EX-99.1 2 a991-2016q3earningspressre.htm PRESS RELEASE Exhibit
Exhibit 99.1
image011a11.jpg

Federated Investors, Inc. Reports Third Quarter 2016 Earnings; Board Declares Cash Dividend Per Share of $1.25, Including $0.25 Quarterly and $1.00 Special Dividend
•
Q3 2016 EPS of $0.54 up 29 percent from $0.42 in Q3 2015
•
Equity assets reach record $64.1 billion on YTD net equity sales of $6.7 billion
•
Board adds independent director, Joseph C. Bartolacci, and authorizes new share repurchase program
(PITTSBURGH, Pa., Oct. 27, 2016) — Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.54 for Q3 2016, compared to $0.42 for the same quarter last year on net income of $54.9 million for Q3 2016, compared to $44.1 million for Q3 2015. Federated reported YTD 2016 EPS of $1.48, compared to $1.17 for the same period in 2015 on YTD 2016 net income of $153.1 million compared to $122.2 million for the same period last year.
Federated's total managed assets were $364.3 billion at Sept. 30, 2016. Total managed assets were up $13.3 billion or 4 percent from $351.0 billion at Sept. 30, 2015 and down $2.9 billion or 1 percent from $367.2 billion at June 30, 2016. Growth in equity and fixed-income assets was offset by lower money market assets at the end of Q3 2016 compared to the end of Q2 2016. Average managed assets for Q3 2016 were $365.4 billion, up $13.5 billion or 4 percent from $351.9 billion reported for Q3 2015 and up $1.2 billion from $364.2 billion reported for Q2 2016.
“Federated benefited in the third quarter from continued demand for our range of high-quality income-oriented products,” said  J. Christopher Donahue, president and chief executive officer. “Equity assets increased 23 percent over the past 12 months, driven by substantial flows into our dividend-driven strategies. Meanwhile, fixed-income investors sought the Federated Total Return Bond Fund, a multi-sector core bond strategy with strong long-term performance, as well as our high-yield offerings.”
Federated's board of directors added an independent director with the election of Joseph C. Bartolacci, appointing him to Federated's Audit, Compensation and Compliance committees. Since 2006, Bartolacci has served as president and chief executive officer of publicly traded Matthews International Corporation, a global provider of brand solutions, memorialization products and industrial products with more than 10,000 employees in more than 25 countries. He brings to the board more than 30 years of domestic and international business management experience. He has served as corporate legal counsel, and he has a background in accounting, tax and auditing. Bartolacci earned a bachelor's degree in accounting from St. Vincent College and a juris doctor degree from The University of Pittsburgh School of Law. He also serves on the boards of directors of Matthews, the Jas. H. Matthews & Co. Educational and Charitable Trust and Saint Vincent College.
Federated's board of directors declared a dividend of $1.25 per share. The dividend, which will be paid from Federated's existing cash balance, is considered an ordinary dividend for tax purposes and consists of a $0.25 quarterly dividend and a $1.00 special dividend. The dividend is payable on Nov. 15, 2016 to shareholders of record as of Nov. 8, 2016. During Q3 2016, Federated purchased 906,454 shares of Federated class B common stock for $23.1 million. Also on Oct. 27, 2016, the company's board of directors authorized a new share repurchase program, which allows Federated to repurchase up to 4 million additional shares of class B common stock in the open market with no expiration date. The repurchased stock is to be held in treasury for employee

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ANALYSTS:
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Ray Hanley 412-288-1920

  
Federated Reports Q3 2016 Earnings
Page 2 of 11

share-based compensation plans, potential acquisitions and other corporate activities. The company’s existing share repurchase program, which also has no stated expiration date, remains in effect with approximately 537,000 shares available.
"The November special dividend payment marks our fourth in eight years and brings the special-dividends total since 2008 to $6.53 per share," said Thomas R. Donahue, chief financial officer. "The special dividend and the new share repurchase program further emphasize Federated's commitment to shareholder value."
Asset Summary
Federated's equity assets were a record $64.1 billion at Sept. 30, 2016, up $12.1 billion or 23 percent from $52.0 billion at Sept. 30, 2015 and up $2.2 billion or 4 percent from $61.9 billion at June 30, 2016. Top-selling equity funds during Q3 2016 on a net basis were Federated Strategic Value Dividend Fund, Federated International Strategic Value Dividend Fund, Federated Muni and Stock Advantage Fund, Federated Strategic Value U.S. Equity Dividend Fund and Federated MDT Small Cap Core Fund.
Federated's fixed-income assets were $51.8 billion at Sept. 30, 2016, down slightly from $52.1 billion at Sept. 30, 2015 and up $1.5 billion or 3 percent from $50.3 billion at June 30, 2016. Top-selling fixed-income funds during Q3 2016 on a net basis were Federated Total Return Bond Fund, Federated Institutional High Yield Bond Fund, Federated Sterling Cash Plus Fund, Federated Government Ultrashort Duration Fund and Federated Short-Intermediate Duration Municipal Trust.
Money market assets were $248.4 billion at Sept. 30, 2016, up $1.5 billion or 1 percent from $246.9 billion at Sept. 30, 2015 and down $6.6 billion or 3 percent from $255.0 billion at June 30, 2016. Money market fund assets were $209.4 billion at Sept. 30, 2016, down $6.9 billion or 3 percent from $216.3 billion at Sept. 30, 2015 and down $8.7 billion or 4 percent from $218.1 billion at June 30, 2016.
Financial Summary
Q3 2016 vs. Q3 2015
Revenue increased by $60.3 million or 26 percent primarily due to a decrease in voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields (voluntary yield-related fee waivers), as well as an increase in revenue from higher average equity assets. This was partially offset by a decrease in revenue due to a change in the mix of average money market assets. See additional information about voluntary yield-related fee waivers in the table at the end of this financial summary.
During Q3 2016, Federated derived 55 percent of its revenue from equity and fixed-income assets (39 percent from equity assets and 16 percent from fixed-income assets) and 45 percent from money market assets.
Operating expenses increased by $45.9 million or 29 percent primarily due to an increase in distribution expenses as a result of a decrease in voluntary yield-related fee waivers.
Nonoperating income (expenses), net increased $6.9 million primarily due to an increase in net investment income due to an increase in the market value of trading securities in Q3 2016 as compared to a decrease in the market value of trading securities in Q3 2015.







  
Federated Reports Q3 2016 Earnings
Page 3 of 11

Q3 2016 vs. Q2 2016
Revenue increased by $7.9 million or 3 percent primarily due to higher average equity assets, one additional day in Q3 compared to Q2, a decrease in voluntary yield-related fee waivers and higher average fixed-income assets. This was partially offset by a decrease in revenue from lower average money market assets.
Operating expenses increased by $6.9 million or 3 percent primarily due to an increase in distribution expenses as a result of a decrease in voluntary yield-related fee waivers and an increase in certain operating expenses, primarily professional service fees, due to the recognition of $3.5 million in insurance proceeds in Q2 2016.
Nonoperating income (expenses), net increased $2.8 million primarily due to an increase in net investment income primarily due to losses recorded on available-for-sale securities in Q2 2016.
YTD 2016 vs. YTD 2015
Revenue increased by $170.5 million or 25 percent primarily due to a decrease in voluntary yield-related fee waivers. The increase in revenue was partially offset by a decrease in revenue from lower average fixed-income assets.
For the first nine months of 2016, Federated derived 54 percent of its revenue from equity and fixed-income assets (38 percent from equity assets and 16 percent from fixed-income assets) and 46 percent from money market assets.
Operating expenses increased $122.2 million or 25 percent primarily due to an increase in distribution expenses as a result of a decrease in voluntary yield-related fee waivers.
Nonoperating income (expenses), net increased $9.7 million primarily due to an increase in net investment income resulting from an increase in the market value of trading securities in 2016, as compared to a decrease in the market value of trading securities in 2015.
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 and mix, product sales and redemptions, market appreciation or depreciation, revenues, fee waivers, expenses and regulatory changes, can significantly impact Federated's business activity levels and financial results. 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 (SEC).
Voluntary yield-related fee waivers and their resulting negative impact 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, yields on instruments available for purchase by the money market funds, actions by the Federal Reserve, the U.S. Department of the Treasury, the SEC, the Financial Stability Oversight Council and other governmental entities, changes in fees and expenses of the money market funds, changes in the mix of money market customer assets, changes in customer relationships, changes in the money market product structures and offerings, demand for competing products, changes in the distribution fee arrangements with third parties, 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 Q3 2016 Earnings
Page 4 of 11

Unaudited Money Market Fund Yield Waiver Impact to the Consolidated Statements of Income
(in millions)
 
Quarter Ended
 
Change
Q3 2015 to Q3 2016
 
Quarter Ended
 
Change
Q2 2016 to Q3 2016
 
Nine Months Ended
 
Change
YTD 2015 to YTD 2016
 
Sept. 30, 2016
 
Sept. 30, 2015
 
 
June 30, 2016
 
 
Sept. 30, 2016
 
Sept. 30, 2015
 
Investment advisory fees
$
(5.1
)
 
$
(49.3
)
 
$
44.2

 
$
(6.2
)
 
$
1.1

 
$
(26.3
)
 
$
(165.0
)
 
$
138.7

Other service fees
(12.9
)
 
(34.0
)
 
21.1

 
(15.1
)
 
2.2

 
(50.5
)
 
(96.6
)
 
46.1

Total revenue
(18.0
)
 
(83.3
)
 
65.3

 
(21.3
)
 
3.3

 
(76.8
)
 
(261.6
)
 
184.8

Less: Reduction in distribution expense
13.8

 
61.3

 
(47.5
)
 
16.5

 
(2.7
)
 
58.2

 
186.1

 
(127.9
)
Operating income
(4.2
)
 
(22.0
)
 
17.8

 
(4.8
)
 
0.6

 
(18.6
)
 
(75.5
)
 
56.9

Less: Reduction/(Increase) in noncontrolling interest
0.0

 
1.7

 
(1.7
)
 
(0.2
)
 
0.2

 
0.0

 
6.0

 
(6.0
)
Pre-tax impact
$
(4.2
)
 
$
(20.3
)
 
$
16.1

 
$
(5.0
)
 
$
0.8

 
$
(18.6
)
 
$
(69.5
)
 
$
50.9

Federated will host an earnings conference call at 9 a.m. Eastern on Oct. 28, 2016. 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. on Oct. 28, 2016 and through Nov. 4, 2016 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering access code 13647405.
Federated Investors, Inc. is one of the largest investment managers in the United States, managing $364.3 billion in assets as of Sept. 30, 2016. With 123 funds and a variety of separately managed account options, Federated provides comprehensive investment management to approximately 8,500 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top 4 percent of money market fund managers in the industry, the top 5 percent of equity fund managers and the top 10 percent of fixed-income fund managers1. For more information, visit FederatedInvestors.com.
###
1) Strategic Insight, Aug. 31, 2016. 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 and performance, investor interest and preferences, asset flows and mix, changes in customer relationships, changes in product structure, fee arrangements with customers, distribution expense, contributions of directors, regulatory changes 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 SEC.  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 2016 Earnings
Page 5 of 11

Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
 
 
 
 
 
 
 
Quarter Ended
% Change Q3 2015 to Q3 2016
 
Quarter Ended
 % Change Q2 2016 to Q3 2016
 
Sept. 30, 2016
Sept. 30, 2015
 
June 30, 2016
Revenue
 
 
 
 
 
 
Investment advisory fees, net
$
197,253

$
158,898

24
 %
 
$
192,663

2
 %
Administrative service fees, net—affiliates
53,577

53,275

1

 
53,131

1

Other service fees, net
42,734

21,198

102

 
39,943

7

Other, net
1,056

950

11

 
1,001

5

Total Revenue
294,620

234,321

26

 
286,738

3

 
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
 
Distribution
98,740

58,823

68

 
94,741

4

Compensation and related
75,731

70,624

7

 
75,225

1

Systems and communications
7,763

6,684

16

 
7,767

0

Professional service fees
7,360

7,823

(6
)
 
3,645

102

Office and occupancy
6,660

6,552

2

 
6,675

0

Advertising and promotional
3,371

3,310

2

 
3,938

(14
)
Travel and related
3,165

3,183

(1
)
 
3,656

(13
)
Other
3,194

3,078

4

 
3,421

(7
)
Total Operating Expenses
205,984

160,077

29

 
199,068

3

Operating Income
88,636

74,244

19

 
87,670

1

 
 
 
 
 
 
 
Nonoperating Income (Expenses)
 
 
 
 
 
 
Investment income (loss), net
3,889

(3,049
)
228

 
1,105

252

Debt expense
(1,039
)
(979
)
6

 
(1,020
)
2

Other, net
19

(8
)
338

 
(2
)
NM

Total Nonoperating Income (Expenses), net
2,869

(4,036
)
171

 
83

NM

Income before income taxes
91,505

70,208

30

 
87,753

4

Income tax provision
32,597

26,072

25

 
31,335

4

Net income including the noncontrolling interests in subsidiaries
58,908

44,136

33

 
56,418

4

Less: Net income attributable to the noncontrolling interests in subsidiaries
3,983

5

NM

 
3,709

NM

Net Income
$
54,925

$
44,131

24
 %
 
$
52,709

4
 %
 
 
 
 
 
 
 
Amounts Attributable to Federated Investors, Inc.
 
 
 
 
 
 
Earnings Per Share1
 
 
 
 
 
 
Basic and diluted
$
0.54

$
0.42

29
 %
 
$
0.51

6
 %
Weighted-average shares outstanding
 
 
 
 
 
 
Basic
98,805

100,449

 
 
99,592

 
Diluted
98,806

100,451

 
 
99,593

 
Dividends declared per share
$
0.25

$
0.25

 
 
$
0.25

 
1) Unvested share-based 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 $2.0 million, $1.7 million and $2.1 million available to unvested restricted shareholders for the quarterly periods ended Sept. 30, 2016, Sept. 30, 2015 and June 30, 2016, respectively, was excluded from the computation of earnings per share.



  
Federated Reports Q3 2016 Earnings
Page 6 of 11

Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
 
 
 
 
Nine Months Ended
 
 
Sept. 30, 2016
Sept. 30, 2015
% Change
Revenue
 
 
 
Investment advisory fees, net
$
571,762

$
459,885

24
 %
Administrative service fees, net - affiliates
160,181

157,897

1

Other service fees, net
118,575

62,014

91

Other, net
2,949

3,174

(7
)
Total Revenue
853,467

682,970

25

 
 
 
 
Operating Expenses
 
 
 
Distribution
281,862

166,376

69

Compensation and related
227,726

218,062

4

Systems and communications
23,395

20,533

14

Office and occupancy
20,223

20,115

1

Professional service fees
19,886

22,990

(14
)
Advertising and promotional
10,751

10,285

5

Travel and related
9,727

9,474

3

Other
9,036

12,574

(28
)
Total Operating Expenses
602,606

480,409

25

Operating Income
250,861

202,561

24

 
 
 
 
Nonoperating Income (Expenses)
 
 
 
Investment income (loss), net
7,657

(1,749
)
538

Debt expense
(3,118
)
(3,325
)
(6
)
Other, net
13

(37
)
135

Total Nonoperating Income (Expenses), net
4,552

(5,111
)
189

Income before income taxes
255,413

197,450

29

Income tax provision
91,128

74,633

22

Net income including the noncontrolling interests in subsidiaries
164,285

122,817

34

Less: Net income attributable to the noncontrolling interests in subsidiaries
11,208

620

NM

Net Income
$
153,077

$
122,197

25
 %
 
 
 
 
Amounts Attributable to Federated Investors, Inc.
 
 
 
Earnings Per Share1
 
 
 
Basic and diluted
$
1.48

$
1.17

26
 %
Weighted-average shares outstanding
 
 
 
Basic
99,397

100,606

 
Diluted
99,398

100,607

 
Dividends declared per share
$
0.75

$
0.75

 
1) Unvested share-based 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 $6.0 million and $4.8 million available to unvested restricted shareholders for the nine months ended Sept. 30, 2016 and Sept. 30, 2015, respectively, was excluded from the computation of earnings per share.




  
Federated Reports Q3 2016 Earnings
Page 7 of 11

Unaudited Condensed Consolidated Balance Sheets
 
 
(in thousands)
Sept. 30, 2016
Dec. 31, 2015
Assets
 
 
Cash and other investments
$
380,508

$
346,815

Other current assets
51,983

49,013

Intangible assets, net and goodwill
733,326

734,492

Other long-term assets
64,700

56,883

Total Assets
$
1,230,517

$
1,187,203

 
 
 
Liabilities, Redeemable Noncontrolling Interests and Equity
 
 
Current liabilities
$
152,334

$
159,208

Long-term debt
172,125

191,250

Other long-term liabilities
195,220

179,039

Redeemable noncontrolling interests
29,945

8,734

Equity excluding treasury stock
923,596

840,911

Treasury stock
(242,703
)
(191,939
)
Total Liabilities, Redeemable Noncontrolling Interests and Equity
$
1,230,517

$
1,187,203




  
Federated Reports Q3 2016 Earnings
Page 8 of 11

Unaudited Changes in Equity and Fixed-Income Fund and Separate Account Assets
(in millions)
 
Quarter Ended
 
Nine Months Ended
 
Sept. 30, 2016
June 30, 2016
Sept. 30, 2015
 
Sept. 30, 2016
Sept. 30, 2015
Equity funds
 
 
 
 
 
 
Beginning assets
$
37,076

$
34,935

$
35,533

 
$
34,125

$
33,141

Sales
3,011

3,117

2,464

 
9,567

7,658

Redemptions
(2,883
)
(2,294
)
(2,043
)
 
(7,697
)
(5,880
)
Net sales
128

823

421

 
1,870

1,778

Net exchanges
(26
)
(16
)
(110
)
 
(79
)
(65
)
Market gains and losses/reinvestments1
599

1,334

(2,571
)
 
1,861

(1,581
)
Ending assets
$
37,777

$
37,076

$
33,273

 
$
37,777

$
33,273

 
 
 
 
 
 
 
Equity separate accounts2
 
 
 
 
 
 
Beginning assets
$
24,785

$
21,550

$
19,256

 
$
19,431

$
18,285

Sales3
2,968

3,156

1,456

 
8,474

4,598

Redemptions3
(1,262
)
(1,153
)
(1,350
)
 
(3,644
)
(3,388
)
Net sales3
1,706

2,003

106

 
4,830

1,210

Net exchanges
1

0

(1
)
 
1

(1
)
Market gains and losses4
(155
)
1,232

(678
)
 
2,075

(811
)
Ending assets
$
26,337

$
24,785

$
18,683

 
$
26,337

$
18,683

 
 
 
 
 
 
 
Total equity2
 
 
 
 
 
 
Beginning assets
$
61,861

$
56,485

$
54,789

 
$
53,556

$
51,426

Sales3
5,979

6,273

3,920

 
18,041

12,256

Redemptions3
(4,145
)
(3,447
)
(3,393
)
 
(11,341
)
(9,268
)
Net sales3
1,834

2,826

527

 
6,700

2,988

Net exchanges
(25
)
(16
)
(111
)
 
(78
)
(66
)
Market gains and losses/reinvestments1
444

2,566

(3,249
)
 
3,936

(2,392
)
Ending assets
$
64,114

$
61,861

$
51,956

 
$
64,114

$
51,956

 
 
 
 
 
 
 
Fixed-income funds
 
 
 
 
 
 
Beginning assets
$
38,611

$
37,826

$
40,042

 
$
37,989

$
40,456

Sales
3,641

3,467

3,277

 
10,442

11,019

Redemptions
(2,971
)
(3,364
)
(4,173
)
 
(10,415
)
(12,370
)
Net sales (redemptions)
670

103

(896
)
 
27

(1,351
)
Net exchanges
19

18

90

 
(12
)
31

Market gains and losses/reinvestments1
496

664

(254
)
 
1,792

(154
)
Ending assets
$
39,796

$
38,611

$
38,982

 
$
39,796

$
38,982

 
 
 
 
 
 
 
Fixed-income separate accounts2
 
 
 
 
 
 
Beginning assets
$
11,714

$
13,352

$
12,862

 
$
13,130

$
12,251

Sales3
360

147

638

 
704

1,631

Redemptions3
(284
)
(2,105
)
(336
)
 
(2,717
)
(817
)
Net sales (redemptions)3
76

(1,958
)
302

 
(2,013
)
814

Net exchanges
0

0

(6
)
 
0

(6
)
Market gains and losses4
258

320

(75
)
 
931

24

Ending assets
$
12,048

$
11,714

$
13,083

 
$
12,048

$
13,083

 
 
 
 
 
 
 
Total fixed income2
 
 
 
 
 
 
Beginning assets
$
50,325

$
51,178

$
52,904

 
$
51,119

$
52,707

Sales3
4,001

3,614

3,915

 
11,146

12,650

Redemptions3
(3,255
)
(5,469
)
(4,509
)
 
(13,132
)
(13,187
)
Net sales (redemptions)3
746

(1,855
)
(594
)
 
(1,986
)
(537
)
Net exchanges
19

18

84

 
(12
)
25

Market gains and losses/reinvestments1
754

984

(329
)
 
2,723

(130
)
Ending assets
$
51,844

$
50,325

$
52,065

 
$
51,844

$
52,065

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, 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.
4) Reflects the approximate changes in the fair value of the securities held by the portfolios.






  
Federated Reports Q3 2016 Earnings
Page 9 of 11

Unaudited Total Changes in Equity and Fixed-Income Assets
(in millions)
 
Quarter Ended
 
Nine Months Ended
 
Sept. 30, 2016
June 30, 2016
Sept. 30, 2015
 
Sept. 30, 2016
Sept. 30, 2015
 
 
 
 
 
 
 
Funds
 
 
 
 
 
 
Beginning assets
$
75,687

$
72,761

$
75,575

 
$
72,114

$
73,597

Sales
6,652

6,584

5,741

 
20,009

18,677

Redemptions
(5,854
)
(5,658
)
(6,216
)
 
(18,112
)
(18,250
)
Net sales (redemptions)
798

926

(475
)
 
1,897

427

Net exchanges
(7
)
2

(20
)
 
(91
)
(34
)
Market gains and losses/reinvestments1
1,095

1,998

(2,825
)
 
3,653

(1,735
)
Ending assets
$
77,573

$
75,687

$
72,255

 
$
77,573

$
72,255

 
 
 
 
 
 
 
Separate accounts2
 
 
 
 
 
 
Beginning assets
$
36,499

$
34,902

$
32,118

 
$
32,561

$
30,536

Sales3
3,328

3,303

2,094

 
9,178

6,229

Redemptions3
(1,546
)
(3,258
)
(1,686
)
 
(6,361
)
(4,205
)
Net sales3
1,782

45

408

 
2,817

2,024

Net exchanges
1

0

(7
)
 
1

(7
)
Market gains and losses4
103

1,552

(753
)
 
3,006

(787
)
Ending assets
$
38,385

$
36,499

$
31,766

 
$
38,385

$
31,766

 
 
 
 
 
 
 
Total assets 2
 
 
 
 
 
 
Beginning assets
$
112,186

$
107,663

$
107,693

 
$
104,675

$
104,133

Sales3
9,980

9,887

7,835

 
29,187

24,906

Redemptions3
(7,400
)
(8,916
)
(7,902
)
 
(24,473
)
(22,455
)
Net sales (redemptions)3
2,580

971

(67
)
 
4,714

2,451

Net exchanges
(6
)
2

(27
)
 
(90
)
(41
)
Market gains and losses/reinvestments1
1,198

3,550

(3,578
)
 
6,659

(2,522
)
Ending assets
$
115,958

$
112,186

$
104,021

 
$
115,958

$
104,021

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, 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.
4) Reflects the approximate changes in the fair value of the securities held by the portfolios.




  
Federated Reports Q3 2016 Earnings
Page 10 of 11

(unaudited)
 
 
 
 
 
MANAGED ASSETS
(in millions)
Sept. 30, 2016

June 30, 2016

March 31, 2016

Dec. 31, 2015

Sept. 30, 2015

By Asset Class
 
 
 
 
 
Equity
$
64,114

$
61,861

$
56,485

$
53,556

$
51,956

Fixed-income
51,844

50,325

51,178

51,119

52,065

Money market
248,366

254,992

262,030

256,437

246,937

Total Managed Assets
$
364,324

$
367,178

$
369,693

$
361,112

$
350,958

By Product Type
 
 
 
 
 
Funds:
 
 
 
 
 
Equity
$
37,777

$
37,076

$
34,935

$
34,125

$
33,273

Fixed-income
39,796

38,611

37,826

37,989

38,982

Money market
209,382

218,107

224,681

221,615

216,252

Total Fund Assets
$
286,955

$
293,794

$
297,442

$
293,729

$
288,507

Separate accounts:
 
 
 
 
 
Equity
$
26,337

$
24,785

$
21,550

$
19,431

$
18,683

Fixed-income
12,048

11,714

13,352

13,130

13,083

Money market
38,984

36,885

37,349

34,822

30,685

Total Separate Accounts
$
77,369

$
73,384

$
72,251

$
67,383

$
62,451

Total Managed Assets
$
364,324

$
367,178

$
369,693

$
361,112

$
350,958

 
AVERAGE MANAGED ASSETS
Quarter Ended
(in millions)
Sept. 30, 2016

June 30, 2016

March 31, 2016

Dec. 31, 2015

Sept. 30, 2015

By Asset Class
 
 
 
 
 
Equity
$
63,682

$
58,680

$
52,786

$
54,097

$
54,238

Fixed-income
51,446

50,793

50,880

51,922

52,577

Money market
250,292

254,693

260,203

247,986

245,133

Total Avg. Managed Assets
$
365,420

$
364,166

$
363,869

$
354,005

$
351,948

By Product Type
 
 
 
 
 
Funds:
 
 
 
 
 
Equity
$
37,902

$
35,891

$
32,921

$
34,726

$
35,181

Fixed-income
39,527

38,214

37,776

38,779

39,526

Money market
213,078

217,226

221,848

217,031

213,633

Total Avg. Fund Assets
$
290,507

$
291,331

$
292,545

$
290,536

$
288,340

Separate accounts:
 
 
 
 
 
Equity
$
25,780

$
22,789

$
19,865

$
19,371

$
19,057

Fixed-income
11,919

12,579

13,104

13,143

13,051

Money market
37,214

37,467

38,355

30,955

31,500

Total Avg. Separate Accounts
$
74,913

$
72,835

$
71,324

$
63,469

$
63,608

Total Avg. Managed Assets
$
365,420

$
364,166

$
363,869

$
354,005

$
351,948





  
Federated Reports Q3 2016 Earnings
Page 11 of 11

(unaudited)
 
 
 
 
AVERAGE MANAGED ASSETS
 
Nine Months Ended
(in millions)
 
Sept. 30, 2016
 
Sept. 30, 2015
By Asset Class
 
 
 
 
Equity
 
$
58,383

 
$
54,166

Fixed-income
 
51,039

 
53,100

Money market
 
255,063

 
246,057

Total Avg. Managed Assets
 
$
364,485

 
$
353,323

By Product Type
 
 
 
 
Funds:
 
 
 
 
Equity
 
$
35,572

 
$
35,114

Fixed-income
 
38,505

 
40,371

Money market
 
217,384

 
212,582

Total Avg. Fund Assets
 
$
291,461

 
$
288,067

Separate accounts:
 
 
 
 
Equity
 
$
22,811

 
$
19,052

Fixed-income
 
12,534

 
12,729

Money market
 
37,679

 
33,475

Total Avg. Separate Accounts
 
$
73,024

 
$
65,256

Total Avg. Managed Assets
 
$
364,485

 
$
353,323