[PDF] - 2016 Annual Report We believe that we are to play an imporant part PDF Document

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Eaton Vance

Annual Report

2016

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About the Cover: The images represent the six principal operating locations of Eaton Vance and its consolidated subsidiaries: (from left) New York, Atlanta, Boston, Seattle, Minneapolis and London.

“We believe that we are to play an imporant part in the evolution of the financial and economic life of our times. We must accept that responsibility and perform

ur task with enlightened purpose, vision, and imagination. We shall grow and

prosper only as we make ourselves useful to others, and as we prove that we may be relied upon.”

–Charles F. Eaton Jr.

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Our fjscal 2016 was a period of continuing challenge for the global asset management industry, as investor fmows and investment performance trends favored lower-cost passive strategies over active management in most asset classes. According to Strategic Insight, an industry data provider, actively managed long-term funds offered in the United States experienced net outfmows of $301 billion over the 12 months ended October 31, 2016; for the same period, index mutual funds and exchange-traded funds (ETFs) saw net infmows of $415

billion. Competition also drove down average fee rates in both active and passive investment

strategies over the course of the fjscal year. In this diffjcult environment, Eaton Vance has done comparatively well. Our stock and business performance meaningfully exceeded that of most peer companies in fjscal 2016. Holders of

ur non-voting common stock realized a total return of 0.2 percent in the 12 months ended

October 31, 2016. For comparison, the average total return of other U.S.-listed mid-cap and

To Shareholders and Friends of Eaton Vance: 2

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large-cap asset manager stocks was -13.8 percent over the same period. While lagging the broad market, our stock returns have also exceeded the average of peer asset managers over periods of three, fjve and 10 years. Eaton Vance earned $2.12 per diluted share in the fjscal year ended October 31, 2016, an increase of 10 percent from $1.92 per diluted share in fjscal 2015. On an adjusted basis,1 the Company earned $2.13 per diluted share in fjscal 2016, a decrease of seven percent from $2.29 of adjusted earnings per diluted share in fjscal 2015. Adjusted earnings differed from earnings under generally accepted accounting principles to refmect the payment of $2.3 million

f structuring fees in connection with the initial public offering of Eaton Vance High Income

2021 Target Term Trust in May 2016 and the January 2015 payment of $73.0 million to terminate service and additional compensation arrangements in place with a major distribution partner for certain previously offered Eaton Vance closed-end funds. In fjscal 2016, the Company’s consolidated revenue decreased four percent to $1.3 billion, as lower average fee rates more than offset higher average managed assets. Adjusting to remove the payments described in the previous paragraph, operating expenses were down less than

ne percent and adjusted operating income was 12 percent lower.

Consolidated assets under management were $336.4 billion on October 31, 2016, an increase

f eight percent from $311.4 billion at the end of fjscal 2015. Average consolidated managed

assets were $320.9 billion in fjscal 2016, an increase of six percent. Excluding performance fees, annualized effective investment advisory and administrative fee rates on consolidated assets under management averaged 36 basis points in fjscal 2016 versus 39 basis points in fjscal 2015, a decline of nine percent. Changes in average fee rates refmect the ongoing shift in

ur business toward lower-fee offerings and fee rate compression in certain mandates.

The Company had consolidated net infmows of $19.3 billion in fjscal 2016, a six percent internal growth rate (consolidated net infmows divided by beginning-of-period consolidated assets under management) and our 21st consecutive year of positive net fmows. For comparison, the Company had consolidated net infmows of $16.7 billion and six percent internal growth in fjscal 2015. Refmecting lower average fee rates on infmows versus outfmows, internal growth in investment advisory and administrative fee revenue was one percent in fjscal 2016 and minus two percent in fjscal 2015. Most other public asset managers experienced net outfmows and negative organic revenue growth over the period of our fjscal 2016.

In this difficult environment, Eaton Vance has done comparatively well. Our stock and business performance meaningfully exceeded that of most peer companies in fiscal 2016.

1See footnote 1 on page 14.

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Eaton Vance’s fjscal 2016 consolidated net infmows were led by the portfolio implementation and exposure management businesses of Parametric Portfolio Associates (Parametric), with net infmows of $9.4 billion and $6.1 billion, respectively. Investment advisory and administrative fee rates for portfolio implementation and exposure management averaged 15 basis points and fjve basis points, respectively, down four percent and seven percent from fjscal 2015 category

averages. Fixed-income net infmows in fjscal 2016 were $7.4 billion, driven by strong fmows

into laddered municipal and corporate bond separate accounts and high-yield bond strategies managed by Eaton Vance Management (EVM). Average management fee rates of the Company’s fjxed-income mandates were 40 basis points, down seven percent from fjscal 2015 due primarily to growth in lower-fee laddered bond separate accounts. Floating-rate income mandates had net outfmows of $3.8 billion, an improvement from $5.0 billion of net outfmows in fjscal 2015. Flow trends also improved year-over-year in equities, where net outfmows fell to $500 million from $4.9 billion in fjscal 2015, and alternatives, with fjscal 2016 net infmows of $700 million versus net outfmows of $700 million in fjscal 2015. Average investment advisory and administrative fee rates across fmoating-rate income, equity and alternative mandates were little changed, down three percent, two percent and unchanged, respectively. We continued to achieve strong investment performance in fjscal 2016. In the annual Barron’s/Lipper rankings of Best Mutual Fund Families released in February, Eaton Vance Funds ranked 2nd overall among 67 fund families rated for one-year performance, 17th among 58 fund families based on fjve-year returns and 11th among 52 families for 10-year performance. At fjscal year-end, 57 of our U.S. mutual funds were rated four or fjve stars by Morningstar™ for at least one class of shares, including 24 fjve-star rated funds. As of that date, 74 percent of the net assets of Eaton Vance and Parametric mutual funds were in funds ranked in the top half of their Morningstar peer group for one-year total return, 78 percent for three-year total return, 72 percent for fjve-year total return and 71 percent for 10-year total return. Our long history of prudent fjnancial management continued in fjscal 2016, as refmected in

ur A-/A3 credit rating and strong balance sheet. At fjscal year-end, we held $510 million of

cash, cash equivalents and short-term debt instruments, and $313 million of seed capital investments, against $574 million of debt obligations maturing in 2017 and 2023. To provide additional fjnancial fmexibility, we have a $300 million credit facility, which was unused over the course of the fjscal year.

In the annual Barron’s/Lipper rankings of Best Mutual Fund Families released in February, Eaton Vance Funds ranked 2nd

verall among 67 fund families rated for one-year performance.

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During fjscal 2016, we used $253 million to repurchase and retire 7.3 million shares of our non-voting common stock and paid $119 million of dividends to shareholders. Dividends declared per share increased six percent to $1.075 in fjscal 2016, marking our 36th consecutive year of regular dividend increases. A year ago, we identifjed four primary near-term priorities for addressing the ongoing diffjcult environment for asset management. These are: (1) capitalizing on our leading investment performance and distribution strengths to increase sales and gain market share in active strategies; (2) becoming a more global company by building the Company’s investment and distribution capabilities outside the United States; (3) expanding our Custom Beta lineup of separately managed account offerings and the distribution of Custom Beta strategies; and (4) achieving commercial success of NextShares™ exchange-traded managed funds (NextShares). Although actively managed investment strategies continue to lose ground to index investing, the market for active management remains enormous. Considering only U.S. mutual funds, assets invested in active strategies currently exceed $10 trillion and annual gross sales are approximately $2.5 trillion. Even with the strong growth of indexing, there remain numerous asset classes and market segments where active strategies continue to compete effectively against passive alternatives. With a current market share of less than one percent, we can grow our active business even if the overall market for active management remains in decline. In fjscal 2016, Eaton Vance had net outfmows from active investment strategies of $1.2 billion, signifjcantly improved from active-strategy net outfmows of $6.0 billion in fjscal 2015. With strong investment performance across a range of actively managed Eaton Vance strategies and an improving trend of fmows for our important fmoating-rate income franchise, we believe we can achieve positive organic growth in active strategies in fjscal 2017. Outside the United States, the Company is expanding our investment teams and committing greater distribution resources to support business growth. In fjscal 2016, EVM’s international affjliates added six new equity investment professionals and six income professionals, increasing EVM’s overseas investment staff from three at the end of fjscal 2014 to 25 at the end of fjscal 2016. In September, we hired Tjalling Halbertsma to head the London-based global sales organization that represents the Company’s strategies across Europe, the Middle East, Asia, Australia and Latin America. Although Eaton Vance’s business remains centered primarily on our home market in the United States, we are committed to growing aggressively

Although actively managed investment strategies continue to lose ground to index investing, the market for active management remains enormous.

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around the world. Through EVM’s international operations, Parametric’s expanding centralized portfolio management business in Australia and our 49 percent interest in Montreal-based global equity manager Hexavest, we now have a diverse range of investment offerings for international clients and the support of a growing distribution organization. In fjscal 2016, consolidated net infmows into investments managed for non-U.S. clients were $4.0 billion, compared to international net outfmows of $2.3 billion in fjscal 2015. We believe we are positioned for further improvement in international net fmows in fjscal 2017. Our suite of Custom Beta separately managed account offerings for retail and high-net-worth investors contributed signifjcantly to the Company’s growth in fjscal 2016. Net infmows of $9.2 billion brought Custom Beta managed assets to $43.5 billion, equating to 28 percent

rganic growth. The Company’s Custom Beta lineup includes Parametric tax-managed and

non-tax-managed custom core equity and EVM-managed laddered municipal and corporate bond strategies. Our Custom Beta offerings combine the benefjts of passive investing with the ability to customize portfolios to meet individual investor preferences and needs. Compared to index mutual funds and ETFs, Custom Beta separate accounts give clients the ability to tailor their exposures to achieve better tax outcomes and to refmect client-specifjed responsible investing criteria, factor tilts and portfolio exclusions. Unlike mutual funds and ETFs, Custom Beta separate accounts can pass through harvested tax losses to offset client gains on other

investments. In fjscal 2016, we increased the range of Custom Beta strategies available

at major broker-dealers and made signifjcant investments in technology to enhance the user experience of clients and advisors and to support the expanding scale of Custom Beta

perations. We continue to view Custom Beta as a major growth opportunity going forward.

The Company’s NextShares initiative achieved a series of milestones in fjscal 2016, including the launch of the fjrst three Eaton Vance-sponsored NextShares funds in February and March, the July announcement that UBS Financial Services intends to begin offering NextShares through its U.S. fjnancial advisors network in 2017 and the introduction by Ivy Funds of the fjrst non-Eaton Vance NextShares funds in October. NextShares are a new type of fund combining proprietary active management with the conveniences and potential performance and tax advantages of exchange-traded products. Our NextShares Solutions subsidiary holds patents and other intellectual property rights related to NextShares, and is seeking to commercialize NextShares by entering into licensing and service agreements with fund

companies. As the investment and trading advantages of NextShares are demonstrated over a

broader range of funds and experienced by a growing number of investors, we expect to attract more broker-dealers and an ever-widening array of fund sponsors and fund strategies to the NextShares opportunity. We continue to be excited by the potential of NextShares, and expect signifjcant progress toward commercial success in 2017.

Our suite of Custom Beta separately managed account offerings for retail and high-net-worth investors contributed significantly to the Company’s growth in fiscal 2016.

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Responding to the rapidly changing industry landscape, Eaton Vance committed to two strategic investments during fjscal 2016. In May, we announced the Company’s participation as lead investor in a private equity fjnancing by SigFig, an industry-leading provider of digital technology to fjnancial institutions across the wealth management, banking and insurance

industries. In October, we announced the signing of a defjnitive agreement to acquire the

business assets of Calvert Investment Management, Inc. (Calvert), a recognized leader in responsible investing with $12.3 billion of assets under management as of September 30,

2016. The Calvert Funds are one of the largest and most diversifjed families of responsibly

invested mutual funds, encompassing actively and passively managed equity, fjxed-income and asset allocation strategies managed in accordance with the Calvert Principles for Responsible

Investment. As part of Eaton Vance, we see tremendous potential for Calvert to extend its

leadership position in responsible investing. Since the purchase of controlling interests in Atlanta Capital Management in 2001, Parametric in 2003 and the Tax-Advantaged Bond Strategies business of M.D. Sass in 2008, acquisitions

f complementary asset management businesses have been a key component of Eaton

Vance’s business growth strategy. In the SigFig and Calvert transactions, we again seek to enhance our competitive position and growth prospects through timely capital investments. Looking ahead, the results of the November 2016 U.S. elections portend signifjcant changes in geopolitics and the global business environment, with potentially major implications for fjnancial markets and the asset management industry. While certain changes are likely to favor Eaton Vance, others could be detrimental to our business. As always, during periods of disruptive change we benefjt from the diversity of our investment franchises, the strength of

ur business reputation and fjnancial position, and a corporate culture that rewards nimbleness

and innovation. I believe Eaton Vance is exceptionally well-positioned to meet the challenges and opportunities that lie ahead. In closing, I wish to thank the 1,510 Eaton Vance employees whose names appear on the back of this report for a job well done. Investment management is ultimately a people business, and the people of Eaton Vance set us apart. Sincerely, Thomas E. Faust Jr. Chairman, Chief Executive Offjcer and President

I believe Eaton Vance is exceptionally well-positioned to meet the challenges and opportunities that lie ahead.

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Historical Stock Returns

Eaton Vance Corp. Value of $1,000 invested April 30, 1979 Eaton Vance Corp. was formed by the merger on April 30, 1979 of two Boston-based investment managers: Eaton & Howard, Inc., founded in 1924, and Vance, Sanders & Company, organized in 1934.

4/79 10/91 10/96 10/01 10/06 10/11 1,000 10,000 100,000 1,000,000 $10,000,000 10/16 10/86

4

Assumes reinvestment of all dividends and proceeds of 1995 spinoff of Investors Financial Services Corp. Sources: FactSet, Eaton Vance.

$2,351,696

April 30, 1979 to October 31, 2016

Rank Company Annual Return

1 Eaton Vance Corp. 23.0% 2 Helen of Troy Limited 22.4 3 Hasbro, Inc. 22.2 4 TJX Companies, Inc. 22.1 5 Kansas City Southern 21.7 Standard & Poor’s 500 Index 11.5

Total return with dividends reinvested. Source: FactSet.

Best-Performing Publicly Traded US Stocks

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Assets Under Management

as of October 31, 2016

by Investment Mandate (in billions)

Open-End Funds $74.7 Private Funds $27.4 Closed-End Funds $23.6 Institutional Separate Accounts $136.5 Retail Managed Accounts $48.4 High-Net-Worth Separate Accounts $25.8

by Investment Vehicle (in billions) by Investment Affjliate (in billions) Consolidated Total: $336.4 billion

Hexavest $13.71 Atlanta Capital $18.5 Parametric $174.12 Eaton Vance Management $143.83 Alternative $10.7 Floating-Rate Income $32.2 Fixed Income $60.5 Equity $90.0 Portfolio Implementation $71.4 Exposure Management $71.6

100% 80 60 40 20 100% 80 60 40 20

1Eaton Vance holds a 49% interest in Hexavest Inc., a Montreal-based investment adviser. Other than Eaton Vance-sponsored funds for which

Hexavest is adviser or subadviser, the managed assets of Hexavest are not included in Eaton Vance’s consolidated totals.

2Includes managed assets of Parametric Risk Advisors LLC. 3Includes managed assets of Eaton Vance Investment Counsel. Also includes approximately $1.8 billion of Eaton Vance-sponsored funds and

accounts managed by third-party advisers under Eaton Vance supervision.

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Eaton Vance Investment Affiliates

Our principal investment affjliates, Eaton Vance Management, Parametric, Atlanta Capital and Hexavest,

ffer a range of distinctive strategies. Investment approaches include bottom-up and top-down

fundamental active management, rules-based systematic alpha investing and implementation of passive

strategies. This broad diversifjcation provides us the opportunity to address a wide range of investor

needs and to offer products and services suited for various market environments.

Floating-Rate Income Floating-Rate Loans Taxable Fixed Income Cash Management Core Bond/Core Plus Emerging-Markets Debt High Yield Infmation-Linked Investment-Grade Corporate Laddered Corporate Mortgage-Backed Securities Multisector Preferred Securities Short Duration Taxable Municipal Tax-Advantaged/Municipal Income Laddered Municipal Municipal Income Floating Rate High Yield National State-Specifjc Opportunistic Municipal Tax-Advantaged Bond Equity Dividend/Global Dividend Emerging/Frontier Markets Equity Option Global Developed Global Small-Cap Global ex-U.S. Developed Global ex-U.S. Small-Cap Health Care Large-Cap Core Large-Cap Growth Large-Cap Value Multi-Cap Growth Real Estate Small-Cap SMID-Cap Tax-Managed Multi-Asset Asset Allocation Balanced Global Diversifjed Income Alternative Commodity Currency Global Macro Hedged Equity Multi-Strategy Absolute Return History dating to 1924 AUM: $143.8 billion Fundamental active managers: In-depth fundamental analysis is the primary basis for our investment decision-making across a broad range of equity, income and alternative strategies.

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Equity Dividend Income Emerging Markets Global Global ex U.S. Tax-Managed U.S. Options Absolute Return Covered Call Defensive Equity Hedged Equity Equity Large-Cap Growth Mid-Large Cap Small-Cap SMID-Cap Responsible Equity Canadian Emerging Markets Global – All Country Global – Developed Global ex U.S. Alternative and Income Commodity Enhanced Income Implementation Centralized Portfolio Management Custom Core Exposure Management Policy Overlay Fixed Income Core Bond Intermediate Duration Short Duration Eaton Vance also sponsors U.S. mutual funds managed by third-party subadvisers: BMO Global Asset Management (Asia) Greater China Growth Goldman Sachs Asset Management International Greater India Richard Bernstein Advisors All Asset Strategy Equity Strategy Founded in 1987 AUM: $174.1 billion Leaders in engineered portfolio solutions: Rules-based alpha-seeking equity, alternative and options strategies, custom core equity and centralized portfolio management implementation, and customized exposure management services. Founded in 1969 AUM: $18.5 billion Specialists in high-quality investing: Actively managed high-quality U.S. stock and bond portfolios constructed using bottom-up fundamental analysis. Founded in 2004 AUM: $13.7 billion Top-down global managers: Global equity strategies combining fundamental research and proprietary quantitative models.

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Key Statistics

1Adjusted net income attributable to EVC shareholders differs from net income attributable to EVC shareholders as determined under U.S. generally accepted

accounting principals (GAAP) due to adjustments in connection with changes in the estimated redemption value of noncontrolling interests in our affiliates redeemable at other than fair value, closed-end fund structuring fees, payments to end closed-end fund service and additional compensation arrangements, and

ther items management deems nonrecurring or nonoperating in nature, or otherwise outside the ordinary course (such as special dividends, costs associated

with the extinguishment of debt and tax settlements). Adjusted earnings per diluted share applies the same adjustments to earnings per diluted share. Te Company’s use of these adjusted numbers, including reconciliations of net income attributable to EVC shareholders to adjusted net income attributable to EVC shareholders and earnings per diluted share to adjusted earnings per diluted share, is discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included within this Annual Report.

14 Fiscal Year Ended October 31,

(in $ millions, except per share and employee amounts)

2016 2015 % Change Ending consolidated assets under management 336,380 311,354 8% Average consolidated assets under management 320,860 303,770 6% Gross inflows 125,057 124,773 0% Net inflows 19,304 16,684 16% Revenue 1,343 1,404

4%

Operating income 414 400 4% Operating income margin 30.8% 28.5% 8% Net income attributable to Eaton Vance Corp. shareholders 241 230 5% Adjusted net income attributable to Eaton Vance Corp. shareholders1 243 275

12%

Earnings per diluted share 2.12 1.92 10% Adjusted earnings per diluted share1 2.13 2.29

7%

Dividends declared per share 1.075 1.015 6% Cash and cash equivalents 424 466

9%

Debt 574 574 0% Employees 1,510 1,448 4% Market capitalization 3,981 4,170

5%

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Performance Trends

Assets Under Management (in billions) Earnings per Diluted Share

50 100 150 200 250 300 $350 '16 '11 '06

Dividends per Share2

0.0 0.5 1.0 1.5 $2.0 '16 '11 '06

Gross Infmows (in billions)

30 60 90 120 $150 '16 '11 '06

Revenue (in millions)

300 600 900 1200 $1500 '16 '11 '06

Operating Income (in millions)

100 200 300 400 500 $600 '16 '11 '06

Adjusted Earnings per Diluted Share1

0.0 0.5 1.0 1.5 2.0 2.5 $3.0 '16 '11 '06 0.0 0.5 1.0 1.5 2.0 2.5 $3.0 '16 '11 '06

Employees

400 800 1200 1600 '16 '11 '06

Net Infmows (in billions)

5 10 15 20 $25 '16 '11 '06 1See footnote on previous page. 2Te Company declared and paid a special dividend of $1.00 per share in fiscal 2013.

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| 2016 Annual Report 17 Five-Year Financial Summary 18 Management’s Discussion and Analysis of Financial Condition and Results of Operations 57 Consolidated Statements of Income 58 Consolidated Statements of Comprehensive Income 59 Consolidated Balance Sheets 60 Consolidated Statements of Shareholders’ Equity 63 Consolidated Statements of Cash Flows 65 Notes to Consolidated Financial Statements 117 Report of Independent Registered Public Accounting Firm 118 Investor Information

Financial Review

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Five-Year Financial Summary The following table contains selected financial data for the last five years. This data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Consolidated Financial Statements and Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

Financial Highlights

For the Years Ended October 31,

(in thousands, except per share data)

2016 2015 2014 2013 2012

Income Statement Data:

Total revenue $ 1,342,860 $ 1,403,563 $ 1,450,294 $ 1,357,503 $ 1,209,036 Operating income(1) 414,268 400,447 519,857 453,007 392,992 Net income(1) 264,757 238,191 321,164 230,426 264,768 Net income attributable to non-controlling and other beneficial interests(2) 23,450 7,892 16,848 36,585 61,303 Net income attributable to Eaton Vance

Corp. shareholders(1)

241,307 230,299 304,316 193,841 203,465 Adjusted net income attributable to Eaton Vance Corp. shareholders(3) 242,908 274,990 309,627 262,942 223,331

Balance Sheet Data:

Total assets(4) $ 1,732,576 $ 2,116,471 $ 1,860,086 $ 2,407,249 $ 1,979,491 Debt(5) 573,967 573,811 573,655 573,499 500,000 Redeemable non-controlling interests (temporary equity) 109,028 88,913 107,466 74,856 98,765 Total Eaton Vance Corp. shareholders' equity 703,789 620,231 655,176 669,784 612,072 Non-redeemable non-controlling interests 786 1,725 2,305 1,755 1,513 Total permanent equity 704,575 621,956 657,481 671,539 613,585

Per Share Data:

Earnings per share: Basic $ 2.20 $ 2.00 $ 2.55 $ 1.60 $ 1.76 Diluted 2.12 1.92 2.44 1.53 1.72 Adjusted diluted(3) 2.13 2.29 2.48 2.08 1.89 Cash dividends declared 1.075 1.015 0.91 1.82 0.77

(1) Net income and net income attributable to Eaton Vance Corp. shareholders reflects a one-time payment of $73.0 million to terminate service and additional compensation arrangements in place with a major distribution partner for certain Eaton Vance closed-end funds in fiscal 2015. (2) Net income attributable to non-controlling and other beneficial interests reflects an increase (decrease) of $0.2 million, $(0.2) million, $5.3 million, $24.3 million and $19.9 million in the estimated redemption value of redeemable non-controlling interests in our majority-owned subsidiaries in fiscal 2016, 2015, 2014, 2013 and 2012, respectively. Net income attributable to non-controlling and

ther beneficial interests also includes net income (loss) of $9.8 million, $(5.8) million, $(4.1) million, $(8.5) million and $22.6

million, respectively, in fiscal 2016, 2015, 2014, 2013 and 2012 substantially borne by other beneficial interest holders of consolidated collateralized loan obligation (“CLO”) entities. (3) Represents a non-U.S. GAAP financial measure. The Company defines adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share as net income attributable to Eaton Vance Corp. shareholders and earnings per diluted share, respectively, adjusted to exclude changes in the estimated redemption value of non-controlling interests in our affiliates redeemable at other than fair value ("non-controlling interest value adjustments"), closed-end fund structuring fees, payments to end closed-end fund service and additional compensation arrangements and other items management deems non-recurring or non-operating in nature, or otherwise outside the ordinary course of business (such as special dividends, costs associated with the extinguishment of debt and tax settlements). Adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share should not be construed to be a substitute for,

r superior to, net income attributable to Eaton Vance Corp. shareholders and earnings per diluted share computed in accordance with

accounting principles generally accepted in the United States of America. Our use of these adjusted numbers, including reconciliations 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, is discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included within this Annual Report. (4) Total assets on October 31, 2015, 2014, 2013 and 2012 include $467.1 million, $156.5 million, $728.1 million and $468.4 million of assets held by consolidated CLO entities, respectively. The Company did not have any consolidated CLO entities as of October 31, 2016. (5) In fiscal 2013, the Company tendered $250 million of its 6.5 percent Senior Notes due 2017 and issued $325 million of 3.625 percent Senior Notes due 2023. The Company recognized a loss on extinguishment of debt totaling $53.0 million in conjunction with the tender in fiscal 2013.

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Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations
CAUTIONARYNOTEREGARDINGFORWARDLOOKINGSTATEMENTS
ThisAnnualReportforEatonVanceCorp.(“EatonVance”or“theCompany”)includesstatementsthatare

“forwardlookingstatements”withinthemeaningofSection27AoftheSecuritiesActof1933,asamended, andSection21EoftheSecuritiesExchangeActof1934,asamended,includingstatementsregardingour expectations,intentionsorstrategiesregardingthefuture.Allstatements,otherthanstatementsof historicalfacts,includedinthisAnnualReportregardingourfinancialposition,businessstrategyandother plansandobjectivesforfutureoperationsareforwardlookingstatements.Theterms“may,”“will,” “could,”“anticipate,”“plan,”“continue,”“project,”“intend,”“estimate,”“believe,”“expect”andsimilar expressionsareintendedtoidentifyforwardlookingstatements,althoughnotallforwardlooking statementscontainsuchwords.Althoughwebelievethattheassumptionsandexpectationsreflectedin suchforwardlookingstatementsarereasonable,wecangivenoassurancethattheywillprovetohavebeen correctorthatwewilltakeanyactionsthatmaynowbeplanned.Certainimportantfactorsthatcouldcause actualresultstodiffermateriallyfromourexpectationsaredisclosedinRiskFactorsofthisAnnualReport. Allsubsequentwrittenororalforwardlookingstatementsattributabletousorpersonsactingonourbehalf areexpresslyqualifiedintheirentiretybysuchfactors.Wedisclaimanyintentionorobligationtoupdateor reviseanyforwardlookingstatement,whetherasaresultofnewinformation,futureeventsorotherwise.

Overview
Ourprincipalbusinessismanaginginvestmentfundsandprovidinginvestmentmanagementandadvisory

servicestohighnetworthindividualsandinstitutions.Ourcorestrategyistodevelopandsustain managementexpertiseacrossarangeofinvestmentdisciplinesandtoofferleadinginvestmentproductsand servicesthroughmultipledistributionchannels.Inexecutingthisstrategy,wehavedevelopedbroadly diversifiedinvestmentmanagementcapabilitiesandahighlyfunctionalmarketing,distributionandcustomer serviceorganization.Althoughwemanageanddistributeawiderangeofinvestmentproductsandservices,we

perateinonebusinesssegment,namelyasaninvestmentadvisertofundsandseparateaccounts.
ThroughoursubsidiariesEatonVanceManagementandAtlantaCapitalManagementCompany,LLC(“Atlanta

Capital”)andotheraffiliates,wemanageactiveequity,incomeandalternativestrategiesacrossarangeof investmentstylesandassetclasses,includingU.S.andglobalequities,floatingratebankloans,municipal bonds,globalincome,highyieldandinvestmentgradebonds.ThroughoursubsidiaryParametricPortfolio AssociatesLLC(“Parametric”),wemanagearangeofengineeredalphastrategies,includingsystematicequity, systematicalternativesandmanagedoptionsstrategies.ThroughParametric,wealsoprovideportfolio implementationandoverlayservices,includingtaxmanagedandnontaxmanagedcustomcoreequity strategies,centralizedportfoliomanagementofmultimanagerportfoliosandcustomizedexposure managementservices.Wealsooverseethemanagementof,anddistribute,investmentfundssubadvisedby unaffiliatedthirdpartymanagers,includingglobalandregionalequityandassetallocationstrategies.Our breadthofinvestmentmanagementcapabilitiessupportsawiderangeofproductsandservicesofferedto fundshareholders,retailmanagedaccountinvestors,institutionalinvestorsandhighnetworthclients.Our equitystrategiesencompassadiversityofinvestmentobjectives,riskprofiles,incomelevelsandgeographic representation.Ourincomeinvestmentstrategiescoverabroaddurationandcreditqualityrangeandencompass bothtaxableandtaxfreeinvestments.Wealsoofferarangeofalternativeinvestmentstrategies,including commodityandcurrencybasedinvestmentsandaspectrumofabsolutereturnstrategies.AsofOctober31, 2016,wehad$336.4billioninconsolidatedassetsundermanagement.

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19 Wedistributeourfundsandretailmanagedaccountsprincipallythroughfinancialintermediaries.Wehave broadmarketreach,withdistributionpartnersincludingnationalandregionalbrokerdealers,independent brokerdealers,registeredinvestmentadvisors,banksandinsurancecompanies.Wesupportthesedistribution partnerswithateamofapproximately120salesprofessionalscoveringU.S.andinternationalmarkets.

Wealsocommitsignificantresourcestoservinginstitutionalandhighnetworthclientswhoaccessinvestment

managementservicesonadirectbasisandthroughinvestmentconsultants.Throughourwhollyowned affiliatesandconsolidatedsubsidiaries,wemanageinvestmentsforabroadrangeofclientsintheinstitutional andhighnetworthmarketplaceintheU.S.andinternationally,includingcorporations,sovereignwealth funds,endowments,foundations,familyofficesandpublicandprivateemployeeretirementplans.

Ourrevenueisderivedprimarilyfrominvestmentadvisory,administrative,distributionandservicefees

receivedfromEatonVanceandParametricfundsandinvestmentadvisoryfeesreceivedfromseparate accounts.Ourfeesarebasedprimarilyonthevalueoftheinvestmentportfolioswemanageandfluctuatewith changesinthetotalvalueandmixofassetsundermanagement.Asamatterofcourse,investorsinour sponsoredopenendfundsandseparateaccountshavetheabilitytoredeemtheirinvestmentsatanytime, withoutpriornotice,andtherearenomaterialrestrictionsthatwouldpreventthemfromdoingso.Ourmajor expensesareemployeecompensation,distributionrelatedexpenses,facilitiesexpenseandinformation technologyexpense.

Ourdiscussionandanalysisofourfinancialcondition,resultsofoperationsandcashflowsisbaseduponour

ConsolidatedFinancialStatements,whichhavebeenpreparedinaccordancewithaccountingprinciples generallyacceptedintheUnitedStatesofAmerica(“U.S.GAAP”).Thepreparationofthesefinancial statementsrequiresustomakeestimatesandjudgmentsthataffectthereportedamountsofassets,liabilities, revenueandexpenses,andrelateddisclosuresofcontingentassetsandliabilities.Onanongoingbasis,we evaluateourestimates,includingthoserelatedtogoodwillandintangibleassets,incometaxes,investments andstockbasedcompensation.Webaseourestimatesonhistoricalexperienceandonvariousassumptions thatwebelievetobereasonableundercurrentcircumstances,theresultsofwhichformthebasisformaking judgmentsaboutthecarryingvaluesofassetsandliabilitiesthatarenotreadilyavailablefromothersources. Actualresultsmaydifferfromtheseestimates.

BusinessDevelopments
Infiscal2015,weidentifiedfourprimaryneartermprioritiestosupportourlongtermgrowth.Thosepriorities

are:(1)capitalizingonourindustryleadinginvestmentperformancetogrowsalesandgainmarketsharein activeinvestmentstrategies;(2)furtherdevelopingourglobalinvestmentcapabilitiesanddistributionto addressidentifiedmarketopportunities;(3)expandingourCustomBetalineupofseparateaccountofferings andthedistributionofCustomBetastrategies;and(4)achievingcommercialsuccessofNextSharesTM exchangetradedmanagedfunds.

AsofOctober31,2016,theCompanyoffered57U.S.mutualfundsrated4or5starsbyMorningstar™forat

leastoneclassofshares,including24fivestarratedfunds.Althoughactivelymanagedstrategiesasawhole arelosingsharetopassiveinvestments,theCompanybelievesthattopperformingactivestrategiescan continuetogrow,particularlyinassetclasseswherecompetitionversuspassivealternativesislessacute.In fiscal2016,netflowsintotheCompany’sactivestrategiesweremodestlypositive.

OutsidetheUnitedStates,theCompanycontinuestoexpandinvestmentstaffandcommitadditional

distributionresourcestosupportbusinessgrowth.EVMIhasgrownitsequityandincometeamsfromthree

SLIDE 22

20

investmentprofessionalsattheendoffiscal2014toacurrentstaffof26.Infiscal2016,theCompanyalso

hiredTjallingHalbertsmatoheadourLondonbasedglobalsalesorganization.

Infiscal2016,theCompanyachievedsignificantgrowthforourCustomBetasuiteofseparatelymanaged

accountstrategies,whichincludeParametriccoreequitiesandEatonVanceManagementmanagedmunicipal bondandcorporatebondladders.Differentfromindexmutualfundsandexchangetradedfunds(“ETFs”),our CustomBetaseparateaccountproductsgiveclientstheabilitytotailortheirmarketexposurestoachieve bettertaxoutcomesandtoreflectclientspecifiedresponsibleinvestingcriteria,factortiltsandportfolio exclusions.

TheCompany’sNextSharesinitiativeachievedaseriesofmilestonesinfiscal2016,includingthelaunchofthe

firstthreeEatonVancesponsoredNextSharesfundsinFebruaryandMarch,theJulyannouncementthatUBS FinancialServicesintendstobeginofferingNextSharesthroughitsU.S.financialadvisorsnetworkin2017and theintroductionbyIvyFundsofthefirstnonEatonVanceNextSharesfundsinOctober.TheCompany’s NextSharesSolutionsLLC(“NextSharesSolutions”)subsidiaryremainsfocusedonthedevelopmentand commercializationofNextShares,theonlyexchangetradedproductstructurecompatiblewithproprietary activemanagementtobeapprovedbytheSEC.

ConsolidatedAssetsunderManagement
Prevailingequityandincomemarketconditionsandinvestorsentimentaffectthesalesandredemptionsof
urinvestmentproducts,managedassetlevels,operatingresultsandtherecoverabilityofourinvestments.

Duringfiscal2016,theS&P500Index,abroadmeasureofU.S.equitymarketperformance,hadtotalreturns

f2.3percentandtheBarclaysU.S.AggregateBondIndex,abroadmeasureofU.S.bondmarketperformance,

hadtotalreturnsof4.4percent.Overthesameperiod,theMSCIEmergingMarketIndex,abroadmeasureof emergingmarketequityperformance,hadtotalreturnsof6.8percent.

Consolidatedassetsundermanagementof$336.4billiononOctober31,2016increased$25.0billion,or8

percent,fromthe$311.4billionofconsolidatedassetsundermanagementonOctober31,2015.Consolidated netinflowsof$19.3billioninfiscal2016representa6percentannualizedinternalgrowthrate(consolidated netinflowsdividedbybeginningofperiodconsolidatedassetsundermanagement).Forcomparison,the Companyhadconsolidatednetinflowsof$16.7billionand$2.8billioninfiscal2015and2014,respectively, representinga6percentand1percentannualizedinternalgrowthrate,respectively.Marketpriceinclinesin managedassetsincreasedconsolidatedassetsundermanagementby$5.8billioninfiscal2016.Average consolidatedassetsundermanagementof$320.9billionfortheyearendedOctober31,2016increased$17.1 billion,or6percent,fromthe$303.8billionofaverageconsolidatedassetsundermanagementforthefiscal yearendedOctober31,2015.

Thefollowingtablessummarizeourconsolidatedassetsundermanagementbyinvestmentmandate,

investmentvehicleandinvestmentaffiliateasofOctober31,2016,2015and2014.Withintheinvestment mandatetable,the“PortfolioImplementation”categoryconsistsofParametric’scustomcoreequitystrategies andcentralizedportfoliomanagementservices,andthe“ExposureManagement”categoryconsistsof Parametric’sfuturesandoptionsbasedcustomizedexposuremanagementservices.

SLIDE 23

21

ConsolidatedAssetsUnderManagementbyInvestmentMandate(1)(2)

October31,

2016 2015

%of
%of
%of

vs. vs.

(inmillions)

2016

Total

2015

Total 2014(5) Total 2015 2014

Equity(3)

$ 89,990 27% $ 90,013 29% $ 96,379 33% 0% 7%

Fixedincome(4)

60,513

18%

52,373

17%

46,062

15% 16% 14%

Floatingrateincome

32,192

10%

35,619

11%

42,009

14% 10% 15%

Alternative

10,687

3%

10,173

3%

11,241

4% 5% 10%

Portfolioimplementation

71,426

21%

59,487

19%

48,008

16% 20% 24%

Exposuremanagement

71,572

21%

63,689

21%

54,036

18% 12% 18%

Total

$ 336,380 100% $ 311,354 100% $ 297,735 100% 8% 5%

(1)ConsolidatedEatonVanceCorp.Seetableonpage25formanagedassetsandflowsof49percentownedHexavestInc.,whicharenot

(1)includedinthetableabove. (2)Assetsundermanagementforwhichweestimatefairvalueusingsignificantunobservableinputsarenotmaterialtothetotalvalueof (2)theassetswemanage. (3)Includesassetsinbalancedandmultiassetmandates.

(4)Includesassetsincashmanagementaccounts.

(5)Portfolioimplementationandexposuremanagementcategorieswerereportedasasinglecategory,implementationservices,infiscal2014.

Equityassetsundermanagementincluded$31.4billion,$31.7billionand$31.7billionofassetsmanagedfor aftertaxreturnsonOctober31,2016,2015and2014,respectively.Portfolioimplementationassetsunder managementincluded$48.5billion,$40.0billionand$34.1billionofassetsmanagedforaftertaxreturnson October31,2016,2015and2014,respectively.Fixedincomeassetsincluded$36.1billion,$30.3billionand $27.4billionofmunicipalincomeassetsonOctober31,2016,2015and2014,respectively.

SLIDE 24

22

ConsolidatedAssetsUnderManagementbyInvestmentVehicle(1)
October31,

2016 2015

%of
%of
%of

vs. vs.

(inmillions)

2016

Total

2015

Total 2014 Total 2015 2014

Openendfunds(2)

$ 74,721 22% $ 74,838 24% $ 83,176 28% 0% 10%

Privatefunds(3)

27,430

8%

26,647

8%

25,969

9% 3% 3%

Closedendfunds(4)

23,571

7%

24,449

8%

25,419

8% 4% 4%

Institutionalseparate

accountassets
136,451

41%

119,987

39%

106,443

36% 14% 13%

Highnetworthseparate

accountassets
25,806

8%

24,516

8%

22,235

7% 5% 10%

Retailmanagedseparate

accountassets
48,401

14%

40,917

13%

34,493

12% 18% 19%

Total

$ 336,380 100% $ 311,354 100% $ 297,735 100% 8% 5%

(1)ConsolidatedEatonVanceCorp.Seetableonpage25formanagedassetsandflowsof49percentownedHexavestInc.,whicharenot (1)includedinthetableabove.

(2)IncludesassetsinNextSharesfunds.
(3)Includesprivatelyofferedequity,fixedincomeandfloatingrateincomefundsandCLOentities.
(4)Includesunitinvestmenttrusts.
ThefollowingtablesummarizesourassetsundermanagementbyinvestmentaffiliateasofOctober31,2016,

2015and2014:

ConsolidatedAssetsUnderManagementbyInvestmentAffiliate(1)
YearsEndedOctober31,

2016 2015

vs.

vs.

(inmillions)

2016
2015
2014
2015

2014

EatonVanceManagement(2)

$ 143,809

$

141,415 $ 143,100

2%

1%

Parametric

174,084
152,506
136,176
14%

12%

AtlantaCapital

18,487
17,433
18,459
6%

6%

Total

$ 336,380

$

311,354 $ 297,735

8%

5%

(1)ConsolidatedEatonVanceCorp.Seetableonpage25formanagedassetsandflowsof49percentownedHexavestInc.,

(1)whicharenotincludedinthetableabove.
(2)IncludesmanagedassetsofwhollyownedsubsidiariesandEatonVancesponsoredfundsandaccountsmanaged
(1)byHexavestandunaffiliatedthirdpartyadvisersunderEatonVancesupervision.
Thefollowingtablessummarizeourconsolidatedassetsundermanagementandassetflowsbyinvestment

mandateandinvestmentvehicleforthefiscalyearsendedOctober31,2016,2015and2014:

SLIDE 25

23

ConsolidatedNetFlowsbyInvestmentMandate (1)

2016

2015

YearsEndedOctober31,
vs.

vs.

(inmillions)

2016

2015 2014

(5)

2015

2014

Equityassetsbeginningofperiod (2)

$ 90,013 $ 96,379 $ 93,585

7%

3%

Salesandotherinflows
15,337

18,082 14,473

15%

25%

Redemptions/outflows
(15,803)

(22,993) (19,099)

31%

20%

Netflows
(466)

(4,911) (4,626)

91%

6%

Exchanges
(32)

50 567

NM

(3)

91%

Marketvaluechange
475

(1,505) 6,853

NM

NM

Equityassetsendofperiod

$ 89,990 $ 90,013 $ 96,379

0%

7%

Fixedincomeassetsbeginningofperiod (4)

52,373 46,062 44,414

14%

4%

Salesandotherinflows
20,429

18,516 12,024

10%

54%

Redemptions/outflows
(13,011)

(11,325) (11,867)

15%

5%

Netflows
7,418

7,191 157

3%

NM

Exchanges
23

52 96

56%

46%

Marketvaluechange
699

(932) 1,395

NM

NM

Fixedincomeassetsendofperiod

$ 60,513 $ 52,373 $ 46,062

16%

14%

Floatingrateincomeassetsbeginningofperiod

35,619 42,009 41,821

15%

0%

Salesandotherinflows
7,237

9,336 15,669

22%

40%

Redemptions/outflows
(11,081)

(14,376) (14,742)

23%

2%

Netflows
(3,844)

(5,040) 927

24%

NM

Exchanges
(16)

(136) (145)

88%

6%

Marketvaluechange
433

(1,214) (594)

NM

104%

Floatingrateincomeassetsendofperiod

$ 32,192 $ 35,619 $ 42,009

10%

15%

Alternativeassetsbeginningofperiod

10,173 11,241 15,212

10%

26%

Salesandotherinflows
4,184

3,219 3,339

30%

4%

Redemptions/outflows
(3,474)

(3,892) (7,237)

11%

46%

Netflows
710

(673) (3,898)

NM

83%

Exchanges
(2)

24 (89)

NM

NM

Marketvaluechange
(194)

(419) 16

54%

NM

Alternativeassetsendofperiod

$ 10,687 $ 10,173 $ 11,241

5%

10%

Portfolioimplementationassetsbeginningofperiod

59,487

48,008 42,992

24%

12%

Salesandotherinflows
19,882

18,034 8,331

10%

116%

Redemptions/outflows
(10,455)

(7,217) (7,449)

45%

3%

Netflows
9,427

10,817 882

13%

NM

Exchanges
(3)

(461)

NM

NM

Marketvaluechange
2,515

662 4,595

280%

86%

Portfolioimplementationassetsendofperiod

$ 71,426 $ 59,487 $ 48,008

20%

24%

Exposuremanagementassetsendofperiod

63,689

54,036 42,645

18%

27%

Salesandotherinflows
57,988

57,586 52,914

1%

9%

Redemptions/outflows
(51,929)

(48,286) (43,604)

8%

11%

Netflows
6,059

9,300 9,310

35%

0%

Marketvaluechange
1,824

353 2,081

417%

83%

Exposuremanagementassetsendofperiod

$

71,572 $ 63,689 $ 54,036

12%

18%

Totalfundandseparateaccountassetsbeginningofperiod

311,354 297,735 280,669

5%

6%

Salesandotherinflows
125,057

124,773 106,750

0%

17%

Redemptions/outflows
(105,753)

(108,089) (103,998)

2%

4%

Netflows
19,304

16,684 2,752

16%

506%

Exchanges
(30)

(10) (32)

200%

69%

Marketvaluechange
5,752

(3,055) 14,346

NM

NM

Totalassetsundermanagementendofperiod

$ 336,380 $ 311,354 $ 297,735

8%

5%

(1)ConsolidatedEatonVanceCorp.Seetableonpage25formanagedassetsandflowsof49percentownedHexavestInc.,whicharenotincludedin

(1)thetableabove. (2)Includesassetsinbalancedaccountsholdingincomesecurities. (3)Notmeaningful("NM").

(4)Includesassetsincashmanagementaccounts.
(5)Portfolioimplementationandexposuremanagementcategorieswerereportedasasinglecategory,implementationservices,infiscal2014.

SLIDE 26

24

ConsolidatedNetFlowsbyInvestmentVehicle(1)
2016
2015
YearsEndedOctober31,
vs.

vs.

(inmillions)
2016
2015
2014
2015

2014

Fundassetsbeginningofperiod

(2)

$
125,934
$

134,564

$

133,401

6%

1%

Salesandotherinflows
29,890
32,029
35,408
7%

10%

Redemptions/outflows
(29,535)
(36,330)
(38,077)
19%

5%

Netflows
355
(4,301)
(2,669)
NM

61%

Exchanges
(94)
181
(32)
NM

NM

Marketvaluechange
(473)
(4,510)
3,864
90%

NM

Fundassetsendofperiod

$ 125,722

$

125,934

$

134,564

0%

6%

Institutionalseparateaccountassets
beginningofperiod
119,987
106,443
95,724
13%

11%

Salesandotherinflows
74,476
75,568
59,938
1%

26%

Redemptions/outflows
(62,945)
(61,569)
(54,957)
2%

12%

Netflows
11,531
13,999
4,981
18%

181%

Exchanges
420
(208)
216
NM

NM

Marketvaluechange
4,513
(247)
5,522
NM

NM

Institutionalseparateaccountassetsendofperiod

$ 136,451

$

119,987

$

106,443

14%

13%

Highnetworthseparateaccountassetsbeginningofperiod

24,516

22,235
19,699
10%

13%

Salesandotherinflows
5,832
4,816
3,532
21%

36%

Redemptions/outflows
(4,841)
(2,933)
(3,620)
65%

19%

Netflows
991
1,883
(88)
47%

NM

Exchanges
(309)
(99)
286
212%

NM

Marketvaluechange
608
497
2,338
22%

79%

Highnetworthseparateaccountassetsendofperiod

$ 25,806

$

24,516

$

22,235

5%

10%

Retailmanagedaccountassetsbeginningofperiod
40,917
34,493
31,845
19%

8%

Salesandotherinflows
14,859
12,360
7,872
20%

57%

Redemptions/outflows
(8,432)
(7,257)
(7,344)
16%

1%

Netflows
6,427
5,103
528
26%

866%

Exchanges
(47)
116
(502)
NM

NM

Marketvaluechange
1,104
1,205
2,622
8%

54%

Retailmanagedaccountassetsendofperiod

$ 48,401

$

40,917

$

34,493

18%

19%

Totalfundandseparateaccountassets
beginningofperiod
311,354
297,735
280,669
5%

6%

Salesandotherinflows
125,057
124,773
106,750
0%

17%

Redemptions/outflows
(105,753)
(108,089)
(103,998)
2%

4%

Netflows
19,304
16,684
2,752
16%

506%

Exchanges
(30)
(10)
(32)
200%

69%

Marketvaluechange
5,752
(3,055)
14,346
NM

NM

Totalassetsundermanagementendofperiod

$ 336,380

$

311,354

$

297,735

8%

5%

(1)ConsolidatedEatonVanceCorp.Seetableonpage25formanagedassetsandflowsof49percentownedHexavestInc.,whicharenotincluded
(1)inthetableabove.
(2)Includesassetsincashmanagementfunds.
AsofOctober31,2016,49percentownedaffiliateHexavestInc.(“Hexavest”)managed$13.7billionofclient

assets,adecreaseof1percentfrom$13.9billionofmanagedassetsonOctober31,2015.OtherthanEaton VancesponsoredfundsforwhichHexavestisadviserorsubadviser,themanagedassetsofHexavestarenot includedinEatonVanceconsolidatedtotals.

SLIDE 27

25 ThefollowingtablesummarizesassetsundermanagementandassetflowinformationforHexavestforthe fiscalyearsendedOctober31,2016,2015and2014:

HexavestAssetsUnderManagementandNetFlows
2016
2015
YearsEndedOctober31,
vs.
vs.

(inmillions)

2016
2015

2014

2015
2014

EatonVancedistributed:

EatonVancesponsoredfunds–beginningofperiod

(1)

$

229

$ 227 $ 211

1%
8%
Salesandotherinflows
22
22
58
NM
62%
Redemptions/outflows
(33)
(21)
(57)
57%
63%
Netflows
(11)
1
1
NM
0%
Marketvaluechange
13
1
15
NM
93%

EatonVancesponsoredfunds–endofperiod

$
231

$ 229 $ 227

1%
1%

EatonVancedistributedseparateaccounts–beginningofperiod (2)

$

2,440

$ 2,367 $ 1,574

3%
50%
Salesandotherinflows
131
535
531
76%
1%
Redemptions/outflows
(236)
(488)
(260)
52%
88%
Netflows
(105)
47
271
NM
83%
Exchanges
389
NM
NM
Marketvaluechange
157
26
133
504%
80%

EatonVancedistributedseparateaccounts–endofperiod

$
2,492

$ 2,440 $ 2,367

2%
3%

TotalEatonVancedistributed–beginningofperiod

$
2,669

$ 2,594 $ 1,785

3%
45%
Salesandotherinflows
153
557
589
73%
5%
Redemptions/outflows
(269)
(509)
(317)
47%
61%
Netflows
(116)
48
272
NM
82%
Exchanges
389
NM
NM
Marketvaluechange
170
27
148
530%
82%

TotalEatonVancedistributed–endofperiod

$
2,723

$ 2,669 $ 2,594

2%
3%

Hexavestdirectlydistributed–beginningofperiod (3)

$

11,279

$ 14,101 $ 15,136

20%
7%
Salesandotherinflows
985
786
1,637
25%
52%
Redemptions/outflows
(1,919)
(3,503)
(3,046)
45%
15%
Netflows
(934)
(2,717)
(1,409)
66%
93%
Exchanges
(389)
NM
NM
Marketvaluechange
676
(105)
763
NM
NM

Hexavestdirectlydistributed–endofperiod

$
11,021

$ 11,279 $ 14,101

2%
20%

TotalHexavestassets–beginningofperiod

$
13,948

$ 16,695 $ 16,921

16%
1%
Salesandotherinflows
1,138
1,343
2,226
15%
40%
Redemptions/outflows
(2,188)
(4,012)
(3,363)
45%
19%
Netflows
(1,050)
(2,669)
(1,137)
61%
135%
Exchanges
NM
NM
Marketvaluechange
846
(78)
911
NM
NM

TotalHexavestassets–endofperiod

$
13,744

$ 13,948 $ 16,695

1%
16%
(1)

ManagedassetsandflowsofEatonVancesponsoredpooledinvestmentvehiclesforwhichHexavestisadviserorsubadviser.EatonVance

receivesmanagementand/ordistributionrevenueontheseassets,whichareincludedintheEatonVanceconsolidatedresults.
(2)

ManagedassetsandflowsofEatonVancedistributedseparateaccountsmanagedbyHexavest.EatonVancereceivesdistributionrevenue,

butnotinvestmentadvisoryfees,ontheseassets,whicharenotincludedintheEatonVanceconsolidatedresults.
(3)

ManagedassetsandflowsofpretransactionHexavestclientsandposttransactionHexavestclientsinCanada.EatonVancereceivesno

investmentadvisoryordistributionrevenueontheseassets,whicharenotincludedintheEatonVanceconsolidatedresults.

SLIDE 28

26

Consolidatedaverageassetsundermanagementpresentedinthefollowingtablesarederivedbyaveraging

thebeginningandendingassetsofeachmonthovertheperiod.Thesetablesareintendedtoprovide informationusefulintheanalysisofourassetbasedrevenueanddistributionexpenses.Separateaccount investmentadvisoryfeesaregenerallycalculatedasapercentageofeitherbeginning,averageorending quarterlyassets.Fundinvestmentadvisory,administrative,distributionandservicefees,aswellascertain expenses,aregenerallycalculatedasapercentageofaveragedailyassets.

ConsolidatedAverageAssetsUnderManagementbyInvestmentMandate
October31,

2016

2015
vs.
vs.

(inmillions)

2016
2015
2014
2015
2014

Equity(1)

$

88,753 $ 93,413 $ 94,822

5%
1%

Fixedincome(2)

56,245
49,263
44,372
14%
11%

Floatingrateincome

32,843
38,238
43,635
14%
12%

Alternative

10,072
10,584
12,555
5%
16%

Portfolioimplementation

65,766
52,703
45,961
25%
15%

Exposuremanagement

67,181
59,569
46,861
13%
27%

Total

$ 320,860

$ 303,770 $ 288,206

6%
5%
(1)Includesassetsinbalancedandmultiassetmandates.
(2)Includesassetsincashmanagementaccounts.
ConsolidatedAverageAssetsUnderManagementbyInvestmentVehicle
2016
2015
YearsEndedOctober31,
vs.
vs.

(inmillions)

2016
2015
2014
2015
2014

Openendfunds(1)

$ 72,910 $ 79,109 $ 85,905

8%
8%

Privatefunds(2)

26,832
26,141
23,617
3%
11%

Closedendfunds(3)

23,736
24,956
25,395
5%
2%

Institutionalseparateaccountassets

128,033

112,309
99,224
14%
13%

Highnetworthseparateaccountassets

24,873

23,472
20,681
6%
13%

Retailmanagedseparateaccountassets

44,476

37,783
33,384
18%
13%

Total

$ 320,860 $ 303,770 $ 288,206

6%
5%
(1)IncludesNextSharesfunds.
(2)Includesprivatelyofferedequity,fixedincomeandfloatingrateincomefundsandCLOentities.
(3)Includesunitinvestmenttrusts.
ResultsofOperations
Inevaluatingoperatingperformance,weconsidernetincomeattributabletoEatonVanceCorp.shareholders

andearningsperdilutedshare,whicharecalculatedonabasisconsistentwithU.S.GAAP,aswellasadjusted netincomeattributabletoEatonVanceCorp.shareholdersandadjustedearningsperdilutedshare,bothof whichareinternallyderivednonU.S.GAAPperformancemeasures.

SLIDE 29

27 WedefineadjustednetincomeattributabletoEatonVanceCorp.shareholdersandadjustedearningsper dilutedshareasnetincomeattributabletoEatonVanceCorp.shareholdersandearningsperdilutedshare, respectively,adjustedtoexcludechangesintheestimatedredemptionvalueofnoncontrollinginterestsinour affiliatesredeemableatotherthanfairvalue(“noncontrollinginterestvalueadjustments”),closedendfund structuringfees,paymentstoendserviceandadditionalcompensationarrangementsinplaceforcertain EatonVanceclosedendfundsandotheritemsmanagementdeemsnonrecurringornonoperatinginnature,

rotherwiseoutsidetheordinarycourseofbusiness(suchastheimpactofspecialdividends,costsassociated

withtheextinguishmentofdebtandtaxsettlements).AdjustednetincomeattributabletoEatonVanceCorp. shareholdersandadjustedearningsperdilutedshareshouldnotbeconstruedtobeasubstitutefor,or superiorto,netincomeattributabletoEatonVanceCorp.shareholdersandearningsperdilutedshare computedinaccordancewithU.S.GAAP.WeprovidedisclosuresofadjustednetincomeattributabletoEaton VanceCorp.shareholdersandadjustedearningsperdilutedsharetoreflectthefactthatourmanagementand BoardofDirectors,aswellasourinvestors,considertheseadjustednumbersameasureoftheCompany’s underlyingoperatingperformance.ManagementbelievesadjustednetincomeattributabletoEatonVance Corp.shareholdersandadjustedearningsperdilutedshareareimportantindicatorsofouroperationsbecause theyexcludeitemsthatmaynotbeindicativeof,orareunrelatedto,ourcoreoperatingresults,andmay provideausefulbaselineforanalyzingtrendsinourunderlyingbusiness.

ThefollowingtableprovidesareconciliationofnetincomeattributabletoEatonVanceCorp.shareholdersand

earningsperdilutedsharetoadjustednetincomeattributabletoEatonVanceCorp.shareholdersandadjusted earningsperdilutedshare,respectively,forthefiscalyearsendedOctober31,2016,2015and2014:

2016
2015
YearsEndedOctober31,

vs.

vs.

(inthousands,exceptpersharedata)

2016
2015
2014
2015
2014

Netincomeattributableto

EatonVanceCorp.shareholders

$ 241,307 $ 230,299 $ 304,316

5%
24%

Noncontrollinginterestvalueadjustments(1)

200
(204)
5,311
NM
NM

Paymentstoendcertainclosedendfund

serviceandadditionalcompensation
arrangements,netoftax(2)
44,895
NM
NM

Closedendfundstructuringfees,netoftax(3)

1,401
NM
NM

Adjustednetincomeattributableto

EatonVanceCorp.shareholders

$ 242,908 $ 274,990 $ 309,627

12%
11%

Earningsperdilutedshare

$ 2.12 $ 1.92 $ 2.44

10%
21%

Noncontrollinginterestvalueadjustments

0.04
NM
NM

Paymentstoendcertainclosedendfund

serviceandadditionalcompensation
arrangements,netoftax
0.37
NM
NM

Closedendfundstructuringfees,netoftax

0.01
NM
NM

Adjustedearningsperdilutedshare

$ 2.13 $ 2.29 $ 2.48

7%
8%

SLIDE 30

28

(1)Pleaseseepage36"NetIncomeAttributabletoNoncontrollingandOtherBeneficialInterests,"forafurtherdiscussionofthe

(1)noncontrollinginterestvalueadjustmentsreferencedabove. (2)Reflectsa$73.0millionpaymenttoendcertainfundservicesandadditionalcompensationarrangementsforcertainEaton (1)Vanceclosedendfunds,netoftheassociatedimpacttotaxesof$28.1millioncalculatedusingtheCompany'seffectivetaxrate. (1)Seepage33forfurtherdiscussion. (3)Reflectsstructuringfeesof$2.3millionpaidinconnectionwiththeMay2016initialpublicofferingofEatonVanceHighIncome (1)2021TargetTermTrust,netoftheassociatedimpacttotaxesof$0.9millioncalculatedusingtheCompany'seffectivetaxrate.

The5percentincreaseinnetincomeattributabletoEatonVanceCorp.shareholdersinfiscal2016compared tofiscal2015canbeattributedprimarilytothefollowing:

Adecreaseinrevenueof$60.7million,or4percent,primarilyreflectingloweraveragemanaged

assetsinhigherfeeratefloatingrateincome,alternativeandequitymandates,partiallyoffsetby growthinlowerfeerateexposuremanagement,portfolioimplementationandladderedbond mandates.

Adecreaseinexpensesof$74.5million,or7percent,reflectinglowerdistributionfeesandservice

fees,partiallyoffsetbyincreasesincompensation,amortizationofdeferredsalescommissionsand

thercorporateexpenses.Thedecreaseindistributionexpenserelatesprincipallytothepaymentof

$73.0milliontoterminatecertainclosedendfundserviceandadditionalcompensationarrangements infiscal2015.

A$12.4millionincreaseingains(losses)andotherinvestmentincome,net,primarilyreflecting

increasesinnetgainsandinterestandotherincomerecognizedonourseedcapitalportfolio.

A$12.5millionincreaseinincomerelatedtotheCompany’sconsolidatedCLOentities.
Anincreaseinincometaxesof$10.4million,or7percent,reflectinganincreaseintheCompany’s

incomebeforetaxes.ConsolidatedCLOentityincomethatisallocatedtootherbeneficialinterest holdersisnotsubjecttotaxintheCompany’sprovision.

Adecreaseinequityinnetincomeofaffiliates,netoftax,of$1.7million,reflectingadecreaseinthe

Company’sproportionatenetinterestintheearningsofHexavestandsponsoredfundsaccountedfor undertheequitymethod.

Anincreaseinnetincomeattributabletononcontrollinginterestsof$15.6million,primarilyreflecting

anincreaseinnetincomeoftheCompany’sconsolidatedCLOentitiesthatarebornebyother beneficialinterestsandadecreaseinnetlossesattributabletononcontrollinginterestholdersinthe Company’sconsolidatedsponsoredfunds,partiallyoffsetbyadecreaseinnetincomeattributableto noncontrollinginterestholdersintheCompany’smajorityownedsubsidiaries.

Weightedaveragedilutedsharesoutstandingdecreasedby4.2millionshares,or4percent,infiscal2016

comparedtofiscal2015.Thechangereflectstheimpactofsharesrepurchasedoverthecourseofthefiscal yearandlowerdilutiveimpactofunexercisedoptions,partiallyoffsetbytheimpactofemployeestockoption exercisesandtheannualvestingofrestrictedstock.

The24percentdecreaseinnetincomeattributabletoEatonVanceCorp.shareholdersinfiscal2015compared

tofiscal2014canbeattributedprimarilytothefollowing:

Adecreaseinrevenueof$46.7million,or3percent,primarilyreflectingloweraveragemanaged

assetsinhigherfeeratefloatingrateincome,alternativeandequitymandates,partiallyoffsetby growthinlowerfeerateexposuremanagement,portfolioimplementationandfixedincome mandates.

Anincreaseinexpensesof$72.7million,or8percent,primarilyreflectingthepaymentof$73.0

milliontoterminatecertainclosedendfundserviceandadditionalcompensationarrangementsinthe

6 3

SLIDE 31

29 firstquarteroffiscal2015.Yearoveryearincreasesincompensationandothercorporateexpenses werelargelyoffsetbydecreasesinotherdistributionexpenses,includingtheamortizationofdeferred salescommissionsandservicefeeexpenses.

A$1.2milliondeclineingains(losses)andotherinvestmentincome,net,primarilyreflectingincreases

innetlossesrecognizedonourseedcapitalportfolio,offsetbyanincreaseininterestandother incomerecognizedonourseedcapitalportfolio.

A$1.7milliondeclineinincome(expense)oftheCompany’sconsolidatedCLOentities.
Adecreaseinincometaxesof$43.5million,or23percent,reflectinganincreaseintheCompany’s

incomebeforetaxes.

Adecreaseinequityinnetincomeofaffiliates,netoftax,of$4.7million,reflectingadecreaseinthe

Company’snetinterestintheearningsofsponsoredfundsaccountedforundertheequitymethod.

Adecreaseinnetincomeattributabletononcontrollinginterestsof$9.0million,reflectingadecrease

intheannualadjustmentsmadetotheestimatedredemptionvalueofnoncontrollinginterestsinthe Company’smajorityownedsubsidiariesredeemableatotherthanfairvalue,anincreaseinnetlosses recognizedbytheCompany’sconsolidatedCLOentitiesthatarebornebyotherbeneficialinterests andanincreaseinnetlossesattributabletononcontrollinginterestholdersintheCompany’s majorityownedsubsidiaries,offsetbyanincreaseinnetincomeattributabletononcontrolling interestholdersintheCompany’sconsolidatedsponsoredfunds.

Weightedaveragedilutedsharesoutstandingdecreasedby3.4millionshares,or3percent,infiscal2015

comparedtofiscal2014.Thechangereflectstheimpactofsharesrepurchasedoverthecourseofthefiscal year,partiallyoffsetbytheimpactofemployeestockoptionexercisesandtheannualvestingofrestricted stock.

Revenue
Ourrevenuedeclinedby4percentinfiscal2016,reflectinglowerinvestmentadvisoryandadministrativefees,

distributionandunderwriterfees,servicefeesandotherrevenue.Feerevenuedeclineddespitea6percent increaseinaverageconsolidatedassetsundermanagement,astherevenueimpactofgrowthinlowerfeerate exposuremanagement,portfolioimplementationandfixedincomemandateswasmorethanoffsetbylower averagemanagedassetsinhigherfeeratefloatingrateincome,alternativeandequitymandates.

Thefollowingtableshowsourinvestmentadvisoryandadministrativefees,distributionandunderwriterfees,

servicefeesandotherrevenueforthefiscalyearsendedOctober31,2016,2015and2014:

2016

2015

YearsEndedOctober31,

vs. vs. (inthousands)

2016
2015
2014

2015 2014 Investmentadvisoryand

administrativefees

$ 1,151,198 $ 1,196,866 $ 1,231,188 4% 3% Distributionandunderwriterfees

74,822
80,815
85,514

7% 5% Servicefees

107,684
116,448
125,713

8% 7% Otherrevenue

9,156
9,434
7,879

3% 20% Totalrevenue $ 1,342,860 $ 1,403,563 $ 1,450,294 4% 3%

SLIDE 32

30

Investmentadvisoryandadministrativefees

Thedecreaseininvestmentadvisoryandadministrativefeesof4percentinfiscal2016and3percentinfiscal 2015canbeattributedprimarilytothelossofassetsinhigherfeeinvestmentmandates.Ouraverage annualizedeffectiveinvestmentadvisoryandadministrativefeerate,excludingperformancebasedfees, declinedto35.8basispointsinfiscal2016from39.3basispointsinfiscal2015and42.4basispointsinfiscal 2014.

Averageannualizedeffectiveinvestmentadvisoryandadministrativefeerates,excludingperformancebased

fees,forthefiscalyearsendedOctober31,2016,2015and2014byinvestmentmandatewereasfollows:

2016

2015

YearsEndedOctober31,

vs. vs. (inbasispointsonaveragemanagedassets)

2016
2015
2014

2015 2014 Equity

62.8
64.1
64.6

2% 1% Fixedincome

39.9
42.8
44.8

7% 4% Floatingrateincome

51.8
53.2
54.2

3% 2% Alternatives

63.1
62.8
62.2

0% 1% Portfolioimplementation

14.9
15.5
15.7

4% 1% Exposuremanagement

5.1
5.4
5.3

7% 2% Averageeffectiveinvestmentadvisory

andadministrativefeerate
35.8
39.3
42.4

9% 7% Averageassetsundermanagementbyinvestmentmandatetowhichthesefeeratesapplycanbefoundinthe table“ConsolidatedAverageAssetsUnderManagementbyInvestmentMandate”onpage26.

Performancebasedfeeswere$3.4million,$3.7millionand$8.3millioninfiscal2016,2015and2014,

respectively.

Distributionandunderwriterfees

Distributionfees,whichareearnedundercontractualagreementswithcertainsponsoredfunds,arecalculated asapercentageof,andfluctuatewith,averageassetsundermanagementoftheapplicablefundsandfund shareclasses.Underwriterfeesandotherdistributionincomeincludesunderwritercommissionsearnedon salesoffundshareclassessubjecttothosefees,contingentdeferredsaleschargesreceivedoncertainClassA redemptions,unitinvestmenttrustsaleschargesandfundraisingandservicingfeesassociatedwithTheU.S. CharitableGiftTrust.

Distributionfees,underwriterfeesandotherdistributionincomeforthefiscalyearsendedOctober31,2016,

2015and2014wereasfollows:

SLIDE 33

31

2016

2015

YearsEndedOctober31,

vs. vs. (inthousands)

2016
2015
2014

2015 2014 Distributionfees:

ClassA

$ 646 $ 876 $ 1,241 26% 29% ClassB

1,338
2,173
3,540

38% 39% ClassC

60,031
64,809
67,739

7% 4% ClassN

78
136
273

43% 50% ClassR

1,361
1,208
1,030

13% 17% Privatefunds

4,382
4,267
3,874

3% 10% Totaldistributionfees $ 67,836 $ 73,469 $ 77,697 8% 5% Underwriterfees

2,763
2,745
2,924

1% 6% Otherdistributionincome

4,223
4,601
4,893

8% 6% Totaldistributionandunderwriterfees $ 74,822 $ 80,815 $ 85,514 7% 5%

Servicefees

Servicefees,whicharepaidtoEVDpursuanttodistributionorserviceplansadoptedbyoursponsoredmutual funds,arecalculatedasapercentof,andfluctuatewith,averageassetsundermanagementinspecificmutual fundshareclasses(principallyClassesA,B,C,NandR).Certainprivatefundsalsomakeservicefeepayments toEVD.

Servicefeerevenuedecreased8percentand7percentinfiscal2016and2015,respectively,primarily

reflectingadecreaseinaverageassetsundermanagementincertainclassesoffundssubjecttoservicefees.

Otherrevenue

Otherrevenue,whichconsistsprimarilyofsubtransferagentfees,miscellaneousdealerincome,custodyfees, Hexavestrelateddistributionandservicerevenueandsubleaseincome,decreased3percentinfiscal2016, primarilyreflectinglowersubleaserevenue.Otherrevenueincreased20percentinfiscal2015,primarily reflectinganincreaseinHexavestrelateddistributionandservicerevenue.

Expenses
Operatingexpensesdecreased7percentinfiscal2016fromfiscal2015,reflectinglowerdistributionexpenses,

partiallyoffsetbyincreasesincompensationcosts,amortizationofdeferredsalescommissionsandother expenses.Includedindistributionexpenseforfiscal2015isaonetimepaymentof$73.0milliontoterminate certainclosedendfundserviceandadditionalcompensationarrangementswithadistributionpartner. ExpensesinconnectionwiththeCompany’sNextSharesinitiativetotaledapproximately$8.0millioninfiscal 2016,anincreaseof8percentfrom$7.4millioninfiscal2015.

ThefollowingtableshowsouroperatingexpensesforthefiscalyearsendedOctober31,2016,2015and2014:

SLIDE 34

32

2016

2015

YearsEndedOctober31,

vs. vs. (inthousands) 2016

2015
2014
2015

2014 Compensationandrelated

costs:
Cashcompensation

$ 419,515 $ 414,307 $ 400,890

1%

3% Stockbasedcompensation 71,600

69,520
60,548
3%

15% Totalcompensation

andrelatedcosts
491,115
483,827
461,438
2%

5% Distributionexpense 117,996

198,155
141,544
40%

40% Servicefeeexpense 98,494

106,663
116,620
8%

9% Amortizationofdeferredsales

commissions

15,451

14,972
17,590
3%

15% Fundrelatedexpenses 35,899

35,886
35,415
0%

1% Otherexpenses 169,637

163,613
157,830
4%

4% Totalexpenses $ 928,592 $ 1,003,116 $ 930,437

7%

8%

Compensationandrelatedcosts

ThefollowingtableshowsourcompensationandrelatedcostsforthefiscalyearsendedOctober31,2016, 2015and2014:

2016

2015

YearsEndedOctober31,

vs. vs. (inthousands)

2016
2015
2014

2015 2014 Basesalariesandemployeebenefits $ 226,463 $ 217,289 $ 204,935 4% 6% Operatingincomebasedincentives

131,250
134,052
137,563

2% 3% Salesincentives

55,550
57,716
54,989

4% 5% Othercompensationexpense

6,252
5,250
3,403

19% 54% Totalcashcompensation

419,515
414,307
400,890

1% 3% Stockbasedcompensation

71,600
69,520
60,548

3% 15% Total $ 491,115 $ 483,827 $ 461,438 2% 5% Theincreaseinbasesalariesandemployeebenefitsinfiscal2016reflectsa4percentincreaseinheadcount, annualmeritincreasesandacorrespondingincreaseinemployeebenefits.Thedecreaseinoperatingincome basedincentivesinfiscal2016reflectslowerprebonusadjustedoperatingincome.Thedecreaseinsales incentivesinfiscal2016reflectsadecreaseincompensationeligiblesales.Othercompensationexpense increasedduetocompensationexpenseassociatedwithemployeerecruitingandterminations.Theincreasein stockbasedcompensationinfiscal2016primarilyreflectstheincreaseinannualstockbasedcompensation awardsassociatedwiththeincreaseinheadcount.

Theincreaseinbasesalariesandemployeebenefitsinfiscal2015primarilyreflectsa4percentincreasein

headcountandannualmeritincreases.Thedecreaseinoperatingincomebasedincentivesinfiscal2015 reflectslowerprebonusadjustedoperatingincome.Theincreaseinsalesincentivesinfiscal2015reflectsan increaseincompensationeligiblesales.Othercompensationexpenseincreasedduetohigherseverancecosts,

SLIDE 35

33 primarilyassociatedwithclosingourNewJerseybasedaffiliateFoxAssetManagementLLC(“FoxAsset Management”),aswellasadditionalcompensationexpenseassociatedwiththeexpansionofourglobal investmentteamsinLondon.Theincreaseinstockbasedcompensationinfiscal2015reflectstheincreasein annualstockbasedcompensationawardsassociatedwiththeincreaseinheadcountandtheimpactofcertain employeeretirementsandterminations.

Distributionexpense

DistributionexpenseconsistsprimarilyofcommissionspaidtobrokerdealersonthesaleofClassAsharesat netassetvalue,ongoingassetbasedpaymentsmadetodistributionpartnerspursuanttothirdparty distributionarrangementsforClassCsharesandcertainclosedendfunds,marketingsupportarrangementsto distributionpartnersandotherdiscretionarymarketingexpenses.

ThefollowingtableshowsourdistributionexpenseforthefiscalyearsendedOctober31,2016,2015and

2014:

2016

2015

YearsEndedOctober31,

vs. vs. (inthousands)

2016
2015
2014

2015 2014 ClassAsharecommissions $ 2,064 $ 2,628 $ 4,264 21% 38% ClassCsharedistributionfees

50,324
53,462
54,423

6% 2% Closedendfundstructuringfees

2,291
NM

NM Paymentstoendcertainfundserviceand

additionalcompensationarrangements
73,000
NM

NM Closedendfunddealercompensationpayments

3,836
6,575
18,833

42% 65% Intermediarymarketingsupportpayments

40,308
41,901
46,950

4% 11% NextSharesdistributionexpenses

35
NM

NM Discretionarymarketingexpenses

19,138
20,589
17,074

7% 21% Total $ 117,996 $ 198,155 $ 141,544 40% 40% ClassAsharecommissionsdecreasedinfiscal2016andfiscal2015,inbothcasesreflectingadecreaseinClass Asalesonwhichwepaycommissions.ClassCsharedistributionfeesalsodecreasedinfiscal2016andfiscal 2015,reflectingdeclinesinClassCshareassetsheldmorethanoneyear.Closedendfundstructuringfeesin fiscal2016reflectpaymentsmadeinconjunctionwiththeMay2016initialpublicofferingoftheEatonVance HighIncome2021TargetTermTrust.Expensesforfiscal2015includeaonetimepaymentof$73.0millionin fiscal2015toterminatecertainclosedendfundserviceandadditionalcompensationarrangementswitha distributionpartnerpursuanttowhichwewereobligatedtomakerecurringpaymentsovertimebasedonthe assetsoftheclosedendfundscoveredbythearrangements.Closedendfunddealercompensationpayments decreasedinbothfiscal2016and2015,reflectingtheabovedescribedterminationoffundserviceand additionalcompensationarrangements.Thedecreaseinintermediarymarketingsupportpaymentsto distributionpartnersinbothfiscal2016and2015reflectsloweraverageassetssubjecttothosearrangements. Thedecreaseindiscretionarymarketingexpensesinfiscal2016reflectslowerspendingonadvertisingand marketingcommunications;theincreaseinfiscal2015reflectsanincreaseintheuseofoutsideagenciesin supportofNextSharesandotherstrategicinitiatives.

SLIDE 36

34

Servicefeeexpense

Servicefeeswereceivefromsponsoredfundsaregenerallyretainedinthefirstyearandpaidtobroker dealersthereafterpursuanttothirdpartysellingagreements.Thesefeesarecalculatedasapercentof averageassetsundermanagementincertainshareclassesofourmutualfunds(principallyClassesA,B,C,N andR),aswellascertainprivatefunds.Servicefeeexpensedecreasedby8percentinfiscal2016and9 percentinfiscal2015,reflectingloweraveragefundassetsretainedmorethanoneyearinfundsandshare classesthataresubjecttoservicefees.

Amortizationofdeferredsalescommissions

AmortizationexpenseisaffectedbyongoingsalesandredemptionsofmutualfundClassCsharesandcertain privatefundsandredemptionsofClassBshares.Amortizationexpenseincreased3percentinfiscal2016, reflectinganincreaseindeferredsalescommissionsrelatedtoprivatelyofferedequityfunds,partiallyoffset byadecreaseinaverageClassBsharesandClassCsharesdeferredsalescommissions.Amortizationexpense decreased15percentinfiscal2015,asloweraverageClassBsharesandClassCsharesdeferredsales commissionsmorethanoffsetanincreaseindeferredsalescommissionsrelatedtoprivatelyofferedequity funds.Infiscal2016,4percentoftotalamortizationexpenserelatedtoClassBshares,61percenttoClassC sharesand35percenttoprivatelyofferedequityfunds.Infiscal2015,8percentoftotalamortizationexpense relatedtoClassBshares,70percenttoClassCsharesand22percenttoprivatelyofferedequityfunds.

Fundrelatedexpenses

Fundrelatedexpensesconsistprimarilyoffeespaidtosubadvisers,compliancecostsandotherfundrelated expensesweincur.Fundrelatedexpensesweresubstantiallyunchangedinfiscal2016andincreased1percent infiscal2015,primarilyreflectinganincreaseinotherfundrelatedexpensesbornebytheCompanyonfunds inwhichitearnsanallinfee,partiallyoffsetbydecreasesinsubadvisoryexpensesandfundsubsidies.

Otherexpenses

ThefollowingtableshowsourotherexpenseforthefiscalyearsendedOctober31,2016,2015and2014:

2016

2015

YearsEndedOctober31,

vs. vs. (inthousands)

2016
2015
2014

2015 2014 Informationtechnology $ 72,718 $ 67,834 $ 64,051 7% 6% Facilitiesrelated

40,806
40,771
38,761

0% 5% Travel

16,663
16,360
16,480

2% 1% Professionalservices

13,331
13,854
12,065

4% 15% Communications

5,081
5,272
5,250

4% 0% Othercorporateexpense

21,038
19,522
21,223

8% 8% Total $ 169,637 $ 163,613 $ 157,830 4% 4%

Theincreaseininformationtechnologyexpenseinfiscal2016canbeattributedprimarilytoincreasesin

projectrelatedconsultingandsoftwaremaintenancefees.Theincreaseintravelexpenserelatestoan increaseintravelactivity.Thedecreaseinprofessionalservicesexpensecanbeattributedprimarilytoa decreaseincorporateconsultingengagementsandexternallegalcosts.Thedecreaseincommunications reflectsareductioninexpensesprimarilyrelatedtoshareholdercommunications.Theincreaseinother corporateexpensesprimarilyreflectsanincreaseinothercorporatetaxes.

SLIDE 37

35 Theincreaseininformationtechnologyexpenseinfiscal2015canbeattributedprimarilytoincreasesin softwaremaintenancefees,marketdatacostsandprojectrelatedconsultingassociatedwithbudgeted technologyprojects.Theincreaseinfacilitiesrelatedexpensescanbeattributedprimarilytoanincreasein rentanddepreciationexpense.Thedecreaseintravelexpenserelatestoadecreaseintravelactivity.The increaseinprofessionalservicesexpensecanbeattributedprimarilytoanincreaseincorporateconsulting engagements(includingengagementsrelatedtoourNextSharesinitiative)andexternallegalcosts.The decreaseinothercorporateexpensesreflectsadecreaseinothercorporatetaxesoffsetbyincreasesin amortizationofintangibleassetsrelatedtoclosingFoxAssetManagement,andhighercorporatemembership andprofessionaldevelopmentexpenses.

NonoperatingIncome(Expense)

Themaincategoriesofnonoperatingincome(expense)forthefiscalyearsendedOctober31,2016,2015and 2014areasfollows:

2016

2015

YearsEndedOctober31,

vs. vs. (inthousands)

2016
2015
2014
2015

2014 Gains(losses)andotherinvestment

income,net

$ 12,411 $ (31) $ 1,139

NM

NM Interestexpense

(29,410)
(29,357)
(29,892)
0%

2% Otherincome(expense)of

consolidatedCLOentities:
Gainsandotherinvestmentincome,net

24,069

5,092
14,892
373%

66% Interestandotherexpense

(13,286)
(6,767)
(14,847)
96%

54% Totalnonoperatingexpense $ (6,216) $ (31,063) $ (28,708)

80%

8% Gains(losses)andotherinvestmentincome,net,improvedby$12.4millioninfiscal2016comparedtofiscal 2015,reflectingincreasesinnetinvestmentgains,interestincomeandforeigncurrencygainsof$9.0million, $2.2millionand$1.2million,respectively.Infiscal2016,werecognized$0.1millionofnetlossesrelatedto

urseedinvestmentsandassociatedhedges,comparedto$9.2millionofnetlossesinfiscal2015.
Gains(losses)andotherinvestmentincome,net,declinedby$1.2millioninfiscal2015comparedtofiscal

2014,primarilyreflectingincreasesinnetinvestmentandforeigncurrencylossesof$2.2millionand$0.1 million,respectively,offsetbyanincreaseof$1.2millionininterestincomeearned.Infiscal2015we recognized$9.2millionofnetlossesrelatedtoourseedinvestmentsandassociatedhedges,comparedto$6.9 millionofnetlossesinfiscal2014.

Interestexpensewassubstantiallyunchangedinfiscal2016comparedtofiscal2015andfiscal2014.
Netgains(losses)ofconsolidatedCLOentitieswere$10.6million,$(1.7million)and$(0.3million)infiscal

2016,2015and2014,respectively.Approximately$9.8million,$(5.8million)and$(4.1million)ofconsolidated CLOentities’gains(losses)wereincludedinnetincomeattributabletononcontrollingandotherbeneficial interestsduringfiscal2016,2015and2014,respectively,reflectingthirdpartynoteholders’proportionate interestsinthenetincome(loss)ofeachconsolidatedCLOentity.NetincomeattributabletoEatonVance Corp.shareholdersincluded$0.8million,$4.1millionand$3.8millionofincomeassociatedwiththe consolidatedCLOentitiesforfiscal2016,2015and2014,respectively,representingmanagementfeesearned

SLIDE 38

36

bytheCompanyoffsetbytheCompany’sproportionateinterestinnetgains(losses)oftheconsolidatedCLO

entities.

IncomeTaxes
Oureffectivetaxrate,calculatedasincometaxesasapercentageofincomebeforeincometaxesandequityin

netincomeofaffiliates,was37.6percent,38.8percentand38.0percentinfiscal2016,2015and2014, respectively.

Ourpolicyforaccountingforincometaxesincludesmonitoringourbusinessactivitiesandtaxpoliciesfor

compliancewithfederal,stateandforeigntaxlaws.Intheordinarycourseofbusiness,varioustaxing authoritiesmaynotagreewithcertaintaxpositionswehavetaken,orapplicablelawmaynotbeclear.We periodicallyreviewthesetaxpositionsandprovideforandadjustasnecessaryestimatedliabilitiesrelatingto suchpositionsaspartofouroveralltaxprovision.

EquityinNetIncomeofAffiliates,NetofTax
Equityinnetincomeofaffiliates,netoftax,primarilyreflectsour49percentequityinterestinHexavest,our

sevenpercentminorityequityinterestinaprivateequitypartnershipmanagedbyathirdpartyandequity interestsincertainfundswesponsorormanage.

Thefollowingtablesummarizesthecomponentsofequityinnetincomeofaffiliates,netoftax,forthefiscal

yearsendedOctober31,2016,2015and2014:

2016

2015 YearsEndedOctober31, vs. vs. (inthousands)

2016
2015
2014

2015 2014 InvestmentinHexavest,netoftax

andamortization

$ 9,979 $ 10,857 $ 10,963 8% 1% Investmentinprivateequitypartnership,

netoftax
356
849
517

58% 64% Investmentinsponsoredfunds,netoftax

315
5,245

NM 94% Total $ 10,335 $ 12,021 $ 16,725 14% 28% NetIncomeAttributabletoNoncontrollingandOtherBeneficialInterests

Thefollowingtablesummarizesthecomponentsofnetincomeattributabletononcontrollingandother

beneficialinterestsforthefiscalyearsendedOctober31,2016,2015and2014:

SLIDE 39

37

2016

2015

YearsEndedOctober31,

vs. vs.

(inthousands)

2016
2015
2014

2015 2014

Consolidatedsponsoredfunds

$ 43 $ 1,752 $ 318 98% 451%

Majorityownedsubsidiaries

(13,525)
(15,673)
(15,950)

14% 2%

Noncontrollinginterestvalueadjustments(1)

(200)
204
(5,311)

NM NM

ConsolidatedCLOentities

(9,768)
5,825
4,095

NM 42%

Netincomeattributabletononcontrolling

andotherbeneficialinterests

$ (23,450) $ (7,892) $ (16,848) 197% 53%

(1)Relatestononcontrollinginterestsredeemableatotherthanfairvalue.
Netincomeattributabletononcontrollingandotherbeneficialinterestsisnotadjustedfortaxesduetothe

underlyingtaxstatusofourconsolidatedsubsidiaries,whicharetreatedaspartnershipsorotherpassthrough entitiesfortaxpurposes.FundsandtheCLOentitiesweconsolidateareregisteredinvestmentcompaniesor privatefundsthataretreatedaspassthroughentitiesfortaxpurposes.

Infiscal2016andfiscal2015,noncontrollinginterestvalueadjustmentsreflectchangesintheestimated

redemptionvalueofnoncontrollinginterestsinAtlantaCapital.

Infiscal2014,increasesintheestimatedredemptionvalueofnoncontrollinginterestsinParametricRisk

AdvisorsandAtlantaCapitalredeemableatotherthanfairvaluewere$1.3millionand$4.0million, respectively.

ChangesinFinancialCondition,LiquidityandCapitalResources
TheassetsandliabilitiesofourconsolidatedCLOentitiesdonotaffectourliquidityorcapitalresources.The

collateralassetsofourconsolidatedCLOentitiesareheldsolelytosatisfytheobligationsoftheseentitiesand wehavenorighttotheseassetsbeyondourdirectinvestmentin,andmanagementfeesgeneratedfrom, theseentities.ThenoteholdersoftheseentitieshavenorecoursetothegeneralcreditoftheCompany.Asa result,theassetsandliabilitiesofourconsolidatedCLOentitiesareexcludedfromthediscussionofliquidity andcapitalresourcesbelow.

Thefollowingtablesummarizescertainkeyfinancialdatarelatingtoourliquidityandcapitalresourceson

October31,2016,2015and2014andusesofcashfortheyearsthenended:

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38

BalanceSheetandCashFlowData
AsofOctober31,

(inthousands)

2016
2015

2014

Balancesheetdata:
Assets:
Cashandcashequivalents

$ 424,174

$

465,558 $ 385,215

Investmentadvisoryfeesandotherreceivables
186,172
187,753

186,344

Totalliquidassets

$ 610,346

$

653,311 $ 571,559

Investments

$ 589,773

$

507,020 $ 624,605

Liabilities:
Debt

$ 573,967

$

573,811 $ 573,655

YearsEndedOctober31,

(inthousands)

2016
2015

2014

Cashflowdata:
Operatingcashflows

$ 340,549

$

219,867 $ 98,785

Investingcashflows
(108,278)
84,266

185,460

Financingcashflows
(270,199)
(221,446)

(359,378)

LiquidityandCapitalResources
Liquidassetsconsistofcashandcashequivalentsandinvestmentadvisoryfeesandotherreceivables.Cash

andcashequivalentsconsistofcashandshortterm,highlyliquidinvestmentsthatarereadilyconvertibleto cash.Investmentadvisoryfeesandotherreceivablesprimarilyrepresentreceivablesduefromsponsored fundsandseparatelymanagedaccountsforinvestmentadvisoryanddistributionservicesprovided.Liquid assetsrepresented35percentand40percentoftotalassetsonOctober31,2016and2015,respectively, excludingthoseassetsidentifiedasassetsofconsolidatedCLOentities.Notincludedintheliquidasset amountsare$85.8millionand$77.4millionofhighlyliquidshorttermdebtsecuritieswithremaining maturitiesbetweenthreeand12monthsheldasofOctober31,2016and2015,respectively,whichare includedwithininvestmentsonourConsolidatedBalanceSheets.Ourseedinvestmentsinconsolidatedfunds andseparateaccountsarenottreatedasliquidassetsbecausetheymaybelongerterminnature.

The$43.0milliondecreaseinliquidassetsinfiscal2016primarilyreflectstherepurchaseof$253.0millionof

NonVotingCommonStock,thepaymentof$118.6millionofdividendstoshareholders,$82.6millionfromthe investingandfinancingactivitiesofconsolidatedCLOentities,thepaymentof$15.7milliontoacquire additionalinterestsinAtlantaCapitalandParametric,a$10.1millioncontingentpaymentrelatedtothe Company’sacquisitionoftheTaxAdvantagedBondStrategies(“TABS”)business,theadditionof$10.7million inequipmentandleaseholdimprovementsandtheissuanceofa$5.0millionnotereceivabletoouraffiliate Hexavest,offsetbynetcashprovidedbyoperatingactivitiesof$340.6million,proceedsfromtheissuanceof NonVotingCommonStockof$110.4millioninconnectionwiththeexerciseofemployeestockoptionsand

theremployeestockpurchases,andexcesstaxbenefitsof$2.9millionassociatedwithstockoptionexercises.

SLIDE 41

39 The$81.8millionincreaseinliquidassetsinfiscal2015primarilyreflectsnetcashprovidedbyoperating activitiesof$219.9million,netproceedsfromsalesandpurchasesofavailableforsalesecuritiesof$59.4 million,proceedsfromtheissuanceofNonVotingCommonStockof$89.7millioninconnectionwiththe exerciseofemployeestockoptionsandotheremployeestockpurchases,excesstaxbenefitsof$10.0million associatedwithstockoptionexercisesand$149.2millionfromtheinvestingandfinancingactivitiesof consolidatedCLOentities,offsetbythepaymentof$116.0millionofdividendstoshareholders,the repurchaseof$283.4millionofNonVotingCommonStock,thepaymentof$20.0milliontoacquireadditional interestsinAtlantaCapitalandParametric,a$9.1millioncontingentpaymentrelatedtotheCompany’s acquisitionoftheTABSbusinessandtheadditionof$11.5millioninequipmentandleaseholdimprovements.

Ourdebtconsistsof$250millioninaggregateprincipalamountof6.5percentSeniorNotesdueinOctober

2017and$325millioninaggregateprincipalamountof3.625percentSeniorNotesdueinJune2023. The Companycurrentlyintendstoseekrefinancingofthe$250millioninseniornotesdueinOctober2017priorto maturityofthosenotes.Intheeventthatthenotesarenotrefinanced,itistheCompany’sintenttoretirethe notesusingexistingliquidassets.

Wemaintaina$300millionunsecuredrevolvingcreditfacilitywithseveralbanksthatexpiresonOctober21,

2019.ThefacilityprovidesthatwemayborrowatLIBORbasedratesofinterestthatvarydependingonthe levelofusageofthefacilityandourcreditratings.Theagreementcontainsfinancialcovenantswithrespectto leverageandinterestcoverageandrequiresustopayanannualfacilityfeeonanyunusedportion.Wehadno borrowingsunderourrevolvingcreditfacilityatOctober31,2016oratanypointduringthefiscalyear.We wereincompliancewithalldebtcovenantsasofOctober31,2016.

Wecontinuetomonitorourliquiditydaily.Weremaincommittedtogrowingourbusinessandreturning

capitaltoshareholders.Weexpectthatourmainusesofcashwillbepayingdividends,acquiringsharesofour NonVotingCommonStock,makingseedinvestmentsinnewproductsandstrategicacquisitions,enhancing

urtechnologyinfrastructureandpayingtheoperatingexpensesofourbusiness,whicharelargelyvariablein

natureandfluctuatewithrevenueandassetsundermanagement.Webelievethatourexistingliquidassets, cashflowsfromoperationsandborrowingcapacityunderourexistingcreditfacilityaresufficienttomeetour currentandforecastedoperatingcashneeds.Theriskexists,however,thatifweneedtoraiseadditional capitalorrefinanceexistingdebtinthefuture,resourcesmaynotbeavailabletousinsufficientamountsoron acceptableterms.Ourabilitytoenterthecapitalmarketsinatimelymannerdependsonanumberoffactors, includingthestateofglobalcreditandequitymarkets,interestrates,creditspreadsandourcreditratings.If weareunabletoaccesscapitalmarketstoissuenewdebt,refinanceexistingdebtorsellsharesofourNon VotingCommonStockasneeded,orifweareunabletoobtainsuchfinancingonacceptableterms,our businesscouldbeadverselyaffected.

RecoverabilityofourInvestments
Our$589.8millionofinvestmentsasofOctober31,2016consistedofour49percentequityinterestin

Hexavest,positionsinCompanysponsoredfundsandseparateaccountsenteredintoforinvestmentand businessdevelopmentpurposes,andcertainotherinvestmentshelddirectlybytheCompany.Investmentsin CompanysponsoredfundsandseparateaccountsanddirectinvestmentsbytheCompanyaregenerallyin liquiddebtorequitysecuritiesandarecarriedatfairmarketvalue.Wetestourinvestments,otherthan equitymethodinvestments,forimpairmentonaquarterlybasis.Weevaluateourinvestmentsinnon consolidatedCLOentitiesandinvestmentsclassifiedasavailableforsaleforimpairmentusingquantitative factors,includinghowlongtheinvestmenthasbeeninanetunrealizedlossposition,andqualitativefactors, includingthecreditqualityoftheunderlyingissuerandourabilityandintenttocontinueholdingthe

SLIDE 42

40

investment.Ifmarketsdeteriorateinthequartersahead,ourassessmentofimpairmentonaquantitative

basismayleadustoimpairinvestmentsinfuturequartersthatwereinanunrealizedlosspositionatOctober 31,2016.

Wetestourinvestmentsinequitymethodinvestees,goodwillandindefinitelivedintangibleassetsinthe

fourthquarterofeachfiscalyear,orasfactsandcircumstancesindicatethatadditionalanalysisiswarranted. Therehavebeennosignificantchangesinfinancialconditioninfiscal2016thatwouldindicatethatan impairmentlossexistsatOctober31,2016.

Weperiodicallyreviewourdeferredsalescommissionsandidentifiableintangibleassetsforimpairmentas

eventsorchangesincircumstancesindicatethatthecarryingamountofsuchassetsmaynotberecoverable. Therehavebeennosignificantchangesinfinancialconditioninfiscal2016thatwouldindicatethatan impairmentlossexistsatOctober31,2016.

OperatingCashFlows
Ouroperatingcashflowsarecalculatedbyadjustingnetincometoreflectothersignificantsourcesandusesof

cash,certainsignificantnoncashitemsandtimingdifferencesinthecashsettlementofotherassetsand liabilities.Significantsourcesandusesofcashthatarenotreflectedineitherrevenueorexpensesincludenet cashflowsassociatedwithourdeferredsalescommissionassets(capitalizedsalescommissionspaidnetof contingentdeferredsaleschargesreceived),aswellasnetcashflowsassociatedwiththepurchaseandsaleof investmentswithintheportfoliosofourconsolidatedsponsoredfundsandseparateaccounts(proceeds receivedfromthesaleoftradinginvestmentsnetofcashoutflowsassociatedwiththepurchaseoftrading investments).Significantnoncashitemsincludetheamortizationofdeferredsalescommissionsandintangible assets,depreciation,stockbasedcompensationandnetchangeindeferredincometaxes.

Cashprovidedbyoperatingactivitiestotaled$340.5millioninfiscal2016,anincreaseof$120.7millionfrom

$219.9millioninfiscal2015.Theincreaseinnetcashprovidedbyoperatingactivitiesprimarilyreflectsan increaseinthecashprovidedbytheoperatingactivitiesofourconsolidatedCLOentitiesandincreasesinthe timingdifferencesinthecashsettlementofotherassetsandliabilities,offsetbyanincreaseinnetpurchases

ftradingsecurities.
Cashprovidedbyoperatingactivitiestotaled$219.9millioninfiscal2015,anincreaseof$121.1millionfrom

$98.8millioninfiscal2014.Theincreaseinnetcashprovidedbyoperatingactivitiesprimarilyreflectsan increaseinthenetsalesoftradingsecuritiesandanincreaseinthetimingdifferencesinthecashsettlementof

therassetsandliabilities,offsetbyanincreaseinthenetcashusedintheoperatingactivitiesofour

consolidatedCLOentities.

InvestingCashFlows
Cashflowsfrominvestingactivitiesconsistprimarilyofthepurchaseofequipmentandleasehold

improvements,cashpaidinacquisitionsandthepurchaseandsaleofavailableforsaleinvestmentsin sponsoredfundsthatwedonotconsolidate.

Cashusedforinvestingactivitiestotaled$108.3millioninfiscal2016comparedtocashprovidedbyinvesting

activitiesof$84.3millioninfiscal2015.Thechangeincashprovidedby(usedfor)investingactivitiescanbe attributedprimarilytoadecreaseof$128.1millioninthenetproceedsfromthesalesofconsolidatedCLO entityinvestments,adecreaseof$59.2millioninthenetproceedsfromthesalesandpurchasesofavailable

SLIDE 43

41 forsalesecurities,theissuanceofa$5.0millionnotereceivabletoHexavestandanincreaseof$1.0millionin paymenttosellersoftheTABSbusinessinfiscal2016.

Cashprovidedbyinvestingactivitiestotaled$84.3millioninfiscal2015comparedto$185.5millioninfiscal

2014.Thedecreaseincashprovidedbyinvestingactivitiescanbeattributedprimarilytoa$9.1million paymenttosellersoftheTABSbusinessinfiscal2015,offsetbyadecreaseof$8.6millioninthenetproceeds fromthesalesandpurchasesofavailableforsalesecuritiesandadecreaseof$79.6millioninthenet proceedsfromthesalesofconsolidatedCLOentityinvestments.

FinancingCashFlows
Financingcashflowsprimarilyreflectdistributionstononcontrollinginterestholdersofourmajorityowned

subsidiariesandconsolidatedfunds,thepurchaseofadditionalnoncontrollinginterestsinourmajority

wnedsubsidiaries,theissuanceandrepurchaseofourNonVotingCommonStock,excesstaxbenefits

associatedwithstockoptionexercises,thepaymentofdividendstoourshareholdersandtheproceedsand paymentsassociatedwiththeCompany’sdebt.Financingcashflowsalsoincludeproceedsfromtheissuance

fcapitalstockbyconsolidatedfundsandcashpaidtomeetredemptionsbynoncontrollinginterestholders
fthesefunds.
Cashusedforfinancingactivitiestotaled$270.2million,$221.4millionand$359.4millioninfiscal2016,2015

and2014,respectively.Infiscal2016,wepaid$15.7milliontoacquireadditionalinterestsinAtlantaCapital andParametric,repurchasedandretiredapproximately7.3millionsharesofourNonVotingCommonStock for$253.0millionunderourauthorizedrepurchaseprogramsandissued5.4millionsharesofourNonVoting CommonStockinconnectionwiththegrantofrestrictedshareawards,theexerciseofstockoptionsandother employeestockpurchasesfortotalproceedsof$110.4million.AsofOctober31,2016,wehaveauthorization topurchaseanadditional2.9millionsharesunderourcurrentsharerepurchaseauthorizationandanticipate thatfuturerepurchaseswillcontinuetobeanongoinguseofcash.Ourdividendsdeclaredpersharewere $1.075infiscal2016,$1.015infiscal2015and$0.91infiscal2014.Wecurrentlyexpecttodeclareandpay quarterlydividendsonourVotingandNonVotingCommonStockcomparabletothedividenddeclaredinthe fourthquarteroffiscal2016.

Infiscal2015,cashusedforfinancingactivitiesincluded$381.5millioninprincipalpaymentsmadeonsenior

notes,linesofcreditandredeemablepreferredsharesofconsolidatedCLOentities,aswellas$485.2million relatedtotheproceedsfromthelineofcreditandtheissuanceofnewseniornotesandredeemablepreferred sharesofthoseentities.Infiscal2014,cashusedforfinancingactivitiesincluded$436.2millioninprincipal paymentsmadeonseniornotes,linesofcredit,andredeemablepreferredsharesofconsolidatedCLOentities, aswellas$429.6millionrelatedtotheissuanceofnewseniornotesandredeemablepreferredsharesofthose entities.

SLIDE 44

42

ContractualObligations
ThefollowingtabledetailsourcontractualobligationsasofOctober31,2016:
Paymentsduebyperiod
Less
More
than1
13
45
than5

(inmillions)

Total

Year
Years
Years
Years

Operatingleases–facilitiesandequipment(1)

$ 346 $ 22 $ 45 $ 43 $ 236

Seniornotes

575
250
325

Interestpaymentonseniornotes

99
27
24
24
24

Paymentstononcontrollinginterestholdersof

majorityownedsubsidiaries
3
3
Unrecognizedtaxbenefits(2)
2
1
1
Total

$ 1,025 $ 303 $ 70 $ 67 $ 585

(1)

Minimumpaymentshavenotbeenreducedbyminimumsubleaserentalsof$0.1milliontobereceivedinthefutureundernoncancelable

subleases.

(2)

Thisamountincludesunrecognizedtaxbenefitsalongwithaccruedinterestandpenalties.

InterestsheldbynoncontrollinginterestholdersofAtlantaCapitalandParametricarenotsubjectto mandatoryredemption.Thepurchaseofnoncontrollinginterestsispredicatedontheexerciseofaseriesof putsheldbynoncontrollinginterestholdersandcallsheldbyus.Theputsprovidethenoncontrollinginterest holderstherighttorequireustopurchasetheseretainedinterestsatspecificintervalsovertime,whilethe callsprovideuswiththerighttorequirethenoncontrollinginterestholderstoselltheirretainedequity intereststousatspecifiedintervalsovertime,aswellasupontheoccurrenceofcertaineventssuchasdeath

rpermanentdisability.Asaresult,thereissignificantuncertaintyastothetimingofanynoncontrolling

interestpurchaseinthefuture.Noncontrollinginterestsareredeemableatfairvalueorbasedonamultipleof earningsbeforeinterestandtaxesofthesubsidiary,whichisameasurethatisintendedtorepresentfair value.Asaresult,thereissignificantuncertaintyastotheamountofanynoncontrollinginterestpurchasein thefuture.Accordingly,futurepaymentstobemadetopurchasenoncontrollinginterestshavebeenexcluded fromtheabovetable,unlessaputorcalloptionhasbeenexercisedandamandatoryfirmcommitmentexists forustopurchasesuchnoncontrollinginterests.Althoughthetimingandamountsofthesepurchasescannot bepredictedwithcertainty,weanticipatethatthepurchaseofnoncontrollinginterestsinourconsolidated subsidiariesmaybeasignificantuseofcashinfutureyears.

WehavepresentedallredeemablenoncontrollinginterestsatredemptionvalueonourConsolidatedBalance

SheetasofOctober31,2016.Wehaverecordedthecurrentyearchangeintheestimatedredemptionvalueof noncontrollinginterestsredeemableatfairvalueasacomponentofadditionalpaidincapitalandhave recordedthecurrentyearchangeintheestimatedredemptionvalueofnoncontrollinginterestsredeemable atotherthanfairvalue(noncontrollinginterestsredeemablebasedonamultipleofearningsbeforeinterest andtaxesofthesubsidiary)asacomponentofnetincomeattributabletononcontrollingandotherbeneficial interests.Basedonourcalculations,theestimatedredemptionvalueofournoncontrollinginterests, redeemableateitherfairvalueorotherthanfairvalue,totaled$109.0milliononOctober31,2016compared to$88.9milliononOctober31,2015.

SLIDE 45

43 RedeemablenoncontrollinginterestsasofOctober31,2016consistedofthirdpartyinvestors’ownershipin consolidatedinvestmentfundsof$24.5million,noncontrollinginterestsinParametricissuedinconjunction withtheCliftonacquisitionof$13.9million,noncontrollinginterestsinParametricissuedinconjunctionwith theParametricRiskAdvisorsfinalputoptionof$12.1millionandprofitinterestsgrantedunderthelongterm incentiveplansofParametricandAtlantaCapitalof$36.4millionand$19.6million,respectively,allofwhich areredeemableatfairvalue.RedeemablenoncontrollinginterestsasofOctober31,2016alsoincludednon controllinginterestsinAtlantaCapitalredeemableatotherthanfairvalueof$2.6million.Redeemablenon controllinginterestsasofOctober31,2015consistedofthirdpartyinvestors’ownershipinconsolidated investmentfundsof$11.9million,noncontrollinginterestsinParametricissuedinconjunctionwiththeClifton acquisitionof$18.6million,noncontrollinginterestsinParametricissuedinconjunctionwiththeParametric RiskAdvisorsfinalputoptionof$10.8millionandprofitinterestsgrantedunderthelongtermincentiveplans

fParametricandAtlantaCapitalof$28.5millionand$16.4million,respectively,allofwhichareredeemable

atfairvalue.RedeemablenoncontrollinginterestsasofOctober31,2015alsoincludednoncontrolling interestsinAtlantaCapitalredeemableatotherthanfairvalueof$2.7million.

Wehaveincludedinthetableabove$0.6millionand$1.9millionrelatedtotheexecutionofterminationcall
ptionsbytheCompanyrelatedtoindirectprofitinterestsgrantedunderthelongtermincentiveplansof

ParametricandAtlantaCapital,respectively,whichwereheldbyemployeeswhoseemploymentterminatedin fiscal2016.ThesetransactionssettledinNovember2016.

WeareobligatedtomakeacontingentpaymentrelatedtoouracquisitionoftheTABSbusinessbasedona

prescribedmultipleofTABS’srevenueforthetwelvemonthsendingDecember31,2016.Becausethereisno definedfloororceiling,significantuncertaintyexistsastotheamountofpayment.Accordingly,anestimate cannotbereasonablymadeandthisfuturepaymenthasbeenexcludedfromtheabovetable.

Weholdanoption,exercisableinfiscal2017,toacquireanadditional26percentinterestinHexavest.Because

thereisnodefinedfloororceiling,significantuncertaintyexistsastotheamountofpayment.Accordingly,any paymenttobemadehasbeenexcludedfromtheabovetable.Althoughtheamountsofthispaymentcannot bepredictedwithcertainty,itmayrepresentasignificantuseofcashinfiscal2018.

InNovember2010,weacquiredpatentsandotherintellectualpropertyfromManagedETFsLLC,adeveloper
fintellectualpropertyinthefieldofexchangetradedfunds.Thisintellectualpropertyisthefoundationof

theCompany’sNextShares™exchangetradedmanagedfundsinitiative.Thetermsoftheacquisitionofthe patentsandotherintellectualpropertyofManagedETFsLLCincludeapproximately$9.0millioninaggregate contingentmilestonepaymentsthatarebasedonspecificeventsrepresentingkeydevelopmentsinthe commercializationofNextShares.Thereisnodefinedtimingonthesepayments,resultinginsignificant uncertaintyastowhentheamountofanypaymentisdueinthefuture.Accordingly,futurepaymentstobe madehavebeenexcludedfromtheabovetableuntilsuchtimeastheuncertaintyhasbeenresolved.Ifand whenthemilestonesarereached,ManagedETFsLLCisalsoentitledtorevenuesharingpaymentsthatare calculatedasapercentageoflicensingrevenuethatwereceiveforuseoftheacquiredintellectualproperty.

ForeignSubsidiaries
Weconsidertheundistributedearningsofcertainofourforeignsubsidiariestobeindefinitelyreinvestedin

foreignoperationsasofOctober31,2016.Accordingly,noU.S.incometaxeshavebeenprovidedthereon.As

fOctober31,2016,theCompanyhadapproximately$47.7millionofundistributedearningsincertain

Canadian,UKandAustralianforeignsubsidiariesthatisnotavailabletofunddomesticoperationsorto distributetoshareholdersunlessrepatriated.RepatriationwouldrequiretheCompanytoaccrueandpayU.S.

SLIDE 46

44

corporateincometaxes.Theunrecognizeddeferredincometaxliabilityontheseunrepatriatedfunds,or

temporarydifference,isestimatedtobe$5.8million.TheCompanydoesnotintendtorepatriatethesefunds, hasnotpreviouslyrepatriatedfundsfromtheseentities,andhasthefinancialliquiditytopermanentlyleave thesefundsoffshore.

OffBalanceSheetArrangements
Wedonotinvestinanyoffbalancesheetvehiclesthatprovidefinancing,liquidity,marketorcreditrisk

supportorengageinanyleasingactivitiesthatexposeustoanyliabilitythatisnotreflectedinour ConsolidatedFinancialStatements.

CriticalAccountingPolicies
Webelievethefollowingcriticalaccountingpoliciesreflectouraccountingpoliciesthatrequiresignificant

judgmentsandestimatesusedinthepreparationofourConsolidatedFinancialStatements.Actualresultsmay differfromtheseestimates.

ConsolidationofVariableInterestEntities

Accountingguidanceprovidesaframeworkfordeterminingwhetheranentityshouldbeconsideredavariable interestentity(“VIE”),and,ifso,whetherourinvolvementwiththeentityresultsinavariableinterestinthe entity.Ifwedeterminethatwedohaveavariableinterestintheentity,wemustthenperformananalysisto determinewhetherwearetheprimarybeneficiaryoftheVIE.Ifwedeterminethatwearetheprimary beneficiaryoftheVIE,wearerequiredtoconsolidatetheassets,liabilities,resultsofoperationsandcashflows

ftheVIEintotheConsolidatedFinancialStatementsoftheCompany.
AcompanyistheprimarybeneficiaryofaVIEifithasacontrollingfinancialinterestintheVIE.Acompanyis

deemedtohaveacontrollingfinancialinterestinaVIEifithasboth(i)thepowertodirecttheactivitiesofthe VIEthatmostsignificantlyimpacttheVIE’seconomicperformanceand(ii)theobligationtoabsorbthelosses

ftheVIEthatcouldpotentiallybesignificanttotheVIEortherighttoreceivebenefitsfromtheVIEthatcould

potentiallybesignificanttotheVIE.

OurevaluationofwhetherwequalifyastheprimarybeneficiaryofaVIEishighlycomplex.Inouranalysis,we

mustmakesignificantestimatesandassumptionsregardingfuturecashflowsoftheVIE.Theseestimatesand assumptionsrelateprimarilytomarketinterestrates,creditdefaultrates,prepaymentrates,discountrates, themarketabilityofcertainsecuritiesandtheprobabilityofcertainoutcomes.Thereisalsojudgmentinvolved inassessingwhetherwehavethepowertodirecttheactivitiesthatmostsignificantlyimpacttheVIE’s economicperformanceandtheobligationtoabsorblossesof,ortherighttoreceivebenefitsfrom,theVIE thatcouldpotentiallybesignificanttotheentity.

Whilewebelievethatourevaluationisappropriate,futurechangesinestimates,judgments,assumptions

and/orintheownershipinterestsoftheCompanyinaVIEmayaffectthedeterminationoftheprimary beneficiarystatusandtheresultingconsolidationordeconsolidationoftheassets,liabilitiesandresultsof

perationsoftheVIEinourConsolidatedFinancialStatements.
FairValueMeasurements

Accountingstandardsdefinefairvalueasthepricethatwouldbereceivedforanassetortheexitpricethat wouldbepaidtotransferaliabilityintheprincipalormostadvantageousmarketinanorderlytransaction betweenmarketparticipantsatthemeasurementdate.Thefairvaluehierarchyestablishedinthesestandards

SLIDE 47

45 prioritizestheinputstovaluationtechniquesandgivesthehighestprioritytoquotedpricesinactivemarkets foridenticalassetsorliabilitiesandthelowestprioritytounobservableinputs.

Assetsandliabilitiesmeasuredandreportedatfairvalueareclassifiedanddisclosedinoneofthefollowing

categoriesbasedonthenatureoftheinputsthataresignificanttothefairvaluemeasurementsintheir entirety.Incertaincases,theinputsusedtomeasurefairvaluemayfallintodifferentlevelsofthefairvalue measurementhierarchy.Insuchcases,aninvestment’sclassificationwithinthefairvaluemeasurement hierarchyisbasedonthelowestlevelofinputthatissignificanttothefairvaluemeasurement.

Level1

Unadjustedquotedmarketpricesinactivemarketsforidenticalassetsorliabilitiesat thereportingdate.

Level2

ObservableinputsotherthanLevel1unadjustedquotedmarketprices,suchasquoted marketpricesforsimilarassetsorliabilitiesinactivemarkets,quotedpricesfor identicalorsimilarassetsorliabilitiesthatarenotactive,andinputsotherthanquoted pricesthatareobservableorcorroboratedbyobservablemarketdata.

Level3

Unobservableinputsthataresupportedbylittleornomarketactivity.

Goodwill

Goodwillrepresentstheexcessofthecostofourinvestmentinthenetassetsofacquiredcompaniesoverthe fairvalueoftheunderlyingidentifiablenetassetsatthedatesofacquisition.Weattributeallgoodwill associatedwiththeacquisitionsofAtlantaCapital,Parametricanditswhollyownedsubsidiaries,whichshare similareconomiccharacteristics,toasinglereportingunit.Managementbelievesthattheinclusionofthese entitiesinasinglereportingunitforthepurposesofgoodwillimpairmenttestingmostaccuratelyreflectsthe synergiesachievedinacquiringtheseentities,namelycentralizeddistributionofsimilarproductsandservices tosimilarclients.WeattributeallgoodwillassociatedwiththeacquisitionoftheTABSbusinessandother acquisitionstoasecondreportingunit.

Goodwillisnotamortizedbutistestedannuallyforimpairmentinthefourthquarterofeachfiscalyearby

comparingthefairvalueofthereportingunitstothecarryingamounts,includinggoodwill.Weestablishfair valueforthepurposeofimpairmenttestingbyaveragingfairvalueestablishedusinganincomeapproachand fairvalueestablishedusingamarketapproachforeachreportingunit.

Theincomeapproachemploysadiscountedcashflowmodelthattakesintoaccount(1)assumptionsthat

marketplaceparticipantswoulduseintheirestimatesoffairvalue,(2)currentperiodactualresults,and(3) budgetprojectionsforfutureperiodsthathavebeenvettedbyseniormanagementatthereportingunitlevel. Budgetprojectionsforfutureperiodsaremostsignificantlyimpactedbyassumptionsmadeastothegrowthin assetsundermanagement,futurerevenuerunratesandfutureoperatingmargins.Thediscountedcashflow modelincorporatesthesamefundamentalpricingconceptsusedtocalculatefairvalueintheacquisitiondue diligenceprocessandadiscountratethattakesintoconsiderationourestimatedcostofcapitaladjustedfor theuncertaintyinherentintheacquisition.

Themarketapproachemploysmarketmultiplesforcomparabletransactionsinthefinancialservicesindustry
btainedfromindustrysources,takingintoconsiderationthenature,scopeandsizeoftheacquiredreporting

unit.Estimatesoffairvalueareestablishedusinghistoricalandforwardmultiplesofbothrevenueand earningsbeforeinterest,tax,depreciationandamortization(“EBITDA”)adjustedforsize,growthrateand marginrelativetopeercompanies.

SLIDE 48

46

Toevaluatethesensitivityofthegoodwillimpairmenttestingtothecalculationoffairvalue,weapplya

hypothetical10percentand20percentdecreasetothefairvalueofeachreportingunit.Ifthecarrying amountofthereportingunitexceedsitscalculatedfairvalue,thesecondstepofthegoodwillimpairmenttest willbeperformedtomeasuretheamountoftheimpairmentloss,ifany.

IntangibleAssets

Amortizedidentifiableintangibleassetsgenerallyrepresentthecostofclientrelationshipsandmanagement contractsacquired.Invaluingtheseassets,wemakeassumptionsregardingusefullivesandprojectedgrowth rates,andsignificantjudgmentisrequired.Weperiodicallyreviewidentifiableintangiblesforimpairmentas eventsorchangesincircumstancesindicatethatthecarryingamountofsuchassetsmaynotberecoverable.If thecarryingamountsoftheassetsexceedtheirrespectivefairvalues,additionalimpairmenttestsare performedtomeasuretheamountoftheimpairmentloss,ifany.

Nonamortizingintangibleassetsgenerallyrepresentthecostofmutualfundmanagementcontractsacquired.

Nonamortizingintangibleassetsaretestedforimpairmentinthefourthquarterofeachfiscalyearby comparingthefairvalueofthemanagementcontractsacquiredtotheircarryingvalues.TheCompany establishesfairvalueforpurposesofimpairmenttestingusingtheincomeapproach.Ifthecarryingvalueofa managementcontractacquiredexceedsitsfairvalue,animpairmentlossisrecognizedequaltothatexcess.

AccountingforIncomeTaxes

Oureffectivetaxratereflectsthestatutorytaxratesofthemanyjurisdictionsinwhichweoperate.Significant judgmentisrequiredindeterminingoureffectivetaxrateandinevaluatingourtaxpositions.Intheordinary courseofbusiness,manytransactionsoccurforwhichtheultimatetaxoutcomeisuncertain,andweadjust

urincometaxprovisionintheperiodinwhichwedeterminethatactualoutcomeswilllikelybedifferentfrom
urestimates.Accountingstandardsrequirethatthetaxeffectsofapositionberecognizedonlyifitismore

likelythannottobesustainedbasedsolelyonitstechnicalmeritsasofthereportingdate.Themorelikely thannotthresholdmustcontinuetobemetineachreportingperiodtosupportcontinuedrecognitionofa benefit.Unrecognizedtaxbenefits,aswellastherelatedinterest,areadjustedregularlytoreflectchanging factsandcircumstances.Whilewehaveconsideredfuturetaxableincomeandongoingtaxplanningin assessingourtaxes,changesintaxlawsmayresultinachangetoourtaxpositionandeffectivetaxrate.We classifyanyinterestorpenaltiesincurredasacomponentofincometaxexpense.

Managementisrequiredtoestimatethetimingoftherecognitionofdeferredtaxassetsandliabilitiesandto

makeassumptionsaboutthefuturedeductibilityofdeferredtaxassets.Weassesswhetheravaluation allowanceshouldbeestablishedagainstourdeferredtaxassetsbasedonconsiderationofallavailable evidence,usingamorelikelythannotstandard.Thisassessmenttakesintoaccountourforecastoffuture profitability,thedurationofstatutorycarrybackandcarryforwardperiods,ourexperiencewiththetax attributesexpiringunused,taxplanningalternativesandothertaxconsiderations.

StockBasedCompensation

Stockbasedcompensationexpensereflectsthefairvalueofstockbasedawardsmeasuredatgrantdate,is recognizedonastraightlinebasisovertherelevantserviceperiod(generallyfiveyears),andisadjustedeach periodforanticipatedforfeitures.

ThefairvalueofoptionawardsgrantedisestimatedonthedateofgrantusingtheBlackScholesoption

valuationmodel.TheBlackScholesoptionvaluationmodelincorporatesassumptionsastodividendyield, volatility,anappropriateriskfreeinterestrateandtheexpectedlifeoftheoption.Manyoftheseassumptions

SLIDE 49

47 requiremanagement’sjudgmentbutarenotsubjecttosignificantvariability.Managementmustalsoapply judgmentindevelopinganexpectationofawardsthatmaybeforfeited.Ifactualexperiencediffers significantlyfromtheseestimates,stockbasedcompensationexpenseandourresultsofoperationscouldbe materiallyaffected.

Thefairvalueofprofitinterestsgrantedundersubsidiarylongtermequityplansisestimatedonthedateof

grantbyaveragingfairvalueestablishedusinganincomeapproachandfairvalueestablishedusingamarket approachforeachsubsidiary.

Theincomeandfairvalueapproachesusedtoestablishfairvalueofsubsidiaryprofitinterestsmirrorthose

describedinoursignificantaccountingpolicyforGoodwillasdescribedabove.

Noncontrollinginterests

Certaininterestsinourmajorityownedsubsidiariesareputtableatestablishedmultiplesofearningsbefore interestandtaxesand,assuch,areconsideredredeemableatotherthanfairvalue.TheCompany’snon controllinginterestsredeemableatotherthanfairvaluearerecordedintemporaryequityatestimated redemptionvalueandchangesinestimatedredemptionvaluearerecordedinearnings.Asaresult,net incomeattributabletoEatonVanceCorp.shareholdersandearningsperbasicanddilutedshareareimpacted bychangesintheestimatedredemptionvaluesofsuchredeemablenoncontrollinginterests.

AccountingDevelopments
SeeNote2,“NewAccountingStandardsNotYetAdopted”intheNotestoConsolidatedFinancialStatements.
QuantitativeandQualitativeDisclosuresAboutMarketRisk
Inthenormalcourseofbusiness,ourfinancialpositionissubjecttodifferenttypesofrisk,includingmarket

risk.Marketriskistheriskthatwewillincurlossesduetoadversechangesinequityandbondprices,interest rates,crediteventsorcurrencyexchangerates.Managementisresponsibleforidentifying,assessingand managingmarketandotherrisks.

Inevaluatingmarketrisk,itisimportanttonotethatmostofourrevenueisbasedonthemarketvalueof

assetsundermanagement.Asnotedin“RiskFactors”inthisAnnualReport,declinesoffinancialmarketvalues negativelyimpactourrevenueandnetincome.

Ourprimarydirectexposuretoequitypriceriskarisesfrominvestmentsinequitysecuritiesmadebyconsolidated

sponsoredfunds,investmentsinequitysecuritiesheldinseparatelymanagedaccountsseededfornewproduct developmentpurposesandourinvestmentsinsponsoredequityfundsthatarenotconsolidated.Equitypricerisk asitrelatestotheseinvestmentsrepresentsthepotentialfuturelossofvaluethatwouldresultfromadeclinein thefairvaluesofthefundsharesorunderlyingequitysecurities.

Thefollowingisasummaryoftheeffectthata10percentincreaseordecreaseinequitypriceswouldhaveonour

investmentssubjecttoequitypricefluctuationsatOctober31,2016:

SLIDE 50

48

(inthousands)
Carrying

Value

Carrying

Value Assuming a10% Increase

Carrying

Value Assuming a10% Decrease

Investmentsecurities,trading:
Consolidatedsponsoredfundsand
separatelymanagedaccounts

$ 136,031 $ 149,634 $ 122,428

Investmentsecurities,availableforsale:
Sponsoredfunds
12,163
13,379
10,947
Total

$ 148,194 $ 163,013 $ 133,375

AtOctober31,2016,wewereexposedtointerestrateriskandcreditspreadriskasaresultofapproximately

$278.0millionininvestmentsinfixedandfloatingrateincomefundssponsoredormanagedbyus,debtsecurities heldbysponsoredfundsweconsolidate,debtsecuritiesheldinseparatelymanagedaccountsseededfornew productdevelopmentpurposesandshorttermdebtsecuritieshelddirectlybyus.Managementconsidereda hypothetical100basispointchangeininterestratesanddeterminedthatanincreaseofsuchmagnitudewould resultinadecreaseofapproximately$2.8millioninthecarryingamountofourdebtinvestmentsandthata decreaseof100basispointswouldincreasethecarryingamountofsuchinvestmentsbyapproximately$2.8 million.

Currentlywehaveacorporatehedgingprograminplacetohedgecurrencyrisk,interestrateriskandmarketprice

exposuresoncertaininvestmentsinconsolidatedsponsoredfundsandseparatelymanagedaccountsseededfor newproductdevelopmentpurposes.Aspartofthisprogram,weenterintoforwards,futuresandswapcontracts tohedgecertainexposuresheldwithintheportfoliosoftheseconsolidatedsponsoredfundsandseparately managedaccounts.Thecontractsnegotiatedareshortterminnature.Wedonotenterintoderivative instrumentsforspeculativepurposes.

AtOctober31,2016,wehadoutstandingforeigncurrencyforwardcontracts,stockindexfuturescontractsand

totalreturnswapcontractswithaggregatenotionalvaluesofapproximately$18.6million,$125.4millionand$40 million,respectively.Weestimatethata10percentadversechangeinmarketpriceswouldresultinadecreaseof approximately$8,000,$200,000and$42,000,respectively,inthefairvalueofopencurrency,equityandswap derivativecontractsheldatOctober31,2016.

Wearerequiredtomaintaincashcollateralformarginaccountsestablishedtosupportcertainderivative

positions.Ourinitialmarginrequirementsarecurrentlyequaltofivepercentoftheinitialunderlyingvalueofthe stockindexfuturescontracts.Additionalmarginrequirementsincludedailypostingofvariationmarginequalto thedailychangeinthepositionvalue.Wedonothaveacollateralrequirementrelatedtoforeigncurrency forwardcontractsortotalreturnswapcontracts.Cashcollateralsupportingmarginrequirementsisclassifiedas restrictedcashandisincludedasacomponentofotherassetsonourConsolidatedBalanceSheets.AtOctober31, 2016,cashcollateralincludedinotherassetsonourConsolidatedBalanceSheetstotaled$8.1million.

DirectexposuretocreditriskarisesfromourinterestsinnonconsolidatedCLOentitiesthatareincludedin

investmentsinourConsolidatedBalanceSheets,aswellasourinterestsinconsolidatedCLOentitiesthatare eliminatedinconsolidation.OurCLOentityinvestmentsentitleusonlytoaresidualinterestintheCLOentity, makingtheseinvestmentshighlysensitivetothedefaultandrecoveryexperiencesoftheunderlyinginstruments heldbytheCLOentity.OurCLOinvestmentsaresubjecttoanimpairmentlossintheeventthatthecashflows

SLIDE 51

49 generatedbythecollateralsecuritiesarenotsufficienttoallowequityholderstorecovertheirinvestments.If thereisdeteriorationinthecreditqualityofcollateralandreferencesecuritiesandacorrespondingincreasein defaults,CLOentitycashflowsmaybeadverselyimpactedandwemaybeunabletorecoverourinvestment.Our totalinvestmentsinnonconsolidatedCLOentitieswas$3.8millionasofOctober31,2016,representingourtotal valueatriskwithrespecttosuchentitiesasofOctober31,2016.TheCompanydidnotholdanyinterestsin consolidatedCLOentitiesasofOctober31,2016.

Wearesubjecttoforeigncurrencyexchangeriskthroughourinternationaloperations.Whileweoperateprimarily

intheUnitedStatesand,accordingly,mostofourconsolidatedrevenueandassociatedexpensesaredenominated inU.S.dollars,wealsoprovideservicesandearnrevenueoutsideoftheUnitedStates.Revenueandexpenses denominatedinforeigncurrenciesmaybeimpactedbymovementsinforeigncurrencyexchangerates.The exposuretoforeigncurrencyexchangeriskinourConsolidatedBalanceSheetsrelatesprimarilytoanequity methodinvestmentandcashandcashequivalentsthataredenominatedinforeigncurrencies,principally Canadiandollars.ThisriskwilllikelyincreaseasourbusinessoutsideoftheUnitedStatesgrows.Wegenerallydo notusederivativefinancialinstrumentstomanagetheforeigncurrencyexchangeriskexposureweassumein connectionwithinvestmentsininternationaloperations.Asaresult,bothpositiveandnegativecurrency fluctuationsagainsttheU.S.dollarmayaffectourresultsofoperationsandaccumulatedothercomprehensive income(loss).Wedonotenterintoforeigncurrencytransactionsforspeculativepurposes.

RiskFactors
Wearesubjecttosubstantialcompetitioninallaspectsofourinvestmentmanagementbusiness.Ourfunds

andseparateaccountscompeteagainstalargenumberofinvestmentproductsandservicessoldtothepublic byinvestmentmanagementcompanies,investmentdealers,banks,insurancecompaniesandothers.Many institutionswecompetewithhavegreaterfinancialresourcesthanusandtherearefewbarrierstoentry.We competewiththesefirmsonthebasisofinvestmentperformance,diversityofproducts,distribution capability,scopeandqualityofservices,reputationandtheabilitytodevelopnewinvestmentstrategiesand productstomeetthechangingneedsofinvestors.Totheextentthatcurrentorpotentialcustomersdecideto investinproductssponsoredbyourcompetitors,thesalesofourproductsaswellasourmarketshare, revenueandnetincomecoulddecline.

Theinvestmentmanagementindustryishighlycompetitiveandinvestmentmanagementcustomersare

increasinglyfeesensitive.Intheeventthatcompetitorschargelowerfeesforsubstantiallysimilarproducts, wemaybeforcedtocompeteonthebasisofpriceinordertoattractandretaincustomers.Rulesand regulationsapplicabletoregisteredinvestmentcompaniesprovide,insubstance,thateachinvestment advisoryagreementbetweenafundanditsinvestmentadvisercontinuesineffectfromyeartoyearonlyifits continuationisapprovedatleastannuallybythefund’sboardoftrustees.Periodicreviewoffundadvisory agreementscouldresultinareductionintheCompany’sadvisoryfeerevenuesfromfunds.Feereductionson existingorfuturebusinessand/ortheimpactofevolvingindustryfeestructurescouldhaveanadverseimpact

nourfuturerevenueandprofitability.
Theinabilitytoaccessclientsthroughintermediariescouldhaveamaterialadverseeffectonourbusiness.

Ourabilitytomarketinvestmentproductsishighlydependentonaccesstothevariousdistributionsystemsof nationalandregionalsecuritiesdealerfirms,whichgenerallyoffercompetingproductsthatcouldlimitthe distributionofourinvestmentproducts.Therecanbenoassurancethatwewillbeabletoretainaccessto theseintermediaries.Theinabilitytohavesuchaccesscouldhaveamaterialadverseeffectonourbusiness.To theextentthatexistingorpotentialcustomers,includingsecuritiesbrokerdealers,decidetoinvestinor broadendistributionrelationshipswithourcompetitors,thesalesofourproductsaswellasourmarketshare,

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50

revenueandnetincomecoulddecline.Certainintermediarieswithwhichweconductbusinesschargethe

Companyfeestomaintainaccesstotheirdistributionnetworks.Ifwechoosenottopaysuchfees,ourability todistributethroughthoseintermediarieswouldbelimited.

Ourinvestmentadvisoryagreementsaresubjecttoterminationonshortnoticeornonrenewal.Wederive

almostallofourrevenuefrominvestmentadvisoryandadministrativefees,distributionincomeandservice feesreceivedfrommanagedfundsandseparateaccounts.Asaresult,wearedependentuponmanagement contracts,administrativecontracts,distributioncontracts,underwritingcontractsorservicecontractsunder whichthesefeesarepaid.Generally,thesecontractsareterminableupon30to60days’noticewithout penalty.Ifanyofthesecontractsareterminated,notrenewed,oramendedtoreducefees,ourfinancial resultscouldbeadverselyaffected.

Ourassetsundermanagement,whichimpactrevenue,aresubjecttosignificantfluctuations.Ourmajor

sourcesofrevenue,includinginvestmentadvisory,administrative,distributionandservicefees,aregenerally calculatedaspercentagesofassetsundermanagement.Feeratesforourinvestmentproductsgenerallyvary byinvestmentmandate(e.g.,equity,fixedincome,floatingrateincome,alternative,portfolioimplementation

rexposuremanagementservices)andvehicle(e.g.,fundorseparateaccount).Anadversechangeinasset

mixbymandateorvehicle,independentofourlevelofassetsundermanagement,mayresultinadecreasein

uroverallaverageeffectivefeerate,therebyreducingourrevenueandnetincome.Anydecreaseinthelevel
fourassetsundermanagementgenerallywouldalsoreduceourrevenueandnetincome.Assetsunder

managementcoulddecreasedueto,amongotherthings,adeclineinsecuritiesprices,adeclineinthesalesof

urinvestmentproducts,anincreaseinopenendfundredemptionsorclientwithdrawals,repurchasesofor
therreductionsinclosedendfundsharesoutstanding,orreductionsinleverageusedbyinvestmentvehicles.

Adversemarketconditionsand/orlackofinvestorconfidenceinthefinancialmarketscouldleadtoadecrease ininvestorrisktolerance.Adecreaseininvestorrisktolerancecouldresultininvestorswithdrawingfrom marketsordecreasingtheirrateofinvestment,therebyreducingouroverallassetsundermanagementand adverselyaffectingourrevenue,earningsandgrowthprospects.Changesininvestorrisktolerancecouldalso resultininvestorallocationawayfromhigherfeeproductstolowerfeeproducts,whichcouldadverselyaffect

urrevenueandearnings.Ouroverallassetsundermanagementmaynotchangeintandemwithoverall

marketconditions,aschangesinourtotalassetsundermanagementmaylagimprovementsordeclinesinthe marketbaseduponproductmixandinvestmentperformance.

Poorinvestmentperformanceofourproductscouldaffectoursalesorreducetheamountofassetsunder

management,negativelyimpactingrevenueandnetincome.Investmentperformanceiscriticaltoour success.Poorinvestmentperformanceonanabsolutebasisorascomparedtothirdpartybenchmarksor competitorproductscouldleadtoadecreaseinsalesandstimulatehigherredemptions,therebyloweringthe amountofassetsundermanagementandreducingtheinvestmentadvisoryfeesweearn.Adeclinein investmentperformanceofanyinvestmentfranchisecouldhaveamaterialadverseeffectonthelevelof assetsundermanagement,revenueandnetincomeofthatfranchise.Pastorpresentperformanceinthe investmentproductswemanageisnotindicativeoffutureperformance.

Ourclientscanwithdrawtheassetswemanageonshortnotice,makingourfutureclientandrevenuebase

unpredictable.Ouropenendfundclientsgenerallymayredeemtheirinvestmentsinthesefundseach businessdaywithoutpriornotice.Whilenotsubjecttodailyredemption,closedendfundsthatwemanage mayshrinkinsizeduetorepurchasesofsharesinopenmarkettransactionsorpursuanttotenderoffers,orin connectionwithdistributionsinexcessofrealizedreturns.Institutionalandindividualseparateaccountclients canterminatetheirrelationshipswithusgenerallyatanytime.Inadecliningstockmarket,thepaceofopen endfundredemptionscouldaccelerate.Poorperformancerelativetootherassetmanagementfirmscan

SLIDE 53

51 resultindecreasedpurchasesofopenendfundshares,increasedredemptionsofopenendfundshares,and thelossofinstitutionalorindividualseparateaccounts.Thedecreaseinrevenuethatcouldresultfromanyof theseeventscouldhaveamaterialadverseeffectonourbusiness.

Wecouldbeimpactedbycounterpartyorclientdefaults.Aswehaveseeninperiodsofsignificantmarket

volatility,thedeterioratingfinancialconditionofonefinancialinstitutionmaymateriallyandadverselyimpact theperformanceofothers.We,andthefundsandaccountswemanage,haveexposuretomanydifferent counterparties,androutinelyexecutetransactionswithcounterpartiesacrossthefinancialindustry.We,and thefundsandaccountswemanage,maybeexposedtocredit,operationalorotherriskintheeventofa defaultbyacounterpartyorclient,orintheeventofotherunrelatedsystemicmarketfailures.

Oursuccessdependsonkeypersonnelandourfinancialperformancecouldbenegativelyaffectedbytheloss
ftheirservices.Oursuccessdependsuponourabilitytoattract,retainandmotivatequalifiedportfolio

managers,analysts,investmentcounselors,salesandmanagementpersonnelandotherkeyprofessionals, includingourexecutiveofficers.Ourkeyemployeesgenerallydonothaveemploymentcontractsandmay voluntarilyterminatetheiremploymentatanytime.Certainseniorexecutivesandthenonemployee membersofourBoardofDirectorsaresubjecttoourmandatoryretirementpolicyatage65andage72, respectively.Thelossoftheservicesofkeypersonnelorourfailuretoattractreplacementoradditional qualifiedpersonnelcouldnegativelyaffectourfinancialperformance.Anincreaseincompensationtoattract

rretainpersonnelcouldresultinadecreaseinnetincome.
Ourexpensesaresubjecttofluctuationsthatcouldmateriallyaffectouroperatingresults.Ourresultsof
perationsaredependentonourlevelofexpenses,whichcanvarysignificantlyfromperiodtoperiod.Our

expensesmayfluctuateasaresultof,amongotherthings,variationsinthelevelofcompensation,expenses incurredtosupportdistributionofourinvestmentproducts,expensesincurredtodevelopnewproductsand franchises,expensesincurredtoenhanceourinfrastructure(includingtechnologyandcompliance)and impairmentsofintangibleassetsorgoodwill.Increasesinourlevelofexpenses,orourinabilitytoreduceour levelofexpenseswhennecessary,couldmateriallyaffectouroperatingresults.

Ourbusinessissubjecttooperationalrisk.Inthemanagementandadministrationoffundsandclient

accounts,wearesubjecttotheriskthatwecommiterrorsthatcausetheCompanytoincurfinanciallosses anddamageourreputation.Becausetheyinvolvelargenumbersofaccountsandoperateatgenerallylowfee rates,ourportfolioimplementationandexposuremanagementservicesbusinessesmaybeparticularly susceptibletolossesfromoperationalortradingerrors.

Ourreputationcouldbedamaged.Wehavebuiltareputationofhighintegrity,prudentinvestment

managementandsuperiorclientservice.Ourreputationisextremelyimportanttooursuccess.Anydamage toourreputationcouldresultinclientwithdrawalsfromfundsorseparateaccountsthatareadvisedbyusand ultimatelyimpedeourabilitytoattractandretainkeypersonnel.Thelossofeitherclientrelationshipsorkey personnelduetodamagetoourreputationcouldreducetheamountofassetsundermanagementandcause ustosufferalossinrevenueorareductioninnetincome.

SuccessofourNextSharesinitiativeishighlyuncertain.Inrecentyears,theCompanyhasdevotedsubstantial

resourcestothedevelopmentofNextSharesexchangetradedmanagedfunds,anewtypeofactivelymanaged funddesignedtoprovidebetterperformanceforinvestors.TheCompanymadeprogressadvancingits NextSharesinitiativeinfiscal2016,andexpectstocontinuethestagedintroductionofNextSharesfundsin fiscal2017.Broadmarketadoptionandcommercialsuccessrequiresthedevelopmentofexpanded

SLIDE 54

52

distribution,thelaunchofNextSharesbyotherfundsponsorsandacceptancebymarketparticipants,which

cannotbeassured.

Supportprovidedtonewproductsmayreducefeeincome,increaseexpensesandexposeustopotentialloss
ninvestedcapital.Wemaysupportthedevelopmentofnewinvestmentproductsbywaivingalloraportion
fthefeeswereceiveformanagingsuchproducts,bysubsidizingexpensesorbymakingseedcapital

investments.SeedinvestmentsinnewproductsutilizeCompanycapitalthatwouldotherwisebeavailablefor generalcorporatepurposesandexposeustocapitallossestotheextentthatrealizedinvestmentlossesare notoffsetbyhedginggains.Theriskoflossmaybegreaterforseedcapitalinvestmentsthatarenothedged,

rifanintendedhedgedoesnotperformasexpected.Failuretohaveordevotesufficientcapitaltosupport

newproductscouldhaveanadverseimpactonourfuturegrowth.

Wemayneedtoraiseadditionalcapitalorrefinanceexistingdebtinthefuture,andresourcesmaynotbe

availabletousinsufficientamountsoronacceptableterms.Significantfuturedemandsonourcapital includecontractualobligationstoserviceourdebt,satisfythetermsofnoncancelableoperatingleasesand purchasenoncontrollinginterestsinourmajorityownedsubsidiariesasdescribedmorefullyinContractual ObligationsinManagement’sDiscussionandAnalysisofFinancialConditionandResultsofOperationsinthis AnnualReportandinNote10inthisAnnualReport.Althoughwebelieveourexistingliquidassets,cashflows fromoperationsandborrowingcapacityunderourcreditfacilityaresufficienttomeetourcurrentand forecastedoperatingcashneeds,ourabilitytosatisfyourlongtermcontractualobligationsmaybedependent

nourabilitytoaccesscapitalmarkets.Ourabilitytoaccesscapitalmarketsefficientlydependsonanumber
ffactors,includingthestateofglobalcreditandequitymarkets,interestrates,creditspreadsandourcredit

ratings.Ifweareunabletoaccesscapitalmarketstoissuenewdebt,refinanceexistingdebtorsellsharesof

urNonVotingCommonStockasneeded,orifweareunabletoobtainsuchfinancingonacceptableterms,
urbusinesscouldbeadverselyimpacted.
Wecouldbesubjecttolossesandreputationalharmifwe,orouragents,failtoproperlysafeguardsensitive

andconfidentialinformationorasaresultofcyberattacks.Wearedependentontheeffectivenessofour informationandcybersecuritypolicies,proceduresandcapabilitiestoprotectourcomputerand telecommunicationssystemsandthedatathatresidesinoristransmittedthroughsuchsystems.Aspartof

urnormaloperations,wemaintainandtransmitconfidentialinformationaboutourclientsandemployeesas

wellasproprietaryinformationrelatingtoourbusinessoperations.Wemaintainasystemofinternalcontrols designedtoprovidereasonableassurancethatfraudulentactivity,includingmisappropriationofassets, fraudulentfinancialreportingandunauthorizedaccesstosensitiveorconfidentialdata,iseitherpreventedor detectedonatimelybasis.Nevertheless,alltechnologysystemsremainvulnerabletounauthorizedaccessand maybecorruptedbycyberattacks,computervirusesorothermalicioussoftwarecode,thenatureofwhich threatsareconstantlyevolvingandbecomingincreasinglysophisticated.Inaddition,authorizedpersonscould inadvertentlyorintentionallyreleaseconfidentialorproprietaryinformation.Althoughwetakeprecautionsto passwordprotectandencryptourmobileelectronichardware,ifsuchhardwareisstolen,misplacedorleft unattended,itmaybecomevulnerabletohackingorotherunauthorizeduse,creatingapossiblesecurityrisk andresultinginpotentiallycostlyactionsbyus.Breachorotherfailureofourtechnologysystems,including thoseofthirdpartieswithwhichwedobusiness,orfailuretotimelyandeffectivelyidentifyandrespondto anysuchbreachorfailure,couldresultinthelossofvaluableinformation,liabilityforstolenassetsor information,remediationcoststorepairdamagecausedbytheincident,additionalsecuritycoststomitigate againstfutureincidentsandlitigationcostsresultingfromtheincident.Moreover,lossofconfidential customeridentificationinformationcouldharmourreputation,resultintheterminationofcontractsbyour existingcustomersandsubjectustoliabilityunderlawsthatprotectconfidentialpersonaldata,resultingin increasedcostsorlossofrevenues.Recentwellpublicizedsecuritybreachesatothercompanieshaveledto enhancedgovernmentandregulatoryscrutinyofthemeasurestakenbycompaniestoprotectagainstcyber

SLIDE 55

53 attacks,andmayinthefutureresultinheightenedcybersecurityrequirements,includingadditionalregulatory expectationsforoversightofvendorsandserviceproviders.

Failuretomaintainadequateinfrastructurecouldimpedeourproductivityandabilitytosupportbusiness

growth.Ourinfrastructure,includingourtechnologicalcapacity,datacentersandofficespace,isvitaltothe

perationsandcompetitivenessofourbusiness.Thefailuretomaintainaninfrastructurecommensuratewith

thesizeandscopeofourbusiness,includinganyexpansion,couldimpedeourproductivityandgrowth,which couldresultinadeclineinourearnings.

Failuretomaintainadequatebusinesscontinuityplanscouldhaveamaterialadverseimpactonusandour

products.Significantportionsofourbusinessoperationsandthoseofourcriticalthirdpartyserviceproviders areconcentratedinafewgeographicareas,includingBoston,MassachusettsandSeattle,Washington.Critical

perationsthataregeographicallyconcentratedinBostonand/orSeattleincludetradingoperations,

informationtechnology,fundadministration,andcustodyandportfolioaccountingservicesfortheCompany’s products.Shouldwe,oranyofourcriticalserviceproviders,experienceasignificantlocalorregionaldisaster

rotherbusinesscontinuityproblem,ourcontinuedsuccesswilldependinpartonthesafetyandavailability
fourpersonnel,ourofficefacilities,andtheproperfunctioningofourcomputer,telecommunicationand
therrelatedsystemsandoperations.Thefailurebyus,oranyofourcriticalserviceproviders,tomaintain

updatedadequatebusinesscontinuityplans,includingbackupfacilities,couldimpedeourabilitytooperatein theeventofadisruption,whichcouldcauseourearningstodecline.Wehavedevelopedvariousbackup systemsandcontingencyplansbutwecannotbeassuredthattheywillbeadequateinallcircumstancesthat couldariseorthatmaterialinterruptionsanddisruptionswillnotoccur.Inaddition,werelytovaryingdegrees

noutsidevendorsfordisastercontingencysupport,andwecannotbeassuredthatthesevendorswillbeable

toperforminanadequateandtimelymanner.Ifwe,oranyofourcriticalserviceproviders,areunableto respondadequatelytosuchaneventinatimelymanner,wemaybeunabletocontinueourbusiness

perations,whichcouldleadtoadamagedreputationandlossofcustomersthatresultsinadecreasein

assetsundermanagement,lowerrevenuesandreducednetincome.

WepursuegrowthintheUnitedStatesandabroadinpartthroughacquisitions,whichexposesustorisks

inherentinassimilatingnewoperations,expandingintonewjurisdictionsandexecutingonnew developmentopportunities.Ourgrowthstrategyisbasedinpartontheselectivedevelopmentoracquisition

fassetmanagementorrelatedbusinessesthatwebelievewilladdvaluetoourbusinessandgenerate

positivenetreturns.Thisstrategymaynotbeeffective,andfailuretosuccessfullydevelopandimplement suchastrategymaydecreaseearningsandharmtheCompany’scompetitivepositionintheinvestment managementindustry.Wecannotguaranteethatwewillidentifyandconsummateanysuchtransactionson acceptabletermsorhavesufficientresourcestoaccomplishsuchastrategy.Inaddition,anystrategic transaction,suchasourpendingacquisitionofthebusinessassetsofCalvert,caninvolveanumberofrisks, includingadditionaldemandsonourstaff;unanticipatedproblemsregardingintegrationofoperatingfacilities, technologiesandnewemployees;andtheexistenceofliabilitiesorcontingenciesnotdisclosedtoorotherwise knownbyuspriortoclosingatransaction.Asaresult,theCompanymaynotbeabletorealizeallofthe benefitsthatithopedtoachievefromsuchtransactions.Inaddition,wemayberequiredtospendadditional timeormoneyonintegrationthatwouldotherwisebespentonthedevelopmentandexpansionofour businessandservices.

Expansionintointernationalmarketsandtheintroductionofnewproductsand/orservicesincreasesour
perational,regulatoryandotherrisks.Wecontinuetoincreaseourproductofferingsandinternational

businessactivities.Asaresultofsuchexpansion,wefaceincreasedoperational,regulatory,complianceand reputationalrisks.Thefailureofourcomplianceandinternalcontrolsystemstoproperlymitigatesuch additionalrisks,orofouroperatinginfrastructuretosupportsuchexpansion,couldresultinoperational failuresandregulatoryfinesorsanctions.OuroperationsintheUnitedKingdom,theEuropeanEconomicArea,

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54

AustraliaandSingaporearesubjecttosignificantcompliance,disclosureandotherobligations.Weincur

additionalcoststosatisfytherequirementsoftheEuropeanUnionDirectiveonUndertakingsforCollective InvestmentsinTransferableSecurities,theAlternativeInvestmentFundManagersDirectiveandtheMarkets inFinancialInstrumentsDirective(together,the“Directives”).TheDirectivesmayalsolimitouroperating flexibilityandimpactourabilitytoexpandinEuropeanmarkets.Activityininternationalmarketsalsoexposes ustofluctuationsincurrencyexchangerates,whichmayadverselyaffecttheU.S.dollarvalueofrevenues, expensesandassetsassociatedwithourbusinessactivitiesoutsidetheUnitedStates.Actualandanticipated changesincurrentexchangeratesmayalsoadverselyaffectinternationaldemandforourinvestmentproducts andservices,mostofwhichrepresentinvestmentsprimarilyinU.S.dollarbasedassets.Becausecertainofour coststosupportinternationalbusinessactivitiesarebasedinlocalcurrencies,theprofitabilityofsuchactivities inU.S.dollartermsmaybeadverselyaffectedbyaweakeningoftheU.S.dollarversusothercurrenciesin whichwederivesignificantrevenues.

Legalandregulatorydevelopmentsaffectingtheinvestmentindustrycouldincreaseourregulatorycosts

and/orreduceourrevenues.Ourbusinessissubjecttocomplexandextensiveregulationbyvariousregulatory authoritiesinjurisdictionsaroundtheworld.Thisregulatoryenvironmentmaybealteredwithoutnoticeby newlawsorregulations,revisionstoexistingregulationsornewinterpretationsorguidance.Globalfinancial regulatoryreforminitiativesmayresultinmorestringentregulation,andchangesinlawsorregulationsand theirapplicationtouscouldhaveamaterialadverseimpactonourbusiness,ourprofitabilityandmodeof

perations.Inrecentyears,regulatorsinboththeUnitedStatesandabroadhaveincreasedoversightofthe

financialsectoroftheeconomy.Someofthenewlyadoptedandproposedregulationsarefocuseddirectlyon theinvestmentmanagementindustry,whileothersaremorebroadlyfocused,butimpactourindustry.Itis uncertainhowregulatorytrendswillbeaffectedbytheadministrationofthenextU.S.President.

UnderafinalruleandinterpretiveguidanceissuedbyFSOCinApril2012,certainnonbankfinancial

institutionshavebeendesignatedfortheFederalReserve’ssupervisionasSIFIs.Additionalnonbankfinancial companies,whichmayincludelargeassetmanagementcompaniessuchasus,maybedesignatedasSIFIsin thefuture.IfwearedesignatedaSIFI,wewouldbesubjecttoenhancedprudentialmeasures,whichcould includecapitalandliquidityrequirements,leveragelimits,enhancedpublicdisclosuresandriskmanagement requirements,annualstresstestingbytheFederalReserve,creditexposureandconcentrationlimits, supervisoryandotherrequirements.Theseheightenedregulatoryobligationscould,individuallyorinthe aggregate,adverselyimpactourbusinessandoperations.

EatonVanceManagement,BMRandParametricareregisteredwiththeCommodityFuturesTrading

Commission(“CFTC”)andtheNationalFuturesAssociation(“NFA”)asCommodityPoolOperatorsand CommodityTradingAdvisors;othersubsidiariesoftheCompanyclaimexemptionsfromregistration.In August2013,theCFTCadoptedrulesforoperatorsofregisteredmutualfundsthataresubjecttoregistration asCommodityPoolOperatorsgenerallyallowingsuchcommoditypoolstocomplywithSECdisclosure, reportingandrecordkeepingrulesasthemeansofcomplyingwithCFTC’ssimilarrequirements.TheseCFTC rulesdonot,however,relieveregisteredCommodityPoolOperatorsfromcompliancewithapplicableanti fraudprovisionsaswellascertainperformancereportingandrecordkeepingrequirements.TheCompanymay incurongoingcostsassociatedwithmonitoringcompliancewiththeserequirements,including,butnotlimited to,CFTCandNFAregistrationandexemptionobligationsandtheperiodicreportingrequirementsof CommodityPoolOperatorsandCommodityTradingAdvisors.

RecentregulationspromulgatedundertheDoddFrankWallStreetReformandConsumerProtectionAct

(“DoddFrankAct”)requiremanytypesofderivativesthathavebeentradedoverthecountertobeexecuted inregulatedmarketsandsubmittedforclearingtoregulatedclearinghouses.Complyingwiththenew regulationsmaysignificantlyincreasethecostsofderivativestradingonbehalfofourclients.TheDoddFrank

SLIDE 57

55 ActalsoexpandedtheCFTC’sauthoritytolimitthemaximumlongorshortpositionthatanypersonmaytake infuturescontracts,optionsonfuturescontractsandcertainswaps.Finalrulesimplementingthisauthority maybeadoptedbytheCFTCthatcouldrequireallaccountsownedormanagedbyCommodityTrading AdvisorslikeEatonVanceManagementorBMRtobeaggregatedtowardssuch“speculativepositionlimits.” ComplyingwiththeserulesmayadverselyaffecttheCompany’sfinancialconditionorperformanceby requiringchangestoexistingstrategiesorpreventinganinvestmentstrategyfrombeingfullyimplemented.

CertainofoursubsidiariesarerequiredtofilequarterlyreportsonFormPFforprivatefundstheymanage,

pursuanttosystemicriskreportingrequirementsadoptedbytheSEC.Thesefilingsrequiresignificant investmentsinpeopleandsystemstoensuretimelyandaccuratereporting.Furtherinvestmentwillbe necessaryinthecomingyearsasweimplementrulesadoptedbytheSECin2016thatamendedFormADVand establishedFormNPORTtorequireadditionalreportingfortheseparateaccountsandRegisteredFundswe manage,respectively.

EffectiveDecember24,2016,allsecuritizationtransactionswillbesubjecttoriskretentionrules,requiringthe

Companytoholdinterestsequaltoatleast5percentofthecreditriskoftheassetsofanynewCLOentities thatwemanage(unlesstheCLOentityinvestsonlyincertainqualifyingloans)andlimitingtheCompany’s abilitytosellorhedgethoseinterests.ThenewmandatoryriskretentionrequirementforCLOentitiesmay resultintheCompanyhavingtoinvestmoneytolaunchnewCLOentitiesthatwouldotherwisebeavailablefor

theruses.SuchinvestmentswouldalsosubjecttheCompanytoexposuretotheunderlyingperformanceof

theassetsoftheCLOentitiesandcouldhaveanadverseimpactonourresultsofoperationsorfinancial condition.

In2016,theU.S.DepartmentofLaborfinalizedchangestodefinitionsandrulesrelatedtofiduciaries.These

changesmaymateriallyimpacthowadvicecanbeprovidedtoretirementaccountholdersin401(k)plans, individualretirementaccountsandotherqualifiedretirementprograms.Wemayneedtomodifyour interactionsorlimitdistributiontoretirementplans,whichcouldnegativelyaffectourresultsofoperations. Ourrevenuesandexpensesmayalsobeadverselyaffectedbythenewruleadoptedin2016bytheSECto addressliquidityriskmanagementbyregisteredopenendfundsandthenewruleproposedin2015toaddress useofderivativesbyregisteredopenendandclosedendfunds.Theserulescouldlimitinvestment

pportunitiesforcertainfundswemanageandincreaseourmanagementandadministrationcosts.
Allofthesenewanddevelopinglawsandregulationswilllikelyresultingreatercomplianceandadministrative

burdensonus,increasingourexpenses.

Ourbusinessissubjecttoriskfromregulatoryinvestigation,potentialsecuritieslaws,liabilityand

litigation.Wearesubjecttofederalsecuritieslaws,statelawsregardingsecuritiesfraud,otherfederaland statelawsandrules,andregulationsofcertainregulatory,selfregulatoryandotherorganizations,including, amongothers,theSEC,FINRA,theCFTC,theNFA,theFCAandtheNewYorkStockExchange.Whilewehave focusedsignificantattentionandresourcesonthedevelopmentandimplementationofcompliancepolicies, proceduresandpractices,noncompliancewithapplicablelaws,rulesorregulations,eitherintheUnited Statesorabroad,orourinabilitytoadapttoacomplexandeverchangingregulatoryenvironmentcouldresult insanctionsagainstus,whichcouldadverselyaffectourreputation,business,revenueandearnings.From timetotime,variousclaimsorpotentialclaimsagainstusariseintheordinarycourseofbusiness,including employmentrelatedclaims.Wecarryinsuranceinamountsandundertermsthatwebelieveareappropriate. Wecannotguaranteethatourinsurancewillcovermostliabilitiesandlossestowhichwemaybeexposed,or thatourinsurancepolicieswillcontinuetobeavailableatacceptabletermsandfees.Certaininsurance coveragemaynotbeavailableormaybeprohibitivelyexpensiveinfutureperiods.Asourinsurancepolicies

SLIDE 58

56

comeupforrenewal,wemayneedtoassumehigherdeductiblesorpayhigherpremiums,whichwould

increaseourexpensesandreduceournetincome.

Changesincorporatetaxlawsorexposuretoadditionalincometaxliabilitiescouldhaveamaterialimpact
nourfinancialcondition,resultsofoperationsand/orliquidity.Taxauthoritiesmaydisagreewithcertain

positionswehavetakenandassessadditionaltaxes.Weregularlyassessthelikelyoutcomesoftheseauditsin

rdertodeterminetheappropriatenessofourtaxprovision.However,therecanbenoassurancethatwewill

accuratelypredicttheoutcomesoftheseaudits,andtheactualoutcomesoftheseauditscouldhaveamaterial impactonourfinancialstatements.Wearesubjecttoongoingtaxauditsinvariousjurisdictions,including severalstates.Changesintaxlawsortaxrulingscouldmateriallyimpactoureffectivetaxrate.

Wecouldbeimpactedbychangesintaxpolicy.ChangesinU.S.taxpolicymayaffectustoagreaterdegree

thanmanyofourcompetitorsbecausewemanagesignificantassetsinfundsandseparateaccountswithan aftertaxreturnobjective.Adecreaseinincometaxratescouldhaveanadverseimpactonourmunicipal incomeandtaxmanagedequitybusinesses.Changesintaxpolicycouldalsoadverselyaffectourprivately

fferedequityfunds.
OurNonVotingCommonStocklacksvotingrights.OurNonVotingCommonStockhasnovotingrightsunder

anycircumstances.AllvotingpowerresideswithourVotingCommonStock,allsharesofwhichareheldby

fficersoftheCompanyandoursubsidiariesanddepositedinavotingtrust(the“VotingTrust”)inexchange

forVotingTrustReceipts.AsofOctober31,2016,therewere23holdersofVotingTrustReceiptsrepresenting VotingCommonStock,eachholderofwhichisaVotingTrusteeoftheVotingTrust.HoldersofNonVoting CommonStockshouldunderstandthatsuchownershipinterestshavenoabilitytovoteintheelectionofthe Company’sBoardofDirectorsorotherwisetoinfluencetheCompany’smanagementandstrategicdirection.

EvaluationofDisclosureControlsandProcedures
WeevaluatedtheeffectivenessofourdisclosurecontrolsandproceduresasofOctober31,2016.Disclosure

controlsandproceduresaredesignedtoensurethattheinformationwearerequiredtodiscloseinthereports thatwefileorsubmitundertheExchangeActisrecorded,processed,summarizedandreportedwithinthetime periodspecifiedintheSEC’sruleandforms.Disclosurecontrolsandproceduresinclude,withoutlimitation, controlsandproceduresdesignedtoensurethatinformationwearerequiredtodiscloseinthereportsthatwefile

rsubmitundertheExchangeActisaccumulatedandcommunicatedtoourmanagement,includingourChief

ExecutiveOfficer(“CEO”)andChiefFinancialOfficer(“CFO”),toallowtimelydecisionsregardingrequired disclosure.OurCEOandCFOparticipatedinthisevaluationandconcludedthat,asofOctober31,2016,our disclosurecontrolsandprocedureswereeffective.

Therehavebeennochangesinourinternalcontroloverfinancialreportingthatoccurredduringthefourth

quarterofourfiscalyearendedOctober31,2016thatmateriallyaffected,orarereasonablylikelytomaterially affect,ourinternalcontroloverfinancialreporting.

SLIDE 59

57

ConsolidatedStatementsofIncome

YearsEndedOctober31,

(inthousands,exceptpersharedata)

2016
2015
2014

Revenue:

Investmentadvisoryandadministrativefees

$ 1,151,198 $ 1,196,866 $ 1,231,188

Distributionandunderwriterfees
74,822
80,815
85,514
Servicefees
107,684
116,448
125,713
Otherrevenue
9,156
9,434
7,879
Totalrevenue
1,342,860
1,403,563
1,450,294

Expenses:

Compensationandrelatedcosts
491,115
483,827
461,438
Distributionexpense
117,996
198,155
141,544
Servicefeeexpense
98,494
106,663
116,620
Amortizationofdeferredsalescommissions
15,451
14,972
17,590
Fundrelatedexpenses
35,899
35,886
35,415
Otherexpenses
169,637
163,613
157,830
Totalexpenses
928,592
1,003,116
930,437

Operatingincome

414,268
400,447
519,857

Nonoperatingincome(expense):

Gains(losses)andotherinvestmentincome,net
12,411
(31)
1,139
Interestexpense
(29,410)
(29,357)
(29,892)
Otherincome(expense)ofconsolidatedcollateralized
loanobligation(“CLO”)entities:
Gainsandotherinvestmentincome,net
24,069
5,092
14,892
Interestandotherexpense
(13,286)
(6,767)
(14,847)
Totalnonoperatingexpense
(6,216)
(31,063)
(28,708)

Incomebeforeincometaxesandequityinnetincomeofaffiliates

408,052
369,384
491,149

Incometaxes

(153,630)
(143,214)
(186,710)

Equityinnetincomeofaffiliates,netoftax

10,335
12,021
16,725

Netincome

264,757
238,191
321,164

Netincomeattributabletononcontrollingandotherbeneficialinterests

(23,450)
(7,892)
(16,848)

NetincomeattributabletoEatonVanceCorp.shareholders $ 241,307 $ 230,299 $ 304,316 Earningspershare:

Basic

$ 2.20 $ 2.00 $ 2.55

Diluted

$ 2.12 $ 1.92 $ 2.44 Weightedaveragesharesoutstanding:

Basic
109,914
113,318
116,440
Diluted
113,982
118,155
121,595

Dividendsdeclaredpershare $ 1.075 $ 1.015 $ 0.910 SeenotestoConsolidatedFinancialStatements.

SLIDE 60

58

ConsolidatedStatementsofComprehensiveIncome
YearsEndedOctober31,

(inthousands)

2016
2015
2014
Netincome

$ 264,757 $ 238,191 $ 321,164 Othercomprehensiveincome(loss):

Amortizationofnetgains(losses)onderivatives,netoftax
13
13
13

Unrealizedholdinggains(losses)onavailableforsaleinvestmentsand

reclassificationadjustments,netoftax
(790)
(1,895)
1,124

Foreigncurrencytranslationadjustments,netoftax

(8,220)
(28,708)
(18,956)

Othercomprehensiveloss,netoftax

(8,997)
(30,590)
(17,819)

Totalcomprehensiveincome

255,760
207,601
303,345

Comprehensiveincomeattributabletononcontrollingandother

beneficialinterests
(23,450)
(7,892)
(16,848)

TotalcomprehensiveincomeattributabletoEatonVanceCorp.shareholders $ 232,310 $ 199,709 $ 286,497 SeenotestoConsolidatedFinancialStatements.

SLIDE 61

59

ConsolidatedBalanceSheets

October31,

(inthousands,exceptsharedata) 2016 2015 Assets

Cashandcashequivalents

$ 424,174 $ 465,558 Investmentadvisoryfeesandotherreceivables 186,172 187,753 Investments 589,773 507,020 AssetsofconsolidatedCLOentity: Cashandcashequivalents

162,704

Bankloaninvestments

304,250

Otherassets

128

Deferredsalescommissions 27,076 25,161 Deferredincometaxes 73,295 42,164 Equipmentandleaseholdimprovements,net 44,427 44,943 Intangibleassets,net 46,809 55,433 Goodwill 248,091 237,961 Loantoaffiliate 5,000

Otherassets

87,759 83,396 Totalassets $ 1,732,576 $ 2,116,471 Liabilities,TemporaryEquityandPermanentEquity

Liabilities:
Accruedcompensation

$ 173,485 $ 178,875 Accountspayableandaccruedexpenses 59,927 65,249 Dividendpayable 36,525 32,923 Debt 573,967 573,811 LiabilitiesofconsolidatedCLOentity:

Seniorandsubordinatednoteobligations
397,039

Otherliabilities

70,814

Otherliabilities 75,069 86,891 Totalliabilities 918,973 1,405,602 Commitmentsandcontingencies(Note20)

TemporaryEquity:
Redeemablenoncontrollinginterests

109,028 88,913 PermanentEquity:

VotingCommonStock,parvalue$0.00390625pershare:
Authorized,1,280,000shares
Issuedandoutstanding,442,932and415,078shares,respectively

2 2 NonVotingCommonStock,parvalue$0.00390625pershare:

Authorized,190,720,000shares
Issuedandoutstanding,113,545,008and115,470,485shares,respectively

444 451 Additionalpaidincapital

Notesreceivablefromstockoptionexercises

(12,074) (11,143) Accumulatedothercomprehensiveloss (57,583) (48,586) Appropriateddeficit

(5,338)

Retainedearnings 773,000 684,845 TotalEatonVanceCorp.shareholders'equity 703,789 620,231 Nonredeemablenoncontrollinginterests 786 1,725 Totalpermanentequity 704,575 621,956 Totalliabilities,temporaryequityandpermanentequity $ 1,732,576 $ 2,116,471 SeenotestoConsolidatedFinancialStatements.

SLIDE 62

60

ConsolidatedStatementsofShareholders'Equity

PermanentEquity
Temporary

Equity (inthousands) Votingand NonVoting Common Shares Voting Common Stock

NonVoting

Common Stock

Additional

PaidInCapital Notes Receivable fromStock Option Exercises

Accumulated

Other Comprehensive Loss

Appropriated

Retained Earnings Retained Earnings

Non

Redeemable Non Controlling Interests

Total

Permanent Equity

Redeemable

Non Controlling Interests

Balance,November1,2013

121,632 $ 2 $ 474 $ 124,837 $ (7,122) $ (177) $ 10,249 $ 541,521 $ 1,755 $ 671,539 $ 74,856 Netincome

(4,095)

304,316 6,228 306,449 14,715 Othercomprehensiveloss

(17,819)
(17,819)
Dividendsdeclared($0.910pershare)
(109,020)
(109,020)
IssuanceofVotingCommonStock
30
162

162

IssuanceofNonVotingCommonStock:
Onexerciseofstockoptions
3,732
14

84,704 (3,549)

81,169
Underemployeestockpurchaseplans

110

3,709
3,709
Underemployeestockpurchaseincentiveplans

99

3,353
3,353
Underrestrictedstockplans,netofforfeitures

1,176

5
5
Stockbasedcompensation
60,281
60,281
Taxbenefitofstockoptionexercises
18,570
18,570
RepurchaseofVotingCommonStock

(14)

(77)
(77)
RepurchaseofNonVotingCommonStock

(8,504)

(33)

(266,561)

(55,426)
(322,020)
Principalrepaymentsonnotesreceivable
fromstockoptionexercises
1,853
1,853
Netsubscriptions(redemptions/distributions)of

noncontrollinginterestholders

(5,326)

(5,326) (376) Netconsolidations(deconsolidations)of sponsoredinvestmentfundsandCLOentities

(3,687)
(3,687)

(4,111) Reclasstotemporaryequity

(352)

(352) 352 Purchaseofnoncontrollinginterests

(19,213)

Issuanceofsubsidiaryequity

9,935

Otherchangesinnoncontrollinginterests

(28,978)
(2,330)
(31,308)

31,308 Balance,October31,2014 118,261 $ 2 $ 460 $ $ (8,818) $ (17,996) $ 2,467 $ 679,061 $ 2,305 $ 657,481 $ 107,466

SeenotestoConsolidatedFinancialStatements.

SLIDE 63

61

ConsolidatedStatementsofShareholders'Equity(continued)

PermanentEquity
Temporary

Equity (inthousands) Votingand NonVoting Common Shares Voting Common Stock

Non

Voting Common Stock

Additional

PaidIn Capital

Notes

Receivable fromStock Option Exercises

AccumulatedOther

Comprehensive Loss

Appropriated

(Deficit) Retained Earnings Retained Earnings

Non

Redeemable Non Controlling Interests

TotalPermanent

Equity

Redeemable

Non Controlling Interests Balance,November1,2014 118,261 $ 2 $ 460 $ $ (8,818) $ (17,996) $ 2,467 $ 679,061 $ 2,305 $ 657,481 $ 107,466 Netincome

(5,825)

230,299 4,049 228,523 9,668 Othercomprehensiveloss

(30,590)
(30,590)
Dividendsdeclared($1.015pershare)
(118,719)
(118,719)
IssuanceofVotingCommonStock
14
77

77

IssuanceofNonVotingCommonStock:
Onexerciseofstockoptions
3,500
14

87,625 (4,752)

82,887
Underemployeestockpurchaseplans

101

3,324
3,324
Underemployeestockpurchaseincentiveplan

94

3,483
3,483
Underrestrictedstockplan,netofforfeitures

1,304

5
5
Stockbasedcompensation
69,279
69,279
Taxbenefitofstockoptionexercises
9,979
9,979
RepurchaseofVotingCommonStock

(14)

(77)
(77)
RepurchaseofNonVotingCommonStock

(7,374)

(28)

(177,548)

(105,796)
(283,372)
Principalrepaymentsonnotesreceivable
fromstockoptionexercises
2,427
2,427
Netsubscriptions(redemptions/distributions)of

noncontrollinginterestholders

(4,032)

(4,032) (3,863) Netconsolidations(deconsolidations)of sponsoredinvestmentfundsandCLOentities

(1,980)
(1,980)

(2,623) Reclasstotemporaryequity

(597)

(597) 597 Purchaseofnoncontrollinginterests

(18,474)

Otherchangesinnoncontrollinginterests

3,858
3,858

(3,858) Balance,October31,2015 115,886 $ 2 $ 451 $ $ (11,143) $ (48,586) $ (5,338) $ 684,845 $ 1,725 $ 621,956 $ 88,913

SeenotestoConsolidatedFinancialStatements.

SLIDE 64

62

ConsolidatedStatementsofShareholders’Equity(continued)

PermanentEquity
Temporary

Equity (inthousands) Votingand NonVoting Common Shares Voting Common Stock

NonVoting

Common Stock

Additional

PaidIn Capital

Notes

Receivable fromStock Option Exercises

Accumulated

Other Comprehensive Loss Appropriated Deficit

Retained

Earnings

Non

Redeemable Non Controlling Interests

Total

Permanent Equity

Redeemable

Non Controlling Interests Balance,November1,2015 115,886 $ 2 $ 451 $ $ (11,143) $ (48,586) $ (5,338) $ 684,845 $ 1,725 $ 621,956 $ 88,913 Netincome

9,768

241,307 4,066 255,141 9,616 Othercomprehensiveloss

(8,997)
(8,997)
Dividendsdeclared($1.075pershare)
(122,154)
(122,154)
IssuanceofVotingCommonStock
56
232
232
IssuanceofNonVotingCommonStock:
Onexerciseofstockoptions
3,805
15

107,851 (4,188)

103,678
Underemployeestockpurchaseplans

98

3,145
3,145
Underemployeestockpurchaseincentiveplan

134

1

3,596

3,597
Underrestrictedstockplan,netofforfeitures

1,366

5
5
Stockbasedcompensation
71,337
71,337
Taxbenefitofstockoptionexercises
2,240
2,240
Taxbenefitofnoncontrollinginterest

repurchases(SeeNote16)

52,657
52,657
RepurchaseofVotingCommonStock

(28)

(77)
(77)
RepurchaseofNonVotingCommonStock

(7,329)

(28)

(221,949)

(30,998)
(252,975)
Principalrepaymentsonnotesreceivable
fromstockoptionexercises
3,257
3,257
Netsubscriptions(redemptions/distributions)of

noncontrollinginterestholders

(4,886)

(4,886) 1,736 Netconsolidations(deconsolidations)of sponsoredinvestmentfundsandCLOentities

(4,430)
(4,430)

(1,567) Reclasstotemporaryequity

(119)

(119) 119 Purchaseofnoncontrollinginterests

(8,821)

Otherchangesinnoncontrollinginterests

(19,032)
(19,032)

19,032 Balance,October31,2016 113,988 $ 2 $ 444 $ $ (12,074) $ (57,583) $ $ 773,000 $ 786 $ 704,575 $ 109,028

SeenotestoConsolidatedFinancialStatements.

SLIDE 65

63

ConsolidatedStatementsofCashFlows

YearsEndedOctober31,

(inthousands) 2016 2015

2014

CashFlowsFromOperatingActivities:

Netincome

$ 264,757 $ 238,191 $ 321,164 Adjustmentstoreconcilenetincometonetcashprovided

byoperatingactivities:
Depreciationandamortization

20,798 21,749 21,398 Amortizationofdeferredsalescommissions 15,458 14,976 17,664 Stockbasedcompensation 71,337 69,279 60,281 Deferredincometaxes 22,089 4,784 11,382 Net(gains)lossesoninvestmentsandderivatives (534) 9,151 6,946 Impairmentlossoninvestments 650

Equityinnetincomeofaffiliates,netofamortization

(10,552) (12,734) (20,274) Dividendsreceivedfromaffiliates 11,460 15,908 16,079 ConsolidatedCLOentities’operatingactivities:

Net(gains)lossesonbankloans,otherinvestmentsandnote
bligations

(6,094) (1,625) 1,282 Amortization (624) 3 (754) Netincrease(decrease)inotherassetsandliabilities, includingcashandcashequivalents

80,468

(141,450) (114,974) Changesinoperatingassetsandliabilities:

Investmentadvisoryfeesandotherreceivables

1,334 (1,151) (16,206) Investmentsintradingsecurities (93,420) 639 (187,295) Deferredsalescommissions (17,380) (22,294) (17,580) Otherassets (4,051) 3,466 (8,092) Accruedcompensation (4,845) (2,078) 11,140 Accountspayableandaccruedexpenses (5,482) 1,308 5,911 Otherliabilities (4,820) 21,745 (9,287) Netcashprovidedbyoperatingactivities 340,549 219,867 98,785 CashFlowsFromInvestingActivities:

Additionstoequipmentandleaseholdimprovements

(10,682) (11,480) (7,580) Netcashpaidinacquisition (10,130) (9,085)

Cashpaidforintangibleassets

(25)

Issuanceofloantoaffiliate

(5,000)

Proceedsfromsaleofinvestments

17,375 69,946 95,788 Purchaseofinvestments (17,177) (10,583) (27,846) ConsolidatedCLOentities’investingactivities:

Proceedsfromsalesandmaturitiesofbankloansandother

investments 166,460 147,766 378,100 Purchaseofbankloansandotherinvestments (249,099) (102,298) (253,002) Netcash(usedfor)providedbyinvestingactivities (108,278) 84,266 185,460

SeenotestoConsolidatedFinancialStatements.

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64

ConsolidatedStatementsofCashFlows(continued)
YearsEndedOctober31,

(inthousands) 2016 2015 2014 CashFlowsFromFinancingActivities: Purchaseofadditionalnoncontrollinginterest (15,673) (19,964) (26,872) Lineofcreditissuancecosts

(1,111)

ProceedsfromissuanceofVotingCommonStock 232 77 162 ProceedsfromissuanceofNonVotingCommonStock 110,425 89,699 88,236 RepurchaseofVotingCommonStock (77) (77) (77) RepurchaseofNonVotingCommonStock (252,975) (283,372) (322,020) Principalrepaymentsonnotesreceivablefromstockoptionexercises 3,257 2,427 1,853 Excesstaxbenefitofstockoptionexercises 2,931 9,979 18,570 Dividendspaid (118,621) (116,016) (105,848) Netsubscriptionsreceivedfrom(redemptions/distributionspaid to)noncontrollinginterestholders 302 (7,895) (5,702) ConsolidatedCLOentities’financingactivities: Proceedsfromlineofcredit

83,612
Repaymentoflineofcredit
(202,357)

(247,789) Repaymentofredeemablepreferredshares

(60,000)

Issuanceofseniorandsubordinatednotesandpreferredshares

401,607

429,582 Principalrepaymentsofseniorandsubordinatednoteobligations

(179,166)

(128,362) Netcashusedforfinancingactivities (270,199) (221,446) (359,378) Effectofcurrencyratechangesoncashandcashequivalents (3,456) (2,344) (1,558) Netincrease(decrease)incashandcashequivalents (41,384) 80,343 (76,691) Cashandcashequivalents,beginningofyear 465,558 385,215 461,906 Cashandcashequivalents,endofyear $ 424,174 $ 465,558 $ 385,215 SupplementalCashFlowInformation: Cashpaidforinterest $ 28,413 $ 28,390 $ 29,298 CashpaidforinterestbyconsolidatedCLOentities 11,024

2,388

7,103 Cashpaidforincometaxes,netofrefunds 128,845

120,496

172,119 SupplementalDisclosureofNonCashInformation: Increaseinequipmentandleaseholdimprovementsdue tononcashadditions $ 453 $ 389 $ 154 Exerciseofstockoptionsthroughissuanceofnotesreceivable 4,188

4,752

3,549 Acquisitionofnoncontrollingintereststhroughissuanceof

subsidiaryequity
9,935

Noncontrollinginterestcalloptionexercisesrecordedinother

liabilities

2,510

10,105

11,594 InitialConsolidationofCLOEntity:

Increaseinotherassets,netofotherliabilities

$

$

(54,578) $

Increaseininvestments
207,371
Increaseinborrowings
153,745
DeconsolidationofCLOEntity:
Decreaseinotherassets,netofotherliabilities

$ (12,118) $ (3,566) $ (19,210) Decreaseininvestments (389,856)

(1,559)

(411,897) Decreaseinborrowings (397,544)

(4,097)

(427,418) NetConsolidations(Deconsolidations)ofSponsored

InvestmentFunds:
Decreaseininvestments

$ (2,737) $ (21,029) $ (4,122) Increase(decrease)inotherassets,netofotherliabilities (222)

18,992
Decreaseinnoncontrollinginterests

(1,567)

(2,623)

(4,111)

SeenotestoConsolidatedFinancialStatements.

SLIDE 67

65

NotestoConsolidatedFinancialStatements

1. SummaryofSignificantAccountingPolicies
Businessandorganization
EatonVanceCorp.anditssubsidiaries(the“Company”)manageinvestmentfundsandprovideinvestment

managementandadvisoryservicestohighnetworthindividualsandinstitutionsintheUnitedStates,Europe andcertainotherinternationalmarkets.TheCompanydistributesitsfundsandretailmanagedaccounts principallythroughfinancialintermediaries.TheCompanyalsocommitssignificantresourcestoserving institutionalandhighnetworthclientswhoaccessinvestmentmanagementservicesonadirectbasis.

Revenueislargelydependentonthetotalvalueandcompositionofassetsundermanagement,whichinclude

sponsoredfundsandseparateaccounts.Accordingly,fluctuationsinfinancialmarketsandchangesinthe compositionofassetsundermanagementimpactrevenueandtheresultsofoperations.

Basisofpresentation
ThepreparationoftheCompany’sConsolidatedFinancialStatementsinconformitywithaccounting

principlesgenerallyacceptedintheUnitedStatesofAmerica(“GAAP”)requiresmanagementtomake judgments,estimatesandassumptionsthataffecttheamountsreportedintheConsolidatedFinancial StatementsandrelatednotestotheConsolidatedFinancialStatements.However,duetotheinherent uncertaintiesinmakingestimates,actualresultscoulddifferfromthoseestimates.

Duringthefirstquarteroffiscal2015,theCompanymadeaonetimepaymentof$73.0millionto

terminatecertainclosedendfundserviceandadditionalcompensationarrangementswithadistribution partner.ThepaymentwasincludedasacomponentofdistributionexpenseintheCompany’s ConsolidatedStatementofIncomeforthefiscalyearendedOctober31,2015.

Principlesofconsolidation
TheConsolidatedFinancialStatementsincludetheaccountsoftheCompanyanditscontrolledaffiliates.

TheCompanyconsolidatesanyvotinginterestentityinwhichtheCompany’svotingownershipexceeds50 percentorwheretheCompanyhascontrol.Inaddition,theCompanyconsolidatesanyvariableinterest entity(“VIE”)forwhichtheCompanyisconsideredtheprimarybeneficiary.TheCompanyrecognizesnon controllingandotherbeneficialinterestsinconsolidatedaffiliatesinwhichtheCompany’sownershipis lessthan100percent.Allintercompanyaccountsandtransactionshavebeeneliminatedinconsolidation.

TheCompanymaybeconsideredtheprimarybeneficiaryofcertaincollateralizedloanobligation(“CLO”)

entitiesforwhichitactsascollateralmanager.Intheseinstances,theCompanyconsolidatestheassets, liabilities,resultsofoperationsandcashflowsofsuchentitiesintheCompany’sConsolidatedFinancial Statements.TheassetsofconsolidatedCLOentitiescannotbeusedbytheCompany,andseniorand subordinatedinterestholdersoftheCLOentitieshavenorecoursetothegeneralcreditorassetsofthe Company.

TheCompanymaymaintainacontrollinginterestinanopenendregisteredinvestmentcompanythatit

sponsors(a“sponsoredfund”).Undertheaccountingguidanceforinvestmentcompanies,underlying investmentsheldbyconsolidatedsponsoredfundsarecarriedatfairvalue,withcorrespondingchangesin

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fairvaluereflectedingains(losses)andotherinvestmentincome,net,intheCompany’sConsolidated

StatementsofIncome.Uponconsolidation,theCompanyretainsthespecializedaccountingtreatmentof thesponsoredfund.

Withlimitedexceptions,eachoftheCompany’ssponsoredmutualfundsisorganizedasaseparately

managedcomponent(or“series”)ofaseriestrust.Thetrustsqualifyforthedeferralofaccounting guidancethatrequiresseparateevaluationforinvestmentcompanyVIEsandotherVIEs(see “ConsolidationofVIEs”below).Allassetsofaseriesirrevocablybelongtothatseriesandaresubjecttothe liabilitiesofthatseries;undernocircumstancesaretheliabilitiesofoneseriespayablebyanotherseries. Seriestruststhemselveshavenoequityinvestmentatrisk,butdecisionsregardingthetrusteesofthetrust andcertainkeyactivitiesofeachsponsoredfundwithinthetrust,suchasappointmentofeachsponsored fund’sinvestmentadviser,typicallyresideatthetrustlevel.Asaresult,shareholdersofasponsoredfund thatisorganizedasaseriesofaseriestrustlacktheabilitytocontrolthekeydecisionmakingprocesses thatmostdirectlyaffecttheperformanceofthesponsoredfund.Accordingly,theCompanybelievesthat eachtrustisaVIEandeachsponsoredfundisasiloofaVIEthatalsomeetsthedefinitionofaVIE.Having concludedthateachsiloisaVIE,theprimarybeneficiaryevaluationisfocusedonananalysisofeconomic interest.TheCompanymayholdthemajorityofthesharesofasponsoredfundcorrespondingtoa majorityeconomicinterestduringtheseedinvestmentstagewhenthesponsoredfund’sinvestmenttrack recordisbeingestablishedorwhenthefundisintheearlystagesofsolicitingoutsideinvestors.The Companyconsolidatesthefundasprimarybeneficiaryduringthisperiod.Feerevenueearnedon sponsoredfundsiseliminatedinconsolidation.

TheCompanyregularlyseedsnewsponsoredfundsandthereforemayconsolidateavarietyofsponsored

fundsduringagivenreportingperiod.DuetothesimilarityofrisksrelatedtotheCompany’sinvolvement witheachsponsoredfund,disclosuresrequiredundertheVIEmodelareaggregated,suchasthose disclosuresregardingthecarryingamountandclassificationofassetsofthesponsoredfundsandthegains andlossesthattheCompanyrecognizesfromthesponsoredfunds.

WhentheCompanyisnolongerdeemedtoholdacontrollingfinancialinterestinasponsoredfund,which
ccurswheneithertheCompanyredeemsitssharesorsharesheldbythirdpartiesexceedthenumberof

sharesheldbytheCompany,theCompanydeconsolidatesthesponsoredfundandremovestherelated assets,liabilitiesandnoncontrollinginterestsfromitsbalancesheetandclassifiestheCompany’s remaininginvestmentaseitheranequitymethodinvestmentorasavailableforsale,asapplicable. Becauseconsolidatedsponsoredfundsutilizefairvaluemeasurements,thereisnoincrementalgainorloss recognizedupondeconsolidation.

TheextentoftheCompany’sexposuretolosswithrespecttoaconsolidatedsponsoredfundistheamount
ftheCompany’sinvestmentinthesponsoredfund.TheCompanyisnotobligatedtoprovidefinancial

supporttosponsoredfunds.Onlytheassetsofasponsoredfundareavailabletosettleitsobligations. BeneficialinterestholdersofsponsoredfundsdonothaverecoursetothegeneralcreditoftheCompany.

ConsolidationofVIEs
AccountingguidanceprovidesaframeworkfordeterminingwhetheranentityshouldbeconsideredaVIE

and,ifso,whetheracompany’sinvolvementwiththeentityresultsinavariableinterestintheentity.If theCompanydeterminesthatitdoeshaveavariableinterestinanentity,itmustperformananalysisto determinewhetheritistheprimarybeneficiaryoftheVIE.IftheCompanydeterminesitistheprimary

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67 beneficiaryoftheVIE,itisrequiredtoconsolidatetheassets,liabilities,resultsofoperationsandcash flowsoftheVIEintotheConsolidatedFinancialStatementsoftheCompany.

TheCompany’sevaluationofwhetheritqualifiesastheprimarybeneficiaryofaVIEishighlycomplex.

Withtheexceptionofentitiesdescribedinthenextparagraph,theCompanyistheprimarybeneficiaryof aVIEifithasacontrollingfinancialinterestintheVIE.Acompanyisdeemedtohaveacontrollingfinancial interestinaVIEifithasboth(i)thepowertodirecttheactivitiesoftheVIEthatmostsignificantlyimpact theVIE’seconomicperformance,and(ii)theobligationtoabsorblossesoftheVIEthatcouldpotentially besignificanttotheVIEortherighttoreceivebenefitsfromtheVIEthatcouldpotentiallybesignificantto theVIE.

ForinvestmentsinVIEsthatqualifyforthedeferralofaccountingguidancethatrequiresseparate

evaluationforinvestmentcompanyVIEsandotherVIEs(the“InvestmentCompanydeferral”),the CompanymustmakesignificantestimatesandassumptionsregardingfuturecashflowsofeachVIEto determinewhetherithasthemajorityoftherisksandrewardsofownershipandthusistheprimary beneficiaryoftheseVIEs.

ForCLOentities,theCompanyhasconcludedthatitdoesnotqualifyfortheInvestmentCompanydeferral

andthereforetheCompanymustevaluateestimatesandassumptionsrelatingprimarilytomarketinterest rates,creditdefaultrates,prepaymentrates,discountrates,themarketabilityofcertainsecuritiesand theprobabilityofcertainoutcomes.ThereisalsojudgmentinvolvedinassessingwhethertheCompany hasthepowertodirecttheactivitiesthatmostsignificantlyimpacttheVIE’seconomicperformanceand theobligationtoabsorblossesofortherighttoreceivebenefitsfromtheVIEthatcouldpotentiallybe significanttotheentity.

WhiletheCompanybelievesitsoverallevaluationofVIEsisappropriate,futurechangesinestimates,

judgmentsandassumptions,changesintheownershipinterestsoftheCompanyinaVIE,and/orfuture accountingpronouncementsmayaffecttheresultingconsolidation,ordeconsolidation,oftheassets, liabilities,resultsofoperationsandcashflowsofaVIE.

Segmentinformation
ManagementhasdeterminedthattheCompanyoperatesinonesegment,namelyasaninvestment

advisermanagingfundsandseparateaccounts.TheCompany’sdeterminationthatitoperatesinone businesssegmentisbasedonthefactthattheCompany’sChiefExecutiveOfficerreviewstheCompany’s financialperformanceatanaggregatelevel.AlloftheproductsandservicesprovidedbytheCompany relatetoinvestmentmanagementandaresubjecttosimilarregulatoryframeworks.Investment managementteamsattheCompanyaregenerallynotalignedwithspecificproductlinesordistribution channels;inmanyinstances,theinvestmentprofessionalswhomanagetheCompany’ssponsoredfunds arethesameinvestmentprofessionalswhomanagetheCompany’sseparatelymanagedaccounts.

Cashandcashequivalents
Cashandcashequivalentsconsistprincipallyofcashandshortterm,highlyliquidinvestmentsinmoney

marketfunds,commercialpaper,certificatesofdepositandholdingsofTreasuryandgovernmentagency securities,whicharereadilyconvertibletocash.Cashequivalentshavematuritiesoflessthanthree monthsonthedateofacquisitionandarestatedatfairvalueorcost,whichapproximatesfairvaluedueto theshorttermmaturitiesoftheunderlyinginvestments.

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Restrictedcash
Restrictedcashconsistsprincipallyofcashcollateralrequiredformarginaccountsestablishedtosupport

derivativepositions,andisincludedasacomponentofotherassetsontheCompany’sConsolidated BalanceSheets.Suchderivativesareusedtohedgecertaininvestmentsinconsolidatedsponsoredfunds andseparatelymanagedaccountsseededforproductdevelopmentpurposes(“consolidatedseed investments”).Becausetheaccountsareusedtosupporttradingactivities,changesinrestrictedcash balancesarereflectedasoperatingcashflowsintheCompany’sConsolidatedStatementsofCashFlows.

Investments
Investmentsecurities,trading

Marketablesecuritiesclassifiedastradingsecuritiesconsistofinvestmentsindebtandequitysecurities heldintheportfoliosofconsolidatedseedinvestments,bankobligations,certificatesofdeposit, commercialpaperandcorporatedebtsecuritieswithremainingmaturities(uponpurchasebythe Company)rangingfromthreemonthsto12months.

Investmentsecuritiesheldintheportfoliosofconsolidatedseedinvestmentsand/orhelddirectlybythe

Companyarecarriedatfairvaluebasedonquotedmarketprices.Netrealizedandunrealizedgainsor lossesarereflectedasacomponentofgains(losses)andotherinvestmentincome.Thespecificidentified costmethodisusedtodeterminetherealizedgainsorlossesonalltradingsecuritiessold.

Investmentsecurities,availableforsale

Marketablesecuritiesclassifiedasavailableforsaleconsistprimarilyofinvestmentsinsharesof sponsoredfundsandarecarriedatfairvaluebasedonquotedmarketprices.Unrealizedholdinggainsor losses(totheextentsuchlossesareconsideredtemporary)arereportednetofdeferredtaxasaseparate componentofaccumulatedothercomprehensiveincome(loss)untilrealized.Realizedgainsorlossesare reflectedasacomponentofgains(losses)andotherinvestmentincome.Thespecificidentifiedcost methodisusedtodeterminetherealizedgainsorlossesonthesaleofsharesofsponsoredfunds.

TheCompanyevaluatesthecarryingvalueofmarketablesecuritiesclassifiedasavailableforsalefor

impairmentonaquarterlybasis.Initsimpairmentanalysis,theCompanytakesintoconsideration numerouscriteria,includingthedurationandextentofanydeclineinfairvalueandtheCompany’sintent withrespecttoagivensecurity.Ifthedeclineinvalueisdeterminedtobeotherthantemporary,the carryingvalueofthesecurityiswrittendowntofairvaluethroughearnings.

InvestmentsinnonconsolidatedCLOentities

InvestmentsinnonconsolidatedCLOentitiesarecarriedatamortizedcostunlessimpaired.Theexcessof actualandanticipatedfuturecashflowsovertheinitialinvestmentatthedateofpurchaseisrecognizedin gains(losses)andotherinvestmentincome,net,overthelifeoftheinvestmentusingtheeffectiveyield method.TheCompanyreviewscashflowestimatesthroughoutthelifeofeachnonconsolidatedCLO entity.Iftheupdatedestimateoffuturecashflows(takingintoaccountbothtimingandamounts)isless thanthelastrevisedestimate,animpairmentlossisrecognizedtotheextentthecarryingamountofthe investmentexceedsitsfairvalue.

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69 Investmentsinequitymethodinvestees InvestmentsinnoncontrolledaffiliatesinwhichtheCompany’sownershiprangesfrom20to50percent,

rininstancesinwhichtheCompanyisabletoexercisesignificantinfluencebutnotcontrol,are

accountedforundertheequitymethodofaccounting.Undertheequitymethodofaccounting,the Company’sshareoftheinvestee’sunderlyingnetincomeorlossisrecordedasequityinnetincomeof affiliates,netoftax.DistributionsreceivedfrominvesteesreducetheCompany’sinvestmentbalance. Investmentsinequitymethodinvesteesareevaluatedforimpairmentaseventsorchangesin circumstancesindicatethatthecarryingamountofsuchassetsmaynotberecoverable.Ifthecarrying amountsoftheassetsexceedtheirrespectivefairvalues,additionalimpairmenttestsareperformedto measuretheamountsoftheimpairmentlosses,ifany.

Investments,other

Certaininvestmentsarecarriedatcost.Thefairvaluesofcostmethodinvestmentsarenotestimatedif therearenoidentifiedeventsorchangesincircumstancesthatmayhaveasignificantadverseeffecton thefairvaluesoftheinvestments.

Fairvaluemeasurements
Theaccountingstandardsforfairvaluemeasurementprovideaframeworkformeasuringfairvalueand

requireexpandeddisclosuresregardingfairvaluemeasurements.Fairvalueisdefinedasthepricethat wouldbereceivedforanassetortheexitpricethatwouldbepaidtotransferaliabilityintheprincipalor mostadvantageousmarketinanorderlytransactionbetweenmarketparticipantsonthemeasurement date.Theaccountingstandardsestablishafairvaluemeasurementhierarchy,whichrequiresanentityto maximizetheuseofobservableinputswhereavailable.Thisfairvaluemeasurementhierarchygivesthe highestprioritytoquotedpricesinactivemarketsforidenticalassetsorliabilitiesandthelowestpriority tounobservableinputs.

TheCompanyutilizesthirdpartypricingservicestovalueinvestmentsinvariousassetclasses,including

interestsinseniorfloatingrateloansandotherdebtobligations,derivativesandcertainforeignequity securities,asfurtherdiscussedbelow.Valuationsprovidedbythepricingservicesaresubjecttoexception reportingthatidentifiessecuritieswithsignificantmovementsinvaluation,aswellasinvestmentswithno movementsinvaluation.TheseexceptionsarereviewedbytheCompanyonadailybasis.TheCompany comparesthepriceoftradesexecutedbytheCompanytothevaluationsprovidedbythethirdparty pricingservicestoidentifyandresearchsignificantvariances.TheCompanyperiodicallycomparesthe pricingservicevaluationstovaluationsprovidedbyasecondaryindependentsourcewhenavailable. Marketdataprovidedbythepricingservicesandothermarketparticipants,suchastheLoanSyndication andTradingAssociation(“LSTA”)tradestudy,isreviewedbytheCompanytoassessthereliabilityofthe provideddata.TheCompany’sValuationCommitteereviewsthegeneralassumptionsunderlyingthe methodologiesusedbythepricingservicestovaluevariousassetclassesatleastannually.Throughoutthe year,membersoftheCompany’sValuationCommitteeoritsdesigneesmeetwiththeserviceprovidersto discussanysignificantchangestotheserviceproviders’valuationmethodologiesoroperationalprocesses.

Assetsandliabilitiesmeasuredandreportedatfairvalueareclassifiedanddisclosedinoneofthe

followingcategoriesbasedonthenatureoftheinputsthataresignificanttothefairvaluemeasurements intheirentirety.Incertaincases,theinputsusedtomeasurefairvaluemayfallintodifferentlevelsofthe fairvaluemeasurementhierarchy.Insuchcases,aninvestment’sclassificationwithinthefairvalue measurementhierarchyisbasedonthelowestlevelofinputthatissignificanttothefairvalue measurement.

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Level1

Unadjustedquotedmarketpricesinactivemarketsforidenticalassetsorliabilitiesatthe reportingdate.

Level2

ObservableinputsotherthanLevel1unadjustedquotedmarketprices,suchasquotedmarket pricesforsimilarassetsorliabilitiesinactivemarkets,quotedpricesforidenticalorsimilar assetsorliabilitiesthatarenotactive,andinputsotherthanquotedpricesthatareobservable

rcorroboratedbyobservablemarketdata.
Level3

Unobservableinputsthataresupportedbylittleornomarketactivity.

TheCompanyrecognizesanytransfersbetweenlevelsattheendofeachquarter.
Derivativefinancialinstruments
TheCompanymayutilizederivativefinancialinstrumentstohedgemarket,commodityandcurrencyrisks

associatedwithitsinvestmentsinseparateaccountsandcertainconsolidatedsponsoredfundsseededfor newproductdevelopmentpurposes,exposurestofluctuationsinforeigncurrencyexchangerates associatedwithinvestmentsdenominatedinforeigncurrenciesandinterestrateriskinherentindebt

fferings.Thesederivativefinancialinstrumentsmayormaynotqualifyashedgesforaccounting

purposes.Inaddition,certainconsolidatedseedinvestmentsmayenterintoderivativefinancial instrumentswithintheirportfoliostoachievestatedinvestmentobjectives.TheCompanydoesnotuse derivativefinancialinstrumentsforspeculativepurposes.

TheCompanyrecordsallderivativefinancialinstrumentsaseitherassetsorliabilitiesonitsConsolidated

BalanceSheetsandmeasurestheseinstrumentsatfairvalue.Derivativetransactionsarepresentedona grossbasisintheCompany’sConsolidatedBalanceSheets.Foraderivativefinancialinstrumentthatis designatedasacashflowhedginginstrument,theeffectiveportionofthederivative’sgainorlossis initiallyreportedasacomponentofothercomprehensiveincome(loss)andsubsequentlyreclassifiedinto earningsoverthelifeofthehedge.Theineffectiveportionofthegainorlossisreportedinearnings immediately.ChangesinthefairvalueoftheCompany’sotherderivativefinancialinstrumentsare recognizedinearningsinthecurrentperiod.

Deferredsalescommissions
Salescommissionspaidtobrokerdealersinconnectionwiththesaleofcertainclassesofsharesof

sponsoredopenendandprivatefundsaregenerallydeferredandamortizedovertheperiodduringwhich redemptionsbythepurchasingshareholderaresubjecttoacontingentdeferredsalescharge,whichdoes notexceedsixyearsfrompurchase.Distributionplanpaymentsreceivedfromthesefundsarerecordedin revenueasearned.Contingentdeferredsaleschargesandearlywithdrawalchargesreceivedfrom redeemingshareholdersofthesesponsoredfundsaregenerallyappliedtoreducetheCompany’s unamortizeddeferredsalescommissionassets.ShouldtheCompanyloseitsabilitytorecoversuchsales commissionsthroughdistributionplanpaymentsandcontingentdeferredsalescharges,thevalueofits deferredsalescommissionassetwouldimmediatelydecline,aswouldrelatedfuturecashflows.

TheCompanyevaluatesthecarryingvalueofitsdeferredsalescommissionassetforimpairmentona

quarterlybasis.Initsimpairmentanalysis,theCompanycomparesthecarryingvalueofthedeferredsales commissionassettotheundiscountedcashflowsexpectedtobegeneratedbytheassetintheformof

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71 distributionfeesoveritsremainingusefullifetodeterminewhetherimpairmenthasoccurred.Ifthe carryingvalueoftheassetexceedstheundiscountedcashflows,theassetiswrittendowntofairvalue basedondiscountedcashflows.Impairmentadjustmentsarerecognizedinoperatingincomeasa componentofamortizationofdeferredsalescommissions.

Incometaxes
Deferredincometaxesreflecttheexpectedfuturetaxconsequencesoftemporarydifferencesbetween

thecarryingamountsandtaxbasesoftheCompany’sassetsandliabilitiesmeasuredusingratesexpected tobeineffectwhensuchdifferencesreverse.Totheextentthatdeferredtaxassetsareconsideredmore likelythannottobeunrealizable,valuationallowancesareprovided.

TheCompany’seffectivetaxratereflectsthestatutorytaxratesofthemanyjurisdictionsinwhichit
perates.Significantjudgmentisrequiredinevaluatingitstaxpositions.Intheordinarycourseofbusiness,

manytransactionsoccurforwhichtheultimatetaxoutcomeisuncertain.Accountingstandardsgoverning theaccountingforuncertaintyinincometaxesforataxpositiontakenorexpectedtobetakeninatax returnrequirethatthetaxeffectsofapositionberecognizedonlyifitismorelikelythannottobe sustainedbasedsolelyonitstechnicalmeritsasofthereportingdate.Themorelikelythannotthreshold mustbemetineachreportingperiodtosupportcontinuedrecognitionofthebenefit.Thedifference betweenthetaxbenefitrecognizedinthefinancialstatementsforataxpositionandthetaxbenefit claimedintheincometaxreturnisreferredtoasanunrecognizedtaxbenefit.Unrecognizedtaxbenefits, aswellastherelatedinterestandpenalties,areadjustedregularlytoreflectchangingfactsand circumstances.TheCompanyclassifiesanyinterestorpenaltiesincurredasacomponentofincometax expense.

Equipmentandleaseholdimprovements
Equipmentandotherfixedassetsarerecordedatcostanddepreciatedonastraightlinebasisovertheir

estimatedusefullives,whichrangefromthreetofiveyears.Acceleratedmethodsareusedforincometax purposes.Leaseholdimprovementsareamortizedonastraightlinebasisovertheshorteroftheir estimatedusefullivesorthetermsoftheleases.Expendituresforrepairsandmaintenancearechargedto expensewhenincurred.Equipmentandleaseholdimprovementsaretestedforimpairmentwhenever changesinfactsorcircumstancesindicatethatthecarryingamountofanassetmaynotberecoverable.

Certaininternalandexternalcostsincurredinconnectionwithdevelopingorobtainingsoftwarefor

internalusearecapitalizedandamortizedonastraightlinebasisovertheshorteroftheestimateduseful lifeofthesoftwareorthreeyears,beginningwhenthesoftwareprojectiscompleteandtheapplicationis putintoproduction.Thesecostsareincludedinequipmentandleaseholdimprovementsonthe Company’sConsolidatedBalanceSheets.

Goodwill
GoodwillrepresentstheexcessofthecostoftheCompany’sinvestmentinthenetassetsofacquired

companiesoverthefairvalueoftheunderlyingidentifiablenetassetsatthedatesofacquisition.The CompanyattributesallgoodwillassociatedwithitsacquisitionsofAtlantaCapitalManagementCompany, LLC(“AtlantaCapital”),ParametricPortfolioAssociatesLLC(“Parametric”)andTheCliftonGroup InvestmentManagementCompany(“Clifton”),whichsharesimilareconomiccharacteristics,toone reportingunit.TheCompanyattributesallgoodwillassociatedwithitsacquisitionoftheTaxAdvantaged

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BondStrategies(“TABS”)businessofM.D.SassInvestorServicesandotheracquisitionstoasecond

reportingunit.

Goodwillisnotamortizedbutistestedannuallyforimpairmentinthefourthquarterofeachfiscalyearby

comparingthefairvaluesofidentifiedreportingunitstotheirrespectivecarryingamounts,including goodwill.TheCompanyestablishesfairvalueforthepurposeofimpairmenttestingforeachreportingunit byusinganincomeapproachandamarketapproach.

Theincomeapproachemploysadiscountedcashflowmodelthattakesintoaccount(1)assumptionsthat

marketparticipantswoulduseintheirestimatesoffairvalue,(2)currentperiodactualresultsand(3) budgetprojectionsforfutureperiodsthathavebeenvettedbyseniormanagement.Thediscountedcash flowmodelincorporatesthesamefundamentalpricingconceptsusedtocalculatefairvalueinthe acquisitionduediligenceprocessandadiscountratethattakesintoconsiderationtheCompany’s estimatedcostofcapitaladjustedfortheuncertaintyinherentintheforecastedinformation.

Themarketapproachemploysmarketmultiplesbasedoncomparablepubliclytradedcompaniesinthe

financialservicesindustry,calculatedwithdatafromindustrysources.Estimatesoffairvalueare establishedusingcurrentandforwardmultiplesofbothrevenueandearningsbeforeinterest,taxes, depreciationandamortization(“EBITDA”),adjustedforsizeandperformanceofthereportingunitrelative topeercompanies.

Ifthecarryingamountofthereportingunitexceedsitscalculatedfairvalue,thesecondstepofthe

goodwillimpairmenttestwillbeperformedtomeasuretheamountoftheimpairmentloss,ifany.

Intangibleassets
Amortizingidentifiableintangibleassetsgenerallyrepresentthecostofclientrelationships,intellectual

propertyandmanagementcontractsacquired.Invaluingtheseassets,theCompanymakesassumptions regardingusefullivesandprojectedgrowthrates,andsignificantjudgmentisrequired.TheCompany periodicallyreviewsitsidentifiableintangibleassetsforimpairmentaseventsorchangesincircumstances indicatethatthecarryingamountofsuchassetsmaynotberecoverable.Ifthecarryingamountsofthose assetsexceedtheirrespectivefairvalues,additionalimpairmenttestsareperformedtomeasurethe amountsoftheimpairmentlosses,ifany.

Nonamortizingintangibleassetsgenerallyrepresentthecostofmutualfundmanagementcontracts

acquired.Nonamortizingintangibleassetsaretestedforimpairmentinthefourthquarterofeachfiscal yearbycomparingthefairvaluesofthemanagementcontractsacquiredtotheircarryingvalues.The Companyestablishesfairvalueforpurposesofimpairmenttestingusingtheincomeapproach.Ifthe carryingvalueofamanagementcontractacquiredexceedsitsfairvalue,animpairmentlossisrecognized equaltothatexcess.

Debtissuancecosts
Deferreddebtissuancecostsareamortizedusingtheeffectiveinterestmethodovertherelateddebtterm

andareincludedinotherassets.Theamortizationofdeferreddebtissuancecostsisincludedininterest expense.

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73 Appropriatedretainedearnings(deficit)

TheCompanyrecordsappropriatedretainedearnings(deficit)equaltothedifferencebetweenthefair

valueofconsolidatedCLOentityassetsandthefairvalueofconsolidatedCLOentityliabilitiesthatcanbe attributedtoexternalinvestors.Theamountisrecordedasappropriatedretainedearnings(deficit)since theotherholdersoftheCLOentity’sbeneficialinterests,nottheCompany,willreceivethebenefitsor absorbthelossesassociatedwiththeirproportionateshareoftheCLOentity’sassetsandliabilities.Forall periodspresented,thenetchangesinthefairvalueofconsolidatedCLOentityassetsandliabilitiesthat canbeattributedtotheCLOentity’sotherbeneficialinterestholdershavebeenrecordedasnetincome attributabletononcontrollingandotherbeneficialinterestsandasanadjustmenttoappropriated retainedearnings(deficit).

Revenuerecognition
Investmentadvisoryandadministrativefees

Investmentadvisoryandadministrativefeesforthefundsandinvestmentadvisoryfeesforseparate accountsmanagedbytheCompanyarerecordedinrevenueastheservicesareperformed.Suchfeesare basedprimarilyonpredeterminedpercentagesofthemarketvaluesoftheassetsundermanagement. TheCompany’sfundinvestmentadvisoryandadministrativefeesarecalculatedprincipallyasapercentage

faveragedailynetassets.TheCompany’sseparateaccountinvestmentadvisoryfeesarecalculatedasa

percentageofeitherbeginning,averageorendingmonthlyorquarterlynetassets.Investmentadvisory andadministrativefeesforthefundsareearneddailyandpaidmonthly;investmentadvisoryfeesfor separateaccountsareearneddailyandpaideithermonthlyorquarterly.TheCompanymaywaivecertain feesforinvestmentandadministrativeservicesatitsdiscretion.

Performancefeesaregeneratedoncertainfundandseparateaccountmanagementcontractswhen

specificperformancehurdlesaremet.Suchfeesarerecordedininvestmentadvisoryandadministrative feesasoftheperformancemeasurementdate,whentheoutcomecanbereasonablyassuredand measuredreliably.

TheCompanyhascontractualarrangementswiththirdpartiestoprovidecertainfundrelatedservices,

includingsubadvisoryanddistributionrelatedservices.Management’sdeterminationofwhetherrevenue shouldbereportedgrossbasedontheamountpaidbythefundsornetofpaymentstothirdpartyservice providersisbasedonmanagement’sassessmentofwhethertheCompanyisactingastheprincipalservice providerorisactingasanagent.TheprimaryfactorsconsideredinassessingthenatureoftheCompany’s roleinclude(1)whethertheCompanyisresponsibleforthefulfillmentoftheobligation,includingthe acceptabilityoftheservicesprovided;(2)whethertheCompanyhasreasonablelatitudetoestablishthe priceoftheserviceprovided;(3)whethertheCompanyhasthediscretiontoselecttheserviceprovider; and(4)whethertheCompanyassumescreditriskinthearrangement.

Pursuanttomanagement’sassessmentofthecriteriadescribedabove,investmentadvisoryand

administrativefeesarerecordedgrossofanysubadvisorypayments,withthecorrespondingfeespaidto anysubadviserbasedonthetermsofthosearrangementsincludedinfundrelatedexpensesinthe Company’sConsolidatedStatementsofIncome.

Distribution,underwriterandservicefees

Distributionandservicefeesforallshareclassessubjecttothesefeesarecalculatedasapercentageof averagedailynetassetsandrecordedinrevenueasearned,grossofanythirdpartydistributionand

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servicefeepaymentsmade.Distributionandservicefeesareearneddailyandpaidmonthly.Theexpenses

associatedwiththirdpartydistributionandservicefeearrangementsarerecordedindistributionand servicefeeexpense,respectively,astheservicesareprovidedbythethirdparty.Theseexpensesarealso paidmonthly.

Underwritercommissionsareearnedonsalesofsharesofsponsoredmutualfundsonwhichinvestorspay

asaleschargeatthetimeofpurchase.Saleschargesandunderwritercommissionsarewaivedorreduced

nshareholderpurchasesthatexceedspecifiedminimumamountsandonpurchasesbycertaincategories
finvestors.
Advertisingandpromotion
TheCompanyexpensesalladvertisingandpromotionalcostsasincurred.Advertisingcostsincurredwere

notmaterialtotheCompany’sConsolidatedFinancialStatementsinthefiscalyearsendedOctober31, 2016,2015or2014.

Leases
TheCompanyleasesofficespaceundervariousleasingarrangements.Asleasesexpire,theyarenormally

renewedorreplacedintheordinarycourseofbusiness.Mostleaseagreementscontainrenewaloptions, rentescalationclausesand/orotherinducementsprovidedbythelandlord.Rentexpenseisrecordedona straightlinebasis,includingescalationsandinducements,overtheleaseterm.

Earningspershare
Earningsperbasicanddilutedsharearecalculatedunderthetwoclassmethod.Pursuanttothetwoclass

method,theCompany’sunvestedrestrictedstockawardswithnonforfeitablerightstodividends,which relateexclusivelytorestrictedstockawardsgrantedonorbeforeNovember1,2012,areconsidered participatingsecurities andnetincomeattributabletoEatonVanceCorp.shareholdersisadjustedforthe allocationofearningstotheseparticipatingsecurities.Earningsperdilutedshareisthencomputedonthe basisoftheweightedaveragenumberofcommonsharesoutstandingduringtheperiodplusthedilutive effectofanypotentialcommonsharesoutstandingduringtheperiodusing themoredilutiveofthetreasury methodortwoclassmethod.

Stockbasedcompensation
TheCompanyaccountsforstockbasedcompensationexpenseatfairvalue.Underthefairvaluemethod,

stockbasedcompensationexpense,whichreflectsthefairvalueofstockbasedawardsmeasuredatgrant date,isrecognizedonastraightlinebasisovertherelevantserviceperiod(generallyfiveyears)andis adjustedeachperiodforanticipatedforfeitures.

ThefairvalueofeachoptionawardgrantedisestimatedusingtheBlackScholesoptionvaluationmodel.

TheBlackScholesoptionvaluationmodelincorporatesassumptionsastodividendyield,expected volatility,anappropriateriskfreeinterestrateandtheexpectedlifeoftheoption.

Thefairvalueofprofitinterestsgrantedundersubsidiarylongtermequityplansisestimatedonthegrant

datebyaveragingfairvalueestablishedusinganincomeapproachandfairvalueestablishedusinga

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75 marketapproachforeachsubsidiary.Theincomeandfairvalueapproachesusedinthedeterminationof grantdatefairvalueofprofitinterestsareconsistentwiththosedescribedinGoodwillabove.

Taxbenefitsrealizedupontheexerciseofstockoptionsthatareinexcessoftheexpensepreviously

recognizedfor financialreportingpurposesarerecordedinshareholders’equityandreflectedasa financingactivityintheCompany’sConsolidatedStatementsofCashFlows.Ifthetaxbenefitrealizedis lessthantheexpensepreviouslyrecorded,theshortfallisrecordedinshareholders’equity.Totheextent theexpenseexceedsavailablewindfalltaxbenefits,itisrecordedintheCompany’sConsolidated StatementsofIncomeandreflectedasanoperatingactivityontheCompany’sConsolidatedStatementsof CashFlows.

Foreigncurrencytranslation
SubstantiallyalloftheCompany’sforeignsubsidiarieshaveafunctionalcurrencythatissomethingother

thantheU.S.dollar.AssetsandliabilitiesofthesesubsidiariesaretranslatedintoU.S.dollarsatcurrent exchangeratesasoftheendofeachaccountingperiod.Relatedrevenueandexpensesaretranslatedat averageexchangeratesineffectduringtheaccountingperiod.Nettranslationexchangegainsandlosses areexcludedfromincomeandrecordedinaccumulatedothercomprehensiveincome(loss).Foreign currencytransactiongainsandlossesarereflectedingains(losses)andotherinvestmentincome,net,as theyoccur.

Comprehensiveincome
TheCompanyreportsallchangesincomprehensiveincomeinitsConsolidatedStatementsof

ComprehensiveIncome.Comprehensiveincomeincludesnetincome,thechangeinunrealizedgainson certainderivatives,theamortizationofnetgainsandlossesoncertainderivatives,unrealizedholdinggains andlossesoninvestmentsecuritiesclassifiedasavailableforsaleandforeigncurrencytranslation adjustments,ineachcasenetoftax.WhentheCompanyhasestablishedanindefinitereinvestment assertionforaforeignsubsidiary,deferredincometaxesarenotprovidedontherelatedforeigncurrency translation.

Noncontrollinginterests
Nonredeemablenoncontrollinginterestsconsistentirelyofunvestedinterestsgrantedtoemployeesof

theCompany’smajorityownedsubsidiariesundersubsidiaryspecificlongtermequityplans.Thesegrants becomesubjecttoholderputrightsuponvestingandarereclassifiedtotemporaryequityasvesting

ccurs.
NoncontrollinginterestsredeemableatfairvalueconsistofinterestsintheCompany’sconsolidated

sponsoredfundsandcertainvestedinterestsheldbyemployeesofourmajorityownedsubsidiariesthat weregrantedunderthesubsidiaries’longtermequityplans.TheCompany’snoncontrollinginterests redeemableatfairvaluearerecordedintemporaryequityatestimatedredemptionvalueandchangesin theestimatedredemptionvalueoftheseinterestsarerecognizedasincreasesordecreasestoadditional paidincapital.

Noncontrollinginterestsredeemableatotherthanfairvalueconsistofcertainotherinterestsinthe

Company’smajorityownedsubsidiaries.TheseinterestsaresubjecttoholderputrightsandCompanycall rightsatestablishedmultiplesofearningsbeforeinterestandtaxesand,assuch,areconsidered

SLIDE 78

76

redeemableatotherthanfairvalue.Theputandcallrightsarenotlegallydetachableorseparately

exercisableandaredeemedtobeembeddedintherelatednoncontrollinginterests.Noncontrolling interestsredeemableatotherthanfairvaluearerecordedontheCompany’sConsolidatedBalanceSheets intemporaryequityatestimatedredemptionvalue,andchangesinestimatedredemptionvalueofthese interestsarerecordedintheCompany’sConsolidatedStatementsofIncomeasincreasesordecreasesto netincomeattributabletononcontrollingandotherbeneficialinterests.

Losscontingencies
TheCompanycontinuouslyreviewsanyinvestor,employeeorvendorcomplaintsandpendingor

threatenedlitigation.TheCompanyevaluatesthelikelihoodthatalosscontingencyexistsunderthe criteriaofapplicableaccountingstandardsthroughconsultationwithlegalcounselandrecordsaloss contingency,inclusiveoflegalcosts,ifthecontingencyisprobableandreasonablyestimableatthedateof thefinancialstatements.Therearenolossesofthisnaturethatarecurrentlydeemedprobableand reasonablyestimable,and,thus,nonehavebeenrecordedintheaccompanyingConsolidatedFinancial Statements.

2. NewAccountingStandardsNotYetAdopted
Consolidation
InFebruary2015,theFinancialAccountingStandardsBoard(“FASB”)issuedanamendmenttoexisting

consolidationguidance.Theamendmentmodifiestheconsolidationframeworkforcertaininvestment entitiesandalllimitedpartnershipsandeliminatesthedeferralofaccountingguidancethatrequires separateevaluationforinvestmentcompanyVIEsandotherVIEs.Thenewguidanceiseffectiveforannual periods,andinterimperiodswithinthoseannualperiods,fortheCompany’sfiscalyearthatbeginson November1,2016andallowsforeitherafullretrospectiveoramodifiedretrospectiveadoptionapproach. TheCompanyintendstoadopttheguidanceonamodifiedretrospectivebasisandfurtheranticipatesthat certainofitssponsoredinvestmentvehicleswillbesubjecttoconsolidationatanownershippercentage thatislowerthanthecurrentlyemployedthresholdof50percent.

FinancialInstruments
InJanuary2016,FASBissuedanamendmenttoitsfinancialinstrumentsguidance.Theamendment

requiressubstantiallyallequityinvestmentsinnonconsolidatedentitiestobemeasuredatfairvaluewith changesinfairvaluerecognizedinnetincome,exceptforthoseinvestmentsaccountedforusingthe equitymethodofaccounting.Therewillnolongerbeanavailableforsaleclassificationforequity securitieswithreadilydeterminablefairvalues.ThenewguidanceiseffectivefortheCompany’sfiscalyear thatbeginsonNovember1,2018andrequiresamodifiedretrospectiveapproachtoadoption.The CompanyiscurrentlyevaluatingthepotentialimpactonitsConsolidatedFinancialStatementsandrelated disclosures.Asindicated,changesinthefairvalueoftheCompany’sinvestmentsecuritiesclassifiedas availableforsalewillnolongerbereportedthroughothercomprehensiveincome,butratherthrough earnings.

InJune2016,theFASBissuednewguidancefortheaccountingforcreditlosses,whichchangesthe

impairmentmodelformostfinancialassets.Thenewguidancerequirestheuseofan“expectedloss” modelforinstrumentsmeasuredatamortizedcostandanallowanceforcreditlossmodelforavailable forsaledebtsecurities.ThenewguidanceiseffectivefortheCompany’sfiscalyearthatbeginson

SLIDE 79

77 November1,2020andrequiresamodifiedretrospectiveapproachtoadoption.Earlyadoptionis permittedforthefiscalyearbeginningNovember1,2019.TheCompanyiscurrentlyevaluatingthe potentialimpactonitsConsolidatedFinancialStatementsandrelateddisclosures.

Debtissuancecosts
InApril2015,theFASBissuednewguidancerequiringdebtissuancecostsrelatedtoarecognizeddebt

liabilitybepresentedinthebalancesheetasadirectdeductionfromthecarryingamountofthatdebt liability,consistentwiththepresentationofdebtdiscountsandpremiums.Thenewguidanceiseffective fortheCompany’sfiscalyearthatbeginsonNovember1,2016andrequiresretrospectiveapplicationfor eachpriorperiodpresented.AtOctober31,2016,theCompanyhad$2.9millionofdebtissuancecostsin

therassetsonitsConsolidatedBalanceSheetthatmeetthecriteriaofthisamendment.
Leases
InFebruary2016,theFASBissuednewguidancefortheaccountingforleases,whichrequiresalesseeto

recognizeonthebalancesheettheassetsandliabilitiesfortherightsandobligationscreatedbythose leaseswithaleasetermofmorethantwelvemonths.Leaseswillcontinuetobeclassifiedaseither financingoroperating,withclassificationaffectingtherecognition,measurementandpresentationof expensesandcashflowsarisingfromalease.ThenewguidanceiseffectivefortheCompany’sfiscalyear thatbeginsonNovember1,2019andrequiresamodifiedretrospectiveapproachtoadoption.Early adoptionispermitted.TheCompanyiscurrentlyevaluatingthepotentialimpactonitsConsolidated FinancialStatementsandrelateddisclosures.

Stockbasedcompensation
InMarch2016,theFASBissuednewguidancefortheaccountingforstockbasedcompensation.Thenew

guidancerequiresallincometaxeffectsofstockbasedcompensationtoberecognizedasincometax expensewhentheawardsvestorsettle,providesanelectiontoaccountforforfeituresastheyoccurand clarifiestheclassificationofthesetransactionsinthestatementofcashflows.Thenewguidanceis effectivefortheCompany’sfiscalyearthatbeginsonNovember1,2017withearlyadoptionpermitted. TheCompanyiscurrentlyevaluatingthepotentialimpactonitsConsolidatedFinancialStatementsand relateddisclosures.

Revenuerecognition
InMay2014,theFASBissuednewguidanceforrevenuerecognition.Thenewguidanceseekstoimprove

comparabilitybyremovinginconsistenciesinrevenuerecognitionpractices.Thecoreprincipleofthe guidancerequirescompaniestorecognizerevenueuponthetransferofpromisedgoodsorservicesto customersinanamountthatreflectstheexpectedconsiderationtobereceivedforthegoodsorservices. ThisguidancewasfurtherupdatedinMarch2016toclarifyhowcompaniesshouldevaluatetheprincipal versusagentaspectsofthepreviouslyissuedrevenueguidance.Thenewguidanceiseffectiveforthe Company’sfiscalyearthatbeginsonNovember1,2018andrequiresamodifiedretrospectiveapproachto adoption.TheCompanyiscurrentlyevaluatingthepotentialimpactonitsConsolidatedFinancial Statementsandrelateddisclosures.

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78

StatementofCashFlows
InAugust2016,theFASBissuednewguidancethataddresseseightspecificcashflowissuestoreduce

diversityinpracticeinhowcertaincashreceiptsandcashpaymentsarepresentedontheStatementsof CashFlows.ThenewguidanceiseffectivefortheCompany’sfiscalyearthatbeginsNovember1,2018and requiresaretrospectivetransitionmethod.TheCompanyisevaluatingtheimpactonitsConsolidated FinancialStatementsandrelateddisclosures.

3. ConsolidatedSponsoredFunds
Underlyinginvestmentsheldbyconsolidatedsponsoredfundswereincludedininvestmentsonthe

Company’sConsolidatedBalanceSheetsandclassifiedastradingsecuritiesatOctober31,2016and2015. Netinvestmentincomeor(loss)relatedtoconsolidatedsponsoredfundswasincludedingains(losses)and

therinvestmentincome,net,ontheCompany’sConsolidatedStatementsofIncomeforallperiods

presented.Theimpactofconsolidatedsponsoredfunds’netincomeor(loss)onnetincomeattributable toEatonVanceCorp.shareholderswasreducedbyamountsattributabletononcontrollinginterest holders,whicharerecordedinnetincomeattributabletononcontrollingandotherbeneficialinterestson theCompany’sConsolidatedStatementsofIncomeforallperiodspresented.TheCompany’sriskwith respecttoeachinvestmentinaconsolidatedsponsoredfundislimitedtoitsequityownershipandany uncollectedmanagementandperformancefees.

ThefollowingtablesetsforththebalancesrelatedtoconsolidatedsponsoredfundsatOctober31,2016

and2015,aswellastheCompany’snetinterestinthesefunds:

(inthousands)
2016

2015

Investments
$

248,036 $ 196,395

Otherassets
10,984

6,011

Otherliabilities
(23,947)

(25,729)

Redeemablenoncontrollinginterests
(24,474)

(11,939)

Netinterestinconsolidatedsponsoredfunds(1)
$

210,599 $ 164,738

(1)ExcludestheCompany'sinvestmentinitsconsolidatedCLOentity,whichisdiscussedinNote8.

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79

4. Investments
ThefollowingisasummaryofinvestmentsatOctober31,2016and2015:
(inthousands)
2016

2015

Investmentsecurities,trading:
Shorttermdebtsecurities
$

85,822 $ 77,395

Consolidatedsponsoredfunds
248,036

196,395

Separatelymanagedaccounts
79,683

56,859

Totalinvestmentsecurities,trading
413,541

330,649

Investmentsecurities,availableforsale
13,312

25,720

InvestmentsinnonconsolidatedCLOentities
3,837

4,363

Investmentsinequitymethodinvestees
139,929

144,137

Investments,other
19,154

2,151

Totalinvestments(1)
$

589,773 $ 507,020

(1)ExcludestheCompany'sinvestmentinitsconsolidatedCLOentity,whichisdiscussedinNote8.

Investmentsecurities,trading

ThefollowingisasummaryofthefairvalueofinvestmentsclassifiedastradingatOctober31,2016and

2015:

(inthousands)
2016

2015

Shorttermdebtsecurities
$

85,822 $ 77,395

Otherdebtsecurities
191,688

136,959

Equitysecurities
136,031

116,295

Totalinvestmentsecurities,trading
$

413,541 $ 330,649

TheCompanyrecognizedgains(losses)relatedtotradingsecuritiesstillheldatthereportingdateof$11.3

million,$(14.7)millionand$(6.9)millionfortheyearsendedOctober31,2016,2015and2014, respectively,withingains(losses)andotherinvestmentincome,net,intheCompany’sConsolidated StatementsofIncome.

Investmentsecurities,availableforsale
Thefollowingisasummaryofthegrossunrealizedgains(losses)includedinaccumulatedother

comprehensivelossrelatedtosecuritiesclassifiedasavailableforsaleatOctober31,2016and2015:

October31,2016
GrossUnrealized
(inthousands)

Cost

Gains
Losses
FairValue
Investmentsecurities,availableforsale

$ 8,528

$

4,798

$

(14) $ 13,312

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80

October31,2015
GrossUnrealized
(inthousands)

Cost

Gains
Losses
FairValue
Investmentsecurities,availableforsale

$ 19,586

$

6,450

$ (316)

$ 25,720 Netunrealizedholdinggains(losses)oninvestmentsecuritiesclassifiedasavailableforsaleincludedin

thercomprehensiveincome(loss)ontheCompany’sConsolidatedStatementsofComprehensiveIncome

were$0.7million,$(8,000)and$1.9millionfortheyearsendedOctober31,2016,2015and2014, respectively.

TheCompanyrecognized$0.3millionofotherthantemporaryimpairmentlossesrelatedtoinvestment

securitiesclassifiedasavailableforsale,whichamountisincludedingains(losses)andotherinvestment income,net,ontheCompany’sConsolidatedStatementofIncomefortheyearendedOctober31,2016. TheCompanydidnotrecognizeanyimpairmentlossesoninvestmentsecuritiesclassifiedasavailablefor salefortheyearsendedOctober31,2015or2014.

TheaggregatefairvalueofinvestmentswithunrealizedlossesatOctober31,2016was$0.3million;

unrealizedlossesrelatedtotheseinvestmentstotaled$14,000.Noinvestmentwithagrossunrealizedloss hasbeeninalosspositionforgreaterthanoneyear.

ThefollowingisasummaryoftheCompany’srealizedgainsandlossesrecognizedupondispositionof

investmentsclassifiedasavailableforsalefortheyearsendedOctober31,2016,2015and2014:

(inthousands)

2016 2015 2014

Gains

$ 2,191 $ 7,828 $ 823

Losses
(37)
(3,885)
(904)
Netrealizedgains(losses)

$ 2,154 $ 3,943 $ (81) InvestmentsinnonconsolidatedCLOentities

TheCompanyprovidesinvestmentmanagementservicesfor,andhasmadeinvestmentsin,anumberof

CLOentitiesthatitdoesnotconsolidateonitsConsolidatedFinancialStatements.TheCompany’s

wnershipinterestsinnonconsolidatedCLOentitiesarecarriedatamortizedcostunlessimpaired.The

Companyearnsinvestmentmanagementfees,includingsubordinatedmanagementfees,formanagingthe collateraloftheseCLOentities.AtOctober31,2016and2015,combinedassetsundermanagementinthe poolsofnonconsolidatedCLOentitieswere$2.0billionand$2.1billion,respectively.TheCompany’s maximumexposuretolossasaresultofitsinvestmentsintheequityofnonconsolidatedCLOentitiesis thecarryingvalueofsuchinvestments,whichwas$3.8millionand$4.4millionatOctober31,2016and 2015,respectively.InvestorsintheseCLOentitieshavenorecourseagainsttheCompanyforanylosses sustainedintheCLOstructures.

TheCompanyrecognizeda$0.3millionimpairmentlossrelatedtotheCompany’sinvestmentinoneofits

nonconsolidatedCLOentitiesinfiscal2016.TheCompanydidnotrecognizeanyimpairmentlosseson investmentsinnonconsolidatedCLOentitiesfortheyearsendedOctober31,2015or2014.

SLIDE 83

81 Investmentsinequitymethodinvestees

TheCompanyhasa49percentinterestinHexavestInc.(“Hexavest”),aMontreal,Canadabased

investmentadviser.Thecarryingvalueofthisinvestmentwas$137.3millionand$142.1millionatOctober 31,2016and2015,respectively.AtOctober31,2016,theCompany’sinvestmentinHexavestconsistedof $5.3millionofequityinthenetassetsofHexavest,definitelivedintangibleassetsof$24.5millionand goodwillof$114.1million,netofadeferredtaxliabilityof$6.6million.AtOctober31,2015,the Company’sinvestmentinHexavestconsistedof$5.5millionofequityinthenetassetsofHexavest, definitelivedintangibleassetsof$27.0millionandgoodwillof$116.9million,netofadeferredtaxliability

f$7.3million.TheinvestmentisdenominatedinCanadiandollarsandissubjecttoforeigncurrency

translationadjustments,whicharerecordedinaccumulatedothercomprehensiveincome(loss).

TheCompanyhasanoption,exercisableinfiscal2017,topurchaseanadditional26percentinterestin

Hexavest.Aspartofthepurchasepriceallocation,avalueof$8.3millionwasassignedtothisoption.The

ptionisincludedinotherassetsintheCompany’sConsolidatedBalanceSheetsatOctober31,2016and

2015.

TheCompanyalsohasasevenpercentequityinterestinaprivateequitypartnershipmanagedbyathird

partythatinvestsincompaniesinthefinancialservicesindustry.TheCompany’sinvestmentinthe partnershipwas$2.6millionand$2.0millionatOctober31,2016and2015,respectively.

SummarizedfinancialinformationonastandalonebasisfortheCompany’sequitymethodinvesteesat

October31,2016and2015andfortheyearsendedOctober31,2016,2015and2014isasfollows:

(inthousands)

2016 2015

Assets

$ 78,214 $ 62,180

Liabilities
16,224
11,979
Outsideequityinterests
54,087
42,670
(inthousands)

2016 2015 2014

Revenue

$ 50,506 $ 52,899 $ 58,281

Netincome
36,575
51,013
67,966

TheCompanydidnotrecognizeanyimpairmentlossesrelatedtoitsinvestmentsinequitymethod investeesduringtheyearsendedOctober31,2016,2015or2014.

DuringtheyearsendedOctober31,2016,2015and2014,theCompanyreceiveddividendsof$11.5

million,$15.9millionand$16.1million,respectively,fromitsinvestmentsinequitymethodinvestees.

Investments,other
Investments,other,consistofcertaininvestmentscarriedatcosttotaling$19.2millionand$2.2millionas
fOctober31,2016and2015.
DuringthefiscalyearendedOctober31,2016,theCompanyparticipatedasleadinvestorinanequity

financinginSigFig,anindependentSanFranciscobasedwealthmanagementtechnologyfirm.The Company’sinvestmentinSigFigwas$17.0millionatOctober31,2016.

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82

ManagementbelievesthatthecarryingvalueoftheCompany’sotherinvestments,includingits

investmentinSigFig,approximatesfairvalue.

5. DerivativeFinancialInstruments
Derivativefinancialinstrumentsdesignatedascashflowhedges
Infiscal2013,theCompanyenteredintoaforwardstartinginterestrateswapinconnectionwiththe
fferingofits3.625percentunsecuredseniornotesdueJune15,2023(“2023SeniorNotes”)andrecorded

theunamortizedgainontheswapinothercomprehensiveincome(loss).TheCompanyreclassified$0.2 millionofthedeferredgainintointerestexpenseineachofthefiscalyearsendedOctober31,2016,2015 and2014andwillreclassifytheremaining$1.3millionofunamortizedgainatOctober31,2016to earningsasacomponentofinterestexpenseovertheremainingtermofthedebt.Duringthenexttwelve months,theCompanyexpectstoreclassifyapproximately$0.2millionofthegainintointerestexpense.

Infiscal2007,theCompanyenteredintoaTreasurylocktransactioninconnectionwiththeofferingofits

6.5percentunsecuredseniornotesdueOctober2,2017(“2017SeniorNotes”)andrecordedthe unamortizedlossonthelockinothercomprehensiveincome(loss).TheCompanyreclassified$0.2million

fthedeferredlossintointerestexpenseineachofthefiscalyearsendedOctober31,2016,2015and

2014andwillreclassifytheremaining$0.2millionofunamortizedlossatOctober31,2016toearningsasa componentofinterestexpenseoverthenexttwelvemonths,whichrepresentstheremainingtermofthe debt.

Otherderivativefinancialinstrumentsnotdesignatedforhedgeaccounting
TheCompanyutilizesstockindexfuturescontracts,totalreturnswapcontracts,foreignexchange

contracts,commodityfuturescontracts,interestratefuturescontractsandinterestrateswapcontractsto hedgethemarket,commodityandcurrencyrisksassociatedwithitsinvestmentsincertainconsolidated sponsoredfundsandseparatelymanagedaccountsseededfornewproductdevelopmentpurposes (“consolidatedseedinvestments”).

Excludingconsolidatedseedinvestments,theCompanywasapartytothefollowingderivativefinancial

instrumentsatOctober31,2016and2015:

2016
2015
Numberof

contracts

Notional

value

(inmillions)

Numberof contracts

Notional

value

(inmillions)

Stockindexfuturescontracts

1,721 $ 125.4

1,366

$ 97.2

Totalreturnswapcontracts

1 $ 40.0

2

$ 49.5

Foreignexchangecontracts

32 $ 18.7

28

$ 27.2

Commodityfuturescontracts
$
56

$ 3.1

TheCompanyhasnotdesignatedanyofthesederivativecontractsashedginginstrumentsforaccounting

purposes.ThederivativecontractsoutstandingandthenotionalvaluestheyrepresentatOctober31,2016 and2015arerepresentativeofderivativebalancesthroughouteachrespectiveyear.Theweighted averageremainingcontracttermforderivativecontractsoutstandingatOctober31,2016was2.2months.

SLIDE 85

83 TheCompanyhasnotelectedtooffsetfairvalueamountsrelatedtoderivativeinstrumentsexecutedwith thesamecounterpartyundermasternettingarrangements;asaresult,theCompanyrecordsallderivative financialinstrumentsaseitherotherassetsorotherliabilities,gross,onitsConsolidatedBalanceSheets andmeasuresthematfairvalue(seeNote1).Thefollowingtablespresentthefairvalueofderivative financialinstruments,excludingconsolidatedseedinvestments,notdesignatedforhedgeaccounting,and howtheyarereflectedintheCompany’sConsolidatedFinancialStatementsasofOctober31,2016and 2015:

2016
2015
(inthousands)
Other

assets

Other

liabilities

Other

assets

Other

liabilities

Stockindexfuturescontracts

$ 1,722 $ 130

$

53 $ 4,712

Foreignexchangecontracts
350
267
133
540
Totalreturnswapcontracts
418
128
Commodityfuturescontracts
112
43
Total
$

2,072 $ 815

$

298 $ 5,423

Changesinthefairvalueofderivativecontractsarerecognizedingains(losses)andotherinvestment

income,net(seeNote15).TheCompanyrecognizedthefollowingnetgains(losses)onderivativefinancial instrumentsfortheyearsendedOctober31,2016,2015and2014:

(inthousands)
2016
2015
2014
Stockindexfuturescontracts

$ (2,931) $ 640 $ (12,902)

Totalreturnswapcontracts
(2,935)
157
Foreignexchangecontracts
(590)
1,948
15
Commodityfuturescontracts
3,396
720
Interestratefuturescontracts
(181)
(75)
Interestrateswapcontracts
(21)
Netgains(losses)ontotalderivativefinancialinstruments

$ (6,456) $ 5,939 $ (12,242)

Inadditiontothederivativecontractsdescribedabove,certainconsolidatedsponsoredfundsand

separatelymanagedaccountsmayutilizederivativefinancialinstrumentswithintheirportfoliosinpursuit

ftheirstatedinvestmentobjectives.SeeNote3fordiscussionofconsolidatedsponsoredfunds.

SLIDE 86

84

6. VIEs
Inthenormalcourseofbusiness,theCompanymaintainsinvestmentsinsponsoredproductsthatare

consideredVIEs.ThesevariableinterestsgenerallyrepresentseedinvestmentsmadebytheCompany,as collateralmanagerorinvestmentadviser,tolaunchormarketthesevehicles.TheCompanyreceives managementfeesfortheservicesitprovidesascollateralmanagerorinvestmentadvisertotheseentities. Thesefeesmayalsobeconsideredvariableinterests.

InvestmentsinVIEsthatareconsolidated
Consolidatedsponsoredfunds

TheCompanyinvestsininvestmentcompaniesthatmeetthedefinitionofaVIE.Disclosureregardingsuch consolidatedsponsoredfundsisincludedinNote3.

ConsolidatedCLOentities

AsofOctober31,2016,theCompanywasnotdeemedtobetheprimarybeneficiaryofanynonrecourse CLOentities.

TheassetsofpreviouslyconsolidatedCLOentitieswereheldsolelyascollateraltosatisfytheobligationsof

theentity.TheCompanyhadnorighttothebenefitsfrom,nordidtheCompanybeartherisksassociated with,theassetsheldbyconsolidatedCLOentitiesbeyondtheCompany’sbeneficialinterestthereinand managementfeesgeneratedfromtheentity.ThenoteholdersandothercreditorsofconsolidatedCLO entitieshadnorecoursetotheCompany’sgeneralassets.TheCompanywasnotapartytoanyexplicit arrangementsnordiditholdanyimplicitvariableintereststhatwouldrequireittoprovideanyongoing financialsupporttotheseentities.

Interestincomeandexpensewererecordedonanaccrualbasisandreportedasgains(losses)andother

investmentincome,net,andasinterestexpenseininterestandotherexpense,respectively,ofthe consolidatedCLOentitiesintheCompany’sConsolidatedStatementsofIncomeforthefiscalyearsended October31,2016,2015and2014.Substantiallyallongoinggains(losses)relatedtotheconsolidatedCLO entities’bankloans,otherinvestmentsandnoteobligationsandredeemablepreferredsharesrecordedin earningsfortheperiodspresentedareattributabletochangesininstrumentspecificcreditconsiderations.

EatonVanceCLO20151

EatonVanceCLO20151beganasawarehousestageCLOinFebruary2015.ThepricingofEatonVance CLO20151occurredonOctober6,2015,atwhichtimetheCompanyassumedthepowertodirectthe activitiesthatmostsignificantlyaffectthefinancialperformanceoftheentity.Atpricing,theCompany enteredintoatradecommitmenttoacquireapproximately16.1percentofthesubordinatedintereststo beissuedatclosingonOctober29,2015,representingacontrollingfinancialinterestintheentity.Asa result,theCompanybeganconsolidatingEatonVanceCLO20151fromOctober6,2015.OnSeptember 21,2016,theCompanysoldits16.1percentsubordinatedinterestinEatonVanceCLO20151toan unrelatedthirdparty,recognizingagainondisposalof$0.1million.AlthoughtheCompanycontinuesto serveascollateralmanageroftheentityandthereforehasthepowertodirecttheactivitiesthatmost significantlyimpacttheeconomicperformanceoftheentity,theCompanyconcludedthatitwasnolonger theprimarybeneficiaryoftheentityupondispositionofits16.1percentresidualinterest.Asaresult,the CompanydeconsolidatedEatonVanceCLO20151effectiveSeptember21,2016.

SLIDE 87

85 TheCompanyirrevocablyelectedthefairvalueoptionformeasurementofsubstantiallyallfinancialassets

fEatonVanceCLO20151atpricing.TheCompanyirrevocablyelectedthefairvalueoptionforthesenior

andsubordinatednoteobligationsofEatonVanceCLO20151upontheirissuancetomitigateany accountingmismatchesbetweenthecarryingvalueofthenoteobligationsandthecarryingvalueofthe assetsheldtoprovidethecashflowsforthosenoteobligations.Unrealizedgainsandlossesonassetsand liabilitiesforwhichthefairvalueoptionwaselectedarereportedingainsandotherinvestmentincome, net,ofconsolidatedCLOentitiesintheConsolidatedStatementsofIncome.

Thefollowingtablepresents,asofOctober31,2015,thefairvalueofEatonVanceCLO20151’sassetsand

liabilitiesthatweresubjecttofairvalueaccounting:

October31,2015
CLOBankLoanInvestments
(inthousands)
TotalCLO

bankloan investments

90daysor

morepast due

Seniorand

subordinated noteobligations

Unpaidprincipalbalance

$ 306,483 $

$

397,039

Unpaidprincipalbalance
verfairvalue
(2,233)
Fairvalue

$ 304,250 $

$

397,039 DuringthefiscalyearendedOctober31,2015,theCompanyrecordedapproximately$2.4millionof

rganizationalandstructuringcostsandotherexpensesassociatedwiththeclosingofEatonVanceCLO

20151ininterestandotherexpenseofconsolidatedCLOentitiesintheCompany’sConsolidated StatementofIncome.

ChangesinthefairvaluesofEatonVanceCLO20151’sbankloansandotherinvestmentsresultedinnet

gains(losses)of$2.4millionand$(28,550)forthefiscalyearsendedOctober31,2016and2015, respectively,whilechangesinthefairvalueofEatonVanceCLO20151’snoteobligationsresultedinnet gains(losses)of$3.7millionforthefiscalyearendedOctober31,2016.Thecombinednetgains(losses)of $6.1millionand$(28,550),respectively,forthefiscalyearsendedOctober31,2016and2015were recordedingainsandotherinvestmentincome,net,ofconsolidatedCLOentitiesintheCompany’s ConsolidatedStatementsofIncomefortheseperiods.

ForthefiscalyearsendedOctober31,2016and2015,theCompanyrecordednetgains(losses)of$10.6

million(includingagainondisposalofitssubordinatedinterestof$0.1millionduringthefiscalyearended October31,2016)and$(4.2)million,respectively,relatedtoEatonVanceCLO20151.TheCompany recordednetgains(losses)attributabletootherbeneficialinterestsof$9.8millionand$(4.4)millionfor thefiscalyearsendedOctober31,2016and2015,respectively.NetincomeattributabletoEatonVance Corp.shareholderswas$0.8millionand$0.2millionforthefiscalyearsendedOctober31,2016and2015, respectively.

ThecarryingamountsofassetsandliabilitiesrelatedtoEatonVanceCLO20151areseparatelyidentified
ntheCompany’sConsolidatedBalanceSheetatOctober31,2015.TheCompany’ssubordinatedinterest

inEatonVanceCLO20151of$4.6millionatOctober31,2015waseliminatedinconsolidation.

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86

EatonVanceCLOIX

TheCompanyirrevocablyelectedthefairvalueoptionforallfinancialassetsandliabilitiesofEatonVance CLOIXuponitsinitialconsolidationonNovember1,2010.Unrealizedgainsandlossesonassetsand liabilitiescarriedatfairvaluewerereportedingainsandotherinvestmentincome,net,ofconsolidated CLOentitiesintheCompany’sConsolidatedStatementsofIncome.OnNovember13,2014,theCompany soldits8percentresidualinterestinEatonVanceCLOIXtoanunrelatedthirdpartyandrecognizedaloss

ndisposalof$0.3million.Duringthethirdquarteroffiscal2015,amajorityoftheholdersofthe

subordinatednoteselectedtoliquidateEatonVanceCLOIX,withredemptionoccurringnearlyinfullon thescheduledJuly20,2015paymentdate.TheCompanywillremainthecollateralmanagerofEaton VanceCLOIXthroughresolutionofthedisposalofallremainingcollateralassets.TheCompanymadethe decisiontodeconsolidateEatonVanceCLOIXinthefourthquarteroffiscal2015,astheremainingnet assetsofEatonVanceCLOIXof$4.9millionwerenotmaterialtotheCompany’sfinancialposition.

ChangesinthefairvaluesofEatonVanceCLOIX’sbankloansandotherinvestmentsresultedinnetlosses
f$3.2millionand$2.4millionforthefiscalyearsendedOctober31,2015and2014,respectively,while

changesinthefairvalueofEatonVanceCLOIX’snoteobligationsresultedinnetgains(losses)of$5.1 millionand$(1.2)million,respectively,forthefiscalyearsendedOctober31,2015and2014.The combinednetgains(losses)of$1.9millionand$(3.6)million,respectively,forthefiscalyearsended October31,2015and2014wererecordedingainsandotherinvestmentincome,net,ofconsolidatedCLO entitiesontheCompany’sConsolidatedStatementsofIncomefortheseperiods.

DuringthefiscalyearsendedOctober31,2015and2014,$144.2millionand$128.4million,respectively,
fprepaymentswereusedtopaydowntheentity’snoteobligations.Theentity’sseniornoteswerepaid

downinfullasaresultofamajorityoftheholdersofthesubordinatednoteselectingtoliquidateEaton VanceCLOIXduringthethirdquarteroffiscal2015.

ForthefiscalyearsendedOctober31,2015and2014,theCompanyrecordednetgains(losses)of$2.0

million(includingthelossondisposalofitssubordinatedinterestof$(0.3)million)and$(2.2)million, respectively,relatedtoEatonVanceCLOIX.TheCompanyrecordednetlossesattributabletoother beneficialinterestsof$1.4millionand$5.1millionforthefiscalyearsendedOctober31,2015and2014, respectively.NetincomeattributabletoEatonVanceCorp.shareholderswas$3.4millionand$2.9million forthefiscalyearsendedOctober31,2015and2014,respectively.

EatonVanceCLO20131

TheCompanyirrevocablyelectedthefairvalueoptionformeasurementofsubstantiallyallfinancialassets

fEatonVanceCLO20131uponitsinitialconsolidationonOctober11,2013,whentheseniornote
bligationsandredeemablepreferredsharesoftheCLOwerepriced.Atpricing,theCompanyenteredinto

atradecommitmenttoacquire20percentoftheredeemablepreferredsharesoftheentitytobeissuedat closingonNovember13,2013,representingavariable,althoughnotbeneficial,interestintheentity.The Companyirrevocablyelectedthefairvalueoptionfortheseniornoteobligationsandredeemable preferredsharesofEatonVanceCLO20131upontheirissuance.OnMay1,2014,theCompanysoldits20 percentresidualinterestinEatonVanceCLO20131.AlthoughtheCompanycontinuestoserveas collateralmanageroftheentityandthereforehasthepowertodirecttheactivitiesthatmostsignificantly impacttheeconomicperformanceoftheentity,theCompanyconcludedthatitwasnolongertheprimary beneficiaryoftheentityupondispositionofits20percentresidualinterest,atwhichtimetheCompany deconsolidatedtheentity.TheCompanycontinuestoholda$1.4millionbeneficialinterestintheformof noteobligationsissuedbyEatonVanceCLO20131,whichiscarriedatamortizedcost.

SLIDE 89

87 Unrealizedgainsandlossesonassetsandliabilitiesforwhichthefairvalueoptionwaselectedare reportedingainsandotherinvestmentincome,net,oftheconsolidatedCLOentitiesintheCompany’s ConsolidatedStatementofIncome.

DuringthefiscalyearendedOctober31,2014,approximately$4.8millionoforganizationalandstructuring

costsassociatedwiththeclosingofEatonVanceCLO20131wererecordedininterestandotherexpense

fconsolidatedCLOentitiesintheCompany’sConsolidatedStatementofIncome.
ChangesinthefairvaluesofEatonVanceCLO20131’sbankloansandotherinvestmentsresultedinanet

lossof$39,000duringthefiscalyearendedOctober31,2014,whilechangesinthefairvalueofEaton VanceCLO20131’snoteobligationsresultedinanetgainof$2.4millionduringthefiscalyearended October31,2014.Thecombinednetgainof$2.4millionforthefiscalyearendedOctober31,2014was recordedingainsandotherinvestmentincome,net,ofconsolidatedCLOentitiesontheCompany’s ConsolidatedStatementofIncomeforthatperiod.

ForthefiscalyearendedOctober31,2014theCompanyrecordednetincomeof$2.0millionrelatedto

EatonVanceCLO20131.TheCompanyrecordednetincomeattributabletootherbeneficialinterestsof $1.1millionforthefiscalyearendedOctober31,2014.NetincomeattributabletoEatonVanceCorp. shareholderswas$0.9millionduringthefiscalyearendedOctober31,2014.

InvestmentsinVIEsthatarenotconsolidated
Sponsoredfunds

TheCompanyclassifiesitsinvestmentsincertainsponsoredfundsthatareconsideredVIEsaseitherequity methodinvestments(generallywhentheCompanyownsmorethan20percentbutlessthan50percentof thefund)orasavailableforsaleinvestments(generallywhentheCompanyownslessthan20percentof thefund)whenitisnotconsideredtheprimarybeneficiaryoftheseVIEs.TheCompanyprovides aggregateddisclosureswithrespecttothesenonconsolidatedsponsoredfundVIEsinNote4.

NonconsolidatedCLOentities

TheCompanyisnotdeemedtheprimarybeneficiaryofseveralCLOentitiesinwhichitholdsvariable interests.Initsroleascollateralmanager,theCompanyoftenhasthepowertodirecttheactivitiesofthe CLOentitiesthatmostsignificantlyimpacttheeconomicperformanceoftheseentities.Indevelopingits conclusionthatitisnottheprimarybeneficiaryoftheseentities,theCompanydeterminedthat,for certainoftheseentities,althoughithasvariableinterestsineachbyvirtueofitsresidualintereststherein andthecollateralmanagementfeesitreceives,itsvariableinterestsneitherindividuallynorinthe aggregaterepresentanobligationtoabsorblossesof,orarighttoreceivebenefitsfrom,anysuchentity thatcouldpotentiallybesignificanttothatentity.QuantitativefactorssupportingtheCompany’s qualitativeconclusionineachcaseincludedtherelativesizeoftheCompany’sresidualinterestandthe

verallmagnitudeanddesignofthecollateralmanagementfeeswithineachstructure.
NonconsolidatedCLOentitieshadtotalassetsof$2.0billionand$2.1billionasofOctober31,2016and

2015,respectively.TheCompany’svariableinterestsintheseentitiesconsistoftheCompany’sdirect

wnershipintheseentitiesandanysubordinatedmanagementfeesearnedbutuncollected.The

Company’sinvestmentintheseentitiestotaled$3.8millionand$4.4millionasofOctober31,2016and 2015,respectively.Collateralmanagementfeesreceivablefortheseentitiestotaled$1.4millionand$1.8 milliononOctober31,2016and2015,respectively.TheCompanydidnotprovideanyfinancialorother supporttotheseentitiesthatitwasnotpreviouslycontractuallyrequiredtoprovideinanyofthefiscal

SLIDE 90

88

yearspresented.TheCompany’sriskoflosswithrespecttothesemanagedCLOentitiesislimitedtothe

carryingvalueofitsinvestmentsin,andcollateralmanagementfeesreceivablefrom,theseentitiesasof October31,2016.

TheCompany’sinvestmentinnonconsolidatedCLOentitiesiscarriedatamortizedcostandisdisclosedas

acomponentofinvestmentsinNote4.Incomefromtheseentitiesisrecordedasacomponentofgains andotherinvestmentincome,net,intheCompany’sConsolidatedStatementsofIncome,basedupon projectedinvestmentyields.

Otherentities

TheCompanyholdsvariableinterestsin,butisnotdeemedtobetheprimarybeneficiaryof,certain sponsoredprivatelyofferedequityfundswithtotalassetsof$13.5billionand$12.7billionasofOctober 31,2016and2015,respectively.TheCompanyhasdeterminedthattheseentitiesqualifyforthedeferral

faccountingguidancethatrequiresseparateevaluationforinvestmentcompanyVIEsandotherVIEs,and

thusassesseswhetheritistheprimarybeneficiaryoftheseentitiesbasedontheCompany’sexposureto theexpectedlossesandexpectedresidualreturnsoftheentity.TheCompany’svariableinterestsinthese entitiesconsistoftheCompany’sdirectownershiptherein,whichineachcaseisinsignificantrelativeto thetotalownershipofthefund,andanyinvestmentadvisoryfeesearnedbutuncollected.TheCompany heldinvestmentsintheseentitiestotaling$2.2milliononbothOctober31,2016and2015,and investmentadvisoryfeesreceivabletotaling$0.8millionand$0.7milliononOctober31,2016and2015, respectively.TheCompanydidnotprovideanyfinancialorothersupporttotheseentitiesthatitwasnot contractuallyrequiredtoprovideinanyofthefiscalyearspresented.TheCompany’sriskoflosswith respecttothesemanagedentitiesislimitedtothecarryingvalueofitsinvestmentsin,andinvestment advisoryfeesreceivablefrom,theentitiesasofOctober31,2016.TheCompanydoesnotconsolidate theseVIEsbecauseitdoesnotholdthemajorityoftherisksandrewardsofownership.

TheCompany’sinvestmentsinprivatelyofferedequityfundsarecarriedatfairvalueandincludedin

investmentsecurities,availableforsale,whicharedisclosedasacomponentofinvestmentsinNote4.The Companyrecordsanychangeinfairvalue,netofincometax,inothercomprehensiveincome(loss).

7. FairValueofAssetsandLiabilitiesMeasuredatFairValueonaRecurringBasis
Thefollowingtablessummarizefinancialassetsandliabilitiesmeasuredatfairvalueonarecurringbasis

andtheirassignedlevelswithinthevaluationhierarchyatOctober31,2016and2015:

SLIDE 91

89

October31,2016

(inthousands)
Level1
Level2
Level3
Other

AssetsNot Heldat FairValue

Total
Financialassets:
Cashequivalents

$ 21,875 $ 35,913 $

$
$

57,788 Investments:

Investmentsecurities,trading:
Shorttermdebtsecurities
85,822
85,822

Otherdebtsecurities

18,757
172,931
191,688

Equitysecurities

93,491
42,540
136,031

Investmentsecurities,availableforsale

11,051
2,261
13,312

InvestmentsinnonconsolidatedCLO

entities(1)
3,837
3,837

Investmentsinequitymethodinvestees(2)

139,929
139,929

Investments,other(3)

120
19,034
19,154

Derivativeinstruments

2,072
2,072

Totalfinancialassets $ 145,174 $ 341,659 $

$

162,800 $ 649,633

Financialliabilities:
Derivativeinstruments

$

$

815 $

$
$

815 Totalfinancialliabilities $

$

815 $

$
$

815

SLIDE 92

90

October31,2015
(inthousands)
Level1
Level2
Level3
Other

AssetsNot Heldat FairValue

Total
Financialassets:
Cashequivalents

$ 14,599 $ 39,447 $

$
$

54,046

Investments:

Investmentsecurities,trading:
Shorttermdebtsecurities
77,395
77,395

Otherdebtsecurities

20,822
116,137
136,959

Equitysecurities

71,535
44,760
116,295

Investmentsecurities,availableforsale

23,544
2,176
25,720

InvestmentsinnonconsolidatedCLO

entities(1)
4,363
4,363

Investmentsinequitymethodinvestees(2)

144,137
144,137

Investments,other(3)

103
2,048
2,151

Derivativeinstruments

298
298

AssetsofconsolidatedCLOentity:

Bankloaninvestments
304,250
304,250

Totalfinancialassets

$ 130,500 $ 584,566 $

$

150,548 $ 865,614

Financialliabilities:
Derivativeinstruments

$

$

5,423 $

$
$

5,423

Securitiessold,notyetpurchased

3,034
3,034

LiabilitiesofconsolidatedCLOentity:

Seniorandsubordinatednoteobligations
397,039
397,039

Totalfinancialliabilities

$

$

405,496 $

$
$

405,496

(1)

TheCompany’sinvestmentsintheseCLOentitiesaremeasuredatfairvalueonanonrecurringbasisusingLevel3inputs.

Theinvestmentsarecarriedatamortizedcostunlessfactsandcircumstancesindicatethattheinvestmentshavebeenimpaired, atwhichtimetheinvestmentsarewrittendowntofairvalue.Duringfiscal2016,theCompanyrecognized$0.3millionof

therthantemporaryimpairmentlossesrelatedtoitsinvestmentinonenonconsolidatedCLOentity.TheCompanydid

notrecognizeanyimpairmentlossesoninvestmentsinCLOentitiesduringfiscal2015or2014.

(2)

InvestmentsinequitymethodinvesteesarenotmeasuredatfairvalueinaccordancewithGAAP.

(3)

Investments,other,includeinvestmentscarriedatcostthatarenotmeasuredatfairvalueinaccordancewithGAAP.

Valuationmethodologies
Cashequivalents

Cashequivalentsincludeinvestmentsinmoneymarketfunds,governmentagencysecurities,certificatesof depositandcommercialpaperwithoriginalmaturitiesoflessthanthreemonths.Cashinvestmentsin activelytradedmoneymarketfundsarevaluedusingpublishednetassetvaluesandareclassifiedasLevel 1withinthefairvaluemeasurementhierarchy.Governmentagencysecuritiesarevaluedbasedupon quotedmarketpricesforsimilarassetsinactivemarkets,quotedpricesforidenticalorsimilarassetsthat

SLIDE 93

91 arenotactiveandinputsotherthanquotedpricesthatareobservableorcorroboratedbyobservable marketdata.Thecarryingamountsofcertificatesofdepositandcommercialpaperaremeasuredat amortizedcost,whichapproximatesfairvalueduetotheshorttimebetweenthepurchaseandexpected maturityoftheinvestments.Dependingonthenatureoftheinputs,theseassetsaregenerallyclassifiedas Level1or2withinthefairvaluemeasurementhierarchy.

Investmentsecurities,trading–shorttermdebt

Shorttermdebtsecuritiesincludecertificatesofdeposit,commercialpaperandcorporatedebt

bligationswithremainingmaturitiesfromthreemonthsto12months.Shorttermdebtsecuritiesheld

aregenerallyvaluedonthebasisofvaluationsprovidedbythirdpartypricingservices,asderivedfrom suchservices’pricingmodels.Inputstothemodelsmayinclude,butarenotlimitedto,reportedtrades, executablebidandaskprices,brokerdealerquotations,pricesoryieldsofsecuritieswithsimilar characteristics,benchmarkcurvesorinformationpertainingtotheissuer,aswellasindustryandeconomic events.Thepricingservicesmayuseamatrixapproach,whichconsidersinformationregardingsecurities withsimilarcharacteristicstodeterminethevaluationforasecurity.Dependingonthenatureofthe inputs,theseassetsaregenerallyclassifiedasLevel1or2withinthefairvaluemeasurementhierarchy.

Investmentsecurities,trading–otherdebt

Otherdebtsecuritiesclassifiedastradingincludedebtobligationsheldintheportfoliosofconsolidated sponsoredfundsandseparatelymanagedaccounts.Otherdebtsecuritiesheldaregenerallyvaluedonthe basisofvaluationsprovidedbythirdpartypricingservicesasdescribedaboveforinvestmentsecurities, trading–shorttermdebt.Otherdebtsecuritiespurchasedwitharemainingmaturityof60daysorless (excludingthosethatarenonU.S.denominated,whichtypicallyarevaluedbyathirdpartypricingservice

rdealerquotes)aregenerallyvaluedatamortizedcost,whichapproximatesfairvalue.Dependingupon

thenatureoftheinputs,theseassetsaregenerallyclassifiedasLevel1or2withinthefairvalue measurementhierarchy.

Investmentsecurities,trading–equity

Equitysecuritiesclassifiedastradingincludeforeignanddomesticequitysecuritiesheldintheportfoliosof consolidatedsponsoredfundsandseparatelymanagedaccounts.Equitysecuritiesarevaluedatthelast sale,officialcloseor,iftherearenoreportedsalesonthevaluationdate,atthemeanbetweenthelatest availablebidandaskpricesontheprimaryexchangeonwhichtheyaretraded.Whenvaluingforeign equitysecuritiesthatmeetcertaincriteria,theportfoliosuseafairvalueservicethatvaluessuchsecurities toreflectmarkettradingthatoccursafterthecloseoftheapplicableforeignmarketsofcomparable securitiesorotherinstrumentsthathaveastrongcorrelationtothefairvaluedsecurities.Inaddition,the Companyperformsitsownindependentbacktestreviewoffairvaluesversusthesubsequentlocalmarket

peningpriceswhenavailable.Dependinguponthenatureoftheinputs,theseassetsgenerallyare

classifiedasLevel1or2withinthefairvaluemeasurementhierarchy.

Investmentsecurities,availableforsale

Investmentsecuritiesclassifiedasavailableforsaleincludeinvestmentsinsponsoredmutualfundsand privatelyofferedequityfunds.Sponsoredmutualfundsarevaluedusingpublishednetassetvaluesand areclassifiedasLevel1withinthefairvaluemeasurementhierarchy.Investmentsinsponsoredprivately

fferedequityfundsthatarenotlistedonanactiveexchangebuthavenetassetvaluesthatare

comparabletomutualfundsandhavenoredemptionrestrictionsareclassifiedasLevel2withinthefair valuemeasurementhierarchy.

SLIDE 94

92

Derivativeinstruments

Derivativeinstruments,whichincludestockindexfuturescontracts,foreignexchangecontracts,total returnswapcontractsandcommodityfuturescontracts,arerecordedaseitherotherassetsorother liabilitiesontheCompany’sConsolidatedBalanceSheets.Stockindexfuturescontracts,totalreturnswap contractsandcommodityfuturescontractsarevaluedusingathirdpartypricingservicethatdetermines fairvaluebasedonbidandaskprices.Foreignexchangecontractsarevaluedbyinterpolatingavalueusing thespotforeignexchangerateandforwardpoints,whicharebasedonspotrateandcurrencyinterestrate differentials.DerivativeinstrumentsgenerallyareclassifiedasLevel2withinthefairvaluemeasurement hierarchy.

AssetsofconsolidatedCLOentity

ConsolidatedCLOentityassetsincludeinvestmentsinbankloans.Fairvalueisdeterminedutilizing unadjustedquotedmarketpriceswhenavailable.Interestsinseniorfloatingrateloansforwhichreliable marketquotationsarereadilyavailablearevaluedgenerallyattheaveragemidpointofbidandask quotationsobtainedfromathirdpartypricingservice.Fairvaluemayalsobebaseduponvaluations

btainedfromindependentthirdpartybrokersordealersutilizingmatrixpricingmodelsthatconsider

informationregardingsecuritieswithsimilarcharacteristics.Incertaininstances,fairvaluehasbeen determinedutilizingdiscountedcashflowanalysesorsinglebrokernonbindingquotes.Dependingonthe natureoftheinputs,theseassetsareclassifiedasLevel2or3withinthefairvaluemeasurement hierarchy.

Securitiessold,notyetpurchased

Securitiessold,notyetpurchased,arerecordedasotherliabilitiesontheCompany’sConsolidatedBalance Sheetsandarevaluedbyathirdpartypricingservicethatdeterminesfairvaluebasedonbidandask prices.Securitiessold,notyetpurchased,generallyareclassifiedasLevel2withinthefairvalue measurementhierarchy.

LiabilitiesofconsolidatedCLOentity

ConsolidatedCLOentityliabilitiesincludeseniorandsubordinatednoteobligations.Seniorand subordinatednotesgenerallyarevaluedutilizinganincomeapproachmodelinwhichoneormore significantinputsareunobservableinthemarket.Dependingonthenatureoftheinputs,theseliabilities areclassifiedasLevel2or3withinthefairvaluemeasurementhierarchy.

TransfersinandoutofLevels
ThefollowingtablesummarizesfairvaluetransfersbetweenLevel1andLevel2ofthefairvalue

measurementhierarchyfortheyearsendedOctober31,2016and2015:

(inthousands)
2016
2015
TransfersfromLevel1intoLevel2(1)
$

87

$

314

TransfersfromLevel2intoLevel1(2)
15
29
(1)

TransfersfromLevel1intoLevel2primarilyrepresentdebtandequitysecuritiesforwhichunadjustedquotedmarket

pricesinactivemarketsbecameunavailableinthecurrentperiod.
(2)

TransfersfromLevel2intoLevel1primarilyrepresentdebtandequitysecuritiesforwhichunadjustedquotedmarket

pricesinactivemarketsbecameavailableinthecurrentperiod.

SLIDE 95

93 Level3assetsandliabilities

Thefollowingtableshowsareconciliationofthebeginningandendingfairvaluemeasurementsofassets

andliabilitiesvaluedonarecurringbasisandclassifiedasLevel3withinthefairvaluemeasurement hierarchyfortheyearsendedOctober31,2016and2015:

2016
2015

(inthousands)

Bankloans

andother investmentsof EatonVance CLO20151

Seniorand

subordinated note

bligationsof

EatonVance CLO20151

Bankloans

andother investmentsof EatonVance CLOIX

Seniorand

subordinated note

bligationsof

EatonVance CLOIX

Beginningbalance

$

$
$

801 $ 149,310

Netgains(losses)oninvestmentsandnote

bligationsincludedinnetincome(1)
56
2,846
(281)
(2,426)

Additions(2)

1,379

Purchases

72
Sales
(756)
(137)
Amortizationoforiginalissuediscount
457
Principalpaydown
(144,166)

TransfersintoLevel3(3)

700
390,654
TransfersoutofLevel3(4)
(383)
DeconsolidationofCLOentity
(72)
(393,957)
(4,097)

Endingbalance

$

$
$
$
Changeinunrealizedgains(losses)
includedinnetincomerelatingto
assetsandliabilitiesheld

$

$
$
$
(1)Substantiallyallnetgains(losses)oninvestmentsandnoteobligationsattributabletotheassetsandborrowingsoftheCompany'sconsolidated

CLOentitiesareallocatedtononcontrollingandotherbeneficialinterestsontheCompany'sConsolidatedStatementsofIncome. (2)RepresentstheCompany'ssubordinatedinterest,whichwaspreviouslyeliminatedinconsolidation.TheCompanysolditsinterestinthe firstquarteroffiscal2015.RefertoNote6. (3)TransfersintoLevel3weretheresultofareductionintheavailabilityofsignificantobservableinputsusedindeterminingthefairvalueof certaininstruments. (4)TransfersoutofLevel3wereduetoanincreaseintheobservabilityoftheinputsusedindeterminingthefairvalueofcertaininstruments.

AsdiscussedmorefullyinNote6,theCompanydeconsolidatedEatonVanceCLO20151andEatonVance CLOIXonSeptember21,2016andAugust1,2015,respectively.

8. FairValueMeasurementsofOtherFinancialInstruments
Certainfinancialinstrumentsarenotcarriedatfairvalue,buttheirfairvalueisrequiredtobedisclosed.

Thefollowingisasummaryofthecarryingamountsandestimatedfairvaluesofthesefinancial instrumentsatOctober31,2016and2015:

SLIDE 96

94

2016
2015
(inthousands)
Carrying

Value

Fair

Value FairValue Level

Carrying

Value

Fair

Value FairValue Level

Loantoaffiliate

$ 5,000 $ 5,000 3 $

$
3
Investments,other

$ 19,034 $ 19,034 3 $ 2,048 $ 2,048 3

Otherassets

$ 6,194 $ 4,328 3 $ 6,345 $ 6,345 3

Debt

$ 573,967 $ 603,625 2 $ 573,811 $ 600,930 2

AsdiscussedinNote21,onDecember23,2015,EatonVanceManagementCanadaLtd.(“EVMC”),awholly
wnedsubsidiaryoftheCompany,loaned$5.0milliontoHexavestunderatermloanagreementtoseeda

newinvestmentstrategy.Thecarryingvalueoftheloanapproximatesfairvalue.Thefairvalueis determinedannuallyusingacashflowmodelthatprojectsfuturecashflowsbaseduponcontractual

bligations,towhichtheCompanythenappliesanappropriatediscountrate.
Includedininvestments,other,isanoncontrollingcapitalinterestinSigFigcarriedat$17millionat

October31,2016(seeNote4).Thecarryingvalueofthisinvestmentapproximatesfairvalue.

IncludedinotherassetsatOctober31,2016and2015isanoptionexercisableinfiscal2017toacquirean

additional26percentinterestinHexavestcarriedat$6.2millionand$6.3million,respectively.Thefair valueofthisoptionisdeterminedusingaMonteCarlomodel,whichsimulatespotentialfuturemarket multiplesofearningsbeforeinterestandtaxes(“EBIT”)andcomparesthistothecontractuallyfixed multipleofHexavest’sEBITatwhichtheoptioncanbeexercised.TheMonteCarlomodelusesthisarrayof simulatedmultiplesandtheirdifferencefromthecontractualmultipletimestheprojectedEBITfor Hexavesttoestimatethefutureexercisevalueoftheoption,whichisthenadjustedtopresentvalue.

ThefairvalueoftheCompany’sdebthasbeendeterminedbasedonquotedpricesininactivemarkets.
9. EquipmentandLeaseholdImprovements
ThefollowingisasummaryofequipmentandleaseholdimprovementsatOctober31,2016and2015:
(inthousands)
2016
2015
Equipment

$ 78,460 $ 75,492

Leaseholdimprovements
54,884
56,364
Subtotal
133,344
131,856
Less:Accumulateddepreciationandamortization
(88,917)
(86,913)
Equipmentandleaseholdimprovements,net

$ 44,427 $ 44,943

Depreciationandamortizationexpensewas$10.9million,$11.4millionand$10.9millionfortheyearsended

October31,2016,2015and2014,respectively.

SLIDE 97

95 10.Acquisitions,GoodwillandIntangibleAssets

AtlantaCapitalManagementCompany,LLC(“AtlantaCapital”)
Infiscal2016and2015,theCompanypurchasedanadditional0.9percentand0.4percentprofitinterest

inAtlantaCapitalfor$1.9millionand$0.5million,respectively,pursuanttotheputandcallprovisionsof theAtlantaCapitalPlan.PleaseseeNote12foradditionalinformationrelatedtotheAtlantaCapitalPlan.

Infiscal2016and2015,theCompanypurchasedanadditional0.02percentand1.4percentprofitinterest

inAtlantaCapitalfor$0.1millionand$6.8million,respectively,pursuanttothetermsoftheoriginal acquisitionagreement,asamended.Thepurchasepriceineachinstancewasbasedonamultipleof AtlantaCapital’searningsbeforetaxesfortherelevantfiscalperiod.

AsofOctober31,2016,noncontrollinginterestholdersofAtlantaCapitalretaineda0.5percentprofit

interestinAtlantaCapitalassociatedwiththeoriginalacquisition.Pursuanttothetermsoftheoriginal acquisitionagreement,asamended,thenoncontrollinginterestholdersofAtlantaCapitalhavetheright tosellanadditional0.1percentprofitinterestinAtlantaCapitaltotheCompanyatamultipleofAtlanta Capital’searningsbeforetaxesforthefiscalyearendedOctober31,2017.Totheextentthattheputisnot fullyexercisedbasedonfiscal2017results,noncontrollinginterestholdershavetheopportunitytosell the0.1percentprofitinterest,lessanyportionsoldinprioryears,basedonthefinancialresultsofAtlanta Capitalforeachfiscalyearthereafter.Alsopursuanttothetermsoftheoriginalacquisitionagreement,as amended,theCompanyhastherighttopurchase100percentoftheprofitinterestsrelatedtotheoriginal acquisitionretainedbynoncontrollinginterestholdersasofOctober31,2017andannuallythereafter,at pricesbasedonthefinancialresultsofAtlantaCapitalforthosefiscalyears.Neithertheexerciseofthe putsnortheexerciseofthecallsiscontingentuponthenoncontrollinginterestholdersofAtlantaCapital remainingemployees.

TotalprofitinterestsinAtlantaCapitalheldbynoncontrollinginterestholders,includingdirectprofit

interestsrelatedtotheoriginalacquisitionaswellasindirectprofitinterestsissuedpursuanttotheAtlanta CapitalPlan,decreasedto13.0percentonOctober31,2016from13.1percentonOctober31,2015, reflectingtheexerciseofputsandcallsasdescribedabove,aswellasthegrantofanadditional1.4 percentprofitinteresttoemployeesofAtlantaCapitalpursuanttothetermsoftheAtlantaCapitalPlanin fiscal2016.NoncontrollinginterestholdersdidnotholdanycapitalinterestsinAtlantaCapitalasof October31,2016and2015.

ParametricPortfolioAssociatesLLC(“Parametric”)
InNovember2013,thenoncontrollinginterestholdersofParametricRiskAdvisorsenteredintoaUnit

AcquisitionAgreementwithParametrictoexchangetheirremainingownershipinterestsinParametricRisk Advisors(representinga20percentownershipinterestintheentity)foradditionalownershipinterestsin ParametricPortfolioLP(“ParametricLP”),whosesoleassetisownershipinterestsinParametric.The ParametricLPownershipinterestsissuedintheexchange,representinga0.8percentprofitinterestanda 0.8percentcapitalinterest,containputandcallfeaturesthatbecomeexercisableoverafouryearperiod startinginfiscal2018.Asaresultofthisexchange,ParametricRiskAdvisorsbecameawhollyowned subsidiaryofParametric.

InDecember2012,ParametricacquiredClifton.Aspartofthetransaction,theCompanyissuedindirect
wnershipinterestsinParametricLPtocertainformerCliftonemployees.Theseindirectinterests,

SLIDE 98

96

representinga1.9percentprofitinterestanda1.9percentcapitalinterest,aresubjecttocertainputand

callfeaturesthatareexercisableoverafouryearperiodthatbeganatclosing.Infiscal2015,the associatedholdersexercisedaputoptionandtheCompanyexercisedacalloptionwithrespecttothe ParametricLPownershipinterestsissuedinconjunctionwiththeCliftonacquisition,resultinginthe Company’sacquisitionofanindirect0.5percentprofitinterestanda0.5percentcapitalinterestin Parametricforatotalof$6.7million.Infiscal2016,theassociatedholdersexercisedaputoptionandthe CompanyexercisedacalloptionwithrespecttotheParametricLPownershipinterestsissuedin conjunctionwiththeCliftonacquisition,resultingintheCompany’sacquisitionofanindirect0.5percent profitinterestanda0.5percentcapitalinterestinParametricforatotalof$6.2million.

Infiscal2016and2015,theCompanypurchasedadditional0.1percentand0.5percentprofitinterestsin

Parametricfor$0.6millionand$4.2million,respectively,pursuanttotheputandcallprovisionsofthe ParametricPlan.PleaseseeNote12foradditionalinformationrelatedtotheParametricPlan.

TotalprofitinterestsinParametricheldbynoncontrollinginterestholders,includingindirectprofit

interestsissuedpursuanttotheParametricPlan,decreasedto7.0percentasofOctober31,2016from7.4 percentasofOctober31,2015,reflectingthetransactionsdescribedabove,aswellasthegrantof0.5 percentprofitinteresttoemployeesofParametricpursuanttothetermsoftheParametricPlaninfiscal 2016.TotalcapitalinterestsinParametricheldbynoncontrollinginterestholdersdecreasedto1.8 percentasofOctober31,2016from2.2percentasofOctober31,2015.

TaxAdvantagedBondStrategies(“TABS”)
Infiscal2009,theCompanyacquiredtheTABSbusinessofM.D.SassInvestorsServices,aprivatelyheld

investmentmanagerbasedinNewYork,NewYorkforcashandfutureconsideration.Subsequentto closing,theTABSbusinesswasreorganizedastheTaxAdvantagedBondStrategiesdivisionofEatonVance Management.Theacquisitionwascompletedpriortothechangeinaccountingforcontingentpurchase priceconsideration.Accordingly,allcontingentpurchasepricepaymentsrelatedtothisacquisitionare treatedasadjustmentstothepurchasepriceallocation.

Duringfiscal2016,theCompanymadeacontingentpaymentof$10.1milliontothesellinggroupbased

uponprescribedmultiplesofTABS’srevenueforthetwelvemonthsendedDecember31,2015,increasing goodwillbythepaymentamount,astheacquisitionwascompletedpriortothechangeinaccountingfor contingentpurchasepriceconsideration.

TheCompanyisobligatedtomakeoneadditionalannualcontingentpaymenttothesellinggroupbased
nprescribedmultiples ofTABS’srevenueforthetwelvemonthsendingDecember31,2016.Thisfuture

paymentwillbeincashandwillresultinanadditiontogoodwill.Anestimateofthispaymentcannotbe reasonablymade.Thispaymentisnotcontingentuponanymemberofthesellinggroupremainingan employeeoftheCompany.

Goodwill
ThechangesinthecarryingamountofgoodwillfortheyearsendedOctober31,2016and2015areasfollows:

SLIDE 99

97

October31,
(inthousands)
2016

2015

Balance,beginningofperiod
$

237,961 $ 228,876

Goodwillacquired
10,130
9,085
Balance,endofperiod
$

248,091 $ 237,961

Allacquiredgoodwillisdeductiblefortaxpurposes.
TheCompanycompleteditsmostrecentgoodwillimpairmenttestinginthefourthquarteroffiscal2016

anddeterminedthattherewasnoimpairmentinthecarryingvalueofthisassetasofSeptember30,2016. Toevaluatethesensitivityofthegoodwillimpairmenttestingtothecalculationoffairvalue,theCompany appliedahypothetical10percentand20percentdecreasetothefairvalueofeachreportingunit.Based

nsuchhypotheticalscenarios,theresultsoftheCompany’simpairmenttestingwouldnotchange,asthe

reportingunitsstillhadanexcessoffairvalueoverthecarryingvalueunderbothhypotheticalscenarios.

NoimpairmentinthevalueofgoodwillwasrecognizedduringtheyearsendedOctober31,2016,2015or

2014.

Intangibleassets
ThefollowingisasummaryofintangibleassetsatOctober31,2016and2015:
October31,2016
(dollarsinthousands)

Weighted average remaining amortization period (inyears) Gross carrying amount Accumulated amortization Net carrying amount

Amortizingintangibleassets:
Clientrelationshipsacquired

8.5

$

133,927 $ (94,873) $ 39,054

Intellectualpropertyacquired

9.6

1,025
(385)
640
Trademarkacquired

3.2

900
(493)
407
Nonamortizingintangibleassets:
Mutualfundmanagementcontracts

acquired

6,708
6,708
Total
$

142,560 $ (95,751) $ 46,809

SLIDE 100

98

October31,2015
(dollarsinthousands)

Weighted average remaining amortization period (inyears) Gross carrying amount Accumulated amortization Net carrying amount

Amortizingintangibleassets:
Clientrelationshipsacquired

8.8

$

133,927 $ (86,419) $ 47,508

Intellectualpropertyacquired

10.6

1,000
(319)
681
Trademarkacquired

4.2

900
(364)
536
Nonamortizingintangibleassets:
Mutualfundmanagementcontracts

acquired

6,708
6,708
Total
$

142,535 $ (87,102) $ 55,433 Noimpairmentinthevalueofamortizingornonamortizingintangibleassetswasrecognizedduringtheyears endedOctober31,2016,2015or2014.

Amortizationexpensewas$8.6million,$9.7millionand$9.4millionfortheyearsendedOctober31,2016,

2015and2014,respectively.EstimatedamortizationexpensetoberecognizedbytheCompanyoverthenext fiveyearsisasfollows:

YearEndingOctober31,
Estimatedamortization
(inthousands)
expense
2017

$ 8,537

2018
8,508
2019
4,531
2020
3,510
2021
2,021
11.Debt
Seniornotesdue2017
Duringfiscal2007,theCompanyissued$500millioninaggregateprincipalamountof6.5percent

unsecuredseniornotesdueOctober2,2017.InterestispayablesemiannuallyinarrearsonApril2ndand October2ndofeachyear.Therearenocovenantsassociatedwiththe2017SeniorNotes.

Duringfiscal2013,theCompanypurchased$250millioninaggregateprincipalamountoftheoutstanding

2017SeniorNotesthroughatenderoffer.AtOctober31,2016and2015,theaggregateprincipalamount duewas$250million.

SLIDE 101

99 Seniornotesdue2023

Duringfiscal2013,theCompanyissued$325millioninaggregateprincipalamountof3.625percentten

yearseniornotesdueJune15,2023.InterestispayablesemiannuallyinarrearsonJune15thand December15thofeachyear.AtOctober31,2016and2015,thecarryingvalueofthe2023SeniorNotes was$324.0millionand$323.8million,respectively.The2023SeniorNotesareunsecuredand unsubordinatedobligationsoftheCompany.Therearenocovenantsassociatedwiththe2023Senior Notes.

Corporatecreditfacility
TheCompanyenteredintoa$300millionseniorunsecuredrevolvingcreditfacilityonOctober21,2014.The

creditfacilityhasafiveyearterm,expiringonOctober21,2019.Underthefacility,theCompanymayborrow upto$300millionatLIBORbasedratesofinterestthatvarydependingonthelevelofusageofthefacilityand creditratingsoftheCompany.Thecreditfacilityisunsecured,containsfinancialcovenantswithrespectto leverageandinterestcoverage,andrequirestheCompanytopayanannualcommitmentfeeonanyunused portion.AsofOctober31,2016,theCompanyhadnoborrowingsunderitsunsecuredrevolvingcreditfacility.

12.StockBasedCompensationPlans
TheCompanyrecognizedcompensationcostrelatedtoitsstockbasedcompensationplansfortheyears

endedOctober31,2016,2015and2014asfollows:

(inthousands)
2016
2015
2014
OmnibusIncentivePlans:
Stockoptions

$ 18,870 $ 17,606 $ 16,291

Restrictedshares
43,199
41,789
35,672
Phantomstockunits
263
241
267
EmployeeStockPurchasePlans
389
624
607
EmployeeStockPurchaseIncentivePlans
601
512
393
AtlantaCapitalPlan
2,905
2,534
2,360
ParametricPlan
5,373
6,214
4,958
Totalstockbasedcompensationexpense

$ 71,600 $ 69,520 $ 60,548

Thetotalincometaxbenefitrecognizedforstockbasedcompensationarrangementswas$24.8million,

$23.3millionand$20.5millionfortheyearsendedOctober31,2016,2015and2014,respectively.

OmnibusIncentivePlans
The2013OmnibusIncentivePlan(the“2013Plan”),whichisadministeredbytheCompensation

CommitteeoftheBoard,allowsforawardsofstockoptions,restrictedsharesandphantomstockunitsto eligibleemployeesandnonemployeeDirectors.OptionstopurchaseNonVotingCommonStockgranted underthe2013Planexpiretenyearsfromthedateofgrant,vestoverfiveyearsandmaynotbegranted withanexercisepricethatislessthanthefairmarketvalueofthestockasofthecloseofbusinessonthe dateofgrant.RestrictedsharesofNonVotingCommonStockgrantedunderthe2013Planvestoverfive yearsandmaybesubjecttoperformancegoals.Theseperformancegoalsgenerallyrelatetothe achievementofspecifiedlevelsofadjustedoperatingincome.Phantomstockunitsgrantedunderthe

SLIDE 102

100

2013Planvestovertwoyears.The2013Plancontainschangeincontrolprovisionsthatmayaccelerate

thevestingofawards.Atotalof18.5millionsharesofNonVotingCommonStockhavebeenreservedfor issuanceunderthe2013Plan.ThroughOctober31,2016,4.0millionrestrictedsharesandoptionsto purchase7.9millionshareshavebeenissuedpursuanttothe2013Plan.

Stockoptions

ThefairvalueofeachstockoptionawardisestimatedonthedateofgrantusingtheBlackScholesoption valuationmodel.TheBlackScholesoptionvaluationmodelincorporatesassumptionsastodividendyield, volatility,anappropriateriskfreeinterestrateandtheexpectedlifeoftheoption.Manyofthese assumptionsrequiremanagement’sjudgment.ThedividendyieldassumptionrepresentstheCompany’s expecteddividendyieldbasedonitshistoricaldividendpayoutsandthestockpriceatthedateofgrant. TheCompany’sstockvolatilityassumptionisbaseduponitshistoricalstockpricefluctuations.The Companyuseshistoricaldatatoestimateoptionforfeitureratesandtheexpectedlifeofoptionsgranted. TheriskfreerateforperiodswithinthecontractuallifeoftheoptionisbasedontheU.S.Treasuryyield curveatthetimeofgrant.

TheweightedaveragefairvaluespershareofstockoptionsgrantedduringtheyearsendedOctober31,

2016,2015and2014usingtheBlackScholesoptionvaluationmodelwereasfollows:

2016

2015 2014

Weightedaveragegrantdatefairvalue
foptionsgranted

$7.39 $10.13 $13.25

Assumptions:
Dividendyield

2.9%to3.8% 2.3%to2.7% 2.1%to2.4%

Expectedvolatility

25%to27% 27%to34% 36%to37%

Riskfreeinterestrate

1.3%to2.0% 1.7%to2.1% 2.1%to2.4%

Expectedlifeofoptions

6.9years 6.7years 6.9years Stockoptiontransactionsunderthe2013Planandpredecessoromnibusincentiveplansfortheyear endedOctober31,2016aresummarizedasfollows:

(shareandintrinsicvaluefiguresinthousands)

Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (inyears) Aggregate Intrinsic Value

Optionsoutstanding,beginningofperiod

21,076 $ 32.23

Granted

3,348

36.06
Exercised

(3,805)

28.35
Forfeited/expired

(308)

36.64
Optionsoutstanding,endofperiod

20,311 $ 33.52 5.3 $ 87,568

Optionsexercisable,endofperiod

11,391 $ 32.31 3.4 $ 69,301

VestedorexpectedtovestatOctober31,2016

20,272 $ 33.51 5.3 $ 87,543

SLIDE 103

101 TheCompanyreceived$103.7million,$82.9millionand$81.2millionrelatedtotheexerciseofoptionsfor thefiscalyearsendedOctober31,2016,2015and2014,respectively.Sharesissueduponexerciseof

ptionsrepresentnewlyissuedshares.Thetotalintrinsicvalueofoptionsexercisedduringtheyears

endedOctober31,2016,2015and2014was$32.2million,$46.2millionand$59.9million,respectively. ThetotalfairvalueofoptionsthatvestedduringtheyearendedOctober31,2016was$20.7million.

AsofOctober31,2016,therewas$47.9millionofcompensationcostrelatedtounvestedstockoptions

grantedundertheOmnibusIncentivePlansnotyetrecognized.Thatcostisexpectedtoberecognizedover aweightedaverageperiodof2.6years.

InNovember2016,theCompanygrantedoptionstopurchase2.8millionsharesoftheCompany’sNon

VotingCommonStockunderthe2013Planatapriceof$34.84pershare,thethencurrenttradingpriceof theunderlyingsecurities.

Restrictedshares

TheCompany’srestrictedshareawardsaregenerallysubjecttograduatedvestingschedules. Compensationexpenseisadjustedforestimatedforfeituresandisrecognizedonastraightlinebasisover theserviceperiodsunderlyingtheawards.AsofOctober31,2016,therewas$89.0millionof compensationcostrelatedtounvestedawardsgrantedunderthe2013Planandpredecessorplansnotyet recognized.Thatcostisexpectedtoberecognizedoveraweightedaverageperiodof2.7years.

AsummaryoftheCompany’srestrictedshareactivityfortheyearendedOctober31,2016underthe2013

Planandpredecessorplansispresentedbelow:

Weighted
Average
GrantDate
(sharefiguresinthousands)

Shares

FairValue
Unvested,beginningofperiod

3,988

$

34.43

Granted

1,546

35.23
Vested

(1,197)

31.87
Forfeited

(180)

35.14
Unvested,endofperiod

4,157

$

35.43 ThetotalfairvalueofrestrictedstockvestedfortheyearsendedOctober31,2016,2015and2014was $38.1million,$33.3millionand$35.9million,respectively.InNovember2016,theCompanyawardeda totalof1.5millionsharesofrestrictedsharesunderthe2013Planatagrantdatefairvalueof$34.84per share.

Phantomstockunits

Duringfiscal2016,7,965phantomstockunitswereissuedtononemployeeDirectorspursuanttothe 2013Plan.Becausetheseunitsarecontingentlyforfeitable,compensationexpenseisrecordedoverthe forfeitureperiod.Thetotalliabilitypaidoutassociatedwithphantomstockduringthefiscalyearsended October31,2016,2015and2014was$0.3million,$0.3millionand$0.5million,respectively.Asof October31,2016,therewas$0.1millionofcompensationcostrelatedtounvestedawardsgrantedunder the2013Plannotyetrecognized.Thatcostisexpectedtoberecognizedoveraweightedaverageperiod

foneyear.

SLIDE 104

102

EmployeeStockPurchasePlans
The2013EmployeeStockPurchasePlan(the“QualifiedESPP”)andthe2013NonqualifiedEmployeeStock

PurchasePlan(the“NonqualifiedESPP”)(together,the“EmployeeStockPurchasePlans”),whichare administeredbytheCompensationCommitteeoftheBoard,permiteligibleemployeestodirectuptoa maximumof$12,500persixmonthofferingperiodtowardthepurchaseofNonVotingCommonStockat thelowerof90percentofthemarketpriceoftheNonVotingCommonStockatthebeginningoratthe endofeachofferingperiod.TheQualifiedESPPqualifiesunderSection423oftheU.S.InternalRevenue Codeof1986,asamended(“InternalRevenueCode”).Atotalof0.4millionand0.1millionsharesofthe Company’sNonVotingCommonStockhavebeenreservedforissuanceundertheQualifiedESPPand NonqualifiedESPP,respectively.ThroughOctober31,2016,0.3millionshareshavebeenissuedpursuant totheEmployeeStockPurchasePlans.

TheCompanyreceived$3.1million,$3.3millionand$3.7millionrelatedtosharesissuedunderthe

EmployeeStockPurchasePlansfortheyearsendedOctober31,2016,2015and2014,respectively.

EmployeeStockPurchaseIncentivePlan
The2013IncentiveCompensationNonqualifiedEmployeeStockPurchasePlan(the“EmployeeStock

PurchaseIncentivePlan”),whichisadministeredbytheCompensationCommitteeoftheBoard,permits employeestodirectuptohalfoftheirincentivebonusesandcommissionstowardthepurchaseofthe Company’sNonVotingCommonStockatthelowerof90percentofthemarketpriceoftheNonVoting CommonStockatthebeginningorattheendofeachquarterlyofferingperiod.Atotalof0.6million sharesoftheCompany’sNonVotingCommonStockhavebeenreservedforissuanceundertheEmployee StockPurchaseIncentivePlan.ThroughOctober31,2016,0.3millionshareshavebeenissuedpursuantto theplan.

TheCompanyreceived$3.6million,$3.5millionand$3.3millionrelatedtosharesissuedunderthe

EmployeeStockPurchaseIncentivePlanfortheyearsendedOctober31,2016,2015and2014, respectively.

AtlantaCapitalandParametricIncentivePlans
TheAtlantaCapitalManagementCompany,LLCLongtermEquityIncentivePlan(the“AtlantaCapital

Plan”)andtheParametricPortfolioAssociatesLLCLongtermEquityIncentivePlan(the“ParametricPlan”) allowforawardsofprofitunitsofAtlantaCapitalandParametric,respectively,tokeyemployees.Profit unitsgrantedundertheAtlantaCapitalandParametricPlansvestoverfiveyearsandentitletheholdersto quarterlydistributionsofavailablecashflow.Fairvalueoftheawardsisdeterminedonthegrantdate utilizinganannualappraisalofeachentity.Theannualappraisalisdevelopedusingtwomodels,anincome approachandamarketapproach,asdescribedinNote1.Thesemodelsutilizeappropriatediscountrates aswellasrelevantinvestmentmanagementindustrymarketmultiples.Vestedprofitunitsareredeemable upontheexerciseoflimitedinserviceputrightsheldbytheemployeeorcallrightsheldbytheCompany. ThecallrightsheldbytheCompanyentitletheCompanytorepurchasetheprofitunitsattheendofaten yearcallperiodandeachyearthereafter,anduponterminationofemployment.Executionoftheputsand callstakesplaceuponavailabilityoftheannualappraisaltoensurethetransactionstakeplaceatfair value.Profitunitsarenotreservedforissuance;thenumberofprofitunitsauthorizedforawardsis determinedannuallybytheCompanyonthefirstcalendardayofthefiscalyear.Theawardsunderthe AtlantaCapitalandParametricPlansareaccountedforasequityawards.

SLIDE 105

103

DuringthefiscalyearendedOctober31,2016,30,690profitunitsofAtlantaCapitalwereissuedtocertain

employeesofthatentitypursuanttotheAtlantaCapitalPlanataweightedaverageperunitpriceof $135.59.Becausetheunitsarecontingentlyforfeitable,compensationexpenseisrecordedonastraight linebasisovertheforfeitureperiodoffiveyears.AsofOctober31,2016,therewas$7.1millionof compensationcostrelatedtounvestedawardsgrantedundertheplannotyetrecognized.Thatcostis expectedtoberecognizedoveraweightedaverageperiodof3.1years.ThroughOctober31,2016, 297,355profitunitshavebeenissuedpursuanttotheAtlantaCapitalPlan.

DuringthefiscalyearendedOctober31,2016,3,358profitunitsofParametricwereissuedtocertain

employeesofthatentitypursuanttotheParametricPlanataweightedaverageperunitpriceof $2,035.91.Becausetheseunitsarecontingentlyforfeitable,compensationexpenseisrecordedona straightlinebasisovertheforfeitureperiodoffiveyears.AsofOctober31,2016,therewas$10.8million

fcompensationcostrelatedtounvestedawardsgrantedundertheplannotyetrecognized.Thatcostis

expectedtoberecognizedoveraweightedaverageperiodof3.3years.ThroughOctober31,2016,39,423 profitunitshavebeenissuedpursuanttotheParametricPlan.

InNovember2016,theCompanygrantedatotalof25,661profitunitsatagrantdatefairvalueof$153.85

perunitpursuanttotheAtlantaCapitalPlan.TheCompanydidnotgrantanyprofitunitsunderthe ParametricPlanduringNovember2016.

ParametricPhantomIncentivePlan
OnOctober26,2016,theCompensationCommitteeoftheBoardrecommended,andtheCompany’s

Boardapproved,the2016ParametricPhantomIncentivePlan(the“ParametricPhantomIncentivePlan”). TheParametricIncentivePlanisalongtermequityincentiveplanthatprovidesfortheawardofphantom incentiveunitstoeligibleemployeesofParametric.Theinitialvalueofthephantomincentiveunitsistied totheenterprisevalueofParametriconthedateofgrant,andtheunitsvestoverfiveyears.Ateach vestingdate,thevestedportionoftheawardisadjustedtoreflectthethenenterprisevalueofParametric andtheadjustedvalueofthevestedawardissettledinEatonVanceNonVotingCommonStockunderthe 2013Plan.TheenterprisevaluesoftheawardsaredeterminedutilizinganannualappraisalofParametric. Theannualappraisalisdevelopedusingtwomodels,anincomeapproachandamarketapproach,as describedinNote1.Thesemodelsutilizeappropriatediscountratesaswellasrelevantinvestment managementindustrymarketmultiples.Phantomincentiveunitsarenotreservedforissuance;the numberofphantomincentiveunitsauthorizedforawardsisdeterminedannuallybytheCompanyonthe firstcalendardayofthefiscalyear.However,sincetheawardsaresettledunderthe2013Plan,theawards aresubjecttotheNonVotingCommonStockreservesdefinedunderthe2013Plan.Asdescribedabove,a totalof18.5millionsharesofNonVotingCommonStockhavebeenreservedforissuanceunderthe2013 Plan.TheawardsundertheParametricPhantomIncentivePlanwillbeaccountedforasequityawards.

TherewerenograntsmadeundertheParametricPhantomIncentivePlanduringfiscal2016.However,in

November2016,theCompanygrantedatotalof3,212phantomincentiveunitsatagrantdatefairvalue

f$2,352.63perunitpursuanttheParametricPhantomIncentivePlan.

SLIDE 106

104

StockOptionIncomeDeferralPlan
TheCompanyhasestablishedanunfunded,nonqualifiedStockOptionIncomeDeferralPlantopermitkey

employeestodeferrecognitionofincomeuponexerciseofnonqualifiedstockoptionspreviouslygranted bytheCompany.AsofOctober31,2016,optionstopurchase0.2millionshareshavebeenexercisedand placedintrustwiththeCompany.

13.EmployeeBenefitPlans
ProfitSharingandSavingsPlan
TheCompanyhasaProfitSharingandSavingsPlanforthebenefitofemployees.TheProfitSharingand

SavingsPlanisadefinedcontributionprofitsharingplanwitha401(k)deferralcomponent.Allfulltime employeeswhohavemetcertainageandlengthofservicerequirementsareeligibletoparticipateinthe plan.Theplanallowsparticipatingemployeestomakeelectivedeferralsofcompensationuptotheplan’s annuallimits.TheCompanythenmatcheseachparticipant’scontributiononadollarfordollarbasistoa maximumof$1,040perannum.Inaddition,theCompanymay,atitsdiscretion,contributeupto15 percentofeligibleemployeecompensationtotheplan,uptoamaximumof$39,750,$39,000and$38,250 peremployeefortheyearsendedOctober31,2016,2015and2014,respectively.TheCompany’sexpense undertheplanwas$23.9million,$22.7millionand$21.8millionfortheyearsendedOctober31,2016, 2015and2014,respectively.

SupplementalProfitSharingRetirementPlan
TheCompanyhasanunfunded,nonqualifiedSupplementalProfitSharingRetirementPlanwhereby

certainkeyemployeesoftheCompanymayreceiveprofitsharingcontributionsinexcessoftheamounts allowedundertheProfitSharingandSavingsPlan.ParticipationintheSupplementalProfitSharing RetirementPlanhasbeenfrozenandisrestrictedtoemployeeswhoqualifiedasparticipantsonNovember 1,2002.TheCompanydidnotmakeanycontributionstotheplaninfiscal2016.Participantsinthe SupplementalProfitSharingRetirementPlancontinuetoearninvestmentreturnsontheirbalances commensuratewiththoseearnedintheemployerdirectedportionoftheProfitSharingandSavingsPlan. TheCompany’sexpenseundertheSupplementalProfitSharingRetirementPlanfortheyearsended October31,2016,2015and2014was$12,320,$1,486and$21,576,respectively.

14.CommonStock
AlloutstandingsharesoftheCompany’sVotingCommonStockaredepositedinavotingtrust,thetrusteesof

whichhaveunrestrictedvotingrightswithrespecttotheVotingCommonStock.Thetrusteesofthevoting trustareallofficersoftheCompany.NonVotingCommonsharesdonothavevotingrightsunderany circumstances.Infiscal2016,theCompanyissued55,708sharesandrepurchased27,854sharesofitsVoting CommonStock.

TheCompany’scurrentNonVotingCommonStocksharerepurchaseprogramwasannouncedonJanuary

13,2016.TheBoardauthorizedmanagementtorepurchaseandretireupto8.0millionsharesofitsNon VotingCommonStockontheopenmarketandinprivatetransactionsinaccordancewithapplicable securitieslaws.Thetimingandamountofsharepurchasesaresubjecttomanagement’sdiscretion.The Company’ssharerepurchaseprogramisnotsubjecttoanexpirationdate.

SLIDE 107

105 Infiscal2016,theCompanypurchasedandretiredapproximately5.1millionsharesofitsNonVoting CommonStockunderthecurrentrepurchaseauthorizationandapproximately2.2millionsharesundera previousrepurchaseauthorization.Approximately2.9millionadditionalsharesmayberepurchasedunder thecurrentauthorizationasofOctober31,2016.

15.NonoperatingIncome(Expense)
Thecomponentsofnonoperatingincome(expense)fortheyearsendedOctober31,2016,2015and2014

wereasfollows:

(inthousands)
2016
2015
2014
Nonoperatingincome(expense):
Interestandotherincome

$ 11,515 $ 9,346 $ 8,182

Netlossesoninvestmentsandderivatives
(116)
(9,151)
(6,946)
Netforeigncurrencygains(losses)
1,012
(226)
(97)
Gains(losses)andotherinvestmentincome,net
12,411
(31)
1,139
Interestexpense
(29,410)
(29,357)

(29,892)

Otherincome(expense)ofconsolidated
CLOentities:
Interestincome
17,975
3,467
16,174
Netgains(losses)onbankloans,otherinvestments,
noteobligationsandpreferredshares
6,094
1,625
(1,282)
Gainsandotherinvestmentincome,net
24,069
5,092
14,892
Structuringandclosingfees
(2,359)
(4,847)
Interestexpense
(13,286)
(4,408)

(10,000)

Interestandotherexpense
(13,286)
(6,767)

(14,847)

Totalnonoperatingexpense

$ (6,216) $ (31,063) $ (28,708) 16.IncomeTaxes

TheprovisionforincometaxesfortheyearsendedOctober31,2016,2015and2014consistsofthe

following:

(inthousands)
2016
2015
2014
Current:
Federal

$ 114,350 $ 117,682 $ 149,999

State
17,305
20,837
25,329
Deferred:
Federal
18,391
4,614
10,653
State
3,584
81
729
Total

$ 153,630 $ 143,214 $ 186,710

SLIDE 108

106

Deferredincometaxesreflecttheexpectedfuturetaxconsequencesoftemporarydifferencesbetween

thecarryingamountsandtaxbasesoftheCompany’sassetsandliabilities.Thesignificantcomponentsof deferredincometaxesareasfollows:

(inthousands)
2016
2015
Deferredtaxassets:
Stockbasedcompensation

$ 66,221 $ 69,133

Deferredrent
12,575
12,776
Investmentbasisinpartnerships
7,478
Compensationandbenefitexpense
4,193
5,190
Differencesbetweenbookandtaxbasesofinvestments
3,233
9,268
Federalbenefitofunrecognizedstatetaxbenefits
716
883
Other
409
460
Totaldeferredtaxasset

$ 94,825 $ 97,710

Deferredtaxliabilities:
Deferredsalescommissions

$ (10,407) $ (9,760)

Differencesbetweenbookandtaxbasesofproperty
(7,537)
(6,117)
Unrealizednetholdinggainsoninvestments
(1,821)
(2,380)
Differencesbetweenbookandtaxbasesofgoodwill
andintangibles
(1,322)
(36,855)
Unrealizedgainsonderivativeinstruments
(443)
(434)
Totaldeferredtaxliability

$ (21,530) $ (55,546)

Netdeferredtaxasset

$ 73,295 $ 42,164

TheCompanyrecordsavaluationallowancewhennecessarytoreducedeferredtaxassetstoanamount

thatismorelikelythannottoberealized.Novaluationallowancehasbeenrecordedfordeferredtax assets,reflectingmanagement’sbeliefthatalldeferredtaxassetswillbeutilized.

ThefollowingtablereconcilestheCompany’seffectivetaxratefromtheU.S.federalstatutorytaxrateto

suchamountforeachoftheyearsendedOctober31,2016,2015and2014:

2016

2015 2014

Federalstatutoryrate

35.0 % 35.0 % 35.0 %

Stateandlocalincometax,netof
federalincometaxbenefit

3.5

3.8
3.5
Noncontrollinginterest

(2.0)

(0.8)
(0.8)
Stockbasedcompensation

0.6

0.8
0.4
Other

0.6

(0.1)
Effectiveincometaxrate

37.7 % 38.8 % 38.0 %

SLIDE 109

107 Theexerciseofnonqualifiedstockoptionsresultedinareductionoftaxespayableofapproximately$2.2 million,$10.0millionand$18.6millionfortheyearsendedOctober31,2016,2015and2014,respectively. Suchbenefithasbeenreflectedasacomponentofshareholders’equity.

Thechangesingrossunrecognizedtaxbenefits,excludinginterestandpenalties,fortheyearsended

October31,2016,2015and2014areasfollows:

(inthousands)
2016
2015
2014

BeginningBalance $ 2,100 $ 1,798 $ 857 Additionsfortaxpositionsofprioryears

6
437
1,117

Additionsbasedontaxpositionsrelatedtocurrentyear

57
62
Reductionsfortaxpositionsofprioryears
(130)
(176)

Lapseofstatuteoflimitations

(304)
(67)
EndingBalance

$ 1,859 $ 2,100 $ 1,798

ThetotalamountofunrecognizedtaxbenefitsasofOctober31,2016,2015and2014that,ifrecognized,

wouldimpacttheeffectivetaxrateis$1.9million,$2.1millionand$1.8million,respectively.

IntheyearsendedOctober31,2016,2015and2014,theCompanyrecognized$(0.2)million,$0.1million

and$0.2million,respectively,ininterestandpenaltiesinitsincometaxprovision.Accruedinterestand penalties,whichareincludedasacomponentofunrecognizedtaxbenefits,totaled$0.6million,$0.8 millionand$0.7millionatOctober31,2016,2015and2014,respectively.

TheCompanybelievesthatitisreasonablypossiblethatapproximately$1.0millionofitscurrently

remainingunrecognizedtaxbenefits,eachofwhichareindividuallyinsignificant,mayberecognizedwithin thenext12monthsasaresultofalapseofthestatuteoflimitationsandsettlementswithstatetaxing authorities.

TheCompanyconsiderstheundistributedearningsofcertainofitsforeignsubsidiariestobeindefinitely

reinvestedinforeignoperationsasofOctober31,2016.Accordingly,noU.S.incometaxeshavebeen providedthereon.AsofOctober31,2016,theCompanyhadapproximately$47.7millionofundistributed earningsincertainCanadian,UnitedKingdomandAustralianforeignsubsidiariesthatarenotavailableto funddomesticoperationsortodistributetoshareholdersunlessrepatriated.Repatriationwouldrequire theCompanytoaccrueandpayU.S.corporateincometaxes.Theunrecognizeddeferredincometax liabilityontheseunrepatriatedfunds,ortemporarydifference,isestimatedtobe$5.8millionatOctober 31,2016.TheCompanydoesnotintendtorepatriatethesefunds,hasnotpreviouslyrepatriatedfunds fromtheseentitiesandhasthefinancialliquiditytopermanentlyleavethesefundsoffshore.

TheCompanyisgenerallynolongersubjecttoincometaxexaminationsbyU.S.federal,state,localornon

U.S.taxingauthoritiesforfiscalyearspriortofiscal2012.

TheConsolidatedBalanceSheetasofOctober31,2016hasbeenadjustedtoreflectacorrectionofan

immaterialerrorrelatedtobasisadjustmentsofcertainpartnershipinterestsarisingfromCompany repurchasesofnoncontrollinginterestsinmajorityownedsubsidiaries.Thecumulativeerrorresultedin anunderstatementofboththeCompany’sdeferredincometaxassetandadditionalpaidincapitalinthe amountof$50.5millionasofOctober31,2015.TheerrorwasnotconsideredmaterialtotheCompany’s ConsolidatedBalanceSheetorConsolidatedStatementofEquityasofOctober31,2015,andhadnoeffect

SLIDE 110

108

ntheConsolidatedStatementsofIncome,ComprehensiveIncome,orCashFlowsasofandfortheyears

endedOctober31,2016,2015and2014.Thecurrentyearbasisadjustmentof$2.2millionisreflected withintheCompany’sdeferredincometaxassetandadditionalpaidincapitalintheaccompanying ConsolidatedBalanceSheets.

17.NoncontrollingandOtherBeneficialInterests
Noncontrollingandotherbeneficialinterestsareasfollows:
Nonredeemablenoncontrollinginterests
Nonredeemablenoncontrollinginterestsconsistentirelyofunvestedprofitinterestsgrantedto

employeesoftheCompany’smajorityownedsubsidiariesundersubsidiaryspecificlongtermequityplans. Thesegrantsbecomesubjecttoputrightsuponvestingandwillbereclassifiedtotemporaryequityas vestingoccurs.

Redeemablenoncontrollinginterestsatotherthanfairvalue
AsofOctober31,2016,redeemablenoncontrollinginterestsatotherthanfairvalueconsistofinterestsin

AtlantaCapitalretainedbysellingshareholdersatthetimeofacquisition.TheCompany’spurchaseof theseremainingnoncontrollinginterests,whicharenotsubjecttomandatoryredemption,ispredicated

ntheexerciseofaseriesofputsheldbynoncontrollinginterestholdersandcallsheldbytheCompany.

Theseputandcallrightsarenotlegallydetachableorseparatelyexercisableandaredeemedtobe embeddedintherelatednoncontrollinginterests.Theputsprovidenoncontrollinginterestholdersthe righttorequiretheCompanytopurchasetheseretainedinterestsatspecificintervalsovertime,whilethe callsprovidetheCompanytherighttorequirethenoncontrollinginterestholderstoselltheirretained equityintereststotheCompanyatspecificintervalsovertime,aswellasupontheoccurrenceofcertain eventssuchasdeathorpermanentdisability.Asaresult,thereissignificantuncertaintyastothetimingof anynoncontrollinginterestpurchasesinthefuture.Thevalueassignedtothepurchaseofanon controllinginterestisbased,ineachcase,onamultipleofearningsbeforeinterestandtaxesofAtlanta Capitalatspecifiedpointsinthefuture.Asaresult,theseinterestsareconsideredredeemableatother thanfairvalueandchangesintheredemptionvalueoftheseinterestsarerecognizedinnetincome attributabletononcontrollingandotherbeneficialinterests.

Netincomeattributabletononcontrollingandotherbeneficialinterestsinfiscal2016and2015reflectsan

increaseof$0.2millionandadecreaseof$0.2million,respectively,intheestimatedredemptionvalueof redeemablenoncontrollinginterestsinAtlantaCapital.Netincomeattributabletononcontrollingand

therbeneficialinterestsinfiscal2014reflectsanincreaseof$5.3millionintheestimatedredemption

valueofredeemablenoncontrollinginterestsinAtlantaCapitalandParametricRiskAdvisors.Non controllinginterestsinParametricRiskAdvisorsredeemableatotherthanfairvaluewerefullyredeemed infiscal2014.AnyfuturepaymentsmadetothenoncontrollinginterestholdersofAtlantaCapitalupon executionoftheputsandcallsdescribedabovewillreducetemporaryequity.

Redeemablenoncontrollinginterestsatfairvalue
InterestsintheCompany’sconsolidatedfundsandvestedinterestsgrantedtoemployeesofthe

Company’smajorityownedsubsidiariesundersubsidiaryspecificlongtermequityplansareconsidered redeemableatfairvalue.Futurechangesintheredemptionvalueoftheseinterestswillberecognizedas

SLIDE 111

109 increasesordecreasestoadditionalpaidincapital.Anyfuturepaymentsmadetothesenoncontrolling interestholderswillreducetemporaryequity.

Thecomponentsofnetincomeattributabletononcontrollingandotherbeneficialinterestsfortheyears

endedOctober31,2016,2015and2014wereasfollows:

(inthousands)

2016

2015
2014
Consolidatedsponsoredfunds

$ 43 $ 1,752 $ 318

Majorityownedsubsidiaries

(13,525)

(15,673)

(15,950)

Noncontrollinginterestvalueadjustments(1)

(200)

204
(5,311)
ConsolidatedCLOentities

(9,768)

5,825
4,095
Netincomeattributabletononcontrollingand
therbeneficialinterests

$ (23,450) $ (7,892) $ (16,848)

(1)Relatestononcontrollinginterestsredeemableatotherthanfairvalue.

SLIDE 112

110

18.AccumulatedOtherComprehensiveIncome(Loss)
Thecomponentsofaccumulatedothercomprehensiveincome(loss),netoftax,fortheyearsended

October31,2016,2015and2014areasfollows:

(inthousands)
Unamortized

netgains (losses)on derivatives(1)

Netunrealized

holdinggains (losses)on availablefor sale investments(2)

Foreign

currency translation adjustments(3)

Total
BalanceatOctober31,2013

$ 648 $ 4,504 $ (5,329) $ (177)

Othercomprehensiveincome(loss),
beforereclassificationsandtax
1,735

(15,984) (14,249)

Taximpact
(690)

(2,972) (3,662)

Reclassificationadjustments,beforetax
22

131

153
Taximpact
(9)

(52)

(61)
Netcurrentperiodother

comprehensiveincome(loss)

13
1,124
(18,956)
(17,819)
BalanceatOctober31,2014

$ 661 $ 5,628 $ (24,285) $ (17,996)

Othercomprehensiveloss,before
reclassificationsandtax
(8)

(28,877) (28,885)

Taximpact
3

(115) (112)

Reclassificationadjustments,beforetax
22

(2,992) 463 (2,507)

Taximpact
(9)

1,102 (179) 914

Netcurrentperiodother

comprehensiveincome(loss)

13
(1,895)
(28,708)
(30,590)
BalanceatOctober31,2015

$ 674 $ 3,733 $ (52,993) $ (48,586)

Othercomprehensiveincome(loss),
beforereclassificationsandtax
732

(8,220) (7,488)

Taximpact
(303)
(303)
Reclassificationadjustments,beforetax
22

(2,082)

(2,060)
Taximpact
(9)

863

854
Netcurrentperiodother

comprehensiveincome(loss)

13
(790)
(8,220)
(8,997)
BalanceatOctober31,2016

$ 687 $ 2,943 $ (61,213) $ (57,583)

(1)Amountsreclassifiedfromaccumulatedothercomprehensiveincome(loss),netoftax,representtheamortizationofnetgains(losses)on
interestrateswapsoverthelifeoftheCompany'sSeniorNotesintointerestexpenseontheConsolidatedStatementsofIncome.
(2)Amountsreclassifiedfromaccumulatedothercomprehensiveincome(loss),netoftax,representgains(losses)ondisposalofavailable
forsalesecuritiesthatwererecordedingains(losses)andotherinvestmentincome,net,ontheConsolidatedStatementsofIncome.
(3)Amountsreclassifiedfromaccumulatedothercomprehensiveincome(loss),netoftax,representtherealizationofforeigncurrency
translationlossesonaconsolidatedsponsoredfunddenominatedinEurosthatwasdeconsolidatedduringfiscal2015.Theseamounts
wererecordedingains(losses)andotherinvestmentincome,net,ontheConsolidatedStatementsofIncome.

SLIDE 113

111 19.EarningsperShare

Thefollowingtablesetsforththecalculationofearningsperbasicanddilutedsharefortheyearsended

October31,2016,2015and2014:

(inthousands,exceptpersharedata)

2016 2015 2014

NetincomeattributabletoEatonVanceCorp.
shareholders

$ 241,307 $ 230,299 $ 304,316

Less:Allocationofearningstoparticipating
restrictedshares
3,885
7,611
Netincomeavailabletocommonshareholders

$ 241,307 $ 226,414 $ 296,705

Weightedaveragesharesoutstanding–basic
109,914
113,318
116,440
Incrementalcommonshares
4,068
4,837
5,155
Weightedaveragesharesoutstanding–diluted
113,982
118,155
121,595
Earningspershare:
Basic

$ 2.20 $ 2.00 $ 2.55

Diluted

$ 2.12 $ 1.92 $ 2.44 Antidilutivecommonsharesrelatedtostockoptionsandunvestedrestrictedstockexcludedfromthe computationofearningsperdilutedsharewereapproximately11.9million,7.8millionand5.1millionfor theyearsendedOctober31,2016,2015and2014,respectively.

20.CommitmentsandContingencies
Inthenormalcourseofbusiness,theCompanyentersintoagreementsthatincludeindemnitiesinfavorof

thirdparties,suchasengagementletterswithadvisorsandconsultants,informationtechnology agreements,distributionagreementsandserviceagreements.Incertaincircumstances,theseindemnities infavorofthirdpartiesrelatetoserviceagreementsenteredintobyinvestmentfundsmanagedand/or advisedbyEatonVanceManagementorBostonManagementandResearch,bothwhollyowned subsidiariesoftheCompany.TheCompanyhasalsoagreedtoindemnifyitsdirectors,officersand employeesinaccordancewiththeCompany’sArticlesofIncorporation,asamended.Certainagreements donotcontainanylimitsontheCompany’sliabilityand,therefore,itisnotpossibletoestimatethe Company’spotentialliabilityundertheseindemnities.Incertaincases,theCompanyhasrecourseagainst thirdpartieswithrespecttotheseindemnities.Further,theCompanymaintainsinsurancepoliciesthat mayprovidecoverageagainstcertainclaimsundertheseindemnities.

TheCompanyanditssubsidiariesaresubjecttovariouslegalproceedings.Intheopinionofmanagement,

afterdiscussionswithlegalcounsel,theultimateresolutionofthesematterswillnothaveamaterialeffect

ntheconsolidatedfinancialcondition,resultsofoperationsorcashflowsoftheCompany.
InNovember2010,theCompanyacquiredpatentsandotherintellectualpropertyfromManagedETFsLLC,

adeveloperofintellectualpropertyinthefieldofexchangetradedfunds.Thisintellectualpropertyisthe foundationoftheCompany’sNextShares™exchangetradedmanagedfundsinitiative.Thetermsofthe acquisitionofthepatentsandotherintellectualpropertyofManagedETFsLLCincludeapproximately$9.0 millioninaggregatecontingentmilestonepaymentsthatarebasedonspecificeventsrepresentingkey developmentsinthecommercializationofNextShares.Thereisnodefinedtimingonthesepayments,

SLIDE 114

112

resultinginsignificantuncertaintyastowhentheamountofanypaymentisdueinthefuture.Ifandwhen

themilestoneshavebeenaccomplished,ManagedETFsLLCisalsoentitledtorevenuesharingpayments thatarecalculatedbasedonapercentageoflicensingrevenuethattheCompanyreceivesforuseofthe acquiredintellectualproperty.

TheCompanyhasenteredintotransactionsinfinancialinstrumentsinwhichithassoldsecurities,notyet

purchased,aspartofitscorporatehedgingprogram.AsofOctober31,2015,theCompanyhad$3.0 millionincludedwithinotherliabilitiesonitsConsolidatedBalanceSheetrelatedtosecuritiessold,notyet purchased.TheCompanydidnotholdanypositionsrelatedtosecuritiessold,notyetpurchasedonits ConsolidatedBalanceSheetasofOctober31,2016.

TheCompanyleasescertainofficespaceandequipmentundernoncancelableoperatingleases.Theoffice

spaceleasesexpireovervarioustermsthatextendthrough2034.Certainoftheleasescontainrenewal

ptions.Theleasepaymentsarerecognizedonastraightlinebasisoverthenoncancelabletermofeach

leaseplusanyanticipatedextensions.Rentexpenseundertheseleasesinfiscal2016,2015and2014 totaled$21.2million,$21.5millionand$20.7million,respectively.Futureminimumleasecommitments areasfollows:

YearEndingOctober31,
(inthousands)
Amount(1)
2017

$ 21,887

2018
22,554
2019
22,821
2020
22,396
2021
20,149
2022–thereafter
236,476
Total

$ 346,283

(1)Futureminimumleasepaymentshavenotbeenreducedbyminimumsubleaserentalsof$0.1milliondue
inthefuture.
TheCompanysubleasestounaffiliatedthirdpartiesofficespaceunderoperatingleasesthatexpireover

variousterms.Thesubleasepaymentsarerecognizedonastraightlinebasisoverthenoncancelable termsofthesubleases.Rentalincomeunderthesesubleasestotaled$0.3million,$1.3millionand$1.2 millionforthefiscalyearsendedOctober31,2016,2015and2014,respectively.Futureminimumrental paymentstobereceivedundersubleasesareasfollows:

YearEndingOctober31,
(inthousands)
Amount
2017
53
2018
53
2019(1)
30
Total

$ 136

(1)TherearenofutureminimumleasepaymentsduetotheCompanyinperiodsafterfiscal2019.
Othercommitmentsandcontingenciesincludefuturepaymentstobemadeupontheexerciseofputsand

callsofnoncontrollinginterestsinAtlantaCapital;putsandcallsrelatedtoindirectprofitinterestsissued

SLIDE 115

113 pursuanttotheAtlantaCapitalPlanandtheParametricPlan;andthecontingentpaymenttobemadeto thesellingshareholdersofTABS,asmorefullydescribedinNote10.

21.RelatedPartyTransactions
SponsoredFunds
TheCompanyisaninvestmentadviserto,andhasadministrativeagreementswith,certainsponsored

mutualfunds,privatelyofferedfundsandclosedendfundsforwhichcertainemployeesareofficers and/ordirectors.SubstantiallyalloftheservicestotheseentitiesforwhichtheCompanyearnsafee, includinginvestmentadvisory,distribution,shareholderandadministrativeservices,areprovidedunder contractsthatsetforththeservicestobeprovidedandthefeestobecharged.Certainofthesecontracts aresubjecttoannualreviewandapprovalbythefunds’boardsofdirectorsortrustees.Revenuesfor servicesprovidedorrelatedtothesefundsfortheyearsendedOctober31,2016,2015and2014areas follows:

(inthousands)
2016
2015
2014
Investmentadvisoryandadministrativefees

$ 809,102 $ 865,792 $ 900,478

Distributionfees
71,784
73,468
77,697
Servicefees
107,684
116,448
125,713
Shareholderservicefees
2,433
2,641
2,315
Otherrevenue
2,133
2,384
2,093
Total

$ 993,136 $ 1,060,733 $ 1,108,296 FortheyearsendedOctober31,2016,2015and2014,theCompanyhadinvestmentadvisoryagreements withcertainsponsoredfundspursuanttowhichtheCompanycontractuallywaived$15.1million,$13.0 millionand$12.3million,respectively,ofinvestmentadvisoryfeesitwasotherwiseentitledtoreceive.

Salesproceedsandnetrealizedgains(losses)fortheyearsendedOctober31,2016,2015and2014from

investmentsinsponsoredfundsclassifiedasavailableforsale,includingsponsoredfundsaccountedfor undertheequitymethod,areasfollows:

(inthousands)
2016
2015
2014
Proceedsfromsales

$ 10,895 $ 44,736 $ 79,829

Netrealizedgains(losses)
2,154
3,943
(81)

TheCompanybearsthenonadvisoryexpensesofcertainsponsoredfundsforwhichitearnsanallin managementfeeandprovidessubsidiestostartupandothersmallersponsoredfundstoenhancetheir competitiveness.FortheyearsendedOctober31,2016,2015and2014,expensesof$24.4million,$22.5 millionand$21.7million,respectively,wereincurredbytheCompanypursuanttothesearrangements.

IncludedininvestmentadvisoryandotherreceivablesatOctober31,2016and2015arereceivablesdue

fromsponsoredfundsof$88.7millionand$89.2million,respectivelyandpayablestosponsoredfundsof $1.6millionand$0.6million,respectively.

SLIDE 116

114

LoantoAffiliate
OnDecember23,2015,EVMC,awhollyownedsubsidiaryoftheCompany,loaned$5.0milliontoHexavest

underatermloanagreementtoseedanewinvestmentstrategy.Theloanrenewsautomaticallyforan additionaloneyearperiodoneachanniversarydateunlesswrittenterminationnoticeisprovidedby EVMC.TheloanearnsinterestequaltotheoneyearCanadianDollarOfferedRateplus200basispoints, whichispayablequarterlyinarrears.Hexavestmayprepaytheloaninwholeorinpartatanytimewithout penalty.Duringfiscal2016,theCompanyrecorded$128,000ofinterestincomerelatedtotheloaningains (losses)andotherinvestmentincome,net,ontheCompany’sConsolidatedStatementofIncome.Asof October31,2016,theCompanyhasincluded$13,000ofinterestreceivableontheloanwithinotherassets

nitsConsolidatedBalanceSheet.
HexavestAgreements
TheCompanyhasanagreementwithHexavestwherebytheCompanycompensatesHexavestforsub

advisoryservicesandHexavestreimbursestheCompanyforaportionoffundsubsidiesrelatedtocertain investmentcompaniesforwhichtheCompanyistheinvestmentadviser.TheCompanypaidHexavest$0.3 million,$0.3millionand$0.2millioninsubadvisoryfeesinfiscal2016,2015and2014,respectively,and theCompanyreceived$0.2millionand$1.2millioninfiscal2016and2015,respectively,fromHexavest forreimbursementoffundsubsidies.ThereimbursementoffundsubsidiestheCompanyreceivedfrom Hexavestinfiscal2014werenegligible.ThenetamountduetoHexavestunderthisarrangementand includedinotherliabilitiesatbothOctober31,2016and2015was$0.1million.Inaddition,theCompany hasanagreementwithHexavestwherebytheCompanyisreimbursedforcostsrelatedtothesaleof certaininstitutionalseparatelymanagedaccounts.Duringfiscal2016,2015and2014,theCompany earned$2.4million,$2.4millionand$2.1millionunderthisarrangement.Thenetamountduefrom Hexavestunderthisarrangementandincludedinotherassetswas$0.3millionand$0.2millionatOctober 31,2016and2015,respectively.

EmployeeLoanProgram
TheCompanyhasestablishedanEmployeeLoanProgramunderwhichamaximumof$20.0millionis

availableforloanstoofficers(otherthanexecutiveofficers)andotherkeyemployeesoftheCompanyfor purposesoffinancingtheexerciseofemployeestockoptions.Loansarewrittenforasevenyearperiod,at varyingfixedinterestrates(currentlyrangingfrom0.9percentto2.9percent),arepayableinannual installmentscommencingwiththethirdyearinwhichtheloanisoutstanding,andarecollateralizedbythe stockissueduponexerciseoftheoption.AllloansundertheprogrammustbemadeonorbeforeOctober 31,2018.Loansoutstandingunderthisprogram,whicharefullrecourseinnature,arereflectedasnotes receivablefromstockoptionexercisesinshareholders’equity,andtotaled$12.1millionand$11.1million atOctober31,2016and2015,respectively.

22.RegulatoryRequirements
TheCompanyisrequiredtomaintainnetcapitalincertainregulatedsubsidiarieswithinanumberof

jurisdictions.SuchrequirementsmaylimittheCompany’sabilitytomakewithdrawalsofcapitalfromthese subsidiaries.

EatonVanceDistributors,Inc.(“EVD”),awhollyownedsubsidiaryoftheCompanyandprincipalunderwriter
ftheEatonVanceandParametricfunds,issubjecttotheU.SSecuritiesandExchangeCommission’s

SLIDE 117

115 uniformnetcapitalrule,whichrequiresthemaintenanceofminimumnetcapital.Forpurposesofthisrule, EVDhadnetcapitalof$67.1million,whichexceedsitsminimumnetcapitalrequirementof$3.6millionat October31,2016.TheratioofaggregateindebtednesstonetcapitalatOctober31,2016was0.80to1.

AtOctober31,2016,theCompanywasrequiredtomaintainnetcapitalincertainotherregulated

subsidiaries.TheCompanywasincompliancewithallapplicableregulatoryminimumnetcapital requirements.

23.ConcentrationsofCreditRiskandSignificantRelationships
FinancialinstrumentsthatpotentiallysubjecttheCompanytoconcentrationsofcreditriskconsist

primarilyofcashandcashequivalentsheld.TheCompanymaintainscashandcashequivalentswith variousfinancialinstitutions.Cashdepositsmaintainedatafinancialinstitutionmayexceedthefederally insuredlimit.

DuringthefiscalyearsendedOctober31,2016,2015and2014,therewerenomanagedportfolios,related

fundsorotherclientsthatprovidedover10percentofthetotalrevenuefortheCompany.

24.GeographicInformation
RevenuesandlonglivedassetsbyprincipalgeographicareasfortheyearsendedandasofOctober31,

2016,2015and2014areasfollows:

(inthousands)
2016
2015
2014
Revenue:
U.S.

$ 1,289,830 $ 1,340,760 $ 1,376,107

International
53,030
62,803
74,187
Total

$ 1,342,860 $ 1,403,563 $ 1,450,294

(inthousands)
2016
2015
2014
LonglivedAssets:
U.S.

$ 42,153 $ 43,596 $ 44,279

International
2,274
1,347
1,372
Total

$ 44,427 $ 44,943 $ 45,651

Internationalrevenuesandlonglivedassetsareattributedtocountriesbasedonthelocationinwhich

revenuesareearned.

SLIDE 118

116

25.ComparativeQuarterlyFinancialInformation(Unaudited)
2016
(inthousands,exceptpersharedata)

First Quarter Second Quarter Third Quarter Fourth Quarter FullYear

Totalrevenue

$ 331,556 $ 323,290 $ 341,168 $ 346,846 $

1,342,860
Operatingincome

$ 100,625 $ 95,768 $ 106,725 $ 111,150 $ 414,268

Netincome

$ 63,232 $ 69,455 $ 65,774 $ 66,296 $ 264,757

Netincomeattributable

toEatonVanceCorp. shareholders $ 58,386 $ 54,967 $ 62,899 $ 65,055 $ 241,307

EarningsperShare:
Basic

$ 0.52 $ 0.50 $ 0.57 $ 0.59 $ 2.20

Diluted

$ 0.50 $ 0.48 $ 0.55 $ 0.57 $ 2.12

2015
(inthousands,exceptpersharedata)

First Quarter Second Quarter Third Quarter Fourth Quarter FullYear

Totalrevenue

$ 354,930 $ 351,664 $ 355,511 $ 341,458 $

1,403,563
Operatingincome

$ 50,560 $ 122,221 $ 116,733 $ 110,933 $ 400,447

Netincome

$ 32,509 $ 75,893 $ 68,974 $ 60,815 $ 238,191

Netincomeattributable

toEatonVanceCorp. shareholders $ 29,003 $ 70,384 $ 68,709 $ 62,203 $ 230,299

EarningsperShare:
Basic

$ 0.25 $ 0.61 $ 0.60 $ 0.55 $ 2.00

Diluted

$ 0.24 $ 0.58 $ 0.57 $ 0.53 $ 1.92

SLIDE 119

117

REPORTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM
TotheBoardofDirectorsandShareholdersofEatonVanceCorp.:
WehaveauditedtheaccompanyingconsolidatedbalancesheetsofEatonVanceCorp.andsubsidiaries(the

“Company”)asofOctober31,2016and2015,andtherelatedconsolidatedstatementsofincome, comprehensiveincome,shareholders’equity,andcashflowsforeachofthethreeyearsintheperiodended October31,2016.ThesefinancialstatementsaretheresponsibilityoftheCompany'smanagement.Our responsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudits.

WeconductedourauditsinaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard

(UnitedStates).Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassurance aboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,ona testbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludes assessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluating theoverallfinancialstatementpresentation.Webelievethatourauditsprovideareasonablebasisforour

pinion.
Inouropinion,suchconsolidatedfinancialstatementspresentfairly,inallmaterialrespects,thefinancial

positionofEatonVanceCorp.andsubsidiariesasofOctober31,2016and2015,andtheresultsoftheir

perationsandtheircashflowsforeachofthethreeyearsintheperiodendedOctober31,2016,in

conformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.

/s/DELOITTE&TOUCHELLP
Boston,Massachusetts

December21,2016

SLIDE 120

| 2016 Annual Report Eaton Vance Corp. has fjled an Annual Report on Form 10-K with the Securities and Exchange Commission for the 2016 fjscal year. For a copy of the Company’s Form 10-K, which is available free of charge to shareholders upon request, or other information regarding the Company, please contact: Laurie G. Hylton Chief Financial Offjcer Eaton Vance Corp. Two International Place Boston MA 02110 (617) 482-8260 The Company’s Form 10-K and other information about Eaton Vance Corp. are also available on the Company’s website: eatonvance.com. The Company has submitted to the New York Stock Exchange a certifjcate of the chief executive offjcer representing that he is not aware of any violation by the Company of New York Stock Exchange corporate governance listing standards. Transfer Agent and Registrar Computershare Investor Services P.O. Box 30170 College Station, TX 77842-3170 (877) 282-1168 computershare.com/investor The Transfer Agent maintains shareholder account records and should be contacted regarding changes in address, name or ownership, lost certifjcates and consolidation

f accounts. When corresponding with the Transfer Agent, shareholders should state

the exact name(s) in which their stock is registered and the certifjcate number, as well as other pertinent account information. Independent Registered Public Accounting Firm Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116 (617) 437-2000 deloitte.com

Investor Information

118

SLIDE 121

| 2016 Annual Report

Directors

Ann E. Berman (1,2,3) Thomas E. Faust Jr. Leo I. Higdon Jr.*(2) Brian D. Langstraat Dorothy E. Puhy (1,3) Winthrop H. Smith Jr. (1,2,3) Richard A. Spillane Jr. (2,3)

Offjcers

*Lead Independent Director. Board Committees: 1. Audit, 2. Compensation, 3. Nominating and Governance

Thomas E. Faust Jr. Chairman, Chief Executive Offjcer and President Jeffrey P. Beale Vice President and Chief Administrative Offjcer Daniel C. Cataldo Vice President and Treasurer Laurie G. Hylton Vice President, Chief Financial Offjcer and Chief Accounting Offjcer Frederick S. Marius Vice President, Secretary and Chief Legal Offjcer

Directors and Officers

119 | 2016 Annual Report

SLIDE 122

| 2016 Annual Report

Our mission and core values

Eaton Vance strives to be the premier investment management organization.

We seek to provide clients with superior performance, top-quality service and

value-added products across a range of investment disciplines and distribution channels.

We seek to provide an attractive work environment and fulfjlling careers for our

dedicated employees.

Through the success of clients and associates, we thereby seek to build long-term

shareholder value.

Integrity

Is honest in word and deed. Adheres to the company’s code of ethics, industry standards of business conduct and applicable law. Deals fairly and forthrightly with clients, colleagues and business partners.

Teamwork

Works collaboratively with others to achieve shared goals. Communicates openly and follows through on commitments. Enhances the work experience of colleagues.

Client Focus

Meets or exceeds client performance expectations. Places the interests of clients fjrst.

Professionalism

Demonstrates maturity, dedication and a strong work ethic. Behaves appropriately; is respectful of clients, colleagues and business partners. Uses the company’s resources wisely.

Creativity/Adaptability

Develops business opportunities and process improvements. Is open and adaptable to change. Works to achieve personal development.

Excellence

Achieves outstanding results for clients and shareholders. Advances the record and reputation of Eaton Vance as an industry leader.

120

Printed on 100% PC Recycled Paper

SLIDE 123

| 2016 Annual Report We seek to provide an attractive work environment and fulfjlling careers for our

continued from back cover

Erin Canon Holly Bragdon Christopher Brown Robert Zaccardi David Glen William Reardon Ashley Peterson Michael Askew Diogenes Balsam Nagabhushan Beeram Tracy Potorski Jesse Tobiason Macki Anderson Amy Arslain Ryan Balko Matthew Cullen Michael Hebert Qiwen Liu Laura Sanders Punit Shetty Yi Sun Robert Cruice Craig McHaffie Robert Pellow John Jaje Rakshya Sigdel Scott Sovine Benjamin Lazarus Lee Bertram Allison Li Jennifer Rodas Jenna Alleva Micaela Curley Joshua Rock Carolyn Cawley Steven Heck Andrea Vaitkus Ashley Boecker Shiva Iyer Jacob Homchick Glenn Pardo Raewyn Williams Timothy Gaudette Erin Kandamar Elizabeth McDonough Alba Shkurti Michael Sullivan Alexis Walsh John Flanagan Patrick Keogh Julie Smith Scott VanSickle Jason Chalmers Paul Cocanour Heather Anderson Kathryn Salzl Daniel Cozzi Edward Perkin Ashok Nayak Sheila Pechacek Bradford Tomas Andrew Spero Darrell Tompson Joseph Cinar Glenn Fitzsimmons Alexandra Monaco Christopher Arthur James Allen Madeline Anderson Dial Boehmer Michael Bortnick Emily Crandall Allison Goldie Blair McGreenery Peter Milinazzo Michael Rabinowitz Nicholas Stahelski Jason Nelson Mark Bumann Miles Ferguson Elaina Kenney Donald Schofield Max Chou Patrick Curran Wei Ge Michael Gose Audrey Grant Justin Horner Kurt Kostyu Joonmo Ku Michael Lopesciolo Tyler Nowicki Caitlyn Olson Adam Swinney Alli Bayko Lauren McAllister Abbas Jaffri Shannon Larson Leonard Williams Baharan MacLean Jeffrey Miller Samuel Tripp Laura Zilewicz Devin Greaney Alfred Walterscheit Keith Schweitzer Emi Yajima Katherine Campbell Erin Nygard Lynn Parker Maya Calabrese Alfred Bonfantini Lindsay Dahlstrom Carlos Del Valle-Ortiz Jeffrey Feccia David Grean Jonathan Lahey Desmond Gallacher Kimberly Matisoff Branden Tanga Roy Belen Karen Long Onix Marrero Nicolette Mills Clinton Talmo Cory Gately Yuepeng Li Danielle Carr William Murray Vincent Primavera Nicole Stenerson Tomas Roslansky Kevin DeVito Andrew Scanlon Azyzah Sasry David Turk Jackson Bennett Christopher Ferrier Domini Gardner Joseph Zeck Malia Bandli Amir Aliabadi Brock Griffin Mark Grube Dorothy Maloney Richard Bissell Steven Abbiuso John Garvey Omar Yassin Matthew Butorac Kattie Elder Matthew Calos Isaac Beckel Max Chisaka Kristine Delano Holly DiCostanzo Robert Pieroni Alec Szczerbinski Nataliya Zubrylova Cory Gorski Alexander Lee Michael McDonough Abraham Hyun William Busch Monica Durango Kathryn Griffin Tyler Pascucci Corinne Pekoske Samuel Reinhart Prachi Samudra Briton Wheeler Rob Anketell Peter Iodice Jun Li Paul Metheny David Morley Whitlam Zhang Lynn Mach Lucas Anderson Matthew Johnson Jennifer Kilroy Teodore Zwieg Carolyn Foster Gabriela Paz Riley Allen Diana Granger Hasmid Haro Brian King Craig Letendre Scott Linari Jennifer Magazu David Mattson Jeffrey Mueller Glenn Bowens Andrew Cantrall Veronika Karova Kyle Shannon Patrice Spencer Bradley Gagnon-Palick Ryan Jenkins Colin Egan Mary Primiterra Russell Smith Kathleen Colangelo Kyle Shanafelt David Miles Elizabeth Royer August Kristoferson Kiva Boddy Kathrine Vinciguerra Nicholas Hunter Ryan Olsen Alexander Payne Helena Racette Bradley Vopni Anne Darlington Adam Homicz Tasha Tomas Heather Wolf Steven Fahey Juan Garcia Corey O’Connor Georgia Emms Joseph Hudepohl John Kowalczik Jan Mowbray John Schneider Colt Wolfram Nicholas Burdeau Paul Chang Mark Collins Christopher Dyer Aidan Farrell Marielle Gallant Andrew Lebowitz Jake McDougall John O’Brien Jeffrey Parsons Christopher Rios Katharine Maretz Alison Wagner Emily Cetlin Peter Correggio Justin David Sean Gildea Kathryn Mohrfeld Matthew Morin Maria van Heeckeren Justin Ziegler Deanna Young Neal Cabanos Jeremy Catt Joshua Schramm Jonathan Alexander Cailly Carroll Kristin Chan John Henry Jonathan Schlaudraff Suresh Sundaram Dane Fickel Carmen Boscia Gregory Gelinas Peter Smith Sandy Tam Marissa Simmons Beau Bowman Stelios Kousettis Andrew Mangin James McCourt Patricia Odnakk Joshua Ford Hunter Hayes Jo-Ellen Kenney Paul Oh Quinn Christofferson Gregory Lawson Sterling Tran Gavin Kennedy Audrey Ford Andrew McKee Raymond Singh Brian Austin Julija Coloma Alexander Dyson Julianne Williams Nicholas Kirsch Hillary Kloeckner Mary Rouse Gregory Bauer Maryanne Cronin Sean Melville Steven Perlmutter Brian Reilly Robert Ankenbauer Katherine Baker Hannah Gottas Elizabeth Pringle Katelyn Daignault Donandrea Myette Edward Smith Jacqueline Mills Tianchuan Li Anna Calcagno Henry Meuret Stephanie Uvwo Claus Roller Brian Johnson Alex Provencal Emily Santa Fe Abigail Cammack William Bergen Kristin Carcio Stephen Munoz Amelia Wren Tiffany Lee Allen Mayer Samantha Pandolfi Alexa Whiteman Ian Kirwan Maria Calabrese Joshua Chao Stephanie Hammond Kevin Karales Iain McNaught Nakaba Minai Devendra Singh Manoj Sukumaran Caitlyn Lacey Sydni Arnett Laura Bourgeois Kyle Buswell Tomas Coan Sarah Yates Kristopher Brassard Timothy George Krista Lacolla Matthew Robson Michael Zaslavsky Kashif Ditta Ryan Dalzell Sandy Fortin John Holberg Shawn Klopp Dina Putrya-Momotok Kelly Riley Morgan Woods Jennifer Bullock Mark Lobbestael Taylor Mackinnon Leah Smith Angie Wu Nehemie Alcindor Bryan Holdt Robert Buckley Paul Kimani Brent Sullivan Amanda Woodgate Seth Goldzweig Clinton Barber James Croom Tyler DeCotis Daniel Lungu David White Joseph Whiting Bradford Cadigan Jenna DiSalvio Kristen Grant Ryan Hartung Alexander Hovsepian Reed Lerner John Lockwood Clark McMahon Scott Price Jacob Rife Samuel Shankel Tyrone Gamby Charlotte Keith Joseph Bustros Jamie Manzo Sandra Oles Joel Turba Kerry Wasgatt Davina Armstrong-Cruz Timothy Finnell Colton Blackman Nancy Curtin Timothy Grossman Ryan Potter Jorge Valcarcel Michelle Capriotti Mohamed Masoud Lillian Pena William Poillucci Surya Rai Martha Strebinger Kirby Arens Doug Keagle Luke Murdock Matias Vera Andrew Carlson Randall Hegarty Christine Japhet Scott Tice Anthony Emde Jennifer Everett Erik Stumo Krishna Das Peter Graham Gina Hutter Scott Kudlacik Kyle Lunde Esther Tam Vivek Vinayak Meaghan Buckley Michael Esposito Michael Broughton Nicole Haberer Erin Mellen Lawrence Gingrow Scott Lindsay Chris Morahan Joseph Brody Natividad Lozada Cheryl Swanberg David Dodson Robel Ghebremichael Leah Lam Alex Meyer Lisa Weiler Marc Fiore Scott Habeeb Katherine Walsh Andrew Grennon Ainsley Haughton Michael Hill Ryan Martin Kittisak Toyparn Alec Macmillan Kimberly McGinn Agneta Sheire Terry Stebner Matthew Groth Samuel Juliano Tin Mai Wei Mei Alexander Arnold Ashley Beckham Nicholas Bertonazzi Jesse Cauble Benjamin Cheung Taryn Donohue Marston Fries Gray Gibson Sam Hodgson Lindsay Hydorn Joshua Latimer Michael LaVita Michael Maddahi Carly McCarthy Dylan McGuire Jason Michonski Patrick Mullin Kellen Smith Daniel Sullivan Sarah Wood Ryan Richard Digajara Degaga Brenda Anguiano Aaron Benedict Carolina Concannon Michael Dietrich Erik Dunn Adam Gardner Christopher Stadtler Daniel Streppa Justin Ward Alexandros Apostolidis Jie Yuan Taylor Jenkins Brian Smith Andrew Furney Walter Lindsay Jay Schwartz Francis Coughlin Matthew Morse Erik Saarinen John Spence Hari Tirumalai Zachary Gears Andrew Goodale Anthony Mitrano Abigail Torrisi Moran Zhang John Gordon Nicholas Scalia Ash Islam Tomas Deang Richard Perrins Alex Woolbert Julie Brezen Stephen Antanavige David Bloom Robert Blood Emily Casey Jennette Erickson John Hemingway John Perna Razzie Smith Jeffrey Leighton Connor O’Leary Tjalling Halbertsma Timothy Mamis Fan Bu Laurie Halulakos William Heffernan Billy Savanh Nicole Vicino Galina Warner Ryan Cox Brian Hertzog Lynne Milinganyo Ryan Spengler Christopher Reed Tyler Anderl Arthur Driscoll Cristy O’Neil Paula Shea Kriti Khanna

“Managing other people’s money carries with it, of course, great responsibility. No one can lightly undertake the burden of advising others as to the handling of their investments. We have chosen to assume that responsibility and so we have a profound obligation to those who have placed their confidence in us. That

bligation is to put forth our best efforts, with the full realization that others

look to us for leadership in an undertaking which, at its best, requires to the highest degree, integrity, intelligence, and hard work.”

–Charles F. Eaton Jr.

SLIDE 124

Dallas Lundy Linda Hanson Nora Bernazzani Wayne Saulnier Deborah Bishop William Austin Daniel Cataldo Jenilde Mastrangelo Jane Nussbaum Linda Doherty Tomas Faust Cynthia Clemson Lauren Mannone Donna D’Addario Marlo-Jean Tulis Anne Marie Gallagher Stephanie Brady Mary Maestranzi James Foley Veth Huorn William Gillen Mary Little Kelley Creedon Douglas McMahon Diane Brissette Rosemary Leavitt Scott Page Lynn Ostberg Brian Langstraat James Tebado Lynne Hetu Mary Byrom Payson Swaffield Michael Weilheimer Amy Ursillo Perry Hooker John Gibson Gregory Parker Hadi Mezher Delores Wood Julie Andrade Jeffrey Beale John Murphy Deanna Berry Jane Rudnick Leighton Young Geoffrey Marshall Robert Bortnick Cecilia O’Keefe Louann Penzo Maureen Gemma David Michaud John Trotsky David Olivieri Laurie Hylton Jie Lu Margaret Taylor James Womack Kathleen Fryer Jonathan Isaac Kathleen Krivelow Tomas Luster William Hackney John Pumphrey James Godfrey Katherine Kreider Marie Preston William Cross Lewis Piantedosi Christopher Gaylord Kelly Williams Elizabeth Prall John Macejka Marie Charles Brian Dunkley Leanne Parziale Mark Burkhard Peter Crowley Craig Russ Michelle Green Roseann Sulano Yana Barton Michael Botthof Deborah Trachtenberg John Redding Paul O’Neil Kristin Anagnost Duke Laflamme Tiffany Cayarga Sotiria Kourtelidis Joanne Mey Jeffrey DuVall William Delahunty Gillian Moore Linda Carter John Crowley Michael McGurn Michael Kinahan Daniel Ethier John Ullman Richard Wilson Maria Cappellano Suzanne Marger Steven O’Brien Noah Coons Daniel Puopolo Adam Weigold Shannon Price Lee Tacker Craig Brandon Kirsten Ulich Charles Reed Stephen Jones Tomas Seto Far Salimian Scott Firth Catherine Gagnon David Zimmerman Eric Caplinger Andrew Sveen Simone Santiago Robert Breshock Joseph Roman Carolee MacLellan Mary Arutyunyan Shalamar Kanemoto Jeanene Montgomery Amanda Madison Gregory Walsh Jeremiah Casey Amanda Kokan Donald McCaughey Robert Walton William Bell Erica Burke Lilly Scher Jeffrey Hesselbein Tina Holmes Ira Baron Timothy McEwen Robert Curtis Lisa Flynn Jared Gray Jeffrey Brown Philip Pace Linda Nishi Xiaozhen Li Michael Allison John Gill Elizabeth McNamara Deborah Chlebek Samuel Scholz Stephen Concannon Craig Castriano Bruce McIntosh Christine Bogossian Michael Nappi Catherine McDermott Stephen Soltys Randall Skarda Steven Leveille Kimberly Pacheco Kevin Sullivan Patrick Cosgrove Douglas Rogers James McCuddy Michael Devlin Lidia Pavlotsky Michael Costello Katharine Walker Randall Clark Steven Widder Michelle Baran Troy Evans Michael McLean Paul Rose James Durocher James Putman Coleen Lynch Elizabeth Johnson Kristen Abruzzese John Santoro Jay McKenney Christopher Berry Linda Bailey James Skesavage Timothy Breer Robert Ellerbeck Deborah Henry David Lochiatto Daniel Yifru Christopher Mason Brian Herbert Joseph Furey Bradford Godfrey Amy Schwartz Lawrence Fahey Matthew Hereford Katherine Cameron John Greenway Dorothy Kopp Deidre Walsh Gregor Yuska John Simchuk Michael Cirami Christian Howe Vassilii Nemtchinov Heath Christensen Ralph Hinckley Eugene Lee Peter Campo Christopher Hayes Lori Miller Paul Nicely Darin Clauson Charles Gaffney Ian McGinn West Saltonstall Ian Schuelke James Reber Meghann Clark Maureen Emmerso Earl Brown Frederick Marius John Brodbine Ronald Randall Sheila Irizarry Mark Milan Laurie Allard Michael Keffer Joshua Lipchin Benjamin Pomeroy William Pannella Kristin Chisholm John Croft Megan Keaty Noriko Ogawa-Ishii Eileen Tam Leonard Dolan Samuel Perry Jonathan Treat Kevin Darrow George Nelson Marc Moran Jodi Wong David Richman Richard England Melinda Olson Erin Kace John Murphy Jamie Babineau Nicole Hoitt Sharon Gordon Jason Fisher Daniel McElaney Brian Kiernan Christopher Teixeira Joseph Hernandez Charles Manning William Holt Gordon Wotherspoon Gary LeFave Barbara Jean Jeffrey Sine Richard Michaels Geoff Longmeier Erick Lopez Matthew McNamara Scott Craig Richard Milano Brendan MacKenzie Jamie Mullen Stewart Taylor Sean Broussard Tomas Tajmajer David Lefcourt Aamir Moin Dennis Carson Anatoliy Eybelman Kathryn McElroy Kevin Connerty Michael O’Brien Bridget Fangueiro Kelley Baccei Jordana Mirel Raymond Sleight Adam Pacelli Michael Parker Jeffrey Rawlins Dan Strelow Kimberly Williams Peter Popovics John Baur Richard Kelly Scott Timmerman Timothy Fetter Christopher Marek Michael Reidy Sebastian Vargas Jay Schlott Stephanie Douglas Patrick Gill Eric Stein Kate Chanoux Marsh Enquist Tomas Guiendon Juliene Ehmig Matthew Buckley Eric Robertson Ryan Landers Ross Chapin Walter Fullerton Carla Lopez-Codio Laura Donovan Ivan Huerta Jennifer Mihara Brittany Barber Rainer Germann Dan Maalouly Coreen Kraysler Louis Membrino Adan Gutierrez Stephen Byrnes Tracey Carter Bernadette Mahoney David McCabe Michael Striglio Michael Keogh Daniel Clayton Hemambara Vadlamudi Michaella Callaghan Patricia Greene Nancy Tooke Patricia Bishop Susan Brengle Francine Craig Gayle Hodus Kevin Taylor Henry Hong Daniel Grover Egan Ludwig Robert Allen Jean Carlos Michelle Berardinelli Paul Bouchey Bernard Scozzafava Andrew Frenette Brian Taranto Michelle Wu Brian Pomerleau Michael Shea Alan Simeon Adam Bodnarchuk Rhonda Forde Katy Burke Christopher Doyle Melissa Fell Eleanor McDonough Meghan Moses John Casamassima John Shea Brian Shuell Derek DiGregorio Brian Hassler Michael Turgel Phuong Cam Travis Bohon Aubin Quesnell Michael Roppolo Annemarie Ng Sean Caplice Melissa Marks Brian Mazzocchi Eric Dorman Brian Coole Steven Kleyn Justin Bourgette Tullan Cunningham Kim Day Steven Pietricola David Andrews Pamela Parker Irene Deane Scott Forst Stacey McAllister Michael Mazzei Daniel McCarthy Stuart Muter Tristan Benoit Christopher Sansone Jeanmarie Lee David Gordon David Perry Christian Johnson Nelson Cohn Ryan DeBoe George Hopkins Christopher Hackman Janice Korpusik Collette Keenan Raphael Leeman Danat Abdrakhmanov Randolph Verzillo Katie McBride Andrew Szczurowski Virginia Gockelman Jessica Savageau Marconi Bomfim Bradley Berggren Lawrence Berman Kenneth Everding Helen Hedberg Jonathan Orseck Kenneth Lyons John Ring Patrick Escarcega Jennifer Johnson Kevin Longacre John Jannino Maureen Renzi Matthew Witkos Elaine Peretti Stephanie Rosander Kathleen Walsh Eileen Storz-Salino Brooke Beresh Taylor Evans Trevor Harlow James Kirchner Tatiana Koltsova Rose-Lucie Croisiere Lance Garrison James Stafford Kyle Johns Ross Anderson Mary Gillespie Robert Bastien Jake Lemle Robert Greene Donna Drewes Natasha Balagula Christopher Mitchell Roger Weber Steven Dansreau Tara O’Brien Jaime Smoller Michael Ferreira Gonzalo Cabello Judith Cranna Michelle Rousseau Mary Proler Stephanie McEvoy Andrew Valk Yingying Liu Laura Maguire Heather Dennehy Christopher Eustance Marc Bertrand Kyle Lee Andrew Waples Sharon Pinkston Sean Kelly Louis Cobuccio Tomas Hardy Scott Weisel David Hanley Dan Stanger Praveenkumar Rapol Lisa Wolff Michael Deich Rey Santodomingo Zamir Klinger John Loy Mary Panza John Cullen Raya McAnern Albert Festa Benjamin Finley James Maynard Nathan Flint Rachael Carey Michael Kelly Margaret Egan Christopher Nebons James Roccas Alice Li Charles McCrosson Michael Shattuck Michael Alexander Scott Casey Bernard Cassamajor Edward Greenaway Samuel Swartz Richard Hein James McInerney Matthew Navins David Guarino Cheryl Innerarity Avia Johnston Kevin Hickey Michele Sheperd Christopher Remington Andrew Beaton Darwin Macapagal Christopher Nabhan Eric Trottier Lauren Kashmanian Wiwik Soetanto Nicholas Vose Lorraine Lake John Murray Velvet Regan Marcos Rojas-Sosa Marie Elliott Luke England-Markun Jennifer Madden Emily Gray James Maki Kristen O’Riordan Ashley Walsh John Harrington Michael McGrail Robert Osborne Patrick Campbell Brian Eriksen Alexander Martin Michael Ortiz Andrew Collins Sarah Orvin Davendra Rao Timothy Williamson Hydn Vales Brian Blair Anna Zeinieh Dustin Cole Joshua Rolstad Andrew Hinkelman Alain Auguste Robyn Tice Susan Perry Elizabeth Stohlman Dana Wood Diane Tracey Brian Barney Devin Cooch Joseph Davolio James Evans John Hanna Nisha Patel Jonathan Rocafort Evan Rourke Robert Runge Robert Salmon Colin Shaw Elizabeth Driscoll Liselle Aresty Hirotake Yamamoto Mitchell Matthews Patrick Cerrato Christopher Harshman Patrick McCarthy Ryan Walsh Diana Atanasova Antoinette Russell Anthony Gigante Jonathan Futterman Justin Serevitch Justine Abbadessa Joseph Kosciuszek Kevin Rookey Michelle Graham Kevin Amell Kerianne Austin Jason DesLauriers Eric Filkins Matthew Manning Vibhawari Naik Jeffrey Selby Kevin Andrade William Kennedy Brian Shaw Lisa Falotico William Buie Nicholas Bender Kelsey Hill Howard Lee Tro Hallajian Deanna Foley Marcus Jurado Kha Ta Teodore Hovivian Issac Kuo Stuart Shaw William Jervey Paul Leonardo Timothy Atwill Jessica Hemenway Maeve Flanagan Jeanette Liu Robert Quinn Johnathan Komich Daniel Grzywacz Sandra Snow Sean Bakhtiari Robert Nichols Aaron Burke Sarah Kenyon Aida Jovani Jeffrey Timbas Brian Ventura Trevor Smith Harsh Vahalia Monica Marois Cyril Legrand Steven DeAlmo Dori Hetrick Alfonso Hernandez Marc Savaria Jessica Roeder Timothy Russo Sabina Duborg Federico Sequeda Rodolfo Galgana Samantha Higgins Geoffrey Underwood Christopher Fortier Robert White James Birkins Jenny Winters Kristen Gaspar Diane Hallett Madhuleena Saha David Barr William O’Brien Stephen Tilson Timothy Walsh Kelly Maneman Courtney Graham Amarnath Jayam Isabelle Cazales-Evans Charles Cordeiro Amy Laliberte Tomas Nitroy Deirdre O’Connell Richard Raymond Robert Howell Michael Guertin James Barrett Ryan Gagliastre David Smith Rafika Shibly Duncan Hodnett Robert Yocum Anna Semakhin Jarir Mallah Charles Turgeon Stephen Kistner Andrew Subkoviak Andrew Haycock Jennifer Klempa Richard Lints Tomas Shively Brian Dailey David Callard Anne Chaisiriwatanasai John Paolella Anthony Pell Rodrigo Soto Erik Lanhaus Miranda Hill Anthony Zanetti Daryl Johnson Kai Xie Michael Yip Eric Britt Timothy Giles Darcy Fernandes Justin Brown Leidy Hoffman Ross Taylor Christopher McKenzie Jacob Greene Victor Joita Colleen Lavery Ryan Gallagher Toebe Hinckle Julia LeGacy Monica McGillicuddy Emily Coville Mark Haskell Jason Rendon Carl Tompson Jason Jung Reuben Butler Lauren Gassel Syed Rahman Jeffrey Brody Timothy Kierstead Isabel Clark Matthew Murphy Schuyler Hooper Michael Wagner Courtney Collura Derek Brown Pamela Begin Kenneth DeJesus Robert Faulkner David Oliveri Christopher Rohan Rebecca Moles Benjamin Garforth Suzanne Hingel Michael Swirski Mark Hogan Daniel Sugameli Emma Hutchinson Stephen Clarke Nathan Goldman John Northrop Masha Carey Jeremy McLeod Peter Lonergan Megan Dooley Rachael Boggia Kim Le Jeffrey Schenkman Rocco Scanniello Tyler Cortelezzi Adrian Jackson Hottis McGovern Kenneth Zinner Mary Pollard Robert D’Amato Matthew Williams Brian Arcara Kathryn Johnson Michael Kincheloe Daniel Sullivan Vinh-Quang Van Ha Jeremy Milleson Cory McGrath William King Colin Looby Gregory Johnsen David Chafin Gregory Chalas Yu Fu Justin Wilson David Zigas Kara Boon Matthew Clenney Yanling Zhang Sheila Doherty Robert Holmes Katherine Johnson Tomas Leonard Jason Vanas Laura Foster Steven Pasquantonio James DeCaprio Alexander Paulsen David Pychewicz Frederick Wright Peter Avallone Sachiko McHugh Lori Abboud Enrico Coscia Steven U Aaron Dunn Jacqueline Poke John Wilton Philip Casalini Candice Flemming Lindsay Mallett John Noble Steven Reece Jason Kritzer David Doggett Collin Weir Luke Bruno Matthew Gibbons Kirk Heelen Megan Kanter Kevin Liederbach Anthony Scalese Lei Chen Matthew Furan Teresa Curtis Marquisa Gaines Bradford Richards Daniel Lee William Lesler Hang Nguyen Paulina Koutroubis William Bohensky John Jezowski Leonard Senkovsky Andrius Balta Chad Brown Andrew Dillon Christopher Hearne Dorothy Jones Dylan Kline Adam White Eric Zeigler Sarah Sheehan Stephannie Workman Qihua Liu Daniel Sunderland Michael Pogson Elaine Sullivan Jennifer Flynn Laura Nykreim Christopher Loger Patrick O’Brien Alexander Randall Jennifer Ranahan Jeremy Davis Jill Holland Karl Saur Huong Strong Kathleen Gaffney Brendan Lanahan Danforth Sullivan Megan Fiorito Teresa Watkins Cynthia Danger Melissa Perry Michael Spear Dean Graves John Moninger Jennifer Casey Harrison Kent Dan Codreanu David Sacco Rachel Goering David Irizarry Mary Anderson Matthew Bailey Gregory Baranivsky Steven Bedell Alexander Braun Allison Brunette Orison Chaffee Michael Cole Richard Fong Alexander Gomelsky Vladimir Gomelsky Jack Hansen Christopher Haskamp Justin Henne Jane Henning Hong Huo Tomas Lee Gregory Liebl RaeAnn McDonnell Antony Motl Alicia Neese Timothy Post Eric Prawalsky Ashley Schulzetenberg Kelly Shelquist Jay Strohmaier Denise Timmons Christopher Uhas Mark Wacker Daniel Wamre Alyssa Wiechmann Alex Zweber Mark Saindon Robert Ciro Scott Brindle Brian Gudely Hussein Khattab Henry Rehberg Jennifer Sireklove AnnMarie DuBose Alexander Macrokanis Emily Finn Deborah Flood Jeffrey Boutin Timothy Robey Robert Swidey Mary Barsoom Benjamin King John Simeone Sarah Castanheira Simon Mui Louise Bradshaw Patrick Duffy Jeffrey Keady A.J. Leimenstoll Benjamin Spitz Faisal Zahoor Joshua Lipinski Kelly Finneran Milind Kanitkar Rachel Schaefbauer Melanie Kramer Sean Sorensen Robert Cunha Katherine Todd Diane Gordon Tomas McMahon Michi McDonough Christopher Wisdom Michael Finney Benjamin Hammes Christopher Burnet Jerome D’Alessandro Raffi Samkiranian Brittany Isenhart Jeffrey Norton Adriana Tacu Serena Lee Craig Melillo Todd Johnson Mahesh Pritamani Juliet Todd Patrick Huerta Chris Smith Mei Chang Matthew Mueller Timothy Nelson Jared Pawelk Matthew Tesone Christopher Belnap Elizabeth McManus Troy Neville Jeffrey Sayman Caitlin Schlesinger Spencer Swan Charlotte Watkins Christopher Webb Alexander Amado Christopher Briant Heather Chapman Bradley Galko Daniel Saltus James Torson Marshall Stocker Jared Allen Amanda Lyons Tyler Smith Ryan Cavanaugh Derrick Leung Jared Proske Sophie Murray Patrick Gennaco Zachary Camara Christopher Cook Matthew Gile Henry Peabody David Brinker Nicholas Hailey Benjamin LeFevre Robert Rowe William Turner Charles Norvish Biana Perez Stephanie Nevin Rachel LeBlanc Anne Mitchell Nokio Twumasi Steven Vanne Lisa Brown Amir Vaziri Alan Arrington Kevin Pih Michael Szyska Mamatha Chilumuthuru Isaiah Petersen Victor La Ryan Smith William Spring Daniel Ryan Casey Foskett Caroline Spellman Wenlei Sun Benjamin Adams Allen Wagner David Butters