Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 16, 2017 | Jun. 30, 2016 | |
Entity Registrant Name | FEDERATED INVESTORS INC /PA/ | ||
Entity Central Index Key | 1,056,288 | ||
Trading Symbol | FII | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 2,700,000,000 | ||
Subsequent Event [Member] | Class A [Member] | |||
Entity Common Stock, Shares Outstanding | 9,000 | ||
Subsequent Event [Member] | Common Class B [Member] | |||
Entity Common Stock, Shares Outstanding | 101,697,183 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Current Assets | |||
Cash and cash equivalents | $ 104,839 | $ 172,628 | |
Investments—affiliates | 130,785 | 141,748 | [1] |
Investments—consolidated investment companies | 58,072 | 25,368 | |
Investments—other | 7,453 | 7,071 | |
Receivables, net of reserve of $84 and $59, respectively | 44,804 | 33,524 | |
Prepaid expenses | 9,994 | 10,722 | |
Other current assets | 3,813 | 4,767 | |
Total current assets | 359,760 | 395,828 | |
Long-Term Assets | |||
Goodwill | 659,189 | 659,315 | |
Renewable investment advisory contracts | 70,378 | 70,582 | |
Other intangible assets, net | 3,570 | 4,595 | |
Property and equipment, net | 39,280 | 35,743 | |
Other long-term assets | 22,930 | 21,140 | |
Total long-term assets | 795,347 | 791,375 | |
Total assets | 1,155,107 | 1,187,203 | |
Current Liabilities | |||
Short-term debt | 25,500 | 25,500 | |
Accounts payable and accrued expenses | 54,177 | 43,551 | |
Accrued compensation and benefits | 74,745 | 75,691 | |
Other current liabilities | 8,116 | 14,466 | |
Total current liabilities | 162,538 | 159,208 | |
Long-Term Liabilities | |||
Long-term debt | 165,750 | 191,250 | |
Long-term deferred tax liability, net | 176,686 | 158,895 | |
Other long-term liabilities | 22,987 | 20,144 | |
Total long-term liabilities | 365,423 | 370,289 | |
Total liabilities | 527,961 | 529,497 | |
Commitments and contingencies (Note (17)) | |||
Temporary Equity | |||
Redeemable noncontrolling interest in subsidiaries | 31,362 | 8,734 | |
Permanent Equity | |||
Retained earnings | 529,749 | 545,785 | |
Treasury stock, at cost, 7,515,773 and 5,411,429 shares Class B common stock, respectively | (255,382) | (191,939) | |
Accumulated other comprehensive loss, net of tax | (523) | (4,609) | |
Total Federated Investors, Inc. shareholders' equity | 594,826 | 647,816 | |
Nonredeemable noncontrolling interest in subsidiary | 958 | 1,156 | |
Total permanent equity | 595,784 | 648,972 | |
Total liabilities, temporary equity and permanent equity | 1,155,107 | 1,187,203 | |
Class A [Member] | |||
Permanent Equity | |||
Common stock | 189 | 189 | |
Common Class B [Member] | |||
Permanent Equity | |||
Common stock | $ 320,793 | $ 298,390 | |
[1] | Investments that calculate NAV as a practical expedient were recategorized and are no longer included within Level 2 of the valuation hierarchy as of December 31, 2015 (see Note (2) for additional information). |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Receivables, reserve | $ 84 | $ 59 |
Treasury stock, shares | 7,515,773 | 5,411,429 |
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 |
Common Class B [Member] | ||
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 109,505,456 | 109,505,456 |
Common stock, shares outstanding | 101,989,683 | 104,094,027 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Revenue | ||||
Investment advisory fees, net—affiliates | $ 654,224 | $ 526,564 | $ 461,919 | |
Investment advisory fees, net—other | 112,601 | 99,761 | 95,399 | |
Administrative service fees, net—affiliates | 211,646 | 211,458 | 213,136 | |
Other service fees, net—affiliates | 156,938 | 81,039 | 73,137 | |
Other service fees, net—other | 4,440 | 3,871 | 10,902 | |
Other, net | 3,522 | 3,916 | 4,757 | |
Total revenue | 1,143,371 | 926,609 | 859,250 | |
Operating Expenses | ||||
Distribution | 383,648 | 232,445 | 210,641 | |
Compensation and related | 296,466 | 286,932 | 285,337 | |
Systems and communications | 31,271 | 27,629 | 25,794 | |
Professional service fees | 27,447 | 29,090 | 30,216 | |
Office and occupancy | 27,379 | 26,706 | 29,968 | |
Advertising and promotional | 14,522 | 13,930 | 13,330 | |
Travel and related | 13,228 | 13,409 | 13,219 | |
Other | 13,727 | 17,022 | 12,796 | |
Total operating expenses | 807,688 | 647,163 | 621,301 | |
Operating income | 335,683 | 279,446 | 237,949 | |
Nonoperating Income (Expenses) | ||||
Investment income, net | 7,256 | 5,056 | 6,071 | |
Gain (loss) on securities, net | [1] | 2,108 | (5,264) | 4,972 |
Debt expense | (4,173) | (4,299) | (9,611) | |
Other, net | 60 | (33) | (29) | |
Total nonoperating income (expenses), net | 5,251 | (4,540) | 1,403 | |
Income before income taxes | 340,934 | 274,906 | 239,352 | |
Income tax provision | 119,420 | 102,920 | 89,530 | |
Net income including the noncontrolling interests in subsidiaries | 221,514 | 171,986 | 149,822 | |
Less: Net income attributable to the noncontrolling interests in subsidiaries | 12,595 | 2,179 | 586 | |
Net income | $ 208,919 | $ 169,807 | $ 149,236 | |
Amounts Attributable to Federated Investors, Inc. | ||||
Earnings per common share—Basic and Diluted | [2] | $ 2.03 | $ 1.62 | $ 1.42 |
Cash dividends per share | $ 2 | $ 1 | $ 1 | |
[1] | Amounts related to consolidated entities, primarily Federated Funds, totaled $2.9 million, $(4.0) million and $(0.6) million for the years ended December 31, 2016, 2015 and 2014, respectively. | |||
[2] | Federated Common Stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income including the noncontrolling interests in subsidiaries | $ 221,514 | $ 171,986 | $ 149,822 |
Permanent Equity | |||
Unrealized gain (loss) on interest rate swap | 0 | 42 | (67) |
Reclassification adjustment related to interest rate swap | 0 | 227 | 2,983 |
Unrealized gain (loss) on securities available for sale | 3,029 | (4,049) | (88) |
Reclassification adjustment related to securities available for sale | 1,674 | 1,380 | (2,624) |
Foreign currency items | (617) | (547) | (658) |
Temporary Equity | |||
Foreign currency translation loss | (13) | 0 | 0 |
Other comprehensive income (loss), net of tax | 4,073 | (2,947) | (454) |
Comprehensive income including noncontrolling interest in subsidiaries | 225,587 | 169,039 | 149,368 |
Less: Comprehensive income (loss) attributable to redeemable noncontrolling interest in subsidiaries | 3,189 | (1,263) | 609 |
Less: Comprehensive income (loss) attributable to nonredeemable noncontrolling interest in subsidiary | 9,393 | 3,442 | (23) |
Comprehensive income attributable to Federated Investors, Inc. | $ 213,005 | $ 166,860 | $ 148,782 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive (Loss) Income, Net of Tax [Member] | Total Shareholders' Equity [Member] | Nonredeemable Noncontrolling Interest in Subsidiary [Member] | Redeemable Noncontrolling Interest in Subsidiaries / Temporary Equity [Member] | Treasury Stock [Member] | Common Class A [Member] | Common Class B [Member] |
Common stock, shares outstanding | 24,715,473 | 9,000 | 104,789,983 | ||||||||
Stock award activity, shares | 0 | 1,069,081 | |||||||||
Stock award activity, treasury shares reissued | (1,069,081) | ||||||||||
Repurchase of class B shares | (940,417) | ||||||||||
Purchase of treasury stock, shares | 940,417 | ||||||||||
Retirement of treasury stock, shares | (20,000,000) | ||||||||||
Balance at Dec. 31, 2013 | $ 566,344 | $ 295,958 | $ 1,022,608 | $ (751,239) | $ (1,208) | $ 566,119 | $ 225 | $ 15,517 | |||
Net income | 149,213 | 149,236 | 149,236 | (23) | 609 | ||||||
Other comprehensive income (loss), net of tax | (454) | (454) | (454) | 0 | |||||||
Subscriptions – redeemable noncontrolling interest holders | 0 | 12,129 | |||||||||
Consolidation/(deconsolidation) | 0 | 0 | (12,200) | ||||||||
Stock award activity | 26,308 | 24,262 | (23,548) | 25,594 | 26,308 | ||||||
Dividends declared | (104,834) | (104,834) | (104,834) | ||||||||
Distributions to noncontrolling interest in subsidiaries | (44) | (44) | (12,358) | ||||||||
Purchase of treasury stock | (26,881) | (26,881) | (26,881) | ||||||||
Retirement of treasury stock | 0 | (49,200) | (538,068) | 587,268 | 0 | ||||||
Balance at Dec. 31, 2014 | 609,652 | 271,020 | 505,394 | (165,258) | (1,662) | 609,494 | 158 | 3,697 | |||
Common stock, shares outstanding | 4,586,809 | 9,000 | 104,918,647 | ||||||||
Stock award activity, shares | 0 | 871,837 | |||||||||
Stock award activity, treasury shares reissued | (871,837) | ||||||||||
Repurchase of class B shares | (1,696,457) | ||||||||||
Purchase of treasury stock, shares | 1,696,457 | ||||||||||
Net income | 173,249 | 169,807 | 169,807 | 3,442 | (1,263) | ||||||
Other comprehensive income (loss), net of tax | (2,947) | (2,947) | (2,947) | 0 | |||||||
Subscriptions – redeemable noncontrolling interest holders | 0 | 16,409 | |||||||||
Consolidation/(deconsolidation) | 0 | 0 | (6,867) | ||||||||
Stock award activity | 29,111 | 27,559 | (24,810) | 26,362 | 29,111 | ||||||
Dividends declared | (104,606) | (104,606) | (104,606) | ||||||||
Distributions to noncontrolling interest in subsidiaries | (2,444) | (2,444) | (3,242) | ||||||||
Purchase of treasury stock | (53,043) | (53,043) | (53,043) | ||||||||
Balance at Dec. 31, 2015 | 648,972 | 298,579 | 545,785 | (191,939) | (4,609) | 647,816 | 1,156 | 8,734 | |||
Common stock, shares outstanding | 5,411,429 | 9,000 | 104,094,027 | ||||||||
Adoption of new accounting pronouncements | Adjustments for New Accounting Pronouncement [Member] | 43 | 123 | (911) | 831 | 43 | 14,850 | |||||
Stock award activity, shares | 0 | 948,860 | |||||||||
Stock award activity, treasury shares reissued | (948,860) | ||||||||||
Repurchase of class B shares | (3,053,204) | ||||||||||
Purchase of treasury stock, shares | 3,053,204 | ||||||||||
Net income | 218,312 | 208,919 | 208,919 | 9,393 | 3,202 | ||||||
Other comprehensive income (loss), net of tax | 3,255 | 3,255 | 3,255 | (13) | |||||||
Subscriptions – redeemable noncontrolling interest holders | 0 | 17,868 | |||||||||
Consolidation/(deconsolidation) | 0 | 0 | (4,579) | ||||||||
Stock award activity | 23,715 | 22,280 | (18,715) | 20,150 | 23,715 | ||||||
Dividends declared | (205,329) | (205,329) | (205,329) | ||||||||
Distributions to noncontrolling interest in subsidiaries | (9,591) | (9,591) | (8,700) | ||||||||
Purchase of treasury stock | (83,593) | (83,593) | (83,593) | ||||||||
Balance at Dec. 31, 2016 | $ 595,784 | $ 320,982 | $ 529,749 | $ (255,382) | $ (523) | $ 594,826 | $ 958 | $ 31,362 | |||
Common stock, shares outstanding | 7,515,773 | 9,000 | 101,989,683 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Activities | |||
Net income including the noncontrolling interests in subsidiaries | $ 221,514 | $ 171,986 | $ 149,822 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities | |||
Amortization of deferred sales commissions | 11,980 | 15,054 | 12,699 |
Depreciation and other amortization | 9,578 | 9,535 | 10,704 |
Share-based compensation expense | 22,445 | 22,685 | 21,711 |
Loss (gain) on disposal of assets | 1,070 | 3,413 | (6,514) |
Provision for deferred income taxes | 17,496 | 19,263 | 21,614 |
Fair-value adjustments for contingent liabilities | 320 | 415 | (1,589) |
Impairment of assets | 1,637 | 1,342 | 0 |
Net purchases of trading securities | (8,099) | (11,388) | (2,580) |
Consolidation/deconsolidation of investment companies | (176) | 213 | (6,777) |
Adoption of new accounting pronouncement | (2,653) | 0 | 0 |
Deferred sales commissions paid | (11,801) | (13,898) | (17,316) |
Contingent deferred sales charges received | 2,195 | 2,350 | 1,792 |
Other changes in assets and liabilities: | |||
(Increase) decrease in receivables, net | (11,120) | (5,505) | 1,821 |
(Increase) decrease in prepaid expenses and other assets | (5,126) | 4,471 | 136 |
Increase in accounts payable and accrued expenses | 6,001 | 5,451 | 709 |
(Decrease) increase in other liabilities | (2,490) | 7,797 | 6,250 |
Net cash provided by operating activities | 252,771 | 233,184 | 192,482 |
Investing Activities | |||
Purchases of securities available for sale | (3,345) | (5,461) | (84,988) |
Cash paid for business acquisitions | 0 | 0 | (9,697) |
Proceeds from redemptions of securities available for sale | 7,990 | 5,756 | 87,117 |
Cash paid for property and equipment | (12,839) | (6,026) | (8,850) |
Net cash used by investing activities | (8,194) | (5,731) | (16,418) |
Financing Activities | |||
Dividends paid | (205,468) | (104,628) | (104,840) |
Purchases of treasury stock | (81,771) | (53,868) | (27,239) |
Distributions to noncontrolling interests in subsidiaries | (18,291) | (5,686) | (12,402) |
Contributions from noncontrolling interests in subsidiaries | 17,868 | 16,409 | 12,129 |
Cash paid for business acquisitions | (640) | (2,015) | (2,991) |
Proceeds from shareholders for share-based compensation | 1,436 | 1,552 | 2,046 |
Excess tax benefits from share-based compensation | 0 | 3,644 | 2,666 |
Payments on debt | (25,500) | (25,500) | (34,000) |
Other financing activities | 0 | 0 | (609) |
Net cash used by financing activities | (312,366) | (170,092) | (165,240) |
Net (decrease) increase in cash and cash equivalents | (67,789) | 57,361 | 10,824 |
Cash and cash equivalents, beginning of year | 172,628 | 115,267 | 104,443 |
Cash and cash equivalents, end of year | 104,839 | 172,628 | 115,267 |
Supplemental Disclosure of Cash Flow Information, Cash paid during the year for: | |||
Income taxes | 104,581 | 77,247 | 66,733 |
Interest | $ 3,487 | $ 3,985 | $ 8,758 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Summary of Significant Accounting Policies (a) Nature of Operations Federated provides investment advisory, administrative, distribution and other services primarily to the Federated Funds and Separate Accounts in both domestic and international markets. For presentation purposes in the Consolidated Financial Statements, the Federated Funds are considered to be affiliates of Federated. The majority of Federated's revenue is derived from investment advisory services provided to the Federated Funds and Separate Accounts through various subsidiaries pursuant to investment advisory contracts. These subsidiaries are registered as investment advisors under the Advisers Act or operate in similar capacities under applicable jurisdictional law. U.S.-domiciled Federated Funds are generally distributed by a wholly owned subsidiary registered as a broker/dealer under the 1934 Act and under applicable state laws. Non-U.S.-domiciled Federated Funds are generally distributed by wholly owned subsidiaries and a third-party distribution firm which are registered under applicable jurisdictional law. Federated's investment products are distributed within the wealth management and trust, broker/dealer, institutional and international markets. (b) Basis of Presentation The Consolidated Financial Statements have been prepared in accordance with U.S. GAAP. 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. (c) Reclassification of Prior Period Financial Statements Certain items previously reported have been reclassified to conform to the current year's presentation. (d) Principles of Consolidation Federated performs an analysis for each Federated Fund or other entity in which Federated holds a financial interest to determine if it is a VIE or voting rights entities (VRE). Factors considered in this analysis include, but are not limited to, whether (1) it is a legal entity, (2) a scope exception applies, (3) a variable interest exists and (4) shareholders have the power to direct the activities that most significantly impact the economic performance, as well as the equity ownership, and any related party or de facto agent implications of Federated's involvement with the entity. Entities that are determined to be VIEs are consolidated if Federated is deemed to be the primary beneficiary. Entities that are determined to be VREs are generally consolidated if Federated holds the majority voting interest. Federated's conclusion to consolidate a Federated Fund may vary from period to period, most commonly as a result of changes in its percentage interest in the entity. To the extent Federated's interest in a consolidated entity represents less than 100% of the entity's equity, Federated recognizes noncontrolling interests in subsidiaries. In the case of consolidated Federated Funds , the noncontrolling interests represent equity which is redeemable or convertible for cash at the option of the equity holder. As such, these noncontrolling interests are deemed to represent temporary equity and are classified as Redeemable noncontrolling interest in subsidiaries in the mezzanine section of the Consolidated Balance Sheets. All other noncontrolling interests in subsidiaries are classified as permanent equity in the Consolidated Balance Sheets. All intercompany accounts and transactions have been eliminated. Consolidation of Variable Interest Entities Prior to the adoption of ASU 2015-02, Federated considered either a qualitative or quantitative model for identifying whether its interest in a VIE was a controlling financial interest. Considerations of the qualitative model included whether Federated had (1) the ability to direct significant activities of the VIE and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. For the quantitative model, Federated evaluated the extent of its participation in the economic risks and rewards of the entity. In cases where the results indicated that Federated's interest in such an entity absorbed the majority of the variability in the entity's net assets, Federated was deemed to be the primary beneficiary and thus consolidated the entity. Following the adoption of ASU 2015-02, Federated has a controlling financial interest in a VIE and is, therefore, deemed to be the primary beneficiary of a VIE if it has (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Consolidation of Voting Rights Entities Federated has a controlling financial interest in a VRE if it can exert control over the financial and operating policies of the VRE, which generally occurs when Federated holds the majority voting interest (i.e., greater than 50% of the voting equity interest). (e) Business Combinations Business combinations are accounted for under the acquisition method of accounting. Results of operations of an acquired business are included from the date of acquisition. Management estimates the fair value of the acquired assets, including identifiable intangible assets, and assumed liabilities based on their estimated fair values as of the date of acquisition. Goodwill on the Consolidated Balance Sheets represents the cost of a business acquisition in excess of the fair value of the acquired net assets. The fair value of contingent consideration is recorded as a liability in Other current liabilities and Other long-term liabilities on the Consolidated Balance Sheets as of the acquisition date. This liability is re-measured at fair value each quarter end with changes in fair value recognized in Operating Expenses – Other on the Consolidated Statements of Income. (f) Cash and Cash Equivalents Cash and cash equivalents consist of investments in money market funds and deposits with banks. Cash equivalents are highly liquid investments that are readily convertible to cash with original maturities of 90 days or less at the date of acquisition. (g) Investments Federated's investments are categorized as Investments—affiliates , Investments—consolidated investment companies or Investments—other on the Consolidated Balance Sheets. Investments—affiliates represent Federated's available-for-sale investments in fluctuating-value Federated Funds . These investments are carried at fair value with unrealized gains or losses on these securities included in Accumulated other comprehensive loss, net of tax on the Consolidated Balance Sheets. Realized gains and losses on these securities are computed on a specific-identification basis and recognized in Gain (loss) on securities, net on the Consolidated Statements of Income. Investments—consolidated investment companies represent trading securities held by Federated as a result of consolidating certain Federated Funds . Investments—other represent other trading investments held in Separate Accounts for which Federated owns the underlying securities. Trading securities are carried at fair value with changes in fair value recognized in Gain (loss) on securities, net on the Consolidated Statements of Income. See Note (6) for additional information regarding investments held as of December 31, 2016 and 2015 . The fair value of Federated's investments is generally based on quoted market prices in active markets for identical instruments. If quoted market prices are not available, fair value is generally based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. In the absence of observable market data inputs and/or value drivers, internally generated valuation techniques may be utilized in which one or more significant inputs or significant value drivers are unobservable in the market place. See Note (5) for additional information regarding the fair value of investments held as of December 31, 2016 and 2015 . On a periodic basis, management evaluates the carrying value of investments for impairment. With respect to its investments in fluctuating-value Federated Funds , management considers various criteria, including the duration and extent of a decline in fair value, the ability and intent of management to retain the investment for a period of time sufficient to allow the value to recover and the financial condition and near-term prospects of the fund and the underlying investments of the fund, to determine whether a decline in fair value is other than temporary. If, after considering these criteria, management believes that a decline is other than temporary, the carrying value of the security is written down to fair value through the Consolidated Statements of Income. There were no impairments to investments recognized during the year ended December 31, 2014 . See Note (6) for information regarding impairments recognized during the years ended December 31, 2016 and 2015 . (h) Derivatives and Hedging Instruments From time to time, Federated may consolidate an investment product that holds freestanding derivative financial instruments for trading purposes. Federated reports such derivative instruments at fair value and records the changes in fair value in Gain (loss) on securities, net on the Consolidated Statements of Income. From time to time, Federated may also enter into and designate as accounting hedges derivative financial instruments to hedge interest-rate exposures with respect to variable-rate loan facilities (cash flow hedges) or to hedge foreign-currency exchange risk with respect to non-U.S. dollar trading investments in consolidated Federated Funds (net investment hedges). To qualify for hedge accounting, the derivative must be deemed to be highly effective in offsetting the designated changes in the hedged item. For cash flow hedges and net investment hedges, the effective portions of the change in the fair value of the derivative are reported as a component of Accumulated other comprehensive loss, net of tax on the Consolidated Balance Sheets and subsequently reclassified to earnings in the period or periods during which the hedged item affects earnings. The change in fair value of the ineffective portion of the derivative, if any, is recognized immediately in earnings. If it is determined that the derivative instrument is not highly effective, hedge accounting is discontinued. If hedge accounting is discontinued because it is no longer probable that a forecasted transaction will occur, the derivative will continue to be recorded on the Consolidated Balance Sheets at its fair value with changes in fair value included in current earnings, and any existing gains and losses included in Accumulated other comprehensive loss, net of tax would be recognized immediately into earnings. If hedge accounting is discontinued because the hedging instrument is sold, terminated or no longer designated, the amount reported in Accumulated other comprehensive loss, net of tax up to the date of sale, termination or de-designation continues to be reported in Accumulated other comprehensive loss, net of tax until the forecasted transaction or the hedged item affects earnings. Federated did not hold any net investment hedges at December 31, 2016 or 2015 . (i) Property and Equipment Property and equipment are initially recorded at cost and are depreciated using the straight-line method over their estimated useful lives ranging from 1 to 12 years . Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or their respective lease terms. Depreciation and amortization expense is recorded in Office and occupancy on the Consolidated Statements of Income. As property and equipment are taken out of service, the cost and related accumulated depreciation and amortization are removed. During 2016 and 2015 , $1.4 million and $10.4 million , respectively, of fully depreciated assets were taken out of service. The write-off of any residual net book value is reflected as a loss in Operating Expenses – Other on the Consolidated Statements of Income. Management reviews the remaining useful lives and carrying values of property and equipment to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include a decrease in the market price of the asset, an accumulation of costs significantly in excess of the amount originally expected in the acquisition or development of the asset, historical and projected cash flows associated with the asset and an expectation that the asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Should there be an indication of a change in the useful life or an impairment in value, Federated compares the carrying value of the asset to the probability-weighted undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether an impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to fair value which is determined based on prices of similar assets if available or discounted cash flows. Impairment adjustments are recognized in Operating Expenses – Other on the Consolidated Statements of Income. There were no impairment adjustments recognized during the years ended December 31, 2016 , 2015 and 2014 . (j) Costs of Computer Software Developed or Obtained for Internal Use Certain internal and external costs incurred in connection with developing or obtaining software for internal use, including software licenses in a cloud computing arrangement, are capitalized in accordance with the applicable accounting guidance relating to Intangibles - Goodwill and Other - Internal-Use Software. These capitalized costs are included in Property and equipment, net on the Consolidated Balance Sheets and are amortized using the straight-line method over the shorter of the estimated useful life of the software or four years . These assets are subject to the impairment test used for other categories of property and equipment described above. (k) Intangible Assets, including Goodwill Intangible assets, consisting primarily of goodwill and renewable investment advisory contracts acquired in connection with various acquisitions, are recorded at fair value determined using a discounted cash flow model as of the date of acquisition. The discounted cash flow model considers various factors to project future cash flows expected to be generated from the asset. Given the investment advisory nature of Federated's business and of the businesses acquired over the years, these factors typically include: (1) an estimated rate of change for underlying managed assets; (2) expected revenue per managed asset; (3) incremental operating expenses; and (4) a discount rate. Management estimates a rate of change for underlying managed assets based on a combination of an estimated rate of market appreciation or depreciation and an estimated net redemption or sales rate. Expected revenue per managed asset and incremental operating expenses of the acquired asset are generally based on contract terms, average market participant data and historical experience. The discount rate is estimated at the current market rate of return. After the fair value of all separately identifiable assets has been estimated, goodwill is recorded to the extent the consideration paid for the acquisition exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. Federated tests goodwill for impairment at least annually or when indicators of potential impairment exist. Goodwill is evaluated at the reporting unit level. Federated has determined that it has a single reporting unit consistent with its single operating segment based on the management of Federated's operations as a single business: investment management. Federated does not have multiple operating segments or business components for which discrete financial information is available. Federated uses a qualitative approach to test for potential impairment of goodwill. If, after considering various factors, management determines that it is more likely than not that goodwill is impaired, a two-step process to test for and measure impairment is performed which begins with an estimation of the fair value of its reporting unit by considering Federated's market capitalization. If Federated's market capitalization falls to a level below its recorded book value of equity, Federated's goodwill would be considered for possible impairment. There were no impairments to goodwill recognized during the years ended December 31, 2016 , 2015 or 2014 . Federated has determined that certain acquired assets, primarily, certain renewable investment advisory contracts, have indefinite useful lives. In reaching this conclusion, management considered the legal, regulatory and contractual provisions of the investment advisory contract that enable the renewal of the contract, the level of cost and effort required in renewing the investment advisory contract, and the effects of obsolescence, demand, competition and other economic factors that could impact the funds' projected performance and existence. The contracts generally renew annually and the value of these acquired assets assumes renewal. There were no impairments to indefinite-lived intangible assets recognized during the years ended December 31, 2016 , 2015 or 2014 . See Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations under the caption Critical Accounting Policies for additional information on the: (1) valuation in connection with the initial purchase price allocation; (2) ongoing evaluation for impairment; and (3) reconsideration of an asset's useful life . Federated generally amortizes finite-lived identifiable intangible assets on a straight-line basis over their estimated useful lives. Management periodically evaluates the remaining useful lives and carrying values of the intangible assets to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of a potential impairment monitored by management include a significant decline in the level of managed assets, changes to contractual provisions underlying certain intangible assets and significant reductions in underlying operating cash flows. Should there be an indication of a change in the useful life or impairment in value of the finite-lived intangible assets, Federated compares the carrying value of the asset to the projected undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to its fair value determined using discounted cash flows. Federated writes-off the cost and accumulated amortization balances for all fully amortized intangible assets. There were no impairments to finite-lived intangible assets recognized during the years ended December 31, 2016 , 2015 or 2014 . (l) Deferred Sales Commissions Federated pays upfront commissions to broker/dealers to promote the sale of certain fund shares. Under various fund-related contracts, Federated is entitled to distribution and servicing fees from the fund over the life of such shares. Both of these fees are calculated as a percentage of average managed assets associated with the related classes of shares. For certain share classes, Federated is also entitled to receive a contingent deferred sales charge (CDSC), which is collected from certain redeeming shareholders. For share classes that pay both a distribution fee and CDSC, Federated generally capitalizes a portion of the upfront commissions as deferred sales commissions, dependent upon expected recoverability rates. The deferred sales commission asset (included in Other long-term assets on the Consolidated Balance Sheets) is amortized over the estimated period of benefit of up to eight years . Deferred sales commission amortization expense was $12.0 million , $15.1 million and $12.7 million for 2016 , 2015 and 2014 , respectively, and was included in Distribution expense on the Consolidated Statements of Income. Distribution and shareholder service fees are recognized in Other service fees, net—affiliates on the Consolidated Statements of Income over the life of the fund share class. CDSCs collected on these share classes are used to reduce the deferred sales commission asset. Federated reviews the carrying value of deferred sales commission assets on a periodic basis to determine whether a significant long-term decline in the equity or bond markets or other events or circumstances indicate that an impairment in value may have occurred. Should there be an indication of an impairment in value, Federated compares the carrying value of the asset to the probability-weighted undiscounted future cash flows of the underlying asset to determine whether an impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the deferred sales commission asset is written down to its estimated fair value determined using discounted cash flows. There were no impairments to the deferred sales commission asset during the years ended December 31, 2016 , 2015 or 2014 . For share classes that do not pay both a distribution fee and CDSC, Federated expenses the cost of the upfront commission as incurred in Distribution expense on the Consolidated Statements of Income and credits Distribution expense for any CDSCs collected. (m) Foreign Currency Translation The balance sheets of certain wholly owned foreign subsidiaries of Federated, certain consolidated foreign-denominated investment products and all other foreign-denominated cash or investment balances are translated at the current exchange rate as of the end of the reporting period and the related income or loss is translated at the average exchange rate in effect during the period. Net exchange gains and losses resulting from these translations are excluded from income and are recorded in Accumulated other comprehensive loss, net of tax on the Consolidated Balance Sheets. Foreign currency transaction gains and losses are reflected in Operating Expenses – Other on the Consolidated Statements of Income. (n) Treasury Stock Federated accounts for acquisitions of treasury stock at cost and reports total treasury stock held as a deduction from Federated Investors, Inc. shareholders' equity on the Consolidated Balance Sheets. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a specific-identification basis. Additional paid-in capital from treasury stock transactions is increased as Federated reissues treasury stock for more than the cost of the shares. If Federated issues treasury stock for less than its cost, Additional paid-in capital from treasury stock transactions is reduced to no less than zero and any further required reductions are recorded to Retained earnings on the Consolidated Balance Sheets. (o) Revenue Recognition Revenue from providing investment advisory, administrative and other services (including distribution and shareholder servicing) is recognized during the period in which the services are performed. Investment advisory, administrative and the majority of other service fees are generally calculated as a percentage of total net assets of the investment portfolios that are managed by Federated. The fair value of the investment portfolios is primarily determined using quoted market prices or independent third-party pricing services and broker/dealer price quotes. In limited circumstances, a quotation or price evaluation is not readily available from a pricing source. In these cases, pricing is determined by management based on a prescribed valuation process that has been approved by the directors/trustees of the sponsored pro ducts. For the periods presented, a de minimis amount of AUM were priced in this manner by Federated management. For Separate Accounts that are not registered investment companies under the 1940 Act, the fair value of portfolio investments is primarily determined as specified in applicable customer agreements, including in agreements between the customer and the customer's third-party custodian. Federated may waive certain fees for competitive reasons, such as to maintain positive or zero net yields on certain money market funds, to meet regulatory requirements or to meet contractual requirements. Federated wa ived fees of $413.7 million , $662.7 million and $764.3 million for the years ended December 31, 2016 , 2015 and 2014 , respectively, nearly all of which was for competitive reasons. The decrease for the year ended December 31, 2016 as compared to 2015 was primarily due to a $245.8 million decrease in Voluntary Yield-related Fee Waivers and a $5.2 million decrease in other competitive waivers. Fee waivers may increase as a result of continued Voluntary Yield-related Fee Waivers and for other competitive reasons. Voluntary Yield-related Fee Waivers are partially offset by a related reduction to distribution expense and net income attributable to noncontrolling interests (see Note (3) for additional information on the net impact of these waivers). Federated has contractual arrangements with third parties to provide certain fund-related services. Management considers various factors to determine whether Federated's revenue should be recorded based on the gross amount payable by the funds or net of payments to third-party service providers. Management's analysis is based on whether Federated is acting as the principal service provider or as an agent. The primary factors considered include: (1) whether the customer holds Federated or the service provider responsible for the fulfillment and acceptability of the services to be provided; (2) whether Federated has any practical latitude in negotiating the price to pay a third-party provider; (3) whether Federated or the customer selects the ultimate service provider; and (4) whether Federated has credit risk in the arrangement. Generally, the less the customer is directly involved with or participates in making decisions regarding the ultimate third-party service provider, the more supportive the facts are that Federated is acting as the principal in these transactions and should therefore report gross revenues. As a result of considering these factors, investment advisory fees, distribution fees and certain other service fees are recorded gross of payments made to third parties. (p) Share-Based Compensation Federated issues shares for share-based awards from treasury stock. Federated recognizes compensation costs based on grant-date fair value for all share-based awards. For restricted stock awards, the grant-date fair value of the award is calculated as the difference between the closing fair value of Federated's Class B common stock on the date of grant and the purchase price paid by the employee, if any. Federated's awards are generally subject to graded vesting schedules. Compensation and related expense is recognized on a straight-line or modified straight-line basis over the requisite service period of the award and is adjusted for actual forfeitures as they occur. For awards with provisions that allow for accelerated vesting upon retirement, Federated recognizes expense over the shorter of the vesting period or the period between grant date and the date on which the employee meets the minimum required age for retirement. Compensation and related expense also includes dividends paid on forfeited awards. Excess tax benefits and deficiencies (including tax benefits from dividends paid on unvested restricted stock awards) are now recognized in the Income tax provision in the Consolidated Statements of Income, as a result of the adoption of ASU 2016-09 (see Note (2) ). (q) Leases Federated classifies leases as operating in accordance with the provisions of lease accounting. Rent expense under noncancelable operating leases with scheduled rent increases or rent holidays is accounted for on a straight-line basis over the lease term, beginning on the date of initial possession or the effective date of the lease agreement. The amount of the excess of straight-line rent expense over scheduled payments is recorded as a deferred liability. The liability is then amortized when scheduled payments are in excess of the straight-line rent expense. Build-out allowances and other such lease incentives are recorded as deferred credits, and are amortized on a straight-line basis as a reduction of rent expense beginning in the period they are deemed to be earned, which generally coincides with the effective date of the lease. The current portion of unamortized deferred lease costs and build-out allowances is included in Other current liabilities and the long-term portion is included in Other long-term liabilities on the Consolidated Balance Sheets. (r) Advertising Costs Federated generally expenses the cost of all advertising and promotional activities as incurred. Certain printed matter, however, such as sales brochures, are accounted for as prepaid supplies and are included in Other current assets on the Consolidated Balance Sheets until they are distributed or are no longer expected to be used, at which time their costs are expensed. Federated expensed advertising costs of $2.7 million , $2.6 million and $2.2 million in 2016 , 2015 and 2014 , respectively, which were included in Advertising and promotional expense on the Consolidated Statements of Income. (s) Income Taxes Federated accounts for income taxes under the liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Federated recognizes a valuation allowance if, based on the weight of available evidence regarding future taxable income, it is more likely than not that some portion or all of the deferred tax assets will not be realized. (t) Earnings Per Share Basic and diluted earnings per share are calculated under the two-class method. Pursuant to the two-class method, Federated's unvested restricted stock awards with nonforfeitable rights to dividends are considered participating securities and are required to be considered in the computation of earnings per share. Unvested restricted shares, as well as the related dividends paid and their proportionate share of undistributed earnings, if any, are excluded from the computation of earnings per share attributable to Federated Investors, Inc. (u) Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, net of tax is reported in the Consolidated Balance Sheets and the Consolidated Statements of Changes in Equity and includes unrealized gains and losses on securities available for sale, foreign currency translation adjustments and the unrealized gain or loss on the effective portion of derivative instruments designated and qualifying as a cash flow or net investment hedge. (v) Loss Contingencies Federated accrues for estimated costs, including legal costs related to existing lawsuits, claims and proceedings, if any, when it is probable that a loss has been incurred and the costs can be reasonably estimated. Accruals are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information pertinent to a particular matter. Significant differences could exist between the actual cost required to investigate, litigate and/or settle a claim or the ultimate outcome of a lawsuit, claim or proceeding and managem |
Recent Accounting Pronouncement
Recent Accounting Pronouncements Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Recently Adopted Accounting Guidance (a) Consolidation On February 18, 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which affects reporting organizations' evaluation of whether they should consolidate certain legal entities. This includes a scope exception for reporting entities with an interest in legal entities that are required to comply with or operate in accordance with the requirements similar to those in Rule 2a-7 for registered money market funds. Effective January 1, 2016, Federated adopted ASU 2015-02 using the modified retrospective transition method, which did not require the restatement of prior years. In connection with the adoption of ASU 2015-02, Federated reevaluated all of the Federated Funds . As a result, certain Federated Funds previously accounted for as VIEs now meet the characteristics of VREs. The adoption of ASU 2015-02 resulted in the consolidation of one Federated Fund that was not previously consolidated. Upon adoption, this entity was deemed to be a VIE and Federated was deemed to be the primary beneficiary. As a result of this consolidation, Federated recorded $29.4 million in assets, of which $11.5 million was included in Investments—affiliates at December 31, 2015, $0.2 million in liabilities and $17.7 million in Redeemable noncontrolling interest in subsidiaries . Federated also reclassified $0.8 million of unrealized losses from Accumulated other comprehensive loss, net of tax to Retained earnings . The adoption of ASU 2015-02 also resulted in the deconsolidation of one Federated Fund that was previously consolidated. Upon adoption, Federated was no longer deemed to be the primary beneficiary of this VIE. As a result, Federated deconsolidated $5.5 million in assets, $2.7 million in liabilities and $2.8 million in Redeemable noncontrolling interest in subsidiaries . There was no impact to the Consolidated Statements of Income upon adoption of ASU 2015-02. (b) Accounting for Fees Paid in a Cloud Computing Arrangement On January 1, 2016, Federated adopted ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. This update provides guidance about whether a cloud computing arrangement includes a software license. Management elected the prospective transition method and the adoption did not have a material impact on Federated's Consolidated Financial Statements. (c) Disclosure of Investments in Certain Entities that Calculate Net Asset Value per Share On January 1, 2016, Federated adopted ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This update modifies certain disclosure requirements and requires that all investments for which fair value is measured using the NAV practical expedient be excluded from the fair value hierarchy. The ASU required the retrospective adoption approach, which required the restatement of the prior period fair value hierarchy table. As a result, $31.8 million of investments were recategorized into the NAV practical expedient column and are no longer included in Level 2 as of December 31, 2015 (see Note (5) ). The adoption did not have a material impact on Federated's Consolidated Financial Statements. (d) Share-based Compensation During the second quarter 2016, Federated adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, effective January 1, 2016. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The adoption of ASU 2016-09 requires that all excess tax benefits and deficiencies (including tax benefits from dividends paid on unvested restricted stock awards) now be recognized in the Income tax provision in the Consolidated Statements of Income. Accordingly, upon adoption, Federated reduced its income tax provision by $0.2 million and $0.4 million for the three and six months ended June 30, 2016, respectively. Subsequent to adoption, Federated reduced its income tax provision by $0.3 million and $2.1 million for the third and fourth quarters of 2016, respectively. The ASU also requires excess tax benefits to be classified as operating activities along with other income tax cash flows within the Consolidated Statements of Cash Flows. These amendments were adopted on a prospective basis, which did not require the restatement of prior years. ASU 2016-09 also allows entities to make an accounting policy election to either estimate the number of forfeitures expected to occur (as was previously required) or to account for actual forfeitures as they occur. Federated has elected to account for forfeitures as they occur. The ASU required the modified retrospective transition method through a cumulative-effect adjustment to retained earnings. Effective January 1, 2016, Federated recorded an adjustment of $0.1 million as a decrease to Retained earnings and an increase to Common stock to reflect this change in accounting policy. |
Recent Accounting Pronouncements | (e) Revenue Recognition On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes virtually all existing revenue recognition guidance under GAAP. The update's core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On July 9, 2015, the FASB approved a one-year deferral of the effective date of the update, and issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, on August 12, 2015. As a result of the deferral, the update is effective for Federated on January 1, 2018. While early adoption is permitted on January 1, 2017, Federated does not plan to early adopt. During 2016, the FASB issued ASU 2016-08, which clarifies principal versus agent considerations, ASU 2016-10, which clarifies identifying performance obligations and the licensing implementation guidance, ASU 2016-12, which addresses implementation issues and provides additional practical expedients and ASU 2016-20, which provides technical corrections to narrow aspects of the guidance (collectively, with ASU 2014-09, Topic 606). Topic 606 allows for the use of either the retrospective or modified retrospective adoption method. Federated's status of implementation has primarily focused on scoping activities, such as identifying the customer and evaluating revenue contracts. Management has preliminarily identified Federated's performance obligations and material revenue streams. Management continues to evaluate the available transition methods and the potential impact of adoption on Federated's Consolidated Financial Statements. (f) Deferred Taxes On November 20, 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. The update is effective for Federated on January 1, 2017. The update allows for the use of either a prospective or retrospective adoption approach. Management has elected the prospective transition method and does not expect this update to have a material impact on Federated's Consolidated Financial Statements. (g) Financial Instruments On January 5, 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The ASU significantly revises an entity's accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The update is effective for Federated on January 1, 2018, and, except for certain provisions, does not permit early adoption. An entity should apply the amendments, with certain exceptions, by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is currently evaluating the potential impact of adoption on Federated's Consolidated Financial Statements. (h) Leases On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases on the balance sheet, but retains a distinction between finance and operating leases. The update is effective for Federated on January 1, 2019, with early adoption permitted. The update requires the modified retrospective adoption approach. Management is currently evaluating the potential impact of adoption on Federated's Consolidated Financial Statements. (i) Clarifying the Definition of a Business On January 5, 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this Update require that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset (or a group of similar identifiable assets), it is not a business. To be considered a business, an acquisition or disposal must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The amendments also narrow the definition of the term "outputs" to be consistent with Topic 606, Revenue from Contracts with Customers. The ASU is effective for Federated on January 1, 2018, with early adoption permitted in specific circumstances, and should be applied prospectively. Management is currently evaluating the potential impact of adoption on Federated's Consolidated Financial Statements. |
Concentration Risk
Concentration Risk | 12 Months Ended |
Dec. 31, 2016 | |
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 over the last three years: 2016 2015 2014 Money market assets 45 % 33 % 32 % Equity assets 38 % 46 % 45 % Fixed-income assets 17 % 21 % 22 % The change in the relative proportion of Federated's revenue attributable to money market assets from 2015 to 2016 was primarily the result of a decrease in Voluntary Yield-related Fee Waivers . The change in the relative proportion of Federated's revenue attributable to equity and fixed-income assets from 2015 to 2016 was primarily the result of the increase in the proportion of revenue from money market assets mentioned above. At any point in time, a meaningful or significant portion of Federated's total AUM or revenue may be attributable to one or more products or strategies, or asset classes, offered by Federated, or one or more clients or customer intermediaries with whom Federated has a relationship. A significant change in Federated's investment management business (such as its money market business, equity business or separately managed account business) or a significant reduction in AUM (such as money market assets, equity assets or separately managed account assets) due to regulatory changes or developments, changes in the financial markets, such as significant and rapid increases in interest rates over a short period of time causing certain investors to prefer direct investments in interest-bearing securities, non-competitive performance, the availability, supply and/or market interest in repurchase agreements and other investments, significant deterioration in investor confidence, a return to declining or additional prolonged periods of low short-term interest rates and resulting fee waivers, investor preferences for deposit products or other FDIC -insured products, or exchange-traded funds, index funds or other passive investment products, changes in product fee structures, changes in relationships with financial intermediaries, or other circumstances, could have a material adverse effect on Federated's business, results of operations, financial condition and/or cash flows. See Item 1 - Business under the caption Regulatory Matters and Item 1A - Risk Factors under the caption Potential Adverse Effects of Changes in Laws, Regulations and Other Rules on Federated's Investment Management Business for information about the current regulatory environment and related risks. Low Short-Term Interest Rates In December 2015, the FOMC increased the federal funds target rate range by 25 basis points to 0.25%-0.50%, slightly raising short-term interest rates. Throughout 2016, the FOMC deferred making increases in this target rate, but in December raised the federal funds target rate range by an additional 25 basis points to 0.50%-0.75%. The federal funds target rate, which drives short-term interest rates, had been close to zero for nearly seven years prior to the December 2015 increase. As a result of the long-term near-zero interest-rate environment, the gross yield earned by certain money market funds is not sufficient to cover all of the fund's operating expenses. Since the fourth quarter of 2008, Federated has experienced Voluntary Yield-related Fee Waivers . 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 Voluntary Yield-related Fee Waivers. These Voluntary Yield-related Fee Waivers are calculated as a percentage of AUM in certain money market funds and thus will vary depending upon the asset levels and mix 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 and changes in expenses of the money market funds. In any given period, a combination of these factors impacts the amount of Voluntary Yield-related Fee Waivers. 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 (or between such funds and other money market funds or other products) as well as the mix 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 Voluntary Yield-related Fee Waivers. 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 years ended December 31: in millions 2016 2015 2014 Revenue $ (87.8 ) $ (333.6 ) $ (410.6 ) Less: Reduction in Distribution expense 65.8 240.6 280.9 Operating income (22.0 ) (93.0 ) (129.7 ) Less: Reduction in Noncontrolling interest 0.0 7.1 10.7 Pre-tax impact $ (22.0 ) $ (85.9 ) $ (119.0 ) The negative pre-tax impact of Voluntary Yield-related Fee Waivers decreased in 2016 as compared to 2015 primarily as a result of higher yields on instruments held by the money market funds. During 2015, the negative pre-tax impact of Voluntary Yield-related Fee Waivers decreased compared to 2014 primarily as a result of higher yields on instruments held by the money market funds, and to a lesser extent, by a decrease in average money market assets. (See Note (19) for information regarding the quarterly pre-tax impact of these fee waivers.) As mentioned above, the FOMC increased the federal funds target rate range by 25 basis points in both December 2016 and 2015. While the FOMC implied in its economic projections that it would continue to raise the federal funds target rate in a measured and gradual way, Federated is unable to predict when, or to what extent, the FOMC will further increase their target for the federal funds rate. As such , Voluntary Yield-related Fee Waivers and the related reduction in distribution expense and net income attributable to noncontrolling interests could continue for the foreseeable future. See Management's Discussion and Analysis under the caption Business Developments - Low Short-Term Interest Rates for additional information on management's expectations regarding fee waivers. A listing of Federated's risk factors is included in Item 1A - Risk Factors . (b) Revenue Concentration by Investment Strategy Approximately 15% , 14% and 13% of Federated's total revenue for 2016 , 2015 and 2014 , respectively, was derived from services provided to a specific strategy, the Federated Strategic Value Dividend strategy, which includes both Federated Funds and Separate Accounts. A significant and prolonged decline in the AUM of this strategy could have a material adverse effect on Federated's future revenues and, to a lesser extent, net income, due to a related reduction in distribution expenses associated with these funds. Approximately 8% , 11% and 12% of Federated's total revenue for 2016 , 2015 and 2014 , respectively, was derived from services provided to the Federated Kaufmann Mid-Cap Growth strategy, which includes two Federated Funds . A significant and prolonged decline in the AUM of this strategy could have a material adverse effect on Federated's future revenues and, to a lesser extent, net income, due to a related reduction in distribution expenses associated with these funds. (c) Revenue Concentration by Customer Approximately 15% , 8% and 6% of Federated's total revenue for 2016 , 2015 and 2014 , respectively, was derived from services provided to one intermediary customer, The Bank of New York Mellon Corporation, including its Pershing subsidiary. Significant negative changes in Federated's relationship with this customer could have a material adverse effect on Federated's future revenues and, to a lesser extent, net income due to a related reduction in distribution expenses associated with this intermediary. |
Consolidation
Consolidation | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure | Consolidation The Consolidated Financial Statements include the accounts of Federated, Federated Funds and other entities in which Federated holds a controlling financial interest. Federated is involved with various entities in the normal course of business that may be deemed to be VREs or VIEs. From time to time, Federated invests in Federated Funds for general corporate investment purposes or, in the case of newly launched products, in order to provide investable cash to establish a performance history. Federated's investment in these Federated Funds represents its maximum exposure to loss. The assets of the consolidated Federated Funds are restricted for use by the respective Federated Funds . Generally, neither creditors of, nor equity investors in, the Federated Funds have any recourse to Federated’s general credit. 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. Receivables from all Federated Funds for advisory and other services totaled $27.1 million and $16.9 million at December 31, 2016 and 2015 , respectively. In the ordinary course of business, Federated may choose to waive certain fees or assume operating expenses of various Federated Funds for competitive, regulatory or contractual reasons. For the year ended December 31, 2016 , Federated waived fees, including Voluntary Yield-related Fee Waivers , totaling $413.7 million , of which $309.6 million related to waivers for money market funds which meet the scope exception of ASU 2015-02. Like other sponsors of investment companies, Federated in the ordinary course of business may make capital contributions to certain money market Federated Funds in connection with the reorganization of such funds into certain affiliated money market Federated Funds or in connection with the liquidation of a fund. In these instances, such capital contributions typically are intended to either cover realized losses or other permanent impairments to a fund's NAV or increase the market-based NAV per share of the investment company's portfolio that is being reorganized to equal the market-based NAV per share of the acquiring fund. There were no material contributions for the year ended December 31, 2016 . Under current money fund regulations and SEC guidance, Federated is required to report these types of capital contributions to the SEC as financial support to the investment company that is being reorganized or liquidated. 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 to consolidate the entity. The disclosures below represent the results of such evaluations pertaining to December 31, 2016 and 2015 . (a) Consolidated Voting Rights Entities Effective January 1, 2016, most of the Federated Funds now meet the definition of a VRE. Federated consolidates certain VREs when it is deemed to have control. As of December 31, 2016 , consolidated VREs included on Federated's Consolidated Balance Sheets included $14.9 million in Investments—consolidated investment companies and $3.1 million in Redeemable noncontrolling interest in subsidiaries . (b) Consolidated Variable Interest Entities As of December 31, 2016 and 2015 , Federated was deemed to be the primary beneficiary of, and therefore consolidated, several Federated Funds as a result of its controlling financial interest. Certain of the VIEs consolidated as of December 31, 2015 were deemed to be VREs upon adoption of ASU 2015-02 and have been excluded from the December 31, 2016 balances in the table below. See the Consolidated Voting Rights Entities section above for information on consolidated VREs as of December 31, 2016 . The following table presents the balances related to the consolidated Federated Fund VIEs that were included on the Consolidated Balance Sheets as well as Federated's net interest in the consolidated Federated Fund VIEs at December 31: in millions 2016 2015 Cash and cash equivalents $ 0.0 $ 3.1 Investments—consolidated investment companies 43.2 25.4 Receivables 0.7 0.2 Less: Liabilities 0.7 3.0 Less: Redeemable noncontrolling interest in subsidiaries 28.3 8.7 Federated's net interest in Federated Fund VIEs $ 14.9 $ 17.0 Federated's net interest in the consolidated Federated Fund VIEs of $14.9 million and $17.0 million at December 31, 2016 and 2015 , respectively, represents the value of Federated's economic ownership interest in these Federated Funds . The liabilities of the consolidated Federated Fund VIEs primarily represent investments sold short and operating liabilities of the entities. The liabilities as of December 31, 2016 and 2015 are primarily classified as Other current liabilities and Accounts payable and accrued expenses , respectively, on Federated’s Consolidated Balance Sheets. In addition to the table above, at December 31, 2016 , Federated had a majority interest ( 50.5% ) and acted as the general partner in Passport Research Ltd. (Passport), a limited partnership. Edward D. Jones & Co., L.P. was the limited partner with a 49.5% interest. The partnership was an investment advisor to one sponsored fund as of December 31, 2016 and was deemed to be a VIE upon adoption of ASU 2015-02. Assets totaling $7.8 million primarily representing Cash and cash equivalents, liabilities totaling $5.9 million primarily representing operating liabilities and $1.0 million included in Nonredeemable noncontrolling interest in subsidiary were included on the Consolidated Balance Sheets as of December 31, 2016 . There was no change to the Consolidated Financial Statements as a result of the adoption of ASU 2015-02 as Passport had been consolidated as a VRE under the previous guidance. Federated transferred its partnership interest in Passport on January 27, 2017. See Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations under the caption Business Developments - Change in Customer Relationship for additional information. Other than those consolidated or deconsolidated upon the adoption of ASU 2015-02 (see Note (2) ), Federated did not newly consolidate any VIEs or deconsolidate any material VIEs during the year ended December 31, 2016 . (c) Non-Consolidated Variable Interest Entities Federated's involvement with certain Federated Funds 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 losses or receive benefits that could potentially be significant to the VIE. Therefore, Federated is not the primary beneficiary of these VIEs and has not consolidated these entities. At December 31, 2016 , Federated’s investment and maximum risk of loss related to non-consolidated VIEs was entirely related to Federated Funds and totaled $2.3 million , which was recorded in Investments—affiliates on the Consolidated Balance Sheets. AUM for these non-consolidated Federated Funds totaled $76.3 million at December 31, 2016 . At December 31, 2015 , Federated’s investment and maximum risk of loss related to non-consolidated VIEs were entirely related to Federated Funds and totaled $301.5 million . Of this amount, $159.7 million represented investments in money market funds included in Cash and cash equivalents . The remaining $141.8 million is primarily recorded in Investments—affiliates on the Consolidated Balance Sheets as of December 31, 2015 . AUM for these non-consolidated Federated Funds totaled $268.0 billion at December 31, 2015 . Upon adoption of ASU 2015-02 effective January 1, 2016, certain of the non-consolidated VIEs included in the balances as of December 31, 2015 were deemed to be VREs or are money market funds which meet the scope exception and have been excluded from the December 31, 2016 balances above. See the Consolidated Voting Rights Entities section above for information on consolidated VREs as of December 31, 2016 . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
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 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 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 markets. NAV practical expedient – Investments that calculate NAV per share (or its equivalent) as a practical expedient. These investments have been excluded from the fair value hierarchy. (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 at December 31: in thousands Level 1 Level 2 Level 3 NAV Practical Expedient 3 Total 2016 Financial Assets Cash and cash equivalents $ 54,725 $ 0 $ 0 $ 50,114 $ 104,839 Available-for-sale equity securities 103,996 0 0 26,789 130,785 Trading securities – equity 13,866 0 0 6,193 20,059 Trading securities – debt 0 45,466 0 0 45,466 Other 1 19 0 840 0 859 Total financial assets $ 172,606 $ 45,466 $ 840 $ 83,096 $ 302,008 Total financial liabilities 2 $ 2 $ 358 $ 1,931 $ 0 $ 2,291 2015 3 Financial Assets Cash and cash equivalents $ 172,628 $ 0 $ 0 $ 0 $ 172,628 Available-for-sale equity securities 117,422 0 0 24,326 141,748 Trading securities – equity 15,900 65 0 7,433 23,398 Trading securities – debt 0 9,041 0 0 9,041 Other 1 4 17 910 0 931 Total financial assets $ 305,954 $ 9,123 $ 910 $ 31,759 $ 347,746 Total financial liabilities 2 $ 2,681 $ 59 $ 2,630 $ 0 $ 5,370 1 Amounts include structured trade finance loans held by Federated as well as futures contracts and/or foreign currency forward contracts held within certain consolidated Federated Funds . 2 Amounts include acquisition-related future consideration liabilities and may include investments sold short, foreign currency forward contracts and/or futures contracts held within certain consolidated Federated Funds , as well as certain liabilities attributable to structured trade finance loans held by Federated. 3 Investments that calculate NAV as a practical expedient were recategorized and are no longer included within Level 2 of the valuation hierarchy as of December 31, 2015 (see Note (2) for additional information). 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 December 31, 2016 or 2015 . 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 $96.7 million and $162.2 million at December 31, 2016 and 2015 , respectively. Cash investments in publicly available 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. For an investment in a money market 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 excluded from the fair value hierarchy. This investment is included in the NAV practical expedient column in the table above. Available-for-sale equity securities Available-for-sale equity securities include investments in fluctuating-value Federated Funds and are included in Investments—affiliates on the Consolidated Balance Sheets. For investments in Federated 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 certain investments in Federated Funds that are not publicly available but for which the NAV is calculated daily and for which there are no redemption restrictions, the securities are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. These investments are included in the NAV practical expedient column in the table above. Trading securities—equity Trading securities - equity primarily represent the equity securities held by consolidated Federated Funds (included in Investments—consolidated investment companies on the Consolidated Balance Sheets) as well as certain equity investments held in Separate Accounts (included in Investments—other on the Consolidated Balance Sheets). For publicly traded equity securities available in an active market, the fair value of these securities is classified as Level 1 when the fair value is based on unadjusted quoted market prices. The fair value of certain equity securities traded principally in foreign markets and held by consolidated Federated Funds are determined by a third party pricing service (Level 2). For certain investments in Federated Funds that are not publicly available but for which the NAV is calculated daily and for which there are no redemption restrictions, the investments are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. These investments are included in the NAV practical expedient column in the table above. Trading securities—debt Trading securities - debt primarily represent domestic bonds held by consolidated Federated Funds . 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). (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 December 31, 2016 . (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. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments on the Consolidated Balance Sheets as of December 31, 2016 and 2015 included available-for-sale and trading securities. At December 31, 2016 and 2015 , Federated held investments totaling $130.8 million and $141.7 million , respectively, in fluctuating-value Federated Funds that were classified as available-for-sale securities and were included in Investments—affiliates on the Consolidated Balance Sheets. The decrease in Investments—affiliates primarily related to a newly consolidated VIE as a result of the adoption of ASU 2015-02 and is now recorded in Investments—consolidated investment companies . See Note (2) for additional information. Available-for-sale securities were as follows at December 31: 2016 2015 Gross Unrealized Estimated Fair Value Gross Unrealized Estimated Fair Value in thousands Cost Gains (Losses) Cost Gains (Losses) Equity funds $ 23,883 $ 2,112 $ (266 ) $ 25,729 $ 32,357 $ 342 $ (2,416 ) $ 30,283 Fixed-income funds 105,514 92 (550 ) 105,056 115,396 109 (4,040 ) 111,465 Total available-for-sale securities $ 129,397 $ 2,204 $ (816 ) $ 130,785 $ 147,753 $ 451 $ (6,456 ) $ 141,748 During 2016 and 2015, the unrealized losses on certain investments were deemed to be other-than-temporarily impaired. As a result, Federated recorded $1.6 million and $1.3 million to Gain (loss) on securities, net to write down the carrying values of the investments for 2016 and 2015, respectively. As of December 31, 2015 , unrealized losses of $6.5 million related to investments with a fair value of $124.0 million . Of these, investments with a fair value of $92.6 million with unrealized losses of $5.5 million have been in a continuous unrealized loss position for 12 months or longer. The remaining investments with a fair value of $31.4 million with unrealized losses of $1.0 million have been in a continuous unrealized loss position for less than 12 months. Federated's trading securities totaled $65.5 million and $32.4 million at December 31, 2016 and 2015 , respectively. The increase in trading securities primarily related to the aforementioned newly consolidated VIE which was previously recorded in Investments—affiliates on the Consolidated Balance Sheets. See Note (2) for additional information. Federated consolidates certain Federated Funds into its Consolidated Financial Statements as a result of Federated's controlling financial interest in the Federated Fund (see Note (4) ). All investments held by these Federated Funds were included in Investments—consolidated investment companies on Federated's Consolidated Balance Sheets. Investments—other on the Consolidated Balance Sheets represented other trading investments held in Separate Accounts. Federated's trading securities as of December 31, 2016 and 2015 , were primarily composed of domestic debt securities ( $45.5 million and $9.0 million , respectively), investments in Federated Funds ( $8.9 million and $11.0 million , respectively) and stocks of large U.S. and international companies ( $7.2 million and $10.5 million , respectively). The following table presents gains and losses recognized in Gain (loss) on securities, net on the Consolidated Statements of Income in connection with Federated's investments as well as economic derivatives held by certain consolidated Federated Funds for the years ended December 31: in thousands 2016 2015 2014 Unrealized gain (loss) Trading securities $ 4,971 $ (1,359 ) $ (2,578 ) Derivatives 1 (348 ) 119 (147 ) Realized gains 2 Available-for-sale securities 298 1,503 5,359 Trading securities 1,663 910 4,514 Derivatives 1 1,032 301 214 Realized losses 2 Available-for-sale securities 3 (1,647 ) (2,348 ) (91 ) Trading securities (2,252 ) (2,760 ) (1,848 ) Derivatives 1 (1,609 ) (1,630 ) (451 ) Gain (loss) on securities, net 4 $ 2,108 $ (5,264 ) $ 4,972 1 Amounts related to the settlement of economic derivatives held by certain consolidated Federated Funds . 2 Realized gains and losses are computed on a specific-identification basis. 3 The losses for the years ended December 31, 2016 and 2015 include impairments of certain available-for-sale securities. 4 Amounts related to consolidated entities, primarily Federated Funds , totaled $2.9 million , $(4.0) million and $(0.6) million for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure | Intangible Assets, including Goodwill (a) Goodwill Federated's goodwill totaled $659.2 million and $659.3 million as of December 31, 2016 and December 31, 2015 , respectively. (b) Indefinite-lived intangible assets Indefinite-lived intangible assets include Renewable investment advisory contracts ( $70.4 million and $70.6 million at December 31, 2016 and December 31, 2015 , respectively) and Trade names ( $1.9 million at both December 31, 2016 and December 31, 2015 ). (c) Finite-lived intangible assets Finite-lived intangible assets represented customer relationships and consisted of the following at December 31: in thousands 2016 2015 Cost $ 6,300 $ 23,811 Accumulated amortization (4,630 ) (21,116 ) Carrying value $ 1,670 $ 2,695 The decrease of $17.5 million in the cost of the total finite-lived intangible assets at December 31, 2016 as compared to December 31, 2015 primarily relates to the write-off of fully amortized customer relationship intangible assets relating to prior year acquisitions. Amortization expense for finite-lived intangible assets was $1.0 million , $1.4 million and $2.0 million in 2016 , 2015 and 2014 , respectively. This expense was included in Operating Expenses – Other on the Consolidated Statements of Income for each period. Expected aggregate annual amortization expense over the remaining useful life of the finite-lived intangible assets for 2017 , 2018 , and 2019 is $0.6 million , $0.6 million , and $0.5 million , respectively, assuming no new acquisitions or impairments. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment Disclosure | Property and Equipment Property and equipment consisted of the following at December 31: in thousands Estimated Useful Life 2016 2015 Computer software and hardware 1 to 7 years $ 57,277 $ 46,207 Leasehold improvements Up to term of lease 22,199 21,321 Transportation equipment 12 years 17,897 17,897 Office furniture and equipment 5 to 10 years 6,117 6,352 Total cost 103,490 91,777 Accumulated depreciation (64,210 ) (56,034 ) Property and equipment, net $ 39,280 $ 35,743 Depreciation expense was $9.7 million , $9.2 million and $10.0 million for the years ended December 31, 2016 , 2015 and 2014 , respectively, and was recorded in Office and occupancy expense on the Consolidated Statements of Income. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Loans Payable [Abstract] | |
Debt and Interest Rate Swap | Debt Debt consisted of the following at December 31: Interest Rates dollars in thousands 2016 2015 2016 2015 Term Loan 1.745 % 1.555 % $ 191,250 $ 216,750 Less: Short-term debt 25,500 25,500 Long-term debt $ 165,750 $ 191,250 On June 24, 2014, Federated entered into an unsecured Second Amended and Restated Credit Agreement by and among Federated, certain of its subsidiaries as guarantors party thereto, a syndicate of 13 banks as Lenders party thereto led by PNC Bank, National Association as administrative agent, PNC Capital Markets LLC as sole bookrunner and joint lead arranger, Citigroup Global Markets, Inc. as joint lead arranger, Citibank, N.A. as syndication agent, and TD Bank, N.A. as documentation agent. The Credit Agreement amended and restated Federated's prior unsecured Amended and Restated Credit Agreement, which was dated June 10, 2011, and scheduled to mature on June 10, 2016 (Prior Credit Agreement). The borrowings under the Credit Agreement's term loan facility of $255 million equaled the remaining principal balance from the Prior Credit Agreement's term loan facility. The Term Loan facility bears interest based on LIBOR plus a spread, currently 112.5 basis points. The Credit Agreement qualified for modification accounting treatment. The Credit Agreement also refinanced the $200 million re volving credit facility under the Prior Credit Agreement. Federated had no borrowings outstanding on the previous revolving credit facility at the time of refinancing. As of December 31, 2016 , the entire $200 million revolving credit facility was available for borrowings. Similar to the Prior Credit Agreement, 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. Federated pays an annual facility fee, currently 12.5 basis points. Borrowings under the Credit Agreement's revolving credit facility bear interest at LIBOR plus a spread, currently 100 basis points. The Credit A greement matures on June 24, 2019 and, with respect to the Term Loan, requires quarterly principal payments totaling $25.5 million in 2017, $55.8 million in 2018 and $110.0 million in 2019. During the year ended December 31, 2016 , Federated repaid $25.5 million of its borrowings on the Term Loan. The Credit Agreement includes representations and warranties, affirmative and negative financial covenants, including an interest coverage ratio covenant and a leverage ratio covenant, reporting requirements and other non-financial covenants. Federated was in compliance with all covenants at and during the year ended December 31, 2016 (see the Liquidity and Capital Resources section of Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information). The Credit Agreement also has certain stated events of default and cross default provisions which would permit the lenders/counterparties to accelerate the repayment of the debt 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. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits Disclosure | Employee Benefit Plans (a) 401(k)/Profit Sharing Plan Federated offers defined contribution plans to its employees. Its 401(k) plan covers substantially all employees. Under the 401(k) plan, employees can make salary deferral contributions at a rate of 1% to 50% of their annual compensation (as defined in the 401(k) plan), subject to Internal Revenue Code (IRC) limitations. Federated makes a matching contribution in an amount equal to 100% of the first 2% that each participant defers and 50% of the next 4% of deferral contributions for a total possible match of 4% , subject to IRC compensation limits. Forfeitures of unvested matching contributions are used to offset future matching contributions. Matching contributions to the 401(k) plan recognized in Compensation and related expense amounted to $4.8 million , $3.9 million and $4.6 million for 2016 , 2015 and 2014 , respectively. Vesting in Federated's matching contributions commences once a participant in the 401(k) plan has worked at least 1,000 hours per year for two years . Upon completion of this initial service, 20% of Federated's contribution included in a participant's account vests and 20% vests for each of the following four years if the participant works at least 1,000 hours per year. Employees are immediately vested in their 401(k) salary deferral contributions. A Federated employee becomes eligible to participate in the profit sharing plan if the employee is employed on the last day of the year and has worked at least 500 hours for the year. The profit sharing plan is a defined contribution plan to which Federated may contribute amounts as authorized by its board of directors. No contributions were made to the profit sharing plan in 2016 , 2015 or 2014 . At December 31, 2016 , the profit sharing plan held 0.4 million shares of Federated Class B common stock. (b) Employee Stock Purchase Plan Federated offers an employee stock purchase plan that allows employees to purchase a maximum of 750,000 shares of Class B common stock. Employees may contribute up to 10% of their salary to purchase shares of Federated's Class B common stock on a quarterly basis at the market price. The shares purchased under this plan may be newly issued shares, treasury shares or shares purchased on the open market. During 2016 , 9,012 shares were purchased by employees in this plan and, as of December 31, 2016 , a total of 176,631 shares were purchased by employees in this plan on the open market since the plan's inception in 1998. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans Federated's long-term stock-incentive compensation has been provided for under the Stock Incentive Plan (the Plan), as amended and subsequently approved by shareholders from time to time. Share-based awards are granted to reward Federated's employees and non-management directors who have contributed to the success of Federated and to provide incentive to increase their efforts on behalf of Federated. Since the Plan's inception, a total of 27.1 million shares of Class B common stock have been authorized for granting share-based awards in the form of restricted stock, stock options or other share-based awards. As of December 31, 2016 , 2.5 million shares are available under the Plan. Share-based compensation expense was $22.4 million , $22.7 million and $21.7 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. The associated tax benefits recorded in connection with share-based compensation expense were $8.4 million , $8.5 million and $8.1 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. At December 31, 2016 , the maximum remaining unrecognized compensation expense related to share-based awards approximated $73 million which is expected to be recognized over a weighted-average period of approximately 6 years . (a) Restricted Stock Federated's restricted stock awards represent shares of Federated Class B common stock that may be sold by the awardee only once the restrictions lapse, as dictated by the terms of the award. The awards are generally subject to graded vesting schedules that vary in length from three to ten years with a portion of the award vesting each year, as dictated by the terms of the award. For an award with a ten -year vesting period, the restrictions on the vested portion of the award typically lapse on the award's fifth- and tenth-year anniversaries. Certain restricted stock awards granted pursuant to a key employee bonus program have a three -year graded vesting schedule with restrictions lapsing at each vesting date. During the period of restriction, the recipient receives dividends on all shares awarded, regardless of their vesting status. The following table summarizes activity of non-vested restricted stock awards for the year ended December 31, 2016 : Restricted Shares Weighted- Average Grant- Date Fair Value Non-vested at January 1, 2016 4,197,652 $ 24.27 Granted 1 943,160 26.56 Vested (919,738 ) 25.24 Forfeited (195,504 ) 24.24 Non-vested at December 31, 2016 4,025,570 $ 24.58 1 During 2016 , Federated awarded 464,660 shares of restricted Federated Class B common stock in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three -year period. Also during 2016 , Federated awarded 478,500 shares of restricted Federated Class B common stock to certain key employees. The restricted stock awards generally vest over ten -year periods with restrictions on the vested portions of the awards lapsing on the awards' fifth- and tenth-year anniversaries. Federated awarded 943,160 shares of restricted Federated Class B common stock with a weighted-average grant-date fair value of $26.56 to employees during 2016 ; awarded 863,137 shares of restricted Federated Class B common stock with a weighted-average grant-date fair value of $31.07 to employees during 2015 ; and awarded 1,057,981 shares of restricted Federated Class B common stock with a weighted-average grant-date fair value of $27.43 to employees during 2014 . The total fair value of restricted stock vested during 2016 , 2015 and 2014 was $23.9 million , $28.8 million and $24.4 million , respectively. (b) Stock Options The outstanding stock options as of December 31, 2016 were granted to non-management directors with exercise prices that equaled the market price of Federated's Class B common stock on each grant date. All of these stock options were awarded with no requisite service requirement, were immediately exercisable and expire no later than ten years after the grant date. Each vested option may be exercised for the purchase of one share of Class B common stock at the exercise price. The following table summarizes the status of and changes in Federated's stock option program for the year ended December 31, 2016 : Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2016 33,000 $ 34.38 Expired unexercised (9,000 ) 37.73 Outstanding at December 31, 2016 1 24,000 $ 33.13 1.2 $ 28.3 1 All stock options outstanding at December 31, 2016 were vested and exercisable. There were no stock options exercised during the year ended December 31, 2016 . During the years ended December 31, 2015 and December 31, 2014 there were 3,000 and 6,000 options exercised, respectively. There were no stock options granted in 2016 , 2015 or 2014 . (c) Non-management Director Stock Awards Federated awarded 5,700 , 5,700 and 5,100 shares of Federated Class B common stock to non-management directors in the second quarters of 2016 , 2015 and 2014 , respectively. There were no additional awards to non-management directors in 2016 , 2015 or 2014 . |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure | Common Stock The Class A common stockholder has the entire voting rights of Federated; however, without the consent of the majority of the holders of the Class B common stock, the Class A common stockholder cannot alter Federated's structure, dispose of all or substantially all of Federated's assets, amend the Articles of Incorporation or Bylaws of Federated to adversely affect the Class B common stockholders, or liquidate or dissolve Federated. With respect to dividends, distributions and liquidation rights, the Class A common stock and Class B common stock have equal preferences and rights. (a) Dividends Cash dividends of $205.5 million , $104.6 million and $104.8 million were paid in 2016 , 2015 and 2014 , respectively, to holders of Federated common stock. Of the amount paid in 2016, $102.2 million represented a $1.00 special dividend paid in the fourth quarter. All dividends were considered ordinary dividends for tax purposes. (b) Treasury Stock In February 2015, the board of directors authorized a share repurchase program that allows Federated to buy back up to 4 million shares of Federated Class B common stock with no stated expiration date. This program was fulfilled in December 2016. In October 2016, the board of directors authorized a share repurchase program that allows Federated to buy back up to 4 million additional shares of Federated Class B common stock with no stated expiration date. The program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities, unless Federated's board of directors subsequently determines to retire the repurchased stock and restore the shares to authorized but unissued status (rather than holding the shares in treasury). During the year ended December 31, 2016 , Federated repurchased 3.1 million shares of Class B common stock for $83.6 million , the majority of which were repurchased in the open market. The remaining repurchased shares represent restricted stock forfeited from employees and are not counted against the board-approved share repurchase program. At December 31, 2016 , 3.9 million shares remained available to be purchased under Federated's buyback program. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure | Income Taxes Federated files a consolidated federal income tax return. Financial statement tax expense is determined under the liability method. Income tax provision consisted of the following expense/(benefit) components for the years ended December 31: in thousands 2016 2015 2014 Current: Federal $ 93,538 $ 76,902 $ 63,266 State 8,121 6,567 4,574 Foreign 265 188 76 Total Current 101,924 83,657 67,916 Deferred: Federal 17,057 17,317 20,497 State 597 1,753 916 Foreign (158 ) 193 201 Total Deferred 17,496 19,263 21,614 Total $ 119,420 $ 102,920 $ 89,530 The reconciliation between the statutory income tax rate and the effective tax rate consisted of the following for the years ended December 31: 2016 2015 2014 Expected federal statutory income tax rate 35.0 % 35.0 % 35.0 % Increase/(decrease): State and local income taxes, net of federal benefit 1.7 1.8 1.1 Other (0.4 ) 0.9 1.3 Effective tax rate (excluding noncontrolling interests) 36.3 37.7 37.4 Income attributable to noncontrolling interests (1.3 ) (0.3 ) 0.0 Effective tax rate per Consolidated Statements of Income 35.0 % 37.4 % 37.4 % See Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations under the caption Results of Operations - Income Taxes for information about the decrease in the effective tax rate for 2016 as compared to 2015. The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities consisted of the following at December 31: in thousands 2016 2015 Deferred Tax Assets Tax net operating loss carryforwards $ 20,839 $ 18,109 Compensation related 11,692 13,130 Other 2,810 6,920 Total deferred tax assets 35,341 38,159 Valuation allowance (20,419 ) (17,791 ) Total deferred tax asset, net of valuation allowance $ 14,922 $ 20,368 Deferred Tax Liabilities Intangible assets $ 168,748 $ 155,212 Property and equipment 8,975 7,882 Deferred sales commissions 4,439 5,270 State taxes 8,723 8,248 Other 515 714 Total gross deferred tax liability $ 191,400 $ 177,326 Net deferred tax liability $ 176,478 $ 156,958 At December 31, 2016 , Federated had deferred tax assets related to state and foreign tax net operating loss carryforwards in certain taxing jurisdictions in the aggregate of $20.8 million , of which the state net operating losses will expire through 2036 . The foreign net operating losses have no expiration period. A valuation allowance has been recognized for $18.4 million (or 100% ) of the deferred tax asset for state tax net operating losses, and for $2.0 million (or 85% ) of the deferred tax asset for foreign tax net operating losses. The valuation allowances were recorded due to management's belief that it is more likely than not that Federated will not realize the full benefit of these net operating losses. Federated's remaining deferred tax assets as of December 31, 2016 primarily related to compensation-related expenses that have been recognized for book purposes but are not yet deductible for tax purposes. Management believes that it is more likely than not that Federated will receive the full benefit of these deferred tax assets due to the expectation that Federated will generate taxable income well in excess of these amounts in the years they become deductible. At December 31, 2015 , Federated had deferred tax assets related to state and foreign tax net operating loss carryforwards in certain taxing jurisdictions in the aggregate of $18.1 million , of which the state net operating losses will expire through 2035 . The foreign net operating losses have no expiration period. A valuation allowance has been recognized for $15.6 million (or 99% ) of the deferred tax asset for state tax net operating losses, and for $2.2 million (or 92% ) of the deferred tax asset for foreign tax net operating losses. The valuation allowances were recorded due to management's belief that it is more likely than not that Federated will not realize the full benefit of these net operating losses. Federated and its subsidiaries file annual income tax returns in the U.S. federal jurisdiction, various U.S. state and local jurisdictions, and in certain foreign jurisdictions. Based upon its review of these filings, there were no material unrecognized tax benefits as of December 31, 2016 or 2015 . Therefore, there were no material changes during 2016 , and no reasonable possibility of a significant increase or decrease in unrecognized tax benefits within the next twelve months. |
Earnings Per Share Attributable
Earnings Per Share Attributable to Federated Investors, Inc. Shareholders | 12 Months Ended |
Dec. 31, 2016 | |
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 for the years ended December 31: in thousands, except per share data 2016 2015 2014 Numerator – Basic and Diluted Net income attributable to Federated Investors, Inc. $ 208,919 $ 169,807 $ 149,236 Less: Total income available to participating unvested restricted shareholders 1 (7,632 ) (6,608 ) (5,823 ) Total net income attributable to Federated Common Stock 2 $ 201,287 $ 163,199 $ 143,413 Denominator Basic weighted-average Federated Common Stock 2 99,116 100,475 100,721 Dilutive potential shares from stock options 1 2 2 Diluted weighted-average Federated Common Stock 2 99,117 100,477 100,723 Earnings per share Net income attributable to Federated Common Stock - Basic and Diluted 2 $ 2.03 $ 1.62 $ 1.42 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. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases of Lessee Disclosure | Leases The following is a schedule by year of future minimum payments required under the operating leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2016 : in millions 2017 $ 13.6 2018 14.0 2019 13.9 2020 13.6 2021 13.4 2022 and thereafter 94.2 Total minimum lease payments $ 162.7 Federated holds a material operating lease for its corporate headquarters building in Pittsburgh, Pennsylvania. During the third quarter 2016, Federated extended the term through 2030 through an amendment which contains options to renew for additional periods through 2040 . The original lease and subsequent amendments include provisions for leasehold improvement incentives, rent escalation and certain penalties for early termination. In addition, at December 31, 2016 , Federated had various other operating lease agreements primarily involving additional facilities. These leases are noncancelable and expire on various dates through the year 2027 . Most leases include renewal options and, in certain leases, escalation clauses. Rent expenses were $12.9 million , $13.0 million and $14.8 million for the years ended December 31, 2016 , 2015 and 2014 , respectively, and were recorded in Office and occupancy expense on the Consolidated Statements of Income. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income Attributable to Federated Shareholders | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Comprehensive (Loss) Income Note | 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 on Interest Rate Swap 1 Unrealized Gain (Loss) on Securities Available for Sale 2 Foreign Currency Translation Loss Total Balance at December 31, 2013 $ (3,185 ) $ 1,586 $ 391 $ (1,208 ) Other comprehensive loss before reclassifications and tax (107 ) (142 ) (1,013 ) (1,262 ) Tax impact 40 54 355 449 Reclassification adjustment, before tax 4,743 (4,240 ) 0 503 Tax impact (1,760 ) 1,616 0 (144 ) Net current-period other comprehensive income (loss) 2,916 (2,712 ) (658 ) (454 ) Balance at December 31, 2014 $ (269 ) $ (1,126 ) $ (267 ) $ (1,662 ) Other comprehensive income (loss) before reclassifications and tax 67 (6,412 ) (842 ) (7,187 ) Tax impact (25 ) 2,363 295 2,633 Reclassification adjustment, before tax 358 2,185 0 2,543 Tax impact (131 ) (805 ) 0 (936 ) Net current-period other comprehensive income (loss) 269 (2,669 ) (547 ) (2,947 ) Balance at December 31, 2015 $ 0 $ (3,795 ) $ (814 ) $ (4,609 ) Other comprehensive income (loss) before reclassifications and tax 0 4,761 (950 ) 3,811 Tax impact 0 (1,732 ) 333 (1,399 ) Reclassification adjustment, before tax 3 0 2,632 0 2,632 Tax impact 3 0 (958 ) 0 (958 ) Net current-period other comprehensive income (loss) 0 4,703 (617 ) 4,086 Balance at December 31, 2016 $ 0 $ 908 $ (1,431 ) $ (523 ) 1 Federated entered into an interest rate swap in 2010 to hedge its interest rate risk associated with its original term facility. The interest rate swap expired on April 1, 2015. Amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Debt expense on the Consolidated Statements of Income. 2 Other than described in note 3 below, amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Gain (loss) on securities, net on the Consolidated Statements of Income. 3 Amount includes reclassification of $0.8 million , net of tax from Accumulated other comprehensive loss, net of tax to Retained earnings on the Consolidated Balance Sheets as a result of the adoption of ASU 2015-02 (see Note (2) for additional information). |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Contractual Federated is obligated to make certain future payments under various agreements to which it is a party, including debt and operating leases (see Note (9) and Note (15) , respectively). The following table summarizes minimum noncancelable payments contractually due under Federated's significant service contracts and employment arrangements: Payments due in in millions 2017 2018 2019 2020 Total Purchase obligations 1 $ 14.2 $ 4.4 $ 2.4 $ 2.2 $ 23.2 Employment-related commitments 2 9.0 2.5 1.6 0.0 13.1 Other obligations 3 0.7 1.0 0.0 0.0 1.7 Total $ 23.9 $ 7.9 $ 4.0 $ 2.2 $ 38.0 1 Federated is a party to various contracts pursuant to which it receives certain services, including services for marketing and information technology, access to various fund-related information systems and research databases, trade order transmission and recovery services as well as other services. These contracts contain certain minimum noncancelable payments, cancellation provisions and renewal terms. The contracts require payments through the year 2020. Costs for such services are expensed as incurred. 2 Federated has certain domestic and international employment arrangements pursuant to which Federated is obligated to make minimum compensation payments. 3 Amounts include acquisition-related contingent purchase price payments and other liabilities recorded on the Consolidated Balance Sheets. Federated may be required to make certain compensation-related payments through 2019 in connection with various significant employment and incentive arrangements. In addition to the $13.1 million of employment-related commitments included in the table above, based on asset levels as of December 31, 2016 and performance goals, incentive payments could total up to approximately $11 million over the remaining terms of these arrangements. (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. As of December 31, 2016 , management does not believe that a material loss related to any of these matters is reasonably possible. (c) Legal Proceedings CCM Rochester, Inc. (CCM) . On February 10, 2017, Judge Caproni, United States District Judge for the United States District Court for the Southern District of New York, issued an Opinion and Order granting Federated’s motion for summary judgment in its entirety and directed that CCM’s (f/k/a Clover Capital Management, Inc.) lawsuit against Federated be closed. In granting Federated's motion for summary judgment in its entirety, Judge Caproni determined based on the evidence that there existed no genuine dispute of any material fact in concluding that no rational juror could find in favor of CCM on its remaining claims of fraudulent inducement and breach of the implied covenant of good faith and fair dealing; accordingly, Federated was entitled to summary judgment as a matter of law. While CCM can appeal Judge Caproni's decision within 30 days (or by March 13, 2017), management believes Judge Caproni's Opinion and Order affirms Federated's position that CCM's claims were meritless and without factual support and that at all times Federated acted in good faith and complied with its contractual obligations contained in the Asset Purchase Agreement, dated September 12, 2008 (APA). If CCM appeals, Federated intends to continue to vigorously defend the lawsuit. The CCM case stemmed from Federated's acquisition of certain assets of CCM in December 2008. CCM was an investment manager that specialized in value investing. The purchase was consummated in the midst of the U.S. financial markets crisis. The payment terms under the APA included an upfront payment of $30 million paid by Federated at closing and the opportunity for contingent payments over a five year earn-out period following the acquisition date based on the growth in revenue associated with the acquired assets. Under the APA, in order to reach the maximum contingent payments totaling approximately $55 million , the revenue associated with the acquired assets would have had to have grown at a 30% compound annual growth rate. Under the APA, Federated paid CCM an additional $18 million , in the aggregate, in contingent payments for the last three years of the earn-out period. On May 20, 2014, shortly after the final contingent payment was paid to CCM, Federated Investors, Inc. was named as the defendant in a case filed by CCM in the U.S. District Court for the Southern District of New York (CCM Rochester, Inc., f/k/a Clover Capital Management, Inc. v. Federated Investors, Inc., Case No. 14-cv-3600 (S.D.N.Y.)). In this lawsuit, CCM asserted claims against Federated Investors, Inc. for fraudulent inducement, breach of contract (including CCM's allegations relating to implied duties of best efforts and good faith and fair dealing) and indemnification based on Federated's alleged failure to effectively market and distribute the investment products associated with the acquired assets and to pay CCM the maximum contingent payments. CCM sought approximately $37 million in alleged damages plus attorneys' fees from Federated Investors, Inc. Federated filed a motion to dismiss the lawsuit on the basis that, among other reasons, CCM's claims are implausible, have no factual support, and are contrary to the express terms of the APA and to settled law. On November 25, 2014, the Court issued an order granting Federated's motion to dismiss in part and denying Federated's motion to dismiss in part. The Court dismissed CCM's claim for breach of contract and for breach of an implied obligation to use best efforts. Under the strict standards applicable to motions to dismiss that require the Court to accept the allegations of the Complaint as true and draw all inferences in CCM's favor, the Court concluded that CCM's "claim of fraud is at the edge of plausibility" but specifically noted that "[w]hether CCM can successfully prove facts necessary to support that artfully-pled theory remains to be seen." On June 9, 2016, following oral argument, the Court granted Federated's evidentiary motion seeking to exclude CCM's expert testimony, ruling CCM's expert reports and testimony inadmissible. Federated filed its motion for summary judgment on July 15, 2016, seeking to have the Court rule in Federated's favor as a matter of law. As noted above, on February 10, 2017, Judge Caproni issued an Opinion and Order granting Federated's motion for summary judgment in its entirety and directed that CCM's lawsuit against Federated be closed. Federated believes a material loss related to this lawsuit (even if CCM appeals) is remote and, as such, does not believe this lawsuit is material to Federated or its Consolidated Financial Statements. Based on this assessment and the current stage of the lawsuit, Federated currently estimates the loss from damages as a result of CCM's claims to be zero . Other Litigation . Federated also has claims asserted and threatened against it in the ordinary course of business. As of December 31, 2016 , Federated does not believe that a material loss related to these claims is reasonably possible. See Item 1A - Risk Factors under the caption Potential Adverse Effects of Litigation, Investigations, Proceedings and Other Claims for additional information regarding risks related to claims asserted or threatened against Federated. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 26, 2017 , the board of directors declared a $0.25 per share dividend. The dividend was payable to shareholders of record as of February 8, 2017 , resulting in $25.5 million being paid on February 15, 2017 . |
Supplementary Quarterly Financi
Supplementary Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Supplementary Quarterly Financial Data (Unaudited) in thousands, except per share data, for the quarters ended March 31, June 30, September 30, December 31, 2016 Revenue $ 272,109 $ 286,738 $ 294,620 $ 289,904 Operating income $ 74,555 $ 87,670 $ 88,636 $ 84,822 Net income including the noncontrolling interests in subsidiaries 1 $ 48,959 $ 56,418 $ 58,908 $ 57,229 Amounts attributable to Federated Investors, Inc. Net income 1 $ 45,443 $ 52,709 $ 54,925 $ 55,842 Earnings per common share – Basic and Diluted 2 $ 0.44 $ 0.51 $ 0.54 $ 0.52 Impact of Voluntary Yield-related Fee Waivers Revenue $ (37,482 ) $ (21,333 ) $ (18,030 ) $ (11,027 ) Less: Reduction in Distribution expense 27,896 16,528 13,797 7,627 Operating income (9,586 ) (4,805 ) (4,233 ) (3,400 ) Less: Reduction in Noncontrolling interest 208 (208 ) 0 0 Pre-tax impact $ (9,378 ) $ (5,013 ) $ (4,233 ) $ (3,400 ) 2015 Revenue $ 220,522 $ 228,127 $ 234,321 $ 243,639 Operating income $ 59,038 $ 69,279 $ 74,244 $ 76,885 Net income including the noncontrolling interests in subsidiaries $ 36,418 $ 42,263 $ 44,136 $ 49,169 Amounts attributable to Federated Investors, Inc. Net income $ 36,307 $ 41,759 $ 44,131 $ 47,610 Earnings per common share – Basic and Diluted $ 0.35 $ 0.40 $ 0.42 $ 0.46 Impact of Voluntary Yield-related Fee Waivers Revenue $ (94,112 ) $ (84,245 ) $ (83,254 ) $ (71,995 ) Less: Reduction in Distribution expense 64,654 60,179 61,283 54,493 Operating income (29,458 ) (24,066 ) (21,971 ) (17,502 ) Less: Reduction in Noncontrolling interest 2,454 1,851 1,716 1,093 Pre-tax impact $ (27,004 ) $ (22,215 ) $ (20,255 ) $ (16,409 ) 1 As a result of the adoption of ASU 2016-09, the income-tax provision for March 31, 2016 was reduced by $0.2 million from amounts previously reported (see Note (2) for additional information). 2 For the quarter ended December 31, 2016, Federated paid $1.00 per share as a special cash dividend and a $0.25 per share regular cash dividend. All dividends were considered ordinary dividends for tax purposes. The special dividend negatively impacted fourth quarter 2016 earnings per share by $0.02 . |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of Operations [Text Block] | (a) Nature of Operations Federated provides investment advisory, administrative, distribution and other services primarily to the Federated Funds and Separate Accounts in both domestic and international markets. For presentation purposes in the Consolidated Financial Statements, the Federated Funds are considered to be affiliates of Federated. The majority of Federated's revenue is derived from investment advisory services provided to the Federated Funds and Separate Accounts through various subsidiaries pursuant to investment advisory contracts. These subsidiaries are registered as investment advisors under the Advisers Act or operate in similar capacities under applicable jurisdictional law. U.S.-domiciled Federated Funds are generally distributed by a wholly owned subsidiary registered as a broker/dealer under the 1934 Act and under applicable state laws. Non-U.S.-domiciled Federated Funds are generally distributed by wholly owned subsidiaries and a third-party distribution firm which are registered under applicable jurisdictional law. Federated's investment products are distributed within the wealth management and trust, broker/dealer, institutional and international markets. |
Basis of Accounting [Text Block] | (b) Basis of Presentation The Consolidated Financial Statements have been prepared in accordance with U.S. GAAP. 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. |
Reclassifications of Prior Period Financial Statements [Text Block] | (c) Reclassification of Prior Period Financial Statements Certain items previously reported have been reclassified to conform to the current year's presentation. |
Consolidation, Policy [Policy Text Block] | (d) Principles of Consolidation Federated performs an analysis for each Federated Fund or other entity in which Federated holds a financial interest to determine if it is a VIE or voting rights entities (VRE). Factors considered in this analysis include, but are not limited to, whether (1) it is a legal entity, (2) a scope exception applies, (3) a variable interest exists and (4) shareholders have the power to direct the activities that most significantly impact the economic performance, as well as the equity ownership, and any related party or de facto agent implications of Federated's involvement with the entity. Entities that are determined to be VIEs are consolidated if Federated is deemed to be the primary beneficiary. Entities that are determined to be VREs are generally consolidated if Federated holds the majority voting interest. Federated's conclusion to consolidate a Federated Fund may vary from period to period, most commonly as a result of changes in its percentage interest in the entity. To the extent Federated's interest in a consolidated entity represents less than 100% of the entity's equity, Federated recognizes noncontrolling interests in subsidiaries. In the case of consolidated Federated Funds , the noncontrolling interests represent equity which is redeemable or convertible for cash at the option of the equity holder. As such, these noncontrolling interests are deemed to represent temporary equity and are classified as Redeemable noncontrolling interest in subsidiaries in the mezzanine section of the Consolidated Balance Sheets. All other noncontrolling interests in subsidiaries are classified as permanent equity in the Consolidated Balance Sheets. All intercompany accounts and transactions have been eliminated. Consolidation of Variable Interest Entities Prior to the adoption of ASU 2015-02, Federated considered either a qualitative or quantitative model for identifying whether its interest in a VIE was a controlling financial interest. Considerations of the qualitative model included whether Federated had (1) the ability to direct significant activities of the VIE and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. For the quantitative model, Federated evaluated the extent of its participation in the economic risks and rewards of the entity. In cases where the results indicated that Federated's interest in such an entity absorbed the majority of the variability in the entity's net assets, Federated was deemed to be the primary beneficiary and thus consolidated the entity. Following the adoption of ASU 2015-02, Federated has a controlling financial interest in a VIE and is, therefore, deemed to be the primary beneficiary of a VIE if it has (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Consolidation of Voting Rights Entities Federated has a controlling financial interest in a VRE if it can exert control over the financial and operating policies of the VRE, which generally occurs when Federated holds the majority voting interest (i.e., greater than 50% of the voting equity interest). |
Business Combinations and Other Purchase of Business Transactions, Policy [Policy Text Block] | (e) Business Combinations Business combinations are accounted for under the acquisition method of accounting. Results of operations of an acquired business are included from the date of acquisition. Management estimates the fair value of the acquired assets, including identifiable intangible assets, and assumed liabilities based on their estimated fair values as of the date of acquisition. Goodwill on the Consolidated Balance Sheets represents the cost of a business acquisition in excess of the fair value of the acquired net assets. The fair value of contingent consideration is recorded as a liability in Other current liabilities and Other long-term liabilities on the Consolidated Balance Sheets as of the acquisition date. This liability is re-measured at fair value each quarter end with changes in fair value recognized in Operating Expenses – Other on the Consolidated Statements of Income. |
Cash and Cash Equivalents, Policy [Policy Text Block] | (f) Cash and Cash Equivalents Cash and cash equivalents consist of investments in money market funds and deposits with banks. Cash equivalents are highly liquid investments that are readily convertible to cash with original maturities of 90 days or less at the date of acquisition |
Marketable Securities, Policy [Policy Text Block] | (g) Investments Federated's investments are categorized as Investments—affiliates , Investments—consolidated investment companies or Investments—other on the Consolidated Balance Sheets. Investments—affiliates represent Federated's available-for-sale investments in fluctuating-value Federated Funds . These investments are carried at fair value with unrealized gains or losses on these securities included in Accumulated other comprehensive loss, net of tax on the Consolidated Balance Sheets. Realized gains and losses on these securities are computed on a specific-identification basis and recognized in Gain (loss) on securities, net on the Consolidated Statements of Income. Investments—consolidated investment companies represent trading securities held by Federated as a result of consolidating certain Federated Funds . Investments—other represent other trading investments held in Separate Accounts for which Federated owns the underlying securities. Trading securities are carried at fair value with changes in fair value recognized in Gain (loss) on securities, net on the Consolidated Statements of Income. See Note (6) for additional information regarding investments held as of December 31, 2016 and 2015 . The fair value of Federated's investments is generally based on quoted market prices in active markets for identical instruments. If quoted market prices are not available, fair value is generally based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. In the absence of observable market data inputs and/or value drivers, internally generated valuation techniques may be utilized in which one or more significant inputs or significant value drivers are unobservable in the market place. See Note (5) for additional information regarding the fair value of investments held as of December 31, 2016 and 2015 . On a periodic basis, management evaluates the carrying value of investments for impairment. With respect to its investments in fluctuating-value Federated Funds , management considers various criteria, including the duration and extent of a decline in fair value, the ability and intent of management to retain the investment for a period of time sufficient to allow the value to recover and the financial condition and near-term prospects of the fund and the underlying investments of the fund, to determine whether a decline in fair value is other than temporary. If, after considering these criteria, management believes that a decline is other than temporary, the carrying value of the security is written down to fair value through the Consolidated Statements of Income. There were no impairments to investments recognized during the year ended December 31, 2014 . |
Derivatives, Policy [Policy Text Block] | (h) Derivatives and Hedging Instruments From time to time, Federated may consolidate an investment product that holds freestanding derivative financial instruments for trading purposes. Federated reports such derivative instruments at fair value and records the changes in fair value in Gain (loss) on securities, net on the Consolidated Statements of Income. From time to time, Federated may also enter into and designate as accounting hedges derivative financial instruments to hedge interest-rate exposures with respect to variable-rate loan facilities (cash flow hedges) or to hedge foreign-currency exchange risk with respect to non-U.S. dollar trading investments in consolidated Federated Funds (net investment hedges). To qualify for hedge accounting, the derivative must be deemed to be highly effective in offsetting the designated changes in the hedged item. For cash flow hedges and net investment hedges, the effective portions of the change in the fair value of the derivative are reported as a component of Accumulated other comprehensive loss, net of tax on the Consolidated Balance Sheets and subsequently reclassified to earnings in the period or periods during which the hedged item affects earnings. The change in fair value of the ineffective portion of the derivative, if any, is recognized immediately in earnings. If it is determined that the derivative instrument is not highly effective, hedge accounting is discontinued. If hedge accounting is discontinued because it is no longer probable that a forecasted transaction will occur, the derivative will continue to be recorded on the Consolidated Balance Sheets at its fair value with changes in fair value included in current earnings, and any existing gains and losses included in Accumulated other comprehensive loss, net of tax would be recognized immediately into earnings. If hedge accounting is discontinued because the hedging instrument is sold, terminated or no longer designated, the amount reported in Accumulated other comprehensive loss, net of tax up to the date of sale, termination or de-designation continues to be reported in Accumulated other comprehensive loss, net of tax until the forecasted transaction or the hedged item affects earnings. Federated did not hold any net investment hedges at December 31, 2016 or 2015 . |
Property, Plant and Equipment, Policy [Policy Text Block] | (i) Property and Equipment Property and equipment are initially recorded at cost and are depreciated using the straight-line method over their estimated useful lives ranging from 1 to 12 years . Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or their respective lease terms. Depreciation and amortization expense is recorded in Office and occupancy on the Consolidated Statements of Income. As property and equipment are taken out of service, the cost and related accumulated depreciation and amortization are removed. During 2016 and 2015 , $1.4 million and $10.4 million , respectively, of fully depreciated assets were taken out of service. The write-off of any residual net book value is reflected as a loss in Operating Expenses – Other on the Consolidated Statements of Income. Management reviews the remaining useful lives and carrying values of property and equipment to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include a decrease in the market price of the asset, an accumulation of costs significantly in excess of the amount originally expected in the acquisition or development of the asset, historical and projected cash flows associated with the asset and an expectation that the asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Should there be an indication of a change in the useful life or an impairment in value, Federated compares the carrying value of the asset to the probability-weighted undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether an impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to fair value which is determined based on prices of similar assets if available or discounted cash flows. Impairment adjustments are recognized in Operating Expenses – Other on the Consolidated Statements of Income. There were no impairment adjustments recognized during the years ended December 31, 2016 , 2015 and 2014 . |
Internal Use Software, Policy [Policy Text Block] | (j) Costs of Computer Software Developed or Obtained for Internal Use Certain internal and external costs incurred in connection with developing or obtaining software for internal use, including software licenses in a cloud computing arrangement, are capitalized in accordance with the applicable accounting guidance relating to Intangibles - Goodwill and Other - Internal-Use Software. These capitalized costs are included in Property and equipment, net on the Consolidated Balance Sheets and are amortized using the straight-line method over the shorter of the estimated useful life of the software or four years . These assets are subject to the impairment test used for other categories of property and equipment described above. (k) Intangible Assets, including Goodwill |
Goodwill and Intangible Assets, Policy [Policy Text Block] | (k) Intangible Assets, including Goodwill Intangible assets, consisting primarily of goodwill and renewable investment advisory contracts acquired in connection with various acquisitions, are recorded at fair value determined using a discounted cash flow model as of the date of acquisition. The discounted cash flow model considers various factors to project future cash flows expected to be generated from the asset. Given the investment advisory nature of Federated's business and of the businesses acquired over the years, these factors typically include: (1) an estimated rate of change for underlying managed assets; (2) expected revenue per managed asset; (3) incremental operating expenses; and (4) a discount rate. Management estimates a rate of change for underlying managed assets based on a combination of an estimated rate of market appreciation or depreciation and an estimated net redemption or sales rate. Expected revenue per managed asset and incremental operating expenses of the acquired asset are generally based on contract terms, average market participant data and historical experience. The discount rate is estimated at the current market rate of return. After the fair value of all separately identifiable assets has been estimated, goodwill is recorded to the extent the consideration paid for the acquisition exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. Federated tests goodwill for impairment at least annually or when indicators of potential impairment exist. Goodwill is evaluated at the reporting unit level. Federated has determined that it has a single reporting unit consistent with its single operating segment based on the management of Federated's operations as a single business: investment management. Federated does not have multiple operating segments or business components for which discrete financial information is available. Federated uses a qualitative approach to test for potential impairment of goodwill. If, after considering various factors, management determines that it is more likely than not that goodwill is impaired, a two-step process to test for and measure impairment is performed which begins with an estimation of the fair value of its reporting unit by considering Federated's market capitalization. If Federated's market capitalization falls to a level below its recorded book value of equity, Federated's goodwill would be considered for possible impairment. There were no impairments to goodwill recognized during the years ended December 31, 2016 , 2015 or 2014 . Federated has determined that certain acquired assets, primarily, certain renewable investment advisory contracts, have indefinite useful lives. In reaching this conclusion, management considered the legal, regulatory and contractual provisions of the investment advisory contract that enable the renewal of the contract, the level of cost and effort required in renewing the investment advisory contract, and the effects of obsolescence, demand, competition and other economic factors that could impact the funds' projected performance and existence. The contracts generally renew annually and the value of these acquired assets assumes renewal. There were no impairments to indefinite-lived intangible assets recognized during the years ended December 31, 2016 , 2015 or 2014 . See Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations under the caption Critical Accounting Policies for additional information on the: (1) valuation in connection with the initial purchase price allocation; (2) ongoing evaluation for impairment; and (3) reconsideration of an asset's useful life . Federated generally amortizes finite-lived identifiable intangible assets on a straight-line basis over their estimated useful lives. Management periodically evaluates the remaining useful lives and carrying values of the intangible assets to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of a potential impairment monitored by management include a significant decline in the level of managed assets, changes to contractual provisions underlying certain intangible assets and significant reductions in underlying operating cash flows. Should there be an indication of a change in the useful life or impairment in value of the finite-lived intangible assets, Federated compares the carrying value of the asset to the projected undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to its fair value determined using discounted cash flows. Federated writes-off the cost and accumulated amortization balances for all fully amortized intangible assets. There were no impairments to finite-lived intangible assets recognized during the years ended December 31, 2016 , 2015 or 2014 . |
Deferred Sales Commissions [Policy Text Block] | (l) Deferred Sales Commissions Federated pays upfront commissions to broker/dealers to promote the sale of certain fund shares. Under various fund-related contracts, Federated is entitled to distribution and servicing fees from the fund over the life of such shares. Both of these fees are calculated as a percentage of average managed assets associated with the related classes of shares. For certain share classes, Federated is also entitled to receive a contingent deferred sales charge (CDSC), which is collected from certain redeeming shareholders. For share classes that pay both a distribution fee and CDSC, Federated generally capitalizes a portion of the upfront commissions as deferred sales commissions, dependent upon expected recoverability rates. The deferred sales commission asset (included in Other long-term assets on the Consolidated Balance Sheets) is amortized over the estimated period of benefit of up to eight years . Deferred sales commission amortization expense was $12.0 million , $15.1 million and $12.7 million for 2016 , 2015 and 2014 , respectively, and was included in Distribution expense on the Consolidated Statements of Income. Distribution and shareholder service fees are recognized in Other service fees, net—affiliates on the Consolidated Statements of Income over the life of the fund share class. CDSCs collected on these share classes are used to reduce the deferred sales commission asset. Federated reviews the carrying value of deferred sales commission assets on a periodic basis to determine whether a significant long-term decline in the equity or bond markets or other events or circumstances indicate that an impairment in value may have occurred. Should there be an indication of an impairment in value, Federated compares the carrying value of the asset to the probability-weighted undiscounted future cash flows of the underlying asset to determine whether an impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the deferred sales commission asset is written down to its estimated fair value determined using discounted cash flows. There were no impairments to the deferred sales commission asset during the years ended December 31, 2016 , 2015 or 2014 . For share classes that do not pay both a distribution fee and CDSC, Federated expenses the cost of the upfront commission as incurred in Distribution expense on the Consolidated Statements of Income and credits Distribution expense for any CDSCs collected. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | (m) Foreign Currency Translation The balance sheets of certain wholly owned foreign subsidiaries of Federated, certain consolidated foreign-denominated investment products and all other foreign-denominated cash or investment balances are translated at the current exchange rate as of the end of the reporting period and the related income or loss is translated at the average exchange rate in effect during the period. Net exchange gains and losses resulting from these translations are excluded from income and are recorded in Accumulated other comprehensive loss, net of tax on the Consolidated Balance Sheets. Foreign currency transaction gains and losses are reflected in Operating Expenses – Other on the Consolidated Statements of Income. |
Treasury Stock [Policy Text Block] | (n) Treasury Stock Federated accounts for acquisitions of treasury stock at cost and reports total treasury stock held as a deduction from Federated Investors, Inc. shareholders' equity on the Consolidated Balance Sheets. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a specific-identification basis. Additional paid-in capital from treasury stock transactions is increased as Federated reissues treasury stock for more than the cost of the shares. If Federated issues treasury stock for less than its cost, Additional paid-in capital from treasury stock transactions is reduced to no less than zero and any further required reductions are recorded to Retained earnings on the Consolidated Balance Sheets. |
Revenue Recognition, Policy [Policy Text Block] | (o) Revenue Recognition Revenue from providing investment advisory, administrative and other services (including distribution and shareholder servicing) is recognized during the period in which the services are performed. Investment advisory, administrative and the majority of other service fees are generally calculated as a percentage of total net assets of the investment portfolios that are managed by Federated. The fair value of the investment portfolios is primarily determined using quoted market prices or independent third-party pricing services and broker/dealer price quotes. In limited circumstances, a quotation or price evaluation is not readily available from a pricing source. In these cases, pricing is determined by management based on a prescribed valuation process that has been approved by the directors/trustees of the sponsored pro ducts. For the periods presented, a de minimis amount of AUM were priced in this manner by Federated management. For Separate Accounts that are not registered investment companies under the 1940 Act, the fair value of portfolio investments is primarily determined as specified in applicable customer agreements, including in agreements between the customer and the customer's third-party custodian. Federated may waive certain fees for competitive reasons, such as to maintain positive or zero net yields on certain money market funds, to meet regulatory requirements or to meet contractual requirements. Federated wa ived fees of $413.7 million , $662.7 million and $764.3 million for the years ended December 31, 2016 , 2015 and 2014 , respectively, nearly all of which was for competitive reasons. The decrease for the year ended December 31, 2016 as compared to 2015 was primarily due to a $245.8 million decrease in Voluntary Yield-related Fee Waivers and a $5.2 million decrease in other competitive waivers. Fee waivers may increase as a result of continued Voluntary Yield-related Fee Waivers and for other competitive reasons. Voluntary Yield-related Fee Waivers are partially offset by a related reduction to distribution expense and net income attributable to noncontrolling interests (see Note (3) for additional information on the net impact of these waivers). Federated has contractual arrangements with third parties to provide certain fund-related services. Management considers various factors to determine whether Federated's revenue should be recorded based on the gross amount payable by the funds or net of payments to third-party service providers. Management's analysis is based on whether Federated is acting as the principal service provider or as an agent. The primary factors considered include: (1) whether the customer holds Federated or the service provider responsible for the fulfillment and acceptability of the services to be provided; (2) whether Federated has any practical latitude in negotiating the price to pay a third-party provider; (3) whether Federated or the customer selects the ultimate service provider; and (4) whether Federated has credit risk in the arrangement. Generally, the less the customer is directly involved with or participates in making decisions regarding the ultimate third-party service provider, the more supportive the facts are that Federated is acting as the principal in these transactions and should therefore report gross revenues. As a result of considering these factors, investment advisory fees, distribution fees and certain other service fees are recorded gross of payments made to third parties. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | (p) Share-Based Compensation Federated issues shares for share-based awards from treasury stock. Federated recognizes compensation costs based on grant-date fair value for all share-based awards. For restricted stock awards, the grant-date fair value of the award is calculated as the difference between the closing fair value of Federated's Class B common stock on the date of grant and the purchase price paid by the employee, if any. Federated's awards are generally subject to graded vesting schedules. Compensation and related expense is recognized on a straight-line or modified straight-line basis over the requisite service period of the award and is adjusted for actual forfeitures as they occur. For awards with provisions that allow for accelerated vesting upon retirement, Federated recognizes expense over the shorter of the vesting period or the period between grant date and the date on which the employee meets the minimum required age for retirement. Compensation and related expense also includes dividends paid on forfeited awards. |
Lease, Policy [Policy Text Block] | (q) Leases Federated classifies leases as operating in accordance with the provisions of lease accounting. Rent expense under noncancelable operating leases with scheduled rent increases or rent holidays is accounted for on a straight-line basis over the lease term, beginning on the date of initial possession or the effective date of the lease agreement. The amount of the excess of straight-line rent expense over scheduled payments is recorded as a deferred liability. The liability is then amortized when scheduled payments are in excess of the straight-line rent expense. Build-out allowances and other such lease incentives are recorded as deferred credits, and are amortized on a straight-line basis as a reduction of rent expense beginning in the period they are deemed to be earned, which generally coincides with the effective date of the lease. The current portion of unamortized deferred lease costs and build-out allowances is included in Other current liabilities and the long-term portion is included in Other long-term liabilities on the Consolidated Balance Sheets. |
Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block] | (r) Advertising Costs Federated generally expenses the cost of all advertising and promotional activities as incurred. Certain printed matter, however, such as sales brochures, are accounted for as prepaid supplies and are included in Other current assets on the Consolidated Balance Sheets until they are distributed or are no longer expected to be used, at which time their costs are expensed. Federated expensed advertising costs of $2.7 million , $2.6 million and $2.2 million in 2016 , 2015 and 2014 , respectively, which were included in Advertising and promotional expense on the Consolidated Statements of Income. |
Income Tax, Policy [Policy Text Block] | (s) Income Taxes Federated accounts for income taxes under the liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Federated recognizes a valuation allowance if, based on the weight of available evidence regarding future taxable income, it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Earnings Per Share, Policy [Policy Text Block] | (t) Earnings Per Share Basic and diluted earnings per share are calculated under the two-class method. Pursuant to the two-class method, Federated's unvested restricted stock awards with nonforfeitable rights to dividends are considered participating securities and are required to be considered in the computation of earnings per share. Unvested restricted shares, as well as the related dividends paid and their proportionate share of undistributed earnings, if any, are excluded from the computation of earnings per share attributable to Federated Investors, Inc. |
Accumulated Other Comprehensive Income (Loss) [Policy Text Block] | (u) Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, net of tax is reported in the Consolidated Balance Sheets and the Consolidated Statements of Changes in Equity and includes unrealized gains and losses on securities available for sale, foreign currency translation adjustments and the unrealized gain or loss on the effective portion of derivative instruments designated and qualifying as a cash flow or net investment hedge. |
Loss Contingencies [Policy Text Block] | (v) Loss Contingencies Federated accrues for estimated costs, including legal costs related to existing lawsuits, claims and proceedings, if any, when it is probable that a loss has been incurred and the costs can be reasonably estimated. Accruals are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information pertinent to a particular matter. Significant differences could exist between the actual cost required to investigate, litigate and/or settle a claim or the ultimate outcome of a lawsuit, claim or proceeding and management's estimate. These differences could have a material impact on Federated's results of operations, financial position and/or cash flows. Recoveries of losses are recognized on the Consolidated Statements of Income when receipt is deemed probable, or when final approval is received by the insurance carrier. |
Segment Reporting, Policy [Policy Text Block] | (w) Business Segments Business or operating segments are defined as a component of an enterprise that engages in activities from which it may earn revenue and incur expenses for which discrete financial information is available and is regularly evaluated by Federated's Chief Executive Officer (CEO), who is the chief operating decision maker, in deciding how to allocate resources and assess performance. Federated does not have multiple operating segments or business components for which discrete financial information is available. Federated operates in one operating segment, the investment management business, nearly all of which is conducted within the U.S. Federated's CEO utilizes a consolidated approach to assess performance and allocate resources. |
Recent Accounting Pronounceme28
Recent Accounting Pronouncements New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | 12 Months Ended |
Dec. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Recently Adopted Accounting Guidance (a) Consolidation On February 18, 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which affects reporting organizations' evaluation of whether they should consolidate certain legal entities. This includes a scope exception for reporting entities with an interest in legal entities that are required to comply with or operate in accordance with the requirements similar to those in Rule 2a-7 for registered money market funds. Effective January 1, 2016, Federated adopted ASU 2015-02 using the modified retrospective transition method, which did not require the restatement of prior years. In connection with the adoption of ASU 2015-02, Federated reevaluated all of the Federated Funds . As a result, certain Federated Funds previously accounted for as VIEs now meet the characteristics of VREs. The adoption of ASU 2015-02 resulted in the consolidation of one Federated Fund that was not previously consolidated. Upon adoption, this entity was deemed to be a VIE and Federated was deemed to be the primary beneficiary. As a result of this consolidation, Federated recorded $29.4 million in assets, of which $11.5 million was included in Investments—affiliates at December 31, 2015, $0.2 million in liabilities and $17.7 million in Redeemable noncontrolling interest in subsidiaries . Federated also reclassified $0.8 million of unrealized losses from Accumulated other comprehensive loss, net of tax to Retained earnings . The adoption of ASU 2015-02 also resulted in the deconsolidation of one Federated Fund that was previously consolidated. Upon adoption, Federated was no longer deemed to be the primary beneficiary of this VIE. As a result, Federated deconsolidated $5.5 million in assets, $2.7 million in liabilities and $2.8 million in Redeemable noncontrolling interest in subsidiaries . There was no impact to the Consolidated Statements of Income upon adoption of ASU 2015-02. (b) Accounting for Fees Paid in a Cloud Computing Arrangement On January 1, 2016, Federated adopted ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. This update provides guidance about whether a cloud computing arrangement includes a software license. Management elected the prospective transition method and the adoption did not have a material impact on Federated's Consolidated Financial Statements. (c) Disclosure of Investments in Certain Entities that Calculate Net Asset Value per Share On January 1, 2016, Federated adopted ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This update modifies certain disclosure requirements and requires that all investments for which fair value is measured using the NAV practical expedient be excluded from the fair value hierarchy. The ASU required the retrospective adoption approach, which required the restatement of the prior period fair value hierarchy table. As a result, $31.8 million of investments were recategorized into the NAV practical expedient column and are no longer included in Level 2 as of December 31, 2015 (see Note (5) ). The adoption did not have a material impact on Federated's Consolidated Financial Statements. (d) Share-based Compensation During the second quarter 2016, Federated adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, effective January 1, 2016. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The adoption of ASU 2016-09 requires that all excess tax benefits and deficiencies (including tax benefits from dividends paid on unvested restricted stock awards) now be recognized in the Income tax provision in the Consolidated Statements of Income. Accordingly, upon adoption, Federated reduced its income tax provision by $0.2 million and $0.4 million for the three and six months ended June 30, 2016, respectively. Subsequent to adoption, Federated reduced its income tax provision by $0.3 million and $2.1 million for the third and fourth quarters of 2016, respectively. The ASU also requires excess tax benefits to be classified as operating activities along with other income tax cash flows within the Consolidated Statements of Cash Flows. These amendments were adopted on a prospective basis, which did not require the restatement of prior years. ASU 2016-09 also allows entities to make an accounting policy election to either estimate the number of forfeitures expected to occur (as was previously required) or to account for actual forfeitures as they occur. Federated has elected to account for forfeitures as they occur. The ASU required the modified retrospective transition method through a cumulative-effect adjustment to retained earnings. Effective January 1, 2016, Federated recorded an adjustment of $0.1 million as a decrease to Retained earnings and an increase to Common stock to reflect this change in accounting policy. Recently Issued Accounting Guidance Not Yet Adopted (e) Revenue Recognition On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes virtually all existing revenue recognition guidance under GAAP. The update's core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On July 9, 2015, the FASB approved a one-year deferral of the effective date of the update, and issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, on August 12, 2015. As a result of the deferral, the update is effective for Federated on January 1, 2018. While early adoption is permitted on January 1, 2017, Federated does not plan to early adopt. During 2016, the FASB issued ASU 2016-08, which clarifies principal versus agent considerations, ASU 2016-10, which clarifies identifying performance obligations and the licensing implementation guidance, ASU 2016-12, which addresses implementation issues and provides additional practical expedients and ASU 2016-20, which provides technical corrections to narrow aspects of the guidance (collectively, with ASU 2014-09, Topic 606). Topic 606 allows for the use of either the retrospective or modified retrospective adoption method. Federated's status of implementation has primarily focused on scoping activities, such as identifying the customer and evaluating revenue contracts. Management has preliminarily identified Federated's performance obligations and material revenue streams. Management continues to evaluate the available transition methods and the potential impact of adoption on Federated's Consolidated Financial Statements. (f) Deferred Taxes On November 20, 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. The update is effective for Federated on January 1, 2017. The update allows for the use of either a prospective or retrospective adoption approach. Management has elected the prospective transition method and does not expect this update to have a material impact on Federated's Consolidated Financial Statements. (g) Financial Instruments On January 5, 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The ASU significantly revises an entity's accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The update is effective for Federated on January 1, 2018, and, except for certain provisions, does not permit early adoption. An entity should apply the amendments, with certain exceptions, by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is currently evaluating the potential impact of adoption on Federated's Consolidated Financial Statements. (h) Leases On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases on the balance sheet, but retains a distinction between finance and operating leases. The update is effective for Federated on January 1, 2019, with early adoption permitted. The update requires the modified retrospective adoption approach. Management is currently evaluating the potential impact of adoption on Federated's Consolidated Financial Statements. (i) Clarifying the Definition of a Business On January 5, 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this Update require that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset (or a group of similar identifiable assets), it is not a business. To be considered a business, an acquisition or disposal must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The amendments also narrow the definition of the term "outputs" to be consistent with Topic 606, Revenue from Contracts with Customers. The ASU is effective for Federated on January 1, 2018, with early adoption permitted in specific circumstances, and should be applied prospectively. Management is currently evaluating the potential impact of adoption on Federated's Consolidated Financial Statements. |
Concentration Risk Concentratio
Concentration Risk Concentration Risk (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | The following table summarizes the percentage of total revenue earned from Federated's asset classes over the last three years: 2016 2015 2014 Money market assets 45 % 33 % 32 % Equity assets 38 % 46 % 45 % Fixed-income assets 17 % 21 % 22 % |
Voluntary Fee Waivers [Table Text Block] | The impact of such fee waivers on various components of Federated's Consolidated Statements of Income was as follows for the years ended December 31: in millions 2016 2015 2014 Revenue $ (87.8 ) $ (333.6 ) $ (410.6 ) Less: Reduction in Distribution expense 65.8 240.6 280.9 Operating income (22.0 ) (93.0 ) (129.7 ) Less: Reduction in Noncontrolling interest 0.0 7.1 10.7 Pre-tax impact $ (22.0 ) $ (85.9 ) $ (119.0 ) |
Consolidation (Tables)
Consolidation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated VIEs | The following table presents the balances related to the consolidated Federated Fund VIEs that were included on the Consolidated Balance Sheets as well as Federated's net interest in the consolidated Federated Fund VIEs at December 31: in millions 2016 2015 Cash and cash equivalents $ 0.0 $ 3.1 Investments—consolidated investment companies 43.2 25.4 Receivables 0.7 0.2 Less: Liabilities 0.7 3.0 Less: Redeemable noncontrolling interest in subsidiaries 28.3 8.7 Federated's net interest in Federated Fund VIEs $ 14.9 $ 17.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 at December 31: in thousands Level 1 Level 2 Level 3 NAV Practical Expedient 3 Total 2016 Financial Assets Cash and cash equivalents $ 54,725 $ 0 $ 0 $ 50,114 $ 104,839 Available-for-sale equity securities 103,996 0 0 26,789 130,785 Trading securities – equity 13,866 0 0 6,193 20,059 Trading securities – debt 0 45,466 0 0 45,466 Other 1 19 0 840 0 859 Total financial assets $ 172,606 $ 45,466 $ 840 $ 83,096 $ 302,008 Total financial liabilities 2 $ 2 $ 358 $ 1,931 $ 0 $ 2,291 2015 3 Financial Assets Cash and cash equivalents $ 172,628 $ 0 $ 0 $ 0 $ 172,628 Available-for-sale equity securities 117,422 0 0 24,326 141,748 Trading securities – equity 15,900 65 0 7,433 23,398 Trading securities – debt 0 9,041 0 0 9,041 Other 1 4 17 910 0 931 Total financial assets $ 305,954 $ 9,123 $ 910 $ 31,759 $ 347,746 Total financial liabilities 2 $ 2,681 $ 59 $ 2,630 $ 0 $ 5,370 1 Amounts include structured trade finance loans held by Federated as well as futures contracts and/or foreign currency forward contracts held within certain consolidated Federated Funds . 2 Amounts include acquisition-related future consideration liabilities and may include investments sold short, foreign currency forward contracts and/or futures contracts held within certain consolidated Federated Funds , as well as certain liabilities attributable to structured trade finance loans held by Federated. 3 Investments that calculate NAV as a practical expedient were recategorized and are no longer included within Level 2 of the valuation hierarchy as of December 31, 2015 (see Note (2) for additional information). |
Reconciliation of the beginning and ending fair value measurements of a Level 3 financial liability |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-For-Sale Securities | Available-for-sale securities were as follows at December 31: 2016 2015 Gross Unrealized Estimated Fair Value Gross Unrealized Estimated Fair Value in thousands Cost Gains (Losses) Cost Gains (Losses) Equity funds $ 23,883 $ 2,112 $ (266 ) $ 25,729 $ 32,357 $ 342 $ (2,416 ) $ 30,283 Fixed-income funds 105,514 92 (550 ) 105,056 115,396 109 (4,040 ) 111,465 Total available-for-sale securities $ 129,397 $ 2,204 $ (816 ) $ 130,785 $ 147,753 $ 451 $ (6,456 ) $ 141,748 |
Gains and losses on investments | The following table presents gains and losses recognized in Gain (loss) on securities, net on the Consolidated Statements of Income in connection with Federated's investments as well as economic derivatives held by certain consolidated Federated Funds for the years ended December 31: in thousands 2016 2015 2014 Unrealized gain (loss) Trading securities $ 4,971 $ (1,359 ) $ (2,578 ) Derivatives 1 (348 ) 119 (147 ) Realized gains 2 Available-for-sale securities 298 1,503 5,359 Trading securities 1,663 910 4,514 Derivatives 1 1,032 301 214 Realized losses 2 Available-for-sale securities 3 (1,647 ) (2,348 ) (91 ) Trading securities (2,252 ) (2,760 ) (1,848 ) Derivatives 1 (1,609 ) (1,630 ) (451 ) Gain (loss) on securities, net 4 $ 2,108 $ (5,264 ) $ 4,972 1 Amounts related to the settlement of economic derivatives held by certain consolidated Federated Funds . 2 Realized gains and losses are computed on a specific-identification basis. 3 The losses for the years ended December 31, 2016 and 2015 include impairments of certain available-for-sale securities. 4 Amounts related to consolidated entities, primarily Federated Funds , totaled $2.9 million , $(4.0) million and $(0.6) million for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Finite-lived intangible assets represented customer relationships and consisted of the following at December 31: in thousands 2016 2015 Cost $ 6,300 $ 23,811 Accumulated amortization (4,630 ) (21,116 ) Carrying value $ 1,670 $ 2,695 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment [Table Text Block] | Property and equipment consisted of the following at December 31: in thousands Estimated Useful Life 2016 2015 Computer software and hardware 1 to 7 years $ 57,277 $ 46,207 Leasehold improvements Up to term of lease 22,199 21,321 Transportation equipment 12 years 17,897 17,897 Office furniture and equipment 5 to 10 years 6,117 6,352 Total cost 103,490 91,777 Accumulated depreciation (64,210 ) (56,034 ) Property and equipment, net $ 39,280 $ 35,743 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Loans Payable [Abstract] | |
Debt | Debt consisted of the following at December 31: Interest Rates dollars in thousands 2016 2015 2016 2015 Term Loan 1.745 % 1.555 % $ 191,250 $ 216,750 Less: Short-term debt 25,500 25,500 Long-term debt $ 165,750 $ 191,250 |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | The following table summarizes activity of non-vested restricted stock awards for the year ended December 31, 2016 : Restricted Shares Weighted- Average Grant- Date Fair Value Non-vested at January 1, 2016 4,197,652 $ 24.27 Granted 1 943,160 26.56 Vested (919,738 ) 25.24 Forfeited (195,504 ) 24.24 Non-vested at December 31, 2016 4,025,570 $ 24.58 1 During 2016 , Federated awarded 464,660 shares of restricted Federated Class B common stock in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three -year period. Also during 2016 , Federated awarded 478,500 shares of restricted Federated Class B common stock to certain key employees. The restricted stock awards generally vest over ten -year periods with restrictions on the vested portions of the awards lapsing on the awards' fifth- and tenth-year anniversaries. |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The following table summarizes the status of and changes in Federated's stock option program for the year ended December 31, 2016 : Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2016 33,000 $ 34.38 Expired unexercised (9,000 ) 37.73 Outstanding at December 31, 2016 1 24,000 $ 33.13 1.2 $ 28.3 1 All stock options outstanding at December 31, 2016 were vested and exercisable. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax provision consisted of the following expense/(benefit) components for the years ended December 31: in thousands 2016 2015 2014 Current: Federal $ 93,538 $ 76,902 $ 63,266 State 8,121 6,567 4,574 Foreign 265 188 76 Total Current 101,924 83,657 67,916 Deferred: Federal 17,057 17,317 20,497 State 597 1,753 916 Foreign (158 ) 193 201 Total Deferred 17,496 19,263 21,614 Total $ 119,420 $ 102,920 $ 89,530 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The reconciliation between the statutory income tax rate and the effective tax rate consisted of the following for the years ended December 31: 2016 2015 2014 Expected federal statutory income tax rate 35.0 % 35.0 % 35.0 % Increase/(decrease): State and local income taxes, net of federal benefit 1.7 1.8 1.1 Other (0.4 ) 0.9 1.3 Effective tax rate (excluding noncontrolling interests) 36.3 37.7 37.4 Income attributable to noncontrolling interests (1.3 ) (0.3 ) 0.0 Effective tax rate per Consolidated Statements of Income 35.0 % 37.4 % 37.4 % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities consisted of the following at December 31: in thousands 2016 2015 Deferred Tax Assets Tax net operating loss carryforwards $ 20,839 $ 18,109 Compensation related 11,692 13,130 Other 2,810 6,920 Total deferred tax assets 35,341 38,159 Valuation allowance (20,419 ) (17,791 ) Total deferred tax asset, net of valuation allowance $ 14,922 $ 20,368 Deferred Tax Liabilities Intangible assets $ 168,748 $ 155,212 Property and equipment 8,975 7,882 Deferred sales commissions 4,439 5,270 State taxes 8,723 8,248 Other 515 714 Total gross deferred tax liability $ 191,400 $ 177,326 Net deferred tax liability $ 176,478 $ 156,958 |
Earnings Per Share Attributab38
Earnings Per Share Attributable to Federated Investors, Inc. Shareholders (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method [Table Text Block] | The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Federated for the years ended December 31: in thousands, except per share data 2016 2015 2014 Numerator – Basic and Diluted Net income attributable to Federated Investors, Inc. $ 208,919 $ 169,807 $ 149,236 Less: Total income available to participating unvested restricted shareholders 1 (7,632 ) (6,608 ) (5,823 ) Total net income attributable to Federated Common Stock 2 $ 201,287 $ 163,199 $ 143,413 Denominator Basic weighted-average Federated Common Stock 2 99,116 100,475 100,721 Dilutive potential shares from stock options 1 2 2 Diluted weighted-average Federated Common Stock 2 99,117 100,477 100,723 Earnings per share Net income attributable to Federated Common Stock - Basic and Diluted 2 $ 2.03 $ 1.62 $ 1.42 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. |
Schedule of Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Table Text Block[ | The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Federated for the years ended December 31: in thousands, except per share data 2016 2015 2014 Numerator – Basic and Diluted Net income attributable to Federated Investors, Inc. $ 208,919 $ 169,807 $ 149,236 Less: Total income available to participating unvested restricted shareholders 1 (7,632 ) (6,608 ) (5,823 ) Total net income attributable to Federated Common Stock 2 $ 201,287 $ 163,199 $ 143,413 Denominator Basic weighted-average Federated Common Stock 2 99,116 100,475 100,721 Dilutive potential shares from stock options 1 2 2 Diluted weighted-average Federated Common Stock 2 99,117 100,477 100,723 Earnings per share Net income attributable to Federated Common Stock - Basic and Diluted 2 $ 2.03 $ 1.62 $ 1.42 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. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The following is a schedule by year of future minimum payments required under the operating leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2016 : in millions 2017 $ 13.6 2018 14.0 2019 13.9 2020 13.6 2021 13.4 2022 and thereafter 94.2 Total minimum lease payments $ 162.7 |
Accumulated Other Comprehensi40
Accumulated Other Comprehensive (Loss) Income Attributable to Federated Shareholders (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The components of Accumulated other comprehensive loss, net of tax attributable to Federated shareholders are as follows: in thousands Unrealized Loss on Interest Rate Swap 1 Unrealized Gain (Loss) on Securities Available for Sale 2 Foreign Currency Translation Loss Total Balance at December 31, 2013 $ (3,185 ) $ 1,586 $ 391 $ (1,208 ) Other comprehensive loss before reclassifications and tax (107 ) (142 ) (1,013 ) (1,262 ) Tax impact 40 54 355 449 Reclassification adjustment, before tax 4,743 (4,240 ) 0 503 Tax impact (1,760 ) 1,616 0 (144 ) Net current-period other comprehensive income (loss) 2,916 (2,712 ) (658 ) (454 ) Balance at December 31, 2014 $ (269 ) $ (1,126 ) $ (267 ) $ (1,662 ) Other comprehensive income (loss) before reclassifications and tax 67 (6,412 ) (842 ) (7,187 ) Tax impact (25 ) 2,363 295 2,633 Reclassification adjustment, before tax 358 2,185 0 2,543 Tax impact (131 ) (805 ) 0 (936 ) Net current-period other comprehensive income (loss) 269 (2,669 ) (547 ) (2,947 ) Balance at December 31, 2015 $ 0 $ (3,795 ) $ (814 ) $ (4,609 ) Other comprehensive income (loss) before reclassifications and tax 0 4,761 (950 ) 3,811 Tax impact 0 (1,732 ) 333 (1,399 ) Reclassification adjustment, before tax 3 0 2,632 0 2,632 Tax impact 3 0 (958 ) 0 (958 ) Net current-period other comprehensive income (loss) 0 4,703 (617 ) 4,086 Balance at December 31, 2016 $ 0 $ 908 $ (1,431 ) $ (523 ) 1 Federated entered into an interest rate swap in 2010 to hedge its interest rate risk associated with its original term facility. The interest rate swap expired on April 1, 2015. Amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Debt expense on the Consolidated Statements of Income. 2 Other than described in note 3 below, amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Gain (loss) on securities, net on the Consolidated Statements of Income. 3 Amount includes reclassification of $0.8 million , net of tax from Accumulated other comprehensive loss, net of tax to Retained earnings on the Consolidated Balance Sheets as a result of the adoption of ASU 2015-02 (see Note (2) for additional information). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Unrecorded Unconditional Purchase Obligations Disclosure [Table Text Block] | The following table summarizes minimum noncancelable payments contractually due under Federated's significant service contracts and employment arrangements: Payments due in in millions 2017 2018 2019 2020 Total Purchase obligations 1 $ 14.2 $ 4.4 $ 2.4 $ 2.2 $ 23.2 Employment-related commitments 2 9.0 2.5 1.6 0.0 13.1 Other obligations 3 0.7 1.0 0.0 0.0 1.7 Total $ 23.9 $ 7.9 $ 4.0 $ 2.2 $ 38.0 1 Federated is a party to various contracts pursuant to which it receives certain services, including services for marketing and information technology, access to various fund-related information systems and research databases, trade order transmission and recovery services as well as other services. These contracts contain certain minimum noncancelable payments, cancellation provisions and renewal terms. The contracts require payments through the year 2020. Costs for such services are expensed as incurred. 2 Federated has certain domestic and international employment arrangements pursuant to which Federated is obligated to make minimum compensation payments. 3 Amounts include acquisition-related contingent purchase price payments and other liabilities recorded on the Consolidated Balance Sheets. |
Supplementary Quarterly Finan42
Supplementary Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information [Table Text Block] | in thousands, except per share data, for the quarters ended March 31, June 30, September 30, December 31, 2016 Revenue $ 272,109 $ 286,738 $ 294,620 $ 289,904 Operating income $ 74,555 $ 87,670 $ 88,636 $ 84,822 Net income including the noncontrolling interests in subsidiaries 1 $ 48,959 $ 56,418 $ 58,908 $ 57,229 Amounts attributable to Federated Investors, Inc. Net income 1 $ 45,443 $ 52,709 $ 54,925 $ 55,842 Earnings per common share – Basic and Diluted 2 $ 0.44 $ 0.51 $ 0.54 $ 0.52 Impact of Voluntary Yield-related Fee Waivers Revenue $ (37,482 ) $ (21,333 ) $ (18,030 ) $ (11,027 ) Less: Reduction in Distribution expense 27,896 16,528 13,797 7,627 Operating income (9,586 ) (4,805 ) (4,233 ) (3,400 ) Less: Reduction in Noncontrolling interest 208 (208 ) 0 0 Pre-tax impact $ (9,378 ) $ (5,013 ) $ (4,233 ) $ (3,400 ) 2015 Revenue $ 220,522 $ 228,127 $ 234,321 $ 243,639 Operating income $ 59,038 $ 69,279 $ 74,244 $ 76,885 Net income including the noncontrolling interests in subsidiaries $ 36,418 $ 42,263 $ 44,136 $ 49,169 Amounts attributable to Federated Investors, Inc. Net income $ 36,307 $ 41,759 $ 44,131 $ 47,610 Earnings per common share – Basic and Diluted $ 0.35 $ 0.40 $ 0.42 $ 0.46 Impact of Voluntary Yield-related Fee Waivers Revenue $ (94,112 ) $ (84,245 ) $ (83,254 ) $ (71,995 ) Less: Reduction in Distribution expense 64,654 60,179 61,283 54,493 Operating income (29,458 ) (24,066 ) (21,971 ) (17,502 ) Less: Reduction in Noncontrolling interest 2,454 1,851 1,716 1,093 Pre-tax impact $ (27,004 ) $ (22,215 ) $ (20,255 ) $ (16,409 ) 1 As a result of the adoption of ASU 2016-09, the income-tax provision for March 31, 2016 was reduced by $0.2 million from amounts previously reported (see Note (2) for additional information). 2 For the quarter ended December 31, 2016, Federated paid $1.00 per share as a special cash dividend and a $0.25 per share regular cash dividend. All dividends were considered ordinary dividends for tax purposes. The special dividend negatively impacted fourth quarter 2016 earnings per share by $0.02 . |
Summary of Significant Accoun43
Summary of Significant Accounting Policies Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Fully depreciated assets taken out of service | $ 1,400 | $ 10,400 | |
Deferred Sales Commission Asset B-Shares Estimated Period Of Benefit | 8 years | ||
Amortization of deferred sales commissions | $ 11,980 | 15,054 | $ 12,699 |
Total Waived Fees | 413,700 | 662,700 | 764,300 |
Change in Voluntary Yield-related Fee Waivers | (245,800) | ||
Change due to competitive waivers | (5,200) | ||
Advertising Expense | $ 2,700 | $ 2,600 | $ 2,200 |
Number of operating segments | 1 | ||
Minimum [Member] | |||
Property and equipment, useful Life | 1 year | ||
Maximum [Member] | |||
Property and equipment, useful Life | 12 years | ||
Software and Software Development Costs [Member] | |||
Property and equipment, useful Life | 4 years |
Recent Accounting Pronounceme44
Recent Accounting Pronouncements Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 01, 2016 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Investments—affiliates | $ 130,785 | $ 130,785 | $ 141,748 | [1] | |||||||
Redeemable noncontrolling interest in subsidiaries | 31,362 | 31,362 | 8,734 | ||||||||
Total investments using NAV practical expedient | [1] | 83,096 | 83,096 | 31,759 | |||||||
Income tax provision | 119,420 | 102,920 | $ 89,530 | ||||||||
Accounting Standards Update 2015-07 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total investments using NAV practical expedient | 31,800 | ||||||||||
Accounting Standards Update 2016-09 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Income tax provision | (2,100) | $ (300) | $ (200) | $ (200) | $ (400) | ||||||
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | $ 700 | $ 700 | 3,000 | ||||||||
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Accounting Standards Update 2015-02 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Variable Interest Entity, consolidated, carrying amount, assets | $ 29,400 | ||||||||||
Investments—affiliates | $ 11,500 | ||||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | 200 | ||||||||||
Redeemable noncontrolling interest in subsidiaries | 17,700 | ||||||||||
Variable Interest Entity, Not Primary Beneficiary [Member] | Accounting Standards Update 2015-02 [Member] | Deconsolidation [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Variable Interest Entity, consolidated, carrying amount, assets | 5,500 | ||||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | 2,700 | ||||||||||
Redeemable noncontrolling interest in subsidiaries | 2,800 | ||||||||||
Common Stock [Member] | Accounting Standards Update 2016-09 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Adoption of new accounting pronouncements | 100 | ||||||||||
Retained Earnings [Member] | Accounting Standards Update 2015-02 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Adoption of new accounting pronouncements | (831) | ||||||||||
Retained Earnings [Member] | Accounting Standards Update 2016-09 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Adoption of new accounting pronouncements | (100) | ||||||||||
AOCI Attributable to Parent [Member] | Accounting Standards Update 2015-02 [Member] | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Adoption of new accounting pronouncements | $ 831 | ||||||||||
[1] | Investments that calculate NAV as a practical expedient were recategorized and are no longer included within Level 2 of the valuation hierarchy as of December 31, 2015 (see Note (2) for additional information). |
Concentration Risk (Details)
Concentration Risk (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Product Concentration Risk [Member] | FederatedStrategicValueDividendStrategy [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 15.00% | 14.00% | 13.00% |
Product Concentration Risk [Member] | FederatedKaufmannMid-CapGrowthStrategy [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 8.00% | 11.00% | 12.00% |
Customer Concentration Risk [Member] | BNYMellonCorporation [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 15.00% | 8.00% | 6.00% |
Concentration Risk Schedule of
Concentration Risk Schedule of Revenue Concentration (Details) - Product Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Money Market Funds [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 45.00% | 33.00% | 32.00% |
Equity Funds [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 38.00% | 46.00% | 45.00% |
Fixed Income Funds [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 17.00% | 21.00% | 22.00% |
Concentration Risk Voluntary Fe
Concentration Risk Voluntary Fee Waivers (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Concentration Risk [Line Items] | |||||||||||
Revenue | $ (11,027) | $ (18,030) | $ (21,333) | $ (37,482) | $ (71,995) | $ (83,254) | $ (84,245) | $ (94,112) | $ (87,800) | $ (333,600) | $ (410,600) |
Less: Reduction in Distribution expense | 7,627 | 13,797 | 16,528 | 27,896 | 54,493 | 61,283 | 60,179 | 64,654 | 65,800 | 240,600 | 280,900 |
Operating income | (3,400) | (4,233) | (4,805) | (9,586) | (17,502) | (21,971) | (24,066) | (29,458) | (22,000) | (93,000) | (129,700) |
Less: Reduction in Noncontrolling interest | 0 | 0 | (208) | 208 | 1,093 | 1,716 | 1,851 | 2,454 | 0 | 7,100 | 10,700 |
Pre-tax impact | $ (3,400) | $ (4,233) | $ (5,013) | $ (9,378) | $ (16,409) | $ (20,255) | $ (22,215) | $ (27,004) | $ (22,000) | $ (85,900) | $ (119,000) |
Consolidation (Details)
Consolidation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Variable Interest Entity [Line Items] | |||
Accounts receivable from sponsored investment companies | $ 27,100 | $ 16,900 | |
Total Waived Fees | 413,700 | 662,700 | $ 764,300 |
Trading Securities - Consolidated Investment Companies Carrying Amount | 58,072 | 25,368 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net | 14,900 | 17,000 | |
Nonredeemable noncontrolling interest in subsidiary | 958 | 1,156 | |
Consolidated Voting Rights Entities [Member] | |||
Variable Interest Entity [Line Items] | |||
Trading Securities - Consolidated Investment Companies Carrying Amount | 14,900 | ||
Redeemable noncontrolling interests in subsidiaries | $ 3,100 | ||
GeneralPartnershipandVIE [Member] | Passport [Member] | |||
Variable Interest Entity [Line Items] | |||
Noncontrolling interest, ownership percentage by parent | 50.50% | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 49.50% | ||
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | $ 5,900 | ||
Variable Interest Entity, Not Primary Beneficiary [Member] | |||
Variable Interest Entity [Line Items] | |||
Federated's maximum risk of loss in consolidated investment companies | 2,300 | 301,500 | |
Carrying value of investment of nonconsolidated VIEs | 2,300 | 301,500 | |
AUM for nonconsolidated Federated Funds | 76,300 | 268,000,000 | |
Cash and Cash Equivalents [Member] | GeneralPartnershipandVIE [Member] | Passport [Member] | |||
Variable Interest Entity [Line Items] | |||
Variable Interest Entity, consolidated, carrying amount, assets | $ 7,800 | ||
Cash and Cash Equivalents [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | Money Market Funds [Member] | |||
Variable Interest Entity [Line Items] | |||
Carrying value of investment of nonconsolidated VIEs | 159,700 | ||
Investments [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | |||
Variable Interest Entity [Line Items] | |||
Carrying value of investment of nonconsolidated VIEs | $ 141,800 |
Consolidation Consolidated Fede
Consolidation Consolidated Federated Fund VIEs (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Variable Interest Entity [Line Items] | ||
Investments—consolidated investment companies | $ 58,072 | $ 25,368 |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net | 14,900 | 17,000 |
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | ||
Variable Interest Entity [Line Items] | ||
Investments—consolidated investment companies | 43,200 | 25,400 |
Less: Liabilities | 700 | 3,000 |
Less: Redeemable noncontrolling interest in subsidiaries | 28,300 | 8,700 |
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Cash and Cash Equivalents [Member] | ||
Variable Interest Entity [Line Items] | ||
Consolidated assets | 0 | 3,100 |
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Trade Accounts Receivable [Member] | ||
Variable Interest Entity [Line Items] | ||
Consolidated assets | $ 700 | $ 200 |
Consolidation Financial Support
Consolidation Financial Support for Nonconsolidated Legal Entity (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Financial Support, Waived Fees [Member] | |
Financial Support for Nonconsolidated Legal Entity [Line Items] | |
Nonconsolidated Legal Entity, Financial Support Amount | $ 309.6 |
Financial Support, Capital Contributions [Member] | |
Financial Support for Nonconsolidated Legal Entity [Line Items] | |
Nonconsolidated Legal Entity, Financial Support Amount | $ 0 |
Fair Value Measurements Narrati
Fair Value Measurements Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash and cash equivalents | $ 104,839 | $ 172,628 | [1] |
Money Market Funds [Member] | |||
Cash and cash equivalents | $ 96,700 | $ 162,200 | |
[1] | Investments that calculate NAV as a practical expedient were recategorized and are no longer included within Level 2 of the valuation hierarchy as of December 31, 2015 (see Note (2) for additional information). |
Fair Value Measurements Classes
Fair Value Measurements Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | ||
Cash and cash equivalents | $ 104,839 | $ 172,628 | [1] | |
Cash and cash equivalents using NAV practical expedient | [1] | 50,114 | ||
Available-for-sale securities | 130,785 | 141,748 | [1] | |
Available for sale securities using NAV practical expedient | [1] | 26,789 | 24,326 | |
Trading securities - equity | 20,059 | 23,398 | [1] | |
Trading securities equity using NAV practical expedient | [1] | 6,193 | 7,433 | |
Trading securities - debt | 45,466 | 9,041 | [1] | |
Other assets | [2] | 859 | 931 | [1] |
Total financial assets | 302,008 | 347,746 | [1] | |
Total investments using NAV practical expedient | [1] | 83,096 | 31,759 | |
Total financial liabilities | [3] | 2,291 | 5,370 | [1] |
Level 1 [Member] | ||||
Cash and cash equivalents | 54,725 | 172,628 | [1] | |
Available-for-sale securities | 103,996 | 117,422 | [1] | |
Trading securities - equity | 13,866 | 15,900 | [1] | |
Trading securities - debt | 0 | 0 | [1] | |
Other assets | [2] | 19 | 4 | [1] |
Total financial assets | 172,606 | 305,954 | [1] | |
Total financial liabilities | [3] | 2 | 2,681 | [1] |
Level 2 [Member] | ||||
Cash and cash equivalents | 0 | 0 | [1] | |
Available-for-sale securities | 0 | 0 | [1] | |
Trading securities - equity | 0 | 65 | [1] | |
Trading securities - debt | 45,466 | 9,041 | [1] | |
Other assets | [2] | 0 | 17 | [1] |
Total financial assets | 45,466 | 9,123 | [1] | |
Total financial liabilities | [3] | 358 | 59 | [1] |
Level 3 [Member] | ||||
Cash and cash equivalents | 0 | 0 | [1] | |
Available-for-sale securities | 0 | 0 | [1] | |
Trading securities - equity | 0 | 0 | [1] | |
Trading securities - debt | 0 | 0 | [1] | |
Other assets | [2] | 840 | 910 | [1] |
Total financial assets | 840 | 910 | [1] | |
Total financial liabilities | [3] | $ 1,931 | $ 2,630 | [1] |
[1] | Investments that calculate NAV as a practical expedient were recategorized and are no longer included within Level 2 of the valuation hierarchy as of December 31, 2015 (see Note (2) for additional information). | |||
[2] | Amounts include structured trade finance loans held by Federated as well as futures contracts and/or foreign currency forward contracts held within certain consolidated Federated Funds. | |||
[3] | Amounts include acquisition-related future consideration liabilities and may include investments sold short, foreign currency forward contracts and/or futures contracts held within certain consolidated Federated Funds, as well as certain liabilities attributable to structured trade finance loans held by Federated. |
Investments Narrative (Details)
Investments Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Schedule of Investments [Line Items] | |||
Available-for-sale securities | $ 130,785 | $ 141,748 | [1] |
Other-than-temporary impairment on available-for-sale security | 1,600 | 1,300 | |
Gross unrealized losses | 816 | 6,456 | |
Available-for-sale securities, continuous unrealized losses, fair value | 124,000 | ||
Available-for-sale securities, continuous unrealized losses, 12 months or longer, fair value | 92,600 | ||
Available-for-sale securities, continuous unrealized accumulated losses, 12 months or longer | 5,500 | ||
Available-for-sale securities, continuous unrealized losses, 12 months or less, fair value | 31,400 | ||
Available-for-sale securities, continuous unrealized accumulated losses, 12 months or less | 1,000 | ||
Trading securities | 65,500 | 32,400 | |
Corporate Debt Securities [Member] | |||
Schedule of Investments [Line Items] | |||
Trading securities | 45,500 | 9,000 | |
Mutual Fund [Member] | |||
Schedule of Investments [Line Items] | |||
Trading securities | 8,900 | 11,000 | |
Equity Securities [Member] | |||
Schedule of Investments [Line Items] | |||
Trading securities | $ 7,200 | $ 10,500 | |
[1] | Investments that calculate NAV as a practical expedient were recategorized and are no longer included within Level 2 of the valuation hierarchy as of December 31, 2015 (see Note (2) for additional information). |
Investments Available-For-Sale
Investments Available-For-Sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | $ 129,397 | $ 147,753 | |
Gross unrealized gains | 2,204 | 451 | |
Gross unrealized losses | (816) | (6,456) | |
Available-for-sale securities | 130,785 | 141,748 | [1] |
Equity Funds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 23,883 | 32,357 | |
Gross unrealized gains | 2,112 | 342 | |
Gross unrealized losses | (266) | (2,416) | |
Available-for-sale securities | 25,729 | 30,283 | |
Fixed Income Funds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 105,514 | 115,396 | |
Gross unrealized gains | 92 | 109 | |
Gross unrealized losses | (550) | (4,040) | |
Available-for-sale securities | $ 105,056 | $ 111,465 | |
[1] | Investments that calculate NAV as a practical expedient were recategorized and are no longer included within Level 2 of the valuation hierarchy as of December 31, 2015 (see Note (2) for additional information). |
Investments Gain on Securities,
Investments Gain on Securities, Net of Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
(Loss) Gain on Investments [Line Items] | ||||
Gain (loss) on securities, net | [1] | $ 2,108 | $ (5,264) | $ 4,972 |
Trading Securities [Member] | ||||
(Loss) Gain on Investments [Line Items] | ||||
Unrealized gain (loss) on trading securities | 4,971 | (1,359) | (2,578) | |
Realized gains | [2] | 1,663 | 910 | 4,514 |
Realized losses | [2] | (2,252) | (2,760) | (1,848) |
Derivative [Member] | ||||
(Loss) Gain on Investments [Line Items] | ||||
Unrealized (loss) gain on derivatives | [3] | (348) | 119 | (147) |
Realized gains | [2],[3] | 1,032 | 301 | 214 |
Realized losses | [2],[3] | (1,609) | (1,630) | (451) |
Available-for-sale Securities [Member] | ||||
(Loss) Gain on Investments [Line Items] | ||||
Realized gains | [2] | 298 | 1,503 | 5,359 |
Realized losses | [2],[4] | (1,647) | (2,348) | (91) |
Consolidated Products [Member] | ||||
(Loss) Gain on Investments [Line Items] | ||||
Gain (loss) on securities, net | $ 2,900 | $ (4,000) | $ (600) | |
[1] | Amounts related to consolidated entities, primarily Federated Funds, totaled $2.9 million, $(4.0) million and $(0.6) million for the years ended December 31, 2016, 2015 and 2014, respectively. | |||
[2] | Realized gains and losses are computed on a specific-identification basis. | |||
[3] | Amounts related to the settlement of economic derivatives held by certain consolidated Federated Funds. | |||
[4] | The losses for the years ended December 31, 2016 and 2015 include impairments of certain available-for-sale securities. |
Finite-Lived Intangibles Table
Finite-Lived Intangibles Table (Details) - Customer Relationships [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, cost | $ 6,300 | $ 23,811 |
Finite-lived intangible assets, accumulated amortization | (4,630) | (21,116) |
Finite-lived intangible assets, carrying value | $ 1,670 | $ 2,695 |
Intangible Assets and Goodwil57
Intangible Assets and Goodwill Intangible Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $ 659,189 | $ 659,315 | |
Finite-Lived Intangible Assets, Period Increase (Decrease) | (17,500) | ||
Finite-Lived Intangible Assets, Amortization Expense | 1,000 | 1,400 | $ 2,000 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 600 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 600 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 500 | ||
Renewable investment advisory contracts [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 70,400 | 70,600 | |
Trade Names [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 1,900 | $ 1,900 |
Property and Equipment Narrativ
Property and Equipment Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 9.7 | $ 9.2 | $ 10 |
Property and Equipment Table (D
Property and Equipment Table (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Leasehold improvements | $ 22,199 | $ 21,321 |
Office furniture and equipment | 6,117 | 6,352 |
Total cost | 103,490 | 91,777 |
Accumulated depreciation | (64,210) | (56,034) |
Property and equipment, net | 39,280 | 35,743 |
Computer Software and Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Other, Gross | 57,277 | 46,207 |
Transportation Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Other, Gross | $ 17,897 | $ 17,897 |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful Life | 1 year | |
Minimum [Member] | Computer Software and Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful Life | 1 year | |
Minimum [Member] | Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful Life | 5 years | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful Life | 12 years | |
Maximum [Member] | Computer Software and Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful Life | 7 years | |
Maximum [Member] | Transportation Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful Life | 12 years | |
Maximum [Member] | Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful Life | 10 years |
Debt Narrative (Details)
Debt Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 24, 2014 | |
Borrowings under credit agreement | $ 191,250 | $ 216,750 | $ 255,000 | |
Line of credit facility, maximum borrowing capacity | 200,000 | |||
Line of credit, outstanding borrowings | $ 0 | |||
Line of credit facility, current borrowing capacity | 200,000 | |||
Term loan quarterly payments, next twelve months | 25,500 | |||
Term loan quarterly payments, year two | 55,800 | |||
Term loan quarterly payments, year three | 110,000 | |||
Payments on debt | $ 25,500 | $ 25,500 | $ 34,000 | |
Loans Payable [Member] | ||||
Term loan spread basis points | 1.125% | |||
Line of Credit [Member] | ||||
Line of credit facility, facility fee basis points | 0.125% | |||
Line of credit facility spread basis points | 1.00% |
Debt Table (Details)
Debt Table (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 24, 2014 |
Loans Payable [Abstract] | |||
Term loan, weighted average interest rate | 1.745% | 1.555% | |
Term Loan | $ 191,250 | $ 216,750 | $ 255,000 |
Less: Short-term debt | 25,500 | 25,500 | |
Long-term debt | $ 165,750 | $ 191,250 |
Employee Benefit Plans Narrativ
Employee Benefit Plans Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Benefit Plans [Line Items] | |||
Matching contributions recorded in Compensation and related expense | $ 4,800,000 | $ 3,900,000 | $ 4,600,000 |
401(k) plan [Member] | |||
Employee Benefit Plans [Line Items] | |||
Number of hours of service for vesting, per year | 1,000 | ||
Number of years of service for vesting | 2 years | ||
Annual vesting percentage | 20.00% | ||
Number of years for incremental percentage vesting until participant fully vested in Company's matching contribution | 4 years | ||
401(k) plan [Member] | First Salary Deferral Contribution [Member] | |||
Employee Benefit Plans [Line Items] | |||
Employee contribution percentage | 2.00% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 100.00% | ||
401(k) plan [Member] | Second Salary Deferral Contribution [Member] | |||
Employee Benefit Plans [Line Items] | |||
Employee contribution percentage | 4.00% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 50.00% | ||
401(k) plan [Member] | Total Potential Salary Deferral Contribution [Member] | |||
Employee Benefit Plans [Line Items] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 4.00% | ||
401(k) plan [Member] | Minimum [Member] | |||
Employee Benefit Plans [Line Items] | |||
Employee contribution percentage | 1.00% | ||
401(k) plan [Member] | Maximum [Member] | |||
Employee Benefit Plans [Line Items] | |||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 50.00% | ||
Deferred Profit Sharing [Member] | |||
Employee Benefit Plans [Line Items] | |||
Matching contributions recorded in Compensation and related expense | $ 0 | $ 0 | $ 0 |
Number of hours of service for eligibility in profit sharing plan, per year | 500 | ||
Number of shares in profit sharing plan | 400,000 | ||
Employee Stock [Member] | |||
Employee Benefit Plans [Line Items] | |||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 10.00% | ||
Maximum number of shares of Class B common stock for Employee Stock Purchase Plan | 750,000 | ||
Defined Contribution Plan Number Of Shares Of Class B Common Stock Purchased Under Plan During Current Year | 9,012 | ||
Defined Contribution Plan Number Of Shares Of Class B Common Stock Purchased Under Plan Since Inception | 176,631 |
Share-Based Compensation Plan63
Share-Based Compensation Plans Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Number of Shares Authorized under Stock Incentive Plan | 27,100,000 | 27,100,000 | |||||||||||
Number of Shares Available for Grant under Stock Incentive Plan | 2,500,000 | 2,500,000 | |||||||||||
Share-based compensation expense | $ 22,445 | $ 22,685 | $ 21,711 | ||||||||||
Tax benefit from share-based compensation | 8,400 | $ 8,500 | $ 8,100 | ||||||||||
Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 73,000 | $ 73,000 | |||||||||||
Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 6 years | ||||||||||||
Restricted Stock Granted in Period | 943,160 | [1] | 863,137 | 1,057,981 | |||||||||
Restricted Stock Granted in Period, Weighted Average Grant Date Fair Value | $ 26.56 | [1] | $ 31.07 | $ 27.43 | |||||||||
Restricted Stock, Vested in Period, Total Fair Value | $ 23,900 | $ 28,800 | $ 24,400 | ||||||||||
Number of Shares of Common Stock Able To Be Purchased For Each Exercised Stock Option | 1 | ||||||||||||
Options, Exercises in Period | 0 | 3,000 | 6,000 | ||||||||||
Options, Granted In Period | 0 | 0 | 0 | ||||||||||
Federated Class B common stock awarded to non-management directors | 5,700 | 0 | 5,700 | 0 | 5,100 | 0 | 0 | 0 | 0 | ||||
Class B Common Stock Bonus [Member] | |||||||||||||
Award Requisite Service Period | 3 years | ||||||||||||
Restricted Stock Granted in Period | 464,660 | ||||||||||||
Class B Common Stock Key Employees [Member] | |||||||||||||
Award Requisite Service Period | 10 years | ||||||||||||
Restricted Stock Granted in Period | 478,500 | ||||||||||||
Stock Options Exercise Period, Years | 10 years | ||||||||||||
[1] | During 2016, Federated awarded 464,660 shares of restricted Federated Class B common stock in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three-year period. Also during 2016, Federated awarded 478,500 shares of restricted Federated Class B common stock to certain key employees. The restricted stock awards generally vest over ten-year periods with restrictions on the vested portions of the awards lapsing on the awards' fifth- and tenth-year anniversaries. |
Share-Based Compensation Plan64
Share-Based Compensation Plans Nonvested Restricted Stock Units (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Restricted Stock Awards, Nonvested, Number of Shares [Roll Forward] | ||||
Nonvested, Beginning Balance | 4,197,652 | |||
Granted in Period | 943,160 | [1] | 863,137 | 1,057,981 |
Vested in Period | (919,738) | |||
Forfeited in Period | (195,504) | |||
Nonvested, Ending Balance | 4,025,570 | 4,197,652 | ||
Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Nonvested, Weighted Average Grant Date Fair Value, Beginning Balance | $ 24.27 | |||
Granted in Period, Weighted Average Grant Date Fair Value | 26.56 | [1] | $ 31.07 | $ 27.43 |
Vested in Period, Weighted Average Grant Date Fair Value | 25.24 | |||
Forfeited in Period, Weighted Average Grant Date Fair Value | 24.24 | |||
Nonvested, Weighted Average Grant Date Fair Value, Ending Balance | $ 24.58 | $ 24.27 | ||
Class B Common Stock Bonus [Member] | ||||
Restricted Stock Awards, Nonvested, Number of Shares [Roll Forward] | ||||
Granted in Period | 464,660 | |||
Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Vesting period, years | 3 years | |||
Class B Common Stock Key Employees [Member] | ||||
Restricted Stock Awards, Nonvested, Number of Shares [Roll Forward] | ||||
Granted in Period | 478,500 | |||
Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Vesting period, years | 10 years | |||
Minimum [Member] | ||||
Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Lapse of restrictions on vested portion of restricted stock award | 5 years | |||
Maximum [Member] | ||||
Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Lapse of restrictions on vested portion of restricted stock award | 10 years | |||
[1] | During 2016, Federated awarded 464,660 shares of restricted Federated Class B common stock in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three-year period. Also during 2016, Federated awarded 478,500 shares of restricted Federated Class B common stock to certain key employees. The restricted stock awards generally vest over ten-year periods with restrictions on the vested portions of the awards lapsing on the awards' fifth- and tenth-year anniversaries. |
Share-Based Compensation Plan65
Share-Based Compensation Plans Stock Options (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ / shares | $ 37.73 | |
Options Outstanding, Number, Beginning Balance | shares | 33,000 | |
Options Outstanding, Number, Ending Balance | shares | 24,000 | [1] |
Options, Vested, Number | shares | 24,000 | [1] |
Options, Exercisable, Number | shares | 24,000 | [1] |
Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 34.38 | |
Expired unexercised | shares | (9,000) | |
Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ / shares | $ 33.13 | [1] |
Options, Vested, Weighted Average Exercise Price | $ / shares | 33.13 | [1] |
Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 33.13 | [1] |
Options, Outstanding, Weighted Average Remaining Contractual Term | 1 year 2 months | [1] |
Options, Vested, Weighted Average Remaining Contractual Term | 1 year 2 months | [1] |
Options, Exercisable, Weighted Average Remaining Contractual Term | 1 year 2 months | [1] |
Options, Outstanding, Aggregate Intrinsic Value | $ | $ 28,300 | [1] |
Options, Vested, Aggregate Intrinsic Value | $ | 28,300 | [1] |
Options, Exercisable, Aggregate Intrinsic Value | $ | $ 28,300 | [1] |
[1] | All stock options outstanding at December 31, 2016 were vested and exercisable. |
Common Stock Narrative (Details
Common Stock Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 27, 2016 | Feb. 28, 2015 | |
Class of Stock [Line Items] | ||||||
Dividends paid | $ 205,468 | $ 104,628 | $ 104,840 | |||
Amount paid for repurchase of common stock | $ 83,593 | $ 53,043 | $ 26,881 | |||
Common Class B [Member] | ||||||
Class of Stock [Line Items] | ||||||
Number of shares authorized under share repurchase program | 4,000,000 | 4,000,000 | ||||
Remaining number of shares authorized to be repurchased | 3,900,000 | 3,900,000 | ||||
Treasury Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Repurchased shares | 3,053,204 | 1,696,457 | 940,417 | |||
SpecialDividend [Member] | ||||||
Class of Stock [Line Items] | ||||||
Dividends paid | $ 102,200 | |||||
Common Stock, Dividends, Per Share, Cash Paid | $ 1 |
Income Taxes Narrative (Details
Income Taxes Narrative (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Tax net operating loss carryforwards | $ 20,839,000 | $ 18,109,000 |
Valuation allowance, amount | 20,419,000 | 17,791,000 |
Unrecognized Tax Benefits | 0 | 0 |
State Tax Net Operating Losses [Member] | ||
Valuation allowance, amount | $ 18,400,000 | $ 15,600,000 |
Percent of deferred tax asset for which valuation allowance has been recognized | 100.00% | 99.00% |
Foreign Tax Net Operating Losses [Member] | ||
Valuation allowance, amount | $ 2,000,000 | $ 2,200,000 |
Percent of deferred tax asset for which valuation allowance has been recognized | 85.00% | 92.00% |
Income Taxes Components of Inco
Income Taxes Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 93,538 | $ 76,902 | $ 63,266 |
State | 8,121 | 6,567 | 4,574 |
Foreign | 265 | 188 | 76 |
Total Current | 101,924 | 83,657 | 67,916 |
Deferred: | |||
Federal | 17,057 | 17,317 | 20,497 |
State | 597 | 1,753 | 916 |
Foreign | (158) | 193 | 201 |
Total Deferred | 17,496 | 19,263 | 21,614 |
Total | $ 119,420 | $ 102,920 | $ 89,530 |
Income Taxes Effective Income T
Income Taxes Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Expected federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
Increase/(decrease) | |||
State and local income taxes, net of federal benefit | 1.70% | 1.80% | 1.10% |
Other | (0.40%) | 0.90% | 1.30% |
Effective tax rate (excluding noncontrolling interests) | 36.30% | 37.70% | 37.40% |
Income attributable to noncontrolling interests | (1.30%) | (0.30%) | 0.00% |
Effective tax rate per Consolidated Statements of Income | 35.00% | 37.40% | 37.40% |
Income Taxes Deferred Tax Asset
Income Taxes Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Tax Assets | ||
Tax net operating loss carryforwards | $ 20,839 | $ 18,109 |
Compensation related | 11,692 | 13,130 |
Other | 2,810 | 6,920 |
Total deferred tax assets | 35,341 | 38,159 |
Valuation allowance | (20,419) | (17,791) |
Total deferred tax asset, net of valuation allowance | 14,922 | 20,368 |
Deferred Tax Liabilities | ||
Intangible assets | 168,748 | 155,212 |
Property and equipment | 8,975 | 7,882 |
Deferred sales commissions | 4,439 | 5,270 |
State taxes | 8,723 | 8,248 |
Other | 515 | 714 |
Total gross deferred tax liability | 191,400 | 177,326 |
Net deferred tax liability | $ 176,478 | $ 156,958 |
Earnings Per Share Attributab71
Earnings Per Share Attributable to Federated Investors, Inc. Shareholders Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Net income attributable to Federated Investors, Inc. | $ 55,842 | $ 54,925 | $ 52,709 | $ 45,443 | [1] | $ 47,610 | $ 44,131 | $ 41,759 | $ 36,307 | $ 208,919 | $ 169,807 | $ 149,236 | |||||
Less: Total income available to participating unvested restricted shareholders, basic | [2] | (7,632) | (6,608) | (5,823) | |||||||||||||
Less: Total income available to particpating unvested restricted shareholders, diluted | [2] | (7,632) | (6,608) | (5,823) | |||||||||||||
Total net income attributable to Federated Common Stock - Basic | [3] | 201,287 | 163,199 | 143,413 | |||||||||||||
Total net income attributable to Federated Common Stock - Diluted | [3] | $ 201,287 | $ 163,199 | $ 143,413 | |||||||||||||
Earnings per common share—Basic and Diluted | $ 0.52 | [4] | $ 0.54 | $ 0.51 | $ 0.44 | $ 0.46 | $ 0.42 | $ 0.40 | $ 0.35 | $ 2.03 | [3] | $ 1.62 | [3] | $ 1.42 | [3] | ||
Weighted Average Number of Shares Outstanding [Abstract] | |||||||||||||||||
Basic weighted-average common shares outstanding | [3] | 99,116 | 100,475 | 100,721 | |||||||||||||
Dilutive potential shares from stock options | 1 | 2 | 2 | ||||||||||||||
Diluted weighted-average common shares outstanding | [3] | 99,117 | 100,477 | 100,723 | |||||||||||||
[1] | As a result of the adoption of ASU 2016-09, the income-tax provision for March 31, 2016 was reduced by $0.2 million from amounts previously reported (see Note (2) for additional information). | ||||||||||||||||
[2] | Income available to participating unvested restricted shareholders includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings. | ||||||||||||||||
[3] | Federated Common Stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share. | ||||||||||||||||
[4] | For the quarter ended December 31, 2016, Federated paid $1.00 per share as a special cash dividend and a $0.25 per share regular cash dividend. All dividends were considered ordinary dividends for tax purposes. The special dividend negatively impacted fourth quarter 2016 earnings per share by $0.02. |
Leases Narrative (Details)
Leases Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Leased Assets [Line Items] | |||
Rent expenses | $ 12.9 | $ 13 | $ 14.8 |
Leases Future Minimum Rental Pa
Leases Future Minimum Rental Payments (Details) $ in Millions | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 13.6 |
2,018 | 14 |
2,019 | 13.9 |
2,020 | 13.6 |
2,021 | 13.4 |
2022 and thereafter | 94.2 |
Total minimum lease payments | $ 162.7 |
Accumulated Other Comprehensi74
Accumulated Other Comprehensive (Loss) Income Attributable to Federated Shareholders Schedule (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 01, 2016 | Dec. 31, 2013 | |||
Other comprehensive (loss) income, before reclassifications and tax | $ 3,811 | $ (7,187) | $ (1,262) | ||||
Other Comprehensive Income (Loss), Tax | (1,399) | 2,633 | 449 | ||||
Reclassification adjustment, before tax | 2,632 | [1] | 2,543 | 503 | |||
Reclassification adjustment, tax total | (958) | (936) | (144) | ||||
Net current-period other comprehensive income (loss) | 4,086 | (2,947) | (454) | ||||
Accumulated other comprehensive (loss) income, net of tax | (523) | (4,609) | (1,662) | $ (1,208) | |||
Unrealized Loss on Interest Rate Swap [Member] | |||||||
Other comprehensive (loss) income, before reclassifications and tax | [2] | 0 | 67 | (107) | |||
Other Comprehensive Income (Loss), Tax | [2] | 0 | (25) | 40 | |||
Reclassification adjustment, before tax | [2] | 0 | 358 | 4,743 | |||
Reclassification adjustment, tax total | [2] | 0 | (131) | (1,760) | |||
Net current-period other comprehensive income (loss) | [2] | 0 | 269 | 2,916 | |||
Accumulated other comprehensive (loss) income, net of tax | [2] | 0 | 0 | (269) | (3,185) | ||
Unrealized Gain (Loss) on Securities Available for Sale[Member] | |||||||
Other comprehensive (loss) income, before reclassifications and tax | [3] | 4,761 | (6,412) | (142) | |||
Other Comprehensive Income (Loss), Tax | [3] | (1,732) | 2,363 | 54 | |||
Reclassification adjustment, before tax | [3] | 2,632 | 2,185 | (4,240) | |||
Reclassification adjustment, tax total | [3] | (958) | [1] | (805) | 1,616 | ||
Net current-period other comprehensive income (loss) | [3] | 4,703 | (2,669) | (2,712) | |||
Accumulated other comprehensive (loss) income, net of tax | [3] | 908 | (3,795) | (1,126) | 1,586 | ||
Foreign Currency Translation Loss [Member] | |||||||
Other comprehensive (loss) income, before reclassifications and tax | (950) | (842) | (1,013) | ||||
Other Comprehensive Income (Loss), Tax | 333 | 295 | 355 | ||||
Reclassification adjustment, before tax | 0 | [1] | 0 | 0 | |||
Reclassification adjustment, tax total | 0 | [1] | 0 | 0 | |||
Net current-period other comprehensive income (loss) | (617) | (547) | (658) | ||||
Accumulated other comprehensive (loss) income, net of tax | $ (1,431) | $ (814) | $ (267) | $ 391 | |||
Accounting Standards Update 2015-02 [Member] | Retained Earnings [Member] | |||||||
Adoption of new accounting pronouncements | $ (831) | ||||||
[1] | Amount includes reclassification of $0.8 million, net of tax from Accumulated other comprehensive loss, net of tax to Retained earnings on the Consolidated Balance Sheets as a result of the adoption of ASU 2015-02 (see Note (2) for additional information). | ||||||
[2] | Federated entered into an interest rate swap in 2010 to hedge its interest rate risk associated with its original term facility. The interest rate swap expired on April 1, 2015. Amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Debt expense on the Consolidated Statements of Income. | ||||||
[3] | Other than described in note 3 below, amounts reclassified from Accumulated other comprehensive loss, net of tax were recorded in Gain (loss) on securities, net on the Consolidated Statements of Income. |
Commitments and Contingencies N
Commitments and Contingencies Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2008 | Dec. 31, 2016 | Jan. 31, 2015 | Dec. 31, 2014 | ||
Unrecorded Unconditional Purchase Obligation | $ 38 | ||||
Maximum performance incentive payable over remaining terms | [1] | 11 | |||
Prior Business Acquisition Required Compound Annual Growth Rate | 30.00% | ||||
Alleged damages sought | 37 | ||||
Clover Capital Acquisition [Member] | |||||
Contingent purchase price payments | $ 18 | ||||
Business Acquisition Cost Of Acquired Entity Upfront Cash Paid | $ 30 | ||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 55 | ||||
Employment-related Commitments [Member] | |||||
Unrecorded Unconditional Purchase Obligation | [1] | $ 13.1 | |||
[1] | Federated has certain domestic and international employment arrangements pursuant to which Federated is obligated to make minimum compensation payments. |
Commitments and Contingencies U
Commitments and Contingencies Unrecorded Unconditional Purchase Obligations Disclosure (Details) $ in Millions | Dec. 31, 2016USD ($) | |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
2,017 | $ 23.9 | |
2,018 | 7.9 | |
2,019 | 4 | |
2,020 | 2.2 | |
Total | 38 | |
Purchase Obligations [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
2,017 | 14.2 | [1] |
2,018 | 4.4 | [1] |
2,019 | 2.4 | [1] |
2,020 | 2.2 | [1] |
Total | 23.2 | [1] |
Employment-related Commitments [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
2,017 | 9 | [2] |
2,018 | 2.5 | [2] |
2,019 | 1.6 | [2] |
2,020 | 0 | [2] |
Total | 13.1 | [2] |
Other Obligations [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
2,017 | 0.7 | [3] |
2,018 | 1 | [3] |
2,019 | 0 | [3] |
2,020 | 0 | [3] |
Total | $ 1.7 | [3] |
[1] | Federated is a party to various contracts pursuant to which it receives certain services, including services for marketing and information technology, access to various fund-related information systems and research databases, trade order transmission and recovery services as well as other services. These contracts contain certain minimum noncancelable payments, cancellation provisions and renewal terms. The contracts require payments through the year 2020. Costs for such services are expensed as incurred. | |
[2] | Federated has certain domestic and international employment arrangements pursuant to which Federated is obligated to make minimum compensation payments. | |
[3] | Amounts include acquisition-related contingent purchase price payments and other liabilities recorded on the Consolidated Balance Sheets. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 15, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 26, 2017 |
Subsequent Event [Line Items] | |||||
Dividends paid | $ 205,468 | $ 104,628 | $ 104,840 | ||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per share to shareholders | $ 0.25 | ||||
Dividends paid | $ 25,500 |
Supplementary Quarterly Finan78
Supplementary Quarterly Financial Data Schedule (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||||
Quarterly Financial Information [Line Items] | |||||||||||||||||
Income tax provision | $ 119,420 | $ 102,920 | $ 89,530 | ||||||||||||||
Revenue | $ 289,904 | $ 294,620 | $ 286,738 | $ 272,109 | $ 243,639 | $ 234,321 | $ 228,127 | $ 220,522 | 1,143,371 | 926,609 | 859,250 | ||||||
Operating income | 84,822 | 88,636 | 87,670 | 74,555 | 76,885 | 74,244 | 69,279 | 59,038 | 335,683 | 279,446 | 237,949 | ||||||
Net income including the noncontrolling interests in subsidiaries | 57,229 | 58,908 | 56,418 | 48,959 | [1] | 49,169 | 44,136 | 42,263 | 36,418 | 221,514 | 171,986 | 149,822 | |||||
Amounts attributable to Federated Investors, Inc. | |||||||||||||||||
Net income | $ 55,842 | $ 54,925 | $ 52,709 | $ 45,443 | [1] | $ 47,610 | $ 44,131 | $ 41,759 | $ 36,307 | $ 208,919 | $ 169,807 | $ 149,236 | |||||
Negative impact to EPS as a result of the special dividend | $ (0.02) | ||||||||||||||||
Earnings per common share—Basic and Diluted | $ 0.52 | [2] | $ 0.54 | $ 0.51 | $ 0.44 | $ 0.46 | $ 0.42 | $ 0.40 | $ 0.35 | $ 2.03 | [3] | $ 1.62 | [3] | $ 1.42 | [3] | ||
Impact of Voluntary Yield-related Fee Waivers | |||||||||||||||||
Revenue | $ (11,027) | $ (18,030) | $ (21,333) | $ (37,482) | $ (71,995) | $ (83,254) | $ (84,245) | $ (94,112) | $ (87,800) | $ (333,600) | $ (410,600) | ||||||
Less: Reduction in Distribution expense | 7,627 | 13,797 | 16,528 | 27,896 | 54,493 | 61,283 | 60,179 | 64,654 | 65,800 | 240,600 | 280,900 | ||||||
Operating income | (3,400) | (4,233) | (4,805) | (9,586) | (17,502) | (21,971) | (24,066) | (29,458) | (22,000) | (93,000) | (129,700) | ||||||
Less: Reduction in Noncontrolling interest | 0 | 0 | (208) | 208 | 1,093 | 1,716 | 1,851 | 2,454 | 0 | 7,100 | 10,700 | ||||||
Pre-tax impact | (3,400) | (4,233) | (5,013) | (9,378) | $ (16,409) | $ (20,255) | $ (22,215) | $ (27,004) | $ (22,000) | $ (85,900) | $ (119,000) | ||||||
Accounting Standards Update 2016-09 [Member] | |||||||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||||||
Income tax provision | $ (2,100) | $ (300) | $ (200) | $ (200) | $ (400) | ||||||||||||
QuarterlyDividend [Member] | |||||||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.25 | ||||||||||||||||
SpecialDividend [Member] | |||||||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 1 | ||||||||||||||||
[1] | As a result of the adoption of ASU 2016-09, the income-tax provision for March 31, 2016 was reduced by $0.2 million from amounts previously reported (see Note (2) for additional information). | ||||||||||||||||
[2] | For the quarter ended December 31, 2016, Federated paid $1.00 per share as a special cash dividend and a $0.25 per share regular cash dividend. All dividends were considered ordinary dividends for tax purposes. The special dividend negatively impacted fourth quarter 2016 earnings per share by $0.02. | ||||||||||||||||
[3] | Federated Common Stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share. |