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

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8-K - EATON VANCE CORP 8-K 11-22-2016 - 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 Months and Fiscal Year Ended October 31, 2016

Boston, MA, November 22, 2016 – Eaton Vance Corp. (NYSE: EV) today reported earnings per diluted share of $2.12 for the fiscal year ended October 31, 2016, an increase of 10 percent from $1.92 of earnings per diluted share for the fiscal year ended October 31, 2015.

The Company had adjusted earnings per diluted share⁽¹⁾ of $2.13 for the fiscal year ended October 31, 2016, a decrease of 7 percent from $2.29 of adjusted earnings per diluted share for the fiscal year ended October 31, 2015. For the fiscal year ended October 31, 2016, adjusted earnings per diluted share differed from GAAP earnings by $0.01 as a result of the payment of $2.3 million of structuring fees in connection with the initial public offering of Eaton Vance High Income 2021 Target Term Trust in May. Adjusted earnings differed from GAAP earnings for the fiscal year ended October 31, 2015 as a result of the January 2015 payment of $73.0 million, or approximately $0.37 per diluted share, to terminate service and additional compensation arrangements in place with a major distribution partner for certain Eaton Vance closed-end funds.

The Company earned $0.57 per diluted share in the fourth quarter of fiscal 2016, an increase of 8 percent from $0.53 per diluted share in the fourth quarter of fiscal 2015 and an increase of 4 percent from $0.55 per diluted share in the third quarter of fiscal 2016.

The Company had adjusted earnings per diluted share of $0.57 in the fourth quarter of fiscal 2016, an increase of 8 percent from $0.53 of adjusted earnings per diluted share in the fourth quarter of fiscal 2015 and up 2 percent from $0.56 of adjusted earnings per diluted share in the third quarter of fiscal 2016. Adjusted earnings differed from GAAP earnings by $0.01 per diluted share in the third quarter of fiscal 2016 as a result of the $2.3 million of closed-end fund structuring fees mentioned above.

Gains (losses) and other investment income related to seed capital investments contributed $0.05 and $0.01 per diluted share for the fiscal years ended October 31, 2016 and October 31, 2015, respectively. Gains (losses) and other investment income related to seed capital investments increased earnings per diluted share by $0.01 in the fourth quarter and third quarter of fiscal 2016, and reduced earnings per diluted share by $0.01 in the fourth quarter of fiscal 2015.

Consolidated net inflows of $19.3 billion in the fiscal year ended October 31, 2016 represent a 6 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 $16.7 billion and 6 percent internal growth for the fiscal year ended October 31, 2015.

⁽⁾ Although the Company reports its financial results in accordance with U.S. generally accepted accounting principles (“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.

Consolidated net inflows of $4.8 billion in the fourth quarter of fiscal 2016 represent a 6 percent annualized internal growth rate. This compares to net inflows of $4.6 billion in the fourth quarter of fiscal 2015 and net inflows of $7.1 billion in the third quarter of fiscal 2016.

“The positive organic growth Eaton Vance experienced in the first nine months of our fiscal year continued through the fourth quarter, as strong flows into Custom Beta strategies were supported by positive net sales of active strategies,” said Thomas E. Faust Jr., Chairman and Chief Executive Officer. “Steady earnings progress over the course of the fiscal year positions the Company for continued improvement in fiscal 2017.”

Consolidated assets under management were $336.4 billion on October 31, 2016, up 8 percent from $311.4 billion of consolidated managed assets on October 31, 2015 and up 1 percent from $334.4 billion of consolidated managed assets on July 31, 2016. The year-over-year increase in consolidated assets under management reflects net inflows of $19.3 billion and market price appreciation of $5.8 billion. The sequential quarter increase in consolidated assets under management reflects net inflows of $4.8 billion partially offset by market price declines of $2.9 billion.

Average consolidated assets under management were $320.9 billion for the fiscal year ended October 31, 2016, an increase of 6 percent from $303.8 billion for the fiscal year ended October 31, 2015. Average consolidated assets under management were $338.9 billion in the fourth quarter of fiscal 2016, up 11 percent from $306.4 billion in the fourth quarter of fiscal 2015 and up 4 percent from $324.9 billion in the third quarter of fiscal 2016.

Excluding performance-based fees, annualized effective investment advisory and administrative fee rates on consolidated assets under management averaged 35.8 basis points in fiscal 2016, down 9 percent from 39.3 basis points in fiscal 2015. On the same basis, annualized effective investment advisory and administrative fee rates on consolidated assets under management averaged 35.1 basis points in the fourth quarter of fiscal 2016, down 7 percent from 37.7 basis points in the fourth quarter of fiscal 2015 and down 2 percent from 35.7 basis points in the third 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.

On October 21, 2016, the Company announced the signing of a definitive agreement to acquire the business assets of Calvert Investment Management, Inc. (“Calvert”), a subsidiary of Ameritas Holding Company. Based in Maryland, Calvert is a recognized leader in responsible investing with approximately $12.3 billion of fund and separate account assets under management as of September 30, 2016. Completion of the transaction is expected on or about December 31, 2016 and is subject to certain customary closing conditions.

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 $125.1 billion for the fiscal year ended October 31, 2016, substantially unchanged from $124.8 billion for the fiscal year ended October 31, 2015. Consolidated sales and other inflows were $35.1 billion in the fourth quarter of fiscal 2016, up 14 percent from $30.9 billion in the fourth quarter of fiscal 2015 and up 11 percent from $31.6 billion in the third quarter of fiscal 2016.

Consolidated redemptions and other outflows were $105.8 billion for the fiscal year ended October 31, 2016, down 2 percent from $108.1 billion for the fiscal year ended October 31, 2015. Consolidated redemptions and other outflows were $30.2 billion in the fourth quarter of fiscal 2016, up 15 percent from $26.3 billion in the fourth quarter of fiscal 2015 and up 23 percent from $24.5 billion in the third quarter of fiscal 2016.

As of October 31, 2016, the Company’s 49 percent-owned affiliate Hexavest, Inc. (“Hexavest”) managed $13.7 billion of client assets, down 1 percent from $13.9 billion of managed assets on October 31, 2015 and down 5 percent from $14.4 billion of managed assets on July 31, 2016. Hexavest-managed funds and separate accounts had net outflows of $1.1 billion in fiscal 2016 and $2.7 billion in fiscal 2015. Hexavest net outflows were $0.1 billion in the fourth quarter of fiscal 2016 and $0.5 billion in both the fourth quarter of fiscal 2015 and in the third 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)
		October 31,		July 31,		October 31,
		2016		2016		2015
Revenue		$	346,846	$	341,168	$	341,458
Expenses			235,696		234,443		230,525
Operating income			111,150		106,725		110,933
Operating margin			32.0%		31.3%		32.5%
Non-operating expense			(6,505)		(4,131)		(13,663)
Income taxes			(40,837)		(39,781)		(39,113)
Equity in net income of affiliates, net of tax			2,488		2,961		2,658
Net income			66,296		65,774		60,815
Net income attributable to non-controlling
	and other beneficial interests		(1,241)		(2,875)		1,388
Net income attributable to
	Eaton Vance Corp. shareholders	$	65,055	$	62,899	$	62,203
Adjusted net income attributable to Eaton
	Vance Corp. shareholders⁽¹⁾	$	65,132	$	64,290	$	61,796
Earnings per diluted share		$	0.57	$	0.55	$	0.53
Adjusted earnings per diluted share⁽¹⁾		$	0.57	$	0.56	$	0.53

Full Year Fiscal 2016 vs. Full Year Fiscal 2015

In fiscal 2016, revenue decreased 4 percent to $1.3 billion from revenue of $1.4 billion in fiscal 2015. Investment advisory and administrative fees were down 4 percent, as the impact of lower average effective fee rates, driven by product mix, more than offset a 6 percent increase in average consolidated assets under management. Performance fees contributed $3.4 million in fiscal 2016 and $3.7 million in 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 7 percent to $0.9 billion in fiscal 2016 from $1.0 billion in fiscal 2015. Lower distribution and service fee expenses were partially offset by increases in compensation, amortization of deferred sales commissions and other operating expenses. The decrease in service fee expense reflects lower average assets under management in funds subject to service fee payments. The decrease in distribution expense primarily reflects lower closed-end fund-related distribution expense following the fiscal 2015 first quarter payment of $73.0 million to terminate service and additional compensation arrangements in place with a major distribution partner. The increase in compensation expense reflects higher salaries and benefits attributable to an increase in headcount, higher stock-based compensation accruals and other compensation costs, offset by lower operating income-based and sales-based incentive accruals. The 4 percent increase in other operating expenses reflects higher information technology, travel and other expenses, partially offset by lower professional services, communications and facilities-related expenses. The increase in amortization of deferred sales commissions largely reflects an increase

in private fund commission amortization, offset by decreases in Class B share and Class C share amortization. Fund-related expenses in fiscal 2016 were substantially unchanged from fiscal 2015.

Expenses in connection with the Company’s NextShares^TM exchange-traded managed funds (“NextShares”)initiative totaled $8.0 million in fiscal 2016, an increase of 8 percent from $7.4 million in fiscal 2015.

Operating income increased 3 percent to $414.3 million in fiscal 2016 from $400.4 million in fiscal 2015. Operating margin increased to 30.8 percent in fiscal 2016 from 28.5 percent in fiscal 2015. As shown in Attachment 2, adjusted operating margin decreased to 31.0 percent in fiscal 2016 from 33.7 percent in fiscal 2015.

Non-operating expense totaled $6.2 million in fiscal 2016 and $31.1 million in fiscal 2015. The year-over-year reduction in non-operating expense primarily reflects an increase of $12.4 million in gains and other investment income related to the Company’s investments in sponsored products and a $12.5 million favorable change in income (expense) of the Company’s consolidated CLO entities. The Company deconsolidated its last consolidated CLO entity in the fourth quarter of fiscal 2016.

The Company’s effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 37.6 percent in fiscal 2016 and 38.8 percent in fiscal 2015.

Equity in net income of affiliates decreased to $10.3 million in fiscal 2016 from $12.0 million in fiscal 2015. Equity in net income of affiliates in fiscal 2016 included $10.0 million from the Company’s investment in Hexavest and $0.4 million from a private equity partnership. Equity in net income of affiliates in fiscal 2015 included $10.9 million from the Company’s investment in Hexavest, $0.3 million from the Company’s investments in sponsored funds and $0.8 million from a private equity partnership.

As detailed in Attachment 3, net income attributable to non-controlling and other beneficial interests was $23.5 million in fiscal 2016 and $7.9 million in fiscal 2015.

Fourth Quarter Fiscal 2016 vs. Fourth Quarter Fiscal 2015

In the fourth quarter of fiscal 2016, revenue increased 2 percent to $346.8 million from $341.5 million in the fourth quarter of fiscal 2015. Investment advisory and administrative fees were up 3 percent, as an 11 percent increase in average consolidated assets under management more than offset lower average effective fee rates and reduced performance fees. Performance fees contributed $0.6 million in the fourth quarter of fiscal 2016 and $2.0 million in the fourth quarter of fiscal 2015. Distribution and service fee revenues collectively were down 5 percent, reflecting lower managed assets in fund share classes that are subject to these fees.

Operating expenses increased 2 percent to $235.7 million in the fourth quarter of fiscal 2016 from $230.5 million in the fourth quarter of fiscal 2015. Increases in compensation and fund-related expenses were partially offset by decreases in distribution expense, amortization of deferred sales commissions and other operating expenses. The increase in compensation expense reflects higher salaries and benefits associated with an increase in headcount, higher operating income-based and sales-based incentive accruals, and higher stock-based compensation. The increase in fund-related expenses reflects higher sub-advisory fees paid and increased fund expenses borne by the Company on funds for which it earns an all-in fee. The decrease in distribution expense reflects lower marketing and promotion costs. Other operating expenses decreased 2 percent, reflecting lower professional services, communications and facilities expenses, partially offset by higher travel and other expenses.

NextShares-related expenses decreased 11 percent to $2.0 million in the fourth quarter of fiscal 2016 from $2.3 million in the fourth quarter of fiscal 2015.

Operating income of $111.2 million in the fourth quarter of fiscal 2016 was substantially unchanged from $110.9 million in the fourth quarter of fiscal 2015. Operating margin decreased to 32.0 percent in the fourth quarter of fiscal 2016 from 32.5 percent in the fourth quarter of fiscal 2015.

Non-operating expense totaled $6.5 million in the fourth quarter of fiscal 2016 compared with non-operating expense of $13.7 million in the fourth quarter of fiscal 2015. The year-over-year reduction in non-operating expense primarily reflects a favorable change of $5.0 million in gains and other investment income related to the Company’s investments in sponsored products and a $2.2 million favorable change in income (expense) of the Company’s consolidated CLO entity.

The Company’s effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 39.0 percent in the fourth quarter of fiscal 2016 and 40.2 percent in the fourth quarter of fiscal 2015.

Equity in net income of affiliates decreased to $2.5 million in the fourth quarter of fiscal 2016 from $2.7 million in the fourth quarter of fiscal 2015. Equity in net income of affiliates in the fourth quarter of fiscal 2016 included $2.3 million from the Company’s investment in Hexavest and $0.2 million from a private equity partnership. Equity in net income of affiliates in the fourth quarter of fiscal 2015 included $2.4 million from the Company’s investment in Hexavest, $0.2 million from the Company’s investments in sponsored funds and $0.1 million from a private equity partnership.

As detailed in Attachment 3, net income attributable to non-controlling and other beneficial interests was $1.2 million in the fourth quarter of fiscal 2016 compared with a net loss attributable to non-controlling and other beneficial interests of $1.4 million in the fourth quarter of fiscal 2015.

Fourth Quarter Fiscal 2016 vs. Third Quarter Fiscal 2016

In the fourth quarter of fiscal 2016, revenue increased 2 percent to $346.8 million from $341.2 million in the third quarter of fiscal 2016. Investment advisory and administrative fees were up 2 percent, reflecting a 4 percent increase in average consolidated assets under management, a 2 percent decline in average effective fee rates and reduced performance fees. Performance fees contributed $0.6 million in the fourth quarter of fiscal 2016 and $2.7 million in the third quarter of fiscal 2016. Distribution and service fee revenues were substantially unchanged.

Operating expenses increased 1 percent in the fourth quarter of fiscal 2016 from the third quarter of fiscal 2016. Increases in compensation, service fee expense and fund-related expenses were mostly offset by lower distribution and other expenses. The increase in compensation reflects higher salaries and benefits related to increased headcount and higher operating income-based and sales-based incentive accruals, partially offset by lower stock-based compensation. 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. The decrease in distribution expense primarily reflects the $2.3 million of structuring fees paid in connection with the May 2016 closed-end fund offering. Other operating expenses decreased 3 percent, primarily due to lower communications, information technology and other expenses, partially offset by higher travel expenses.

NextShares-related expenses decreased 15 percent to $2.0 million in the fourth quarter of fiscal 2016 from $2.4 million in the third quarter of fiscal 2016.

Operating income was up 4 percent to $111.2 million in the fourth quarter of fiscal 2016 from $106.7 million in the third quarter of fiscal 2016. Operating margin increased to 32.0 percent in the fourth quarter of fiscal 2016 from 31.3 percent in the third quarter of fiscal 2016. Adjusted to remove the structuring fees paid in connection with the May 2016 closed-end fund offering, operating income in the fourth quarter of fiscal 2016 was up 2 percent from the third quarter of fiscal 2016 and operating margin in the current quarter was unchanged.

Non-operating expense totaled $6.5 million in the fourth quarter of fiscal 2016 compared with $4.1 million of non-operating expense in the third quarter of fiscal 2016, reflecting a $0.5 million decline in gains and other investment income related to the Company’s investments in sponsored products and a $1.8 million decrease in income (expense) of the Company’s consolidated CLO entity.

Equity in net income of affiliates decreased to $2.5 million in the fourth quarter of fiscal 2016 from $3.0 million in the third quarter of fiscal 2016. In the fourth quarter of fiscal 2016, $2.3 million of equity in net income of affiliates was from the Company’s investment in Hexavest and $0.2 million of net income was from a private equity partnership. 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.

As detailed in Attachment 3, net income attributable to non-controlling and other beneficial interests was $1.2 million in the fourth quarter of fiscal 2016 and $2.9 million in the third quarter of fiscal 2016.

Balance Sheet Information

Cash and cash equivalents totaled $424.2 million on October 31, 2016, with no outstanding borrowings against the Company’s $300 million credit facility. Included within investments is $85.8 million of holdings of short-term debt securities with maturities between 90 days and one year. During fiscal 2016, the Company used $253.0 million to repurchase and retire approximately 7.3 million shares of its Non-Voting Common Stock under its repurchase authorizations. Of the current 8.0 million share repurchase authorization, approximately 2.9 million shares remain available. The Company deconsolidated its last consolidated CLO entity in the fourth quarter of fiscal 2016.

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 fiscal year ended October 31, 2016. To participate in the conference call, please dial 866-521-4909 (domestic) or 647-427-2311 (international) and refer to “Eaton Vance Corp. Fourth Fiscal 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 dialing 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 17569828 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										Fiscal Year Ended
									%		%
									Change		Change
									Q4 2016		Q4 2016
			October 31,		July 31,		October 31,		vs.		vs.		October 31,		October 31,		%
			2016		2016		2015		Q3 2016		Q4 2015		2016		2015		Change
Revenue:

	Investment advisory and administrative fees		$	298,459	$	292,814	$	290,804	2	%	3	%	$	1,151,198	$	1,196,866	(4)	%
	Distribution and underwriter fees			18,606		18,883		19,446	(1)		(4)			74,822		80,815	(7)
	Service fees			27,481		27,150		28,875	1		(5)			107,684		116,448	(8)
	Other revenue			2,300		2,321		2,333	(1)		(1)			9,156		9,434	(3)
		Total revenue		346,846		341,168		341,458	2		2			1,342,860		1,403,563	(4)
Expenses:

	Compensation and related costs			125,259		121,827		119,160	3		5			491,115		483,827	2
	Distribution expense			29,658		31,616		30,506	(6)		(3)			117,996		198,155	(40)
	Service fee expense			25,458		24,831		25,547	3		-			98,494		106,663	(8)
	Amortization of deferred sales commissions			3,589		3,861		3,785	(7)		(5)			15,451		14,972	3
	Fund-related expenses			9,766		8,939		8,802	9		11			35,899		35,886	-
	Other expenses			41,966		43,369		42,725	(3)		(2)			169,637		163,613	4
		Total expenses		235,696		234,443		230,525	1		2			928,592		1,003,116	(7)
Operating income				111,150		106,725		110,933	4		-			414,268		400,447	3
Non-operating income (expense):
	Gains (losses) and other investment
		income, net		2,645		3,137		(2,330)	(16)		NM			12,411		(31)	NM
	Interest expense			(7,386)		(7,342)		(7,340)	1		1			(29,410)		(29,357)	-
	Other income (expense) of consolidated
		collateralized loan obligation
		("CLO") entities:
		Gains (losses) and other investment
		income, net		2,415		4,467		(192)	(46)		NM			24,069		5,092	373
		Interest and other expense		(4,179)		(4,393)		(3,801)	(5)		10			(13,286)		(6,767)	96
		Total non-operating expense		(6,505)		(4,131)		(13,663)	57		(52)			(6,216)		(31,063)	(80)

Income before income taxes and equity
in net income of affiliates				104,645		102,594		97,270	2		8			408,052		369,384	10
Income taxes				(40,837)		(39,781)		(39,113)	3		4			(153,630)		(143,214)	7
Equity in net income of affiliates, net of tax				2,488		2,961		2,658	(16)		(6)			10,335		12,021	(14)
Net income				66,296		65,774		60,815	1		9			264,757		238,191	11
Net income attributable to non-controlling
and other beneficial interests				(1,241)		(2,875)		1,388	(57)		NM			(23,450)		(7,892)	197
Net income attributable to
Eaton Vance Corp. shareholders			$	65,055	$	62,899	$	62,203	3		5		$	241,307	$	230,299	5

Earnings per share:
	Basic		$	0.59	$	0.57	$	0.55	4		7		$	2.20	$	2.00	10
	Diluted		$	0.57	$	0.55	$	0.53	4		8		$	2.12	$	1.92	10

Weighted average shares outstanding:
	Basic			109,341		109,533		112,040	-		(2)			109,914		113,318	(3)
	Diluted			114,074		113,810		115,949	-		(2)			113,982		118,155	(4)

Dividends declared per share			$	0.280	$	0.265	$	0.265	6		6		$	1.075	$	1.015	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											Fiscal Year Ended
									% Change		% Change
		October 31,		July 31,		October 31,			Q4 2016 vs.		Q4 2016 vs.		October 31,		October 31,			%
(in thousands, except per share figures)		2016		2016		2015			Q3 2016		Q4 2015		2016		2015			Change
Net income attributable to Eaton
	Vance Corp. shareholders	$	65,055	$	62,899	$	62,203		3	%	5	%	$	241,307	$	230,299		5	%

Non-controlling interest value adjustments			77		(10)		(407)		NM		NM			200		(204)		NM

Closed-end fund structuring fees,
	net of tax⁽¹⁾		-		1,401		-		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	$	65,132	$	64,290	$	61,796		1		5		$	242,908	$	274,990		(12)

Earnings per diluted share		$	0.57	$	0.55	$	0.53		4		8		$	2.12	$	1.92		10

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

Closed-end fund structuring fees, net of tax			-		0.01		-		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		$	0.57	$	0.56	$	0.53		2		8		$	2.13	$	2.29		(7)

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

		Three Months Ended											Fiscal Year Ended
									% Change		% Change
		October 31,		July 31,		October 31,			Q4 2016 vs.		Q4 2016 vs.		October 31,		October 31,			%
(in thousands)		2016		2016		2015			Q3 2016		Q4 2015		2016		2015			Change
Operating income		$	111,150	$	106,725	$	110,933		4	%	-	%	$	414,268	$	400,447		3	%

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

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

Adjusted operating income		$	111,150	$	109,016	$	110,933		2		-		$	416,559	$	473,447		(12)

Operating margin			32.0	%	31.3	%	32.5	%	2		(2)			30.8	%	28.5	%	8

Closed-end fund structuring fees			-		0.7		-		NM		-			0.2		-		NM

Payments to end certain closed-end fund
	service and additional compensation
	arrangements		-		-		-		-		-			-		5.2		NM

Adjusted operating margin			32.0	%	32.0	%	32.5	%	-		(2)			31.0	%	33.7	%	(8)

⁽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 terminate service and additional compensation arrangements in place with a major distribution partner 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										Fiscal Year Ended
								% Change		% Change
		October 31,		July 31,		October 31,		Q4 2016 vs.		Q4 2016 vs.		October 31,		October 31,		%
(in thousands)		2016		2016		2015		Q3 2016		Q4 2015		2016		2015		Change

Consolidated sponsored funds		$	(370)	$	343	$	(526)	NM	%	(30)	%	$	(43)	$	(1,752)	(98)	%

Majority-owned subsidiaries			3,775		3,233		3,931	17		(4)			13,525		15,673	(14)

Non-controlling interest value adjustments			77		(9)		(407)	NM		NM			200		(204)	NM

Consolidated CLO entities			(2,241)		(692)		(4,386)	224		(49)			9,768		(5,825)	NM

Net income (loss) attributable to non-
	controlling and other beneficial interests	$	1,241	$	2,875	$	(1,388)	(57)		NM		$	23,450	$	7,892	197


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


		October 31,		October 31,
		2016		2015
Assets


Cash and cash equivalents	$	424,174	$	465,558
Investment advisory fees and other receivables		186,172		187,753
Investments		589,773		507,020
Assets of consolidated CLO entity:
Cash and cash equivalents		-		162,704
Bank loan investments		-		304,250
Other assets		-		128
Deferred sales commissions		27,076		25,161
Deferred income taxes		73,295		42,164
Equipment and leasehold improvements, net		44,427		44,943
Intangible assets, net		46,809		55,433
Goodwill		248,091		237,961
Loan to affiliate		5,000		-
Other assets		87,759		83,396
Total assets	$	1,732,576	$	2,116,471

Liabilities, Temporary Equity and Permanent Equity

Liabilities:

Accrued compensation	$	173,485	$	178,875
Accounts payable and accrued expenses		59,927		65,249
Dividend payable		36,525		32,923
Debt		573,967		573,811
Liabilities of consolidated CLO entity:
Senior and subordinated note obligations		-		397,039
Other liabilities		-		70,814
Other liabilities		75,069		86,891
Total liabilities		918,973		1,405,602
Commitments and contingencies

Temporary Equity:
Redeemable non-controlling interests		109,028		88,913
Total temporary equity		109,028		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, 113,545,008 and 115,470,485 shares, respectively		444		451
Additional paid-in capital		-		-
Notes receivable from stock option exercises		(12,074)		(11,143)
Accumulated other comprehensive loss		(57,583)		(48,586)
Appropriated deficit		-		(5,338)
Retained earnings		773,000		684,845
Total Eaton Vance Corp. shareholders' equity		703,789		620,231
Non-redeemable non-controlling interests		786		1,725
Total permanent equity		704,575		621,956
Total liabilities, temporary equity and permanent equity	$	1,732,576	$	2,116,471


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

		Three Months Ended						Fiscal Year Ended
		October 31,		July 31,		October 31,		October 31,		October 31,
		2016		2016		2015		2016		2015
Equity assets – beginning of period⁽²⁾		$	91,837	$	88,553	$	93,366	$	90,013	$	96,379
	Sales and other inflows		3,836		3,764		4,412		15,337		18,082
	Redemptions/outflows		(3,799)		(3,441)		(5,117)		(15,803)		(22,993)
	Net flows		37		323		(705)		(466)		(4,911)
	Exchanges		(14)		(26)		10		(32)		50
	Market value change		(1,870)		2,987		(2,658)		475		(1,505)
Equity assets – end of period		$	89,990	$	91,837	$	90,013	$	89,990	$	90,013
Fixed income assets – beginning of period⁽³⁾			59,274		56,259		51,266		52,373		46,062
	Sales and other inflows		4,713		5,109		4,519		20,429		18,516
	Redemptions/outflows		(3,038)		(2,707)		(3,167)		(13,011)		(11,325)
	Net flows		1,675		2,402		1,352		7,418		7,191
	Exchanges		(21)		(3)		-		23		52
	Market value change		(415)		616		(245)		699		(932)
Fixed income assets – end of period		$	60,513	$	59,274	$	52,373	$	60,513	$	52,373
Floating-rate income assets – beginning of period			32,483		32,773		37,220		35,619		42,009
	Sales and other inflows		1,835		2,009		2,615		7,237		9,336
	Redemptions/outflows		(2,426)		(2,507)		(3,434)		(11,081)		(14,376)
	Net flows		(591)		(498)		(819)		(3,844)		(5,040)
	Exchanges		28		6		(12)		(16)		(136)
	Market value change		272		202		(770)		433		(1,214)
Floating-rate income assets – end of period		$	32,192	$	32,483	$	35,619	$	32,192	$	35,619
Alternative assets – beginning of period			9,961		9,719		10,333		10,173		11,241
	Sales and other inflows		1,168		1,182		868		4,184		3,219
	Redemptions/outflows		(513)		(1,009)		(816)		(3,474)		(3,892)
	Net flows		655		173		52		710		(673)
	Exchanges		(3)		(1)		(2)		(2)		24
	Market value change		74		70		(210)		(194)		(419)
Alternative assets – end of period		$	10,687	$	9,961	$	10,173	$	10,687	$	10,173
Portfolio implementation assets – beginning of period			72,428		66,132		59,234		59,487		48,008
	Sales and other inflows		3,079		5,857		3,541		19,882		18,034
	Redemptions/outflows		(3,202)		(2,946)		(1,866)		(10,455)		(7,217)
	Net flows		(123)		2,911		1,675		9,427		10,817
	Exchanges		11		-		-		(3)		-
	Market value change		(890)		3,385		(1,422)		2,515		662
Portfolio implementation assets – end of period		$	71,426	$	72,428	$	59,487	$	71,426	$	59,487
Exposure management assets – beginning of period			68,407		65,235		61,137		63,689		54,036
	Sales and other inflows		20,458		13,663		14,918		57,988		57,586
	Redemptions/outflows		(17,268)		(11,912)		(11,895)		(51,929)		(48,286)
	Net flows		3,190		1,751		3,023		6,059		9,300
	Market value change		(25)		1,421		(471)		1,824		353
Exposure management assets – end of period		$	71,572	$	68,407	$	63,689	$	71,572	$	63,689
Total assets under management – beginning of period			334,390		318,671		312,556		311,354		297,735
	Sales and other inflows		35,089		31,584		30,873		125,057		124,773
	Redemptions/outflows		(30,246)		(24,522)		(26,295)		(105,753)		(108,089)
	Net flows		4,843		7,062		4,578		19,304		16,684
	Exchanges		1		(24)		(4)		(30)		(10)
	Market value change		(2,854)		8,681		(5,776)		5,752		(3,055)
Total assets under management – end of period		$	336,380	$	334,390	$	311,354	$	336,380	$	311,354

⁽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						Fiscal Year Ended
		October 31,		July 31,		October 31,		October 31,		October 31,
		2016		2016		2015		2016		2015
Fund assets – beginning of period⁽²⁾		$	126,359	$	122,902	$	130,211	$	125,934	$	134,564
	Sales and other inflows		7,083		7,571		8,644		29,890		32,029
	Redemptions/outflows		(6,594)		(6,385)		(9,632)		(29,535)		(36,330)
	Net flows		489		1,186		(988)		355		(4,301)
	Exchanges		(10)		(24)		(4)		(94)		181
	Market value change		(1,116)		2,295		(3,285)		(473)		(4,510)
Fund assets – end of period		$	125,722	$	126,359	$	125,934	$	125,722	$	125,934
Institutional separate account assets –
	beginning of period		134,580		126,620		118,086		119,987		106,443
	Sales and other inflows		23,135		19,501		17,889		74,476		75,568
	Redemptions/outflows		(20,873)		(15,225)		(14,247)		(62,945)		(61,569)
	Net flows		2,262		4,276		3,642		11,531		13,999
	Exchanges		-		-		-		420		(208)
	Market value change		(391)		3,684		(1,741)		4,513		(247)
Institutional separate account assets –
	end of period	$	136,451	$	134,580	$	119,987	$	136,451	$	119,987
High-net-worth separate account assets –
	beginning of period		25,823		24,565		24,492		24,516		22,235
	Sales and other inflows		1,249		903		1,013		5,832		4,816
	Redemptions/outflows		(844)		(803)		(641)		(4,841)		(2,933)
	Net flows		405		100		372		991		1,883
	Exchanges		28		1		(5)		(309)		(99)
	Market value change		(450)		1,157		(343)		608		497
High-net-worth separate account assets –
	end of period	$	25,806	$	25,823	$	24,516	$	25,806	$	24,516
Retail managed account assets – beginning of period			47,628		44,584		39,767		40,917		34,493
	Sales and other inflows		3,622		3,609		3,327		14,859		12,360
	Redemptions/outflows		(1,935)		(2,109)		(1,775)		(8,432)		(7,257)
	Net flows		1,687		1,500		1,552		6,427		5,103
	Exchanges		(17)		(1)		5		(47)		116
	Market value change		(897)		1,545		(407)		1,104		1,205
Retail managed account assets – end of period		$	48,401	$	47,628	$	40,917	$	48,401	$	40,917
Total assets under management – beginning of period			334,390		318,671		312,556		311,354		297,735
	Sales and other inflows		35,089		31,584		30,873		125,057		124,773
	Redemptions/outflows		(30,246)		(24,522)		(26,295)		(105,753)		(108,089)
	Net flows		4,843		7,062		4,578		19,304		16,684
	Exchanges		1		(24)		(4)		(30)		(10)
	Market value change		(2,854)		8,681		(5,776)		5,752		(3,055)
Total assets under management – end of period		$	336,380	$	334,390	$	311,354	$	336,380	$	311,354

⁽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)

		October 31,		July 31,	%		October 31,	%
		2016		2016	Change		2015	Change
Equity⁽²⁾	$	89,990	$	91,837	-2%	$	90,013	0%
Fixed income⁽³⁾		60,513		59,274	2%		52,373	16%
Floating-rate income		32,192		32,483	-1%		35,619	-10%
Alternative		10,687		9,961	7%		10,173	5%
Portfolio implementation		71,426		72,428	-1%		59,487	20%
Exposure management		71,572		68,407	5%		63,689	12%
Total	$	336,380	$	334,390	1%	$	311,354	8%

⁽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)

		October 31,		July 31,	%		October 31,	%
		2016		2016	Change		2015	Change
Open-end funds⁽²⁾	$	74,721	$	74,699	0%	$	74,838	0%
Private funds⁽³⁾		27,430		27,661	-1%		26,647	3%
Closed-end funds⁽⁴⁾		23,571		23,999	-2%		24,449	-4%
Institutional separate account assets		136,451		134,580	1%		119,987	14%
High-net-worth separate account assets		25,806		25,823	0%		24,516	5%
Retail managed separate account assets		48,401		47,628	2%		40,917	18%
Total	$	336,380	$	334,390	1%	$	311,354	8%

⁽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)

		October 31,		July 31,	%		October 31,	%
		2016		2016	Change		2015	Change
Eaton Vance Management⁽²⁾	$	143,809	$	143,688	0%	$	141,415	2%
Parametric		174,084		171,571	1%		152,506	14%
Atlanta Capital		18,487		19,131	-3%		17,433	6%
Total	$	336,380	$	334,390	1%	$	311,354	8%

⁽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					Fiscal Year Ended
				% Change	% Change
	October 31,	July 31,	October 31,	Q4 2016 vs.	Q4 2016 vs.	October 31,	October 31,	%
	2016	2016	2015	Q3 2016	Q4 2015	2016	2015	Change
Equity	63.5	62.9	63.2	1%	0%	62.8	64.1	-2%
Fixed income	39.2	39.8	41.8	-2%	-6%	39.9	42.8	-7%
Floating-rate income	52.0	51.7	53.1	1%	-2%	51.8	53.2	-3%
Alternative	64.0	63.8	62.6	0%	2%	63.1	62.8	0%
Portfolio implementation	14.5	14.8	15.2	-2%	-5%	14.9	15.5	-4%
Exposure management	4.9	5.2	5.4	-6%	-9%	5.1	5.4	-6%
Total	35.1	35.7	37.7	-2%	-7%	35.8	39.3	-9%

⁽¹⁾ Excludes performance fees received, which were $0.6 million, $2.7 million and $2.0 million for the three months ended October 31, 2016, July 31, 2016,
and October 31, 2015, respectively, and $3.4 million and $3.7 million for the fiscal years ended October 31, 2016 and October 31, 2015, respectively.


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

		Three Months Ended						Fiscal Year Ended
		October 31,		July 31,		October 31,		October 31,		October 31,
		2016		2016		2015		2016		2015
Eaton Vance distributed:
Eaton Vance sponsored funds – beginning of period⁽¹⁾		$	231	$	226	$	239	$	229	$	227
	Sales and other inflows		10		1		1		22		22
	Redemptions/outflows		(1)		(7)		(5)		(33)		(21)
	Net flows		9		(6)		(4)		(11)		1
	Market value change		(9)		11		(6)		13		1
Eaton Vance sponsored funds – end of period		$	231	$	231	$	229	$	231	$	229
Eaton Vance distributed separate accounts –
	beginning of period⁽²⁾	$	2,658	$	2,557	$	2,362	$	2,440	$	2,367
	Sales and other inflows		77		28		140		131		535
	Redemptions/outflows		(142)		(59)		(14)		(236)		(488)
	Net flows		(65)		(31)		126		(105)		47
	Market value change		(101)		132		(48)		157		26
Eaton Vance distributed separate accounts –
	end of period	$	2,492	$	2,658	$	2,440	$	2,492	$	2,440
Total Eaton Vance distributed – beginning of period		$	2,889	$	2,783	$	2,601	$	2,669	$	2,594
	Sales and other inflows		87		29		141		153		557
	Redemptions/outflows		(143)		(66)		(19)		(269)		(509)
	Net flows		(56)		(37)		122		(116)		48
	Market value change		(110)		143		(54)		170		27
Total Eaton Vance distributed – end of period		$	2,723	$	2,889	$	2,669	$	2,723	$	2,669
Hexavest directly distributed – beginning of period⁽³⁾		$	11,522	$	11,435	$	12,208	$	11,279	$	14,101
	Sales and other inflows		375		308		75		985		786
	Redemptions/outflows		(413)		(734)		(699)		(1,919)		(3,503)
	Net flows		(38)		(426)		(624)		(934)		(2,717)
	Market value change		(463)		513		(305)		676		(105)
Hexavest directly distributed – end of period		$	11,021	$	11,522	$	11,279	$	11,021	$	11,279
Total Hexavest managed assets – beginning of period		$	14,411	$	14,218	$	14,809	$	13,948	$	16,695
	Sales and other inflows		462		337		216		1,138		1,343
	Redemptions/outflows		(556)		(800)		(718)		(2,188)		(4,012)
	Net flows		(94)		(463)		(502)		(1,050)		(2,669)
	Market value change		(573)		656		(359)		846		(78)
Total Hexavest managed assets – end of period		$	13,744	$	14,411	$	13,948	$	13,744	$	13,948

⁽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.

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