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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Federated Investors Inc | NYSE:FII | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 36.23 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Pennsylvania
|
|
25-1111467
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Federated Investors Tower
Pittsburgh, Pennsylvania
|
|
15222-3779
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
o
|
|
|
|
|
|||
Non-accelerated filer
|
|
o
|
|
Smaller reporting company
|
|
o
|
|
|
|||
|
Item 1.
|
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
Item 2.
|
||
|
Item 3.
|
||
|
Item 4.
|
||
|
|||
|
Item 1
|
||
|
Item 1A.
|
||
|
Item 2.
|
||
|
Item 6.
|
||
Special Note Regarding Forward-Looking Information
|
Consolidated Balance Sheets
|
||||
(dollars in thousands)
|
||||
(unaudited)
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
153,860
|
|
|
$
|
172,628
|
|
Investments—affiliates
|
|
134,413
|
|
|
141,748
|
|
||
Investments—consolidated investment companies
|
|
56,879
|
|
|
25,368
|
|
||
Investments—other
|
|
7,299
|
|
|
7,071
|
|
||
Receivables, net of reserve of $2 and $59, respectively
|
|
39,469
|
|
|
33,524
|
|
||
Prepaid expenses
|
|
11,214
|
|
|
10,722
|
|
||
Other current assets
|
|
3,305
|
|
|
4,767
|
|
||
Total current assets
|
|
406,439
|
|
|
395,828
|
|
||
Long-Term Assets
|
|
|
|
|
||||
Goodwill
|
|
659,189
|
|
|
659,315
|
|
||
Renewable investment advisory contracts
|
|
70,378
|
|
|
70,582
|
|
||
Other intangible assets, net of accumulated amortization of $21,724 and $21,116, respectively
|
|
3,987
|
|
|
4,595
|
|
||
Property and equipment, net of accumulated depreciation of $60,364 and $56,034, respectively
|
|
38,315
|
|
|
35,743
|
|
||
Other long-term assets
|
|
21,529
|
|
|
21,140
|
|
||
Total long-term assets
|
|
793,398
|
|
|
791,375
|
|
||
Total assets
|
|
$
|
1,199,837
|
|
|
$
|
1,187,203
|
|
LIABILITIES
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Short-term debt
|
|
$
|
25,500
|
|
|
$
|
25,500
|
|
Accounts payable and accrued expenses
|
|
52,643
|
|
|
43,551
|
|
||
Accrued compensation and benefits
|
|
43,591
|
|
|
75,691
|
|
||
Other current liabilities
|
|
13,342
|
|
|
14,466
|
|
||
Total current liabilities
|
|
135,076
|
|
|
159,208
|
|
||
Long-Term Liabilities
|
|
|
|
|
||||
Long-term debt
|
|
178,500
|
|
|
191,250
|
|
||
Long-term deferred tax liability, net
|
|
170,279
|
|
|
158,895
|
|
||
Other long-term liabilities
|
|
17,205
|
|
|
20,144
|
|
||
Total long-term liabilities
|
|
365,984
|
|
|
370,289
|
|
||
Total liabilities
|
|
501,060
|
|
|
529,497
|
|
||
Commitments and contingencies (Note (12))
|
|
|
|
|
||||
TEMPORARY EQUITY
|
|
|
|
|
||||
Redeemable noncontrolling interest in subsidiaries
|
|
29,670
|
|
|
8,734
|
|
||
PERMANENT EQUITY
|
|
|
|
|
||||
Federated Investors, Inc. shareholders’ equity
|
|
|
|
|
||||
Common stock:
|
|
|
|
|
||||
Class A, no par value, 20,000 shares authorized, 9,000 shares issued and outstanding
|
|
189
|
|
|
189
|
|
||
Class B, no par value, 900,000,000 shares authorized, 109,505,456 shares issued
|
|
311,411
|
|
|
298,390
|
|
||
Retained earnings
|
|
577,856
|
|
|
545,785
|
|
||
Treasury stock, at cost, 6,331,819 and 5,411,429 shares Class B common stock, respectively
|
|
(219,616
|
)
|
|
(191,939
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
|
(2,056
|
)
|
|
(4,609
|
)
|
||
Total Federated Investors, Inc. shareholders’ equity
|
|
667,784
|
|
|
647,816
|
|
||
Nonredeemable noncontrolling interest in subsidiary
|
|
1,323
|
|
|
1,156
|
|
||
Total permanent equity
|
|
669,107
|
|
|
648,972
|
|
||
Total liabilities, temporary equity and permanent equity
|
|
$
|
1,199,837
|
|
|
$
|
1,187,203
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Income
|
||||
(dollars in thousands, except per share data)
|
||||
(unaudited)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Investment advisory fees, net—affiliates
|
|
$
|
165,956
|
|
|
$
|
129,464
|
|
|
$
|
320,733
|
|
|
$
|
251,498
|
|
Investment advisory fees, net—other
|
|
26,707
|
|
|
24,965
|
|
|
53,777
|
|
|
49,489
|
|
||||
Administrative service fees, net—affiliates
|
|
53,131
|
|
|
51,605
|
|
|
106,604
|
|
|
104,622
|
|
||||
Other service fees, net—affiliates
|
|
38,803
|
|
|
19,996
|
|
|
73,500
|
|
|
38,715
|
|
||||
Other service fees, net—other
|
|
1,140
|
|
|
1,035
|
|
|
2,341
|
|
|
2,102
|
|
||||
Other, net
|
|
1,001
|
|
|
1,062
|
|
|
1,892
|
|
|
2,223
|
|
||||
Total revenue
|
|
286,738
|
|
|
228,127
|
|
|
558,847
|
|
|
448,649
|
|
||||
Operating Expenses
|
|
|
|
|
|
|
|
|
||||||||
Distribution
|
|
94,741
|
|
|
54,058
|
|
|
183,122
|
|
|
107,553
|
|
||||
Compensation and related
|
|
75,225
|
|
|
70,940
|
|
|
151,995
|
|
|
147,438
|
|
||||
Systems and communications
|
|
7,767
|
|
|
6,979
|
|
|
15,632
|
|
|
13,849
|
|
||||
Office and occupancy
|
|
6,675
|
|
|
6,710
|
|
|
13,563
|
|
|
13,563
|
|
||||
Professional service fees
|
|
3,645
|
|
|
7,285
|
|
|
12,526
|
|
|
15,167
|
|
||||
Advertising and promotional
|
|
3,938
|
|
|
3,504
|
|
|
7,380
|
|
|
6,975
|
|
||||
Travel and related
|
|
3,656
|
|
|
3,533
|
|
|
6,562
|
|
|
6,291
|
|
||||
Other
|
|
3,421
|
|
|
5,839
|
|
|
5,842
|
|
|
9,496
|
|
||||
Total operating expenses
|
|
199,068
|
|
|
158,848
|
|
|
396,622
|
|
|
320,332
|
|
||||
Operating income
|
|
87,670
|
|
|
69,279
|
|
|
162,225
|
|
|
128,317
|
|
||||
Nonoperating Income (Expenses)
|
|
|
|
|
|
|
|
|
||||||||
Investment income, net
|
|
1,674
|
|
|
1,390
|
|
|
3,247
|
|
|
2,534
|
|
||||
(Loss) gain on securities, net
|
|
(569
|
)
|
|
(980
|
)
|
|
522
|
|
|
(1,234
|
)
|
||||
Debt expense
|
|
(1,020
|
)
|
|
(974
|
)
|
|
(2,079
|
)
|
|
(2,347
|
)
|
||||
Other, net
|
|
(2
|
)
|
|
(15
|
)
|
|
(7
|
)
|
|
(28
|
)
|
||||
Total nonoperating income (expenses), net
|
|
83
|
|
|
(579
|
)
|
|
1,683
|
|
|
(1,075
|
)
|
||||
Income before income taxes
|
|
87,753
|
|
|
68,700
|
|
|
163,908
|
|
|
127,242
|
|
||||
Income tax provision
|
|
31,335
|
|
|
26,437
|
|
|
58,531
|
|
|
48,561
|
|
||||
Net income including the noncontrolling interests in subsidiaries
|
|
56,418
|
|
|
42,263
|
|
|
105,377
|
|
|
78,681
|
|
||||
Less: Net income attributable to the noncontrolling interests in subsidiaries
|
|
3,709
|
|
|
504
|
|
|
7,225
|
|
|
615
|
|
||||
Net income
|
|
$
|
52,709
|
|
|
$
|
41,759
|
|
|
$
|
98,152
|
|
|
$
|
78,066
|
|
Amounts Attributable to Federated Investors, Inc.
|
|
|
|
|
|
|
|
|||||||||
Earnings per common share—Basic and Diluted
|
|
$
|
0.51
|
|
|
$
|
0.40
|
|
|
$
|
0.94
|
|
|
$
|
0.74
|
|
Cash dividends per share
|
|
$
|
0.25
|
|
|
$
|
0.25
|
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income
|
||||
(dollars in thousands)
|
||||
(unaudited)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Net income including the noncontrolling interests in subsidiaries
|
|
$
|
56,418
|
|
|
$
|
42,263
|
|
|
$
|
105,377
|
|
|
$
|
78,681
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
||||||||
Permanent equity
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on interest rate swap
|
|
0
|
|
|
0
|
|
|
0
|
|
|
42
|
|
||||
Reclassification adjustment related to interest rate swap
|
|
0
|
|
|
0
|
|
|
0
|
|
|
227
|
|
||||
Unrealized gain (loss) on securities available for sale
|
|
408
|
|
|
(299
|
)
|
|
985
|
|
|
388
|
|
||||
Reclassification adjustment related to securities available for sale
|
|
1,020
|
|
|
0
|
|
|
1,844
|
|
|
0
|
|
||||
Foreign currency items
|
|
(302
|
)
|
|
262
|
|
|
(276
|
)
|
|
(178
|
)
|
||||
Temporary equity
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation (loss) gain
|
|
(3
|
)
|
|
0
|
|
|
3
|
|
|
0
|
|
||||
Other comprehensive income (loss)
|
|
1,123
|
|
|
(37
|
)
|
|
2,556
|
|
|
479
|
|
||||
Comprehensive income including the noncontrolling interests in subsidiaries
|
|
57,541
|
|
|
42,226
|
|
|
107,933
|
|
|
79,160
|
|
||||
Less: Comprehensive income (loss) attributable to redeemable noncontrolling interest in subsidiaries
|
|
872
|
|
|
(298
|
)
|
|
1,893
|
|
|
(383
|
)
|
||||
Less: Comprehensive income attributable to nonredeemable noncontrolling interest in subsidiary
|
|
2,834
|
|
|
802
|
|
|
5,335
|
|
|
998
|
|
||||
Comprehensive income attributable to Federated Investors, Inc.
|
|
$
|
53,835
|
|
|
$
|
41,722
|
|
|
$
|
100,705
|
|
|
$
|
78,545
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Changes in Equity
|
||||
(dollars in thousands)
|
||||
(unaudited)
|
|
|
Federated Investors, Inc. Shareholders' Equity
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
Common
Stock |
|
Retained
Earnings |
|
Treasury
Stock |
|
Accumulated
Other Comprehensive Loss, Net of Tax |
|
Total
Shareholders’ Equity |
|
Nonredeemable
Noncontrolling Interest in Subsidiary |
|
Total
Permanent Equity |
|
Redeemable
Noncontrolling Interest in Subsidiaries/ Temporary Equity |
||||||||||||||||
Balance at December 31, 2014
|
|
$
|
271,020
|
|
|
$
|
505,394
|
|
|
$
|
(165,258
|
)
|
|
$
|
(1,662
|
)
|
|
$
|
609,494
|
|
|
$
|
158
|
|
|
$
|
609,652
|
|
|
$
|
3,697
|
|
Net income (loss)
|
|
0
|
|
|
78,066
|
|
|
0
|
|
|
0
|
|
|
78,066
|
|
|
998
|
|
|
79,064
|
|
|
(383
|
)
|
||||||||
Other comprehensive income, net of tax
|
|
0
|
|
|
0
|
|
|
0
|
|
|
479
|
|
|
479
|
|
|
0
|
|
|
479
|
|
|
0
|
|
||||||||
Subscriptions—redeemable noncontrolling interest holders
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
10,539
|
|
||||||||
Stock award activity
|
|
15,812
|
|
|
(12,396
|
)
|
|
12,478
|
|
|
0
|
|
|
15,894
|
|
|
0
|
|
|
15,894
|
|
|
0
|
|
||||||||
Dividends declared
|
|
0
|
|
|
(52,441
|
)
|
|
0
|
|
|
0
|
|
|
(52,441
|
)
|
|
0
|
|
|
(52,441
|
)
|
|
0
|
|
||||||||
Distributions to noncontrolling interest in subsidiaries
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(134
|
)
|
|
(134
|
)
|
|
(1,630
|
)
|
||||||||
Purchase of treasury stock
|
|
0
|
|
|
0
|
|
|
(20,492
|
)
|
|
0
|
|
|
(20,492
|
)
|
|
0
|
|
|
(20,492
|
)
|
|
0
|
|
||||||||
Balance at June 30, 2015
|
|
$
|
286,832
|
|
|
$
|
518,623
|
|
|
$
|
(173,272
|
)
|
|
$
|
(1,183
|
)
|
|
$
|
631,000
|
|
|
$
|
1,022
|
|
|
$
|
632,022
|
|
|
$
|
12,223
|
|
Balance at December 31, 2015
|
|
$
|
298,579
|
|
|
$
|
545,785
|
|
|
$
|
(191,939
|
)
|
|
$
|
(4,609
|
)
|
|
$
|
647,816
|
|
|
$
|
1,156
|
|
|
$
|
648,972
|
|
|
$
|
8,734
|
|
Adoption of new accounting pronouncements
|
|
123
|
|
|
(911
|
)
|
|
0
|
|
|
831
|
|
|
43
|
|
|
0
|
|
|
43
|
|
|
14,850
|
|
||||||||
Net income
|
|
0
|
|
|
98,152
|
|
|
0
|
|
|
0
|
|
|
98,152
|
|
|
5,335
|
|
|
103,487
|
|
|
1,890
|
|
||||||||
Other comprehensive income, net of tax
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,722
|
|
|
1,722
|
|
|
0
|
|
|
1,722
|
|
|
3
|
|
||||||||
Subscriptions—redeemable noncontrolling interest holders
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
10,774
|
|
||||||||
Deconsolidation
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1,372
|
)
|
||||||||
Stock award activity
|
|
12,898
|
|
|
(13,186
|
)
|
|
13,337
|
|
|
0
|
|
|
13,049
|
|
|
0
|
|
|
13,049
|
|
|
0
|
|
||||||||
Dividends declared
|
|
0
|
|
|
(51,984
|
)
|
|
0
|
|
|
0
|
|
|
(51,984
|
)
|
|
0
|
|
|
(51,984
|
)
|
|
0
|
|
||||||||
Distributions to noncontrolling interest in subsidiaries
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(5,168
|
)
|
|
(5,168
|
)
|
|
(5,209
|
)
|
||||||||
Purchase of treasury stock
|
|
0
|
|
|
0
|
|
|
(41,014
|
)
|
|
0
|
|
|
(41,014
|
)
|
|
0
|
|
|
(41,014
|
)
|
|
0
|
|
||||||||
Balance at June 30, 2016
|
|
$
|
311,600
|
|
|
$
|
577,856
|
|
|
$
|
(219,616
|
)
|
|
$
|
(2,056
|
)
|
|
$
|
667,784
|
|
|
$
|
1,323
|
|
|
$
|
669,107
|
|
|
$
|
29,670
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
|
||||
(dollars in thousands)
|
||||
(unaudited)
|
|
|
Six Months Ended
|
||||||
|
|
June 30,
|
||||||
|
|
2016
|
|
|
2015
|
|
||
Operating Activities
|
|
|
|
|
||||
Net income including the noncontrolling interests in subsidiaries
|
|
$
|
105,377
|
|
|
$
|
78,681
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
|
|
|
|
|
||||
Amortization of deferred sales commissions
|
|
5,856
|
|
|
8,058
|
|
||
Depreciation and other amortization
|
|
4,859
|
|
|
4,851
|
|
||
Share-based compensation expense
|
|
12,927
|
|
|
12,352
|
|
||
Loss on disposal of assets
|
|
1,394
|
|
|
760
|
|
||
Provision for deferred income taxes
|
|
11,911
|
|
|
11,576
|
|
||
Impairment of assets
|
|
1,637
|
|
|
0
|
|
||
Adoption of new accounting pronouncement
|
|
(2,653
|
)
|
|
0
|
|
||
Net purchases of trading securities
|
|
(5,977
|
)
|
|
(7,521
|
)
|
||
Deferred sales commissions paid
|
|
(6,824
|
)
|
|
(8,132
|
)
|
||
Contingent deferred sales charges received
|
|
1,093
|
|
|
1,132
|
|
||
Other changes in assets and liabilities:
|
|
|
|
|
||||
Increase in receivables, net
|
|
(5,532
|
)
|
|
(1,912
|
)
|
||
(Increase) decrease in prepaid expenses and other assets
|
|
(4,756
|
)
|
|
1,150
|
|
||
Decrease in accounts payable and accrued expenses
|
|
(26,019
|
)
|
|
(31,288
|
)
|
||
(Decrease) increase in other liabilities
|
|
(4,141
|
)
|
|
2,873
|
|
||
Net cash provided by operating activities
|
|
89,152
|
|
|
72,580
|
|
||
Investing Activities
|
|
|
|
|
||||
Purchases of securities available for sale
|
|
(1,537
|
)
|
|
(1,918
|
)
|
||
Proceeds from redemptions of securities available for sale
|
|
151
|
|
|
0
|
|
||
Cash paid for property and equipment
|
|
(7,077
|
)
|
|
(3,230
|
)
|
||
Net cash used by investing activities
|
|
(8,463
|
)
|
|
(5,148
|
)
|
||
Financing Activities
|
|
|
|
|
||||
Dividends paid
|
|
(51,986
|
)
|
|
(52,448
|
)
|
||
Purchases of treasury stock
|
|
(35,197
|
)
|
|
(19,469
|
)
|
||
Distributions to noncontrolling interest in subsidiaries
|
|
(10,377
|
)
|
|
(1,764
|
)
|
||
Contributions from noncontrolling interest in subsidiaries
|
|
10,774
|
|
|
10,539
|
|
||
Proceeds from shareholders for share-based compensation
|
|
149
|
|
|
82
|
|
||
Excess tax benefits from share-based compensation
|
|
0
|
|
|
2,198
|
|
||
Cash paid for business acquisitions
|
|
(70
|
)
|
|
0
|
|
||
Payments on debt
|
|
(12,750
|
)
|
|
(12,750
|
)
|
||
Net cash used by financing activities
|
|
(99,457
|
)
|
|
(73,612
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(18,768
|
)
|
|
(6,180
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
172,628
|
|
|
115,267
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
153,860
|
|
|
$
|
109,087
|
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(in millions)
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Revenue
|
|
$
|
(21.3
|
)
|
|
$
|
(84.2
|
)
|
|
$
|
(58.8
|
)
|
|
$
|
(178.3
|
)
|
Less: Reduction in Distribution expense
|
|
16.5
|
|
|
60.2
|
|
|
44.4
|
|
|
124.8
|
|
||||
Operating income
|
|
(4.8
|
)
|
|
(24.0
|
)
|
|
(14.4
|
)
|
|
(53.5
|
)
|
||||
Less: (Increase)/Reduction in Noncontrolling interests
|
|
(0.2
|
)
|
|
1.8
|
|
|
0.0
|
|
|
4.3
|
|
||||
Pre-tax impact
|
|
$
|
(5.0
|
)
|
|
$
|
(22.2
|
)
|
|
$
|
(14.4
|
)
|
|
$
|
(49.2
|
)
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
(in millions)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Cash and cash equivalents
|
|
$
|
0.6
|
|
|
$
|
3.1
|
|
Investments—consolidated investment companies
|
|
44.8
|
|
|
25.4
|
|
||
Receivables
|
|
1.5
|
|
|
0.2
|
|
||
Less: Liabilities
|
|
0.9
|
|
|
3.0
|
|
||
Less: Redeemable noncontrolling interest in subsidiaries
|
|
27.8
|
|
|
8.7
|
|
||
Federated's net interest in the consolidated Federated Fund VIEs
|
|
$
|
18.2
|
|
|
$
|
17.0
|
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
|
|
|
Gross Unrealized
|
|
Estimated
Fair
|
|
|
|
Gross Unrealized
|
|
Estimated
Fair
|
||||||||||||||||||||
(in thousands)
|
|
Cost
|
|
Gains
|
|
(Losses)
|
|
Value
|
|
Cost
|
|
Gains
|
|
(Losses)
|
|
Value
|
||||||||||||||||
Equity mutual funds
|
|
$
|
31,968
|
|
|
$
|
491
|
|
|
$
|
(395
|
)
|
|
$
|
32,064
|
|
|
$
|
32,357
|
|
|
$
|
342
|
|
|
$
|
(2,416
|
)
|
|
$
|
30,283
|
|
Fixed-income mutual funds
|
|
104,003
|
|
|
132
|
|
|
(1,786
|
)
|
|
102,349
|
|
|
115,396
|
|
|
109
|
|
|
(4,040
|
)
|
|
111,465
|
|
||||||||
Total fluctuating-value mutual funds
|
|
$
|
135,971
|
|
|
$
|
623
|
|
|
$
|
(2,181
|
)
|
|
$
|
134,413
|
|
|
$
|
147,753
|
|
|
$
|
451
|
|
|
$
|
(6,456
|
)
|
|
$
|
141,748
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(in thousands)
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Unrealized (loss) gain
|
|
|
|
|
|
|
|
|
||||||||
Trading securities
|
|
$
|
1,581
|
|
|
$
|
(832
|
)
|
|
$
|
3,639
|
|
|
$
|
(376
|
)
|
Derivatives
1
|
|
(410
|
)
|
|
58
|
|
|
(303
|
)
|
|
(100
|
)
|
||||
Realized gains
2
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities
3
|
|
26
|
|
|
0
|
|
|
26
|
|
|
0
|
|
||||
Trading securities
|
|
460
|
|
|
326
|
|
|
672
|
|
|
516
|
|
||||
Derivatives
1
|
|
149
|
|
|
61
|
|
|
555
|
|
|
296
|
|
||||
Realized losses
2
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities
3
|
|
(1,628
|
)
|
|
0
|
|
|
(1,645
|
)
|
|
0
|
|
||||
Trading securities
|
|
(481
|
)
|
|
(417
|
)
|
|
(1,775
|
)
|
|
(1,031
|
)
|
||||
Derivatives
1
|
|
(266
|
)
|
|
(176
|
)
|
|
(647
|
)
|
|
(539
|
)
|
||||
(Loss) gain on securities, net
4
|
|
$
|
(569
|
)
|
|
$
|
(980
|
)
|
|
$
|
522
|
|
|
$
|
(1,234
|
)
|
1
|
Amounts related to the settlement of economic derivatives held by certain consolidated
Federated Funds
.
|
2
|
Realized gains and losses are computed on a specific-identification basis.
|
3
|
Proceeds from redemptions of available-for-sale securities were
$0.1 million
and
$0.2 million
for the three and
six months ended
June 30, 2016
.
|
4
|
Amounts related to consolidated entities, primarily
Federated Funds
, totaled
$0.9 million
and
$1.9 million
for the three and
six months ended
June 30, 2016
, respectively, and
$(0.8) million
and
$(1.1) million
for the three and
six months ended
June 30, 2015
, respectively.
|
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV Practical Expedient
3
|
|
Total
|
||||||||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
153,860
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
153,860
|
|
Available-for-sale equity securities
|
|
108,959
|
|
|
0
|
|
|
0
|
|
|
25,454
|
|
|
134,413
|
|
|||||
Trading securities—equity
|
|
13,443
|
|
|
625
|
|
|
0
|
|
|
5,548
|
|
|
19,616
|
|
|||||
Trading securities—debt
|
|
0
|
|
|
44,562
|
|
|
0
|
|
|
0
|
|
|
44,562
|
|
|||||
Other
1
|
|
7
|
|
|
0
|
|
|
910
|
|
|
0
|
|
|
917
|
|
|||||
Total financial assets
|
|
$
|
276,269
|
|
|
$
|
45,187
|
|
|
$
|
910
|
|
|
$
|
31,002
|
|
|
$
|
353,368
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total financial liabilities
2
|
|
$
|
66
|
|
|
$
|
267
|
|
|
$
|
2,229
|
|
|
$
|
0
|
|
|
$
|
2,562
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
3
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
172,628
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
172,628
|
|
Available-for-sale equity securities
|
|
117,422
|
|
|
0
|
|
|
0
|
|
|
24,326
|
|
|
141,748
|
|
|||||
Trading securities—equity
|
|
15,900
|
|
|
65
|
|
|
0
|
|
|
7,433
|
|
|
23,398
|
|
|||||
Trading securities—debt
|
|
0
|
|
|
9,041
|
|
|
0
|
|
|
0
|
|
|
9,041
|
|
|||||
Other
1
|
|
4
|
|
|
17
|
|
|
910
|
|
|
0
|
|
|
931
|
|
|||||
Total financial assets
|
|
$
|
305,954
|
|
|
$
|
9,123
|
|
|
$
|
910
|
|
|
$
|
31,759
|
|
|
$
|
347,746
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total financial liabilities
2
|
|
$
|
2,681
|
|
|
$
|
59
|
|
|
$
|
2,630
|
|
|
$
|
0
|
|
|
$
|
5,370
|
|
1
|
Amounts include structured trade finance loans held by Federated as well as futures contracts and/or foreign currency forward contracts held within certain consolidated
Federated Funds
.
|
2
|
Amounts include acquisition-related future consideration liabilities and may include investments sold short, foreign currency forward contracts and/or futures contracts held within certain consolidated
Federated Funds
, as well as certain liabilities attributable to structured trade finance loans held by Federated.
|
3
|
Investments that calculate NAV as a practical expedient were recategorized and are no longer included within Level 2 of the valuation hierarchy as of
December 31, 2015
(see
Note (2)
for additional information).
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
|
|
Interest Rates
|
|
|
|
|
||||||
|
|
June 30,
|
|
December 31,
|
|
|
|
|
||||
(dollars in thousands)
|
|
2016
|
|
2015
|
|
June 30, 2016
|
|
|
December 31, 2015
|
|
||
Term Loan
|
|
1.585%
|
|
1.555%
|
|
$
|
204,000
|
|
|
$
|
216,750
|
|
Less: Short-term debt
|
|
|
|
|
|
25,500
|
|
|
25,500
|
|
||
Long-term debt
|
|
|
|
|
|
$
|
178,500
|
|
|
$
|
191,250
|
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(in thousands, except per share data)
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Numerator – Basic and Diluted
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Federated Investors, Inc.
|
|
$
|
52,709
|
|
|
$
|
41,759
|
|
|
$
|
98,152
|
|
|
$
|
78,066
|
|
Less: Total income available to participating unvested restricted shareholders
1
|
|
(2,118
|
)
|
|
(1,661
|
)
|
|
(3,947
|
)
|
|
(3,141
|
)
|
||||
Total net income attributable to Federated Common Stock
2
|
|
$
|
50,591
|
|
|
$
|
40,098
|
|
|
$
|
94,205
|
|
|
$
|
74,925
|
|
Denominator
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares outstanding
|
|
99,592
|
|
|
100,732
|
|
|
99,697
|
|
|
100,686
|
|
||||
Dilutive potential shares from stock options
|
|
1
|
|
|
2
|
|
|
1
|
|
|
2
|
|
||||
Diluted weighted-average common shares outstanding
|
|
99,593
|
|
|
100,734
|
|
|
99,698
|
|
|
100,688
|
|
||||
Earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Federated Common Stock – Basic and Diluted
2
|
|
$
|
0.51
|
|
|
$
|
0.40
|
|
|
$
|
0.94
|
|
|
$
|
0.74
|
|
1
|
Income available to participating unvested restricted shareholders includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings.
|
2
|
Federated Common Stock excludes unvested restricted stock which are deemed participating securities in accordance with the two-class method of computing earnings per share.
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
|
||
Notes to the Consolidated Financial Statements (continued)
|
||
(unaudited)
|
|
|
(in thousands)
|
Unrealized Loss
on Interest Rate Swap
1
|
|
Unrealized
Loss on Securities
Available for
Sale
2
|
|
|
Foreign Currency
Translation Loss
|
|
|
Total
|
|
|||||
Balance at December 31, 2014
|
$
|
(269
|
)
|
|
$
|
(1,126
|
)
|
|
$
|
(267
|
)
|
|
$
|
(1,662
|
)
|
Other comprehensive income (loss) before reclassifications and tax
|
67
|
|
|
614
|
|
|
(273
|
)
|
|
408
|
|
||||
Tax impact
|
(25
|
)
|
|
(226
|
)
|
|
95
|
|
|
(156
|
)
|
||||
Reclassification adjustments, before tax
|
358
|
|
|
0
|
|
|
0
|
|
|
358
|
|
||||
Tax impact
|
(131
|
)
|
|
0
|
|
|
0
|
|
|
(131
|
)
|
||||
Net current-period other comprehensive income (loss)
|
269
|
|
|
388
|
|
|
(178
|
)
|
|
479
|
|
||||
Balance at June 30, 2015
|
$
|
0
|
|
|
$
|
(738
|
)
|
|
$
|
(445
|
)
|
|
$
|
(1,183
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2015
|
$
|
0
|
|
|
$
|
(3,795
|
)
|
|
$
|
(814
|
)
|
|
$
|
(4,609
|
)
|
Other comprehensive income (loss) before reclassifications and tax
|
0
|
|
|
1,549
|
|
|
(424
|
)
|
|
1,125
|
|
||||
Tax impact
|
0
|
|
|
(564
|
)
|
|
148
|
|
|
(416
|
)
|
||||
Reclassification adjustments, before tax
3
|
0
|
|
|
2,898
|
|
|
0
|
|
|
2,898
|
|
||||
Tax impact
3
|
0
|
|
|
(1,054
|
)
|
|
0
|
|
|
(1,054
|
)
|
||||
Net current-period other comprehensive income (loss)
|
0
|
|
|
2,829
|
|
|
(276
|
)
|
|
2,553
|
|
||||
Balance at June 30, 2016
|
$
|
0
|
|
|
$
|
(966
|
)
|
|
$
|
(1,090
|
)
|
|
$
|
(2,056
|
)
|
1
|
Federated entered into an interest rate swap in 2010 to hedge its interest-rate risk associated with its original term loan facility. The interest rate swap expired on April 1, 2015. Amounts reclassified from
Accumulated other comprehensive loss, net of tax
were recorded in
Debt expense
on the Consolidated Statements of Income.
|
2
|
Other than as described in note 3 below, amounts reclassified from
Accumulated other comprehensive loss, net of tax
were recorded in
(Loss) gain on securities, net
on the Consolidated Statements of Income.
|
3
|
Amount includes reclassification of
$0.8 million
, net of tax from
Accumulated other comprehensive loss, net of tax
to
Retained earnings
on the Consolidated Balance Sheets as a result of the adoption of ASU 2015-02 (see
Note (2)
for additional information).
|
Part I, Item 2. Management’s Discussion and Analysis
|
|
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
|
|
June 30,
|
|
Percent
Change
|
|||||||
(in millions)
|
|
2016
|
|
|
2015
|
|
|
||||
By Asset Class
|
|
|
|
|
|
|
|||||
Money market
|
|
$
|
254,992
|
|
|
$
|
241,982
|
|
|
5
|
%
|
Equity
|
|
61,861
|
|
|
54,789
|
|
|
13
|
|
||
Fixed-income
|
|
50,325
|
|
|
52,904
|
|
|
(5
|
)
|
||
Total managed assets
|
|
$
|
367,178
|
|
|
$
|
349,675
|
|
|
5
|
%
|
By Product Type
|
|
|
|
|
|
|
|||||
Mutual Funds:
|
|
|
|
|
|
|
|||||
Money market
|
|
$
|
218,107
|
|
|
$
|
208,786
|
|
|
4
|
%
|
Equity
|
|
37,076
|
|
|
35,533
|
|
|
4
|
|
||
Fixed-income
|
|
38,611
|
|
|
40,042
|
|
|
(4
|
)
|
||
Total mutual fund assets
|
|
293,794
|
|
|
284,361
|
|
|
3
|
|
||
Separate Accounts:
|
|
|
|
|
|
|
|||||
Money market
|
|
36,885
|
|
|
33,196
|
|
|
11
|
|
||
Equity
|
|
24,785
|
|
|
19,256
|
|
|
29
|
|
||
Fixed-income
|
|
11,714
|
|
|
12,862
|
|
|
(9
|
)
|
||
Total separate account assets
|
|
73,384
|
|
|
65,314
|
|
|
12
|
|
||
Total managed assets
|
|
$
|
367,178
|
|
|
$
|
349,675
|
|
|
5
|
%
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
|
June 30,
|
|
Percent Change
|
|
June 30,
|
|
Percent Change
|
||||||||||||||
(in millions)
|
|
2016
|
|
|
2015
|
|
|
|
2016
|
|
|
2015
|
|
|
||||||||
By Asset Class
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market
|
|
$
|
254,693
|
|
|
$
|
239,774
|
|
|
6
|
%
|
|
$
|
257,448
|
|
|
$
|
246,518
|
|
|
4
|
%
|
Equity
|
|
58,680
|
|
|
55,476
|
|
|
6
|
|
|
55,733
|
|
|
54,130
|
|
|
3
|
|
||||
Fixed-income
|
|
50,793
|
|
|
53,319
|
|
|
(5
|
)
|
|
50,836
|
|
|
53,362
|
|
|
(5
|
)
|
||||
Total average managed assets
|
|
$
|
364,166
|
|
|
$
|
348,569
|
|
|
4
|
%
|
|
$
|
364,017
|
|
|
$
|
354,010
|
|
|
3
|
%
|
By Product Type
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mutual Funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market
|
|
$
|
217,226
|
|
|
$
|
205,943
|
|
|
5
|
%
|
|
$
|
219,537
|
|
|
$
|
212,056
|
|
|
4
|
%
|
Equity
|
|
35,891
|
|
|
35,998
|
|
|
0
|
|
|
34,406
|
|
|
35,080
|
|
|
(2
|
)
|
||||
Fixed-income
|
|
38,214
|
|
|
40,574
|
|
|
(6
|
)
|
|
37,995
|
|
|
40,793
|
|
|
(7
|
)
|
||||
Total average mutual fund assets
|
|
291,331
|
|
|
282,515
|
|
|
3
|
|
|
291,938
|
|
|
287,929
|
|
|
1
|
|
||||
Separate Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market
|
|
37,467
|
|
|
33,831
|
|
|
11
|
|
|
37,911
|
|
|
34,462
|
|
|
10
|
|
||||
Equity
|
|
22,789
|
|
|
19,478
|
|
|
17
|
|
|
21,327
|
|
|
19,050
|
|
|
12
|
|
||||
Fixed-income
|
|
12,579
|
|
|
12,745
|
|
|
(1
|
)
|
|
12,841
|
|
|
12,569
|
|
|
2
|
|
||||
Total average separate account assets
|
|
72,835
|
|
|
66,054
|
|
|
10
|
|
|
72,079
|
|
|
66,081
|
|
|
9
|
|
||||
Total average managed assets
|
|
$
|
364,166
|
|
|
$
|
348,569
|
|
|
4
|
%
|
|
$
|
364,017
|
|
|
$
|
354,010
|
|
|
3
|
%
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(in millions)
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Equity Funds
|
|
|
|
|
|
|
|
|
||||||||
Beginning assets
|
|
$
|
34,935
|
|
|
$
|
34,951
|
|
|
$
|
34,125
|
|
|
$
|
33,141
|
|
Sales
|
|
3,117
|
|
|
2,389
|
|
|
6,556
|
|
|
5,194
|
|
||||
Redemptions
|
|
(2,294
|
)
|
|
(1,923
|
)
|
|
(4,814
|
)
|
|
(3,837
|
)
|
||||
Net sales
|
|
823
|
|
|
466
|
|
|
1,742
|
|
|
1,357
|
|
||||
Net exchanges
|
|
(16
|
)
|
|
6
|
|
|
(53
|
)
|
|
45
|
|
||||
Market gains and losses/reinvestments
1
|
|
1,334
|
|
|
110
|
|
|
1,262
|
|
|
990
|
|
||||
Ending assets
|
|
$
|
37,076
|
|
|
$
|
35,533
|
|
|
$
|
37,076
|
|
|
$
|
35,533
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity Separate Accounts
|
|
|
|
|
|
|
|
|
||||||||
Beginning assets
|
|
$
|
21,550
|
|
|
$
|
19,086
|
|
|
$
|
19,431
|
|
|
$
|
18,285
|
|
Sales
2
|
|
3,156
|
|
|
1,449
|
|
|
5,506
|
|
|
3,142
|
|
||||
Redemptions
2
|
|
(1,153
|
)
|
|
(1,084
|
)
|
|
(2,382
|
)
|
|
(2,038
|
)
|
||||
Net sales
2
|
|
2,003
|
|
|
365
|
|
|
3,124
|
|
|
1,104
|
|
||||
Market gains and losses
3
|
|
1,232
|
|
|
(195
|
)
|
|
2,230
|
|
|
(133
|
)
|
||||
Ending assets
|
|
$
|
24,785
|
|
|
$
|
19,256
|
|
|
$
|
24,785
|
|
|
$
|
19,256
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Equity Assets
|
|
|
|
|
|
|
|
|
||||||||
Beginning assets
|
|
$
|
56,485
|
|
|
$
|
54,037
|
|
|
$
|
53,556
|
|
|
$
|
51,426
|
|
Sales
2
|
|
6,273
|
|
|
3,838
|
|
|
12,062
|
|
|
8,336
|
|
||||
Redemptions
2
|
|
(3,447
|
)
|
|
(3,007
|
)
|
|
(7,196
|
)
|
|
(5,875
|
)
|
||||
Net sales
2
|
|
2,826
|
|
|
831
|
|
|
4,866
|
|
|
2,461
|
|
||||
Net exchanges
|
|
(16
|
)
|
|
6
|
|
|
(53
|
)
|
|
45
|
|
||||
Market gains and losses/reinvestments
1
|
|
2,566
|
|
|
(85
|
)
|
|
3,492
|
|
|
857
|
|
||||
Ending assets
|
|
$
|
61,861
|
|
|
$
|
54,789
|
|
|
$
|
61,861
|
|
|
$
|
54,789
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed-income Funds
|
|
|
|
|
|
|
|
|
||||||||
Beginning assets
|
|
$
|
37,826
|
|
|
$
|
41,039
|
|
|
$
|
37,989
|
|
|
$
|
40,456
|
|
Sales
|
|
3,467
|
|
|
3,251
|
|
|
6,801
|
|
|
7,742
|
|
||||
Redemptions
|
|
(3,364
|
)
|
|
(4,004
|
)
|
|
(7,444
|
)
|
|
(8,197
|
)
|
||||
Net sales (redemptions)
|
|
103
|
|
|
(753
|
)
|
|
(643
|
)
|
|
(455
|
)
|
||||
Net exchanges
|
|
18
|
|
|
(22
|
)
|
|
(31
|
)
|
|
(59
|
)
|
||||
Market gains and losses/reinvestments
1
|
|
664
|
|
|
(222
|
)
|
|
1,296
|
|
|
100
|
|
||||
Ending assets
|
|
$
|
38,611
|
|
|
$
|
40,042
|
|
|
$
|
38,611
|
|
|
$
|
40,042
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed-income Separate Accounts
|
|
|
|
|
|
|
|
|
||||||||
Beginning assets
|
|
$
|
13,352
|
|
|
$
|
12,523
|
|
|
$
|
13,130
|
|
|
$
|
12,251
|
|
Sales
2
|
|
147
|
|
|
754
|
|
|
344
|
|
|
993
|
|
||||
Redemptions
2
|
|
(2,105
|
)
|
|
(277
|
)
|
|
(2,433
|
)
|
|
(481
|
)
|
||||
Net (redemptions) sales
2
|
|
(1,958
|
)
|
|
477
|
|
|
(2,089
|
)
|
|
512
|
|
||||
Market gains and losses
3
|
|
320
|
|
|
(138
|
)
|
|
673
|
|
|
99
|
|
||||
Ending assets
|
|
$
|
11,714
|
|
|
$
|
12,862
|
|
|
$
|
11,714
|
|
|
$
|
12,862
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Fixed-income Assets
|
|
|
|
|
|
|
|
|
||||||||
Beginning assets
|
|
$
|
51,178
|
|
|
$
|
53,562
|
|
|
$
|
51,119
|
|
|
$
|
52,707
|
|
Sales
2
|
|
3,614
|
|
|
4,005
|
|
|
7,145
|
|
|
8,735
|
|
||||
Redemptions
2
|
|
(5,469
|
)
|
|
(4,281
|
)
|
|
(9,877
|
)
|
|
(8,678
|
)
|
||||
Net (redemptions) sales
2
|
|
(1,855
|
)
|
|
(276
|
)
|
|
(2,732
|
)
|
|
57
|
|
||||
Net exchanges
|
|
18
|
|
|
(22
|
)
|
|
(31
|
)
|
|
(59
|
)
|
||||
Market gains and losses/reinvestments
1
|
|
984
|
|
|
(360
|
)
|
|
1,969
|
|
|
199
|
|
||||
Ending assets
|
|
$
|
50,325
|
|
|
$
|
52,904
|
|
|
$
|
50,325
|
|
|
$
|
52,904
|
|
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
|
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.
|
3
|
Reflects the approximate changes in the fair value of the securities held by the portfolios.
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(in millions)
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Funds
|
|
|
|
|
|
|
|
|
||||||||
Beginning assets
|
|
$
|
72,761
|
|
|
$
|
75,990
|
|
|
$
|
72,114
|
|
|
$
|
73,597
|
|
Sales
|
|
6,584
|
|
|
5,640
|
|
|
13,357
|
|
|
12,936
|
|
||||
Redemptions
|
|
(5,658
|
)
|
|
(5,927
|
)
|
|
(12,258
|
)
|
|
(12,034
|
)
|
||||
Net sales (redemptions)
|
|
926
|
|
|
(287
|
)
|
|
1,099
|
|
|
902
|
|
||||
Net exchanges
|
|
2
|
|
|
(16
|
)
|
|
(84
|
)
|
|
(14
|
)
|
||||
Market gains and losses/reinvestments
1
|
|
1,998
|
|
|
(112
|
)
|
|
2,558
|
|
|
1,090
|
|
||||
Ending assets
|
|
$
|
75,687
|
|
|
$
|
75,575
|
|
|
$
|
75,687
|
|
|
$
|
75,575
|
|
|
|
|
|
|
|
|
|
|
||||||||
Separate Accounts
|
|
|
|
|
|
|
|
|
||||||||
Beginning assets
|
|
$
|
34,902
|
|
|
$
|
31,609
|
|
|
$
|
32,561
|
|
|
$
|
30,536
|
|
Sales
2
|
|
3,303
|
|
|
2,203
|
|
|
5,850
|
|
|
4,135
|
|
||||
Redemptions
2
|
|
(3,258
|
)
|
|
(1,361
|
)
|
|
(4,815
|
)
|
|
(2,519
|
)
|
||||
Net sales
2
|
|
45
|
|
|
842
|
|
|
1,035
|
|
|
1,616
|
|
||||
Market gains and losses
3
|
|
1,552
|
|
|
(333
|
)
|
|
2,903
|
|
|
(34
|
)
|
||||
Ending assets
|
|
$
|
36,499
|
|
|
$
|
32,118
|
|
|
$
|
36,499
|
|
|
$
|
32,118
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Assets
|
|
|
|
|
|
|
|
|
||||||||
Beginning assets
|
|
$
|
107,663
|
|
|
$
|
107,599
|
|
|
$
|
104,675
|
|
|
$
|
104,133
|
|
Sales
2
|
|
9,887
|
|
|
7,843
|
|
|
19,207
|
|
|
17,071
|
|
||||
Redemptions
2
|
|
(8,916
|
)
|
|
(7,288
|
)
|
|
(17,073
|
)
|
|
(14,553
|
)
|
||||
Net sales
2
|
|
971
|
|
|
555
|
|
|
2,134
|
|
|
2,518
|
|
||||
Net exchanges
|
|
2
|
|
|
(16
|
)
|
|
(84
|
)
|
|
(14
|
)
|
||||
Market gains and losses/reinvestments
1
|
|
3,550
|
|
|
(445
|
)
|
|
5,461
|
|
|
1,056
|
|
||||
Ending assets
|
|
$
|
112,186
|
|
|
$
|
107,693
|
|
|
$
|
112,186
|
|
|
$
|
107,693
|
|
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
|
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.
|
3
|
Reflects the approximate changes in the fair value of the securities held by the portfolios.
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
|
|
Percent of Total Average Managed Assets
|
|
Percent of Total Revenue
|
||||||||
|
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
By Asset Class
|
|
|
|
|
|
|
|
|
||||
Money market assets
|
|
71
|
%
|
|
70
|
%
|
|
47
|
%
|
|
31
|
%
|
Equity assets
|
|
15
|
%
|
|
15
|
%
|
|
37
|
%
|
|
47
|
%
|
Fixed-income assets
|
|
14
|
%
|
|
15
|
%
|
|
16
|
%
|
|
22
|
%
|
By Product Type
|
|
|
|
|
|
|
|
|
||||
Mutual Funds:
|
|
|
|
|
|
|
|
|
||||
Money market assets
|
|
60
|
%
|
|
60
|
%
|
|
46
|
%
|
|
30
|
%
|
Equity assets
|
|
9
|
%
|
|
10
|
%
|
|
30
|
%
|
|
39
|
%
|
Fixed-income assets
|
|
10
|
%
|
|
11
|
%
|
|
14
|
%
|
|
20
|
%
|
Separate Accounts:
|
|
|
|
|
|
|
|
|
||||
Money market assets
|
|
11
|
%
|
|
10
|
%
|
|
1
|
%
|
|
1
|
%
|
Equity assets
|
|
6
|
%
|
|
5
|
%
|
|
7
|
%
|
|
8
|
%
|
Fixed-income assets
|
|
4
|
%
|
|
4
|
%
|
|
2
|
%
|
|
2
|
%
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
Management's Discussion and Analysis (continued)
|
||
of Financial Condition and Results of Operations (unaudited)
|
|
(a)
|
Federated carried out an evaluation, under the supervision and with the participation of management, including Federated’s President and Chief Executive Officer and Chief Financial Officer, of the effectiveness of Federated’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of
June 30, 2016
. Based upon that evaluation, the President and Chief Executive Officer and the Chief Financial Officer concluded that Federated’s disclosure controls and procedures were effective at
June 30, 2016
.
|
(b)
|
There has been no change in Federated’s internal control over financial reporting that occurred during the quarter ended
June 30, 2016
that has materially affected, or is reasonably likely to materially affect, Federated’s internal control over financial reporting.
|
Part II. Other Information
|
||
(unaudited)
|
|
|
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
1
|
|
Maximum Number of Shares that
May Yet Be Purchased Under the
Plans or Programs
1
|
|||||
April
2
|
|
66,250
|
|
|
$
|
26.54
|
|
|
60,000
|
|
|
2,176,916
|
|
May
2
|
|
291,800
|
|
|
30.84
|
|
|
290,000
|
|
|
1,886,916
|
|
|
June
|
|
560,000
|
|
|
29.53
|
|
|
560,000
|
|
|
1,326,916
|
|
|
Total
|
|
918,050
|
|
|
$
|
29.73
|
|
|
910,000
|
|
|
1,326,916
|
|
1
|
In February 2015
,
the board of directors authorized a share repurchase program that allows Federated to buy back up to
4.0 million
shares of Federated Class B common stock with no stated expiration date.
See
Note (10)
to the Consolidated Financial Statements for additional information on this program.
|
2
|
In April and May of 2016, 6,250 and 1,800 shares, respectively, of restricted stock with a weighted-average price of $3.00 per share for both months were repurchased as employees forfeited restricted stock.
|
|
|
|
|
|
|
Federated Investors, Inc.
|
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
Date
|
|
July 29, 2016
|
|
By:
|
|
/s/ J. Christopher Donahue
|
|
|
|
|
|
|
J. Christopher Donahue
|
|
|
|
|
|
|
President and
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
Date
|
|
July 29, 2016
|
|
By:
|
|
/s/ Thomas R. Donahue
|
|
|
|
|
|
|
Thomas R. Donahue
|
|
|
|
|
|
|
Chief Financial Officer
|
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