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 23, 2015 | By: | /s/ Thomas R. Donahue | |
Thomas R. Donahue | ||||
Chief Financial Officer |
• | Equity assets up 18 percent from Q1 2014 to reach record $54 billion at quarter end |
• | Equity and fixed-income assets surpass $107 billion |
• | Board declares $0.25 per share dividend |
MEDIA: | MEDIA: | ANALYSTS: |
Ed Costello 412-288-7538 | Meghan McAndrew 412-288-8103 | Ray Hanley 412-288-1920 |
Federated Reports Q1 2015 Earnings | Page 2 of 8 |
Federated Reports Q1 2015 Earnings | Page 3 of 8 |
Quarter Ended | Change Q1 2014 to Q1 2015 | Quarter Ended | Change Q4 2014 to Q1 2015 | ||||||||||||||||
March 31, 2015 | March 31, 2014 | Dec. 31, 2014 | |||||||||||||||||
Investment advisory fees | $ | (62.3 | ) | $ | (73.1 | ) | $ | 10.8 | $ | (67.4 | ) | $ | 5.1 | ||||||
Other service fees | (31.8 | ) | (33.6 | ) | 1.8 | (32.4 | ) | 0.6 | |||||||||||
Total revenue | (94.1 | ) | (106.7 | ) | 12.6 | (99.8 | ) | 5.7 | |||||||||||
Less: Reduction in distribution expense | 64.6 | 74.3 | (9.7 | ) | 67.6 | (3.0 | ) | ||||||||||||
Operating income | (29.5 | ) | (32.4 | ) | 2.9 | (32.2 | ) | 2.7 | |||||||||||
Less: Reduction in noncontrolling interest | 2.5 | 2.7 | (0.2 | ) | 2.7 | (0.2 | ) | ||||||||||||
Pre-tax impact | $ | (27.0 | ) | $ | (29.7 | ) | $ | 2.7 | $ | (29.5 | ) | $ | 2.5 |
Federated Reports Q1 2015 Earnings | Page 4 of 8 |
Unaudited Condensed Consolidated Statements of Income | ||||||||||||||
(in thousands, except per share data) | ||||||||||||||
Quarter Ended | % Change Q1 2014 to Q1 2015 | Quarter Ended | % Change Q4 2014 to Q1 2015 | |||||||||||
March 31, 2015 | March 31, 2014 | Dec. 31, 2014 | ||||||||||||
Revenue | ||||||||||||||
Investment advisory fees, net | $ | 146,559 | $ | 135,093 | 8 | % | $ | 143,587 | 2 | % | ||||
Administrative service fees, net—affiliates | 53,017 | 54,727 | (3 | ) | 53,427 | (1 | ) | |||||||
Other service fees, net | 19,787 | 20,780 | (5 | ) | 19,562 | 1 | ||||||||
Other, net | 1,159 | 896 | 29 | 1,282 | (10 | ) | ||||||||
Total Revenue | 220,522 | 211,496 | 4 | 217,858 | 1 | |||||||||
Operating Expenses | ||||||||||||||
Compensation and related | 76,498 | 71,759 | 7 | 72,161 | 6 | |||||||||
Distribution | 53,495 | 51,197 | 4 | 53,764 | (1 | ) | ||||||||
Professional service fees | 7,882 | 8,381 | (6 | ) | 5,714 | 38 | ||||||||
Systems and communications | 6,870 | 6,404 | 7 | 6,773 | 1 | |||||||||
Office and occupancy | 6,853 | 6,915 | (1 | ) | 7,526 | (9 | ) | |||||||
Advertising and promotional | 3,471 | 3,439 | 1 | 3,661 | (5 | ) | ||||||||
Travel and related | 2,759 | 2,861 | (4 | ) | 3,792 | (27 | ) | |||||||
Other | 3,656 | 3,895 | (6 | ) | 2,833 | 29 | ||||||||
Total Operating Expenses | 161,484 | 154,851 | 4 | 156,224 | 3 | |||||||||
Operating Income | 59,038 | 56,645 | 4 | 61,634 | (4 | ) | ||||||||
Nonoperating (Expenses) Income | ||||||||||||||
Investment income, net | 890 | 3,613 | (75 | ) | 2,325 | (62 | ) | |||||||
Debt expense | (1,373 | ) | (2,812 | ) | (51 | ) | (1,787 | ) | (23 | ) | ||||
Other, net | (13 | ) | (5 | ) | 160 | (15 | ) | (13 | ) | |||||
Total Nonoperating (Expenses) Income, net | (496 | ) | 796 | (162 | ) | 523 | (195 | ) | ||||||
Income before income taxes | 58,542 | 57,441 | 2 | 62,157 | (6 | ) | ||||||||
Income tax provision | 22,124 | 21,796 | 2 | 22,552 | (2 | ) | ||||||||
Net income including the noncontrolling interests in subsidiaries | 36,418 | 35,645 | 2 | 39,605 | (8 | ) | ||||||||
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries | 111 | 451 | (75 | ) | (8 | ) | 1,488 | |||||||
Net Income | $ | 36,307 | $ | 35,194 | 3 | % | $ | 39,613 | (8 | )% | ||||
Amounts Attributable to Federated Investors, Inc. | ||||||||||||||
Earnings Per Share1 | ||||||||||||||
Basic and diluted | $ | 0.35 | $ | 0.34 | 3 | % | $ | 0.38 | (8 | )% | ||||
Weighted-average shares outstanding | ||||||||||||||
Basic | 100,641 | 100,725 | 100,642 | |||||||||||
Diluted | 100,642 | 100,727 | 100,643 | |||||||||||
Dividends declared per share | $ | 0.25 | $ | 0.25 | $ | 0.25 |
Federated Reports Q1 2015 Earnings | Page 5 of 8 |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in thousands) | March 31, 2015 | Dec. 31, 2014 | ||||
Assets | ||||||
Cash and other investments | $ | 279,630 | $ | 297,338 | ||
Other current assets | 43,261 | 44,717 | ||||
Intangible assets, net and goodwill | 733,400 | 733,847 | ||||
Other long-term assets | 62,816 | 64,617 | ||||
Total Assets | $ | 1,119,107 | $ | 1,140,519 | ||
Liabilities, Redeemable Noncontrolling Interests and Equity | ||||||
Current liabilities | $ | 114,346 | $ | 149,321 | ||
Long-term debt | 210,375 | 216,750 | ||||
Other long-term liabilities | 165,376 | 161,099 | ||||
Redeemable noncontrolling interests | 8,582 | 3,697 | ||||
Equity excluding treasury stock | 783,343 | 774,910 | ||||
Treasury stock | (162,915 | ) | (165,258 | ) | ||
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ | 1,119,107 | $ | 1,140,519 |
Federated Reports Q1 2015 Earnings | Page 6 of 8 |
Quarter Ended | |||||||||
March 31, 2015 | Dec. 31, 2014 | March 31, 2014 | |||||||
Equity funds | |||||||||
Beginning assets | $ | 33,141 | $ | 32,088 | $ | 28,097 | |||
Sales | 2,805 | 2,650 | 2,292 | ||||||
Redemptions | (1,914 | ) | (1,844 | ) | (1,833 | ) | |||
Net sales | 891 | 806 | 459 | ||||||
Net exchanges | 39 | (7 | ) | 32 | |||||
Market gains and losses/reinvestments1 | 880 | 254 | 620 | ||||||
Ending assets | $ | 34,951 | $ | 33,141 | $ | 29,208 | |||
Equity separate accounts2 | |||||||||
Beginning assets | $ | 18,285 | $ | 18,247 | $ | 16,051 | |||
Sales3 | 1,693 | 1,392 | 845 | ||||||
Redemptions3 | (954 | ) | (1,622 | ) | (778 | ) | |||
Net sales (redemptions)3 | 739 | (230 | ) | 67 | |||||
Market gains and losses4 | 62 | 268 | 553 | ||||||
Ending assets | $ | 19,086 | $ | 18,285 | $ | 16,671 | |||
Total equity2 | |||||||||
Beginning assets | $ | 51,426 | $ | 50,335 | $ | 44,148 | |||
Sales3 | 4,498 | 4,042 | 3,137 | ||||||
Redemptions3 | (2,868 | ) | (3,466 | ) | (2,611 | ) | |||
Net sales3 | 1,630 | 576 | 526 | ||||||
Net exchanges | 39 | (7 | ) | 32 | |||||
Market gains and losses/reinvestments1 | 942 | 522 | 1,173 | ||||||
Ending assets | $ | 54,037 | $ | 51,426 | $ | 45,879 | |||
Fixed-income funds | |||||||||
Beginning assets | $ | 40,456 | $ | 40,435 | $ | 39,606 | |||
Sales | 4,491 | 4,631 | 4,248 | ||||||
Redemptions | (4,193 | ) | (4,411 | ) | (4,025 | ) | |||
Net sales | 298 | 220 | 223 | ||||||
Net exchanges | (37 | ) | (285 | ) | (59 | ) | |||
Market gains and losses/reinvestments1 | 322 | 86 | 467 | ||||||
Ending assets | $ | 41,039 | $ | 40,456 | $ | 40,237 | |||
Fixed-income separate accounts2 | |||||||||
Beginning assets | $ | 12,251 | $ | 10,752 | $ | 10,520 | |||
Sales3 | 239 | 1,499 | 254 | ||||||
Redemptions3 | (204 | ) | (306 | ) | (232 | ) | |||
Net sales3 | 35 | 1,193 | 22 | ||||||
Net exchanges | 0 | 229 | 0 | ||||||
Market gains and losses4 | 237 | 77 | 204 | ||||||
Ending assets | $ | 12,523 | $ | 12,251 | $ | 10,746 | |||
Total fixed income2 | |||||||||
Beginning assets | $ | 52,707 | $ | 51,187 | $ | 50,126 | |||
Sales3 | 4,730 | 6,130 | 4,502 | ||||||
Redemptions3 | (4,397 | ) | (4,717 | ) | (4,257 | ) | |||
Net sales3 | 333 | 1,413 | 245 | ||||||
Net exchanges | (37 | ) | (56 | ) | (59 | ) | |||
Market gains and losses/reinvestments1 | 559 | 163 | 671 | ||||||
Ending assets | $ | 53,562 | $ | 52,707 | $ | 50,983 |
Federated Reports Q1 2015 Earnings | Page 7 of 8 |
Quarter Ended | |||||||||
March 31, 2015 | Dec. 31, 2014 | March 31, 2014 | |||||||
Funds | |||||||||
Beginning assets | $ | 73,597 | $ | 72,523 | $ | 67,703 | |||
Sales | 7,296 | 7,281 | 6,540 | ||||||
Redemptions | (6,107 | ) | (6,255 | ) | (5,858 | ) | |||
Net sales | 1,189 | 1,026 | 682 | ||||||
Net exchanges | 2 | (292 | ) | (27 | ) | ||||
Market gains and losses/reinvestments1 | 1,202 | 340 | 1,087 | ||||||
Ending assets | $ | 75,990 | $ | 73,597 | $ | 69,445 | |||
Separate accounts2 | |||||||||
Beginning assets | $ | 30,536 | $ | 28,999 | $ | 26,571 | |||
Sales3 | 1,932 | 2,891 | 1,099 | ||||||
Redemptions3 | (1,158 | ) | (1,928 | ) | (1,010 | ) | |||
Net sales3 | 774 | 963 | 89 | ||||||
Net exchanges | 0 | 229 | 0 | ||||||
Market gains and losses4 | 299 | 345 | 757 | ||||||
Ending assets | $ | 31,609 | $ | 30,536 | $ | 27,417 | |||
Total assets 2 | |||||||||
Beginning assets | $ | 104,133 | $ | 101,522 | $ | 94,274 | |||
Sales3 | 9,228 | 10,172 | 7,639 | ||||||
Redemptions3 | (7,265 | ) | (8,183 | ) | (6,868 | ) | |||
Net sales3 | 1,963 | 1,989 | 771 | ||||||
Net exchanges | 2 | (63 | ) | (27 | ) | ||||
Market gains and losses/reinvestments1 | 1,501 | 685 | 1,844 | ||||||
Ending assets | $ | 107,599 | $ | 104,133 | $ | 96,862 |
Federated Reports Q1 2015 Earnings | Page 8 of 8 |
(unaudited) | |||||||||||||||
MANAGED ASSETS (in millions) | March 31, 2015 | Dec. 31, 2014 | Sept. 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 54,037 | $ | 51,426 | $ | 50,335 | $ | 49,888 | $ | 45,879 | |||||
Fixed-income | 53,562 | 52,707 | 51,187 | 51,129 | 50,983 | ||||||||||
Money market | 248,160 | 258,772 | 245,536 | 245,201 | 263,648 | ||||||||||
Liquidation portfolio1 | 0 | 0 | 5,197 | 5,408 | 5,690 | ||||||||||
Total Managed Assets | $ | 355,759 | $ | 362,905 | $ | 352,255 | $ | 351,626 | $ | 366,200 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 34,951 | $ | 33,141 | $ | 32,088 | $ | 31,673 | $ | 29,208 | |||||
Fixed-income | 41,039 | 40,456 | 40,435 | 40,357 | 40,237 | ||||||||||
Money market | 214,310 | 225,471 | 215,237 | 212,434 | 227,470 | ||||||||||
Total Fund Assets | $ | 290,300 | $ | 299,068 | $ | 287,760 | $ | 284,464 | $ | 296,915 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 19,086 | $ | 18,285 | $ | 18,247 | $ | 18,215 | $ | 16,671 | |||||
Fixed-income | 12,523 | 12,251 | 10,752 | 10,772 | 10,746 | ||||||||||
Money market | 33,850 | 33,301 | 30,299 | 32,767 | 36,178 | ||||||||||
Total Separate Accounts | $ | 65,459 | $ | 63,837 | $ | 59,298 | $ | 61,754 | $ | 63,595 | |||||
Total Liquidation Portfolio1 | $ | 0 | $ | 0 | $ | 5,197 | $ | 5,408 | $ | 5,690 | |||||
Total Managed Assets | $ | 355,759 | $ | 362,905 | $ | 352,255 | $ | 351,626 | $ | 366,200 | |||||
AVERAGE MANAGED ASSETS | Quarter Ended | ||||||||||||||
(in millions) | March 31, 2015 | Dec. 31, 2014 | Sept. 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||
By Asset Class | |||||||||||||||
Equity | $ | 52,784 | $ | 50,901 | $ | 50,207 | $ | 47,466 | $ | 44,693 | |||||
Fixed-income | 53,405 | 52,782 | 51,115 | 50,774 | 50,658 | ||||||||||
Money market | 253,261 | 246,698 | 242,537 | 254,575 | 273,233 | ||||||||||
Liquidation portfolio1 | 0 | 1,563 | 5,307 | 5,569 | 5,791 | ||||||||||
Total Avg. Assets | $ | 359,450 | $ | 351,944 | $ | 349,166 | $ | 358,384 | $ | 374,375 | |||||
By Product Type | |||||||||||||||
Funds: | |||||||||||||||
Equity | $ | 34,162 | $ | 32,705 | $ | 32,060 | $ | 30,154 | $ | 28,516 | |||||
Fixed-income | 41,013 | 41,072 | 40,275 | 40,130 | 39,987 | ||||||||||
Money market | 218,168 | 216,235 | 211,571 | 219,936 | 235,228 | ||||||||||
Total Avg. Fund Assets | $ | 293,343 | $ | 290,012 | $ | 283,906 | $ | 290,220 | $ | 303,731 | |||||
Separate accounts: | |||||||||||||||
Equity | $ | 18,622 | $ | 18,196 | $ | 18,147 | $ | 17,312 | $ | 16,177 | |||||
Fixed-income | 12,392 | 11,710 | 10,840 | 10,644 | 10,671 | ||||||||||
Money market | 35,093 | 30,463 | 30,966 | 34,639 | 38,005 | ||||||||||
Total Avg. Separate Accounts | $ | 66,107 | $ | 60,369 | $ | 59,953 | $ | 62,595 | $ | 64,853 | |||||
Total Avg. Liquidation Portfolio1 | $ | 0 | $ | 1,563 | $ | 5,307 | $ | 5,569 | $ | 5,791 | |||||
Total Avg. Managed Assets | $ | 359,450 | $ | 351,944 | $ | 349,166 | $ | 358,384 | $ | 374,375 |
1) | The liquidation portfolio represented a portfolio of distressed bonds at cost. Federated had been retained by a third party to manage these assets through an orderly liquidation process that was completed during the fourth quarter of 2014. Management-fee rates earned from this portfolio were lower than those of traditional separate account mandates. |
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