Press Release

EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

Federated Investors, Inc. Reports Third Quarter 2009 Earnings

•

Equity and fixed-income assets increase $6.3 billion to reach $61 billion for Q3 2009

•

Net bond fund sales reach $1.8 billion for Q3 2009

•

Board declares quarterly dividend of $0.24 per share

(PITTSBURGH, Pa., October 22, 2009) — Federated Investors, Inc. (NYSE: FII), one of the nation’s largest investment managers, today reported earnings per diluted share from continuing operations (EPS) of $0.56 for the quarter ended Sept. 30, 2009 compared to $0.52 for the same quarter last year. Income from continuing operations was $57.0 million for Q3 2009 compared to $56.2 million for Q3 2008.

Federated reported YTD 2009 EPS of $1.42 compared to $1.62 for the same period in 2008. For the nine months ended Sept. 30, 2009, income from continuing operations was $145.4 million compared to $167.2 million for the same period in 2008. Earnings for YTD 2009 included $20.8 million in non-cash impairment charges recognized primarily in Q1 2009.

Federated’s total managed assets were $392.3 billion at Sept. 30, 2009, up $48.3 billion or 14 percent from $344.0 billion at Sept. 30, 2008 and down $9.5 billion or 2 percent from $401.8 billion reported at June 30, 2009. Average managed assets for Q3 2009 were $408.1 billion, up $73.0 billion or 22 percent from $335.1 billion reported for Q3 2008 and down $6.3 billion or 2 percent from $414.4 billion reported for Q2 2009.

“Federated’s fluctuating fund sales have increased more than 50 percent from the same time last year,” said J. Christopher Donahue, president and chief executive officer. “Investors continue to recognize Federated’s reputation for managing a broad line of stock, bond and alternative strategies that can help them meet their investing needs.”

Federated’s board of directors declared a quarterly dividend of $0.24 per share. The dividend is payable on Nov. 13, 2009 to shareholders of record as of Nov. 9, 2009. During Q3 2009, Federated purchased 470,581 shares of Federated class B common stock for $12.0 million.

Federated’s fixed-income assets were $32.0 billion at Sept. 30, 2009, up $9.3 billion or 41 percent from $22.7 billion at Sept. 30, 2008 and up $3.3 billion or 11 percent from $28.7 billion at June 30, 2009. Federated experienced continued strong net positive flows into its bond funds with $1.8 billion during Q3 2009, bringing total bond fund inflows to $5.6 billion so far in 2009, an increase of $4.0 billion over the first nine months of 2008. Net sales were driven by strong flows into ultrashort bond funds and intermediate-term bond funds including Federated Total Return Bond Fund.

Federated’s equity assets were $29.1 billion at Sept. 30, 2009, down $2.6 billion or 8 percent from $31.7 billion at Sept. 30, 2008 and up $2.9 billion or 11 percent from $26.2 billion at June 30, 2009. During Q3 2009, Federated’s


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

Federated Reports Q3 2009 Earnings

Page 2 of 10

net flows into equity funds were $126 million. Net sales were led by Federated Prudent Bear Fund and Federated Market Opportunity Fund, both of which invest in alternative-asset classes, and Federated Kaufmann Small Cap Fund, a growth fund.

Money market assets in both funds and separate accounts were $318.1 billion at Sept. 30, 2009, up $30.3 billion or 11 percent from $287.8 billion at Sept. 30, 2008 and down $28.3 billion or 8 percent from $346.4 billion at June 30, 2009. Money market mutual fund assets were $287.6 billion at Sept. 30, 2009, up $28.4 billion or 11 percent from $259.2 billion at Sept. 30, 2008 and down $25.2 billion or 8 percent from $312.8 billion at June 30, 2009.

Financial Summary

Q3 2009 vs. Q3 2008

For Q3 2009, revenue decreased by $12.3 million or 4 percent from the same quarter last year. The decrease in revenue primarily reflects $36.5 million in voluntary fee waivers related to certain money market funds in order to maintain positive or zero net yields. The fee waivers were partially offset by a related reduction in marketing and distribution expenses of $27.9 million such that the net impact on operating income was a decrease of $8.6 million. Lower average equity managed assets also contributed to decreased revenue. These decreases were partially offset by increased revenue from higher average money market and fixed-income managed assets.

Fee waivers to produce positive or zero net yields may increase and such increases could be significant. The amount of these waivers will be determined by a variety of factors including available yields on instruments held by the money market funds, changes in assets within money market funds, actions by the Federal Reserve and the U.S. Department of the Treasury, changes in the mix of money market customer assets, changes in expenses of the money market funds and Federated’s willingness to continue these waivers.

For Q3 2009, Federated derived 63 percent of its revenue from money market assets, 24 percent from equity assets, 12 percent from fixed-income assets and 1 percent from other products and services.

Operating expenses for Q3 2009 were $198.9 million compared to $212.7 million for Q3 2008. Marketing and distribution expenses decreased because of the aforementioned fee-waiver-related reductions, partially offset by the impact of increases in average money market managed assets.

Q3 2009 vs. Q2 2009

Compared to the prior quarter, revenue decreased by $13.3 million or 4 percent. The decrease in revenue primarily reflects a $19.6 million increase in voluntary fee waivers on certain money market funds in order to maintain positive or zero net yields. The fee waivers were offset by a related decrease in marketing and distribution expenses of $16.5 million such that the net impact on operating income was a decrease of $3.1 million compared to the prior quarter. In addition, revenue decreased due to lower average money market managed assets. These decreases were partially offset by the impact of increased average equity and fixed-income managed assets.

Compared to Q2 2009, operating expenses decreased by $20.0 million or 9 percent. Changes from the prior period include a decrease in marketing and distribution expenses primarily related to the aforementioned fee-waiver-related reductions.

Federated Reports Q3 2009 Earnings

Page 3 of 10

YTD 2009 vs. YTD 2008

Revenue for the first nine months of 2009 decreased by $10.8 million or 1 percent compared to the same period last year. The decrease in revenue primarily reflects voluntary fee waivers of $63.1 million on certain money market funds in order to maintain positive or zero net yields. The fee waivers were partially offset by a related reduction in marketing and distribution expenses of $43.8 million such that the net impact on operating income was a decrease of $19.3 million. In addition, revenue decreased due to lower average equity managed assets. These decreases were partially offset by the impact of increased average money market and fixed-income managed assets.

For YTD 2009, Federated derived 67 percent of its revenue from money market assets, 21 percent from equity assets, 11 percent from fixed-income assets and 1 percent from other products and services.

Operating expenses for the first nine months of 2009 increased by $21.8 million or 3 percent compared to the same period of last year primarily due to $20.8 million in non-cash impairment charges recorded primarily in Q1 2009.

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.

Federated will host an earnings conference call at 9 a.m. Eastern on Friday, Oct. 23, 2009. 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 for the teleconference. The call may also be accessed in real time on the Internet via the About Us section of FederatedInvestors.com. A replay will be available after 12:30 p.m. and until Oct. 30, 2009 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering codes 286 and 334400.

Federated Investors, Inc. is one of the largest investment managers in the United States, managing $392.3 billion in assets as of Sept. 30, 2009. With 150 funds and a variety of separately managed account options, Federated provides comprehensive investment management to nearly 5,300 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top 2 percent of money market fund managers in the industry, the top 6 percent of fixed-income fund managers and the top 8 percent of equity fund managers¹. For more information, visit FederatedInvestors.com.

###

1	Strategic Insight, August 31, 2009. 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 advisor.

Certain statements in this press release, such as those related to the level of fee waivers incurred by the company, and asset flows, 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

Federated Reports Q3 2009 Earnings

Page 4 of 10

implied by such forward-looking statements. Other risks and uncertainties include the ability of the company to predict the level of fee waivers in future quarters, which could vary significantly depending on a variety of factors identified above, and include the ability of the company to sustain asset flows, 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 Q3 2009 Earnings

Page 5 of 10

Unaudited Condensed Consolidated Statements of Income¹

(in thousands, except per share data)


	Quarter Ended Sept. 30,						% Change Q3 2008 to Q3 2009		Quarter Ended June 30, 2009			% Change Q2 2009 to Q3 2009
	2009			2008			% Change Q3 2008 to Q3 2009		Quarter Ended June 30, 2009			% Change Q2 2009 to Q3 2009
Revenue
Investment advisory fees, net	$	190,012		$	194,653		(2	)%	$	193,757		(2	)%
Administrative service fees, net		65,267			53,551		22			67,514		(3	)
Other service fees, net		36,957			56,007		(34	)		44,586		(17	)
Other, net		1,367			1,702		(20	)		1,037		32
Total Revenue		293,603			305,913		(4	)		306,894		(4	)

Operating Expenses
Compensation and related		62,232			60,482		3			63,609		(2	)
General and administrative
Marketing and distribution		95,452			106,742		(11	)		114,138		(16	)
Professional service fees		10,089			10,259		(2	)		9,777		3
Systems and communications		6,517			5,996		9			6,331		3
Office and occupancy		6,001			5,619		7			5,647		6
Advertising and promotional		2,529			3,787		(33	)		3,059		(17	)
Travel and related		2,316			3,228		(28	)		2,872		(19	)
Other		4,677			4,409		6			4,455		5
Total general and administrative		127,581			140,040		(9	)		146,279		(13	)
Amortization of deferred sales commissions		5,104			7,762		(34	)		4,960		3
Intangible asset amortization and impairment		3,953			4,369		(10	)		3,981		(1	)
Total Operating Expenses		198,870			212,653		(6	)		218,829		(9	)
Operating Income		94,733			93,260		2			88,065		8

Nonoperating Income (Expenses)
Investment income, net		1,685			190		787			1,210		39
Debt expense—recourse		(1,112	)		(757	)	47			(1,146	)	(3	)
Debt expense—nonrecourse		(314	)		(622	)	(50	)		(368	)	(15	)
Other, net		(101	)		(152	)	(34	)		34		(397	)
Total Nonoperating Income (Expenses), net		158			(1,341	)	(112	)		(270	)	(159	)
Income before income taxes		94,891			91,919		3			87,795		8
Income tax provision		34,604			33,253		4			31,712		9
Net income including noncontrolling interests in subsidiaries		60,287			58,666		3			56,083		7
Less: Net income attributable to noncontrolling interests in subsidiaries		3,301			2,455		34			2,809		18
Net Income	$	56,986		$	56,211		1	%	$	53,274		7	%

Amounts Attributable to Federated
Earnings Per Share
Basic²	$	0.56		$	0.53		6	%	$	0.52		8	%
Diluted²	$	0.56		$	0.52		8	%	$	0.52		8	%
Weighted-average shares outstanding
Basic		99,958			99,367					100,041
Diluted		100,086			100,036					100,164
Dividends declared per share	$	0.24		$	3.00				$	0.24

1)	Provisions of a new accounting standard adopted on Jan. 1, 2009 require that minority interest be renamed noncontrolling interest and that companies present a consolidated net income that includes the amount attributable to noncontrolling interests for all periods presented.

Under a new accounting standard adopted on Jan. 1, 2009, unvested share-based payment awards that receive non-forfeitable dividend rights are considered participating securities and are now required to be included in the computation of earnings per share under the “two-class method.” As a result current and prior periods have been adjusted to reflect this new standard. Total income available to participating restricted shareholders was $1.4 million, $4.0 million and $1.3 million for the quarterly periods ended Sept. 30, 2009, Sept. 30, 2008 and June 30, 2009, respectively.

Federated Reports Q3 2009 Earnings

Page 6 of 10

Unaudited Condensed Consolidated Statements of Income¹

(in thousands, except per share data)


	Nine Months Ended Sept. 30,
	2009			2008			% Change
Revenue
Investment advisory fees, net	$	574,238		$	587,697		(2	)%
Administrative service fees, net		199,726			157,828		27
Other service fees, net		132,874			170,438		(22	)
Other, net		4,302			5,949		(28	)
Total Revenue		911,140			921,912		(1	)

Operating Expenses
Compensation and related		192,068			180,967		6
General and administrative
Marketing and distribution		331,897			324,799		2
Professional service fees		29,873			30,356		(2	)
Systems and communications		19,275			17,927		8
Office and occupancy		18,315			18,067		1
Advertising and promotional		8,238			11,495		(28	)
Travel and related		7,631			10,166		(25	)
Other		17,396			13,121		33
Total general and administrative		432,625			425,931		2
Amortization of deferred sales commissions		14,936			25,923		(42	)
Intangible asset amortization and impairment		28,665			13,673		110
Total Operating Expenses		668,294			646,494		3
Operating Income		242,846			275,418		(12	)

Nonoperating Income (Expenses)
Investment income, net		2,493			2,365		5
Debt expense––recourse		(3,370	)		(961	)	251
Debt expense––nonrecourse		(1,114	)		(2,232	)	(50	)
Other, net		(47	)		(356	)	(87	)
Total Nonoperating Expenses, net		(2,038	)		(1,184	)	72
Income from continuing operations before income taxes		240,808			274,234		(12	)
Income tax provision		86,970			101,126		(14	)
Income from continuing operations including noncontrolling interests in subsidiaries		153,838			173,108		(11	)
Discontinued operations, net of tax		—			2,808		(100	)
Net Income including noncontrolling interests in subsidiaries		153,838			175,916		(13	)
Less: Net income attributable to the noncontrolling interest in subsidiaries		8,444			5,861		44
Net income	$	145,394		$	170,055		(15	)%

Amounts Attributable to Federated
Income from continuing operations	$	145,394		$	167,247		(13	)%
Discontinued operations, net of tax		—			2,808		(100	)
Net Income	$	145,394		$	170,055		(15	)%
Earnings Per Share—Basic²
Income from continuing operations	$	1.42		$	1.64		(13	)%
Income from discontinued operations		—			0.03		(100	)
Net income³	$	1.42		$	1.66		(14	)%
Earnings Per Share—Diluted²
Income from continuing operations	$	1.42		$	1.62		(12	)%
Income from discontinued operations		—			0.03		(100	)
Net income	$	1.42		$	1.65		(14	)%
Weighted-average shares outstanding
Basic		99,976			99,508
Diluted		100,096			100,518
Dividends declared per share	$	0.72		$	3.45

1)	Provisions of a new accounting standard adopted on Jan. 1, 2009 require that minority interest be renamed noncontrolling interest and that companies present a consolidated net income that includes the amount attributable to noncontrolling interests for all periods presented.

Under a new accounting standard adopted on Jan. 1, 2009, unvested share-based payment awards that receive non-forfeitable dividend rights are considered participating securities and are now required to be included in the computation of earnings per share under the “two-class method.” As a result current and prior periods have been adjusted to reflect this new standard. Total income available to participating restricted shareholders was $3.4 million and $4.6 million for the year-to-date periods ended Sept. 30, 2009 and Sept. 30, 2008 respectively.

3)	May not sum due to rounding.

Federated Reports Q3 2009 Earnings

Page 7 of 10

Unaudited Condensed Consolidated Balance Sheets

(in thousands)


	Sept. 30, 2009			Dec. 31, 2008
Assets
Cash and other short-term investments	$	87,274		$	58,647
Other current assets		47,443			58,185
Deferred sales commissions, net		17,607			30,261
Intangible assets, net and goodwill		656,807			657,321
Other long-term assets		40,110			42,196
Total Assets	$	849,241		$	846,610

Liabilities and Equity
Current liabilities	$	182,676		$	217,838
Long-term debt—recourse		110,250			126,000
Long-term debt—nonrecourse		15,803			30,497
Other long-term liabilities		35,452			47,705
Equity excluding treasury stock¹		1,310,359			1,229,051
Treasury stock		(805,299	)		(804,481	)
Total Liabilities and Equity	$	849,241		$	846,610

Provisions of a new accounting standard adopted on Jan. 1, 2009 require that minority interest be renamed noncontrolling interest and companies present it as a component of equity for all periods presented. Noncontrolling interest was previously included in other long-term liabilities, but is now included in Equity excluding treasury stock.

Federated Reports Q3 2009 Earnings

Page 8 of 10

Changes in Equity and Fixed-Income Fund Managed Assets

(in millions)


	Quarter Ended									Nine Months Ended
	Sept. 30, 2009			Sept. 30, 2008			June 30, 2009			Sept. 30, 2009			Sept. 30, 2008
Equity Funds
Beginning assets	$	17,966		$	25,569		$	15,902		$	17,562		$	29,145
Sales		1,503			1,060			1,177			4,005			4,009
Redemptions		(1,377	)		(2,031	)		(1,151	)		(4,119	)		(5,453	)
Net sales (redemptions)		126			(971	)		26			(114	)		(1,444	)
Net exchanges		(12	)		(68	)		8			(79	)		(163	)
Acquisition related		257			0			0			257			42
Market gains and losses/reinvestments¹		2,013			(2,947	)		2,030			2,724			(5,997	)
Ending assets	$	20,350		$	21,583		$	17,966		$	20,350		$	21,583

Fixed-Income Funds
Beginning assets	$	24,100		$	19,065		$	20,752		$	19,321		$	17,943
Sales		4,789			2,354			4,597			12,537			6,509
Redemptions		(2,971	)		(1,826	)		(1,997	)		(6,978	)		(4,911	)
Net sales		1,818			528			2,600			5,559			1,598
Net exchanges		53			26			6			101			80
Market gains and losses/reinvestments¹		989			(483	)		742			1,979			(485	)
Ending assets	$	26,960		$	19,136		$	24,100		$	26,960		$	19,136

1)	Reflects changes in the market value of the securities held by the funds and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates.

Changes in Equity and Fixed-Income Separate Account Assets²

(in millions)


	Quarter Ended									Nine Months Ended
	Sept. 30, 2009			Sept. 30, 2008			June 30, 2009			Sept. 30, 2009			Sept. 30, 2008
Equity Separate Accounts
Beginning assets	$	8,245		$	11,712		$	7,509		$	9,099		$	13,017
Net customer flows³		(261	)		(426	)		(204	)		(1,026	)		(621	)
Acquisition related⁴		(257	)		0			0			(257	)		0
Market gains and losses/reinvestments⁵		1,047			(1,218	)		940			958			(2,328	)
Ending assets	$	8,774		$	10,068		$	8,245		$	8,774		$	10,068

Fixed-Income Separate Accounts
Beginning assets	$	4,583		$	3,924		$	4,219		$	4,165		$	3,754
Net customer flows³		188			(150	)		74			269			(93	)
Market gains and losses/reinvestments⁵		308			(172	)		290			645			(59	)
Ending assets	$	5,079		$	3,602		$	4,583		$	5,079		$	3,602

2)	Includes separately managed accounts, institutional accounts and sub-advised funds (both variable annuity and other) and other managed products. Flows for liquidation portfolios have been removed from Changes in Equity and Fixed-Income Separate Account Assets and are detailed on the following page.

3)	For certain accounts, Net customer flows are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses/reinvestments.

4)	Includes assets that were reclassified from Equity Separate Accounts to Equity Funds as a result of the transaction with the Touchstone Funds, which was completed during Q3 2009. See related press release dated Aug. 31, 2009 for more information about the Touchstone transaction.

5)	Reflects the approximate changes in the market value of the securities held in the portfolios, and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates.

Federated Reports Q3 2009 Earnings

Page 9 of 10

Changes in Liquidation Portfolios¹

(in millions)


	Quarter Ended								Nine Months Ended
	Sept. 30, 2009		Sept. 30, 2008			June 30, 2009			Sept. 30, 2009		Sept. 30, 2008
Liquidation Portfolios
Beginning assets	$	556	$	2,083		$	700		$	1,505	$	1,127
Net customer flows²		12,516		(222	)		(151	)		11,563		856
Market gains and losses/reinvestments³		1		(84	)		7			5		(206	)
Ending assets	$	13,073	$	1,777		$	556		$	13,073	$	1,777

Federated added liquidation portfolios as an asset category beginning in Q1 2009. Liquidation portfolios include portfolios of distressed fixed-income securities and liquidating collateralized debt obligation (CDO) products. In the distressed security category, 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. In the case of liquidating CDOs, the CDO structure has unwound earlier than expected due to events of default related to certain distressed securities in the portfolio. The new category was established because management fee rates earned from these portfolios are significantly different than those of traditional separate account mandates.

2)	For certain accounts, Net customer flows are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses/reinvestments.

3)	Reflects the approximate changes in the market value of the securities held in the portfolios, and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates.

Federated Reports Q3 2009 Earnings

Page 10 of 10


(in millions)
MANAGED ASSETS	Sept. 30, 2009		June 30, 2009		March 31, 2009		Dec. 31, 2008		Sept. 30, 2008
By Asset Class
Equity	$	29,124	$	26,211	$	23,411	$	26,661	$	31,651
Fixed-income		32,039		28,683		24,971		23,486		22,738
Money market		318,064		346,354		360,127		355,658		287,836
Liquidation portfolios¹		13,073		556		700		1,505		1,777
Total Managed Assets	$	392,300	$	401,804	$	409,209	$	407,310	$	344,002
By Product Type
Mutual Funds:
Equity	$	20,350	$	17,966	$	15,902	$	17,562	$	21,583
Fixed-income		26,960		24,100		20,752		19,321		19,136
Money market		287,634		312,808		328,780		327,267		259,172
Total Fund Assets	$	334,944	$	354,874	$	365,434	$	364,150	$	299,891
Separate Accounts:
Equity	$	8,774	$	8,245	$	7,509	$	9,099	$	10,068
Fixed-income		5,079		4,583		4,219		4,165		3,602
Money market		30,430		33,546		31,347		28,391		28,664
Total Separate Accounts	$	44,283	$	46,374	$	43,075	$	41,655	$	42,334
Total Liquidation Portfolios¹	$	13,073	$	556	$	700	$	1,505	$	1,777
Total Managed Assets	$	392,300	$	401,804	$	409,209	$	407,310	$	344,002

AVERAGE MANAGED ASSETS	Quarter Ended
	Sept. 30, 2009		June 30, 2009		March 31, 2009		Dec. 31, 2008		Sept. 30, 2008
By Asset Class
Equity	$	27,872	$	25,287	$	24,219	$	24,870	$	35,136
Fixed-income		30,376		26,978		24,218		22,546		23,143
Money market		336,530		361,502		362,269		320,684		274,840
Liquidation portfolios¹		13,370		637		975		1,650		1,944
Total Avg. Assets	$	408,148	$	414,404	$	411,681	$	369,750	$	335,063
By Product Type
Mutual Funds:
Equity	$	19,215	$	17,220	$	16,240	$	16,904	$	24,180
Fixed-income		25,499		22,545		20,009		18,674		19,347
Money market		304,959		326,280		330,294		293,428		245,304
Total Avg. Fund Assets	$	349,673	$	366,045	$	366,543	$	329,006	$	288,831
Separate Accounts:
Equity	$	8,657	$	8,067	$	7,979	$	7,966	$	10,956
Fixed-income		4,877		4,433		4,209		3,872		3,796
Money market		31,571		35,222		31,975		27,256		29,536
Total Avg. Separate Accts.	$	45,105	$	47,722	$	44,163	$	39,094	$	44,288
Total Avg. Liquidation Portfolios¹	$	13,370	$	637	$	975	$	1,650	$	1,944
Total Avg. Assets	$	408,148	$	414,404	$	411,681	$	369,750	$	335,063

Federated added liquidation portfolios as an asset category beginning in Q1 2009. Liquidation portfolios include portfolios of distressed fixed-income securities and liquidating collateralized debt obligation (CDO) products. In the distressed security category, 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. In the case of liquidating CDOs, the CDO structure has unwound earlier than expected due to events of default related to certain distressed securities in the portfolio. The new category was established because the management fee rates earned from these portfolios are significantly different than those of traditional separate account mandates.

Federated discontinued reporting administered assets as of June 30, 2009 as they are no longer a material source of revenue for the firm.