following the acquisition date. The contingent purchase price payments were recorded as additional goodwill at the time the contingency was resolved. The applicable growth targets were not met for the first two anniversary years and as such, no related payments were made. The final three payments of $9.2 million, $3.4 million and $5.9 million were paid in the first quarters of 2014, 2013 and 2012, respectively. | |
Pursuant to other acquisition agreements, Federated may be required to make additional purchase price payments based on a percentage of revenue less certain direct expenses attributable to eligible AUM. The payments could occur annually through 2017. As of March 31, 2014, liabilities totaling $2.1 million, representing the estimated fair value of future consideration payments were recorded in Other current liabilities ($0.8 million) and Other long-term liabilities ($1.3 million) (see Note (7)(a) for a discussion regarding the valuation methodology). The liabilities are remeasured at each reporting date with changes in the fair value recognized in Operating Expenses - Other on the Consolidated Statements of Income. | |
Pursuant to various significant employment arrangements, Federated may be required to make certain incentive compensation-related payments through 2018. As of March 31, 2014, Federated may be required to pay up to $33 million over the remaining terms of the arrangements based on the achievement of performance goals. In addition, certain employees have incentive compensation opportunities related to the Federated Kaufman Large Cap Fund (the Fund Bonus). Assuming asset levels and other variable inputs at March 31, 2014 remain constant throughout the year, the Fund Bonus payment in 2015 may approximate $2 million. Management is unable to reasonably estimate a range of possible bonus payments for the Fund Bonus for subsequent years due to the wide-range of possible growth-rate scenarios. | |
(b) Guarantees and Indemnifications | |
On an intercompany basis, various wholly owned subsidiaries of Federated guarantee certain financial obligations of Federated Investors, Inc., and Federated Investors, Inc. guarantees certain financial and performance-related obligations of various wholly owned subsidiaries. In addition, in the normal course of business, Federated has entered into contracts that provide a variety of indemnifications. Typically, obligations to indemnify third parties arise in the context of contracts entered into by Federated, under which Federated agrees to hold the other party harmless against losses arising out of the contract, provided the other party's actions are not deemed to have breached an agreed upon standard of care. In each of these circumstances, payment by Federated is contingent on the other party making a claim for indemnity, subject to Federated's right to challenge the other party's claim. Further, Federated’s obligations under these agreements may be limited in terms of time and/or amount. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of Federated’s obligations and the unique facts and circumstances involved in each particular agreement. Management believes that if Federated were to incur a loss in any of these matters, such loss should not have a material effect on its business, financial position, results of operations or cash flows. | |
(c) Other Legal Proceedings | |
Federated has claims asserted and threatened against it in the ordinary course of business. Federated cannot assess or predict whether, when or what types of claims may be threatened or asserted, the types or amounts of damages or other remedies that may be sought (which may be material when threatened or asserted), whether claims that have been threatened will become formal asserted pending legal proceedings, or whether claims ultimately may be successful (whether through settlement or adjudication), entirely or in part, whether or not any such claims are threatened or asserted in or outside the ordinary course of business. Federated also may be initially unable to accurately assess a claim's impact on its business, results of operations, financial condition and/or cash flows. As of March 31, 2014, Federated does not have any material pending legal proceedings and, as such, does not believe that a material loss related to these claims is reasonably possible. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss attributable to Federated Investors, Inc. Shareholders | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||||||||||||||
Accumulated Other Comprehensive Loss attributable to Federated Investors, Inc. Shareholders | ' | |||||||||||||||
Accumulated Other Comprehensive Loss attributable to Federated Investors, Inc. Shareholders | ||||||||||||||||
The components of Accumulated other comprehensive loss, net of tax attributable to Federated shareholders are as follows: | ||||||||||||||||
(in thousands) | Unrealized Loss | Unrealized | Foreign Currency | Total | ||||||||||||
on Interest Rate Swap1 | Gain on Securities | Translation (Loss) Gain | ||||||||||||||
Available for | ||||||||||||||||
Sale2 | ||||||||||||||||
Balance at December 31, 2012 | $ | (7,071 | ) | $ | 3,644 | $ | 490 | $ | (2,937 | ) | ||||||
Other comprehensive (loss) income before reclassifications and tax | (26 | ) | 4,604 | (48 | ) | 4,530 | ||||||||||
Tax impact | 9 | (1,611 | ) | 17 | (1,585 | ) | ||||||||||
Reclassification adjustments, before tax | 1,684 | (2,322 | ) | 0 | (638 | ) | ||||||||||
Tax impact | (618 | ) | 812 | 0 | 194 | |||||||||||
Net current-period other comprehensive income (loss) | 1,049 | 1,483 | (31 | ) | 2,501 | |||||||||||
Balance at March 31, 2013 | $ | (6,022 | ) | $ | 5,127 | $ | 459 | $ | (436 | ) | ||||||
Balance at December 31, 2013 | $ | (3,185 | ) | $ | 1,586 | $ | 391 | $ | (1,208 | ) | ||||||
Other comprehensive (loss) income before reclassifications and tax | (127 | ) | 688 | 139 | 700 | |||||||||||
Tax impact | 48 | (269 | ) | (48 | ) | (269 | ) | |||||||||
Reclassification adjustments, before tax | 1,481 | (1,529 | ) | 0 | (48 | ) | ||||||||||
Tax impact | (560 | ) | 597 | 0 | 37 | |||||||||||
Net current-period other comprehensive income (loss) | 842 | (513 | ) | 91 | 420 | |||||||||||
Balance at March 31, 2014 | $ | (2,343 | ) | $ | 1,073 | $ | 482 | $ | (788 | ) | ||||||
1 | Amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Debt expense on the Consolidated Statements of Income. | |||||||||||||||
2 | Amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Gain on securities, net on the Consolidated Statements of Income. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
On April 24, 2014, the board of directors declared a $0.25 per share dividend to shareholders of record as of May 8, 2014 to be paid on May 15, 2014. |
Recent_Accounting_Pronouncemen1
Recent Accounting Pronouncements Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
New Accounting Pronouncements and Changes in Accounting Principles | 'Effective January 1, 2014, Federated adopted the Financial Accounting Standards Board (FASB) accounting standards update 2013-08, Financial Services-Investment Companies (Topic 946) amending the criteria for an entity to qualify as an investment company under GAAP. Any entity regulated under the Investment Company Act of 1940 is automatically an investment company under the new definition. The update also amends certain disclosure requirements and measurement criteria. The adoption of the update did not have a material impact on Federated's Consolidated Financial Statements. |
Concentration_Risk_Tables
Concentration Risk (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Risks and Uncertainties [Abstract] | ' | ||||||||
Schedule of Revenue Concentration | ' | ||||||||
The following table summarizes the percentage of total revenue earned from Federated's asset classes for the periods presented: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Money market assets | 34 | % | 43 | % | |||||
Equity assets | 42 | % | 33 | % | |||||
Fixed-income assets | 23 | % | 23 | % | |||||
Voluntary Fee Waivers | ' | ||||||||
The impact of such fee waivers on various components of Federated's Consolidated Statements of Income was as follows for the periods presented: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
(in millions) | 2014 | 2013 | |||||||
Revenue | $ | (106.7 | ) | $ | (87.3 | ) | |||
Less: Reduction in Distribution expense | 74.3 | 64.8 | |||||||
Operating income | (32.4 | ) | (22.5 | ) | |||||
Less: Reduction in Noncontrolling interest | 2.7 | 0.8 | |||||||
Pre-tax impact | $ | (29.7 | ) | $ | (21.7 | ) |
Variable_Interest_Entities_Tab
Variable Interest Entities (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Variable Interest Entities [Abstract] | ' | ||||||||
Consolidated VIEs | ' | ||||||||
The following table presents the balances related to the consolidated investment companies that were included on the Consolidated Balance Sheets as well as Federated's net interest in the investment companies for each period presented: | |||||||||
(in millions) | March 31, 2014 | December 31, 2013 | |||||||
Cash and cash equivalents | $ | 1.8 | $ | 1.1 | |||||
Investments—consolidated investment companies | 53.6 | 53.5 | |||||||
Receivables | 0.9 | 0.9 | |||||||
Less: Liabilities | 2.3 | 1.6 | |||||||
Less: Redeemable noncontrolling interest in subsidiaries | 16.6 | 15.5 | |||||||
Federated's net interest in consolidated investment companies | $ | 37.4 | $ | 38.4 | |||||
Investments_Tables
Investments (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||||||||||||||||||||||
Available-For-Sale Securities | ' | ||||||||||||||||||||||||||||||||
Available-for-sale securities were as follows: | |||||||||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
Gross Unrealized | Estimated | Gross Unrealized | Estimated | ||||||||||||||||||||||||||||||
Fair | Fair | ||||||||||||||||||||||||||||||||
(in thousands) | Cost | Gains | (Losses) | Value | Cost | Gains | (Losses) | Value | |||||||||||||||||||||||||
Equity mutual funds | $ | 21,976 | $ | 1,608 | $ | 0 | $ | 23,584 | $ | 24,737 | $ | 2,423 | $ | 0 | $ | 27,160 | |||||||||||||||||
Fixed-income mutual funds | 103,009 | 608 | (453 | ) | 103,164 | 102,072 | 786 | (605 | ) | 102,253 | |||||||||||||||||||||||
Total fluctuating-value mutual funds | $ | 124,985 | $ | 2,216 | $ | (453 | ) | $ | 126,748 | $ | 126,809 | $ | 3,209 | $ | (605 | ) | $ | 129,413 | |||||||||||||||
Gains and losses on investments | ' | ||||||||||||||||||||||||||||||||
The following table presents gains and losses recognized in Gain on securities, net on the Consolidated Statements of Income in connection with investments and economic derivatives held by certain consolidated investment companies: | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Unrealized gain (loss) | |||||||||||||||||||||||||||||||||
Trading securities | $ | 349 | $ | 547 | |||||||||||||||||||||||||||||
Derivatives1 | (62 | ) | (587 | ) | |||||||||||||||||||||||||||||
Realized gains2 | |||||||||||||||||||||||||||||||||
Available-for-sale securities | 1,528 | 2,322 | |||||||||||||||||||||||||||||||
Trading securities | 953 | 349 | |||||||||||||||||||||||||||||||
Derivatives1 | 66 | 384 | |||||||||||||||||||||||||||||||
Realized losses2 | |||||||||||||||||||||||||||||||||
Trading securities | (914 | ) | (122 | ) | |||||||||||||||||||||||||||||
Derivatives1 | (7 | ) | 0 | ||||||||||||||||||||||||||||||
Gain on securities, net3 | $ | 1,913 | $ | 2,893 | |||||||||||||||||||||||||||||
1 | Amounts related to economic derivatives held by certain consolidated investment companies. | ||||||||||||||||||||||||||||||||
2 | Realized gains and losses are computed on a specific-identification basis. | ||||||||||||||||||||||||||||||||
3 | Amounts related to consolidated investment companies totaled $0.3 million and $0.4 million for the three months ended March 31, 2014, and March 31, 2013, respectively. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||||||||||
Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||||||||||||||||||
The following table presents fair value measurements for classes of Federated’s financial assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
Fair Value Measurements Using | Fair Value Measurements Using | ||||||||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Financial Assets | |||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 71,575 | $ | 0 | $ | 0 | $ | 71,575 | $ | 104,443 | $ | 0 | $ | 0 | $ | 104,443 | |||||||||||||||||
Available-for-sale equity securities | 78,477 | 48,271 | 0 | 126,748 | 81,550 | 47,863 | 0 | 129,413 | |||||||||||||||||||||||||
Trading securities—equity | 18,184 | 2,672 | 0 | 20,856 | 11,925 | 9,906 | 0 | 21,831 | |||||||||||||||||||||||||
Trading securities—debt | 0 | 37,530 | 0 | 37,530 | 0 | 36,491 | 0 | 36,491 | |||||||||||||||||||||||||
Foreign currency forward contracts | 0 | 111 | 0 | 111 | 0 | 159 | 0 | 159 | |||||||||||||||||||||||||
Total financial assets | $ | 168,236 | $ | 88,584 | $ | 0 | $ | 256,820 | $ | 197,918 | $ | 94,419 | $ | 0 | $ | 292,337 | |||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||||||||||||
Interest rate swap | $ | 0 | $ | 3,706 | $ | 0 | $ | 3,706 | $ | 0 | $ | 5,061 | $ | 0 | $ | 5,061 | |||||||||||||||||
Acquisition-related future consideration liabilities | 0 | 0 | 6,489 | 6,489 | 0 | 0 | 6,489 | 6,489 | |||||||||||||||||||||||||
Other1 | 1,687 | 11 | 0 | 1,698 | 1,118 | 2 | 0 | 1,120 | |||||||||||||||||||||||||
Total financial liabilities | $ | 1,687 | $ | 3,717 | $ | 6,489 | $ | 11,893 | $ | 1,118 | $ | 5,063 | $ | 6,489 | $ | 12,670 | |||||||||||||||||
1 | Amounts include investments sold short within one of the consolidated investment companies and foreign currency forward contracts recorded within Other current liabilities on the Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||||
Reconciliation of the beginning and ending fair value measurements of a Level 3 financial liability | ' | ||||||||||||||||||||||||||||||||
The following table presents a reconciliation of the beginning and ending balances for Federated’s liability for future consideration payments related to these acquisitions for each period presented: | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||||||||||||||||||
Beginning balance | $ | 6,489 | $ | 11,759 | |||||||||||||||||||||||||||||
Changes in fair value1 | 0 | (48 | ) | ||||||||||||||||||||||||||||||
Ending balance | $ | 6,489 | $ | 11,711 | |||||||||||||||||||||||||||||
1 | For the three months ended March 31, 2013, the amount was primarily included as Operating Expenses - Other on the Consolidated Statements of Income and primarily represented a foreign currency loss. |
Debt_and_Interest_Rate_Swap_Ta
Debt and Interest Rate Swap (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Debt And Interest Rate Swap [Abstract] | ' | ||||||||||||
Debt | ' | ||||||||||||
Debt consisted of the following: | |||||||||||||
(dollars in thousands) | Weighted-Average Interest Rate1 | March 31, 2014 | December 31, 2013 | ||||||||||
Term Loan | 3.65% | $ | 265,625 | $ | 276,250 | ||||||||
Less: Short-term debt | 95,625 | 77,917 | |||||||||||
Long-term debt | $ | 170,000 | $ | 198,333 | |||||||||
1 | See additional information below regarding the interest rate fixed at 3.646% in connection with the Swap. |
Recovered_Sheet1
Earnings Per Share Attributable to Federated Investors, Inc. Shareholders (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Computation of Basic and Diluted Earnings Per Share | ' | ||||||||
The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Federated Investors, Inc.: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
(in thousands, except per share data) | 2014 | 2013 | |||||||
Numerator – Basic and Diluted | |||||||||
Net income attributable to Federated Investors, Inc. | $ | 35,194 | $ | 42,994 | |||||
Less: Total income available to participating unvested restricted shareholders1 | (1,387 | ) | (1,657 | ) | |||||
Total net income attributable to Federated Common Stock2 | $ | 33,807 | $ | 41,337 | |||||
Denominator | |||||||||
Basic weighted-average common shares outstanding | 100,725 | 100,518 | |||||||
Dilutive potential shares from stock options | 2 | 0 | |||||||
Diluted weighted-average common shares outstanding | 100,727 | 100,518 | |||||||
Earnings per share | |||||||||
Net income attributable to Federated Common Stock – Basic and Diluted2 | $ | 0.34 | $ | 0.41 | |||||
1 | Income available to participating unvested restricted shareholders includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings. | ||||||||
2 | Federated Common Stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share. |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss attributable to Federated Investors, Inc. Shareholders (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||
The components of Accumulated other comprehensive loss, net of tax attributable to Federated shareholders are as follows: | ||||||||||||||||
(in thousands) | Unrealized Loss | Unrealized | Foreign Currency | Total | ||||||||||||
on Interest Rate Swap1 | Gain on Securities | Translation (Loss) Gain | ||||||||||||||
Available for | ||||||||||||||||
Sale2 | ||||||||||||||||
Balance at December 31, 2012 | $ | (7,071 | ) | $ | 3,644 | $ | 490 | $ | (2,937 | ) | ||||||
Other comprehensive (loss) income before reclassifications and tax | (26 | ) | 4,604 | (48 | ) | 4,530 | ||||||||||
Tax impact | 9 | (1,611 | ) | 17 | (1,585 | ) | ||||||||||
Reclassification adjustments, before tax | 1,684 | (2,322 | ) | 0 | (638 | ) | ||||||||||
Tax impact | (618 | ) | 812 | 0 | 194 | |||||||||||
Net current-period other comprehensive income (loss) | 1,049 | 1,483 | (31 | ) | 2,501 | |||||||||||
Balance at March 31, 2013 | $ | (6,022 | ) | $ | 5,127 | $ | 459 | $ | (436 | ) | ||||||
Balance at December 31, 2013 | $ | (3,185 | ) | $ | 1,586 | $ | 391 | $ | (1,208 | ) | ||||||
Other comprehensive (loss) income before reclassifications and tax | (127 | ) | 688 | 139 | 700 | |||||||||||
Tax impact | 48 | (269 | ) | (48 | ) | (269 | ) | |||||||||
Reclassification adjustments, before tax | 1,481 | (1,529 | ) | 0 | (48 | ) | ||||||||||
Tax impact | (560 | ) | 597 | 0 | 37 | |||||||||||
Net current-period other comprehensive income (loss) | 842 | (513 | ) | 91 | 420 | |||||||||||
Balance at March 31, 2014 | $ | (2,343 | ) | $ | 1,073 | $ | 482 | $ | (788 | ) | ||||||
1 | Amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Debt expense on the Consolidated Statements of Income. | |||||||||||||||
2 | Amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Gain on securities, net on the Consolidated Statements of Income. |
Concentration_Risk_Narrative_D
Concentration Risk Narrative (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
Federated Kaufmann Fund [Member] | Federated Prime Obligations Fund [Member] | ||
Revenue Concentration By Investment Fund [Member] | Revenue Concentration By Investment Fund [Member] | ||
Estimated Net Impact On Future Pre-Tax Income | $29 | ' | ' |
Concentration Risk, Percentage | ' | 12.00% | 10.00% |
Concentration_Risk_Schedule_of
Concentration Risk Schedule of Revenue Concentration (Details) (Revenue Concentration by Asset Class [Member]) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Money market assets [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration Risk, Percentage | 34.00% | 43.00% |
Equity assets [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration Risk, Percentage | 42.00% | 33.00% |
Fixed-income assets [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration Risk, Percentage | 23.00% | 23.00% |
Concentration_Risk_Voluntary_F
Concentration Risk Voluntary Fee Waivers (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Concentration Risk [Line Items] | ' | ' |
Revenue | ($106.70) | ($87.30) |
Less: Reduction in Distribution expense | 74.3 | 64.8 |
Operating income | -32.4 | -22.5 |
Less: Reduction in Noncontrolling interest | 2.7 | 0.8 |
Pre-tax impact | ($29.70) | ($21.70) |
Variable_Interest_Entities_Nar
Variable Interest Entities Narrative (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Variable Interest Entity [Line Items] | ' | ' |
Federated's net interest in consolidated investment companies | $37.40 | $38.40 |
Accounts Receivable from sponsored investment companies | 14.7 | 13.5 |
Investment Companies [Member] | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Total Remaining Carrying Value Of Investment And Maximum Risk Of Loss In Variable Interest Entities | 189.1 | 220.5 |
Unconsolidated VIE assets | $269,500 | $280,310 |
Variable_Interest_Entities_Con
Variable Interest Entities Consolidated Investment Companies (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Variable Interest Entity [Line Items] | ' | ' |
Investmentsbconsolidated investment companies | $53,589,000 | $53,476,000 |
Less: Liabilities | 2,300,000 | 1,600,000 |
Less: Redeemable noncontrolling interest in subsidiaries | 16,573,000 | 15,517,000 |
Federated's net interest in consolidated investment companies | 37,400,000 | 38,400,000 |
Cash and cash equivalents [Member] | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Consolidated assets | 1,800,000 | 1,100,000 |
Receivables [Member] | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Consolidated assets | $900,000 | $900,000 |
Variable_Interest_Entities_Ass
Variable Interest Entities Assets and Liabilities of Unconsolidated VIEs and Federated's Maximum Risk of Loss (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Variable Interest Entity [Line Items] | ' | ' |
Accounts Receivable from sponsored investment companies | $14.70 | $13.50 |
Investment Companies [Member] | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Total Remaining Carrying Value Of Investment And Maximum Risk Of Loss In Variable Interest Entities | 189.1 | 220.5 |
Unconsolidated VIE assets | $269,500 | $280,310 |
Investments_Narrative_Details
Investments Narrative (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Schedule of Investments [Line Items] | ' | ' | ' |
Available-for-sale securities | $126,748,000 | ' | $129,413,000 |
Proceeds from redemptions of securities avaliable for sale | 9,371,000 | 11,758,000 | ' |
Payments to Acquire Available-for-sale Securities | 6,017,000 | 859,000 | ' |
Trading Securities | 58,400,000 | ' | 58,300,000 |
Corporate Debt Securities [Member] | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' |
Trading Securities | 37,500,000 | ' | 36,500,000 |
Stocks of large U.S. and international companies [Member] | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' |
Trading Securities | 15,400,000 | ' | 17,000,000 |
Consolidated feeder fund investment in offshore master investment fund [Member] | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' |
Trading Securities | $1,700,000 | ' | $2,500,000 |
Investments_AvailableForSale_S
Investments Available-For-Sale Securities (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Cost | $124,985 | $126,809 |
Gross Unrealized Gains | 2,216 | 3,209 |
Gross Unrealized Losses | -453 | -605 |
Available-for-sale securities | 126,748 | 129,413 |
Equity Mutual Funds [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Cost | 21,976 | 24,737 |
Gross Unrealized Gains | 1,608 | 2,423 |
Gross Unrealized Losses | 0 | 0 |
Available-for-sale securities | 23,584 | 27,160 |
Fixed-Income Mutual Funds [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Cost | 103,009 | 102,072 |
Gross Unrealized Gains | 608 | 786 |
Gross Unrealized Losses | -453 | -605 |
Available-for-sale securities | $103,164 | $102,253 |
Investments_Gain_on_Securities
Investments Gain on Securities, Net of Investment Income (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Gain (Loss) on Investments [Line Items] | ' | ' | ||
Gain on securities, net | $1,913 | [1] | $2,893 | [1] |
Consolidated Investment Companies [Member] | ' | ' | ||
Gain (Loss) on Investments [Line Items] | ' | ' | ||
Gain on securities, net | 300 | 400 | ||
Trading Securities [Member] | ' | ' | ||
Gain (Loss) on Investments [Line Items] | ' | ' | ||
Unrealized gain on trading securities | 349 | 547 | ||
Realized gains | 953 | [2] | 349 | [2] |
Realized losses | -914 | [2] | -122 | [2] |
Derivatives [Member] | ' | ' | ||
Gain (Loss) on Investments [Line Items] | ' | ' | ||
Unrealized loss on derivatives | -62 | [3] | -587 | [3] |
Realized gains | 66 | [2],[3] | 384 | [2],[3] |
Realized losses | -7 | [2],[3] | 0 | [2],[3] |
Available-for-sale Securities [Member] | ' | ' | ||
Gain (Loss) on Investments [Line Items] | ' | ' | ||
Realized gains | $1,528 | [2] | $2,322 | [2] |
[1] | Amounts related to consolidated investment companies totaled $0.3 million and $0.4 million for the three months ended MarchB 31, 2014, and MarchB 31, 2013, respectively. | |||
[2] | Realized gains and losses are computed on a specific-identification basis. | |||
[3] | Amounts related to economic derivatives held by certain consolidated investment companies. |
Fair_Value_Measurements_Narrat
Fair Value Measurements Narrative (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Apr. 13, 2017 | Apr. 13, 2017 | Apr. 13, 2017 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
Acquisition-related Future Consideration Liabilities [Member] | Acquisition-related Future Consideration Liabilities [Member] | Acquisition-related Future Consideration Liabilities [Member] | Other Current Liabilities [Member] | Other Noncurrent Liabilities [Member] | Consolidated feeder fund investment in offshore master investment fund [Member] | Consolidated feeder fund investment in offshore master investment fund [Member] | Money Market Funds [Member] | Money Market Funds [Member] | ||||
Minimum [Member] | Maximum [Member] | Weighted Average [Member] | ||||||||||
Cash and cash equivalents | $71,575,000 | $104,443,000 | ' | ' | ' | ' | ' | ' | ' | ' | $61,700,000 | $94,400,000 |
Investments transferred from Level 2 to Level 1 | 4,800,000 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trading Securities | 58,400,000 | 58,300,000 | ' | ' | ' | ' | ' | ' | 1,700,000 | 2,500,000 | ' | ' |
Interest rate swap | 3,706,000 | 5,061,000 | ' | ' | ' | ' | 3,706,000 | ' | ' | ' | ' | ' |
Acquisition-related future consideration liabilities | $6,489,000 | $6,489,000 | ' | ' | ' | ' | $3,000,000 | $3,500,000 | ' | ' | ' | ' |
Fair Value Inputs Estimated Rate of Change for Underlying Assets Under Management | ' | ' | ' | -5.00% | 6.00% | 3.00% | ' | ' | ' | ' | ' | ' |
Fair Value Inputs Estimate of Impact of Fee Waiver | ' | ' | ' | 0.02% | 0.03% | 0.02% | ' | ' | ' | ' | ' | ' |
Fair Value Inputs, Discount Rate | ' | ' | ' | 17.00% | 19.00% | 17.00% | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Classe
Fair Value Measurements Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Cash and cash equivalents | $71,575 | $104,443 | ||
Available-for-sale securities | 126,748 | 129,413 | ||
Trading securitiesbequity | 20,856 | 21,831 | ||
Trading securitiesbdebt | 37,530 | 36,491 | ||
Foreign currency forward contracts | 111 | 159 | ||
Total financial assets | 256,820 | 292,337 | ||
Interest rate swap | 3,706 | 5,061 | ||
Acquisition-related future consideration liabilities | 6,489 | 6,489 | ||
Other | 1,698 | [1] | 1,120 | [1] |
Total financial liabilities | 11,893 | 12,670 | ||
Level 1 [Member] | ' | ' | ||
Cash and cash equivalents | 71,575 | 104,443 | ||
Available-for-sale securities | 78,477 | 81,550 | ||
Trading securitiesbequity | 18,184 | 11,925 | ||
Trading securitiesbdebt | 0 | 0 | ||
Foreign currency forward contracts | 0 | 0 | ||
Total financial assets | 168,236 | 197,918 | ||
Interest rate swap | 0 | 0 | ||
Acquisition-related future consideration liabilities | 0 | 0 | ||
Other | 1,687 | [1] | 1,118 | [1] |
Total financial liabilities | 1,687 | 1,118 | ||
Level 2 [Member] | ' | ' | ||
Cash and cash equivalents | 0 | 0 | ||
Available-for-sale securities | 48,271 | 47,863 | ||
Trading securitiesbequity | 2,672 | 9,906 | ||
Trading securitiesbdebt | 37,530 | 36,491 | ||
Foreign currency forward contracts | 111 | 159 | ||
Total financial assets | 88,584 | 94,419 | ||
Interest rate swap | 3,706 | 5,061 | ||
Acquisition-related future consideration liabilities | 0 | 0 | ||
Other | 11 | [1] | 2 | [1] |
Total financial liabilities | 3,717 | 5,063 | ||
Level 3 [Member] | ' | ' | ||
Cash and cash equivalents | 0 | 0 | ||
Available-for-sale securities | 0 | 0 | ||
Trading securitiesbequity | 0 | 0 | ||
Trading securitiesbdebt | 0 | 0 | ||
Foreign currency forward contracts | 0 | 0 | ||
Total financial assets | 0 | 0 | ||
Interest rate swap | 0 | 0 | ||
Acquisition-related future consideration liabilities | 6,489 | 6,489 | ||
Other | 0 | [1] | 0 | [1] |
Total financial liabilities | $6,489 | $6,489 | ||
[1] | Amounts include investments sold short within one of the consolidated investment companies and foreign currency forward contracts recorded within Other current liabilities on the Consolidated Balance Sheets. |
Fair_Value_Measurements_Reconc
Fair Value Measurements Reconciliation of Fair Value Measurements of Liability for Future Consideration Payments (Details) (Acquisition-related Future Consideration Liabilities [Member], Fair Value, Inputs, Level 3 [Member], USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Acquisition-related Future Consideration Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning balance | $6,489 | $11,759 | ||
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Changes In Fair Value | 0 | [1] | -48 | [1] |
Ending balance | $6,489 | $11,711 | ||
[1] | For the three months ended MarchB 31, 2013, the amount was primarily included as Operating Expenses - Other on the Consolidated Statements of Income and primarily represented a foreign currency loss. |
Debt_and_Interest_Rate_Swap_Na
Debt and Interest Rate Swap Narrative (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Jun. 10, 2011 | Mar. 31, 2014 | Jun. 10, 2011 | Jun. 30, 2011 | Jun. 30, 2011 | Jun. 30, 2011 | ||
Other Current Liabilities [Member] | Borrowings Under Credit Agreement At Date Of Amendment [Member] | Term Loan Quarterly Payment First Three Years [Member] | Term Loan Quarterly Payment Years Four And Five [Member] | Debt Instrument Payment Due Upon Expiration [Member] | ||||||
Borrowings Under Credit Agreement | ' | ' | ' | ' | ' | $382,500,000 | ' | ' | ' | |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | 200,000,000 | ' | ' | ' | ' | ' | |
Required principal payments | ' | ' | ' | ' | ' | ' | 10,600,000 | 28,300,000 | 28,300,000 | |
Term Loan, Weighted-Average Interest Rate | 3.65% | [1] | ' | ' | ' | ' | ' | ' | ' | ' |
Liability on swap agreement | 3,706,000 | ' | 5,061,000 | ' | 3,706,000 | ' | ' | ' | ' | |
Amount of swap liability to be reclassified during next twelve months | 3,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | |
Amount of swap liability reclassified during the period | 1,500,000 | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | |
Line of Credit Facility, Current Borrowing Capacity | $200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | See additional information below regarding the interest rate fixed at 3.646% in connection with the Swap. |
Debt_and_Interest_Rate_Swap_De
Debt and Interest Rate Swap Debt (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Debt And Interest Rate Swap [Abstract] | ' | ' | |
Term Loan, Weighted-Average Interest Rate | 3.65% | [1] | ' |
Term Loan | $265,625 | $276,250 | |
Less: Short-term debt | 95,625 | 77,917 | |
Long-term debt | $170,000 | $198,333 | |
[1] | See additional information below regarding the interest rate fixed at 3.646% in connection with the Swap. |
ShareBased_Compensation_Plans_
Share-Based Compensation Plans (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Restricted Stock Granted in Period | 586,931 | ' | 989,050 |
Stock Options, Issued in Period | 0 | ' | 0 |
Stock Options, Exercises in Period | 0 | ' | 0 |
Shares of Federated Class B Common Stock to Non-Management Directors | 0 | 5,100 | ' |
Class B Common Stock Bonus [Member] | ' | ' | ' |
Restricted Stock Granted in Period | ' | ' | 474,050 |
Restricted stock requisite service period | '3 years | ' | ' |
Class B Common Stock Key Employees [Member] | ' | ' | ' |
Restricted stock requisite service period | ' | ' | '10 years |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | |||
In Thousands, except Share data in Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2008 |
Class B [Member] | Class B [Member] | |||
Number of shares authorized under share repurchase program | ' | ' | ' | 5 |
Repurchased shares | 0.3 | ' | ' | ' |
Amount paid for repurchase of common stock | $7,517 | $2,710 | ' | ' |
Remaining number of shares authorized to be repurchased | ' | ' | 1.1 | ' |
Earnings_Per_Share_Attributabl1
Earnings Per Share Attributable to Federated Investors, Inc. Shareholders Narrative (Details) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Earnings Per Share [Abstract] | ' | ' |
Stock option awards excluded from calculation of diluted EPS | 27 | 55 |
Recovered_Sheet2
Earnings Per Share attributable to Federated Investors, Inc. Shareholders Computation of Basic and Diluted Earnings Per Share (Details) (USD $) | 3 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Net income attributable to Federated Investors, Inc. | $35,194 | $42,994 | ||
Less: Total income available to participating unvested restricted shareholders | -1,387 | [1] | -1,657 | [1] |
Total net income attributable to Federated Common Stock (Basic) | 33,807 | [2] | 41,337 | [2] |
Total net income attributable to Federated Common Stock (Diluted) | $33,807 | [2] | $41,337 | [2] |
Basic weighted-average common shares outstanding | 100,725 | 100,518 | ||
Dilutive potential shares from stock options | 2 | 0 | ||
Diluted weighted-average common shares outstanding | 100,727 | 100,518 | ||
Net income attributable to Federated Common Stock - Basic and Diluted | $0.34 | [2] | $0.41 | [2] |
[1] | Income available to participating unvested restricted shareholders includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings. | |||
[2] | Federated Common Stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share. |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2010 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | Mar. 31, 2011 | Mar. 31, 2010 | Dec. 31, 2008 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
SunTrust Acquisition [Member] | SunTrust Acquisition [Member] | SunTrust Acquisition [Member] | SunTrust Acquisition [Member] | SunTrust Acquisition [Member] | Clover Capital Acquisition [Member] | Clover Capital Acquisition [Member] | Clover Capital Acquisition [Member] | Clover Capital Acquisition [Member] | Clover Capital Acquisition [Member] | Clover Capital Acquisition [Member] | Series of Individually Immaterial Business Acquisitions [Member] | Other Current Liabilities [Member] | Other Current Liabilities [Member] | Other Current Liabilities [Member] | Other Noncurrent Liabilities [Member] | Other Noncurrent Liabilities [Member] | Other Noncurrent Liabilities [Member] | |||
SunTrust Acquisition [Member] | Series of Individually Immaterial Business Acquisitions [Member] | SunTrust Acquisition [Member] | Series of Individually Immaterial Business Acquisitions [Member] | |||||||||||||||||
Business Acquisition Contingent Consideration Payable Period | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' |
Contingent purchase price payments | ' | ' | $3,800,000 | $4,200,000 | $5,000,000 | ' | ' | $9,200,000 | $3,400,000 | $5,900,000 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated remaining contingent payments | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining Business Acquisition Contingent Consideration Payable Period | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of future consideration payments liability | 6,489,000 | 6,489,000 | ' | ' | ' | ' | 4,400,000 | ' | ' | ' | ' | ' | ' | 2,100,000 | 3,000,000 | 2,200,000 | 800,000 | 3,500,000 | 2,200,000 | 1,300,000 |
Maximum performance incentive payable over remaining terms | 33,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee Incentive Compensation Fund Bonus Payable Succeeding Fiscal Year | $2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss attributable to Federated Investors, Inc. Shareholders (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Accumulated other comprehensive (loss) income, net of tax | ($1,208) | ($2,937) | ||
Other comprehensive (loss) income, before reclassifications and tax | 700 | 4,530 | ||
Other comprehensive (loss) income, before reclassifications, tax total | -269 | -1,585 | ||
Reclassification adjustments, before tax | -48 | -638 | ||
Reclassification adjustment, tax total | 37 | 194 | ||
Net current-period other comprehensive income (loss) | 420 | 2,501 | ||
Accumulated other comprehensive (loss) income, net of tax | -788 | -436 | ||
Accumulated Net Loss from Designated or Qualifying Cash Flow Hedges [Member] | ' | ' | ||
Accumulated other comprehensive (loss) income, net of tax | -3,185 | [1] | -7,071 | [1] |
Other comprehensive (loss) income, before reclassifications and tax | -127 | [1] | -26 | [1] |
Other comprehensive (loss) income, before reclassifications, tax total | 48 | [1] | 9 | [1] |
Reclassification adjustments, before tax | 1,481 | [1] | 1,684 | [1] |
Reclassification adjustment, tax total | -560 | [1] | -618 | [1] |
Net current-period other comprehensive income (loss) | 842 | [1] | 1,049 | [1] |
Accumulated other comprehensive (loss) income, net of tax | -2,343 | [1] | -6,022 | [1] |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | ' | ' | ||
Accumulated other comprehensive (loss) income, net of tax | 1,586 | [2] | 3,644 | [2] |
Other comprehensive (loss) income, before reclassifications and tax | 688 | [2] | 4,604 | [2] |
Other comprehensive (loss) income, before reclassifications, tax total | -269 | [2] | -1,611 | [2] |
Reclassification adjustments, before tax | -1,529 | [2] | -2,322 | [2] |
Reclassification adjustment, tax total | 597 | [2] | 812 | [2] |
Net current-period other comprehensive income (loss) | -513 | [2] | 1,483 | [2] |
Accumulated other comprehensive (loss) income, net of tax | 1,073 | [2] | 5,127 | [2] |
Accumulated Translation Adjustment [Member] | ' | ' | ||
Accumulated other comprehensive (loss) income, net of tax | 391 | 490 | ||
Other comprehensive (loss) income, before reclassifications and tax | 139 | -48 | ||
Other comprehensive (loss) income, before reclassifications, tax total | -48 | 17 | ||
Reclassification adjustments, before tax | 0 | 0 | ||
Reclassification adjustment, tax total | 0 | 0 | ||
Net current-period other comprehensive income (loss) | 91 | -31 | ||
Accumulated other comprehensive (loss) income, net of tax | $482 | $459 | ||
[1] | Amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Debt expense on the Consolidated Statements of Income. | |||
[2] | Amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Gain on securities, net on the Consolidated Statements of Income. |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Apr. 24, 2014 |
Dividend declared | $0.25 |