Operator: Greetings, and welcome to the Federated Investors First Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ray Hanley. Please go-ahead sir.

Ray Hanley: Good morning, and welcome. Leading today's call will be Chris Donahue, Federated's CEO and President; and Tom Donahue, Chief Financial Officer; and participating in the Q&A is Debbie Cunningham, our Chief Investment Officer for the Money Markets. During today's call, we may make forward-looking statements, and we want to note that Federated's actual results may be materially different than the results implied by such statements. Please review the risk disclosures in our SEC filings. No assurance can be given as to future results and Federated assumes no duty to update any of these forward-looking statements. Chris?

Chris Donahue: Thank you, Ray and good morning all. I will briefly review Federated’s business performance and Tom will comment on our financial results. Looking first at equities. We closed the quarter with $64 billion of assets, down about $4 billion from year-end due to net outflows and market decreases. Gross sales of equity funds in separate accounts on a combined basis increased by 731 million or 28% over the prior quarter. Our small cap funds have been strong performers and have attracted solid flows. We believe they are well positioned for further growth. MDT Small Cap Core with its top 1% Morningstar category ranking for the trailing three and five years at the end of Q1 had positive net sales of $153 million to reach $520 million in assets at quarter-end. MDT Small Cap growth had top decile performance for the trailing 3 and 5 years at the end of the first quarter and posted positive net sales of $82 million to reach just about $400 million in assets at quarter-end. The Kaufmann Small Cap growth fund with its top decile performance for the trailing 1, 3, and 5 years at the end of the first quarter had positive net sales of $89 million to reach $1.1 billion at quarter end. Other funds with positive net sales in the first quarter included our Muni and Stock Advantage Fund, MDT Mid Cap Growth, and International leaders, as regards, strategic value dividend. This strategy's objective is to provide a high and growing dividend income strength from high-quality companies. The domestic funds, 12-month distribution yield of 3.84% ranked in the second percentile of its Morningstar category at year-end. This fund had a return of minus 6.5% in the first quarter as the January rate spike combined with no exposure to Tech and consumer discretionary impacted absolute and relative performance. However, looking at quarterly returns from inception through the end of 2017, the fund has been at the top or bottom quartile just about every quarter with about the same number of quarters in each. This pattern continued in Q1 with a fund in the top 2% for its March one-month record and at the bottom of the category for the full-quarter. Now using Morningstar data for the trailing three years at the end of the first quarter, six Federated funds were in the top decile, 10 were in the top quartile, and a dozen were in the top half. Trailing one-year rankings showed seven top decile funds, 12 in the top quartile, and 19 above median. Three weeks into Q2 net redemptions of equity funds are approximately 252 million and equity SMA net redemptions are about 57 million. We have seen early Q2 positive net sales in Kaufmann's small cap fund 95 million, MDT Small Cap Core 55 million, MDT Small Cap growth 17 million, and MDT Balance Fund with almost 10 million. Turning to fixed income, assets decreased by about $2 billion in Q1 to $62 billion, due largely to net outflows from institutional accounts and to a lesser extent from funds. Consistent with industry trends we saw our high yield funds shift from $245 million of net positive sales in Q4 to $216 million of net redemptions in Q1. However, funds with net sales in Q1 included our Ultrashort Bond Fund 267 million and the Total Return Bond Fund of 186 million and the Floating Rate Fund at 26 million. Our fixed income business has a variety of strategies that are performing well. At quarter-end, using Morningstar data, our total return bond fund, institutional high yield bond, Federated bond and ultrashort bond were all in the top quartile for trailing three years. In total, we had five fixed income strategies with top quartile three-year records at quarter-end, and 14 funds in the top third for the trailing three years. Fixed income fund net sales are negative early in the second quarter to the tune of 278 million. However, inflows in April in Total Return Bond Fund were over 100 million and we had several other funds with modest net inflows. Now looking at money markets. Total money market assets increased slightly from year-end with growth in separate accounts of just under $4 billion offsetting a decrease in money market fund assets of about 3 billion. Our money market mutual fund market share at the end of the quarter was 7.3%, compared to year-end 7.4%. Prime money fund assets increased about 5% in the first quarter to over $30 billion. Assets in our prime private liquidity fund increased to $730 million in the first quarter, up from about $530 million at year-end. This product and our prime collective fund had just over 1 billion in combined assets at quarter-end up from 845 million at the end of last year. These products preserve the use of amortized cost accounting and do not have the burden of redemption fee and gate provisions. Taking a look now at our most recent asset totals as of April 25. Managed assets were approximately 386 billion, including 261 billion in money markets, 64 billion in equities, and 62 billion in fixed income. Money market mutual fund assets were 175 billion. In the institutional channel, RFP and related activity continues to be solid and increased over last year. And diversified with interest in MDT and dividend income for equities and high yield core broad, low duration for fixed income. We began the first quarter with about 65 million in wins that are yet to fund. Total SMA assets ended the quarter at 25.1 billion. The SMA business produced 1.5 billion in gross sales, up from $1.3 billion in the prior quarter, but had $679 million in net redemptions in the first quarter. Federated still ranks fifth in the MMI/Dover rankings of the largest SMA managers at the end of 2017, which is the most recent data available. On the international side, we recently announced the agreement to purchase 60% controlling interest in Hermes Investment Management from the BT Pension Scheme. We expect this acquisition to close in the third quarter. We believe that the combination of Federated and Hermes offers the potential for growth and stability from a broad spectrum of attractive, differentiated, actively managed strategies, and powerful distribution capabilities in key markets around the world. We are excited to combine forces with the outstanding people at Hermes and see many benefits for the client's, employees, and shareholders of both organizations. We have received excellent feedback from Hermes on the positive reaction of many of their clients to the deal. Over the coming months, we will work together on growth strategies that can leverage the strengths of each company. We are evaluating the application of a number of Hermes strategies for the U.S. Institutional market, including the successful alternative private market strategies that Hermes has offered for years. We also expect to register mutual funds that will offer some of Hermes best investment ideas to our customers. We are also planning to integrate their ESG principles into our portfolio management processes. And we will be looking to how we can help grow the successful Hermes EOS business, and this feature is leading, world leading ESG related services to investment managers. We have also worked with Hermes to evaluate opportunities for them to offer Federated strategies to their clients. We also continue to progress on the launch of our new efforts in the Asia Pac region with a focus on opportunities in Greater China, Korea, and Japan. We continue to work on establishing strategic relationships with financial institutions and adding regional distribution of Federated Investment Strategies. This effort complements our European, UK, and Canadian operations. Managed assets in these markets totaled about $14.5 billion at quarter-end. In addition, we continue to seek alliances and acquisitions to advance our business. Tom?

Tom Donahue: Thank you, Chris. Q1 results were impacted by the adoption of the revenue recognition standard. As a result, certain distribution expenses and other expenses are now recorded as reductions to revenue. Total revenue decreased by 14.5 million from the prior quarter. Of that amount, about $8.6 million was due to the adoption of the revenue recognition standard, which was offset by related lower distribution expense of $6.7 million, and lower other expense of $1.9 million. The remaining $6 million decrease in revenue was mainly due to having two fewer days in the quarter. Revenue was down $9.6 million, compared to Q1 of last year, due to the adoption of the revenue recognition standard, which I mentioned, decreased revenue by $8.6 million. A 6.8 million decrease due to a change in a customer relationship that occurred during Q1 2017 and changes in the mix of average money market assets, which impacted revenue by $4.7 million. These decreases were partially offset by an increase of $4.4 million in revenue from higher average equity assets, an increase of $4.3 million due to lower money fund minimum yield waivers and an increase of $1.9 million from higher fixed income assets. Equities contributed 43% of Q1 revenues and combined equity and fixed income revenues were 60% of the total. Operating expenses decreased $3.3 million, compared to the prior quarter and $11.5 million from Q1 2017. The decreases from the prior quarter was due to the adoption of the revenue recognition standard, which caused expenses to decrease by $9 million and lower distribution expense of $1.7 million from two fewer days in the quarter, offset by higher cost comp and related expense from incentive compensation and seasonally higher payroll taxes. The decrease from Q1 of 2017 was also due to the adoption of the revenue recognition standard, which reduced expenses by $8.7 million, as well as a decrease of $8.6 million in distribution expense, due to changes in the mix of average money market fund assets. The previously discussed change in a customer relationship reduced expenses by $5.3 million. These decreases were partially offset by increased incentive comp of $5.3 million, a $3.5 million increase due to lower money fund minimum yield waivers and approximately 1.5 million related to the Hermes transaction. Compensation related was higher than preliminary estimates we gave in January, due largely to higher incentive compensation expense from higher gross equity sales, which increased by $731 million, compared to the prior quarter. An early estimate of 2Q comp and related is about $76.5 million, down from the $78 million in Q1, due largely to seasonality around payroll taxes and benefit expenses. For 2018, we expect our combined federal, state and local tax to be about 24% to 25%. We maintained the same priorities for use of capital, acquisitions, dividends, and share repurchases. Our board declared a dividend of $0.27, an increase of 8%. Among the factors considered in raising the dividends were the lower tax rates from the 2017 Tax Act. We continue to be active on the share repurchase front with 118,000 shares bought in Q1. At quarter-end, cash and investments were 378 million of which about 349 million was available to us. We expect the use mostly cash and to a lesser extent our revolving credit agreement to fund the purchase price and related obligations of approximately 358 million for the Hermes acquisition. In addition to cash, we have 210 million of unused capacity on our revolving credit agreement at the quarter-end and this does not include the $200 million available on an accordion basis, which is a feature in the loans agreement. Kevin that concludes our prepared remarks. We’d like to open up the call for questions.

Operator: Certainly. [Operator Instructions] Our first question is coming from Patrick Davitt from Autonomous Research. Please proceed with your question.

Patrick Davitt: Hi, good morning, thanks. In the last few year weeks, we’ve seen Goldman cut the fees on their entire range of money funds by about 3 to 5 basis points and in this week, we saw Legg indicate an attention to get a lot more aggressive on pricing in that product. I know you get this question every quarter, but I'm just curious if given those data points, if you could update your thoughts on increasing pressure on fees and the mutual fund side of the money fund business?

Chris Donahue: Thank you, Patrick. Yes, the pressure is constant and from my experience for decades has never really relented. And if you look at our funds on a gross basis and then of course on a net basis they are very, very competitive in the industry. So what others are doing for their fees, I really can't address, but we look very, very closely at these numbers pretty much every day to see what the world is doing and on a gross and net basis we're very, very comfortable with where we are, and very, very well aware of the fact of what is needed to maintain and enhance our money market business.

Patrick Davitt: Great, thanks. And my follow-up, historical patterns would suggest Ultrashort Funds becoming increasingly out of favor as rates go higher, we haven't really seen that happen yet already weakness in flows there, is there any reason that you think this rate cycle would be different for that product?

Chris Donahue: We don't have a specific reason to why it would be different, we do know that our sales of Ultrashort products this quarter versus the all of last year are up over $100 million on average. And I think at this point, I think you’d get a better answer to that if I let Debbie comment.

Debbie Cunningham: Sure Patrick. I think at this point like what we’re seeing is a rebound off of what’s been a very long and unusually low rate environment, zero for the short-end and for a very long period of time, and the ultrashort products were able to capture a pretty nice spread over that zero-rate environment for the better part of the last 10 years. And what we’re also working with in today's rising rate environment as a Fed that is telegraphing in a very specific and well processed way what their intentions are. The dot plot didn't exist in the last rising rate environment that we were in. So, I think both of those things are continuing to keep Ultrashort Funds in favor. In addition, when you look at our own Ultrashort products they are, you know the very short-end of the spectrum and quite honestly if you looked at money market funds prior to the last two re-writes of rule 2a-7 the Ultrashort Funds look a lot like those did then, which were constant NAV product, now obviously they are mark-to-market products that they are not constant NAV, but their movement has been not huge and the spread over the cash and liquidity products has been substantial enough to keep customers comfortable that that’s a good portion of their strategy for their liquidity bucket positions.

Tom Donahue: Patrick just one other thing on this April flow data that Chris mentioned, on the fixed income side, a meaningful part, a little more than half of the outflows we’ve seen in April is coming from the Ultrashort side of the equation, but we’ve seen that before in April and we relate that to tax seasonality.

Patrick Davitt: Very helpful. Thanks guys.

Operator: Thank you. And our next question is coming from Michael Carrier from Bank of America Merrill Lynch. Your line is now live.

Michael Carrier: Thanks guys. Hi Tom, just, first one just on the comp for the quarter and for the guidance, just seems like it’s probably a little bit higher than expected and I understand your point on the strong sales on the equity side, like how does that kind of get incorporated versus like the redemptions or the performance and how can that play out, meaning if your, you know your revenues are under pressure, will we see some flexibility in the comp, you know or is a lot of that being driven by the sales momentum?

Tom Donahue: Yes, Mike it’s a good question. If we have strong products, which we have, on a number of basis as Chris went through, particularly the small cap and the sales people, sales force is actually able to sell it then we get to, they get to earn more and we get to pay more and it doesn’t have anything to do with redemptions that would happen in other funds, which of course are going on as we all know about, and so I used to call it a success item when we were paying more out in incentive comp and it was a pretty good leading indicator to future that the products were successful. If that trails off then their comp would trail down, but we are looking at the performance and looking at what the sales force is producing and not expecting that to trail off.

Michael Carrier: Okay, thanks. And a follow-up, maybe for Chris, just on the equity products, when we look at the outflows in the quarter, you mentioned, you know kind of the weakness in strategic value dividend earlier in the quarter, just wanted to get some sense, was a lot of it like environmental, was it the performance, anything unusual and then on the small cap strategies where you are seeing positive flows in momentum, just any kind of context on capacity across those funds, just because in the industry obviously a lot of small cap funds have been closing, but it seems like you guys have more capacity.

Chris Donahue: Okay. Yes. On the first part of the question, we didn’t see anything unusual. The 10-year went to 3%, we didn’t own as much technology as others because they don’t pay dividends. We own the consumer staples that got whacked. So, that is nothing unusual. However, as I mentioned, we are still running a very strong product with respect to what we said we would do, which is to pay a good dividend and buy companies with growing dividends. And the way the portfolio manager team would look at it is that there is now a sale on dividends into the future. So, there was nothing unusual there. In terms of capacity on the small caps, none of these funds are in danger of threatening capacity at this point. On the philosophy of it, I would mention that when the PM teams determined that their act doesn't play any more than we would declare victory and have a close of a fund. But we’re not in danger of getting there any time soon.

Michael Carrier: Okay. Thanks a lot.

Operator: Thank you. Our next question is coming from Ari Gosh from Credit Suisse. Please proceed with your question.

Ari Gosh: Hi, good morning everyone. On the core expense base, excluding the comp and distribution, I think you were looking for pretty much flattish levels for most items heading into 2018, and now with the deal I was just hoping you could give us an update on your outlook for some of these core line items, excluding comp and distribution for 2018 and how we should think about the growth rate as we head into 2019?

Chris Donahue: For 2018, on the call when we announced the deal and we had the call, we talked about and the impact to 2018 of $0.20 and we haven't broken that out in terms of which line items it’s going to hit, and I don't think we are prepared to do that right now. In terms of 2019, the guidance that we said was – and also on the 2018 we just talked about cash and have that as an accretive from our view of cash of $0.05 and then in 2019 we said that our models showed a $0.02 basically reduction in EPS, and on a cash basis we said $0.16 [Ph] and I don't really have any updates on those numbers except we are spending the money, which I did mention about 1.5 million in Q1 of transaction cost on the deal.

Ari Gosh: Got it. And then just as a follow-up on the Hermes deal. So, it looks like their adjusted 2017 pretax numbers, the profit and EBITDA levels benefited pretty much from deferred comps and if I look at that line item it kind of was forex versus trailing periods. So, just curious if their legacy deferred comp is going to flow through your financials as best over the next 3 years to 4 years? Or if all of this was embedded in the deal price and this thus I could reset upon the deal closing?

Chris Donahue: That the historical [indiscernible] cost will not go through in the future in order they impact our calculation of EBITDA in the numbers that we gave on the call two weeks ago.

Ari Gosh: Thank you.

Tom Donahue: We looked at the transaction on, basically on a run rate basis and then did our estimates based on that.

Operator: Thank you. Our next question is coming from Ken Worthington from JP Morgan. Your line is now live.

Ken Worthington: Hi, good morning. Thank you for taking my questions. Maybe first for Debbie on the rate sensitivity and money fund customer behavior, so maybe one, are you seeing retail money move from banks to funds? May be two, are you seeing an impact from intermediaries moving client cash from funds back to the balance sheet? And then lastly on the institutional side, any evidence that money is moving from money market funds to the direct market? Thanks.

Debbie Cunningham: Sure. Let’s start with the first one, retail out of deposits and into fund. Yes, we're starting to see faster growth – let me capture it by saying we are starting to see faster growth in funds then the deposit market. So, if you looked at most recent statistics, the deposit market grew through I think it was February 2018 over the last year at a pace of 2.8%. The fund industry, the money market fund industry to a seven funds grew 6.5%. So, there are smaller basis so the dollars are actually out of lack because of that. The money fund dollars are smaller because it is half of $2.6 trillion base versus half of $10 trillion base for the deposit market. Nonetheless, the percentage growth is finally in the favor of the funds. Specifically, from our own clients’ perspective, we are seeing retail customers back into those products and out of deposit products, some into the government funds, more into the prime funds, and although there are not – many of them are not utilizing sweep option if you are still in that process, there are a lot of ticket trade that have been undertaken in that market. Going to the second part of your question from an intermediary standpoint, not seeing a whole lot of wholesale change from an intermediary perspective with their underlying clients cash. Again, more directed by what I would call the underlying client coming through more in the ticket trademark market not necessarily wholesale fleet changes along the intermediary line. And from an institutional market perspective that’s actually where we’ve seen the most amount of growth at least in prime institutional, government institutional is down a little bit in the first quarter, although down less on an industrial basis then what’s historically the case. Usually the first quarter is a very large outflow quarter from an industry standpoint and although it was down some, it was not a huge amount this first quarter, compared to others, but the institutional prime sector is actually the fastest growing sector from our experience as well for as from the industry's experience. So, rather than going into the direct market at this point it seems to be taking the path of going into that prime institutional market.

Ken Worthington: Okay. Great, thank you. And then just on the separate accounts side, elevated gross redemptions this quarter in fixed income and equity and I think Chris you mentioned one of the fixed income funds, but what where the products that were driving the elevated gross redemption side of the equation both on the equity separate accounts and the fixed income separate accounts? Thanks.

Ray Hanley: Ken, this is Ray, I mean on the separate account on the equity side as Chris mentioned, we did have elevated numbers there and that would have been, we did have a pickup on the SMA redemptions for strategic value, which we’re tracking that SMA in that separate account category. On the fixed income side, about two thirds of it wars from lower shorter duration fixed income mandates and on the lower fee side of it.

Ken Worthington: Okay, great. Thank you very much.

Operator: Thank you. Our next question is coming from Robert Lee from KBW. Your line is now live.

Robert Lee: Thank you. Good morning guys. Maybe just starting Tom just with the 1.5 million transaction cost flowing through the P&L in the quarter, shall we just assume that that kind of number is going to stick around at least in the next couple of quarters then maybe as we get to the end of the year kind of revert back to its historic range?

Tom Donahue: Then they get higher. They get a lot higher. Our guidance was $22 million in closing cost.

Robert Lee: And that will – I'm sorry, go ahead.

Tom Donahue: Just a tip – 1.5 million is just a tip of the iceberg.

Robert Lee: Okay. Thanks for the reminder. Could you maybe talk a little bit about distribution cell space, obviously continued large distributors winnowing down there their list and narrowing their focus, so could you maybe update us on kind of, how you feel like you're faring with that in the – at the larger distributors who are going through that process or maybe in any way you need that perhaps you're also thinking about or have retooled your distribution approach, particularly in the larger distributor channels?

Chris Donahue: We have retooled the distribution approach. We organized the sales department [indiscernible] came in, he spent good bit of time figuring out the lay of the land from his perch on the tree and the changes that occurred in the marketplace, and as of year-end there was restructuring. Now, we still have 213 consultants/sales reps in an about the country, but they were restructured and part of it was exactly to address the question you were on, which is what’s our approach to the platforms and how do we do that. And, so we enhanced the groups that are falling directly on the platforms and we have found this to be a very, very good situation. When we [indiscernible] of what was then the DOL drive various of the firms cut thousands of funds off of their list, we found that none of the key funds that we were after were cut, and in fact we’ve been able to add and preserve very, very good mandates at Federated. So, for example that whole list of MDT Small Cap Funds and even the Kaufmann Small Cap Fund were very important funds that were preserved and in fact being added to others as we speak. One of the other things we’ve discovered is that as you have top performing products of this type that helps you with your other funds and then we look at the arrangements with Hermes like we’ve already had discussions and questions for some of these platforms about when and how this can be integrated or when some of those products could be available as well. Obviously, we haven't even closed yet, so that’s a down the road deal, but that’s another enhancement to our ability to stay on and improve the product listings with the big firms.

Robert Lee: Right, great. And then maybe just one last question, I appreciate the color on kind of the nature of the strategic value product suite, but can you maybe just size for us at least in the SMA bucket, how big that strategy and its variations is relative to your equity SMA, your equity separate accounts is?

Tom Donahue: Well the SMA is around $22 billion.

Robert Lee: Great. Thanks guys. Appreciate it.

Operator: Thank you. Our next question is coming from Bill Katz from Citi. Your line is now live.

Ben Herbert: Hi good morning. It’s Ben Herbert on for Bill. Just wanted to touch on back to Hermes, and just if you are getting, you know you had mentioned the efforts to integrate some of their products, but any early feedback from gatekeepers beyond early plans?

Chris Donahue: Well as I just mentioned, we have had some preliminary discussions and comments from some of the so-called gatekeepers, I use the term flat platforms about when this could happen and what products we could look forward to. And we're just not prepared to go down chapter and verse on that because we haven’t closed and we don't know, which ones we would do that with. What we have – Hermes themselves has had excellent conversations with their client base and have gotten comments about the fact that it strengthens Hermes to have a U.S. distribution platform and they were happy with that, and some of their clients have mentioned that they see the clear growth potential that the transaction offers Hermes and a strong fit because of the lack of overlap from both the product and a distribution point-of-view. But I think at this point, the most important thing to focus on is that the people and the enterprise are excited and very positive about the arrangement and all of the fundamentals that you could look at point to a very complementary and positive growth potential as we march towards closing.

Ben Herbert: Thanks for that. And then maybe just a follow-up on investment spend or need there, the tick up in expense this quarter, but is there anything underlying pick-up and investment spend or also how you might be thinking about investment spend through the rest of the year, ex-Hermes?

Tom Donahue: You know, outside of the due diligence cost and the tech things to make sure we can connect on things we need to connect with and obvious fees that used to get spread out over years now get one-time expenses and then our plans for growth and Hermes plans for growth. I don't think we have things in our schedule or big upticks in expenses outside of that.

Ben Herbert: All right great, thank you.

Operator: Thank you. Our next question is coming from Kenneth Lee from RBC Capital Markets. Please proceed with your question.

Kenneth Lee: Thanks for taking my question. Just a quick follow-up on the equity flows in the first quarter. Were there any sizeable institutional redemptions that you would like to call out that were – any meaningful drivers within those flows?

Chris Donahue: No. Ken there was kind of, there were some activity on the institutional side, but nothing really outsized. As we talked about earlier, the bulk of the separate account outflows came from the SMA side of strategic value, and so there wasn’t – the institutional activity as Chris mentioned, we actually had a pretty good uptick in our RFP activity during Q1 and the strategies they are performing pretty well. So, no there weren’t anything to point too.

Kenneth Lee: Okay. And just one more on the – in terms of the money market fund, maybe any comments on seeing any kind of incremental flows from cash repatriation from overseas post tax reform? Thanks.

Chris Donahue: Right out of the box we had several large clients that make deposits of meaningful amounts. So, we’ve seen some of it already and I will let Debbie give you her report on that.

Debbie Cunningham: To date I would characterize it as being very short lived. So, what Chris is referencing, certain companies, large blocks coming in remaining for a short period of time and going back out, presumably those were firms that sort of had a hint as to what was going to happen from a repatriation perspective and knew what they had, how they were going to use that cash once it came back into the U.S., whether they were paying a special dividend, whether they were buying back stock what have happens to be, they were, they had a specific use for that cash and it sat in liquidity products, money market funds for a short period of time only. In speaking with clients that have not confirmed any amounts from a repatriation perspective, but have every intention of doing so it seems as though there is quite a lot on the table for reviewing just exactly how they do want to use it, whether it is better off staying where it is for some portion of it, whether they need it for a certain purpose or whether it can be used more for general balance sheet purposes once it’s back in the U.S. and I think there is a, I’d say probably at least 80% of those that could potentially be impacted by the repatriation are still in that mode at this point.

Kenneth Lee: Okay, great. Very helpful. Thanks.

Operator: Thank you. We've reached the end of our question-and-answer session. I like to turn the floor back over for any further closing comments.

Ray Hanley: Well thank you for joining us today. We appreciate your time and this concludes our remarks.