Commitments and Contingencies

(a) Contractual

Federated is obligated to make certain future payments under various agreements to which it is a party, including debt and operating leases (see Note (9) and Note (15), respectively). The following table summarizes minimum noncancelable payments contractually due under Federated's significant service contracts and employment arrangements:



	Payments due in

in millions	2018		2019		2020		Total
Purchase obligations¹	$	12.6	$	5.5	$	2.4	$	20.5
Employment-related commitments²	10.7		3.9		2.3		16.9
Other obligations	2.4		1.0		0.1		3.5
Total	$	25.7	$	10.4	$	4.8	$	40.9

Federated is a party to various contracts pursuant to which it receives certain services, including services for marketing and information technology, access to various fund-related information systems and research databases, trade order transmission and recovery services as well as other services. These contracts contain certain minimum noncancelable payments, cancellation provisions and renewal terms. The contracts require payments through the year 2020. Costs for such services are expensed as incurred.


2	Federated has certain domestic and international employment arrangements pursuant to which Federated is obligated to make minimum compensation payments.

In addition to the $16.9 million of employment-related commitments included in the table above, Federated may be required to make certain compensation-related payments through 2023 in connection with various significant employment and incentive arrangements. Based on asset levels as of December 31, 2017 and performance goals, incentive payments could total up to another $31 million over the remaining terms of these arrangements.

In 2017, Federated refinanced the Prior Credit Agreement and is no longer committed to make quarterly principal payments. Outstanding principal is to be paid no later than the expiration date of the Credit Agreement. See Note (9) to the Consolidated Financial Statements for additional information.

(b) Guarantees and Indemnifications

On an intercompany basis, various wholly owned subsidiaries of Federated guarantee certain financial obligations of Federated Investors, Inc., and Federated Investors, Inc. guarantees certain financial and performance-related obligations of various wholly owned subsidiaries. In addition, in the normal course of business, Federated has entered into contracts that provide a variety of indemnifications. Typically, obligations to indemnify third parties arise in the context of contracts entered into by Federated, under which Federated agrees to hold the other party harmless against losses arising out of the contract, provided the other party's actions are not deemed to have breached an agreed upon standard of care. In each of these circumstances, payment by Federated is contingent on the other party making a claim for indemnity, subject to Federated's right to challenge the other party's claim. Further, Federated's obligations under these agreements may be limited in terms of time and/or amount. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of Federated's obligations and the unique facts and circumstances involved in each particular agreement. As of December 31, 2017, management does not believe that a material loss related to any of these matters is reasonably possible.

Federated has claims asserted and threatened against it in the ordinary course of business. As of December 31, 2017, Federated does not believe that a material loss related to these claims is reasonably possible.

See Item 1A - Risk Factors under the caption Potential Adverse Effects of Litigation, Investigations, Proceedings and Other Claims for additional information regarding risks related to claims asserted or threatened against Federated.