0001056288-13-000016.txt : 20130726 0001056288-13-000016.hdr.sgml : 20130726 20130725173116 ACCESSION NUMBER: 0001056288-13-000016 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20130725 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130726 DATE AS OF CHANGE: 20130725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEDERATED INVESTORS INC /PA/ CENTRAL INDEX KEY: 0001056288 STANDARD INDUSTRIAL CLASSIFICATION: INVESTMENT ADVICE [6282] IRS NUMBER: 251111467 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14818 FILM NUMBER: 13987319 BUSINESS ADDRESS: STREET 1: FEDERATED INVESTORS TOWER STREET 2: 5800 CORPORATE DR CITY: PITTSBURGH STATE: PA ZIP: 15222 BUSINESS PHONE: 4122888141 MAIL ADDRESS: STREET 1: FEDERATED INVESTORS TOWER CITY: PITTSBURGH STATE: PA ZIP: 15222 8-K 1 a8-kx2013q2epr.htm 8-K 8-K - 2013 Q2 EPR


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934

Date of Report (Date of earliest event reported): July 25, 2013


FEDERATED INVESTORS, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania
 
  001-14818
 
25-1111467
  (State or other jurisdiction
 
(Commission File Number)
 
(I.R.S. Employer
of incorporation)
 
 
 
Identification No.)

Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Address of principal executive offices, including zip code)


(412) 288-1900
(Registrant's telephone number, including area code)


Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 25, 2013, Federated Investors, Inc. issued the earnings press release attached hereto as Exhibit 99.1 to report second quarter 2013 results.
    


ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.


(d) Exhibits:

Exhibit 99.1 - Earnings press release issued by Federated Investors, Inc. dated July 25, 2013










SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
                                    

 
 
 
FEDERATED INVESTORS, INC.
 
 
 
 
(REGISTRANT)
 
 
 
 
 
 
 
 
 
 
 
Dated:
July 25, 2013
By:
/s/ Thomas R. Donahue
 
 
 
 
Thomas R. Donahue
 
 
 
 
Chief Financial Officer
 





 EX-99.1 2 a991-2013q2earningspressre.htm PRESS RELEASE 99.1 - 2013 Q2 Earnings Press Release

Exhibit 99.1

Federated Investors, Inc. Reports Second Quarter 2013 Earnings
•
Equity assets increase $5.5 billion or 17% to $38.7 billion from Q2 2012
•
Net equity sales were $383 million during Q2 2013
•
Board increases dividend 4% to $0.25 per share
(PITTSBURGH, Pa., July 25, 2013) — Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.39 and net income of $40.4 million for Q2 2013, each of which is the same amount reported for Q2 2012. Federated reported YTD 2013 EPS of $0.80, matching the amount reported for the first half of 2012.
Federated's total managed assets were $363.8 billion at June 30, 2013, up $7.9 billion or 2 percent from $355.9 billion at June 30, 2012 and down $13.5 billion or 4 percent from $377.3 billion reported at March 31, 2013. Average managed assets for Q2 2013 were $372.9 billion, up $12.3 billion or 3 percent from $360.6 billion reported for Q2 2012 and down $8.3 billion or 2 percent from $381.2 billion reported for Q1 2013.
"Equity sales were positive for the quarter with strong client interest in a variety of strategies, especially our income-oriented portfolios investing in both U.S. and international dividend-paying companies," said J. Christopher Donahue, president and chief executive officer.  "Federated offers a diversified approach to the pursuit of dividends and income with a range of equity, fixed-income and balanced investment solutions."
Federated's board of directors declared a quarterly dividend of $0.25 per share, a 4 percent increase from the prior quarter. The dividend is payable on Aug. 15, 2013 to shareholders of record as of Aug. 8, 2013. During Q2 2013, Federated purchased 158,133 shares of Federated class B common stock for $2.8 million. 
Federated's equity assets were $38.7 billion at June 30, 2013, up $5.5 billion or 17 percent from $33.2 billion at June 30, 2012 and up $0.8 billion or 2 percent from $37.9 billion at March 31, 2013. Top-selling equity funds during Q2 2013 on a net basis were Federated Strategic Value Dividend Fund, Federated Capital Income Fund, Federated International Strategic Value Dividend Fund, Federated Kaufmann Large Cap Fund and Federated Muni and Stock Advantage Fund.
Federated's fixed-income assets were $50.0 billion at June 30, 2013, up $1.0 billion or 2 percent from $49.0 billion at June 30, 2012 and down $2.8 billion or 5 percent from $52.8 billion at March 31, 2013. Bond assets in the liquidation portfolio were $6.6 billion at June 30, 2013. Top-selling fixed-income funds during Q2 2013 on a net basis included several of Federated's U.S. and U.K.-domiciled short-duration products and Federated Institutional High Yield Bond Fund.
Money market assets in both funds and separate accounts were $268.5 billion at June 30, 2013, up $3.0 billion or 1 percent from $265.5 billion at June 30, 2012 and down $11.2 billion or 4 percent from $279.7 billion at March 31, 2013. Money market mutual fund assets were $232.9 billion at June 30, 2013, down $5.7 billion or 2 percent from $238.6 billion at June 30, 2012 and down $9.8 billion or 4 percent from $242.7 billion at March 31, 2013.

MEDIA:
MEDIA:
ANALYSTS:
Meghan McAndrew 412-288-8103
J.T. Tuskan 412-288-7895
Ray Hanley 412-288-1920

  
Federated Reports Q2 2013 Earnings
Page 2 of 10

Financial Summary
Q2 2013 vs. Q2 2012
Revenue decreased by $8.3 million or 4 percent due primarily to an increase in voluntary fee waivers related to certain money market funds in order for these funds to maintain positive or zero net yields. The decrease was partially offset by an increase in revenue due to higher average equity and fixed-income assets. See additional information about voluntary fee waivers in the table at the end of this financial summary.
During Q2 2013, Federated derived 59 percent of its revenue from equity and fixed-income assets (36 percent from equity assets and 23 percent from fixed-income assets), 40 percent from money market assets and 1 percent from other products and services.
Operating expenses decreased $5.3 million or 3 percent primarily related to a decrease in distribution expense related to increased fee waivers, which were partially offset by increased compensation and related expenses.
Q2 2013 vs. Q1 2013
Revenue decreased by $4.2 million or 2 percent primarily due to an increase in voluntary fee waivers.
Operating expenses decreased by $2.0 million or 1 percent. The decrease primarily reflects lower distribution expense related to the aforementioned increase in fee waivers.
YTD 2013 vs. YTD 2012
Revenue decreased by $10.6 million or 2 percent primarily due to an increase in voluntary fee waivers, which was partially offset by an increase from higher average equity, fixed-income and money market assets.
For the first half of 2013, Federated derived 57 percent of its revenue from equity and fixed-income assets (34 percent from equity assets and 23 percent from fixed-income assets), 42 percent from money market assets and 1 percent from other products and services.
Operating expenses decreased by $5.5 million or 2 percent primarily due to a decrease in distribution expense related primarily to increased fee waivers that were partially offset by an increase related to a change in the mix of average money market assets and increased compensation and related expenses.
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.
Fee waivers to maintain positive or zero net yields could vary significantly in the future as they are contingent on a number of variables including, but not limited to, changes in assets within the money market funds, available yields on instruments held by the money market funds, actions by the Federal Reserve, the U.S. Department of the Treasury, the Securities and Exchange Commission, the Financial Stability Oversight Council and other governmental entities, changes in expenses of the money market funds, changes in the mix of money market customer assets, Federated’s willingness to continue the fee waivers and changes in the extent to which the impact of the waivers is shared by third parties.



  
Federated Reports Q2 2013 Earnings
Page 3 of 10

Money Market Fund Yield Waiver Impact to Consolidated Statements of Income
(in millions)
 
Quarter Ended
 
Change
Q2 2012 to Q2 2013
 
Quarter Ended
 
Change
Q1 2013 to Q2 2013
 
Six Months Ended
 
Change
YTD 2012 to YTD 2013
 
June 30, 2013
 
June 30, 2012
 
 
March 31,
2013
 
 
June 30, 2013
 
June 30, 2012
 
Investment advisory fees
$
(59.4
)
 
$
(43.0
)
 
$
(16.4
)
 
$
(54.9
)
 
$
(4.5
)
 
$
(114.3
)
 
$
(95.9
)
 
$
(18.4
)
Other service fees
(32.5
)
 
(27.3
)
 
(5.2
)
 
(32.4
)
 
(0.1
)
 
(65.0
)
 
(54.8
)
 
(10.2
)
Total Revenue
$
(91.9
)
 
$
(70.3
)
 
$
(21.6
)
 
$
(87.3
)
 
$
(4.6
)
 
$
(179.3
)
 
$
(150.7
)
 
$
(28.6
)
Less: Reduction in distribution expense
66.9

 
53.1

 
13.8

 
64.8

 
2.1

 
131.7

 
110.6

 
21.1

Operating income
$
(25.0
)
 
$
(17.2
)
 
$
(7.8
)
 
$
(22.5
)
 
$
(2.5
)
 
$
(47.6
)
 
$
(40.1
)
 
$
(7.5
)
Less: Reduction in noncontrolling interest
1.3

 
0.0

 
1.3

 
0.8

 
0.5

 
2.1

 
0.6

 
1.5

Pre-tax impact
$
(23.7
)
 
$
(17.2
)
 
$
(6.5
)
 
$
(21.7
)
 
$
(2.0
)
 
$
(45.5
)
 
$
(39.5
)
 
$
(6.0
)

Federated will host an earnings conference call at 9 a.m. Eastern on July 26, 2013. 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. The call may also be accessed in real time on the Internet via the About Federated section of FederatedInvestors.com. A replay will be available after 12:30 p.m. and through Aug. 2, 2013 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering access code 417387.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $363.8 billion in assets as of June 30, 2013. With 135 funds and a variety of separately managed account options, Federated provides comprehensive investment management to approximately 5,700 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top 3 percent of money market fund managers in the industry, the top 7 percent of equity fund managers and the top 9 percent of fixed-income fund managers1. For more information, visit FederatedInvestors.com.
###
1 Strategic Insight, May 31, 2013. 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 adviser.

Certain statements in this press release, such as those related to the level of fee waivers and expenses incurred by the company, product demand, asset flows and mix and market conditions 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 implied by such forward-looking statements.  Other risks and uncertainties include the ability of the company to predict the level of fee waivers and expenses in future quarters, which could vary significantly depending on a variety of factors identified above, and include the ability of the company to sustain product demand and asset flows and mix, 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 Q2 2013 Earnings
Page 4 of 10

Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
 
 
 
 
 
 
Quarter Ended
% Change Q2 2012 to Q2 2013
Quarter Ended
 % Change Q1 2013 to Q2 2013
 
June 30, 2013
June 30, 2012
March 31, 2013
Revenue
 
 
 
 
 
Investment advisory fees, net
$
147,515

$
154,367

(4
)%
$
150,763

(2
)%
Administrative service fees, net
55,253

54,986

0

56,828

(3
)
Other service fees, net
19,856

22,007

(10
)
19,332

3

Other, net
1,182

772

53

1,049

13

Total Revenue
223,806

232,132

(4
)
227,972

(2
)
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
Compensation and related
67,855

65,215

4

66,937

1

Distribution
53,809

62,328

(14
)
58,240

(8
)
Professional service fees
9,293

9,932

(6
)
8,844

5

Office and occupancy
6,543

6,119

7

6,432

2

Systems and communications
6,087

6,773

(10
)
6,623

(8
)
Advertising and promotional
3,936

3,316

19

3,422

15

Travel and related
3,533

3,336

6

2,686

32

Intangible asset related
654

822

(20
)
763

(14
)
Other
6,068

5,271

15

5,826

4

Total Operating Expenses
157,778

163,112

(3
)
159,773

(1
)
Operating Income
66,028

69,020

(4
)
68,199

(3
)
 
 
 
 
 
 
Nonoperating Income (Expenses)
 
 
 
 
 
Investment income, net
4,059

2,272

79

4,428

(8
)
Debt expense
(3,137
)
(3,690
)
(15
)
(3,253
)
(4
)
Other, net
(30
)
(128
)
(77
)
(40
)
(25
)
Total Nonoperating Income (Expenses), net
892

(1,546
)
(158
)
1,135

(21
)
Income before income taxes
66,920

67,474

(1
)
69,334

(3
)
Income tax provision
25,059

24,401

3

24,646

2

Net income including noncontrolling interest in subsidiaries
41,861

43,073

(3
)
44,688

(6
)
Less: Net income attributable to the noncontrolling interest in subsidiaries
1,453

2,663

(45
)
1,694

(14
)
Net Income
$
40,408

$
40,410

0
 %
$
42,994

(6
)%
 
 
 
 
 
 
Amounts Attributable to Federated
 
 
 
 
 
Earnings Per Share1
 
 
 
 
 
Basic and diluted
$
0.39

$
0.39

0
 %
$
0.41

(5
)%
Weighted-average shares outstanding
 
 
 
 
 
Basic
100,716

100,347

 
100,518

 
Diluted
100,717

100,347

 
100,518

 
Dividends declared per share
$
0.24

$
0.24

 
$
0.24

 
1) Unvested share-based payment awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the “two-class method.” As such, total net income of $1.5 million, $1.5 million and $1.7 million available to unvested restricted shares for the quarterly periods ended June 30, 2013, June 30, 2012 and March 31, 2013, respectively, was excluded from the computation of earnings per share.



















  
Federated Reports Q2 2013 Earnings
Page 5 of 10


Unaudited Condensed Consolidated Statements of Income
 
 
 
(in thousands, except per share data)
 
 
 
 
Six Months Ended
% Change
 
June 30, 2013
June 30, 2012
Revenue
 
 
 
Investment advisory fees, net
$
298,278

$
303,714

(2
)%
Administrative service fees, net
112,081

112,278

0

Other service fees, net
39,187

44,663

(12
)
Other, net
2,231

1,758

27

Total Revenue
451,777

462,413

(2
)
 
 
 
 
Operating Expenses
 
 
 
Compensation and related
134,792

129,280

4

Distribution
112,048

124,021

(10
)
Professional service fees
18,137

20,240

(10
)
Office and occupancy
12,975

12,371

5

Systems and communications
12,710

13,084

(3
)
Advertising and promotional
7,358

6,244

18

Travel and related
6,219

6,087

2

Intangible asset related
1,417

843

68

Other
11,894

10,876

9

Total Operating Expenses
317,550

323,046

(2
)
Operating Income
134,227

139,367

(4
)
 
 
 
 
Nonoperating Income (Expenses)
 
 
 
Investment income, net
8,487

5,618

51

Debt expense
(6,390
)
(7,401
)
(14
)
Other, net
(70
)
(166
)
(58
)
Total Nonoperating Income (Expenses), net
2,027

(1,949
)
(204
)
Income before income taxes
136,254

137,418

(1
)
Income tax provision
49,705

49,938

0

Net income including noncontrolling interest in subsidiaries
86,549

87,480

(1
)
Less: Net income attributable to the noncontrolling interest in subsidiaries
3,147

4,745

(34
)
Net Income
$
83,402

$
82,735

1
 %
 
 
 
 
Amounts Attributable to Federated
 
 
 
Earnings Per Share1
 
 
 
Basic and diluted
$
0.80

$
0.80

0
 %
Weighted-average shares outstanding
 
 
 
Basic
100,617

100,229

 
Diluted
100,618

100,229

 
Dividends declared per share
$
0.48

$
0.48

 
1) Unvested share-based payment awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the “two-class method.” As such, total net income of $3.2 million and $3.0 million available to unvested restricted shares for the six months ended June 30, 2013 and June 30, 2012, respectively, was excluded from the computation of earnings per share.










  
Federated Reports Q2 2013 Earnings
Page 6 of 10

Unaudited Condensed Consolidated Balance Sheets
 
 
(in thousands)
June 30, 2013
Dec. 31, 2012
Assets


Cash and other investments
$
302,945

$
258,628

Other current assets
48,293

41,434

Intangible assets, net and goodwill
726,505

727,857

Other long-term assets
64,463

62,142

Total Assets
$
1,142,206

$
1,090,061

 
 
 
Liabilities, redeemable noncontrolling interest and equity
 
 
Current liabilities
$
146,326

$
181,134

Long-term debt
255,000

276,250

Other long-term liabilities
136,218

128,733

Redeemable noncontrolling interest
69,539

7,268

Equity excluding treasury stock
1,289,317

1,256,698

Treasury stock
(754,194
)
(760,022
)
Total Liabilities, Redeemable Noncontrolling Interest and Equity
$
1,142,206

$
1,090,061




  
Federated Reports Q2 2013 Earnings
Page 7 of 10

Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions)
 
Quarter Ended
 
Six Months Ended
 
June 30, 2013
March 31, 2013
June 30, 2012
 
June 30, 2013
June 30, 2012
Equity Funds
 
 
 
 
 
 
Beginning assets
$
24,491

$
23,152

$
23,612

 
$
23,152

$
21,930

Sales
1,918

1,752

1,529

 
3,670

3,352

Redemptions
(1,629
)
(2,388
)
(1,797
)
 
(4,017
)
(3,984
)
Net sales (redemptions)
289

(636
)
(268
)
 
(347
)
(632
)
Net exchanges
43

47

3

 
90

(9
)
Market gains and losses/reinvestments1
207

1,928

(676
)
 
2,135

1,382

Ending assets
$
25,030

$
24,491

$
22,671

 
$
25,030

$
22,671


 
 
 
 
 
 
Equity Separate Accounts2
 
 
 
 
 
 
Beginning assets
$
13,361

$
11,858

$
10,505

 
$
11,858

$
8,957

Sales3
1,031

1,106

836

 
2,137

2,297

Redemptions3
(937
)
(568
)
(697
)
 
(1,505
)
(1,183
)
Net sales3
94

538

139

 
632

1,114

Net exchanges
0

0

(9
)
 
0

(9
)
Market gains and losses/reinvestments1
220

965

(85
)
 
1,185

488

Ending assets
$
13,675

$
13,361

$
10,550

 
$
13,675

$
10,550

 
 
 
 
 
 
 
Total Equity2
 
 
 
 
 
 
Beginning assets
$
37,852

$
35,010

$
34,117

 
$
35,010

$
30,887

Sales3
2,949

2,858

2,365

 
5,807

5,649

Redemptions3
(2,566
)
(2,956
)
(2,494
)
 
(5,522
)
(5,167
)
Net sales (redemptions)3
383

(98
)
(129
)
 
285

482

Net exchanges
43

47

(6
)
 
90

(18
)
Market gains and losses/reinvestments1
427

2,893

(761
)
 
3,320

1,870

Ending assets
$
38,705

$
37,852

$
33,221

 
$
38,705

$
33,221

 
 
 
 
 
 
 
Fixed-Income Funds
 
 
 
 
 
 
Beginning assets
$
42,612

$
42,478

$
38,526

 
$
42,478

$
37,241

Sales
5,232

5,148

5,636

 
10,380

10,458

Redemptions
(6,877
)
(5,009
)
(3,639
)
 
(11,886
)
(7,626
)
Net (redemptions) sales
(1,645
)
139

1,997

 
(1,506
)
2,832

Net exchanges
(80
)
(42
)
(1,510
)
 
(122
)
(1,569
)
Market gains and losses/reinvestments1
(699
)
37

481

 
(662
)
990

Ending assets
$
40,188

$
42,612

$
39,494

 
$
40,188

$
39,494

 
 
 
 
 
 
 
Fixed-Income Separate Accounts2
 
 
 
 
 
 
Beginning assets
$
10,158

$
10,233

$
7,695

 
$
10,233

$
7,573

Sales3
562

531

624

 
1,093

844

Redemptions3
(725
)
(645
)
(521
)
 
(1,370
)
(801
)
Net (redemptions) sales3
(163
)
(114
)
103

 
(277
)
43

Net exchanges
7

0

1,592

 
7

1,592

Market gains and losses/reinvestments1
(185
)
39

84

 
(146
)
266

Ending assets
$
9,817

$
10,158

$
9,474

 
$
9,817

$
9,474

 
 
 
 
 
 
 
Total Fixed Income2
 
 
 
 
 
 
Beginning assets
$
52,770

$
52,711

$
46,221

 
$
52,711

$
44,814

Sales3
5,794

5,679

6,260

 
11,473

11,302

Redemptions3
(7,602
)
(5,654
)
(4,160
)
 
(13,256
)
(8,427
)
Net (redemptions) sales3
(1,808
)
25

2,100

 
(1,783
)
2,875

Net exchanges
(73
)
(42
)
82

 
(115
)
23

Market gains and losses/reinvestments1
(884
)
76

565

 
(808
)
1,256

Ending assets
$
50,005

$
52,770

$
48,968

 
$
50,005

$
48,968

1) Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates.
2) Includes separately managed accounts, institutional accounts and sub-advised funds and other managed products.
3) For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses/reinvestments.



  
Federated Reports Q2 2013 Earnings
Page 8 of 10

Changes in Liquidation Portfolio
(in millions)
 
Quarter Ended
 
Six Months Ended
 
June 30, 2013
March 31, 2013
June 30, 2012
 
June 30, 2013
June 30, 2012
Liquidation Portfolio1
 
 
 
 
 
 
Beginning assets
$
7,019

$
7,346

$
8,583

 
$
7,346

$
8,856

Net redemptions
(458
)
(327
)
(458
)
 
(785
)
(731
)
Market gains and losses/reinvestments2
0

0

(1
)
 
0

(1
)
Ending Assets
$
6,561

$
7,019

$
8,124

 
$
6,561

$
8,124

1) Liquidation portfolio represents a portfolio of distressed bonds. 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. Management-fee rates earned from this portfolio are lower than those of traditional separate account mandates.
2) Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates.




  
Federated Reports Q2 2013 Earnings
Page 9 of 10


 
 
 
 
 
 
MANAGED ASSETS
(in millions)
June 30, 2013
March 31, 2013
Dec. 31, 2012
Sept. 30, 2012
June 30, 2012
By Asset Class
 
 
 
 
 
Equity
$
38,705

$
37,852

$
35,010

$
35,355

$
33,221

Fixed-income
50,005

52,770

52,711

51,389

48,968

Money market
268,532

279,668

284,704

269,622

265,548

Liquidation portfolio1
6,561

7,019

7,346

7,718

8,124

Total Managed Assets
$
363,803

$
377,309

$
379,771

$
364,084

$
355,861

By Product Type
 
 
 
 
 
Funds:
 
 
 
 
 
Equity
$
25,030

$
24,491

$
23,152

$
23,658

$
22,671

Fixed-income
40,188

42,612

42,478

41,547

39,494

Money market
232,874

242,734

255,689

244,826

238,610

Total Fund Assets
$
298,092

$
309,837

$
321,319

$
310,031

$
300,775

Separate Accounts:
 
 
 
 
 
Equity
$
13,675

$
13,361

$
11,858

$
11,697

$
10,550

Fixed-income
9,817

10,158

10,233

9,842

9,474

Money market
35,658

36,934

29,015

24,796

26,938

Total Separate Accounts
$
59,150

$
60,453

$
51,106

$
46,335

$
46,962

Total Liquidation Portfolio1
$
6,561

$
7,019

$
7,346

$
7,718

$
8,124

Total Managed Assets
$
363,803

$
377,309

$
379,771

$
364,084

$
355,861

 
AVERAGE MANAGED ASSETS
Quarter Ended
(in millions)
June 30, 2013
March 31, 2013
Dec. 31, 2012
Sept. 30, 2012
June 30, 2012
By Asset Class
 
 
 
 
 
Equity
$
38,762

$
36,685

$
35,016

$
34,429

$
32,993

Fixed-income
52,375

52,732

52,211

50,195

47,747

Money market
274,899

284,588

273,943

268,573

271,507

Liquidation portfolio1
6,834

7,215

7,559

7,948

8,353

Total Avg. Assets
$
372,870

$
381,220

$
368,729

$
361,145

$
360,600

By Product Type
 
 
 
 
 
Funds:
 
 
 
 
 
Equity
$
25,094

$
24,037

$
23,209

$
23,133

$
22,642

Fixed-income
42,258

42,581

42,156

40,579

38,901

Money market
237,790

250,652

248,534

243,111

243,454

Total Avg. Fund Assets
$
305,142

$
317,270

$
313,899

$
306,823

$
304,997

Separate Accounts:
 
 
 
 
 
Equity
$
13,668

$
12,648

$
11,807

$
11,296

$
10,351

Fixed-income
10,117

10,151

10,055

9,616

8,846

Money market
37,109

33,936

25,409

25,462

28,053

Total Avg. Separate Accounts
$
60,894

$
56,735

$
47,271

$
46,374

$
47,250

Total Avg. Liquidation Portfolio1
$
6,834

$
7,215

$
7,559

$
7,948

$
8,353

Total Avg. Managed Assets
$
372,870

$
381,220

$
368,729

$
361,145

$
360,600

1) Liquidation portfolio represents a portfolio of distressed bonds. 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. Management-fee rates earned from this portfolio are lower than those of traditional separate account mandates.









  
Federated Reports Q2 2013 Earnings
Page 10 of 10

AVERAGE MANAGED ASSETS
Six Months Ended
(in millions)
June 30, 2013
 
June 30, 2012
By Asset Class
 
 
 
Equity
$
37,724

 
$
32,910

Fixed-income
52,553

 
46,769

Money market
279,743

 
277,154

Liquidation portfolio1
7,025

 
8,528

Total Avg. Assets
$
377,045

 
$
365,361

By Product Type
 
 
 
Funds:
 
 
 
Equity
$
24,566

 
$
22,859

Fixed-income
42,419

 
38,514

Money market
244,221

 
247,640

Total Avg. Fund Assets
$
311,206

 
$
309,013

Separate Accounts:
 
 
 
Equity
$
13,158

 
$
10,051

Fixed-income
10,134

 
8,255

Money market
35,522

 
29,514

Total Avg. Separate Accounts
$
58,814

 
$
47,820

Total Avg. Liquidation Portfolio1
$
7,025

 
$
8,528

Total Avg. Managed Assets
$
377,045

 
$
365,361

1) Liquidation portfolio represents a portfolio of distressed bonds. 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. Management-fee rates earned from this portfolio are lower than those of traditional separate account mandates.


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