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Federated Investors Inc (FII) SEC Filing 8-K Material Event for the period ending Thursday, July 25, 2019

Federated Investors Inc

CIK: 1056288 Ticker: FII

Exhibit 99.1
image011a23.jpg

Federated Investors, Inc. Reports Second Quarter 2019 Earnings;  Managed Assets Reach Record $502.2 billion
Q2 2019 EPS of $0.62 compared to $0.38 for Q2 2018
Money market assets up $77.9 billion or 31% from Q2 2018
Board declares $0.27 per share quarterly dividend
(PITTSBURGH, Pa., July 25, 2019) — Federated Investors, Inc. (NYSE: FII), one of the world's largest investment managers, today reported earnings per diluted share (EPS) of $0.62 for Q2 2019, compared to $0.38 for the same quarter last year, on net income of $62.7 million for Q2 2019, compared to $38.8 million for Q2 2018. Federated reported YTD 2019 EPS of $1.16, compared to $0.98 for the same period in 2018, on YTD 2019 net income of $117.3 million, compared to $99.2 million for the same period in 2018. Federated's Q2 2018 and YTD 2018 results included a $27.2 million pre-tax net expense, representing $0.21 per diluted share net of tax, primarily related to two foreign currency forward derivative instruments (FX Forward Loss) entered into in connection with Federated's Q3 2018 acquisition of a majority interest in Hermes Fund Managers Limited (Hermes).
Federated's total managed assets were a record $502.2 billion at June 30, 2019, up $122.5 billion or 32% from $379.7 billion at June 30, 2018 and up $17.3 billion or 4% from $484.9 billion at March 31, 2019. Total average managed assets for Q2 2019 were $493.3 billion, up $107.3 billion or 28% from $386.0 billion reported for Q2 2018 and up $17.9 billion or 4% from $475.4 billion reported for Q1 2019.
"Federated saw an uptick in interest in equity products during the second quarter, including the growth-focused Federated Kaufmann Small Cap Fund, the fundamentally driven MDT products and a range of Hermes strategies," said J. Christopher Donahue, president and chief executive officer. "Investors also continued to choose money market strategies for liquidity solutions, especially our prime money market products."
Federated's board of directors declared a quarterly dividend of $0.27 per share. The dividend is payable on Aug. 15, 2019 to shareholders of record as of Aug. 8, 2019. During Q2 2019, Federated purchased 52,600 shares of Federated class B common stock for $0.7 million.
Federated's equity assets were $82.0 billion at June 30, 2019, up $24.0 billion or 41% from $58.0 billion at June 30, 2018 and up $1.8 billion or 2% from $80.2 billion at March 31, 2019. Top-selling equity funds during Q2 2019 on a net basis were Federated Kaufmann Small Cap Fund; Hermes Global Emerging Markets Fund; Federated MDT Small Cap Growth Fund; Hermes Global Equity ESG Fund; and Hermes SDG Engagement Equity Fund.
Federated's fixed-income assets were $65.1 billion at June 30, 2019, up $3.7 billion or 6% from $61.4 billion at June 30, 2018 and up $1.0 billion or 2% from $64.1 billion at March 31, 2019. Top-selling fixed-income funds during Q2 2019 on a net basis were Federated Total Return Bond Fund; Federated Sterling Cash Plus Fund; Federated Institutional High Yield Bond Fund; Federated U.S. Government Securities Fund:1-3 Years; and Federated Government Ultrashort Duration Fund.

MEDIA:
MEDIA:
ANALYSTS:
Ed Costello 412-288-7538
Meghan McAndrew 412-288-8103
Ray Hanley 412-288-1920

 
Federated Reports Q2 2019 Earnings
Page 2 of 12

Money market assets were $333.1 billion at June 30, 2019, up $77.9 billion or 31% from $255.2 billion at June 30, 2018 and up $14.7 billion or 5% from $318.4 billion at March 31, 2019. Money market fund assets were $231.3 billion at June 30, 2019, up $58.6 billion or 34% from $172.7 billion at June 30, 2018 and up $16.5 billion or 8% from $214.8 billion at March 31, 2019. Federated's money market separate account assets were $101.7 billion at June 30, 2019, up $19.1 billion or 23% from $82.6 billion at June 30, 2018 and down $1.9 billion or 2% from $103.6 billion at March 31, 2019.
Financial Summary
Q2 2019 vs. Q2 2018
Revenue increased $65.5 million or 26% primarily due to the consolidation of Hermes' revenue and higher average domestic money market assets. These increases in revenue were partially offset by a decrease in revenue from lower average domestic equity assets.
During Q2 2019, Federated derived 61% of its revenue from long-term assets (42% from equity assets, 14% from fixed-income assets and 5% from multi-asset and alternative/private markets assets), 38% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased $61.3 million or 35% primarily due to the consolidation of Hermes' expenses and an increase in distribution expenses associated with higher average money market fund assets.
Nonoperating income (expenses), net decreased $28.4 million primarily due to the Q2 2018 FX Forward Loss.
Q2 2019 vs. Q1 2019
Revenue increased $14.4 million or 5% primarily due to higher average equity and money market assets.
Amortization of intangibles related to the Hermes acquisition recorded in other operating expenses decreased $2.6 million due primarily to a one-time reversal of $1.9 million related to the finalization of the purchase price allocation. Assuming no change to foreign exchange rates, amortization of intangibles recorded in operating expenses is expected to be approximately $8 million on an annual basis.
Nonoperating amortization of intangibles related to the Hermes acquisition increased $0.6 million due primarily to a one-time increase of $0.4 million related to the finalization of the purchase price allocation. Assuming no change to foreign exchange rates, amortization of intangibles recorded in nonoperating expenses is expected to be approximately $2 million on an annual basis.
YTD 2019 vs. YTD 2018
Revenue increased $108.7 million or 21% primarily due to the consolidation of Hermes’ revenue, which included performance fees of $2.8 million, and higher average domestic money market assets. These increases in revenue were partially offset by a decrease in revenue from lower average domestic equity and multi-asset assets and a change in the mix of average domestic fixed-income assets.
For the first half of 2019, Federated derived 61% of its revenue from long-term assets (41% from equity assets, 14% from fixed-income assets and 6% from multi-asset and alternative/private markets assets), 38% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased $113.3 million or 32% due to the consolidation of Hermes' expenses and an increase in distribution expenses associated with higher average money market fund assets.



 
Federated Reports Q2 2019 Earnings
Page 3 of 12

Nonoperating income (expenses), net decreased $30.8 million primarily due to the Q2 2018 FX Forward Loss.
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).
Federated will host an earnings conference call at 9 a.m. Eastern on July 26, 2019. 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 online in real time via the About section of FederatedInvestors.com. A replay will be available from approximately 12:30 p.m. Eastern on July 26, 2019 until Aug. 2, 2019 by calling 877-481-4010 (domestic) or 919-882-2331 (international) and entering access code 49711. An online replay will be available via FederatedInvestors.com for one year.
Federated Investors, Inc. is a leading global investment manager with $502.2 billion in assets under management as of June 30, 2019. Our investment solutions span 130 equity, fixed-income, alternative/private markets, multi-asset and money market funds and a range of separately managed account strategies. Providing comprehensive investment management to more than 10,000 institutions and intermediaries, our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated’s more than 1,900 employees include those in New York, Boston, London and several other offices worldwide. In 2018, Federated acquired a majority interest in Hermes Investment Management, which provides world-class active management and stewardship services.
Federated ranks in the top 6% of equity fund managers in the industry, the top 7% of money market fund managers and the top 11% of fixed-income fund managers1. Federated also ranks as the 10th-largest SMA manager2. Information regarding Hermes is available at Hermes-Investment.com. An analyst presentation that includes information about Hermes also is available. For more information, visit FederatedInvestors.com.
###
1) Strategic Insight, June 30, 2019. Based on assets under management in open-end funds.
2) Money Management Institute/Cerulli, Q1 2019.
Federated Securities Corp. is distributor of the Federated funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Investment Management Limited and Hermes European Equities Limited, each a registered investment adviser.
Certain statements in this press release, such as those related to performance, investor preferences and demand, and asset flows and mix, 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, predict whether performance fees or carried interest will be earned and retained, sustain product demand, and asset flows and mix, which could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties 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 Q2 2019 Earnings
Page 4 of 12

Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
 
 
 
 
 
 
 
Quarter Ended
% Change Q2 2018 to Q2 2019
 
Quarter Ended
% Change Q1 2019 to Q2 2019
 
June 30, 2019
June 30, 2018
 
March 31, 2019
Revenue
 
 
 
 
 
 
Investment advisory fees, net
$
220,669

$
168,127

31
 %
 
$
211,199

4
 %
Administrative service fees, net—affiliates
57,968

48,370

20

 
54,135

7

Other service fees, net
42,842

39,496

8

 
41,716

3

Total Revenue
321,479

255,993

26

 
307,050

5

 
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
 
Compensation and related
107,248

74,147

45

 
111,216

(4
)
Distribution
82,000

69,446

18

 
77,632

6

Systems and communications
12,111

7,751

56

 
12,794

(5
)
Office and occupancy
11,066

7,365

50

 
11,362

(3
)
Professional service fees
10,281

9,278

11

 
10,486

(2
)
Advertising and promotional
4,697

3,237

45

 
4,190

12

Travel and related
4,459

3,523

27

 
3,848

16

Other
4,677

489

NM

 
4,633

1

Total Operating Expenses
236,539

175,236

35

 
236,161

0

Operating Income
84,940

80,757

5

 
70,889

20

 
 
 
 
 
 
 
Nonoperating Income (Expenses)
 
 
 
 
 
 
Investment income (loss), net
1,526

1,377

11

 
2,709

(44
)
Debt expense
(1,332
)
(1,431
)
(7
)
 
(1,400
)
(5
)
Other, net
(832
)
(28,974
)
(97
)
 
324

(357
)
Total Nonoperating Income (Expenses), net
(638
)
(29,028
)
(98
)
 
1,633

(139
)
Income before income taxes
84,302

51,729

63

 
72,522

16

Income tax provision
20,462

13,062

57

 
17,911

14

Net income including the noncontrolling interests in subsidiaries
63,840

38,667

65

 
54,611

17

Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries
1,116

(155
)
NM

 
65

NM

Net Income
$
62,724

$
38,822

62
 %
 
$
54,546

15
 %
 
 
 
 
 
 
 
Amounts Attributable to Federated Investors, Inc.
 
 
 
 
 
 
Earnings Per Share1
 
 
 
 
 
 
Basic and diluted
$
0.62

$
0.38

63
 %
 
$
0.54

15
 %
Weighted-Average Shares Outstanding
 
 
 
 
 
 
Basic
97,330

97,193

 
 
96,994

 
Diluted
97,330

97,194

 
 
96,995

 
Dividends Declared Per Share
$
0.27

$
0.27

 
 
$
0.27

 
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 basic earnings per share under the "two-class method." As such, total net income of $2.4 million, $1.5 million and $2.1 million available to unvested restricted Federated shareholders for the quarterly periods ended June 30, 2019, June 30, 2018 and March 31, 2019, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary for the quarterly periods ended June 30, 2019 and March 31, 2019.




 
Federated Reports Q2 2019 Earnings
Page 5 of 12

Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
 
 
 
 
Six Months Ended
 
 
June 30, 2019
June 30, 2018
% Change
Revenue
 
 
 
Investment advisory fees, net
$
431,868

$
342,393

26
 %
Administrative service fees, net—affiliates
112,103

97,393

15

Other service fees, net
84,558

80,059

6

Total Revenue
628,529

519,845

21

 
 
 
 
Operating Expenses
 
 
 
Compensation and related
218,464

152,521

43

Distribution
159,632

141,945

12

Professional service fees
20,767

18,908

10

Systems and communications
24,905

16,184

54

Office and occupancy
22,428

14,906

50

Advertising and promotional
8,886

6,465

37

Travel and related
8,307

6,344

31

Other
9,311

2,144

334

Total Operating Expenses
472,700

359,417

32

Operating Income
155,829

160,428

(3
)
 
 
 
 
Nonoperating Income (Expenses)
 
 
 
Investment income (loss), net
4,235

2,095

102

Debt expense
(2,732
)
(2,761
)
(1
)
Other, net
(508
)
(29,117
)
(98
)
Total Nonoperating Income (Expenses), net
995

(29,783
)
(103
)
Income before income taxes
156,824

130,645

20

Income tax provision
38,373

31,972

20

Net income including the noncontrolling interests in subsidiaries
118,451

98,673

20

Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries
1,181

(480
)
(346
)
Net Income
$
117,270

$
99,153

18
 %
 
 
 
 
Amounts Attributable to Federated Investors, Inc.
 
 
 
Earnings Per Share1
 
 
 
Basic and diluted
$
1.16

$
0.98

18
 %
Weighted-Average Shares Outstanding
 
 
 
Basic
97,163

97,191

 
Diluted
97,163

97,192

 
Dividends Declared Per Share
$
0.54

$
0.52

 
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 basic earnings per share under the "two-class method." As such, total net income of $4.5 million and $3.9 million available to unvested restricted Federated shareholders for the six months ended June 30, 2019 and June 30, 2018 , respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary for the six-month period ended June 30, 2019.



 
Federated Reports Q2 2019 Earnings
Page 6 of 12

Unaudited Condensed Consolidated Balance Sheets
 
 
(in thousands)
June 30, 2019
Dec. 31, 2018
Assets
 
 
  Cash and other investments
$
227,010

$
190,490

  Other current assets
111,362

113,611

  Intangible assets, net, including goodwill
1,148,063

1,149,247

  Other long-term assets
201,615

90,335

  Total Assets
$
1,688,050

$
1,543,683

 
 
 
Liabilities, Redeemable Noncontrolling Interests and Equity
 
 
  Current liabilities
$
151,809

$
181,180

  Long-term debt
125,000

135,000

  Other long-term liabilities
296,725

187,869

  Redeemable noncontrolling interests
201,988

182,513

  Equity excluding treasury stock
1,190,161

1,144,458

  Treasury stock
(277,633
)
(287,337
)
  Total Liabilities, Redeemable Noncontrolling Interests and Equity
$
1,688,050

$
1,543,683





 
Federated Reports Q2 2019 Earnings
Page 7 of 12

Unaudited Changes in Long-Term Assets - By Asset Class
(in millions)
Quarter Ended
 
Six Months Ended
 
June 30, 2019
March 31, 2019
June 30, 2018
 
June 30, 2019
June 30, 2018
Equity
 
 
 
 
 
 
Beginning assets
$
80,245

$
72,497

$
58,830

 
$
72,497

$
62,816

Sales1
4,812

5,136

2,731

 
9,948

5,924

Redemptions1
(4,404
)
(5,926
)
(5,078
)
 
(10,330
)
(10,336
)
Net sales (redemptions)1
408

(790
)
(2,347
)
 
(382
)
(4,412
)
Net exchanges
191

13

202

 
204

75

Impact of foreign exchange2
4

(122
)
0

 
(118
)
0

Market gains and losses3
1,151

8,647

1,288

 
9,798

(506
)
Ending assets
$
81,999

$
80,245

$
57,973

 
$
81,999

$
57,973

 
 
 
 
 
 
 
Fixed Income
 
 
 
 
 
 
Beginning assets
$
64,107

$
63,158

$
62,205

 
$
63,158

$
64,160

Sales1
5,193

5,416

4,755

 
10,609

9,663

Redemptions1
(5,181
)
(6,341
)
(4,934
)
 
(11,522
)
(11,528
)
Net sales (redemptions)1
12

(925
)
(179
)
 
(913
)
(1,865
)
Net exchanges
(191
)
(33
)
(207
)
 
(224
)
(80
)
Impact of foreign exchange2
(25
)
8

0

 
(17
)
0

Market gains and losses3
1,149

1,899

(384
)
 
3,048

(780
)
Ending assets
$
65,052

$
64,107

$
61,435

 
$
65,052

$
61,435

 
 
 
 
 
 
 
Alternative/Private Markets4
 
 
 
 
 
 
Beginning assets
$
17,854

$
18,318

$
343

 
$
18,318

$
366

Sales1
320

313

15

 
633

56

Redemptions1
(302
)
(858
)
(44
)
 
(1,160
)
(111
)
Net sales (redemptions)1
18

(545
)
(29
)
 
(527
)
(55
)
Net exchanges
(1
)
(2
)
(2
)
 
(3
)
(1
)
Impact of foreign exchange2
(435
)
387

0

 
(48
)
0

Market gains and losses3
481

(304
)
(20
)
 
177

(18
)
Ending assets
$
17,917

$
17,854

$
292

 
$
17,917

$
292

 
 
 
 
 
 
 
Multi-asset
 
 
 
 
 
 
Beginning assets
$
4,259

$
4,093

$
4,843

 
$
4,093

$
5,014

Sales1
78

104

126

 
182

254

Redemptions1
(228
)
(241
)
(229
)
 
(469
)
(464
)
Net sales (redemptions)1
(150
)
(137
)
(103
)
 
(287
)
(210
)
Net exchanges
0

2

(2
)
 
2

(2
)
Market gains and losses3
104

301

(8
)
 
405

(72
)
Ending assets
$
4,213

$
4,259

$
4,730

 
$
4,213

$
4,730

 
 
 
 
 
 
 
Total Long-term Assets4
 
 
 
 
 
 
Beginning assets
$
166,465

$
158,066

$
126,221

 
$
158,066

$
132,356

Sales1
10,403

10,969

7,627

 
21,372

15,897

Redemptions1
(10,115
)
(13,366
)
(10,285
)
 
(23,481
)
(22,439
)
Net sales (redemptions)1
288

(2,397
)
(2,658
)
 
(2,109
)
(6,542
)
Net exchanges
(1
)
(20
)
(9
)
 
(21
)
(8
)
Impact of foreign exchange2
(456
)
273

0

 
(183
)
0

Market gains and losses3
2,885

10,543

876

 
13,428

(1,376
)
Ending assets
$
169,181

$
166,465

$
124,430

 
$
169,181

$
124,430

1) For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.
2) Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. Reporting only contains foreign exchange separately beginning with Q1 2019 (previously included in Market gains and losses).
3) 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 for periods prior to Q1 2019.
4)
Ending assets includes $8.4 billion and $8.1 billion at June 30, 2019 and March 31, 2019, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.




 
Federated Reports Q2 2019 Earnings
Page 8 of 12

Unaudited Changes in Long-Term Assets - By Asset Class and Product Type
(in millions) 
 
 
Quarter Ended
 
June 30, 2019
 
Equity
Fixed Income
Alternative / Private Markets
Multi-asset
Total
 
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds2
Separate Accounts1
Funds
Separate Accounts1
Funds2
Separate Accounts1
Beginning assets
$
42,057

$
38,188

$
41,189

$
22,918

$
11,164

$
6,690

$
4,072

$
187

$
98,482

$
67,983

Sales
3,047

1,765

4,141

1,052

241

79

73

5

7,502

2,901

Redemptions
(2,740
)
(1,664
)
(3,845
)
(1,336
)
(213
)
(89
)
(222
)
(6
)
(7,020
)
(3,095
)
Net sales (redemptions)
307

101

296

(284
)
28

(10
)
(149
)
(1
)
482

(194
)
Net exchanges
191

0

(191
)
0

(1
)
0

0

0

(1
)
0

Impact of foreign exchange3
(27
)
31

(37
)
12

(267
)
(168
)
0

0

(331
)
(125
)
Market gains and losses4
915

236

827

322

476

5

96

8

2,314

571

Ending assets
$
43,443

$
38,556

$
42,084

$
22,968

$
11,400

$
6,517

$
4,019

$
194

$
100,946

$
68,235

 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
June 30, 2019
 
Equity
Fixed Income
Alternative / Private Markets
Multi-asset
Total
 
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds2
Separate Accounts1
Funds
Separate Accounts1
Funds2
Separate Accounts1
Beginning assets
$
36,584

$
35,913

$
40,490

$
22,668

$
11,365

$
6,953

$
3,920

$
173

$
92,359

$
65,707

Sales
6,459

3,489

8,295

2,314

495

138

175

7

15,424

5,948

Redemptions
(5,743
)
(4,587
)
(8,571
)
(2,951
)
(600
)
(560
)
(457
)
(12
)
(15,371
)
(8,110
)
Net sales (redemptions)
716

(1,098
)
(276
)
(637
)
(105
)
(422
)
(282
)
(5
)
53

(2,162
)
Net exchanges
204

0

(199
)
(25
)
(3
)
0

2

0

4

(25
)
Impact of foreign exchange3
(42
)
(76
)
(14
)
(3
)
(27
)
(21
)
0

0

(83
)
(100
)
Market gains and losses4
5,981

3,817

2,083

965

170

7

379

26

8,613

4,815

Ending assets
$
43,443

$
38,556

$
42,084

$
22,968

$
11,400

$
6,517

$
4,019

$
194

$
100,946

$
68,235

1)
Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products. For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.
2)
Ending assets includes $8.4 billion of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.
3) Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
4)
Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.




 
Federated Reports Q2 2019 Earnings
Page 9 of 12

Unaudited Changes in Long-Term Assets - By Product Type
 
 
 
(in millions) 
Quarter Ended
 
Six Months Ended
 
June 30, 2019
March 31, 2019
June 30, 2018
 
June 30, 2019
June 30, 2018
Total Fund Assets1
 
 
 
 
 
 
Beginning assets
$
98,482

$
92,359

$
76,999

 
$
92,359

$
79,301

Sales
7,502

7,922

5,609

 
15,424

11,565

Redemptions
(7,020
)
(8,351
)
(6,947
)
 
(15,371
)
(14,581
)
Net sales (redemptions)
482

(429
)
(1,338
)
 
53

(3,016
)
Net exchanges
(1
)
5

(7
)
 
4

(9
)
Impact of foreign exchange2
(331
)
248

0

 
(83
)
0

Market gains and losses3
2,314

6,299

735

 
8,613

113

Ending assets
$
100,946

$
98,482

$
76,389

 
$
100,946

$
76,389

 
 
 
 
 
 
 
Total Separate Account Assets4
 
 
 
 
 
 
Beginning assets
$
67,983

$
65,707

$
49,222

 
$
65,707

$
53,055

Sales5
2,901

3,047

2,018

 
5,948

4,332

Redemptions5
(3,095
)
(5,015
)
(3,338
)
 
(8,110
)
(7,858
)
Net sales (redemptions)5
(194
)
(1,968
)
(1,320
)
 
(2,162
)
(3,526
)
Net exchanges
0

(25
)
(2
)
 
(25
)
1

Impact of foreign exchange2
(125
)
25

0

 
(100
)
0

Market gains and losses3
571

4,244

141

 
4,815

(1,489
)
Ending assets
$
68,235

$
67,983

$
48,041

 
$
68,235

$
48,041

 
 
 
 
 
 
 
Total Long-term Assets1,4
 
 
 
 
 
 
Beginning assets
$
166,465

$
158,066

$
126,221

 
$
158,066

$
132,356

Sales5
10,403

10,969

7,627

 
21,372

15,897

Redemptions5
(10,115
)
(13,366
)
(10,285
)
 
(23,481
)
(22,439
)
Net sales (redemptions)5
288

(2,397
)
(2,658
)
 
(2,109
)
(6,542
)
Net exchanges
(1
)
(20
)
(9
)
 
(21
)
(8
)
Impact of foreign exchange2
(456
)
273

0

 
(183
)
0

Market gains and losses3
2,885

10,543

876

 
13,428

(1,376
)
Ending assets
$
169,181

$
166,465

$
124,430

 
$
169,181

$
124,430

1)
Includes $8.4 billion and $8.1 billion at June 30, 2019 and March 31, 2019, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.
2) Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. Reporting only contains foreign exchange separately beginning with Q1 2019 (previously included in Market gains and losses).
3) 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 for periods prior to Q1 2019.
4) Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products.
5)
For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.



 
Federated Reports Q2 2019 Earnings
Page 10 of 12

Unaudited Managed Assets
(in millions)
June 30, 2019

March 31, 2019

Dec. 31, 2018

Sept. 30, 2018

June 30, 2018

By Asset Class
 
 
 
 
 
Equity
$
81,999

$
80,245

$
72,497

$
84,143

$
57,973

Fixed-income
65,052

64,107

63,158

65,369

61,435

Alternative / private markets1
17,917

17,854

18,318

18,621

292

Multi-asset
4,213

4,259

4,093

4,790

4,730

Total long-term assets
169,181

166,465

158,066

172,923

124,430

Money market
333,066

318,413

301,794

264,233

255,247

Total Managed Assets
$
502,247

$
484,878

$
459,860

$
437,156

$
379,677

 
 
 
 
 
 
By Product Type
 
 
 
 
 
Funds:
 
 
 
 
 
Equity
$
43,443

$
42,057

$
36,584

$
43,578

$
31,699

Fixed-income
42,084

41,189

40,490

41,817

39,877

Alternative / private markets1
11,400

11,164

11,365

11,457

292

Multi-asset
4,019

4,072

3,920

4,585

4,521

Total long-term assets
100,946

98,482

92,359

101,437

76,389

Money market
231,321

214,764

208,480

182,966

172,671

Total Fund Assets
$
332,267

$
313,246

$
300,839

$
284,403

$
249,060

Separate Accounts:
 
 
 
 
 
Equity
$
38,556

$
38,188

$
35,913

$
40,565

$
26,274

Fixed-income
22,968

22,918

22,668

23,552

21,558

Alternative / private markets
6,517

6,690

6,953

7,164

0

Multi-asset
194

187

173

205

209

Total long-term assets
68,235

67,983

65,707

71,486

48,041

Money market
101,745

103,649

93,314

81,267

82,576

Total Separate Account Assets
$
169,980

$
171,632

$
159,021

$
152,753

$
130,617

Total Managed Assets
$
502,247

$
484,878

$
459,860

$
437,156

$
379,677

1) Includes $8.4 billion, $8.1 billion, $8.3 billion and $8.4 billion at June 30, 2019, March 31, 2019, Dec. 31, 2018 and Sept. 30, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.



 
Federated Reports Q2 2019 Earnings
Page 11 of 12

Unaudited Average Managed Assets
Quarter Ended
(in millions)
June 30, 2019

March 31, 2019

Dec. 31, 2018

Sept. 30, 2018

June 30, 2018

By Asset Class
 
 
 
 
 
Equity
$
80,819

$
77,554

$
78,084

$
84,262

$
58,818

Fixed-income
64,913

64,167

63,881

64,750

61,648

Alternative / private markets1
17,772

18,311

18,410

18,504

319

Multi-asset
4,225

4,225

4,449

4,805

4,824

Total long-term assets
167,729

164,257

164,824

172,321

125,609

Money market
325,527

311,150

278,885

261,571

260,371

Total Avg. Managed Assets
$
493,256

$
475,407

$
443,709

$
433,892

$
385,980

 
 
 
 
 
 
By Product Type
 
 
 
 
 
Funds:
 
 
 
 
 
Equity
$
42,571

$
40,217

$
39,871

$
43,473

$
31,911

Fixed-income
41,652

41,095

41,088

41,501

40,199

Alternative / private markets1
11,146

11,545

11,351

11,109

319

Multi-asset
4,034

4,042

4,268

4,598

4,604

Total long-term assets
99,403

96,899

96,578

100,681

77,033

Money market
222,282

209,260

194,009

179,562

175,885

Total Avg. Fund Assets
$
321,685

$
306,159

$
290,587

$
280,243

$
252,918

Separate Accounts:
 
 
 
 
 
Equity
$
38,248

$
37,337

$
38,213

$
40,789

$
26,907

Fixed-income
23,261

23,072

22,793

23,249

21,449

Alternative / private markets
6,626

6,766

7,059

7,395

0

Multi-asset
191

183

181

207

220

Total long-term assets
68,326

67,358

68,246

71,640

48,576

Money market
103,245

101,890

84,876

82,009

84,486

Total Avg. Separate Account Assets
$
171,571

$
169,248

$
153,122

$
153,649

$
133,062

Total Avg. Managed Assets
$
493,256

$
475,407

$
443,709

$
433,892

$
385,980

1) The average balance includes $8.1 billion, $8.4 billion, $8.3 billion and $8.2 billion for the quarters ended June 30, 2019, March 31, 2019, Dec. 31, 2018 and Sept. 30, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.



 
Federated Reports Q2 2019 Earnings
Page 12 of 12

Unaudited Average Managed Assets
 
Six Months Ended
(in millions)
 
June 30, 2019
 
June 30, 2018
By Asset Class
 
 
 
 
Equity
 
$
79,187

 
$
60,186

Fixed-income
 
64,540

 
62,593

Alternative / private markets1
 
18,041

 
337

Multi-asset
 
4,225

 
4,902

Total long-term assets
 
165,993

 
128,018

Money market
 
318,339

 
263,958

Total Avg. Managed Assets
 
$
484,332

 
$
391,976

 
 
 
 
 
By Product Type
 
 
 
 
Funds:
 
 
 
 
Equity
 
$
41,394

 
$
32,296

Fixed-income
 
41,373

 
40,610

Alternative / private markets1
 
11,346

 
337

Multi-asset
 
4,038

 
4,677

Total long-term assets
 
98,151

 
77,920

Money market
 
215,771

 
178,870

Total Avg. Fund Assets
 
$
313,922

 
$
256,790

Separate Accounts:
 
 
 
 
Equity
 
$
37,793

 
$
27,890

Fixed-income
 
23,167

 
21,983

Alternative / private markets
 
6,695

 
0

Multi-asset
 
187

 
225

Total long-term assets
 
67,842

 
50,098

Money market
 
102,568

 
85,088

Total Avg. Separate Account Assets
 
$
170,410

 
$
135,186

Total Avg. Managed Assets
 
$
484,332

 
$
391,976

1) The average balance includes $8.3 billion for the six months ended June 30, 2019 of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.


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Federated Investors Inc provided additional information to their SEC Filing as exhibits

Ticker: FII
CIK: 1056288
Form Type: 8-K Corporate News
Accession Number: 0001056288-19-000014
Submitted to the SEC: Thu Jul 25 2019 8:47:00 PM EST
Accepted by the SEC: Fri Jul 26 2019
Period: Thursday, July 25, 2019
Industry: Investment Advice
Events:
  1. Earnings Release
  2. Financial Exhibit

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