Pennsylvania | 001-14818 | 25-1111467 | ||
(State or other jurisdiction | (Commission File Number) | (I.R.S. Employer | ||
of incorporation) | Identification No.) |
FEDERATED INVESTORS, INC. | ||||
(REGISTRANT) | ||||
Date | April 24, 2014 | By: | /s/ Thomas R. Donahue | |
Thomas R. Donahue | ||||
Chief Financial Officer |
• | Equity assets increase $8 billion from Q1 2013 to a record $46 billion |
• | Equity and bond assets surpass $102 billion at quarter end |
• | Board declares $0.25 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 2014 Earnings | Page 2 of 8 |
Federated Reports Q1 2014 Earnings | Page 3 of 8 |
Quarter Ended | Change Q1 2013 to Q1 2014 | Quarter Ended | Change Q4 2013 to Q1 2014 | ||||||||||||||||
March 31, 2014 | March 31, 2013 | Dec. 31, 2013 | |||||||||||||||||
Investment advisory fees | $ | (73.1 | ) | $ | (54.9 | ) | $ | (18.2 | ) | $ | (70.9 | ) | $ | (2.2 | ) | ||||
Other service fees | (33.6 | ) | (32.4 | ) | (1.2 | ) | (33.7 | ) | 0.1 | ||||||||||
Total revenue | (106.7 | ) | (87.3 | ) | (19.4 | ) | (104.6 | ) | (2.1 | ) | |||||||||
Less: Reduction in distribution expense | 74.3 | 64.8 | 9.5 | 73.3 | 1.0 | ||||||||||||||
Operating income | (32.4 | ) | (22.5 | ) | (9.9 | ) | (31.3 | ) | (1.1 | ) | |||||||||
Less: Reduction in noncontrolling interest | 2.7 | 0.8 | 1.9 | 2.0 | 0.7 | ||||||||||||||
Pre-tax impact | $ | (29.7 | ) | $ | (21.7 | ) | $ | (8.0 | ) | $ | (29.3 | ) | $ | (0.4 | ) |
Federated Reports Q1 2014 Earnings | Page 4 of 8 |
Unaudited Condensed Consolidated Statements of Income | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Quarter Ended | % Change Q1 2013 to Q1 2014 | Quarter Ended | % Change Q4 2013 to Q1 2014 | ||||||||||
March 31, 2014 | March 31, 2013 | Dec. 31, 2013 | |||||||||||
Revenue | |||||||||||||
Investment advisory fees, net | $ | 135,093 | $ | 150,763 | (10 | )% | $ | 138,051 | (2 | )% | |||
Administrative service fees, net | 54,727 | 56,828 | (4 | ) | 55,354 | (1 | ) | ||||||
Other service fees, net | 20,780 | 19,332 | 7 | 20,399 | 2 | ||||||||
Other, net | 896 | 1,049 | (15 | ) | 918 | (2 | ) | ||||||
Total Revenue | 211,496 | 227,972 | (7 | ) | 214,722 | (2 | ) | ||||||
Operating Expenses | |||||||||||||
Compensation and related | 71,759 | 66,937 | 7 | 68,725 | 4 | ||||||||
Distribution | 48,558 | 58,240 | (17 | ) | 49,802 | (2 | ) | ||||||
Professional service fees | 8,381 | 8,844 | (5 | ) | 9,241 | (9 | ) | ||||||
Office and occupancy | 6,915 | 6,432 | 8 | 6,838 | 1 | ||||||||
Systems and communications | 6,404 | 6,623 | (3 | ) | 6,628 | (3 | ) | ||||||
Advertising and promotional | 3,439 | 3,422 | 0 | 3,760 | (9 | ) | |||||||
Travel and related | 2,861 | 2,686 | 7 | 4,108 | (30 | ) | |||||||
Other | 6,534 | 6,589 | (1 | ) | 5,862 | 11 | |||||||
Total Operating Expenses | 154,851 | 159,773 | (3 | ) | 154,964 | 0 | |||||||
Operating Income | 56,645 | 68,199 | (17 | ) | 59,758 | (5 | ) | ||||||
Nonoperating Income (Expenses) | |||||||||||||
Investment income, net | 3,613 | 4,428 | (18 | ) | 8,089 | (55 | ) | ||||||
Debt expense | (2,812 | ) | (3,253 | ) | (14 | ) | (2,996 | ) | (6 | ) | |||
Other, net | (5 | ) | (40 | ) | (88 | ) | (636 | ) | (99 | ) | |||
Total Nonoperating Income, net | 796 | 1,135 | (30 | ) | 4,457 | (82 | ) | ||||||
Income before income taxes | 57,441 | 69,334 | (17 | ) | 64,215 | (11 | ) | ||||||
Income tax provision | 21,796 | 24,646 | (12 | ) | 22,039 | (1 | ) | ||||||
Net income including the noncontrolling interest in subsidiaries | 35,645 | 44,688 | (20 | ) | 42,176 | (15 | ) | ||||||
Less: Net income attributable to the noncontrolling interest in subsidiaries | 451 | 1,694 | (73 | ) | 1,105 | (59 | ) | ||||||
Net Income | $ | 35,194 | $ | 42,994 | (18 | )% | $ | 41,071 | (14 | )% | |||
Amounts Attributable to Federated | |||||||||||||
Earnings Per Share1 | |||||||||||||
Basic and diluted | $ | 0.34 | $ | 0.41 | (17 | )% | $ | 0.39 | (13 | )% | |||
Weighted-average shares outstanding | |||||||||||||
Basic | 100,725 | 100,518 | 100,760 | ||||||||||
Diluted | 100,727 | 100,518 | 100,762 | ||||||||||
Dividends declared per share | $ | 0.25 | $ | 0.24 | $ | 0.25 |
Federated Reports Q1 2014 Earnings | Page 5 of 8 |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | March 31, 2014 | Dec 31, 2013 | ||||
Assets | ||||||
Cash and other investments | $ | 256,709 | $ | 292,178 | ||
Other current assets | 43,651 | 47,140 | ||||
Intangible assets, net and goodwill | 734,807 | 735,345 | ||||
Other long-term assets | 59,706 | 61,134 | ||||
Total Assets | $ | 1,094,873 | $ | 1,135,797 | ||
Liabilities, Redeemable Noncontrolling Interests and Equity | ||||||
Current liabilities | $ | 186,180 | $ | 214,205 | ||
Long-term debt | 170,000 | 198,333 | ||||
Other long-term liabilities | 146,173 | 141,398 | ||||
Redeemable noncontrolling interests | 16,573 | 15,517 | ||||
Equity excluding treasury stock | 1,321,068 | 1,317,583 | ||||
Treasury stock | (745,121 | ) | (751,239 | ) | ||
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ | 1,094,873 | $ | 1,135,797 |
Federated Reports Q1 2014 Earnings | Page 6 of 8 |
Quarter Ended | |||||||||
March 31, 2014 | Dec. 31, 2013 | March 31, 2013 | |||||||
Equity funds | |||||||||
Beginning assets | $ | 28,097 | $ | 25,930 | $ | 23,152 | |||
Sales | 2,292 | 1,913 | 1,752 | ||||||
Redemptions | (1,833 | ) | (1,740 | ) | (2,388 | ) | |||
Net sales (redemptions) | 459 | 173 | (636 | ) | |||||
Net exchanges | 32 | 47 | 47 | ||||||
Market gains and losses/reinvestments1 | 620 | 1,947 | 1,928 | ||||||
Ending assets | $ | 29,208 | $ | 28,097 | $ | 24,491 | |||
Equity separate accounts2 | |||||||||
Beginning assets | $ | 16,051 | $ | 14,353 | $ | 11,858 | |||
Sales3 | 845 | 1,337 | 1,106 | ||||||
Redemptions3 | (778 | ) | (701 | ) | (568 | ) | |||
Net sales3 | 67 | 636 | 538 | ||||||
Market gains and losses4 | 553 | 1,062 | 965 | ||||||
Ending assets | $ | 16,671 | $ | 16,051 | $ | 13,361 | |||
Total equity2 | |||||||||
Beginning assets | $ | 44,148 | $ | 40,283 | $ | 35,010 | |||
Sales3 | 3,137 | 3,250 | 2,858 | ||||||
Redemptions3 | (2,611 | ) | (2,441 | ) | (2,956 | ) | |||
Net sales (redemptions)3 | 526 | 809 | (98 | ) | |||||
Net exchanges | 32 | 47 | 47 | ||||||
Market gains and losses/reinvestments1 | 1,173 | 3,009 | 2,893 | ||||||
Ending assets | $ | 45,879 | $ | 44,148 | $ | 37,852 | |||
Fixed-income funds | |||||||||
Beginning assets | $ | 39,606 | $ | 39,944 | $ | 42,478 | |||
Sales | 4,248 | 3,944 | 5,148 | ||||||
Redemptions | (4,025 | ) | (4,400 | ) | (5,009 | ) | |||
Net sales (redemptions) | 223 | (456 | ) | 139 | |||||
Net exchanges | (59 | ) | (131 | ) | (42 | ) | |||
Market gains and losses/reinvestments1 | 467 | 249 | 37 | ||||||
Ending assets | $ | 40,237 | $ | 39,606 | $ | 42,612 | |||
Fixed-income separate accounts2 | |||||||||
Beginning assets | $ | 10,520 | $ | 10,018 | $ | 10,233 | |||
Sales3 | 254 | 751 | 531 | ||||||
Redemptions3 | (232 | ) | (368 | ) | (645 | ) | |||
Net sales (redemptions)3 | 22 | 383 | (114 | ) | |||||
Net exchanges | 0 | 7 | 0 | ||||||
Market gains and losses4 | 204 | 112 | 39 | ||||||
Ending assets | $ | 10,746 | $ | 10,520 | $ | 10,158 | |||
Total fixed income2 | |||||||||
Beginning assets | $ | 50,126 | $ | 49,962 | $ | 52,711 | |||
Sales3 | 4,502 | 4,695 | 5,679 | ||||||
Redemptions3 | (4,257 | ) | (4,768 | ) | (5,654 | ) | |||
Net sales (redemptions)3 | 245 | (73 | ) | 25 | |||||
Net exchanges | (59 | ) | (124 | ) | (42 | ) | |||
Market gains and losses/reinvestments1 | 671 | 361 | 76 | ||||||
Ending assets | $ | 50,983 | $ | 50,126 | $ | 52,770 |
Federated Reports Q1 2014 Earnings | Page 7 of 8 |
Quarter Ended | |||||||||
March 31, 2014 | Dec. 31, 2013 | March 31, 2013 | |||||||
Funds | |||||||||
Beginning assets | $ | 67,703 | $ | 65,874 | $ | 65,630 | |||
Sales | 6,540 | 5,857 | 6,900 | ||||||
Redemptions | (5,858 | ) | (6,140 | ) | (7,397 | ) | |||
Net sales (redemptions) | 682 | (283 | ) | (497 | ) | ||||
Net exchanges | (27 | ) | (84 | ) | 5 | ||||
Market gains and losses/reinvestments1 | 1,087 | 2,196 | 1,965 | ||||||
Ending assets | $ | 69,445 | $ | 67,703 | $ | 67,103 | |||
Separate accounts2 | |||||||||
Beginning assets | $ | 26,571 | $ | 24,371 | $ | 22,091 | |||
Sales3 | 1,099 | 2,088 | 1,637 | ||||||
Redemptions3 | (1,010 | ) | (1,069 | ) | (1,213 | ) | |||
Net sales3 | 89 | 1,019 | 424 | ||||||
Net exchanges | 0 | 7 | 0 | ||||||
Market gains and losses4 | 757 | 1,174 | 1,004 | ||||||
Ending assets | $ | 27,417 | $ | 26,571 | $ | 23,519 | |||
Total assets 2 | |||||||||
Beginning assets | $ | 94,274 | $ | 90,245 | $ | 87,721 | |||
Sales3 | 7,639 | 7,945 | 8,537 | ||||||
Redemptions3 | (6,868 | ) | (7,209 | ) | (8,610 | ) | |||
Net sales (redemptions)3 | 771 | 736 | (73 | ) | |||||
Net exchanges | (27 | ) | (77 | ) | 5 | ||||
Market gains and losses/reinvestments1 | 1,844 | 3,370 | 2,969 | ||||||
Ending assets | $ | 96,862 | $ | 94,274 | $ | 90,622 |
Federated Reports Q1 2014 Earnings | Page 8 of 8 |
(unaudited) | |||||||||||||||
MANAGED ASSETS (in millions) | March 31, 2014 | Dec. 31, 2013 | Sept. 30, 2013 | June 30, 2013 | March 31, 2013 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 45,879 | $ | 44,148 | $ | 40,283 | $ | 38,705 | $ | 37,852 | |||||
Fixed-income | 50,983 | 50,126 | 49,962 | 50,005 | 52,770 | ||||||||||
Money market | 263,648 | 275,952 | 270,293 | 268,532 | 279,668 | ||||||||||
Liquidation portfolio1 | 5,690 | 5,858 | 6,177 | 6,561 | 7,019 | ||||||||||
Total Managed Assets | $ | 366,200 | $ | 376,084 | $ | 366,715 | $ | 363,803 | $ | 377,309 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 29,208 | $ | 28,097 | $ | 25,930 | $ | 25,030 | $ | 24,491 | |||||
Fixed-income | 40,237 | 39,606 | 39,944 | 40,188 | 42,612 | ||||||||||
Money market | 227,470 | 240,048 | 237,949 | 232,874 | 242,734 | ||||||||||
Total Fund Assets | $ | 296,915 | $ | 307,751 | $ | 303,823 | $ | 298,092 | $ | 309,837 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 16,671 | $ | 16,051 | $ | 14,353 | $ | 13,675 | $ | 13,361 | |||||
Fixed-income | 10,746 | 10,520 | 10,018 | 9,817 | 10,158 | ||||||||||
Money market | 36,178 | 35,904 | 32,344 | 35,658 | 36,934 | ||||||||||
Total Separate Accounts | $ | 63,595 | $ | 62,475 | $ | 56,715 | $ | 59,150 | $ | 60,453 | |||||
Total Liquidation Portfolio1 | $ | 5,690 | $ | 5,858 | $ | 6,177 | $ | 6,561 | $ | 7,019 | |||||
Total Managed Assets | $ | 366,200 | $ | 376,084 | $ | 366,715 | $ | 363,803 | $ | 377,309 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | March 31, 2014 | Dec. 31, 2013 | Sept. 30, 2013 | June 30, 2013 | March 31, 2013 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 44,693 | $ | 42,539 | $ | 39,910 | $ | 38,762 | $ | 36,685 | |||||
Fixed-income | 50,658 | 50,268 | 49,983 | 52,375 | 52,732 | ||||||||||
Money market | 273,233 | 267,351 | 267,881 | 274,899 | 284,588 | ||||||||||
Liquidation portfolio1 | 5,791 | 6,050 | 6,434 | 6,834 | 7,215 | ||||||||||
Total Avg. Assets | $ | 374,375 | $ | 366,208 | $ | 364,208 | $ | 372,870 | $ | 381,220 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 28,516 | $ | 27,157 | $ | 25,761 | $ | 25,094 | $ | 24,037 | |||||
Fixed-income | 39,987 | 39,883 | 39,987 | 42,258 | 42,581 | ||||||||||
Money market | 235,228 | 234,788 | 234,528 | 237,790 | 250,652 | ||||||||||
Total Avg. Fund Assets | $ | 303,731 | $ | 301,828 | $ | 300,276 | $ | 305,142 | $ | 317,270 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 16,177 | $ | 15,382 | $ | 14,149 | $ | 13,668 | $ | 12,648 | |||||
Fixed-income | 10,671 | 10,385 | 9,996 | 10,117 | 10,151 | ||||||||||
Money market | 38,005 | 32,563 | 33,353 | 37,109 | 33,936 | ||||||||||
Total Avg. Separate Accounts | $ | 64,853 | $ | 58,330 | $ | 57,498 | $ | 60,894 | $ | 56,735 | |||||
Total Avg. Liquidation Portfolio1 | $ | 5,791 | $ | 6,050 | $ | 6,434 | $ | 6,834 | $ | 7,215 | |||||
Total Avg. Managed Assets | $ | 374,375 | $ | 366,208 | $ | 364,208 | $ | 372,870 | $ | 381,220 |
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