Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 20, 2017 | |
Entity Registrant Name | FEDERATED INVESTORS INC /PA/ | |
Entity Central Index Key | 1,056,288 | |
Trading Symbol | FII | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Amendment Flag | false | |
Subsequent Event [Member] | Class A [Member] | ||
Entity Common Stock, Shares Outstanding | 9,000 | |
Subsequent Event [Member] | Class B [Member] | ||
Entity Common Stock, Shares Outstanding | 100,893,690 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 161,410 | $ 104,839 |
Investments—affiliates | 116,136 | 130,785 |
Investments—consolidated investment companies | 45,046 | 58,072 |
Investments—other | 5,679 | 7,453 |
Receivables, net of reserve of $57 and $84, respectively | 45,530 | 44,804 |
Prepaid expenses | 9,690 | 9,994 |
Other current assets | 2,198 | 3,813 |
Total current assets | 385,689 | 359,760 |
Long-Term Assets | ||
Goodwill | 660,040 | 659,189 |
Renewable investment advisory contracts | 73,878 | 70,378 |
Other intangible assets, net of accumulated amortization of $5,059 and $4,630, respectively | 3,141 | 3,570 |
Property and equipment, net of accumulated depreciation of $69,144 and $64,210, respectively | 38,654 | 39,280 |
Other long-term assets | 20,106 | 22,930 |
Total long-term assets | 795,819 | 795,347 |
Total assets | 1,181,508 | 1,155,107 |
Current Liabilities | ||
Line of Credit, Current | 0 | |
Short-term debt | 25,500 | |
Accounts payable and accrued expenses | 51,029 | 54,177 |
Accrued compensation and benefits | 56,882 | 74,745 |
Other current liabilities | 7,903 | 8,116 |
Total current liabilities | 115,814 | 162,538 |
Long-Term Liabilities | ||
Long-term debt - line of credit | 175,000 | |
Long term debt | 165,750 | |
Long-term deferred tax liability, net | 185,370 | 176,686 |
Other long-term liabilities | 22,536 | 22,987 |
Total long-term liabilities | 382,906 | 365,423 |
Total liabilities | 498,720 | 527,961 |
Commitments and contingencies (Note (12)) | ||
TEMPORARY EQUITY | ||
Redeemable noncontrolling interest in subsidiaries | 28,991 | 31,362 |
PERMANENT EQUITY | ||
Retained earnings | 598,901 | 529,749 |
Treasury stock, at cost, 8,610,766 and 7,515,773 shares Class B common stock, respectively | (283,482) | (255,382) |
Accumulated other comprehensive income (loss), net of tax | 166 | (523) |
Total Federated Investors, Inc. shareholders' equity | 653,797 | 594,826 |
Nonredeemable noncontrolling interest in subsidiary | 0 | 958 |
Total permanent equity | 653,797 | 595,784 |
Total liabilities, temporary equity and permanent equity | 1,181,508 | 1,155,107 |
Class A [Member] | ||
PERMANENT EQUITY | ||
Common stock | 189 | 189 |
Class B [Member] | ||
PERMANENT EQUITY | ||
Common stock | $ 338,023 | $ 320,793 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Receivables, reserve | $ 57 | $ 84 |
Other intangible assets, accumulated amortization | 5,059 | 4,630 |
Property and equipment, accumulated depreciation | $ 69,144 | $ 64,210 |
Treasury stock, shares | 8,610,766 | 7,515,773 |
Class A [Member] | ||
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | 20,000 | 20,000 |
Common stock, shares issued | 9,000 | 9,000 |
Common stock, shares outstanding | 9,000 | 9,000 |
Class B [Member] | ||
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 109,505,456 | 109,505,456 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Revenue | |||||
Investment advisory fees, net—affiliates | $ 149,412 | $ 169,327 | $ 442,536 | $ 490,059 | |
Investment advisory fees, net—other | 35,474 | 27,926 | 102,989 | 81,703 | |
Administrative service fees, net—affiliates | 47,461 | 53,577 | 139,763 | 160,181 | |
Other service fees, net—affiliates | 44,196 | 41,701 | 133,748 | 115,201 | |
Other service fees, net—other | 1,364 | 1,033 | 4,306 | 3,374 | |
Other, net | 408 | 1,056 | 1,270 | 2,949 | |
Total revenue | 278,315 | 294,620 | 824,612 | 853,467 | |
Operating Expenses | |||||
Distribution | 84,838 | 98,740 | 262,371 | 281,862 | |
Compensation and related | 72,454 | 75,731 | 217,226 | 227,726 | |
Systems and communications | 7,992 | 7,763 | 24,258 | 23,395 | |
Office and occupancy | 7,293 | 6,660 | 21,805 | 20,223 | |
Professional service fees | 6,563 | 7,360 | 18,971 | 19,886 | |
Travel and related | 3,258 | 3,165 | 9,150 | 9,727 | |
Advertising and promotional | 2,345 | 3,371 | 8,396 | 10,751 | |
Other | 4,882 | 3,194 | 11,761 | 9,036 | |
Total operating expenses | 189,625 | 205,984 | 573,938 | 602,606 | |
Operating income | 88,690 | 88,636 | 250,674 | 250,861 | |
Nonoperating Income (Expenses) | |||||
Investment income, net | 1,889 | 1,857 | 5,244 | 5,104 | |
Gain on securities, net | [1] | 1,667 | 2,032 | 6,463 | 2,553 |
Debt expense | (1,250) | (1,039) | (3,534) | (3,118) | |
Other, net | 1 | 19 | (32) | 13 | |
Total nonoperating income, net | 2,307 | 2,869 | 8,141 | 4,552 | |
Income before income taxes | 90,997 | 91,505 | 258,815 | 255,413 | |
Income tax provision | 33,756 | 32,597 | 95,888 | 91,128 | |
Net income including the noncontrolling interests in subsidiaries | 57,241 | 58,908 | 162,927 | 164,285 | |
Less: Net income attributable to the noncontrolling interests in subsidiaries | 802 | 3,983 | 3,396 | 11,208 | |
Net income | $ 56,439 | $ 54,925 | $ 159,531 | $ 153,077 | |
Amounts Attributable to Federated Investors, Inc. | |||||
Earnings per common share—Basic and Diluted | [2] | $ 0.56 | $ 0.54 | $ 1.57 | $ 1.48 |
Cash dividends per share | $ 0.25 | $ 0.25 | $ 0.75 | $ 0.75 | |
[1] | Amounts related to consolidated entities, primarily Federated Funds, totaled $0.6 million and $3.2 million for the three and nine months ended September 30, 2017, respectively and $1.6 million and $3.5 million for the three and nine months ended September 30, 2016, respectively. | ||||
[2] | Federated Common Stock excludes unvested restricted shares which are deemed participating securities in accordance with the two-class method of computing earnings per share. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net income including the noncontrolling interests in subsidiaries | $ 57,241 | $ 58,908 | $ 162,927 | $ 164,285 |
Permanent equity | ||||
Unrealized (loss) gain on securities available for sale | (43) | 1,688 | 1,350 | 2,673 |
Reclassification adjustment related to securities available for sale | (58) | (178) | (1,215) | 1,666 |
Foreign currency items | 191 | (47) | 554 | (324) |
Temporary equity | ||||
Foreign currency translation loss | 0 | (16) | 0 | (13) |
Other comprehensive income, net of tax | 90 | 1,447 | 689 | 4,002 |
Comprehensive income including the noncontrolling interests in subsidiaries | 57,331 | 60,355 | 163,616 | 168,287 |
Less: Comprehensive income attributable to redeemable noncontrolling interest in subsidiaries | 802 | 1,349 | 2,920 | 3,242 |
Less: Comprehensive income attributable to nonredeemable noncontrolling interest in subsidiary | 0 | 2,618 | 476 | 7,953 |
Comprehensive income attributable to Federated Investors, Inc. | $ 56,529 | $ 56,388 | $ 160,220 | $ 157,092 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [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] |
Balance at Dec. 31, 2015 | $ 648,972 | $ 298,579 | $ 0 | $ 545,785 | $ (191,939) | $ (4,609) | $ 647,816 | $ 1,156 | |
Balance - Temporary Equity at Dec. 31, 2015 | $ 8,734 | ||||||||
Adoption of new accounting pronouncements (Adjustments for New Accounting Pronouncement [Member]) at Dec. 31, 2015 | 43 | 123 | (911) | 831 | 43 | 14,850 | |||
Net income | 161,030 | 153,077 | 153,077 | 7,953 | 3,255 | ||||
Other comprehensive income (loss), net of tax | 3,184 | 3,184 | 3,184 | (13) | |||||
Subscriptions—redeemable noncontrolling interest holders | 14,040 | ||||||||
Consolidation/(deconsolidation) | (4,579) | ||||||||
Stock award activity | 17,271 | 17,049 | 45 | (13,160) | 13,337 | 17,271 | |||
Dividends declared | (77,630) | (77,630) | (77,630) | ||||||
Distributions to noncontrolling interest in subsidiaries | (7,876) | (7,876) | (6,342) | ||||||
Purchases of treasury stock | (64,101) | 0 | (64,101) | (64,101) | |||||
Balance at Sep. 30, 2016 | 680,893 | 315,751 | 45 | 607,161 | (242,703) | (594) | 679,660 | 1,233 | |
Balance - Temporary Equity at Sep. 30, 2016 | 29,945 | ||||||||
Balance at Dec. 31, 2016 | 595,784 | 320,982 | 0 | 529,749 | (255,382) | (523) | 594,826 | 958 | |
Balance - Temporary Equity at Dec. 31, 2016 | 31,362 | ||||||||
Net income | 160,007 | 159,531 | 159,531 | 476 | 2,920 | ||||
Other comprehensive income (loss), net of tax | 689 | 689 | 689 | 0 | |||||
Subscriptions—redeemable noncontrolling interest holders | 4,095 | ||||||||
Consolidation/(deconsolidation) | (1,891) | ||||||||
Stock award activity | 17,320 | 17,230 | 0 | (14,131) | 14,221 | 17,320 | |||
Dividends declared | (76,248) | (76,248) | (76,248) | ||||||
Distributions to noncontrolling interest in subsidiaries | (1,434) | (1,434) | (7,495) | ||||||
Purchases of treasury stock | (42,321) | 0 | (42,321) | (42,321) | |||||
Balance at Sep. 30, 2017 | $ 653,797 | $ 338,212 | $ 0 | $ 598,901 | $ (283,482) | $ 166 | $ 653,797 | $ 0 | |
Balance - Temporary Equity at Sep. 30, 2017 | $ 28,991 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities | ||
Net income including the noncontrolling interests in subsidiaries | $ 162,927 | $ 164,285 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities | ||
Amortization of deferred sales commissions | 6,580 | 8,979 |
Depreciation and other amortization | 7,788 | 7,098 |
Share-based compensation expense | 17,290 | 17,212 |
(Gain) loss on disposal of assets | (5,358) | 1,417 |
Provision for deferred income taxes | 8,226 | 13,686 |
Impairment of assets | 0 | 1,637 |
Consolidation/deconsolidation of investment companies | 0 | (176) |
Adoption of new accounting pronouncement | 0 | (2,653) |
Net sales (purchases) of trading securities | 14,702 | (8,753) |
Deferred sales commissions paid | (3,737) | (10,137) |
Contingent deferred sales charges received | 1,484 | 1,636 |
Other changes in assets and liabilities: | ||
Increase in receivables, net | (707) | (5,356) |
Decrease (increase) in prepaid expenses and other assets | 834 | (4,776) |
Decrease in accounts payable and accrued expenses | (23,360) | (5,794) |
Increase (decrease) in other liabilities | 4,054 | (2,787) |
Net cash provided by operating activities | 190,723 | 175,518 |
Investing Activities | ||
Purchases of securities available for sale | (7,266) | (2,273) |
Cash paid for business acquisitions | (4,352) | 0 |
Proceeds from redemptions of securities available for sale | 26,382 | 7,980 |
Cash paid for property and equipment | (6,791) | (10,391) |
Net cash provided (used) by investing activities | 7,973 | (4,684) |
Financing Activities | ||
Dividends paid | (76,286) | (77,767) |
Purchases of treasury stock | (44,152) | (61,440) |
Distributions to noncontrolling interest in subsidiaries | (8,929) | (14,218) |
Contributions from noncontrolling interest in subsidiaries | 4,095 | 14,040 |
Cash paid for amended and restated credit agreement | (483) | 0 |
Proceeds from shareholders for share-based compensation | 90 | 222 |
Payments on contingent consideration liabilities | (210) | (70) |
Payments on debt | (16,250) | (19,125) |
Net cash used by financing activities | (142,125) | (158,358) |
Net increase in cash and cash equivalents | 56,571 | 12,476 |
Cash and cash equivalents, beginning of period | 104,839 | 172,628 |
Cash and cash equivalents, end of period | $ 161,410 | $ 185,104 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Basis of Accounting [Abstract] | |
Basis of Accounting | Basis of Presentation The interim Consolidated Financial Statements of Federated Investors, Inc. and its consolidated subsidiaries (collectively, Federated) included herein have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP). In the opinion of management, the financial statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods presented. In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates, and such differences may be material to the Consolidated Financial Statements. These financial statements should be read in conjunction with Federated's Annual Report on Form 10-K for the year ended December 31, 2016 . Certain items previously reported have been reclassified to conform to the current period's presentation. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Significant Accounting Policies For a listing of Federated's significant accounting policies, please refer to Federated's Annual Report on Form 10-K for the year ended December 31, 2016 . |
Recent Accounting Pronouncement
Recent Accounting Pronouncements Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Deferred Taxes On January 1, 2017, Federated adopted Accounting Standards Update (ASU) 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This update requires that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. Management elected the prospective transition method, which did not require the restatement of prior years, and the adoption did not have a material impact on Federated's Consolidated Financial Statements. |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | Revenue Recognition On May 28, 2014, the Financial Accounting Standards Board (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. During the third quarter of 2015, the FASB issued ASU 2015-14, which deferred the effective date of the standard by one year. As a result of the deferral, the update is effective for Federated on January 1, 2018. While early adoption is permitted, Federated does not plan to early adopt in 2017. During 2016, the FASB issued ASU 2016-08, which clarified principal versus agent considerations, ASU 2016-10, which clarified identifying performance obligations and the licensing implementation guidance, ASU 2016-12, which addressed implementation issues and provided additional practical expedients and ASU 2016-20, which provided 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. Management has substantially completed evaluating revenue contracts, as well as identifying Federated's customers, performance obligations and material revenue streams. For revenue streams evaluated to date, no changes have been identified as to the timing of revenue recognition. Management has reevaluated the capitalization and amortization policies of deferred sales commission assets, which will result in a shorter amortization period. Contingent deferred sales charges received, which are currently recorded as a reduction of the deferred sales commission asset, will be recorded as revenue. Additionally, consideration payable to a customer (such as payments to a fund for amounts in excess of the fund's expense cap), which is currently recorded as an expense, will be recorded as a reduction of revenue. Management continues to evaluate other potential impacts of adoption, including whether certain costs should be capitalized or expensed based on the criteria for costs to obtain or fulfill a contract, and the new disclosure requirements, as well as available transition methods and the impact of adoption on Federated's Consolidated Financial Statements. 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, including investments in mutual funds and (2) the presentation of certain fair value changes for financial liabilities. 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. The amendments pertaining to financial liabilities are currently not expected to have a material impact on Federated's Consolidated Financial Statements. Management continues to evaluate the amendments pertaining to equity securities and their potential impact of adoption on Federated's Consolidated Financial Statements. Leases On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The core principle is that a lessee should recognize the assets and liabilities that arise from leases on the balance sheet, but Topic 842 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 method. Management is currently evaluating the potential impact of adoption on Federated's Consolidated Financial Statements. 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), the assets are not considered to be 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. The ASU is effective for Federated on January 1, 2018, with early adoption permitted in specific circumstances, and is required to be applied prospectively. Management does not expect this update to have a material impact on Federated's Consolidated Financial Statements. |
Concentration Risk
Concentration Risk | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk | Concentration Risk (a) Revenue Concentration by Asset Class The following table summarizes the percentage of total revenue earned from Federated's asset classes for the periods presented: Nine Months Ended September 30, 2017 2016 Money market assets 41 % 46 % Equity assets 42 % 38 % Fixed-income assets 17 % 16 % The change in the relative proportion of Federated's revenue attributable to money market assets for the first nine months of 2017 as compared to the same period in 2016 was primarily the result of lower average money market assets and a decrease related to a change in a customer relationship. This was partially offset by a decrease in voluntary waivers (either through fee waivers or reimbursements or assumptions of expenses) in order for certain money market funds to maintain positive or zero net yields ( Voluntary Yield-related Fee Waivers ). The change in the relative proportion of Federated's revenue attributable to equity assets for the first nine months of 2017 as compared to the same period in 2016 was primarily the result of higher average equity assets due to market appreciation, partially offset by net redemptions . Current Regulatory Environment Federated and its investment management business are subject to extensive regulation in the U.S. and abroad. Federated and its products, both sponsored investment companies and other funds ( Federated Funds ) and strategies, are subject to: federal securities laws, principally the Securities Act of 1933, the Securities Exchange Act of 1934 (1934 Act), the Investment Company Act of 1940 (1940 Act) and the Investment Advisers Act of 1940; state laws regarding securities fraud and registration; and other rules and regulations, promulgated by various regulatory authorities, self-regulatory organizations or exchanges, as well as foreign laws, regulations or other rules promulgated by foreign regulatory or other authorities. See the Business Developments - Current Regulatory Environment section of Management's Discussion and Analysis for additional information about the current regulatory environment. Low Short-Term Interest Rates After initiating short-term interest rate increases of 0.25% in late 2015 and 2016, the Federal Open Market Committee of the Federal Reserve Board ( FOMC ) raised the federal funds target rate by 0.25% twice in the first six months of 2017 to its current target range of 1.00%-1.25%. 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. The long-term low interest-rate environment resulted in the gross yield earned by certain money market funds not being sufficient to cover all of the fund's operating expenses. As a result, beginning in the fourth quarter of 2008, Federated implemented Voluntary Yield-related Fee Waivers . These 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 assets under management (AUM or managed assets) 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, and changes in expenses of, the money market funds. As an isolated variable, an increase in yields on instruments held by the money market funds will cause the pre-tax impact of waivers to decrease. Conversely, as an isolated variable, an increase in expenses of the money market funds would cause the pre-tax impact of 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 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 Voluntary Yield-related Fee Waivers on various components of Federated's Consolidated Statements of Income was as follows for the periods presented: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2017 2016 2017 2016 Revenue $ 0.0 $ (18.0 ) $ (4.4 ) $ (76.8 ) Less: Reduction in Distribution expense 0.0 13.8 3.6 58.2 Pre-tax impact $ 0.0 $ (4.2 ) $ (0.8 ) $ (18.6 ) The negative pre-tax impact of Voluntary Yield-related Fee Waivers decreased for the nine-month period ended September 30, 2017 as compared to the same period in 2016 due primarily to higher yields on instruments held by the money market funds. As previously mentioned, the FOMC increased the federal funds target rate range by 25 basis points in December 2016, and in March and June 2017. These rate increases have nearly eliminated the pre-tax impact of the Voluntary Yield-related Fee Waivers . A listing of Federated's risk factors is included in Federated's Annual Report on Form 10-K for the year ended December 31, 2016 under Item 1A - Risk Factors (as updated under Part II, Item 1A - Risk Factors included in Federated's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017) . (b) Revenue Concentration by Investment Strategy Approximately 18% of Federated's total revenue for both the three - and nine-month period s ended September 30, 2017 , and 16% and 14% for the three - and nine-month period s ended September 30, 2016 , respectively, was derived from services provided to a specific domestic strategy, the Federated Strategic Value Dividend strategy, which includes Federated Funds and Separate Accounts (which include separately managed accounts, institutional accounts, sub-advised funds and other managed products) . 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 the Federated Funds managed in accordance with this strategy. (c) Revenue Concentration by Customer Approximately 16% of Federated's total revenue for both the three - and nine-month period s ended September 30, 2017 , and 15% for both the three - and nine-month period s ended September 30, 2016 , 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 | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Consolidation The Consolidated Financial Statements include the accounts of Federated, which include 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 voting rights entities ( VREs) or variable interest entities ( 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 each consolidated Federated Fund are restricted for use by the respective Federated Fund . 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 $24.9 million and $27.1 million at September 30, 2017 and December 31, 2016 , respectively. In the ordinary course of business, Federated may implement Fee Waivers for various Federated Funds for competitive, regulatory or contractual reasons. For the three and nine months ended September 30, 2017 , Fee Waivers totaled $83.8 million and $259.1 million , respectively, of which $53.1 million and $166.7 million , respectively, related to money market funds which meet the scope exception of the consolidation guidance. For the three and nine months ended September 30, 2016 , Fee Waivers totaled $113.9 million and $356.0 million , respectively, of which $82.4 million and $262.1 million , respectively, related to money market funds which meet the scope exception of the consolidation guidance. 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 money market Federated Fund . In these instances, such capital contributions typically are intended to either offset realized losses or other permanent impairments to a fund's net asset value (NAV) or increase the market-based NAV per share of the fund's portfolio that is being reorganized to equal the market-based NAV per share of the acquiring fund or to bear a portion of expenses relating to a fund liquidation. There were no contributions for the three and nine months ended September 30, 2017 , no contributions for the three months ended September 30, 2016 and no material contributions for the nine months ended September 30, 2016 . Under current money fund regulations and Securities and Exchange Commission (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 as of September 30, 2017 and December 31, 2016 . (a) Consolidated Voting Rights Entities Most of the Federated Funds meet the definition of a VRE. Federated consolidates certain VREs when it is deemed to have control. As of September 30, 2017 and December 31, 2016 , consolidated VREs included on Federated's Consolidated Balance Sheets included $1.6 million and $14.9 million , respectively, in Investments—consolidated investment companies and $0.4 million and $3.1 million , respectively, in Redeemable noncontrolling interest in subsidiaries . The decrease in these line items primarily relates to the liquidation of three consolidated Federated Fund VREs. (b) Consolidated Variable Interest Entities As of September 30, 2017 and December 31, 2016 , Federated was deemed to be the primary beneficiary of, and therefore consolidated, certain Federated Funds as a result of its controlling financial interest. 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 for each period presented: (in millions) September 30, 2017 December 31, 2016 Cash and cash equivalents $ 0.1 $ 0.0 Investments—consolidated investment companies 43.4 43.2 Receivables 0.8 0.7 Less: Liabilities 0.6 0.7 Less: Redeemable noncontrolling interest in subsidiaries 28.6 28.3 Federated's net interest in Federated Fund VIEs $ 15.1 $ 14.9 Federated's net interest in the consolidated Federated Fund VIEs represents the value of Federated's economic ownership interest in these Federated Funds . The liabilities of the consolidated Federated Fund VIEs primarily represent operating liabilities of the entities. In addition to the VIEs in the table above, at December 31, 2016 , Federated held 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 in accordance with the consolidation guidance. Federated transferred its partnership interest on January 27, 2017 and is no longer the primary beneficiary of Passport. Accordingly, Federated deconsolidated $4.8 million from Cash and cash equivalents , $2.6 million from Receivables, $5.3 million from liabilities (primarily representing operating liabilities) and $1.0 million from Nonredeemable noncontrolling interest in subsidiary on the Consolidated Balance Sheets as of the date of deconsolidation. Federated also recorded a receivable of $1.1 million for the undistributed earnings of the partnership through the date of deconsolidation, which was collected during the second quarter of 2017. There was no impact to the Consolidated Statements of Income as a result of this deconsolidation. Other than the deconsolidation mentioned above, Federated did not newly consolidate or deconsolidate any VIEs during the nine months ended September 30, 2017 . (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 September 30, 2017 and December 31, 2016 , Federated's investment and maximum risk of loss related to non-consolidated VIEs was entirely related to Federated Funds and totaled $1.2 million and $2.3 million , respectively, and was recorded in Investments—affiliates on the Consolidated Balance Sheets. AUM for these non-consolidated Federated Funds totaled $15.8 million and $76.3 million at September 30, 2017 and December 31, 2016 , respectively. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments on the Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016 included available-for-sale and trading securities. At September 30, 2017 and December 31, 2016 , Federated held investments totaling $116.1 million and $130.8 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. Available-for-sale securities were as follows: September 30, 2017 December 31, 2016 Gross Unrealized Estimated Fair Gross Unrealized Estimated Fair (in thousands) Cost Gains (Losses) Value Cost Gains (Losses) Value Equity funds $ 14,040 $ 2,188 $ (23 ) $ 16,205 $ 23,883 $ 2,112 $ (266 ) $ 25,729 Fixed-income funds 100,468 105 (642 ) 99,931 105,514 92 (550 ) 105,056 Total available-for-sale securities $ 114,508 $ 2,293 $ (665 ) $ 116,136 $ 129,397 $ 2,204 $ (816 ) $ 130,785 The decrease in the available-for-sale securities as of September 30, 2017 as compared to December 31, 2016 primarily related to net redemptions of available-for-sale securities during 2017. Federated's trading securities totaled $50.7 million and $65.5 million at September 30, 2017 and December 31, 2016 , respectively. 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 (5) ). 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 represent other trading investments held in Separate Accounts. Federated's trading securities as of September 30, 2017 and December 31, 2016 , were primarily composed of domestic debt securities ( $46.0 million and $45.5 million , respectively), stocks of large U.S. and international companies ( $3.6 million and $7.2 million , respectively) and investments in Federated Funds ( $0.6 million and $8.9 million , respectively). The following table presents gains and losses recognized in Gain 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 : Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2017 2016 2017 2016 Net unrealized gains (losses) Trading securities $ 151 $ 1,684 $ 526 $ 5,410 Derivatives 1 (499 ) 315 493 11 Realized gains 2 Available-for-sale securities 3 914 266 2,806 291 Trading securities 258 472 2,014 1,058 Derivatives 1 914 28 1,648 583 Realized losses 2 Available-for-sale securities 3 0 0 (14 ) (1,645 ) Trading securities (71 ) (273 ) (692 ) (2,048 ) Derivatives 1 0 (460 ) (318 ) (1,107 ) Gain on securities, net 4 $ 1,667 $ 2,032 $ 6,463 $ 2,553 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 Proceeds from redemptions of available-for-sale securities were $9.0 million and $26.4 million for the three and nine months ended September 30, 2017 , respectively. These amounts include a redemption of $1.5 million recorded as a receivable during the second quarter that was not settled until after June 30, 2017. Proceeds from redemptions of available-for-sale securities were $7.8 million and $8.0 million for the three and nine months ended September 30, 2016 , respectively. 4 Amounts related to consolidated entities, primarily Federated Funds , totaled $0.6 million and $3.2 million for the three and nine months ended September 30, 2017 , respectively and $1.6 million and $3.5 million for the three and nine months ended September 30, 2016 , respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
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 that would be 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: (in thousands) Level 1 Level 2 Level 3 NAV Practical Expedient Total September 30, 2017 Financial Assets Cash and cash equivalents $ 50,881 $ 0 $ 0 $ 110,529 $ 161,410 Available-for-sale equity securities 92,610 0 0 23,526 116,136 Trading securities—equity 3,975 618 0 135 4,728 Trading securities—debt 0 45,997 0 0 45,997 Other 1 19 76 840 0 935 Total financial assets $ 147,485 $ 46,691 $ 840 $ 134,190 $ 329,206 Total financial liabilities 2 $ 9 $ 0 $ 1,721 $ 0 $ 1,730 December 31, 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 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 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. 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 September 30, 2017 or December 31, 2016 . Cash and cash equivalents Cash and cash equivalents include investments in money market funds and deposits with banks. Investments in money market Federated Funds totaled $153.7 million and $96.7 million at September 30, 2017 and December 31, 2016 , 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 Federated 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 certain equity investments held in Separate Accounts (included in Investments—other on the Consolidated Balance Sheets) as well as equity securities held by consolidated Federated Funds (included in Investments—consolidated investment companies 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 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 and/or Separate Accounts 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 September 30, 2017 . (c) Fair Value Measurements of Other Financial Instruments The fair value of Federated's debt is estimated by management using observable market data (Level 2). Based on this fair value estimate, the carrying value of debt appearing on the Consolidated Balance Sheets approximates fair value. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure | Debt On June 5, 2017 , Federated entered into an unsecured Third Amended and Restated Credit Agreement by and among Federated, certain of its subsidiaries as guarantors party thereto, a syndicate of ten banks as Lenders party thereto, 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 (Credit Agreement). The Credit Agreement amended and restated Federated's prior unsecured Second Amended and Restated Credit Agreement, which was dated June 24, 2014 and scheduled to mature on June 24, 2019 (Prior Credit Agreement). The Credit Agreement refinanced $200 million available on the revolving credit facility and $178.5 million outstanding on the term loan facility under the Prior Credit Agreement, replacing both with a $375 million revolving credit facility which has an additional $200 million available via an optional increase (or accordion) feature. Federated had no borrowings under the previous revolving credit facility. The Credit Agreement does not include a term loan facility. The Credit Agreement, which expires on June 5, 2022, has no principal payment schedule, but instead requires that any outstanding principal be repaid by the expiration date. Federated, however, may elect to make discretionary principal payments prior to the expiration date. As of September 30, 2017 , the amount outstanding under the revolving credit facility was $175.0 million and was recorded as Long-term debt on the Consolidated Balance Sheets. The interest rate was 2.362% as of September 30, 2017 , which was calculated at the London Interbank Offering Rate (LIBOR) plus a spread. The commitment fee under the Credit Agreement currently is 0.125% per annum on the daily unused portion of each Lender's commitment. As of September 30, 2017 , Federated has $200 million available for borrowings. As of December 31, 2016 , the outstanding balance on the term loan facility under the Prior Credit Agreement was $191.3 million , which consisted of $25.5 million recorded in Short-term debt and $165.8 million recorded in Long-term debt . The interest rate was 1.745% as of December 31, 2016 , which was calculated at LIBOR plus a spread. The Credit Agreement, similar to the Prior 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 nine months ended September 30, 2017 (see the Liquidity and Capital Resources section of Management's Discussion and Analysis 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 debt outstanding 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, notice of lien or assessment, and other proceedings, whether voluntary or involuntary, that would require the repayment of amounts borrowed. The Credit Agreement also requires certain subsidiaries to enter into a Second Amended and Restated Continuing Agreement of Guaranty and Suretyship to guarantee payment of all obligations incurred through the Credit Agreement. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans (a) Restricted Stock During the first nine months of 2017 , Federated awarded 543,570 shares of restricted Federated Class B common stock, nearly all of which was granted in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under Federated's Stock Incentive Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, will generally vest over a three -year period. The remaining shares were awarded to certain key employees and generally vest over a ten -year period. During 2016 , Federated awarded 943,160 shares of restricted Federated Class B common stock under its Stock Incentive Plan. Of this amount, 464,660 shares were awarded in connection with the aforementioned bonus program in 2016 . The remaining shares were awarded to certain key employees and generally vest over a ten -year period. (b) Non-Management Director Stock Award During the second quarters of 2017 and 2016 , Federated awarded 6,000 and 5,700 shares of Federated Class B common stock, respectively, to non-management directors. There were no additional awards to non-management directors in 2017 or 2016 . |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Equity | Equity In October 2016 , 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. No other programs existed as of September 30, 2017. 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 first nine months of 2017 , Federated repurchased 1.6 million shares of Class B common stock for $42.3 million , the majority of which were repurchased in the open market. The remaining repurchased shares represent restricted stock forfeited by employees and are not counted against the board-approved share repurchase program. At September 30, 2017 , 2.3 million shares remain available to be purchased under Federated's buyback program. |
Earnings Per Share Attributable
Earnings Per Share Attributable to Federated Investors, Inc. Shareholders | 9 Months Ended |
Sep. 30, 2017 | |
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: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share data) 2017 2016 2017 2016 Numerator – Basic and Diluted Net income attributable to Federated Investors, Inc. $ 56,439 $ 54,925 $ 159,531 $ 153,077 Less: Total income available to participating unvested restricted shareholders 1 (2,220 ) (2,035 ) (6,342 ) (5,987 ) Total net income attributable to Federated Common Stock 2 $ 54,219 $ 52,890 $ 153,189 $ 147,090 Denominator Basic weighted-average Federated Common Stock 2 97,128 98,805 97,521 99,397 Dilutive potential shares from stock options 1 1 1 1 Diluted weighted-average Federated Common Stock 2 97,129 98,806 97,522 99,398 Earnings per share Net income attributable to Federated Common Stock – Basic and Diluted 2 $ 0.56 $ 0.54 $ 1.57 $ 1.48 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 shares which are deemed participating securities in accordance with the two-class method of computing earnings per share. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Contractual Federated may be required to make certain compensation-related payments through 2019 in connection with various significant employment and incentive arrangements. Federated is obligated to make future minimum compensation payments of approximately $6 million . Based on asset levels as of September 30, 2017 and performance goals, incentive payments could total up to another $8 million over the remaining terms of these arrangements. On June 5, 2017 , Federated refinanced the Prior Credit Agreement and is no longer committed to make quarterly principal payments. Outstanding principal is to be paid no later than the expiration date of the Credit Agreement. See Note (8) to the Consolidated Financial Statements for additional information. (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 September 30, 2017 , management does not believe that a material loss related to any of these matters is reasonably possible. (c) Legal Proceedings Federated has claims asserted and threatened against it in the ordinary course of business. As of September 30, 2017 , Federated does not believe that a material loss related to these claims is reasonably possible. See Item 1A - Risk Factors included in Federated's Annual Report on Form 10-K for the year ended December 31, 2016 (as updated under Part II, Item 1A - Risk Factors included in Federated's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017) for additional information regarding risks related to claims asserted or threatened against Federated. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) Attributable to Federated Investors, Inc. Shareholders | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) attributable to Federated Investors, Inc. Shareholders | Accumulated Other Comprehensive Income (Loss) Attributable to Federated Investors, Inc. Shareholders The components of Accumulated other comprehensive income (loss), net of tax attributable to Federated shareholders are as follows: (in thousands) Unrealized (Loss) Gain on Securities Available for Sale 1 Foreign Currency Translation (Loss) Gain Total Balance at December 31, 2015 $ (3,795 ) $ (814 ) $ (4,609 ) Other comprehensive income (loss) before reclassifications and tax 4,185 (497 ) 3,688 Tax impact (1,512 ) 173 (1,339 ) Reclassification adjustments, before tax 2 2,632 0 2,632 Tax impact 2 (966 ) 0 (966 ) Net current-period other comprehensive income (loss) 4,339 (324 ) 4,015 Balance at September 30, 2016 $ 544 $ (1,138 ) $ (594 ) Balance at December 31, 2016 $ 908 $ (1,431 ) $ (523 ) Other comprehensive income before reclassifications and tax 2,391 852 3,243 Tax impact (1,041 ) (298 ) (1,339 ) Reclassification adjustments, before tax (2,151 ) 0 (2,151 ) Tax impact 936 0 936 Net current-period other comprehensive income 135 554 689 Balance at September 30, 2017 $ 1,043 $ (877 ) $ 166 1 Other than as described in footnote 2 below, amounts reclassified from Accumulated other comprehensive income (loss), net of tax were recorded in Gain on securities, net on the Consolidated Statements of Income. 2 Amount includes reclassification of $0.8 million , net of tax from Accumulated other comprehensive income (loss), net of tax to Retained earnings on the Consolidated Balance Sheets as a result of the adoption of ASU 2015-02, Consolidation (Topic 810): Amendment to the Consolidation Analysis. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 26, 2017 , the board of directors declared a $0.25 per share dividend to shareholders of record as of November 8, 2017 to be paid on November 15, 2017 . |
Concentration Risk (Tables)
Concentration Risk (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenue Concentration | The following table summarizes the percentage of total revenue earned from Federated's asset classes for the periods presented: Nine Months Ended September 30, 2017 2016 Money market assets 41 % 46 % Equity assets 42 % 38 % Fixed-income assets 17 % 16 % |
Voluntary Fee Waivers | The impact of Voluntary Yield-related Fee Waivers on various components of Federated's Consolidated Statements of Income was as follows for the periods presented: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2017 2016 2017 2016 Revenue $ 0.0 $ (18.0 ) $ (4.4 ) $ (76.8 ) Less: Reduction in Distribution expense 0.0 13.8 3.6 58.2 Pre-tax impact $ 0.0 $ (4.2 ) $ (0.8 ) $ (18.6 ) |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entities [Abstract] | |
Consolidated Federated Funds 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 for each period presented: (in millions) September 30, 2017 December 31, 2016 Cash and cash equivalents $ 0.1 $ 0.0 Investments—consolidated investment companies 43.4 43.2 Receivables 0.8 0.7 Less: Liabilities 0.6 0.7 Less: Redeemable noncontrolling interest in subsidiaries 28.6 28.3 Federated's net interest in Federated Fund VIEs $ 15.1 $ 14.9 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-For-Sale Securities | Available-for-sale securities were as follows: September 30, 2017 December 31, 2016 Gross Unrealized Estimated Fair Gross Unrealized Estimated Fair (in thousands) Cost Gains (Losses) Value Cost Gains (Losses) Value Equity funds $ 14,040 $ 2,188 $ (23 ) $ 16,205 $ 23,883 $ 2,112 $ (266 ) $ 25,729 Fixed-income funds 100,468 105 (642 ) 99,931 105,514 92 (550 ) 105,056 Total available-for-sale securities $ 114,508 $ 2,293 $ (665 ) $ 116,136 $ 129,397 $ 2,204 $ (816 ) $ 130,785 |
Gains and losses on investments | The following table presents gains and losses recognized in Gain on securities, net on the Consolidated Statements of Income in connection with Federated's investments as well as economic derivatives held by certain consolidated Federated Funds : Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2017 2016 2017 2016 Net unrealized gains (losses) Trading securities $ 151 $ 1,684 $ 526 $ 5,410 Derivatives 1 (499 ) 315 493 11 Realized gains 2 Available-for-sale securities 3 914 266 2,806 291 Trading securities 258 472 2,014 1,058 Derivatives 1 914 28 1,648 583 Realized losses 2 Available-for-sale securities 3 0 0 (14 ) (1,645 ) Trading securities (71 ) (273 ) (692 ) (2,048 ) Derivatives 1 0 (460 ) (318 ) (1,107 ) Gain on securities, net 4 $ 1,667 $ 2,032 $ 6,463 $ 2,553 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 Proceeds from redemptions of available-for-sale securities were $9.0 million and $26.4 million for the three and nine months ended September 30, 2017 , respectively. These amounts include a redemption of $1.5 million recorded as a receivable during the second quarter that was not settled until after June 30, 2017. Proceeds from redemptions of available-for-sale securities were $7.8 million and $8.0 million for the three and nine months ended September 30, 2016 , respectively. 4 Amounts related to consolidated entities, primarily Federated Funds , totaled $0.6 million and $3.2 million for the three and nine months ended September 30, 2017 , respectively and $1.6 million and $3.5 million for the three and nine months ended September 30, 2016 , respectively. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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: (in thousands) Level 1 Level 2 Level 3 NAV Practical Expedient Total September 30, 2017 Financial Assets Cash and cash equivalents $ 50,881 $ 0 $ 0 $ 110,529 $ 161,410 Available-for-sale equity securities 92,610 0 0 23,526 116,136 Trading securities—equity 3,975 618 0 135 4,728 Trading securities—debt 0 45,997 0 0 45,997 Other 1 19 76 840 0 935 Total financial assets $ 147,485 $ 46,691 $ 840 $ 134,190 $ 329,206 Total financial liabilities 2 $ 9 $ 0 $ 1,721 $ 0 $ 1,730 December 31, 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 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 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. |
Earnings Per Share Attributab26
Earnings Per Share Attributable to Federated Investors, Inc. Shareholders (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share data) 2017 2016 2017 2016 Numerator – Basic and Diluted Net income attributable to Federated Investors, Inc. $ 56,439 $ 54,925 $ 159,531 $ 153,077 Less: Total income available to participating unvested restricted shareholders 1 (2,220 ) (2,035 ) (6,342 ) (5,987 ) Total net income attributable to Federated Common Stock 2 $ 54,219 $ 52,890 $ 153,189 $ 147,090 Denominator Basic weighted-average Federated Common Stock 2 97,128 98,805 97,521 99,397 Dilutive potential shares from stock options 1 1 1 1 Diluted weighted-average Federated Common Stock 2 97,129 98,806 97,522 99,398 Earnings per share Net income attributable to Federated Common Stock – Basic and Diluted 2 $ 0.56 $ 0.54 $ 1.57 $ 1.48 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 shares 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: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share data) 2017 2016 2017 2016 Numerator – Basic and Diluted Net income attributable to Federated Investors, Inc. $ 56,439 $ 54,925 $ 159,531 $ 153,077 Less: Total income available to participating unvested restricted shareholders 1 (2,220 ) (2,035 ) (6,342 ) (5,987 ) Total net income attributable to Federated Common Stock 2 $ 54,219 $ 52,890 $ 153,189 $ 147,090 Denominator Basic weighted-average Federated Common Stock 2 97,128 98,805 97,521 99,397 Dilutive potential shares from stock options 1 1 1 1 Diluted weighted-average Federated Common Stock 2 97,129 98,806 97,522 99,398 Earnings per share Net income attributable to Federated Common Stock – Basic and Diluted 2 $ 0.56 $ 0.54 $ 1.57 $ 1.48 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 shares which are deemed participating securities in accordance with the two-class method of computing earnings per share. |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive Income (Loss) Attributable to Federated Investors, Inc. Shareholders (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive (Loss) Income | The components of Accumulated other comprehensive income (loss), net of tax attributable to Federated shareholders are as follows: (in thousands) Unrealized (Loss) Gain on Securities Available for Sale 1 Foreign Currency Translation (Loss) Gain Total Balance at December 31, 2015 $ (3,795 ) $ (814 ) $ (4,609 ) Other comprehensive income (loss) before reclassifications and tax 4,185 (497 ) 3,688 Tax impact (1,512 ) 173 (1,339 ) Reclassification adjustments, before tax 2 2,632 0 2,632 Tax impact 2 (966 ) 0 (966 ) Net current-period other comprehensive income (loss) 4,339 (324 ) 4,015 Balance at September 30, 2016 $ 544 $ (1,138 ) $ (594 ) Balance at December 31, 2016 $ 908 $ (1,431 ) $ (523 ) Other comprehensive income before reclassifications and tax 2,391 852 3,243 Tax impact (1,041 ) (298 ) (1,339 ) Reclassification adjustments, before tax (2,151 ) 0 (2,151 ) Tax impact 936 0 936 Net current-period other comprehensive income 135 554 689 Balance at September 30, 2017 $ 1,043 $ (877 ) $ 166 1 Other than as described in footnote 2 below, amounts reclassified from Accumulated other comprehensive income (loss), net of tax were recorded in Gain on securities, net on the Consolidated Statements of Income. 2 Amount includes reclassification of $0.8 million , net of tax from Accumulated other comprehensive income (loss), net of tax to Retained earnings on the Consolidated Balance Sheets as a result of the adoption of ASU 2015-02, Consolidation (Topic 810): Amendment to the Consolidation Analysis. |
Concentration Risk Narrative (D
Concentration Risk Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Product Concentration Risk [Member] | FederatedStrategicValueDividendStrategy [Member] | ||||
Concentration Risk, Percentage | 18.00% | 16.00% | 18.00% | 14.00% |
Customer Concentration Risk [Member] | BNYMellonCorporation [Member] | ||||
Concentration Risk, Percentage | 16.00% | 15.00% | 16.00% | 15.00% |
Concentration Risk Schedule of
Concentration Risk Schedule of Revenue Concentration (Details) - Product Concentration Risk [Member] | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Money market assets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 41.00% | 46.00% |
Equity assets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 42.00% | 38.00% |
Fixed income assets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 17.00% | 16.00% |
Concentration Risk Voluntary Fe
Concentration Risk Voluntary Fee Waivers (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Concentration Risk [Line Items] | ||||
Revenue | $ 0 | $ (18) | $ (4.4) | $ (76.8) |
Less: Reduction in Distribution expense | 0 | 13.8 | 3.6 | 58.2 |
Pre-tax impact | $ 0 | $ (4.2) | $ (0.8) | $ (18.6) |
Consolidation Narrative (Detail
Consolidation Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jan. 27, 2017 |
Variable Interest Entities [Line Items] | ||||||
Accounts receivable from Federated Funds | $ 27,100 | $ 24,900 | $ 24,900 | |||
Total Fee Waivers | 83,800 | $ 113,900 | 259,100 | $ 356,000 | ||
Investments—consolidated investment companies | 58,072 | 45,046 | 45,046 | |||
Nonredeemable noncontrolling interest in subsidiary | 958 | 0 | 0 | |||
Receivables | 44,804 | 45,530 | 45,530 | |||
Financial Support, Fee Waivers [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Nonconsolidated Legal Entity, Financial Support Amount | 53,100 | 82,400 | 166,700 | 262,100 | ||
Financial Support, Capital Contributions [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Nonconsolidated Legal Entity, Financial Support Amount | 0 | $ 0 | 0 | $ 0 | ||
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Investments—consolidated investment companies | 43,200 | 43,400 | 43,400 | |||
Redeemable noncontrolling interest in subsidiaries | 28,300 | 28,600 | 28,600 | |||
Liabilities | 700 | 600 | 600 | |||
Federated's maximum risk of loss in consolidated investment companies | 14,900 | 15,100 | 15,100 | |||
Non-Consolidated Variable Interest Entity, Not Primary Beneficiary [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Carrying Value of investment of nonconsolidated VIEs | 2,300 | 1,200 | 1,200 | |||
Federated's maximum risk of loss in consolidated investment companies | 2,300 | 1,200 | 1,200 | |||
AUM for nonconsolidated Federated Funds | 76,300 | 15,800 | 15,800 | |||
Cash and Cash Equivalents [Member] | Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Consolidated VIE assets | 0 | 100 | 100 | |||
Trade Accounts Receivable [Member] | Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Consolidated VIE assets | $ 700 | 800 | 800 | |||
General Partnership and VIE [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Receivables | $ 1,100 | |||||
General Partnership and VIE [Member] | Passport [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent | 50.50% | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 49.50% | |||||
General Partnership and VIE [Member] | Deconsolidation [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Liabilities | 5,300 | |||||
Nonredeemable noncontrolling interest in subsidiary | 1,000 | |||||
General Partnership and VIE [Member] | Cash and Cash Equivalents [Member] | Deconsolidation [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Consolidated VIE assets | 4,800 | |||||
General Partnership and VIE [Member] | Trade Accounts Receivable [Member] | Deconsolidation [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Consolidated VIE assets | $ 2,600 | |||||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||||
Variable Interest Entities [Line Items] | ||||||
Investments—consolidated investment companies | $ 14,900 | 1,600 | 1,600 | |||
Redeemable noncontrolling interest in subsidiaries | $ 3,100 | $ 400 | $ 400 |
Consolidation Consolidated Fede
Consolidation Consolidated Federated Fund VIEs (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Variable Interest Entities [Line Items] | ||
Investments—consolidated investment companies | $ 45,046 | $ 58,072 |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities | 15,100 | 14,900 |
Variable Interest Entity, Not Primary Beneficiary [Member] | ||
Variable Interest Entities [Line Items] | ||
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets | 1,200 | 2,300 |
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | ||
Variable Interest Entities [Line Items] | ||
Investments—consolidated investment companies | 43,400 | 43,200 |
Less: Liabilities | 600 | 700 |
Less: Redeemable noncontrolling interest in subsidiaries | 28,600 | 28,300 |
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Cash and Cash Equivalents [Member] | ||
Variable Interest Entities [Line Items] | ||
Consolidated VIE assets | 100 | 0 |
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Trade Accounts Receivable [Member] | ||
Variable Interest Entities [Line Items] | ||
Consolidated VIE assets | $ 800 | $ 700 |
Investments Narrative (Details)
Investments Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Investments [Line Items] | ||
Investments—affiliates | $ 116,136 | $ 130,785 |
Trading Securities | 50,700 | 65,500 |
Domestic Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Trading Securities | 46,000 | 45,500 |
Equity Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Trading Securities | 3,600 | 7,200 |
Mutual Fund [Member] | ||
Schedule of Investments [Line Items] | ||
Trading Securities | $ 600 | $ 8,900 |
Investments Available-For-Sale
Investments Available-For-Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | $ 114,508 | $ 129,397 |
Gross unrealized gains | 2,293 | 2,204 |
Gross unrealized losses | (665) | (816) |
Investments—affiliates | 116,136 | 130,785 |
Equity Funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 14,040 | 23,883 |
Gross unrealized gains | 2,188 | 2,112 |
Gross unrealized losses | (23) | (266) |
Investments—affiliates | 16,205 | 25,729 |
Fixed-Income Funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 100,468 | 105,514 |
Gross unrealized gains | 105 | 92 |
Gross unrealized losses | (642) | (550) |
Investments—affiliates | $ 99,931 | $ 105,056 |
Investments Gain (Loss) on Sec
Investments Gain (Loss) on Securities, Net of Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | ||
Gain (Loss) on Investments [Line Items] | ||||||
Gain on securities, net | [1] | $ 1,667 | $ 2,032 | $ 6,463 | $ 2,553 | |
Proceeds from redemptions of securities available for sale | 9,000 | 7,800 | 26,382 | 7,980 | ||
Receivable for securities not settled | $ 1,500 | |||||
Trading Securities [Member] | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Net unrealized gains on trading securities | 151 | 1,684 | 526 | 5,410 | ||
Realized gains | [2] | 258 | 472 | 2,014 | 1,058 | |
Realized losses | [2] | (71) | (273) | (692) | (2,048) | |
Derivatives [Member] | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Net unrealized (losses) gains on derivatives | [3] | (499) | 315 | 493 | 11 | |
Realized gains | [2],[3] | 914 | 28 | 1,648 | 583 | |
Realized losses | [2],[3] | 0 | (460) | (318) | (1,107) | |
Available-for-sale Securities [Member] | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Realized gains | [2],[4] | 914 | 266 | 2,806 | 291 | |
Realized losses | [2],[4] | 0 | 0 | (14) | (1,645) | |
Consolidated Products [Member] | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Gain on securities, net | $ 600 | $ 1,600 | $ 3,200 | $ 3,500 | ||
[1] | Amounts related to consolidated entities, primarily Federated Funds, totaled $0.6 million and $3.2 million for the three and nine months ended September 30, 2017, respectively and $1.6 million and $3.5 million for the three and nine months ended September 30, 2016, 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] | Proceeds from redemptions of available-for-sale securities were $9.0 million and $26.4 million for the three and nine months ended September 30, 2017, respectively. These amounts include a redemption of $1.5 million recorded as a receivable during the second quarter that was not settled until after June 30, 2017. Proceeds from redemptions of available-for-sale securities were $7.8 million and $8.0 million for the three and nine months ended September 30, 2016, respectively. |
Fair Value Measurements Narrati
Fair Value Measurements Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and cash equivalents | $ 161,410 | $ 104,839 |
Money Market Funds [Member] | ||
Cash and cash equivalents | $ 153,700 | $ 96,700 |
Fair Value Measurements Classes
Fair Value Measurements Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Cash and cash equivalents | $ 161,410 | $ 104,839 | |
NAV Practical Expedient | 134,190 | 83,096 | |
Available-for-sale equity securities | 116,136 | 130,785 | |
Trading securities—equity | 4,728 | 20,059 | |
Trading securities—debt | 45,997 | 45,466 | |
Other assets | [1] | 935 | 859 |
Total financial assets | 329,206 | 302,008 | |
Total financial liabilities | [2] | 1,730 | 2,291 |
Level 1 [Member] | |||
Cash and cash equivalents | 50,881 | 54,725 | |
Available-for-sale equity securities | 92,610 | 103,996 | |
Trading securities—equity | 3,975 | 13,866 | |
Trading securities—debt | 0 | 0 | |
Other assets | [1] | 19 | 19 |
Total financial assets | 147,485 | 172,606 | |
Total financial liabilities | [2] | 9 | 2 |
Level 2 [Member] | |||
Cash and cash equivalents | 0 | 0 | |
Available-for-sale equity securities | 0 | 0 | |
Trading securities—equity | 618 | 0 | |
Trading securities—debt | 45,997 | 45,466 | |
Other assets | [1] | 76 | 0 |
Total financial assets | 46,691 | 45,466 | |
Total financial liabilities | [2] | 0 | 358 |
Level 3 [Member] | |||
Cash and cash equivalents | 0 | 0 | |
Available-for-sale equity securities | 0 | 0 | |
Trading securities—equity | 0 | 0 | |
Trading securities—debt | 0 | 0 | |
Other assets | [1] | 840 | 840 |
Total financial assets | 840 | 840 | |
Total financial liabilities | [2] | 1,721 | 1,931 |
Cash and Cash Equivalents [Member] | |||
NAV Practical Expedient | 110,529 | 50,114 | |
Available-for-sale Securities [Member] | |||
NAV Practical Expedient | 23,526 | 26,789 | |
Trading Securities [Member] | |||
NAV Practical Expedient | $ 135 | $ 6,193 | |
[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 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. |
Debt Narrative (Details)
Debt Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 05, 2017 | Dec. 31, 2016 | Jun. 24, 2014 |
Line of credit facility, maximum borrowing capacity | $ 375,000 | $ 200,000 | ||
Borrowings under Term Loan | 178,500 | $ 191,250 | ||
Line of Credit Facility Accordion Feature | 200,000 | |||
Line of credit facility, outstanding borrowings | $ 175,000 | $ 0 | ||
Line of Credit Facility, Interest Rate at Period End | 2.362% | |||
Line of Credit Facility, Commitment Fee Percentage | 0.125% | |||
Line of credit facility, current borrowing capacity | $ 200,000 | |||
Short-term debt | 25,500 | |||
Long term debt | $ 165,750 | |||
Term loan, weighted average interest rate | 1.745% |
Share-Based Compensation Plans
Share-Based Compensation Plans (Details) - shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Restricted Stock Granted in Period | 543,570 | 943,160 | |||||||
Shares of Federated Class B Common Stock Granted to Non-Management Directors | 0 | 6,000 | 0 | 0 | 0 | 5,700 | 0 | ||
Class B Common Stock Bonus [Member] | |||||||||
Restricted Stock Granted in Period | 464,660 | ||||||||
Restricted stock requisite service period | 3 years | ||||||||
Class B Common Stock Key Employees [Member] | |||||||||
Restricted stock requisite service period | 10 years | 10 years |
Equity (Details)
Equity (Details) - USD ($) $ in Thousands, shares in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Oct. 27, 2016 | |
Purchase of treasury stock | $ 42,321 | $ 64,101 | |
Treasury Stock [Member] | |||
Purchase of treasury stock | $ 42,321 | $ 64,101 | |
Class B [Member] | |||
Number of shares authorized under share repurchase program | 4 | ||
Repurchased shares | 1.6 | ||
Remaining number of shares authorized to be repurchased | 2.3 |
Earnings Per Share Attributab41
Earnings Per Share Attributable to Federated Investors, Inc. Shareholders Earnings Pe 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 | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Earnings Per Share [Abstract] | |||||
Net income attributable to Federated Investors, Inc. | $ 56,439 | $ 54,925 | $ 159,531 | $ 153,077 | |
Less: Total income available to participating unvested restricted shareholders, basic | [1] | (2,220) | (2,035) | (6,342) | (5,987) |
Less: Total income available to participating unvested restricted shareholders, diluted | [1] | (2,220) | (2,035) | (6,342) | (5,987) |
Total net income attributable to Federated Common Stock, basic | [2] | 54,219 | 52,890 | 153,189 | 147,090 |
Total net income attributable to Federated Common Stock, diluted | [2] | $ 54,219 | $ 52,890 | $ 153,189 | $ 147,090 |
Net income attributable to Federated Common Stock - Basic and Diluted | [2] | $ 0.56 | $ 0.54 | $ 1.57 | $ 1.48 |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||
Basic weighted-average Federated Common Stock | [2] | 97,128 | 98,805 | 97,521 | 99,397 |
Dilutive potential shares from stock options | 1 | 1 | 1 | 1 | |
Diluted weighted-average Federated Common Stock | [2] | 97,129 | 98,806 | 97,522 | 99,398 |
[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 shares which are deemed participating securities in accordance with the two-class method of computing earnings per share. |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2017USD ($) |
Employee Incentive Compensation Maximum Bonus Payable Over Remaining Terms | $ 8 |
Employment-related Commitments [Member] | |
Unrecorded Unconditional Purchase Obligation | $ 6 |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Income (Loss) Attributable to Federated Investors, Inc. Shareholders (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jan. 01, 2016 | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Balance | $ 595,784 | $ 648,972 | |||||
Other comprehensive income, net of tax | $ 90 | $ 1,447 | 689 | 4,002 | |||
Balance | 653,797 | 680,893 | 653,797 | 680,893 | |||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Balance | (523) | (4,609) | |||||
Other comprehensive income (loss) before reclassifications and tax | 3,243 | 3,688 | |||||
Tax impact | (1,339) | (1,339) | |||||
Reclassification adjustments, before tax | (2,151) | 2,632 | |||||
Tax impact | 936 | (966) | |||||
Other comprehensive income, net of tax | 689 | 4,015 | |||||
Balance | 166 | (594) | 166 | (594) | |||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Member] | Accounting Standards Update 2015-02 [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Adoption of new accounting pronouncements | $ 831 | ||||||
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Balance | [1] | 908 | (3,795) | ||||
Other comprehensive income (loss) before reclassifications and tax | [1] | 2,391 | 4,185 | ||||
Tax impact | [1] | (1,041) | (1,512) | ||||
Reclassification adjustments, before tax | [1] | (2,151) | 2,632 | [2] | |||
Tax impact | [1] | 936 | (966) | [2] | |||
Other comprehensive income, net of tax | [1] | 135 | 4,339 | ||||
Balance | [1] | 1,043 | 544 | 1,043 | 544 | ||
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Balance | (1,431) | (814) | |||||
Other comprehensive income (loss) before reclassifications and tax | 852 | (497) | |||||
Tax impact | (298) | 173 | |||||
Reclassification adjustments, before tax | 0 | 0 | |||||
Tax impact | 0 | 0 | |||||
Other comprehensive income, net of tax | 554 | (324) | |||||
Balance | (877) | (1,138) | (877) | (1,138) | |||
Retained Earnings [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Balance | 529,749 | 545,785 | |||||
Balance | $ 598,901 | $ 607,161 | $ 598,901 | $ 607,161 | |||
Retained Earnings [Member] | Accounting Standards Update 2015-02 [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Adoption of new accounting pronouncements | $ (831) | ||||||
[1] | Other than as described in footnote 2 below, amounts reclassified from Accumulated other comprehensive income (loss), net of tax were recorded in Gain on securities, net on the Consolidated Statements of Income. | ||||||
[2] | Amount includes reclassification of $0.8 million, net of tax from Accumulated other comprehensive income (loss), net of tax to Retained earnings on the Consolidated Balance Sheets as a result of the adoption of ASU 2015-02, Consolidation (Topic 810): Amendment to the Consolidation Analysis. |
Subsequent Events (Details)
Subsequent Events (Details) | Oct. 26, 2017$ / shares |
Subsequent Event [Member] | |
Dividend declared | $ 0.25 |