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Eaton Vance Corp. Report for the Three and Nine Month Periods Ended July 31, 2013

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BOSTON, Aug. 21, 2013 /PRNewswire/ -- Eaton Vance Corp. (NYSE: EV) today reported adjusted earnings per diluted share(1) of $0.52 for the third quarter of fiscal 2013, an increase of 21 percent over the $0.43 of adjusted earnings per diluted share in the third quarter of fiscal 2012 and flat versus the $0.52 of adjusted earnings per diluted share in the second quarter of fiscal 2013.

As determined under U.S. generally accepted accounting principles ("GAAP"), the Company earned $0.18 in the third quarter of fiscal 2013, $0.43 in the third quarter of fiscal 2012 and $0.50 in the second quarter of fiscal 2013. Adjusted earnings per diluted share differed from GAAP earnings per diluted share in the third quarter of fiscal 2013 to reflect $0.28 per diluted share of costs associated with retiring $250 million of the Company's 6.5 percent 2017 Senior Notes ("2017 Senior Notes"), $0.05 per diluted share of charges in connection with settling a state tax matter and $0.01 per diluted share of closed-end structuring fees incurred in connection with the $135 million initial public offering of Eaton Vance Floating-Rate Income Plus Fund in June.  In the second quarter of fiscal 2013, adjusted earnings per diluted share differed from GAAP earnings per diluted share to reflect $0.01 per diluted share of closed-end structuring fees paid in connection with the $205 million initial public offering of Eaton Vance Municipal Income Term Trust and $0.01 per diluted share related to the increase in the estimated redemption value of non-controlling interests in affiliates redeemable at other than fair value.

Both adjusted and GAAP earnings in the third quarter of fiscal 2013 were reduced by net investment losses of $0.02 per diluted share.  By comparison, net investment gains contributed $0.02 per diluted share in the second quarter of fiscal 2013 and were negligible in the third quarter of fiscal 2012.

Adjusted earnings per diluted share were $1.53 in the nine months ended July 31, 2013 compared to $1.35 in the nine months ended July 31, 2012. The Company's GAAP earnings per diluted share were $1.07 and $1.27, respectively, in the same periods.

Net inflows of $8.8 billion into long-term funds and separate accounts in the third quarter of fiscal 2013 compare to net outflows of $1.4 billion in the third quarter of fiscal 2012 and net inflows of $6.6 billion in the second quarter of fiscal 2013.  As shown in Attachment 5, the improvement in net flow results year-over-year reflects strong net inflows into floating-rate income and implementation services mandates and reduced outflows from equity strategies.  The Company's annualized internal growth rate (net inflows into long-term assets divided by beginning of period long-term assets managed) was 14 percent in both the third quarter of fiscal 2013 and the nine months ended July 31, 2013. 

"The $8.8 billion in net inflows in the third quarter of fiscal 2013 rank as the second highest quarterly total in Eaton Vance history" said Thomas E. Faust Jr., Chairman and Chief Executive Officer. "Our leading positions in floating-rate bank loans and implementation services propelled the Company to an outstanding growth quarter."

Consolidated assets under management were $268.8 billion on July 31, 2013.  This represents an increase of 39 percent over the $192.9 billion of managed assets on July 31, 2012 and an increase of 3 percent from the $260.3 billion of managed assets on April 30, 2013.  The year-over-year increase in ending assets under management reflects the $34.8 billion of managed assets gained in the December 2012 acquisition of the former Clifton Investment Management Company ("Clifton") by subsidiary Parametric Portfolio Associates LLC ("Parametric"), twelve-month net inflows of $23.0 billion and market price appreciation of $18.2 billion.  The sequential increase in ending assets under management reflects net inflows of $8.8 billion offset by market price declines of $0.4 billion.

Average consolidated assets under management were $263.7 billion in the third quarter of fiscal 2013, up 37 percent from $192.8 billion in the third quarter of fiscal 2012 and up 4 percent from $253.5 billion in the second quarter of fiscal 2013. 

Attachments 5 and 6 summarize the Company's consolidated assets under management and asset flows by investment mandate and investment vehicle. Attachment 7 summarizes the Company's consolidated assets under management by investment affiliate.

As shown in Attachment 6, consolidated gross sales and other inflows were $28.0 billion in the third quarter of fiscal 2013, up 157 percent from $10.9 billion in the third quarter of fiscal 2012 and up 14 percent from $24.7 billion in the second quarter of fiscal 2013. Gross redemptions and other outflows were $19.2 billion in the third quarter of fiscal 2013, up 55 percent from $12.4 billion in the third quarter of fiscal 2012 and up 7 percent from $18.0 billion in the second quarter of fiscal 2013.   

As of July 31, 2013, 49 percent-owned affiliate Hexavest, Inc. ("Hexavest") managed $15.7 billion of client assets, an increase of 3 percent from the $15.3 billion of managed assets on April 30, 2013. Net inflows into Hexavest-managed funds and separate accounts were $0.5 billion in the third quarter of fiscal 2013 compared to net outflows of $0.3 billion in the second quarter of fiscal 2013.  Since Eaton Vance acquired its interest in Hexavest on August 6, 2012, Hexavest's net inflows have totaled $2.9 billion and assets under management have increased by $4.7 billion, or 43 percent, from $11.0 billion at the date of acquisition.  Attachment 9 summarizes assets under management and asset flow information for Hexavest. Other than Eaton Vance-sponsored funds for which Hexavest is advisor or sub-advisor, the managed assets and flows of Hexavest are not included in Eaton Vance consolidated totals.

As of July 31, 2013, the Clifton division of Parametric managed $40.7 billion of client assets, an increase of 13 percent from the $36.0 billion of managed assets on April 30, 2013.  Net inflows into Clifton-managed funds and accounts were $5.1 billion in the third quarter of fiscal 2013 and have totaled $5.0 billion since the Clifton acquisition closed on December 31, 2012.  Clifton-managed assets have increased by $5.9 billion, or 17 percent, from $34.8 billion at the date of acquisition.  The managed assets and flows of Clifton since the date of acquisition are included in Eaton Vance consolidated totals and reflected as assets and flows of Parametric.








Financial Highlights

















Three Months Ended



(in thousands, except per share figures)











July 31,

April 30,

July 31,



2013

2013

2012









Revenue

$

350,361

$

331,692

$

298,771

Expenses


231,511


223,622


203,755

Operating income


118,850


108,070


95,016









Operating margin


34%


33%


32%









Non-operating (expense) income


(71,315)


(2,196)


1,875

Income taxes


(25,137)


(38,194)


(34,379)

Equity in net income of affiliates, net of tax


2,652


3,440


175

Net income


25,050


71,120


62,687

Net income attributable to non-controlling








 and other beneficial interests


(1,847)


(7,439)


(12,481)

Net income attributable to








Eaton Vance Corp. shareholders

$

23,203

$

63,681

$

50,206

Adjusted net income attributable to Eaton








Vance Corp. shareholders(1)

$

66,513

$

66,024

$

51,002









Earnings per diluted share

$

0.18

$

0.50

$

0.43









Adjusted earnings per diluted share(1)

$

0.52

$

0.52

$

0.43


Third Quarter Fiscal 2013 vs. Third Quarter Fiscal 2012

In the third quarter of fiscal 2013, revenue increased 17 percent to $350.4 million from revenue of $298.8 million in the third quarter of fiscal 2012.  Investment advisory and administrative fees were up 20 percent, reflecting a 37 percent increase in average consolidated assets under management and lower average effective fee rates, primarily as a result of the Clifton acquisition. Distribution and service fees were up 4 percent in aggregate, reflecting higher managed assets in fund share classes that are subject to distribution and service fees.

Operating expenses increased 14 percent to $231.5 million in the third quarter of fiscal 2013 from $203.8 million in the third quarter of fiscal 2012, reflecting increases in compensation, distribution and service fees, amortization of deferred sales commissions, fund-related expenses and other expenses. Excluding the $2.3 million of structuring fees, incentive compensation and other expenses incurred in connection with the closed-end fund offered in the third quarter fiscal 2013, operating expenses increased 12 percent from the third quarter of fiscal 2012. The increase in compensation expense reflects increases in sales- and operating income-based incentives, higher employee headcount and increases in base salaries and benefits. Gross sales and other inflows, which drive sales-based incentives, were up 157 percent year-over-year, while pre-bonus adjusted operating income, which drives operating-income based incentives, was up 23 percent over the same period. The increase in distribution expense reflects $1.7 million in closed-end fund-related structuring fees paid to distribution partners and an increase in intermediary marketing support payments, partially offset by a decrease in discretionary marketing expenses. The increase in amortization of deferred sales commissions largely reflects an increase in Class C share amortization.  The increase in fund-related expenses reflects an increase in subadvisory fees and $0.3 million of fund-related expenses incurred in conjunction with the closed-end fund offering mentioned above. Other expenses increased 6 percent, as increases in travel-related expenses, information technology and other corporate expenses were partially offset by decreases in professional fees and facilities-related expenses. 

Operating income was up 25 percent to $118.9 million in the third quarter of fiscal 2013 from $95.0 million in the third quarter of fiscal 2012.

Non-operating expense was $71.3 million in the third quarter of fiscal 2013 compared to non-operating income of $1.9 million in the third quarter of fiscal 2012. The swing to non-operating expense from non-operating income reflects $52.9 million in costs incurred on the retirement of $250 million of the Company's 2017 Senior Notes in the third quarter of fiscal 2013, a decline of $10.0 million in gains (losses) and other investment income, a $0.6 million increase in interest expense and a $9.7 million decline in income (expense) of the Company's consolidated collateralized obligation entity ("CLO").  The decline in gains (losses) and other investment income reflects a $3.1 million loss recognized in the third quarter of fiscal 2013 on a reverse treasury lock entered into in conjunction with the retirement of the 2017 Senior Notes and markdowns in fixed income positions in the Company's seed capital portfolio in the third quarter of fiscal 2013.  The increase in interest expense reflects approximately $0.9 million of additional interest expense recognized in the third quarter of fiscal 2013 related to the accelerated amortization of a treasury lock tied to the retired portion of the 2017 Senior Notes.   

During the third quarter of fiscal 2013, the Company settled a multi-year state tax audit for a lump sum payment of $19.6 million. Taking into account prior accruals and the federal tax benefit, the effect on earnings was an increase to income tax expense of $6.7 million.  The Company's effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 52.9 percent in the third quarter of fiscal 2013. Excluding the state tax settlement and the impact of CLO entity expense borne by other beneficial interest holders, the Company's effective tax rate was 37.1 percent. 

Equity in net income of affiliates increased $2.5 million from the third quarter of fiscal 2012, reflecting $2.5 million of Company equity in the net income of Hexavest.

Net income attributable to non-controlling and other beneficial interests was $1.8 million in the third quarter of fiscal 2013 compared to $12.5 million in the third quarter of fiscal 2012. As shown in Attachment 3, the change reflects a decline in the net income (loss) attributable to non-controlling interest holders of the Company's consolidated CLO entity and a decline in net income (loss) attributable to non-controlling interest holders of the Company's consolidated funds. 

Weighted average diluted shares outstanding increased 9.3 million shares, or 8 percent, in the third quarter of fiscal 2013 over the third quarter of fiscal 2012.  The change reflects an increase in the total number of shares outstanding due to exercise of employee stock options and an increase in the dilutive effect of in-the-money options resulting from a 58 percent increase in the quarterly average share price of the Company's Non-Voting Common Stock.

Third Quarter Fiscal 2013 vs. Second Quarter Fiscal 2013

In the third quarter of fiscal 2013, revenue increased 6 percent to $350.4 million from revenue of $331.7 million in the second quarter of fiscal 2013.  Investment advisory and administrative fees were up 6 percent in the third quarter of fiscal 2013 compared to the second quarter of fiscal 2013, reflecting a 4 percent increase in average consolidated assets under management and a modest increase in average effective fee rates. Performance fees contributed $0.9 million and $0.1 million to investment advisory and administrative fees in the third quarter of fiscal 2013 and the second quarter of fiscal 2013, respectively. Distribution and service fee revenue increased 3 percent in aggregate, reflecting an increase in average managed assets in fund share classes that are subject to such fees.

Operating expenses increased 4 percent to $231.5 million in the third quarter of fiscal 2013 from $223.6 million in the second quarter of fiscal 2013, reflecting increases in compensation, fund-related and other expenses and higher amortization of deferred sales commissions, partially offset by a decrease in service fee expense. The increase in compensation expense reflects increases in operating income-based incentives and increases in the number of payroll days in the quarter, offset by a decrease in sales-based incentives. Pre-bonus adjusted operating income, which drives operating-income based incentives, was up 9 percent over the second quarter of fiscal 2013. Lower sales-based incentives reflect a shift in sales mix from point-of-sale incentives to revenue-based incentives paid over time.  The increase in amortization of deferred sales commissions largely reflects an increase in Class C share amortization. Fund-related expenses increased 2 percent due to an increase in sub-advisory fees paid. Other expenses increased 6 percent, reflecting increases in travel-related expenses, facilities-related expenses, information technology, professional services and other corporate expenses.

Operating income was up 10 percent to $118.9 million in the third quarter of fiscal 2013 from $108.1 million in the second quarter of fiscal 2013.

Non-operating expense was $71.3 million in the third quarter of fiscal 2013 compared to $2.2 million in the second quarter of fiscal 2013.  The increase in non-operating expense reflects the $52.9 million in costs incurred on the retirement of $250 million of the Company's 2017 Senior Notes in the third quarter, a $13.1 million decline in gains (losses) and other investment income, a $0.6 million increase in interest expense and a $2.6 million decline in income (expense) of the Company's consolidated CLO entity.  The decline in gains (losses) and other investment income reflects the $3.1 million loss recognized in the third quarter on a reverse treasury lock entered into in conjunction with the retirement of the 2017 Senior Notes and markdowns in fixed income positions in the Company's seed capital portfolio in the third quarter.  The increase in interest expense reflects approximately $0.9 million of additional interest expense recognized in the third quarter related to the accelerated amortization of a treasury lock tied to the retired portion of the 2017 Senior Notes.

Equity in net income of affiliates decreased by $0.8 million in the third quarter of fiscal 2013 compared to the second quarter of fiscal 2013, primarily reflecting a decline in gains (losses) and other income on the Company's investments in sponsored products.  Equity in net income of affiliates for the third quarter of fiscal 2013 and the second quarter of fiscal 2013 includes $2.5 million and $2.1 million, respectively, of Company equity in net income of Hexavest. 

Net income attributable to non-controlling and other beneficial interests totaled $1.8 million in the third quarter of fiscal 2013 and $7.4 million in the second quarter of fiscal 2013. As shown in Attachment 3, the decrease can be primarily attributed to a decline in the net income (loss) attributable to non-controlling interest holders of the Company's consolidated CLO entity and a decline in net income (loss) attributable to non-controlling interest holders of the Company's consolidated funds.  Included in net income attributable to non-controlling and other beneficial interests in the second quarter of fiscal 2013 was a $0.7 million non-controlling interest value adjustment relating to subsidiary Parametric Risk Advisors LLC based on an April 30 enterprise value measurement.

Balance Sheet Information

Cash and cash equivalents totaled $379.4 million on July 31, 2013, with no outstanding borrowings against the Company's $300 million credit facility.  During the third quarter of fiscal 2013, the Company issued $325 million of new 3.625 percent 2023 Senior Notes and retired $250 million of its outstanding 2017 Senior Notes.  During the first nine months of fiscal 2013, the Company used $48.2 million to repurchase and retire approximately 1.3 million shares of its Non-Voting Common Stock under its repurchase authorization.  Approximately 2.6 million shares of the current 8.0 million share repurchase authorization remains unused.

Conference Call Information

Eaton Vance Corp. will host a conference call and webcast at 11:00 AM EDT today to discuss the financial results for the three and nine months ended July 31, 2013. To participate in the conference call, please call 877-407-0778 (domestic) or 201-689-8565 (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, www.eatonvance.com

A replay of the call will be available for one week by calling 877-660-6853 (domestic) or 201-612-7415 (international) or by accessing Eaton Vance's website, www.eatonvance.com. Listeners to the telephone replay must enter the confirmation code 419235.

About Eaton Vance Corp.

Eaton Vance Corp. is one of the oldest investment management firms in the United States, with a history dating back to 1924. 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 www.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.

_________________________
(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 and other items management deems non-recurring or non-operating, such as special dividends, costs associated with retiring debt and tax settlements. See reconciliation provided in Attachment 2 for more information on adjusting items.


















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 2013

Q3 2013












July 31,

April 30,

July 31,

vs.

vs.


July 31,

July 31,

%





2013

2013

2012

Q2 2013

Q3 2012


2013

2012

Change


Revenue:








































Investment advisory and administrative fees

$

293,589

$

276,921

$

244,655

6

%

20

%


$

833,791

$

732,995

14

%



Distribution and underwriter fees


22,681


22,165


22,066

2


3




67,597


67,132

1




Service fees


32,259


31,132


30,760

4


5




94,521


95,124

(1)




Other revenue


1,832


1,474


1,290

24


42




4,661


3,896

20





Total revenue


350,361


331,692


298,771

6


17




1,000,570


899,147

11



Expenses:








































Compensation and related costs


115,379


110,012


94,700

5


22




334,220


288,949

16




Distribution expense


35,452


35,304


32,670

-


9




104,645


97,958

7




Service fee expense


29,013


29,211


28,165

(1)


3




86,488


84,926

2




Amortization of deferred sales commissions


4,983


4,752


4,593

5


8




14,518


15,946

(9)




Fund-related expenses


8,230


8,074


7,205

2


14




23,728


20,446

16




Other expenses


38,454


36,269


36,422

6


6




109,371


104,275

5





Total expenses


231,511


223,622


203,755

4


14




672,970


612,500

10



Operating income


118,850


108,070


95,016

10


25




327,600


286,647

14



Non-operating income (expense):




















(Losses) gains and other investment income, net


(8,027)


5,043


1,927

NM


NM




2,223


12,900

(83)




Interest expense


(9,167)


(8,572)


(8,525)

7


8




(26,309)


(25,350)

4




Loss on extinguishment of debt


(52,886)


-


-

NM


NM




(52,886)


-

NM




Other income (expense) of consolidated CLO entity:




















     Gains and other investment income, net


1,704


4,384


12,872

(61)


(87)




7,881


32,047

(75)





     Interest expense


(2,939)


(3,051)


(4,399)

(4)


(33)




(10,211)


(12,844)

(20)





Total non-operating (expense) income


(71,315)


(2,196)


1,875

NM


NM




(79,302)


6,753

NM
























Income before income taxes and equity



















   in net income of affiliates

47,535


105,874


96,891

(55)


(51)




248,298


293,400

(15)



Income taxes


(25,137)


(38,194)


(34,379)

(34)


(27)




(99,270)


(104,730)

(5)



Equity in net income of affiliates, net of tax


2,652


3,440


175

(23)


NM




9,269


1,657

459



Net income


25,050


71,120


62,687

(65)


(60)




158,297


190,327

(17)



Net income attributable to non-controlling



















   and other beneficial interests


(1,847)


(7,439)


(12,481)

(75)


(85)




(21,608)


(39,980)

(46)



Net income attributable to



















   Eaton Vance Corp. Shareholders

$

23,203

$

63,681

$

50,206

(64)


(54)



$

136,689

$

150,347

(9)
























Earnings per share:



















Basic

$

0.19

$

0.53

$

0.44

(64)


(57)



$

1.12

$

1.30

(14)




Diluted

$

0.18

$

0.50

$

0.43

(64)


(58)



$

1.07

$

1.27

(16)
























Weighted average shares outstanding:


















Basic


117,594


117,102


112,110

-


5




116,399


112,354

4




Diluted


123,872


123,330


114,591

-


8




122,155


115,031

6
























Dividends declared per share

$

0.20

$

0.20

$

0.19

-


5



$

1.60

$

0.57

181



 


































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 2013 vs.

Q3 2013 vs.


July 31,

July 31,

%


(in thousands, except per share figures)

2013

2013

2012

Q2 2013

Q3 2012


2013

2012

Change






















Net income attributable to Eaton




















Vance Corp. shareholders

$

23,203

$

63,681

$

50,206

(64)

%

(54)

%


$

136,689

$

150,347

(9)

%





















Non-controlling interest value




















adjustments


405


666


796

(39)


(49)




11,718


9,996

17






















Closed-end fund structuring fees,




















net of tax


1,043


1,677


-

(38)


NM




2,720


-

NM






















Loss on extinguishment of debt, net of tax *


35,171


-


-

NM


NM




35,171


-

NM






















Settlement of state tax audit


6,691


-


-

NM


NM




6,691


-

NM






















Adjusted net income attributable to




















Eaton Vance Corp. shareholders

$

66,513

$

66,024

$

51,002

1


30



$

192,989

$

160,343

20










































Earnings per diluted share

$

0.18

$

0.50

$

0.43

(64)


(58)



$

1.07

$

1.27

(16)






















Non-controlling interest value




















adjustments


-


0.01


-

NM


NM




0.09


0.08

13






















Closed-end fund structuring fees,



















net of tax


0.01


0.01


-

-


NM




0.02


-

NM






















Loss on extinguishment of debt, net of tax


0.28


-


-

NM


NM




0.28


-

NM






















Settlement of state tax audit


0.05


-


-

NM


NM




0.05


-

NM






















Special dividend adjustment


-


-


-

NM


NM




0.02


-

NM























Adjusted earnings per diluted share

$

0.52

$

0.52

$

0.43

-


21



$

1.53

$

1.35

13
























* The loss on extinguishment of debt is comprised of a $52.9 million loss on extinguishment of debt, a $3.1 million loss on a reverse treasury lock entered into in




   conjunction with the retirement of debt and $0.9 million of additional interest related to the accelerated amortization of a treasury lock tied to the retired portion of the debt.






































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 2013 vs.

Q3 2013 vs.


July 31,

July 31,

%


(in thousands)

2013

2013

2012

Q2 2013

Q3 2012


2013

2012

Change






















Consolidated funds

$

(206)

$

2,986

$

839

NM

%

NM

%


$

3,886

$

3,167

23

%





















Majority-owned subsidiaries


4,007


3,690


3,354

9


19




11,596


10,465

11























Non-controlling interest value




















adjustments


405


666


796

(39)


(49)




11,718


9,996

17






















Consolidated CLO entity


(2,359)


97


7,492

NM


NM




(5,592)


16,352

NM























Net income attributable to non-controlling




















and other beneficial interests

$

1,847

$

7,439

$

12,481

(75)


(85)



$

21,608

$

39,980

(46)



 







Attachment 4


Eaton Vance Corp.


Balance Sheet


(in thousands, except per share figures)








July 31,




October 31,




2013




2012


Assets
























Cash and cash equivalents

$

379,414



$

462,076


Investment advisory fees and other receivables


161,237




133,589


Investments


545,474




486,933


Assets of consolidated collateralized loan obligation ("CLO") entity:








          Cash and cash equivalents


58,300




36,758


          Bank loans and other investments


245,991




430,583


          Other assets


2,237




1,107


Deferred sales commissions


18,859




19,336


Deferred income taxes


57,422




51,234


Equipment and leasehold improvements, net


49,713




54,889


Intangible assets, net


76,892




59,228


Goodwill


228,876




154,636


Other assets


85,942




89,122


   Total assets

$

1,910,357



$

1,979,491










Liabilities, Temporary Equity and Permanent Equity
















Liabilities:
















Accrued compensation

$

133,686



$

145,338


Accounts payable and accrued expenses


58,645




59,397


Dividend payable


24,273




23,250


Debt


573,460




500,000


Liabilities of consolidated CLO entity:








          Senior and subordinated note obligations


291,175




446,605


          Other liabilities


421




766


Other liabilities


77,411




91,785


   Total liabilities


1,159,071




1,267,141


Commitments and contingencies
















Temporary Equity:








Redeemable non-controlling interests


97,051




98,765


          Total temporary equity


97,051




98,765










Permanent Equity:








Voting Common Stock, par value $0.00390625 per share:








   Authorized, 1,280,000 shares








   Issued, 399,240 and 413,167 shares, respectively


2




2


Non-Voting Common Stock, par value $0.00390625 per share:








   Authorized, 190,720,000 shares








   Issued, 120,938,397 and 115,878,384 shares, respectively


472




453


Additional paid-in capital


134,464




26,730


Notes receivable from stock option exercises


(6,861)




(4,155)


Accumulated other comprehensive income


686




3,923


Appropriated retained earnings


13,107




18,699


Retained earnings


511,034




566,420


   Total Eaton Vance Corp. shareholders' equity


652,904




612,072


Non-redeemable non-controlling interests


1,331




1,513


   Total permanent equity


654,235




613,585


Total liabilities, temporary equity and permanent equity

$

1,910,357



$

1,979,491










 















Attachment 5


Eaton Vance Corp.


Consolidated Net Flows by Investment Mandate(1)


(in millions)




Three Months Ended


Nine Months Ended




July 31,


April 30,


July 31,


July 31,


July 31,




2013


2013


2012


2013


2012


Equity assets - beginning of period(2)

$

89,534


$

86,518


$

86,040


$

80,782


$

84,281



Sales and other inflows


4,056



5,270



3,551



13,823



12,743



Redemptions/outflows


(4,185)



(4,990)



(6,660)



(14,135)



(20,132)



Net flows


(129)



280



(3,109)



(312)



(7,389)



Assets acquired(3)


-



-



-



1,572



-



Exchanges


46



124



(19)



162



(32)



Market value change


1,323



2,612



(2,652)



8,570



3,400


Equity assets - end of period

$

90,774


$

89,534


$

80,260


$

90,774


$

80,260


Fixed income assets - beginning of period


49,949



49,679



46,891



49,003



43,708



Sales and other inflows


2,065



3,289



2,886



8,732



9,139



Redemptions/outflows


(3,595)



(3,348)



(1,973)



(10,318)



(6,702)



Net flows


(1,530)



(59)



913



(1,586)



2,437



Assets acquired(3)


-



-



-



472



-



Exchanges


(277)



(59)



30



(358)



70



Market value change


(2,321)



388



364



(1,710)



1,983


Fixed income assets - end of period

$

45,821


$

49,949


$

48,198


$

45,821


$

48,198


Floating-rate income assets - 

















beginning of period


33,679



28,656



24,847



26,388



24,322



Sales and other inflows


6,636



6,092



2,091



15,987



5,212



Redemptions/outflows


(2,152)



(1,153)



(1,535)



(4,664)



(4,274)



Net flows


4,484



4,939



556



11,323



938



Exchanges


169



50



5



251



24



Market value change


(162)



34



(163)



208



(39)


Floating-rate income assets - end

















of period

$

38,170


$

33,679


$

25,245


$

38,170


$

25,245


Alternative assets -  beginning of period


16,022



14,345



10,517



12,864



10,650



Sales and other inflows


2,348



2,767



1,343



6,925



3,570



Redemptions/outflows


(1,770)



(960)



(1,201)



(3,785)



(3,440)



Net flows


578



1,807



142



3,140



130



Assets acquired(3)


-



-



-



650



-



Exchanges


(22)



(103)



(13)



(138)



(74)



Market value change


(480)



(27)



(34)



(418)



(94)


Alternative assets - end of period

$

16,098


$

16,022


$

10,612


$

16,098


$

10,612


Implementation services assets -

















beginning of period(4)


70,966



68,420



28,852



30,302



24,574



Sales and other inflows


12,933



7,252



1,052



26,663



4,980



Redemptions/outflows


(7,504)



(7,576)



(996)



(18,396)



(3,090)



Net flows


5,429



(324)



56



8,267



1,890



Assets acquired(3)


-



-



-



32,064



-



Exchanges


-



(15)



-



(14)



(1)



Market value change


1,278



2,885



(585)



7,054



1,860


Implementation services assets -

















end of period

$

77,673


$

70,966


$

28,323


$

77,673


$

28,323


Long-term assets - beginning of period


260,150



247,618



197,147



199,339



187,535



Sales and other inflows


28,038



24,670



10,923



72,130



35,644



Redemptions/outflows


(19,206)



(18,027)



(12,365)



(51,298)



(37,638)



Net flows


8,832



6,643



(1,442)



20,832



(1,994)



Assets acquired(3)


-



-



-



34,758



-



Exchanges


(84)



(3)



3



(97)



(13)



Market value change


(362)



5,892



(3,070)



13,704



7,110


Total long-term assets - end of period

$

268,536


$

260,150


$

192,638


$

268,536


$

192,638


Cash management fund assets -

















end of period


219



127



220



219



220


Total assets under management -

















end of period

$

268,755


$

260,277


$

192,858


$

268,755


$

192,858



















(1)  Consolidated Eaton Vance Corp.  See Attachment 9 for managed assets and flows of 49 percent-owned Hexavest Inc.


(2)  Balances include assets in balanced accounts holding income securities.


(3)  Balances represent Clifton assets acquired on December 31, 2012.








(4)  Balances represent amounts reclassified from equity for fiscal 2012 periods.


 














Attachment 6


Eaton Vance Corp.


Consolidated Net Flows by Investment Vehicle(1)


(in millions)




Three Months Ended


Nine Months Ended




July 31,


April 30,


July 31,


July 31,


July 31,




2013


2013


2012


2013


2012


Long-term fund assets - beginning of period

$

127,014


$

119,162


$

114,029


$

113,249


$

111,705



Sales and other inflows


11,597



12,629



6,266



33,307



19,819



Redemptions/outflows


(7,932)



(6,506)



(8,554)



(21,316)



(24,483)



Net flows


3,665



6,123



(2,288)



11,991



(4,664)



Assets acquired(2)


-



-



-



638



-



Exchanges


(241)



(3)



3



(262)



(13)



Market value change


(1,396)



1,732



(1,487)



3,426



3,229


Long-term fund assets - end of period

$

129,042


$

127,014


$

110,257


$

129,042


$

110,257



















Institutional separate account assets -

















beginning of period


84,724



83,350



40,883



43,338



38,003



Sales and other inflows


13,480



8,102



2,262



28,366



7,347



Redemptions/outflows


(8,901)



(9,071)



(1,970)



(21,792)



(6,979)



Net flows


4,579



(969)



292



6,574



368



Assets acquired(2)


-



-



-



34,120



-



Exchanges


152



-



-



157



11



Market value change


18



2,343



(890)



5,284



1,903


Institutional separate account assets -

















end of period

$

89,473


$

84,724


$

40,285


$

89,473


$

40,285



















High-net-worth separate account assets -

















beginning of period


18,027



16,245



14,704



15,036



13,256



Sales and other inflows


1,055



1,497



752



3,931



3,110



Redemptions/outflows


(614)



(573)



(540)



(2,385)



(1,626)



Net flows


441



924



212



1,546



1,484



Exchanges


(9)



9



-



(16)



(999)



Market value change


612



849



(234)



2,505



941


High-net-worth separate account
















   assets - end of period

$

19,071


$

18,027


$

14,682


$

19,071


$

14,682



















Retail managed account assets -

















beginning of period


30,385



28,861



27,531



27,716



24,571



Sales and other inflows


1,906



2,442



1,643



6,526



5,368



Redemptions/outflows


(1,759)



(1,877)



(1,301)



(5,805)



(4,550)



Net flows


147



565



342



721



818



Exchanges


14



(9)



-



24



988



Market value change


404



968



(459)



2,489



1,037


Retail managed account assets -

















end of period

$

30,950


$

30,385


$

27,414


$

30,950


$

27,414



















Total long-term assets - beginning

















of period


260,150



247,618



197,147



199,339



187,535



Sales and other inflows


28,038



24,670



10,923



72,130



35,644



Redemptions/outflows


(19,206)



(18,027)



(12,365)



(51,298)



(37,638)



Net flows


8,832



6,643



(1,442)



20,832



(1,994)



Assets acquired(2)


-



-



-



34,758



-



Exchanges


(84)



(3)



3



(97)



(13)



Market value change


(362)



5,892



(3,070)



13,704



7,110


Total long-term assets - end of period

$

268,536


$

260,150


$

192,638


$

268,536


$

192,638



















Cash management fund assets -

















end of period


219



127



220



219



220



















Total assets under management -

















end of period

$

268,755


$

260,277


$

192,858


$

268,755


$

192,858



















(1)   Consolidated Eaton Vance Corp.  See Attachment 9 for managed assets and flows of 49 percent-owned Hexavest Inc.


(2)   Balances represent Clifton assets acquired on December 31, 2012.








 













Attachment 7


Eaton Vance Corp.


Consolidated Assets under Management by Investment Affiliate (1)


(in millions)




















July 31,



April 30,


%



July 31,


%





2013



2013


Change



2012


Change


Eaton Vance Management(2)

$

143,229


$

142,211


1%


$

128,953


11%


Parametric


107,192



100,760


6%



49,023


119%


Atlanta Capital


18,334



17,306


6%



14,882


23%


Total

$

268,755


$

260,277


3%


$

192,858


39%

















(1)   Consolidated Eaton Vance Corp. See Attachment 9 for managed assets and flows of 49 percent-owned Hexavest.


(2)   Includes managed assets of wholly owned subsidiaries Eaton Vance Investment Counsel and Fox Asset Management


      LLC, as well as certain Eaton Vance-sponsored funds and accounts managed by Hexavest and unaffiliated third-party


      advisors under Eaton Vance supervision.






























Attachment 8


Eaton Vance Corp.


Consolidated Assets under Management by Investment Mandate (1)


(in millions)




















July 31,



April 30,


%



July 31,


%





2013



2013


Change



2012


Change


Equity(2)

$

90,774


$

89,534


1%


$

80,260


13%


Fixed income


45,821



49,949


-8%



48,198


-5%


Floating-rate income


38,170



33,679


13%



25,245


51%


Alternative


16,098



16,022


0%



10,612


52%


Implementation services


77,673



70,966


9%



28,323


174%


Cash management


219



127


72%



220


0%


Total

$

268,755


$

260,277


3%


$

192,858


39%

















(1)   Consolidated Eaton Vance Corp. See Attachment 9 for managed assets and flows of 49 percent-owned Hexavest.


(2)   Balances include assets in balanced accounts holding income securities.


 





Attachment 9



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,





2013


2013


2013



Eaton Vance distributed:











Eaton Vance sponsored funds - beginning











   of period(1)

$

161


$

135


$

37




Sales and other inflows


19



17



130




Redemptions/outflows


(6)



(1)



(12)




Net flows


13



16



118




Market value change


(1)



10



18



Eaton Vance sponsored funds - end











   of period

$

173


$

161


$

173



Eaton Vance distributed separate accounts -











   beginning of period(2)

$

1,283


$

1,185


$

-




Sales and other inflows


227



3



1,378




Redemptions/outflows


(1)



-



(1)




Net flows


226



3



1,377




Market value change


6



95



138



Eaton Vance distributed separate accounts -











   end of period

$

1,515


$

1,283


$

1,515



Total Eaton Vance distributed - beginning











   of period

$

1,444


$

1,320


$

37




Sales and other inflows


246



20



1,508




Redemptions/outflows


(7)



(1)



(13)




Net flows


239



19



1,495




Market value change


5



105



156



Total Eaton Vance distributed - end











   of period

$

1,688


$

1,444


$

1,688



Hexavest directly distributed - beginning











   of period(3)

$

13,831


$

13,224


$

12,073




Sales and other inflows


785



298



2,003




Redemptions/outflows


(530)



(570)



(1,363)




Net flows


255



(272)



640




Market value change


(40)



879



1,333



Hexavest directly distributed - end











   of period

$

14,046


$

13,831


$

14,046



Total Hexavest assets - beginning of period

$

15,275


$

14,544


$

12,110




Sales and other inflows


1,031



318



3,511




Redemptions/outflows


(537)



(571)



(1,376)




Net flows


494



(253)



2,135




Market value change


(35)



984



1,489



Total Hexavest assets - end of period

$

15,734


$

15,275


$

15,734





















(1)

Managed assets and flows of Eaton Vance-sponsored pooled investment vehicles for which Hexavest is advisor or sub-advisor.



Eaton Vance receives management and/or distribution revenue on these assets, which are included in the Eaton



Vance consolidated results in Attachments 5, 6, 7 and 8.


(2)

Managed assets and flows of Eaton Vance-distributed separate accounts managed by Hexavest.  Eaton Vance receives



distribution, but not management, revenue on these assets, which are not included in the Eaton Vance consolidated



results in Attachments 5, 6, 7 and 8.


(3)

Managed assets and flows of pre-transaction Hexavest clients and post-transaction Hexavest clients in Canada. Eaton



Vance receives no management or distribution revenue on these assets, which are not included in the Eaton Vance



consolidated results in Attachments 5, 6, 7 and 8.


 

 

SOURCE Eaton Vance Corp.



RELATED LINKS
http://www.eatonvance.com

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