2014

Eaton Vance Corp. Report for the Three Months and Fiscal Year Ended October 31, 2013

BOSTON, Nov. 26, 2013 /PRNewswire/ -- Eaton Vance Corp. (NYSE: EV) today reported adjusted earnings per diluted share(1) of $0.55 for the fourth quarter of fiscal 2013, an increase of 4 percent over the $0.53 of adjusted earnings per diluted share in the fourth quarter of fiscal 2012 and an increase of 6 percent over the $0.52 of adjusted earnings per diluted share in the third quarter of fiscal 2013. Adjusted earnings per diluted share were $2.08 for the full fiscal year ended October 31, 2013, an increase of 10 percent over the $1.89 for the fiscal year ended October 31, 2012.

As determined under U.S. generally accepted accounting principles ("GAAP"), the Company earned $0.45 in the fourth quarter of fiscal 2013, $0.45 in the fourth quarter of fiscal 2012 and $0.18 in the third quarter of fiscal 2013. Adjusted earnings per diluted share differed from GAAP earnings per diluted share in the fourth quarter of fiscal 2013 and 2012 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 $0.10 and $0.08 per diluted share, respectively. Adjusted earnings per diluted share differed from GAAP earnings per diluted share in the third quarter of fiscal 2013 to reflect $0.28 per diluted share of costs associated with retiring $250 million of the Company's 6.5 percent 2017 Senior Notes ("2017 Senior Notes"), $0.05 per diluted share of charges in connection with settling a state tax matter and $0.01 per diluted share of closed-end structuring fees incurred in connection with the $135 million initial public offering of Eaton Vance Floating-Rate Income Plus Fund in June. The Company's GAAP earnings per diluted share were $1.53 for the fiscal year ended October 31, 2013 and $1.72 for the fiscal year ended October 31, 2012.

Net income and gains on seed capital investments were negligible in the fourth quarter of fiscal 2013 and contributed $0.02 per diluted share in the fourth quarter of fiscal 2012. Losses (net of interest and dividend income) on seed capital investments reduced diluted earnings by $0.02 per share in the third quarter of fiscal 2013.

Net inflows of $3.9 billion into long-term funds and separate accounts in the fourth quarter of fiscal 2013 were driven by strong flows into floating-rate income and implementation services, and represent a 6 percent annualized internal growth rate (net inflows into long-term assets divided by beginning of period long-term assets managed). For comparison, the Company had net inflows of $2.2 billion in the fourth quarter of fiscal 2012 and $8.8 billion in the third quarter of fiscal 2013. Net inflows of $24.7 billion for the fiscal year 2013 equate to 12 percent annual internal growth and compare to $0.2 billion of net inflows in fiscal 2012.

"Fiscal 2013 was a period of significant progress for Eaton Vance, as we achieved double-digit organic growth and expanded our capabilities through the successful acquisition of Clifton Group" said Thomas E. Faust Jr., Chairman and Chief Executive Officer. "I see the Company as well-positioned for how our industry is evolving and poised for continued success."

Consolidated assets under management were $280.7 billion on October 31, 2013. This is an increase of 41 percent from the $199.5 billion of managed assets on October 31, 2012 and an increase of 4 percent from the $268.8 billion of managed assets on July 31, 2013. The year-over-year increase in ending assets under management reflects the $34.8 billion of managed assets acquired in the December 2012 acquisition of the former Clifton Group Investment Management Company ("Clifton") by subsidiary Parametric Portfolio Associates LLC ("Parametric"), net inflows of $24.7 billion and market price appreciation of $21.7 billion. The sequential quarterly increase in ending assets under management reflects net inflows of $3.9 billion and market appreciation of $8.0 billion.

Average consolidated assets under management were $271.4 billion in the fourth quarter of fiscal 2013, up 38 percent from $196.6 billion in the fourth quarter of fiscal 2012 and up 3 percent from $263.7 billion in the third quarter of fiscal 2013.

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

As shown in Attachment 6, consolidated gross sales and other inflows were $25.5 billion in the fourth quarter of fiscal 2013, up 77 percent from $14.4 billion in the fourth quarter of fiscal 2012 and down 9 percent from $28.0 billion in the third quarter of fiscal 2013. Gross redemptions and other outflows were $21.6 billion in the fourth quarter of fiscal 2013, up 76 percent from $12.3 billion in the fourth quarter of fiscal 2012 and up 13 percent from $19.2 billion in the third quarter of fiscal 2013. Consolidated gross sales and other inflows were $97.6 billion in fiscal 2013, up 95 percent from $50.1 billion in fiscal 2012. Gross redemptions and other outflows were $72.9 billion in fiscal 2013, up 46 percent from $49.9 billion in fiscal 2012.

As of October 31, 2013, 49 percent-owned affiliate Hexavest, Inc. ("Hexavest") managed $16.9 billion of client assets, an increase of 40 percent from the $12.1 billion of managed assets on October 31, 2012 and an increase of 8 percent from the $15.7 billion of managed assets on July 31, 2013. Net inflows into Hexavest-managed funds and separate accounts were $0.2 billion in the fourth quarter of fiscal 2013 compared to net inflows of $0.8 billion in the fourth quarter of fiscal 2012 and net inflows of $0.5 billion in the third quarter of fiscal 2013. Since Eaton Vance acquired its interest in Hexavest on August 6, 2012, Hexavest's net inflows have totaled $3.1 billion and assets under management have increased by $6.0 billion, or 54 percent, from $11.0 billion at the date of acquisition. Attachment 9 summarizes assets under management and asset flow information for Hexavest. Other than Eaton Vance-sponsored funds for which Hexavest is advisor or sub-advisor, the managed assets and flows of Hexavest are not included in Eaton Vance consolidated totals.

As of October 31, 2013, the Clifton division of Parametric managed $45.6 billion of client assets, an increase of 12 percent from the $40.7 billion of managed assets on July 31, 2013. Net inflows into Clifton-managed funds and accounts were $3.9 billion in the fourth quarter of fiscal 2013 and $5.1 billion in the third quarter of fiscal 2013. Clifton net inflows since the December 31, 2012 acquisition have totaled $8.9 billion. Clifton-managed assets have increased by $10.8 billion, or 31 percent, from $34.8 billion at the date of acquisition. The managed assets and flows of Clifton since the date of acquisition are included in Eaton Vance consolidated totals and reflected as assets and flows of Parametric.

 

Financial Highlights

















Three Months Ended



(in thousands, except per share figures)











October 31,

July 31,

October 31,



2013

2013

2012









Revenue

$

356,933

$

350,361

$

309,889

Expenses


231,526


231,511


203,544

Operating income


125,407


118,850


106,345









Operating margin


35%


34%


34%









Non-operating (expense) income


(14,252)


(71,315)


3,993

Income taxes


(44,626)


(25,137)


(37,655)

Equity in net income of affiliates, net of tax


5,600


2,652


1,758

Net income


72,129


25,050


74,441

Net income attributable to non-controlling








and other beneficial interests


(14,977)


(1,847)


(21,323)

Net income attributable to








Eaton Vance Corp. shareholders

$

57,152

$

23,203

$

53,118

Adjusted net income attributable to Eaton








Vance Corp. shareholders(1)

$

69,953

$

66,513

$

62,988









Earnings per diluted share

$

0.45

$

0.18

$

0.45









Adjusted earnings per diluted share(1)

$

0.55

$

0.52

$

0.53

 

Fourth Quarter Fiscal 2013 vs. Fourth Quarter Fiscal 2012

In the fourth quarter of fiscal 2013, revenue increased 15 percent to $356.9 million from revenue of $309.9 million in the fourth quarter of fiscal 2012. Investment advisory and administrative fees were up 18 percent, reflecting a 38 percent increase in average consolidated assets under management offset by lower average effective fee rates, primarily as a result of the Clifton acquisition. Performance fees contributed $3.4 million and $3.7 million to investment advisory and administrative fees in the fourth quarter of fiscal 2013 and 2012, respectively. Distribution and service fee revenues were flat in aggregate, reflecting consistent levels of managed assets in fund share classes that are subject to distribution and service fees.

Operating expenses increased 14 percent to $231.5 million in the fourth quarter of fiscal 2013 from $203.5 million in the fourth quarter of fiscal 2012, reflecting increases in compensation, distribution fees, amortization of deferred sales commissions, fund-related expenses and other expenses. The increase in compensation expense reflects increases in sales- and operating income-based incentives, stock-based compensation, higher employee headcount and increases in base salaries and benefits, partially driven by the acquisition of Clifton in the first quarter of fiscal 2013. Gross sales and other inflows, which drive sales-based incentives, were up 77 percent year-over-year, while pre-bonus adjusted operating income, which drives operating-income based incentives, was up 18 percent over the same period. The increase in distribution expense reflects increases in intermediary marketing support payments and discretionary marketing expenses. The increase in amortization of deferred sales commissions largely reflects an increase in Class C share amortization. The increase in fund-related expenses reflects an increase in sub-advisory expenses for Company sponsored funds managed by unaffiliated sub-advisors and increases in other fund expenses. Other expenses increased 15 percent, as increases in travel-related expenses, information technology and professional fees were partially offset by decreases in facilities-related expenses.

Operating income was up 18 percent to $125.4 million in the fourth quarter of fiscal 2013 from $106.3 million in the fourth quarter of fiscal 2012.

Non-operating expense was $14.3 million in the fourth quarter of fiscal 2013 compared to non-operating income of $4.0 million in the fourth quarter of fiscal 2012. The year-over-year change reflects a decline of $10.3 million in gains (losses) and other investment income, a $9.1 million decline in income (expense) of the Company's consolidated collateralized loan obligation entities ("CLO"), partially offset by a $1.2 million decrease in interest expense.

The Company's effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 40.1 percent in the fourth quarter of fiscal 2013. Excluding the impact of CLO entities' income (expense) borne by other beneficial interest holders, the Company's effective tax rate was approximately 39.2 percent for the quarter.

Equity in net income of affiliates increased $3.8 million from the fourth quarter of fiscal 2012, reflecting an increase in gains (losses) and other income on the Company's investments in sponsored funds and an increase in the Company's equity in the net income of Hexavest. Equity in net income of affiliates for the fourth quarter of fiscal 2013 and 2012 includes $3.0 million and $1.9 million, respectively, of Company equity in the net income of Hexavest.

Net income attributable to non-controlling and other beneficial interests was $15.0 million in the fourth quarter of fiscal 2013 compared to $21.3 million in the fourth quarter of fiscal 2012. As shown in Attachment 3, net income attributable to non-controlling and other beneficial interests in the fourth quarter of fiscal 2013 and 2012 includes $12.6 million and $9.9 million, respectively, of non-controlling interest value adjustments relating to our subsidiary Atlanta Capital Management. The year-over-year change also reflects a decline in the net income (loss) attributable to non-controlling interest holders of the Company's consolidated CLO entities and a decline in net income attributable to non-controlling interest holders of the Company's consolidated funds, partially offset by an increase in the income attributable to non-controlling interest holders of majority-owned subsidiaries.

Weighted average diluted shares outstanding increased 7.9 million shares, or 7 percent, in the fourth quarter of fiscal 2013 from the fourth quarter of fiscal 2012. The change reflects an increase in the total number of shares outstanding due to the 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.

Fourth Quarter Fiscal 2013 vs. Third Quarter Fiscal 2013

In the fourth quarter of fiscal 2013, revenue increased 2 percent to $356.9 million from revenue of $350.4 million in the third quarter of fiscal 2013. Investment advisory and administrative fees were up 3 percent in the fourth quarter of fiscal 2013 compared to the third quarter of fiscal 2013, reflecting a 3 percent increase in average consolidated assets under management. Performance fees contributed $3.4 million and $0.9 million to investment advisory and administrative fees in the fourth quarter of fiscal 2013 and the third quarter of fiscal 2013, respectively. Distribution and service fee revenue decreased 2 percent in aggregate, reflecting a decrease in average managed assets in fund share classes that are subject to such fees.

Operating expenses were flat at $231.5 million in the fourth quarter of fiscal 2013 as compared to the third quarter of fiscal 2013, reflecting decreases in compensation and distribution and service fees, offset by higher amortization of deferred sales commissions and increases in fund-related and other operating expenses. The decrease in compensation expense reflects decreases in operating income-based incentives and sales-based incentives, partially offset by an increase in stock-based compensation. Lower sales-based incentives reflect the 9 percent decrease in gross sales and other inflows. The decrease in operating income-based incentives reflects lower bonus accruals in the fourth quarter of fiscal 2013. The increase in stock-based compensation relates principally to affiliate equity plans. The decrease in distribution expense reflects the $1.7 million in closed-end fund-related structuring fees paid to distribution partners in the third quarter of fiscal 2013, partially offset by an increase in discretionary marketing expenses. The increase in amortization of deferred sales commissions largely reflects an increase in Class C share amortization. Fund-related expenses increased 28 percent due to increases in fund subsidies and other fund-related expense. Other expenses increased 2 percent, reflecting increases in travel-related expenses, information technology and professional services offset by decreases in facilities-related expenses and other corporate expenses.

Operating income was up 6 percent to $125.4 million in the fourth quarter of fiscal 2013 from $118.9 million in the third quarter of fiscal 2013.

Non-operating expense was $14.3 million in the fourth quarter of fiscal 2013 compared to $71.3 million in the third quarter of fiscal 2013. The improvement in non-operating expense reflects the $52.9 million in costs incurred on the retirement of $250 million of the Company's 2017 Senior Notes in the third quarter, a $3.3 million improvement in gains (losses) and other investment income, a $1.8 million decrease in interest expense offset by a $0.8 million decline in income (expense) of the Company's consolidated CLO entities. The improvement in gains (losses) and other investment income reflects the $3.1 million loss recognized in the third quarter on a reverse treasury lock entered into in conjunction with the retirement of the 2017 Senior Notes. The decrease in interest expense reflects approximately $0.9 million of additional interest expense recognized in the third quarter related to the accelerated amortization of a treasury lock tied to the retired portion of the 2017 Senior Notes as well as a full quarter of reduced interest expense as a result of the debt restructuring.

Equity in net income of affiliates increased by $2.9 million in the fourth quarter of fiscal 2013 compared to the third quarter of fiscal 2013, primarily reflecting an increase in gains (losses) and other income on the Company's investments in sponsored products. Equity in net income of affiliates for the fourth quarter of fiscal 2013 and the third quarter of fiscal 2013 includes $3.0 million and $2.5 million, respectively, of Company equity in the net income of Hexavest.

Net income attributable to non-controlling and other beneficial interests was $15.0 million in the fourth quarter of fiscal 2013 compared to $1.8 million in the third quarter of fiscal 2013. As shown in Attachment 3, included in net income attributable to non-controlling and other beneficial interests in the fourth quarter of fiscal 2013 is $12.6 million of non-controlling interest value adjustments relating to our subsidiary Atlanta Capital Management. The sequential quarter change also reflects a $1.0 million increase in the income attributable to non-controlling interest holders of the Company's majority-owned subsidiaries.

Balance Sheet Information

Cash and cash equivalents totaled $461.9 million on October 31, 2013, with no outstanding borrowings against the Company's $300 million credit facility. During fiscal 2013, the Company used $73.9 million to repurchase and retire approximately 2.0 million shares of its Non-Voting Common Stock under its repurchase authorization. Approximately 1.9 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 EST today to discuss the financial results for the three months and fiscal year ended October 31, 2013. To participate in the conference call, please call 877-407-0709 (domestic) or 201-689-8566 (international) and refer to "Eaton Vance Corp. Fourth 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 13572801.

About Eaton Vance Corp.

Eaton Vance Corp. is one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates offer individuals and institutions a broad array of investment strategies and wealth management solutions. The Company's long record of providing exemplary service, timely innovation and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today's most discerning investors. For more information about Eaton Vance, visit www.eatonvance.com.

Forward-Looking Statements

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

 



(1) Although the Company reports its financial results in accordance with GAAP, management believes that certain non-GAAP financial measures, while not a substitute for GAAP financial measures, may be effective indicators of the Company's performance over time. Adjusted net income and adjusted earnings per diluted share reflect the add back of adjustments in connection with changes in the estimated redemption value of non-controlling interests in our affiliates redeemable at other than fair value ("non-controlling interest value adjustments"), closed-end fund structuring fees and other items management deems non-recurring or non-operating, such as special dividends, costs associated with retiring debt and tax settlements. See reconciliation provided in Attachment 2 for more information on adjusting items.

 

















Attachment 1

Eaton Vance Corp.

Summary of Results of Operations

(in thousands, except per share figures)












































Three Months Ended


Fiscal Year Ended










%

%

















Change

Change

















Q4 2013

Q4 2013











October 31,

July 31,

October 31,

vs.

vs.


October 31,

October 31,

%




2013

2013

2012

Q3 2013

Q4 2012


2013

2012

Change

Revenue:






































Investment advisory and administrative fees

$

301,536

$

293,589

$

255,063

3

%

18

%


$

1,135,327

$

988,058

15

%


Distribution and underwriter fees


21,637


22,681


22,278

(5)


(3)




89,234


89,410

-



Service fees


32,039


32,259


31,221

(1)


3




126,560


126,345

-



Other revenue


1,721


1,832


1,327

(6)


30




6,382


5,223

22




Total revenue


356,933


350,361


309,889

2


15




1,357,503


1,209,036

12


Expenses:






































Compensation and related costs


112,914


115,379


96,446

(2)


17




447,134


385,395

16



Distribution expense


34,973


35,452


32,956

(1)


6




139,618


130,914

7



Service fee expense


28,661


29,013


28,559

(1)


-




115,149


113,485

1



Amortization of deferred sales commissions


5,063


4,983


4,495

2


13




19,581


20,441

(4)



Fund-related expenses


10,502


8,230


6,929

28


52




34,230


27,375

25



Other expenses


39,413


38,454


34,159

2


15




148,784


138,434

7




Total expenses


231,526


231,511


203,544

-


14




904,496


816,044

11


Operating income


125,407


118,850


106,345

6


18




453,007


392,992

15


Non-operating income (expense):



















Gains (losses) and other investment income, net


(4,736)


(8,027)


5,517

(41)


NM




(2,513)


18,417

NM



Interest expense


(7,399)


(9,167)


(8,580)

(19)


(14)




(33,708)


(33,930)

(1)



Loss on extinguishment of debt


(110)


(52,886)


-

NM


NM




(52,996)


-

NM



Other income (expense) of consolidated CLO entities:



















Gains (losses) and other investment




















income, net


6,934


1,704


12,659

307


(45)




14,815


44,706

(67)




Interest expense


(8,941)


(2,939)


(5,603)

204


60




(19,152)


(18,447)

4




Total non-operating (expense) income


(14,252)


(71,315)


3,993

(80)


NM




(93,554)


10,746

NM






















Income before income taxes and equity


















in net income of affiliates

111,155


47,535


110,338

134


1




359,453


403,738

(11)


Income taxes


(44,626)


(25,137)


(37,655)

78


19




(143,896)


(142,385)

1


Equity in net income of affiliates, net of tax


5,600


2,652


1,758

111


219




14,869


3,415

335


Net income


72,129


25,050


74,441

188


(3)




230,426


264,768

(13)


Net income attributable to non-controlling


















and other beneficial interests


(14,977)


(1,847)


(21,323)

711


(30)




(36,585)


(61,303)

(40)


Net income attributable to


















Eaton Vance Corp. Shareholders

$

57,152

$

23,203

$

53,118

146


8



$

193,841

$

203,465

(5)






















Earnings per share:


















Basic

$

0.47

$

0.19

$

0.46

147


2



$

1.60

$

1.76

(9)



Diluted

$

0.45

$

0.18

$

0.45

150


-



$

1.53

$

1.72

(11)






















Weighted average shares outstanding:

















Basic


117,419


117,594


112,504

-


4




116,597


112,359

4



Diluted


123,431


123,872


115,524

-


7




122,444


115,126

6






















Dividends declared per share

$

0.22

$

0.20

$

0.20

10


10



$

1.82

$

0.77

136


 


 

































Attachment 2

Eaton Vance Corp.

Reconciliation of net income attributable to Eaton Vance Corp.

shareholders to adjusted net income attributable to Eaton Vance

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








































Three Months Ended


Fiscal Year Ended









% Change

% Change









October 31,

July 31,

October 31,

Q4 2013 vs.

Q4 2013 vs.


October 31,

October 31,

%

(in thousands, except per share figures)

2013

2013

2012

Q3 2013

Q4 2012


2013

2012

Change




















Net income attributable to Eaton



















Vance Corp. shareholders

$

57,152

$

23,203

$

53,118

146

%

8

%


$

193,841

$

203,465

(5)

%



















Non-controlling interest value



















adjustments


12,602


405


9,870

NM


28




24,320


19,866

22




















Closed-end fund structuring fees,



















net of tax


131


1,043


-

(87)


NM




2,851


-

NM




















Loss on extinguishment of debt, net of tax *


68


35,171


-

NM


NM




35,239


-

NM




















Settlement of state tax audit


-


6,691


-

NM


NM




6,691


-

NM




















Adjusted net income attributable to



















Eaton Vance Corp. shareholders

$

69,953

$

66,513

$

62,988

5


11



$

262,942

$

223,331

18




















Earnings per diluted share

$

0.45

$

0.18

$

0.45

150


-



$

1.53

$

1.72

(11)




















Non-controlling interest value



















adjustments


0.10


-


0.08

NM


25




0.19


0.17

12




















Closed-end fund structuring fees,


















net of tax


-


0.01


-

NM


NM




0.02


-

NM




















Loss on extinguishment of debt, net of tax


-


0.28


-

NM


NM




0.28


-

NM




















Settlement of state tax audit


-


0.05


-

NM


NM




0.05


-

NM




















Special dividend adjustment


-


-


-

NM


NM




0.01


-

NM





















Adjusted earnings per diluted share

$

0.55

$

0.52

$

0.53

6


4



$

2.08

$

1.89

10






















* The loss on extinguishment of debt consists of a $53.0 million loss on extinguishment of debt, a $3.1 million loss on a reverse treasury lock entered into in



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




















































Attachment 3

Eaton Vance Corp.

Components of net income attributable

to non-controlling and other beneficial interests









































Three Months Ended


Fiscal Year Ended









% Change

% Change










October 31,

July 31,

October 31,

Q4 2013

vs.

Q4 2013

vs.


October 31,

October 31,

%

(in thousands)

2013

2013

2012

Q3 2013

Q4 2012


2013

2012

Change




















Consolidated funds

$

209

$

(206)

$

1,186

NM

%

(82)

%


$

4,095

$

4,353

(6)

%



















Majority-owned subsidiaries


5,024


4,007


4,053

25


24




16,620


14,518

14





















Non-controlling interest value



















adjustments


12,602


405


9,870

NM


28




24,320


19,866

22




















Consolidated CLO entity


(2,858)


(2,359)


6,214

21


NM




(8,450)


22,566

NM





















Net income attributable to non-controlling



















and other beneficial interests

$

14,977

$

1,847

$

21,323

711


(30)



$

36,585

$

61,303

(40)


 







Attachment 4


Eaton Vance Corp.


Balance Sheet


(in thousands, except per share figures)








October 31,




October 31,




2013




2012


Assets
























Cash and cash equivalents

$

461,906



$

462,076


Investment advisory fees and other receivables


170,220




133,589


Investments


536,323




486,933


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








Cash and cash equivalents


36,641




36,758


Bank loans and other investments


685,681




430,583


Other assets


5,814




1,107


Deferred sales commissions


17,923




19,336


Deferred income taxes


61,139




51,234


Equipment and leasehold improvements, net


48,746




54,889


Intangible assets, net


74,534




59,228


Goodwill


228,876




154,636


Other assets


79,446




89,122


Total assets

$

2,407,249



$

1,979,491










Liabilities, Temporary Equity and Permanent Equity
















Liabilities:
















Accrued compensation

$

169,953



$

145,338


Accounts payable and accrued expenses


58,529




59,397


Dividend payable


26,740




23,250


Debt


573,499




500,000


Liabilities of consolidated CLO entities:








Senior and subordinated note obligations and line of credit


586,916




446,605


Other liabilities


129,257




766


Other liabilities


115,960




91,785


Total liabilities


1,660,854




1,267,141


Commitments and contingencies
















Temporary Equity:








Redeemable non-controlling interests


74,856




98,765


Total temporary equity


74,856




98,765










Permanent Equity:








Voting Common Stock, par value $0.00390625 per share:








Authorized, 1,280,000 shares








Issued and outstanding, 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 and outstanding, 121,232,506 and 115,878,384 shares, respectively


474




453


Additional paid-in capital


124,837




26,730


Notes receivable from stock option exercises


(7,122)




(4,155)


Accumulated other comprehensive (loss) income


(177)




3,923


Appropriated retained earnings


10,249




18,699


Retained earnings


541,521




566,420


Total Eaton Vance Corp. shareholders' equity


669,784




612,072


Non-redeemable non-controlling interests


1,755




1,513


Total permanent equity


671,539




613,585


Total liabilities, temporary equity and permanent equity

$

2,407,249



$

1,979,491










 


 














Attachment 5

Eaton Vance Corp.

Consolidated Net Flows by Investment Mandate(1)

(in millions)



Three Months Ended


Fiscal Year Ended



October 31,


July 31,


October 31,


October 31,


October 31,



2013


2013


2012


2013


2012

Equity assets - beginning of period(2)

$

90,774


$

89,534


$

80,260


$

80,782


$

84,281


Sales and other inflows


3,167



4,056



3,828



16,989



16,572


Redemptions/outflows


(5,324)



(4,185)



(5,902)



(19,459)



(26,033)


Net flows


(2,157)



(129)



(2,074)



(2,470)



(9,461)


Assets acquired(3)


-



-



-



1,572



-


Exchanges


166



46



48



328



15


Market value change


4,802



1,323



2,548



13,373



5,947

Equity assets - end of period

$

93,585


$

90,774


$

80,782


$

93,585


$

80,782

Fixed income assets - beginning of period


45,821



49,949



48,198



49,003



43,708


Sales and other inflows


2,149



2,065



3,140



10,881



12,278


Redemptions/outflows


(3,697)



(3,595)



(2,752)



(14,015)



(9,455)


Net flows


(1,548)



(1,530)



388



(3,134)



2,823


Assets acquired(3)


-



-



-



472



-


Exchanges


(151)



(277)



13



(510)



84


Market value change


89



(2,321)



404



(1,620)



2,388

Fixed income assets - end of period

$

44,211


$

45,821


$

49,003


$

44,211


$

49,003

Floating-rate income assets -
















beginning of period


38,170



33,679



25,245



26,388



24,322


Sales and other inflows


5,742



6,636



2,188



21,729



7,401


Redemptions/outflows


(2,207)



(2,152)



(1,387)



(6,871)



(5,662)


Net flows


3,535



4,484



801



14,858



1,739


Exchanges


145



169



21



397



45


Market value change


(29)



(162)



321



178



282

Floating-rate income assets - end
















of period

$

41,821


$

38,170


$

26,388


$

41,821


$

26,388

Alternative assets - beginning of period


16,098



16,022



10,612



12,864



10,650


Sales and other inflows


1,271



2,348



3,167



8,195



6,736


Redemptions/outflows


(1,903)



(1,770)



(909)



(5,688)



(4,348)


Net flows


(632)



578



2,258



2,507



2,388


Assets acquired(3)


-



-



-



650



-


Exchanges


(47)



(22)



(19)



(184)



(94)


Market value change


(207)



(480)



13



(625)



(80)

Alternative assets - end of period

$

15,212


$

16,098


$

12,864


$

15,212


$

12,864

Implementation services assets -
















beginning of period(4)


77,673



70,966



28,323



30,302



24,574


Sales and other inflows


13,177



12,933



2,115



39,841



7,096


Redemptions/outflows


(8,490)



(7,504)



(1,320)



(26,887)



(4,411)


Net flows


4,687



5,429



795



12,954



2,685


Assets acquired(3)


-



-



-



32,064



-


Exchanges


(104)



-



-



(118)



(1)


Market value change


3,381



1,278



1,184



10,435



3,044

Implementation services assets -
















end of period

$

85,637


$

77,673


$

30,302


$

85,637


$

30,302

Long-term assets - beginning of period


268,536



260,150



192,638



199,339



187,535


Sales and other inflows


25,506



28,038



14,438



97,635



50,083


Redemptions/outflows


(21,621)



(19,206)



(12,270)



(72,920)



(49,909)


Net flows


3,885



8,832



2,168



24,715



174


Assets acquired(3)


-



-



-



34,758



-


Exchanges


9



(84)



63



(87)



49


Market value change


8,036



(362)



4,470



21,741



11,581

Total long-term assets - end of period

$

280,466


$

268,536


$

199,339


$

280,466


$

199,339

Cash management fund assets -
















end of period


203



219



169



203



169

Total assets under management -
















end of period

$

280,669


$

268,755


$

199,508


$

280,669


$

199,508

















(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


Fiscal Year Ended



October 31,


July 31,


October 31,


October 31,


October 31,



2013


2013


2012


2013


2012

Long-term fund assets - beginning of period

$

129,042


$

127,014


$

110,257


$

113,249


$

111,705


Sales and other inflows


10,299



11,597



7,261



43,606



27,080


Redemptions/outflows


(8,653)



(7,932)



(6,410)



(29,970)



(30,895)


Net flows


1,646



3,665



851



13,636



(3,815)


Assets acquired(2)


-



-



-



638



-


Exchanges


(17)



(241)



-



(279)



(13)


Market value change


2,527



(1,396)



2,141



5,954



5,372

Long-term fund assets - end of period

$

133,198


$

129,042


$

113,249


$

133,198


$

113,249

















Institutional separate account assets -
















beginning of period


89,473



84,724



40,285



43,338



38,003


Sales and other inflows


12,742



13,480



5,149



41,108



12,496


Redemptions/outflows


(9,756)



(8,901)



(3,535)



(31,548)



(10,514)


Net flows


2,986



4,579



1,614



9,560



1,982


Assets acquired(2)


-



-



-



34,120



-


Exchanges


26



152



27



183



38


Market value change


3,239



18



1,412



8,523



3,315

Institutional separate account assets -
















end of period

$

95,724


$

89,473


$

43,338


$

95,724


$

43,338

















High-net-worth separate account assets -
















beginning of period


19,071



18,027



14,682



15,036



13,256


Sales and other inflows


832



1,055



498



4,763



3,609


Redemptions/outflows


(1,313)



(614)



(657)



(3,699)



(2,283)


Net flows


(481)



441



(159)



1,064



1,326


Exchanges


(1)



(9)



9



(16)



(990)


Market value change


1,110



612



504



3,615



1,444

High-net-worth separate account















    assets - end of period

$

19,699


$

19,071


$

15,036


$

19,699


$

15,036

















Retail managed account assets -
















beginning of period


30,950



30,385



27,414



27,716



24,571


Sales and other inflows


1,633



1,906



1,530



8,158



6,898


Redemptions/outflows


(1,899)



(1,759)



(1,668)



(7,703)



(6,217)


Net flows


(266)



147



(138)



455



681


Exchanges


1



14



27



25



1,014


Market value change


1,160



404



413



3,649



1,450

Retail managed account assets -
















end of period

$

31,845


$

30,950


$

27,716


$

31,845


$

27,716

















Total long-term assets - beginning
















of period


268,536



260,150



192,638



199,339



187,535


Sales and other inflows


25,506



28,038



14,438



97,635



50,083


Redemptions/outflows


(21,621)



(19,206)



(12,270)



(72,920)



(49,909)


Net flows


3,885



8,832



2,168



24,715



174


Assets acquired(2)


-



-



-



34,758



-


Exchanges


9



(84)



63



(87)



49


Market value change


8,036



(362)



4,470



21,741



11,581

Total long-term assets - end of period

$

280,466


$

268,536


$

199,339


$

280,466


$

199,339

















Cash management fund assets -
















end of period


203



219



169



203



169

















Total assets under management -
















end of period

$

280,669


$

268,755


$

199,508


$

280,669


$

199,508

















(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)


















October 31,



July 31,


%



October 31,


%




2013



2013


Change



2012


Change

Eaton Vance Management(2)

$

144,693


$

143,229


1%


$

131,004


10%

Parametric


117,044



107,192


9%



53,332


119%

Atlanta Capital


18,932



18,334


3%



15,172


25%

Total

$

280,669


$

268,755


4%


$

199,508


41%















(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 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)


















October 31,



July 31,


%



October 31,


%




2013



2013


Change



2012


Change

Equity(2)

$

93,585


$

90,774


3%


$

80,782


16%

Fixed income


44,211



45,821


-4%



49,003


-10%

Floating-rate income


41,821



38,170


10%



26,388


58%

Alternative


15,212



16,098


-6%



12,864


18%

Implementation services


85,637



77,673


10%



30,302


183%

Cash management


203



219


-7%



169


20%

Total

$

280,669


$

268,755


4%


$

199,508


41%















(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


Fiscal Year Ended





October 31,


July 31,


October 31,


October 31,


October 31,





2013


2013


2012 (2)


2013


2012 (2)


Eaton Vance distributed:
















Eaton Vance sponsored funds - beginning
















of period(1)

$

173


$

161


$

-


$

37


$

-



Sales and other inflows


30



19



36



162



36



Redemptions/outflows


(3)



(6)



-



(15)



-



Net flows


27



13



36



147



36



Market value change


11



(1)



1



27



1


Eaton Vance sponsored funds - end
















of period

$

211


$

173


$

37


$

211


$

37


Eaton Vance distributed separate accounts -
















beginning of period(3)

$

1,515


$

1,283


$

-


$

-


$

-



Sales and other inflows


4



227



-



1,381



-



Redemptions/outflows


(32)



(1)



-



(33)



-



Net flows


(28)



226



-



1,348



-



Market value change


87



6



-



226



-


Eaton Vance distributed separate accounts -
















end of period

$

1,574


$

1,515


$

-


$

1,574


$

-


Total Eaton Vance distributed - beginning
















of period

$

1,688


$

1,444


$

-


$

37


$

-



Sales and other inflows


34



246



36



1,543



36



Redemptions/outflows


(35)



(7)



-



(48)



-



Net flows


(1)



239



36



1,495



36



Market value change


98



5



1



253



1


Total Eaton Vance distributed - end
















of period

$

1,785


$

1,688


$

37


$

1,785


$

37


Hexavest directly distributed - beginning
















of period(4)

$

14,046


$

13,831


$

10,956


$

12,073


$

10,956



Sales and other inflows


699



785



1,047



2,703



1,047



Redemptions/outflows


(488)



(530)



(318)



(1,853)



(318)



Net flows


211



255



729



850



729



Market value change


879



(40)



388



2,213



388


Hexavest directly distributed - end
















of period

$

15,136


$

14,046


$

12,073


$

15,136


$

12,073


Total Hexavest assets - beginning of period

$

15,734


$

15,275


$

10,956


$

12,110


$

10,956



Sales and other inflows


733



1,031



1,083



4,246



1,083



Redemptions/outflows


(523)



(537)



(318)



(1,901)



(318)



Net flows


210



494



765



2,345



765



Market value change


977



(35)



389



2,466



389


Total Hexavest managed assets - end of period

$

16,921


$

15,734


$

12,110


$

16,921


$

12,110




















(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)

Reflects activity from August 6, 2012, the date Eaton Vance acquired its 49 percent equity interest in Hexavest through October 31, 2012.

(3)

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.

(4)

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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