A press release entitled, "Federated Investors, Inc. Reports Fourth Quarter and Full-Year 2013 Earnings tells us, "Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.39 for Q4 2013 compared to $0.44 for the same quarter last year on net income of $41.1 million for Q4 2013 compared to $49.6 million for Q4 2012. Federated reported 2013 EPS of $1.55 compared to $1.79 for 2012 on 2013 net income of $162.2 million compared to $188.1 million for 2012." (Federated will host its earnings conference call at 9 a.m. Eastern on Jan. 24, 2014. Call 877-407-0782 prior to the 9 a.m. start time to listen in or visit www.federatedinvestors.com.)
Federated's release explains, "Money market assets in both funds and separate accounts were $276.0 billion at Dec. 31, 2013, down $8.7 billion or 3 percent from $284.7 billion at Dec. 31, 2012 and up $5.7 billion or 2 percent from $270.3 billion at Sept. 30, 2013. Money market mutual fund assets were $240.0 billion at Dec. 31, 2013, down $15.7 billion or 6 percent from $255.7 billion at Dec. 31, 2012 and up $2.1 billion or 1 percent from $237.9 billion at Sept. 30, 2013. Revenue decreased by $30.1 million or 12 percent due primarily to an increase in voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields and a decrease in revenue due to lower average money market and fixed-income assets. The decrease was partially offset by an increase in revenue from higher average equity assets. See additional information about voluntary fee waivers in the table at the end of this financial summary."
It continues, "During Q4 2013, Federated derived 63 percent of its revenue from equity and fixed-income assets (40 percent from equity assets and 23 percent from fixed-income assets), 36 percent from money market assets and 1 percent from other products and services. Operating expenses decreased $6.7 million or 4 percent primarily due to a decrease in distribution expenses associated with increased fee waivers related to the low-yield environment for money market funds, partially offset by an increase in compensation and related expense. Revenue decreased by $67.3 million or 7 percent primarily due to an increase in voluntary fee waivers and was partially offset by an increase in revenue due to higher average equity assets."
Federated's release adds, "During 2013, Federated derived 60 percent of its revenue from equity and fixed-income assets (37 percent from equity assets and 23 percent from fixed-income assets), 39 percent from money market assets and 1 percent from other products and services. Operating expenses decreased by $6.5 million or 1 percent primarily due to a decrease in distribution expenses related to the low-yield environment."
Finally, the release says, "Fee waivers to maintain positive or zero net yields and the resulting negative impact of these waivers could vary significantly in the future as they are contingent on a number of variables including, but not limited to, changes in assets within the money market funds, available yields on instruments held by the money market funds, actions by the Federal Reserve, the U.S. Department of the Treasury, the Securities and Exchange Commission, the Financial Stability Oversight Council and other governmental entities, changes in expenses of the money market funds, changes in the mix of money market customer assets, changes in the distribution fee arrangements with customers, Federated's willingness to continue the fee waivers and changes in the extent to which the impact of the waivers is shared by third parties."
