Eaton Vance Corp. Report for the Three and Nine Month Periods Ended July 31, 2015

Aug 19, 2015, 08:42 ET from Eaton Vance Corp.

BOSTON, Aug. 19, 2015 /PRNewswire/ -- Eaton Vance Corp. (NYSE: EV) today reported adjusted earnings per diluted share(1) of $0.57 for the third quarter of fiscal 2015, a decrease of 10 percent from $0.63 of adjusted earnings per diluted share in the third quarter of fiscal 2014 and a decrease of 2 percent from $0.58 of adjusted earnings per diluted share in the second quarter of fiscal 2015.

As determined under U.S. generally accepted accounting principles ("GAAP"), the Company earned $0.57 per diluted share in the third quarter of fiscal 2015, $0.63 per diluted share in the third quarter of fiscal 2014 and $0.58 per diluted share in the second quarter of fiscal 2015.

Compensation and related costs in connection with closing our Fox Asset Management LLC affiliate and other compensation costs attributable to retirements, terminations and additions to staff reduced earnings by $0.04 per diluted share in the third quarter of fiscal 2015.  For comparison, costs attributable to retirements, terminations and additions to staff reduced earnings per diluted share by $0.02 per diluted share in the third quarter of fiscal 2014 and $0.01 per diluted share in the second quarter of fiscal 2015.

Adjusted earnings per diluted share were $1.76 in the nine months ended July 31, 2015 compared to $1.80 in the nine months ended July 31, 2014, a decrease of 2 percent. The Company's GAAP earnings per diluted share were $1.39 and $1.78, respectively, for these periods. Adjusted earnings differed from GAAP earnings in the nine months ended July 31, 2015 to reflect the 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. Adjusted earnings per diluted share differed from GAAP earnings per diluted share in the nine months ended July 31, 2014 due to an increase in the estimated redemption value of non-controlling interests in affiliates redeemable at other than fair value, which reduced GAAP earnings by $0.02 per diluted share. 

Consolidated net inflows of $3.9 billion in the third quarter of fiscal 2015 represent a 5 percent annualized internal growth rate (net inflows divided by beginning of period assets managed). For comparison, the Company had net outflows of $2.0 billion in the third quarter of fiscal 2014 and net inflows of $6.8 billion in the second quarter of fiscal 2015.

"The Company's earnings in the third fiscal quarter were held back by sluggish revenues, spending to support key corporate initiatives and costs in connection with personnel changes," said Thomas E. Faust Jr., Chairman and Chief Executive Officer. "An improving trend of core asset flows, favorable investment performance and continued progress advancing our NextShares™ actively managed exchange-traded product initiative position us for resumed earnings growth as these translate into increased revenues."

Consolidated assets under management were $312.6 billion on July 31, 2015, an increase of 8 percent from the $288.2 billion of managed assets on July 31, 2014 and an increase of approximately 1 percent from the $311.0 billion of managed assets on April 30, 2015. The year-over-year increase in assets under management reflects net inflows of $18.9 billion and market appreciation of $5.5 billion. The sequential quarterly increase in assets under management reflects net inflows of $3.9 billion offset by market price declines of $2.4 billion.

Average consolidated assets under management were $309.8 billion in the third quarter of fiscal 2015, up 7 percent from $289.3 billion in the third quarter of fiscal 2014 and up 2 percent from $303.4 billion in the second quarter of fiscal 2015.

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 $32.8 billion in the third quarter of fiscal 2015, up 26 percent from $26.2 billion in the third quarter of fiscal 2014 and up 9 percent from $30.2 billion in the second quarter of fiscal 2015. Gross redemptions and other outflows were $28.9 billion in the third quarter of fiscal 2015, an increase of 3 percent from $28.2 billion in the third quarter of fiscal 2014 and up 23 percent from $23.4 billion in the second quarter of fiscal 2015.

As of July 31, 2015, 49 percent-owned affiliate Hexavest, Inc. ("Hexavest") managed $14.8 billion of client assets, a decrease of 13 percent from the $17.0 billion of managed assets on July 31, 2014 and a decrease of 5 percent from the $15.6 billion of managed assets on April 30, 2015. Hexavest-managed funds and separate accounts had net outflows of $0.5 billion in the third quarter of fiscal 2015, $0.3 billion in the third quarter of fiscal 2014 and $0.2 billion in the second quarter of fiscal 2015. Attachment 9 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,

2015

2015

2014

Revenue 

$

355,511

$

351,664

$

367,590

Expenses 

238,778

229,443

236,412

Operating income 

116,733

122,221

131,178

    Operating margin 

32.8%

34.8%

35.7%

Non-operating expense 

(7,584)

(5,389)

(4,850)

Income taxes 

(43,435)

(43,896)

(48,899)

Equity in net income of affiliates, net of tax 

3,260

2,957

3,840

Net income 

68,974

75,893

81,269

Net income attributable to non-controlling 

 and other beneficial interests 

(265)

(5,509)

(3,334)

Net income attributable to  

Eaton Vance Corp. shareholders 

$

68,709

$

70,384

$

77,935

Adjusted net income attributable to Eaton  

Vance Corp. shareholders(1)

$

68,715

$

70,381

$

77,876

Earnings per diluted share 

$

0.57

$

0.58

$

0.63

Adjusted earnings per diluted share(1)

$

0.57

$

0.58

$

0.63

 

Third Quarter Fiscal 2015 vs. Third Quarter Fiscal 2014

In the third quarter of fiscal 2015, revenue decreased 3 percent to $355.5 million from revenue of $367.6 million in the third quarter of fiscal 2014. Investment advisory and administrative fees were down 3 percent, as the impact of a lower average effective fee rate, driven by product mix, more than offset a 7 percent increase in average consolidated assets under management. Performance fees contributed $1.7 million in the third quarter of fiscal 2015 compared to $0.9 million in the third quarter of fiscal 2014. Distribution and service fee revenues collectively were down 7 percent, reflecting lower managed assets in fund share classes that are subject to distribution and service fees.

Operating expenses increased 1 percent to $238.8 million in the third quarter of fiscal 2015 from $236.4 million in the third quarter of fiscal 2014. Increases in compensation and other operating expenses were mostly offset by lower distribution and service fee expenses and reduced amortization of deferred sales commissions. The increase in compensation expense reflects higher salaries and benefits attributable to an increase in headcount, as well as higher stock-based compensation accruals and other compensation costs in connection with employee retirements, other terminations and additions to staff.  Other expenses increased 7 percent, reflecting higher professional services, travel, facilities-related and other expenses, offset in part by lower information technology 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 first quarter fiscal 2015 termination of service and additional compensation arrangements in place with a major distribution partner. The decrease in amortization of deferred sales commissions largely reflects decreases in Class B share and Class C share amortization, offset by an increase in private fund commission amortization.

Expenses in connection with the Company's NextShares initiative totaled approximately $2.0 million in the third quarter of fiscal 2015, an increase of 107 percent from $1.0 million in the third quarter of fiscal 2014.

During the third quarter of fiscal 2015, the Company and its wholly owned subsidiary Navigate Fund Solutions LLC ("Navigate") made further progress advancing NextShares toward market introduction. In July, the U.S. Securities and Exchange Commission ("SEC") approved the listing and trading of the 18 initial Eaton Vance NextShares funds on the NASDAQ Stock Market LLC ("Nasdaq").  To date, 11 fund advisers, including Eaton Vance, have indicated their intent to offer NextShares funds by entering into preliminary agreements with Navigate and filing request for exemptive relief with the SEC.  These 11 firms collectively manage approximately $500 billion in mutual fund assets and sponsor approximately 200 funds currently rated four or five stars by Morningstar.  Following the end of the third quarter, Envestnet, Inc. announced an initiative to make NextShares available on its advisor platform.  Envestnet is a leading provider of unified wealth management technology and services to financial advisors, supporting over 41,000 advisors. 

Operating income was down 11 percent to $116.7 million in the third quarter of fiscal 2015 from $131.2 million in the third quarter of fiscal 2014. Operating margin declined to 32.8 percent in the third quarter of fiscal 2015 from 35.7 percent in the third quarter of fiscal 2014.

Non-operating expense totaled $7.6 million in the third quarter of fiscal 2015 compared to $4.9 million in the third quarter of fiscal 2014. The year-over-year change primarily reflects a $3.8 million decline in gains (losses) and other investment income related to the Company's investments in sponsored products and a $0.9 million increase in income (expense) of the Company's consolidated CLO entities.

The Company's effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 39.8 percent in the third quarter of fiscal 2015. Excluding the impact of consolidated CLO entity income (expense) borne by other beneficial interest holders, the Company's effective tax rate was 38.9 percent for the quarter.

Equity in net income of affiliates decreased to $3.3 million in the third quarter of fiscal 2015 from $3.8 million in the third quarter of fiscal 2014. Equity in net income of affiliates in the third quarter of fiscal 2015 included $2.9 million of Company equity in the net income of Hexavest and $0.4 million of net income in a private equity partnership. Equity in net income of affiliates in the third quarter of fiscal 2014 included $2.9 million of Company equity in the net income of Hexavest and $0.9 million of gains (losses) and other income on the Company's investments in sponsored funds.

As detailed in Attachment 3, net income attributable to non-controlling and other beneficial interests was $0.3 million in the third quarter of fiscal 2015 compared to $3.3 million in the third quarter of fiscal 2014.

Third Quarter Fiscal 2015 vs. Second Quarter Fiscal 2015

In the third quarter of fiscal 2015, revenue increased 1 percent to $355.5 million from $351.7 million in the second quarter of fiscal 2015. Investment advisory and administrative fees were up 1 percent, reflecting a 2 percent increase in average consolidated assets under management and an increase in the number of fee days in the quarter, offset by a slight decline in effective fee rates. Performance fees contributed $1.7 million in the third quarter of fiscal 2015 and were negligible in the second quarter of fiscal 2015. Distribution and service fee revenues collectively increased 2 percent, reflecting an increase in managed assets in fund share classes that are subject to distribution and service fees.

Operating expenses increased 4 percent to $238.8 million in the third quarter of fiscal 2015 from $229.4 million in the second quarter of fiscal 2015. The 4 percent increase reflects higher compensation, distribution and service fee expenses, fund-related expenses, other operating expenses and increased amortization of deferred sales commissions. The increase in compensation expense reflects an increase in base salaries, driven by an increase in payroll days in the current quarter, higher stock-based compensation accruals and other compensation costs in connection with employee retirements, other terminations and additions to staff, offset by a decrease in sales-based incentives. The increase in distribution expense reflects increased marketing expenses and distribution fee expenses. Service fee expense reflects increased average assets under management subject to those fees. The increase in fund-related expenses is attributable to higher fund expenses borne by the Company on funds for which it earns an all-in fee. The increase in amortization of deferred sales commissions largely reflects higher private fund commission amortization, offset by a decrease in Class B share amortization. Other expenses increased 6 percent, reflecting higher professional services, travel expenses and other corporate expenses, offset by lower information technology expenses.

NextShares-related expenses grew from $1.8 million in the second quarter of fiscal 2015 to $2.0 million in the third quarter of fiscal 2015, an increase of 12 percent.

Operating income was down 4 percent to $116.7 million in the third quarter of fiscal 2015 from $122.2 million in the second quarter of fiscal 2015. Operating margin decreased to 32.8 percent in the third quarter of fiscal 2015 from 34.8 percent in the second quarter of fiscal 2015.

Non-operating expense totaled $7.6 million in the third quarter of fiscal 2015 compared to $5.4 million in the second quarter of fiscal 2015, reflecting a $1.2 million decline in gains (losses) and other investment income related to the Company's investments in sponsored products and a $1.0 million decline in income (expense) of the Company's consolidated CLO entity.

Equity in net income of affiliates increased to $3.3 million in the third quarter of fiscal 2015 from $3.0 million in the second quarter of fiscal 2015. In the third quarter of fiscal 2015, equity in net income of affiliates included $2.9 million of Company equity in the net income of Hexavest and $0.4 million of net income in a private equity partnership. In the second quarter of fiscal 2015, equity in net income of affiliates included $2.6 million of Company equity in the net income of Hexavest and $0.4 million of net income in a private equity partnership.

As detailed in Attachment 3, net income attributable to non-controlling and other beneficial interests was $0.3 million in the third quarter of fiscal 2015 and $5.5 million in the second quarter of fiscal 2015.

Balance Sheet Information

Cash and cash equivalents totaled $318.8 million on July 31, 2015, with no outstanding borrowings against the Company's $300 million credit facility. Included within investments is $115.4 million of holdings of short-term debt securities with maturities between 90 days and one year. During the first nine months of fiscal 2015, the Company used $192.2 million to repurchase and retire approximately 4.7 million shares of its Non-Voting Common Stock under its repurchase authorizations. Of the current 8.0 million share repurchase authorization, approximately 5.9 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 nine months ended July 31, 2015. 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 – Conference ID 1717296." 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 855-859-2056 (domestic) or 404-537-3406 (international) or by accessing Eaton Vance's website, www.eatonvance.com. Listeners to the telephone replay must enter the confirmation code 1717296.

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, 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. 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 2015

Q3 2015

July 31,

April 30,

July 31,

vs.

vs.

July 31,

July 31,

%

2015

2015

2014

Q2 2015

Q3 2014

2015

2014

Change

Revenue:

Investment advisory and administrative fees

$

303,625

$

300,624

$

311,756

1

%

(3)

%

$

906,062

$

916,605

(1)

%

Distribution and underwriter fees

20,285

20,048

21,548

1

(6)

61,369

64,381

(5)

Service fees

29,265

28,461

31,977

3

(8)

87,573

95,097

(8)

Other revenue

2,336

2,531

2,309

(8)

1

7,101

5,829

22

Total revenue

355,511

351,664

367,590

1

(3)

1,062,105

1,081,912

(2)

Expenses:

Compensation and related costs

124,400

120,075

117,632

4

6

364,667

351,110

4

Distribution expense

31,300

30,082

35,591

4

(12)

167,649

105,924

58

Service fee expense

26,978

26,358

29,780

2

(9)

81,116

87,266

(7)

Amortization of deferred sales commissions

3,767

3,692

4,084

2

(8)

11,187

13,408

(17)

Fund-related expenses

9,446

8,932

9,380

6

1

27,084

26,288

3

Other expenses

42,887

40,304

39,945

6

7

120,888

117,235

3

Total expenses

238,778

229,443

236,412

4

1

772,591

701,231

10

Operating income

116,733

122,221

131,178

(4)

(11)

289,514

380,681

(24)

Non-operating income (expense):

Gains (losses) and other investment

income, net

(850)

347

2,917

NM

NM

2,299

2,592

(11)

Interest expense

(7,344)

(7,337)

(7,443)

-

(1)

(22,017)

(22,247)

(1)

Other income (expense) of consolidated

collateralized loan obligation

("CLO") entities:

     Gains and other investment

          income, net

1,771

2,212

1,434

(20)

24

5,284

15,247

(65)

     Interest and other expense

(1,161)

(611)

(1,758)

90

(34)

(2,966)

(13,781)

(78)

Total non-operating expense

(7,584)

(5,389)

(4,850)

41

56

(17,400)

(18,189)

(4)

Income before income taxes and equity

   in net income of affiliates

109,149

116,832

126,328

(7)

(14)

272,114

362,492

(25)

Income taxes

(43,435)

(43,896)

(48,899)

(1)

(11)

(104,101)

(138,790)

(25)

Equity in net income of affiliates, net of tax

3,260

2,957

3,840

10

(15)

9,363

12,344

(24)

Net income

68,974

75,893

81,269

(9)

(15)

177,376

236,046

(25)

Net income attributable to non-controlling

   and other beneficial interests

(265)

(5,509)

(3,334)

(95)

(92)

(9,280)

(11,852)

(22)

Net income attributable to

   Eaton Vance Corp. Shareholders

$

68,709

$

70,384

$

77,935

(2)

(12)

$

168,096

$

224,194

(25)

Earnings per share:

Basic

$

0.60

$

0.61

$

0.66

(2)

(9)

$

1.45

$

1.86

(22)

Diluted

$

0.57

$

0.58

$

0.63

(2)

(10)

$

1.39

$

1.78

(22)

Weighted average shares outstanding:

Basic

113,406

114,415

116,145

(1)

(2)

113,890

117,248

(3)

Diluted

118,281

119,730

121,013

(1)

(2)

119,013

122,550

(3)

Dividends declared per share

$

0.25

$

0.25

$

0.22

-

14

$

0.75

$

0.66

14

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 2015 vs.

Q3 2015 vs.

July 31,

July 31,

%

(in thousands, except per share figures)

2015

2015

2014

Q2 2015

Q3 2014

2015

2014

Change

Net income attributable to Eaton

Vance Corp. shareholders

$

68,709

$

70,384

$

77,935

(2)

%

(12)

%

$

168,096

$

224,194

(25)

%

Non-controlling interest value adjustments

6

(3)

(59)

NM

NM

203

2,330

(91)

Payments to end certain closed-end fund

service and additional compensation

arrangements, net of tax

-

-

-

-

-

44,895

-

NM

Adjusted net income attributable

to Eaton Vance Corp. shareholders

$

68,715

$

70,381

$

77,876

(2)

(12)

$

213,194

$

226,524

(6)

Earnings per diluted share

$

0.57

$

0.58

$

0.63

(2)

(10)

$

1.39

$

1.78

(22)

Non-controlling interest value adjustments

-

-

-

-

-

-

0.02

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

$

0.58

$

0.63

(2)

(10)

$

1.76

$

1.80

(2)

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 2015 vs.

Q3 2015 vs.

July 31,

July 31,

%

(in thousands)

2015

2015

2014

Q2 2015

Q3 2014

2015

2014

Change

Consolidated funds

$

(1,027)

$

315

$

42

NM

%

NM

%

$

(1,226)

$

259

NM

%

Majority-owned subsidiaries

4,066

3,903

4,261

4

(5)

11,742

11,268

4

Non-controlling interest value adjustments

6

(3)

(59)

NM

NM

203

2,330

(91)

Consolidated CLO entities

(2,780)

1,294

(910)

NM

205

(1,439)

(2,005)

(28)

Net income attributable to non-controlling

and other beneficial interests

$

265

$

5,509

$

3,334

(95)

(92)

$

9,280

$

11,852

(22)

 Attachment 4

Eaton Vance Corp.

Balance Sheet

(in thousands, except per share figures)

July 31,

October 31,

2015

2014

Assets

Cash and cash equivalents

$

318,800

$

385,215

Investment advisory fees and other receivables

180,827

186,344

Investments

637,368

624,605

Assets of consolidated CLO entity:

          Cash and cash equivalents

73

8,963

          Bank loans and other investments

1,559

147,116

          Other assets

3,549

371

Deferred sales commissions

22,845

17,841

Deferred income taxes

43,585

46,099

Equipment and leasehold improvements, net

45,428

45,651

Intangible assets, net

57,670

65,126

Goodwill

237,961

228,876

Other assets

76,230

103,879

   Total assets

$

1,625,895

$

1,860,086

Liabilities, Temporary Equity and Permanent Equity

Liabilities:

Accrued compensation

$

135,615

$

181,064

Accounts payable and accrued expenses

64,943

64,598

Dividend payable

30,931

30,057

Debt

573,772

573,655

Liabilities of consolidated CLO entity:

          Senior and subordinated note obligations

4,097

151,982

          Other liabilities

56

298

Other liabilities

84,667

93,485

   Total liabilities

894,081

1,095,139

Commitments and contingencies

Temporary Equity:

Redeemable non-controlling interests

111,694

107,466

   Total temporary equity

111,694

107,466

Permanent Equity:

Voting Common Stock, par value $0.00390625 per share:

   Authorized, 1,280,000 shares

   Issued and outstanding, 429,005 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, 116,214,971 and 117,846,273 shares, respectively

454

460

Additional paid-in capital

-

-

Notes receivable from stock option exercises

(8,360)

(8,818)

Accumulated other comprehensive loss

(47,192)

(17,996)

Appropriated retained earnings

1,028

2,467

Retained earnings

672,538

679,061

   Total Eaton Vance Corp. shareholders' equity

618,470

655,176

Non-redeemable non-controlling interests

1,650

2,305

   Total permanent equity

620,120

657,481

Total liabilities, temporary equity and permanent equity

$

1,625,895

$

1,860,086

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, 

2015

2015

2014

2015

2014

 Equity assets - beginning of period(2)

$

97,167

$

92,966

$

93,733

$

96,379

$

93,585

Sales and other inflows 

5,191

3,965

3,451

13,670

10,905

Redemptions/outflows 

(8,371)

(4,432)

(4,052)

(17,876)

(14,688)

  Net flows 

(3,180)

(467)

(601)

(4,206)

(3,783)

Exchanges 

(19)

24

16

40

548

Market value change 

(602)

4,644

2,520

1,153

5,318

 Equity assets - end of period 

$

93,366

$

97,167

$

95,668

$

93,366

$

95,668

 Fixed income assets - beginning of period(3)

49,690

47,417

44,094

46,062

44,414

Sales and other inflows 

5,370

5,116

3,344

13,997

8,421

Redemptions/outflows 

(3,212)

(2,511)

(3,299)

(8,158)

(9,336)

  Net flows 

2,158

2,605

45

5,839

(915)

Exchanges 

(27)

5

59

52

22

Market value change 

(555)

(337)

276

(687)

953

 Fixed income assets - end of period 

$

51,266

$

49,690

$

44,474

$

51,266

$

44,474

 Floating-rate income assets -  beginning of period 

38,269

38,648

45,115

42,009

41,821

Sales and other inflows 

2,032

2,387

4,139

6,720

13,095

Redemptions/outflows 

(2,554)

(3,433)

(5,491)

(10,941)

(11,038)

  Net flows 

(522)

(1,046)

(1,352)

(4,221)

2,057

Exchanges 

2

(21)

(62)

(124)

(57)

Market value change 

(529)

688

51

(444)

(69)

 Floating-rate income assets - end of period 

$

37,220

$

38,269

$

43,752

$

37,220

$

43,752

 Alternative assets -  beginning of period 

10,582

10,805

12,112

11,241

15,212

Sales and other inflows 

721

782

774

2,351

2,630

Redemptions/outflows 

(869)

(1,069)

(1,208)

(3,076)

(6,164)

  Net flows 

(148)

(287)

(434)

(725)

(3,534)

Exchanges 

45

(4)

(15)

27

(83)

Market value change 

(146)

68

28

(210)

96

 Alternative assets - end of period 

$

10,333

$

10,582

$

11,691

$

10,333

$

11,691

 Portfolio implementation assets - beginning of period 

52,879

48,538

45,753

48,008

42,992

Sales and other inflows 

8,395

3,435

2,320

14,493

6,320

Redemptions/outflows 

(1,988)

(1,799)

(2,061)

(5,352)

(5,519)

  Net flows 

6,407

1,636

259

9,141

801

Exchanges 

-

-

(4)

-

(462)

Market value change 

(52)

2,705

946

2,085

3,623

 Portfolio implementation assets - end of period 

$

59,234

$

52,879

$

46,954

$

59,234

$

46,954

 Exposure management assets - beginning of period(4)

62,459

57,294

45,062

54,036

42,645

Sales and other inflows 

11,113

14,523

12,123

42,668

37,093

Redemptions/outflows 

(11,909)

(10,196)

(12,069)

(36,391)

(35,726)

  Net flows 

(796)

4,327

54

6,277

1,367

Market value change 

(526)

838

539

824

1,643

 Exposure management assets - end of period 

$

61,137

$

62,459

$

45,655

$

61,137

$

45,655

 Total fund and separate account 

assets - beginning of period 

311,046

295,668

285,869

297,735

280,669

Sales and other inflows 

32,822

30,208

26,151

93,899

78,464

Redemptions/outflows 

(28,903)

(23,440)

(28,180)

(81,794)

(82,471)

  Net flows 

3,919

6,768

(2,029)

12,105

(4,007)

Exchanges 

1

4

(6)

(5)

(32)

Market value change 

(2,410)

8,606

4,360

2,721

11,564

 Total assets under management - end of period 

$

312,556

$

311,046

$

288,194

$

312,556

$

288,194

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

(2)  Includes assets in balanced accounts holding income securities. 

(3)  Includes assets in cash management accounts. 

(4)  Category includes amounts reclassified from portfolio implementation and equity categories for all periods presented. 

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, 

2015

2015

2014

2015

2014

 Fund assets - beginning of period(2)

$

132,161

$

129,552

$

135,119

$

134,564

$

133,401

Sales and other inflows 

7,016

7,755

8,634

23,385

27,552

Redemptions/outflows 

(7,570)

(8,390)

(10,272)

(26,698)

(29,285)

  Net flows 

(554)

(635)

(1,638)

(3,313)

(1,733)

Exchanges 

1

4

(6)

185

41

Market value change 

(1,397)

3,240

1,681

(1,225)

3,447

 Fund assets - end of period 

$

130,211

$

132,161

$

135,156

$

130,211

$

135,156

 Institutional separate account assets -  

beginning of period(3)

115,942

107,547

96,564

106,443

95,724

Sales and other inflows 

21,764

17,860

14,717

57,678

42,620

Redemptions/outflows 

(18,424)

(12,501)

(14,912)

(47,323)

(44,633)

  Net flows 

3,340

5,359

(195)

10,355

(2,013)

Exchanges 

(34)

-

377

(207)

281

Market value change 

(1,162)

3,036

1,647

1,495

4,401

 Institutional separate account assets -  

end of period 

$

118,086

$

115,942

$

98,393

$

118,086

$

98,393

 High-net-worth separate account assets -  

beginning of period 

24,226

22,594

20,968

22,235

19,699

Sales and other inflows 

1,177

1,166

794

3,803

2,476

Redemptions/outflows 

(877)

(792)

(953)

(2,291)

(3,045)

  Net flows 

300

374

(159)

1,512

(569)

Exchanges 

-

(1)

(433)

(94)

(31)

Market value change 

(34)

1,259

475

839

1,752

 High-net-worth separate account assets -

end of period 

$

24,492

$

24,226

$

20,851

$

24,492

$

20,851

 Retail managed account assets - beginning of period

38,717

35,975

33,218

34,493

31,845

Sales and other inflows 

2,865

3,427

2,006

9,033

5,816

Redemptions/outflows 

(2,032)

(1,757)

(2,043)

(5,482)

(5,508)

  Net flows 

833

1,670

(37)

3,551

308

Exchanges 

34

1

56

111

(323)

Market value change 

183

1,071

557

1,612

1,964

 Retail managed account assets - end of period

$

39,767

$

38,717

$

33,794

$

39,767

$

33,794

 Fund and separate account assets - beginning of period

311,046

295,668

285,869

297,735

280,669

Sales and other inflows 

32,822

30,208

26,151

93,899

78,464

Redemptions/outflows 

(28,903)

(23,440)

(28,180)

(81,794)

(82,471)

  Net flows 

3,919

6,768

(2,029)

12,105

(4,007)

Exchanges 

1

4

(6)

(5)

(32)

Market value change 

(2,410)

8,606

4,360

2,721

11,564

 Total assets under management - end of period 

$

312,556

$

311,046

$

288,194

$

312,556

$

288,194

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

(2)   Includes assets in cash management funds. 

(3)   Includes assets in cash management separate accounts. 

Attachment 7 

 Eaton Vance Corp. 

 Consolidated Assets under Management by Investment Affiliate (1)

 (in millions) 

July 31,

April 30,

%

July 31,

%

2015

2015

Change

2014

Change 

 Eaton Vance Management(2)

$

142,987

$

142,930

0%

$

143,373

0%

 Parametric  

150,983

149,656

1%

126,741

19%

 Atlanta Capital 

18,586

18,460

1%

18,080

3%

 Total  

$

312,556

$

311,046

0%

$

288,194

8%

(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, as well as certain  Eaton Vance-sponsored funds and accounts managed by   

      Hexavest and unaffiliated third-party advisers 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,

%

2015

2015

Change

2014

Change 

 Equity(2)

$

93,366

$

97,167

-4%

$

95,668

-2%

 Fixed income(3)

51,266

49,690

3%

44,474

15%

 Floating-rate income 

37,220

38,269

-3%

43,752

-15%

 Alternative 

10,333

10,582

-2%

11,691

-12%

 Portfolio implementation 

59,234

52,879

12%

46,954

26%

 Exposure management 

61,137

62,459

-2%

45,655

34%

 Total  

$

312,556

$

311,046

0%

$

288,194

8%

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

(2)   Includes assets in balanced accounts holding income securities.

(3)   Includes assets in cash management accounts.

 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,

July 31,

July 31, 

2015

2015

2014

2015

2014

 Eaton Vance distributed: 

 Eaton Vance sponsored funds - beginning of period(1)

$

247

$

234

$

221

$

227

$

211

Sales and other inflows 

2

3

6

21

49

Redemptions/outflows 

(6)

(4)

(10)

(15)

(53)

  Net flows 

(4)

(1)

(4)

6

(4)

Market value change 

(4)

14

4

6

14

 Eaton Vance sponsored funds - end of period 

$

239

$

247

$

221

$

239

$

221

 Eaton Vance distributed separate accounts - 

 beginning of period(2)

$

2,401

$

1,999

$

2,354

$

2,367

$

1,574

Sales and other inflows 

11

284

136

395

519

Redemptions/outflows 

(39)

(3)

(122)

(475)

(201)

  Net flows 

(28)

281

14

(80)

318

Exchanges 

-

-

-

-

389

Market value change 

(11)

121

29

75

116

 Eaton Vance distributed separate accounts -  

end of period 

$

2,362

$

2,401

$

2,397

$

2,362

$

2,397

 Total Eaton Vance distributed - beginning of period 

$

2,648

$

2,233

$

2,575

$

2,594

$

1,785

Sales and other inflows 

13

287

142

416

568

Redemptions/outflows 

(45)

(7)

(132)

(490)

(254)

  Net flows 

(32)

280

10

(74)

314

Exchanges 

-

-

-

-

389

Market value change 

(15)

135

33

81

130

 Total Eaton Vance distributed - end of period 

$

2,601

$

2,648

$

2,618

$

2,601

$

2,618

 Hexavest directly distributed - beginning of period(3)

$

12,999

$

12,749

$

14,477

$

14,101

$

15,136

Sales and other inflows 

286

180

597

711

1,392

Redemptions/outflows 

(780)

(683)

(904)

(2,804)

(2,546)

  Net flows 

(494)

(503)

(307)

(2,093)

(1,154)

Exchanges 

-

-

-

-

(389)

Market value change 

(297)

753

253

200

830

 Hexavest directly distributed - end of period 

$

12,208

$

12,999

$

14,423

$

12,208

$

14,423

 Total Hexavest assets - beginning of period 

$

15,647

$

14,982

$

17,052

$

16,695

$

16,921

Sales and other inflows 

299

467

739

1,127

1,960

Redemptions/outflows 

(825)

(690)

(1,036)

(3,294)

(2,800)

  Net flows 

(526)

(223)

(297)

(2,167)

(840)

Exchanges 

-

-

-

-

-

Market value change 

(312)

888

286

281

960

 Total Hexavest assets - end of period 

$

14,809

$

15,647

$

17,041

$

14,809

$

17,041

(1)

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

but not investment advisory fees, 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  

investment advisory 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