Eaton Vance Corp. Report for the Three and Six Month Periods Ended April 30, 2013

22 May, 2013, 08:59 ET from Eaton Vance Corp.

BOSTON, May 22, 2013 /PRNewswire/ -- Eaton Vance Corp. (NYSE: EV) today reported adjusted earnings per diluted share(1) of $0.52 for the second quarter of fiscal 2013, an increase of 16 percent over the $0.45 of adjusted earnings per diluted share in the second quarter of fiscal 2012 and an increase of 4 percent from the $0.50 of adjusted earnings per diluted share in the first quarter 2013.

As determined under U.S. generally accepted accounting principles ("GAAP"), the Company earned $0.50 in the second quarter of fiscal 2013, $0.44 in the second quarter of fiscal 2012 and $0.38 in the first quarter of fiscal 2013. Adjusted earnings differed from GAAP earnings due to adjustments in connection with increases in the estimated redemption value of non-controlling interests in affiliates redeemable at other than fair value, which reduced GAAP earnings by $0.01, $0.01 and $0.09 per diluted share in the second quarter of fiscal 2013, the second quarter of fiscal 2012 and the first quarter of fiscal 2013, respectively. In the second quarter of fiscal 2013, adjusted earnings also differed from GAAP earnings due to the closed-end fund structuring fees recognized in connection with the $205 million initial public offering of Eaton Vance Municipal Income Term Trust during the quarter, which reduced GAAP earnings per diluted share by $0.01. In the first quarter of fiscal 2013, adjusted earnings per diluted share also differed from GAAP earnings per diluted share due to the application of the two-class method of computing earnings per share in connection with the special dividend declared in the first quarter of fiscal 2013, which reduced GAAP earnings per diluted share by $0.03

Adjusted earnings per diluted share were $1.01 in the six months ended April 30, 2013 compared to $0.92 in the six months ended April 30, 2012. The Company's GAAP earnings per diluted share were $0.89 and $0.84, respectively, for the compared semi-annual periods.

Net inflows of $6.6 billion into long-term funds and separate accounts in the second quarter of fiscal 2013 compare to net inflows of $0.6 billion in the second quarter of fiscal 2012 and $5.4 billion in the first quarter of fiscal 2013.  As shown in Attachment 5, the sharp improvement in net flow results year-over-year reflects strong net inflows into floating-rate income and alternative mandates and improved equity net flows.  The Company's annualized internal growth rate (net inflows into long-term assets divided by beginning of period long-term assets managed) was 11 percent in the second quarter of fiscal 2013 and 12 percent for the six months ended April 30, 2013. 

"Strong net flows and favorable market action propelled Eaton Vance to solid growth in our second fiscal quarter," said Thomas E. Faust Jr., Chairman and Chief Executive Officer. "Higher managed assets across a range of investment categories position the Company for continued progress."

Consolidated assets under management were $260.3 billion on April 30, 2013.  This represents an increase of 32 percent over the $197.5 billion of managed assets on April 30, 2012 and an increase of 5 percent from the $247.8 billion of managed assets on January 31, 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 $12.7 billion and market price appreciation of $15.4 billion.  The sequential increase in ending assets under management reflects net inflows of $6.6 billion and market price appreciation of $5.9 billion.

Average consolidated assets under management were $253.5 billion in the second quarter of fiscal 2013, up 30 percent from $195.6 billion in the second quarter of fiscal 2012 and up 17 percent from $216.2 billion in the first quarter of fiscal 2013. 

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

As shown in Attachment 6, consolidated gross sales and other inflows were $24.7 billion in the second quarter of fiscal 2013, up 87 percent from $13.2 billion in the second quarter of fiscal 2012 and up 27 percent from $19.4 billion in the first quarter of fiscal 2013. Gross redemptions and other outflows were $18.0 billion in the second quarter of fiscal 2013, up 42 percent from $12.7 billion in the second quarter of fiscal 2012 and up 28 percent from $14.1 billion in the first quarter of fiscal 2013.   

As of April 30, 2013, 49 percent-owned affiliate Hexavest, Inc. ("Hexavest") managed $15.3 billion of client assets, an increase of 5 percent from the $14.5 billion of managed assets on January 31, 2013. Net outflows from Hexavest-managed funds and separate accounts were $0.3 billion in the second quarter of fiscal 2013 compared to net inflows of $1.9 billion in the first quarter of fiscal 2013.  Hexavest net inflows have totaled $2.4 billion since Eaton Vance acquired its interest on August 6, 2012.  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 of Hexavest are not included in Eaton Vance consolidated totals.

 

Financial Highlights

Three Months Ended

(in thousands, except per share figures)

April 30,

January 31,

April 30,

2013 

2013

2012

Revenue

$

331,692

$

318,517

$

304,770

Expenses

223,622 

217,837

205,959

Operating income

108,070 

100,680

98,811

Operating margin

33%

32%

32%

Non-operating expense

(2,196)

(5,791)

(855)

Income taxes

(38,194)

(35,939)

(35,164)

Equity in net income (loss) of affiliates, net of tax

3,440 

3,177

(22)

Net income

 71,120 

62,127

62,770

Net income attributable to non-controlling

 and other beneficial interests

(7,439)

(12,322)

(9,900)

Net income attributable to

Eaton Vance Corp. shareholders

$

63,681

$

49,805

$

52,870

Adjusted net income attributable to Eaton

Vance Corp. shareholders(1)

$

66,024

$

60,452

$

53,967

Earnings per diluted share

$

0.50

$

0.38

$

0.44

Adjusted earnings per diluted share(1)

$

0.52

$

0.50

$

0.45

 

Second Quarter Fiscal 2013 vs. Second Quarter Fiscal 2012

In the second quarter of fiscal 2013, revenue increased 9 percent to $331.7 million from revenue of $304.8 million in the second quarter of fiscal 2012.  Investment advisory and administrative fees were up 11 percent, reflecting a 30 percent increase in average consolidated assets under management and lower average effective fee rates, primarily as a result of the full quarter impact of the Clifton acquisition. Distribution and service fees were down 2 percent on a combined basis, reflecting lower managed assets in fund share classes that are subject to distribution and service fees.

Expenses increased 9 percent to $223.6 million in the second quarter of fiscal 2013 from $206.0 million in the second quarter of fiscal 2012, reflecting increases in compensation, distribution, service fees, fund-related expenses and other expenses, offset by reduced amortization of deferred sales commissions. Excluding the $3.4 million of structuring fee, incentive compensation and other expenses associated with the second quarter fiscal 2013 closed-end fund offering, operating expenses increased 7 percent from the second 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, offset by a decrease in other compensation expense. Gross sales and other inflows, which drive sales-based incentives, were up 87 percent year-over-year, while pre-bonus adjusted operating income, which drives operating-income based incentives, was up 9 percent over the same period. The increase in distribution expense reflects $2.7 million in closed-end fund related structuring fees paid to distribution partners, offset by a decrease in intermediary marketing support payments to distribution partners. The increase in fund-related expenses can be attributed to an increase in expenses borne by the Company on funds for which it receives an all-in fee, as well as $0.3 million of fund-related expenses incurred in conjunction with the closed-end fund offering mentioned above. Other expenses increased 3 percent from the prior year, as increases in travel-related expenses, information technology and other corporate expenses were offset by decreases in professional fees and facilities-related expenses.  The decrease in amortization of deferred sales commissions largely reflects changes in product mix away from fund share classes to which these expenses apply.

Operating income was up 9 percent to $108.1 million in the second quarter of fiscal 2013 from $98.8 million in the second quarter of fiscal 2012.

Non-operating expense was $2.2 million in the second quarter of fiscal 2013 compared to $0.9 million in the second quarter of fiscal 2012. The increase in non-operating expense reflects a $4.5 million decrease in gains and other investment income recognized by the Company's consolidated collateralized loan obligation entity ("CLO") offset by a $2.2 million increase in gains and other investment income earned on the Company's investments in sponsored products.

The Company's effective tax rate, calculated as a percentage of income before income taxes and equity in net income (loss) of affiliates, was 36.1 percent in the second quarter of fiscal 2013. 

Equity in net income (loss) of affiliates increased $3.5 million from the second quarter of fiscal 2012, reflecting $2.1 million related to the Company's interest in Hexavest and higher income from the Company's investments in sponsored products.

Net income attributable to non-controlling and other beneficial interests was $7.4 million in the second quarter of fiscal 2013 compared to $9.9 million in the second quarter of fiscal 2012. As shown in Attachment 3, the change reflects a decline in the net income attributable to non-controlling interest holders of the Company's consolidated CLO entity offset by an increase in net income 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 and 2012 were $0.7 million and $1.1 million, respectively, of non-controlling interest value adjustments relating to the Company's Parametric Risk Advisors LLC ("PRA") subsidiary, based on an annual April 30 enterprise value measurement.

Weighted average diluted shares outstanding increased 7.4 million shares, or 6 percent, in the second quarter of fiscal 2013 over the second 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 42 percent increase in the quarterly average share price of the Company's Non-Voting Common Stock.

Second Quarter Fiscal 2013 vs. First Quarter Fiscal 2013

In the second quarter of fiscal 2013, revenue increased 4 percent to $331.7 million from revenue of $318.5 million in the first quarter of fiscal 2013.  Investment advisory and administrative fees were up 5 percent in the second quarter of fiscal 2013 compared to the first quarter of fiscal 2013, reflecting a 17 percent increase in average assets under management and lower average effective fee rates, primarily due to the full quarter impact of the Clifton acquisition. Performance fees contributed $0.1 million and $1.6 million to investment advisory and administrative fees in the second quarter of fiscal 2013 and the first quarter of fiscal 2013, respectively. Distribution and service fee revenue decreased 1 percent on a combined basis, reflecting a decrease in average managed assets in fund share classes that are subject to such fees.

Expenses increased 3 percent to $223.6 million in the second quarter of fiscal 2013 from $217.8 million in the first quarter of fiscal 2013, reflecting increases in compensation, distribution, service fee, fund-related and other expenses, offset by reduced amortization of deferred sales commissions. Excluding the $3.4 million of expenses associated with the closed-end fund offering in the second quarter of fiscal 2013, operating expenses increased 1 percent from the first quarter of fiscal 2013. The increase in compensation expense reflects a full quarter of Clifton salaries and increases in sales- and operating income-based incentives, offset by decreases in the number of payroll days in the quarter, stock-based compensation and other compensation. Gross sales and other inflows, which drive sales-based incentives, were up 27 percent in the second quarter of fiscal 2013 from the first quarter of fiscal 2013, while pre-bonus adjusted operating income, which drives operating-income based incentives, was up 6 percent over the same period. The increase in distribution expense primarily reflects $2.7 million in closed-end fund related structuring fees paid to distribution partners, offset by a decrease in intermediary marketing support payments. Fund-related expenses increased 9 percent from the first quarter of fiscal 2013 due to higher expenses borne by the Company on funds for which it receives an all-in fee, an increase in sub-advisory fees paid and $0.3 million of fund-related expenses incurred in conjunction with the closed-end fund offering discussed above.

Operating income was up 7 percent to $108.1 million in the second quarter of fiscal 2013 from $100.7 million in the first quarter of fiscal 2013.

Non-operating expense was $2.2 million in the second quarter of fiscal 2013 compared to $5.8 million in the first quarter of fiscal 2013.  The decrease in non-operating expense is primarily attributable to a $2.6 million increase in gains and other investment income, net recognized by the Company's consolidated CLO entity and a $1.2 million decrease in interest expense recognized by the Company's consolidated CLO entity.

Equity in net income of affiliates increased by $0.3 million in the second quarter of fiscal 2013 compared to the first quarter of fiscal 2013, primarily reflecting higher income on the Company's investments in sponsored products.  Equity in net income of affiliates for the second quarter of fiscal 2013 and the first quarter of fiscal 2013 includes $2.1 million and $2.0 million, respectively, related to Hexavest. 

Net income attributable to non-controlling and other beneficial interests totaled $7.4 million in the second quarter of fiscal 2013 and $12.3 million in the first quarter of fiscal 2013. As shown in Attachment 3, the decrease can be primarily attributed to lower non-controlling interest value adjustments, offset by an increase in the net income associated with the non-controlling interests of the Company's consolidated CLO entity and an increase in non-controlling interests associated with the Company's consolidated funds. Included in net income attributable to non-controlling and other beneficial interests in the second quarter of fiscal 2013 and the first quarter of fiscal 2013 were $0.7 million and $10.6 million of non-controlling interest value adjustments relating, respectively, to PRA and Parametric based on an April 30 and December 31 enterprise value measurement, respectively.

Weighted average diluted shares outstanding increased 4.2 million shares, or 4 percent, in the second quarter of fiscal 2013 over the first quarter of fiscal 2013.  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 due to a 23 percent increase in the average share price of the Company's Non-Voting Common Stock over the prior quarter.

Balance Sheet Information

Cash and cash equivalents totaled $320.1 million on April 30, 2013, with no outstanding borrowings against the Company's $300 million credit facility.  During the first six months of fiscal 2013, the Company used $22.7 million to repurchase and retire approximately 0.7 million shares of its Non-Voting Common Stock under its repurchase authorization.  Approximately 3.2 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 six months ended April 30, 2013. To participate in the conference call, please call 877-407-0778 (domestic) or 201-689-8565 (international) and refer to "Eaton Vance Corp. Second 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 414388.

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 structuring fees and other items management deems non-recurring or non-operating, such as special dividends. 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

Six Months Ended

%

%

Change

Change

Q2 2013

Q2 2013

April 30,

January 31,

April 30,

vs.

vs.

April 30,

April 30,

%

2013

2013

2012

Q1 2013

Q2 2012

2013

2012

Change

Revenue:

Investment advisory and administrative fees

$

276,921

$

263,281

$

248,888

5

%

11

%

$

540,202

$

488,340

11

%

Distribution and underwriter fees

22,165

22,751

22,551

(3)

(2)

44,916

45,066

-

Service fees

31,132

31,130

32,065

-

(3)

62,262

64,364

(3)

Other revenue

1,474

1,355

1,266

9

16

2,829

2,606

9

Total revenue

331,692

318,517

304,770

4

9

650,209

600,376

8

Expenses:

Compensation and related costs

110,012

108,829

97,566

1

13

218,841

194,249

13

Distribution expense

35,304

33,889

32,960

4

7

69,193

65,288

6

Service fee expense

29,211

28,264

28,088

3

4

57,475

56,761

1

Amortization of deferred sales commissions

4,752

4,783

5,533

(1)

(14)

9,535

11,353

(16)

Fund-related expenses

8,074

7,424

6,590

9

23

15,498

13,241

17

Other expenses

36,269

34,648

35,222

5

3

70,917

67,853

5

Total expenses

223,622

217,837

205,959

3

9

441,459

408,745

8

Operating income

108,070

100,680

98,811

7

9

208,750

191,631

9

Non-operating income (expense):

Gains and other investment income, net

5,043

5,207

2,796

(3)

80

10,250

10,973

(7)

Interest expense

(8,572)

(8,570)

(8,412)

-

2

(17,142)

(16,825)

2

Other income (expense) of consolidated CLO entity:

     Gains and other investment income, net

4,384

1,793

8,895

144

(51)

6,177

19,175

(68)

     Interest expense

(3,051)

(4,221)

(4,134)

(28)

(26)

(7,272)

(8,445)

(14)

Total non-operating (expense) income

(2,196)

(5,791)

(855)

(62)

157

(7,987)

4,878

NM

Income before income taxes and equity

   in net income (loss) of affiliates

105,874

94,889

97,956

12

8

200,763

196,509

2

Income taxes

(38,194)

(35,939)

(35,164)

6

9

(74,133)

(70,351)

5

Equity in net income (loss) of affiliates,

   net of tax

3,440

3,177

(22)

8

NM

6,617

1,482

346

Net income

71,120

62,127

62,770

14

13

133,247

127,640

4

Net income attributable to non-controlling

   and other beneficial interests

(7,439)

(12,322)

(9,900)

(40)

(25)

(19,761)

(27,499)

(28)

Net income attributable to

   Eaton Vance Corp. Shareholders

$

63,681

$

49,805

$

52,870

28

20

$

113,486

$

100,141

13

Earnings per share:

Basic

$

0.53

$

0.39

$

0.46

36

15

$

0.93

$

0.87

7

Diluted

$

0.50

$

0.38

$

0.44

32

14

$

0.89

$

0.84

6

Weighted average shares outstanding:

Basic

117,102

114,925

112,418

2

4

115,900

112,541

3

Diluted

123,330

119,112

115,881

4

6

121,235

115,324

5

Dividends declared per share

$

0.20

$

1.20

$

0.19

(83)

5

$

1.40

$

0.38

268

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

Six Months Ended

% Change

% Change

April 30,

January 31,

April 30,

Q2 2013 vs.

Q2 2013 vs.

April 30,

April 30,

%

(in thousands, except per share figures)

2013

2013

2012

Q1 2013

Q2 2012

2013

2012

Change

Net income attributable to Eaton Vance

Corp. shareholders

$

63,681

$

49,805

$

52,870

28

%

20

%

$

113,486

$

100,141

13

%

Non-controlling interest value adjustments

666

10,647

1,097

(94)

(39)

11,313

9,199

23

Closed-end fund structuring fees, net of tax

1,677

-

-

NM

NM

1,677

-

NM

Adjusted net income attributable to Eaton

Vance Corp. shareholders

$

66,024

$

60,452

$

53,967

9

22

$

126,476

$

109,340

16

Earnings per diluted share

$

0.50

$

0.38

$

0.44

32

14

$

0.89

$

0.84

6

Non-controlling interest value adjustments

0.01

0.09

0.01

(89)

-

0.09

0.08

13

Closed-end fund structuring fees, net of tax

0.01

-

-

NM

NM

0.01

-

NM

Special dividend adjustment

-

0.03

-

NM

NM

0.02

-

NM

Adjusted earnings per diluted share

$

0.52

$

0.50

$

0.45

4

16

$

1.01

$

0.92

10

Attachment 3

Eaton Vance Corp.

Components of net income attributable

to non-controlling and other beneficial interests

Three Months Ended

Six Months Ended

% Change

% Change

April 30,

January 31,

April 30,

Q2 2013 vs.

Q2 2013 vs.

April 30,

April 30,

%

(in thousands)

2013

2013

2012

Q1 2013

Q2 2012

2013

2012

Change

Consolidated funds

$

(2,986)

$

(1,106)

$

(1,182)

170

%

153

%

$

(4,092)

$

(2,328)

76

%

Majority-owned subsidiaries

(3,690)

(3,899)

(3,751)

(5)

(2)

(7,589)

(7,111)

7

Non-controlling interest value adjustments

(666)

(10,647)

(1,097)

(94)

(39)

(11,313)

(9,199)

23

Consolidated CLO entity

(97)

3,330

(3,870)

NM

(97)

3,233

(8,861)

NM

Net income attributable to non-controlling

and other beneficial interests

$

(7,439)

$

(12,322)

$

(9,900)

(40)

(25)

$

(19,761)

$

(27,499)

(28)

Attachment 4

Eaton Vance Corp.

Balance Sheet

(in thousands, except per share figures)

April 30,

October 31,

2013

2012

Assets

Cash and cash equivalents

$

320,135

$

462,076

Investment advisory fees and other receivables

153,135

133,589

Investments

542,058

486,933

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

          Cash and cash equivalents

61,244

36,758

          Bank loans and other investments

319,321

430,583

          Other assets

5,538

1,107

Deferred sales commissions

19,261

19,336

Deferred income taxes

54,637

51,234

Equipment and leasehold improvements, net

51,657

54,889

Intangible assets, net

79,251

59,228

Goodwill

228,876

154,636

Other assets

52,166

89,122

   Total assets

$

1,887,279

$

1,979,491

Liabilities, Temporary Equity and Permanent Equity

Liabilities:

Accrued compensation

$

86,993

$

145,338

Accounts payable and accrued expenses

60,428

59,397

Dividend payable

24,287

23,250

Debt

500,000

500,000

Liabilities of consolidated CLO entity:

          Senior and subordinated note obligations

368,127

446,605

          Other liabilities

489

766

Other liabilities

72,905

91,785

   Total liabilities

1,113,229

1,267,141

Commitments and contingencies

Temporary Equity:

Redeemable non-controlling interests

121,252

98,765

          Total temporary equity

121,252

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, 121,009,816 and 115,878,384 shares, respectively

473

453

Additional paid-in capital

129,282

26,730

Notes receivable from stock option exercises

(7,278)

(4,155)

Accumulated other comprehensive income

1,251

3,923

Appropriated retained earnings

15,466

18,699

Retained earnings

512,038

566,420

   Total Eaton Vance Corp. shareholders' equity

651,234

612,072

Non-redeemable non-controlling interests

1,564

1,513

   Total permanent equity

652,798

613,585

Total liabilities, temporary equity and permanent equity

$

1,887,279

$

1,979,491

Attachment 5

Eaton Vance Corp.

Consolidated Net Flows by Investment Mandate(1)

(in millions)

Three Months Ended

Six Months Ended

April 30,

January 31,

April 30,

April 30,

April 30,

2013 

2013

2012

2013

2012

Equity assets - beginning of period(2)

$

86,518

$

80,782

$

84,957

$

80,782

$

84,281

Sales and other inflows

 5,270 

4,496

4,416

9,766

9,192

Redemptions/outflows

 (4,990)

(4,959)

(6,998)

(9,949)

(13,472)

Net flows

 280 

(463)

(2,582)

(183)

(4,280)

Assets acquired(3)

 - 

1,572

-

1,572

-

Exchanges

 124 

(8)

(5)

116

(13)

Market value change

 2,612 

4,635

3,670

7,247

6,052

Equity assets - end of period

$

89,534

$

86,518

$

86,040

$

89,534

$

86,040

Fixed income assets - beginning of period

 49,679 

49,003

45,514

49,003

43,708

Sales and other inflows

 3,289 

3,377

3,626

6,666

6,253

Redemptions/outflows

 (3,348)

(3,375)

(2,276)

(6,723)

(4,729)

Net flows

 (59)

2

1,350

(57)

1,524

Assets acquired(3)

 - 

472

-

472

-

Exchanges

 (59)

(22)

-

(81)

40

Market value change

 388 

224

27

612

1,619

Fixed income assets - end of period

$

49,949

$

49,679

$

46,891

$

49,949

$

46,891

Floating-rate income assets -  beginning of period

 28,656 

26,388

24,376

26,388

24,322

Sales and other inflows

 6,092 

3,260

1,662

9,352

3,122

Redemptions/outflows

 (1,153)

(1,359)

(1,451)

(2,512)

(2,740)

Net flows

 4,939 

1,901

211

6,840

382

Exchanges

 50 

33

27

83

19

Market value change

 34 

334

233

368

124

Floating-rate income assets - end

of period

$

33,679

$

28,656

$

24,847

$

33,679

$

24,847

Alternative assets -  beginning of period

 14,345 

12,864

10,462

12,864

10,650

Sales and other inflows

 2,767 

1,809

1,121

4,576

2,227

Redemptions/outflows

 (960)

(1,055)

(1,036)

(2,015)

(2,238)

Net flows

 1,807 

754

85

2,561

(11)

Assets acquired(3)

 - 

650

-

650

-

Exchanges

 (103)

(13)

(23)

(116)

(62)

Market value change

 (27)

90

(7)

63

(60)

Alternative assets - end of period

$

16,022

$

14,345

$

10,517

$

16,022

$

10,517

Implementation services assets -

beginning of period(4)

 68,420 

30,302

25,864

30,302

24,574

Sales and other inflows

 7,252 

6,479

2,401

13,731

3,928

Redemptions/outflows

 (7,576)

(3,316)

(898)

(10,892)

(2,094)

Net flows

 (324)

3,163

1,503

2,839

1,834

Assets acquired(3)

 - 

32,064

-

32,064

-

Exchanges

 (15)

-

(1)

(15)

(1)

Market value change

 2,885 

2,891

1,486

5,776

2,445

Implementation services assets -

end of period

$

70,966

$

68,420

$

28,852

$

70,966

$

28,852

Long-term assets - beginning of period

 247,618 

199,339

191,173

199,339

187,535

Sales and other inflows

 24,670 

19,421

13,226

44,091

24,722

Redemptions/outflows

 (18,027)

(14,064)

(12,659)

(32,091)

(25,273)

Net flows

 6,643 

5,357

567

12,000

(551)

Assets acquired(3)

 - 

34,758

-

34,758

-

Exchanges

 (3)

(10)

(2)

(13)

(17)

Market value change

 5,892 

8,174

5,409

14,066

10,180

Total long-term assets - end of period

$

260,150

$

247,618

$

197,147

$

260,150

$

197,147

Cash management fund assets -

end of period

 127 

155

340

127

340

Total assets under management -

end of period

$

260,277

$

247,773

$

197,487

$

260,277

$

197,487

(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

Six Months Ended

April 30,

January 31,

April 30,

April 30,

April 30,

2013 

2013

2012

2013

2012

Long-term fund assets - beginning of period

$

119,162

$

113,249

$

112,664

$

113,249

$

111,705

Sales and other inflows

 12,629 

9,079

6,648

21,708

13,553

Redemptions/outflows

 (6,506)

(6,876)

(7,818)

(13,382)

(15,930)

Net flows

 6,123 

2,203

(1,170)

8,326

(2,377)

Assets acquired(2)

 - 

638

-

638

-

Exchanges

 (3)

(19)

(2)

(22)

(16)

Market value change

 1,732 

3,091

2,537

4,823

4,717

Long-term fund assets - end of period

$

127,014

$

119,162

$

114,029

$

127,014

$

114,029

Institutional separate account assets -

beginning of period

 83,350 

43,338

38,726

43,338

38,003

Sales and other inflows

 8,102 

6,785

3,261

14,887

5,085

Redemptions/outflows

 (9,071)

(3,821)

(2,794)

(12,892)

(5,009)

Net flows

 (969)

2,964

467

1,995

76

Assets acquired(2)

 - 

34,120

-

34,120

-

Exchanges

 - 

5

40

5

11

Market value change

 2,343 

2,923

1,650

5,266

2,793

Institutional separate account assets -

end of period

$

84,724

$

83,350

$

40,883

$

84,724

$

40,883

High-net-worth separate account assets -

beginning of period

 16,245 

15,036

13,255

15,036

13,256

Sales and other inflows

 1,497 

1,379

1,338

2,876

2,359

Redemptions/outflows

 (573)

(1,198)

(534)

(1,771)

(1,086)

Net flows

 924 

181

804

1,105

1,273

Exchanges

 9 

(15)

(42)

(6)

(999)

Market value change

 849 

1,043

687

1,892

1,174

High-net-worth separate account

   assets - end of period

$

18,027

$

16,245

$

14,704

$

18,027

$

14,704

Retail managed account assets -

beginning of period

 28,861 

27,716

26,528

27,716

24,571

Sales and other inflows

 2,442 

2,178

1,979

4,620

3,725

Redemptions/outflows

 (1,877)

(2,169)

(1,513)

(4,046)

(3,248)

Net flows

 565 

9

466

574

477

Exchanges

 (9)

19

2

10

987

Market value change

 968 

1,117

535

2,085

1,496

Retail managed account assets -

end of period

$

30,385

$

28,861

$

27,531

$

30,385

$

27,531

Total long-term assets - beginning

of period

 247,618 

199,339

191,173

199,339

187,535

Sales and other inflows

 24,670 

19,421

13,226

44,091

24,722

Redemptions/outflows

 (18,027)

(14,064)

(12,659)

(32,091)

(25,273)

Net flows

 6,643 

5,357

567

12,000

(551)

Assets acquired(2)

 - 

34,758

-

34,758

-

Exchanges

 (3)

(10)

(2)

(13)

(17)

Market value change

 5,892 

8,174

5,409

14,066

10,180

Total long-term assets - end of period

$

260,150

$

247,618

$

197,147

$

260,150

$

197,147

Cash management fund assets -

end of period

 127 

155

340

127

340

Total assets under management -

end of period

$

260,277

$

247,773

$

197,487

$

260,277

$

197,487

(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)

April 30,

January 31,

%

April 30,

%

2013 

2013

Change

2012

Change

Eaton Vance Management(2)

$

142,211

$

134,554

6%

$

133,257

7%

Parametric

 100,760 

96,725

4%

49,245

105%

Atlanta Capital

 17,306 

16,494

5%

14,985

15%

Total

$

260,277

$

247,773

5%

$

197,487

32%

(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)

April 30,

January 31,

%

April 30,

%

2013 

2013

Change

2012

Change

Equity(2)

$

89,534

$

86,518

3%

$

86,040

4%

Fixed income

 49,949 

49,679

1%

46,891

7%

Floating-rate income

 33,679 

28,656

18%

24,847

36%

Alternative

 16,022 

14,345

12%

10,517

52%

Implementation services

 70,966 

68,420

4%

28,852

146%

Cash management

 127 

155

-18%

340

-63%

Total

$

260,277

$

247,773

5%

$

197,487

32%

(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

Six Months Ended

April 30,

January 31,

April 30,

2013 

2013

2013

Eaton Vance distributed:

Eaton Vance sponsored funds - beginning

   of period(1)

$

135

$

37

$

37

Sales and other inflows

 17 

94

111

Redemptions/outflows

 (1)

(5)

(6)

Net flows

 16 

89

105

Market value change

 10 

9

19

Eaton Vance sponsored funds - end

   of period

$

161

$

135

$

161

Eaton Vance distributed separate accounts -

   beginning of period(2)

$

1,185

$

-

$

-

Sales and other inflows

 3 

1,148

1,151

Redemptions/outflows

 - 

-

-

Net flows

 3 

1,148

1,151

Market value change

 95 

37

132

Eaton Vance distributed separate accounts -

   end of period

$

1,283

$

1,185

$

1,283

Total Eaton Vance distributed - beginning

   of period

$

1,320

$

37

$

37

Sales and other inflows

 20 

1,242

1,262

Redemptions/outflows

 (1)

(5)

(6)

Net flows

 19 

1,237

1,256

Market value change

 105 

46

151

Total Eaton Vance distributed - end

   of period

$

1,444

$

1,320

$

1,444

Hexavest directly distributed - beginning

   of period(3)

$

13,224

$

12,073

$

12,073

Sales and other inflows

 298 

920

1,218

Redemptions/outflows

 (570)

(263)

(833)

Net flows

 (272)

657

385

Market value change

 879 

494

1,373

Hexavest directly distributed - end

   of period

$

13,831

$

13,224

$

13,831

Total Hexavest assets - beginning of period

$

14,544

$

12,110

$

12,110

Sales and other inflows

 318 

2,162

2,480

Redemptions/outflows

 (571)

(268)

(839)

Net flows

 (253)

1,894

1,641

Market value change

 984 

540

1,524

Total Hexavest assets - end of period

$

15,275

$

14,544

$

15,275

(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.



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