EATON VANCE CORP - FORM 8-K - EX-99.1 - PRESS RELEASE

Attached files

file	filename
8-K - EATON VANCE CORP 8-K 8-17-16 - EATON VANCE CORP	evc8k_8k.htm

News Release

Contacts: Laurie G. Hylton 617.672.8527

Daniel C. Cataldo 617.672.8952

Eaton Vance Corp.

Report for the Three and Nine Month Periods Ended July 31, 2016

Boston, MA, August 17, 2016 – Eaton Vance Corp. (NYSE: EV) today reported earnings per diluted share of $0.55 for the third quarter of fiscal 2016, a decrease of 4 percent from $0.57 of earnings per diluted share in the third quarter of fiscal 2015 and an increase of 15 percent from $0.48 of earnings per diluted share in the second quarter of fiscal 2016.

The Company reported adjusted earnings per diluted share⁽¹⁾of $0.56 for the third quarter of fiscal 2016, a decrease of 2 percent from $0.57 of adjusted earnings per diluted share in the third quarter of fiscal 2015 and an increase of 17 percent from $0.48 of adjusted earnings per diluted share in the second quarter of fiscal 2016. In the third quarter of fiscal 2016, adjusted earnings differed from GAAP earnings by $0.01 per diluted share to reflect $2.3 million of structuring fees paid in connection with the $215 million initial public offering of Eaton Vance High Income 2021 Target Term Trust in May.

Gains (losses) and other investment income related to seed capital investments contributed $0.01 and $0.02 per diluted share in the third quarter of fiscal 2016 and the second quarter of fiscal 2016, respectively, and were negligible in the third quarter of fiscal 2015.

Consolidated net inflows of $7.1 billion in the third quarter of fiscal 2016 represent a 9 percent annualized internal growth rate (consolidated net inflows divided by beginning of period consolidated assets under management). For comparison, the Company had consolidated net inflows of $3.9 billion in the third quarter of fiscal 2015 and $2.1 billion in the second quarter of fiscal 2016.

“Eaton Vance’s third quarter earnings improved sharply over the preceding quarter, reflecting favorable market movement, positive organic revenue growth and continuing tight expense control.” said Thomas E. Faust Jr., Chairman and Chief Executive Officer. “Our mix of strongly performing active strategies and value-added passive products and services positions us well for this challenging period for investment managers.”

Consolidated assets under management were $334.4 billion on July 31, 2016, up 7 percent from $312.6 billion of consolidated managed assets on July 31, 2015 and up 5 percent from $318.7 billion of consolidated managed assets on April 30, 2016. The year-over-year increase in consolidated assets under management reflects net inflows of $19.0 billion and market price

⁽¹⁾Although the Company reports its financial results in accordance with GAAP, management believes that certain non-GAAP financial measures, while not a substitute for GAAP financial measures, may be effective indicators of the Company’s performance over time. Adjusted net income and adjusted earnings per diluted share reflect the add back of adjustments in connection with changes in the estimated redemption value of non-controlling interests in our affiliates redeemable at other than fair value (“non-controlling interest value adjustments”), closed-end fund structuring fees, payments to end closed-end fund service and additional compensation arrangements, and other items management deems non-recurring or non-operating, such as special dividends, costs associated with retiring debt and tax settlements. We provide disclosures of adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share to reflect the fact that our management and Board of Directors, as well as our outside investors, consider these adjusted numbers a measure of the Company’s underlying operating performance. Management believes adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share are important indicators of our operations because they exclude items that may not be indicative of, or are unrelated to, our core operating results, and may provide a better baseline for analyzing trends in our underlying business. See reconciliation provided in Attachment 2 for more information on adjusting items.

appreciation of $2.8 billion. The sequential increase in consolidated assets under management reflects net inflows of $7.1 billion and market price appreciation of $8.7 billion.

Average consolidated assets under management were $324.9 billion in the third quarter of fiscal 2016, up 5 percent from $309.8 billion in the third quarter of fiscal 2015 and $309.5 billion in the second quarter of fiscal 2016.

Excluding performance-based fees, annualized effective investment advisory and administrative fee rates on consolidated assets under management averaged 35.7 basis points in the third quarter of fiscal 2016, down 8 percent from 39.0 basis points in the third quarter of fiscal 2015 and substantially unchanged from 35.8 basis points in the second quarter of fiscal 2016. The decline in average advisory and administrative fee rates year-over-year primarily reflects shifts in the Company’s mix of business.

Attachments 5 and 6 summarize the Company’s asset flows by investment mandate and investment vehicle. Attachments 7, 8 and 9 summarize the Company’s ending consolidated assets under management by investment mandate, investment vehicle and investment affiliate. Attachment 10 shows the Company’s average annualized effective investment advisory and administrative fee rates by investment mandate.

As shown in Attachments 5 and 6, consolidated sales and other inflows were $31.6 billion in the third quarter of fiscal 2016, down 4 percent from $32.8 billion in the third quarter of fiscal 2015 and up 14 percent from $27.8 billion in the second quarter of fiscal 2016. Consolidated redemptions and other outflows were $24.5 billion in the third quarter of fiscal 2016, down 15 percent from $28.9 billion in the third quarter of fiscal 2015 and down 5 percent from $25.7 billion in the second quarter of fiscal 2016.

As of July 31, 2016, the Company’s 49 percent-owned affiliate Hexavest, Inc. (“Hexavest”) managed $14.4 billion of client assets, down 3 percent from $14.8 billion of managed assets on July 31, 2015 and up 1 percent from $14.2 billion of managed assets on April 30, 2016. Hexavest-managed funds and separate accounts had net outflows of $0.5 billion in the third quarter of fiscal 2016, $0.5 billion in the third quarter of fiscal 2015 and $0.3 billion in the second quarter of fiscal 2016. Attachment 11 summarizes assets under management and asset flow information for Hexavest. Other than Eaton Vance-sponsored funds for which Hexavest is adviser or sub-adviser, the managed assets and flows of Hexavest are not included in Eaton Vance consolidated totals.


Financial Highlights
		Three Months Ended
		(in thousands, except per share figures)
		July 31,		April 30,		July 31,
		2016		2016		2015
Revenue		$	341,168	$	323,290	$	355,511
Expenses			234,443		227,522		238,778
Operating income			106,725		95,768		116,733
Operating margin			31.3%		29.6%		32.8%
Non-operating income (expense)			(4,131)		7,479		(7,584)
Income taxes			(39,781)		(36,169)		(43,435)
Equity in net income of affiliates, net of tax			2,961		2,377		3,260
Net income			65,774		69,455		68,974
Net income attributable to non-controlling
	and other beneficial interests		(2,875)		(14,488)		(265)
Net income attributable to
	Eaton Vance Corp. shareholders	$	62,899	$	54,967	$	68,709
Adjusted net income attributable to Eaton
	Vance Corp. shareholders⁽¹⁾	$	64,290	$	54,967	$	68,715
Earnings per diluted share		$	0.55	$	0.48	$	0.57
Adjusted earnings per diluted share⁽¹⁾		$	0.56	$	0.48	$	0.57

Third Quarter Fiscal 2016 vs. Third Quarter Fiscal 2015

In the third quarter of fiscal 2016, revenue decreased 4 percent to $341.2 million from $355.5 million in the third quarter of fiscal 2015. Investment advisory and administrative fees were down 4 percent, as lower average effective fee rates more than offset a 5 percent increase in average consolidated assets under management. Performance fees contributed $2.7 million in the third quarter of fiscal 2016 compared with $1.7 million in the third quarter of fiscal 2015. Distribution and service fee revenues collectively were down 7 percent, reflecting lower managed assets in fund share classes that are subject to these fees.

Operating expenses decreased 2 percent to $234.4 million in the third quarter of fiscal 2016 from $238.8 million in the third quarter of fiscal 2015. Decreases in compensation, service fees and fund-related expenses were partially offset by slightly higher other operating expenses. The decrease in compensation expense reflects lower stock-based compensation accruals and other compensation costs. The decrease in service fee expense reflects lower average assets under management in fund share classes subject to service fee payments. The decrease in fund-related expenses reflects lower sub-advisory fees paid and reduced fund subsidies, as well as lower fund expenses borne by the Company on funds for which it earns an all-in fee. Other operating expenses increased 1 percent, reflecting higher information technology and facilities expenses offset by lower professional services and travel expenses.

Expenses in connection with the Company’s NextShares™exchange-traded managed funds (“NextShares”) initiative totaled $2.4 million in the third quarter of fiscal 2016, an increase of 17 percent from $2.0 million in the third quarter of fiscal 2015. In May, Interactive Brokers Group, Inc., an automated global electronic broker and market maker, announced plans to offer NextShares to retail investors and financial professionals through its investing and trading platforms. In July, UBS Financial Services announced plans to offer NextShares through its financial advisor network to its wealth management clients. UBS Asset Management (Americas) also announced plans to develop and launch UBS sponsored-NextShares funds. Also in July, NEPC, LLC announced an agreement with Eaton Vance Management for NEPC to lead a selection process to identify investment managers to sub-advise a series of new Eaton Vance sponsored-NextShares funds to be offered to retail investors and financial professionals.

Operating income was down 9 percent to $106.7 million in the third quarter of fiscal 2016 from $116.7 million in the third quarter of fiscal 2015. Operating margin decreased to 31.3 percent in the third quarter of fiscal 2016 from 32.8 percent in the third quarter of fiscal 2015. Adjusted to remove the $2.3 million of structuring fees paid in connection with the May 2016 initial public offering of Eaton Vance High Income 2021 Target Term Trust, operating income in the third quarter of fiscal 2016 was down 7 percent from the third quarter of fiscal 2015 and adjusted operating margins in the current quarter were 32.0 percent.

Non-operating expense totaled $4.1 million in the third quarter of fiscal 2016 compared to non-operating expense of $7.6 million in the third quarter of fiscal 2015. The year-over-year change primarily reflects an increase of $4.0 million in gains and other investment income related to the Company’s investments in sponsored products.

The Company’s effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 38.8 percent in the third quarter of fiscal 2016.

Equity in net income of affiliates decreased to $3.0 million in the third quarter of fiscal 2016 from $3.3 million in the third quarter of fiscal 2015. In the third quarter of fiscal 2016, substantially all of the $3.0 million of equity in net income of affiliates related to the Company’s investment in Hexavest. Equity in net income of affiliates in the third quarter of fiscal 2015 included $2.9 million from the Company’s investment in Hexavest and $0.4 million from a private equity partnership.

As detailed in Attachment 3, net income attributable to non-controlling and other beneficial interests was $2.9 million in the third quarter of fiscal 2016 compared with $0.3 million in the third quarter of fiscal 2015.

Third Quarter Fiscal 2016 vs. Second Quarter Fiscal 2016

In the third quarter of fiscal 2016, revenue increased 6 percent to $341.2 million from $323.3 million in the second quarter of fiscal 2016. Investment advisory and administrative fees were up 6 percent, primarily reflecting a 5 percent increase in average consolidated assets and more fee days in the quarter. Performance fees contributed $2.7 million in the third quarter of fiscal 2016 and were negligible in the second quarter of fiscal 2016. Distribution and service fee revenues collectively increased 4 percent, reflecting higher managed assets in fund share classes that are subject to these fees.

Operating expenses increased 3 percent in the third quarter of fiscal 2016 from the second quarter of fiscal 2016. The increase in distribution expense primarily reflects the $2.3 million of structuring fees paid in connection with the May 2016 initial public offering of Eaton Vance High Income 2021 Target Term Trust. The increase in service fee expense reflects higher average assets under management in fund share classes subject to service fee payments. The increase in fund-related expenses primarily reflects increases in sub-advisory fees paid and higher expenses borne by the Company on funds for which it earns an all-in fee. Other operating expenses increased 3 percent primarily due to higher information technology expenses.

NextShares-related expenses increased 27 percent to $2.4 million in the third quarter of fiscal 2016 from $1.9 million in the second quarter of fiscal 2016.

Operating income was up 11 percent to $106.7 million in the third quarter of fiscal 2016 from $95.8 million in the second quarter of fiscal 2016. Operating margin increased to 31.3 percent in the third quarter of fiscal 2016 from 29.6 percent in the second quarter of fiscal 2016. Adjusted to remove the structuring fees paid in connection with the May 2016 initial public offering of Eaton Vance High Income 2021 Target Term Trust, operating income in the third quarter of fiscal 2016 was up 14 percent from the second quarter of fiscal 2016 and adjusted operating margins in the current quarter were 32.0 percent.

Non-operating expense totaled $4.1 million in the third quarter of fiscal 2016 compared to $7.5 million of non-operating income in the second quarter of fiscal 2016, reflecting a $0.6 million decline in gains (losses) and other investment income related to the Company’s investments in sponsored products and an $11.0 million decrease in income (expense) of the Company’s consolidated CLO entity.

Equity in net income of affiliates increased to $3.0 million in the third quarter of fiscal 2016 from $2.4 million in the second quarter of fiscal 2016. In the third quarter of fiscal 2016, substantially all of the $3.0 million in equity in net income of affiliates related to the Company’s investment in Hexavest. In the second quarter of fiscal 2016, $2.2 million of equity in net income of affiliates was attributable to the Company’s investment in Hexavest and $0.2 million of net income was attributable to a private equity partnership in which the Company invests.

As detailed in Attachment 3, net income attributable to non-controlling and other beneficial interests was $2.9 million in the third quarter of fiscal 2016 compared to $14.5 million in the second quarter of fiscal 2016.

Balance Sheet Information

Cash and cash equivalents totaled $378.2 million on July 31, 2016, with no outstanding borrowings against the Company’s $300 million credit facility. Included within investments is $98.6 million of holdings of short-term debt securities with maturities between 90 days and one year. During the first nine months of fiscal 2016, the Company used $205.0 million to repurchase and retire approximately 6.1 million shares of its Non-Voting Common Stock under its repurchase authorizations. Of the current 8.0 million share repurchase authorization, approximately 4.2 million shares remain available.

Conference Call Information

Eaton Vance Corp. will host a conference call and webcast at 11:00 AM eastern time today to discuss the financial results for the three months and nine months ended July 31, 2016. To participate in the conference call, please call 877-201-0168 (domestic) or 647-788-4901 (international) and refer to “Eaton Vance Corp. Third Quarter Earnings.” A webcast of the conference call can also be accessed via Eaton Vance’s website, eatonvance.com.

A replay of the call will be available for one week by calling 855-859-2056 (domestic) or 404-537-3406 (international) or by accessing Eaton Vance’s website, eatonvance.com. To listen to the replay, enter the conference ID number 60613114 when instructed.

About Eaton Vance Corp.

Eaton Vance is a leading global asset manager whose history dates to 1924. With offices in North America, Europe, Asia and Australia, Eaton Vance and its affiliates offer individuals and institutions a broad array of investment strategies and wealth management solutions. The Company’s long record of providing exemplary service, timely innovation and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today’s most discerning investors. For more information about Eaton Vance, visit eatonvance.com.

Forward-Looking Statements

This news release may contain statements that are not historical facts, referred to as “forward-looking statements.” The Company’s actual future results may differ significantly from those stated in any forward-looking statements, depending on factors such as changes in securities or financial markets or general economic conditions, client sales and redemption activity, the continuation of investment advisory, administration, distribution and service contracts, and other risks discussed in the Company’s filings with the Securities and Exchange Commission.


																Attachment 1
Eaton Vance Corp.
Summary of Results of Operations
(in thousands, except per share figures)


			Three Months Ended										Nine Months Ended
									%		%
									Change		Change
									Q3 2016		Q3 2016
			July 31,		April 30,		July 31,		vs.		vs.		July 31,		July 31,		%
			2016		2016		2015		Q2 2016		Q3 2015		2016		2015		Change
Revenue:

	Investment advisory and administrative fees		$	292,814	$	276,883	$	303,625	6	%	(4)	%	$	852,739	$	906,062	(6)	%
	Distribution and underwriter fees			18,883		18,275		20,285	3		(7)			56,216		61,369	(8)
	Service fees			27,150		25,794		29,265	5		(7)			80,203		87,573	(8)
	Other revenue			2,321		2,338		2,336	(1)		(1)			6,856		7,101	(3)
		Total revenue		341,168		323,290		355,511	6		(4)			996,014		1,062,105	(6)
Expenses:

	Compensation and related costs			121,827		121,519		124,400	-		(2)			365,856		364,667	-
	Distribution expense			31,616		28,239		31,300	12		1			88,338		167,649	(47)
	Service fee expense			24,831		23,610		26,978	5		(8)			73,036		81,116	(10)
	Amortization of deferred sales commissions			3,861		3,957		3,767	(2)		2			11,862		11,187	6
	Fund-related expenses			8,939		8,031		9,446	11		(5)			26,133		27,084	(4)
	Other expenses			43,369		42,166		42,887	3		1			127,671		120,888	6
		Total expenses		234,443		227,522		238,778	3		(2)			692,896		772,591	(10)
Operating income				106,725		95,768		116,733	11		(9)			303,118		289,514	5
Non-operating income (expense):
	Gains (losses) and other investment
		income, net		3,137		3,789		(850)	(17)		NM			9,766		2,299	325
	Interest expense			(7,342)		(7,340)		(7,344)	-		-			(22,024)		(22,017)	-
	Other income (expense) of consolidated
		collateralized loan obligation
		("CLO") entities:
		Gains and other investment
		income, net		4,467		13,908		1,771	(68)		152			21,654		5,284	310
		Interest expense		(4,393)		(2,878)		(1,161)	53		278			(9,107)		(2,966)	207
		Total non-operating income (expense)		(4,131)		7,479		(7,584)	NM		(46)			289		(17,400)	NM

Income before income taxes and equity
in net income of affiliates				102,594		103,247		109,149	(1)		(6)			303,407		272,114	11
Income taxes				(39,781)		(36,169)		(43,435)	10		(8)			(112,793)		(104,101)	8
Equity in net income of affiliates, net of tax				2,961		2,377		3,260	25		(9)			7,847		9,363	(16)
Net income				65,774		69,455		68,974	(5)		(5)			198,461		177,376	12
Net income attributable to non-controlling
and other beneficial interests				(2,875)		(14,488)		(265)	(80)		985			(22,209)		(9,280)	139
Net income attributable to
Eaton Vance Corp. Shareholders			$	62,899	$	54,967	$	68,709	14		(8)		$	176,252	$	168,096	5

Earnings per share:
	Basic		$	0.57	$	0.50	$	0.60	14		(5)		$	1.60	$	1.45	10
	Diluted		$	0.55	$	0.48	$	0.57	15		(4)		$	1.55	$	1.39	12

Weighted average shares outstanding:
	Basic			109,533		110,459		113,406	(1)		(3)			110,275		113,890	(3)
	Diluted			113,810		113,667		118,281	-		(4)			114,044		119,013	(4)

Dividends declared per share			$	0.265	$	0.265	$	0.250	-		6		$	0.795	$	0.750	6


													Attachment 2
Eaton Vance Corp.
Reconciliation of net income attributable to Eaton Vance Corp.
shareholders to adjusted net income attributable to Eaton Vance Corp.
shareholders and earnings per diluted share to adjusted earnings per diluted share

		Three Months Ended											Nine Months Ended
									% Change		% Change
		July 31,		April 30,		July 31,			Q3 2016 vs.		Q3 2016 vs.		July 31,		July 31,			%
(in thousands, except per share figures)		2016		2016		2015			Q2 2016		Q3 2015		2016		2015			Change
Net income attributable to Eaton
	Vance Corp. shareholders	$	62,899	$	54,967	$	68,709		14	%	(8)	%	$	176,252	$	168,096		5	%

Non-controlling interest value adjustments			(10)		-		6		NM		NM			123		203		(39)

Closed-end fund structuring fees,
	net of tax⁽¹⁾		1,401		-		-		NM		NM			1,401		-		NM

Payments to end certain closed-end fund
	service and additional compensation
	arrangements, net of tax⁽²⁾		-		-		-		-		-			-		44,895		NM
Adjusted net income attributable
	to Eaton Vance Corp.
	shareholders	$	64,290	$	54,967	$	68,715		17		(6)		$	177,776	$	213,194		(17)

Earnings per diluted share		$	0.55	$	0.48	$	0.57		15		(4)		$	1.55	$	1.39		12

Non-controlling interest value adjustments			-		-		-		-		-			-		-		-

Closed-end fund structuring fees, net of tax			0.01		-		-		NM		NM			0.01		-		NM

Payments to end certain closed-end fund
	service and additional compensation
	arrangements, net of tax		-		-		-		-		-			-		0.37		NM

Adjusted earnings per diluted share		$	0.56	$	0.48	$	0.57		17		(2)		$	1.56	$	1.76		(11)

Eaton Vance Corp.
Reconciliation of operating income and operating margin
to adjusted operating income and adjusted operating margin

		Three Months Ended											Nine Months Ended
									% Change		% Change
		July 31,		April 30,		July 31,			Q3 2016 vs.		Q3 2016 vs.		July 31,		July 31,			%
(in thousands)		2016		2016		2015			Q2 2016		Q3 2015		2016		2015			Change
Operating income		$	106,725	$	95,768	$	116,733		11	%	(9)	%	$	303,118	$	289,514		5	%

Closed-end fund structuring fees⁽¹⁾			2,291		-		-		NM		NM			2,291		-		NM

Payments to end certain closed-end fund
	service and additional compensation
	arrangements⁽²⁾		-		-		-		-		-			-		73,000		NM

Adjusted operating income		$	109,016	$	95,768	$	116,733		14		(7)		$	305,409	$	362,514		(16)

Operating margin			31.3	%	29.6	%	32.8	%	6		(5)			30.4	%	27.3	%	11

Closed-end fund structuring fees			0.7		-		-		NM		NM			0.3		-		NM

Payments to end certain closed-end fund
	service and additional compensation
	arrangements		-		-		-		-		-			-		6.8		NM

Adjusted operating margin			32.0	%	29.6	%	32.8	%	8		(2)			30.7	%	34.1	%	(10)

⁽¹⁾ Reflects structuring fees of $2.3 million paid in connection with the May 2016 initial public offering of Eaton Vance High Income 2021 Target Term Trust, net of the
associated impact to taxes of $0.9 million calculated using the Company's effective tax rate.
⁽²⁾ Reflects a $73.0 million payment to end certain fund services and additional compensation arrangements for certain Eaton Vance closed-end funds, net of the associated
impact to taxes of $28.1 million calculated using the Company's effective tax rate.


												Attachment 3
Eaton Vance Corp.
Components of net income attributable
to non-controlling and other beneficial interests


		Three Months Ended										Nine Months Ended
								% Change		% Change
		July 31,		April 30,		July 31,		Q3 2016 vs.		Q3 2016 vs.		July 31,		July 31,		%
(in thousands)		2016		2016		2015		Q2 2016		Q3 2015		2016		2015		Change

Consolidated sponsored funds		$	343	$	493	$	(1,027)	(30)	%	NM	%	$	327	$	(1,226)	NM	%

Majority-owned subsidiaries			3,233		3,206		4,066	1		(20)			9,749		11,742	(17)

Non-controlling interest value adjustments			(9)		-		6	NM		NM			124		203	(39)

Consolidated CLO entities			(692)		10,789		(2,780)	NM		(75)			12,009		(1,439)	NM

Net income attributable to non-controlling
	and other beneficial interests	$	2,875	$	14,488	$	265	(80)		985		$	22,209	$	9,280	139


				Attachment 4
Eaton Vance Corp.
Balance Sheet
(in thousands, except per share figures)


		July 31,		October 31,
		2016		2015
Assets


Cash and cash equivalents	$	378,156	$	465,558
Investment advisory fees and other receivables		182,050		187,753
Investments		563,609		507,020
Assets of consolidated CLO entity:
Cash and cash equivalents		18,278		162,704
Bank loans and other investments		379,988		304,250
Other assets		21,976		128
Deferred sales commissions		26,114		25,161
Deferred income taxes		26,046		42,164
Equipment and leasehold improvements, net		45,194		44,943
Intangible assets, net		48,944		55,433
Goodwill		248,091		237,961
Loan to affiliate		5,000		-
Other assets		55,910		83,396
Total assets	$	1,999,356	$	2,116,471

Liabilities, Temporary Equity and Permanent Equity

Liabilities:

Accrued compensation	$	127,888	$	178,875
Accounts payable and accrued expenses		67,364		65,249
Dividend payable		33,934		32,923
Debt		573,928		573,811
Liabilities of consolidated CLO entity:
Senior and subordinated note obligations		387,783		397,039
Other liabilities		21,852		70,814
Other liabilities		72,300		86,891
Total liabilities		1,285,049		1,405,602
Commitments and contingencies

Temporary Equity:
Redeemable non-controlling interests		90,576		88,913
Total temporary equity		90,576		88,913

Permanent Equity:
Voting Common Stock, par value $0.00390625 per share:
Authorized, 1,280,000 shares
Issued and outstanding, 442,932 and 415,078 shares, respectively		2		2
Non-Voting Common Stock, par value $0.00390625 per share:
Authorized, 190,720,000 shares
Issued and outstanding, 112,709,623 and 115,470,485 shares, respectively		440		451
Additional paid-in capital		-		-
Notes receivable from stock option exercises		(9,673)		(11,143)
Accumulated other comprehensive loss		(49,767)		(48,586)
Appropriated retained earnings (deficit)		6,671		(5,338)
Retained earnings		674,236		684,845
Total Eaton Vance Corp. shareholders' equity		621,909		620,231
Non-redeemable non-controlling interests		1,822		1,725
Total permanent equity		623,731		621,956
Total liabilities, temporary equity and permanent equity	$	1,999,356	$	2,116,471


									Attachment 5
Eaton Vance Corp.
Consolidated Assets Under Management and Net Flows by Investment Mandate⁽¹⁾
(in millions)

		Three Months Ended						Nine Months Ended
		July 31,		April 30,		July 31,		July 31,		July 31,
		2016		2016		2015		2016		2015
Equity assets – beginning of period⁽²⁾		$	88,553	$	83,351	$	97,167	$	90,013	$	96,379
	Sales and other inflows		3,764		3,906		5,191		11,502		13,670
	Redemptions/outflows		(3,441)		(4,170)		(8,371)		(12,004)		(17,876)
	Net flows		323		(264)		(3,180)		(502)		(4,206)
	Exchanges		(26)		(5)		(19)		(18)		40
	Market value change		2,987		5,471		(602)		2,344		1,153
Equity assets – end of period		$	91,837	$	88,553	$	93,366	$	91,837	$	93,366
Fixed income assets – beginning of period⁽³⁾			56,259		52,756		49,690		52,373		46,062
	Sales and other inflows		5,109		5,675		5,370		15,716		13,997
	Redemptions/outflows		(2,707)		(3,090)		(3,212)		(9,973)		(8,158)
	Net flows		2,402		2,585		2,158		5,743		5,839
	Exchanges		(3)		17		(27)		44		52
	Market value change		616		901		(555)		1,114		(687)
Fixed income assets – end of period		$	59,274	$	56,259	$	51,266	$	59,274	$	51,266
Floating-rate income assets – beginning of period			32,773		32,676		38,269		35,619		42,009
	Sales and other inflows		2,009		1,490		2,032		5,403		6,720
	Redemptions/outflows		(2,507)		(2,719)		(2,554)		(8,655)		(10,941)
	Net flows		(498)		(1,229)		(522)		(3,252)		(4,221)
	Exchanges		6		(14)		2		(44)		(124)
	Market value change		202		1,340		(529)		160		(444)
Floating-rate income assets – end of period		$	32,483	$	32,773	$	37,220	$	32,483	$	37,220
Alternative assets – beginning of period			9,719		9,730		10,582		10,173		11,241
	Sales and other inflows		1,182		614		721		3,016		2,351
	Redemptions/outflows		(1,009)		(743)		(869)		(2,961)		(3,076)
	Net flows		173		(129)		(148)		55		(725)
	Exchanges		(1)		(1)		45		-		27
	Market value change		70		119		(146)		(267)		(210)
Alternative assets – end of period		$	9,961	$	9,719	$	10,333	$	9,961	$	10,333
Portfolio implementation assets – beginning of period			66,132		58,920		52,879		59,487		48,008
	Sales and other inflows		5,857		5,176		8,395		16,801		14,493
	Redemptions/outflows		(2,946)		(2,379)		(1,988)		(7,253)		(5,352)
	Net flows		2,911		2,797		6,407		9,548		9,141
	Exchanges		-		(3)		-		(13)		-
	Market value change		3,385		4,418		(52)		3,406		2,085
Portfolio implementation assets – end of period		$	72,428	$	66,132	$	59,234	$	72,428	$	59,234
Exposure management assets – beginning of period			65,235		65,146		62,459		63,689		54,036
	Sales and other inflows		13,663		10,938		11,113		37,530		42,668
	Redemptions/outflows		(11,912)		(12,626)		(11,909)		(34,661)		(36,391)
	Net flows		1,751		(1,688)		(796)		2,869		6,277
	Market value change		1,421		1,777		(526)		1,849		824
Exposure management assets – end of period		$	68,407	$	65,235	$	61,137	$	68,407	$	61,137
Total assets under management – beginning of period			318,671		302,579		311,046		311,354		297,735
	Sales and other inflows		31,584		27,799		32,822		89,968		93,899
	Redemptions/outflows		(24,522)		(25,727)		(28,903)		(75,507)		(81,794)
	Net flows		7,062		2,072		3,919		14,461		12,105
	Exchanges		(24)		(6)		1		(31)		(5)
	Market value change		8,681		14,026		(2,410)		8,606		2,721
Total assets under management – end of period		$	334,390	$	318,671	$	312,556	$	334,390	$	312,556

⁽¹⁾ Consolidated Eaton Vance Corp. See Attachment 11 for managed assets and flows of 49 percent-owned Hexavest Inc.
⁽²⁾ Includes balanced and multi-asset mandates.
⁽³⁾ Includes cash management mandates.


									Attachment 6
Eaton Vance Corp.
Consolidated Assets Under Management and Net Flows by Investment Vehicle⁽¹⁾
(in millions)

		Three Months Ended						Nine Months Ended
		July 31,		April 30,		July 31,		July 31,		July 31,
		2016		2016		2015		2016		2015
Fund assets – beginning of period⁽²⁾		$	122,902	$	117,788	$	132,161	$	125,934	$	134,564
	Sales and other inflows		7,571		6,977		7,016		22,807		23,385
	Redemptions/outflows		(6,385)		(6,842)		(7,570)		(22,941)		(26,698)
	Net flows		1,186		135		(554)		(134)		(3,313)
	Exchanges		(24)		(6)		1		(84)		185
	Market value change		2,295		4,985		(1,397)		643		(1,225)
Fund assets – end of period		$	126,359	$	122,902	$	130,211	$	126,359	$	130,211
Institutional separate account assets –
	beginning of period		126,620		120,197		115,942		119,987		106,443
	Sales and other inflows		19,501		15,109		21,764		51,341		57,678
	Redemptions/outflows		(15,225)		(14,735)		(18,424)		(42,072)		(47,323)
	Net flows		4,276		374		3,340		9,269		10,355
	Exchanges		-		436		(34)		420		(207)
	Market value change		3,684		5,613		(1,162)		4,904		1,495
Institutional separate account assets –
	end of period	$	134,580	$	126,620	$	118,086	$	134,580	$	118,086
High-net-worth separate account assets –
	beginning of period		24,565		23,999		24,226		24,516		22,235
	Sales and other inflows		903		1,417		1,177		4,583		3,803
	Redemptions/outflows		(803)		(2,055)		(877)		(3,997)		(2,291)
	Net flows		100		(638)		300		586		1,512
	Exchanges		1		(409)		-		(337)		(94)
	Market value change		1,157		1,613		(34)		1,058		839
High-net-worth separate account assets –
	end of period	$	25,823	$	24,565	$	24,492	$	25,823	$	24,492
Retail managed account assets – beginning of period			44,584		40,595		38,717		40,917		34,493
	Sales and other inflows		3,609		4,296		2,865		11,237		9,033
	Redemptions/outflows		(2,109)		(2,095)		(2,032)		(6,497)		(5,482)
	Net flows		1,500		2,201		833		4,740		3,551
	Exchanges		(1)		(27)		34		(30)		111
	Market value change		1,545		1,815		183		2,001		1,612
Retail managed account assets – end of period		$	47,628	$	44,584	$	39,767	$	47,628	$	39,767
Total assets under management – beginning of period			318,671		302,579		311,046		311,354		297,735
	Sales and other inflows		31,584		27,799		32,822		89,968		93,899
	Redemptions/outflows		(24,522)		(25,727)		(28,903)		(75,507)		(81,794)
	Net flows		7,062		2,072		3,919		14,461		12,105
	Exchanges		(24)		(6)		1		(31)		(5)
	Market value change		8,681		14,026		(2,410)		8,606		2,721
Total assets under management – end of period		$	334,390	$	318,671	$	312,556	$	334,390	$	312,556

⁽¹⁾ Consolidated Eaton Vance Corp. See Attachment 11 for managed assets and flows of 49 percent-owned Hexavest Inc.
⁽²⁾ Includes assets in cash management funds.


							Attachment 7
Eaton Vance Corp.
Consolidated Assets under Management by Investment Mandate⁽¹⁾
(in millions)

		July 31,		April 30,	%		July 31,	%
		2016		2016	Change		2015	Change
Equity⁽²⁾	$	91,837	$	88,553	4%	$	93,366	-2%
Fixed income⁽³⁾		59,274		56,259	5%		51,266	16%
Floating-rate income		32,483		32,773	-1%		37,220	-13%
Alternative		9,961		9,719	2%		10,333	-4%
Portfolio implementation		72,428		66,132	10%		59,234	22%
Exposure management		68,407		65,235	5%		61,137	12%
Total	$	334,390	$	318,671	5%	$	312,556	7%

⁽¹⁾ Consolidated Eaton Vance Corp. See Attachment 11 for managed assets and flows of 49 percent-owned Hexavest Inc.
⁽²⁾ Includes balanced and multi-asset mandates.
⁽³⁾ Includes cash management mandates.


							Attachment 8
Eaton Vance Corp.
Consolidated Assets under Management by Investment Vehicle⁽¹⁾
(in millions)

		July 31,		April 30,	%		July 31,	%
		2016		2016	Change		2015	Change
Open-end funds⁽²⁾	$	74,699	$	72,486	3%	$	78,932	-5%
Private funds⁽³⁾		27,661		26,908	3%		26,202	6%
Closed-end funds⁽⁴⁾		23,999		23,508	2%		25,077	-4%
Institutional separate account assets		134,580		126,620	6%		118,086	14%
High-net-worth separate account assets		25,823		24,565	5%		24,492	5%
Retail managed separate account assets		47,628		44,584	7%		39,767	20%
Total	$	334,390	$	318,671	5%	$	312,556	7%

⁽¹⁾ Consolidated Eaton Vance Corp. See Attachment 11 for managed assets and flows of 49 percent-owned Hexavest Inc.
⁽²⁾ Includes assets in NextShares funds.
⁽³⁾ Includes privately offered equity, fixed income and floating-rate income funds and CLO entities.
⁽⁴⁾ Includes unit investment trusts.


							Attachment 9
Eaton Vance Corp.
Consolidated Assets under Management by Investment Affiliate⁽¹⁾
(in millions)

		July 31,		April 30,	%		July 31,	%
		2016		2016	Change		2015	Change
Eaton Vance Management⁽²⁾	$	143,688	$	139,534	3%	$	142,987	0%
Parametric		171,571		160,935	7%		150,983	14%
Atlanta Capital		19,131		18,202	5%		18,586	3%
Total	$	334,390	$	318,671	5%	$	312,556	7%

⁽¹⁾ Consolidated Eaton Vance Corp. See Attachment 11 for managed assets and flows of 49 percent-owned Hexavest Inc.
⁽²⁾ Includes managed assets of wholly owned subsidiaries and Eaton Vance-sponsored funds and accounts managed by Hexavest and unaffiliated
third-party advisers under Eaton Vance supervision.


							Attachment 10
Eaton Vance Corp.
Average Annualized Effective Investment Advisory and Administrative Fee Rates by Investment Mandate⁽¹⁾
(in basis points on average managed assets)

	Three Months Ended		Three Months Ended			Three Months Ended
		July 31,		April 30,	%		July 31,	%
		2016		2016	Change		2015	Change
Equity		62.9		62.5	1%		64.4	-2%
Fixed income		39.8		39.6	1%		42.7	-7%
Floating-rate income		51.7		51.4	1%		53.8	-4%
Alternative		63.8		62.4	2%		63.1	1%
Portfolio implementation		14.8		14.9	-1%		14.8	0%
Exposure management		5.2		5.4	-4%		5.4	-4%
Total		35.7		35.8	0%		39.0	-8%

⁽¹⁾ Excludes performance fees received, which were $2.7 million for the three months ended July 31, 2016, negligible for the three months ended
April 30, 2016, and $1.7 million for the three months ended July 31, 2015.


Attachment 11
Eaton Vance Corp.
Hexavest Inc. Assets under Management and Net Flows
(in millions)

		Three Months Ended						Nine Months Ended
		July 31,		April 30,		July 31,		July 31,		July 31,
		2016		2016		2015		2016		2015
Eaton Vance distributed:
Eaton Vance sponsored funds – beginning of period⁽¹⁾		$	226	$	205	$	247	$	229	$	227
	Sales and other inflows		1		5		2		13		21
	Redemptions/outflows		(7)		(4)		(6)		(32)		(15)
	Net flows		(6)		1		(4)		(19)		6
	Market value change		11		20		(4)		21		6
Eaton Vance sponsored funds – end of period		$	231	$	226	$	239	$	231	$	239
Eaton Vance distributed separate accounts –
	beginning of period⁽²⁾	$	2,557	$	2,344	$	2,401	$	2,440	$	2,367
	Sales and other inflows		28		22		11		54		395
	Redemptions/outflows		(59)		(25)		(39)		(94)		(475)
	Net flows		(31)		(3)		(28)		(40)		(80)
	Market value change		132		216		(11)		258		75
Eaton Vance distributed separate accounts –
	end of period	$	2,658	$	2,557	$	2,362	$	2,658	$	2,362
Total Eaton Vance distributed – beginning of period		$	2,783	$	2,549	$	2,648	$	2,669	$	2,594
	Sales and other inflows		29		27		13		67		416
	Redemptions/outflows		(66)		(29)		(45)		(126)		(490)
	Net flows		(37)		(2)		(32)		(59)		(74)
	Market value change		143		236		(15)		279		81
Total Eaton Vance distributed – end of period		$	2,889	$	2,783	$	2,601	$	2,889	$	2,601
Hexavest directly distributed – beginning of period⁽³⁾		$	11,435	$	10,533	$	12,999	$	11,279	$	14,101
	Sales and other inflows		308		173		286		610		711
	Redemptions/outflows		(734)		(442)		(780)		(1,505)		(2,804)
	Net flows		(426)		(269)		(494)		(895)		(2,093)
	Market value change		513		1,171		(297)		1,138		200
Hexavest directly distributed – end of period		$	11,522	$	11,435	$	12,208	$	11,522	$	12,208
Total Hexavest managed assets – beginning of period		$	14,218	$	13,082	$	15,647	$	13,948	$	16,695
	Sales and other inflows		337		200		299		677		1,127
	Redemptions/outflows		(800)		(471)		(825)		(1,631)		(3,294)
	Net flows		(463)		(271)		(526)		(954)		(2,167)
	Market value change		656		1,407		(312)		1,417		281
Total Hexavest managed assets – end of period		$	14,411	$	14,218	$	14,809	$	14,411	$	14,809

⁽¹⁾	Managed assets and flows of Eaton Vance-sponsored pooled investment vehicles for which Hexavest is adviser or sub-adviser. Eaton Vance
	receives management revenue (and in some cases also distribution revenue) on these assets, which are included in the Eaton Vance consolidated
	results in Attachments 5 through 9.
⁽²⁾	Managed assets and flows of Eaton Vance-distributed separate accounts managed by Hexavest. Eaton Vance receives distribution revenue,
	but not investment advisory fees, on these assets, which are not included in the Eaton Vance consolidated results in Attachments 5 through 9.
⁽³⁾	Managed assets and flows of pre-transaction Hexavest clients and post-transaction Hexavest clients in Canada. Eaton Vance receives no
	investment advisory or distribution revenue on these assets, which are not included in the Eaton Vance consolidated results in Attachments
	5 through 9.

Attached files

Stock widget

Investing forum

EATON VANCE CORP Reports