Eaton Vance Corp. Report for the Three Month Period Ended January 31, 2016

Feb 24, 2016, 08:39 ET from Eaton Vance Corp.

BOSTON, Feb. 24, 2016 /PRNewswire/ -- Eaton Vance Corp. (NYSE: EV) today reported adjusted earnings per diluted share(1) of $0.51 for the first quarter of fiscal 2016, a decrease of 16 percent from $0.61 of adjusted earnings per diluted share in the first quarter of fiscal 2015 and a decrease of 4 percent from $0.53 of adjusted earnings per diluted share in the fourth quarter of fiscal 2015.

As determined under U.S. generally accepted accounting principles ("GAAP"), the Company earned $0.50 per diluted share in the first quarter of fiscal 2016, $0.24 per diluted share in the first quarter of fiscal 2015 and $0.53 per diluted share in the fourth quarter of fiscal 2015. Adjusted earnings per diluted share differed from GAAP earnings per diluted share by $0.01 in the first quarter of fiscal 2016 due to an increase in the estimated redemption value of non-controlling interest in affiliates redeemable at other than fair value. Adjusted earnings differed from GAAP earnings in the first quarter of fiscal 2015 to reflect the payment of $73.0 million, or approximately $0.37 per diluted share, to end service and additional compensation arrangements for certain Eaton Vance closed-end funds. 

Performance fees received were negligible in the first quarters of fiscal 2016 and fiscal 2015, and contributed $0.01 per diluted share in the fourth quarter of fiscal 2015. Net income and gains (losses) on seed capital investments contributed $0.01 per diluted share in the first quarter of fiscal 2016 and the first quarter of fiscal 2015 and reduced earnings per diluted share by $0.01 in the fourth quarter of fiscal 2015.

Consolidated net inflows of $5.3 billion in the first quarter of fiscal 2016 represent a 7 percent annualized internal growth rate (consolidated net inflows divided by beginning of period consolidated assets under management). For comparison, the Company had consolidated net inflows of $1.4 billion in the first quarter of fiscal 2015 and consolidated net inflows of $4.6 billion in the fourth quarter of fiscal 2015.  

"Market declines and outflows from floating-rate income and emerging market equity mandates more than offset strong organic growth in the Company's other businesses in the first quarter of fiscal 2016, driving revenue and profits lower," said Thomas E. Faust Jr., Chairman and Chief Executive Officer. "Our diverse line-up of high-performing and value-added investment strategies, innovative new product offerings and strong financial characteristics position us well versus competitors if adverse market conditions endure."

Consolidated assets under management were $302.6 billion on January 31, 2016, up 2 percent from the $295.7 billion of consolidated managed assets on January 31, 2015 and down 3 percent from the $311.4 billion of consolidated managed assets on October 31, 2015. The year-over-year increase in consolidated assets under management reflects net inflows of $20.6 billion and market price declines of $13.7 billion. The sequential decrease in consolidated assets under management reflects net inflows of $5.3 billion and market price declines of $14.1 billion.

Average consolidated assets under management were $308.3 billion in the first quarter of fiscal 2016, up 4 percent from $297.5 billion in the first quarter of fiscal 2015 and up 1 percent from $306.4 billion in the fourth quarter of fiscal 2015.

Excluding performance-based fees, annualized effective investment advisory and administrative fee rates on consolidated assets under management averaged 36.7 basis points in the first quarter of fiscal 2016, down 10 percent from 40.6 basis points in the first quarter of fiscal 2015 and down 3 percent from 37.7 basis points in the fourth quarter of fiscal 2015.  The declines in average advisory and administrative fee rates primarily reflect shifts in the Company's mix of business.

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

As shown in Attachments 5 and 6, consolidated sales and other inflows were $30.6 billion in the first quarter of fiscal 2016, down 1 percent from $30.9 billion in the first quarter of fiscal 2015 and the fourth quarter of fiscal 2015. Consolidated redemptions and other outflows were $25.3 billion in the first quarter of fiscal 2016, down 14 percent from $29.5 billion in the first quarter of fiscal 2015 and down 4 percent from $26.3 billion in the fourth quarter of fiscal 2015.

As of January 31, 2016, the Company's 49 percent-owned affiliate Hexavest, Inc. ("Hexavest") managed $13.1 billion of client assets, down 13 percent from $15.0 billion of managed assets on January 31, 2015 and down 6 percent from $13.9 billion of managed assets on October 31, 2015. Hexavest-managed funds and separate accounts had net outflows of $0.2 billion in the first quarter of fiscal 2016, $1.4 billion in the first quarter of fiscal 2015 and $0.5 billion in the fourth quarter of fiscal 2015. Attachment 11 summarizes assets under management and asset flow information for Hexavest. Other than Eaton Vance-sponsored funds for which Hexavest is adviser or sub-adviser, the managed assets and flows of Hexavest are not included in Eaton Vance consolidated totals.

 

Financial Highlights 

Three Months Ended

(in thousands, except per share figures)

January 31,

October 31,

January 31,

2016

2015

2015

Revenue 

$

331,556

$

341,458

$

354,930

Expenses 

230,931

230,525

304,370

Operating income 

100,625

110,933

50,560

    Operating margin 

30.3%

32.5%

14.2%

Non-operating expense 

(3,059)

(13,663)

(4,427)

Income taxes 

(36,843)

(39,113)

(16,770)

Equity in net income of affiliates, net of tax 

2,509

2,658

3,146

Net income 

63,232

60,815

32,509

Net (income) loss attributable to non-controlling 

 and other beneficial interests 

(4,846)

1,388

(3,506)

Net income attributable to 

Eaton Vance Corp. shareholders 

$

58,386

$

62,203

$

29,003

Adjusted net income attributable to Eaton  

Vance Corp. shareholders(1)

$

58,519

$

61,796

$

74,098

Earnings per diluted share 

$

0.50

$

0.53

$

0.24

Adjusted earnings per diluted share(1)

$

0.51

$

0.53

$

0.61

 

First Quarter Fiscal 2016 vs. First Quarter Fiscal 2015

In the first quarter of fiscal 2016, revenue decreased 7 percent to $331.6 million from $354.9 million in the first quarter of fiscal 2015. Investment advisory and administrative fees were down 6 percent, as the impact of lower average effective fee rates, driven by product mix, more than offset a 4 percent increase in average consolidated assets under management. Distribution and service fee revenues collectively were down 9 percent, reflecting lower managed assets in fund share classes that are subject to these fees.

Operating expenses decreased 24 percent to $230.9 million in the first quarter of fiscal 2016 from $304.4 million in the first quarter of fiscal 2015. Excluding the lump-sum payment of $73.0 million to end service and additional compensation arrangements in place with a distribution partner for certain Eaton Vance closed-end funds in the first quarter of fiscal 2015, expenses were substantially unchanged. Increases in compensation, fund-related expenses, amortization of deferred sales commissions and other operating expenses were offset by lower distribution and service fee expenses. The increase in compensation expense reflects higher salaries and benefits and stock-based compensation attributable to an increase in headcount and an increase in other compensation costs related to employee recruiting, retirements and terminations, partially offset by lower operating-income based accruals and sales-based incentives. The increase in amortization of deferred sales commissions largely reflects an increase in private fund sales commission amortization. The increase in fund-related expenses primarily reflects an increase in fund subsidies and higher fund expenses borne by the Company on funds for which it earns an all-in fee. Other operating expenses increased 12 percent, reflecting higher information technology, professional services and other corporate expenses. The decrease in distribution expense primarily reflects lower closed-end fund-related distribution expense following the fiscal 2015 first quarter termination of service and additional compensation arrangements in place with a distribution partner and lower open-end fund asset-based distribution fees. The decrease in service fee expense reflects lower average assets under management in fund share classes subject to service fee payments.

Expenses in connection with the Company's NextShares™ initiative totaled approximately $1.8 million in the first quarter of fiscal 2016, an increase of 34 percent from $1.3 million in the first quarter of fiscal 2015.

During the first quarter of fiscal 2016, the Company made continued progress advancing NextShares toward market introduction. In December, the U.S. Securities and Exchange Commission declared effective the registration statements of 18 initial Eaton Vance NextShares funds, representing a broad complement of actively managed equity, fixed income, floating-rate income, absolute return and multi-asset strategies now offered as mutual funds. In January, Eaton Vance announced plans to introduce Eaton Vance Stock NextShares as the first NextShares fund in late February and to continue the staged rollout of NextShares with additional product launches in March. Those plans remain on track.

Operating income was up 99 percent to $100.6 million in the first quarter of fiscal 2016 from $50.6 million in the first quarter of fiscal 2015. Operating margin increased to 30.3 percent in the first quarter of fiscal 2016 from 14.2 percent in the first quarter of fiscal 2015. Adjusting for the $73.0 million lump-sum payment in the first quarter of fiscal 2015 described above, operating margin declined to 30.3 percent in the first quarter of fiscal 2016 from 34.8 percent in the first quarter of fiscal 2015.

Non-operating expense totaled $3.1 million in the first quarter of fiscal 2016 compared to $4.4 million in the first quarter of fiscal 2015. The year-over-year change primarily reflects a $1.3 million increase in income (expense) of the Company's consolidated collateralized loan obligation ("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 37.8 percent in the first quarter of fiscal 2016. Excluding the impact of consolidated CLO entity income (expense) borne by other beneficial interest holders, the Company's effective tax rate was 38.4 percent for the quarter.

Equity in net income of affiliates decreased to $2.5 million in the first quarter of fiscal 2016 from $3.1 million in the first quarter of fiscal 2015. Equity in net income of affiliates in the first quarter of fiscal 2016 was from the Company's position in Hexavest. Equity in net income of affiliates in the first quarter of fiscal 2015 included $2.9 million from the Company's position in Hexavest, $0.1 million of gains (losses) and other income on the Company's investments in sponsored funds and $0.1 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 $4.8 million in the first quarter of fiscal 2016 compared to $3.5 million in the first quarter of fiscal 2015.

First Quarter Fiscal 2016 vs. Fourth Quarter Fiscal 2015

In the first quarter of fiscal 2016, revenue decreased 3 percent to $331.6 million from $341.5 million in the fourth quarter of fiscal 2015. Investment advisory and administrative fees were down 3 percent, reflecting a 1 percent increase in average consolidated assets under management and lower average effective fee rates. Performance fees received were negligible in the first quarter of fiscal 2016 and contributed $2.0 million in the fourth quarter of fiscal 2015. Distribution and service fee revenues collectively decreased 4 percent, reflecting lower managed assets in fund share classes that are subject to these fees.

Operating expenses were substantially unchanged in the first quarter of fiscal 2016 from the fourth quarter of fiscal 2015. Increases in compensation and related costs, amortization of deferred sales commissions and fund-related expenses were offset by lower distribution and service fee expenses and lower other operating expenses. The increase in compensation expense reflects higher stock-based compensation expense, annual merit increases and seasonal increases in employee benefit costs and payroll taxes, offset by lower operating income-based bonus accruals and lower sales-based incentives.  The increase in amortization of deferred sales commissions largely reflects an increase in private fund sales commission amortization. The increase in fund-related expenses is attributable to higher fund subsidies. The decrease in distribution expense reflects lower marketing expenses and fund asset-based distribution fees. The decrease in service fee expense reflects lower average assets under management in fund share classes subject to service fee payments. Other operating expenses decreased 1 percent, reflecting lower travel, information technology and professional services expenses and higher other corporate expenses.

NextShares-related expenses decreased 22 percent to $1.8 million in the first quarter of fiscal 2016 from $2.3 million in the fourth quarter of fiscal 2015.

Operating income was down 9 percent to $100.6 million in the first quarter of fiscal 2016 from $110.9 million in the fourth quarter of fiscal 2015. Operating margin decreased to 30.3 percent in the first quarter of fiscal 2016 from 32.5 percent in the fourth quarter of fiscal 2015.

Non-operating expense totaled $3.1 million in the first quarter of fiscal 2016 compared to $13.7 million in the fourth quarter of fiscal 2015, reflecting a $5.2 million improvement in gains (losses) and other investment income related to the Company's investments in sponsored products and a $5.4 million increase in income (expense) of the Company's consolidated CLO entity.

Equity in net income of affiliates decreased to $2.5 million in the first quarter of fiscal 2016 from $2.7 million in the fourth quarter of fiscal 2015. In the first quarter of fiscal 2016, equity in net income of affiliates was from the Company's position in Hexavest. In the fourth quarter of fiscal 2015, equity in net income of affiliates included $2.4 million from the Company's position in Hexavest and $0.2 million of net 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 $4.8 million in the first quarter of fiscal 2016 compared to net loss attributable to non-controlling and other beneficial interests of $1.4 million in the fourth quarter of fiscal 2015.

Balance Sheet Information

Cash and cash equivalents totaled $358.1 million on January 31, 2016, with no outstanding borrowings against the Company's $300 million credit facility. Included within investments is $61.2 million of holdings of short-term debt securities with maturities between 90 days and one year. During the first quarter of fiscal 2016, the Company used $73.3 million to repurchase and retire approximately 2.3 million shares of its Non-Voting Common Stock under its repurchase authorizations. On January 13, 2016, the Company's Board authorized the repurchase of 8.0 million shares, of which all shares remain available.

Conference Call Information

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

A replay of the call will be available for one week by calling 855-859-2056 (domestic) or 404-537-3406 (international) or by accessing Eaton Vance's website, eatonvance.com. Listeners to the telephone replay must enter the confirmation code 50143622.

About Eaton Vance Corp.

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

Forward-Looking Statements

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

 

(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

%

%

Change

Change

Q1 2016

Q1 2016

January 31,

October 31,

January 31,

vs.

vs.

2016

2015

2015

Q4 2015

Q1 2015

Revenue:

Investment advisory and administrative fees

$

283,042

$

290,804

$

301,813

(3)

%

(6)

%

Distribution and underwriter fees

19,058

19,446

21,036

(2)

(9)

Service fees

27,259

28,875

29,847

(6)

(9)

Other revenue

2,197

2,333

2,234

(6)

(2)

Total revenue

331,556

341,458

354,930

(3)

(7)

Expenses:

Compensation and related costs

122,510

119,160

120,192

3

2

Distribution expense

28,483

30,506

106,267

(7)

(73)

Service fee expense

24,595

25,547

27,780

(4)

(11)

Amortization of deferred sales commissions

4,044

3,785

3,728

7

8

Fund-related expenses

9,163

8,802

8,706

4

5

Other expenses

42,136

42,725

37,697

(1)

12

Total expenses

230,931

230,525

304,370

-

(24)

Operating income

100,625

110,933

50,560

(9)

99

Non-operating income (expense):

Gains (losses) and other investment

income, net

2,840

(2,330)

2,802

NM

1

Interest expense

(7,342)

(7,340)

(7,336)

-

-

Other income (expense) of consolidated

collateralized loan obligation

("CLO") entities:

     Gains (losses) and other investment

          income, net

3,279

(192)

1,301

NM

152

     Interest and other expense

(1,836)

(3,801)

(1,194)

(52)

54

Total non-operating expense

(3,059)

(13,663)

(4,427)

(78)

(31)

Income before income taxes and equity

   in net income of affiliates

97,566

97,270

46,133

-

111

Income taxes

(36,843)

(39,113)

(16,770)

(6)

120

Equity in net income of affiliates, net of tax

2,509

2,658

3,146

(6)

(20)

Net income

63,232

60,815

32,509

4

95

Net (income) loss attributable to non-controlling

   and other beneficial interests

(4,846)

1,388

(3,506)

NM

38

Net income attributable to

   Eaton Vance Corp. Shareholders

$

58,386

$

62,203

$

29,003

(6)

101

Earnings per share:

Basic

$

0.52

$

0.55

$

0.25

(5)

108

Diluted

$

0.50

$

0.53

$

0.24

(6)

108

Weighted average shares outstanding:

Basic

111,641

112,040

114,592

-

(3)

Diluted

114,603

115,949

119,690

(1)

(4)

Dividends declared per share

$

0.265

$

0.265

$

0.250

-

6

 

 

 

Attachment 2

Eaton Vance Corp.

Reconciliation of net income attributable to Eaton Vance Corp.

shareholders to adjusted net income attributable to Eaton Vance Corp.

shareholders and earnings per diluted share to adjusted earnings per diluted share

Three Months Ended

% Change

% Change

January 31,

October 31,

January 31,

Q1 2016 vs.

Q1 2016 vs.

(in thousands, except per share figures)

2016

2015

2015

Q4 2015

Q1 2015

Net income attributable to Eaton

Vance Corp. shareholders

$

58,386

$

62,203

$

29,003

(6)

%

101

%

Non-controlling interest value adjustments

133

(407)

200

NM

(34)

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

$

58,519

$

61,796

$

74,098

(5)

(21)

Earnings per diluted share

$

0.50

$

0.53

$

0.24

(6)

108

Non-controlling interest value adjustments

0.01

-

-

NM

NM

Payments to end certain closed-end fund

service and additional compensation

arrangements, net of tax

-

-

0.37

-

NM

Adjusted earnings per diluted share

$

0.51

$

0.53

$

0.61

(4)

(16)

Attachment 3

Eaton Vance Corp.

Components of net income attributable

to non-controlling and other beneficial interests

Three Months Ended

% Change

% Change

January 31,

October 31,

January 31,

Q1 2016 vs.

Q1 2016 vs.

(in thousands)

2016

2015

2015

Q4 2015

Q1 2015

Consolidated funds

$

(509)

$

(526)

$

(514)

(3)

%

(1)

%

Majority-owned subsidiaries

3,310

3,931

3,773

(16)

(12)

Non-controlling interest value adjustments

133

(407)

200

NM

(34)

Consolidated CLO entities

1,912

(4,386)

47

NM

NM

Net income (loss) attributable to non-

controlling and other beneficial interests

$

4,846

$

(1,388)

$

3,506

NM

38

 

 

 

 Attachment 4

Eaton Vance Corp.

Balance Sheet

(in thousands, except per share figures)

January 31,

October 31,

2016

2015

Assets

Cash and cash equivalents

$

358,133

$

465,558

Investment advisory fees and other receivables

172,329

187,753

Investments

495,221

507,020

Assets of consolidated CLO entity:

          Cash and cash equivalents

30,447

162,704

          Bank loan investments

380,299

304,250

          Other assets

3,535

128

Deferred sales commissions

26,082

25,161

Deferred income taxes

35,911

42,164

Equipment and leasehold improvements, net

45,248

44,943

Intangible assets, net

53,227

55,433

Goodwill

237,961

237,961

Loan receivable from affiliate

5,000

-

Other assets

49,727

83,396

   Total assets

$

1,893,120

$

2,116,471

Liabilities, Temporary Equity and Permanent Equity

Liabilities:

Accrued compensation

$

59,697

$

178,875

Accounts payable and accrued expenses

68,167

65,249

Dividend payable

32,979

32,923

Debt

573,850

573,811

Liabilities of consolidated CLO entity:

          Senior and subordinated note obligations

390,654

397,039

          Other liabilities

22,956

70,814

Other liabilities

67,216

86,891

   Total liabilities

1,215,519

1,405,602

Commitments and contingencies

Temporary Equity:

Redeemable non-controlling interests

85,279

88,913

   Total temporary equity

85,279

88,913

Permanent Equity:

Voting Common Stock, par value $0.00390625 per share:

   Authorized, 1,280,000 shares

   Issued and outstanding, 442,932 and 415,078 shares, respectively

2

2

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

   Authorized, 190,720,000 shares

   Issued and outstanding, 114,722,876 and 115,470,485 shares, respectively

448

451

Additional paid-in capital

-

-

Notes receivable from stock option exercises

(10,702)

(11,143)

Accumulated other comprehensive loss

(63,306)

(48,586)

Appropriated deficit

(3,426)

(5,338)

Retained earnings

667,541

684,845

   Total Eaton Vance Corp. shareholders' equity

590,557

620,231

Non-redeemable non-controlling interests

1,765

1,725

   Total permanent equity

592,322

621,956

Total liabilities, temporary equity and permanent equity

$

1,893,120

$

2,116,471

 

 

 

Attachment 5

 Eaton Vance Corp. 

 Consolidated Net Flows by Investment Mandate(1)

 (in millions) 

Three Months Ended

January 31,

October 31,

January 31,

2016

2015

2015

 Equity assets - beginning of period(2)

$

90,013

$

93,366

$

96,379

Sales and other inflows 

3,831

4,412

4,514

Redemptions/outflows 

(4,393)

(5,117)

(5,072)

  Net flows 

(562)

(705)

(558)

Exchanges 

13

10

35

Market value change 

(6,113)

(2,658)

(2,890)

 Equity assets - end of period 

$

83,351

$

90,013

$

92,966

 Fixed income assets - beginning of period(3)

52,373

51,266

46,062

Sales and other inflows 

4,933

4,519

3,512

Redemptions/outflows 

(4,177)

(3,167)

(2,435)

  Net flows 

756

1,352

1,077

Exchanges 

30

-

74

Market value change 

(403)

(245)

204

 Fixed income assets - end of period 

$

52,756

$

52,373

$

47,417

 Floating-rate income assets -  beginning of period 

35,619

37,220

42,009

Sales and other inflows 

1,904

2,615

2,302

Redemptions/outflows 

(3,428)

(3,434)

(4,955)

  Net flows 

(1,524)

(819)

(2,653)

Exchanges 

(36)

(12)

(105)

Market value change 

(1,383)

(770)

(603)

 Floating-rate income assets - end of period 

$

32,676

$

35,619

$

38,648

 Alternative assets -  beginning of period 

10,173

10,333

11,241

Sales and other inflows 

1,220

868

847

Redemptions/outflows 

(1,209)

(816)

(1,138)

  Net flows 

11

52

(291)

Exchanges 

3

(2)

(14)

Market value change 

(457)

(210)

(131)

 Alternative assets - end of period 

$

9,730

$

10,173

$

10,805

 Portfolio implementation assets - beginning of period 

59,487

59,234

48,008

Sales and other inflows 

5,768

3,541

2,663

Redemptions/outflows 

(1,928)

(1,866)

(1,565)

  Net flows 

3,840

1,675

1,098

Exchanges 

(11)

-

-

Market value change 

(4,396)

(1,422)

(568)

 Portfolio implementation assets - end of period 

$

58,920

$

59,487

$

48,538

 Exposure management assets - beginning of period 

63,689

61,137

54,036

Sales and other inflows 

12,929

14,918

17,033

Redemptions/outflows 

(10,122)

(11,895)

(14,286)

  Net flows 

2,807

3,023

2,747

Market value change 

(1,350)

(471)

511

 Exposure management assets - end of period 

$

65,146

$

63,689

$

57,294

 Total fund and separate account 

assets - beginning of period 

311,354

312,556

297,735

Sales and other inflows 

30,585

30,873

30,871

Redemptions/outflows 

(25,257)

(26,295)

(29,451)

  Net flows 

5,328

4,578

1,420

Exchanges 

(1)

(4)

(10)

Market value change 

(14,102)

(5,776)

(3,477)

 Total assets under management - end of period 

$

302,579

$

311,354

$

295,668

(1)  Consolidated Eaton Vance Corp.  See Attachment 11 for managed assets and flows of 49 percent-owned Hexavest Inc. 

(2)  Includes balanced and multi-asset mandates. 

(3)  Includes cash management mandates. 

 

 

 

Attachment 6

 Eaton Vance Corp.

 Consolidated Net Flows by Investment Vehicle(1)

 (in millions)

Three Months Ended 

January 31,

October 31,

January 31, 

2016

2015

2015

 Fund assets - beginning of period(2)

$

125,934

$

130,211

$

134,564

Sales and other inflows 

8,258

8,644

8,614

Redemptions/outflows 

(9,712)

(9,632)

(10,739)

  Net flows 

(1,454)

(988)

(2,125)

Exchanges 

(55)

(4)

181

Market value change 

(6,637)

(3,285)

(3,068)

 Fund assets - end of period 

$

117,788

$

125,934

$

129,552

 Institutional separate account assets - beginning of period 

119,987

118,086

106,443

Sales and other inflows 

16,731

17,889

18,055

Redemptions/outflows 

(12,112)

(14,247)

(16,398)

  Net flows 

4,619

3,642

1,657

Exchanges 

(15)

-

(173)

Market value change 

(4,394)

(1,741)

(380)

 Institutional separate account assets - end of period 

$

120,197

$

119,987

$

107,547

 High-net-worth separate account assets - beginning of period 

24,516

24,492

22,235

Sales and other inflows 

2,264

1,013

1,460

Redemptions/outflows 

(1,140)

(641)

(621)

  Net flows 

1,124

372

839

Exchanges 

70

(5)

(94)

Market value change 

(1,711)

(343)

(386)

 High-net-worth separate account assets - end of period 

$

23,999

$

24,516

$

22,594

 Retail managed account assets - beginning of period

40,917

39,767

34,493

Sales and other inflows 

3,332

3,327

2,742

Redemptions/outflows 

(2,293)

(1,775)

(1,693)

  Net flows 

1,039

1,552

1,049

Exchanges 

(1)

5

76

Market value change 

(1,360)

(407)

357

 Retail managed account assets - end of period

$

40,595

$

40,917

$

35,975

 Total fund and separate account assets - beginning of period

311,354

312,556

297,735

Sales and other inflows 

30,585

30,873

30,871

Redemptions/outflows 

(25,257)

(26,295)

(29,451)

  Net flows 

5,328

4,578

1,420

Exchanges 

(1)

(4)

(10)

Market value change 

(14,102)

(5,776)

(3,477)

 Total assets under management - end of period 

$

302,579

$

311,354

$

295,668

(1)   Consolidated Eaton Vance Corp.  See Attachment 11 for managed assets and flows of 49 percent-owned Hexavest Inc.

(2)   Includes assets in cash management funds.

 

 

 

Attachment 7 

 Eaton Vance Corp. 

 Consolidated Assets under Management by Investment Mandate (1)

 (in millions) 

January 31,

October 31,

%

January 31,

%

2016

2015

Change

2015

Change 

 Equity(2)

$

83,351

$

90,013

-7%

$

92,966

-10%

 Fixed income(3)

52,756

52,373

1%

47,417

11%

 Floating-rate income 

32,676

35,619

-8%

38,648

-15%

 Alternative 

9,730

10,173

-4%

10,805

-10%

 Portfolio implementation 

58,920

59,487

-1%

48,538

21%

 Exposure management 

65,146

63,689

2%

57,294

14%

 Total  

$

302,579

$

311,354

-3%

$

295,668

2%

(1)   Consolidated Eaton Vance Corp. See Attachment 11 for managed assets and flows of 49 percent-owned Hexavest.

(2)   Includes balanced and multi-asset mandates.

(3)   Includes cash management mandates.

Attachment 8 

 Eaton Vance Corp. 

 Consolidated Assets under Management by Investment Vehicle (1)

 (in millions) 

January 31,

October 31,

%

January 31,

%

2016

2015

Change

2015

Change 

 Open-end funds 

$

69,110

$

74,838

-8%

$

78,828

-12%

 Private funds(2)

25,475

26,647

-4%

25,765

-1%

 Closed-end funds(3)

23,203

24,449

-5%

24,959

-7%

 Institutional separate account assets 

120,197

119,987

0%

107,547

12%

 High-net-worth separate account assets 

23,999

24,516

-2%

22,594

6%

 Retail managed separate account assets 

40,595

40,917

-1%

35,975

13%

 Total  

$

302,579

$

311,354

-3%

$

295,668

2%

(1)   Consolidated Eaton Vance Corp. See Attachment 11 for managed assets and flows of 49 percent-owned Hexavest.

(2)   Includes privately offered equity, fixed income and floating-rate income loan funds and CLO entities.

(3)   Includes unit investment trusts.

Attachment 9 

 Eaton Vance Corp. 

 Consolidated Assets under Management by Investment Affiliate (1)

 (in millions) 

January 31,

October 31,

%

January 31,

%

2016

2015

Change

2015

Change 

 Eaton Vance Management(2)

$

135,352

$

141,415

-4%

$

139,714

-3%

 Parametric  

150,488

152,506

-1%

138,015

9%

 Atlanta Capital 

16,739

17,433

-4%

17,939

-7%

 Total  

$

302,579

$

311,354

-3%

$

295,668

2%

(1)   Consolidated Eaton Vance Corp. See Attachment 11 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 10 

 Eaton Vance Corp. 

 Average Annualized Effective Investment Advisory and Administrative Fee Rates by Investment Mandate (1)

 (basis points on average managed assets) 

Three Months Ended

Three Months Ended

Three Months Ended

January 31,

October 31,

%

January 31,

%

2016

2015

Change

2015

Change 

 Equity 

62.7

63.2

-1%

64.4

-3%

 Fixed income 

41.0

41.8

-2%

44.1

-7%

 Floating-rate income 

52.3

53.1

-2%

53.9

-3%

 Alternative 

63.5

62.6

1%

64.1

-1%

 Portfolio implementation 

15.4

15.2

1%

14.6

5%

 Exposure management 

5.1

5.4

-6%

5.3

-4%

 Total 

36.7

37.7

-3%

40.6

-10%

(1)   Excludes performance fees received, which were negligible for the three months ended January 31, 2016, $2.0 million for the three months ended

      October 31, 2015 and negligible for the three months ended January 31, 2015.

 

 

 

 Attachment 11

 Eaton Vance Corp. 

 Hexavest Inc. Assets under Management and Net Flows 

 (in millions) 

Three Months Ended

January 31,

October 31,

January 31,

2016

2015

2015

 Eaton Vance distributed: 

 Eaton Vance sponsored funds - beginning of period(1)

$

229

$

239

$

227

Sales and other inflows 

7

1

16

Redemptions/outflows 

(21)

(5)

(6)

  Net flows 

(14)

(4)

10

Market value change 

(10)

(6)

(3)

 Eaton Vance sponsored funds - end of period 

$

205

$

229

$

234

  Eaton Vance distributed separate accounts -beginning of period(2)

$

2,440

$

2,362

$

2,367

Sales and other inflows 

4

140

100

Redemptions/outflows 

(9)

(14)

(432)

  Net flows 

(5)

126

(332)

Exchanges 

-

-

-

Market value change 

(91)

(48)

(36)

 Eaton Vance distributed separate accounts - end of period 

$

2,344

$

2,440

$

1,999

 Total Eaton Vance distributed - beginning of period 

$

2,669

$

2,601

$

2,594

Sales and other inflows 

11

141

116

Redemptions/outflows 

(30)

(19)

(438)

  Net flows 

(19)

122

(322)

Exchanges 

-

-

-

Market value change 

(101)

(54)

(39)

 Total Eaton Vance distributed - end of period 

$

2,549

$

2,669

$

2,233

 Hexavest directly distributed - beginning of period(3)

$

11,279

$

12,208

$

14,101

Sales and other inflows 

129

75

245

Redemptions/outflows 

(329)

(699)

(1,341)

  Net flows 

(200)

(624)

(1,096)

Exchanges 

-

-

-

Market value change 

(546)

(305)

(256)

 Hexavest directly distributed - end of period 

$

10,533

$

11,279

$

12,749

 Total Hexavest assets - beginning of period 

$

13,948

$

14,809

$

16,695

Sales and other inflows 

140

216

361

Redemptions/outflows 

(359)

(718)

(1,779)

  Net flows 

(219)

(502)

(1,418)

Exchanges 

-

-

-

Market value change 

(647)

(359)

(295)

 Total Hexavest assets - end of period 

$

13,082

$

13,948

$

14,982

(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 through 9. 

(2)

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

but not investment advisory fees, on these assets, which are not included in the Eaton Vance consolidated results in Attachments 5 through 9. 

(3)

Managed assets and flows of pre-transaction Hexavest clients and post-transaction Hexavest clients in Canada. Eaton Vance receives no  

investment advisory or distribution revenue on these assets, which are not included in the Eaton Vance consolidated results in Attachments 

5 through 9. 

 

 

 

SOURCE Eaton Vance Corp.



RELATED LINKS

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