EX-99.1 2 a991-2022q3earningspressre.htm EX-99.1 Document

Exhibit 99.1
fhipressreleaseimageq12020a.gif
Federated Hermes, Inc. reports third quarter 2022 earnings
•Q3 2022 earnings per diluted share of $0.78
•Board declares $0.27 per share quarterly dividend
(PITTSBURGH, Pa., Oct. 27, 2022) — Federated Hermes, Inc. (NYSE: FHI), a global leader in active, responsible investing, today reported earnings per diluted share (EPS) of $0.78 for Q3 2022, compared to $0.73 for the same quarter last year, on net income of $69.5 million for Q3 2022, compared to $71.4 million for Q3 2021. Federated Hermes reported YTD 2022 EPS of $2.02, compared to $2.04 for the same period in 2021, on YTD 2022 net income of $183.0 million, compared to $201.7 million for the same period in 2021. The results for Q3 2022 and YTD 2022 include net realized and unrealized losses on investments of $6.8 million and $39.4 million, respectively, due to the reduction in the market value of equity and fixed-income investments. These losses reduced Q3 2022 and YTD 2022 EPS by $0.04 per diluted share and $0.22 per diluted share, respectively, after excluding the losses attributable to noncontrolling interests and including tax effects.
Federated Hermes' total managed assets were $624.4 billion at Sept. 30, 2022, down $9.7 billion or 2% from $634.1 billion at Sept. 30, 2021 and down $7.5 billion or 1% from $631.9 billion at June 30, 2022. Total average managed assets for Q3 2022 were $631.8 billion, down $1.3 billion or less than 1% from $633.1 billion reported for Q3 2021 and up $13.9 billion or 2% from $617.9 billion for Q2 2022.
"Federated Hermes offered our clients a diverse range of active strategies for the volatile inflationary environment, and we saw net positive sales in our equity, fixed-income and alternative/private markets asset categories," said J. Christopher Donahue, president and chief executive officer. "In the third quarter, Federated Hermes also achieved record gross and net positive sales of fixed-income separately managed accounts, and we further diversified our investment solutions in that area by closing on the acquisition of the business of C.W. Henderson & Associates, Inc., a specialist in municipal-bond SMA products, which was effective Oct. 1, 2022. Investors also continued to seek haven in Federated Hermes' alternative strategies, such as private equity products and Federated Hermes Prudent Bear Fund."
Federated Hermes' board of directors declared a dividend of $0.27 per share. The dividend is payable on Nov. 15, 2022 to shareholders of record as of Nov. 8, 2022. During Q3 2022, Federated Hermes purchased 211,885 shares of Federated Hermes class B common stock for $6.9 million.
Equity assets were $74.7 billion at Sept. 30, 2022, down $22.7 billion or 23% from $97.4 billion at Sept. 30, 2021 and down $6.3 billion or 8% from $81.0 billion at June 30, 2022. Top-selling equity funds during Q3 2022 on a net basis were Federated Hermes Strategic Value Dividend Fund, Federated Hermes Asia ex-Japan Equity Fund, Federated Hermes International Strategic Value Dividend Fund, Federated Hermes China Equity Fund and Federated Hermes MDT Small Cap Core Fund.
Fixed-income assets were $85.4 billion at Sept. 30, 2022, down $11.8 billion or 12% from $97.2 billion at Sept. 30, 2021 and down $0.9 billion or 1% from $86.3 billion at June 30, 2022. Top-selling fixed-income funds during Q3 2022 on a net basis were Federated Hermes Total Return Bond Fund, Federated Hermes Conservative Municipal Microshort Fund, Federated Hermes Municipal High Yield Advantage Fund, Federated Hermes Total Return Government Bond Fund and Federated Hermes Conservative Microshort Fund.
MEDIA:MEDIA:ANALYSTS:
Ed Costello 412-288-7538Meghan McAndrew 412-288-8103Ray Hanley 412-288-1920
    
Federated Hermes reports Q3 2022 earnings
Page 2 of 13
Alternative/private markets assets were $20.2 billion at Sept. 30, 2022, down $1.9 billion or 9% from $22.1 billion at Sept. 30, 2021 and down $1.6 billion or 7% from $21.8 billion at June 30, 2022.
Money market assets were $441.3 billion at Sept. 30, 2022, up $27.6 billion or 7% from $413.7 billion at Sept. 30, 2021 and up $1.6 billion or less than 1% from $439.7 billion at June 30, 2022. Money market fund assets were $309.9 billion at Sept. 30, 2022, up $17.6 billion or 6% from $292.3 billion at Sept. 30, 2021 and up $11.9 billion or 4% from $298.0 billion at June 30, 2022.
Financial Summary
Q3 2022 vs. Q3 2021
Revenue increased $54.6 million or 17% 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). For further information on the waivers, see “Impact of voluntary yield-related fee waivers” below. This increase was partially offset by a decrease in revenue due to lower average long-term assets.
During Q3 2022, Federated Hermes derived 54% of its revenue from long-term assets (33% from equity, 13% from fixed-income and 8% from alternative/private markets and multi-asset), 45% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased $56.2 million or 25% due to increased distribution expenses resulting primarily from lower voluntary yield-related fee waivers, partially offset by a decrease due to lower average managed fund assets.
Nonoperating income (expenses), net decreased $5.8 million primarily due to a larger decrease in the market value of investments in Q3 2022 as compared to the decrease in the market value of investments in Q3 2021.
Q3 2022 vs. Q2 2022
Revenue increased $15.1 million or 4% primarily due to a decrease in voluntary yield-related and other fee waivers and an increase in revenue from higher average money market assets. This increase was partially offset by a decrease in revenue due to lower average long-term assets.
Operating expenses increased $10.7 million or 4% primarily due to increased distribution expenses predominantly resulting from lower voluntary yield-related fee waivers.
Nonoperating income (expenses), net increased $15.1 million or 67% primarily due to a lesser decrease in the market value of investments in Q3 2022 as compared to the decrease in the market value of investments in Q2 2022.
YTD 2022 vs. YTD 2021
Revenue increased $93.1 million or 10% primarily due to a decrease in voluntary yield-related fee waivers. This increase was partially offset by decreases in revenue due to lower average equity assets, a change in the mix of average fixed-income assets and a decrease in performance fees and carried interest.
For the first nine months of 2022, Federated Hermes derived 62% of its revenue from long-term assets (38% from equity, 15% from fixed-income and 9% from alternative/private markets and multi-asset), 37% from money market assets and 1% from sources other than managed assets.

    
Federated Hermes reports Q3 2022 earnings
Page 3 of 13
Operating expenses increased $97.8 million or 14% primarily due to increased distribution expenses predominantly resulting from lower voluntary yield-related fee waivers partially offset by lower average managed fund assets and a decrease in compensation and related expense.
Nonoperating income (expenses), net decreased $49.0 million primarily due to a decrease in the market value of investments in the first nine months of 2022 compared to an increase in the market value of investments for the same period in 2021.
Income tax provision decreased $25.2 million primarily due to legislation enacted in the U.K. in Q2 2021, increasing the U.K. corporate income tax rate from 19% to 25% effective April 1, 2023, resulting in the revaluation of certain net deferred tax liabilities in Q2 2021, and lower income before income taxes.
Impact of voluntary yield-related fee waivers
There were no material voluntary yield-related fee waivers during the quarter ended Sept. 30, 2022. During the nine months ended Sept. 30, 2022, voluntary yield-related fee waivers totaled $85.3 million. These fee waivers were partially offset by related reductions in distribution expenses of $66.5 million, such that the net negative pre-tax impact to Federated Hermes was $18.8 million for the nine months ended Sept. 30, 2022. During the three and nine months ended Sept. 30, 2021, voluntary yield-related fee waivers totaled $109.2 million and $310.2 million, respectively. These fee waivers were partially offset by related reductions in distribution expenses of $72.3 million and $204.9 million, respectively, such that the net negative pre-tax impact to Federated Hermes was $36.9 million and $105.3 million for the three and nine months ended Sept. 30, 2021, respectively.
Due to increases in the yields of securities held by money market portfolios, the net negative pre-tax impact of the voluntary yield-related fee waivers has been eliminated. The amount of voluntary yield-related fee waivers can vary based on a number of factors, including, among others, interest rates, yields, asset levels, asset flows and the ability of distributors to share in waivers. Any change in these factors can impact the amount and level of voluntary yield-related fee waivers, including in a material way.
Federated Hermes' 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 Hermes' business activity levels and financial results. Risk factors and uncertainties that can influence Federated Hermes' financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission (SEC).
Federated Hermes will host an earnings conference call at 9 a.m. Eastern on Oct. 28, 2022. Investors are invited to listen to the earnings teleconference by calling 888-506-0062 (domestic) or 973-528-0011 (international) prior to the 9 a.m. start time. To listen online, go to the Investor Relations section and the Analyst Information tab of FederatedHermes.com at least 15 minutes prior to register and join the call. A replay will be available at approximately 12:30 p.m. Eastern on Oct. 28, 2022. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 46773. The online replay will be available via FederatedHermes.com for one year.
Federated Hermes, Inc. is a global leader in active, responsible investment management, with $624.4 billion in assets under management1. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 11,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and

    
Federated Hermes reports Q3 2022 earnings
Page 4 of 13
endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has nearly 2,000 employees in London, New York and offices worldwide.
Federated Hermes ranks in the top 7% of equity fund managers in the industry, the top 10% of fixed-income fund managers and the top 10% of money market fund managers2. Federated Hermes also ranks as the 5th-largest manager of model-delivered SMAs3. For more information, including an analyst presentation, which is updated periodically, visit FederatedHermes.com.
###
1) As of Sept. 30, 2022.
2) ISS Market Intelligence (SIMFUND), Sept. 30, 2022. Based on assets under management in open-end funds.
3) Money Management Institute/Cerulli,Q2 2022.
Federated Securities Corp. is distributor of the Federated Hermes funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Fund Managers Ireland Limited, Hermes Investment Management Limited, and Hermes GPE LLP, each a registered investment advisor in one or more of the U.S., U.K. or Ireland.
Certain statements in this press release, such as those related to performance, investor preferences and demand, asset flows, asset mix, interest rates and fee waivers 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. Forward-looking statements can include statements that do not relate strictly to historical or current facts and are typically identified by words or phrases such as “trend,” “forecast,” “project,” “predict,” “potential,” “approximate,” “opportunity,” “believe,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “projection,” “plan,” “assume,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “can,” “may” and similar expressions. Any forward-looking statement is inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond Federated Hermes’ control. 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, and sustain product demand, 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, or updating, of such statements in the future.


    
Federated Hermes reports Q3 2022 earnings
Page 5 of 13
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
Quarter Ended% Change Q3 2021 to Q3 2022Quarter Ended% Change Q2 2022 to Q3 2022
Sept. 30, 2022Sept. 30, 2021June 30, 2022
Revenue
Investment advisory fees, net$263,644 $230,210 15 %$258,043 2  %
Administrative service fees, net—affiliates75,021 76,853 (2)70,182 7 
Other service fees, net42,478 19,526 118 37,783 12 
Total Revenue381,143 326,589 17 366,008 4 
Operating Expenses
Compensation and related126,668 131,996 (4)128,086 (1)
Distribution91,032 38,486 137 84,243 8 
Systems and communications19,294 18,537 4 18,446 5 
Professional service fees14,203 14,294 (1)13,976 2 
Office and occupancy10,622 11,036 (4)10,512 1 
Advertising and promotional6,496 4,660 39 4,736 37 
Travel and related3,421 1,643 108 3,328 3 
Other12,627 7,535 68 10,363 22 
Total Operating Expenses284,363 228,187 25 273,690 4 
Operating Income96,780 98,402 (2)92,318 5 
Nonoperating Income (Expenses)
Investment income (loss), net(4,226)42 NM(19,308)78 
Debt expense(3,302)(476)NM(3,350)(1)
Other, net(38)(1,319)97 (13)(192)
Total Nonoperating Income (Expenses), net(7,566)(1,753)(332)(22,671)67 
Income before income taxes89,214 96,649 (8)69,647 28 
Income tax provision21,640 23,163 (7)18,889 15 
Net income including the noncontrolling interests in subsidiaries67,574 73,486 (8)50,758 33 
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries(1,905)2,124 (190)(6,899)72 
Net Income$69,479 $71,362 (3)%$57,657 21  %
Amounts Attributable to Federated Hermes, Inc.
Earnings Per Share1
Basic and Diluted$0.78 $0.73 7 %$0.64 22  %
Weighted-Average Shares Outstanding
Basic and Diluted84,341 93,320 85,373 
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 $3.7 million, $3.0 million and $3.2 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended Sept. 30, 2022, Sept. 30, 2021 and June 30, 2022, 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 for the quarterly period ended Sept. 30, 2021 excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary.

    
Federated Hermes reports Q3 2022 earnings
Page 6 of 13
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
Nine Months Ended
Sept. 30, 2022Sept. 30, 2021% Change
Revenue
Investment advisory fees, net$754,681 $692,188 9 %
Administrative service fees, net—affiliates218,710 228,904 (4)
Other service fees, net98,524 57,710 71 
Total Revenue1,071,915 978,802 10 
Operating Expenses
Compensation and related388,719 408,385 (5)
Distribution223,837 120,990 85 
Systems and communications57,234 56,086 2 
Professional service fees41,647 44,052 (5)
Office and occupancy32,457 33,358 (3)
Advertising and promotional13,965 12,107 15 
Travel and related8,543 2,838 201 
Other32,466 23,297 39 
Total Operating Expenses798,868 701,113 14 
Operating Income273,047 277,689 (2)
Nonoperating Income (Expenses)
Investment income (loss), net(34,136)9,446 (461)
Debt expense(7,873)(1,313)500 
Other, net31 (1,158)103 
Total Nonoperating Income (Expenses), net(41,978)6,975 NM
Income before income taxes231,069 284,664 (19)
Income tax provision58,140 83,353 (30)
Net income including the noncontrolling interests in subsidiaries172,929 201,311 (14)
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries(10,070)(419)NM
Net Income$182,999 $201,730 (9)%
Amounts Attributable to Federated Hermes, Inc.
Earnings Per Share1
Basic$2.02 $2.05 (1)%
Diluted$2.02 $2.04 (1)%
Weighted-Average Shares Outstanding
Basic and Diluted85,909 94,160 
Dividends Declared Per Share$0.81 $0.81 
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 $9.5 million and $8.4 million available to unvested restricted Federated Hermes shareholders for the nine months ended Sept. 30, 2022 and Sept. 30, 2021, 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 nine months ended Sept. 30, 2021.




    
Federated Hermes reports Q3 2022 earnings
Page 7 of 13

Unaudited Condensed Consolidated Balance Sheets
(in thousands)Sept. 30, 2022Dec. 31, 2021
Assets
  Cash and other investments$481,196 $426,674 
  Other current assets149,087 132,773 
  Intangible assets, net, including goodwill1,181,383 1,270,080 
  Other long-term assets160,904 188,660 
  Total Assets$1,972,570 $2,018,187 
Liabilities, Redeemable Noncontrolling Interests and Equity
  Current liabilities$238,929 $270,707 
  Long-term debt397,514 223,350 
  Other long-term liabilities310,112 346,911 
  Redeemable noncontrolling interests54,586 63,202 
Equity excluding treasury stock1
1,348,816 1,652,481 
Treasury stock1
(377,387)(538,464)
  Total Liabilities, Redeemable Noncontrolling Interests and Equity$1,972,570 $2,018,187 

1) During the third quarter 2022, the board of directors authorized the retirement of 10 million treasury shares, which restored them to authorized but unissued
status. There was no impact to total equity as a result of this transaction.


    
Federated Hermes reports Q3 2022 earnings
Page 8 of 13
Unaudited Changes in Long-Term Assets - By Asset Class
(in millions)Quarter EndedNine Months Ended
Sept. 30, 2022June 30, 2022Sept. 30, 2021Sept. 30, 2022Sept. 30, 2021
Equity
Beginning assets$80,988 $91,676 $100,506 $96,716 $91,788 
Sales1
5,133 6,595 4,332 18,720 17,458 
Redemptions1
(4,951)(7,564)(5,707)(19,585)(19,655)
Net sales (redemptions)1
182 (969)(1,375)(865)(2,197)
Net exchanges9 20 3 (145)43 
Acquisitions/(dispositions)0 0 408 0 408 
Impact of foreign exchange2
(1,187)(1,199)(510)(2,840)(934)
Market gains and (losses)3
(5,308)(8,540)(1,607)(18,182)8,317 
Ending assets$74,684 $80,988 $97,425 $74,684 $97,425 
Fixed Income
Beginning assets$86,253 $92,146 $90,801 $97,550 $84,277 
Sales1
7,681 6,991 12,935 22,096 34,706 
Redemptions1
(6,584)(8,950)(6,604)(24,971)(22,306)
Net sales (redemptions)1
1,097 (1,959)6,331 (2,875)12,400 
Net exchanges(17)(51)(7)78 (58)
Acquisitions/(dispositions)0 0 17 0 17 
Impact of foreign exchange2
(231)(225)(89)(560)(124)
Market gains and (losses)3
(1,737)(3,658)173 (8,828)714 
Ending assets$85,365 $86,253 $97,226 $85,365 $97,226 
Alternative/Private Markets
Beginning assets$21,785 $23,109 $20,962 $22,920 $19,084 
Sales1
946 1,116 1,319 2,706 3,127 
Redemptions1
(929)(1,091)(533)(2,525)(1,710)
Net sales (redemptions)1
17 25 786 181 1,417 
Net exchanges3 4 0 7 (2)
Acquisitions/(dispositions)0 0 81 0 81 
Impact of foreign exchange2
(1,638)(1,555)(554)(3,830)(361)
Market gains and (losses)3
15 202 789 904 1,845 
Ending assets$20,182 $21,785 $22,064 $20,182 $22,064 
Multi-asset
Beginning assets$3,135 $3,555 $3,699 $3,780 $3,948 
Sales1
54 43 71 171 226 
Redemptions1
(132)(143)(103)(407)(817)
Net sales (redemptions)1
(78)(100)(32)(236)(591)
Net exchanges0 1 9 6 28 
Acquisitions/(dispositions)0 0 54 0 54 
Impact of foreign exchange2
0 0 0 0 (1)
Market gains and (losses)3
(155)(321)(38)(648)254 
Ending assets$2,902 $3,135 $3,692 $2,902 $3,692 
Total Long-term Assets
Beginning assets$192,161 $210,486 $215,968 $220,966 $199,097 
Sales1
13,814 14,745 18,657 43,693 55,517 
Redemptions1
(12,596)(17,748)(12,947)(47,488)(44,488)
Net sales (redemptions)1
1,218 (3,003)5,710 (3,795)11,029 
Net exchanges(5)(26)5 (54)11 
Acquisitions/(dispositions)0 0 560 0 560 
Impact of foreign exchange2
(3,056)(2,979)(1,153)(7,230)(1,420)
Market gains and (losses)3
(7,185)(12,317)(683)(26,754)11,130 
Ending assets$183,133 $192,161 $220,407 $183,133 $220,407 
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.
3) Reflects the approximate changes in the fair value of the securities held by portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.




    
Federated Hermes reports Q3 2022 earnings
Page 9 of 13
Unaudited Changes in Long-Term Assets - By Asset Class and Product Type
(in millions)
Quarter Ended
Sept. 30, 2022
EquityFixed IncomeAlternative / Private MarketsMulti-assetTotal
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds.
Separate Accounts1
Beginning assets$44,207 $36,781 $48,215 $38,038 $13,911 $7,874 $3,001 $134 $109,334 $82,827 
Sales2,581 2,552 3,956 3,725 537 409 54 0 7,128 6,686 
Redemptions(3,033)(1,918)(6,058)(526)(835)(94)(130)(2)(10,056)(2,540)
Net sales (redemptions)(452)634 (2,102)3,199 (298)315 (76)(2)(2,928)4,146 
Net exchanges9 0 (17)0 3 0 0 0 (5)0 
Impact of foreign exchange2
(667)(520)(161)(70)(1,013)(625)0 0 (1,841)(1,215)
Market gains and (losses)3
(2,464)(2,844)(1,039)(698)77 (62)(141)(14)(3,567)(3,618)
Ending assets$40,633 $34,051 $44,896 $40,469 $12,680 $7,502 $2,784 $118 $100,993 $82,140 
Nine Months Ended
Sept. 30, 2022
EquityFixed IncomeAlternative / Private MarketsMulti-assetTotal
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Beginning assets$57,036 $39,680 $59,862 $37,688 $14,788 $8,132 $3,608 $172 $135,294 $85,672 
Sales10,210 8,510 13,711 8,385 1,637 1,069 170 1 25,728 17,965 
Redemptions(11,122)(8,463)(22,614)(2,357)(2,020)(505)(397)(10)(36,153)(11,335)
Net sales (redemptions) (912)47 (8,903)6,028 (383)564 (227)(9)(10,425)6,630 
Net exchanges(145)0 79 (1)7 0 6 0 (53)(1)
Impact of foreign exchange2
(1,635)(1,205)(409)(151)(2,390)(1,440)0 0 (4,434)(2,796)
Market gains and (losses)3
(13,711)(4,471)(5,733)(3,095)658 246 (603)(45)(19,389)(7,365)
Ending assets$40,633 $34,051 $44,896 $40,469 $12,680 $7,502 $2,784 $118 $100,993 $82,140 
1)    Includes separately managed accounts, institutional accounts, certain 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) Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
3)    Reflects the approximate changes in the fair value of the securities held by portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.









    
Federated Hermes reports Q3 2022 earnings
Page 10 of 13

Unaudited Changes in Long-Term Assets - By Product Type
(in millions)
Quarter EndedNine Months Ended
Sept. 30, 2022June 30, 2022Sept. 30, 2021Sept. 30, 2022Sept. 30, 2021
Total Fund Assets
Beginning assets$109,334 $124,968 $135,161 $135,294 $123,713 
Sales7,128 8,743 11,139 25,728 39,031 
Redemptions(10,056)(12,993)(9,702)(36,153)(32,413)
Net sales (redemptions)(2,928)(4,250)1,437 (10,425)6,618 
Net exchanges(5)(27)55 (53)(345)
Acquisitions/(dispositions)0 0 560 0 560 
Impact of foreign exchange1
(1,841)(1,827)(699)(4,434)(778)
Market gains and (losses)2
(3,567)(9,530)(217)(19,389)6,529 
Ending assets$100,993 $109,334 $136,297 $100,993 $136,297 
Total Separate Account Assets3
Beginning assets$82,827 $85,518 $80,807 $85,672 $75,384 
Sales4
6,686 6,002 7,518 17,965 16,486 
Redemptions4
(2,540)(4,755)(3,245)(11,335)(12,075)
Net sales (redemptions)4
4,146 1,247 4,273 6,630 4,411 
Net exchanges0 1 (50)(1)356 
Impact of foreign exchange1
(1,215)(1,152)(454)(2,796)(642)
Market gains and (losses)2
(3,618)(2,787)(466)(7,365)4,601 
Ending assets$82,140 $82,827 $84,110 $82,140 $84,110 
Total Long-term Assets3
Beginning assets$192,161 $210,486 $215,968 $220,966 $199,097 
Sales4
13,814 14,745 18,657 43,693 55,517 
Redemptions4
(12,596)(17,748)(12,947)(47,488)(44,488)
Net sales (redemptions)4
1,218 (3,003)5,710 (3,795)11,029 
Net exchanges(5)(26)5 (54)11 
Acquisitions/(dispositions)0 0 560 0 560 
Impact of foreign exchange1
(3,056)(2,979)(1,153)(7,230)(1,420)
Market gains and (losses)2
(7,185)(12,317)(683)(26,754)11,130 
Ending assets$183,133 $192,161 $220,407 $183,133 $220,407 
1) Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
2) Reflects the approximate changes in the fair value of the securities held by portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.
3) Includes separately managed accounts, institutional accounts, certain sub-advised funds and other managed products.
4)    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 Hermes reports Q3 2022 earnings
Page 11 of 13
Unaudited Managed Assets

(in millions)
Sept. 30, 2022June 30, 2022March 31, 2022Dec. 31, 2021Sept. 30, 2021
By Asset Class
Equity$74,684 $80,988 $91,676 $96,716 $97,425 
Fixed-income85,365 86,253 92,146 97,550 97,226 
Alternative / private markets20,182 21,785 23,109 22,920 22,064 
Multi-asset2,902 3,135 3,555 3,780 3,692 
Total long-term assets183,133 192,161 210,486 220,966 220,407 
Money market441,294 439,697 420,596 447,907 413,713 
Total Managed Assets$624,427 $631,858 $631,082 $668,873 $634,120 
By Product Type
Funds:
Equity$40,633 $44,207 $51,890 $57,036 $58,218 
Fixed-income44,896 48,215 54,830 59,862 60,262 
Alternative / private markets12,680 13,911 14,847 14,788 14,299 
Multi-asset2,784 3,001 3,401 3,608 3,518 
Total long-term assets100,993 109,334 124,968 135,294 136,297 
Money market309,859 298,031 279,514 312,834 292,311 
Total Fund Assets$410,852 $407,365 $404,482 $448,128 $428,608 
Separate Accounts:
Equity$34,051 $36,781 $39,786 $39,680 $39,207 
Fixed-income40,469 38,038 37,316 37,688 36,964 
Alternative / private markets7,502 7,874 8,262 8,132 7,765 
Multi-asset118 134 154 172 174 
Total long-term assets82,140 82,827 85,518 85,672 84,110 
Money market131,435 141,666 141,082 135,073 121,402 
Total Separate Account Assets$213,575 $224,493 $226,600 $220,745 $205,512 
Total Managed Assets$624,427 $631,858 $631,082 $668,873 $634,120 

    
Federated Hermes reports Q3 2022 earnings
Page 12 of 13
Unaudited Average Managed AssetsQuarter Ended
(in millions)
Sept. 30, 2022June 30, 2022March 31, 2022Dec. 31, 2021Sept. 30, 2021
By Asset Class
Equity$81,809 $85,785 $92,034 $97,751 $100,076 
Fixed-income87,042 88,740 95,475 97,229 93,685 
Alternative / private markets21,193 22,230 22,848 22,243 21,446 
Multi-asset3,144 3,337 3,621 3,763 3,713 
Total long-term assets193,188 200,092 213,978 220,986 218,920 
Money market438,601 417,778 433,254 419,392 414,141 
Total Avg. Managed Assets$631,789 $617,870 $647,232 $640,378 $633,061 
By Product Type
Funds:
Equity$45,135 $47,504 $52,419 $58,290 $59,918 
Fixed-income47,489 51,173 57,413 60,339 59,618 
Alternative / private markets13,432 14,297 14,746 14,419 13,704 
Multi-asset3,012 3,193 3,460 3,590 3,533 
Total long-term assets109,068 116,167 128,038 136,638 136,773 
Money market301,940 275,631 291,157 294,618 289,566 
Total Avg. Fund Assets$411,008 $391,798 $419,195 $431,256 $426,339 
Separate Accounts:
Equity$36,674 $38,281 $39,615 $39,461 $40,158 
Fixed-income39,553 37,567 38,062 36,890 34,067 
Alternative / private markets7,761 7,933 8,102 7,824 7,742 
Multi-asset132 144 161 173 180 
Total long-term assets84,120 83,925 85,940 84,348 82,147 
Money market136,661 142,147 142,097 124,774 124,575 
Total Avg. Separate Account Assets$220,781 $226,072 $228,037 $209,122 $206,722 
Total Avg. Managed Assets$631,789 $617,870 $647,232 $640,378 $633,061 


    
Federated Hermes reports Q3 2022 earnings
Page 13 of 13
Unaudited Average Managed AssetsNine Months Ended
(in millions)Sept. 30, 2022Sept. 30, 2021
By Asset Class
Equity$86,543 $98,136 
Fixed-income90,419 89,676 
Alternative / private markets22,090 20,257 
Multi-asset3,368 3,918 
Total long-term assets202,420 211,987 
Money market429,878 418,285 
Total Avg. Managed Assets$632,298 $630,272 
By Product Type
Funds:
Equity$48,353 $58,471 
Fixed-income52,025 57,346 
Alternative / private markets14,158 12,882 
Multi-asset3,222 3,732 
Total long-term assets117,758 132,431 
Money market289,577 293,320 
Total Avg. Fund Assets$407,335 $425,751 
Separate Accounts:
Equity$38,190 $39,665 
Fixed-income38,394 32,330 
Alternative / private markets7,932 7,375 
Multi-asset146 186 
Total long-term assets84,662 79,556 
Money market140,301 124,965 
Total Avg. Separate Account Assets$224,963 $204,521 
Total Avg. Managed Assets$632,298 $630,272