Pennsylvania | 001-14818 | 25-1111467 | ||
(State or other jurisdiction | (Commission File Number) | (I.R.S. Employer | ||
of incorporation) | Identification No.) |
FEDERATED INVESTORS, INC. | ||||
(REGISTRANT) | ||||
Dated: | April 25, 2013 | By: | /s/ Thomas R. Donahue | |
Thomas R. Donahue | ||||
Chief Financial Officer |
• | Equity and bond assets increase $2.6 billion during Q1 2013 to a record $98 billion |
• | Board declares $0.24 per share quarterly dividend |
MEDIA: | MEDIA: | ANALYSTS: |
Meghan McAndrew 412-288-8103 | J.T. Tuskan 412-288-7895 | Ray Hanley 412-288-1920 |
Federated Reports Q1 2013 Earnings | Page 2 of 8 |
Quarter Ended | Change Q1 2012 to Q1 2013 | Quarter Ended | Change Q4 2012 to Q1 2013 | ||||||||||||||||
March 31, 2013 | March 31, 2012 | Dec. 31, 2012 | |||||||||||||||||
Investment advisory fees | $ | (54.9 | ) | $ | (52.9 | ) | $ | (2.0 | ) | $ | (40.0 | ) | $ | (14.9 | ) | ||||
Other service fees | (32.4 | ) | (27.5 | ) | (4.9 | ) | (30.7 | ) | (1.7 | ) | |||||||||
Total Revenue | $ | (87.3 | ) | $ | (80.4 | ) | $ | (6.9 | ) | $ | (70.7 | ) | $ | (16.6 | ) | ||||
Less: Reduction in distribution expense | 64.8 | 57.5 | 7.3 | 54.9 | 9.9 | ||||||||||||||
Operating income | $ | (22.5 | ) | $ | (22.9 | ) | $ | 0.4 | $ | (15.8 | ) | $ | (6.7 | ) | |||||
Less: Reduction in noncontrolling interest | 0.8 | 0.6 | 0.2 | 0.3 | 0.5 | ||||||||||||||
Pre-tax impact | $ | (21.7 | ) | $ | (22.3 | ) | $ | 0.6 | $ | (15.5 | ) | $ | (6.2 | ) |
Federated Reports Q1 2013 Earnings | Page 3 of 8 |
Federated Reports Q1 2013 Earnings | Page 4 of 8 |
Unaudited Condensed Consolidated Statements of Income | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Quarter Ended | % Change Q1 2012 to Q1 2013 | Quarter Ended | % Change Q4 2012 to Q1 2013 | ||||||||||
March 31, 2013 | March 31, 2012 | Dec. 31, 2012 | |||||||||||
Revenue | |||||||||||||
Investment advisory fees, net | $ | 150,763 | $ | 149,348 | 1 | % | $ | 166,813 | (10 | )% | |||
Administrative service fees, net | 56,828 | 57,292 | (1 | ) | 57,372 | (1 | ) | ||||||
Other service fees, net | 19,332 | 22,655 | (15 | ) | 19,818 | (2 | ) | ||||||
Other, net | 1,049 | 986 | 6 | 821 | 28 | ||||||||
Total Revenue | 227,972 | 230,281 | (1 | ) | 244,824 | (7 | ) | ||||||
Operating Expenses | |||||||||||||
Compensation and related | 66,937 | 64,065 | 4 | 63,211 | 6 | ||||||||
Distribution | 58,240 | 61,693 | (6 | ) | 65,278 | (11 | ) | ||||||
Professional service fees | 8,844 | 10,308 | (14 | ) | 6,549 | 35 | |||||||
Systems and communications | 6,623 | 6,310 | 5 | 6,100 | 9 | ||||||||
Office and occupancy | 6,432 | 6,253 | 3 | 6,349 | 1 | ||||||||
Advertising and promotional | 3,422 | 2,928 | 17 | 3,611 | (5 | ) | |||||||
Travel and related | 2,686 | 2,751 | (2 | ) | 3,837 | (30 | ) | ||||||
Intangible asset related | 763 | 21 | 3,533 | 951 | (20 | ) | |||||||
Other | 5,826 | 5,605 | 4 | 5,746 | 1 | ||||||||
Total Operating Expenses | 159,773 | 159,934 | 0 | 161,632 | (1 | ) | |||||||
Operating Income | 68,199 | 70,347 | (3 | ) | 83,192 | (18 | ) | ||||||
Nonoperating Income (Expenses) | |||||||||||||
Investment income, net | 4,428 | 3,346 | 32 | 4,343 | 2 | ||||||||
Debt expense | (3,253 | ) | (3,711 | ) | (12 | ) | (3,506 | ) | (7 | ) | |||
Other, net | (40 | ) | (37 | ) | 8 | (3,112 | ) | (99 | ) | ||||
Total Nonoperating Income (Expenses), net | 1,135 | (402 | ) | 382 | (2,275 | ) | 150 | ||||||
Income before income taxes | 69,334 | 69,945 | (1 | ) | 80,917 | (14 | ) | ||||||
Income tax provision | 24,646 | 25,538 | (3 | ) | 28,961 | (15 | ) | ||||||
Net income including noncontrolling interest in subsidiaries | 44,688 | 44,407 | 1 | 51,956 | (14 | ) | |||||||
Less: Net income attributable to the noncontrolling interest in subsidiaries | 1,694 | 2,082 | (19 | ) | 2,375 | (29 | ) | ||||||
Net Income | $ | 42,994 | $ | 42,325 | 2 | % | $ | 49,581 | (13 | )% | |||
Amounts Attributable to Federated | |||||||||||||
Earnings Per Share1 | |||||||||||||
Basic and diluted | $ | 0.41 | $ | 0.41 | 0 | % | $ | 0.44 | (7 | )% | |||
Weighted-average shares outstanding | |||||||||||||
Basic and diluted | 100,518 | 100,112 | 100,374 | ||||||||||
Dividends declared per share | $ | 0.24 | $ | 0.24 | $ | 1.75 |
Federated Reports Q1 2013 Earnings | Page 5 of 8 |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | March 31, 2013 | Dec. 31, 2012 | ||||
Assets | ||||||
Cash and other investments | $ | 306,857 | $ | 258,628 | ||
Other current assets | 39,390 | 41,434 | ||||
Intangible assets, net and goodwill | 727,163 | 727,857 | ||||
Other long-term assets | 63,858 | 62,142 | ||||
Total Assets | $ | 1,137,268 | $ | 1,090,061 | ||
Liabilities and Equity | ||||||
Current liabilities | $ | 137,541 | $ | 181,134 | ||
Long-term debt | 265,625 | 276,250 | ||||
Other long-term liabilities | 135,119 | 128,733 | ||||
Equity excluding treasury stock | 1,350,401 | 1,263,966 | ||||
Treasury stock | (751,418 | ) | (760,022 | ) | ||
Total Liabilities and Equity | $ | 1,137,268 | $ | 1,090,061 |
Federated Reports Q1 2013 Earnings | Page 6 of 8 |
Quarter Ended | |||||||||
March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||||
Equity Funds | |||||||||
Beginning assets | $ | 23,152 | $ | 23,658 | $ | 21,930 | |||
Sales | 1,752 | 1,415 | 1,823 | ||||||
Redemptions | (2,388 | ) | (1,866 | ) | (2,187 | ) | |||
Net redemptions | (636 | ) | (451 | ) | (364 | ) | |||
Net exchanges | 47 | (47 | ) | (12 | ) | ||||
Market gains and losses/reinvestments1 | 1,928 | (8 | ) | 2,058 | |||||
Ending assets | $ | 24,491 | $ | 23,152 | $ | 23,612 | |||
Equity Separate Accounts2 | |||||||||
Beginning assets | $ | 11,858 | $ | 11,697 | $ | 8,957 | |||
Sales3 | 1,106 | 893 | 1,461 | ||||||
Redemptions3 | (568 | ) | (605 | ) | (486 | ) | |||
Net sales3 | 538 | 288 | 975 | ||||||
Net exchanges | 0 | 1 | 0 | ||||||
Market gains and losses/reinvestments1 | 965 | (128 | ) | 573 | |||||
Ending assets | $ | 13,361 | $ | 11,858 | $ | 10,505 | |||
Total Equity2 | |||||||||
Beginning assets | $ | 35,010 | $ | 35,355 | $ | 30,887 | |||
Sales3 | 2,858 | 2,308 | 3,284 | ||||||
Redemptions3 | (2,956 | ) | (2,471 | ) | (2,673 | ) | |||
Net (redemptions) sales3 | (98 | ) | (163 | ) | 611 | ||||
Net exchanges | 47 | (46 | ) | (12 | ) | ||||
Market gains and losses/reinvestments1 | 2,893 | (136 | ) | 2,631 | |||||
Ending assets | $ | 37,852 | $ | 35,010 | $ | 34,117 | |||
Fixed-Income Funds | |||||||||
Beginning assets | $ | 42,478 | $ | 41,547 | $ | 37,241 | |||
Sales | 5,148 | 4,848 | 4,822 | ||||||
Redemptions | (5,009 | ) | (4,268 | ) | (3,987 | ) | |||
Net sales | 139 | 580 | 835 | ||||||
Net exchanges | (42 | ) | 141 | (59 | ) | ||||
Market gains and losses/reinvestments1 | 37 | 210 | 509 | ||||||
Ending assets | $ | 42,612 | $ | 42,478 | $ | 38,526 | |||
Fixed-Income Separate Accounts2 | |||||||||
Beginning assets | $ | 10,233 | $ | 9,842 | $ | 7,573 | |||
Sales3 | 531 | 393 | 220 | ||||||
Redemptions3 | (645 | ) | (125 | ) | (280 | ) | |||
Net (redemptions) sales3 | (114 | ) | 268 | (60 | ) | ||||
Market gains and losses/reinvestments1 | 39 | 123 | 182 | ||||||
Ending assets | $ | 10,158 | $ | 10,233 | $ | 7,695 | |||
Total Fixed Income2 | |||||||||
Beginning assets | $ | 52,711 | $ | 51,389 | $ | 44,814 | |||
Sales3 | 5,679 | 5,241 | 5,042 | ||||||
Redemptions3 | (5,654 | ) | (4,393 | ) | (4,267 | ) | |||
Net sales3 | 25 | 848 | 775 | ||||||
Net exchanges | (42 | ) | 141 | (59 | ) | ||||
Market gains and losses/reinvestments1 | 76 | 333 | 691 | ||||||
Ending assets | $ | 52,770 | $ | 52,711 | $ | 46,221 |
Federated Reports Q1 2013 Earnings | Page 7 of 8 |
Quarter Ended | |||||||||
March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||||
Liquidation Portfolio1 | |||||||||
Beginning assets | $ | 7,346 | $ | 7,718 | $ | 8,856 | |||
Net redemptions | (327 | ) | (372 | ) | (273 | ) | |||
Ending Assets | $ | 7,019 | $ | 7,346 | $ | 8,583 |
Federated Reports Q1 2013 Earnings | Page 8 of 8 |
MANAGED ASSETS (in millions) | March 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 37,852 | $ | 35,010 | $ | 35,355 | $ | 33,221 | $ | 34,117 | |||||
Fixed-income | 52,770 | 52,711 | 51,389 | 48,968 | 46,221 | ||||||||||
Money market | 279,668 | 284,704 | 269,622 | 265,548 | 274,704 | ||||||||||
Liquidation portfolio1 | 7,019 | 7,346 | 7,718 | 8,124 | 8,583 | ||||||||||
Total Managed Assets | $ | 377,309 | $ | 379,771 | $ | 364,084 | $ | 355,861 | $ | 363,625 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 24,491 | $ | 23,152 | $ | 23,658 | $ | 22,671 | $ | 23,612 | |||||
Fixed-income | 42,612 | 42,478 | 41,547 | 39,494 | 38,526 | ||||||||||
Money market | 242,734 | 255,689 | 244,826 | 238,610 | 245,232 | ||||||||||
Total Fund Assets | $ | 309,837 | $ | 321,319 | $ | 310,031 | $ | 300,775 | $ | 307,370 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 13,361 | $ | 11,858 | $ | 11,697 | $ | 10,550 | $ | 10,505 | |||||
Fixed-income | 10,158 | 10,233 | 9,842 | 9,474 | 7,695 | ||||||||||
Money market | 36,934 | 29,015 | 24,796 | 26,938 | 29,472 | ||||||||||
Total Separate Accounts | $ | 60,453 | $ | 51,106 | $ | 46,335 | $ | 46,962 | $ | 47,672 | |||||
Total Liquidation Portfolio1 | $ | 7,019 | $ | 7,346 | $ | 7,718 | $ | 8,124 | $ | 8,583 | |||||
Total Managed Assets | $ | 377,309 | $ | 379,771 | $ | 364,084 | $ | 355,861 | $ | 363,625 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 36,685 | $ | 35,016 | $ | 34,429 | $ | 32,993 | $ | 32,827 | |||||
Fixed-income | 52,732 | 52,211 | 50,195 | 47,747 | 45,792 | ||||||||||
Money market | 284,588 | 273,943 | 268,573 | 271,507 | 282,801 | ||||||||||
Liquidation portfolio1 | 7,215 | 7,559 | 7,948 | 8,353 | 8,703 | ||||||||||
Total Avg. Assets | $ | 381,220 | $ | 368,729 | $ | 361,145 | $ | 360,600 | $ | 370,123 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 24,037 | $ | 23,209 | $ | 23,133 | $ | 22,642 | $ | 23,075 | |||||
Fixed-income | 42,581 | 42,156 | 40,579 | 38,901 | 38,128 | ||||||||||
Money market | 250,652 | 248,534 | 243,111 | 243,454 | 251,825 | ||||||||||
Total Avg. Fund Assets | $ | 317,270 | $ | 313,899 | $ | 306,823 | $ | 304,997 | $ | 313,028 | |||||
Separate Accounts: | |||||||||||||||
Equity | $ | 12,648 | $ | 11,807 | $ | 11,296 | $ | 10,351 | $ | 9,752 | |||||
Fixed-income | 10,151 | 10,055 | 9,616 | 8,846 | 7,664 | ||||||||||
Money market | 33,936 | 25,409 | 25,462 | 28,053 | 30,976 | ||||||||||
Total Avg. Separate Accounts | $ | 56,735 | $ | 47,271 | $ | 46,374 | $ | 47,250 | $ | 48,392 | |||||
Total Avg. Liquidation Portfolio1 | $ | 7,215 | $ | 7,559 | $ | 7,948 | $ | 8,353 | $ | 8,703 | |||||
Total Avg. Managed Assets | $ | 381,220 | $ | 368,729 | $ | 361,145 | $ | 360,600 | $ | 370,123 |
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