XML 30 R13.htm IDEA: XBRL DOCUMENT v3.6.0.2
Investments
 12 Months Ended
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Investments
Investments
Investments on the Consolidated Balance Sheets as of December 31, 2016 and 2015 included available-for-sale and trading securities. At December 31, 2016 and 2015, Federated held investments totaling $130.8 million and $141.7 million, respectively, in fluctuating-value Federated Funds that were classified as available-for-sale securities and were included in Investments—affiliates on the Consolidated Balance Sheets. The decrease in Investments—affiliates primarily related to a newly consolidated VIE as a result of the adoption of ASU 2015-02 and is now recorded in Investments—consolidated investment companies. See Note (2) for additional information.

Available-for-sale securities were as follows at December 31:
 
 
2016
 
2015
 
 
 
 
Gross Unrealized
 
Estimated
Fair
Value
 
 
 
Gross Unrealized
 
Estimated
Fair
Value
in thousands
 
Cost

 
Gains

 
(Losses)

 
Cost

 
Gains

 
(Losses)

 
Equity funds
 
$
23,883

 
$
2,112

 
$
(266
)
 
$
25,729

 
$
32,357

 
$
342

 
$
(2,416
)
 
$
30,283

Fixed-income funds
 
105,514

 
92

 
(550
)
 
105,056

 
115,396

 
109

 
(4,040
)
 
111,465

Total available-for-sale securities
 
$
129,397

 
$
2,204

 
$
(816
)
 
$
130,785

 
$
147,753

 
$
451

 
$
(6,456
)
 
$
141,748


During 2016 and 2015, the unrealized losses on certain investments were deemed to be other-than-temporarily impaired. As a result, Federated recorded $1.6 million and $1.3 million to Gain (loss) on securities, net to write down the carrying values of the investments for 2016 and 2015, respectively. As of December 31, 2015, unrealized losses of $6.5 million related to investments with a fair value of $124.0 million. Of these, investments with a fair value of $92.6 million with unrealized losses of $5.5 million have been in a continuous unrealized loss position for 12 months or longer. The remaining investments with a fair value of $31.4 million with unrealized losses of $1.0 million have been in a continuous unrealized loss position for less than 12 months.
Federated's trading securities totaled $65.5 million and $32.4 million at December 31, 2016 and 2015, respectively. The increase in trading securities primarily related to the aforementioned newly consolidated VIE which was previously recorded in Investments—affiliates on the Consolidated Balance Sheets. See Note (2) for additional information. Federated consolidates certain Federated Funds into its Consolidated Financial Statements as a result of Federated's controlling financial interest in the Federated Fund (see Note (4)). All investments held by these Federated Funds were included in Investments—consolidated investment companies on Federated's Consolidated Balance Sheets. Investments—other on the Consolidated Balance Sheets represented other trading investments held in Separate Accounts.
Federated's trading securities as of December 31, 2016 and 2015, were primarily composed of domestic debt securities ($45.5 million and $9.0 million, respectively), investments in Federated Funds ($8.9 million and $11.0 million, respectively) and stocks of large U.S. and international companies ($7.2 million and $10.5 million, respectively).

The following table presents gains and losses recognized in Gain (loss) on securities, net on the Consolidated Statements of Income in connection with Federated's investments as well as economic derivatives held by certain consolidated Federated Funds for the years ended December 31:
in thousands
 
2016

 
2015

 
2014

Unrealized gain (loss)
 
 
 
 
 
 
Trading securities
 
$
4,971

 
$
(1,359
)
 
$
(2,578
)
Derivatives1
 
(348
)
 
119

 
(147
)
Realized gains2
 
 
 
 
 
 
Available-for-sale securities
 
298

 
1,503

 
5,359

Trading securities
 
1,663

 
910

 
4,514

Derivatives1
 
1,032

 
301

 
214

Realized losses2
 
 
 
 
 
 
Available-for-sale securities3
 
(1,647
)
 
(2,348
)
 
(91
)
Trading securities
 
(2,252
)
 
(2,760
)
 
(1,848
)
Derivatives1
 
(1,609
)
 
(1,630
)
 
(451
)
Gain (loss) on securities, net4
 
$
2,108

 
$
(5,264
)
 
$
4,972


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
The losses for the years ended December 31, 2016 and 2015 include impairments of certain available-for-sale securities.
4
Amounts related to consolidated entities, primarily Federated Funds, totaled $2.9 million, $(4.0) million and $(0.6) million for the years ended December 31, 2016, 2015 and 2014, respectively.