Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents fair value measurements for classes of Federated’s financial assets and liabilities measured at fair value on a recurring basis at December 31:



	2013								2012
	Fair Value Measurements Using								Fair Value Measurements Using
in thousands	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and cash equivalents	$	104,443	$	0	$	0	$	104,443	$	67,585	$	0	$	0	$	67,585
Available-for-sale equity securities	81,550		47,863		0		129,413		102,493		33,530		0		136,023
Trading securities – equity	11,925		9,906		0		21,831		9,194		16,776		0		25,970
Trading securities – debt	0		36,491		0		36,491		614		28,436		0		29,050
Foreign currency forward contracts	0		159		0		159		0		158		0		158
Total financial assets	$	197,918	$	94,419	$	0	$	292,337	$	179,886	$	78,900	$	0	$	258,786
Financial Liabilities
Interest rate swap	$	0	$	5,061	$	0	$	5,061	$	0	$	11,178	$	0	$	11,178
Acquisition-related future consideration liabilities	0		0		6,489		6,489		0		0		11,759		11,759
Other¹	1,118		2		0		1,120		1,015		0		0		1,015
Total financial liabilities	$	1,118	$	5,063	$	6,489	$	12,670	$	1,015	$	11,178	$	11,759	$	23,952


1	Amounts include investments sold short within one of the consolidated investment companies and/or foreign currency forward contracts recorded in Other current liabilities on the Consolidated Balance Sheets.

Reconciliation of the beginning and ending fair value measurements of a Level 3 financial liability

The following table presents a reconciliation of the beginning and ending balances for Federated’s liability for future consideration payments related to these acquisitions for each year presented:



in thousands	2013			2012			2011
Beginning balance	$	11,759		$	13,404		$	20,058
New acquisition adjustment¹	330			3,361			(2,600		)
Changes in fair value²	(941		)	(793		)	900
Contingent consideration payments	(4,659		)	(4,213		)	(4,954		)
Ending balance	$	6,489		$	11,759		$	13,404


1	Amounts include the preliminary fair value estimate of the contingent payment liability recorded in connection with a new acquisition or the revision thereof upon finalization of the valuation process related to initial purchase accounting.


2	Amounts were primarily included as a (decrease) increase to Intangible asset related expense on the Consolidated Statements of Income.

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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