Good morning. My name is Stephanie and I will be your conference operator today. At this time, I would like to welcome everyone to the Eaton Vance First Quarter 2015 Earnings Release Audio and Webcast Conference Call. All lines have been placed on mute to avoid any background noise. After the speakers' remarks, there’ll be a question-and-answer session. [Operator Instructions] Thank you. Dan Cataldo, Treasurer, you may begin your conference.

Thank you and welcome to our fiscal 2015 first quarter earnings call and webcast. Here this morning are Tom Faust, Chairman and CEO of Eaton Vance, and Laurie Hylton, CFO of Eaton Vance Corp. We will first comment on the quarter and then we will take your questions. The full earnings release and charts we'll refer to during the call are now available on our website, eatonvance.com under the heading, Press Releases. Today’s presentation contains forward-looking statements about our business and financial results. The actual results may differ materially from those projected due to risks and uncertainties in our business including, but not limited to those discussed in our SEC filings. These filings, including our 2014 Annual Report and Form 10-K are available on our website on request at no charge. I’ll now turn the call over to Tom.

Good morning and thank you for joining us. Eaton Vance reported adjusted earnings per diluted share of $0.61 for the first quarter, an increase of 5% over $0.58 of adjusted earnings per diluted share in the first quarter of fiscal 2014 and a decrease of 10% from $0.68 in the fourth quarter of fiscal 2014. As Laurie will explain in more detail, the sequential decline in adjusted earnings per diluted share primarily reflects lower performance fees received and seasonally higher employee benefit cost and stock-based compensation. We finished the quarter with managed assets of $295.7 billion, up 6% from a year ago and down 1% from the end of the fourth quarter. In the first quarter, we had net inflows of 1.4 billion which equates to a 2% annualized internal growth rate. You will notice in our press release and call slide tables that we now breakout assets and flows for what we used to call implementation services into two categories. Portfolio implementation and exposure management. Portfolio implementation consists of three parametric offerings, Tax-Managed Core, Centralized Portfolio Management and Specialty Indexing. These businesses, Parametric implements portfolios according to client specified directions, seeking to add value through efficient trading and as appropriate ongoing tax management. Tax-Managed Core is the largest fastest-growing and highest average fee component of this category, accounting for slightly less than 50% of total category assets. Exposure management is a parametric franchise added in the December 2012 acquisition of the former Clifton group. For those not familiar with this business, Parametric's exposure management services utilized futures options and other derivatives to help clients add or subtract specified market exposures to their underlying portfolio positions to reduce cash drag, better match the duration of assets and liabilities and facilitate more efficient and flexible management across their portfolios. It's a…

Thank you and good morning. As Tom mentioned we are reporting adjusted earnings per diluted share of $0.61 for the first quarter fiscal 2015, compared to $0.58 for the first quarter of fiscal 2014 and $0.68 for the fourth quarter of fiscal 2014. On the GAAP basis we are and $0.24 per diluted share in the first quarter fiscal 2015, $0.56 in the first quarter fiscal 2014 and $0.66 in the fourth quarter of last fiscal year. As you can see in attachment two of our press release adjustments from reported GAAP earnings in the first quarter of fiscal 2015 primarily reflect a one-time payment made to terminate certain closed-end funds service and additional compensation arrangements. Were adjustments in the first and fourth quarters to fiscal 2014 primarily reflect changes in the estimated redemption value of non-controlling interest in our affiliates that are redeemable at other than fair value. In the first quarter of fiscal 2015, we announced that we have mutually agreed with one of our distribution partners to terminate service and additional compensation arrangements in place for certain closed-end funds. Terms of those arrangements require the company to make recurring payments over time based on the managed assets with respective funds. The termination payments, which totaled $73 million pretax, is included as a component of distribution expense in our summary of results of operations. We anticipate that terminating these arrangements will reduce distribution expense by roughly $0.07 per diluted share annually. Excluding the effect of the one-time payment, our operating margin decreased to 34.8% in the first quarter, from 37.8% of the fourth quarter of fiscal 2014, primarily reflecting seasonal compensation expense and performance fee effects. Our first quarter revenue decreased 4% sequentially and 1% year-over-year, reflecting a decrease in investment advisory and administrative fees as well as…

[Operator Instructions] Our first question comes from Michael Kim with Sandler O'Neill. Please go ahead.

Hey, good morning guys. This is actually Andrew Disdier sitting in for Michael. First, just wondering if you could give us some color on demand trends across the institutional channel? Really, in terms of de-risking, moving into passive from an asset allocation standpoint? And then, more specifically, which of your strategies are more in play and really any comments on RFP activity or the pipeline?

I mentioned - this is Tom - I mentioned that we have a robust pipeline. We have some visibility on the retail side, but that tends to be - generated pipeline tends to have more visibility on the institutional side. So, I'll comment on our pipeline and maybe fill in the gaps, as to which of those are institutional versus retail. But mostly, this is on the institutional side. We do have a quite robust pipeline as I mentioned. Several areas that we expect to see significant inflows. One of them is Parametric's emerging market equity strategy where we've recently had a large institutional win. We also have a - for their - what they call delta shift, which is a managed options program. We have a large win that we expect to begin funding over the next couple of months. Multi-sector income is an area where we also expect to see a large mandate funding soon. We have a cash management mandate, multi $100 million mandate that we expect to fund in the next few weeks. On an overall basis, we have a multi-billion dollar pipeline that's broadly diversified across strategies. The ones I just mentioned for the biggest single pieces contributing to that. As yet, active equities are not an area of particular strength for us in terms of flow outlook. That may reflect a broader active to passive trend, but also I’m sure reflects to some degree the fact that we are still recovering, in terms of our equity performance after a period of weakness in the 2010 to 2013 period. So, I'm not sure we’re in a great position to offer a look into the broader trends in active versus passive. We’re still a relatively small player in the institutional. The areas where we have strength they are not necessarily representative of the overall broad market, but that's a sense of where we are and what we see, based on where we have visibility for the next couple of quarters.

Great. Thanks. It's helpful. And then maybe a question for Laurie, how are you thinking about compensation expense looking forward. I know you spoke a little bit about the past really in the context of headcount growth and incentive income accruals.

Yeah. I think I mentioned in my comments that we had about 3.8 million of what we are considering sort of seasonal adjustments relating to 401(k) fundings, accelerations of stock-based compensation associated with retirements and payroll tax resets. Obviously, as we move into the first quarter, we also had base salary increases which are now fully baked into our first quarter numbers and I would anticipate would certainly continue through the rest of the fiscal year and we reset our operating income based incentive accruals and that’s -- we go through the year were we're accruing at rates of operating income. We adjust as we go throughout the year in order to ensure that we're adjusting by the end of the year to what we anticipate we will actually pay out and then we look to the New Year and we reset our accrual rate. So the accrual rates have been reset modestly higher from the numbers that we were looking at in the fourth quarter, but substantially higher. I think that our operating income based incentive increase from the fourth quarter to first quarter were about $2.8 million. So, it's not a big number by any stretch. But, I think that we've been giving very broad guidance in terms of comp and looking at that as a percentage of revenue and I think we're something in that 33% or just North of 33% range. I wouldn't anticipate that we are going to see significant changes in that as we move through the fiscal year.

I might add a couple of things. This is Tom, again. One area that we've highlighted of increased spend, and some of which will show up in comp, but some of which will show up in consulting and other expenses, is related to our NextShares initiative, where we've signaled that that will be ramping up over the course of the year. I would also mention that we are consistent with the plan that we've put in place, when Eddie Perkin was hired nine months ago or 10 months ago. That we're looking potentially to add new equity investment professionals under Eaton Vance management, taking advantage of opportunity we see to grow up that business, taking advantage of the improving performance here, but also Eddie's experience investing outside the United States.

Our next question comes from Craig Siegenthaler with Credit Suisse. Please go ahead.

I have a few follow-ups here on NextShares. Question one, what are your expectations for additional sign-ups this year now that you have three signed up to date? Also, can you talk about why we have not seen any large asset managers sign-up yet? And then my third, if I can just squeeze it in is, when can Gabelli and American Beacon launch their first nontransparent CTS? Is that something we should expect in the second half of this year?

So I'll just start in on those and if I forget something, just remind me. So we announced that we actually have five licensees. So Eaton asset-management, which maybe you are excluding the three that we've named our American Beacon, GAMCO or Gabelli and announced earlier today with the Hartford Fund. There is a fifth or fourth depending on how you look at it that has signed, that has not yet really release that information which we expect to come shortly over the next few days. We are relating to the timing of the introduction by the firms that have filed. Let me just go through the remaining steps for them and also, the Eaton Vance to get into the marketplace. First, there is a requirement that every licensee file and get approval for an Exemptive Application. American Beacon has filed their application recently, just in the last couple of days. They filed a very small amendment to that, which I think should be viewed as a sign of progress that they are making with regulators. I don't believe that Gabelli has yet filed, but I understand that they are working on it. Hartford, since they just filed today. It's maybe a sign with us within the next 24 hours, maybe a little premature to expect action, there. But they are all aware that the first step, really, in a regulatory sense in getting into the market is filing an Exemptive Application. Just as a reminder, that is a four, five page form that says, an effect, that the licensee, the applicant will agree to abide by the terms and conditions of the order that was submitted to Eaton Vance back in December. So, we expect that to be a simple and easy approval process. There is no guarantee in…

Larger asset managers. I was wondering if maybe the relationship with Precidian and was blocking some of the larger ones BlackRock, Invesco, State Street or maybe the fact that your public competitor may be another issue or with a larger guys?

I wouldn't want to speculate on the reasoning. I think the biggest issue we face, is that the larger firms tend to have, generally, a bigger staff and more people involved in the process. We are engaged in -- talking to companies of all sizes including the very largest firms. I'm not aware of any competitors that have current agreements with Precidian. I believe the applications that were there using their technology have all been withdrawn. Perhaps, that's change, but that's my understanding. But, know. We see no impediment arising from the fact that Eaton Vance is a public asset manager or, in a sense, a competitor to all the other players in our business. We make the case that arrangements where one asset manager relies on another, what is in effect a competitor for technology or for distribution, or for other things, is today, quite common. Eaton Vance has an overall market share of less than 1% in the fund industry. I don't think that the biggest companies will view us as may be a real significant threat to their business. We'd like to change that. But, I don't see that is changing overnight. I don't honestly think that's a significant factor. As we see it, there is a little bit of an issue of who wants to be first in this and there is little bit of an issue - the bigger the firm tends to be, to have more complicated, more complex decision-making process and governance. But, we're optimistic that we will see many firms, many additional firms as licensees over the coming weeks, including potentially firms that are substantially larger than Eaton Vance, ourselves.

Great, Tom. Thanks for all the color.

Your next question comes from Michael Carrier with Bank of America. Please go ahead.

Thanks. I guess, maybe a question for Tom, when I look at the year-over-year trends, and you've hinted at a lot of the drivers. But, look at the average AUM, significant decent growth obviously, the fee rate has come under pressure. And to the operating income, is relatively flat year-over-year. So, I guess what I'm just trying to understand is, if we think that the flows into the areas that have been strong, so whether it’s Parametrics or some of the other product areas, remain healthy, are you getting to a certain level of scale in some of those product areas where like the operating leverage can start to improve in this product despite the lower average fee rate? And then I guess on the flip side, when I think about the areas that you've seen, the net outflows, whether it’s on the equities, the floating rate, the alternatives, when you think about 2015, and you hit on this in your remarks. When you see the improving trends, do think it's going to be driven more on the sales front, or improving redemptions, just any color on those two fronts so we get a sense of not only the revenue outlook but also the operating income?

Yes. I guess, on the first part of that, is the profitability of Parametric and some of the lower fee franchises that we have. I would say on an overall basis, Parametric is quite profitable and we have scale in most of the things they do, including close to $60 billion in exposure management business. Well, that's not -- it's five basis point business but it's a $30 million round way revenue franchise. They are at scale. It is nicely profitable. It's very good business that's growing rapidly and is a highly coveted relationship and service by many of the most sophisticated institutional investors in the United States. We see huge potential to grow that business, not only by continuing to build out in the United States, but, potentially, to take that capability outside the United States. We also see that as offering a significant opportunity to offer other services from within Parametric to those same high-value clients. So, we wish it were a higher fee business, but the fact that it's a five basis point average fee rate does not mean that we're operating at low levels of profitability and does not mean that in a revenue sense, that this is not a scaled business. More broadly, across Parametric, I would say that we have significant scale in emerging market equities, which is a $20 billion franchise at nice fees. We have significant scale in Tax Managed Core, which I think it says $23 billion in assets under management on an overall basis. It's a business whose profit margins, I think most anyone in our business would be happy to accept. I would say that may be expanding your question a little bit, we've talked about in recent quarters, a number of our emerging franchises, which we've identified as focused on four of those. One is our multi-sector income strategy led by Kathleen Gaffney here in Boston. A second is our municipal bond ladders which is run by our [Tabs] [ph] Group in New York. The third is the defensive equity strategy that's run by the former Clifton team in Minneapolis under Parametric. And the fourth is our relationship with Richard Bernstein Advisors to support a range of sub-advised funds. All of them because they are still relatively small, those businesses are in a position where margins are not what we would expect them to be as they build out to scale. So, I would say those are the places where potentially we have the ability to see margin expansion as those businesses scale collectively, today. They are $10 billion, as they grow to $20 billion and $50 billion, which we think our reasonable targets over some timeframe. We will see not only revenue growth, but we will also see disproportionate growth in margins related to that. So, remind me of your second question. What was the other thing you asked about?

I think you hit on it. It was -- margins on the one side and then on the areas that aren't on the low fee products, where do you see the upside potential? You noted the four areas.

Okay. I would guess on an overall basis, the thing that's going to have the most impact on us over the balance of the year, in terms of everything, in terms of flows, in terms of revenues, and margins, is what happens with bank outflows. And if we see a nice snapback in bank loan flows at the market, again comes around to the view that short rates are likely to go up and that long rates impose interest rate risk on investors that don't exist for bank loan investors, I think that's where we have probably the greatest near-term leverage to see swings inflows, swings in revenues and swings in profitability because, that is a business that, for us, is a very high scale, the fees are good. So, that's probably where we have the most short-term leverage, is in terms of hoping for -- and in some ways expecting to see a turn of the business. I don't necessarily see is going back to the races like where we were in 2013. But, I'd be quite surprised if we don't see a significant abating of outflows and the beginning of positive inflows over the coming months.

Your next question comes from Chris Shutler with William Blair. Please go ahead.

Hi. This is actually Andrew Nicholas filling in for Chris Shutler. Thanks for taking my questions. First, I was wondering if you could give a rough sense for how you're AUM in bank loan mutual funds breaks down by distribution channel? So, maybe how much is [BDs] [ph] versus our IAAs, self direct retail, et cetera. And then also given some potential liquidity concerns, are you aware of any of the big platforms that are recommending advisors avoid that asset class, or if there's been any development there?

Maybe these guys have some more detail. Self-directed retail, probably rounds to approximately zero, in terms of -- and -- so that one. The second I would say we're not aware of major platforms that have put a halt or a hold on bank loan investments. I think what probable what you are referring to is the fact that in customary secondary market trading, bank loans trade it settle with settlement cycles that our experiences something like seven days on average on sales, which is longer than the time period for mutual funds to meet redemptions. We've been doing this for decades. We believe we have pieces in place, steps that we've taken to allow us to get through periods of accelerated redemption without any interruption in the ability to meet daily liquidity needs. So we’ve just gone through a period of quite strong redemptions. We had no period of interruption and availability of funding. We understand that there are industry initiatives in place that will result in a shortening of settlement cycles. So, while that is happening, that sends a positive signal to the market and regulators that kind of anomaly or quirk of history that makes bank loan settlements time longer than it is for other fixed income assets. I think, over some time, that that gets corrected. I think we'll see significant steps in that direction in 2015. So, this is an issue that we and other leaders in that business certainly are focused on trying to address. We see it as a manageable problem. But, ultimately, how we want to see this asset class work is not with a settlement cycle that significantly longer than it needs to be an significantly longer than other income asset classes. So, it hasn't been a problem for us in operational sense. We don't really think it's been a significant factor in the patterns of inflows and outflows, redemptions that we've seen. I ask our guys that run investment, run our sales teams what's driving the outflows then it's mostly driven by expectations about interest rates, both long-term and short-term and that to the extent that people are reading the newspaper or industry pieces about the phenomenon you are talking about, it's very much a secondary or tertiary issue that we don't think is weighing on investors, nor do we think it should weigh on investors. We think this is something that we and other leading managers in the asset class are well-prepared to deal with and that the problem or the issue is likely to be significantly addressed over the course of 2015 through structural changes that we believe are now ongoing. In terms of the mix of -

Across distribution channels, the major warehouses versus independence versus sub-advisory relationships I would say, it's quite broad. There is no significant focus on any particular channel. If you look at our 38, almost 39 billion in AUM, 20 - just under 20 billion are in our retail mutual funds. And again, those are broadly held across distribution channels, the balance of the AUM and co-mingled institutional accounts, as well as sub-advisory relationships and institutional separate accounts. So, I would say, really broad-based acceptance of the asset class across pretty much all our distribution.

Thank you very much. That's helpful. And then second, and I apologize if this is something you already touched on in your prepared remarks. But, I believe you said you are not targeting the second half of 2015 for the launch of Eaton Vance's products under the NextShares format. And I was just curious, how you would kind of describe the main primary reasons for pushing back that timeline, if it's specific to technology or NASDAQ or whatever it may be. I was wondering if you could provide some color there.

So, there are a lot of things here that are beyond our control. We’re doing everything we can to push this forward, as I described in my prepared remarks, or maybe elaborate on in response to a question. There is a significant process involving the SEC that we don't have any control over. There are a couple of additional approvals that we need. There are also steps that need to be taken by NASDAQ to permit within their systems, the accommodation of this NAV base trading approach that we’re doing and also broker dealers need to be in a position to accommodate that. As I mentioned, the plan would be for a multiple firms to be involved in launching at the same time. That would be the idea. We can't necessarily control that. But, so need, if we’re going to do that, we need not only Eaton Vance, but also other fund companies to have approvals at the same time. So, it's fluid. I wish I could tell you that the launch is going to happen on June 30, 2015 or November 15, 2015. But, that's not the way the world works. There are lots of things that have to come together. I can assure you that we are working as hard as we can on what we see as the critical path items to get this in the market as soon as we can. We see tremendous investor benefit of the structure and also quite significant potential benefits to Eaton Vance shareholders, if we can build this out to a scaled business that is a significant part of the fund industry. Our success here is by no means assured that we are working hard. I think we're very pleased with - as we go around and talk to everyone, fund sponsors, distributors, market makers. The thing that most gratifies us is the degree, to which people seem to understand and accept the tremendous investor benefits that come with the structure. And that’s people also acknowledge that that's a great place to start. I think there is also a broad understanding that over the last 20 and 30 years, that there's been a significant evolution of fund structures towards structures that are more investor friendly, that are inherently lower cost and inherently more tax efficient. Certainly the ETF is a prime example of that. And people see this is playing exactly into that trend. But this is not going to be easy. There are many things that have to happen to make this a success. We've got, going forth, that it's a great product. The benefits, of which are broadly accepted and it ties in nicely with trends and distribution. But, that doesn't make it necessarily a lay out that we’re going to be successful there. So, working hard at it and doing everything we can to make this happen as soon as possible.

[Operator Instructions] Our next question comes from Ken Worthington with JPMorgan. Please go ahead.

I guess it’s still good morning. So I'm trying to figure out is how much skin in the game does an asset manager have when they sign-up with Eaton Vance as a partner for the NextShares? So is - some like Hartford or GAMCO, are they prohibited from working with another ETF provider if they partner with Eaton Vance for NextShares and is there anything that kind of walks these partners into launching NextShares if they sign up? So, is this a cheap option for these partners or I guess, is there a way to determine for us to determine if they are really committed and have strong confidence in the NextShares product?

No. The nature of the agreement is not exclusive. I don't think it would be realistic to expect us to be able to impose on licensee restrictions on their other fund and activities. So, they would be free to launch product, open end fund, closed end fund, ETF or any other product. There’s nothing that as a part of this agreement that ties their hands to do anything else. So, if that was your expectation, I think that was probably unrealistic. In terms of their commitment to this, I guess I would say all you can do is watch their behavior. Every firm that has announced the signing has also announced that it is their intent to introduce a family of NextShares funds and we can only take them on their word for that, but that's truly their intent. That could certainly change. This is, as you point out, this is a relatively low cost step for them to sign a term sheet and announce their intention to do this. They could change their mind. But, that's the way it works. So, if you're thinking that this is something less than an ironclad guarantee that they will come out with NextShares funds, absolutely. There is a lot of work to be done. There’s no guarantee that anyone will come out with NextShares funds. But, in all cases, based on our conversations with him, and I've been involved in this. We believe that there is a sincere commitment to sink these things through and introduce new products. And I believe that this is a superior technology for the delivery of active management to fund investors and that they want to be able to deliver that to their investors.

Okay, great. Thank you very much.

Our next question comes from Bill Katz with Citi. Please go ahead.

Hi, this is actually Ryan Bailey filling in for Bill. So I guess my question also relates to NextShares. We are wondering with regards to some of the funds, are you thinking that assets are going to be moving over from existing funds, or whether it's going to be sort of new AUM that's going to be picked up?

So there is not -- there's not a facility -- there wouldn't be a facility, at least immediately, for assets to be exchanged from an existing mutual fund or any other kind of fund into a NextShares fund. So, there would be a literal sense of sale of fund A and purchase of fund B. I can imagine in that some of that would be funded by moving out of the mutual fund equivalent of the NextShares version, but we would certainly hope that if it's a compelling product strategy and it's now available in a compelling structure, that that will attract significant new money, not just transfers over from a similar mutual fund. Overtime, I think as this structure is established in the marketplace and demonstrated to work in the way we expect it to, I think there's a distinct possibility that you'll see funds that are now structured as mutual funds convert into a NextShares structure through a shareholder vote. I wouldn't count on that any time soon, but longer term, there's a possibility of that kind of wholesale conversion through a shareholder vote. But, until we are ready to do that, I think that you should think about the flows into a NextShares fund as coming from two sources. One is what you might think of as a transfers, not literally exchanges, but transfers from out of a corresponding mutual fund that has the same management team, the same objectives, the same underlying approach. But, with a more efficient structure as NextShares. But I also would expect some significant amount of assets to flow incrementally into the strategy in this new structure. Remember, that across the fund industry, the mutual fund industry, typical holding periods are, let's say, three years to four years -- for us, maybe four years. So, roughly 25% of the money in mutual funds is in motion every year. So, think about us as trying to capture for NextShares, not just the conversions from like strategies as fund, but also a share of that money in motion that's there and hopefully in some cases, we can help drive that by offering better performance and better tax efficiency than competing mutual funds can offer.

Great. Thank you very much.

Your next question comes from Eric Berg with RBC Capital Markets. Please go ahead.

There's been discussion on this call as to whether Eaton Vance has signed up a well-known fund manager. It occurred to me that over the years, many of the Hartford Funds, if not most of them, both on the equity side and the fixed income side have been managed by the Wellington Management Company. I consider them big, is an important. My question is, is that what is happening here, namely that’s effectively Wellington has signed on to the concept?

I guess you could say that. As you point out the Hartford Funds exist primarily as a distribution channel for Wellington. So, I suppose you can read that into this. Our agreement is with Hartford, not Wellington. But, I'm quite sure that people at Wellington were significantly involved in the process of vetting this new type of fund for their strategies.

Thank you.

Your next question comes from Daniel Fannon with Jefferies. Please go ahead.

Thanks. Just a quick one on actually performance fees. Can you give a sense of how the sort of the 4Q number compared year-over-year? I think its 6.3 million. And has you disclosed any of the fund strategies that are eligible for those performance fees?

Actually, the fourth quarter performance fees is actually almost exclusively one large institutional client, it's an emerging market client, Parametric. And I believe -- and I'm just pulling my numbers here, the number this year in total for the fourth quarter was 6.3, if I remember correctly. If I remember correctly, the performance fee at the end of the previous fiscal year was in the three-point something million. But I can get you that.

I don't have the formula in front of me, but it's based on a multiyear performance measure. So, depending on what happens this year, we are going to be rolling on what this year is and rolling off. I think it's primarily a three-year measure.

I don't have the 2013.

It's very hard to predict. As a function of performance versus benchmark on a rolling, I think, three-year basis. So, we got a good head start. But will see what happens this year.

Okay. That's helpful. But just what I'm hearing, it's just one strategy, its not kind of a compilation, is that correct?

There are a couple of other small clients that also have a performance - fourth quarter performance but nothing in comparison, it's largely one largest client.

So it's dominated by one client and one strategy. There are other ones but that's the one that accounts for the line share of the money.

Understood. That's helpful. Thank you. That's it for me.

Your last question comes from Robert Lee with KBW. Please go ahead.

Hi, guys. This is actually Andrew Donnantuono filling in for Rob. Thanks for taking a questions. Just sticking with the NextShares theme. Its clear that you have purposely gotten five sponsors signed on. I wanted to hone in a little bit more on the distribution side. Specifically, what types of reservations and concerns have been raised by distribution partners? Whether it's potential lost distribution fees or just kind of the logistics of the NextShares product. How have those conversations gone?

I'd say they are going well. It is a conversation. It's not - we tell them this needs to be done and they go do it. That's not the way our business works and we don't have that kind of relationship with our distribution partners, related to anything. I would say the conversations are going well. The good part is - and this is repeating some things I said earlier - a good part is, they really get the investor benefits of this. There is zero pushback on the assertion that we make that this is fundamentally a better product for their clients. In terms of lower cost, in terms of better performance, in terms of tax efficiency I would argue a better social contract among long-term investors versus traders in and out of the fund. We also get zero pushback that this fits well with trends in distribution that are already in place when I started my careers back in the dark ages, 30 years ago, Eaton Vance sold its funds exclusively with the front-end load. And over the years, we've gone far, far away from that, to the point that today, roughly 70% of our funds sales are not only no load, but also no 12b-1 fees, no distribution and service fees. So, for a financial advisor and a firm that is offering mutual funds, primarily according to today's predominant model of no front-end load, no backend load, no 12b-1 fees, this is not a huge leap versus what they are doing today. I guess the hesitancy on the part of broker dealers to say we are going to drop everything and make this work, and primarily it relates to the fact that as of this point, it’s still a fairly small group of fund firms that are…

Okay. Great. Thanks, Tom. I appreciate that context.

There are no further questions at this time. Dan Cataldo, I turn the call back over to you.

Great. Thank you very much and thank you all for joining us this morning and your continued interest in the Eaton Vance. We'll talk to at the end of next quarter. Thank you.

Thank you. This concludes today's conference call. You may now disconnect.