Exhibit 99.1
Federated Investors, Inc. Reports Third Quarter 2009 Earnings
• | Equity and fixed-income assets increase $6.3 billion to reach $61 billion for Q3 2009 |
• | Net bond fund sales reach $1.8 billion for Q3 2009 |
• | Board declares quarterly dividend of $0.24 per share |
(PITTSBURGH, Pa., October 22, 2009) — Federated Investors, Inc. (NYSE: FII), one of the nation’s largest investment managers, today reported earnings per diluted share from continuing operations (EPS) of $0.56 for the quarter ended Sept. 30, 2009 compared to $0.52 for the same quarter last year. Income from continuing operations was $57.0 million for Q3 2009 compared to $56.2 million for Q3 2008.
Federated reported YTD 2009 EPS of $1.42 compared to $1.62 for the same period in 2008. For the nine months ended Sept. 30, 2009, income from continuing operations was $145.4 million compared to $167.2 million for the same period in 2008. Earnings for YTD 2009 included $20.8 million in non-cash impairment charges recognized primarily in Q1 2009.
Federated’s total managed assets were $392.3 billion at Sept. 30, 2009, up $48.3 billion or 14 percent from $344.0 billion at Sept. 30, 2008 and down $9.5 billion or 2 percent from $401.8 billion reported at June 30, 2009. Average managed assets for Q3 2009 were $408.1 billion, up $73.0 billion or 22 percent from $335.1 billion reported for Q3 2008 and down $6.3 billion or 2 percent from $414.4 billion reported for Q2 2009.
“Federated’s fluctuating fund sales have increased more than 50 percent from the same time last year,” said J. Christopher Donahue, president and chief executive officer. “Investors continue to recognize Federated’s reputation for managing a broad line of stock, bond and alternative strategies that can help them meet their investing needs.”
Federated’s board of directors declared a quarterly dividend of $0.24 per share. The dividend is payable on Nov. 13, 2009 to shareholders of record as of Nov. 9, 2009. During Q3 2009, Federated purchased 470,581 shares of Federated class B common stock for $12.0 million.
Federated’s fixed-income assets were $32.0 billion at Sept. 30, 2009, up $9.3 billion or 41 percent from $22.7 billion at Sept. 30, 2008 and up $3.3 billion or 11 percent from $28.7 billion at June 30, 2009. Federated experienced continued strong net positive flows into its bond funds with $1.8 billion during Q3 2009, bringing total bond fund inflows to $5.6 billion so far in 2009, an increase of $4.0 billion over the first nine months of 2008. Net sales were driven by strong flows into ultrashort bond funds and intermediate-term bond funds including Federated Total Return Bond Fund.
Federated’s equity assets were $29.1 billion at Sept. 30, 2009, down $2.6 billion or 8 percent from $31.7 billion at Sept. 30, 2008 and up $2.9 billion or 11 percent from $26.2 billion at June 30, 2009. During Q3 2009, Federated’s
MEDIA: | MEDIA: | ANALYSTS: | ||
Meghan McAndrew 412-288-8103 | J.T. Tuskan 412-288-7895 | Ray Hanley 412-288-1920 |
Federated Reports Q3 2009 Earnings
| Page 2 of 10
|
net flows into equity funds were $126 million. Net sales were led by Federated Prudent Bear Fund and Federated Market Opportunity Fund, both of which invest in alternative-asset classes, and Federated Kaufmann Small Cap Fund, a growth fund.
Money market assets in both funds and separate accounts were $318.1 billion at Sept. 30, 2009, up $30.3 billion or 11 percent from $287.8 billion at Sept. 30, 2008 and down $28.3 billion or 8 percent from $346.4 billion at June 30, 2009. Money market mutual fund assets were $287.6 billion at Sept. 30, 2009, up $28.4 billion or 11 percent from $259.2 billion at Sept. 30, 2008 and down $25.2 billion or 8 percent from $312.8 billion at June 30, 2009.
Financial Summary
Q3 2009 vs. Q3 2008
For Q3 2009, revenue decreased by $12.3 million or 4 percent from the same quarter last year. The decrease in revenue primarily reflects $36.5 million in voluntary fee waivers related to certain money market funds in order to maintain positive or zero net yields. The fee waivers were partially offset by a related reduction in marketing and distribution expenses of $27.9 million such that the net impact on operating income was a decrease of $8.6 million. Lower average equity managed assets also contributed to decreased revenue. These decreases were partially offset by increased revenue from higher average money market and fixed-income managed assets.
Fee waivers to produce positive or zero net yields may increase and such increases could be significant. The amount of these waivers will be determined by a variety of factors including available yields on instruments held by the money market funds, changes in assets within money market funds, actions by the Federal Reserve and the U.S. Department of the Treasury, changes in the mix of money market customer assets, changes in expenses of the money market funds and Federated’s willingness to continue these waivers.
For Q3 2009, Federated derived 63 percent of its revenue from money market assets, 24 percent from equity assets, 12 percent from fixed-income assets and 1 percent from other products and services.
Operating expenses for Q3 2009 were $198.9 million compared to $212.7 million for Q3 2008. Marketing and distribution expenses decreased because of the aforementioned fee-waiver-related reductions, partially offset by the impact of increases in average money market managed assets.
Q3 2009 vs. Q2 2009
Compared to the prior quarter, revenue decreased by $13.3 million or 4 percent. The decrease in revenue primarily reflects a $19.6 million increase in voluntary fee waivers on certain money market funds in order to maintain positive or zero net yields. The fee waivers were offset by a related decrease in marketing and distribution expenses of $16.5 million such that the net impact on operating income was a decrease of $3.1 million compared to the prior quarter. In addition, revenue decreased due to lower average money market managed assets. These decreases were partially offset by the impact of increased average equity and fixed-income managed assets.
Compared to Q2 2009, operating expenses decreased by $20.0 million or 9 percent. Changes from the prior period include a decrease in marketing and distribution expenses primarily related to the aforementioned fee-waiver-related reductions.
Federated Reports Q3 2009 Earnings
| Page 3 of 10
|
YTD 2009 vs. YTD 2008
Revenue for the first nine months of 2009 decreased by $10.8 million or 1 percent compared to the same period last year. The decrease in revenue primarily reflects voluntary fee waivers of $63.1 million on certain money market funds in order to maintain positive or zero net yields. The fee waivers were partially offset by a related reduction in marketing and distribution expenses of $43.8 million such that the net impact on operating income was a decrease of $19.3 million. In addition, revenue decreased due to lower average equity managed assets. These decreases were partially offset by the impact of increased average money market and fixed-income managed assets.
For YTD 2009, Federated derived 67 percent of its revenue from money market assets, 21 percent from equity assets, 11 percent from fixed-income assets and 1 percent from other products and services.
Operating expenses for the first nine months of 2009 increased by $21.8 million or 3 percent compared to the same period of last year primarily due to $20.8 million in non-cash impairment charges recorded primarily in Q1 2009.
Federated’s level of business activity and financial results are dependent upon many factors including market conditions, investment performance and investor behavior. These factors and others including asset levels, product sales and redemptions, market appreciation or depreciation, revenues, fee waivers and expenses can impact Federated’s activity levels and financial results significantly. Risk factors and uncertainties that can influence Federated’s financial results are discussed in the company’s annual and quarterly reports as filed with the Securities and Exchange Commission.
Federated will host an earnings conference call at 9 a.m. Eastern on Friday, Oct. 23, 2009. Investors are invited to listen to Federated’s earnings teleconference by calling 877-407-0782 (domestic) or 201-689-8567 (international) prior to the 9 a.m. start time for the teleconference. The call may also be accessed in real time on the Internet via theAbout Us section ofFederatedInvestors.com. A replay will be available after 12:30 p.m. and until Oct. 30, 2009 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering codes 286 and 334400.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $392.3 billion in assets as of Sept. 30, 2009. With 150 funds and a variety of separately managed account options, Federated provides comprehensive investment management to nearly 5,300 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top 2 percent of money market fund managers in the industry, the top 6 percent of fixed-income fund managers and the top 8 percent of equity fund managers1. For more information, visitFederatedInvestors.com.
###
1 | Strategic Insight, August 31, 2009. Based on assets under management in open-end funds. |
Federated Securities Corp. is distributor of the Federated funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling and Federated MDTA LLC, each a registered investment advisor.
Certain statements in this press release, such as those related to the level of fee waivers incurred by the company, and asset flows, constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or
Federated Reports Q3 2009 Earnings
| Page 4 of 10
|
implied by such forward-looking statements. Other risks and uncertainties include the ability of the company to predict the level of fee waivers in future quarters, which could vary significantly depending on a variety of factors identified above, and include the ability of the company to sustain asset flows, which could vary significantly depending on market conditions, investment performance and investor behavior. Other risks and uncertainties also include the risk factors discussed in the company’s annual and quarterly reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness of such statements in the future.
Federated Reports Q3 2009 Earnings
| Page 5 of 10
|
Unaudited Condensed Consolidated Statements of Income1
(in thousands, except per share data)
Quarter Ended Sept. 30, | % Change | Quarter June 30, | % Change | |||||||||||||||
2009 | 2008 | |||||||||||||||||
Revenue | ||||||||||||||||||
Investment advisory fees, net | $ | 190,012 | $ | 194,653 | (2 | )% | $ | 193,757 | (2 | )% | ||||||||
Administrative service fees, net | 65,267 | 53,551 | 22 | 67,514 | (3 | ) | ||||||||||||
Other service fees, net | 36,957 | 56,007 | (34 | ) | 44,586 | (17 | ) | |||||||||||
Other, net | 1,367 | 1,702 | (20 | ) | 1,037 | 32 | ||||||||||||
Total Revenue | 293,603 | 305,913 | (4 | ) | 306,894 | (4 | ) | |||||||||||
Operating Expenses | ||||||||||||||||||
Compensation and related | 62,232 | 60,482 | 3 | 63,609 | (2 | ) | ||||||||||||
General and administrative | ||||||||||||||||||
Marketing and distribution | 95,452 | 106,742 | (11 | ) | 114,138 | (16 | ) | |||||||||||
Professional service fees | 10,089 | 10,259 | (2 | ) | 9,777 | 3 | ||||||||||||
Systems and communications | 6,517 | 5,996 | 9 | 6,331 | 3 | |||||||||||||
Office and occupancy | 6,001 | 5,619 | 7 | 5,647 | 6 | |||||||||||||
Advertising and promotional | 2,529 | 3,787 | (33 | ) | 3,059 | (17 | ) | |||||||||||
Travel and related | 2,316 | 3,228 | (28 | ) | 2,872 | (19 | ) | |||||||||||
Other | 4,677 | 4,409 | 6 | 4,455 | 5 | |||||||||||||
Total general and administrative | 127,581 | 140,040 | (9 | ) | 146,279 | (13 | ) | |||||||||||
Amortization of deferred sales commissions | 5,104 | 7,762 | (34 | ) | 4,960 | 3 | ||||||||||||
Intangible asset amortization and impairment | 3,953 | 4,369 | (10 | ) | 3,981 | (1 | ) | |||||||||||
Total Operating Expenses | 198,870 | 212,653 | (6 | ) | 218,829 | (9 | ) | |||||||||||
Operating Income | 94,733 | 93,260 | 2 | 88,065 | 8 | |||||||||||||
Nonoperating Income (Expenses) | ||||||||||||||||||
Investment income, net | 1,685 | 190 | 787 | 1,210 | 39 | |||||||||||||
Debt expense—recourse | (1,112 | ) | (757 | ) | 47 | (1,146 | ) | (3 | ) | |||||||||
Debt expense—nonrecourse | (314 | ) | (622 | ) | (50 | ) | (368 | ) | (15 | ) | ||||||||
Other, net | (101 | ) | (152 | ) | (34 | ) | 34 | (397 | ) | |||||||||
Total Nonoperating Income (Expenses), net | 158 | (1,341 | ) | (112 | ) | (270 | ) | (159 | ) | |||||||||
Income before income taxes | 94,891 | 91,919 | 3 | 87,795 | 8 | |||||||||||||
Income tax provision | 34,604 | 33,253 | 4 | 31,712 | 9 | |||||||||||||
Net income including noncontrolling interests in subsidiaries | 60,287 | 58,666 | 3 | 56,083 | 7 | |||||||||||||
Less: Net income attributable to noncontrolling interests in subsidiaries | 3,301 | 2,455 | 34 | 2,809 | 18 | |||||||||||||
Net Income | $ | 56,986 | $ | 56,211 | 1 | % | $ | 53,274 | 7 | % | ||||||||
Amounts Attributable to Federated | ||||||||||||||||||
Earnings Per Share | ||||||||||||||||||
Basic2 | $ | 0.56 | $ | 0.53 | 6 | % | $ | 0.52 | 8 | % | ||||||||
Diluted2 | $ | 0.56 | $ | 0.52 | 8 | % | $ | 0.52 | 8 | % | ||||||||
Weighted-average shares outstanding | ||||||||||||||||||
Basic | 99,958 | 99,367 | 100,041 | |||||||||||||||
Diluted | 100,086 | 100,036 | 100,164 | |||||||||||||||
Dividends declared per share | $ | 0.24 | $ | 3.00 | $ | 0.24 |
1) | Provisions of a new accounting standard adopted on Jan. 1, 2009 require that minority interest be renamed noncontrolling interest and that companies present a consolidated net income that includes the amount attributable to noncontrolling interests for all periods presented. |
2) | Under a new accounting standard adopted on Jan. 1, 2009, unvested share-based payment awards that receive non-forfeitable dividend rights are considered participating securities and are now required to be included in the computation of earnings per share under the “two-class method.” As a result current and prior periods have been adjusted to reflect this new standard. Total income available to participating restricted shareholders was $1.4 million, $4.0 million and $1.3 million for the quarterly periods ended Sept. 30, 2009, Sept. 30, 2008 and June 30, 2009, respectively. |
Federated Reports Q3 2009 Earnings
| Page 6 of 10
|
Unaudited Condensed Consolidated Statements of Income1
(in thousands, except per share data)
Nine Months Ended Sept. 30, | |||||||||||
2009 | 2008 | % Change | |||||||||
Revenue | |||||||||||
Investment advisory fees, net | $ | 574,238 | $ | 587,697 | (2 | )% | |||||
Administrative service fees, net | 199,726 | 157,828 | 27 | ||||||||
Other service fees, net | 132,874 | 170,438 | (22 | ) | |||||||
Other, net | 4,302 | 5,949 | (28 | ) | |||||||
Total Revenue | 911,140 | 921,912 | (1 | ) | |||||||
Operating Expenses | |||||||||||
Compensation and related | 192,068 | 180,967 | 6 | ||||||||
General and administrative | |||||||||||
Marketing and distribution | 331,897 | 324,799 | 2 | ||||||||
Professional service fees | 29,873 | 30,356 | (2 | ) | |||||||
Systems and communications | 19,275 | 17,927 | 8 | ||||||||
Office and occupancy | 18,315 | 18,067 | 1 | ||||||||
Advertising and promotional | 8,238 | 11,495 | (28 | ) | |||||||
Travel and related | 7,631 | 10,166 | (25 | ) | |||||||
Other | 17,396 | 13,121 | 33 | ||||||||
Total general and administrative | 432,625 | 425,931 | 2 | ||||||||
Amortization of deferred sales commissions | 14,936 | 25,923 | (42 | ) | |||||||
Intangible asset amortization and impairment | 28,665 | 13,673 | 110 | ||||||||
Total Operating Expenses | 668,294 | 646,494 | 3 | ||||||||
Operating Income | 242,846 | 275,418 | (12 | ) | |||||||
Nonoperating Income (Expenses) | |||||||||||
Investment income, net | 2,493 | 2,365 | 5 | ||||||||
Debt expense––recourse | (3,370 | ) | (961 | ) | 251 | ||||||
Debt expense––nonrecourse | (1,114 | ) | (2,232 | ) | (50 | ) | |||||
Other, net | (47 | ) | (356 | ) | (87 | ) | |||||
Total Nonoperating Expenses, net | (2,038 | ) | (1,184 | ) | 72 | ||||||
Income from continuing operations before income taxes | 240,808 | 274,234 | (12 | ) | |||||||
Income tax provision | 86,970 | 101,126 | (14 | ) | |||||||
Income from continuing operations including noncontrolling interests in subsidiaries | 153,838 | 173,108 | (11 | ) | |||||||
Discontinued operations, net of tax | — | 2,808 | (100 | ) | |||||||
Net Income including noncontrolling interests in subsidiaries | 153,838 | 175,916 | (13 | ) | |||||||
Less: Net income attributable to the noncontrolling interest in subsidiaries | 8,444 | 5,861 | 44 | ||||||||
Net income | $ | 145,394 | $ | 170,055 | (15 | )% | |||||
Amounts Attributable to Federated | |||||||||||
Income from continuing operations | $ | 145,394 | $ | 167,247 | (13 | )% | |||||
Discontinued operations, net of tax | — | 2,808 | (100 | ) | |||||||
Net Income | $ | 145,394 | $ | 170,055 | (15 | )% | |||||
Earnings Per Share—Basic2 | |||||||||||
Income from continuing operations | $ | 1.42 | $ | 1.64 | (13 | )% | |||||
Income from discontinued operations | — | 0.03 | (100 | ) | |||||||
Net income3 | $ | 1.42 | $ | 1.66 | (14 | )% | |||||
Earnings Per Share—Diluted2 | |||||||||||
Income from continuing operations | $ | 1.42 | $ | 1.62 | (12 | )% | |||||
Income from discontinued operations | — | 0.03 | (100 | ) | |||||||
Net income | $ | 1.42 | $ | 1.65 | (14 | )% | |||||
Weighted-average shares outstanding | |||||||||||
Basic | 99,976 | 99,508 | |||||||||
Diluted | 100,096 | 100,518 | |||||||||
Dividends declared per share | $ | 0.72 | $ | 3.45 |
1) | Provisions of a new accounting standard adopted on Jan. 1, 2009 require that minority interest be renamed noncontrolling interest and that companies present a consolidated net income that includes the amount attributable to noncontrolling interests for all periods presented. |
2) | Under a new accounting standard adopted on Jan. 1, 2009, unvested share-based payment awards that receive non-forfeitable dividend rights are considered participating securities and are now required to be included in the computation of earnings per share under the “two-class method.” As a result current and prior periods have been adjusted to reflect this new standard. Total income available to participating restricted shareholders was $3.4 million and $4.6 million for the year-to-date periods ended Sept. 30, 2009 and Sept. 30, 2008 respectively. |
3) | May not sum due to rounding. |
Federated Reports Q3 2009 Earnings
| Page 7 of 10
|
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
Sept. 30, 2009 | Dec. 31, 2008 | |||||||
Assets | ||||||||
Cash and other short-term investments | $ | 87,274 | $ | 58,647 | ||||
Other current assets | 47,443 | 58,185 | ||||||
Deferred sales commissions, net | 17,607 | 30,261 | ||||||
Intangible assets, net and goodwill | 656,807 | 657,321 | ||||||
Other long-term assets | 40,110 | 42,196 | ||||||
Total Assets | $ | 849,241 | $ | 846,610 | ||||
Liabilities and Equity | ||||||||
Current liabilities | $ | 182,676 | $ | 217,838 | ||||
Long-term debt—recourse | 110,250 | 126,000 | ||||||
Long-term debt—nonrecourse | 15,803 | 30,497 | ||||||
Other long-term liabilities | 35,452 | 47,705 | ||||||
Equity excluding treasury stock1 | 1,310,359 | 1,229,051 | ||||||
Treasury stock | (805,299 | ) | (804,481 | ) | ||||
Total Liabilities and Equity | $ | 849,241 | $ | 846,610 |
1) | Provisions of a new accounting standard adopted on Jan. 1, 2009 require that minority interest be renamed noncontrolling interest and companies present it as a component of equity for all periods presented. Noncontrolling interest was previously included in other long-term liabilities, but is now included in Equity excluding treasury stock. |
Federated Reports Q3 2009 Earnings
| Page 8 of 10
|
Changes in Equity and Fixed-Income Fund Managed Assets
(in millions)
Quarter Ended | Nine Months Ended | |||||||||||||||||||
Sept. 30, 2009 | Sept. 30, 2008 | June 30, 2009 | Sept. 30, 2009 | Sept. 30, 2008 | ||||||||||||||||
Equity Funds | ||||||||||||||||||||
Beginning assets | $ | 17,966 | $ | 25,569 | $ | 15,902 | $ | 17,562 | $ | 29,145 | ||||||||||
Sales | 1,503 | 1,060 | 1,177 | 4,005 | 4,009 | |||||||||||||||
Redemptions | (1,377 | ) | (2,031 | ) | (1,151 | ) | (4,119 | ) | (5,453 | ) | ||||||||||
Net sales (redemptions) | 126 | (971 | ) | 26 | (114 | ) | (1,444 | ) | ||||||||||||
Net exchanges | (12 | ) | (68 | ) | 8 | (79 | ) | (163 | ) | |||||||||||
Acquisition related | 257 | 0 | 0 | 257 | 42 | |||||||||||||||
Market gains and losses/reinvestments1 | 2,013 | (2,947 | ) | 2,030 | 2,724 | (5,997 | ) | |||||||||||||
Ending assets | $ | 20,350 | $ | 21,583 | $ | 17,966 | $ | 20,350 | $ | 21,583 | ||||||||||
Fixed-Income Funds | ||||||||||||||||||||
Beginning assets | $ | 24,100 | $ | 19,065 | $ | 20,752 | $ | 19,321 | $ | 17,943 | ||||||||||
Sales | 4,789 | 2,354 | 4,597 | 12,537 | 6,509 | |||||||||||||||
Redemptions | (2,971 | ) | (1,826 | ) | (1,997 | ) | (6,978 | ) | (4,911 | ) | ||||||||||
Net sales | 1,818 | 528 | 2,600 | 5,559 | 1,598 | |||||||||||||||
Net exchanges | 53 | 26 | 6 | 101 | 80 | |||||||||||||||
Market gains and losses/reinvestments1 | 989 | (483 | ) | 742 | 1,979 | (485 | ) | |||||||||||||
Ending assets | $ | 26,960 | $ | 19,136 | $ | 24,100 | $ | 26,960 | $ | 19,136 |
1) | Reflects changes in the market value of the securities held by the funds and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates. |
Changes in Equity and Fixed-Income Separate Account Assets2
(in millions)
Quarter Ended | Nine Months Ended | |||||||||||||||||||
Sept. 30, 2009 | Sept. 30, 2008 | June 30, 2009 | Sept. 30, 2009 | Sept. 30, 2008 | ||||||||||||||||
Equity Separate Accounts | ||||||||||||||||||||
Beginning assets | $ | 8,245 | $ | 11,712 | $ | 7,509 | $ | 9,099 | $ | 13,017 | ||||||||||
Net customer flows3 | (261 | ) | (426 | ) | (204 | ) | (1,026 | ) | (621 | ) | ||||||||||
Acquisition related4 | (257 | ) | 0 | 0 | (257 | ) | 0 | |||||||||||||
Market gains and losses/reinvestments5 | 1,047 | (1,218 | ) | 940 | 958 | (2,328 | ) | |||||||||||||
Ending assets | $ | 8,774 | $ | 10,068 | $ | 8,245 | $ | 8,774 | $ | 10,068 | ||||||||||
Fixed-Income Separate Accounts | ||||||||||||||||||||
Beginning assets | $ | 4,583 | $ | 3,924 | $ | 4,219 | $ | 4,165 | $ | 3,754 | ||||||||||
Net customer flows3 | 188 | (150 | ) | 74 | 269 | (93 | ) | |||||||||||||
Market gains and losses/reinvestments5 | 308 | (172 | ) | 290 | 645 | (59 | ) | |||||||||||||
Ending assets | $ | 5,079 | $ | 3,602 | $ | 4,583 | $ | 5,079 | $ | 3,602 |
2) | Includes separately managed accounts, institutional accounts and sub-advised funds (both variable annuity and other) and other managed products. Flows for liquidation portfolios have been removed from Changes in Equity and Fixed-Income Separate Account Assets and are detailed on the following page. |
3) | For certain accounts, Net customer flows are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses/reinvestments. |
4) | Includes assets that were reclassified from Equity Separate Accounts to Equity Funds as a result of the transaction with the Touchstone Funds, which was completed during Q3 2009. See related press release dated Aug. 31, 2009 for more information about the Touchstone transaction. |
5) | Reflects the approximate changes in the market value of the securities held in the portfolios, and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates. |
Federated Reports Q3 2009 Earnings
| Page 9 of 10
|
Changes in Liquidation Portfolios1
(in millions)
Quarter Ended | Nine Months Ended | |||||||||||||||||
Sept. 30, 2009 | Sept. 30, 2008 | June 30, 2009 | Sept. 30, 2009 | Sept. 30, 2008 | ||||||||||||||
Liquidation Portfolios | ||||||||||||||||||
Beginning assets | $ | 556 | $ | 2,083 | $ | 700 | $ | 1,505 | $ | 1,127 | ||||||||
Net customer flows2 | 12,516 | (222 | ) | (151 | ) | 11,563 | 856 | |||||||||||
Market gains and losses/reinvestments3 | 1 | (84 | ) | 7 | 5 | (206 | ) | |||||||||||
Ending assets | $ | 13,073 | $ | 1,777 | $ | 556 | $ | 13,073 | $ | 1,777 |
1) | Federated added liquidation portfolios as an asset category beginning in Q1 2009. Liquidation portfolios include portfolios of distressed fixed-income securities and liquidating collateralized debt obligation (CDO) products. In the distressed security category, Federated has been retained by a third party to manage these assets through an orderly liquidation process that will generally occur over a multi-year period. In the case of liquidating CDOs, the CDO structure has unwound earlier than expected due to events of default related to certain distressed securities in the portfolio. The new category was established because management fee rates earned from these portfolios are significantly different than those of traditional separate account mandates. |
2) | For certain accounts, Net customer flows are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses/reinvestments. |
3) | Reflects the approximate changes in the market value of the securities held in the portfolios, and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates. |
Federated Reports Q3 2009 Earnings
| Page 10 of 10
|
(in millions) | |||||||||||||||
MANAGED ASSETS | Sept. 30, 2009 | June 30, 2009 | March 31, 2009 | Dec. 31, 2008 | Sept. 30, 2008 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 29,124 | $ | 26,211 | $ | 23,411 | $ | 26,661 | $ | 31,651 | |||||
Fixed-income | 32,039 | 28,683 | 24,971 | 23,486 | 22,738 | ||||||||||
Money market | 318,064 | 346,354 | 360,127 | 355,658 | 287,836 | ||||||||||
Liquidation portfolios1 | 13,073 | 556 | 700 | 1,505 | 1,777 | ||||||||||
Total Managed Assets | $ | 392,300 | $ | 401,804 | $ | 409,209 | $ | 407,310 | $ | 344,002 | |||||
By Product Type | |||||||||||||||
Mutual Funds: | |||||||||||||||
Equity | $ | 20,350 | $ | 17,966 | $ | 15,902 | $ | 17,562 | $ | 21,583 | |||||
Fixed-income | 26,960 | 24,100 | 20,752 | 19,321 | 19,136 | ||||||||||
Money market | 287,634 | 312,808 | 328,780 | 327,267 | 259,172 | ||||||||||
Total Fund Assets | $ | 334,944 | $ | 354,874 | $ | 365,434 | $ | 364,150 | $ | 299,891 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 8,774 | $ | 8,245 | $ | 7,509 | $ | 9,099 | $ | 10,068 | |||||
Fixed-income | 5,079 | 4,583 | 4,219 | 4,165 | 3,602 | ||||||||||
Money market | 30,430 | 33,546 | 31,347 | 28,391 | 28,664 | ||||||||||
Total Separate Accounts | $ | 44,283 | $ | 46,374 | $ | 43,075 | $ | 41,655 | $ | 42,334 | |||||
Total Liquidation Portfolios1 | $ | 13,073 | $ | 556 | $ | 700 | $ | 1,505 | $ | 1,777 | |||||
Total Managed Assets | $ | 392,300 | $ | 401,804 | $ | 409,209 | $ | 407,310 | $ | 344,002 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
Sept. 30, 2009 | June 30, 2009 | March 31, 2009 | Dec. 31, 2008 | Sept. 30, 2008 | |||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 27,872 | $ | 25,287 | $ | 24,219 | $ | 24,870 | $ | 35,136 | |||||
Fixed-income | 30,376 | 26,978 | 24,218 | 22,546 | 23,143 | ||||||||||
Money market | 336,530 | 361,502 | 362,269 | 320,684 | 274,840 | ||||||||||
Liquidation portfolios1 | 13,370 | 637 | 975 | 1,650 | 1,944 | ||||||||||
Total Avg. Assets | $ | 408,148 | $ | 414,404 | $ | 411,681 | $ | 369,750 | $ | 335,063 | |||||
By Product Type | |||||||||||||||
Mutual Funds: | |||||||||||||||
Equity | $ | 19,215 | $ | 17,220 | $ | 16,240 | $ | 16,904 | $ | 24,180 | |||||
Fixed-income | 25,499 | 22,545 | 20,009 | 18,674 | 19,347 | ||||||||||
Money market | 304,959 | 326,280 | 330,294 | 293,428 | 245,304 | ||||||||||
Total Avg. Fund Assets | $ | 349,673 | $ | 366,045 | $ | 366,543 | $ | 329,006 | $ | 288,831 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 8,657 | $ | 8,067 | $ | 7,979 | $ | 7,966 | $ | 10,956 | |||||
Fixed-income | 4,877 | 4,433 | 4,209 | 3,872 | 3,796 | ||||||||||
Money market | 31,571 | 35,222 | 31,975 | 27,256 | 29,536 | ||||||||||
Total Avg. Separate Accts. | $ | 45,105 | $ | 47,722 | $ | 44,163 | $ | 39,094 | $ | 44,288 | |||||
Total Avg. Liquidation Portfolios1 | $ | 13,370 | $ | 637 | $ | 975 | $ | 1,650 | $ | 1,944 | |||||
Total Avg. Assets | $ | 408,148 | $ | 414,404 | $ | 411,681 | $ | 369,750 | $ | 335,063 |
1) | Federated added liquidation portfolios as an asset category beginning in Q1 2009. Liquidation portfolios include portfolios of distressed fixed-income securities and liquidating collateralized debt obligation (CDO) products. In the distressed security category, Federated has been retained by a third party to manage these assets through an orderly liquidation process that will generally occur over a multi-year period. In the case of liquidating CDOs, the CDO structure has unwound earlier than expected due to events of default related to certain distressed securities in the portfolio. The new category was established because the management fee rates earned from these portfolios are significantly different than those of traditional separate account mandates. |
Federated discontinued reporting administered assets as of June 30, 2009 as they are no longer a material source of revenue for the firm.