"We are very pleased with the progress we have made in the five months since the May Co. transaction closed," Hoguet commented. "There have not been any material surprises, and we are where we expected to be in the integration process at this time."

Hoguet said the company is dedicated to focusing on four main priorities: people; assortment; physical conversions; and fourth quarter results. She noted that identifying and retaining May talent has been a top priority for the company. In regard to assortment, Federated plans to make changes throughout the course of the year.

Hoguet went on to explain that Federated plans to convert 400 May stores. "We divided May doors into five tiers," she told investors. "On one end of the spectrum is a store where we are changing the name on building and putting in the minimum amount of signage. On the end other is remodeling and re-branding the store." In three-year's time, she said 70% of the May stores will be "reinvented."

The company also announced its fourth quarter earnings ended Dec. 31. During the quarter, earnings per diluted share from continuing operations were 48 cents, up 60% from last year's 30 cents. Income from continuing operations for Q4 2005 increased 61% to $51.8 million compared to $32.3 million for Q4 2004.

During the quarter, total revenue increased 17% to $241.8 million from $207.2 million for Q4 2004 and grew slightly from the prior quarter's $241.4 million. Total revenue for 2005 increased 8% to $909.2 million compared to $843.3 million for 2004. The company attributed the year-over-year increase in total revenue to increased average money market assets resulting from Federated's acquisition of Alliance Capital Management LP's cash management business.

Federated's total managed assets were $213.4 billion at Dec. 31, up $34.1 billion or 19% from $179.3 billion a year ago and up $6 billion or 3% from $207.4 billion at Sept. 30. Average managed assets for Q4 2005 were $210.1 billion, up $31.2 billion or 17% from $178.9 billion reported for Q4 2004 and up $2 billion or 1% from $208.1 billion in average managed assets reported for Q3 2005.

Federated now operates about 950 department stores in 49 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's, Bloomingdale's, Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, L.S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, Strawbridge's, and the Jones Store.