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MarketScreener Homepage  >  Equities  >  Nyse  >  Eaton Vance Corp.    EV

EATON VANCE CORP.

(EV)
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Eaton Vance Corp. : Report for the Three Months and Fiscal Year Ended October 31, 2019

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11/26/2019 | 09:04am EDT

BOSTON, Nov. 26, 2019 /PRNewswire/ -- Eaton Vance Corp. (NYSE: EV) today reported earnings per diluted share of $3.50 for the fiscal year ended October 31, 2019, an increase of 13 percent from $3.11 of earnings per diluted share in the fiscal year ended October 31, 2018.

The Company reported adjusted earnings per diluted share(1) of $3.45 for the fiscal year ended October 31, 2019, an increase of 7 percent from $3.21 of adjusted earnings per diluted share in the fiscal year ended October 31, 2018. Earnings under U.S. generally accepted accounting principles (U.S. GAAP) exceeded adjusted earnings by $0.05 per diluted share in the fiscal year ended October 31, 2019, reflecting the reversal of net excess tax benefits related to stock‐based compensation awards of $5.4 million. Adjusted earnings exceeded earnings under U.S. GAAP by $0.10 per diluted share in the fiscal year ended October 31, 2018, reflecting the add back of $24.0 million of charges related to enactment of the Tax Cuts and Jobs Act (the 2017 Tax Act), a $6.5 million charge recognized upon the expiration of the Company's option to acquire an additional 26 percent ownership interest in 49 percent-owned Hexavest, Inc. (Hexavest) and the reversal of net excess tax benefits related to stock‐based compensation awards of $17.5 million.

The Company reported earnings per diluted share of $0.96 for the fourth quarter of fiscal 2019, an increase of 10 percent from $0.87 of earnings per diluted share in the fourth quarter of fiscal 2018 and an increase of 7 percent from $0.90 of earnings per diluted share in the third quarter of fiscal 2019. 

The Company reported adjusted earnings per diluted share of $0.95 for the fourth quarter of fiscal 2019, an increase of 12 percent from $0.85 of adjusted earnings per diluted share in the fourth quarter of fiscal 2018 and an increase of 6 percent from $0.90 of adjusted earnings per diluted share in the third quarter of fiscal 2019. Earnings under U.S. GAAP exceeded adjusted earnings by $0.01 per diluted share in the fourth quarter of fiscal 2019 and $0.02 per diluted share in the fourth quarter of fiscal 2018, reflecting the reversal of net excess tax benefits related to stock‐based compensation awards of $1.5 million and $2.4 million, respectively. Earnings under U.S. GAAP matched adjusted earnings in the third quarter of fiscal 2019.

Net gains and other investment income related to seed capital investments contributed $0.13 and $0.03 to earnings per diluted share in the fiscal years ended October 31, 2019 and 2018, respectively. Other income and expense amounts related to consolidated collateralized loan obligation (CLO) entities contributed $0.07 and $0.01 to earnings per diluted share in the fiscal years ended October 31, 2019 and 2018, respectively.

Net gains and other investment income related to seed capital investments contributed $0.04 to earnings per diluted share in the fourth quarter of fiscal 2019, $0.01 in the fourth quarter of fiscal 2018 and $0.06 in the third quarter of fiscal 2019. Other income and expense amounts related to consolidated CLO entities contributed $0.04 to earnings per diluted share in the fourth quarter of fiscal 2019, were negligible in the fourth quarter of fiscal 2018 and reduced earnings by $0.02 per diluted share in the third quarter of fiscal 2019.

Consolidated net inflows of $23.9 billion in the fiscal year ended October 31, 2019 represent 5 percent internal growth in managed assets (consolidated net inflows divided by beginning of period consolidated assets under management). This compares to net inflows of $17.3 billion and 4 percent internal growth in managed assets in the fiscal year ended October 31, 2018. Excluding exposure management mandates, the Company's internal growth in managed assets was 4 percent and 8 percent in the fiscal years ended October 31, 2019 and 2018, respectively.

Consolidated net inflows of $9.8 billion in the fourth quarter of fiscal 2019 represent 8 percent annualized internal growth in managed assets. This compares to net inflows of $2.1 billion and 2 percent annualized internal growth in managed assets in the fourth quarter of fiscal 2018 and net inflows of $8.0 billion and 7 percent annualized internal growth in managed assets in the third quarter of fiscal 2019. Excluding exposure management mandates, the Company's annualized internal growth in managed assets was 3 percent in the fourth quarter of fiscal 2019 and 5 percent in both the fourth quarter of fiscal 2018 and the third quarter of fiscal 2019.

The Company's internal management fee revenue growth (management fees attributable to consolidated inflows less management fees attributable to consolidated outflows divided by beginning of period consolidated management fee revenue) was negligible in the fiscal year ended October 31, 2019 and 4 percent in the fiscal year ended October 31, 2018. The Company's annualized internal management fee revenue growth was 2 percent in the fourth quarter of fiscal 2019, 1 percent in the fourth quarter of fiscal 2018 and 2 percent in the third quarter of fiscal 2019. These growth rates reflect the Company's retrospective adoption of Accounting Standard Update (ASU) 2014-09, Revenue from Contracts with Customers, on November 1, 2018, which provides for management fee revenue to be recorded net of associated subsidy expenses.

Consolidated assets under management were $497.4 billion on October 31, 2019, up 13 percent from $439.3 billion of consolidated managed assets on October 31, 2018 and up 3 percent from $482.8 billion of consolidated managed assets on July 31, 2019. The year-over-year increase in consolidated assets under management reflects net inflows of $23.9 billion and market price appreciation of $34.2 billion in the fiscal year ended October 31, 2019. The sequential quarterly increase in consolidated assets under management reflects net inflows of $9.8 billion and market price appreciation of $4.9 billion in the fourth quarter of fiscal 2019.

"Eaton Vance closed fiscal 2019 with record annual and quarterly earnings and new highs in assets under management," said Thomas E. Faust Jr., Chairman and Chief Executive Officer. "While not immune from our industry's continuing challenges, we remain confident of our future growth prospects."

Average consolidated assets under management were $462.8 billion in the fiscal year ended October 31, 2019, up 5 percent from $442.4 billion in the fiscal year ended October 31, 2018. Average consolidated assets under management were $488.9 billion in the fourth quarter of fiscal 2019, up 8 percent from $453.3 billion in the fourth quarter of fiscal 2018 and up 4 percent from $471.0 billion in the third quarter of fiscal 2019.

As shown in Attachment 10, excluding performance-based fees, annualized management fee rates on consolidated assets under management averaged 31.6 basis points in the fiscal year ended October 31, 2019, down 4 percent from 33.0 basis points in the fiscal year ended October 31, 2018. Excluding performance-based fees, annualized management fee rates on consolidated assets under management averaged 30.8 basis points in the fourth quarter of fiscal 2019, down 6 percent from 32.7 basis points in the fourth quarter of fiscal 2018 and down 3 percent from 31.8 basis points in the third quarter of fiscal 2019. Changes in average annualized management fee rates for the compared periods primarily reflect shifts in the Company's mix of business. Average annualized management fee rates for prior year periods have been restated to reflect the retrospective adoption of ASU 2014-09 on November 1, 2018 as described above.

Attachments 5 and 6 summarize the Company's consolidated assets under management and net flows by investment mandate and investment vehicle reporting categories. 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 management fee rates by investment mandate.

As shown in Attachments 5 and 6, consolidated sales and other inflows were $168.9 billion in the fiscal year ended October 31, 2019, up 8 percent from $156.5 billion in the fiscal year ended October 31, 2018. Consolidated sales and other inflows were $46.6 billion in the fourth quarter of fiscal 2019, up 32 percent from $35.2 billion in the fourth quarter of fiscal 2018 and up 14 percent from $40.8 billion in the third quarter of fiscal 2019.

Consolidated redemptions and other outflows were $144.9 billion in the fiscal year ended October 31, 2019, up 4 percent from $139.1 billion in the fiscal year ended October 31, 2018. Consolidated redemptions and other outflows were $36.8 billion in the fourth quarter of fiscal 2019, up 12 percent from $33.0 billion in the fourth quarter of fiscal 2018 and up 12 percent from $32.8 billion in the third quarter of fiscal 2019.

As of October 31, 2019, the Company's 49 percent-owned affiliate Hexavest Inc. (Hexavest) managed $13.4 billion of client assets, down 3 percent from $13.8 billion of managed assets on October 31, 2018 and substantially unchanged from the $13.4 billion of managed assets on July 31, 2019. Hexavest had net outflows of $1.6 billion and $2.2 billion in the fiscal years ended October 31, 2019 and 2018, respectively. Hexavest had net outflows of $0.4 billion in the fourth quarter of fiscal 2019, net outflows of $0.9 billion in the fourth quarter of fiscal 2018 and net outflows of $0.6 billion in the third quarter of fiscal 2019. Attachment 11 summarizes the assets under management and net flows of Hexavest. Other than Eaton Vance-sponsored funds for which Hexavest is the adviser or sub-adviser, the managed assets and flows of Hexavest are not included in Eaton Vance consolidated totals. 

Financial Highlights(2)

(in thousands, except per share figures)























Three Months Ended


Fiscal Year Ended


October 31,

July 31,

October 31,


October 31,

October 31,


2019

2019

2018


2019

2018

Revenue

$

433,740

$

431,235

$

430,795


$

1,683,252

$

1,692,422

Expenses


298,307


294,100


286,343



1,162,381


1,137,220

Operating income


135,433


137,135


144,452



520,871


555,202

   Operating margin


31.2%


31.8%


33.5%



30.9%


32.8%

Non-operating income (expense)


15,599


5,470


(4,912)



38,167


(11,967)

Income taxes


(34,254)


(36,304)


(36,823)



(135,252)


(156,703)

Equity in net income of affiliates, net of tax


2,172


2,235


2,496



9,090


11,373

Net income


118,950


108,536


105,213



432,876


397,905

Net income attributable to non-controlling












   and other beneficial interests


(9,744)


(6,315)


274



(32,841)


(15,967)

Net income attributable to












   Eaton Vance Corp. shareholders

$

109,206

$

102,221

$

105,487


$

400,035

$

381,938

Adjusted net income attributable to












   Eaton Vance Corp. shareholders

$

107,665

$

101,584

$

102,383


$

394,631

$

394,138

Earnings per diluted share

$

0.96

$

0.90

$

0.87


$

3.50

$

3.11

Adjusted earnings per diluted share

$

0.95

$

0.90

$

0.85


$

3.45

$

3.21

 

Fiscal 2019 vs. Fiscal 2018(2) 

In fiscal 2019, revenue decreased 1 percent to $1.68 billion from $1.69 billion in fiscal 2018. Management fees were substantially unchanged year-over-year, as a 5 percent increase in average consolidated assets under management was offset by lower consolidated average management fee rates. Performance fees were $1.7 million in fiscal 2019 and $(1.7) million in fiscal 2018. Distribution and service fee revenues were collectively down 5 percent, reflecting lower managed assets in fund share classes that are subject to these fees.

Operating expenses increased 2 percent to $1.16 billion in fiscal 2019 from $1.14 billion in fiscal 2018. Increases in compensation, service fee expense, amortization of deferred sales commissions, fund-related expenses and other operating expenses were partially offset by a decrease in distribution expense. The increase in compensation reflects higher salaries and benefits associated with increases in headcount, higher stock-based compensation and increases in severance, partially offset by lower sales-based incentive compensation and operating income-based bonus accruals. The increase in service fee expense reflects higher Class A and private fund service fee payments, partially offset by lower Class C service fee payments. The increase in amortization of deferred sales commissions reflects higher private fund commission amortization. The increase in fund-related expenses reflects higher sub-advisory fees paid. Other operating expenses increased 5 percent, primarily reflecting increases in information technology spending, facilities expenses and travel expenses, partially offset by a decrease in amortization expense related to certain intangible assets that were fully amortized during the first quarter of fiscal 2019 and lower professional services expenses. The decrease in distribution expense primarily reflects lower Class C distribution fee payments, partially offset by higher marketing and promotion costs and an increase in up-front sales commission expense.

Operating income decreased 6 percent to $520.9 million in fiscal 2019 from $555.2 million in fiscal 2018. Operating margin decreased to 30.9 percent in fiscal 2019 from 32.8 percent in fiscal 2018.

Non-operating income totaled $38.2 million in fiscal 2019 versus $12.0 million of non-operating expense in fiscal 2018. The year-over-year change primarily reflects a $41.0 million increase in net gains and other investment income from the Company's investments in sponsored strategies, including consolidated sponsored funds, and a $9.3 million increase in income contribution from consolidated CLO entities.

The Company's effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 24.2 percent in fiscal 2019 and 28.8 percent in fiscal 2018. The Company's effective tax rate is discussed in greater detail under "Taxation" below.

Equity in net income of affiliates was $9.1 million in fiscal 2019 and $11.4 million in fiscal 2018. In fiscal 2019, substantially all equity in net income of affiliates related to the Company's investment in Hexavest. Equity in net income of affiliates in fiscal 2018 included $11.0 million from the Company's Hexavest investment and $0.4 million from the Company's investment in a private equity partnership.

As detailed in Attachment 3, net income attributable to non-controlling and other beneficial interests was $32.8 million in fiscal 2019 and $16.0 million in fiscal 2018. The year-over-year change reflects an increase in income earned by consolidated sponsored funds and the Company's accelerated repurchase of certain profit and capital interests in Parametric Portfolio Associates LLC (Parametric) entities held by current and former employees, which settled at the end of the fourth quarter of fiscal 2019.

The Company's weighted average basic shares outstanding were 110.1 million in fiscal 2019 and 114.7 million in fiscal 2018, a decrease of 4 percent. The year-over-year reduction reflects share repurchases in excess of new shares issued upon the vesting of restricted stock awards and the exercise of employee stock options. On a diluted basis, the Company's weighted average shares outstanding were 114.4 million in fiscal 2019 and 122.9 million in fiscal 2018, a decrease of 7 percent. The decline in weighted average diluted shares outstanding further reflects a decrease in the dilutive effect of in-the-money options and unvested restricted stock awards due to lower market prices of the Company's shares.

Fourth Quarter Fiscal 2019 vs. Fourth Quarter Fiscal 2018(2) 

In the fourth quarter of fiscal 2019, revenue increased 1 percent to $433.7 million from $430.8 million in the fourth quarter of fiscal 2018. Management fees were up 2 percent, as an 8 percent increase in average consolidated assets under management more than offset lower consolidated average management fee rates. Performance fees were $0.1 million in the fourth quarter of fiscal 2019 and $(0.3) million in the fourth quarter of fiscal 2018. Distribution and service fee revenues were collectively down 3 percent, reflecting lower managed assets in fund share classes that are subject to these fees.

Operating expenses increased 4 percent to $298.3 million in the fourth quarter of fiscal 2019 from $286.3 million in the fourth quarter of fiscal 2018. Increases in compensation, service fee expense, amortization of deferred sales commissions and fund-related expenses were partially offset by decreases in distribution expense and other operating expenses. The increase in compensation reflects higher salaries and benefits associated with increases in headcount, higher stock-based compensation and increases in severance, partially offset by decreases in performance-based and operating income-based bonus accruals and lower sales-based incentive compensation. The increase in service fee expense reflects higher Class A and private fund service fee payments, partially offset by lower Class C service fee payments. The increase in amortization of deferred sales commissions reflects higher private fund commission amortization. The increase in fund-related expenses reflects higher sub-advisory fees paid. The decrease in distribution expense primarily reflects lower Class C distribution fee payments, partially offset by an increase in up-front sales commission expense. Other operating expenses decreased by 1 percent, primarily reflecting lower professional services expenses and a decrease in amortization expense related to certain intangible assets that were fully amortized during the first quarter of fiscal 2019, partially offset by an increase in information technology spending and facilities expenses.

Operating income decreased 6 percent to $135.4 million in the fourth quarter of fiscal 2019 from $144.5 million in the fourth quarter of fiscal 2018. Operating margin decreased to 31.2 percent in the fourth quarter of fiscal 2019 from 33.5 percent in the fourth quarter of fiscal 2018.

Non-operating income totaled $15.6 million in the fourth quarter of fiscal 2019 versus $4.9 million of non-operating expense in the fourth quarter of fiscal 2018. The year-over-year change reflects a $14.6 million increase in net gains and other investment income from the Company's investments in sponsored strategies, including consolidated sponsored funds, and a $5.9 million increase in income contribution from consolidated CLO entities.

The Company's effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 22.7 percent in the fourth quarter of fiscal 2019 and 26.4 percent in the fourth quarter of fiscal 2018. The Company's effective tax rate is discussed in greater detail under "Taxation" below.

Equity in net income of affiliates was $2.2 million and $2.5 million in the fourth quarters of fiscal 2019 and 2018, respectively, substantially all relating to the Company's investment in Hexavest.

As detailed in Attachment 3, net income (loss) attributable to non-controlling and other beneficial interests was $9.7 million in the fourth quarter of fiscal 2019 and $(0.3) million in the fourth quarter of fiscal 2018. The year-over-year change reflects an increase in income earned by consolidated sponsored funds and the Company's accelerated repurchase of certain profit and capital interests in Parametric entities held by current and former employees, which settled at the end of the fourth quarter of fiscal 2019.

The Company's weighted average basic shares outstanding were 108.7 million in the fourth quarter of fiscal 2019 and 113.6 million in the fourth quarter of fiscal 2018, a decrease of 4 percent. The year-over-year reduction reflects share repurchases in excess of new shares issued upon the vesting of restricted stock awards and the exercise of employee stock options. On a diluted basis, the Company's weighted average shares outstanding were 113.7 million in the fourth quarter of fiscal 2019 and 121.0 million in the fourth quarter of fiscal 2018, a decrease of 6 percent. The decline in weighted average diluted shares outstanding further reflects a decrease in the dilutive effect of in-the-money options and unvested restricted stock awards due to lower market prices of the Company's shares.

Fourth Quarter Fiscal 2019 vs. Third Quarter Fiscal 2019    

In the fourth quarter of fiscal 2019, revenue increased 1 percent to $433.7 million from $431.2 million in the third quarter of fiscal 2019. Management fees were up 1 percent, as a 4 percent increase in average consolidated assets under management more than offset lower consolidated average management fee rates. Performance fees were $0.1 million in both the fourth and third quarters of fiscal 2019. Distribution and service fee revenues were collectively up 1 percent, reflecting higher managed assets in fund share classes that are subject to these fees.

Operating expenses increased 1 percent to $298.3 million in the fourth quarter of fiscal 2019 from $294.1 million in the third quarter of fiscal 2019, reflecting increases in compensation, distribution expense, service fee expense, amortization of deferred sales commissions and fund-related expenses. The increase in compensation reflects higher salaries and benefits associated with increases in headcount, higher sales-based incentive compensation and increases in severance, partially offset by decreases in performance-based and operating income-based bonus accruals, lower payroll taxes and a decrease in stock-based compensation. The increase in distribution expense reflects higher marketing and promotion costs and an increase in up-front sales commission expense. The increase in service fee expense reflects higher private fund service fee payments. The increase in amortization of deferred sales commissions reflects higher private fund commission amortization. The increase in fund-related expenses primarily reflects an increase in fund expenses borne by the Company and higher sub-advisory fees paid. Other operating expenses in the fourth quarter of fiscal 2019 were substantially unchanged from the third quarter of fiscal 2019.

Operating income decreased 1 percent to $135.4 million in the fourth quarter of fiscal 2019 from $137.1 million in the third quarter of fiscal 2019. Operating margin decreased to 31.2 percent in the fourth quarter of fiscal 2019 from 31.8 percent in the third quarter of fiscal 2019.

Non-operating income totaled $15.6 million in the fourth quarter of fiscal 2019 and $5.5 million in the third quarter of fiscal 2019. The sequential change reflects a $9.8 million increase in income contribution from consolidated CLO entities and a $0.3 million increase in net gains and other investment income from the Company's investments in sponsored strategies, including consolidated sponsored funds.

The Company's effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 22.7 percent in the fourth quarter of fiscal 2019 and 25.5 percent in the third quarter of fiscal 2019. The Company's effective tax rate is discussed in greater detail under "Taxation" below.

Equity in net income of affiliates was $2.2 million in both the fourth and third quarters of fiscal 2019, substantially all relating to the Company's investment in Hexavest.

As detailed in Attachment 3, net income attributable to non-controlling and other beneficial interests was $9.7 million in the fourth quarter of fiscal 2019 and $6.3 million in the third quarter of fiscal 2019. The sequential change reflects an increase in income earned by consolidated sponsored funds and the Company's accelerated repurchase of certain profit and capital interests in Parametric entities held by current and former employees, which settled at the end of the fourth quarter of fiscal 2019.

The Company's weighted average basic shares outstanding decreased to 108.7 million in the fourth quarter of fiscal 2019 from 109.1 million in the third quarter of fiscal 2019. The sequential reduction reflects share repurchases in excess of new shares issued upon the vesting of restricted stock awards and the exercise of employee stock options. On a diluted basis, the Company's weighted average shares outstanding increased to 113.7 million in the fourth quarter of fiscal 2019 from 113.5 million in the third quarter of fiscal 2019. The increase in weighted average diluted shares outstanding reflects an increase in the dilutive effect of in-the-money options and unvested restricted stock awards due to higher market prices of the Company's shares.

Taxation

The following table reconciles the statutory federal income tax rate to the Company's effective tax rate:


Three Months Ended


Fiscal Year Ended


October 31,

July 31,

October 31,


October 31,

October 31,


2019

2019

2018


2019

2018

Statutory U.S. federal income tax rate(3)

21.0

%

21.0

%

23.3

%


21.0

%

23.3

%

State income taxes for current year, net of

   federal income tax benefits

4.5


5.0


4.4



4.7


4.4


Net income attributable to non-controlling

   and other beneficial interests

(1.7)


(1.3)





(1.2)


(0.7)


Other items

(0.1)


1.2


0.9



0.7


0.6


Adjusted effective income tax rate(4)

23.7


25.9


28.6



25.2


27.6


Non-recurring impact of U.S. tax reform



-

-

(0.5)





4.4


Net excess tax benefits from stock-based

     compensation plans(5)

(1.0)


(0.4)


(1.7)



(1.0)


(3.2)


Effective income tax rate

22.7

%

25.5

%

26.4

%


24.2

%

28.8

%

 

The Company's income tax provision for fiscal 2019 includes $3.2 million of charges associated with certain provisions of the 2017 Tax Act taking effect for the Company in fiscal 2019, relating principally to limitations on the deductibility of executive compensation. These charges totaled $0.7 million in the fourth quarter of fiscal 2019 and $1.1 million in the third quarter of fiscal 2019.

The Company's income tax provision for fiscal 2019 and 2018 was reduced by net excess tax benefits related to stock-based compensation awards of $5.4 million and $17.5 million, respectively. These net excess tax benefits totaled $1.5 million in the fourth quarter of fiscal 2019, $2.4 million in the fourth quarter of fiscal 2018 and $0.6 million in the third quarter of fiscal 2019.

The Company's income tax provision for fiscal 2018 also included a non-recurring charge of $24.0 million related to the enactment of the 2017 Tax Act. In the fourth quarter of fiscal 2018, the Company's income tax provision was reduced by $0.7 million due to the refinement of prior estimates used to calculate the non-recurring impact of the 2017 Tax Act.

The Company's calculations of adjusted net income and adjusted earnings per diluted share remove the tax impact of stock-based compensation shortfalls or windfalls recognized in connection with the accounting guidance adopted by the Company in fiscal 2018 and the non-recurring tax impact of U.S. tax law changes. On this basis, the Company's adjusted effective tax rate was 25.2 percent and 27.6 percent for fiscal 2019 and 2018, respectively, and was 23.7 percent in the fourth quarter of fiscal 2019, 28.6 percent in the fourth quarter of fiscal 2018 and 25.9 percent in the third quarter of fiscal 2019. On the same adjusted basis, the Company estimates that its effective tax rate will be approximately 26.5 to 27.0 percent for fiscal 2020. The Company's actual adjusted effective tax rate for fiscal 2020 may vary from this estimate due to changes in the Company's tax policy interpretations and assumptions, additional regulatory guidance that may be issued and other factors.

Balance Sheet Information

As of October 31, 2019, the Company held cash and cash equivalents of $557.7 million and its investments included $297.8 million of short-term debt securities with maturities between 90 days and one year. There were no outstanding borrowings under the Company's $300 million credit facility at such date. During fiscal 2019, the Company used $299.9 million to repurchase and retire approximately 7.4 million shares of its Non-Voting Common Stock under its repurchase authorizations. Of the current 8.0 million share repurchase authorization, approximately 6.3 million shares remain available.

Conference Call Information

Eaton Vance Corp. will host a conference call and webcast at 11:00 AM eastern time today to discuss the financial results for the three months and fiscal year ended October 31, 2019. To participate in the conference call, please dial 866-521-4909 (domestic) or 647-427-2311 (international) and refer to "Eaton Vance Corp. Fourth Fiscal 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 800-585-8367 (domestic) or 416-621-4642 (international) or by accessing Eaton Vance's website, eatonvance.com. To listen to the replay, enter the conference ID number 9993809 when instructed.

About Eaton Vance Corp.

Eaton Vance Corp. (NYSE: EV) provides advanced investment strategies and wealth management solutions to forward-thinking investors around the world. Through principal investment affiliates Eaton Vance Management, Parametric, Atlanta Capital, Calvert and Hexavest, the Company offers a diversity of investment approaches, encompassing bottom-up and top-down fundamental active management, responsible investing, systematic investing and customized implementation of client-specified portfolio exposures. As of October 31, 2019, Eaton Vance had consolidated assets under management of $497.4 billion. Exemplary service, timely innovation and attractive returns across market cycles have been hallmarks of Eaton Vance since 1924. For more information, 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.
















Attachment 1


Eaton Vance Corp.


Summary of Results of Operations(1)


(in thousands, except per share figures)
























Three Months Ended


Fiscal Year Ended










%

%

















Change

Change

















Q4 2019

Q4 2019











October 31,

July 31,

October 31,

vs.

vs.


October 31,

October 31,

%




2019

2019

2018

Q3 2019

Q4 2018


2019

2018

Change


Revenue:



















Management fees

$

378,062

$

375,747

$

372,292

1

%

2

%


$

1,463,943

$

1,459,186

-

%


Distribution and underwriter fees


21,187


21,281


23,529

-


(10)




85,612


97,371

(12)



Service fees


32,272


31,855


31,364

1


3




123,073


122,231

1



Other revenue


2,219


2,352


3,610

(6)


(39)




10,624


13,634

(22)




Total revenue


433,740


431,235


430,795

1


1




1,683,252


1,692,422

(1)



Expenses:



















Compensation and related costs


160,441


158,642


148,673

1


8




626,513


604,631

4



Distribution expense


38,731


38,070


41,142

2


(6)




150,239


165,033

(9)



Service fee expense


28,287


28,037


27,237

1


4




107,762


106,831

1



Amortization of deferred sales commissions


5,831


5,644


5,052

3


15




22,593


18,394

23



Fund-related expenses


11,037


9,715


9,829

14


12




40,357


37,602

7



Other expenses


53,980


53,992


54,410

-


(1)




214,917


204,729

5




Total expenses


298,307


294,100


286,343

1


4




1,162,381


1,137,220

2



Operating income


135,433


137,135


144,452

(1)


(6)




520,871


555,202

(6)



Non-operating income (expense):



















Gains and other investment income, net


15,155


14,846


598

2


NM




51,040


10,066

407



Interest expense


(5,888)


(5,888)


(5,913)

-


-




(23,795)


(23,629)

1



Other income (expense) of consolidated




















collateralized loan obligation (CLO) entities:




















   Gains and other investment income, net


24,777


18,260


12,059

36


105




70,272


16,882

316




   Interest and other expense


(18,445)


(21,748)


(11,656)

(15)


58




(59,350)


(15,286)

288




Total non-operating income (expense)


15,599


5,470


(4,912)

185


NM




38,167


(11,967)

NM























Income before income taxes and equity



















   in net income of affiliates


151,032


142,605


139,540

6


8




559,038


543,235

3



Income taxes


(34,254)


(36,304)


(36,823)

(6)


(7)




(135,252)


(156,703)

(14)



Equity in net income of affiliates, net of tax


2,172


2,235


2,496

(3)


(13)




9,090


11,373

(20)



Net income


118,950


108,536


105,213

10


13




432,876


397,905

9



Net (income) loss attributable to non-controlling



















   and other beneficial interests


(9,744)


(6,315)


274

54


NM




(32,841)


(15,967)

106



Net income attributable to



















   Eaton Vance Corp. shareholders

$

109,206

$

102,221

$

105,487

7


4



$

400,035

$

381,938

5























Earnings per share:



















Basic

$

1.00

$

0.94

$

0.93

6


8



$

3.63

$

3.33

9



Diluted

$

0.96

$

0.90

$

0.87

7


10



$

3.50

$

3.11

13























Weighted average shares outstanding:



















Basic


108,690


109,111


113,576

-


(4)




110,064


114,745

(4)



Diluted


113,702


113,464


121,021

-


(6)




114,388


122,932

(7)























Dividends declared per share

$

0.375

$

0.350

$

0.350

7


7



$

1.425

$

1.280

11























(1)  Prior year amounts have been restated to reflect the Company's retrospective adoption of ASU 2014-09 on November 1, 2018. Fund subsidies previously included as a component of



     fund-related expenses are now presented as a contra-revenue component of management fees. In addition, certain front-end load sales commissions that were previously reported



     on a net basis as a component of distribution expense are now reported on a gross basis in distribution and underwriter fee revenue and distribution expense. The adoption of ASU



     2014-09 had no impact on net income or earnings per share.




















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

(in thousands, except per share figures)
























Three Months Ended


Fiscal Year Ended










%

%


















Change

Change


















Q4 2019

Q4 2019










October 31,

July 31,

October 31,


vs.

vs.


October 31,

October 31,


%


2019

2019

2018


Q3 2019

Q4 2018


2019

2018


Change






















Net income attributable to Eaton Vance





















Corp. shareholders

$

109,206

$

102,221

$

105,487


7

%

4

%


$

400,035

$

381,938


5

%






















Net excess tax benefit from stock-based





















compensation plans(1)


(1,541)


(637)


(2,416)


142


(36)




(5,404)


(17,487)


(69)























Revaluation of deferred tax amounts(2)


-


-


(433)


NM


(100)




-


21,220


(100)























Repatriation of undistributed earnings of





















foreign subsidiaries(3)


-


-


(255)


NM


(100)




-


2,807


(100)























Loss on write-off of Hexavest option, net of tax(4)


-


-


-


NM


NM




-


5,660


(100)























Adjusted net income attributable to Eaton





















Vance Corp. shareholders

$

107,665

$

101,584

$

102,383


6


5



$

394,631

$

394,138


-












































Earnings per diluted share

$

0.96

$

0.90

$

0.87


7


10



$

3.50

$

3.11


13























Net excess tax benefit from stock-based





















compensation plans


(0.01)


-


(0.02)


NM


(50)




(0.05)


(0.14)


(64)























Revaluation of deferred tax amounts


-


-


-


NM


NM




-


0.17


(100)























Repatriation of undistributed earnings of





















foreign subsidiaries


-


-


-


NM


NM




-


0.02


(100)























Loss on write-off of Hexavest option, net of tax


-


-


-


NM


NM




-


0.05


(100)












































Adjusted earnings per diluted share

$

0.95

$

0.90

$

0.85


6


12



$

3.45

$

3.21


7























(1)  Reflects the impact of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which was adopted in the first quarter of fiscal 2018.






















(2)  Reflects the revaluation of deferred tax assets and deferred tax liabilities resulting from the enactment of the 2017 Tax Act on December 22, 2017.






















(3)  Reflects the recognition of incremental tax expense related to the deemed repatriation of foreign earnings considered to be indefinitely reinvested abroad and not previously subject to U.S.

     taxation.






















(4)  Reflects the $6.5 million loss recognized upon expiration of the Company's option to acquire an additional 26 percent ownership interest in Hexavest, net of the associated impact to taxes

     of $0.8 million.

 
















Attachment 3

Eaton Vance Corp.

Components of net income (loss) attributable

to non-controlling and other beneficial interests

(in thousands)























Three Months Ended


Fiscal Year Ended










%

%

















Change

Change

















Q4 2019

Q4 2019










October 31,

July 31,

October 31,


vs.

vs.


October 31,

October 31,

%


2019

2019

2018


Q3 2019

Q4 2018


2019

2018

Change





















Consolidated sponsored funds

$

6,759

$

2,760

$

(4,447)


145

%

NM

%


$

20,081

$

(232)

NM

%




















Majority-owned subsidiaries


2,985


3,555


4,173


(16)


(28)




12,760


16,199

(21)






















Net income (loss) attributable to non-controlling




















and other beneficial interests

$

9,744

$

6,315

$

(274)


54


NM



$

32,841

$

15,967

106



 







 Attachment 4


Eaton Vance Corp.


Balance Sheet


(in thousands, except per share figures)






October 31,



October 31,(1)




2019



2018


Assets














Cash and cash equivalents

$

557,668


$

600,696


Management fees and other receivables


237,864



236,736


Investments


1,060,739



1,078,627


Assets of consolidated CLO entities:







   Cash


48,704



216,598


   Bank loans and other investments


1,704,270



874,304


   Other assets


28,039



4,464


Deferred sales commissions


55,211



48,629


Deferred income taxes


62,661



45,826


Equipment and leasehold improvements, net


72,798



52,428


Intangible assets, net


75,907



80,885


Goodwill


259,681



259,681


Loan to affiliate


5,000



5,000


Other assets


85,087



95,454


   Total assets

$

4,253,629


$

3,599,328









Liabilities, Temporary Equity and Permanent Equity














Liabilities:














Accrued compensation

$

240,722


$

233,836


Accounts payable and accrued expenses


89,984



91,410


Dividend payable


55,177



51,731


Debt


620,513



619,678


Liabilities of consolidated CLO entities:







   Senior and subordinated note obligations


1,617,095



873,008


   Other liabilities


51,122



154,185


Other liabilities


108,982



131,952


   Total liabilities


2,783,595



2,155,800









Commitments and contingencies














Temporary Equity:







Redeemable non-controlling interests


285,915



335,097


   Total temporary equity


285,915



335,097









Permanent Equity:







Voting Common Stock, par value $0.00390625 per share:







   Authorized, 1,280,000 shares







   Issued and outstanding, 422,935 and 422,935 shares, respectively


2



2


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







   Authorized, 190,720,000 shares







   Issued and outstanding, 113,143,567 and 116,527,845 shares, respectively


442



455


Additional paid-in capital


-



17,514


Notes receivable from stock option exercises


(8,447)



(8,057)


Accumulated other comprehensive loss


(58,317)



(53,181)


Retained earnings


1,250,439



1,150,698


   Total Eaton Vance Corp. shareholders' equity


1,184,119



1,107,431


Non-redeemable non-controlling interests


-



1,000


   Total permanent equity


1,184,119



1,108,431


Total liabilities, temporary equity and permanent equity

$

4,253,629


$

3,599,328

























Attachment 5

Eaton Vance Corp.

Consolidated Assets under Management and Net Flows by Investment Mandate(1)

(in millions)



















Three Months Ended


Fiscal Year Ended



October 31,


July 31,


October 31,


October 31,


October 31,



2019


2019


2018


2019


2018

Equity assets – beginning of period(2)

$

128,996


$

125,869


$

122,466


$

115,772


$

113,472


Sales and other inflows


6,833



6,749



4,666



24,852



21,840


Redemptions/outflows


(4,861)



(5,130)



(5,328)



(20,022)



(20,813)


  Net flows


1,972



1,619



(662)



4,830



1,027


Exchanges


(9)



(43)



31



(10)



37


Market value change


936



1,551



(6,063)



11,303



1,236

Equity assets end of period

$

131,895


$

128,996


$

115,772


$

131,895


$

115,772

Fixed income assets – beginning of period(3)


91,399



86,744



76,819



77,844



70,797


Sales and other inflows


7,731



8,005



7,038



33,310



26,259


Redemptions/outflows


(5,383)



(4,566)



(4,788)



(21,429)



(16,715)


  Net flows


2,348



3,439



2,250



11,881



9,544


Exchanges


161



69



5



626



-


Market value change


167



1,147



(1,230)



3,724



(2,497)

Fixed income assets end of period

$

94,075


$

91,399


$

77,844


$

94,075


$

77,844

Floating-rate income assets – beginning of period


38,339



39,750



42,955



44,837



38,819


Sales and other inflows


1,289



1,772



4,079



8,706



14,301


Redemptions/outflows


(3,890)



(2,963)



(2,103)



(16,988)



(8,401)


  Net flows


(2,601)



(1,191)



1,976



(8,282)



5,900


Exchanges


(67)



(38)



46



(428)



86


Market value change


(568)



(182)



(140)



(1,024)



32

Floating-rate income assets – end of period

$

35,103


$

38,339


$

44,837


$

35,103


$

44,837

Alternative assets – beginning of period


9,031



9,409



13,465



12,139



12,637


Sales and other inflows


405



466



847



2,717



5,679


Redemptions/outflows


(970)



(1,109)



(1,570)



(6,618)



(4,947)


  Net flows


(565)



(643)



(723)



(3,901)



732


Exchanges


(88)



9



(75)



(255)



(103)


Market value change


(6)



256



(528)



389



(1,127)

Alternative assets – end of period

$

8,372


$

9,031


$

12,139


$

8,372


$

12,139

Portfolio implementation assets – beginning of period


128,636



125,391



115,035



110,840



99,615


Sales and other inflows


5,961



6,468



5,578



25,900



22,562


Redemptions/outflows


(4,306)



(4,378)



(3,819)



(17,518)



(14,141)


  Net flows


1,655



2,090



1,759



8,382



8,421


Exchanges


2



3



(6)



59



(22)


Market value change


2,905



1,152



(5,948)



13,917



2,826

Portfolio implementation assets end of period

$

133,198


$

128,636


$

110,840


$

133,198


$

110,840

Exposure management assets – beginning of period


86,379



82,775



82,443



77,871



86,976


Sales and other inflows


24,388



17,307



12,946



73,376



65,812


Redemptions/outflows


(17,400)



(14,611)



(15,438)



(62,363)



(74,095)


  Net flows


6,988



2,696



(2,492)



11,013



(8,283)


Market value change


1,422



908



(2,080)



5,905



(822)

Exposure management assets – end of period

$

94,789


$

86,379


$

77,871


$

94,789


$

77,871

Total assets under management – beginning of period


482,780



469,938



453,183



439,303



422,316


Sales and other inflows


46,607



40,767



35,154



168,861



156,453


Redemptions/outflows


(36,810)



(32,757)



(33,046)



(144,938)



(139,112)


  Net flows


9,797



8,010



2,108



23,923



17,341


Exchanges


(1)



-



1



(8)



(2)


Market value change


4,856



4,832



(15,989)



34,214



(352)

Total assets under management end of period

$

497,432


$

482,780


$

439,303


$

497,432


$

439,303

















(1)  Consolidated Eaton Vance Corp. See Attachment 11 for directly managed assets and flows of 49 percent-owned Hexavest, which are not included in the table above.

















(2)  Whenever presented, Equity assets include balanced and other multi‐asset mandates.

















(3)  Whenever presented, Fixed Income assets include cash management mandates.















Attachment 6

Eaton Vance Corp.

Consolidated Assets under Management and Net Flows by Investment Vehicle(1)

(in millions)



















Three Months Ended


Fiscal Year Ended



October 31,


July 31,


October 31,


October 31,


October 31,



2019


2019


2018


2019


2018

Funds – beginning of period(2)

$

173,433


$

170,962


$

168,778


$

164,968


$

156,853


Sales and other inflows


10,020



10,084



11,303



44,337



44,470


Redemptions/outflows


(9,613)



(8,912)



(9,438)



(43,349)



(34,802)


  Net flows


407



1,172



1,865



988



9,668


Exchanges


(1)



22



-



(84)



305


Market value change


229



1,277



(5,675)



8,196



(1,858)

Funds end of period

$

174,068


$

173,433


$

164,968


$

174,068


$

164,968

Institutional separate accounts – beginning of period


165,311



160,460



162,701



153,996



159,986


Sales and other inflows


27,342



20,903



14,936



85,401



79,502


Redemptions/outflows


(21,782)



(17,861)



(18,278)



(78,471)



(85,638)


  Net flows


5,560



3,042



(3,342)



6,930



(6,136)


Exchanges


4



(16)



-



86



18


Market value change


2,456



1,825



(5,363)



12,319



128

Institutional separate accounts – end of period

$

173,331


$

165,311


$

153,996


$

173,331


$

153,996

Individual separate accounts – beginning of period(3)


144,036



138,516



121,704



120,339



105,477


Sales and other inflows


9,245



9,780



8,915



39,123



32,481


Redemptions/outflows


(5,415)



(5,984)



(5,330)



(23,118)



(18,672)


  Net flows


3,830



3,796



3,585



16,005



13,809


Exchanges


(4)



(6)



1



(10)



(325)


Market value change


2,171



1,730



(4,951)



13,699



1,378

Individual separate accounts – end of period

$

150,033


$

144,036


$

120,339


$

150,033


$

120,339

Total assets under management – beginning of period


482,780



469,938



453,183



439,303



422,316


Sales and other inflows


46,607



40,767



35,154



168,861



156,453


Redemptions/outflows


(36,810)



(32,757)



(33,046)



(144,938)



(139,112)


  Net flows


9,797



8,010



2,108



23,923



17,341


Exchanges


(1)



-



1



(8)



(2)


Market value change


4,856



4,832



(15,989)



34,214



(352)

Total assets under management – end of period

$

497,432


$

482,780


$

439,303


$

497,432


$

439,303

















(1)  Consolidated Eaton Vance Corp. See Attachment 11 for directly managed assets and flows of 49 percent‐owned Hexavest, which are not included in the table above.

















(2)  Whenever presented, Fund assets include assets of cash management funds.

















(3)  In the first quarter of fiscal 2019, the Company revised its classification of consolidated assets under management and net flows by investment vehicle to combine the formerly separate

     high-net-worth separate account and retail managed account categories into a single individual separate account category. The above presentation of prior year results has been revised

     for comparability purposes. The reclassification does not affect total consolidated assets under management or total consolidated net flows for any period.














Attachment 7

Eaton Vance Corp.

Consolidated Assets under Management by Investment Mandate(1)

(in millions)


















October 31,



July 31,


%



October 31,


%




2019



2019


Change



2018


Change

Equity(2)

$

131,895


$

128,996


2%


$

115,772


14%

Fixed income(3)


94,075



91,399


3%



77,844


21%

Floating-rate income


35,103



38,339


-8%



44,837


-22%

Alternative


8,372



9,031


-7%



12,139


-31%

Portfolio implementation


133,198



128,636


4%



110,840


20%

Exposure management


94,789



86,379


10%



77,871


22%

   Total

$

497,432


$

482,780


3%


$

439,303


13%















(1)  Consolidated Eaton Vance Corp. See Attachment 11 for directly managed assets and flows of 49 percent‐owned Hexavest, which are not included in the table above.















(2)  Includes balanced and other multi‐asset mandates.















(3)  Includes cash management mandates.


























Attachment 8

Eaton Vance Corp.

Consolidated Assets under Management by Investment Vehicle(1)

(in millions)


















October 31,



July 31,


%



October 31,


%




2019



2019


Change



2018


Change

Open-end funds

$

105,043


$

105,614


-1%


$

102,426


3%

Closed-end funds


24,284



24,307


0%



23,998


1%

Private funds(2)


44,741



43,512


3%



38,544


16%

Institutional separate accounts


173,331



165,311


5%



153,996


13%

Individual separate accounts(3)


150,033



144,036


4%



120,339


25%

   Total

$

497,432


$

482,780


3%


$

439,303


13%















(1)  Consolidated Eaton Vance Corp. See Attachment 11 for directly managed assets and flows of 49 percent‐owned Hexavest, which are not included in the table above.















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















(3)  In the first quarter of fiscal 2019, the Company revised its classification of consolidated assets under management by investment vehicle to combine the formerly separate

     high-net-worth separate account and retail managed account categories into a single individual separate account category. The above presentation of prior year results has

     been revised for comparability purposes. The reclassification does not affect total consolidated assets under management for any period.


























Attachment 9

Eaton Vance Corp.

Consolidated Assets under Management by Investment Affiliate(1)

(in millions)


















October 31,



July 31,


%



October 31,


%




2019



2019


Change



2018


Change

Eaton Vance Management(2)

$

187,711


$

188,144


0%


$

179,321


5%

Parametric


265,824



252,447


5%



224,238


19%

Atlanta Capital(3)


27,564



27,008


2%



23,355


18%

Calvert(3)


16,333



15,181


8%



12,389


32%

   Total

$

497,432


$

482,780


3%


$

439,303


13%















(1)  Consolidated Eaton Vance Corp. See Attachment 11 for directly managed assets and flows of 49 percent-owned Hexavest, which are not included in the table above.















(2)  Includes managed assets of Eaton Vance-sponsored funds and separate accounts managed by Hexavest and unaffiliated third-party advisers under Eaton Vance supervision.















(3)  Consistent with the Company's policies for reporting the managed assets and flows of investment portfolios for which multiple Eaton Vance affiliates have management responsibilities,

     the managed assets of Atlanta Capital indicated above include the assets of Calvert Equity Fund, for which Atlanta Capital serves as sub-adviser. The total managed assets of Calvert,

     including assets sub-advised by other Eaton Vance affiliates, were $19.8 billion as of October 31, 2019, $18.2 billion as of July 31, 2019 and $14.7 billion as of October 31, 2018.



Attachment 10

Eaton Vance Corp.

Average Annualized Management Fee Rates by Investment Mandate(1)(2)

(in basis points on average managed assets)












Three Months Ended


Fiscal Year Ended





%

%









Change

Change









Q4 2019

Q4 2019






October 31,

July 31,

October 31,

vs.

vs.


October 31,

October 31,

%


2019

2019

2018

Q3 2019

Q4 2018


2019

2018

Change

Equity

56.2

57.1

58.2

-2%

-3%


56.9

58.9

-3%

Fixed income

32.5

32.8

33.9

-1%

-4%


32.9

34.9

-6%

Floating-rate income

49.3

49.7

50.3

-1%

-2%


49.7

50.6

-2%

Alternative

62.7

66.9

60.2

-6%

4%


61.4

64.8

-5%

Portfolio implementation

14.9

15.1

14.7

-1%

1%


14.8

14.6

1%

Exposure management

4.9

5.2

5.4

-6%

-9%


5.1

5.2

-2%

  Total

30.8

31.8

32.7

-3%

-6%


31.6

33.0

-4%











(1)  Prior year management fee rates have been restated to reflect the Company's retrospective adoption of ASU 2014-09 on November 1, 2018. Fund subsidies previously included as

     a component of fund-related expenses are now presented as a contra-revenue component of management fees. Fluctuations in fund subsidies may cause average management fee

     rates to fluctuate from one period to the next.











(2)  Excludes performance-based fees, which were $0.1 million in both the three months ended October 31, 2019 and July 31, 2019, $(0.3) million in the three months ended

     October 31, 2018, $1.7 million in the fiscal year ended October 31, 2019 and $(1.7) million in the fiscal year ended October 31, 2018.



Attachment 11

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,




2019


2019


2018


2019


2018

Eaton Vance distributed:















Eaton Vance sponsored funds – beginning of period(1)

$

170


$

184


$

168


$

159


$

182


Sales and other inflows


1



3



1



48



12


Redemptions/outflows


(24)



(17)



(4)



(69)



(35)


   Net flows


(23)



(14)



(3)



(21)



(23)


Market value change


5



-



(6)



14



-

Eaton Vance sponsored funds end of period

$

152


$

170


$

159


$

152


$

159

Eaton Vance distributed separate accounts –















    beginning of period(2)

$

1,745


$

2,076


$

2,522


$

2,169


$

3,092


Sales and other inflows


2



79



58



105



230


Redemptions/outflows


(226)



(414)



(327)



(859)



(1,176)


   Net flows


(224)



(335)



(269)



(754)



(946)


Market value change


42



4



(84)



148



23

Eaton Vance distributed separate accounts – end of period

$

1,563


$

1,745


$

2,169


$

1,563


$

2,169

Total Eaton Vance distributed – beginning of period

$

1,915


$

2,260


$

2,690


$

2,328


$

3,274


Sales and other inflows


3



82



59



153



242


Redemptions/outflows


(250)



(431)



(331)



(928)



(1,211)


   Net flows


(247)



(349)



(272)



(775)



(969)


Market value change


47



4



(90)



162



23

Total Eaton Vance distributed – end of period

$

1,715


$

1,915


$

2,328


$

1,715


$

2,328

Hexavest directly distributed – beginning of period(3)

$

11,474


$

11,634


$

12,553


$

11,467


$

12,748


Sales and other inflows


140



410



233



1,769



1,149


Redemptions/outflows


(321)



(646)



(844)



(2,574)



(2,416)


   Net flows


(181)



(236)



(611)



(805)



(1,267)


Market value change


347



76



(475)



978



(14)

Hexavest directly distributed – end of period

$

11,640


$

11,474


$

11,467


$

11,640


$

11,467

Total Hexavest managed assets – beginning of period

$

13,389


$

13,894


$

15,243


$

13,795


$

16,022


Sales and other inflows


143



492



292



1,922



1,391


Redemptions/outflows


(571)



(1,077)



(1,175)



(3,502)



(3,627)


   Net flows


(428)



(585)



(883)



(1,580)



(2,236)


Market value change


394



80



(565)



1,140



9

Total Hexavest managed assets – end of period

$

13,355


$

13,389


$

13,795


$

13,355


$

13,795


















(1)  Managed assets and flows of Eaton Vance-sponsored pooled investment vehicles for which Hexavest is adviser or sub-adviser. Eaton Vance receives management fees (and in some

     cases also distribution fees) on these assets, which are included in Eaton Vance's consolidated assets under management and flows in Attachments 5 through 9.


















(2)  Managed assets and flows of Eaton Vance-distributed separate accounts managed by Hexavest. Eaton Vance receives distribution fees, but not management fees, on these assets,

     which are not included in Eaton Vance's consolidated assets under management and flows 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 management fees or distribution

     fees on these assets, which are not included in Eaton Vance's consolidated assets under management and flows in Attachments 5 through 9.

 

____________________________________

(1)  Although the Company reports its financial results in accordance with U.S. GAAP, management believes that certain non-U.S. GAAP financial measures, specifically, adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share, while not a substitute for U.S. GAAP financial measures, may be effective indicators of the Company's performance over time. Non-U.S. GAAP financial measures should not be construed to be superior to U.S. GAAP measures. In calculating these non-U.S. GAAP financial measures, net income attributable to Eaton Vance Corp. shareholders and earnings per diluted share are adjusted to exclude items management deems non-operating or non-recurring in nature, or otherwise outside the ordinary course of business. These adjustments may include, when applicable, the add back of closed-end fund structuring fees, costs associated with special dividends, debt repayments and tax settlements, the tax impact of stock-based compensation shortfalls or windfalls, and non-recurring charges for the effect of tax law changes. Management and our Board of Directors, as well as certain of our outside investors, consider these adjusted numbers a measure of the Company's underlying operating performance. Management believes adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share are important indicators of our operations because they exclude items that may not be indicative of, or are unrelated to, our core operating results, and may provide a useful baseline for analyzing trends in our underlying business.


(2)  Prior period revenue and expenses have been restated to reflect certain classification adjustments resulting from the Company's retrospective adoption of ASU 2014-09 on November 1, 2018. The adoption of the new revenue recognition accounting standard had no impact on operating income or earnings per share.


(3)  The statutory U.S. federal income tax rate in effect for the Company's fiscal 2019 was 21 percent, the federal corporate income tax rate pursuant to the 2017 Tax Act. The statutory U.S. federal income tax rate in effect for the Company's fiscal 2018 was a blend of 35 percent and 21 percent based on the number of days in the Company's fiscal year before and after the January 1, 2018 effective date of the 2017 Tax Act.


(4)  Represents the Company's effective income tax rate, excluding the tax impact of stock-based compensation shortfalls or windfalls and the non-recurring tax impact of U.S. tax law changes. Management believes that the Company's adjusted effective income tax rate is an important indicator of our operations because it excludes items that may not be indicative of, or are unrelated to, our core operating results, and may provide a useful baseline for analyzing trends in our underlying business.


(5)  Reflects the impact of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which was adopted by the Company in fiscal 2018. The Company anticipates that the adoption of this guidance may cause fluctuations in the Company's effective tax rate, particularly in the first quarter of each fiscal year, when most of the Company's annual stock-based awards vest.

 

 

Cision
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SOURCE Eaton Vance Corp.


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