Federated Investors, Inc. Reports Third Quarter 2015 Earnings

- Earnings per share increases 17 percent to $0.42 per share compared to Q3 2014

- Net equity sales positive for eighth consecutive quarter

- Board declares $0.25 per share dividend

News provided by

Oct 22, 2015, 04:16 ET

PITTSBURGH, Oct. 22, 2015 /PRNewswire/ -- Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today reported earnings per diluted share (EPS) of $0.42 for Q3 2015, up 17 percent from $0.36 for the same quarter last year on net income of $44.1 million for Q3 2015, compared to $37.6 million for Q3 2014. Federated reported YTD 2015 EPS of $1.17 compared to $1.05 for the same period in 2014 and YTD 2015 net income of $122.2 million compared to $109.6 million for the same period last year.

Federated's total managed assets were $351.0 billion at Sept. 30, 2015. Total managed assets were down $1.3 billion from $352.3 billion at Sept. 30, 2014 and up $1.3 billion from $349.7 billion at June 30, 2015. Growth in money market assets was offset by lower equity and fixed-income assets in Q3 2015 compared to Q2 2015. Average managed assets for Q3 2015 were $351.9 billion, up $2.7 billion or 1 percent from $349.2 billion reported for Q3 2014 and up $3.3 billion or 1 percent from $348.6 billion reported for Q2 2015.

"Federated again saw positive net equity sales in the third quarter, as investors continued to seek alpha from a range of our historically strong-performing Federated products, including our Kaufmann growth strategies and the Federated International Leaders Fund," said J. Christopher Donahue, president and chief executive officer. "Additionally, as investors navigated volatile markets, we saw renewed interest in alternative strategies, such as the Federated Prudent Bear and Absolute Return funds."

Federated's board of directors declared a dividend of $0.25 per share. The dividend is payable on Nov. 13, 2015 to shareholders of record as of Nov. 6, 2015. During Q3 2015, Federated purchased 539,805 shares of Federated class B common stock for $16.4 million.

Federated's equity assets were $52.0 billion at Sept. 30, 2015, up $1.7 billion or 3 percent from $50.3 billion at Sept. 30, 2014 and down $2.8 billion or 5 percent from $54.8 billion at June 30, 2015. Top-selling equity funds during Q3 2015 on a net basis were Federated Kaufmann Large Cap Fund, Federated International Leaders Fund, Federated Kaufmann Small Cap Fund, Federated Prudent Bear Fund and Federated MDT Stock Trust.

Federated's fixed-income assets were $52.1 billion at Sept. 30, 2015, up $0.9 billion or 2 percent from $51.2 billion at Sept. 30, 2014 and down $0.8 billion or 2 percent from $52.9 billion at June 30, 2015. Top-selling fixed-income funds during Q3 2015 on a net basis were Capital Preservation Fund, Federated Sterling Cash Plus Fund, Federated Floating Rate Strategic Income Fund, Federated U.S. Government Securities Fund: 2-5 Years and Federated Ultrashort Bond Fund.

Money market assets were $246.9 billion at Sept. 30, 2015, up $1.4 billion or 1 percent from $245.5 billion at Sept. 30, 2014 and up $4.9 billion or 2 percent from $242.0 billion at June 30, 2015. Money market mutual fund assets were $216.3 billion at Sept. 30, 2015, up $1.1 billion or 1 percent from $215.2 billion at Sept. 30, 2014 and up $7.5 billion or 4 percent from $208.8 billion at June 30, 2015.

Financial Summary

Q3 2015 vs. Q3 2014

Revenue increased by $17.4 million or 8 percent primarily due to a decrease in voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields (voluntary yield-related fee waivers) and an increase in revenue from higher average equity assets. See additional information about voluntary yield-related fee waivers in the table at the end of this financial summary.

During Q3 2015, Federated derived 67 percent of its revenue from equity and fixed-income assets (46 percent from equity assets and 21 percent from fixed-income assets) and 33 percent from money market assets.

Operating expenses increased by $4.0 million or 3 percent primarily due to an increase in distribution expenses as a result of a decrease in voluntary yield-related fee waivers.

Nonoperating expenses, net increased by $2.7 million primarily due to a decrease in net investment income due largely to an increase in losses incurred on investments, partially offset by a decrease in debt expense primarily due to a lower average interest rate on Federated's term loan.

Q3 2015 vs. Q2 2015

Revenue increased by $6.2 million or 3 percent primarily due to an increase in revenue from higher average money market assets and an additional day in Q3 2015. The increase in revenue was partially offset by a decrease in revenue from lower average equity and fixed-income assets.

Operating expenses increased by $1.2 million or 1 percent primarily due to an increase in distribution expenses resulting from higher average money market assets and an additional day in Q3 2015.

Nonoperating expenses, net increased by $3.5 million primarily due to a decrease in net investment income resulting from an increase in losses incurred on investments.

YTD 2015 vs. YTD 2014

Revenue increased by $41.6 million or 6 percent primarily due to a decrease in voluntary yield-related fee waivers and an increase in revenue from higher average equity assets. The increase in revenue was partially offset by a decrease in revenue from lower average money-market assets.

For the first nine months of 2015, Federated derived 68 percent of its revenue from equity and fixed-income assets (47 percent from equity assets and 21 percent from fixed-income assets) and 32 percent from money market assets.

Operating expenses increased by $15.3 million or 3 percent primarily due to an increase in distribution expenses and compensation and related expenses. The increase in distribution expenses primarily resulted from a decrease in voluntary yield-related fee waivers, coupled with higher average equity assets, partially offset by lower average money market assets. Compensation and related expenses increased primarily due to higher incentive compensation.

Nonoperating (expenses) income, net decreased by $6.0 million primarily due to a decrease in net investment income resulting from an increase in losses incurred on investments in 2015 compared to investment gains realized in 2014, partially offset by a decrease in debt expense primarily due to a lower average interest rate on Federated's term loan.

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, expenses and regulatory changes, can significantly impact Federated's business activity levels and financial results. Risk factors and uncertainties that can influence Federated's financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission (SEC).

Voluntary yield-related fee waivers and 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, yields on instruments available for purchase by the money market funds, actions by the Federal Reserve, the U.S. Department of the Treasury, the SEC, the Financial Stability Oversight Council and other governmental entities, changes in fees and expenses of the money market funds, changes in the mix of money market customer assets, changes in customer relationships, changes in the money market product structures and offerings, demand for competing products, changes in the distribution fee arrangements with third parties, Federated's willingness to continue the fee waivers and changes in the extent to which the impact of the waivers is shared by third parties.

*Unaudited Money Market Fund Yield Waiver Impact to the Consolidated Statements of Income*
(in millions)
	Quarter Ended				Change Q3 2014 to Q3 2015		Quarter Ended		Change Q2 2015 to Q3 2015		Nine Months Ended				Change YTD 2014 to YTD 2015
	Sept. 30, 2015		Sept. 30, 2014				June 30, 2015				Sept. 30, 2015		Sept. 30, 2014
Investment advisory fees	$	(49.3)	$	(69.3)	$	20.0	$	(53.4)	$	4.1	$	(165.0)	$	(212.0)	$	47.0
Other service fees	(34.0)		(32.4)		(1.6)		(30.8)		(3.2)		(96.6)		(98.7)		2.1
Total revenue	(83.3)		(101.7)		18.4		(84.2)		0.9		(261.6)		(310.7)		49.1
Less: Reduction in distribution expense	61.3		68.7		(7.4)		60.2		1.1		186.1		213.2		(27.1)
Operating income	(22.0)		(33.0)		11.0		(24.0)		2.0		(75.5)		(97.5)		22.0
Less: Reduction in noncontrolling interest	1.7		2.8		(1.1)		1.8		(0.1)		6.0		8.0		(2.0)
Pre-tax impact	$	(20.3)	$	(30.2)	$	9.9	$	(22.2)	$	1.9	$	(69.5)	$	(89.5)	$	20.0

Federated will host an earnings conference call at 9 a.m. Eastern on Oct. 23, 2015. Investors are invited to listen to Federated's earnings teleconference by calling 877-407-0782 (domestic) or 201-689-8567 (international) prior to the 9 a.m. start time. The call may also be accessed in real time on the Internet via the About Federated section of FederatedInvestors.com. A replay will be available after 12:30 p.m. and through Oct. 30, 2015 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering access code 13621743.

Federated Investors, Inc. is one of the largest investment managers in the United States, managing $351.0 billion in assets as of Sept. 30, 2015. With 129 funds and a variety of separately managed account options, Federated provides comprehensive investment management to more than 8,400 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top 4 percent of money market fund managers in the industry, the top 5 percent of equity fund managers and the top 9 percent of fixed-income fund managers¹. For more information, visit FederatedInvestors.com.

###

1) Strategic Insight, Aug. 31, 2015. Based on assets under management in open-end funds.
Federated Securities Corp. is distributor of the Federated funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling and Federated MDTA LLC, each a registered investment adviser.

Certain statements in this press release, such as those related to the level of fee waivers and expenses incurred by the company, product demand and performance, investor interest and preferences, asset flows and mix, changes in customer relationships, changes in product structure, fee arrangements with customers, distribution expense, regulatory changes and market conditions constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Other risks and uncertainties include the ability of the company to predict the level of yield-related fee waivers and expenses in future quarters, which could vary significantly depending on a variety of factors identified above, and include the ability of the company to sustain product demand and asset flows and mix, which could vary significantly depending on market conditions, investment performance and investor behavior. Other risks and uncertainties also include the risk factors discussed in the company's annual and quarterly reports as filed with the SEC. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness of such statements in the future.

*Unaudited Condensed Consolidated Statements of Income*
(in thousands, except per share data)
	Quarter Ended				% Change Q3 2014 to Q3 2015		Quarter Ended		% Change Q2 2015 to Q3 2015
	Sept. 30, 2015		Sept. 30, 2014				June 30, 2015
Revenue
Investment advisory fees, net	$	158,898	$	141,086	13	%	$	154,429	3	%
Administrative service fees, net—affiliates	53,275		52,244		2		51,605		3
Other service fees, net	21,198		22,249		(5)		21,031		1
Other, net	950		1,336		(29)		1,062		(11)
Total Revenue	234,321		216,915		8		228,127		3

Operating Expenses
Compensation and related	70,624		70,724		0		70,940		0
Distribution	58,823		53,487		10		54,058		9
Professional service fees	7,823		7,944		(2)		7,285		7
Systems and communications	6,684		6,392		5		6,979		(4)
Office and occupancy	6,552		8,241		(20)		6,710		(2)
Advertising and promotional	3,310		3,271		1		3,504		(6)
Travel and related	3,183		3,028		5		3,533		(10)
Other	3,078		3,000		3		5,839		(47)
Total Operating Expenses	160,077		156,087		3		158,848		1
Operating Income	74,244		60,828		22		69,279		7

Nonoperating (Expenses) Income
Investment (loss) income, net	(3,049)		794		(484)		410		(844)
Debt expense	(979)		(2,162)		(55)		(974)		1
Other, net	(8)		(4)		100		(15)		(47)
Total Nonoperating Expenses, net	(4,036)		(1,372)		194		(579)		597
Income before income taxes	70,208		59,456		18		68,700		2
Income tax provision	26,072		22,197		17		26,437		(1)
Net income including the noncontrolling interests in subsidiaries	44,136		37,259		18		42,263		4
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries	5		(301)		102		504		(99)
Net Income	$	44,131	$	37,560	17	%	$	41,759	6	%

Amounts Attributable to Federated Investors, Inc.
Earnings Per Share¹
Basic and diluted	$	0.42	$	0.36	17	%	$	0.40	5	%
Weighted-average shares outstanding
Basic	100,449		100,729				100,732
Diluted	100,451		100,731				100,734
Dividends declared per share	$	0.25	$	0.25			$	0.25

Unvested share-based awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the "two-class method." As such, total net income of $1.7 million, $1.5 million and $1.7 million available to unvested restricted shareholders for the quarterly periods ended Sept. 30, 2015, Sept. 30, 2014 and June 30, 2015, respectively, was excluded from the computation of earnings per share.

*Unaudited Condensed Consolidated Statements of Income*
(in thousands, except per share data)
	Nine Months Ended
	Sept. 30, 2015		Sept. 30, 2014		% Change
Revenue
Investment advisory fees, net	$	459,885	$	413,732	11	%
Administrative service fees, net - affiliates	157,897		159,708		(1)
Other service fees, net	62,014		64,478		(4)
Other, net	3,174		3,474		(9)
Total Revenue	682,970		641,392		6

Operating Expenses
Compensation and related	218,062		213,176		2
Distribution	166,376		156,877		6
Professional service fees	22,990		24,502		(6)
Systems and communications	20,533		19,021		8
Office and occupancy	20,115		22,442		(10)
Advertising and promotional	10,285		9,668		6
Travel and related	9,474		9,427		0
Other	12,574		9,964		26
Total Operating Expenses	480,409		465,077		3
Operating Income	202,561		176,315		15

Nonoperating (Expenses) Income
Investment (loss) income, net	(1,749)		8,719		(120)
Debt expense	(3,325)		(7,824)		(58)
Other, net	(37)		(14)		164
Total Nonoperating (Expenses) Income, net	(5,111)		881		(680)
Income before income taxes	197,450		177,196		11
Income tax provision	74,633		66,978		11
Net income including the noncontrolling interests in subsidiaries	122,817		110,218		11
Less: Net income attributable to the noncontrolling interests in subsidiaries	620		595		4
Net Income	$	122,197	$	109,623	11	%

Amounts Attributable to Federated Investors, Inc.
Earnings Per Share¹
Basic and diluted	$	1.17	$	1.05	11	%
Weighted-average shares outstanding
Basic	100,606		100,748
Diluted	100,607		100,749
Dividends declared per share	$	0.75	$	0.75

Unvested share-based awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the "two-class method." As such, total net income of $4.8 million and $4.3 million available to unvested restricted shareholders for the nine months ended Sept. 30, 2015 and Sept. 30, 2014, respectively, was excluded from the computation of earnings per share.

*Unaudited Condensed Consolidated Balance Sheets*
(in thousands)	Sept. 30, 2015		Dec. 31, 2014
Assets
Cash and other investments	$	321,762	$	297,338
Other current assets	41,132		44,717
Intangible assets, net and goodwill	734,808		733,847
Other long-term assets	58,998		64,617
Total Assets	$	1,156,700	$	1,140,519

Liabilities, Redeemable Noncontrolling Interests and Equity
Current liabilities	$	141,661	$	149,321
Long-term debt	197,625		216,750
Other long-term liabilities	171,259		161,099
Redeemable noncontrolling interests	8,611		3,697
Equity excluding treasury stock	827,157		774,910
Treasury stock	(189,613)		(165,258)
Total Liabilities, Redeemable Noncontrolling Interests and Equity	$	1,156,700	$	1,140,519

*Unaudited Changes in Equity and Fixed-Income Fund and Separate Account Assets*
(in millions; excludes liquidation portfolio)
	Quarter Ended						Nine Months Ended
	Sept. 30, 2015		June 30, 2015		Sept. 30, 2014		Sept. 30, 2015		Sept. 30, 2014
Equity funds
Beginning assets	$	35,533	$	34,951	$	31,673	$	33,141	$	28,097
Sales	2,464		2,389		2,632		7,658		7,490
Redemptions	(2,043)		(1,923)		(1,389)		(5,880)		(4,686)
Net sales	421		466		1,243		1,778		2,804
Net exchanges	(110)		6		8		(65)		49
Market gains and losses/reinvestments¹	(2,571)		110		(836)		(1,581)		1,138
Ending assets	$	33,273	$	35,533	$	32,088	$	33,273	$	32,088

Equity separate accounts²
Beginning assets	$	19,256	$	19,086	$	18,215	$	18,285	$	16,051
Sales³	1,456		1,449		1,131		4,598		3,144
Redemptions³	(1,350)		(1,084)		(737)		(3,388)		(2,261)
Net sales³	106		365		394		1,210		883
Net exchanges	(1)		0		0		(1)		0
Market gains and losses⁴	(678)		(195)		(362)		(811)		1,313
Ending assets	$	18,683	$	19,256	$	18,247	$	18,683	$	18,247

Total equity²
Beginning assets	$	54,789	$	54,037	$	49,888	$	51,426	$	44,148
Sales³	3,920		3,838		3,763		12,256		10,634
Redemptions³	(3,393)		(3,007)		(2,126)		(9,268)		(6,947)
Net sales³	527		831		1,637		2,988		3,687
Net exchanges	(111)		6		8		(66)		49
Market gains and losses/reinvestments¹	(3,249)		(85)		(1,198)		(2,392)		2,451
Ending assets	$	51,956	$	54,789	$	50,335	$	51,956	$	50,335

Fixed-income funds
Beginning assets	$	40,042	$	41,039	$	40,357	$	40,456	$	39,606
Sales	3,277		3,251		3,982		11,019		11,555
Redemptions	(4,173)		(4,004)		(3,744)		(12,370)		(11,709)
Net (redemptions) sales	(896)		(753)		238		(1,351)		(154)
Net exchanges	90		(22)		1		31		(69)
Acquisition related	0		0		0		0		301
Market gains and losses/reinvestments¹	(254)		(222)		(161)		(154)		751
Ending assets	$	38,982	$	40,042	$	40,435	$	38,982	$	40,435

Fixed-income separate accounts²
Beginning assets	$	12,862	$	12,523	$	10,772	$	12,251	$	10,520
Sales³	638		754		263		1,631		894
Redemptions³	(336)		(277)		(268)		(817)		(1,037)
Net sales (redemptions)³	302		477		(5)		814		(143)
Net exchanges	(6)		0		0		(6)		1
Market gains and losses⁴	(75)		(138)		(15)		24		374
Ending assets	$	13,083	$	12,862	$	10,752	$	13,083	$	10,752

Total fixed income²
Beginning assets	$	52,904	$	53,562	$	51,129	$	52,707	$	50,126
Sales³	3,915		4,005		4,245		12,650		12,449
Redemptions³	(4,509)		(4,281)		(4,012)		(13,187)		(12,746)
Net (redemptions) sales³	(594)		(276)		233		(537)		(297)
Net exchanges	84		(22)		1		25		(68)
Acquisition related	0		0		0		0		301
Market gains and losses/reinvestments¹	(329)		(360)		(176)		(130)		1,125
Ending assets	$	52,065	$	52,904	$	51,187	$	52,065	$	51,187

1)	Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates.
2)	Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products.
3)	For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses.
4)	Reflects the approximate changes in the fair value of the securities held by the portfolios.

*Unaudited Total Changes in Equity and Fixed-Income Assets*
(in millions; excludes liquidation portfolio)
	Quarter Ended						Nine Months Ended
	Sept. 30, 2015		June 30, 2015		Sept. 30, 2014		Sept. 30, 2015		Sept. 30, 2014
Funds
Beginning assets	$	75,575	$	75,990	$	72,030	$	73,597	$	67,703
Sales	5,741		5,640		6,614		18,677		19,045
Redemptions	(6,216)		(5,927)		(5,133)		(18,250)		(16,395)
Net (redemptions) sales	(475)		(287)		1,481		427		2,650
Net exchanges	(20)		(16)		9		(34)		(20)
Acquisition related	0		0		0		0		301
Market gains and losses/reinvestments¹	(2,825)		(112)		(997)		(1,735)		1,889
Ending assets	$	72,255	$	75,575	$	72,523	$	72,255	$	72,523

Separate accounts²
Beginning assets	$	32,118	$	31,609	$	28,987	$	30,536	$	26,571
Sales³	2,094		2,203		1,394		6,229		4,038
Redemptions³	(1,686)		(1,361)		(1,005)		(4,205)		(3,298)
Net sales³	408		842		389		2,024		740
Net exchanges	(7)		0		0		(7)		1
Market gains and losses⁴	(753)		(333)		(377)		(787)		1,687
Ending assets	$	31,766	$	32,118	$	28,999	$	31,766	$	28,999

Total assets ²
Beginning assets	$	107,693	$	107,599	$	101,017	$	104,133	$	94,274
Sales³	7,835		7,843		8,008		24,906		23,083
Redemptions³	(7,902)		(7,288)		(6,138)		(22,455)		(19,693)
Net (redemptions) sales³	(67)		555		1,870		2,451		3,390
Net exchanges	(27)		(16)		9		(41)		(19)
Acquisition related	0		0		0		0		301
Market gains and losses/reinvestments¹	(3,578)		(445)		(1,374)		(2,522)		3,576
Ending assets	$	104,021	$	107,693	$	101,522	$	104,021	$	101,522

1)	Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates.
2)	Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products.
3)	For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of Market gains and losses.
4)	Reflects the approximate changes in the fair value of the securities held by the portfolios.

(unaudited)
MANAGED ASSETS (in millions)	Sept. 30, 2015		June 30, 2015		March 31, 2015		Dec. 31, 2014		Sept. 30, 2014
By Asset Class
Equity	$	51,956	$	54,789	$	54,037	$	51,426	$	50,335
Fixed-income	52,065		52,904		53,562		52,707		51,187
Money market	246,937		241,982		248,160		258,772		245,536
Liquidation portfolio¹	0		0		0		0		5,197
Total Managed Assets	$	350,958	$	349,675	$	355,759	$	362,905	$	352,255
By Product Type
Funds:
Equity	$	33,273	$	35,533	$	34,951	$	33,141	$	32,088
Fixed-income	38,982		40,042		41,039		40,456		40,435
Money market	216,252		208,786		214,310		225,471		215,237
Total Fund Assets	$	288,507	$	284,361	$	290,300	$	299,068	$	287,760
Separate accounts:
Equity	$	18,683	$	19,256	$	19,086	$	18,285	$	18,247
Fixed-income	13,083		12,862		12,523		12,251		10,752
Money market	30,685		33,196		33,850		33,301		30,299
Total Separate Accounts	$	62,451	$	65,314	$	65,459	$	63,837	$	59,298
Total Liquidation Portfolio¹	$	0	$	0	$	0	$	0	$	5,197
Total Managed Assets	$	350,958	$	349,675	$	355,759	$	362,905	$	352,255

AVERAGE MANAGED ASSETS	Quarter Ended
(in millions)	Sept. 30, 2015		June 30, 2015		March 31, 2015		Dec. 31, 2014		Sept. 30, 2014
By Asset Class
Equity	$	54,238	$	55,476	$	52,784	$	50,901	$	50,207
Fixed-income	52,577		53,319		53,405		52,782		51,115
Money market	245,133		239,774		253,261		246,698		242,537
Liquidation portfolio¹	0		0		0		1,563		5,307
Total Avg. Assets	$	351,948	$	348,569	$	359,450	$	351,944	$	349,166
By Product Type
Funds:
Equity	$	35,181	$	35,998	$	34,162	$	32,705	$	32,060
Fixed-income	39,526		40,574		41,013		41,072		40,275
Money market	213,633		205,943		218,168		216,235		211,571
Total Avg. Fund Assets	$	288,340	$	282,515	$	293,343	$	290,012	$	283,906
Separate accounts:
Equity	$	19,057	$	19,478	$	18,622	$	18,196	$	18,147
Fixed-income	13,051		12,745		12,392		11,710		10,840
Money market	31,500		33,831		35,093		30,463		30,966
Total Avg. Separate Accounts	$	63,608	$	66,054	$	66,107	$	60,369	$	59,953
Total Avg. Liquidation Portfolio¹	$	0	$	0	$	0	$	1,563	$	5,307
Total Avg. Managed Assets	$	351,948	$	348,569	$	359,450	$	351,944	$	349,166

The liquidation portfolio represented a portfolio of distressed bonds at cost. Federated had been retained by a third party to manage these assets through an orderly liquidation process that was completed during the fourth quarter of 2014. Management-fee rates earned from this portfolio were lower than those of traditional separate account mandates.

(unaudited)
AVERAGE MANAGED ASSETS	Nine Months Ended
(in millions)	Sept. 30, 2015		Sept. 30, 2014
By Asset Class
Equity	$	54,166	$	47,455
Fixed-income	53,100		50,850
Money market	246,057		256,782
Liquidation portfolio¹	0		5,555
Total Avg. Assets	$	353,323	$	360,642
By Product Type
Funds:
Equity	$	35,114	$	30,243
Fixed-income	40,371		40,131
Money market	212,582		222,245
Total Avg. Fund Assets	$	288,067	$	292,619
Separate Accounts:
Equity	$	19,052	$	17,212
Fixed-income	12,729		10,719
Money market	33,475		34,537
Total Avg. Separate Accounts	$	65,256	$	62,468
Total Avg. Liquidation Portfolio¹	$	0	$	5,555
Total Avg. Managed Assets	$	353,323	$	360,642